"Does it seem it will be nearly impossible to short bank stocks involved in the new Treasury plan? "
Hi Jayhawk,
I think it makes them much more lucrative shorts in the long run and risky shorts in the short run, which is to be expected from the various EW thumbnails I've sketched here. That is not an ideal situation, but for the disciplined "sell and hold" dollar cost averager, it is a great opportunity--especially if stocks bounce higher this summer, which I expect.
The assets are still worthless no matter how badly they can rip off the governement/taxpayer to overpay for some. Those who think there is enough money in the system to make these leveraged losses go away don't understand the nature of the losses or the nature of the system.
More than ever, the vast majority of a stock's price is the multiple, and the loss of capitalism as an option chops that portion way down.
Wednesday, March 25, 2009
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Capitalism does not set price multiple of stocks. The oligarchs do.
ReplyDeleteThe loss of capitalism only means there is more control of oligrachs over price of stocks, which they own.
"The loss of capitalism only means there is more control of oligrachs over price of stocks, which they own."
ReplyDeleteYes, and and has been demonstrated quite resoundingly, the more control government exerts to raise their personal portfolios, the lower prices fall.
frankly, it doesn't matter anymore. everything is a joke. manufactured rallies, media propaganda, politicians on the take.
ReplyDeletewe know all of this already. funny thing is, will it even matter if we salvage our dollars if the whole system collapses? I think the Fed is simply saying "spend money and get in more debt, or we will collapse the system." So who cares. You might as well stock up on food, gasoline, liquor, and ammo, and prepare to defend your property.
"Yes, and and has been demonstrated quite resoundingly, the more control government exerts to raise their personal portfolios, the lower prices fall."
ReplyDeleteIf this is so consistently true, then shouldn't government exert control to lower their personal portfolios when they indeed want to raise them?