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Rally of the Insolvent, Bến Tre on the Stock Market and You had better Listen to What Obama Said

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May 07, 2009 – Comments (3) | RELATED TICKERS: SWHC , WFC

NOTE: I am away again. I have limited bandwidth and I am sorry for not replying to comments to my posts. I have had a few beers, so I am sorry for the grammer and spelling.

I am almost 50% cash. I am long the gun makers, which is a "no brainer". Go try and buy ammo, you will understand why. Or look at the current press on SWHC or go to a gun show and try and buy ammo, ask about the mark up, if they have any ammo for sale. Guns and ammo have been one of the best investment classes over the last decade, I suspect they will be over the next decade. I hope I am wrong, but Fooldom knows how Keyensians cure Depressions.

I WAS short WFC, which is a no brainer, since WFC is insolvent. Despite what the "silver spooned", son of a Senator, a high school shop lifter turned "worlds richest man" says.

I have been short WFC for some time, I covered part of my short when it reached $7 ish, but I expected WFC to hit $0.01 or less, so I let it run past $20. Not a big deal, plenty of cash to cover and not a big position in short WFC.

Funny thing was half of my short position was covered AUTOMATICALLY by my broker. They said the shares were recalled, and I WAS FORCED TO COVER AT $20++++! ROFL! But I still had half of the short position left in WFC. I let it ride past a 20% one day move, when the high school shoplifter/worlds richest man, said he would buy WFC. Then the week day, I was CALLED and EMAILED that my borrowed shares were being RECALLED and I had to cover at $24+++. Lol. 

I was forced to cover shares after a 100% run up. LOL. Joke is on me, Fooldom.  Although I had 2X the net amount in cash, I had to return shares at the current price? ie I had $30k in cash, $10k in short WFC. 

But I know this type of action, Ben Tre on the stock market ie destroying the village to save it. Basically, I was riped off, but it was a small price to pay to learn how corrupt and out of synch the market has become.

My advice to longs and shorts is to realize the market has become detached from fundamentals and the rule of law and SEC, do not appear to want to intervene, in any serious manner. We are witnessing the Rally of the Insolvent. 

BREAK-------------------------------------------------------------

Cheney had shares of HAL, and Bush II was a failed wannan be "Oil man". That should have told you where certain stocks were going and where the market was going.

Vox Day has the post:

Obama gets it part right I actually agree with aspects of his broad diagnosis of the Wall Street problem:

Wall Street is not going to play as dominant a role in the economy as regulations reduce
"some of the massive leveraging and the massive risk-taking that had become so common," President Barack Obama says. The changes in the role of Wall Street and the huge profits that came from that risk-taking could mean other adjustments as well, Obama said in an interview in this week's New York Times Magazine.

"That means that more talent, more resources will be going to other sectors of the economy," he said. "I actually think that's healthy. We don't want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design.... I think it's important to understand that some of that wealth was illusory in the first place," he said."

Where Obama goes awry is that his plan is to attack the symptoms and not the disease. So long as the paper money system exists, the easiest and fastest way to obtain more of it is to play paper games. And some of the policies he is contemplating are certifiably insane, such as his plan to attack tax havens and overseas profits. As the British are learning, all that does is cause your best entrepreneurs to leave the country entirely. Preventing companies from writing off domestic expenses for overseas profits isn't going to reduce the incentive for U.S. companies to base part of their operations in other countries, it's going to increase their incentive to move ALL of their operations elsewhere.

It's also amusing how the US media inevitably mentions places like the Cayman Islands in articles like these, when the real problem is that in comparison with US corporate rates, about half the world, including many European countries, look like tax havens.

 

3 Comments – Post Your Own

#1) On May 07, 2009 at 4:47 AM, kaskoosek (85.49) wrote:

Sorry for the WFC short.

 

It was really high risk to do such a thing, eventhough they are technically insolvent. 

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#2) On May 07, 2009 at 7:17 AM, rd80 (98.44) wrote:

I was wondering if my broker had loaned out the WFC shares I sold yesterday. 

Sorry 'bout that.

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#3) On May 07, 2009 at 4:05 PM, abitare (63.42) wrote:

FYI - I sold most of my SWHC, today after they announced additional share offering.

 kaskoosek,

No worries, live and learn, it was not a huge amount, I feel sorry for people, who had big money short these insolvent institutions.

 rd80,

Funny 

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