Senate Approval

With that done it goes to the house that already said no Monday. This time though there is more pork added to make it attractive. Last I read, it has 112 billion of pork added to it and a simple 3 page proposal has turned into a Novel size now. Just ridiculous.

Did not get filled yesterday on the Nov puts early on as the market went south in the beginning. Canceled the trade. Looking for this political voting to end then place the trade again.

In my humble opinion, October should be a very bad month for stocks. A very good probability trade for the short side.

A question

If the supposed bailout is to effect the banking system, why do we need a vote for 700 billion. Didnt the reserves just pump 650 billion into the system already?

Is this bailout pacakage more of a "see we are doing something" in Washington.

Looking to go long Nov. puts in the next few days on the SPY. What strike depends on where the market is at the time. I am looking for a real route this month in equities. I do not usually do this, but what the market is showing us this makes sense to me.

Another Day?

After the failed bailout, I was told by economists and what all that we would be destroyed, the sky would fall etc. I went into my bunker and hunkered down. But then I heard some birds chirping this morning. Opened the door and I could not believe we actually survived the night.

So goes the socialists and their central planning. Glad to see common sense rule for once. Now lets not stop when a new watered down version comes along. The gang of 3 will not stop with this defeat.

Mr. Market will get where he wants regardless of how much money you or I or the feds pump into to the contrary. Let the banks that gambled go down. A stronger bank will takes its place.

Now if we can just stop the FDIC from its grabbing tactics. Just because a bank has a run on its money, does not mean they have to force a sale in order to place the bank off the endangered species list. What the FDIC has done the last week is a crime. This is all so that they do not have to tap into the reserves and make it look like the FDIC is solvent when in reality we need 125 billion to cover the losses that will come.

We won a great battle, but free markets are still be assailed.

Long gold....

And Now WAMU

JP Morgan bought Washington Mutual after the FDIC seized them. Morgan it is estimated has 30-1 leverage of their own. My guess is that Morgan will be the next victim of the investment bankers. they can only buy so much of the counter party that they sold to.

This is getting interesting to say the least. If you wanted to play a pretty good idea, you might look to selling a call spread on Morgan 6 months out and 10% above its price. However wait until the big rally today once the WAMU news jumps Morgan.

Here is the fundamentals as I see them. We are setting up the largest drop in the dollar to happen. The next big bust is bonds as interest rates go up regardless of what the reserve does. They will almost certainly have to raise to keep up with market pressure.

I mentioned inverse ETF's and that has backfired. With the SEC banning short selling, many of these instruments had to stop trading since they could not sell short. If they were set up with puts, then they were not effected.

It is tough to have any degree of confidence when they change the rules on you. Many are sitting on the sidelines and that can be a position too, I think the gold,oil,etc. game is just fine in these times for me anyways