Monday, September 22, 2008

Market Chaos: Theater of the Absurd

If you thought last week's market action was wild, hold on. The second act: this week, figures to create such a climate of fear and derision the likes of which most traders and common people have never seen.

Remember 9/11.

That bears repeating: Remember 9/11, when the Twin Towers were felled, supposedly by fires caused by airplanes smashing into them 90 stories above ground. It was fiction then and it is fiction now.

And, you'll recall that the first thing the Bush administration did was to enact the Patriot Act, stripping out habeas corpus and other rights from the constitution and rushed through Congress without deliberation or debate.

The current "crisis" is nothing more than the handiwork of the same criminals. Henry Paulson, Treasury Secretary and former CEO of Goldman Sachs (more on those louts later in this article), put forward a piece of legislation to the congress calling for an "emergency" bailout of Wall Street companies and financiers to the tune of $700 billion - more or less - or else risk the "collapse of the US economy."

The language in Mr. Paulson's proposed legislation included this nugget: "Decisions by the Secretary [of the Treasury] pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

Of course it would. The administration is attempting to nationalize all the wealth in America. They've already glommed up most of the mortgage debt through the bailouts of Fannie Mae and Freddie Mac. They now own 80% of AIG, which was the nation's largest insurance firm. They are disguising a complete takeover of America's wealth by scaring everybody into believing that there is no alternative.

They are so utterly corrupt, deceitful, dishonest and ruthless that every American should be scared, not of financial ruin, but of tyranny and a de facto coup d' etat by the same group of "leaders" who marched us into Iraq on threats of "imminent danger", "weapons of mass destruction" and "the smoking gun is a mushroom cloud" rhetoric.

How absurd is it? Take a look at these closing numbers:

Dow 11,015.69 -372.75 (-3.27%); NASDAQ 2,178.98 -94.92 (-4.17%); S&P 500 1,207.09 -47.99 (-3.82%); NYSE Composite 7,918.67 -268.46 (3.28%)

And that's with short-selling of nearly 800 "select" companies being sheltered by the SEC's no-shorting rules which went into effect last week and will expire - however conveniently - on September 29, after congress has acceded to the demands of the Treasury Secretary and has gone into recess, of course.

The proposed Wall Street bailout has raised the ire of a slew of activist groups and the call is unified: No deal without accountability, enforcement and financial penalties to corporate executives. Better yet, some groups are calling for the best outcome of all: that congress take their scheduled recess beginning this Friday, and stay in recess until after the elections on November 4 without passing any legislation including this rushed, ill-intentioned (and probably unnecessary) bailout proposal.

The level of absurdity reached new levels on Monday as Goldman Sachs and Morgan Stanley - the two remaining investment banks out of five - asked to change their designation from investment bank to commercial bank. If approved, the crooks who robbed corporations of shareholder value for years can now take money directly from consumers as well.

Henry Blodgett makes the case in "Wall St. R.I.P."

More hilarity came from Yahoo's Tech Ticker with columnist
Aaron Task asking if last week was the market bottom.

Judging by the comments and today's results, Mr. Task ought to begin polishing up his resume right quick. His credibility as an economic correspondent is nil.

Market breadth was prominently bearish with decliners trouncing advancers, 5032-1365, or by a 4-1 margin. New lows retook their position above new highs, 182-60. Volume was extremely light due to the lack of short-selling and covering on many issues, general investor disgust and the declines of today represent a beginning of the final unwinding of this overly-leveraged market. Many small investors are clearly on the sidelines, and certainly, fund managers are shedding even more dead weight from their portfolios in light of the extreme market conditions, to say nothing of the impending end of the third quarter.

Commodities boomed once again, with crude oil for November delivery settling up $6.62, to $109.37. After spiking up $25, a clear threat from the PPT and those calling the shots of what's to come if congress doesn't grant Paulson and Treasury wide-ranging, sweeping powers to take over the wealth of the nation, the October contract closed at $120.92, up $16.37, the largest one-day gain ever for the slimy commodity. Gold was up $44.30, to $902.00. Silver, the day's best performer, was up nearly 8%, gaining 97 cents, to $13.45 per ounce.

NYSE Volume 1,269,865,000
NASDAQ Volume 1,914,590,000

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