Confidence Crash…Your Mommy Can't Save You!

This is not a crisis that will be solved with tax cuts and lower interest rates.

If you make it easier for a bank to lend money and they are not lending it, what’s the [email protected]#king point. I have many friends in Phoenix, smart guys, guys I would give my last dime, that can’t get breathing room for their projects.

Why the hell would that person be inspired to buy stocks right now, down 500 more points or 2,000 more points for that matter.

There is no REAL number that relates to mood or confidence. Banks are using cheap money to shore up their putrid balance sheets.

We need leadership right now. Confidence comes from the top. Not from this blog, not your mommy. Interest rate cuts wont cut it. Tax incentives?…WTF. Have you seen the start-up market lately. We are all in that business already. We don’t need no stinkin’ incentives. If you are a working middle class executive, you were just fired or will be. That’s pretty good incetive.

What I would like is, for example, for the best city in the world – New York, to have a [email protected]#cking airport that looks better than a Russian airport. Can’t our government create confidence by raising taxes for jobs for legal immigrants that will make that happen and get people spending and believeing in America?

Instead, Bush comes on TV Friday and says they are “WORKING on a plan”. You think?

Sure I may dabble in the indexes tomorrow, mainly because I can and it seems like the right thing to do, but the average investor should not until we see some leadership.

In the interim, stocks are just pieces of paper that have a market because of perception. The perception that chaos won’t ensue. Frankly, we have chaos. Catching this falling knife and making money off it would just be luck at this point. Big woop on being lucky. All yours.

When a market crashes, we all lose something. Shit, I am nervous and I am 10 percent allocated to stocks, after being slammed for the last three weeks. I will still see bids disappear as they have been doing. It’s like the Dead Sea at this point. If you have a cut and enter the water, the salt will find the wound.

I have a little cut in my portfolio (10 percentish) and the Global Markets are my Dead Sea right now.

At this point, I watched the Canadian Markets close on their lows down 10 percent. Their venture Index was down over 10 percent. That’s a crash. They closed on thewir lows because they are waiting to see if anything significant comes from our leadership tonight.

I doubt it.

16 comments

  1. cheesefries says:

    Howard-
    I’m afraid anything from the administration this late would be viewed as panic based. If they do nothing wouldn’t it be viewed as confidence?

    What did you think of Cramer’s MBIA/Ambac government takeover plan?

  2. Keith Shepard says:

    Hmmm…I still think the Fed will step in tomorrow (21 Jan 08) with an emergency rate cut. An assumption, of course. However, I think it’s all a little too late … especially for the Monolines … and when (if) their ratings come unglued…look the fuck out below Sparky.

  3. manish jain says:

    India just had it’s worst day ever in terms of absolute points. At one point the SENSEX was down 2050 points, closed down “only” 1400 points.

    But, it’s funny b/c people still believe the Indian market can still go up if the US falters…delusional at best.

  4. Woah, sounding like a cynical short seller a bit there–welcome to the club, we meet every Tuesday and lately we’ve been able to afford the best food/entertainment money can buy!

  5. Tom says:

    I’m getting out my stock and fund shopping list. I think this Bull Market trend, supported by borrowed money, is over! Time to get off!

  6. annonymous says:

    This is a pin prick. Pull up a 30 year chart of just about anything. It’s not even volatile yet. If we don’t see 10,000 on the DOW in the next 2 years we’ll be lucky.

    But what a great market. If daytraders aren’t getting rich in this they need to stop and get a real job. Swing traders that have learned to short are having a hard time tracking all the opportunities. Long term investors are drooling over the potential bargins on the way. Anybody that didn’t have this built into their strategy is under 25 or naive or both.

    Chaos is opportunity…those that stay focused and positive will do extremely well. This is when the basis for outstanding profits are built!

  7. mike b says:

    Nice job on Bnn!
    Was it coincidence that you were on after a 600 point Tsx drop?
    Love the blog, you and the fly should rock!

  8. with inverse etf’s and no uptick rules it is a great market for traders for sure.

    Wish I cared about it but I dont.

    I would rather the center hold than please some shortsellers.

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  10. johnjaygebhardt says:

    the sell off started with the change in the uptick rule in late july. the mortgage crisis is a direct result of limiting the ability of fnm and fre from increasing their portfolio. banks stepped in and created junk mortgages. this was another policy disaster of the buh administration. yes it was.

  11. Great entry Howard! You make some good points and I do agree–the solution has to come from the top, but it won’t until we get a new President. I’m not a political man, but this administration acted like a fat pig and now it’s time for the butcher. The Fed can only do so much. But I see opportunity as well, but I’m not stupid enough to guess the bottom like some people are doing right now.

  12. Stephen L. McKay says:

    Howard,
    Just back yesterday from Canada, and don’t let Andy kid with you (Canada is not a fad), Ha!
    love your post! Sounds like my take, and as I told Andy yesterday, in response to his comment on Fred’s blog (gotta start twitting), I’d rather have buying power than a discount on debt anyday!
    Great post, and thanks!

    Steve

  13. BDG123 says:

    Mommy can’t save you but your daddy can. Who’s your daddy? The party hasn’t even begun. Most people have no idea what the implications for the global economy. This outcome was baked more than ten years ago. And, those who were uber bullish were living in an alternative reality based on the biggest Wall Street bubble in history. It will likely take four or more years for this environment to gain some type of footing.

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