Spiga

Sperm Banks, Blood Banks, next in line at Fed Window

I wanted to start this post by reiterating we are short the equities markets. We are reshort WMT at 58 with a stop right over that (Sept 50 puts long) as well as holding our OEX/SPX option shorts from around Dow 13,000. We are buying SLV index on the Amex and neutral/bearish on crude with no trade on. From our previous post, a short term spike in the dollar may come from a quick tip up in rates from the Fed. Now on to the entertainment! I also wanted to put Wells Fargo on the short list as well. This stock is going to make some new lows in the next 3 months. Level Three to Fed... but how to recycle it? Those outstanding equity lines are going to come home to "Roast".

Its enjoyable to read the press that isn't making major headlines to see what is going on. Some great reprints from an article

"The Federal Reserve is just days away from completing the financing for its
bailout of Bear Stearns Cos., after which the central bank will have another big
decision to make: how to account for it.

"Flip through the footnotes to
the Fed's latest annual report, and you'll come across an open secret. The Fed
doesn't follow normal accounting rules, as promulgated by any of the major
standard-setting boards. Rather, the Fed writes its own, in a document called
the Financial Accounting Manual for Federal Reserve Banks.

"If you ever
wanted to design an accounting regime to help a bank cook its books, the Fed's
would be perfect. This doesn't exactly inspire faith in the U.S. financial
system, at a time when a good example might help a lot."

Foreigners that
buy U.S. assets and finance the Current Account Deficit need to have faith in
the U.S. financial system to continue buying... The Fed's not exactly giving
foreigners a reason to buy U.S. assets, are they now?

WELL im tired...

Type rest of the post here

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