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A place for friends to gather and view stock market charts, discuss technical analysis and market outlook. What is your Principal Asset? How can it be developed? Each and all should do their own due dilligence and homework before investing. And by no means should you use anything I say or show here as a sole basis to buy or sell securities as everything is for educational experience only.

Saturday, March 21, 2009

More FED speak martket manipulation....

From The Associated Press:

"The officials, who spoke on condition of anonymity because they were not authorized to speak publicly about Geithner's plan, said it will have three major parts. One part will be an effort Geithner spoke about last month which would be the creation of a public-private partnership to back purchases of bad assets by private investors.

A second part of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF. That program is providing loans for investors to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans. Under Geithner's proposal, this program would be expanded to support investors' purchases of banks' toxic assets.

The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets.

When Geithner announced the administration's overhaul of the troubled financial rescue program on Feb. 10, it was widely panned by investors with the Dow Jones industrial average plunging by 380 points.

Geithner's new plan on toxic assets would attack what many analysts see as the major failing of the bank rescue effort so far, the failure to rid banks' of more than $1 trillion in bad loans and other troubled assets weighing down banks' books. As a result, banks have been unable to shake off the effects of the worst financial crisis to hit the country in seven decades."


Bottom-line is what they've done so far isn't working. They're scared, really scared. Could a major bank be in REAL trouble? And if a major bank failed what the market do? Imagine the fear of investors and the unmitigated selling that would take place. I was not complete on board with the naysayers predicting we could see 400 on the S&P 500, but now I beginning to see it as a real possibility. This kind of stuff being released on the weekend following a quadruple witching where the market was weakening is exactly why I shy away from trading on expiration weeks and have made it a rule to be OUT going into the new contract period. Imagine what all those people who loaded up short going into the close are thinking now. This news will probably pop the market higher to S&P 500 - 800 level, but I believe if it does it will fade in less than a week. If it breaks the 800 level though the bulls could be in control. Nonetheless it's another wait and see week, especially on Monday.

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