MARKET COMMENT
October 1, 2008, Courtesy of Dave Fry, at ETF Digest.
Highlight: "…The bill has gone from 3 pages to over 400 and growing." [Wow! – stunning and horrifying at once. – me]
“I couldn’t have gotten this deal six months ago,” so says Warren Buffett regarding his GE score. Perhaps one might add, “…and you never will either, so bug out!” The gang at CNBC is pretty excited to have him as an owner. I wonder if they’ll give him his own show. How about calling it “My Big Money!”?
The congressional bailout bucket brigade is meeting again. They’re already decorating the proposal with all manner of non-bailout related nonsense like: renewable energy tax incentives, relief from the AMT and weird stuff including a “Mental Health Parity” provision, which would require health insurance companies to cover mental illness at parity with physical illness etc. The taxpayer will no doubt need the mental health provisions right? The bill has gone from 3 pages to over 400 and growing.
This entire episode just demonstrates what a cesspool Washington DC is. What a joke!
Speaking of sewage, the bailout peddlers are much too focused on this bailout bill and ignoring other more serious news like ISM data where today’s report showed manufacturing in recession. Further, earnings estimates continue to be revised lower for the third quarter. In April earnings were estimated to be up 17%, in July by 12% and now a negative 1.7%. This is hardly the stuff for a rally.
Volume was light today as investors are seized-up once again on “congress watch”. Overall breadth was negative.
I really didn’t want to post today since it seems futile given impending news and associated fireworks. But someone put a gun to my head and said, “Do it or no cocktail hour for you bub!” So the deed is done and now I’ll have a beer thank you very much.
Buffett is drinking coca cola out of a champagne glass tonight while no doubt trolling for more victims. Am I jealous? You bet!
This entire bailout episode has many including me pretty upset. One thing is that it’s revealed to some and reinforced to many skeptics how dysfunctional our government and politics have become. Money and power is the name of the game in DC.
No doubt there will be a deal of some kind. Then we’ll see if they sell the news like they did last Monday before the last so-called deal failed.
But investors are ignoring the real economic and earnings news while focusing exclusively on a bailout. That will come back to bite those that ignore reality I should think.
Have a pleasant evening.
Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SDS, QID, SIJ, SMN, SDP, IEF, GLD, DGP, EFA, EFU, EEM, EEV and FXI.
