Manic Depressive Market Part II

by Larry Levin

The manic-depressive market continued today - early on the Dow was +400, then got depressed and fell to -200. By the close, it was only down -76.62. On the other hand, the NASDAQ was just depressed; it closed down -3.54%. The wild swings should be considered normal today; after all, Monday's rally was an eye-popping +11%.

The Treasury Department said today that it is currently developing ANOTHER (alternative) approach to provide capital to certain failing firms on a case-by-case basis. The department did not go into many details, only describing the plan as for systemically significant failing institutions. Apparently the Treasury Department itself doesn't have much faith in the current alphabet soup of bailout and handout programs.

The new program Treasury is referring to is buried in the agency's description of executive compensation standards. In other words, this new program that they won't even mention yet was slipped into the TARP bill by sleight of hand.

So this is ANOTHER way Mikhail Paulson and Vladimir Bernanke have LIED to us, via omission this time.

"Oh it's buried in the description of executive compensation" they'll say.

"You see that line? I know it doesn't really sound like we can use that line to defend our new program, but who cares anyway? Words mean whatever we want them to mean. It allows us to rob Peter to pay Paul - yeah, right there."

"What? Oh yeah, I know we didn't specifically mention this in any news conference, but we didn't mention using any of the $700-billion to buy into banks either."

So the Feds have directly LIED to you about the following in just one week's time:

1) FNM and FRE buying $40-billion per month in junk bonds, which is NOT included in the TARP. Did you vote on that?

2) The Treasury Department guaranteed the $9-billion Mitsubishi loan to Morgan Stanley. Did you vote on that?

3) The Treasury Department used 36% of the TARP funds to buy bank shares, which was NEVER mentioned during the shakedown. Did you vote on that?

4) Now there is an additional, as of yet undisclosed, measure to stop the free markets from working. Did you vote on that?

5) Vote? What does it matter - they don't listen!



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