More Handouts!

by Larry Levin

President-Elect Obama's honeymoon has come to an abrupt end - the markets are front and center again. All three indices were hammered again Thursday, notching a near 1,000 point 2-day decline in the Dow. The platitudes and banalities of the election have been replaced with reality: economic news is bad and getting worse. Next up - the biggie - monthly jobs data. Friday should be interesting.

What are some spending categories people cut back on when things get tough? If you owned an older car, you would probably service it regularly in order to put off buying a new one. You would certainly spend less on high ticket retail items. And I'm certain that if you're job was on the line you would cut back on your high-roller trips to Las Vegas . Agreed? Well, you must because all three are in the news today.

The automakers are back in Washington DC , hat in hand, begging for another handout from Congress. But does CONgress actually earn anything? No, of course not. Congress collects taxes from us via the threat of force and jail time, so in actuality, the automakers are asking for YOUR money. But is that true either? Not really. You see, the idiots who are elected and reelected continuously don't give a damn about fiscal responsibility so they spend hundreds of billions more than they take from you every year.

Therefore, it's more appropriate to say: GM, Ford, and Chrysler and begging CONgress to ask the Chinese and Japanese governments for a loan with the promise that YOU will repay it - WITH INTEREST. Will it happen like that? Youbetcha!

Will you be asked to vote on the idea? No. Will your CONgressman ask you if you would like to be liable for the fat pensions of the UAW? No way. Will your CONgressman ask you if you and your children would like to be weighed down by this debt, along with the accompanying burden of interest? HELL NO!

Those friggin' morons you just reelected don't give a rat's @ss about you now that you've given them their power back. I read a good phrase the other day that fits well here: Giving CONgress power and money is like giving teenage boys whiskey and the car keys. It just isn't going to end well.

Remember how the TARP (Wall Street bailout bill) was going to be used to buy bad debts from banks? Yeah, well, not so much. It's more like a hodgepodge of whatever goes and should be named the Whatever The Hell We Want To Do With It Bill. A trial balloon was floated today and discussed on television. The idiots you reelected to CONgress are considering using that money to - get this - FUND AUTO LOANS!

I'm sorry, did I miss something? Was this brought up when this pig was being voted on? Oh no, of course not. Why was I against that preposterous bill from the beginning? There were many reasons, but the main reason was that I don't trust the circus clowns in CONgress one iota!

When I'm done with this I'll be contacting the reelected jokers in CONgress that are supposed to represent me. No, I didn't vote for any of them. In the coming emails and phone calls I will be asking them NOT to do this with the TARP money. I suggest you do the same.

It will go something like this ---

Dear CONgressman,

Stop the madness! Please no more bailouts or bridge loans that can't be repaid. You are robbing Peter to pay Paul. And why are the CEO's and board members aloud to keep their jobs when millions are about to lose theirs? They are the ones responsible for running their companies into the ground! Moreover, why are you following their example?

U.S Taxpayer

In other news, shares of Las Vegas Sands (LVS) were pummeled today, dropping 33% when LVS said it may not be able to make good on an upcoming bond payment. Yep, that'll do it every time.

The company's auditors, PricewaterhouseCoopers LLP, said in a filing that if Sands does default on debt covenants, lenders could demand to be repaid sooner, something that raises substantial doubt about the company's ability to continue as a going concern.

Shares of LVS rallied a bit into the close as some bottom pickers hoped the billionaire major shareholder (Sheldon Adelson) would pump some of his own money into the company. To that I must laugh. Excuse me, won't you? AAAAhahahahah aaaaaa hahahahahahahaaaaaaaaaaaaaaaaaaaaaaaa, oh mercy! The way it's going now, that would be UNamerican. What the hell Sheldon, just tap Uncle Sugar's TARP sludge fund for a few billion - it's all the rage.

This morning we found out that Europe and Britain cut short term rates 1/2% and 1.5% respectively and got zero bang for their buck. Their markets were down between 4-5% while Asian markets were even weaker. A year ago rate cuts were all the rage, and the excitement leading up to the cuts was a sight to behold since everyone was sure lower rates will fix everything. They didn't, they can't. I believe that the majority of market participants are now aware of what pushing on a string looks like. The central banks can pour liquidity into commercial banks and lower rates to try to entice borrowers, but they cannot force any to lend or people to come in for a loan. The horse is still standing at the trough but refuses to drink any more of the central bank Kool-Aid.

As I have said before, Japan tried the same drill 18 years ago and to this day it still has not worked; and Japan's interest are virtually 0%. The US is following Japan's playbook to the letter, even though it didn't work. Who would do such a thing? Only feckless politicians. What's more, some so-called experts believe the US should also have its interest rate at 0%. Never mind that it won't work they say, we have to do something.


Previous Day's Trading Room Results:

Trade Date: 11/6/08

E-Mini S&P Trades*
(before fees and commissions):

1) VA sell @ 8:35am at 948.00 = -1.75 (1 lot)

2) Multiple entries were just missed as the market fell apart.

3) Algorithm positions (33)...combined daily total...+27.25

ZB (30 Year Bond) Trades*
(before fees and commissions):


1) No trades today.



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