Perhaps after this bailout news is out of the way one way or the other, things can go back to being relatively normal on Wall Street. I somehow doubt it, but hopefully they can. I will still wait for the IBD follow-through day, but there are few stocks setting up in great patterns and no leadership, so even if we get one, I don't know that it will amount to much.
Not much else to say. There is no reason to be trading right now and sometimes that's how it is in the market. Remain patient and let's hope a better atmosphere to make money in comes along soon.
I didn't get to check out any of the hearings today, but reading through some articles, I have to say it is somewhat good to hear that Congress is not just rolling over and doing whatever Paulson and Bernanke wants. I hope they put up more of a fight. Two things that stood out to me that makes me even more upset about this idea is that they want to pay significantly above current values for these toxic assets (in order to get the banks to participate according to Big Ben) and also that the taxpayer gets no equity stake in these companies that we bailout. As if the bailout itself wasn't bad enough, we also have to give them sweetheart deals and allow them to keep all the profits if these sweetheart deals allow them to continue on doing business?? That truly sounds awful and downright corrupt.
I read a few articles today about how Sweden faced a similar situation in the early nineties, and how by receiving equity in exchange for providing capital to these banks. This equity in the long run allowed taxpayers to get off with a relatively low bill but at the same time forced banks to pay for their mistakes. Moral hazard wasn't running wild as it is now because the banks were forced to write down their losses and could not just dump them on the taxpayer without a heavy cost to their own business. They actually did have to pay for their mistakes. I am not an economist, but that sounds like common sense to me, along with the morally right way to do this. So why isn't it being considered? Well, we all know common sense and Washington don't mix, let along morals and Washington, but if this does pass the way Paulson wants it to pass, it will be a complete farce and quite possibly the biggest fleecing of honest Americans in history. Let's hope Congress pushes him on this and does take its time before approving this deal. Good luck Wednesday.