The House Votes and then the Market Votes

Panic struck investors around the world today. Congress failed to pass the much-hyped financial bailout plan. Despite all the rumors of cheery bi-partisan support, it was just business as usual on Capital Hill. I didn’t think they had it in ‘em.

But considering Congress’ recent history… I don’t know why I expected anything different.
And so the Dow fell 748 points, the biggest one-day point drop ever. That’s over 6%. The S&P 500 fell 8.6%, its worst single day since “Black Monday” in 1987.The NASDAQ fell a stunning 9%. Gold held up nicely. It rose around $20 to around $915. All other commodities were slammed. Oil fell $10 for instance, and most oil and energy stocks plummeted in tandem. World wide ETF's were creamed. Brazil etf's down 15%.

Today I exercised a very successful put option on a brazilian bank stock UBB returning 400% in 10 days. Yes the sun will come up tomorrow.

Personally I think we need to have a year of Jubilee and foregive all debtors their home mortgage balance up to $250,00. At the same time credit the mortgage holder bank or other financial debt holder the same sum of $250,00 and then let the markets determine the rapidly rising price of gold. A simple solution to a complex problem. Hummm--send this post on to your congressman and senator--I think they are in great need of some fresh ideas and help in these days of financial meltdown.

I am reading "A Demon of Our Own Design" by Richard Bookstabber--he correctly predicted this current crisis in this book published in 2007. I have recently reread "When Genius Failed" the rise and fall of Long-Term Capital Management by Roger Lowenstein. It is a shame that most members of congress spend their time getting reelected instead of reading these two books.

Do the opposite of clicker sense blogger sentiment!!!

Please review my previous posts--In Novemeber 21, 2007 I correctly identified the current bear market.

I look for the $INDU to drop as low as 7500 before this current bear market is over. I will not buy any gold mining stocks until the current liqudity crisis is resolved because investors are dumping everything in their rush to cash. Oil could drop severely to as low as $25 to $30 if deflation continues. No wonder the Fed quit releasing M3 money supply numbers. If shadow statistics are correct this financial metdown can be traced to the fed worrying too much about inflation instead of minding their own store.

One of my close childhood friends used to fight with his older brother at the dinner table--whenever this occurred the father would admonish them--"boys mind your own plate." I personally do not think a government bailout will save our financial system until we return to a gold standard and start minding our own plate.