Bailout: Buy the rumour, sell the news

I am 90 delta the vote is to give $300B, and the rest in installments with regular review.

No one in their right mind hands over $700B in a week. Even $300B is insane imo, especially since neither Paulson or Bernanke may be at their posts in forty or so days.

Futher, Paulson asked for $700B, he hopes to get $350. That is standard negotiation tactics.

nitro
 
There is a rule in pit trading. When you see a broker running into your pit and asks you to make a decision fast, it is wrong for you.

Paulson is the broker...

nitro
 
Quote from nitro:

I am 90 delta the vote is to give $300B, and the rest in installments with regular review.

No one in their right mind hands over $700B in a week. Even $300 is insane imo, especially since neither Paulson or Bernanke may be at their posts in forty or so days.

Futher, Paulson asked for $700B, he hopes to get $350. That is standard negotiation tactics.

nitro
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you should read this. there are some amazing things e.g. about MtM or CEO comp:
http://money.cnn.com/2008/09/28/news/pdf/firstdraft.pdf
 
Quote from JamesVU2000:

The market is oversold, if you plan on shorting this thing I wouldnt due it for longer than a day.
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There can definitely be bear market rallies. Everyone wants an elixir to get the bull back. It will only happen naturally, when all the problems have been flushed.

All this plan does is take away zero. There are tons of levels between 1 and 1215 SPX.

nitro
 
I understand all the longterm issues, and I know a new high in the sp 500 is out of the question, but there has been a lot of news already.
 
to send spx below 1000 or even 1100 you need some really bad news. what is it going to be? many many bad stuff is priced in - just look at low forward P/Es - which are likely massaged down to surprise to the upside. this is not 30+ stuff like in 1920-30s. and so much cash everywhere.

yup - unemployment to 7%. so what...

i do not say we go up but i am afraid to be a big bear - always when i take short pos in ssf i feel uncomfortable recently...
 
The VIX went out at about 35 on Friday for a reason. There is lots of uncertainty either way.

What I am saying is that people that think this bailout is some sort of elixir for the intermediate term are not being objective, imo.

In the short term, anything can happen. We could see 1282 in a week for all I know.

nitro
 
t-bills yields went up significantly on friday. even more importantly there was a big move up in eurodollar futures, treasury yield curve flattened.... and all that with big uncertainty if the plan is going to be passed at all.

is this plan really needed when all big names already defaulted or merged? (save WB)
i do not know. certainly it will not hurt to get the credit moving better.

still we are for some rough times - likely nerve wrecking rangebound environment. maybe to sell straddles is the best way to play it.
 
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