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Aug 6, 2007 - Issue #070

Fed to the Rescue?

DJ-30: 13181.91 -83.56 -0.63%. In the Real World: 54.06 -0.35 -0.64%.

UP: 13, Down: 17.

Trends (weekly): This is the subjective part.

Rising 8 (-4) 27%:

BA, GE, HPQ, IBM, MMM, MRK, UTX, VZ.

Consolidating 9 (+2) 30%:

CAT, GM, -*HON, -*INTC, KO, MCD, PG, T, -*XOM.

Declining 13 (+2) 43%:

AA, AIG, AXP, C, DD, -*DIS, HD, JNJ, JPM, MO, -*MSFT, PFE, WMT.

+/- denotes change of direction.

* denotes change of category.

Fed to the Rescue?

The primary question on Larry Kudlow's mind (CNBC's Kudlow & Company) for his guest panelists, following the Bear Stearns statement that the credit market conditions were the worst they'ed seen in 22 years, seemed to be, "Should the Fed announce that they will be the 'lender of last resort'?"

He didn't get much affirmative response from his guests; quite the contrary.

The underlying premise of the question seemed to be that, if only the Fed would do a little "hand holding", everything would be OK. Gee, if only it were that easy, we'd all be rich!

Irregardless of whatever statement the Fed may or may not make on Tuesday's meeting, the only realistic course of action any investor/trader can follow is to have a pre-arranged trading plan and stick to it.

Hoping (there's that word again) for someone else to come along and "kiss your boo-boo and make it better" is, in my opinion, infantile in the extreme.

The private equity gang created this mess with their "deals" which, by the way, were loaded with fat fees to enrich themselves. Aided and abetted by Wall Street investment banks (more fat fees and commissions) who then unloaded these "dogs" onto their greedy customer lists.

Can you believe these morons? These are, supposedly, sophisticated "qualified" investors!!!

Learn from this mess. If heads roll, so be it. Write it off, move on, and resolve to be smarter next time. "Smarter" meaning not to invest in non-liquid deals where no one knows how to value the holdings (or is afraid to tell you what they're really worth) and the only people making money on these deals are those pushing them.