Aug 6, 2007 - Issue #070
Fed to the Rescue?
Dow score card for the week ending 8/3/07.
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
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.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!