Friday, October 3, 2008

Wall Street As i See It: The Truth Hurts!!

Wall Street Volatility: Hedge Funds Unwinding??

The recent signs of desperation by US authorities seeking a USD 700B bailout plan for Wall Street is clearly an admission by the administration on the seriousness of the problem that plagued the country's financial system and the recently announced economic datas (declining manufacturing data and rising unemployment) further indicate that the country's real economy is heading for further steep decline.

Knowing these facts together with mixed comments by those so called gurus (80% bullshitters) interviewed on CNBC and Bloomberg, there are indeed uncertainties over the workability of this USD 700B bailout package. It doesn't matter how they want to term it. Rescue Plan or a Bailout Plan? Just a propaganda delusion trick! The fact remained no matter how want to call it. US is already in recession and this time it is going to take a long time before they can recover.

With this uncertain scenario, one only need to ask themselves this question: Is Dow attractive enough for hedge funds to remain invested in there? Don't listen to Bernanke or Paulson. They are just political puppets and their credibilities have been flushed down the drain ever since the subprime problems emerged. All their lies and assurances only delayed the truth of this financial holocaust.
We only need to understand the behaviour of hedge fund here. Would any hedge fund place their money on markets with gloomy days ahead? It would be stupid for any of them to do so. Only logical thing for any hedge fund manager to do is to cash out now. And how are they going to do it? They are going to make full use of news and economic datas to unwind their position. That should explains the volatile behaviour of Dow.
As a layman, it would be advisable and cash out on strength and consolidate your finances. Do not tread the equities as you would most probably be getting yourself into trouble. Do not hold any long term view for the time being. If you intend to trade the volatility, use the 'hit and run' technique with a 5% stop loss point.
From where i stand, it would be better for one to stay clear as the return is not worth taking the risk, not to mention those stress involved.
Ignore George Bush and with all due respect, ignore Warren Buffet too. Bush doesn't know a thing about economy and it doesn't hurt Warren Buffet at all if he makes a USD 10B mistake. Can anyone of you afford further losses?
In other words, It is Time to Fold!! We are not even near the bottom yet. Better bet is to trade the Dow futures. Short Dow futures on Strength. Concentrate and Be Patient. Hit only when you feel the Time is Right.
For God sake, learn to filter off those interviews over CNBC and Bloomberg. Full of garbage. Full of baseless false hopes. Avoid those who talked with a saleman's pitch for example, that Kudlow guy. I bet if he put his money where his mouth is, he would be Dead years ago.

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