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Market Recap: Not Good

November 19, 2008 4:39 PM

womanthinking.jpgWell, I said that if we cleared 826 then 818 would be put into question and yesterday would be “off the board”. 826 cleared, it tried to reverse late and ran up to about 838. I was long at about 830 and knew we had to close positive on the day. I should have exited with a profit, but was going for the “close day” homerun. We had 45 minutes left, so positive was still possible, and I knew it would likely break big - one way or another. Once again, I got the other. You have to be correct on close days. Win big or lose big, there generally is little if anything in between.

At any rate, I am not sure were we are going now, but today was not good. New lows on the SP, but we still have the Dow low left at 7773. That is basically all that is left to defend here, other than the 2002 low of 768 on the SP. Risk is still very high, rather obviously. GM has to get the bailout or I see little, if any, chance of any low holding. I believe it is really as simple as that. Unfortunately, guessing on what Congress will do on that is going to be difficult, at best.

At least I was correct that yesterday’s move higher “just didn’t feel right”. The conviction just didn’t feel like it was there. No real explanation other than that.

All I know is I wish Obama was president as in right now. Letting GM fail is a big, big mistake, IMO, and he has stated he supports a bailout.  I 100% agree with this. I understand all the reasoning with the critics - they may fail anyhow, bad management, etc. etc.. I get all that. But failing in 2 years is a LOT better than failing now. The economy may be far better off then and they may make it. They need to get off this ideology and be pragmatic about this. If GM fails, we are going to likely see 10% unemployment. If $25 billion will keep all three afloat for 2 years or more, they have to do it. The country will lose a ton of that in lost sales taxes and unemployment benefits alone. I just don’t get it. I dislike bailouts as much as anyone. But at some point, you have to forget ideaology and just say - which outcome is worse?

The troubling part of the arguing over GM and the Big Three is this. Everyone is a skeptic about the motives of anyone that supports a bailout. Namely a payback for union support. When are we going to simply get back to doing what is in the nation’s best interest? Isn’t it possible that Obama supporting a bailout is because he is simply being pragmatic about whether allowing GM to fail is good or not? People need to stop being so skeptical about everything.  I just think any reasonable person has to conclude that it is worth $25 billion to maybe keep the Big Three afloat. Just add up the potential lost tax revenue, the unemployment benefits, etc, etc. They need to put politics aside here and make prudent choices. At some point, the big picture has to come into play. Whether you supported Obama or not, whether a democrat or republican, the economic issues facing the country right now are the worst since the depression, IMO, and now is not a time for politics.

Written by Tom@StockBlade.com · Filed Under SP Futures 

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