Time to Buy When Washington Panics Over the Stock Market ~ The Risk Averse Alert

Thursday, October 02, 2008

Time to Buy When Washington Panics Over the Stock Market

How can the stock market possibly collapse with so many mainstream eyes turned to it? My goodness, even the Vice Presidential candidates are talking about it! Are you kidding me? Can anyone name me the last time that happened?

The facts of the matter are this...
  1. Wall Street's power has been greatly diminished with the collapse of Structured Finance.

  2. The demands for a bailout bill do not originate in lower Manhattan. Rather their origin is the City of London.

  3. The U.S. House of Representatives has stood up to this, objecting to the provision in the Paulson plan allowing "foreign banks" to sell their worthless securities to the TARP.

  4. Both Presidential candidates voted Yes for the Paulson plan.

  5. A widening divide transcending political parties has broken into the open.

  6. The Tory press — both left and right — is losing its sway over public opinion.

  7. The prospect of chaos breaking into the open is freely being discussed by people in positions of authority and should not be seen as some attempt to forecast the future. Rather it should be judged as a direct threat against the continuance of domestic Tranquility.

  8. The need for calm, for thoughtfulness, for courage, for principle has never been greater.

So, these are some of the underlying elements providing a backdrop to the present moment.

Every opportunity I get to say, "There is nothing to fear, but fear itself," I take it.

Every opportunity I get to express my contempt for those who align with the very same tyranny our nation was formed to oppose, I speak it.

Listen, the stock market is not the economy. The stock market is not America. Rather, Wall Street has become like Rome. And you know what they say, when in Rome do as the Romans do. That's as far as my interest goes.

I will walk their walk, but I certainly will not talk their talk.

When I was a child, I spoke as a child, I understood as a child, I thought as a child; but when I became a man, I put away childish things.

Wall Street has lost the unique American quality for abiding fair and decent regulation, and instead has become a pathetic satrap of the City of London, who like a spoiled child will not be restrained. So, I will not speak their language.

I only wish to somehow thrive as their game meets a grave crisis that, even now, is shaking the world to its very foundation. If I can help a few friends in the process, fanfreekintastic.

Let me ask you. Is it any wonder the people of the United States are revolting against "Wall Street?" Is it any wonder the switchboards of Congress have been bombarded with rage against this Paulson "bailout" plan? This thing IS treason!

Just read the U.S. Constitution's Preamble. On every point we can see with our own eyes how the open policy of those who claim our generation's union of Wall and Main somehow is vitally "American" truly defile this nation's principled intention.

Don't get me wrong. I am not suggesting the institutions of private capitalism do no good. Rather, I am only saying they must do much better if they are to remain viable. So, politicians who argue, "this is not the time for assigning blame," could not possibly be more wrong.

Look, Wall Street will survive the coming bankruptcy reorganization. Wall Street will thrive when the Bank of the United States is reconstituted. Wall Street will truly become "the financial capital of the world" when a credit-based system of fixed exchange rates among all nations along the lines of the Bretton Woods agreement are re-instituted.

Anyone who argues otherwise simply should be ignored.

So, that's my story and I'm sticking to it. This is where we are at. Just because the mainstream media is not on board does nothing to make truth about this moment in history any less real.

Listen, these folks were completely behind the curve in Y2k — arguing a technology-led "New Era." Being a market historian, I was all over that.

They moaned like lost children trapped in a war zone when NASDAQ approached 1000 late in '02. Right about that time things were "stabilized" with "the greatest flood of liquidity since Noah" (quoting Robert Hormats from Goldman Sachs) ... and in February '03 the Elliott Wave Guy recognized low-risk opportunity was on the long side of Monsieur Market, seeing this through the prism of the very same technical measures I frequently present here.

Today, they sow seeds of panic. Well, I am not panicking just because a bunch of blind, pin-headed mice tell me that's what I should do. To quote President Bust's daddy, "Na ga da it."

All the various technical measures plotted on daily charts presented here from time to time reveal divergence upon divergence coincident with today's decline in major indexes to (and in some cases through) lows set this past Monday (9.29.08). This is positive indication a bottom is forming and, indeed, may be at hand.

Fast Money
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