Bank Nationalization Day Near? ~ The Risk Averse Alert

Thursday, January 22, 2009

Bank Nationalization Day Near?

All the chitter chatter on CNBC today about bank nationalization ... where did it come from?

Are you concerned about the financial future? Do you fear the worst?

Then, as soon as you finish reading, write your state's U.S. Senators and relay what Schumer learned from me today:
Dear Senator Schumer:

Why is AIG being allowed to auction off its most profitable businesses?

Why is not the government taking over these units in exchange for backing all the bad CDS AIG wrote?

Seeing AIG's Asian Life Assurance business unit is profitable and seeing how tax liabilities are bound to rise as a consequence of financial bailouts, does it not make sense that our Federal government receive the benefit of revenue streams from businesses whose irresponsible actions have necessitated a capital infusion from the taxpayer? It is bad enough AIG's rescue became necessary. But that we allow legitimate revenue streams go to the highest bidder borders on criminal insanity.

Tom Chechatka
Rochester, NY

If you're interested I elaborate these thoughts further in, "Nationalization is as American as Apple Pie."

The question is whether bank nationalization is, in fact, a done deal. If so, Hellooo Melt-up!

Here's an oddity for you. With all the financial fear being played up these days ... where's the rush into short-term U.S. Treasuries?


Oh, and one more thing. Those who speak of a "bubble" in Treasuries? Not if the banking system is nationalized it would seem. Uncle Sam's AAA rating surely would be more greatly assured with the benefit of nationalized revenue streams.

These are interesting times, indeed.

And I really like what I am seeing under the stock market's covers...


It's like early-April '08 ... but better. Lots more relative strength upside potential here ... with the NYSE Bullish Percent positively positioned above its 200-day moving average ... and bullishly diverging from the NYSE Composite Index's performance ... much like the NYSE Cumulative Advance-Decline line (presented yesterday).

Better still (relative to last April) the 200-day moving average on the NYSE Bullish Percent Index is, in fact, rising off a bottom.

All things considered here — technically speaking that is — underlying strength, having been building these past couple months, finds this measure (and its derivatives) at a critical inflection point ... precisely as you'd expect just prior to a melt-up.

Fast Money
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