How to Press a Button in Under 100 Days ~ The Risk Averse Alert

Wednesday, April 29, 2009

How to Press a Button in Under 100 Days

There was so much lipstick applied to the GDP and Fed pigs today that even Revlon was up 8%. (Masterful management, Mr. Icahn ... NOT!)

Not that any wide reaching interest was buying it. Rather, there simply was no great interest selling into it. At least not today. However, tomorrow is another day...

Then comes May and "stress test" revelation the original two banks needing to raise capital ... which today was bumped to at least six ... might settle at an even dozen (out of a lowly nineteen financial institutions currently being scrutinized). That's my guess.

So, first piece of advice tonight is, if you can't already hear pigs squealing, better get your ears checked.


Once again the volume of shares exchanged on the Big Board tells all. M.I.A. are animal spirits necessary to keep the market levitated. This would be revealed by an expanding bid. Instead we see an interest willing to play chicken. Today this group did not sell. Instead, they held.

You would think by now most everyone would know where needed capital for the banking system will come from, because it's the same place where it came from last year. You're looking at it.

Do not for one second think Washington is on the case either. This from President Obama when asked during tonight's press conference what he found most humbling during his first 100 days in office:
"There are a lot of different power centers. I can't just press a button and suddenly have the bankers do exactly what I want."
This is a man who, before he was inaugurated, indicated during a 60 Minutes interview he was reading "The Defining Moment: FDR's Hundred Days and the Triumph of Hope" by Jonathan Alter.

The President must be a slow reader, because during FDR's first full day in office he declared a bank holiday, an act which gave the administration and Congress time to push the Emergency Banking Act through the legislative chain in only a matter of days. This paved the path for evaluating bank balance sheets, allowing solvent banks to quickly resume business.

About a week after taking office FDR delivered his First Fireside Chat. In it he confided with the American people that...
We have had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people’s funds. They had used the money entrusted to them in speculations and unwise loans. This was, of course, not true in the vast majority of our banks, but it was true in enough of them to shock the people of the United States, for a time, into a sense of insecurity and to put them into a frame of mind where they did not differentiate, but seemed to assume that the acts of a comparative few had tainted them all. And so it became the Government’s job to straighten out this situation and do it as quickly as possible. And that job is being performed.

Sounds like a man who not only knew how to push buttons, but had the courage to do so.

Far be it for me to pass harsh judgment on President Obama. Still there is a matter of patriotic duty one might wisely exercise in light of this contrast...

Fast Money
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