I don't want to go through another week like this one again. Monday seems like months ago. If you've been active in this market, it should. To me, BAC buying MER happened lifetimes ago. This week is so dense with historical events, it seems like we're going through a 9/11 every morning, and again every night. The insanity is the only thing keeping me from collapsing in a heap.
Today the wheels absolutely came off. Britain bans short selling. The US plans to ban short selling. The New York Attorney General announces criminal investigations of short sellers. The Federal Government plans to gather their chiefs (particularly those follicularly challenge) over the weekend to put together a plan to "fix" everything.
Earlier today, I was distressed to think that – once again – I'd have to wait several months before things were ready to short again. I think the government shenanigans are going to be a huge time saver. I'm going to go out on a limb here and say that, yes, this blatant socialist interference with the markets will push them higher, and that will create a golden shorting opportunity for which otherwise we'd have to patiently wait. And then, come October, earnings will start to roll in, and it will be plainly evident that corporate America's equities are a poor place to have your money. So a lot of people are going to sell. And – – as of this writing – – selling stocks is still permitted in this formerly great nation of ours.
Someone emailed me to ask if I thought put options would be banned. I would have formerly laughed this off as the musings of someone wearing an aluminum foil hat. Not anymore. It seems absolutely plausible. It even seems within reason that the government would shut down stock exchanges. They did in Russia. Hey, Russia isn't the U.S., but it's not the Congo either. That's a large, powerful, highly industrialized country. And they shuttered the exchange to restore what they think of as "order."
I've glanced at other sites, and there's a ton of electronic ink being spilled on how wretched the government is. At least, that's how thinking people regard it. See, banning short-selling is a politically attractive stance. I mean, why would John Q. Public have a problem with the rumor-spreading short-sellers who……….good God!…………want to see stocks go down in price! ………getting banned? Bears are about as popular as the tax man. Naturally the vast majority of the nation (most of whom, as with any normal distribution, aren't the sharpest knives in the drawer).
I am going to carefully prepare my coming trades. Provided that put options are still legal, I'm going to buy a lot of them. Not necessarily tomorrow, but soon. The next fall in prices…….and it is coming, make no mistake………is going to make this week look like Mr. Rogers Neighborhood. And I firmly believe that we are heading to a level on the Dow below 9,000 by the middle of next year.
