With all the chicanery going on, it seems a good time to get into SRS. I've got a stop on this at 48.17. And at least this one is widely-traded, unlike some other inverse ETFs I could name. (Purchase price of SRS: 2,000 @ 51.4473)

"The Federal Open Market Committee decided today to keep
its target range for the federal funds rate at 0 to 1/4 percent. The
Committee continues to anticipate that economic conditions are likely
to warrant exceptionally low levels of the federal funds rate for some
time. Information received since the Committee met in December suggests that
the economy has weakened further. Industrial production, housing
starts, and employment have continued to decline steeply, as consumers
and businesses have cut back spending. Furthermore, global demand
appears to be slowing significantly. Conditions in some financial
markets have improved, in part reflecting government efforts to provide
liquidity and strengthen financial institutions; nevertheless, credit
conditions for households and firms remain extremely tight. The
Committee anticipates that a gradual recovery in economic activity will
begin later this year, but the downside risks to that outlook are
significant."

I've been bellyaching a lot lately about no trend, but now with a bit of perspective, we actually have had a nice upward trend since last Friday. A full 70 points in just a few trading sessions! I feel bad for having missed it (even worse – – fighting it!). I'll be interesting to see what, if any, effect the Fed's announcement has this afternoon. Someone commented recently that the only thing they'd have to announce is Bernanke's shopping list, since, at 0%, there's not much else to do.

I have been a utilities bear off and on, and just a couple of days ago, I mentioned how I was getting back into SDP in a big way. Never again. Let me explain why.

In the past, when people would talk about how market makers would "gun for their stops", I would take these as simply rantings of a person who didn't want to take responsibility for his own mistakes. But, in some cases, there really is truth to this.

SDP (which is a double inverse based on the Dow Jones Utilities Index) is quite thinly traded. FAS, for example, was only introduced last November, and it already trades about 50-80 million shares per day. SDP, on the other hand, trades maybe fifty thousand shares a day.

So this morning, not long after the open, I found myself completely stopped out of two large SDP positions. I was puzzled, since the market wasn't moving that dramatically. So I took a look at the graph. Note the highlighted portion:

01

Yep! That's my trade! Nearly 10% below the "normal" trading of the day.

So I got taken. From now on, if I want to do anything with utilities, I'm going to stock with other instruments, like XLU. Good-bye, and good-riddance, SDP. I've had enough.

Even though seven years have passed, Enron is probably a company whose scandal you remember. The simplified version is something like this: you had an organization which:

1. Had some performing assets and some very bad investments;
2. Set up some "off-balance partnerships" into which they could move the bad investments;
3. Propped up an untenable situation by leaving only the good stuff, thus creating the illusion of prosperity

So I ask you this: what is the difference between what Enron did and what the US Government is about to do with the "bad bank" proposal? Remember, people went to prison or put bullets through their own heads because of Enron.

Indeed, I would say what Enron did was actually better than what the Feds are proposing, because at least those who suffered due to the fraud did so at their own choosing. In other words, they elected to buy (and hold on to) Enron stock. ENE was falling a long, long time before the scandal broke and the stock truly collapsed. Anyone with even the most basic knowledge of a chart would have exited ENE safely.

The bad bank, however, forces the entire country to be saddled with toxic "assets." There isn't a way to sell.

I don't imagine anyone is going to wind up going to prison over this one. It's a million times worse than Enron ever was.