CRISIS

This whole FNM and FRE deal is amazing. What is the government thinking??? I thought America was a free capital market system and we don’t allow the government to affect the wheel of capitalism. This is so contrary to what american politicians talk. They don’t walk their talk, let the banks fail!! let FNM and FRE fail. It has been over 5 year now that accountants have been questioning the value of the derivatives on FNM books, it is not a overnight thing that happened it was in the making a long time but as usual no one does nothing till it is too late.
We might get a bounce here because of the news but we will see that same thing that happened in March with the Bear Sterns bailout and we ended bouncing and selling off again. I think the same will happen here. I think 10500 on the DOW and 1200 on the S&P are magnets right now.
Folks we are just in the beginning of bear market and I think we will ultimately be around 7500 on the DOW and Nasdaq will tag 1250 before the Bear market is over.
Only fools will be here trying to buy and yes call me crazy again but within the next 24 months the banking system will be in alot worst condition than we are now and we will virtually be in a no mans land in the financials. What I think is we will have more IndyMac scenarios and more and more people will cause run on banks and totally crush the banking system. I hope I am wrong but Americans don’t like to face reality and that's the ultimate problem.
I still think Citibank sees below $10 and this FNM bounce is just that a bounce and we will ultimately be sub $5 on that crap soon enough.
This week we have GOOG and IBM earnings so watch to see how the overvalued TECH land does.


Have a great trading week.

MARKETJEDI