Coked out money managers and piker retail investors dove head first into banks today, on the thesis that the Government always makes things better. There was no fundamental reason to get long, with oil higher and Fannie Mae [[FNM]] /Freddie Mac [[FRE]] on the cusp of disaster.
In my opinion, this is the worst type of moral hazard:
Through innovative and historic measures, taken by the Fed and Treasury, they (Gov’t cheese makers) have morphed Wall Streeters into upright walking pigs, always willing to take a stab at socialism.
This, as you can understand, is not how free markets work.
With the credit crisis in full blown mode here, I wouldn’t touch the banks, unless of course I was managing money for the Iranian Sovereign Wealth Fund.
Eventually, as predicted by many, the cheese makers will run out of dairy, unable to make new cheese. Then, and only then, will the market be able to correct itself and eliminate the weak/corrupted players.
For the day, my losses were minimal, as long positions in National-Oilwell Varco, Inc. [[NOV]] , Barnes & Noble, Inc. [[BKS]] , Clean Energy Fuels Corp. [[CLNE]] and Wachovia Corporation [[WB]] , amongst 90% of my financial shorts, buoyed me.
In addition, I have built a small cash position of 5%, which will be used to buy [[FXP]] under $85 or [[SKF]] under $125.Comments »