FED TO BUY $300 BILLION OF TREASURIES - QUANTITATIVE EASING ALERT!

[Swing low, sweet chariot. Comin' for to carry me home.]

PERFECT!  Good move by the Fed.  I would have liked it to have been larger than $1.25T...but can't really complain.

Next step needs to be changes to uptick rule and MTM.

We have to stablize the banks.

Full disclosure: I own 25k shares of Citi at a cost of $2.30

[Swing low, sweet chariot. Comin' for to carry me home.]

Oh and btw, if the dollar falls much (it won't), everyone else will just have to quantitatively ease (print) to equalize - they have no choice.

the UK is already quantitatively easing.  And, you're right, the dollar won't fall much, the EU economy is twice as bad as the U.S.

[Swing low, sweet chariot. Comin' for to carry me home.]

Opebo and Jmfcst agreeing on economics, cats and dogs living together...MASS HYSTERIA

yep, sure sign that the 2nd Coming is near!

After a long hiatus, I finally got back into the stock market.  My first buy, CAT, was a stimulus play, but Obama stimulus sucked and I hit my stop loss limit.  My second buy, PBR, which I sold today, almost recovered all my loses in CAT. 

Now, I am in Citigroup (C) at $2.30. The U.S. is NOT going to let Citi fail.  They claimed to be profitable in Jan and Feb.  And the reinstatement of the uptick rule and the changes to MTM will make help stabilize Citi.  It is either a $10 stock or a $0 stock.  I'm betting that it is a $10.

For the rest of the overall market...there is no reason to be long right now given the risks.  Better to play stocks that are receiving Federal protectsion, like C and BAC and F.

April will be a very crucial month.  Obama's team better have all their cards on the table by the end of April.  IMO.

One thing is for sure:  Fed chairman Ben does not want to deal with a depression on his watch.  He failed us miserably in 2007 and most of 2008, but he's had his game face on since taking rates to near zero.

[Swing low, sweet chariot. Comin' for to carry me home.]

Opebo and Jmfcst agreeing on economics, cats and dogs living together...MASS HYSTERIA

Actually, it tells me something as well...

EDIT:  Well, it tells me that ( to myself), but it tells me something more important - wait patiently and prepare.

look...though you and opebo have totally different economic viewpoints, both of your viewpoints never change, regardless of market conditions.  Both of you are willing to play chicken with icebergs.  I, on the other hand, am willing to temporarily change course in order to save the ship.

[Swing low, sweet chariot. Comin' for to carry me home.]

If you view me as being stubborn or unchangeable, so be it.  History has shown time and time again that the only way out of a debt-deflation is to default the bad debt. 

I don't consider the Great Depression of the 1930's as a "way out".

In any case, check out this video about the short squeeze on Citi's stock conversion:

http://online.wsj.com/article/SB123739700104873325.html#articleTabs%3Dvideo

[Swing low, sweet chariot. Comin' for to carry me home.]

In the GD, we used the same mechanisms that we're using today, just not in such great amount. 

huh?!  How can you say that?   The Hoover administration did next to nothing from Oct 1929 to early 1933 - Hoover believed the market would sort it all out.  The market did sort it all out - and the vast majority of Americans were huge losers.

Feb Chairman Ben is a huge student of the GD and he is doing everything the Fed didn't do from 29-33.  By the time FDR came into office, the patient was already dead. Chairman Ben, though MIA in 2007 and most of 2008, is trying to keep the patient alive.

[Swing low, sweet chariot. Comin' for to carry me home.]

Basically, what happened today is that Bernanke did not like Obama's stimulus (that's why Ben warned on 60Minutes about the lack of political will)...so Ben cranked up the printing presses and created his own stimulus.

[Swing low, sweet chariot. Comin' for to carry me home.]

That said, one aspect of this Bernanky printing I don't like is that the money goes to holders of securities - the very class which will not spend/cannot spend. 

YES!  I meant to point that out to you yesterday.  Obviously you get the picture: the Ben-stimulus is geared toward those liquid enough to able to take advantage of a good deal.

Spot on!

[Swing low, sweet chariot. Comin' for to carry me home.]

Sam,

Were you in agreement of the original $700B "bailout" last Sept-Oct?  Because, the way I see it, we were headed for an instant depression last fall, and the government intervention has bought some time for us to deleverage in an orderly manner so that, hopefully, we only end up with an severe recession.

If you don't agree with attempting to intervene in the markets last fall in some fashion, you and I will certainly never agree on current policy.

[Swing low, sweet chariot. Comin' for to carry me home.]

Because, the way I see it, we were headed for an instant depression last fall,

Instant depression then, worse and longer one now...  Perhaps even complete economic collapse.

As of right now (short term) we are MUCH better off than if the Fed had done nothing last fall.  That's a certainty.

In the long run, we may still go into a depression and maybe even a worse one.

When the next war comes, we may be better off surrendering than fighting, but I rather go down fighting.  At least then we have a chance to "win" even though victory will come at a high price.

Same thing in this economic situation.

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When private entities make bad bets, government's role is not to paper over the losses.  Rather, it is to ensure the pieces are broken up properly (that's why we have a Bankruptcy Code) and sold to the highest bidder. 

More importantly, it should ensure that those entities who have made good bets are protected from the destruction AND that those who depend on the private market for the livelihood (i.e. the masses) are protected, no matter how bad things get.

That's just it - government can NOT do that, it's not that powerful.  The economy is too big and too intertwined to isolate pain.

Our economy is based upon debt.  Debt requires confidence.  We allowed too much leverage.  We allowed insurance in the form of credit default swaps to be sold without regulation, now they total $55T (fifty-five trillion USD).  That kind of leverage creates an unstopable domino effect.  We can NOT sit on our hands and let it unwind on its own, doing so would put us in a >99% chance of another great depression.

And I'm not sure, with the current structure of our society (very few living on farms), that we could survive that as a nation.

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And I am not pleased that with the crisis we are facing, Congress is persuing AIG bonuses that were paid under legal and binding contracts.  It may very well be an outrage, but we have bigger fish to fry.