Sunday morning rant.

Tony has a good sunday morning rant.

Most of which I agree with.

One thing I have to say about the stimulus package, which I have the thesis that the market psychologically won't turn around until we abandon all hope... and a sustainable bottom won't be reached until then. Regardless of if it will or won't help, it doesn't matter... "We" have to "give up".

But the good thing about the Stimulus package, is that it helps to return some confidence to some people.. this seems counter to my earlier phrase... I guess, and I'm just Waging at this stuff. but it does keep the villagers from breaking out the torches and pitchforks. And that ... well I refuse to take sides, but it does bode well for economic stability.... if that is a good thing.

I still ... In Psychology and criminology they have this thing called "institutionalizing". What one is doing is increasing dependence on outside forces to solve problems, and it can be a "death Spiral" "feedback loop", however you want to phrase it. What I Pose for Thought, is that if we "nationalize banks" we are more likely to "institutionalize them"... I've heard this argument all week....

In the macro sense, we are not Sweden, or Japan. We have Thousands of financial institutions. Having Citigroup a "Zombie" bank... I don't mean to be an asshole, but couldn't happen to a better group of people. As a "Cautionary tail" for the future, or to talk about "Moral Hazard"... Letting Citigroup be a Zombie.... seems like a fine idea. It's not like a Citi credit card has crossed my desk, and I've been all "Thank god For Citi" I could never have received this credit without them. Sweden and japan ... well I'd pose that they have less diversification in Financial institutions, so Our economy can adapt to a different system than the one in the past. In fact I'm soft shoeing this... to be honest I think there are a few million people out there who would be better off to get credit from people besides BOA or C. There is another side of their business, which is "High end Finance", like ability to get Multi billion dollar deals done, But it's hard for me to cry for this part of finance... and seems like the government of the united states doesn't particularly have an interest in.... Citi providing financing so Pizer buying Wyeth, that seems like a market problem.

What I'm getting at is that, we need to apply some of the social lessons we have learned over past decades, We need to give them a "hand up", and not a "hand out". nationalization will just scare more capital from financial institutions. Than it will attract to it.They also could get lazy on their willingness to raise their own capital. The result could be, More need for financial institutions for government help. I start getting all "Free market", I'd rather see Citi Liquidated than see it nationalized. I know this is a Kudlow Theme... but Even a blind squirrel...

and again... nationalization isn't the problem with the market... it's a Psychological problem, we need to give up all hope. and we won't get a sustained bottom until all the "Fixes" are done being hoped for.

as I recall we have this "stimulus hope" finished.
bank rescue hope is done.
We may have to work through hope on:
"mark to market" will save us.
"nationalization" will save us.


As my theme this week has been... we will not find a bottom until we "Abandon all hope"