Give Me A Fucking Break

OK, I know some of you have been waiting for this, so I am going to post.

But Holy Shit, not even I expected that latest round of bullshit claptrap from the government.

Hank Paulson, Secretary of the Treasury, announced a plan today to help Freddie and Fannie. According to the press release he is going to do the following:

July 13 (Bloomberg) -- Treasury Secretary Henry Paulson swung the weight of the federal government behind Fannie Mae and Freddie Mac, the beleaguered companies that buy or finance almost half of the $12 trillion of U.S. mortgages.

Paulson, speaking on the steps of the Treasury facing the White House, asked Congress for authority to buy unlimited stakes in and lend to the companies, aiming to stem a collapse in confidence. The Federal Reserve separately authorized the firms to borrow directly from the central bank.

The announcement followed crisis talks between the firms, government officials, lawmakers and regulators, after Fannie Mae and Freddie Mac lost about half their value last week. Paulson and Fed Chairman Ben S. Bernanke are trying to prevent a collapse in the companies that would exacerbate the worst housing recession in 25 years and deepen the economic slowdown.

Ha hahahahahaha! Buying stock???? You have got to be out of your mind!

Is it just me or does this smack of a bailout? I mean, it's what it is; the government BUYING shares of what are for all intents and purposes defunct orgnanizations, all in the hope of "buoying the market".

Please. This is like the Captain of the Titantic getting on the loudspeaker and saying that they are working an alternate "floating plan" after the boat hit the iceberg. Something makes me smell a rat.

Combined, these two companies represent about a 20B market cap - the number of shares times the price - and there is no way that this support means a thing.

I mean, why not just put out a tender offer of 60B for both comnpanies? That would make a lot more sense and would get them under government control NOW and TODAY. Yet we hear this BS bout "buying shares" and are expected to think it is good for the two stocks.

I disagree.

Any involvement by the Fed or The Treasury will be subject to major congressional oversight, and, frankly, I think they will have a tough time. After all, why keep a failing business afloat, even if they are integral to the mortgage market?

So, the real issue is this: what happens at the open tomorow?

Easy.

The finanicals will sell up, and hurt SKF, but I bet by the end of the day people will sell it (meaning it goes up) and if you have the balls to do it, and buy during the dip, which the morning will represent, a GREAT buying opportunity will prsent itself.

Two factors that I think support what I am saying:

1) EVERY rally in the financials results in people "selling" into the rally ( big part of tha is the shorts covering their position). Count on it happening again tomorrow.

2) We simply don't have enough capital, as a country, to backstop this.

So - if you have a position NOW set some tight limits and sell at 10% below where it is now. But buy it again when it hits the $135-$140 mark.

Must do the same for my account and belive me, I will be the first taken out.

If you do it, I think you'll be glad you did.

I'll even go so far as to make a call on what the markets will do tomorow: up early, sell off during the day, and plunging in the last 90 minutes.

We shall see.