actio-et-reactio
Balance is but a brief transition between extremes.
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Friday, September 19, 2008
Perspective
The short term cure of government liquidity-- a lovely sounding term for what is largely bond holder money and a mix of taxpayer dollars-- has stemmed the short term situation. On the week the massive move down for the week looks to correct itself.
The total ban on short selling of 799 financial names is completely uncharted territory. I emphasize charted as even during the 1929 plunge this extreme measure was not enacted. The waters are muddied on this issue as, in fact, naked short selling among "financial professionals" has been a long term unenforced situation. Naked short selling has been illegal for a long time, yet preferential treatment allowed it to go on none the less. This issue is a fundamental one much I don't include in my thinking as it has never affected my own decisions. Clearly, the world is in need of the global financial industry, but is this "the cure"? The very people who brought us the whole mess are just now being rewarded for the events of the week. My knee jerk reaction is that the foxes are being fed roast chicken on a platter.
Back to the charts. Weekly and monthly charts are pictures from the moon for most traders, and even main street, whose perspective has been shaped by immediacy. There's a place for that, but not just yet. Here are two from sputnik, both the same, one just a close up of the other.
Labels: VWAP
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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