Nov 26

I was thinking about what happened yesterday with the massive 36 point rally on the Dow after the government announced an $800 billion program and it appears that the market is getting tired of government programs. I know I don’t trust them and I’m getting the feeling that all these programs are just fixing a credit problem with more credit. It’s kind of like the David Ramsey caller I talked about last night and instead of David telling him to get a $2,000 car, sell the house and get a second job throwing boxes at UPS, he tells him about a bank that will let him borrow even more money. It’s crazy. Our economy is way over leveraged and I get the feeling we are just moving the pain down the road.

I think having a slowdown for consumer credit is a good thing in the long run but it is bad for businesses. Companies make money borrowing and individuals lose money borrowing. I got something yesterday from Bank of America letting me know that I had a line of unsecured credit for as much as $50,000 at 8.99%-22.99%. It showed some examples of the very low monthly payments based on 8.99%. These are the type of things that pushed our economy up buying flat screen TVs, furniture, home improvements, cars and so on. It wasn’t real. Now the credit drug dealer has run out of the drug but the government is moving in to bring more supply. Does this sound crazy to anyone else? It will be tough to prop up a fake economy. I don’t even know what I would do with that $50,000 even at 8.99%. Give it to me at 0% interest for a year and I’ll buy a 4% interest CD. Otherwise, they can give that slavery to someone else.

The market should start going down today. We do have a lot of date coming out….Michigan Sentiment, New Home Sales, Chicago PMI, Personal income, Personal spending, Durable orders and most important Initial jobless claims. I can’t imagine any of this data is good. It’s time to be short again.

Happy Thanksgiving!!