Dec 4

Ok…the government intervention is officially out of control. The idea of the government manipulating mortgage rates down to 4.5% is going to a dangerous area. Where will this stop? Why don’t they just set the price for every stock as well? The reason we are in this position is because of government manipulation and I’m guessing doing the same thing will not get us out of it. I hope you guys realize that the Fed is printing money and buying 10 year Bills to drive down the yield and lower mortgage rates. They started this last week and it has driven down mortgage rates. At the end of the day yesterday, The Wall St Journal sent out a rumor saying that the government is going to do even more to push the mortgage rate down more. The Treasury hasn’t confirmed or denied the story.

We have some data coming out and the bankrupt 3 show in Washington. We are also going to get retail same store sales for November. This will give us some real numbers for Black Friday weekend. The numbers coming across right now are ugly. Many are down double digits. We will also get factory orders and the all important weekly jobless claims. Speaking of jobs loss….all day long I see stories of companies cutting thousands of jobs around the world. It is just picking up speed.

We also have the ECB and BOE looking to cut rates. We have already had many rate cuts around the world this week. New Zealand, Taiwan, Sweden China and many more have been cutting in a big way. This doesn’t make me feel very good about the economy if the central banks are making such aggressive cuts. They must see something really bad out there. However, I don’t think cutting rates means much in a deflationary environment and when the banks don’t lend…what difference does it make? Tichet should’ve been cutting rates all this year instead of raising them. What a moron!! I just got the rate cuts for BOE and ECB. BOE cut 100 BPS to 2% and ECB cut 75 BPS to 2.50%. This is just a show now. They will be at 0 just like we will in a few months.

I’m not even going to make a prediction with all this data and government manipulations today. This market is broken and going down. I can’t come up with one reason for this market to go up….of course besides another government program. Stay short!!