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UNINTENDED CONSEQUENCES

One of the best trades possible is shorting the market whenever Hank Paulson and Ben Bernanke make TV appearances. So, it should be no surprise that the market dropped 670 points (8%) on Monday as BOTH decided to grace us with the ...

Posted On December 04, 20083 MIN Read
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One of the best trades possible is shorting the market whenever Hank Paulson and Ben Bernanke make TV appearances. So, it should be no surprise that the market dropped 670 points (8%) on Monday as BOTH decided to grace us with their presence. The markets message is clear; more government interference is NOT what we need. Yesterday we got news that the government is looking at artificially reducing interest rates on mortgages to spur a housing rebound. While this might appear to be good news on the surface, the unintended consequences of these kinds of moves is almost always a short term fix while dramatically increasing our long term problems. We got into this mess because easy credit made it possible for anyone that could fog a mirror to get a 500k home loan. Corrections like the one we are going through now “right the wrongs” and restore balance to a system that is out of whack. In the 1930’s, a recession turned into a depression because of government meddling, and it’s beginning to ...

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