Wednesday, January 28, 2009

I'm closing all short positions.

I only want money stolen from me once, not twice.

My plan was to close my short positions this June, after the next two quarters of surprise reports saying things like GDP is falling at a -5% annualized rate. However, the Obama administration along with both houses of Congress have signaled that they are not going to do the right thing - which is to nationalize the banks and force the equity holders to pay for the risks they took - and are instead going to steal money from me (and you) and use it to overpay for bad loans which will never, ever be paid back.

Are they going to do clawbacks on all the false bonuses that were paid over the past five years based on false earnings? No. Why would they take from the bankers? They are going to steal from us instead. The government is going to steal from us and transfer that money - in the form of huge dividend payments and bonuses - to the very people who created this mess (oh, and a very rich Saudi billionaire). They've done it before, and they have now signaled that they will continue to do it again and again.

That's right...the government stole money from us, gave to Citi, and Citi immediately paid a huge dividend of the same amount (with much of that going to Citi's largest shareholder -- a Saudi billionaire). God bless America.

Anyway...the point here is that the government has changed all the rules. And I can't keep doing this when the rules keep changing. I'm out of all short positions.

We as investors have clearly made the wrong decisions by living below our means and saving. We should have gotten huge loans far above our means, taken out multiple home equity withdrawals, and pissed all that money away on vacations and boats. The government would then see what bad financial shape we're in and bail us out by renegotiating our contracts.

Oh, and for the record, no one is bailing me out of my student loans. We have $140,000 of student loans and many of them are stuck at almost 7% in a 0% interest rate environment. I've contacted every major lender in the USA and exactly zero of them will consolidate those loans despite having perfect credit. All the bailout money you suckers paid to the banks so they could lend? They aren't lending a dime. They pissed it all away on huge bonuses and dividends. They won't use any of it to actually lend.

Words cannot describe how disappointed I am in the Obama administration. They lied to us over and over again about how we must make sacrifices. Why are the bondholders and shareholders of these toxic companies not having to sacrifice their equity? They got to keep all the profits when times were good but I have to pay all their losses?

I guess he meant the taxpayers will have to sacrifice for the richest people in America.

1 comment:

Walter said...

Thanks for your advice Rick. I, too, feel like a sucker who has saved all the money I could stand over the last 4 years, lived with a modest home mortgage that I could have paid off at least twice with the money I have lost since the mortgage meltdown began, and now have to listen as everyone in Washington wants to buy votes from the Joneses and prop up the weakest of huge, wreckless companies.

But don't you think SCC (short retail svc's) will continue to do well for a while longer. Surely a government stimulus would take many, many months to trickle down the the companies targeted in this fund. And EEV (short emerging mkt's)?

Walter