Morning Observations

  • Isn't it amazing how all the analysts had the foresight to lower Goldman' s earnings estimates in the last few weeks to the exact range where it came out? Its a wonder that they didn't see the credit crisis happening.
  • The market is looking much lower on Goldman's earnings. I would usually love to buy into this kind of mess for a trade but the FOMC meeting later in the day is too much of an unknown.
  • It might seem as if AIG being bailed out or the Federal Reserve lowering rates will cure all that ails us. However, AIG is not the problem, it is a symptom of the problem. If AIG is bailed out another problem will arise.
  • Our Current Account Deficit is 6%. These imbalances grew over a long period of time. They will not be solved in one day.
  • Best Buy missed earnings. It seems that lower gas prices are not the only factor in people buying 60" plasmas. Retail should get hit. As a function of discipline I will probably use the weakness to unwind my retail short.
  • Many are pointing to the positive divergences yesterday. The S&P made a new low while the number of individual stocks making new lows was 792. On July 15 there were 1304 new lows. While I am not ignoring that I would point to the fact that the market is not done going down and new lows can still expand.
  • I am starting to make a shopping list of stocks I want to buy. Im not quite ready to use the list but I'm keeping it handy.
  • Does anyone else think that Greenspan should just keep his mouth shut? Greenspan was to this crisis what Pamela Anderson's chest was to Baywatch.

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