Jim, it goes back to that Russian default they covered up that we talked about 3-4 months ago. That one hit the German banks, the Asia Pulp $12 billion default hit the Japanese banks along with some US banks that have some of that paper. This is what I have said for some time, they will step in heavy if/when the banking system gets into real trouble, like we are now seeing.
So, we know all that, I was short going into today, cashed early, went long on my thinking that they will have to cut a bit more than they figured, 'cause if one US banks runs into a "liquidity" problem, the whole system is in serious question, and I think they want to head that event off, if they can. I am not expecting anything more than a 10-20% rally (off todays morning lows) in the DOW & NDX over the next week or 2. Which is of course a nice opportunity, in my mind.
Also, I suggested that MCD was a touch racy in the 32-34 range, suggested that it was a nice short, currently working into 26<sweet> HDI is also cracking again..38-39 from 45 & change. Not for the weak of heart, for sure.
Some interesting reading>http://www.thestreet.com/_yahoo/basics/optionsfocus/1344151.html |
