Peter and Tom,
IMHO, the risk just got much greater with the election. Any semblance of separation of powers is now gone. Totally unconstitutional, but nevermind that--the WH rules the roost, no one will guard the chicken coop. No subpoena power for democrats, no power to call investigations at the federal level. The amount of info that has come out about the CA power fixes over the past year has only come out because of Jim Jeffords' switch. Before then, there was just stonewalling and bafflegab about free markets and CA's tight regulatory environment and their laws full of loopholes. Nothing about traders playing games with the system, nothing about energy companies withholding energy. With this election, even with all the info that has come out, I'll bet that these companies get away with light fines and slap on the wrist and a promise to never misbehave again. The only way something worse will happen to them is if CA or some other states gets someone on the inside to actually turn state's evidence, and even that is no sure thing if they don't have a paper trail to back up their story. Most of the paper has probably been shredded by now. Even Anderson would have survived if this government had been in place over the past two years, IMO.
This will not increase confidence in the markets one iota. And AG is up for renomination next year. If he doesn't play ball with the Bush Admin, he's gone. He will probably be gone anyway, given the history with Bush41 in 1992. Bush has a vindictive streak in him, and loves to exercise it. "Help your friends and harm your enemies" was the Golden Rule prior to Christianity, and it has lived alongside the Christian golden rule over the past two thousand years. These guys believe in it and exercise it. His replacement will also not inspire confidence in the markets. Nor, I will bet, will anyone they name to replace Pitt or Webster (if they decide to replace him too, which they may well not if he can survive further scrutiny by the press).
There are big risks ahead. I am out of SLR and FLEX again with some nice profits (though SLR is already over my selling price of 3.36), I may get back in them again on a dip, but only to trade. I'm not holding much if anything longer than a few weeks at most (assuming I don't get clobbered while holding and inadvertently turned into a long term investor).
Sam |
