Wednesday, November 12, 2008

Et Tu, Paulson?

This is the worst thing possible, change of plan in the middle of execution. President and Treasury secretary spent a lot of political capital pushing TARP, and now what? The most important thing, nobody understands why. So much for promised transparency...

Bought even more Altria (MO) today. Maybe it might get in trouble and cut the dividend. But it's more likely that it's one of the stocks hedge funds are selling right now. Also bought some Spiders (SPY), thinking that everything is oversold too much. I'd prefer some individual stock, but don't see anything obvious. This is a trade, I can sell SPY at any moment for a lot of reasons, including taking profit or being stopped out.

I wonder how much more redemptions hedgies have to meet. It's just unbelievable. Looks like every endowment fund, every state pension fund and a lot of others are withdrawing their money from hedge funds. What were they doing in the hedge funds in the first place? Is anybody there doing some risk analysis? When state pension funds invests into oil futures, that's crazy. When diversification of such funds means investing in oil futures, China and real estate, it's even more crazy. Any state official making that decision should be on the street right now. Doing community work.

Full disclosure: at the time of publication author had long positions in MO and SPY. Positions can change any time.

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