AIG bailout- help save the world

I can't help but laugh at the auctions going on at Ebay. Last night I saw an auction for Lehman Brothers for 99 million. This one is even better. AIG save the world Bag

The Sellers name is hopingforseverance and this is the description of the Bag-

"As you may have heard, an AIG collapse is imminent and would cause a catastrophic global economic depression. In order to stave off such a catastrophic event AIG needs $20 Billion in capital. Therefore, to rescue the world from this debacle, I am auctioning off this authentic AIG Emergency Bag in hopes of raising the required $40 Billion. This very stylish bag can be used as a backpack during both emergency and non-emergency situations and can hold up to $75 Billion (must use really large denomination bills) which is exactly the amount needed to salvage AIG from ruin. Although not photographed here, the bag comes with a pair of goggles and a gas mask issued to me on orientation day at AIG. The gas mask is unused, however I did put the goggles on a few times and run around the office (Christmas parties, Wednesdays, things like that)."

In real news- The Government is Bailing out AIG for $75 Billion.
"The Federal Reserve said Tuesday it would provide up to $85 billion in an emergency, two-year loan to rescue AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management.")(Reuters)

PPT

Ok. This after hours jump could just be the PPT (Plunge Protection Team).
I'm not trying to make predictions on where the market is going based on news, but let me just say that the current news we have this weekend is terrible and the US Economy is in the shitter, and its getting shittier if that's even possible.

WaMu CEO is ousted.

I like this post from Elite Trader on the 5 horseman(thanks to Digs)

1.January-Fed lowers rates dramatically January 2008 to help banks.(January 21st the world stock markets plunge, and on Monday morning the FED does a surprise 50bp interest rate drop, and another 25bp days later at the scheduled FOMC meeting)
2.February-MBI/ABK delay downgrading
3.March-Bear Sterns bailout over the weekend. (interest rates on bonds spike at their lowest levels for the year, BSC to be bought for 2, but then is raised later to a higher price at $10)
4.July- SEC enforces rule of "NO SHORT SALES"(naked shorts) on selected financial stocks, which made it incredibly difficult for anybody to borrow shares to short on selected financial stocks like BAC, C, and GS)
5.September- Government bailout of Fannie Mae and Freddie Mac, which will cost taxpayers billions in an economy seeing record levels of unemployment and mortgage foreclosures.
6. Whats next- AutoMaker Bailout? WaMu or other big bank failure? FDIC failure?

With that acknowledgment out of the way, I'm ready to trade my signals no matter if the market goes up or down. 300pts can become 600pts, and 300pts can become -300pts.

Who owns FRE and FNM?
Institutional Holdings for FRE
Institutional Holdings for FNM

Paulson warned stock holders 2 months ago.

Waiting for the FOMC decision

I don't plan on trading until after the FOMC decision. If you look at the index futures you will see a trading pattern that no one is good at trading; the trading pattern is called CHOP, because that is what it does to your account after trying to trade it.

In bond news, the Fed funds have dipped just below 95.50. This has got to be the most straight forward instrument to swing trade and the best way to measure investor sentiment along with 90 day T-Bills. As noted earlier last week I shorted ZQ around 95.65 on the simulator.



In other news Trader Bubs had a BLOWUP trading day today. Not a blowup like one of my bad days where I lose an average Americans years salary in one day, but a blowup for his account none the less. I promised Bubs increased traffic, so go check out his site and make the guy feel better.

Today's educational link comes from TraderMag, which discusses risk management and risk analysis.

I'm working on my "trading system" and working on adding some cool new features to this blog.
As some of you may have noticed, I decided to monetize this blog, so that in the future I may be able to put this money towards upgrading the blog, donating it charitable foundations, or giving out prizes to readers.