Auto Bailout

I was going to bed on Thursday night and the Senate had stated there were not enough votes to allow them to give $15 billion to the automobile makers to keep them in business for another month. The Dow was down 350 points (at about 8,250). I had two thoughts –

This was the single biggest policy blunder in my lifetime
The Whitehouse would use the TARP over the weekend to bail out the auto makers

I turned on the TV Friday morning and the Dow was down -25 points, and I knew that Paulson had at the least hinted that he would open his proprietary Hedge Fund (the TARP) and write a check to save Detroit. I assumed that he would have waited until the markets closed on Friday, but he could not wait and had to prop up the equities markets ahead of the weekend.

By now you know my belief that until somebody other than the US Government is willing to buy an investment for longer than a few days, I am not willing to buy anything. Until the US Government gets out of the stock market manipulation business, I am reluctant to short anything. So I took most of this week and spent it with my family and some clients and turned off the computer and the Blackberry.