The Award for the Best Actor in a Financial Crisis

We will probably be singing the Slumdog Millionaire song tomorrow as this picture will be crowned best in 2008. Why not think about the nominees for best actor in a financial crisis? We would have to think about Alan Greenspan, George Bush, Ben Bernanke, Timothy Geithner, Barney Frank, Hank Paulson and Barack Obama as potential nominees. Barack Obama is clearly the winner for best political actor in 2008 as he convinced a nation that he could change the course of America and the world. The best financial actor is none of the above. President Obama chose Timothy Geithner as Secretary of the Treasury so he could lead and provide confidence for markets and consumers. In his debut performance a week ago he clearly failed on all counts as markets collapsed. Secretary Geithner has one more chance this week to convince the world that he has the answers and the ability to solve the banking crisis. Hopefully he will succeed and become the winner of the best actor in a financial crisis for 2009. My nominee and winner would have been Paul Volcker as he would have provided the confidence and leadership that the world needs. Lets watch tonight and see if the winner is really a wrestler.

Random thoughts......The 'Dow Theory' gave a sell signal late in the week indicating a Bear market that can still decline by another 20% or more....it sounds like we are very close to a rally

in a bear market...

Will Obama go Swedish

The Dow was down almost 300 points today as it approaches the low reached in November 2008. The decline today was due in part to the probability that the 'Swedish Model' for banks (nationalization of the banking sector) will be approved by President Obama. The banks would be forced to write down their assets to market which would effectively wipe out their equity. The Government would then recapitalize the banking institution or sell it off. Some economists believe that this would be bullish for the markets.

Random thoughts....GM & Chrysler want more $Billions and promise more employee layoffs....Obama signs the Stimulus Bill and the market goes down 300 (sounds like what happened to George Bush)....Gold is approaching $1000 as the Euro heads to 1.20....Obama unveils his plan to end home foreclosures tomorrow...The Dow may go down to 7,200 this week...

Suspending FASB 157 true or false?

This Federal Accounting Standards Board Rule requires all publicly-traded companies in the U.S. to classify their assets based on fair value. Banks have had to write down billions of dollars in hard-to-value level III assets following the credit crisis. This Rule became effective after November 17, 2007 and requires commercial banks to value securities and loans quarterly according to current values whether or not the institution planned on selling the asset. Marking to market creates these 'paper' unrealized losses. This Rule has contributed to the credit crisis and the weakening of our banking system. There are rumors today that the Obama administration may alter this concept in some instances.

Random thoughts....The Senate will pass the Recovery Act by tomorrow the unemployment report will be horrible....January shows an economy in depression...Obama will begin to change psychology next week with the Stimulus bill...the market is holding 8,000....we could get a rally beginning next week that breaks above 8,600....leadership is what counts...