A Cruel Market

Today the market played a cruel joke. Despite the surging unemployment rate of 8.1 % the market decided to put in early gains, but that would be the set up of the joke. Before even being open half an hour, the market came tumbling down. The European markets were still open at the time and reaeacted by giving back most of their late gains.

Asia:
Nikkei => 7,173.10, -260.39, -3.50%
Hang Seng => 11,921.52, -289.72, -2.37%
Straits Times => 1,513.12, -5.52, -0.36%

Europe:
FTSE => 3,530.73, +0.87, +0.02%
DAX => 3,666.41, -29.08, -0.79%
CAC => 2,534.45, -35.18, -1.37%

U.S.:
Dow => 6,626.94, +32.50, +0.49%
Nasdaq => 1,293.85, -5.74, -0.44%
S&P => 683.38, +0.83, +0.12%

As for me:
AMD => 2.14, -0.02
AMD DG => 0.09, -0.20
BKC PX => 2.00, -0.30
MIPS => 2.13, +0.21
NG => 2.70, -0.12

In other news:
Senator Charles Grassley (R) Iowa, among others in Washington, says that foreign workers should be fired first. My opinion agrees with that. By doing that it reduces the number of unemployed workers in the U.S. who will be reducing their consumption of goods here. Any job that can and is being performed on U.S. soil in this recession should be done by a U.S. citizen or resident. Once the economy here has stabilized, then and only then should H1-B visas be processed again. There is no valid reason to continue the importation of workers when the employee pool here is so rich with available workers who are already citizen's or permanent resident's.

Carl Guardino, makes the point that we were all immigrants at one time or another. That is only true if you weren't born here. And even then, the statement wasn't to kick them out, just to lay them off first. If they go back to there native countries because they can not afford to stay while looking for a new job, then so be it. Look at the numbers. How many of them have families here in the U.S. that depend on them? How much of the pay that they are earning is staying in the U.S.? My guess would be that it is not much in comparison. Effectively it is an economic bleed that has been tolerated for the purpose participation in the world economy. This is not the time to be expanding foreign business relation. Once the markets have stabilized, then the importation of workers can restart.

Electrolux CEO Hans Straberg told CNBC that failing businesses should be allowed to fail and not be propped up with any more state aid. If they can not survive the winter then they should be allowed to die. Now that is quite a barbaric stance to take in the business world, but truly a point that I can agree with. For instance, in the financial sector Bank of America, Citigroup, and many more others have become too big to survive, not the other way around. And adding failing banks to them was not the best thing to do.

It would have been so much better if the FDIC had just seized the failing banks that were swallowed up by BofA, Citigroup, and Wells Fargo, and broke them up into regional holdings. Those regional holdings should then have been sold off to smaller regional banks that had enough liquid assets to purchase them. And then whatever was left should have been auctioned off for what could be salvaged and distributed as funding to the regional economies.

Again, Jon Najarian, co-founder of OpionMonster.com, appeared on CNBC promoting the suspension of mark-to-market. Again, how do you figure that? He says that by doing that the financial institutions will double in a matter of days. That is ludicrous because they still haven't proved that they have changed their business practices. And the big money investors are not going to invest in a pig with lipstick. Bad business practices is what got us here, not mark-to-market.

His appearance on CNBC increases my opinion that Jon Najarian has an ulterior motive. Maybe it has something to do with the fact that the exponential gains in options are paltry in the financial sector. There is not much left to play puts against, and maybe he is trying to do something to pump the market up so that he can profit on the rise of the supposedly "doubling" in price and profit on the dump that will most likely occur right after the bears take their money right back out. Electrolux CEO Hans Straberg understands this economy better. Let the bad businesses fail and divide what is left of their assets and sell to the smaller businesses that can afford to buy them. This includes the financial sector.

That is my opinion, you can take it or leave it.

Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.