Parachute Out of the Fed Flight Fast

We need just two words for our next prediction: sell short. Why is that? Simply because giving badly-run banks cheap credit will not save them from drowning. We do not agree with the Fed on this one. It does not matter if we lack clout with Washington. Business modeling means more than influence.

The March 11 stock price rocket has given a boost to mortgage backed security as well. That is an upside-cum-downside of the Fed bending backwards for benefits to banks. All of us must pay for the Washington deficit.

Day trading is not the only way to make money from an irrational stock market. You can also move long-term capital in to stocks with inherent value. Patience pays in that game. You must endure transient paper losses in order to have the last laugh. That is how stock market volatility works, especially in an election year.

Recognition that the March 11 2008 rise is illusory, matters. What would make an upward stock price trend credible? Rise in demand for US goods and services, reduction in the national deficit, and fresh regulatory clearances for world-beating technologies, are some of the dreams we have. Oh for an administration that could make such things happen.

What is your take on the March 11 2008 stock market price trend? Have you made money out of it? Do you know which sectors can sustain the rally? Please share your insights with our community. Join our forum. You could also make contact to become a regular contributor. We want to hear from you.