Much Of The US Is Getting Sold To Overseas Investors

I don’t like the above image any more than you, but let’s face it, the country is about to be auctioned-off to overseas investors. It’s a pathetic situation.

Paulson and Bernanke came up with a rescue package “of sorts” for FNM and FRE that was greeted positively for about 10 minutes after the opening this morning. The possibility that the Fed/Treasury would directly intervene to buy stock of these two institutions was a unique twist to previous rumors. After all it seems they only need to threaten that to squeeze shorts one would have thought. But no, Mr. Market is calling them out on it.

In the meantime, bank’s are in deep trouble and depositors are demanding their money now! It’s been said that IndyMac depositors may suffer $1 billion in uninsured losses. Wachovia, Key Corp, Washington Mutual were among other institutions rumored to have troubles. Maybe Chucky Boy “Where’s the Microphone and Camera” Schumer can stimulate runs there too!

This is a scary market without question. I remember the same feelings during the Bunker Hunt silver crisis in 1980 when silver prices ran to $50 and then collapsed causing tremendous stress on brokers carrying his positions. But, we got thru that okay. This crisis still has to play out.

Volume remains heavy and breadth stinks.

The DJ Transportation Index has been an enigma to many including myself. Contrary Investor has given us this visual that I noted posted on Barry Ritholtz’s Big Picture blog. This is helpful.

This market is pretty spooky that’s for sure. Let’s face it, the much anticipated rescue for FRE and FNM came to pass and investors scoffed at it. There are lines of people at many banks wanting to withdraw funds. That’s not supposed to happen in this modern financial system, but it is. None of this is good.

Bernanke testifies tomorrow and no doubt he’d like to bring by the shirt collar, the architect, former Chairman and “maestro” Alan Greenspan with him. But, he’ll just have to be as creative as possible.

Also we get producer prices [please ignore the bogus “core rate”], retail sales [watch for a spike caused by inflated energy and other prices] and there are some interesting government bond auctions taking place as well. Want some?

I’ve been cynical and sarcastic about conditions as readers know, but that’s the way things are.

Have a pleasant day.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SPY, SDS, MZZ, TWM, IWM, QQQQ, QLD, XLY, SCC, XLI, XLB, SMN, SIJ, IYR, SRS, GLD, DBG, DBA, DAG, EFA, EFU, EEM, EEV, EWZ, RSX, FXI and FXP.

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