For the record, I believe the Fed should/must cut 50 basis points, reinvigorate the rest of the economy to compensate for the coming mortgage resets in February that will cause even more trouble. This, I believe will give foreigners more confidence to come back to the U.S. to invest, buying dollars to do so, and thus stabilizing the dollar. The dollar isn’t getting manhandled by lower rates but simply, who the heck in their right minds would need dollars? If they don’t need dollars to invest in the U.S…they’ll dump the dollar to buy other currencies where they are actively investing. Am I just pulling this stuff out of my, well, you know. Not really, check out these stats:

“Including ETF activity, Equity funds report net cash outflows totaling -$2.223 billion in the week ended 10/24/07 with Domestic funds reporting net outflows of -$2.504 billion and Non-domestic funds reporting net inflows of $281 million” ~AMG Data Services for week of 10/24/07

I’m not biased because I’m long equities (at least I don’t think so!). I can go to 100% cash in a few clicks of my mouse. What I’m keying off of is how many companies were crying on their Q3 conference calls (as much as CEO’s, CFO’s, and directors can cry on telecons). Hiding, under the kitchen sink (those who haven’t thrown it out like Citi), rolled up in the fetal position, crying, begging for mercy. That’s how it looks going forward for these companies, and its not just the banking and housing sector anymore. Retail, manufacturing, steel, logistics. All crying. They’ve tossed out the baby (with the bath water). They’ve thrown out the kitchen sink (now that there’s no baby or bath water in there…yes they had to wash the baby in the sink because they couldn’t afford a bathtub). They are going to lose their shirt and pants soon if things don’t change. I judge Ben Bernanke’s intelligence by the quality of his baldness- it’d good quality baldness. Says his brain is so powerful the radiation burned off his hair. Let’s see what you got Uncle Ben.

(yes, this is my favorite Big Ben photo. I call it “Gansta Ben”)

This entry was posted on Wednesday, October 31st, 2007 at 9:33 am and is filed under Banks & Finance, Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.