Would they or wouldnt they? They wouldnt-for now

Litmus test for the market today with the US Senate rejecting the GM, Ford 15BN Usd bailout plan. Doing the right thing, if you ask me. Global political tensions already increasing as seen in the bickering between Germany and the UK, and it will get worse as we move along. Bailouts will just make it worse. Unfortunately I do not think we have seen the end of this bailout story yet.

As politicians realise the seriousness and length of this recession/(soon depression?), they will need capital for infrastructure projects instead. Dont spend all the bullets on bailouts and fiscal stimulus, infrastructure projects will provide more bang for the buck for any recession with longevity. Fiscal stimulus is the short term solution and bailouts are just silly. Just stop it. Change tac.

The Swedish government should stick to their original strategy instead of throwing good money after bad to the Swedish auto suppliers, as was done yesterday. Fine, thats not exactly what they call it, but in essence, that will be the main effect.

For what is expected to become a negative day, the question is how bad? Will the positive market signals we have seen over the last few days make it through this?
Well, so far, the signals havent been that good, Usd/Jpy reached a low of 88.10 overnight, Asian equity markets down with the Hang Seng Index leading the way with -5.9%. JP Morgan CEO saying Q4 trading "terrible"and Blackrock CEO saying Q4 results being "horrific" does not help.

Will monitor implied volatility development from here but risk is of course that this was just a brief relief and that we go back to the trend again. However, given the positive marketsentiment over recent days I will await the full day before saying it is over for this year.

I have now added puts to my former calls in US Bank stocks, still long USD puts vs Euro.
Added to my long Eur Calls vs Sek after the bad Swedish unemployment data yesterday, looking for Eur/Sek to test the alltime highs of 10.79 before long, on its way towards 11.00.
Long Eur/Pln. Emerging markets is a clear and present danger here, we will soon be aware of how big, unfortunately.

As always, good luck






The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.

Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.