In late breaking news tonight, we have learned that both sides of the Senate
have agreed to take up a vote on the bailout bill. The details we know at this
time, are that the Senate will add the current bailout bill to another bill.
Additionally, it is being reported that the revised bill will include an
increase to the FDIC insurance from $100,000 to $250,000.
The bill will be voted on by the full Senate tomorrow evening at sundown. It
is then expected to go to the House on Thursday. The questions that remain
unclear are: to what existing bill are they attaching the bailout bill; is the
FDIC insurance limit the only thing being added; and, what changes will be made
to the existing plan? Many questions and no answers.
It would seem that they are now going to try and squeeze this bill through
the House, by attaching it to another bill with added provisions. The purpose
would be to grease the skids for a successful vote. Leave it to Washington,D.C.
to pull late night ‘behind the door deals’ in order to get this bill passed.
Looks like I will have another late night, as I will be sending faxes to
Washington again.
How about that rally today? It was a great daytraders event,
but beyond that it remains dangerous waters (see the charts below) to make
trades in.
Also coming off the news wires tonight is this…
(US) CNBC’S GASPARINO REPORTS THAT SOME OF THE HOUSE REPUBLICANS ARE
PREPARING AN ALTERNATIVE TO PAULSON’S BAILOUT PLAN AS THE GROUP DOES NOT FAVOR
THE GOVERNMENT TAKING A BIG ROLE IN MARKETS
- CNBC adds that components of
the alternative plan include requiring the Treasury to guarantee, at up to 100%,
bank losses resulting from failed MBS originated prior to the plans enactment;
Allow companies to carry back losses arising in tax yrs ending in 2007,2008 or
2009 back 5 yrs; Allow a “repatriation window” for profits earned by US firms
overseas; Allow banks to treat losses on shares of preferred stock in the GSEs
as ordinary losses and not as capital losses; Suspend the capital gains tax rate
for 2 yrs; Limit backing of high-risk loans by the GSEs; Schedule Fannie and
Freddie for privatization; Suspend mark to market accounting until the SEC can
issue new guidelines that will enable firms to mark these assets to their true
economic value; Stabilize the USD by repealing the Humphrey-Hawkins Full
Employment Act, which some say diverts the Fed’s attention from long-term price
stability to short-term economic growth; Require the Treasury to write rules
prohibiting excessive compensation to executives of failed companies; Task the
SEC with regular, annual audit reports of entities the federal government has
brought under conservatorship or now owns.
- Earlier it was reported that the
House GOP members were seen supporting the Senate’s bailout
proposal.
All that glitters IS
gold:
- REPORTEDLY THE HOLDINGS OF THE SPDR GOLD TRUST (GLD) ROSE BY 4.2% TO 755.2
TONS ON OCT 1, WHICH IS A RECORD
- FINANCIAL TIMES REPORTS THAT WEALTHY INVESTORS ARE STARTING TO HOARD GOLD.
After a 777 point decline in the Dow Industrials it hardly seems like a big
deal to have a 485 point recovery. The only significant event was the S&P
500 did not remain below the channel and the resistance did not hold. I have
marked the next significant resistance levels.
The Dow stayed within the channel as I suspected it would, and the Nasdaq is
still below its significant resistance level.
