I had originally planned on discussing what I thought should be the appropriate changes to the "short sale" regulations in this week's edition of the Sterling Weekly. However after a week of watching Congress work on a rescue package for the financial sector and seeing how laden it had become with special interest packages and how partisan it had become my feelings about the process and the package changed 180 degrees from originally being in support of the package to feeling that we needed to put the brakes on the process. Don't get me wrong, I definitely think we need a sound and healthy financial system in order for our economy to grow and function properly. However, I am somewhat concerned when I see Barney Frank, Harry Reid, Chris Dodd, Charles Schumer, and Nancy Pelosi being the architects behind the legislation that would implement the rescue package for our financial system. They have been some of the biggest obstacles to badly needed reform that could have easily helped prevent our current financial crisis from getting so out of hand.
As I write this edition of the Sterling Weekly, the Wall Street Journal is reporting that Congressional Lawmakers have reached a tentative bailout deal. Looking at the cast of characters who have helped draft the deal I have strong concerns that it will be ladened with trust funds set up to benefit special interest groups that ultimately will turn out being used as payoffs back to the very congressmen that helped draft the bailout deal. As a result I am asking everyone to write their congressmen asking them to oppose any such features in the proposed legislation.
You can locate your Representative in the US House of Representatives (here).
You can locate your US Senator from the site located (here)
I will be writing my letters to my representative and senators later today or early Monday. I will post them on line for others to see and use as a template.
In the upcoming editions of the Sterling Weekly I will be taking a look at the two (2) remaining issues I feel are weighing on the market. If you are not a subscriber, please be sure to sign up in order to see our upcoming comments.
The overall market continues to remain under pressure. The uncertainty of the financial bailout package has created a set of circumstances where the trend of the market is going to remain to the downside until there is a clear resolution to the structure and the legislation of the bailout package. The Bottom Line is that until then, the trend of the market is going to be to the downside.