Shorting the Market and Buying Gold

By Jeff Macke  FEB 25, 2009 11:30 AM

But does this imply financial anarchy is upon us?


Greetings from New York, where last night was one of those evenings where my body and brain staged a flat-out uprising against my will, refusing me even a wink of sleep.

How did I kill the time? Roughly 2 hours trying to sleep; surrendering at 1 a.m. and kicking the wife into the guest room so I could a) read John Kenneth Galbraith’s The Great Crash, 1929 b) watch the episode of PBS’ American Experience on FDR c) fret that I just may have become an Obamaniac (which would require blood tests, sheepishly explaining how I caught it to Mrs. Jeffmacke, a possible bumper sticker and drifting into the sweet release of death as my bumper-stickered car idled in a closed garage).

The administration, so hyped just a month ago, spent its first 30 days lowering expectations like a teen retailer. I confess, I went into the speech cocky. I'm the Roy Hobbes of cynicism. It simply never occurred to me that my love of a well-delivered speech could overcome the sole natural gift I’ll claim freely: the gift of inherent mistrust of any and all flimflammers or hustles.

Ben Bernanke softened me up; the President finished me off. Despite several nods to the mess he “inherited” from George W. Bush (and a needless tangent into stoking the fires of class warfare), President Obama largely gave me the broad strokes I’ve been pining for over the last week.

This wasn’t the place for wonkish details. Addressing Congress is a time for broad strokes and rhetoric. The president said the right things about being tough on the automakers, seemingly drawing a line between the banks and other industries. I hated his lack of restraint on spending but I voted for a guy who used his pre-9 /11 Congressional address to announce plans for a manned flight to Mars by 2020.

Had I final edit authority on the speech, I would have scrapped the pandering to his party, added some shots at the pork-laden stimulus package put together solely by the Democrats, and subbed in one major theme that's beginning to glare by omission: unity between classes, parties, industries and Americans as a whole.

The president assured us we’d win, citing our history, but didn’t touch on how we’d achieved prior victories.

Lincoln stood for a united United States (to which he later added freeing slaves). FDR stood for overcoming fear itself and later oversaw a pretty darn solid American war effort. Lincoln delighted in Sherman making “Georgia howl” but, in his final speech -- the greatest in Presidential history -- he sounded a shocking tone of unification with the very rebels he’d spent the entirety of his first term suppressing. (Read the final paragraph of Lincoln’s Greatest Hit here.)

President Obama shamelessly draws parallels between himself and the Great Emancipator. You can’t cite the Civil War effort as an example of American will in the same speech you take potshots bankers and fat cats “in their private jets."

If Lincoln could leave it to God to levee judgment against slave-trading rebels in order to “bind up the nation’s wounds, to care for him who shall have borne in battle and for his widow and his orphan,” isn't it possible to ask and expect our young, ambitious president to refrain from yet another moan about W. leaving him a deficit? It’s a tired point made in the wrong forum.

Other than that, we have a president reclaiming control of the moment; a Fed chair who seems to have discovered Xanax, scotch or leadership in the last 6 months (whatever it is, Mr. Bernanke, make mine a double); and some level of restraint on the bailout spending coupled with an argument for understanding and compassion towards the regular citizen - who would, and will, bear the brunt of a class-warfare backlash and looming low-level cutbacks.

Deduct points for President Obama not having a good last edit. Add points back for his having Leapin’ Nancy Pelosi, as opposed to Angelo Dundee, backing him up last night, and I’m giving the speech an 8.5. Better than good enough, at least to push back the growing panic and, to my horror, good enough to make me deeply concerned at my falling in lust, if not love, with the one type of person still socially unacceptable for a man like me: a president who wants to raise my taxes and quasi-nationalize my banks.

I don’t see a lot of great set-ups but I’ll be trading it today just to keep my mind off my shame (and to try and stay in front of a looming 95% tax rate). Here’s the playing field as I see it and the names I’m watching:

No positions in stocks mentioned.

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