They Said They Wouldn't, But...

Tuesday, March 31, 2009 - 1:35 AM.  So Obama keeps saying that he doesn't want to the government to run a company, but that's what he's doing.  Last night, Washington announced that Rick Wagoner, CEO of GM, would be stepping down.  This is a landmark step and yes, sets a possible precedent for what Washington will do with the banks.  That's really it in a nutshell.  

The news was enough to stop the recent rally and sent the Dow down 254.16 to 7,522.02.  I sold off several positions that had gained in the last couple weeks.   As I said to a couple friends, the risk of more downside is now higher than the probability of upside.  I don't expect much "good" news in the next couple days, and stocks have had a good run.  More buyers have to jump in to continue the upside run.  So, sideways and declines are now much more probable than upticks in the market. 

There probably is a play in the acceptance of FASB 157-X, the rule that will allow for more discretion in mark-to-market accounting.  FASB is expected to vote on that this Thursday, April 2nd.  I will probably gamble on buying some bank stocks over the next day or two, ahead of the vote, and look to see if I should sell almost immediately.  

I also spent the weekend writing my monthly investing article.  The full text will be up on www.asiancemagazine.com or you can email me at mtlo@post.harvard.edu for a copy. 

Sleep well,

Ming