My Expensive Nap

I overslept on Friday... big mistake. There were some pretty simple set ups and I know I would've made at least a quick $10,000. I went to play sand volleyball w/ James until about 9, 9:30pm and went to bed about 10pm but my sister and my brother in law was in town b/c of the whole Hurricane Ike mess and they woke me up about midnight. I had trouble falling asleep until about 3am since I was naturally excited about the next day.

I knew I should at least came in and I managed to bang out what used to be a pretty good day for me, plus I knew we were going to have an office wide happy hour after the close if we finish the week w/ no down days as a firm overall. In fact, our firm broke a few records as well. Gosh, I don't even know how much cocktail shrimps and mojitos I had that afternoon.

It was quite interesting when someone sitting behind me was talking about the whole government bail out situation at the UT vs Rice game on Saturday. The gentleman's remark was that it's not right that the government is bailing out all these rich executives. I wanted to throw my 2 cents in but I didn't... I didn't want to cause a scene.

Here's what my thoughts are... should the gov't bail out these companies who took on excessive risk and now you have a moral hazard situation where you might actually be encouraging people to take on excessive risk? Yes and no. I don't think the gov't should bail out every company that is about to go out of business, but if the result of that company going out of business will thoroughly rattle the financial market and people's confidence, then yes it should be bailed out. It makes me nervous whenever I hear the phrase "too big to fail." Who's to be the judge of that? I do have to say, if company like AIG or god forbid GS went on... then yeah, we're going to be in big trouble.

All this stuff on banning short selling etc is all very REACTIVE. There needs to be a PROACTIVE approach. Yeah, I know that hindsight is 20/20 and nobody has a crystal ball but the gov't has consistently wait for something to blow up and then figure out how to put out the fire. b/c of Enron we now have SOX 404, which still didn't get the problem solved b/c you have companies reporting something on their balance sheet that's dramatically overvalued. Greed, in this case, is not good. There's been a lot of talk about regulating the hedge funds ever since I started taking accounting classes but I'm almost convinced that we're not going to see anything done in that area until a series of them start blowing up.

It was kind of funny that TV stations were still running AIG ads on Monday but the ads were yanked by Tuesday. (We have CNBC on at the office all the time; you notice silly things like that). One ad in particular, there are bunch of kids together talking about their parents not properly planning things financially and finally one kid said "my parents are with AIG" and the other said "you parents rock!" My buddy and I were at some bar getting ready for Monday Night Football and the ad came on; that's when he said "your parents are fucked!" There's also jokes of changing the AIG sponsorship logo on the Manchester United jersey to the U.S. Treasury seal. I'm not trying to be insensitive; sometimes you just gotta learn how to laugh.

I'm shorting the dollar by longing the Euro (143ish entry on FXE) and long oil since commodity prices are positively correlated with the strength of the dollar. A lot of these oil/energy companies that have been taking a beating might have a nice rally. I've also got a list of regional banks with high short interest and high trading volume... there's too many to list at the moment. There's like 120 on the list that I've generated. If anybody is actually interested I'll email it.