Blogging as you have come to know it at HEDGEfolios is over for now.  I said “for now” because I don’t want to say “forever” but it is time for me to move in another direction.

I am contemplating a weekly or monthly newsletter and if that happens, I’ll probably post a notice here telling you how to get it for those that would be interested.  If you want to be notified via email, then you’ll need to send me one of your own to let me know.  Just use the Contact form that you can find by clicking here.

I started this site at a very difficult time in my life and it became a way for me to focus and channel much of my energies.  For quite a while, I looked at the success or failure of HEDGEfolios as the one thing that would define the success or failure of the rest of my professional life.  With that great commitment comes reward and yet for all the things that this has given me, it has also taken away.  For both the positive rewards and the negative sacrifices, you become extremely attached to things and it is extremely difficult to break out of that.  I finally got there.

HEDGEfolios was the platform for me to show evidence of a new way to manage money - the Steinhardt way.  It was the best platform for me to provide a transparent record of what I could do as a no-name stock analyst outside of New York.  Much of my work flies in the face of finance theory and by working by myself and speaking for myself on the blog, I was free to challenge those established ideas and more importantly, challenge myself.  My methodologies would never have been given a chance 6 years ago if I was trying to do them for someone else with real big money on the line.  That just does not happen until you have a reputation and provide enough of a track record to prove what you can do.  Have I proven that 1 person covering 3000-4000 equities by himself each week using a set of tools available to anyone for very little money can be extremely successful?  You decide.  Let the results speak for themselves…they have been open for everyone to see for the past 4 or so years HEDGEfolios has been online.  Both the good results and the bad results.  Check the performance.  Check the stability during these volatile times.   How many mutual fund managers or hedge fund managers have done as well?  All of them in my opinion.  They made money delivering whatever performance their investors received.

HEDGEfolios has not been lucrative for me - the opportunity cost of my time has put this into the negative high 6 figures.  Much of that was based upon my choices.  Maybe I should have dressed in a gorilla suit and spent money on tv commercials.  I chose not to do that because it is not me.  Maybe I should have promoted myself by appearing on television and bragging about my performance and my opinion on the news of the second.  I chose not to do that because it is not me.  Maybe I should have responded to newspaper reporters who sought my comments to get more publicity.  I chose to say no comment when I really didn’t feel I had the credibility to respond to their questions.  Maybe I should have asked for other sites to link to my site over and over again regardless of whether I liked the content on the other sites.  I chose to never ask for a link request and never accepted a link request from someone else.  Maybe I should have sold those google ads that annoy the hell out of me and promote products that I may not like or care to associate with.  I chose to not populate my site with that crap.  Maybe I should have continued to sell subscriptions for something I had decided to shut down 10 months ago.  I chose to make it free for everyone because my integrity is worth more than taking $40 per month from someone.  Those were my choices, for good or bad.  I don’t do well trying to profit from things that are not consistent with who I am.

I thought that performance mattered.  I thought that consistency mattered.  I thought that making things simple and convenient to use mattered.  It did matter.  Not the performance of my signals or the consistent accuracy of the signals regardless of market volatility or the simplicity and convenience of the HEDGEfolios database.  Nope, I am not talking about that.  I am talking about the pathetic performance of my ability to get people to sign up for a free trial.  Thousands of site visitors that don’t check out the goods.  I am talking about the consistency of the free trial users who never return or never pay for the subscription when the trial is over.  I am talking about the simplicity and convenience of how to measure something that others are not willing to pay for.  It’s my version of mark-to-market.  The only thing worse than doing something that does not work is to continue doing it the way you have been doing it.

I mistakenly thought that my signal performance would be more popular than my writing.  I kept saying things like….”I have no idea how anyone profits from reading this stuff or how they avoid losing money.”  I hope you did, but not like I think you would have by following my analytical work.  Yet, I could sit down and write a spoof of some market event in a few minutes and it would fly around the internet.  It’s humbling to have work you care little about be appreciated far more than the work you devote your life to.  The blog has been fun and fortunately I never anticipated getting paid a penny for it, because I never did receive that penny.  I love a lot of things in life…writing is near the top.  I am even enjoying writing this painful ass post.   However, since I am not getting paid a ton of money to compensate me for my time, I am going to take a break to channel my efforts in other directions.  Like I said, I’ll probably write periodically for as long as that does not present conflicts for my other activities whether that means managing a fund or finishing a book I have been working on - The America I Want - and how to get it.  If I ever do get that published, I’ll send a free signed copy to the first 100 people that send me an email.  I am a sucker for giving stuff away for free!

I am appreciative of those that helped me in this endeavor and I’ll avoid the stupid Oscar-like list of names.  They’ll here from me in private.  Thanks to all the readers and to the ones that I have communicated with, you will hear from me in private.

There are some great bloggers to keep the focus on the facts.  I’ll keep reading them.  I’ll keep communicating with them about ideas.

There are a few journalists I respect like Pimm Fox of Bloomberg and if you ever see me do an interview(not likely), it’ll probably be with Pimm.

Going forward, there will be stuff appearing on this blog for the indefinite future.  The content will probably be boring for most, if not all of you.  Mostly academic stuff relating to the database results.  The database will continue for an undetermined while as well.  Access privileges may change to accredited investors only or it may disappear entirely.  Come back if you want, just don’t expect to see what you have been used to.  As I said, if you want to communicate with me to receive whatever I might be able to put out in the future, you need to do that before the site goes away or try to find me after that.

So until we meet again…good luck with your investing.  Keep asking tough questions of yourself.  Keep doing your own work.  That’s what I’ll be doing.

I am not talking about currency investing.  I am talking about investing in a stock because of the value or direction of the dollar relative to other currencies.

Over the past several years, fund managers, stock research firms and the media have often suggested that you should invest in stocks based upon their percentage of international operations and try to play the currency effect.  Meanwhile, I said that the weak dollar is a stupid reason to invest in stocks and I still say it. The theory went that a high percentage of foreign operations means that the company would benefit during a weak dollar period.  Of course, this concept went a long way to try and generate buying for large cap stocks and specifically humongo multinationals that had underperformed for many of the previous 6 or 7 years.  Did I mention that many of the brainiacs pumping this idea to the masses were managing funds that were heavily loaded with multinational stocks that had been hurting their performance?

First off, currencies are an asset class on their own whose values are largely determined by complex domestic and global macroeconomic factors.  If you want to invest in the dollar I think you should consider investing in the dollar and not some proxy in equity form.  Note that I have consistently cautioned non-experts from trading currencies.

People are/were  so hung up on this they almost give the impression that there is no better reason to buy stocks than a weak dollar. The idea that the multinationals benefit greatly because sales accelerate when our cheapass dollar makes their products more competitive and more appealing to international purchasers is not a new idea. Secondarily, the dollar exchange rate does increase the earnings due to currency translation effects. I get the theory.  Presumably, these effects would allow a stock to have improving fundamental valuation metrics and allow for higher stock prices.

So what’s the problem with me? There is a difference between theory and reality.  Equities and the decision making process for building and managing a portfolio are much too complicated to just blindly pick multinationals over stocks that are purely domestic.

When the broad statements about buying multinationals are mentioned, do you ever hear which specific currency pair they are discussing?  I never did.  I just heard the “weak dollar” as if they were referring to the US Dollar index which is a basket of currencies, not specific ones.  So what does “weak dollar” mean exactly?  Weak dollar relative to what?   What if it is the Canadian dollar and not the Euro or Yen or whatever.  Does it matter which currency pair?  Does it matter whether the company actually does business in a country with a currency that appreciated more dramatically than some other currency?  What percentage of total revenues and cash flows came from each currency?

If the general theory was accurate, then wouldn’t you expect that as the dollar was crumbling over the past 6 years that the multinational stocks would have done extremely well. HMMM!  The reality is that the stock prices of many multinationals declined dramatically and consistently from February 2002 when the US Dollar Index last peaked.

Since the beginning of February 2002 through today’s close, here are the performance figures of relevant indices.

• US Dollar Index declined approximately 36%
• S&P 500 Index increased 4.9%
• Russell 1000 Index (large cap) increased 9.2%
• Russell 2000 Index (small cap) increased 44.4%

Okay, so Russell’s small caps stocks as a group have done about 4 times better than Russell’s large caps.  So when does the payoff come in the form of higher stock prices for the large caps?  I thought that the fund managers and others promoting this concept were interested in stock performance.   Did they get higher revenue growth than small companies?  Some did.  Some did not.  Are we measured on whose sales go up faster or are we measured on whose stock prices go up farther and faster?  Were the multinationals more profitable in their international operations?  Most certainly were.  Are we measured on who has the most profits or better currency translations or are we measured on whose stock prices go up farther and faster?  I love sales growth, I love diversification in geographic sales, but if the stock prices don’t respond, it is not impressive.

While the large cap vs. small cap indices had clear disagreement with the weak dollar theory, not every stock worked out that way.  Certainly, some small stocks did worse than other small stocks from 2002 until now and some small stocks did worse than multinationals.  But that is always the case.  Each stock has its own issues.  The percentage of international revenues and earnings is just one variable and after looking at the data, I found no evidence that showed performance that was uniquely attributable to one percentage or the other of foreign operations.  For each stock that did well, I could find another that did poorly with roughly the same foreign component.  For each stock that did well, I could find another that did equally well without having foreign revenues.  Lastly, the same stock went up and down pretty significantly several times while the dollar weakened rather consistently during the same period.  If the dollar was such an important reason to invest, it should have been a reliable method…it was not.

For the record, now that some people have begun suggesting that the dollar has bottomed and is heading higher, I am hearing that investors should reverse the previous theory and buy small stocks that have a low percentage of foreign operations.  As you might imagine, I find this logic to be about as poor as the weak dollar argument.

I am not suggesting that multinationals are good or bad investment decisions or that small caps are good or bad decisions.  All I am saying is that the dollar’s weakness or strength and its direction is not a reliable indicator to help you pick stocks.

Watch this video of Costanza and picture him as Bernanke or Paulson or the President or any almost any other politician.

What would happen if we told the truth in this country?  What would happen if we told the average American citizen the truth about what might happen during the “crisis”, “meltdown”, “financial Armageddon”,  or whatever vague but scary term they feel comfortable using?

Your representatives are too afraid to tell you the truth.  Is that why you voted for them?  Is that their job - to protect you from the truth?

As I have remarked before - apparently the oath that goes something like “Do you swear to tell the truth, the whole truth and nothing but the truth?” does not need to apply to politicians or Secretary Paulson or Chairman Bernanke.

Two weeks ago (before we had this TARP proposal), I asked some of the media who read this blog, to do something…I wanted them to ask the powerful people to Describe A Meltdown.  Here is the post:

So far I have yet to hear too many people even bother to ask the question.  Stephanopolous gave it a try but Paulson decided to avoid answering and just tried to tell us once again using vague but scary terms, like “grave” or “dire” etc. etc.    Instead we just see more of the same and more of what the Congressional “leaders” said at the end of last week.  Listening to the people briefed by Paulson and Bernanke, they said it was frightening and really really scary.  Oh My!  I guess they were told the truth.  But they refuse to tell us word for word what they were told.  They also refuse to ask Paulson or Bernanke to repeat word for word what was said behind those closed doors.  You can’t handle the truth.  Instead you are getting “protected” and you just have to take their word for it.  Scarrrrrry, really really scarrrrrry!  Just believe us!

Some politicians during the past two days have explained how their constituents are opposing this legislation because they don’t understand what doing it or not doing it will mean to them.  EXACTLY!!!!!  Until average Americans who don’t speak politish or acronymese or know what securitization is or what derivatives are or any of that stuff that smarties like Paulson and Bernanke and their politicians love to discuss….. well, until the truth is spoken they will not support this bailout.  Saying that the economic statistics will be bad or that people will find it hard to buy a car is not very scarrrrrry to the average guy.  Saying the economy will “weaken” or “suffer” is not personal enough - it does not hit home and it does not portray an immediate danger.

They want your money.  $700 billion of it on the low end.  Shouldn’t you be able to hear the truth?  Apparently, you can’t handle the truth!

Well, whether you can handle it or not is your issue.  Whether you believe what someone says might happen is also your issue.  I’ve been telling my family and friends for months and increasingly over the past few weeks and days exactly what I think will happen.  A long time ago(before Bear Stearns), I was laughed at quite a bit as being a touch crazy.  Lately, the usual response is just a look of disbelief and a question like - “Do you really believe that?”

So here is a sample of what I think will happen.  In the short term, I expect that the financial system will come to a halt and not just in the US.  Our economy is based upon credit and credit payment systems.   What does that mean to the guy in Iowa?  What do you think will happen if you cannot use your credit card or your debit card or a check or gain access to your atm?   What if you don’t have cash or a means of payment to buy food or pay for gas?  What desperate things will people do?   Think it through and find your own truth.

You might decide it is worth it to support this TARP bailout.  You might not believe something like chaos and anarchy is possible because of a “financial crisis” so you might decide to continue opposing it.  If you were told the truth about what might happen from your leaders, you would be able to make a decision.

Regardless of the decisions you make or the decisions that Congress makes, there is a deeper truth.  You have to determine whether a government bailout will entirely remove the risks to the average person or whether it will just postpone the inevitable.  Is that worth $700 Billion+ to you?

Worshiping Warren Buffett seems to be a pastime of the financial media and all his cult or disciples or whatever you call them.  Personally, I am sick and tired of hearing about how many Cherry Cokes he drinks or cheeseburgers he eats or what he thinks about politicians or bailouts or just about anything else that CNBC wants to fill its airtime with.  Oh my!  You cannot criticize Warren Buffett!  Who are you to criticize Warren Buffett?  He is the greatest investor of all time!

First of all, I have not yet criticized Warren Buffett.  I am criticizing the infatuation of others and the idol worshipping of Warren.  Those are two different things.

On this blog over the years, I have generally said great things about Buffett,not that it should matter to him or to you.  Click here to read all my articles mentioning the words “Warren Buffett”.  I find him to be a very entertaining and funny guy who is obviously smart and experienced.  I find his commitment to humanity and charitable causes to be worthy of extreme admiration - note that I am equally impressed by someone who only has a few dollars to his name and gives some of it to someone less fortunate.  I find Warren’s investing principles to be very insightful.  But if you read through my past comments on him, you’ll find a common theme.  I want people to be their own investor, not just copy Buffett.  One more time….you are not Warren.  You don’t have his capital, you do not have his cost of capital, his negotiating power or any of that stuff.  Chasing his every 13-F filing or announcement of an actual investment like Goldman or buying into the numerous abusive and false rumors that Buffett is investing in a company (HOV, MBI/ABK, AIG to name a few) that fly around almost every time we have a crisis is crazy.  If you don’t believe me, maybe you’ll believe this quote attributed to him:

“You have to think for yourself. It always amazes me how high-IQ people mindlessly imitate. I never get good ideas talking to other people.”

As for this Goldman investment, it is already being spun as some kind of all-clear blessing on Goldman, the financial sector, the stock market, the TARP Bailout, and just about everything else that appears to be in trouble.  After all, Buffett is the greatest investor of all time they say.  He would never make this investment if he didn’t “know” that the TARP was a done deal they say.   He sees value where the rest of us don’t and just insert any of his folksy sayings that may fit in this case about buying when others are selling.

As for me, I see this investment in Goldman to be an investment in Goldman.  One that only Buffett could negotiate.  Goldman paying 10% interest for the “perpetual preferred” stake and discount on Buffett’s common stock warrants is quite expensive.  All the people that might rush to buy GS common tomorrow to “mindlessly imitate” Warren will not come anywhere close to what he paid.  Good luck with that.

Take a recent example of a new Berkshire position. If you followed Warren into NRG after the 6/30/08 13-F when the stock was trading about $43/share, you might not be so happy today at $27.72.  Unless of course you can rationalize that you are a long term investor just like Warren and you don’t mind losing 35% in a few months.  If not, maybe drinking a Cherry Coke will help you feel better.   Hey, we all have bad picks so maybe it feels good to be just like Warren in a bad kind of way.  Or maybe you can point to JNJ or his railroad picks and say that patience will bring you great rewards.

I think Buffett has done a great job buying operating entities to fold into Berkshire and the BRK/A appreciation over his tenure is obviously phenomenal.  Scooping up CEG last week is a great example and I am confident he will make that work within his existing utility operations.  As for the whole “Worshiping Warren” concept for being the greatest stock investor of all time….relating to the 40 or so stocks in Berkshire’s portfolio, have you looked at their performance lately?  Be objective, how many of his stocks have had a gain during 2008?  I know it’s been a rough year for the markets but is this worthy of worship?  Long term you say?   Go ahead and look at all the trades as far back as you want (include dividends), then make up your own mind whether the stock portfolio performance and diversification we are all supposed to worship is really representative of the greatest investor of all time.  I am not saying it is or it isn’t, just decide for yourself based upon facts and not the hype.

I love equally-weighted portfolios because I like treating each stock the same.   Keeping HEDGEfolios an equally-weighted portfolio requires me to focus on each stock as if it is the only one that matters.  I don’t place more importance on a stock because of how popular it is compared to a small cap company in the same industry.  I see no difference between Microsoft losing 10% and Google losing 10% so there is no reason why I would find a difference between Intel gaining 10% and AMD gaining 10%, even though AMD’s size is about 3% of INTC’s market cap.  The best way for me to make sure the equality perspective finds its way into my portfolio management style is to keep each stock with the same weight in the HEDGEfolios universe.

As a result, the market cap weighting of the S&P 500 index and the stock price weighting of the Dow are not methodologies that I appreciate.

Most investors and fund managers focus on concentrated portfolios and there is a ton of research that will tell you that is the right way to go about it.  That may be good for them, but it is not good for me.   As I have stated repeatedly on this site, you need to figure out who you are as an investor and know what you believe in and then conduct your portfolio management accordingly.

Compare the performance of hedge funds or mutual funds with concentrated portfolios and unequal positions to the performance of HEDGEfolios and ask yourself whether equally-weighting is a stupid idea.  In my opinion, it is stupid if you believe in concentrated portfolios.  If you are more like me, then it might make sense for you.

Here’s an example of how it could work:   Let’s say you start a portfolio construction with $1 million in cash.  Equally-weighting each position in your initial portfolio is easy, but as time goes on, it is impossible to maintain those positions exactly.  As you exit a specific stock, the remaining positions have varying balances and depending upon your gains and losses, taking a new position will never be able to match existing ones exactly.  My preference is to use an average by dividing the total market value of your portfolio by the number of positions you want to hold.  If your portfolio started with 100 positions of $10,000 each and you sell a stock that has appreciated to $12,000, the position I would enter after that would be the lower of $12,000 or the portfolio market value divided by 100.  As a result, any excess cash would be held in reserve to cover for the shortfalls in any future losing trades and the ability to get close to equal weighting when you enter the replacement position.

There are two portfolio management issues that make equal weighting of portfolios problematic.

The first is transaction cost effects.  You need to make sure that the number of positions and the value of your investable assets results in a position that will not be wiped out by trading commissions.  That amount is something you have to determine but I worry about any round trip commission that would exceed 1% of the position size.

The second concern is liquidity.  If your equal weighting means that your trade will comprise too high of a percentage of average daily volume of that stock, you really need to determine the incremental cost of bidding it up on the way in and the difficulty of getting out.  Obviously, if your equal weights result in small positions of highly liquid stocks, it is not likely to be a problem.  A few years ago, a trade I made represented approximately 10% of the total volume in that stock that day.  It was costly and I never made that mistake again.

Lastly, I always look at it this way.  I spend the same amount of analytical effort on each position.   If you have a position that represents a disproportionate amount of your portfolio, do you spend that much more time on it?

Position sizing is a large determinant of overall performance.  Winning big on something that represents a large portion of your portfolio may feel great, but the opposite can be devastating.  Equal weighting of positions is a significant component of why HEDGEfolios has significantly outperformed the index each year since I started - it works for me because it is consistent with who I am as an investor and the other elements of my portfolio management.   Make sure that your position sizing matches your own style.

It’s tempting for many people to do thematic investing.  Listening to smarties appearing on financial entertainment and it’s almost impossible to miss.  Sometimes it’s addressing macroeconomic themes like slowdown or recession and you get treated to how smart it is to be “defensive”.  Note that I don’t intentionally go defensive.  Similarly, when the economy starts to pick up, you might hear about “early cycle recovery” picks.  Note that I don’t intentionally go aggressive.

Over the past few years, we’ve been treated to some fun themes….like buying ethanol stocks because President Bush and Congress supported it (oops) and the bird flu trade buying stocks that would help us deal with pandemics (oops) and the terrorist trade buying stocks in security companies (oops) and the Katrina trade buying stocks in plywood, shingles and other home construction supplies (oops).

Themes are all about fads.  Often, other than the guys talking about the theme and why these stocks make them sound so smart, the strategy has no basis in sound investing.  This is about speculating and trading, not investing.  You really need to evaluate how well thematic bets actually work out and make sure you are paying attention for when the fad fades or isn’t mentioned by a gazillion other smarties on tv.

I recommend that you work on finding good stocks first and then figuring out whether they are getting a boost from a theme that might last for a while.  Coming up with a theme and then trying to find stocks that fit that theme is not a good idea.

I appreciate efforts to use your rights of free speech and to petition your government.  I appreciate your open letters posted and circulated on the web and your attempts to motivate the masses to write, email or call their political representatives.

That being said, I don’t think those tactics work.  I will not be emailing or writing or calling…you do what you want.

Politicians don’t listen very well to people like us and having some minion answering phone calls and saying “thanks for your concern” or filing the letters in the garbage can or replying with an auto-reply form email will not change anything they do.

And since they are private messages, they are transparent.  For all anyone knows, they were the only one.

And when it is over and we get what we get, will the letters be remembered?

I cannot remember too many letters sent to a politician that changed the course of American history, can you?

I do remember the Boston Tea Party.  I do remember the March on Washington for civil rights.  I remember them because they had an impact.

I think it is time for a March For Financial Freedom.  Maybe it’s in Washington.  Maybe it’s in your state capitol.  Maybe it’s a coordinated visit to your legislator’s local office.  Maybe it’s in your home town.  Maybe it’s just in your neighborhood.

If you are interested in organizing or participating in such an effort, contact people that will listen to you.  Encourage them to do the same.  I am doing my part.  Are we a nation that is willing to stand up or a nation that is willing to sit down to write a letter?

Hundreds of thousands of lives have been lost to obtain and defend our rights to free speech, to petition the government, and to peaceably assemble.  Americans died to provide those rights, will we live to use them?

I am amazed at our country and the apathy shown for what is an unconstitutional act and abuse of concentrated power in the executive branch, not to mention the damage done to our financial system.  Many Americans do not understand what has happened and what is being proposed.  They need to know.  Our politicians need to know too.

If a foreign government would have forced these changes upon us, would we send letters, emails or dial the phone? Is that all we would do?

I fully expect that the SEC will extend the ban on short selling (if nothing else to give it time to allow more companies to petition for coverage).  Regardless the reason, I expect the ban to be renewed at the last minute.  But when is the last minute?

I am looking forward to seeing the long-only crowd fall all over themselves to bail on stocks that have rallied 30-100% by squeezing the shorts last week.  How many minutes before the ban expires will it take to see the profit-taking begin?  How long will it take to see the profits disappear?  How long will it take to see people taking losses?  How long will it take before the longs realize that the shorts are not there to provide liquidity and short covering demand?

If you are long a stock that has benefitted greatly from the government’s manipulation, I hope you know when to get out 1 minute before everyone else begins to get out.

I ran across this useless old post of mine written one year ago.  It’s useless for several reasons…mostly because it accomplished nothing and we ended up with the scenario I lampooned.

The Ultimate Government CDO Bailout  September 7, 2007

Raise the caps at Fannie and Freddie to unlimited, print a ton of money, lend it to Fannie and Freddie, who will be able to buy all CDO’s on the planet, have them repackage the products into REMICs (sounds better than CDO) and then resell them with a guarantee of the US government. That would solve it wouldn’t it?

OF COURSE I AM JOKING! Obviously, the effects of such a “plan” would be as devastating as the problem itself. But I have not yet heard any credible plans either. So I thought I would throw together a bunch of the stupid ideas that have been tossed around and point out the absurdity of the path we are on. As I see it, the path being presented most frequently revolves around the government throwing a ton of cheap money at the problem. A problem created by cheap and easy money being thrown around by the government and lenders. BRILLIANT!!

A month ago, I wrote a post called “Subprime Solutions” where I implored the government to set up a forum to develop ideas to address this crisis. Since then, the problems have spiraled out of control and as far as I can tell, there hasn’t been much brainstorming going on. In the “Subprime Solutions” post, I offered up the idea of breaking apart all the CDOs to identify the healthy components from the unhealthy ones. Gillian Tett of the Financial Times recently made a similar suggestion. Since I consider Gillian to be a superior financial journalist, I was happy to see her thought-provoking article. But until there is a coordinated effort to evaluate market-based solutions and not just read about them in papers and blogs, I suspect we are doomed to rely on a government bailout.

If you click on that link to Subprime Solutions in the last paragraph, you’ll run into some additional flashback hell (as I call it).  Maybe if that Blue Ribbon panel had been working on this for the past year, we wouldn’t need to throw together a plan over the weekend again and hurry up to turn it into law.

The bigger issue here is obvious.  The people in power do not like people like me and they do not listen to us either.  But they are great listeners!!!!  Apparently, they like to listen to each other at fancy conferences in Jackson Hole which as far as I can tell, all that groupthink did not help out much over the past few years of this crisis.  Apparently, they like to listen to Bill Gross and other investors with big interests in telling the government what it needs to do.  Apparently, they like to listen to overseas phone calls.  Apparently, they like to listen to execs from the financial firms that have created this mess.  Apparently, they like to listen to regulators who have failed to enforce existing regulations.  Indeed, they are great listeners!

Just a few friends, family and readers (even a few media outlets) have asked me for my solution and for me to stop bitching about the problems with the plans that have been offered in the past, the plans that are being proposed now, and potentially, the plans that will come in the near future.  To what end?  Is this a test?  Will I get a smiley face sticker on my test paper or maybe a red star or a “good job” comment from the graders?  I have no desire to convince anyone how smart or “dum” I am.  I don’t waste my time answering questions that will do nothing even if they are correct.

None of my friends, family and readers I have identified have a hand in crafting this policy or voting on it or signing it.  There are many great minds out there that could actually work together to build a constructive effort to resolve this mess.  What would be done with it?  Blog readers reading it…saying that is smart or that is stupid or that will work or that will not work.  No offense, but I suspect that kind of thing is about as much value as people get out of reading my crap, just like the post I wrote above.

If someone in power can convince me that anything I have or would say would have an impact, I would be willing to offer my assistance.

I guess this is a better approach than buying another shitty bank so you can raid their deposits….just ask your “buds” in Washington to approve your application to become an “official” bank holding company on a Sunday night.

Abracadabra! POOF! TADAAAAAAAA!    Goldman and Morgan Stanley become banks.

Sept. 21 (Bloomberg) — The Federal Reserve Board approved the applications of Morgan Stanley and Goldman Sachs Group Inc. to become bank holding companies, the Fed said.

“The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies,'’ the central bank said in an e-mailed press release in Washington.