Disbelief

I was all set to write today about how in the last two BBT tournament series, I have gone out and essentially won my entire buyins for the series in just the very first event of the series. There's a decent post in there, about how I final tabled the Big Game on Sunday night to start off the BBT after not really playing to win in a single blonkament in many many months, what I did to switch up my routine and try to get back into the groove I have historically felt when playing against the blonkeys. [Mostly what I did was suck out and resuck on people, and win my 60-40s like it was my job. That's the secret, and I was all set to deliver an opus on that to start off the new week in style.]

Now instead I am sitting here mesmerized by the stock market, unable to avert my gaze from the screen, and I am just in total and complete disbelief. Forget the Dow testing the 7000 level for support. Nope, that proved to be a bitter hopeless joke. The Dow quickly proceeded to blow right through 7000 like melty butter, and then right on through 6900 as well. What the hell? The Dow is at 6800 and people are not rushing in to buy buy buy? I am simply in disbelief. Not about the magnitude, but about the sheer ease with which the blue-chips are just slicing through the old lows, in what has proven to be basically a total downward spiral since the week immediately before President Obama took office. I keep waiting for the gifted public speaker to come up with some words, some great oration, to inspire some kind of confidence from someone. Somehow. That shit last week clearly did not do it. Perhaps it was the solid month of down-talking and doomsaying the president himself did all through the first few weeks of the new term that did that effort in. But the American people, investors in American markets, need to hear something soon.

A major problem weighing on the markets right now is this stealth nationalization of Citigroup late last week. Assuming Citi can find private investors to match the government's offer, the U.S. government will convert up to $25 billion of preferred stock into common stock, resulting in the government owning as much as 36% of Citi's total outstanding common shares. But Obama's team won't even admit that they are, in fact, "nationalizing" Citi. I mean, face it guys: the government now owns 36% of Citigroup, period. They are by far the largest shareholder. The government controls that company now, plain and simple. If you want to define "nationalization" as 40%, or 45%, or 60% of the outstanding shares, then fine. For me, it's not about a number; it's about what it represents. In this case, our government now controls Citigroup, just like it controls AIG and Fannie Mae and Freddie Mac. But President Obama knows that bank nationalization is not at all popular with the masses, so he sugar coats it and claims this is his administration's direct attempt not to "nationalize" Citi. And then he takes a 36% ownership in the firm. Mmmm hmmm.

Oh, and while we're at it, another thing the market does not like relates to the losses we have already suffered with the whole Citi investment debacle, and what that likely means for our other investments so far and what we can expect from more direct government intervention in the financial sector going forward. We (the taxpayers, the same people who now own 36% of Citigroup) have already provided Citi with $25 billion from the original tranche of the TARP plan, plus another $25 billion in a second bailout a month or two later. The $50 billion or so we have invested in Citigroup preferred (soon to be common) shares is the equivalent of about 7.5 times Citi's current market capitalization. So we have given this company more than 7 times the value of the entire company currently in the market just over the past few months, and as a result we own just 36% of the whole company? This is a company worth $6.7 billion currently, and we have invested $50 billion in a few months and what we have to show for it is 36% of the total value of that current $6.7 billion. I don't need my calculator to know how putrid that is. Add this to the fact that the government invested approximately another 500 billion in our other financial services firms over the past few months, and imagine applying that same 95% loss rate to all of those investments as well, and it should not be hard to see what the market is worried about right now.

Dow 6800. I truly never thought I'd see the day again.