As Expected $17.4 Billion in Aid

Just in time for Christmas, GM and Chrysler get loans to bide some time. The dollars come from the TARP funds. I guess Bush didn't want to leave office with GM bankrupt. I am sure he must be ready for Obama to take over.

For those that like to bash the Big 3 for creating their own troubles please note that Toyota will be posting its first ever loss for the year ending Mar 09. The recession is hurting all companies.

I also noticed that Paulson has asked for the remaining $350 billion after already commiting the first $350 billion. A billion here and a billion there pretty soon we are taking some serious change. Those printing presses must be running full time!!

Similar to lkast week, this week the markets remained relatively flat. This is the calm before the storm as the bulls and bears continue to circle each other waiting to see who will make the first move. I assume we will probably see more of the same over the holidays with renewed activity in the new year. Still waiting for the indication of which way things will go before commiting serious funds to the markets.

In the mean time continue with straddles and playing a few nice set ups. Unlike the indices we have seen some nice rallies off the bottom on some individual stocks and there is more and more talk of a bottom in place. One of our picks a couple of weeks ago was RMBS. This is the type of rally you want to be on. (It would be nice if the market did that wouldn't it??)

One other thing I have noticed this week is people using the D word. The D word is the new R word. The fear mongers will use Depression shamelessly, but you can really hardly blame them can you. Every day we continue to hear of more and more layoffs. It is going to be a difficult Christmas for a lot of individuals. Below is the commodities index. It makes you realize why the D word has surfaced.

I have warned before about getting sucked into stocks for their high dividend yields. Those yields can't get trashed if dividends are cut. Case in point Weyerhaeuser (WY) cut its dividend by 58% this week. Things don't look so great any more.

For this week I will continue straddling with an expected move in the New Year. My gut is still saying new lows and I see a very common pattern that I will highlight this weeks in my list of potential shorts from the Dow:

DD, DIS, IBM, IP

Others outside the Dow:

APH, ARO, CVD, GES, AMAT, EBAY, HON.