Sunday, November 16, 2008

Could This All Be Part of The Plan? - Part I

I remember the exact moment Henry Paulson, or Hammerin Hank as they like to call him, was named to be Treasury Secretary. It was the morning of May 30th 2006. I had been predominantly trading on the short side of the market for a few weeks. The stock market had been sliding since early May after catapulting higher out of the gates in January. It was the top of the housing bubble. Bob Toll, of Toll Brothers, was selling billions of his own company's stock every few months and buying everything from Atlantic City real estate to Philadelphia newspapers. The price of gold had screamed from $400/oz. a year earlier to over $700/oz. by the end of April. Every gold bug from Geneva to Vancouver were plastering their hyperbolic forecast calling for $2000 gold by the end of the year.

Looking back, you can clearly see they were the initial tremors, the friction points of this current crisis. For me as a trader, the appointment of Henry Paulson as Treasury Secretary was a game-changer. There was so much information to be interpreted by his appointment. This was a man who's very entrance into the Treasury said, "Houston, we have a problem". By Paulson's own admission, he does not walk from a problem or even to a problem, he runs towards the problem. to be continued.

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