THE DOT - if this turns orange or red be alert

Wednesday, September 24, 2008

Mr. Buffett, as he speaks, makes sense partly

Just listening to Mr. Buffett’s CNBC interview, I agree that he is right that the bailout has to be done, but it needed to be done from the beginning. The hesitation of Paulson acting on Fannie and Freddie showed that he didn’t have the guts to do the necessary and, even with Bear Stearns, there was too much hesitation. That is my point - including their big mistake at LEH and AIG to be hesitant.

We were at the brink of a collapse last week - I can underwrite that statement of Mr. Buffett, but that was homemade by an incompetent administration and part of the solution is to put a different team in place. But with elections so close, that will have to wait and I am not particularly positive on the potential people replacing them - since the advisors of Obama are not without flaws in their track records. Even when Volcker passed the office over to Greenspan, we had a crash within a few months in 1987, which was the only crash he was not responsible for since then.

Good luck with your investment, Mr. Buffett. I think GS above 130 is a sell until we hit 80 again, that’s what the charts say.

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