Senate Passes Rescue Plan
Only days after an attempted financial rescue went down in flames, the Senate has passed a new bill that has some “added characteristics” designed to, in theory, help protect Main Street. The bailout plan is a polarizing issue, but there is little in the bill that really protects similar problems from happening again.
Whether you are a fan of the bailout or not, you would be best served knowing the status of it if you are invested in the markets. The issue impacts everyone, and virtually no business is insulated from it. Credit is hard to come by, and that slows down the system. People are scared, and when someone is scared a “fight or flight” instinct kicks in. In this case, fighting is nearly impossible, so everyone is taking their money and going home.
Some readers will likely express frustration that this article is not related to satellite radio. The fact of the matter is that it is indeed an integral part of why this and so many other equities have taken a beating. Sirius XM Radio has debt to refinance. Even though they should do it with relative ease, the fact that they are looking for a loan makes people nervous. If the company announces a resolution to the February converts, then all will be well….at least until the fall.
About a week ago I found myself looking for a new car. I drive a lot, and my old car was at the 200,000 mile point. It was in need of a bit of work (again), and I found myself at the crossroads of putting more money into an existing car, or to trade it in and be done with it. Ultimately I decided to get new wheels. After deciding what car I wanted, and what options I wanted, I cut my best deal, and it was off to the financing department to see if they could beat the rate I had already secured. They couldn’t, so I went with my own lender, but while there I inquired about the credit crisis. The answer I got was that many people were having trouble getting their loans, and even people with “good credit” found it a challenge to get financed. That bore out when the auto sales numbers were released today. Thus, the issue is already being felt on Main Street, and the whole economy seems to be hinging on what will happen in the house.
Will the Senate passage bring the markets up tomorrow? Perhaps, but it is Friday’s action that will be the determining factor. Stay tuned.
Position – Long SIRI
After this bill was passed in the senate, the stock futures tumbled a 125 points. I don’t get it.
Just because they have stopped lending does that mean we should give them whatever they want so they can do it all over again?
I feel like I am being held hostage, encourage our representatives to vote for this Friday or everything stops…no money for any loans commercial or private
There has to be a better way then giving these people 700 billion, in addition if it was not bad enough already, the Senate adds earmarks of additional spending to it.
This is really insane
Recovering a bit now…….
Buy the rumor, sell the news?
I think the futures market is gamed by big money trying to set the tone. They may be trying to influence the house vote or maybe they just want to buy cheap in the morning………who knows?
I think all pre-market and after-hours trading should be outlawed – let some people get some sleep and spend time with their families. Stop the thinly traded manipulation! Why should people have to worry about their stocks tanking before they get up or when they are eating dinner………
That should have been in the bill……along with making naked short selling really against the law and bringing back the uptick rule. Why not give the SEC some funding to really enforce this stuff. What about domestic terrorism? Who are the real terrorists of this country?
Tlyler brandon,
Looking forward to the radio show, always feel better afterwards but I am having a bad feeling about Sirius refinancing there loans in this current market. I believe if they can get by this year of all the debt owed we can put all the bankrupt talk to rest and in a few years dare I say we may make a profit.
if you can go over the debt again in the show you will relax a lot of investors again, and please post more articles if you can, one a day does not seem to be enough lately
If I had originally bought Sirius at .80 cents or even $1….I wouldn’t be frustrated or even as worried as I am that I got in originally at $6.50.
I’ve averaged down since then to around $2.50…which only a few months ago seemed GREAT.
Unfortunately I don’t have any free cash to average down any more…and frankly LOL…I’ve been rewarded EVERY single time I’ve averaged down before with a HUGE drop in price. WITHOUT fail.
I can’t believe I’m at $2.50 and feel worried.
The crazy thing is If I had ALL that cash I’ve invested in Sirius over the years right now…at this price Sirius is at now, I’d be able to buy the exact amount of shares I have now for a fraction of the cost. I’d probably buy even more shares than I have now.
But as it stands now…I don’t feel like sinking another penny into it.
Funny how I can see myself buying even MORE shares than I have now if I was looking at Sirius for the first time….and yet CANNOT see myself buying more shares now.
I guess that tells me that I really DO like the stock…but my emotions of being bashed these last couple of years has just jaded me.
Perhaps at the first sign of good news about refinancing and stock move upward I’d be more willing to average down one last time. But not now.
About the whole bail out issue. Thats ANOTHER funny thing. If I wasn’t stuck in Sirius for so long and COUNTING on the bail out’s possible positive effect on Sirius getting refinancing to save my investment….I’d BE ROOTING FOR THE BAIL OUT TO FAIL. On principle I am totally against bailing these crooks out, and I think they are using exaggerated FEAR to scare us into passing it.
But even if the worst did happen, and we’d plunge into a depression…I’d be for it. Because then ALL the crooks would be burned out and exposed for all time.
As it is however…this bail out will expose the crooks to a degree…but it’d be like pulling out a tick and leaving the head under the skin. They’d only grow back.
I’m just looking forward to getting out of Sirius at break even at this point. I know I’ll have plenty of chances to get back in as Sirius is a LOOOOONG term play. But if I could get out now at break even…I KNOW half a dozen stocks that I KNOW I can at least DOUBLE my money in a short period of time.
Part of the benefit of having most of my “mad money” stuck in Sirius for so long…is that I have used that time to immerse myself in studying other stocks. And I KNOW exactly which ones and at what prices I want to get in on.
That is also one of the frustrating things of being stuck in Sirius…that I SEE these GREAT deals and I am helpless to take advantage of them the way I want to.
The sectors I’ve mainly focused on are Alt fuels(solar, wind etc) and Stem cell stocks….two sectors that will benefit HUGE when Obama wins(which i think he will).
I am NOT holding out any hopes that Sirius will pop to $2.50 -$3 by November….but man…that would be a MIRACLE if it did.
demian,you couldent have said it better!
friggin,
I feel for you man. It’s been a real tough road. You can’t panic and sell down here after all you have been through. Keep your chin up and know how much you have learned from all of this. With your averaged down price, I think you have a real chance of being in the green in just a few months. The key is to be patient and keep your emotions at bay. Try to get out for a walk and take some time to immerse yourself in some things you enjoy. Think positive about the future. Don’t let the bastards get you down. SIRI can go back up just as fast, if not faster, than it went down. Don’t lose your conviction down here. You will be ok if you are patient with yourself and this crazy market. Don’t think abut the past too much and what you could have done different. Maybe all you have been through will help you in the long run. I have had big losses in the market and I know what you are going through. You put into words what many are feeling. I will keep you in my prayers. Don’t ever let the market steal your soul. It really tried to steal mine. Try to be kind to everyone you meet and smile at strangers. It helps me to do that. We are in the hands of mercy at this point. Sometimes mercy comes in unexpected ways. Try to keep your spirit open to miracles, even though they may not be what you expect….
peace……
Demian
I hear you brutha Demian.
Actually I AM patient. Frustrated. But patient.
The question is…will I sell at breakeven? Or hold?
My feeling at this moment, is that if….IF…Sirius did pop to over $2.50 before years end…I’d probably sell.
Sure I’d love to hold for $5. But I truly believe I could get out of Sirius at $2.50 and dump the money into one of my other stocks I’ve been watching at these levels and have a better chance of doubling or tripling my money short term that way.
THEN…I could get back into Sirius later for the ride to $5 or higher.
I think this is going to be my plan. LOL…but can I resist the drug of Sirius popping? The few times it did during the merger process, I didn’t sell in the hope that it’d go even higher.
I don’t want to make that mistake again. If I am lucky enough to get out this year…I really feel I will have plenty of time to get back in later for the BIG move up in the long run.
Anyway….good luck all. It’s late.
Palin debate drinking PARTY later tonight. WOO HOO!!!
friggin – I’m on the fence but pretty much agree with your posts. The only difference is that I’m so burnt by all of this that I hope things crash hard. This is all a bunch of b.s.
Top economists say that we are going to have to pay by means of depression at some point. This bailout will only delay the inevitable.
I say let’s do it now and get it over with. Our deficit that will soon be 11+ trillion will require interest payments alone of billions a day.
I guess our politicians are okay with screwing our children and grand children for a temporary fix of things.
Anyone that has voted for this travesty on the american people needs to be voted out of office for not listening to their people.
I’m with you “Getitstraight”. I say let it BURN too. Operation clean sweep.
BUT FIRST I WANNA GET OUT OF SIRIUS….HOPEFULLY AT LEAST AT BREAKEVEN!!!!
LOL. Pleeeeeeeease God. I’ve never asked for ANYTHING. Grant me this one prayer. 🙂
If I was out of Sirius….I wouldn’t care WHAT happens. I could wait out the Depression with cash on the sidelines.
If it makes you feel any better, I dumped 100% of my IRA and RO 401k into sirius. My average is around $3.80
I know that was an insane move, but I figured what the hell, I have 20 yrs to recoup it.
Im down about $80%.
but there’s a silver lining for me. I took the balance of my account and converted it to a Roth IRA because the tax hit is almost nothing after I take all my deductions this year.
now… IF my portfolio recovers, I have all that tax free money when I retire. plus in 5 years I can take out the amount of the balance of my account at the time of conversion without penalty or taxes.
so as long as they dont change the roth ira laws and as long as sirius doesnt go bankrupt or private, I will be sitting on a LOT of tax free earnings in 20 years.
yep I know thats high risk, but I have a strong stomach 🙂