Bankruptcy

Relevant Quote From Robert Prechter

By J. Michael McBride

This quote is from an article Robert Prechter wrote on Sept. 19:

The overall process of credit manipulation has robbed bears of their rightful income for nine years. The latest announcement was timed perfectly to bail out investment banks and brokers who bet on the upside or against the downside in derivatives. Didn’t you know? Today is a “quadruple witching” expiration day for equity options, index options, index futures and single-stock futures. The Wall Street firms who were choking on their derivatives positions at 1:00 p.m. yesterday got bailed out with a 1000-point rally in 3 hours, and they were able to take billions of dollars away from people who had bet against them. (No, I don’t own options.) The close today at 1250 is conveniently right at the median price range for July and August, where most of the contracts were probably written.

By manipulating their own debt-based, monopoly currency and shifting the burden of debts and speculation upon the prudent and innocent, the government can foster illusions of maintained value by keeping nominal stock prices up. But this charade cannot last. As wave c progresses, it will become increasingly apparent that its bailout structures are boondoggles.

Robert Prechter Jr. is the author of Conquer the Crash, You Can Survive and Prosper in a Deflationary Depression and he also has The Elliot Wave International (see, www.elliotwave.com ).

Michael

Full post as published by Texas Lawyer Blog on September 23, 2008 (boomark / email).