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January 30, 2006
Reflation rules the day, Mon., Jan. 30, 2006, 4:33 PM
When money supply grows so fast, traders are pointed to stocks that are sensitive to higher commodity prices. And they avoid the consumer staples. That's what happened today.

Tomorrow the Bernanke Fed meets to decide what to do about that rampaging M3 they don't want you to be looking at.
So is it 25 or 50 basis points?
Either way, it could put the brakes on some of the metals. Silver, however, seems to have taken on a life of its own.
And as to today's movers, you ought to ignore Airlines. It's not part of this group. In fact it typically trades counter-cyclically because oil prices are heavy costs to the airlines as you know. So yes, they are commodity-price sensitive -- but in the opposite way. Today was all about another bankruptcy scam -- United Airlines.
Tell me, will you be shocked when United Airlines comes out at 15 and flies to 50? And management -- the ones in place when the old company went down the drain -- will be packing millions in their briefcases.
I just can't understand how management of a bankrupt company can't be forced out and prevented from profiting from the misfortune of their making.
Posted by Posted by Bill Cara on January 30, 2006 04:34:01 PM | Category: Cara Today in the Market
Bill,
Hire an army of insolvency consultants, lawyers and accountants and have them build a Chinese Wall that is so intricate that by the time the public and the courts have it figured out the "new" entity is up and running and the management is safe behind the wall. Do all this with the "old" shareholder's equity and you won't need to diminish the value of your "new" shares. Same business, same problems, same management, new owners. Don't you love it! :(
Posted by: TerryC
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January 30, 2006 10:36 PM [link]