There is no blood in the street today but the same madness continues.

Market rallied like crazy. STI up by 6.39%, Hang Seng Index up by 8.25%, Ireland up by 13.86%, FTSE up 6.75% at this moment of writing. How mad can the market gets? Obviously we are in the very bearish market because such high volatility indicates madness in the market place. Why did the market rallied? Because it is celebrating before the ultimate blood that is going haunt the capital market on a very long term basis. Apparently the US government has decided to help companies who had done mistakes in the past have their “sins” forgiven by moving toxic waste off their balanced sheet. Here is the snapshot of the Bloomberg report “ Sept. 19 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed moving troubled assets from the balance sheets of American financial companies into a new institution. Congressional leaders who met with Paulson and Bernanke late yesterday in Washington said they aim to pass legislation soon. The initiative, which may also insure money-market funds, is aimed at removing the devalued mortgage-linked assets at the root of the worst credit crisis since the Great Depression.” Source: HERE

Great now, the US government is helping companies move toxic waste off their balance sheet to a “new institution.” Moving bad debts off balance sheet is illegal (am I right?); moving bad assets with no value is not illegal. Great man, I learn something new today. How is the capital market going to function in the future when companies and institution can do whatever they like knowing Big Brother will eventually come and help make their balance sheet look good again?