What's Going On Here

A bunch of different things are happening today.

First, WaMu announces that it will dilute shareholder equity and earnings by 50% to raise $5 billion. Voila! Stock up 24%. I will short more at the close today, if there's anything left to short.

Secondly, the crack-up-boom is the play of the day today. How can anything else be expected? The Fed has pledged 40% of the collateral backing their notes for dubious MBS. As commodities are hoarded as a protection against further dollar devaluation, there is a lack of supply of commodities relative to the dollar supply. This lack of supply remains firmly in commodities' favor even as the Fed decreases money supply.

Which leads right into number 3. This is the Fed's recent campaign of selling off Treasuries to offset their monetization of MBS for insolvent banks. In my opinion, this is very bearish for equities. It is meant to combat the crack-up-boom, but will probably squash equities instead. This is just my best guess of what's going on.