Letter to Miss HatchetHead

[Grayling Hill]

It's almost been two months without any word from the "frontier" or Miss Hatchethead!

I hope nothing is amiss!!

[Gary Ruben]

Hi Grayling,

All is well.  I've had a nice summer and am playing in NATT.  Arild is one of my opponents and we're testing the Sicilian Dragon.

I decided to slow down on the HatchetHead posts as the economic situation worsened.  I could see some of the things which have happened coming.  I used a 2X bear ETF to short oil and don't have to worry about he cost of filling up my tank for some time to come.

What has surprised me is what amounts to the nationalization of companies like Freddy, Fannie and AIG.  Charging them what Bernacke calls more than 11% interest on money they will be lending them and taking a 79.9% ownership position amounts to nationalization. They have diluted the shareholders down to practically nothing.  Not much different than when Cuba nationalized the businesses.

Simply seizing Washington Mutual was quite the touch.  I'd say foreign investors will be cautious before investing in U.S. financials again.  The short selling ban on the financials doesn't really give a fair indication of the value at which they will settle out.  Canada also has a short selling ban on financial stocks.  It reminds me of pulling back a rubber band then suddenly releasing it. It will be interesting to see if the $700,000,000,000.00 bailout bill passes and works.

Hope you had a nice summer.

[Arild Haugen]

Hi Gary,

Sorry to disturb you while contemplating your next move, but I have got to you use all the dirty tricks in the book to distract you I guess. I think the potential next US President was a bit vague when I first heard her mention "the eyes  they put up there to watch Russia ", but now I understand that it must be Grec Chamitoff she is referring to. When I hear her analyzing the economical situation however, I think Fidel's brother might even be a better choice - after all he is probably a chess-player, too !?
Good luck to us all, I think we may need it ;-) :

Arild