Covered Calls

[Joe Stocks]

Just saw this posted and thought it an interesting thought.
From Minyanville.com

>>
When government makes the judgment for the people to take their money and buy risky assets like stocks, it's the end of free markets. Why is this important? It isn’t to socialists. Socialists believe that government will make good choices and that it knows better than its people how to allocate capital and resources.

Capitalists believe this is worse than hubristic. When the government decides to take taxpayer money and allocate that money to a worthless risky asset, production goes down. Those involved in production do not know what comes next from the mind of government so they don’t know how to allocate whatever capital the government leaves them.

It's a slippery slope so we must be careful. Bank stocks high to low are moving at a 200 vol. Why are stocks moving like this? Because of artificial manipulation and mis-allocation of capital. The volatility we're seeing in the all important financial stocks is a function of government intervention. Investors cannot understand or handicap the risks when the government is stepping in and changing the rules to the game but also mis-allocating capital. So there's no market left per se, no investors buying and selling on the interpretation of value and environment. The government is determining the value for them.

You can’t say “well it stops here so no harm”. People said that at Bear Stearns. Now we have this. Where does it stop?

Risk is high. <<

Someone at Minyanville.com