To Bail...or Bail Out
Research for Online Investors

by John Dalt

5/16/11

Some headlines write themselves.  Dominique Strauss-Kahn was arrested in New York City on Saturday for rape and false imprisonment.  He is alleged to have attempted to rape a 32-year old hotel worker in his bedroom, chased her down the hall when she escaped and dragged her back to his bathroom where he assaulted her again.

Strauss-Kahn is the managing-director of the International Monetary Fund (IMF).  He was in New York on “personal business.”  Strauss-Kahn was staying at the New York Sofitel on Times Square that cost a cool $3,000 per night. He was seen as French President Nicolas Sarkozy’s main challenger in April 2012 elections.  Strauss-Kahn is a socialist…at $3,000 per night.

He appears to have succumbed to the temptation to do to one person what he wanted to do to France, had he been successful in the elections next year.

Media reports that the New York police removed Strauss-Kahn from an Air France flight just before take-off Saturday evening.  He evidently left the hotel in a hurry, leaving his cell-phone behind.  He had called and asked the hotel staff to locate and deliver the phone to him at the airport.

This picture from Financial Times is of Strauss Kahn being led out of the Special Victims Unit on Sunday.  The “Perp Walk.”

Strauss-Kahn was scheduled to meet with German Chancellor Angela Merkel on Sunday, an appointment he did not keep.  This morning the IMF was meeting with Eurozone finance ministers to approve a bail-out package for Portugal.

Strauss-Kahn was denied bail this morning by the New York court.  His next appearance will be May 20.  New York law requires a grand jury to consider the charges within four days.  Legal experts speculate that this time gives the accused time to make a legal settlement with his victim.  The state would most likely drop the prosecution without a willing witness.

New York may have a new millionaire by Friday.

Reuters reports that Finland’s parliament gave conditional approval to a bailout for Portugal as long as the package of loans include new requirements that bond holders maintain exposure to the country’s debt and the government must begin a privatization plan to raise money.

These requirements mean Portugal’s bailout will be different from Greece’s last spring and Ireland’s last December.  Neither of those bailouts contained language concerning exposure to the country’s debt.  This language should help Merkel’s party in Germany.  German voters have been voting their displeasure with the government’s participation in bailouts for other countries that were seen as aiding them in their bad practices.

The Mailbag:
Do you advise subscribers on the next month’s option to sell when the current option expires worthless in the Buy, Sell, Hold service?---subscriber D.T.

John’s reply:  Yes.  I am sorry this is not clear in our explanation of our service.  We follow up, follow up, follow up.  We recommend the original position, and what covered call to sell.  Then we recommend any roll-overs or roll-ups.  We monitor news and events on all of our positions.  We recommend whether to let it expire or buy it back.  We recommend what covered call to sell on any position not called away.  We stay with every position until they are called away for a profit, loss or sold.  We do all the work for you except enter the trades in your computer.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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