Monday, July 14, 2008

U.S. Dollar Bear Flag Broken

I have not posted on the U.S. dollar in some time. It is fairly well convered by people much smarter than I but I still watch it quite closely as it effects so many other items. That being said, a fairly simple looking bear flag looks to have been broken to the downside, which suggests further downside to the dollar. Guess the jawboning by Paulsen and Bernanke isn't enough now is it? But hey how could they have known that adding another 5 trillion to the federal debt by bailing out Fannie and Freddie, might hurt the dollar and the debt markets. Who'd a thunk that! Maybe just maybe someone with a room temperature IQ like this speculator/blogger.

The debate on short selling without an uptick seems to never go away. You see I am not an avowed short seller for to short is a bull market is folly of the highest order. The holier than thou shills like Jim Cramer want the rule back badly and whom better to ask for help than the master of obfuscation himself. The SEC should hire Cramer much like Tom Hanks character did with Leonardo DiCaprio in the film ‘Catch Me if You Can’.

My question is this, if they want the rule of only being able to short shares after an uptick, would not logic, reason and the law of physics suggest that opposite also be true. That being you should only be able to buy on a down tick. I am not the brightest bulb in the room but does having the rule for only one side of the market convey an inherent bias? Just thinking out loud on that one.

I caught Dennis Kneale waxing pollyanically last week, about bank write ups. He somehow believes that over the coming quarters and years that banks will be writing up all these assets they are writing down. First of all, they are NOT writing them down, they are slowing moving them from level 2 to level 3 to hide them. Secondly they banks are going to be taking massive earnings restatements as they re force to admit that much of the negative amortization that was booked as revenue on pay option ARM mortgages is NOT gonna be collected.

Keep this in mind the next time CNBC drags out Dick Bove or some shill floor trader, who is stuck in a long XLF position, telling you how cheap the financials are.

In a déjà vu moment, Fed officials, congressman, and other assorted government shills continue to repeat the mantra that Fannie and Freddie and solvent and healthy and have no financial problems. Yup, there is nothing to worry about. How many times must you hear this before you start to not only ignore but laugh off this drivel. Further to this, Abbey Cohen of Goldman Sachs, is urging investors to ignore the hyperbole out there. Too bad she’s not referring to the true hyperbole spreading charlatans like Bernanke, Paulsen and the like.

Some may have caught the round table discussion in which John Bogle, the founder of Vanguard Funds, quite clearly contradicted my daily dictum of an investor being a speculator who made a mistake and will not admit it.

This garbage about buying into weakness and being an investor is hogwash. I would hazard a ballpark guess that Mr. Bogle made his fortune not from investing as he calls it, but rather from the fees and commissions charged to his clients. Ask your broker how much money he makes from investing/trading as opposed to commissions. Remember those crumbs off the cake, that were referenced to by Tom Wolfe in his classic, Bonfire of the Vanities. And, yes those crumbs can be quite large !

I will state unequivocally here and now that if you do not take care of your losses they will MOST CERTAINLY TAKE CARE OF YOU, most mercilessly ! I know this because in my old stupid days I would ride a stock down, thinking how smart I was holding a position trading below book, at a below market P/E, etc, etc. I have paid my tuition in FULL, and believe me it was not city college tuition but rather the elite, exclusive, private school type $$$ !

Good speculating to you all and always remember that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 3 units Ultrashort Dow DXD@ $50.12 stops $62.22/60.49/58.62
Long 1 unit Ultrashort Financials SKF @ $103.90 stop $161.72
Long 3 units Currencyshares Swiss Franc ticker FXF @ $97.35 stop at $93.82
Long 1 units Ultrashort ReEstate ticker SRS @ $88.95 stop $92.72
Long 1 unit Ultrashort QQQ ticker QID @ $37.05 stop at $41.91
Long 1 unit Ultrashort S&P ticker SDS @ $57.20 stop $61.57
Long 2 units Hecla Mining ticker HL @ $8.50 stop at $7.16
Long 2 units Kinross Gold ticker KGC @ $18.93 stop at $17.56
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $68.70 stop at $65.69
Short 1 unit Daimler AG ticker DAI @ $86.20 stop at $65.94
Short 2 units Brinker Int'al ticker EAT @ $20.07 stop at $19.64
Short 2 units Darden ticker DRI @ $36.35 stop at $35.36
Short 1 unit Lehman ticker LEH @ $43.70 stop at $24.43
Short 2 units Deutsche Bank ticker DB @ $117.03 stops at $93.37/88.34
Short 1 unit of Visa ticker V @ $86.25 stop at $80.16
Short 1 unit HSBC ticker HBC @ $83.23 stop at $80.53
Short 2 units of Netflix ticker NFLX @ $30.35 stop at $29.43
Short 1 unit of IBM ticker IBM @ $122.80 stop at $126.14

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