Thursday, December 18, 2008

Overdue Rant

I heard that the Keystone Cops, errr excuse me, the SEC arrested an individual in an insider trading scandal. Yes you heard that right, Eunich Central has made an arrest. Comical truly comical as you have thugs like Angelo Mozilo, Franklin Raines, Dick Fuld and countless others too numerous to name running around free, enjoying their ill gotten gains, while the SEC goes after these pikers.

Just watch as the Fed's go after early investors who participated in Madoff's ponzi scheme and withdrew their money with ease yet cannot claw back any of the fortunes Mozilo or Raines or others like them looted from their companies. Is it me or is this stupefying beyond comprehension?

Dylan Ratigan was asking some guests what can be done to get confidence back in the markets. First off trust when lost rarely comes back and it takes a very long time but you wouldn't know that by the shills on pompom TV telling us all will be well in a couple of quarters.

As to your question Dylan the answer is simple, you need a hard ass to come in and gore every ones ox. I am not kidding in this regard. I am talking the guillotine, the rack, the stocks, you name it. The phrase medieval punishment comes to mind. There is absolutely nothing to lose at this point as the capital markets of this country have become, not only the laughing stock globally and there is a mighty expensive price to pay for this, but a cesspool of fraud, deceit, connivance, and thievery !

This loss of integrity and confidence Mr. Ratigan, is reason alone to be short this market. Now couple this with severely deteriorating fundamentals economically and you have an extremely bearish scenario. Your bosses at GE and CNBC provide a daily dose of purported pros and pundits who continue to recommend and keep buying cheap stocks based on valuation. They can keep doing this all the way down to zero for all I care.

I had a reader ask me reader as to why am I so negative? Why so sour? Why do I rail on these people and entities, constantly putting them down.

The answer J.S (thx for writing) quite simply is that they deserve it. They are shameless. They, men like Greenspan, Bernanke, Paulson, Cox, Dodd, et al along with the numerous Wall St. and financial CEO's mentioned earlier have literally destroyed what were the finest capital markets on the face of the earth. The purported investigative journalists sit on their collective asses while Rome has been ablaze and only now are waking up to what has transpired.

These thugs have robbed us blind not only with the original fraud, and yes it was all a fraud, and once yet again with their purported remedy of bailouts. To add insult to injury the Fed and Treasury will not even tell us who got the bail out money and what was accepted in exchange. How this passes without civil unrest tells me unequivocally about the state of the average Joe on the street. Suffice to say it is not flattering as we sit here and just take it, too busy focusing on American Idol, and Survivor. The government's remedial actions most assuredly guarantee that we face depression. I wish this were not so but it is. I rant because I am angry that this has happened, I am furious that it continues to happen and that many are brain dead to what is going on right before their eyes.

You want solutions instead?

I have plenty of solutions the first of which is do no harm. Do nothing. Let the weak fail, yes painful but our survival depends on it. You open a new bank with pristine private capital and I am all for it and right there at the head of the line. But not if at the same time the government is propping up its weaker, inferior competitors with taxpayer money. This is not rocket science rather it is common sense.

But why bother with solutions when these will be ignored. I did not attend an Ivy League school. I do not possess an MBA from an "in" school. I do not have a resume stuffer like working for Kissinger's consulting firm like Geitner did so I am not "connected" with the requisite power base. I do not have a father who did the same so I cannot coat tail.

I have no idea how to run the SEC for example but I can assure you I know right from wrong and were I the head of it, Many of the thugs previously mentioned would start losing copious amounts of sleep. I could assure the masses that a new cat was in town and that the lawlessness that has become our markets was over and as for the the criminals running rampant and free, well, I assure you that their worst nightmare would be coming to life in my appointment at the SEC. I say this as a patriot and not as some sort of grandiose self promotional advertisement.

I started this blog as my own personal trading journal and it has slowly evolved into a place of ideas as to how to navigate this cesspool with one's net worth intact and hopefully much larger. I did not nor do I want our current circumstance to happen but this is the hand we have been dealt and it must be played accordingly. To focus on solutions is nice but in my opinion is a waste of valuable mental capital that would be much better spent on finding ideas to profit and increase our wealth which should help protect ourselves and our families going forward.

This capital is just a tool that should provide us with the means to have options and believe me we will need those in the future. So yes J.S. I would rather be long. I would rather see things as rosey and wonderful as trading and living on the long side is much easier than the short side to be sure. Unforturnately none of the facts available support such a stance.

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:

Long 1 unit Ultrashort Real Estate ticker SRS @ $54.10 stop @ $51.10
Long 1 unit Ultrashort Financials ticker SKF @ $103.20 stop @ $98.90
Long 1 unit Ultrashort S&P500 ticker SDS @ $80.40 stop @ $78.12


HistoryRepeatsItself said...

I just wanted to let you know I appreciate your blog and to give you kudos for giving your honest opinion. My career is not related to stocks, but I have always invested my own money since 1985, starting with mutual funds and eventually on to equities, so I love your insider point of view-2 things saved me from this years mess, Bob Prechters book Conquer the Crash (2002) which predicted all of this as well as giving advice on how to prosper in deflation and bumping into your blog which led me to read Turtle Trader books.

Thank You again - and if you haven't read the book you should - it helps understand the bailouts in a way - his degree was in psych (Yale) and he won prestigious trading competitions in the 70's

John said...

I can't agree more. Very good post.

Harleydog said...


thx for the post and your compliments, much appreciated. I have read all of Prechters works and yes he did pedict this mess. I have also read the turtle books, Turtle Trading in particular.
My trading size, re; units, is based on Richard Dennis' work.
Continued success to you.


Harleydog said...


thx for reading and your note.