Monday, February 2, 2009

More Lights Come On

Today Macy's announced that they are slashing jobs and cutting the dividend. I really don't know why they have to cut the dividend when they could just pull a page out of the Simon Properties playbook of paying the dividend in stock.

All these juicy dividend yields the pundits are crowing about may be just a mirage in the desert for the many who are still listening to them but just remember I believe this is a bear market and hence I have a bearish position on the market.

More crowing about tech as the shills of Wall St. continue to try to keep the game alive. Just like the casino's they need a constant flow of suckers to keep them in the lifestyle they have become accustomed to.

I caught Bill O'Reilly the other evening and even he now is on the 'witch hunt' bandwagon. Better late than never Bill. He wants to go after the Mozillo's, Fuld's and O'Neal's of the world as he is now sufficiently fired up as to what has gone on. I wish him luck because, to quote Sean Connery in Untouchables, Mr. O'Reilly.... "What are you prepared to do ?!" I say this because Mr. O'Reilly had better be prepared for what is behind the door if he opens it and where it will lead.

Is he prepared to find that Fannie, Freddie and Franklin Raines leads back to Dodd, Frank et al. among others?

Is he prepared to find that Lehman and Bear with Fuld and Cayne lead back to Geitner and Paulson and Bernanke?

Is he prepared to find that Citi, Prince and Rubin and their Enronesque off-balance sheet holdings lead back to the SEC and the Treasury?

Is he prepared to find that Madoff leads back to the SEC?

Is he prepared to find that appraisal fraud and mortgage fraud was known and ignored and leads back to the administration and congress?

Is he prepared to find that Mozillo and Countrywide lead back to Dodd and friends back in DC?

Is he prepared to find that AIG's funeral meeting leads back to Goldman and Blankfein and their 'no material interest'?

Will Mr. O'Reilly be prepared for what will be uncovered as this cess pool is revealed or will he deem the country 'to fragile to handle that kind of bad news'?

A friend sent me a note (link below) regarding an very unflattering critique of the pom pom network's rising new star Erin Burnett, by the Huffington Post. The post, NBC Has An Erin Burnett Problem, basically calls her an apologist for Wall St. and the banks and includes a video from her appearance on Meet the Press.

I have been merciless in my criticism of the CNBC and it's 'pretty faces',who, as Mike Morgan summed the network up perfectly with,

"CNBC's chairs are filled with boobs and boobs"

It is one thing for me, Mike or many of a long list of bloggers and market participants to criticize them over at CNBC, but completely another to see fellow high profile media types do it publicly and as aggressively. The usual standard operating procedure is to close ranks and circle the wagons against all comers. But alas, just as happened on Wall St. it only takes one to turn and the cannibals are upon one another in an every man/woman for themself.

It is interesting, comical and in the end sad to watch the lights upstairs, slowly go on with the financial media darlings as they awaken to the realize the pawns they are and the fraud they, to be fair, have wittingly and unwittingly become a part of. They learned nothing from the tech bubble because narcissism is a more powerful elixir than knowledge.

Readers viewed my glee in 3 Cheers for Dylan Ratigan as he finally started to get it and was visibly pissed about it, which by the way continues to this day. (keep at em' Dylan) And yet once again in Another Light Goes On, as David Faber finally followed the bread crumbs and realized Andrew Jackson wasn't kidding when he called the bankers a den of vipers and thieves.

This is all a process of quite simply sobering up from a drunken stupor. A massive form of detox if you will. In Don't Believe the Hype I specifically noted the following;

'I have noted in past the famous quote that men go mad in droves only to regain their senses, slowly, one by one. Well, slowly and one by one, people are connecting the dominoes. They are putting 2 and 2 together. They are slowly breaking ranks.'

I offer this not to toot my own horn but to remind you that this process is slow and is not accomplished without a fight. A fight fought by those wising to 'hang in there', those with a vested interest in keeping the game going and then those who will rejecting the facts until they are simply too large, too obvious and too painful to ignore.

To those who continue to remain adamant that this is THE bottom and this is capitulation. I urge you do ask your friends, family, co-workers, neighbours whether they have sold out their stocks. Ask 20 people and my guess is less than 4-5 have done so. We will bottom when the vast majority, say 14-17 have done so. E

Housekeeping notes;

I was stopped out of my long APOL position today at $86.35 for a loss of about $3 pts on 1 unit.

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 2 units Ultrashort MSCI EAFE ticker EFU @ $89.80 stop at $89.80
Long 2 units Ultrashort S&P500 ticker SDS @ $69.80 stop @ $66.15
Long 1 unit Ultrashort Real Estate ticker SRS @ $51.30 stop @ $47.18
Long 1 unit Ultra Crude ticker UCO @ $10.60 stop @ $9.38
Long 1 unit US Gasoline fund ticker UGA $21.85 stop @ $19.58
Short 1 unit Darden ticker DRI @ $27.70 stop @ $28.70
Short 1 unit Wells Fargo ticker WFC @ $20.20 stop @ $22.43
Short 1 unit JP Morgan ticker JPM @ $27.35 stop @ $29.54
Short 2 units Morgan Stanley ticker MS @ $21.30 stop @ $23.82

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