Friday, March 27, 2009

Couple of Thoughts

I was away from my post yesterday off and on so my apologies for not posting.

Regular readers know I am not the most brightest bulb in the room s0 I would appreciate someone explaining to me why deflation, or falling prices, is such an awful thing. The authorities would have you believe that deflation is the leprecy of our age. To be feared above all else.

Why is defeating deflation so important that the powers that be, the masters of the universe, the smartest guys in the room, are "all in" with OUR MONEY to do it ??!!

That they would risk the survival of the republic to do it?

Which got me thinking to this....

I know people have focused on the Jon Stewart/Jim Cramer interview feud. I think the more important one was Stewart's interview with former Fed Chairman, Maestro of our current predicament Allan Greenspan (I think you can search you tube to find it).

In the interview which was some months ago Stewart talked about how Greenspan lowered interest rates everywhere and always. Stewart went on to say, and I am recalling this from memory now, "doesn't that penalize savers and reward risk taking and gambling." Greenspan responded that Stewart understood things quite well.

Think about that exchange for a while. It will go a long way to helping you understand some of the policy responses by government.

We must think about things from the other side of the table.

Asking questions like the following;

Whom does inflation benefit?
Whom does inflation hurt?
Whom does deflation benefit?
Whom does deflation hurt?

Maybe some lights will start to go on and the wonderful thing about this is you do not even need a PhD in economics. You know, the degree they have hundreds of in the halls of the Fed, the Treasury and Wall St. Kinda the ultimate oxy moron, no?

Housekeeping notes;

Yesterday I was stopped out of the following;

1 unit of SKF at $91.30 for basically a flat trade on 1 unit long.
1 unit of SDS at $73.75 for a loss of just over a pt on 1 unit long.
1 unit of AAPL at $108.15 for a loss of just shy of a pt on 1 unit short.

Lots of little losses keeps you solvent and able to trade another day and I don't have an army of Ivy league analysts to figure it out, just little ol' lonely me with a BA from Hobocken U.

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 Ultashort 20yr Treasury ticker TBT @ $44.25 stop @ $43.74
Long 2 units Ultrashort Real Estate ticker SRS @ $49.85 stop @ $49.78
Short 1 unit Microsoft ticker MSFT @ $19.20 stop @ $19.20

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