Friday, August 14, 2009

Disconnect ?

In yet another example of the the disconnect from reality we get this piece from Jonathon Weil over at Bloomberg regarding the over valued loan portfolios on the books of the major banks.

My question, consider this against the backdrop of 550,000 job losses, is when does the stink of the dead bodies become so unbearable that people start to take notice. The foreclosures the banks are sitting on, and yes dear readers they are sitting on them and sitting like a sword of Damocles over the banks collective heads.

Do you really believe that by pretending all is okay all will be okay? What do you call a mortgage note where the homeowner has not made a payment in 3, 6 or 9 months? This whole circumstance has become such a disaster I am at a loss for words. No, not because I am short but because playing hide and seek games like the banks are is only making the final outcome that much worse.

This extend and pretend as it has been called by some is simply a fantasy whereby everyone is hoping and praying things get better to bail them out of the situation. Bankruptcy filings are up 35% this past year and yet we are to believe that by simply waiting things will get better?

So disconnect or not none of this matters until one day, all of a sudden, it matters. A whole lot.
Housekeeping notes;

I was stopped out of ANF yesterday at $33.11 for a loss of just over 1 3/4 pts on 1 unit short.



Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit US Gold ticker UXG @ $3.05 stop @ $2.68
Long 1 unit Ultrashort FTSE/Xinhua China 25 ticker FXP @ $10.15 stop @ $8.89
Long 1 unit Ultrashort MSCI Emerg Mkt ticker EEV @ $16.65 stop @ $15.88
Short 1 unit Spiders ticker SPY @ 100.45 stop @ $102.23

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