Wednesday, October 28, 2009

Guilty of Sedition

U.S. Steel (X) daily chart above. My apologies as for some reason my notes cut off on the above chart. It should read,

"Does this chart of U.S. Steel tell us all we need to know about the economy?"

Nucor (NUE), daily chart above.

Transports i-shares (IYT) daily chart above.


Noteable Noteables

IBM - gapped down last week. Yesterday in the face of a further $5billion stock buyback, near all time highs mind you, barely finished up on the session.

RIMM - breaking July lows.

GDX - failing to make new highs as GLD has. Note SLV has not made a new high either. By the way, I see Jim Cramer likes gold, does that make anyone out there nervous as all hell.

RGLD - the undisputed leader of the golds failed to make a new high.

AA - Gap and crap still intact.

INTC - the same as AA though tech is still the go to pitch for most fund managers.

GS - has Stephen Friedman, that stock picker extraordinaire sold his position yet? (52,600 GS shares @ $76.66)

GMAC -needs another $3 billion, is this just a bad dream. Yup, keep poring money into that winner, just what every prudent businessman would do, right? Sorry I forget the politicians run that baby now, in that case expect $5 bill.


Financials

The big banks and financials have simply become gambling crack houses. I will exclude for the moment, but have not forgotten the pension funds with their market losses and unfunded liabilities. With taxpayer money as their backstop they are gambling on markets and assets pure and simple. I call it gambling and not speculating because when you do it with someone else's money and never suffer the consequences it is gambling, heads they win, tails, you and I lose.

To use a blackjack metaphor, there is an enormous hand of double down going on by many of these institutions. Trading, as they like to call it as it is coctail party inappropriate to call it gambling, accounts for the lions share of their revenue as all other arenas have dried up. This has to stop right now.

As I have said before like children playing a pee wee soccer game, all participants chase the ball, or in their case, the same trade. This is now being facilitated via the dollar. I cannot say this any more succinctly, WHERE ARE THE ADULTS? Are there none in Washington who see this grand heist of the century? Are there no patriots in power who see this for what it is?

Sedition

I have read and listened to how Time writer Joe Klein has accused the Fox News channel of being guilty of sedition, which is absolutely comical, but since we are on the subject lets talk about sedition.

Yes Mr. Klein, let's talk about the those who are really guilty of sedition. They reside in Washington and Wall St. and the Treasury and the Federal Reserve. I have said before that the policies, the remedies, the fixes we continually get from our elected and unelected leaders are so perverse, so counter productive, as to lead me to believe they have designs to see the republic implode.

They saved us from armageddon you say? Prevented us from falling into the abyss.
Really ?
How?
By papering it over with money they don't have?!
With FASB suspension of accounting rules by a shocking 5-0 vote?!
With trickery and gimmicktry?

I have previously counselled on numerous occasions that the answer to it all is to do NOTHING, absolutely nothing !

Let failures go under. The dead must not be kept on life support.
Stop the bailouts. Stop the handouts.
Immediately close insolvent institutions the minute they are discovered.

Am I such a simpleton as to make DO NOTHING the answer?

Or is the answer so sophisticated that only the 435 house of representatives and 100 senators, most of which are lawyers, are only qualified to figure it out? With the advice and counsel of their trusted lobbyists of course.
How else could a house representative vote for a bailout bill that was opposed by his/her contituents by a 99 to 1 margin only to be charged after the fact by King Henry and the clowns!

But back to Mr. Klein and his accusations of sedition. You want sedition charges Mr. Klein?

How about you try starting with a government agency responsible for supervision who aids and abets fraud. Like the obfuscation and obstruction that the Office of Thrift Supervision did with IndyMac.
When banks that a freshman accounting major knows should be closed and are not leading to exponentially larger losses due to this is akin to knowingly letting the cancer spread from the foot to the calf and then to the thigh and now having to amputate the leg.

Or how about you try with Goldman looting the treasury in broad daylight via a pass thru from AIG to the tune of $13 billion on derivatives that were worth a pittance of that !

Or how about former head of the NY Fed who was DIRECTLY responsible to regulate the banks activities in that district (re: Bear Stearns, Lehman, Merrill) yet does not. Is that not sedition when it threatens our economic viability. No Mr. Klein, in our system, that person is not charged with sedition, rather he is promoted to Treasury Secretary !

Or how about a Fed chairman who refuses calls for details (from elected officials mind you!) as to who has borrowed from the Fed and what was posted as collateral for said loans and yet REFUSES to answer these questions. In what can only be termed the height of hubris, then he goes to court to prevent it.

Is any of this not sedition Mr. Klein?

I am no defender of Fox News Mr. Klein but I would humbly suggest you aim your charges of sedition at more appropriate targets.

Just wanted to get that off my chest.


Housekeeping notes;

Yesterday I was stopped out of 1 unit of UEC at $3.09 for a loss of just over 1/2 pt on 1 unit.



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


Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

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