Sunday, December 27, 2009

Merry Christmas

I just wanted to take a moment to wish all my readers and their loved ones a very Merry Christmas. Fortunately I am far too busy enjoying this special time of year with family and friends to post of late and would strongly urge others to do the same.

I will get back to posting in the next few days.

Again Merry Christmas everyone.


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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $8.49
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80

Thursday, December 17, 2009

MSCI Europe and Euro Stoxx 50

Daily view of the i-shares MSCI Eafe index, ticker EFA.


Daily view of the Dow Jones Euro Stoxx 50 etf, ticker FEZ.

Both charts above look to be in some trouble.

I caught an interview CNBC's Melissa Francis of Fast Money had yesterday with Jim Chanos of Kynikos Associates. (you can view it here). Chanos had a quote regarding China, which could very well go down as the quote of the year, in which he said;

"the irony about China Melissa, is that Western investors, who decry the amount of government involvement, say health care in the U.S. or government intervention in the financial markets and really find it distasteful are quick to grasp the fact that 25 members of the Chinese politburo in Beijing are able to fine tune this rapidly growing economy. And we also just don't believe the GDP (re: Chinese) numbers. We think they're massively inflated by under depreciating very, very, very shaky capital asset base."

Regarding the euro (ticker FXE) I was hoping for a bounce to get short which never came so I will sit here frustrated content with my long UUP position.

And don't even get me started on the long natty/short crude trade. The nat gas could almost be as crowded on the short side as the U.S. buck is. Ya gotta just love these extraordinarily bright hedge fund managers with their MBA's from prestigious schools as they proceed to pile into trades like black Friday shoppers at a Walmart.

Truth be told these hedge fund managers, or valets as I am fond of calling them as they are no smarter nor sophisticated than the valet at you fav restaurant or golf club, are really strikingly similar to that drunk frat boy (or girl) you see on the dance floor at almost every wedding. What I find truly fascinating about all this is that this is the talent many in the mainstream media are claiming needs to be paid (re: pay czar and compensation debate).

This is just like American football. So just as in football, stop watching the glamor positions like tailback, quarterback and flanker (wide receiver) for the sizzle and focus are the foundation or the 'steak'. This is the place where the real work is done, where the game is won or lost, that being the offensive and defensive line. Ironically, I would remind you this is historically the lowest paid of positions but slowly that is changing, as it will on Wall St. as well.

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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $8.49
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80

Short more China

This morning China, or in our case FXI has taken out its prior low of $42.30 made back on Nov 27th. Based on this, I am prepared to add to my short China position. I am adding a 2nd unit long of FXP here at $8.56.

As an aside, I am watching Europe closely via EFA and will have a chart in short order.

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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $8.49
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80

Tuesday, December 15, 2009

Couple of Quick Notes

I have been working a quite a few things of late before year end so my apologies for lack of posts.

Dubai World got a stay of execution with a 10 billion injection from Abu Dhabi, which in my view is a pittance given it's total debt, but then why would off balance sheet items matter in a world of denial. Heck, the major houses are right, why even waste any time on this issue as a Dubai default (yes readers, they will default), is a non-event, an outlier and is completely contained. Just like sub prime was or wasn't, I cannot remember. Nothing to see here, please move along

Short term rates, by this I mean 1 month, 3 month, 6 month, 1year rates, (take your pick) are at or below levels when the S&P was south of 700 back in March. Something out there is scaring the heck out of the bond guys and gals and yet the equity crowd seems to dismiss, content to parade around touting stocks with abandon.

Bearish sentiment readings are at levels they were back in the fall of 2007 with the Dow north of 14,000 alongside the fact that i
nsider selling numbers are absolutely annihilating the buying. Would we have it any other way?

Banks and financials are in a mad stampede, almost tripping over one another to issue equity into this rally. You think this is a good omen ? If so then you are fully qualified to run fund of others money. But don't worry if you missed participating in any of these issues as the manager of that equity fund you have in your 401k and IRA has got your back. Dollars to doughnuts he/she has undoubtedly bought you in. Yes dear reader, smart money.... smart money for sure.

A quick note to the bulls regarding gold -on which I have been quiet, content to be long my some physical as insurance- in particular the GDX, please note the very tight flag being formed currently. Heavy volume on the down move from the recent high of $55.40 (the pole). Light volume as the stock moved consolidated sideways between $47.50-49.40 (the flag). A break of the flag's lower bound of $47.5 would imply a target of $39.5 given the pole is worth 8 pts. For what its worth.

Housekeeping notes;

I was stopped out of my VNO short position yesterday at $70.72 for a loss of about 2 1/2 pts.

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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80

Monday, December 14, 2009

Natty/CrudeTrade?

The crude oil etf, ticker USO (chart above) shows an interesting development. Could crude rally and kiss the broken trend line from underneath?

Which then leads me to the Natural Gas etf, ticker UNG (chart above) which also paints a very interesting picture. Which stands in stark contrast to the crude chart.

I am inclined to get long nat gas and short crude in equal dollar amounts but am hesitant to chase this trade today. Especially so in light of the fact that Exxon buying nat gas player XTO Energy for north of $40 billion.

Long Natty/short crude? I will chew on this idea a little over the next few days but yes.... long natty, short crude seems like a decent trade.



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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
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

Friday, December 11, 2009

Please Read !

An old friend forwarded me this piece from Van Hoisington and Lucy Hunt of Hoisington Investment Mgmt. Please take a few moments to read it as it's well worth a few moments of your time.

It is a sobering yet excellent piece one should keep handy as to refer back to each and every time the shills, charlatans and pumpers come out on CNBC and Bloomberg.



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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
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

Thursday, December 10, 2009

The Krona, Aussie Dollar, and Euro.

The currency shares Swedish Krona, ticker FXS (chart above) looks eerily similar to the last time it topped out back in spring/summer 2008.

The currency shares Aussie dollar, ticker FXA, (chart above) also known as the commodity currency tired to take out it's summer of 08 highs and failed. Off the lows this one has been the stongest so easier game might be found with the Cdn $ or the Euro.

Speaking of the Euro, the currency shares, ticker FXE (chart above). Could this test the lower bounds of the channel near 130 and ultimately the 110-115 area? The upsloping trend line (green) has been broken, a break of 145 and things could get nasty quickly here.


Elsewhere, did you per chance catch former Federal Reserve Chairman and current window dressing economic recovery advisor to the White House Paul Volcker's comments to a business crowd in Britain the other day? You can read them here as hey were absolutely priceless, not to mention spot on.

The former US Federal Reserve chairman told an audience that included some of the world's most senior financiers that their industry's "single most important" contribution in the last 25 years has been automatic telling machines, which he said had at least proved "useful".

Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up". He said credit default swaps and collateralised debt obligations had taken the economy "right to the brink of disaster" and added that the economy had grown at "greater rates of speed" during the 1960s without such products.


When one stunned audience member suggested that Mr Volcker did not really mean bond markets and securitisations had contributed "nothing at all", he replied: "You can innovate as much as you like, but do it within a structure that doesn't put the whole economy at risk."


I love it. An ATM machine is your most significant contribution. Don't you just love the comment from the 'stunned audience member? Only a banker could be stunned by Mr. Volcker's comments. Only a banker could still be that oblivious at this point, content to suck on the crack pipe of their own hubris and self import. Well, okay politicians too! Only a banker could still be drunk on the kool aid of their own brilliance and oblivious to their role in the debacle. They just don't get it. Truly unfathomable. I have a hunch when the mood turns they will. Most likely by high tailing out of Dodge with a crowd of pitchforks close behind.

Now you must take all this in proper context as Mr. Volcker is simply a figurehead with no real say or influence. How I wish I were wrong on this count but facts are facts, he is a titular quota filler, nothing more. Cement heads Summers and Geithner are in charge or in the least carrying the water for their masters on Wall. St. Lord Blankfein, Duke Dimon and Sir Mack are in charge but don't take my word for it. Lord Blankfein still claims the bankers are doing God's work so who's to argue with Lord Lloyd.

Regarding my comments on Dubai World the other day and the debt implosion there, I omitted one very important aspect. Besides the fact that there is absolutely nothing to worry about with this happening its that Dubai still has debtors prisons for those that cannot pay their bills. How is that for the irony of ironies that a country with human rights record and laws that would make Vlad the Impaler blush and will jail any and all, 'cept royals, that stiff their creditors, now has the nerve to do just that, stiff everyone on a global basis. Remember now I have no sympathy for the moron bankers who lent these clowns the money but the irony of that situation was omitted in my haste to post. These 2 groups, Dubai World alongside Wall, Bay, and Lombard St. bankers, make fitting bedfellows. They deserve one another as a match made in hell.
Ahhh my friends, you just cannot make this shit up if you tried.


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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
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

Monday, December 7, 2009

Sign of The Times

Regular readers know I have been a vociferous critic of the rampant lawlessness in our capital markets. My previous posts Trust, Crisis of Confidence, Shock and Awe All Right and Sandbagging all can attest to this.


Back on May 20 ,2009 in A Few Thoughts I said the following;

"I have not commented on the GM situation and the absolute raping of the SECURED bondholders by this current administration, and before you say it, if you think the prior administration would have been any different then you deserve the pablum being fed to you. The fact that the union VEBA is getting, by all accounts 70-100 cents on the dollar even thought they are subordinate to the secured debt in question is absolutely staggering. This outright and brazen theft, which is what it is, boggles this simpleton's mind. How to restore confidence to the markets in 1 easy lesson huh? Pathetic if it were not all so illegal but what would the law have to do with anything anyway since rules haven't been enforced in years. The hammer and sickle are waiting to be stitched to the flag shortly."



on Nov 11 this year where in a piece called Sandbagging I said this;

"and yet again another block of the foundation of our financial system, trust, crumbles away. I have commented before that trust is the most crucial element is capital markets. People have to be able to believe that the information they are being provided is legitimate and untainted"

The bankers and their ilk care not a whit when rules of law are skirted in their favour. The lawlessness, the duplicity, the double dealing that have overwhelmed our capital markets suit them fine when works in their favour but boy does it hurt when it doesn't.

So, it is with great pleasure that I read today this article out of the Times of London whereby the bankers seem to be getting a serious dose of their own medicine. It seems they object, no, they strenuously object, to having their interests superseded. (or more likely in this case, rendered moot, but I digress)

The article reports that:

"Bankers are furious that two defaulting Saudi conglomerates that owe $20 billion (£12.2 billion) appear to be favouring local banks over foreign creditors. State-owned Royal Bank of Scotland, HSBC and Standard Chartered are all understood to have exposure to Saad Group and Ahmad Hamad Algosaibi & Bros (Ahab). Dozens of other Western banks are also owed money, including Citigroup and BHP Paribas.

Bankers suspect that the two family-owned businesses, which defaulted over the summer, have privately reached agreement with local Saudi banks over restructuring their loans while leaving foreign banks in the cold. One senior banker told The Times yesterday: “Local banks appear to have been given preference.”


They are furious. They are so furious, they have dispatched a Lord Davies to represent their interests (might I suggests a couple of Sirs and maybe a Duke as reinforcements!) What?!! No TARP? No TALF? No flow through a la AIG? No redemption's at par? What the F$^% !!

Where the hell is Bob Rubin, King Henry and Neel Cash n Carry when you need em' (Mortimor where in hell is Beeks? with apologies to Ralph Bellemy)

I would love to hear what the Saudis tell his Lordness upon arrival.

Remember that toxic, purportedly triple A paper you foisted on us?
Remember those RMBS and CMBS mezzanine loans you peddled us?
Remember those recapitalization deals for financials like Citi you let us participate in?

Well... whenever we complained, (post mortem) you kept repeating over and over again caveat emptor. So a reciprocal caveat emptor to you. Oh, and how do you say...ummm...sucker in latin?

No readers you cannot make this up. This is the natural evolution, or should I say devolution of things, a downward spiral if you will. You can argue against it all you want but the fact remains rule of law regarding our capital markets went out the window a long time ago.

Do I agree with what is happening? Of course I don't but when the gloves are off the gloves are off. By the way, yet another tell in this market.

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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
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

Friday, December 4, 2009

Random Thoughts



I know the big, big, big, news today is the drop in the unemployment rate to 10%. I am not trying to be a stick in the mud but if this is all they can rally the market (+130 on the Dow) on this euphoric news, then you had better watch out below.

Funny how the touts and pumpers have nothing to say about GS rolling over here and not participating. Hey, on second thought, what about every shills favourite tech/consumer/global/defensive play AAPL? No love for it either? Hmmm. Funny how no one is talking about AXP's little pullback? yesterday.

Side note, boy do I want to short some BIDU here (chart 2nd from top).

If you have not had a chance to catch Sen. Jim Bunning from Kentucky absolutely pulverize Fed Chair Zimbabwe Ben Bernanke yesterday, please take a moment to do so as it is must see TV. You can catch it here.

There are lots of little tells appearing in this market. Yes, I realize many of you are sick and tired of hearing the same old same old from me. That's completely fine. Just do me a big favor and don't complain when you don't have a chair, as the music has stopped playing and you can't get off the dance floor.

Housekeeping notes;

Tuesday of this week I was stopped out of BBBY at $38.42 for a loss of almost 3/4 of a pt on 1 unit short.


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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
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