Monday, July 26, 2010

The Yen, Return OF Capital and Idiot Bloggers... again

The chart below is a nice looking weekly view of the Japanese Yen ticker FXY for your viewing pleasure.

There has been much talk by bullish analysts and purported pundits that the Fed is going to cut interest rates that are paid on excess reserves the banks you and I deal with keep on deposit with the Fed. The consensus is that this will encourage banks to lend.

I repeat, yet again, for those that missed it or have forgotten. The people and entities who desperately need money to stay afloat don't have a credit score to qualify, never have and never will. They only received financing in the first place because it was a Greenspan sponsored and endorsed reckless orgy of 'you have a pulse you qualify lending'. The people and entities who do qualify for financing aren't stupid enough to borrow.

So the bulls think the Fed cutting rates here will spur lending huh?

Try this on for size. Remember Japan?
Remember the depression they have been going through since their economy topped out in 1990? Well, the vast majority of Japanese savers gave up on the insolvent banks preferring to keep your yen on deposit with the Japanese Postal Savings System at next to zero rates.

Lowered rates spurring borrowing huh?

It's called pushing on a string and again please refer back to my above point on borrowing.

I do not have current numbers but as of approximately 2006 the Postal Savings System was the largest bank on the planet based on deposits. All the while paying minuscule interests rates to depositors.


Ever heard this phrase..... the return of capital is more important than the return on it.

When people are worried about the very existence of a deposit taking institution all bets are off. Confidence is paramount is so many aspects of our ponzi scheme but more so in this arena than any other.

Think back to any bank panic the globe has ever seen throughout history. In my opinion there is good reason why people will accept 1/4% that is 0.25% for their deposits. Quite frankly the Fed can cut to zero and then even charge I safekeeping fee and it will matter not a whit.

I completely envision a time, though I much prefer not to, when one will pay a rate rather than receive one for the privilege of keeping you money on deposit with a solvent, reliable, transparent, deposit taking institution.

Idiot Bloggers vs Brilliant Mainstream Media.

I caught the following piece where a CNN host calls for crackdown on bloggers in the aftermath of the Shirley Sherrod fiasco. Might I humbly suggest a crackdown on the lamestream media for being comatose, lazy and plain ol' on the take. Need I bring up Balloon Boy or any number of stories the Enquirer has broken the mainstream arena has refused to?

CNN host Kyra PHillips is officially on board the idiot blogger train. Check out this winner of a line:

"There's going to have be a point in time where these people have to be held accountable," Phillips said. "How about all these bloggers that blog anonymously? They say rotten things about people and they're actually given credibility, which is crazy. They're a bunch of cowards, they're just people seeking attention."
Ms. Phillips comments harken back to CNBC village idiot Dennis Kneale's comments last July when he described blog criticisms as "the anonymous, dark and cowardly corners of the blogosphere".

In my post Anonymity Reigns, I outlined the issue of anonymity as
I am one of those bloggers who writes under a nom de plume as they say. So do many other blogs and sites on and off the internet. One of the more famous publications known for this is the Economist Magazine. Bloggers are not the first to write anonymously nor will we be the last. Anonymous writings have been around far longer than the internet for sure. Am I to believe people like Ms. Phillips and village idiot Kneale that ones' anonymity renders his/her information moot? That simply refusing to identify ourselves invalidates our point? Tyler Durden (nom de plume) over at Zero Hedge responded as follows to this exact issue and which I have selfishly now adopted as my own;

"though often maligned (typically by those frustrated by an inability to engage in ad hominem attacks) anonymous speech has a long and storied history in the united states. used by the likes of Mark Twain (aka Samuel Langhorne Clemens) to criticize common ignorance, and perhaps most famously by Alexander Hamilton, James Madison and John Jay (aka publius) to write the federalist papers, we think ourselves in good company in using one or another nom de plume. particularly in light of an emerging trend against vocalizing public dissent in the united states, we believe in the critical importance of anonymity and its role in dissident speech. like the economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker- as it should be. we believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn't."

Maybe journalistic reporting should be judged on the content of your work and not the cover of your face thereby leaving former beauty pageant winners and Calvin Klein models quality and content of work to fend for itself. Tis a thought

Oh well, should you expect anything less from the likes of people who might be dupes when it comes to reporting and insight but sure know what their shelf life is and can sniff out their cheese is being eaten for sure. One thing I can assure you of is that were there more of the ilk of an Edward R. Murrow and less of what I like to call boobs and boobs in chairs, (thx Mike Morgan, never stop laughing at that one) this whole conversation would be moot.

Housekeeping Notes;

In a defensive move I want to move my stop down on AAPL to $266.54

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 @ $60.30
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $60.50
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $42.45
Long 1 unit Ultrashort Real Estate ticker SRS @ $49.10
Long 2 units Direxion Tech 3X Bear ticker TYP @ $52.60
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $22.52
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $92.15
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 93.48 stop @ $93.48
Long 1 unit Ultrashort Gold ticker GLL @ $41.25 stop @ $38.84
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $266.54


Sean said...

"I am one of those bloggers who writes under a nom de plume as they say."

Too bad Kyra Phillips wouldn't understand what you just said.

Harleydog said...


good for you,yes like I said, Ms. Phillips is just another one of the many boobs and boobs in chairs. She is fluent is parroting and regurgitation though.