Wednesday, September 22, 2010

Recessions... Fantasy and the Real World

Much thanks to Mike Panzner over at Financial Armageddon blog and author of the book of the same name along with the sequel When Giants Fall for bringing to my attention the recent comments from Wal-Mart's CEO of U.S. business Bill Simon. Given these comments, which I will get into below, I absolutely had to bring up the news from Monday from the NBER (National Bureau of Economic Research. It seems, now you may want to sit down for this, that according to the NBER that the recession officially ended in June 2009.


This is fantastic or should I say fantasy news but whatever you do, please don't tell those people walking away from their mortgages in droves that it ended. And please don't tell those institutions like Morgan Stanley that are walking away from commercial mortgages that it ended. But most importantly whatever you do don't tell those end of the month Wal-Mart shoppers the recession is over. They might not believe you.

For those that haven't heard, and that is possible if you get your fill from the propaganda network (CNBC), it seems that Bill Simon, CEO of Wal-Mart U.S. business, made some interesting comments at a Goldman Sachs conference regarding shopper behaviour at a Wal Mart store around midnight at the end of a month.

“The paycheck cycle we’ve talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.

“And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs,and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.

“And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason.”

But wait there's more.

Given the above good news that the recession ended back in June of 09' I thought it very strange the comments Simon from Wal-Mart provided.

Could the NBER be wrong? Could it's figures be subject to revision? Naaaah, couldn't be. Could they?

What is even stranger is yet another snippet from the real world that Mike also brought to my attention showing insider selling outpacing buying 290-1 via the sleuths over at Zero Hedge. The cats over at Zero Hedge put out so much info it is hard to keep up so mucho appreciation to Mike for catching it and sharing.

Does anyone else find it strange that, if the recession ended already as the NBER has told us it has, why are the insiders tripping over each other to sell?

Or as Lt. Daniel Kaffee said to Col. Nathan Jessop in A Few Good Men ..... if you gave an order that Santiago wasn't to be touched, why would it necessary to transfer him off the base?"

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
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Long 1 unit Ultrashort Real Estate ticker SRS @ $49.10
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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
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Short 1 unit Bank of Nova Scotia ticker BNS @ $51.65 stop @ $53.41

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