Wednesday, June 30, 2010

Imbeciles Coming out of the Woodwork!

Is there something in the water?

Is it a planetary alignment?

Do these people realize auditions for my All-Imbecile Team is not meant to be flattering but rather homage to abject stupidity? It seems word has gotten out about my All-Imbecile Team search as lately there seems to be no shortage of morons up for consideration.

Recently, June 17 to be precise, a piece was published by Federal Reserve Bank of Richmond senior economist Dr. Kartik Athreya entitled Economics is Hard. Don't Let Bloggers Tell You Otherwise.

I have reprinted a couple of the more choice lines from Dr. Athreya's essay and yes readers I have learned my lesson, I will attempt to refute his arguments rather than simply insult him, thereby NOT lending credibility to his arguments, (sure!)

The good PhD doctor starts off with this beaut:

"In this essay, I argue that neither non-economist bloggers, nor economists who portray economics - especially macroeconomic policy - as a simple enterprise with clear conclusions, are likely to contribute any insight to discussion of economics and, as a result, should be ignored by an open-minded lay public."

Say again now? Wow! With that opener you remind me of some insult throwing, refuse to tea bag like the mainstream media, idiot bloggers.

"So far, I've claimed something a bit obnoxious-sounding: that writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams) cannot meaningfully advance the discussion on economic policy."

And to think know-nuttin' wanna-be bloggers like myself have the gall to call PhD's piled higher and deeper, shame on me for not knowing my place and shutting up.


"The real issue is that there is extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading."

Here's a dynamic consideration for ya Doc,

P=(1+r) to the exponent n.

That's the compound interest equation in case you forgot- and its the underlying problem that got us into this pickle we're in- which is what can happen to many academic types, especially those ensconced at the Fed, who prefer memorization to comprehension. And since you brought up the topic of 'incoherent and misleading', you could not have chosen 2 better adjectives to describe your history re-writing former chief theorist Alan Greenspan,.

As if this were all enough, he has the gall to call for a higher standard with this gem:

"As a result, my hope is that the broader public will ask for a slightly higher bar when it comes to economics, rather than self-selecting into blogs that merely conrm half-baked views that might have been acquired from elsewhere."

Amen to that higher bar Doc and it starts with the Fed and the Treasury, (one can dream can't one?), and its easy money, serial bubble blowing, cut rates at the first sign of trouble, Greenspan put, housing's not in a bubble, chug, chug, chug frat boy attitude and policy. The Fed is the root of the cancer we now face. Easy money all the time. Rather than the being the 'taker-away of the punchbowl, the Fed is the drug pusher of choice. How fitting. The perceived cop is really the criminal.

Funny how, with the shortage of mirrors in this country, cats like Athreya at the Fed want everyone else to get one, themselves excluded. You Dr. Athreya provide yet more proof, as if we needed any more, of why the Fed should be shuttered immediately.

The only missing piece from Dr. Athreya's piece is that he is not an alum of Yale or Harvard, but rather is a Hawkeye from the Univ. Of Iowa. After reading his piece most would conclude Athreya a shoe-in for a spot on the All-Imbecile Team. Most would be wrong. I will not add Dr. Athreya to my All-Imbecile squad. No, he has been cut, instead placed on the junior varsity squad, no even good enough to make the varsity team.

In all honesty I gotta cut Dr. Athreya some slack as he is probably a ton of fun to watch Jeopardy with. He is simply a product of the culture of hubris we have come to expect from the Fed. That they are omnipotent everywhere and always.

I no doubt expect a paper like this to garner Dr. Athreya multiple speaking engagements, a future, a Nobel prize in economics, a Fed Governorship alongside numerous CNBC and Bloomberg visits as a regular guest contributor. No doubt offering up the kind of timely insight right up there with the kind we have become accustomed to from the likes of Dennis Kneale, Ron Insana and Steve Liesman at the Propaganda network.


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 @ $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 @ $10.52
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
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $280.06

Tuesday, June 29, 2010

Revisiting All-Imbecile Paul Krugman

A reader took some umbrage to my post the other day Paul Krugman, Newest Member of the All-Imbecile Team. In it, I took the long overdue move of adding NY Times columnist and Nobel laureate Paul Krugman to my All-Imbecile Team. The reader submitted the following comment to me:

"he's the nobel laureate. your a blogger. the least you could do is try to refute his argument, rather than just insult him. the fact that you haven't tried to refute his argument actually lends credence to it."

Okay, were Krugman a lowly blogger instead of Nobel laureate would this even the playing field? In an attempt to address the writers concern, I offered this quick, albeit feeble, response;

Yes he is a nobel laureate and yes I am the blogger. Okay, so lets refute his Keynesian argument of spend, spend, spend. Most fiscally sane individuals would argue don't spend what you don't have but not Krugman. Borrow, borrow, borrow. One might even go a step further and suggest you don't solve a debt crisis with more debt just as you don't cure a heroin addict with larger doses of heroin, but not Krugman more heroin please. Mr. Krugman thinks penny pinching is more than cruel it endangers our future. What does one say to his other than insult the speaker as penny pinching is EXACTLY what people with a room temp IQ do when they are in trouble financially. In my opinion, remember now I am an idiot blogger and Mr. Krugman is the nobel laureate, you cut taxes across the board and you absolutely go hog wild cutting entitlements and spending to the point where calling it austerity would be a compliment. I apolgize in advance if you find my refutations of the laureate's arguments too simplistic or shallow. If so, I suggest you continue reading the cerebral horses**t the nobel laureate is spouting.
HD



Maybe if I were a Nobel laureate my words might carry some import with readers.

Either way the story of this economy unfolds, it seems there is a plethora (if I knew what that word meant I would tell you) of candidates for my All-Imbecile Team. Mish over at his fantastic blog Global Economic Trend Analysis submits yet another candidate, unwittingly?, this morning with his post Yet Another Keynsian Clown Steps Up To The Plate: Leo Kolivakis at Pension Pulse.


I am reprinting Mish's post in its entirety as an offering to individuals who, like the fella who wrote me, without a proper and concise refutation would lend credence to the argument (really now!) and actually buy into the hogwash. Below is Mish's, another blogger mind you, excellent refutation of Krugman and all the other Keynsian clowns argument.

The Keynesian clown hit parade just keeps on rolling. Leo Kolivakis at Pension Pulse is the latest to put on the clown hat for The Third Depression?

Some economists are worried about the push to slash deficits too early. In his op-ed piece in the NYT, Paul Krugman goes as far as calling for The Third Depression.

I also fear that policymakers are making a major mistake by moving so aggressively to cut deficits at a time when the global economy remains fragile. If you go back in history and look at all the major recessions, they were preceded by major policy mistakes. Either the Fed started raising rates too aggressively, or governments slashed spending too aggressively, or both.
The Cause of Depressions I am sick of Keynesian clowns who do not know the cart from the horse, who think debt is a free lunch, who think spending and debt are the ways to get out of debt problems and most of all never say how this debt is going to get paid back. What causes depressions is an unsustainable runup in credit and debt that precedes it, NOT a failure to go deeper in debt. Anyone who understands 5th grade math should be able to figure that out. Unfortunately, Nobel prize winning economists can't. "I listen to nonsense from some commentators claiming that if the US is not careful, it will suffer the same fate of Greece. Total rubbish." says Kolivakis. Three Examples of Total Rubbish
  • People who think crack addicts can smoke crack to cure their addiction
  • Alcoholics who think they can drink their way out of alcoholism
  • Debt junkies (and Keynesian clowns) who think one can spend one's way out of a spending problem
In a sense all of the above ideas will "work". In the first two cases the result is physical death, nature's way of solving the problem. In the third case, a bond revolt and economic death solves the problem. Depression is Well Earned If a depression is coming, and I think we are in one already, then it was well earned. Thanks to Greenspan and Bernanke, we had the biggest debt party and housing boom the world had ever seen, and depression is the unavoidable payback. Yet parade after parade of Keynesian clowns suggest there should be no payback for that party, that life can go on, that all we have to do is keep spending money no one has, money that cannot possibly be paid back, and all will be fine. Excuse me for pointing out the obvious Greenspan's attempt to defeat the recession and deflation in 2001-2002 did nothing but .... 1. Put off addressing the problem 2. Made a far bigger problem attempting to do just that Thus, those same economic clowns will soon be saying "I told you so" when this recovery dies although the reality is there was never any recovery in the first place, only a mirage of unsustainable spending. Keynesian clowns want to keep spending until the bond market pukes. As I said in More Keynesian Clowns Come Out of Woodwork ... No policy ever performs badly enough to cause its disciples to abandon it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com


Thanks Mish for the refutation, much appreciated. As for bloggers versus nobel laureates, I would side with the sane individual every day of the week and twice on Sunday, no matter how many awards, designations, degrees and acolades that my hang on their wall.

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 @ $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 @ $10.52
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
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $280.06

Ruh Ro !

The ECB European Central Bank failed to auction $55 billion in Euros it had planned to and that which it did (31.8 billion Euros) was at a much higher rate (0.54%) than it had been offered at the start of the program. You can read the full details here from the cats over at the FT in the article ECB fixed term deposit Fail.

Did you notice our equity markets, as usual, ignoring the signals the bond market was sending yesterday? In particular the long end?

For sure you didn't if you wait for your cues from the "would you put new money to work here" crowd at CNBC.

Equities are so much more sexier than bonds, aren't they?

You think maybe, just maybe, the bond markets are worth paying attention to yet?

Ahhh just tune out the bond market. Just pretend it doesn't exist, whereby you can focus on more important issues of the day, like the Tesla IPO.


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 @ $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 @ $10.52
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
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $280.06

Monday, June 28, 2010

Smart Money

Recently I came across an article by Michael Panzner, trader and author of the must read books Financial Armageddon and When Giants Fall. It seems I missed the piece as it was in the June issue of Risk Professional and for some curious reason my subscription had lapsed (hint: sarcasm)

The article "Crisis Analysis; Views from a Non-Risk Manager" is must reading, and as is his hallmark, Mike makes it all very easy to understand.

No offence to all you 'risk management professionals' out there with top notch pedigree to go with lots of letters on your business card, but why does anyone need you? Without question you are all dismissing Mike's simpletonian conclusions and like Dorothy in the Land of Oz, you are no doubt repeating to yourselves how brilliant and necessary you all are in perpetuity.

Now I do understand like any profession out there, there are some who excel and are truly professionals with much substance and acumen.

So where am I going with this?

Well, Mike's article on the risk managers makes me think back to my pointed criticisms of institutional money and Wall St. in general. My calling of hedge fund managers 'glorified valet parking attendants' drew much critical, profane laced emails from many of said valets out there.

I have posited that the institutional money is some of the dumbest money on the planet which I think more out there are starting to realize given the number of institutions who are loaded to their eyeballs on the derivative crap created during this housing debacle.

Back when I was a lowly retail broker at BMO Nesbitt Burns, the company would continually offer institutional participation conference calls with the likes of our global strategist Don Coxe along wit a host of sector analysts. The retail sales force or brokers were allowed on the calls in 'listen only mode'. And with good reason. Why you ask? Well, back at my old firm we had a big city branch that was known internally as the Holt-Renfrew branch. (Holt Renfrew being Canada's version of Nieman Marcus) Pretty people dressed fantastically who, if they knew as much about stocks as they did about Ferragamo and Fendi, might accomplish something for their clients but I digress. Understanding this you realize the vast, emphasis on vast, majority of retail brokers are not advisers as most wouldn't know common stock from livestock if it bit them on the ass, but rather salespeople. You can appreciate the management mandate of listen only mode. But let's not criticize the big investment firms. Barry Ritholz had a great piece recently on this over at this blog The Big Picture called 'Big Investment Firms Whine About News Coverage'.


Now if that is not enough for you on Wall St. and considering the carnage they have left in their wake that is our economy, are you shocked no one is behind bars and been held accountable. Okay Madoff and Sanford have been brought to account but who else? And because of this lack of consequences we see Wall St. is still up to it's standard operating procedure with this piece of news 'Fees Exceed Yield on Black Box Securities'

On June 15, RBS gave brokers a 2.75 percent commission to sell a three-month reverse-convertible note with a 2.56 percent potential yield, according to a prospectus. Last month, JPMorgan charged 5.25 percent in fees and commissions on a three-month Citigroup Inc.-linked note that paid 5 percent interest, and Barclays offered brokers a 2 percent commission on a security paying 2 percent interest, according to other prospectuses.

Yes, readers on Wall St., now as before the debacle was unleashed, 1+1=3. When you have an Harvard or Yale MBA 1+1 equals what you say it does. As the old saying goes, you can lead a horse to water but you cannot make him drink.

Word is over the weekend that BP is having trouble rousing interest in its capital raising efforts via a bond issue. Unsolicited tip for BP, offer the selling brokers 11% commission on a 10% yield bond and watch that puppy fly off the shelves, maybe even become oversubscribed.

But back to the dumb money. Listening in on those institutional calls were, as MasterCard likes to say, priceless! Thinking back, those calls and the discussions therein provided without any doubt to me why the vast majority of the so called "smart money" missed the housing bubble, missed the Japanese equity bubble, missed the dotcom internet bubble and of course why they will miss the next bubble (China?).

Simply put when it's not their money, the results don't matter. Imagine for a moment how they might manage this money if a blowup left themselves destitute and penniless. that if the ship sank, they sank with it. I know this is heresy to comtemplate but do you think they might reconsider their all in at all times strategies?

Do me an enormous favor and call this money institutional money, call it pension money, call it endowment money but whatever you do please don't ever call it smart money because it isn't.

Speaking of smart money I received a delightfully colorful reader email the other day regarding my Apple trade which I have copied and pasted below for your enjoyment.


Hey A**hole,
Short APPL huh? Apple has phenomenal fundamentals, it's product line across the board appeals to all demographic and socio-economic segments of the marketplace.
I love morons like you. I heard another idiot like yourself calling for AAPL $45. The only way AAPL goes to 45 is via a split !!
I hope you bears are right and the stock goes down so I can load up on more of this phenomenal company.
J.R.

What can one say. I wonder if the emailer remembers AAPL's drop from over $200 down to $80 back in 2009. Or can they remember any number of crash and burn "sure things" the Wall St. propaganda machine has promoted. Wall St. loves cats like this as they provide a constant source of funding for their lifestyles. Jesse Livermore was so correct when he said the game of speculation is as old as the hills and the one thing that never changes is the participants.

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 @ $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 @ $10.52
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
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $280.06

Thursday, June 24, 2010

Paul Krugman, Newest Member of the All-Imbecile Team

For those of you out there following my All-Imbecile Team I truly appreciate your input and suggestions. There have been some interesting names submitted. I would counsel any out there to remember that you must supply the accompanying background info such as moronic quotes, imbecilic anecdotes for your submission to be included for consideration.

As an update our current All-Imbecile Team members are:

Ken Rosen from Cal-Berkeley,
Roger Farmer from UCLA and
Alicia Munnell from Boston College.

So now today I must officially add Paul Krugman to this All-Imbecile squad.

Now on any other team Krugman would be hands down the captain but he has some serious competition for that title on this outfit. Recently Krugman came out with a piece in the NY Times called Now and Later.

Now normally if a freshman economics major wrote a piece like this he/she would be thrown out on their ass, lucky to be able to transfer into the basket-weaving program but not with Krugman. No, instead, the Times gives him a platform to spout his brand of Keynesian, spend, spend, spend, idiocy.

Go ahead, read his article but please do so on an empty stomach. In this way you will avoid a bloody mess on your hands after you read it and you will also clearly understand why our nation finds itself in the pickle it is in. A room temp IQ can figure out if you ran your business or household in the fashion Krugman suggests you would find yourself bankrupt but if you run the government this way you get promoted.

Whenever you want to flush out your arteries read this article or for that matter any other article by Krugman. There are not enough derogatory adjectives to describe Krugman's idiocy. Let's just add him to the All-Imbecile team and be done with it, content to know he is a perennial member.


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 @ $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 @ $10.52
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
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $280.06

Tuesday, June 22, 2010

Short some Apple - AAPL

After yesterdays bearish engulfing, or outside reversal if you prefer, on AAPL's daily chart we are today getting a nice looking inside day. I know volume is suspect but I cannot help staring at the chart wondering if this is the fly in the ointment that chases many away.

Therefore based on this I am getting short 1 unit of that darling Apple, ticker AAPL, here at $275.30 with a stop just above yesterdays highs.



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 @ $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 @ $10.52
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
Short 1 unit Apple ticker AAPL @ $275.20 stop @ $280.06

Couple of Charts TLT, RTH, and AAPL


A weekly view of the TLT's below.

A weekly view below of the Retail Holders ticker RTH

And lastly a daily view of everybody's favourite AAPL



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 @ $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 @ $10.52
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

Monday, June 14, 2010

Charts as Promised

I know I promised you some charts and no I did not forget but I have some mitigating circumstances. First off, the World Cup is on, that in and of itself should be sufficient. While on the subject of the World Cup, I simply cannot wait for the Argentina vs Germany match up as winners of Groups B and D, game of the tournament, if it materializes, in my view. Second off, the charts have, as they do from time to time, become less and less reliable. No before you even get started, I am not making excuses here but with the proliferation of HFT-ibots free taxpayer funded prop accounts at GS, JPM, et al. mucho gamz are being played which can distort the charts.

I am not ruling out charts in any way, but in an environment like we have now, one must be on guard for shenanigans if you will. Break out/down fail and reverse. Reliable patterns no longer seem reliable. The rules seem to no longer apply. My refrain is to focus on longer duration charts as the longer duration chart will be less susceptible to da gamz da boyz are playin'. If you don't believe me ask yourself how many good looking, seemingly surefire patterns have been obliterated of late. I thought so and this echo bubble, just like the Japan bubble, the dot com bubble, the housing bubble, and every other bubble before it, it will end when it ends and will spare no one. Not Bob Doll, not Lloyd Blankfein, not Ron Insana, no one.

That said, here are some charts for you to ponder.

Back on a post dated Dec 10, I remarked how I wanted to get short the Euro but didn't want to chase it as it had broken hard. What an absolute fool I am in hindsight. An updated weekly view on the Euro is shown below..



So given this, here is a then and now comparison of the Spiders for you to consider.

First up we have a 5 yr weekly view of the Spiders ticker SPY (below).


Okay, now that you have that hi-lighted yellow area in mind I am going to magnify it so you can see it up close. Remember now that these are still weekly bars. Also note the imaginary flash crash tail I have drawn on the chart, it will come in handy when comparing it to the next chart.

Hang on now. Before you check out on me for good, quickly have a glance at a daily view of the Spiders off the peak back in August.


With the flash crash tail is drawn in the charts look eerily similar. Okay, so even if you don't believe any of my noise and garbage, just ask yourself this question... how often do triple bottoms hold? Ahhh who cares. Lets all just turn on CNBC and get our daily dose of bullish technicals alongside bullish fundamentals, alongside bullish economic news and be happy. How could that crew ever be wrong?


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 @ $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 @ $10.52
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

Wednesday, June 9, 2010

Back From Holiday

I trust everyone had an enjoyable Memorial Day holiday. We took an extended holiday here at Prudens Speculari, as yours truly celebrated a birthday as well. spending our time off in lovely Cape Cod Massachusetts or Tax-a-chusetts as many locals there call it.

Our travels took us to Hyannis, Nantucket, Martha's Vineyard, Provincetown, Newport, and finally Boston. We had the opportunity to see Chappaquiddick and the spot where Mary Jo Kopechne passed away. Shockingly there is not a memorial or marker of any kind commemorating the spot where she died. Truly shameful Massachusetts.


Among the manner great things we saw included charm of Boston. Paul Revere House, the old North Church, in the great city of Boston.

We also found time to see some of the beautiful homes, which is putting it midly, of the gilded age in Newport. The Breakers, The Marble House, The Elms, to mention a few. The Cliff Walk is a must do for anyone visiting as is dinner at the Castle Hill Inn. Wonderful food and views off the peninsula.

We had an absolute fantastic time but alas now back to work.

Some Random Thoughts.

CNBC
You happen to catch this new lunchtime dud on CNBC called Strategy Session? Do yourself a big favor and DON'T ! If you have, you might have noticed all the flashing and blinking screens behind the boobs in chairs. Reminds me of the California gold rush where the only ones made wealthy were the purveyors of picks and shovels to the dreamers, like todays data providers. 10 screens make you ten times as smart. Too funny.

Boston
Did you realize that Boston is home to over 90 post secondary educational institutions? I was not aware the number was that high. Did you also know that when school is in session the city's population swells by approximately 300,000. Something to keep in mind when the bubble that is a university education hits. Unfortunately Boston will be hit hard.

Wall St.
Has you broker called you to buy a little BP on sale here with that generous dividend yet?

Fox News
Caught a little Bill O'Reilly while away and watched his rant on how banks aren't lending to anyone blah, blah, blah. Now O'Reilly is no dummy but it is shocking to see his economic illiteracy on a regular basis. Newsflash Bill, it's called pushing on a string coined to describe Japan. You can lower rates to zero and still no one borrows.

First off Mr. O'Reilly, you must realize the banks are no longer in Angelo Mozillo/idiot lending mode anymore. As shockingly as this may sound the you can fog a mirror you qualify standards of yesterday are gone. The people and entities who desperately need the money to stay afloat don't qualify, never have and most probably never will, and the ones who do qualify aren't stupid enough to borrow.

Further, in an inflationary environment Mr. O'Reilly, your obligation (money borrowed) is diminished or made less as a dollar borrowed today is paid back with a much cheaper dollar in the future. Conversely in a deflationary environment, which we have now, your obligation is increased as your purchasing power increases. Ergo;

Inflation rewards profligates and debtors punishing savers and ......

Deflation rewards savings and prudence and punishes debtors.

I hope this helps Bill. Also you can do yourself a huge favor going forward. Do your own research. When travelling around, local or afar, ask business men and women around you if they would borrow a mill, check that, a half mill, no check that again, a quarter mill right now to expand their business, introduce a new product/service or take over a competitor. You might just get the same response and puzzled look I often get when I pose the same question....."
What? Are you high ?!"

Dollars to doughnuts Bill, the ones who desperately need the money, having viewed their balance sheet and income statement, you would never lend to them not at least without a taxpayer funded backstop and even then you might prefer using that backstop to trade crude oil, gold or S&P futures.

If you are still having trouble understanding this Mr. O do ask a Polish borrower who, as any astute observer knows you should always consult a qualified advisor on any financial matter, most especially the carry trade, took said advice from advisor and avoided the high rates and boredom of the simple Polish zloty mortgage and instead explored the excitement of borrowing at much lower rates in the much cheaper, at the time, Swiss Franc. Only to now be saddled with an income in worthless zloty's and an obligation in rising Swissy's. Nothing like quality advice for a trained professional is there?

I will be posting some interesting charts shortly.

Housekeeping Notes;

While away I was stopped out of my long GLL position at $39.48 for a loss of 2 pts 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 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
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 @ $10.52
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