Friday, October 29, 2010

Adding more TLT

I am content to get long another unit of the long bond via the TLT here at $100.23 and here's why.

Given the almost unanimity of  bearishness on bonds via Misinformation TV which of course as we all know is CNBC (hat tip to Barry Ritholz of the Big Picture for that one!) I have been watching the bonds, in particular the long end closely. 

I find it curiously interesting how the pundits refuse to talk about our junk market yet have the onions to bash the treasury market. Gee whiz, which would I rather own, Neflix or Priceline paper or U.S. Treasury debt? I get 3 guesses and the first 2 don't count (apologies to Warren, Charlie and the Moodys' gang as I'll skip your ratings!)

For those having trouble following the junk - or high yield market as your broker will call it when he pitches it for your retirement account - market you can do so with Barclays high yield Spdr symbol ticker JNK. 

For all the believers in QE 2 I find their love hate relationship with the federal tit amusing to say the least. These pundits who loath the bonds most probably used to loath the Japanese bond market as well. Countless scores of experts bashed the JGB (Japanese Government Bond) market as it continued to rise (yields falling) and yet it refused to crack. Come to think of it it still hasn't!

For those unaware of current JGB yields the 10yr note yield is 0.94% Yes you're reading it correctly zero point nine four percent while the 30yr is 1.99%. 

For what it's worth the 10yr U.S. Treasury is now at 2.61% and the 30yr Treasury is at 3.99%. I don't like to engage in hyperbole but that looks to me like a heck of a long way to go still.


The U.S. bonds needed a correction and it looks like they have experienced a healthy one of late. I want to address a remark Mr. Gross of PIMCO made regarding bonds the other day on Misinformation TV (CNBC) in which he said yields are almost zero near the short end and TIPS went negative. Now I am no bond legend, nor bond king but what I am is a realist who hopes for the best yet plans for the worst. 

Could absolute yields go negative Mr. Gross? 
Could people actually pay a depository institution of the highest integrity just for the courtesy of returning their capital intact? 
Is it at all possible?

What was that phrase, oh yeah, "I am not interesting in return on my capital, I am simply interested in the return of it".

Based on this then is it possible that those looking for returns, at least those less risk averse, then must move farther out on the curve for yield? Or maybe they will simply continue to buy the NFLX or PCLN paper who knows. 

What I do know is that I wouldn't hold high yield, municipal or state debt paper even if you held a gun to my head, only the highest quality paper (everything is relative right?) for me. Yes I feel this way even withstanding the prognostications of the bond king that the 30yr bull market in bonds is dead. Besides a couple of gentleman I have an absolute ton of respect for, Gary Shilling and Bill Helming are both still bond bulls so I like the company I am keeping.

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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short ticker DZZ @ $9.07 stop @ $8.67
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 100.33 stop @ $98.17
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 2 units Caterpillar ticker CAT @ $77.75 stop @ $81.71
Short 1 unit American Express ticker AXP @ $40.37 stop @ $41.81

Thursday, October 28, 2010

4 Years Late

Regular readers know all too well how I feel about the propaganda network know as CNBC. I have ridiculed the boobs and boobs in chairs at the pom pom network so often that I have lost count. Luckily for me the clowns at CNBC continue to offer and endless supply of material to ridicule and mock ad nauseum, like the new heat map recently unveiled. Ya just gotta shake your head and laugh. The leader in carnival theatrics, excuse me, I meant to say serious business news, sure you are. More like the leader in carnival barking, book talking and disinformation. As if all this is not enough, the boobs and boobs at CNBC have the audacity to ridicule and mock those in the blogosphere, or as Michelle Caruso-Cabrera likes to say "idiot bloggers".


That said there are not some glimmers of light in the tunnel of darkness at the pom pom network. When Rick Santelli, Diana Olick or Phil Lebeau appear on screen I most definitely raise the volume. Like now, I am now watching one of the few "reporters" of CNBC, Diana Olick, do a piece on the mortgage mess. Sadly this is CNBC at its typical day late and dollar short best. 

No offence to Ms. Olick as she has done and continues to do a great job reporting the facts in the real estate sector but if you had read blogs like:
  • Mortgage Lender Implode-O-Meter, 
  • Mr. Mortgage, 
  • Market Ticker,
  • Mish's Global Economic Trend Analysis,
  • Financial Armageddon, 
  • Of Two Minds, 
  • Dr. Housing Bubble,
  • Mike Morgan
  • The Mess That Greenspan Made, 
  • and ahemmmm Prudens Speculari (gratuitous plug there!)  
  • not to mention a whole host of others to numerous to mention
you would have known everything you needed to know when it counted, back in 05-06' before the implosion and with the Dow trading 13-14k plus to boot !

So here we are now 4 years past the 'idiot bloggers' warnings about housing, about subprime, about LIAR loans, about NINJA loans, about Lehman, about Bear, about extend and pretend, about delay and pray and now CNBC is finally, at long last, wrapping its collective arms around the problem, intent showing the world how brilliant and insightful they are in analysing and dissecting the issue. 

Reality most often is far funnier than fiction.


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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short ticker DZZ @ $9.07 stop @ $8.67
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 2 units Caterpillar ticker CAT @ $77.75 stop @ $81.71
Short 1 unit American Express ticker AXP @ $40.37 stop @ $41.81

Wednesday, October 27, 2010

Where are the Sane Adults?

According the CNBC's Rick Santelli, Bill Gross's (of PIMCO) piece was the talk of the trading floors today. Actually, as I mentioned earlier, Chris Whalens piece Triple Down: Fannie Freddie and the Triumph of the Corporate State is the real deal and should be the one that was the talk of the day but what do I know. 


Anyway I like Rick so I decided to heed his advice and read Gross's missive entitled Run Turkey Run


Remember now I am no Ivy League missile engineer who can re-configure, slice and dice used toilet paper and make it magically appear to be 17th century collector's edition parchment so bear with me as it takes me longer to comprehend things. 


In his piece today Bill Gross states that:

"Check writing in the trillions is not a bondholder's friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme. Public debt, actually, has always had a Ponzi-like characteristic"

Okay Bill I follow ya there. Next up Bill says:


"Now, however, with growth in doubt, it seems that the Fed has taken Charles Ponzi one step further. Instead of simply paying for maturing debt with receipts from financial sector creditors – banks, insurance companies, surplus reserve nations and investment managers, to name the most significant – the Fed has joined the party itself. Rather than orchestrating the game from on high, it has jumped into the pond with the other swimmers. One and one-half trillion in checks were written in 2009, and trillions more lie ahead. The Fed, in effect, is telling the markets not to worry about our fiscal deficits, it will be the buyer of first and perhaps last resort. There is no need – as with Charles Ponzi – to find an increasing amount of future gullibles, they will just write the check themselves."


Okay Bill, still with ya here. Well, Mr. Gross then goes on to say this:


"I ask you: Has there ever been a Ponzi scheme so brazen? There has not. This one is so unique that it requires a new name. I call it a Sammy scheme, in honor of Uncle Sam and the politicians (as well as its citizens) who have brought us to this critical moment in time. It is not a Bernanke scheme, because this is his only alternative and he shares no responsibility for its origin. It is a Sammy scheme – you and I, and the politicians that we elect every two years – deserve all the blame."


"Because this is his only alternative", 

"he shares no responsibility"


Yeah completely blameless. Innocent bystander that Bernanke right? Or maybe more like aider, abettor and accomplice?


I know some 'other' alternatives Bill...

How about making losers eat losses?
How about stopping the prostitution of sacred accounting standards?
How about enforcing the rules of law?
How about consequences for fraudulent and criminal actions?
and finally 
How about letting the natural forces of economic nature and the markets run their due course and unfold as they were meant to. 

Translation Bill ........ DO NOTHING ! 

Are we so pathetically weak and shallow as to not be able to handle this action.


So now we have the purported bond king, who many consider the smart money in bonds openly advocating that the only alternative available to the Fed chairman is to endorse the ongoing Ponzi scheme.


Well I think I have heard it all know. 

How shamelessly pathetic. I am at a loss for words. Someone please tell me where we can find the sane adults in the room, cause I just don't seem em'.

Actually, please excuse me for a moment while I stick my head up my a%@  so I can understand where all this might all be coming from. 






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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 2 units Caterpillar ticker CAT @ $77.75 stop @ $81.71
Short 1 unit American Express ticker AXP @ $40.37 stop @ $41.81

Sedition and Tyranny

As I was reading Chris Whalen's piece Triple Down: Fannie, Freddie and the Triumph of the Corporate State today from over at Institutional Risk Analytics, which you can view here and I would strongly recommend you do so, I asked myself the following:


At what point do participants in the markets acknowledge what seems to be patently obvious? At least to me anyway.

This is not the first time I have wrestled with this question. I asked myself the exact same question during the dot com bubble as outfits with peanuts in sales traded for market caps in the billions. That voice in the back of my head called self-doubt kept creeping back in reminding me of historical admonitions that the market is a leading indicator, that no one is smarter than the sum total verdict of the market. 


But then again, if the market is such a great leading indicator, why was it so wrong at such critically important junctures throughout history as most recently evidenced by the Nasdaq top in 2000 and the housing bubble top in 2007?

I won't get the answer to that question today, if ever but when I read pieces like the one from Chris Whalen today, with his insight and reputation (for Wall St. seems to really dig that part in people), and think that ever so slowly the extent and depth of the ponzi is becoming public. It must now be so obvious to even the dimmest and most hardened cheer leading apologists among us?


Either way I implore you to please, if you haven't already done so, read Whalen's piece. Here are a couple of paragraphs from it that really struck me:

"Forget Treasury Secretary Tim Geithner lying about the relatively small losses at American International Group (AIG), the fraud and obfuscation now underway in Washington to protect the TBTF banks and GSEs totals into the trillions of dollars and rises to the level of treason. And the sad part is that all of the temporizing and excuses by the Fed and the White House will be for naught. The zombie banks and GSEs alike will muddle along until the operational cost of servicing bad loans engulfs them. Then they will be bailed out -- again -- or restructured."






"Thus we go back to the low-income borrower, who is forced by the GSEs to pay for private mortgage insurance that will never pay out. The relationship between the GSEs and the MIs is identical to the "side letter" insurance transactions between AIG andGen Re, and come to think of it, the AIG credit default swaps trades with Goldman Sachs (GS) and various other Wall Street dealers. In each case the substance of the transaction is to falsify the financial statements of the participants. And in each case, the acts are arguably criminal fraud. And in the case of the zombie banks, the GSEs and the MIs, the fraud is being actively concealed by Congress, the White House and agencies of the U.S. government led by the Federal Reserve Board. Is this not tyranny?"


I highlight these 2 paragraphs not only because they are powerful but also because of Chris's choice of 2 words, sedition and tyranny.


Regular readers know I have been railing, almost daily, against the orchestrator's of the ponzification of our financial system. Chris Whalen of IRA is now using the words tyranny and sedition. Max Keiser of MaxKeiser.com has called the criminals in charge financial terrorists. 


Maybe there is hope for us yet.

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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 2 units Caterpillar ticker CAT @ $77.75 stop @ $81.71
Short 1 unit American Express ticker AXP @ $40.37 stop @ $41.81

AXP and CAT

I was stopped out of my AXP short this morning at $40.51 for a loss of just over a pt on 1 unit. 

Notwithstanding this slap in the face, I am re-entering AXP on the short side here, punting it at $40.47 as the stock moves back below the $40.50 level.


I am also prepared to add to my CAT short punting a  2nd unit short here at $77.40

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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 2 units Caterpillar ticker CAT @ $77.75 stop @ $81.71
Short 1 unit American Express ticker AXP @ $40.37 stop @ $41.81


Tuesday, October 26, 2010

Apalachin Meeting - 2

It seems there is an event going on in New York city put on by the Economist magazine called The Buttonwood Gathering. What is it? Well, to quote directly from the website, 

"Once again in 2010, The Buttonwood Gathering will draw together leading policy makers, banking executives and regulators to discuss restoring trust in the financial system and evaluate our place on the road to recovery."


Are you kidding me?! Someone pinch me and tell me this is a dream. 


Let me get this straight, the thugs who perpetrated the swindle of the century are all getting together to discuss how to fix things. 

How quaint. Actually how galactically arrogant of this bunch that they think they can come together like this after they brazenly looted and destroyed the system right under our noses.


Is it me or is this reminiscent of the Apalachin Meeting of the mob back in 57'?

Quick, someone please call 911 and inform the authorities. Someone please tell the Attorneys General of all 50 states that the perpetrators of the crime of the century on our nation are reconvening in NYC right now! They are all together at one place. You can send the paddy wagons and round em' all up at once.

Ahhh....forget about it. That would be too tough to do as it would actually require enforcing rule of law in this country which we all know is being avoided. Acutally their hubris and arrogance knows no bounds which is why they are getting together, like they are daring us to do something about it and why any discussion of rounding up the culprits responsible as a first step to restore trust in the system will be avoided at all costs.


It's not just these cats thought people. It is all around us and all the way to the top. It is all so bad you start to get numb to it. Like corrupt and on the take judges for instance.For those unaware Commodity Futures Trading Commission (CFTC) judge George Painter penned a retirement letter recently. You can read the letter here. In the letter, retiring judge Painter admits that fellow judge Bruce Levine promised former CFTC chair Wendy Gramm;


“that he would never rule in a complainants favor. A review of his rulings will confirm that he has fulfilled his vow.”

Barry Ritholtz has a great summary of the whole affair and an eloquent description of Mrs. Gramm at his blog which you can read by clicking here.


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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 1 unit Caterpillar ticker CAT @ $78.05 stop @ $81.71

Monday, October 25, 2010

A Grain of Sanity in an Ocean of Ignorance and Ineptitude.

I want to take a minute and congratulate Dylan Ratigan over at MSNBC. He has been front and center with his work on the fraud and ponzi that our financial system has become. Since leaving the Propaganda network (CNBC) Dylan has become ever more aggressive in his Bill Black was on Bloomberg Friday of last week and I have not been able to find the video of the interview in its entirety. Luckily for us Dylan had Bill Black on his show today and if you have not heard what Mr. Black has to say on the subject I urge you to raise your antenna and tune in.  I strongly suggest you listen to the interview which you can find here. Please listen very closely.
 
He is no shill, he is no lunatic, fringe, idiot blogger like yours truly. He is articulate, he is in command of the facts, and he is experienced as having been at the center of the cleanup of the S&L debacle and getting many of the thugs responsible jailed.  He is intimately acquainted with our financial system. He knows a criminal when he sees one as he is the noted author of the book The Best Was To Rob a Bank is To Own One

Now I realize the institutional money/hedge fund valet crowd has more important things to do than listen to Bill Black - things like getting on board the train of the moment SOHU, CMG, or whatever else happens to be sizzling. That crowd will ignore Mr. Black just like they ignored the multitude of  housing doomsayers back in 07 and 08 as there was far too much money to make and bonus' to chase buying the sizzling ABK, MBI, CFC, AIG, LEH and BSC all the way up and all the way down.  But you should make it a priority to avail yourself of Black's thoughts on the situation. You will most certainly be glad you did. Bill most certainly is a grain of sanity in an ocean of ignorance and ineptitude!


Housekeeping notes:

I was stopped out of my IBM position today at $141.22 for a loss of just shy of a 1.5pts 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 @ $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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 1 unit Caterpillar ticker CAT @ $78.05 stop @ $81.71

Friday, October 22, 2010

Plague of Locusts

Gerald Celente is someone I have a lot of respect for. He minces no words and likes to call it like he sees it, which obviously offends the politically correct class in this country as I am sure Juan Williams can attest to. That said, I recently caught a piece from Gerard is which he had a fantastic one liner that had me rolling on the floor in which he said:


 "Politics is no more than show business for ugly people."

So with this quote in mind I bring you to interview from late October with Senate majority leader Harry Reid which I somehow managed to miss. (hap tip to the Drudge Report for pushing it center stage!)  
The interview which was done by MSNBC and can be seen here, in it Reid had the unmitigated gall to say the following:

 "But for me, we'd be in a world-wide depression."


What does one say about this? Can words properly convey your astonishment or anger at this self-aggrandizing psychopath? I think not. It's been said we get the government we deserve. 


While on the topic of government I wrote earlier this month a piece entitled What If the Culture Dies I hi lighted a piece out of the Telegraph in Britain called Savers told to stop moaning and start spending. In the piece, one Charles Bean, the deputy governor of the bank of England said 


"savers should stop complaining about poor returns and start spending to help the economy". 


Well, it is one thing when abject idiocy is being foisted upon the populace of a foreign country but quite another when it happens here at home. So not to be outdone by their British counterparts we now get this.


In a recent interview that I happened to read while surfing the net, one Charles Evans who is president of the Federal Reserve Bank of Chicago revealed that he seems to be drinking the same kool-aid Mr. Bean is in Britain as he uttered the following:


 "But the current circumstances are really extraordinary. It seems to me if we could somehow get lower real interest rates so that the amount of excess savings that is taking place relative to investment is lowered, that would be one channel for stimulating the economy."




Spend more, save less?
Are you kidding me? 
Does he really believe this drivel he's spewing? 
I mean, how stupid does this idiot Evans think we are?

Actually, maybe quite stupid if he (the Fed) were to judge us (the nation) by what we watch on TV (Dancing With the Stars, American Idol) and what we pop in our mouths (Prozac, Zoloft) daily.

This is who's in charge of monetary policy in this country and similarly in Great Britain? 

Please tell me no. 

Where on earth do we find village idiots like this Evans. Is there a machine that spews them forth via an assembly line. Ivy League colleges? No Please tell me no!

It seems they have invaded positions of policy like a plague of locusts. 
Destroying everything in their path. I have said before that either they are lights out stupid or they are corrupt and conniving and know exactly what they are doing with an end goal. 


With this in mind, either side you fall onto, I have often stated that with the likes of this ignoramus Evans in charge we don't stand a chance. 
Are you starting to figure out why now?

The brazen looting of this country is of epidemic proportions. A complete ponzi scheme from top to bottom with, as of today, no one behind bars. But thats what happens when the criminal elelment takes control of the system right in front of us in broad daylight.


Now back to our regular scheduled programing of green shoots and economic recovery via the mainstream media.

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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 1 unit IBM ticker IBM @ $139.95 stop @ $141.21
Short 1 unit Caterpillar ticker CAT @ $78.05 stop @ $81.71

Thursday, October 21, 2010

Punting CAT Short

My apologies as I cannot wait any longer, punting CAT short here at $78.15

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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 1 unit IBM ticker IBM @ $139.95 stop @ $141.21
Short 1 unit Caterpillar ticker CAT @ $78.05 stop @ $81.71

Revisiting Caterpillar - CAT

Remember this chart? A 10 year weekly view of institutional favourite Caterpillar ticker CAT below.





 Below is a daily view of CAT. A couple of interesting things are developing. First as noted is today's, while still early, potential bearish engulfing candle forming. A move below the old high water marks, in particular a close there would really stoke my interest on the short side.




I will be patient, I hope, and wait for a close below 78 before I commence operations here on CAT.


As I side note as I am writing this I have the volume up on the propaganda network (CNBC) and  am listening to this strategy session with the purported 'brain'  David Faber pontificating on the issue of put backs to the banks of  now gone sour paper by pension funds and institutional investors. I have a breaking news flash of my own for the purported 'brain' Faber.  THE HOUSING MARKET COLLAPSED BECAUSE IT WAS A GIANT PONZI SHCEME! 


Ponzi schemes always collapse when the supply of fools runs out but don't let something like facts get in the way of shilling a defence for the banks.

While on the topic of CNBC is did you happen to catch, as I did, over the last few days this sector heat map that CNBC has unveiled during the day?  

Are you kidding me? Why not bring out David Copperfield to wave his wand while you're at it? 

These pathetic clowns at CNBC are hilarious. Heat map so you can tell where the market action is. Like those boom boxes from the 80's with the lights flashing to the beat. Too funny, just smoke and mirrors from the boobs and boobs in chairs. Would you really expect anything less from 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 @ $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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 1 unit IBM ticker IBM @ $139.95 stop @ $141.21

Short some IBM

I have been watching IBM quite closely the last few weeks. In particular the breakout from the multi-month consolidation zone which occurred back in late September. The volume was completely unimpressive, in my opinion for a break out from a 9 month consolidation.


Since the gap down following earnings Tuesday morning we have seen a weak volume rally. Based on this, I am punting 1 unit of IBM here on the short side at $139.95 


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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37
Short 1 unit IBM ticker IBM @ $139.95 stop @ $141.21


Punting Gold

The gap down in gold the other day has now been open for 3 days. This is sufficient evidence for me to test the waters on the short side via  punting gold short via the Powershares gold double short ticker DZZ here at $8.97.

I hate to do this, being short gold,  but I cannot help myself. 

Daily chart below of DZZ.




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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Long 1 unit Powershares Gold Double Short @ $9.07 stop @ $8.67
 Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37

Wednesday, October 20, 2010

Long the Dollar

Much like Mark Twain's quote "the reports of my death are greatly exaggerated" so too are reports of the U.S. dollars demise. I am comfortable getting long the dollar this morning via the Powershares US dollar bullish  ticker UUP here at $22.46. I am comfortable enough to get long 2 units today rather than my customary 1.  

For what its worth I would remind readers that all these debts circling the globe from the mother of all credit bubbles have 2 resolutions, to be paid back or defaulted upon. Sometimes lost in the discussion and soundbites is that the vast majority of these debts are denominated in U.S. dollars.


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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Long 2 units U.S. Dollar Bull ticker UUP @ $22.56 stops @ $21.94/$21.44
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37

Tuesday, October 19, 2010

Blast From The Past

There is lots of chatter today regarding on op-ed piece in the Wall St. Journal today by one David Malpass. For those with a short memory, which encompasses most of Wall St., Mr. Malpass was chief economist at Bear Stearns when it it tried to corner the housing market just before it blew up. Actually I am kidding about the cornering part. Bear Stearns and Mr. Malpass just simply forgot the cardinal rule on Wall St., or as Frank Lopez's advised an up and coming Tony Montana in the classic movie Scarface, "Don't get high on your own supply".

This blast from the past Malpass also held assorted economic appointments in both Reagan and H.W. Bush's cabinet blah, blah, blah. All this means he is eminently qualified to drive a bus, no check that, you need a class 'C' licence, at least in Canada you do. Anyway you get the picture, yet another of the countless number of 'smartest guys in the room' who couldn't see the freight train coming behind the bonus cheque but I digress.


Mr. Malpass used to pooh pooh any naysayers who had the temerity to challenge his claims that housing was healthy, and that it was a bubble of epic proportions. Like a report he put out back in July of 2004 where he observed that the housing market was healthy and that much of the rise in prices simply represented a "catch-up" because they had lagged behind the rise in equity prices since the mid-1990s.
That same Bear Stearns report also noted that rising household formations, declining unemployment, low interest rates, a decline in the inventory of unsold homes and the 1997 cut in capital gains taxes on owner-occupied homes as other reasons for its continued optimism.


Sounds air-tight to me. How about you? Probably did as well to Jimmy Cayne and the rest of the Keystone Cops running Bear Stearns at the time. It is a shame that the Bear braintrust (now there's an oxy-moron if there was one) didn't spend as much time studying the REAL underlying housing market conditions (hint LIAR-loans, NINJA-loans, non-existent Countrywide documentation as my niece informed me of as she was a travelling branch auditor, just to mention a few) as they did the Neiman, Porsche, and Robb Report catalogs or playing bridge if you prefer, right Jimmy? 


Well it seems given this history, one might correctly assume Malpass would be working as a greeter at Wal-Mart, or parking cars at Mortons. But no, your assumption would be wrong. No in this country. Mr. Malpass is still hanging around....maybe hanging around long enought to get Christina Romers old job. Crazy? Far-fetched? Is it?

Let's look around shall we?

How about former Detroit Lions general manager, at the time 2nd highest paid in the league, Matt Millen. Millen will go down in history as the unchallenged prophet on how to bury a franchise in 3 easy lessons and what awaits you after that accomplishment. A life of ridicule? A stint selling life insurance? Purgatory? No, silly, not purgatory, but rather a cushy little job as expert football analyst on ESPN and the NFL network, thats what.  Nice !

Yes that's what a 31-97 record over 8 years and an historical 0-16 season get you. In all fairness and not to be mean, the year Millen's Lions went 0-16 they were a stellar 4-0 in the pre-season. Just want to give you all the facts. 

Or how about former New York Fed President Tim Geithner. Sit on your ass like a boob as the banks you are charged with supervising and regulating in your district blow up in spectacular fashion under your watch and what awaits for you? Tell us what awaits him Johnny !   

A promotion! Yes, readers you heard that right, a promotion! After a successful career marked by ignorance and impotence you Mr. Geithner get to become Treasury Secretary. 

Gotta love this system here.

Anyway what was I talking about? Oh yeah, Malpass. Almost lost my train of thought. 

Yes, Mr. Malpass now serves as president of Encima Global a research firm serving the 'smart money' set. It seems his prior history of 'sizzle sans steak' still resonates with some of his frat buddies who are always in need of a 'story'. Go figure!


I am a huge subscriber to Nassim Taleb's theory, noted author of  the popular book The Black Swan, The Impact of the Highly Improbable. His theory or rather his rather simple rule for judging those whose economic opinions are worth his time said this:


"Did someone predict the crisis before it happened? ... If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say."


Lovely Nassim ! Couldn't have said it better myself. 

So back to Mr. Malpass. Why is anyone still listening to people like this for heavens sake? Why is anyone giving him a forum? 

Is there such a dearth of fresh thought in this country that we have to keep re-cycling the same ol' people with the same ol' ideas over and over again?

Oh yeah, I remember now. Those who don't learn from history are doomed to repeat it.

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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37

Punting AAPL

Punting AAPL on the shortside here at $312.35 on this mornings "AAPL has a great product" bounce.


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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51
Short 1 unit Apple ticker AAPL @ $312.25 stop @ $315.37


Coming To A Theatre Near You

I happened to catch this piece this morning regarding the wonderful city of Chicago. To tell someone these things were on the horizon a few short years ago was akin to talking to a wall, or an Apple shareholder if you prefer. Does not compute, does not compute. 


Regardless it the Piper is here and he is looking to be paid. This piece, Chicago Faces Crisis Over Pension Funding, How to Pay For It which should be filed under Coming to a Theatre Near You, illustrates just how acute the problem has become. Here is what a few of the local chieftains had to say:


But the chairman of the Finance Committee, Ald. Ed Burke, today talked about a far larger problem. One in four pension funds for city workers will go broke in the next decade, if current funding levels continue and markets don't improve, and all will be belly up by 2032 if nothing gives.

"It's similar to watching the house burn down without turning on the fire hydrant," said Burke, 14th, during the first day of hearings on Daley's proposed $6.15 billion budget. "At the present time, the city pension funds are actually selling assets to meet obligations."


Stabilizing employee pensions long-term would require greater employee contributions, higher taxes, major changes to the pension systems or a combination of those steps. Without relief, the city would have to about double its property taxes for the next 40 years to cover its pension obligations, said Gene Saffold, the city's chief financial officer.


Lovely. Just lovely. Now just in case any of you Windy City folk want a bottom line number on the whole shebang, you might want to sit down now...


To cover the outstanding liabilities, each household in Chicago would have to pay $41,966, the report concluded. That's the highest per-home amount among U.S. cities.


Mother of all credit/debt bubbles, municipal and state finance mushroom clouds, banana republic type mortgage fraud, employment picture nightmare, home foreclosure bottomless pit, personal bankruptcy and food stamp bull markets and yet those contrarians of all contrarians, those Wall St. charlatans who never met a stock they wouldn't buy, cats like Ken Fisher, Vince Farrell, Brian Kelly, Bill Spiropoulos, etc keep pounding the table for stocks.  Go figure.



Housekeeping notes:

On Friday afternoon I was stopped out of my AMZN position at $162.12 for a loss of just over 2pts. 
On Monday I was stopped out of my BIDU position at $105.15 for a loss of just shy of 2pts 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 @ $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 ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $98.74
Short 1 unit American Express ticker AXP @ $39.45 stop @ $40.51