Wednesday, June 29, 2011

Extortion goes Global

I want you to read carefully the attached article 'World Economy at stake in Greek austerity vote.
It should give you an idea the ends to which a certain species will go to preserve itself and its masters.

Read and marvel at the audacity of the threats from this trough feeding maggots known as bureaucrats.

"There are decisive moments and the coming hours will be decisive, crucial for the Greek people, but also for the eurozone and the stability of the world economy," EU president Herman Van Rompuy told the European parliament.

Of course the world economy is at stake. I would counter that it would be more dangerous to cancel Jersey Shore or American Idol rather than a Greek default.

Next check out this Van Rompuy cat. Careful now as this 'maverick thinker is a real possibility to be the next yes man chairman of the World Bank or a major Wall St. firm.

Prodding Greek politicians to "take their responsibilities," Van Rompuy said "the more unanimity there is, the more unity there is, the better for the people of Greece and our future."

Not to be outdone water boy Olli Rehn is up to bat next...

European Union economic affairs commissioner Olli Rehn said Greece was facing a "critical juncture," and that "both the future of the country and financial stability in Europe are at stake.

"I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default," he said.

"The only way to avoid immediate default is for Parliament to endorse the revised economic programme."

"To those who speculate about other options, let me say this clearly -- there is no Plan B to avoid default," he said.

Translation: accept my banking master's extortion terms or else. He then seamlessly goes from extortion mode to liar mode with his quote there is no plan B. It is in his DNA which makes him a perfect candidate for the IMF.

A high-ranking European official, speaking on condition of anonymity, has said that a Plan B was in the works, stressing that "the next step is not a default of Greece."

Wait a minute! I thought Olli said there was no plan B. Sunnava......

You have to marvel at this species of trough feeder. Self preservation, up for sale to the highest bidder and the ability to convert food into shit are about their only traits

I caught a piece from Mohammed El-Erian yesterday (hat tip to Mish). I want to say that I have taken him to task for his role at the Harvard Endowment pre-blowup something that none of the boobs and boobs in chairs at CNBC wants or has the onions to question him about. I like his calm demeanor. He is a refreshing change to douche bags like David 'investing is easy' Tepper if there is such a thing on Wall St.

Having said this, El-Erian is not immune from the same disease infecting so many across the globe. Tow the party line to keep the global ponzi scheme alive. Every opportunity you have remind the sheep that its more heroin (more debt) or bust. El-Erian was out in full propaganda mode as evidenced by the piece El-Erian Says U.S. Debt Default Might Have 'Catatrophic' Effect.

Yes martial law if we do not raise the debt ceiling, tanks in the streets, no Doritos and Pepsi on supermarket shelves, complete armageddon if any debtor does not accept the terms of the bankers.

Housekeeping notes;

I was stopped out last week of LULU at @ 105.25 for a loss of about 2.5 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 @ $96.70
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 @ $98.25
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

Thursday, June 23, 2011

Lululemon - LULU

I have been watching Lululemon ticker LULU for some time. Yesterday, it restested the late April highs near 103 and intraday took it out but could not hold it closing at the lows. Double top? Possibly.

Today we are getting an interesting rally that is bucking the overall market, which I am prepared to fade by punting 1 unit of LULU short here at $102.92

Chart to follow shortly.

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 @ $96.70
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 @ $98.25
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
Short 1 unit Lululemon ticker LULU @ $102.82 stop @ $105.21

For Those That Look at Volume

I realize many don't but for those that do here are some numbers for you......

SPY total daily volume yesterday 176.6 million
An hour and a half in today 99.8 million or 56% of yesterdays total.

QQQ total daily volume yesterday 36.8 million
An hour and a half in today 22.5 million or 61% of yesterdays total.

IWM total daily volume yesterday 55.8 million
An hour and a half in today 33.7 million or 60 of yesterdays total.

DIA total daily volume yesterday 4.7 million
An hour and a half in today 3 million or 63% of yesterdays total.

Chauncey Gardner at the Fed

I happened to catch a CNBC headline last evening entitled Firms Have Record $800 Billion of Cash But Still Won't Hire.

Hmmm.... so U.S. companies have record cash now do they? And they won't hire?

Forget for a moment the obvious question that only an Ivy league MBA holding, 2+2=6 Wall St. analyst would forget to ask which is how can the economy grow without jobs? The question I, and the hot dog vendor, want to know regarding that $800 billion.... is it net cash? You know, compared to what level of debt?

Now that hot dog vendor outside Lehman's former HQ and I apologize for such a simplistic question but you can rest assured the likes of Summers, a Rubin, or an Altman and the rest of Wall St. would never ask that as it might interfere with the markets greater ponzi ... oops I meant to say their rackets... ooops I meant to say the country's greater good. It has to be when it comes from those U.S. flag lapel pin wearing patriots.

Maybe da boyz on Wall St. can drop kick the indices far enough to extort QE 3 and 4 before bonus calculation time so they can keep their trophy wives from ditching them for fancier confines for at least another year. Might I suggest da boyz manufacture a few more days like yesterday and this morning(as the pre-market futures indicate), coupled with a 300 pt down day thrown in for good measure and presto, the Pavlovian dogs on their banking leashes react on cue.

In other less meaningful news I also happened to catch some of Bernanke's speech yesterday that the Fed has slashed their growth forecasts and sees unemployment remaining high. It was quite the comedy show. Check out this doozy:

“We don’t have a precise read on why this slower pace of growth is persisting.”

You don't?
Maybe it was the weather?
Speaking of weather it it me or does it feel like Chauncey Gardner from the movie 'Being There' is running things at the Fed? Sadly, we actually might stand a chance with poor Chauncey there.

I thought for sure Ben 'Chauncey Gardner' Bernanke said there would be growth in the spring? You mean he doesn't know? Maybe Bernanke can call the maestro Greenspan for some answers, better yet, he could call the likes of Summers, Rubin, Altman and Co. as they have so many answers. Yes more stimulus (code for debt) and if that doesn't work you simply pile on more debt. It is never enough. And when that doesn't work you claim that you're still as brilliant as you always were and secure a couple corporate board memberships. Or hey you can go to work at private equity/hedge funds where you can help orchestrate the shuffling of paper to buy companies you have no idea how to run from people that do (think Cerberus, Chrysler and Daimler for a primer) Yes there is no end to the supply of morons, simply no end.

What would I know.

So while corporations will hire the likes of Summers, Rubin, Altman and Co. for their boards, I am adding the hot dog vendor to my board of directors so I can check back in with the hot dog vendor for his sound counsel.

Tuesday, June 21, 2011

3 Cheers for Carson Block and Muddy Waters

Funny how the world works. Muddy Waters comes out with some 'unflattering' research on a major institutional and Wall St. favourite and what happens..... the knives come out!

It appears that someone or someone's are none too happy with Carson Block and have published a doctored SEC investigation press release against him and Muddy Waters.

Herb Greenberg, sadly now with propaganda network CNBC, is reporting that the SEC press release is a hoax.

I don't know about you but the fact that this happened today pretty much solidifies any doubts in my mind as to whether or not Sino Forest is an complete and utter fraud.

I want, right here and right now to offer my grandest 3 cheers to Carson Block and Muddy Waters for their work on this and other frauds (think Chinese reverse mergers) the rest of Wall St. is either too stupid or too complicit in to uncover.

Hip, Hip Hooray!
Hip, Hip Hooray!
Hip, Hip Hooray!

Atta boy Carson !!

Gee, I wonder who dumped their long position into any pop that fictitious press release created. I am no MBA but me and the hotdog vendor are wondering if maybe the staff at the SEC, when they're not too busy surfing porn, might find an interest in the trading activity in and around that fictitious release and investigate that.

Remember now we are not MBA's so take what we say with a grain of salt.

Copy and Paste

I want to touch on the Sino Forest situation this morning which I have been watching with interest the past week or so. For those of you out there who still believe that anything a Wall St. MBA utters is the gospel truth well then, you can skip this post and continue about your way. Best of luck to you by the way.

It appears that Sino Forest (ticker TRE on the Toronto Exchange) is perhaps the largest and surely one of the longest running ponzi schemes known. What teams of highly paid analysts were unable to uncover was discovered by the small, (what, 2 person outfit?), known as Muddy Waters. The same research that bought and paid for sell side analysts on Wall St. and Bay St. referred to as "a pile of crap".

Idea time! Let's get uber-expert on hack analysts and Wall St. bullshit Henry 'please don't read my emails' Blodgett in for a guest commentary. Ooops he busy resurrecting his career.

I just love that name! Muddy Waters ! Beautifully simplistic in its elegance. For the uninitiated I believe that there is an inverse correlation between the simplicity of your corporate name and the quality of the work you produce. Just scour all the Greek mythologically named hedge funds and trading outfits out there and you will be amazed. A 3 headed beast guarding the gates of hell comes to mind but I digress.

Back to the Sino Forest situation which looks to be unravelling before our eyes. The whole sad situation takes me back to the Bre-X days back when I was with Nesbitt Burns. You see Nesbitt had an analyst named Egizio Bianchini. Nice enough guy. Precious metals analyst who happened to be responsible for covering Bre-X, and all the assorted maggot companies around it. It was quite the affair and Egizio was a rock star.

I owned no Bre-X, I recommended no Bre-X and was ridiculed by many not. Suffice to say I remember well the institutional conference call that was set up ASAP after the chief geologist, De Guzman I believe, fell from a helicopter over at the jungle property in Borneo.

It was interesting to hear the smart money, and hear was all we could do as retail was listen only mode, whine, plead, gnash their teeth and basically cry for answers. Egizio kept repeating over and over again that the gold was there. The gold was there. The gold was there.

That is, until he didn't anymore because as it always does, the truth never came out. The gold never was there. It was the grandest hoax of the century.

Do you remember being in 7th grade? Nobody did their homework and that was the morning the word spread the teacher was collecting the homework as a surprise test? In a mad rush everyone copied the one kid in the class who happened to do the assignment. I guess everyone copied wrong huh?

In the age of computers it is now copy and paste.

There was not one sell issued on Bre-X the lone strong buy or buy exception came from one analyst at Oppenheimer who had downgraded the stock to neutral I believe based on price run up that's it. Poor Egizio, the one kid in the class who did the assignment and who everyone copied from. Too bad for everyone it was wrong.

Hey, how many Wall St. analysts had a sell on Enron before it mushroom clouded?

I often think of that curbside hot dog vendor outside Lehman's global headquarters in Manhattan. I think of the fact that while he may not be able to define 'due diligence' he sure as hell would know how to do it were it his charge. I bet he also knows what 'shit for brains' means.

Still wondering why I have more respect for the hot dog vendor and his contribution to society than the brilliant Ivy league MBA research analysts on Wall St. and their teflon coated MBA pimp masters on the investment banking side? If so Jim Cramer has a podcast coming up quick you may want to tune in for your retirement riches.

This said, I expect every single analyst with a buy recommendation on Sino Forest to be scooped up by every mythologically named hedge fund in short order. They are not qualified to work the loading dock at Wal Mart but advise millions and billions they will. Tis the way of Wall St.

Besides this my conclusion is that when you want something done right you hire the right people. I suggests that the ECB, the Fed, the IMF and the World Bank without any further hesitation immediately hire Bernie Madoff and the entire management team from Sino-Forest to take over global re-ponzification operations stat as the Dow is flirting with 12K

Monday, June 20, 2011

Quick Quote

Today my remarks regarding the markets will be short and succinct. To accomplish this I will borrow, and slightly tweek, a famously successful quote the Clinton campaign of 92' where from total obscurity an Arkansas governor rose to become a 2 term President.

"It's the volume stupid!"

Wednesday, June 15, 2011

Psycho Babble Translated

I would be remiss ridiculing former CNBC teleprompter reader, turned book writer, turned fund manager, turned guest market guru Ron Insana today while leaving out more notable luminaries like the distinguished Byron Wien. Mr. Wien was a guest on squawk box, emphasis on squawk, this morning.

Byron is a long time shill on CNBC as the propaganda network is eager to provide a medium for Wien, Blackstone and their ilk on a regular basis. and is currently the vice chairman of Blackstone Advisory Partners, (Stephen Schwartzman's outfit) one of the planets leading crumb chasers. In the hierarchy of crumb chasers Blackstone is right at the top of the food chain.

The topic of Greece was on the docket, obviously, and comparisons to Lehman were made. Here is what Wein said in code and my translations below.

"In retrospect, a lot of people think something should have been figured out so Lehman didn't have to go bankrupt,"

This is code and psycho-babble for 'usually our buddies in charge don't let things get out of hand and cause us losses. Lehman was one of those episodes. Normally our puppets in charge can manipulate the outcome and change rules, if needed, for our benefit so we don't have to take losses. Lehman cost us money. It better never happen again.' Wein continued with;

"The second thing is Lehman went under, but no bank went under."

Again more psycho-babble for 'our puppets in charge let things get out of hand with Lehman but they got the message loud and clear that we will not tolerate any more mistakes (think what John Gotti would do) and are now following their orders and since the favourable accounting changes promoted and propagaded by good friend Bill Isaac, which lets banks record garbage paper at whatever mark they wish to, none have gone under'.

Lastly Mr. Wein had this gem of a line from the Wall St. banking mafia, for those puppets the mainstream media claims are in charge;

"People are very sensitive to how much the rest of the world would be affected if Greece goes under," he said, noting that there was not that understanding about Lehman.

Yet more psycho-babble for 'my crew (the banks and note holders) are all watching closely now and any thought by those in charge of letting Greece go under will be dealt with swiftly and harshly by us (think De Niro as Al Capone's Enthusiasms scene in the The Untouchables). We weren't as clear with them on the Lehman issue but there is no ambiguity now.

You see Mr. Wien is yet another of the purported smartest in the room, those masters of the financial universe who are only capitalists when it supports their positions, enhances their performance, fattens their bonus and hence their net worth and socialists when things go awry.
Bankruptcy, survival of the fittest, well that's something lunatics like Adam Smith and Ayn Rand mentioned in passing and never intended it for the ruling elite as it was only meant for the sheeple.

Right on Cue....

Right on cue, with unfailing reliability, the equity markets down triple digits and CNBC hauls out perma guest and fully functioning exotic parrot David Kelley of JP Morgan. Like clockwork the boobs and boobs in chairs network, (footnote to Mike Morgan for that one) CNBC hauls Kelly out to proclaim.... now sit down now as this may come as an utter shock to many......

"stocks are cheap".

Thank goodness stocks are cheap and no one has anything to worry about. And here I was heading for the medicine cabinet to double up my Prozac dosage.

Fortunately for me and countless others former CNBC teleprompter reader, turned book writer, turned fund manager, turned guest market guru Ron Insana earlier today claimed that.... are you ready for this now....

"Greece is irrelevant".

That goodness for that. I am breathing a sign of relief as I write this. Hopefully Greece won't be as irrelevant as his fellow CNBC cheerleader/expert guru/book writer/celebrity Jim Cramer told us sub prime was.

Might be time for yet another book Ron.


I get lots of interesting email from people. I appreciate it all, both good and bad. I usually respond privately but sometimes I think it helpful to share the odd one publicly. Yesterday I received an interesting email from a reader LC who wrote:

"Hey what gives? Your posting frequency is down. Depressed? Bummed out over ur losses ? LOL Dow 15k baby $$ !!"

I assume by the dollar signs he/she is making mucho money in this market and for that I am happy for them. Really, I am! As for being bummed out, am I bummed out about the fact I;
  • don't own AAPL off the lows
  • don't own LNKD
  • don't own GMCR
  • don't own PCLN
  • don't own CRM
Yes I was not smart enough to catch any of these nor was I smart enough to have developed an extensive 'expert network' which could have tipped me off to it, which I could have then parlayed into investment and capital markets acumen via a hedge fund. Then again in the tech bubble I was also not smart enough own:
  • INKT,
  • MSFT
  • CSCO,
Nor did I own Nortel (who'd a thunk I had the gall to short it) or any of the other litany of Wall St. concocted pieces of shit that temporarily astute simpletons raved about.

I was not smart enough to own the likes of CFC, GDW(golden west), RDN, RYL or any of the other names the Greenspan sired housing bubble spawned. Yes I know many others were smart enough to catch RDN single digits and ride it up and get out north of 60. Just as I know these same genius' skin Steve Wynn alive when they visit his many casinos. How else could Mr. Wynn be able to build those sumptuous, grand hotels and live so comfortably? Of course by losing all the time to these perpetual winners.

Time for a quick story.

This takes me back to my BMO Nesbitt Burns training school days. Daily we would have higher ups come in for guest visits to tutor us developing youngins'. One day we had one Chairmans club, million dollar round table, senior VP, managing director, master of the minions type come in to address, no pontificate to our class. Besides waxing eloquently on about his book size and commission rank in the firm he would relay to us his outstanding investment acumen, his stock picking skills, and in general his overall intellectual superiority.

A couple of the institutional desk cats (1 bond and 2 equity) invited myself and a couple of others from my class out for 'pops' one night. That same visiting senior VP, managing directors name came up when they asked who was pontificating to us. They all looked at each other and started to howl at once. They explained to us that said senior VP, managing director guy would come down and troll their floor like a street mut at the back door of a restaurant looking for a handout. Regularly calling down to them pleading for any tips or investment ideas hoping for a sniff at what a pension fund or institution was buying or if they had any ideas. Too funny.

Imagine that Canali wearing market guru was nothing but an unmitigated bullshit artist. A charade. Hey he was kinda like Bank America or Wells Fargo's balance sheet, or Goldman and Morgan's trading record or like Greece being able to pay back their debt or like unemployment being 9%.

So yes, maybe I am bummed that I cannot have a loss free trading quarter like the big Wall St. banks. Yes loss free! 100% batting average. Dow gaps down and then closes down 170. Then trades flat. Then gaps up and closes up 130 to only be followed up by a gap down a day later? But in spite of this, or is it because of this the Wall St. banks can have losing day free trading quarters. What luck !! Maybe it's just me but sometimes when it looks like bullshit, sounds like bullshit, smells like bullshit IT ACTUALLY IS BULLSHIT! Imagine me, a senior fellow at the Room Temp IQ Institute coming up with that sans an Ivy league MBA. What luck!!

So as to LC's question about my posting frequency being down, when the above is going on in the market, what do you say about it other than to marvel at the fact that it goes on front and center for all to see and yet still so many out there actually believe it. Future historians will have a much better perspective on what to write about them and it.

I hereby conclude todays rant and am stepping off my soapbox.

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 @ $96.70
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 @ $98.25
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

Friday, June 10, 2011

Surprise, Surprise He Likes Equities

I just caught the latest guru interview from the propaganda network CNBC. This time the interview was with Larry Fink from Blackrock. I know you will find this a shock but he is bullish of equities. Mr. Find when on to say that his biggest fear is Europe, but he loves equities. I needed a good laugh today and that sure was it.

You know what my biggest fear is? That shills and charlatans like Fink are touted as pundits and given the forum to spout their propaganda.
  • bad economy - he likes equities
  • good economy - he likes equities
  • the Fed is providing liquidity - he likes equities
  • the Fed is withdrawing liquidity - he likes equities
  • mushroom cloud over Japan - he likes equities
  • global economic slowdown - he likes equities
  • US federal balance sheet fiasco - he likes equities
  • job creation non-existant - he likes equities
  • endless war - he likes equities
  • peace - he likes equities

Wow, heady stuff! Kinda reminds me of those experts, where is David Lereah when you need him, who told everyone always to buy real estate, as it always goes up.

I can't seem to figure out how shills like these connect their dots. Someone please tell me why what Fink does is worth listening to or worse yet paying for?

I guess you simply go to one of the drone producing factories, aka MBA grad schools or incubators of financial mobsters as I like to call them, pay hundreds of thousands of your great grandfathers fortune he has left behind from his labor, more often than not manufacturing or creating something, to learn how to become a perpetually bullish, paper shuffling, the Fed is always right, 2+2=6, equity adoring drone. Simply breathtaking in its simplicity.

I love the NY Yankees ergo I am a baseball pundit. I love Barcelona, now I am a futbol pundit. I can pay that 8 year old shooting hoops down the street skittles and big gulps for that type of insight. That people actually listen to the likes of him and his drivel. I refer back, yet again to the insight of Nassim Taleb, and his claim that if you didn't see the bubble coming I don't want to hear what you have to say. Fink much like his comrade in crumb chasing arms David 'investing is easy' Tepper know one thing. Keep the ponzi going or there will be the dickens to pay.

Thursday, June 9, 2011

Remember that Fukushima Nuclear Thing in Japan?

Just in case you were wondering, hey whats been happening with that Fukushima nuclear thing in Japan? Well back on May 12 the truth finally came out and we were advised that a meltdown a Fukushima started 5 hours after the earthquake and that 11 hours after the quake:

"all of the uranium fuel in the facility’s unit 1 reactor had slumped to the bottom of its inner containment vessel, boring a hole through a thick steel lining"

It makes me get all warm and fuzzy about politicians. I have often called politics a shitty version of WWF wresting but you can simply rest assured that whenever a politician is telling you something, anything, there is about a 98-99% probability he is lying to you. Forget the douche bag, less than zero wanna be's like that pimple on a wart Weiner but focus on the serious 'threat to mankind' types than are rampaging the globe as we speak. The financial and humanitarian terrorists. You know the kind. The kind that run around telling us that:
  • sub prime was contained,
  • Saddam had weapons of mass destruction,
  • Armageddon would occur if TARP wasn't passed,
  • Armageddon will occur if the debt ceiling is not raised,
  • that there was only one shooter in the Kennedy assassination,
  • that the Gulf of Tonkin incident really happened,
  • that Libya is not actually a war but is instead a “time-limited, scope-limited military action.”

Yes the kind that gloss over and sugar coat, over and over again ecological and humanitarian disasters and proclaim how it is a nothing event and to ignore the 'scaremongers' also known as idiot bloggers. Yes sheeple, Fukushima was nothing like Chernobyl please move along.

Natural News has reported, via linked sources, that rather than a meltdown, a melt through has occurred at Fukushima. I thought you might want to know about this considering the main stream media conveniently ignore it content to focus on Pippa Middleton, Casey Anthony, Douches Weiner and Schwarzenegger which are all so much more captivating topics.

Wednesday, June 8, 2011

Russell 2000 - IWM

The chart below is a daily view of the Russell 2k tracking stock ticker IWM.

Many have commented about the market being gamed. Now you can argue all day long about it and more often than not it will be perceived as sour grapes. Just as when you ridicule something like a Linked In IPO, you just weren't brilliant enough to know it was going to pop for 1087 minutes. Yes pure acumen. Like at the track or the casino nothing but winners here.

Those hedge fund and pension valet attendants may have Ivy league diplomas but they sure behave like mezzanine riff raff at the track or on the slots floor at the Stratosphere. But back to the Russell.

Just so you don' thing day boyz only game and cheat the bears they also get the dip buying bulls. Yes they are equal opportunity cheats who don't discriminate.

I want you to take note of the hi lighted green area on the chart. How many bought this dip as it broke out. on May 27th, through the descending trend line? Not only a break out but a gap no less. Then another gap the 28th accompanied by massive volume taking out the May 19 reaction high of 83.97.

Are you kidding me? Couldn't have set the trap any better could they. You think the SEC notices things like this? I mean, you can't surf the net for porn all day long now can you?

Are you still wondering why I feel the way I do? Are you still wondering why I post stuff like I did yesterday? Just in case you missed the quote, which was from Frederic Bastiat, a french economist from the mid 1800's, I will reprint it again below.

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.”

Just call this the wandering jibberish of a fool. Actually thats a pretty good name for this blog. Hmmmm.

Anyway, while on the topic of plunderers, did you happen to catch Jamie Dimon's (was it a question or a plea bargain ) dissertation at Bernanke's speech yesterday? Pathetic, corrupt, maggot he is. You see I can say that as I do not live in fear , as Wall St. analysts do, that he may cut me off to any access to him, or my firm off of any high finance deals. I can say that because, as an idiot blogger (right Caruso-Cabrera?) I and others out there, can say anything we want to, hell make it up as we go along.

The thing the regurgitators and enablers in the mainstream media, in particular at propaganda central CNBC miss, is that I do not need to grovel before him as I am not dependent on any of his advertising dollars. You can call me a hater but before you do please take a look at what these, as Max Keiser has continually referred to as 'financial terrorists', have done to the landscape before you pass judgement on my harsh words.

While watching the comedy show, or rather the live perjury session of Bernanke, I howled as Dimon took the stage and claimed mortgage lending has gone back to what it was 30 years ago. Too funny! Except it isn't funny when it is a bold faced lie. Maybe I could, as a non-Ivy league diploma possessing simpleton, remind Mr. Dimon and his band of hacks that 30 years ago you needed to put at least 20% down to buy a home. You think any of the boobs and boobs in chairs at CNBC has the onions to bring this up? And not funny money either, real cash, as bankers back then demanded you have skin in the game. The bank also held the note. Go figure. How stupid were they?

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 @ $96.70
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 @ $98.25
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

Tuesday, June 7, 2011

Something To Think About

Sometimes you come across something that really sets you aback. Yesterday was one of these times. I stumbled upon it, as I do most things in my life, at Rick Ackerman's site Ricks Picks in a guest commentary as Rick calls them. The piece was by a Wayne Razzi entitled So What Are You Going To Do About It?

I have come across numerous quotes from different eras in history that many have tried, often very successfully, to apply to todays circumstances. But this is no ordinary quote. This quote, for me, felt like a ball peen hammer squarely between the eyes. The quote is from French economist Frederic Bastiat and is as follows:

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.”

I have not come across a more succinct, to the point statement of fact such as this up until now. Anyway, it is something I have been thinking about. Much thanks to Rick and Wayne for sharing this, very much appreciated.

Monday, June 6, 2011

Peter Diamond or Ned The Wino?

Back in June last year, I wrote a post entitled Imbeciles Coming out of the Woodwork where I ridiculed the unbridled hubris of one Fed senior economist Kartik Athreya. I did so after the good PhD doctor penned a piece Economics is Hard. Don't let Bloggers Tell You Otherwise.

Others on the net took issue with uber-imbecile Athreya as well. One might think that, after that exercise, seeing sheer idiocy on display and in print hence preserved for future generations to mock and ridicule, other 'smartest guys in the room' , would be much more careful about what the disseminate to the public.

Well, you would be wrong.

Not to be outdone, one Peter Diamond, multiple time Obama nominee for the Federal Reserve has submitted an op-ed piece to the NY Times that even one Stuart Smalley from Saturday Night Live might blush at, humbly entitled When a Nobel Prize Isn't Enough.

Here are a couple of snippets from the extraordinarily humble professor:

LAST October, I won the Nobel Prize in economics for my work on unemployment and the labor market. But I am unqualified to serve on the board of the Federal Reserve — at least according to the Republican senators who have blocked my nomination. How can this be?

The easy answer is to point to shortcomings in our confirmation process and to partisan polarization in Washington. The more troubling answer, though, points to a fundamental misunderstanding: a failure to recognize that analysis of unemployment is crucial to conducting monetary policy.

In April 2010, President Obama nominated me to be one of the seven governors of the Fed. He renominated me in September, and again in January, after Senate Republicans blocked a floor vote on my confirmation. When the Senate Banking Committee took up my nomination in July and again in November, three Republican senators voted for me each time. But the third time around, the Republicans on the committee voted in lockstep against my appointment, making it extremely unlikely that the opposition to a full Senate vote can be overcome. It is time for me to withdraw, as I plan to inform the White House.

But understanding the labor market — and the process by which workers and jobs come together and separate — is critical to devising an effective monetary policy. The financial crisis has led to continuing high unemployment. The Fed has to properly assess the nature of that unemployment to be able to lower it as much as possible while avoiding inflation. If much of the unemployment is related to the business cycle — caused by a lack of adequate demand — the Fed can act to reduce it without touching off inflation. If instead the unemployment is primarily structural — caused by mismatches between the skills that companies need and the skills that workers have — aggressive Fed action to reduce it could be misguided.

"In my Nobel acceptance speech in December, I discussed in detail the patterns of hiring in the American economy, and concluded that structural unemployment and issues of mismatch were not important in the slow recovery we have been experiencing, and thus not a reason to stop an accommodative monetary policy — a policy of keeping short-term interest rates exceptionally low and buying Treasury securities to keep long-term rates down. Analysis of the labor market is in fact central to monetary policy"

Instead of going to the Fed, however, I will go about my congenial professional existence as a professor at M.I.T., where I have taught and researched since 1966, and I will take advantage of some of the many opportunities that come to a Nobel laureate. So don’t worry about me.

Analytical expertise is needed to accomplish this, to make government more effective and efficient. Skilled analytical thinking should not be drowned out by mistaken, ideologically driven views that more is always better or less is always better. I had hoped to bring some of my own expertise and experience to the Fed. Now I hope someone else can.

Peter A. Diamond is a professor of economics at the Massachusetts Institute of Technology.

How can you not admire and stand in awe of this master of the financial universe. Believe me good professor I certainly will NOT be worrying about your arrogant little ass.

The good professor Diamond is so bright, so qualified, so necessary to our economic survival. You want to know how? Because he and the trough feeding maggots on the Nobel committee think so as well. Acutally I am surprised he didn't invoke the ever-popular do what I say or armageddon will ensue argument.

This may come as a shock to many but the one common denominator I see around me is the abundance of Nobel prize winners, Ivy league economic PhD's, and purportedly brilliant people among us, who never saw any of the issues we face coming.

I have come to the conclusion that, statistically speaking, we would at better if not at least have a fighting chance, with Ned the Wino from Good Times at the helm of monetary policy in this country. I don't worry about the good professor Diamond not because I am a heartless idiot bloggert but because I know he enjoys the good life via the cushy confines of the student tuition financed perks of MIT. What I'd really like to see is if Dr. Diamond can successfully run a hot dog vending stand to suggest if he knows his economic ass from his elbow.

For some reason, after watching the above video on Ned the Wino, he has inspired more confidence in me than Dr. Diamond. I hereby nominate Ned The Wino for the Federal Reserve. The best part is when he is rejected we won't have to read some tantrum laden rant in the NY Times.

Does any post secondary institution offer a PhD in thick skin?

Thursday, June 2, 2011

Another Perspective on Greece

Whenever you have a business deal between multiple parties things can go awry. Now historically a six shooter on your hip just as it did in a poker game, kept your business counter party honest, that and the threat of swinging from a noose. In more modern times the threat of hard time behind bars did the trick and kept all the maggots from the cess pool in line. Sadly this is no longer.

Today where we have massive 3 party deal going awry all over the globe. The Debt Deal with taxpayers, the politicians (and bureaucrats) who represent them and the lenders (banks).

Friend and author Charles Hugh Smith of the blog Of Two Minds had an excellent post yesterday on this entitled Greece, Please Do The Right Thing: Default Now. It is absolutely spot on and I am re-posting it below for your viewing pleasure.

Greece, Please Do The Right Thing: Default Now (June 1, 2011)

The big banks' loans to Greece were predatory by design.

There is only one ethically defensible choice for Greece: default now. Before you flame me with emails about the "responsibilities of debtors," please read the entire entry.

Let's look at credit (offered by lenders) and debt (sold to borrowers) from the point of view of predation.

Would you borrow $1 billion if it was offered to you at zero interest, with no collateral required? I would, without hesitation, and I would buy various assets which offered a reasonable return above zero with the "free money," because the lender has no recourse if my investments fail to return the capital.

Who would be dumb enough to make such a loan? The Federal Reserve, of course, and they do so only to their special buddies, the "too big to fail" banks as a way of diverting the national income to recapitalize the banks without directly transferring taxpayer funds.

What does it take for a transaction to become predatory?

1. The lender (if they had sufficient leverage) could change the terms after the fact, for example, demanding more collateral. This would be predatory because the terms of the loan were "too good to be true" and were designed to fail--i.e. a lead-in to a carefully planned predation.

2. The borrower misrepresented his financial circumstance, i.e. committed fraud, which is a type of predation on unwary lenders.

But there is a quantitative difference between the borrower seeking to defraud an unwary lender and a lender planning a predatory loan:

1. The lender is in effect marketing the debt. If a potential borrower declines a loan, life goes on. If a lender doesn't sell loans, it dies. Therefore the incentives to push "too good to be true" or otherwise misrepresented loans are asymmetrically on the lender side.

2. The lender is an institution that is built upon risk management and risk appraisal. The borrower is not, and thus the skills of assessing (and thus of pawning off) risk are asymmetrically on the lender side.

There is an unsavory analogy to lenders offering under-collateralized, low-interest loans with "gotchas" built into the terms: Pushing these types of loans at interest rates which do not reflect prudent risk management is akin to offering an inexperienced young maiden a large sugary drink that is heavily spiked with a tasteless alcohol, with predatory designs.

So when the maiden wakes up groggily the next morning sans clothing in a strange bed, is it really fair to say, tsk, tsk, she should have known better? Doesn't this ethical symmetry miss the reality that the risks of predation were masked and asymmetrical by design?

The banks that lent vast sums to Greece were in essence offering "too good to be true" loans at rates of interest that did not reflect prudent risk management. Anyone who glanced at Greece's history of defaults might have wondered if Greek rates should have been almost as low as those in Germany.

Was the "collateral" any sounder than that offered in the many previous instances of default?

We're left with only two possible conclusions:

1. The big banks which lent stupendous sums of money to Greece at low rates of interest were hapless incompetents when it came to risk assessment and management, or

2. The loans were predatory from the start.

#1 is patently absurd, and so we are left with #2: the banks designed and offered these loans with predatory intent. Now the banks are offering their political lackeys a menu of predation to choose from:

1. Deliver the wealth of the Greek nation directly to the banks via transfer of national assets

2. Deliver the wealth of the nation over time via "austerity" programs that in essence divert the surplus national income to the predatory banks

3. Increase taxes on the "core" Euroland nations' taxpayers to fund a "bailout" of Greece that is in essence a direct transfer of those taxpayers' wealth to the big predatory banks; the "bailout" is just a pass-through to the banks.

If you think this through, there is only one ethical thing for the maiden to do: toss the spiked sugary drink in the face of the predator and deliver a swift, hard kick between his legs "where it counts."

Greece should respond to this planned predation with complete and total default: not a "haircut" or "extended terms," a complete and total refusal to pay any of the debt.

We are constantly warned that the resulting collapse of the "too big to fail" banks would trigger a global implosion. That is false; life would go on after the predators declared bankruptcy and were liquidated. What the predators fear most is an awareness that any disruption in normal life would be brief and relatively painless compared to the vast suffering imposed to render them their pound of flesh.

The banks are in effect imposing Droit du seigneur--"lords rights"-- on Europe. Someone needs to take the predators down, and it might as well be Greece.

I have covered this before in regards to Ireland: Ireland, Please Do the World a Favor and Default (November 29, 2010).

Spot on Charles, spot on. Thanks for the analysis !

Wednesday, June 1, 2011

An Idiot Should Recognize another Idiot.

I do hope everyone had a safe and enjoyable Memorial Day holiday.

Yesterday was one of those days that hearkened me back to the heady days of the internet/dotcom bubble. How can you not love a market that rallies 130 points on the news that Greece is getting yet another bailout. No restructuring for bond holders. Speaking of Greece does anyone out there remember the TV show Good Times? If not google it as there was a character on it named Ned the Wino. Greece has as much chance of paying off any of these loans as Ned the Wino does. But of course don't believe me, believe Junker and Strauss-Kahn and the rest of the idiot parade claiming it is simply a liquidity problem. Too funny if not so tragically sad.

So, yes Another bailout for Greece and the stock market boyz cheered their asses off to the tune of 130 pts. Still guessing why I call the stock boyz the dumb ones? Anyone remember what number bailout this one is? I have lost track.

Suffice to say that it is all good for stocks. Nuclear meltdowns, armed conflict, deficit and balance sheet sheet nightmare, no it is all bullish. Is anyone taking any bets that the Wall St. boyz have, yet another, loss free trading quarter?

Like I said earlier, this all takes me back to the good ol' days of the internet bubble. Yes those days when rookie brokers would wax eloquently to anyone within earshot regarding how astute market observers they were. These market sages would drone on about their Nortel call, or their precient call to buy Cisco. No it didn't stop there, they would argue why JDSU was a must for everyone's portfolio and lest we forget good ol' Intel who in 98' was only trading at only 12X year 2001's earnings.

Quality stuff for sure.

Yes the bull market made absolute genius' out of these cats. I mean what else could it do. That is until one sad day it didn't anymore, and these wizards were relieved of their market sage status much quicker than it ever came to them. Unfortunately for them it did not end there for as the losses mounted the lawsuits started. A curious word popped up into these former genius' vocabulary, suitability. It come as quite a shock to many of these intellectuals that their adoring clients, who so loved them when their market picks went up become quite hostile when they went down. So hostile that they stopped calling them altogether and instead called their attorney.

Now I can imagine that those that survived the tech debacle and those lawsuits most likely re-emerged in the "tight leash" program where the conditions of their continued employment with said broker was peddling only approved selections from the managed product division s they paid off their debt. No more individual stocks for them, no more market calls. Anyone wanna bet they're not buying precious metals funds right now?

I thought so.

I notice that now today that the market is down on a poor private employment and factory activity numbers. Shouldn't it be up on more QE given the economic weakness? I am lost here now. Isn't bad news good for stocks? I am positive that's what David Tepper told me on CNBC. Where are the " lots of cash on the sidelines" morons today?

Do you remember that old phrase "it takes one to know one" to any derogatory playground taunt shouted? Well, I think there is some merit in it. A con man like Frank Abagnale who Leonardo DiCaprio played in Catch Me if You Can, once apprehended, helped the authorities with security. With this in mind you can understand how I would logically suggest that an idiot can recognize other idiots.

Regular readers of this blog know all too well what I think of uber-moron and at one time Wall St. super idiot Henry 'please don't read my emails' Blodgett. So just to show that I can acknowledge the positive and not just the negative I want you to check out a video from Yahoo Tech Ticker Market Rejoice as EU Plays Another Round of Extend and Pretend with Greek Debt put out yesterday. It is with Aaron Task, who I think is quite good, and our dear old friend, former Wall St. thug born anew Henry Blodgett.

In what for sure could be a first for me, Blodgett, at about the 1 minute mark of the video, says something I totally agree with. In particular he says this;

"There has got to be a way to make the
folks (re: the banks) who lent Greece money, who in hindsight, are idiots, actually pay the price for that?

Listen Henry Blodgett could tell me the earth is flat, that Kareem could ball and that water was wet but I would still check it out for myself given the dirt bag he is. But in this case he is totally and completely correct.