Wednesday, March 30, 2011

Financial Wizards

Regular readers might remember how some time ago I hi lighted the financial wizardry of one Harry Macklowe and his son William. I still remember when CNBC had a real estate summit and the younger Macklowe was invited on as a guest expert to pick his brain.

No readers you cannot make this up. Lucky Sperm Club member Bill Macklowe was invited on the propaganda network. No, not as a Manhattan kickin' night club expert, nor as a Hampton polo or cricket circuit expert, and no not as a 6 star vacation getaway expert but as a commercial real estate expert!

Leave it to CNBC to unearth the real hidden gems. This is what I said way back back in April 2008 regarding the Macklowe's real estate exploits:


"Harry Macklowe the famed real estate investor who recently had the GM building in NYC foreclosed on by lenders which was part of his empire, is a glowing example of this last issue, skin in the game. Everyone is complaining that strawberry pickers in California bought $750K homes and the like but why is no one complaining when Mssr. Maclowe amasses a $7.3 billion commercial real estate portfolio with 55 million down. For those without a calculator that's a down payment of 0.00753% or 7/10ths of 1%."


Now that's some leverage! Ivy league style. You wanna bet on whether the lender(s) on that deal had an Ivy league education as well ?

I didn't think so.

But of course all of this is NOT a ponzi scheme ever dependent on cheap credit, non-existent lending criteria and an ample supply of brainwashed, kool-aid drinking or LSC card carrying marks.

Well, the the Macklowe liquidation sale continues and it now appears that all this financial wheeling and dealing with others' money has taken its toll -on the creditors - not to mention the family, as son has parted ways with daddy and relations between them appear "strained".

What was that phrase again about bear markets returning capital to their rightful owners.

In further news it appears we now have yet another casualty among the financial wizards LSC set. Lucky Sperm club member Jared Kushner, graduate of all those fine institutions of higher learning (Harvard/NYU) where the only entry qualification is that your donation cheque doesn't bounce not to mention famous son in law of Donald 'mirror mirror on the wall whose arrogance trumps them all' Trump, seems to be having some trouble.

According to the WSJ:

Jared Kushner, the real-estate scion and Donald Trump's son-in-law, plunged into the New York market at the top of the boom, paying $1.8 billion for a Fifth Avenue office and retail tower, the highest price ever for a single building at the time.

As of March, the aluminum-panel-clad skyscraper, where retailer Uniqlo is planning its flagship store, was about $3.5 million-a-month short on debt service, say people familiar with the matter. Only $10 million remained in a reserve fund used to service the property's $1.22 billion mortgage, which is tied to the office portion of the building. Its revenues are only one-fourth the amount forecast in 2007.


Lovely. Revenues only a 1/4 of projection. How shocking. Ironically the accounting professor at the 2 bit, couldn't hold a candle to the Ivy league, university that awarded me my sheepskin always counselled to take my revenues and discount them 50% and high ball my expenses/carrying costs very aggressively, modelling a worse case scenario.

Imagine that. But hey, like we're told, Ivy league is da bomb!! And as for Mr. Kushner. Lets just ask his father in law;

"He is a very smart young man," Mr. Trump said of Mr. Kushner in an interview Tuesday. "I think it will come out well for him and everybody."


Wow. Maybe Kushner will get credit for work done at Harvard and skip the first 3 levels of the Trump coursework and jump right into 'Going BK and Bouncing Back Unscathed 404'.

Once projected to take in nearly $120 million in annual office rent, the 39-story building is on track to post income of close to $30 million this year, down from $60.1 million in 2007, people familiar with the rents said. But the higher office rents haven't materialized and vacancies have increased.

Like Donald said, a very smart young man. Must have forgot his calculator or used a ouija board for his business plan. All that said, I fully expect to see Kushner working at treasury or the Fed pronto.

But of course real estate is improving right alongside the job front, just turn on CNBC they will tell you that day in and day out.

Hmmmm let's see now. Should I back the business plan of the "dumb" legal immigrant from Colombia selling hot dogs and soda on the corner by central park or should I back the DNA loaded Kushner, the "very smart young man" from Harvard and NYU?

I'll give you 3 guesses as to which one and the first 2 don't count. But then again I may be stupid but I'm not Ivy league stupid.

Friday, March 25, 2011

More Lunacy, More Deceit

The lunacy and deceit simply continues.

I came across an interesting piece out of The NY Times on GE called GE's Strategies Let It Avoid Taxes Altogether. In the piece the Times reports that"

"The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion."

Lovely.
Remember now this is the same GE that has it's CEO Jeff Immelt who is chair of the President's Council on Jobs and Competitiveness.

The only thing GE's Mr. Immelt understands is how to obtain the best government money can buy or like Abraham Lincoln once said "government of the people, by the people, for the people". Does anyone think that's what he meant. This all too funny.

Forget about that, lets focus on important things like Katie Couric's job status.
Better yet, let's focus on Jersey Shore. That's it.

How ironic that this piece on GE comes out just as we learn about General Electric's Harlem Horse Trade with the always entertaining Charlie Rangel.

Yes GE covers all its bases. Now I know what a bought and paid for dirt bag Rangel is. Yes I know he was censured by congress, kinda like being to to hush, pretty please, with sugar on top.

You and me do what Rangel did we go to jail. Guys names Sarducci and Bonello do what Rangel did they go to jail. Politicians of either party do what Rangel did and, well, they get censured, schools named after them, and a cush job lobbying for the same firms that lobbied them when they were in congress. How wonderful is this system of democracy?

Land of laws and rules huh?
Sure.

But put all that aside for a moment.

"In May 2008, while Rangel still held his chairmanship, he met with GE tax chief and former U.S. Treasury official John Samuels. Samuels dropped to one knee and begged Rangel to extend a tax break that is especially important to GE, according to the report, which notes that a GE spokeswoman said Samuels was joking.

Rangel was presumably not joking, however, when he changed his position on the issue, known as "active financing," the same day. The chairman's reversal allowed GE and other companies, including Caterpillar, JPMorgan Chase, Ford and IBM to save an estimated $4 billion annually in taxes.

A month later, Rangel and Immelt were together in Harlem announcing a $30 million donation to benefit New York City schools, $11 million of which would go to institutions in Rangel's district."


What was that Lincoln quote again?

What does one say about this?

I have a word for you and it is not censure. It is called bribery plain and simple. Guess they don't teach that to anyone from the Ivy League or at the Justice Dept.
Actually lets discuss something important like what Natalie Portman wore to the Oscars. Because we sure as heck don't want to discuss something important like mark to market. It seems the push for mark to fantasy is gaining new found steam as now we learn that Four States Consider Legislation Barring Distressed Sales from Comparables.

"Four states - Illinois, Maryland, Missouri and Nevada - are considering legislation that would prohibit or restrict the use of 'distressed sales," such as foreclosures and short sales, as comparable sales as a part of a residential real estate appraisal.

Homebuilders, and real estate agents are concerned that the prevalence of distressed sales, and their subsequent use as comparables, is resulting in the appraised value of residential properties not matching the contract sales price, or in the case of new construction, the cost to build."

Can you imagine that? With this type of thinking, maybe they will classify a stock trader who gets a margin call and is forced to liquidate the position (re:sold out) as a distressed sale and not have to include that on the tape.

I am sure cats banking industy water boy Bill Isaac are just loving this.Yes, Let's all stick our heads under the covers and hide pretend the bogeyman is not there. That'll work great.
Better yet let's click our heels and repeat there's no place like home 3 times. What is with these people? Are these people sober. Did these people read and sanely consider what it is they are proposing? To ignore and pretend that that which is undeniably in front of you is simply not there?
Breathtakingly ignorant they truly are.

If you think it's happening only you need to think again as it is an epidemic across the globe as this Bloomberg piece indicates. The insolvency crisis is spreading across Europe we now see the spotlight on Spain. In the Bloomberg piece Bank of Spain Underestimates Funding Gap Faced by Lenders, Idealista Says. The article outlines more of the same game of charades going on over here.

Spanish lenders face a capital shortfall that’s “substantially” higher than an estimate by the Bank of Spain because they haven’t accounted for all of their real-estate losses, according to Jesus Encinar, founder and chief executive officer of Idealista.com.

“Property portfolios are still mostly valued at prices dating from the boom, rather than current values,” Encinar said during an interview at his office in Madrid. Home prices in some parts of Spain have dropped about 40 percent since the market’s peak in 2007, according to his 10-year-old company, the country’s largest property website.

Savings banks alone have taken on land worth 23 billion euros after borrowers defaulted on their loans, according to data from the Bank of Spain. Land prices have fallen as much as 80 percent in the past four years and the valuations used by lenders are “pure fantasy,” Encinar said.

Jesus Encinar couldn't possibly know what he is talking about, right?. I expect a disinformation and smear campaign to commence against him shortly by the Spanish banking lobby.

Encinar knows what is going on. I know what is going on and you know what's going on..... The Great Ponzi is unravelling.

And THEY ALL KNOW IT !

Bill Isaac knows it better than anyone else which is why he is so vehement in his opposition to mark to market accounting for the banks and financials. I have news for cats like Bill Issac and his ilk, the laws of physics apply in finance. These rules will assert themselves no matter how much you pretend you can circumvent them.

Have a great weekend.

Wednesday, March 23, 2011

How Right You Were Grandpa !

You catch that genius fund manager Bill Miller on the propaganda network today?

How fitting that his onions grew back only after this monster rally hence allowing him to come out from hiding underneath his desk to exhibit his acumen.

Absolutely perfect timing.

Loved his comment about his big regret was not noticing the bubble bursting was a collateral bubble instead of a liquidity one like 87'. A boob like me saw it coming and this heralded fund manager could not see one of the biggest if not THE biggest bubbles of our lifetime.

What was that phrase about confusing brains and bull markets?

Or as my late grandfather used to remind me.... you never appreciate the value of your pilot, skipper, surgeon or fund manager til the shit hits the fan!

How right you were grandpa, how right you were!

Volume, Housing, and Recovery

Did you catch volume yesterday? I would not be surprised if you didn't as it is not something the slight of hand professionals on Wall St. want you to pay attention to as it might give you a clue as to whether they were distributing or accumulating. So yes please ignore the volume. It has nothing to do with anything that concerns you. Please pay closer attention to the glowing fundamentals underpinning the economic recovery as this is much more important than something so technical and unimportant as volume.

Whoever said volume=validity sure was stupid.

Well for those that do care about the volume, as I most certainly do, yesterday was even worse than the day before which was a complete laugher.

Yes, let's focus on those glowing fundamental underpinnings shall we? New home sales numbers are out today which
according to the CNBC piece:

The Commerce Department said sales dropped 16.9 percent to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963, after an upwardly revised 301,000-unit pace in January. Sales plunged to all-time lows in three of the four regions last month.

Compared to February last year sales were down 28 percent.An oversupply of homes exacerbated by an increasing flood of properties falling into foreclosure is frustrating recovery in the housing market.

Data on Monday showed a steep drop in sales of previously owned homes in February, with prices tumbling to a near nine-year low.The median sales price for a new home tumbled 13.9 percent last month to $202,100, the lowest since December 2003. Compared with February last year, the median price fell 8.9 percent.

At Februarys sales pace, the supply of new homes on the market rose to 8.9 months worth, the highest since August, from 7.4 months worth in January. There were 186,000 new homes available for sale last month, matching the prior months inventory.


Hang on a minute here.
More properties falling into foreclosure? How can that be?
The shills on CNBC told me repeatedly everything is getting better.


I even saw Howard Marshall, excuse me I meant to say the oracle Warren Buffett, travelling to India with Anna Nicole, excuse me, I meant to say CNBC anchor Becky Quick, and he told me the economy is improving:

the U.S. economy is “getting better month by month,” aided by government stimulus and the strength of capitalism."

For those that cannot take the above news and are desperately looking for their daily fix of propaganda might I suggest you read the op-ed piece Welcome to the Recovery from the tax cheating Treasury Secretary Timmy Geithner.


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
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Freeport McMoran ticker FCX @ $56.40 stop @ $56.31
Short 1 unit Darden ticker DRI @ $49.51 stop @ $60.11

Tuesday, March 22, 2011

Home Sales, Trump and Buffett

Home Sales

I realize things are getting better and I am just in denial. Just consider the fact of a 9.6 percent drop in home sales in February. Funny who this tidbit can get brushed under the proverbial carpet in an instant. Maybe they could blame the lousy number on the weather. Wait a minute I think NAR the National Association of Dreamers I mean Realtors did:

"Overall, February's weakness could have been driven by bad weather, deals canceled over lowball appraisals and a higher number of distress sales,"

The weather! Too funny.
Where the heck is David Lereah when you need him?

Donald Trump

I came across an interesting piece regarding Donald 'mirror mirror on the wall, who's arrogance trumps them all' Trump and just had to comment on it here today. Full disclosure, I have about as much use for Donald Trump as a case of hemorrhoids but this would disparage hemorrhoids so I won't lump them in with him. Is it just me or is there no one else around to get a quote or sound byte from? I mean seriously. It is truly comical that major news outlets give him a forum but alas such is celebrity in this country. CNN carried a piece today entitled "Trump: I screwed Gaddafi" in which his arrogance boasts about how he put the screws to the Colonel on a real estate deal.

Really?
You don't say?
You Donald Trump put the screws to someone? You mean like Trump casino bondholders?
What a shocker.

In the CNN piece Trump claims:

"I rented him a piece of land. He paid me more for one night than the land was worth for two years, and then I didn't let him use the land. That's what we should be doing. I don't want to use the word 'screwed', but I screwed him."

This is now what passes for capitalism in America. Worshipping at the altar of the almighty dollar. Putting the screws to people. Well, that and getting a bailout is what passes here now. I am sure Donald is mighty proud of his accomplishment.

Listen, Gaddafi is no angel, and neither are the countless other scum who pillage and plunder for their personal gain while their people live in squallor all over the middle east but come on this is what wants to run for President of this great land? You're kidding. This is who claimed at the CPAC convention that Ron Paul didn't have a chance. Like Trump would be able to restore Americas standing and honor. What a joke.

Maybe Mr. Trump might be better suited teaching at a prestigious Ivy league school where he can mold some future movers and shakers for Wall St. and Washington.

How about this curriculum?

Ethics is for Wimps 101.
Twisting the Screws 202.
Self Aggrandizement 303.
Going BK and Bouncing Back Unscathed 404.

How Goldman Sachs let a quality hire like Donald Trump elude their clutches is beyond me. With men like Donald Trump at the forefront of business in this country I can't imagine why anyone here would have anything to worry about.

Warren Buffett

And last but not least I see the oracle himself is at it again back on tour. Yes the hypocrite of the year in this Bloomberg piece Buffett Says U.S. Economy Improves by the Month, Can Withstand Japan Quake had this to say:

“The most important factor is the really underlying resilience of capitalism,” Buffett said today at a press conference in Bangalore. There are more than 300 million Americans “thinking about how to do something better tomorrow than they’ve done today.”

You're hilarious Mr. Buffett. Maybe if you were to substitute resilience of capitalism with either crony capitalism, too big to fail capitalism or heads I win tails taxpayers (re: you) lose capitalism and you might find a modicum of truth to your statement.

As for that last line about what 300 million here are thinking about doing something better tomorrow Buffett might be right. Like the 44 million on food stamps might be thinking about something better. Or the people who've seen the social welfare payments as percentage of income has gone from 10% in 1960 to 21% in 2000 to 35% of the population now might be thinking of something better.

"Warren Buffett, whose Berkshire Hathaway (BRK/A) posted its biggest profit since 2007 last year, said the U.S. economy is “getting better month by month,” aided by government stimulus and the strength of capitalism."

None of this applies to Warren and his co hypocrite-in-chief Charlie "suck it in and cope' Munger. One's just gotta adore the 'aided by government stimulus and the strength of capitalism' line.

An oxymoron if I ever heard one.

Don't you just love how the fawning sheeple over at Bloomberg conveniently omit the oligarch's bailout from the discussion. It must be too distracting to discuss this while simultaneously throwing rose petals at Mr. Buffett's feet.

Monday, March 21, 2011

I Spy With My Little Eye.....

I spy with my little eye.... something that is weak.

Not yet. Okay.

I spy with my little eye.... something that the shills on CNBC don't like talking about.

Not yet. Okay.

I spy with my little eye.... something that is huge on down days.

Not yet. Okay

I spy with my little eye.... something that is missing in action on up days.

Hurray for you if you guessed volume.

Yes volume plain and simple.
Take your pick of which index you prefer to measure it with as it matters not, they're all afflicted with the same disease. For what its worth I am keeping a close eye on the long bond here, ticker TLT. Looks very constructive to the upside.

Friday, March 18, 2011

My Head is Swimming

I caught a story out of Baltimore where a camera based traffic ticket must be signed by verified and signed by a police officer. Okay. Well, it appears that over 2000 of them have been verified and signed off on by an officer that has been deceased for 7 months.

Law and order right?
Right.
Held to a higher standard?
Sure.

Okay, forget that for a minute.

My 7 regular readers(thx guys) know how I have harped on ad nauseum regarding the absence of trust and integrity in our capital markets. Further to this is my contention that this epidemic of lawlessness is not isolated to the capital markets and finance arena as it has infested all aspects of our society (the story above is exhibit #1034 in evidence).

But as I did some headline scanning I came across this piece Japan Nuclear Disaster Caps Decades of Faked Reports from Bloomberg.

I was left breathless.

Falsifying safety reports at a nuclear reator?

What is wrong with these people. I mean seriously, what is WRONG with this people. A word comes to mind

depraved
[dih-preyvd

–adjective
corrupt, wicked, or perverted.


evil, sinful, debased, reprobate, degenerate; dissolute, profligate; licentious, lewd. See immoral.

lets use this in a sentence.
The depravity of these people is absolutely mind boggling.


After reading the article my head is swimming. People like this walking the planet. I am at a loss to reconcile 'things' in my head. Maybe the guy on the street ringing the bell shouting " save yourself, the end is near" is not a kook after all. Maybe prayer is in order.

But hey we have a no fly zone in Libya so the oil and gas will be flowing shortly no worries here and Jim Cramer and the other spineless armchair chicken hawks can breathe easy as the doritos and Bud light will not be cut off.

We have coordinated G7 intervention in the currency markets to make sure no losses need be taken by Wall St. prop desks (jeopardising the bankers bonus pool) and necessitate the imposition of martial law.

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
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Freeport McMoran ticker FCX @ $56.40 stop @ $57.76
Short 1 unit Darden ticker DRI @ $49.51 stop @ $60.11

Tuesday, March 15, 2011

Do They Random Drug Test At CNBC?

When it comes to the idiot scale CNBC rarely disappoints. This morning was no exception as they had on Marc Faber for an interview this morning. I have often remarked that I was counselled long ago that you learn more about another's knowledge not by their answers but by their questions.

That said, you just know things are gonna get interesting when, 'what's it like to be a billionaire?' Carl Quintanilla, the court jester Steve Liesman and Joe "I went to MIT so take that" Kernan are within earshot of a critical thinker like Mark Faber.

I just love Carl who rose to journalistic prominence with his classic interview of Sir Allen Sanford and from hence spawned his nickname. Well, just when you thought poor Carl couldn't sink any lower on the IQ chart he proves you wrong again. Like this morning when Faber remarked that if a nuclear meltdown occurs "all bets are off" and the genius Carl responded what this gem:

"what do you mean by that, all bets are off? You're talking about human life in Japan or the markets or both?"

Now it could just be an overly critical me or is Carl simply a tad slow up in the attic?

No Carl he means Twinkies and Doritos will not be available in local grocers.He means Avator won't be available in 3D you moron. You might think a financial news anchor who had a functioning medulla oblongata would get the 'all bets are off' analogy but you would be wrong. Maybe Carl doesn't understand what a nuclear meltdown means. Maybe Carl isn't aware radiation exposure=very bad. Is Carl even aware of the Chernobyl incident in the Ukraine? Does he know there is still a 30km 'no go' zone around the area 25 years later? Sadly he probably is not as he is too busy fawning over billionaire ponzi scheme operators to take notice.

Hey Carl read up on that Chernobyl thing and then imagine that scenario
in or around Tokyo. You starting to get the picture on "all bets are off" you poor boob.


After everything Faber offered up in the interview, all Steve Liesman could respond with was "I'm a little stunned". Well you don't say. I'm sure all the dupes in Bernie Madoff's ponzi sheme were a tad stunned too when they found out the earth wasn't flat, the tooth fairy doesn't exist and annual 10% returns were, are and always will be fictitious. (just wait till the Ivy league on Wall St. clue into Bernanke and the Fed's ponzi scheme but I digress). Yes Steve Liesman you are a little stunned and to quote the cleaning company owner in Wall Street the movie "thank you for telling me what I already know."


Does anyone know if they random drug test at CNBC? They sure as hell ought to.

Just as I am about to post this piece a friend sent me the following short video from Al Jezeera explaining the reactor situation in Japan. I hope it helps.


video


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
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Freeport McMoran ticker FCX @ $56.40 stop @ $57.76
Short 1 unit Darden ticker DRI @ $49.51 stop @ $60.11

Monday, March 14, 2011

Scratching the Surface on Japan

The tragic news coming out of Japan is almost beyond comprehension let alone description. There is so much news coming out now it is hard to keep up. I have simply been doing a lot of reading, watching and listening.

I have a question. Was it just me or did anyone else find the mainstream television media AWOL in coverage of Japanese events over this past weekend, in particular the explosion at reactor 1 at Fukishima? Yes I know March Madness (which I am a complete junkie) is around the corner and I know Charlie Sheen is making news but are they kidding? Luckily for me, outfits on the net like Alex Jones over at Prison Planet and the cats over at Zero Hedge had the news out of Japan coming non stop (thx guys). Take note mainstream media on how news is reported not distorted.

Japan to rebuild?
I don't know. Debt to GDP of about 200%. Maybe this is the type of situation that people like my grandpa were referring to when they used the phrase 'rainy day' fund. Too bad all the financial genius' populating the Japanese government were too busy throwing money down a rat hole trying to stimulate their economy year after year as they blew said rainy day fund and then some. All that money might prove a tad useful now but what would I know. I'm not Ivy league educated.

Interesting to note that the French, a group that know just a smidge about nuclear, have advised all their nationals to leave Japan.

I am no nuclear physicist but I can assure you that with and explosion at reactor 1, then the explosion at reactor 3 and now this evening an explosion at reactor 2 (everything is contained according to gov't there huh, kinda sounds like subprime right) things are not okay. What was that quote again, oh yeah, he who panics first panics best!

Yes, governments never lie to us. They never obfuscate and misdirect. Further to that can you believe global traders and speculators are selling the Nikkei instead of buying? What is wrong with these guys? Don't they understand this is all bullish for stocks? Haven' they heard of the Keynesian's favourite phrase 'creative destruction'.

In the middle east reports are now out that the Saudi troops have entered into Bahrain. Yes readers all around the globe all is well. Stocks are cheap. Maybe we should start bidding up engineering, material and construction stocks as all this potential future infrastructure devastation is most certainly extraordinarily bullish ! good for GDP numbers, good for employment! Just ask any Wall St. analyst whose bonus depends on it!

By their Ivy league logic a Bahrain that looked like an an ashtray, a Libya that looked a wildfire and the island of Japan an desolate wasteland would be yet 3 more reasons to bid up U.S. equity futures. I adore critical thinking skills.



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
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Freeport McMoran ticker FCX @ $56.40 stop @ $57.76
Short 1 unit Darden ticker DRI @ $49.51 stop @ $60.11

Thursday, March 10, 2011

Housing... The Hits Keep on Comin'

The stream of revelations and blowback in the aftermath of the greatest credit orgy mankind has ever seen (aka the housing bubble) seems never ending. In housing the hits just keep on comin'.

Forged signatures on forged deeds of fraudulently AAA rated mortgages, individual notes of which were counterfeitly sliced and diced multiple times all predicated in the first place upon falsified mortgage applications and a grossly negligent, greed fueled approval process. The top to bottom thoroughness of this mass deceit is simply breathtaking.

I want to introduce you to a word.

raze

–verb (used with object), razed, raz·ing.
1.to tear down; demolish; level to the ground: to raze a row of old buildings.
2.to shave or scrape off.

Hey, lets use raze in a sentence.

Maybe just maybe the whole perverted, diseased temple is rotten to the foundation and should be razed.

Lord help those in the ponzi, those participants who are left without chairs when the supply of perfume to cover the stench runs out.
But yes the economy is resilient. Where have you heard that before. Problems are contained and everything is on the mend. Just make sure you ignore this Bloomberg interview with Michael Feder from Radar Logic that 5 yrs worth of supply in the housing market. (thx to Mish for bringing it to my attn.)

I find it oddly comical how most on Wall St. recognize, how could they not, the ponzi that our capital markets have become and yet continue to participate. Yet these same folks, neck deep in the Great Ponzi and feeling flush riding this winning market, will ridicule the fools and sheep who participated in Madoff's scheme. Yes they will mock and lampoon those who were skinned alive of much of their savings claiming "those fools, how could they have not known."

I guess when the Fed and the treasury run it, all your frat buddies are involved in it, and most importantly its somebody else's money, then this all makes it much more fashionable and easier to stomach. It also helps when you bow before the alter of 'the annual bonus'.

Mortgage Principle Forgiveness

Forget the banks and think society. Has anyone considered the inherent inequity in any of this? Up is down, left is right, can't pay make those that can eat it what an absolute debacle. Wait till nobody pays their debts.

GM CFO Liddell Departs.

So after a little more than 1 yr on the the job Liddell is out. Forget Wall St. for a moment and ask yourself whether this is good or bad. I did the same when Wells Fargo's extraordinarily well compensated CFO departed abruptly. Warren Buffett and Berkshire are the largest shareholder so for sure everything is A-okay there.

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
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Freeport McMoran ticker FCX @ $56.40 stop @ $57.76
Short 1 unit Darden ticker DRI @ $49.51 stop @ $60.11

Tuesday, March 8, 2011

Random Musings

Higher Education

I received a mailer today from the University of Michigan. Many up here in East Lansing pick on the Wolverines which I will not do. Anyway the mailer had a picture of a young up and comer in a suit with the headline;

The blue Michigan 'M' + MBA = The Corner Office.

I was on the floor laughing my butt off. The ad should more properly read,

pick any school emblem to go here + MBA = Lifetime of Debt Slavery!!

Newsflash for parents out there. Take the amount your would've spent on college and and worthless BA in politics, English, philosophy, etc which won't even qualify them to drive a bus for the local transit authority and give it to your kid to start a business or venture.

Succeed or fail, they will learn more from that experience than 4 years of college taught by flakes on prescription meds GUARANTEED ! Now I am not a complete idiot, if you child is going to study engineering, biology, mathematics, physics something of substance then by all means bet on the the sheepskin.

Just ask yourself if being able to brag your kid went to so and so prestigious school is worth costing $250k or worse borrowing it? If that's the case, then simply pasting a copy of your bank statement to your bicep and walking around with it much be a cheaper alternative to the useless degree, as Olive Garden is chock full of college grads.

CNBC

Charles Biderman of Trim Tabs was on the propaganda network for an interview with Maria. He has done this before in which he stated that stock prices were rigged via the Fed. Now he been claiming since Dec of 09' when as he noted, everyone ridiculed him.

It wasn't his statement that stock prices were rigged that I took notice of but rather the 'money honey's reaction to his statement. Nothing, nada, zilch. No comment.

I have been accused of being hard of hearing so maybe I missed her rebuttal to him. Maybe the audio on my TV flaked out on me. Or is it it possible the light bulb finally went on? This staunch defender of all things bullish, of all things Ponzi, just sat there and let Biderman go. I stand to be corrected but wasn't it Plato who stated silence gives consent.

AOL/Huffington Post

As you know the AOL purchase of the Huffington Post closed yesterday with AOL stock continuing to tank. What more can one say, actually there is something else to say except mucho congratulations to Arianna! Not even a fair fight.

1+1= 11 right Mr. Armstrong? He'd be an absolute perfect fit at Treasury or at Goldman doing God's work.

Monday, March 7, 2011

'No Fly Zone' huh Jim Cramer ?

Libya

I happened to catch Jim Cramer on CNBC today as I was walking back in my office. I happened to catch his rant on a 'no fly zone' over Libya so we can get oil prices down and avoid derailing this global recovery.

No fly zone huh Jim?

Sure, lets go over there and bomb them into the dust so we can get oil prices down and keep the ponzi going and then when the inevitable blowback happens you proclaim any activity against us is simply because they hate our democracy, our liberty and our freedoms. Gotta love an Ivy league edumacation where 1+1 = 11

Newsflash for the Ivy league moron Cramer, that other spineless chicken hawk on CNBC today Kildoff and the rest of the 'we know better' neocon crowd pestering for no fly zones. Did you ever consider that they might like us a tad more if we just butt out? They they may just dislike us a tad when metric tonnes of our ordinance gets unloaded upon their heads? Maybe its just me.

You want to send our boys and girls over there to establish and enforce a 'no fly zone' over Libya to keep the Great Ponzi going Cramer? Then how about YOU and YOUR family step up, suit up cocked and locked and lead the way!

Show us all if your onions are as big as your mouth.... you pathetic simpleton of a shill.

Ireland

Politicians are quite the species the world over. The news out of Ireland could get quite interesting if this article out of the Independent Voter betrayal:FG/Labour to ditch pledges on economy has anything to do with it.

The Fine Gael/Labour coalition Government is to implement in detail the outgoing Government's four-year austerity plan as approved by the EU-IMF, the Sunday Independent can reveal.

In what will amount to the most barefaced breach of election promises ever perpetrated by an incoming Government, the coalition partners' programme for government will cause uproar when it is published today.

While an attempt will be made to dress up the programme as a new plan by a new Government, when it is analysed it will be seen for what it is -- the continuation of the economic policies of Fianna Fail and the Greens, virtually in minute detail, as laid down by the EU-IMF.


We shall see how this all turns out and whether the Irish will stand for having the knife stuck in their backs and then twisted. No wonder politicians are held in such high esteem! Time will tell if the statement 'we get the gov't we deserves' reigns supreme or not in Ireland.

CNBC = Propaganda Network

Bob Pisani - Gotta love a die hard shill. The quote "given oil, stocks have held up remarkably well" today was just a beauty. He ought to call in some re-enforcement's to help out. Hey, where's Ron Insana when you need em'?

Maria Bartiromo - Would someone please explain the difference between cash and net cash to the 'money honey'. Someone take her aside and explain borrowing 100k from someone Maria or having 100k doesn't mean you have 100k cash, well it does if you ignore the liability side of the ledger that is. How do say... boobs and boobs in chairs phonetically?

Friday, March 4, 2011

Paper Profits are REAL PROFITS !

Alan Greenspan, our modern day reincarnation of Charles Ponzi was on the propaganda network this morning.

For all those who look to the Maestro for guidance in all things financial, are unaware of it, paper profits are REAL PROFITS !!

Whodathunk it.

Whodathunk it? Well, a ponzi scheme operator thats who!

Yes paper profits are real. And here I am with my room temp IQ having no idea this was the case. Damn, if only I had known this sooner. Maybe the problem was I took Common Sense 101 as opposed to Incomprehensible Bullshit 101 like the Maestro focused on.

My mistake.

Yes paper profits are real profits and don't forget that we, (the markets) are severely underestimating the benefit of this. This is 'Greenspanspeak' with the underestimation being that all these zombies flush with fictitious, excuse me paper profits, can then take this make believe money and borrow real money they will be on the hook for to buy that:
Rolex,
Lexus,
Orlando timeshare,
Hawaii vacation.

Oh shit wait..... didn't we just see that movie already?

And aren't all the idiots who fell for the scam still laden with the debt and being foreclosed upon as the paper profit which wasn't realized, that is turning into PHYSICAL profit, vanished as easily as it appeared leaving the holder with the bag?

What can one say to counter this utter bullshit?

Greenspan is the Grim reaper of financial death. His potions have left this nation in a financial shambles and on life support and he knows it.

Are there any patriots out there, someone of substance to come to the aide of Ron Paul, someone in corporate America that will stand up with Ron Paul to refute Greenspan's toxic potions and refute bogus claims.

Please, is there anyone? Your country needs you.

Are you surprised that it is the chief financial propagandists, (CNBC how fitting) who continue to hang on his every utterance and give this master of financial disaster a forum to tout his message of self immolation.

Mind boggling.

Question for the boobs and boobs at CNBC. I know you all hear what Greenspan says but do any of you LISTEN to the words he is saying? Do any of you comprehend what he is saying?


In other unrelated news, I am not trying to be the bearer of bad news here but would someone please tell 'da boyz' that GM is now below its IPO price of $33/share and is in danger of rolling over. Just a heads up cause with everything going on in the world it could be easy to overlook.

Maybe 'da boyz' are too busy trading credit default swaps (CDS) on GM to notice. Now for those that have some trouble understanding these things here goes. A CDS on GM is a derivative that is a bet on the probability of GM defaulting (or not) on its credit (debt).

Sounds okay right?

Okay, up until the point you find out that since GM went BK and was born again it has no debt.

Yes. No debt.

But how can they trade a derivative on something that doesn't exist you must be asking.

Good question.

See on Wall St. you never let a technicality like the bloody thing even existing enter into the equation of you making your month or your bonus.

You see this is what happens when trust fund babies from the LSC frat (more commonly known as the Lucky Sperm Club) find they have no useful utility to society. (As an aside, an uncle of mine used to call cats like this converters, converts food into sh%& !) Yes realizing no useful utility to society they then retreat to the lab to make up things they can shuffle and pass around as legit. It also helps to get an official looking stamp on said counterfeit paper to make the deal kosher, hey kinda like a Moodys, S&P or Warren Buffett stamp on it.

I am no rocket scientist nor did I attend one of the prestigious universities of the Ivy League but I gotta tell ya, I am at a loss on this one. Being a member in good standing and tenured fellow at the Room Temp IQ Institute I am going to bring this up at the next forum for discussion. Should be and interesting topic, derivatives on something that doesn't exist.

After all is said and done you have to ask yourself what absolute brain dead moron would buy this shit. Wait I know the same hedge fund valets, and pension fund zombies who bought all the other toxic Love Canal shit they peddled before.......and the Great Ponzi continues.

Anyway, somebody better get GM back over $33 stat or there'' be the dickens to pay!

Thursday, March 3, 2011

Good Read from Paul Farrell

Did you happen to catch MarketWatch writer Paul Farrell's piece Four time bombs that will blow up Wall Street?

You can read it in its entirety below. It's worth it.

Four time bombs that will blow up Wall Street

Commentary: Too late to jail bank CEOs; only revolution will succeed

By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — Put Goldman Sachs CEO Lloyd Blankfein in jail for six months, and all this will stop, all over Wall Street and America, a former congressional aide tells Matt Taibbi in his latest Rolling Stone attack, “Why Isn’t Wall Street in Jail? Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.”

Taibbi’s right, everyone knows Wall Street’s run by a bunch of dictators who are doing more damage to democracy and capitalism than North Africa’s dictators. But jail the CEOs of Goldman, Citi, B. of A. or my old firm Morgan Stanley? Too late.

Berkshire contemplates acquisitions

Jamie Heller and Erik Holm discuss the implications of the newly released letter to Berkshire Hathaway shareholders from billionaire investor Warren Buffett.

Only a revolution will stop Wall Street’s self-destructive capitalism. And watching the people revolt against dictators like Mubarak and Gadhafi reminds us of the spirit that sparked America’s revolution in 1776. But today we need a 1930s-style revolution.

During the S&L crisis two decades ago America had a backbone, indicted 3,800 executives and bankers. Today’s leaders have no backbone. Besides jail time won’t reform the darkness consuming Wall Street’s soul. We’re all asleep, in denial about the moral crisis facing America. Yes, we need a new revolution.

Jail time? We’ve heard that many times before. Journalists have been beating that dead horse for three years. Jailing CEOs made sense in early 2009. But our naïve president missed that opportunity, instead surrounded himself with Wall Street insiders as Bush did with Blankfein’s predecessor. Trojan Horses manipulating a Congress filled with clueless Dems mismanaging tired Keynesian theories.

Taibbi got it right: Washington’s error was in protecting Wall Street’s billion-dollar crooks when they should have been prosecuting CEOs for criminal behavior in getting us into the 2008 mess. So today, the political statute-of-limitations has run. Jail solution is wishful thinking, like praying to the tooth fairy for a miracle. Time for action. Time for a revolution on Wall Street.

Jail Wall Street? Old news. They got away with it. We chickened out

“Jail Bank CEOs” makes a great sound bite in the cable pundits’ echo chamber. Remember Taibbi’s earlier indictment of Goldman Sachs: the “world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

But so what? Just three years after Wall Street’s crooks “brought down the world’s economy” Goldman’s Blankfein and his buddies are paying record bonuses, and laughing at us.

Seriously, think about it folks: Since the 2008 meltdown magazines and newspapers have analyzed the 2008 crash to death. It really is old news, history. Journalists churned out book after book: “Greenspan’s Bubbles,” “House of Cards,” “Trillion Dollar Meltdown,” “13 Bankers,” “Dumb Money,” “Bailout Nation,” “All the Devils Are Here,” “The Big Short,” “Too Big to Fail,” “The Failure of Capitalism,” “This Time is Different,” “And Then the Roof Caved In,” on and on, ad nauseum. All talk, no action, and no effect.

Get it? With every book, every editorial, every expose the past three years, Wall Street bankers actually grew stronger, got richer, more arrogant, bolder on bonuses, impervious to attacks, even taunting us, like the dictators Mubarak, Ben Ali and Gadhafi, confident they could do no wrong, confident no one would rebel. Jail? Our moment to act is long past. We blinked.

Yes folks, Wall Street is the “Comeback Kid” story of the 21st century. Like a terrorist in a horror film, Wall Street thrives on threats. Three short years ago, Wall Street was virtually bankrupt, a ward of the state. We could have jailed “just one” of them back then, when they were down for the count. Instead, we bailed them out! Made them richer. Gave them $13.7 trillion, loans, credits, cash, asset buyouts. Gave them keys to the Treasury. They didn’t just recover, they “ran the tables,” to use a blackjack/pool metaphor. Now Wall Street dictators have absolute power, ruling Washington, America, you and me.

Yes, America’s bankrupt, but the rich just do not care

Admit it, we lost the opportunity. Jail a bank CEO and Wall Street will miraculously reform? You’re joking, right? Wall Street got away with a “legal” bank heist. Today the should-be/would-be inmates are running the prison.

Wall Street’s corrupt banks have lost their moral compass … their insatiable greed has become a deadly virus destroying its host nation … their campaign billions buy senate votes, stop regulators’ actions, manipulate presidential decisions. Wall Street money controls voters, runs America, both parties. Yes, Wall Street is bankrupting America.

Wake up America, listen:

  • “Our country is bankrupt. It’s not bankrupt in 30 years or five years,” warns economist Larry Kotlikoff, “it’s bankrupt today.”

  • Economist Peter Morici: “Capitalism is broken, America’s government is two bankrupt political parties bankrupting the country.”

  • David Stockman, Reagan’s budget director: “If there were such a thing as Chapter 11 for politicians” the “tax cuts would amount to a bankruptcy filing.”

  • BusinessWeek recently asked analyst Mary Meeker to run the numbers. How bad is it? America really is bankrupt, with a “net worth of a negative $44 trillion.” Bankrupt.

And it will get worse. Unfortunately, nothing can stop America’s self-destructive Wall Street bankers. They simply do not care that their “doomsday capitalism” is destroying themselves from within, and is bankrupting America too.

One mega-millionaire sent me an email after reading my Jan. 4 column, “America’s worst 10 years start now.”

“Paul, you may well be right about the coming decade, but the rich exist in a different world from the one you write about. They live privileged lives in gated communities. Meet for holidays at the world’s elite resorts. The richest just aren’t worried about today’s economy like your readers. Their issues revolve around who’s the best masseuse, best Pilates teacher, best concierge medical doctor, which private school to choose, what investments they are making at this time, etc. Folks at the top are not concerned with the underlying deterioration of America, except in the abstract, because they aren’t directly affected. That’s why no amount of information from you will ever change things. To them, it’s irrelevant. Best wishes, always enjoy your stuff.”

4 ticking time bombs that will ignite the Wall Street revolution

Yes, the rich live in a different world. And no, information won’t change them. But a revolution will. Revolutions build slowly over a long time. Then, suddenly, a critical mass, a flash point, something totally unexpected ignites the ticking bomb.

It happened recently in a remote Tunisian village. Mohamed Bouazizi, a 26-year-old college graduate, unable to pay bribes, set himself on fire to protest police confiscation of his unlicensed vegetable cart. That triggered a revolution. And his death rapidly led to the collapse of a 24-year dictatorship.

Today we have four hot time bombs, tick-ticking, soon to make history; any one can easily accelerate the revolution that’s already killing Wall Street from within.

1. Wealth gap: Super-Rich vs class wars, death of democracy

The gap: In one generation, America’s wealthiest 1% has exploded from 9% to 23% of America’s income, while middle-class income has stagnated. Even Buffett admits: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and winning.”

But my rich friend tells the real story, of their social disconnect. The rich just don’t care. They live in a different world, live by a self-centered code lacking a moral compass. The public welfare is honored only if supported by tax benefits.

The wealth gap is widening and soon something unpredictable will ignite a Wall Street revolution.

2. Wall Street’s doomsday capitalism vs rule by anarchy

A key Supreme Court decision accelerated and codified Wall Street’s ability to use billions stolen from taxpayers to lobby Washington and solidify its power, all for its own self-interest, through campaign payola, senators’ votes, presidential access, manipulation of regulators, grabbing tax benefits, etc. And it’s every man and woman for themselves.

Don’t believe it? Know this, democracy is dead and you’re in denial. Wall Street CEOs and Forbes 400 billionaires are either engaged in a secret conspiracy, or a classic anarchy picking apart America, oblivious of the fact they are setting up the next big revolution.

3. Pentagon’s perpetual war machine vs America’s budget time bomb

The mathematics of our $75 trillion Social Security and Medicare deficits often seem insurmountable, but can be recalibrated. However, the war-loving mindset of America’s neocons — fueled by China’s military actions, the insatiable expansion of our military spending and a Pentagon prediction that global population growth — is putting more and more pressure on the world’s scarce resources, and will, in turn, increase global wars and the demand for more war spending, increasing the risk of sudden revolutions everywhere.

4. Global population explosion vs resources, jobs, better lifestyles

As the world population explodes from 7 billion to 10 billion in the next generation, the demand for more jobs and the pressure on scarce resources will increase, while expectations will fall as the ratio of haves to have-nots increases, making the world all around Wall Street a burning powder keg setting up a revolution.

Bottom line: Forget jailing Wall Street’s dictators. It’s naïve and too late. We missed that opportunity. But a revolution will do the trick, give us a second chance to jail the crooks.

Until then, remember, these four factors are building to a head, merging into a critical mass that will accelerate into a revolution and destroy Wall Street from within: The widening wealth gap, capitalism’s new rule-by-anarchy, the high cost of feeding the Pentagon’s costly war machine, and the huge global population explosion.