Friday, April 29, 2011

Some Random Items

Recovery
All this QE, stimulus etc and we get 1.8% growth. Uhuh. Then we get initial unemployment claims rising to 429,000. Sadly even the 4 week average is north of 400,000 so you can't even hide behind that one.

If this is what a recovery looks like, 75000 people in Chicago applying for 2000, no, not Boeing jobs, no, not Ford Motor jobs and no, not Cummins engine jobs, but rather those high paying, skilled labor McDonalds positions. Note also that this was not in Lahore, Havana, or Lagos but rather Chicago.

What was it the Walmart CEO said about customers. Ahh, who cares. CNBC doesn't, so why should we. The profoundly enlightened whiz's over at CNBC are busy discussing ideas like bulldozing houses to reduce housing supply.

Yes, you indeed read that right. Bulldoze houses check out the short CNBC video link above for yourself. The real gem of this higher thinking powow comes straight away from host Erin Burnett when she gave us this doozy;

"should we tear down abandoned homes, foreclosed homes, or even built homes by the homebuilders, that, you know, all the the fixtures, and the Wifi, or whatever, even the color, are just not going to be stylish by the time people actually want to buy em'."

So Joe Lavorgna, chief U.S. economist at Deutsche Bank what do you think?

"I think its a great idea Erin!"

Even poor Rick Santelli, whom I like, agreed.

C'mon Rick, give your head a shake for cryin' out loud!

I have and idea to add to this extraordinarily cerebral discussion. Hey, how about dropping some cluster bombs from a squadron of Warthogs and raze half the this countries housing and infrastructure. This way we could get right back to the economic nirvana we had before the housing ponzi collapsed. Put lots of people back to work building houses, the roads and infrastructure destroyed, put lots of people back to work re-stocking all the munitions used. Yes indeed fantastic idea.

Funny but the phrase "shit for brains" immediately comes to mind. And you still wonder why its called the boobs and boobs in chairs network?

Berkshire Hathaway
Given it is the annual meeting of Berkshire Hathaway and that the temperature surrounding the Buffett/Sokol/Lubrizol affair is starting to rise, I thought it time to chime in.

Buffett's holding company Berkshire Hathaway, his right hand man Charlie 'suck it up and cope' Munger and their top lieutenant David Sokol rightly or wrongly are widely considered the top of the financial pyramid. They and their activities represent the holy grail of the financial landscape as Buffett is
the alter at which so many on Wall St. and the financial media worshipped.

We all know what role Moodys played in the housing ponzi scheme and so does Warren Buffett. If you truly believe, as I am sure many devotees do, that the purported smartest/shrewdest investor ever to live while being one of the largest shareholders in Moodys, not to mention Wells Fargo had no idea what was going on, well might I suggest you have yet another hit on the Zoloft pipe and turn Jim Cramer on for an update.

Now consider the front running Berkshire #2 Munger did with Boyd. the book cooking Sokol orchestrated at MidAmerican Energy to drive out a minority partner, and of most recent the insider trading/front running scheme at Lubrizol shows the rot and filth that have been going on at the 'top of the pyramid' for some time. Given this, what does this tell you about the financial scene when this is the top of the pyramid?

Do you dare imagine what the the levels further down the financial food chain are like?

U.S. Dollar
Is it me or are the masters of the universe, the smartest guys in the room eerily quiet on the situation that is the U.S. dollar. If it weren't so tragic I would suggest it might be funny at how we were told by these same experts how we were heading for financial armageddon if Wall St. bankers weren't bailed out of their position. How martial law was imminent if congress didn't acquiesce to Wall Street's extortion scheme and fork over 700 billion so Paulson could hand it over to cover losing bets by his cronies on Wall St.

Yet ironically the dollar, which is in free fall, poses no such threat for us? Where are the experts now? What, you mean no martial law if the dollar drops to 50? No armageddon either?
Just wanted to make sure.



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 Darden ticker DRI @ $49.51 stop @ $49.71

Wednesday, April 27, 2011

Money Multiplier

For those whose eyes glaze over when topics such as money supply are discussed here it is quickie version as best I can do. The multiplier shows the increase in money supply for each $1 increase in reserves or how much bang you get for each dollar added to the system. I haven't commented on the multiplier in some time.

Below is an updated look at the long term M1 Money multiplier chart courtesy of the St. Louis Fed.


The above chart gives a good overall view. Now lets take a closer look with a 5 year chart which is below.


It has been well chronicled that the decline in the multiplier corresponds to the expansion or rise in reserves held of the Fed's balance sheet. You can click here and see the chart of this expansion via the St. Louis Fed website, suffice to say it corresponds counter to the above chart.

According to the St. Louis Fed, the multiplier number as of April 6, 2011, is 0.764. This means that for every $1 added to the monetary base money supply increases 76.4 cents. Something is different. Forget wrong or right for now.

Why?
Banks are building up reserves instead of lending.
Why?
Well now, that's a very good question. It would be awfully strange for a banker to not want to lend and make lots of money, preserve market share dump that college sweetheart who raised his kids and get that trophy wife for the charity circuit. Yes, awfully strange, that is, if the economy was truly recovering and real estate was as strong as the shills like Mark Zandi and Allan Blinder tell us it is.

Have another look at the above chart again.


Notice the shaded area on the chart represents recession. So after a short reprieve bounce which rallied to the lows of that shaded recession, it has now collapsed again and has taken out the prior lows. Nothing has changed. So are things really better as the crumb chasing dependent shills on CNBC would have you believe? Mark Zandi and Allan Blinder (what a fitting last name) put out a paper explaining the great recession was brought to an end. Hey guys, you really think we're out of it huh? You really believe that? You looked at this chart? If you're correct shouldn't the line on the chart have reversed and gone the other way? Or should I simply take your word for it and disbelieve my lying eyes?

As an aside I'll be keeping an eye on you guys just in case you want to pull a Mishkin and rename your paper at a later date. Oh and another thing... if you received compensation for your paper ala Mishkin did via the Icelandic chamber of commerce, I would suggest you disclose the details ASAP or you might just get a spot on my All-Imbecile Team.

Anyhow back to the multiplier.

One might probably want to check with a real professional ponzi operator like Greenspan, Bernanke or Madoff but in my opinion, every successful ponzi requires more money coming in than going out. So my final question is.... can the Great Ponzi the Fed has created continue with a multiplier shrinking let alone not keeping pace with equilibrium at 1?


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 Darden ticker DRI @ $49.51 stop @ $49.71

Tuesday, April 26, 2011

Atlas Shrugged, Here and Now.

Last week my wife and I went to see the movie of the ever popular book Atlas Shrugged by Ayn Rand. I urge you to read the book but given most will not then simply see this movie. If you still decide to pass on this as well then maybe you can take a peek at the following article US Effort to Remove Drug CEO Jolts Firms so you can get an idea of what Ms. Rand was talking about.

Does the story on Forest Labs remind anyone of the recent episode in history where auto dealerships were closed? While we're on the topic has anyone ever get a look at what the criteria was for those dealership closings? Hmmm.

Maybe Wesley Mouch, I meant to say Steve Rattner simply come up with that list from Bureau of Economic Planning and National Resources meeting?

Gee, ya think Ayn Rand knew a thing or two regarding totalitarianism? Oligarchies? Or how about plain ol' economic idiocy?

I hope all my readers had a safe and joyous Easter holiday with their loved ones.

Wednesday, April 20, 2011

Theatre of the Absurd - Act 1

The videos by Max Keiser are not very long and are well worth your time. As the individual in the video states "it's the theatre of the absurd". The only thing left out is that it is only Act 1 with many more to follow.


Part 1

video


Part 2

video


Housekeeping notes;

I was stopped out of my long UUP position late last week at $21.44 for a loss of just over a pt. 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
Short 1 unit Darden ticker DRI @ $49.51 stop @ $49.71

Friday, April 15, 2011

Oh Yes, Morgan Has Done This Before.

Ran into an acquaintance/friend yesterday who I hadn't seen in some time. After a quick catch up conversation I asked what his plans were given he is in his late 20's and fantastic personality to which he replied;

"My wife and I would like to move south (Florida) but we would take such a hit on the house."

quickly got him up to speed with just one example of how condo associations have had to petition the courts for the mortgage holders, like Citi, to foreclose (big assumption that Citi actually holds the note but that is for the courts to decide) on the property given their penchant to 'delay and pray' or 'extend and pretend', take you pick.

You shoulda' seen his eyes get big when I told him the cases in particular the condo debtor hadn't paid assoc. fees in 8-9 months and when the dirt, I mean details, finally came out found out we learned said debtor hadn't paid the mortgage in something like 14 months yet Citi mysteriously hadn't commenced foreclosure proceedings.

Needless to say I explained jingle mail and one can build quite a nest egg to cushion the credit rating blow when one doesn't pay ones mortgage for 12,18 or 24 months. He was incredulous ot say the least but I enphasized that any decision shouldn't be made lightly or rashly and never before prudent and efficient counsel from top to bottom had been saught out.

I left our conversation feeling for him and actually questioning whether or not I should have said what I said to him about the jingle mail. That faded drastically this morning as I read about how the vaunted Morgan Stanley, yet another of the bailout laden, too big to fails, member of the tail wagging dog economy declared that they are performing some jingle mail of their own via one of their property funds.

According to news reports;

A Morgan Stanley property fund failed to make $3.3 billion in debt payments by a deadline on Friday, handing over the keys to a central Tokyo office building to Blackstone and other investors, the largest repayment failure of its kind in Japan.

It marks the latest fallout from a series of highly leveraged investments by Morgan Stanley , one of the most aggressive investors in worldwide property markets before the global financial crisis.


Morgan Stanley common shares are up this morning on the news that they have defaulted on the note. Yup up on that news.The report goes on to state:

Morgan Stanley repackaged the loans into 125 billion yen worth of CMBS in 2005, according to a website for Morgan Stanley. Taking advantage of a run-up in property prices, MSREF V refinanced its debt on the Shinagawa property in 2007 with new debt worth 278 billion yen, twice the value of its purchase and likely yielding a tidy profit for the fund. The refinanced debt was sold in six different tranches by Morgan Stanley to investors.


Wanna bet the tranche was AAA rated?
Wanna bet your, your wifes's or your bother-in-law's pension plan held some of it?
Wanna bet your, your wife's or you brother-in-law's pension plan went along with the re-financing and most probably bought more of that AAA plated paper?

I love it when clients come first. I mean not just at Goldman but all across Wall St. were you know they are looking out for you.

Now for those with a short or selective memory this is not the first time Morgan Stanley has walked away. Oh yes, Morgan has done this before. So given this , I'm actually surprised MS stock didn't gap up wildly on the news as the same valet parking attendants managing your pension fund who bought that AAA plated paper buy MS common stock as well. What given that Morgan's free cash flow should soar on this and future similar activity.


And regarding the whole walk away/jingle mail thing out there, its okay when Morgan Stanley does it multiple times but you serfs out there, no, you must, to quote the legendary yet classy at the same time Charlie 'hypoocrite #2' Munger "suck it in and cope".

Do any guillotine manufacturers trade publicly?

Wednesday, April 13, 2011

Never Underestimate the Other Guy's Greed

I never was the brightest bulb in the room, heck I can admit that now. I needed a tutor to get through calculus locked in my room with absolute silence whereas my younger brother (specialist physician) got all the brains and could do calculus in front of Monday Night Football with his headphones on. Basically, I got the height, that's about it.

Oh, I almost forgot that I have been blessed with, besides height, a super sensitive bullshitometer. I can sniff out a dirt bag quite quickly. My track record for identifying these maggots is quite marvelous as many around me have remarked, sadly done often in hindsight. I sure hope it doesn't take one to know one but hopefully you get the picture.

I have railed ad nauseum about the larceny and outright thievery on Wall St. that seems to be downright limitless. I often think of, and fans of the movie Scarface will recognize the title of this post, Robert Loggia's character Frank Lopez and his memorable line;

"Lesson number 1: Never underestimate the other guy's greed!"

Gee, you think this might apply a tad bit on Wall St?

Readers know my oft repeated adage that many on Wall St. would sell their wives/daughters/mothers into sex slavery for a 6 or 7 figure bonus. Unfortunately many of you thought then and still now find this outlandish, rank hyperbole.

Well, as this cesspool or Great Ponzi as future historians will refer to this current economy, is slowly drained and the facts become apparent we are learning that Frank Lopez and quite frankly myself not only were spot on in our observations about these people but actually quite tame in our assessment.

Case in point. Get a load of Matt Taibbi's (of Rolling Stone magazine who has been all over the story chronicling the Great Ponzi and its aftermath) newest piece entitled The Real Housewives of Wall Street, Why is the Federal Reserve forking over $220 million in bailout money to the wives of 2 Morgan Stanley bigwigs?

Read it and then maybe we'll play word association.
What word shall I use for a family audience cause I sure know what I would use for a locker room one.

How about brazen.
How about audacious.
How about just plain ol' criminal.

Remember now this is the wife of the same John Mack that was investigated for insider trading. Well, I use the term investigated loosely because considering most at the SEC are too busy surfing porn even as we speak, someone (a cat named Aguirre if I recall correctly) starting poking around and wanted to interview (re: question Mack) which didn't sit well with with Mack and long story short Aguirre gets fired. and ended up getting fired.

Here is what I had to say about the dirt bag that is Mack previously back in my post dated Sept. 11, 09;

"And as for John Mack, yes the same John Mack of the insider trading with Pequot Capital, he is living proof of everything that is wrong with Wall St. I am sure he is nice to his pets, adored at his place of worship, and he is very generous with charities, charlatans always are. But make no mistake, the rules and laws of our society and as they apply to you and I do not apply to men like John Mack, Hank Paulson, et al."

For anyone interesting in learning more about this gem of guy Mack and the Pequot incident, Don Bauder out with the San Diego Reader has a great piece you can read here.

Well, what do you think.
Land of rules and laws huh?. And to think money honey Maria still wonders why trust and confidence in the capital markets is missing. Still wonder why its the network of boobs and boobs in chairs. Can she really not get it or just dresses up to play her role in a Vaudeville play.

I hate to say this but as all this dirt is revealed, with time my friends it all will be, maybe the REAL pessimists are correct when they assert that the whole thing is perverted and diseased and would do well to be razed to the ground.

Ahh what the heck, fear not as there is nothing to fret or concern ourselves with here as the TV still works the beer is still cold and the Games of the Coliseum continue. Yes, pro sports, Jersey Shore, Dancing with the Stars Idol, Survivor, Great Race and all the other assorted mind numbing absolute trash continues in their regularly scheduled programming slots.

Tuesday, April 12, 2011

Building Pyramids

Remember the video on the empty Chinese city called Ordos that made the rounds? Well, I came across this interesting video by Australian Dateline on more empty Chinese cities, excuse me I meant to say teh economic miracle that is China. Of course I am fretting over nothing as China's GDP numbers are wholly believable, about as believeable as the Japanese government's statements regarding the Fukushima nuclear plant.

Better yet lets get a snapshot of the situation from boots on the ground, Hong Kong based, real estate analyst Gillem Tulloch in the segment;

"It's essentially the modern day equivalent of building pyramids".

Thank you Gillem.

I would like to quote the heavily accented cleaning company owner in the movie Wall St. and say "thank you for telling us what we already know" but unfortunately the virus called Keynesianism with the hideous symptom called stimulus, spreading like wildfire infecting so many innocents that one cannot assume anything less doing so and making an ass out of u and me (assume).

Watch the video below, You won't be disappointed when you see the size of the ponzi, errr excuse me, the phenomenal growth there.

After watching it, you might be able to commiserate with the toy store owner in the South China Mall (at beginning of the video), if you or your broker talked you into any of those piece of garbage Chinese reverse merger stocks listed over here that are blowing up daily and most assuredly hourly in short order.

Actually in case you were wondered where all those highly skilled senior vice-president/managing directors, global ponzi specialists from Lehman, Bear, Merrill, Countrywide, Fannie and Freddie ended up after the mirage here blew sky high wonder no more. They are manning the Chinese reverse merger desks across the globe.

Global ponzi specialist. I love it !

Nice resume, eerrrr excuse me, C.V. as they call it in the Ivy league, enhancer. Hey, another monicker GPS to put on that business card. Funny! Way too funny!



video

Monday, April 11, 2011

The Inflation- Deflation Debate.

I am not the brightest bulb in the room nor an I connected up the ying yang via 'expert networks' as so many sabbaticalled parking lot valets (re: hedge funders like Rajaratnam) are on Wall St. One thing I am is aware of the obvious and as such have not minced words about stating what I believe is occurring around us.

Regular readers know full well what I think about master of the universe David Tepper and his 'investing is easy' school of thought. Yes economy gets better stocks go up, economy sours Fed steps in and pulls its levers (QE 1,2,3,4...) and presto stocks go up. Yes the laws of physics, not to mention the capital markets, cease to exist when you either have an Ivy league MBA or run massive amounts of other's money and keep all the crumbs.

One of my overall concerns has been what a bond market blowup (re:failed auction or worse default) would entail. The other concern I have harbored has been one that my friend Charles Hugh Smith highlights today. The U.S. dollar.

Full disclosure Charles blog Of Two Minds is a daily must read of mine. For those that have not done so you should pick up a copy of his book Survival + Structuring Prosperity for Yourself and the Nation, as it is well worth the effort. Well today Charles has an interesting piece out The Fed's Most Dangerous Game: Checkmate.

Charles, like others that I really enjoy reading like Mike Panzner of Financial Armageddon and his 2 hugely successful books Financial Armageddon and When Giants Fall, doesn't try to baffle you with bullsh#$. I realize this is obviously what many want but tragically what so few on Wall St., and Washington for that matter offer up.

Having said all this Charles treatise regarding the dollar is;

"The Fed can only choose the least-worst option now: either destroy the real economy by sinking the dollar below support and unleashing the Inflation Monster, or abandon the "risk trade" stock market rally."


This idea is something I have been chewing on for some time. You see I am a deflationist. Many cannot comprehend deflation because inflation is all they have known and experienced.
As my grandfather used to say and some other very smart men 'old hands' have shared with me, "those that know and understand deflation are all now dead".

I ask myself, Is deflation bad?

Well......

It results in lower prices.
It rewards savers.
It penalizes debtors or borrowers.
It rewards those with the cash last as opposed to inflation which rewards those who have it first.

I ask you to find an example globally where deflation caused a poplar uprising or a revolution.
Don't worry I'll wait for you, think about it for a moment.

Okay.... while you're considering that, I'll ask you to find an example of where inflation cause popular uprising, unrest or a revolution.

Gee, that didn't take long. Now you can go back to thinking about the deflation question. Still no answer yet huh. The reason is deflation doesn't.

0.6% interest rates don't matter so much when the price of the goods you want is dropping 10, 20, or 30%.

Who doesn't like lower prices?

I'll tell you who doesn't. Highly leveraged financiers whose bonus's depend on that rising tide lifting their boat, that's who.

Okay that's my position in a quick nutshell. Now back to the serious thinkers. Charles has asked the very simple question, which I immediately find interesting because simple is elegant:

"My question remains: what course of action will benefit those issuing the whispered orders to their lackeys and toadies on the Fed and in Congress? Will a disorderly and disruptive collapse of the dollar serve the Financial Power Elites' best interests? I don't see how it would. Rather, I see it wreaking great damage on their holdings."

Ahhh yes Charles. Whom does it benefit.

This now takes me to an an excellent inflation(hyper) deflation debate that was sparked last week between Rick Ackerman of Rick's Picks and a cat by the name of Gonzalo Lira.

The spark was a piece Rick penned called 'Big Gap in Logic Weakens Hyperinflationary Argument'. In it Rick concludes we are on a path of deflation to which Lira responded with his own piece 'Talk About a Big Gap in Logic!' countering in favor of the hyerinflationary argument.

Rick then countered back with a second piece called 'Here's Why Hyperinflationist Lira is Wrong!'


Take the time and it will take a little to read the exchange in ideas. While speaking of ideas, I take offence at bloggers bashing other bloggers. I am IN NO WAY suggesting bloggers circle the wagons like so many others do, and give other bloggers a pass simply because we are union brothers. I take offence because we are all trying to vet out the truth amidst all the lies and bullshit fed to us by those in charge and their puppets in Washington and the mainstream media. Memo to Lira, to a lesser extent Rick and all the other bloggers out there save your venom for the ones who really deserve it, the ones who put us in the pickle we are in, are digging us in deeper as we speak while frantically attempting to re-write history trying to save their own asses.Those responsible for this calamity absolutely love it when the bickering and name calling happens amongst us and the spotlight is taken off them.

Just my 2 cents worth. Okay!

Anyway I encourage anyone out there to read the articles hi lighted above. I also suggest you read my friend Charles Hugh Smith's piece The Mechanics of Hyperinflation: Bankers vs Politicos.

Given what I have said here about deflation I still give due consideration to the always insightful Richard Russell's admonition that the government has 2 choices: inflate or die. Sadly to say, the longer I have thought about Richard's idea the less I agree. I hate to do that with the old cat because he is just so damn smart and insightful but alas I must. What about he concept of pushing on a string? What about Japan Richard? If its death then its 20 yrs plus and a 75% lower stock market. Further to this, are so many around us confusing rising commodity prices around us for inflation when it could very well be the temporary uncontrolled, unintended consequence of free, easy, politically aided, speculative money. Simply no control over where the money goes. No different that what the Greenspan quarterbacked free money, no holds barred, money pump to avoid the post dotcom bubble armageddon did with housing.

Or, just in case any of you have forgotten, you cannot cure a debt problem with more debt. Now I realize a Harvard educated, Wall St. trained MBA and senior executive vice president and managing director will tell you it can. He might also enlist the aid of Fed chairman to tell you the earth is flat and unicorns gallop across rainbows to bolster his point. Keep ignoring them.

On a micro level I have personally, over the past 2-3 years, broached the subject of deflation to many of my friends and associates. Many of these people are no novices to business, finance and the economy. Initially when I mentioned the word deflation I got the most curious looks, the strangest of stares. They simply did not know and still do not, not to mention how to navigate the markets during it.


Anyway have a peek at the inflation/deflation articles above. It is what I am thinking about right now, whether it makes my heard hurt or not!



Animal Spirits, Market Gurus and Keeping Nimble

Took a few days off last week to care of some things around the house so my apologies for lack of posts.

Recovery Continues

For those that continue to believe that the recovery continues to march onward, that everything is A-okay, and that the 'animal spirits' are coming back I would suggest you skip reading the latest piece Why 2011 is Like 2000 and 2007 from the boys Charlie and Marty over at Comstock.

While on the subject I have to say I just love that one, animal spirits. First it was green shoots now its animal spirits. Lovely. I would bet Goebbels would've loved that one as well.

With all this good news about recovery one might wonder how news of a surge in mall vacancies could possibly happen.

Be careful discussing all this good news with the families of those that are now statistics in Las Vegas about this.

Market Gurus

Well it was market guru week on CNBC's squawk box in the morning last week. I am sure by now most everyone is aware of the smackdown Michael Steinhardt leveled against Warren Buffett. In case you missed it you can view it here from CNBC's website.

Regular readers know I am no fame of this phony, hypocritical charlatan whom the media fawns over ad nauseum. Now Becky 'Anna Nicole' Quick and her shallow pal hosts may be smitten with the wolf in sheep's clothing but I am not.

Congratulations to Mr. Steinhardt whom I do not know for - not only having the onions to say what he did - but to say it in the forum he did. 3 cheers for you Steinhardt! 3 cheers.

I also happened to catch Bill Miller of Legg Mason who was on as yet another market master. For those that didn't know or have forgotten, this is the same Bill Miller who never met a stock, in particular financials (who wouldn't in the ultimate ponzi scheme?) he wouldn't buy nor average down all the way to zero.

The Bill Miller playbook.

  • Take other peoples money and buy (it's a ponzi so buy financials).
  • Just keep buying (the stock market always goes up).
  • Mock anyone who claims your performance was related to the tide(this justifies your fees).
  • When positions drop in value buy more (heck, it's not your money).
  • When problems arise, your acumen questioned buy yet more (mention all the other parking lot valets own it as well).
  • Lunch with said parking lot valets, who all own the same things you do, confidently buy more.
  • When the shit hits the fan hide under your desk (helps if you've been working out).
  • Pray to the god you worship ($$$) for divine intervention (think TARP think Hank Paulson)
  • Re-emerge on CNBC as guru to claim genius status when tsunami of taxpayer bailouts floats your boat.
  • Rinse and repeat for best results.

Bill Miller, a pure financial genius. Ya think he loves free money. Fixes all woes.
I sure wish someone had taught me that game plan as a youngster. They should craft a statue of Miller in adoration so future generations can marvel at our stupid worship of the FIRE economy and ridicule how we all thought the tail wags the dog.

Aw heck, it's all good, just stop wondering why unemployment is 19%.



Quote of the month comes from David Walker the former U.S. Comptroller general regarding the budget debate:

"it's like arguing over the bar tab on the Titanic"

I heard someone, I cannot remember who, over the weekend refer to this market as entering "the stupid phase". Okay I hear ya, I thought only to have him then follow that up by stating "a lot of money can be made in stupid", adding on all the caveats that you need to be nimble, stay close to the exits yada, yada, yada.

Sure champ say nimble. Hey, come to think of it, when you're rounding that icy curve the 300 ft. vertical drop you might want to stay sharp fella !

One simply has to marvel at the crumb chasing, dyed in the wool, shallow Wall St. hacks. Better yet, how about I offer those, like that numbskull with a short memory the infamous words of one Chuck Prince (former CEO and now fired CEO of Citigroup) in this regard;

“As long as the music is playing, you’ve got to get up and dance, we’re still dancing.”

Yup still dancin' was he. Of course Chuck was stayin' close to the exits. Being nimble. Listent up here good, Chuck Prince was far more connected and 'in the know' than that numbskull I quoted earlier, me, you and just about 99.9% of the crumb chasing, parking lot valet sabbaticaled fund managers ever could be and he couldn't find the exit in time. Good luck if you think you can.

Just some food for thought if you will.

Housekeeping notes;

Wednesday last week I was stopped out of my TLT position at $90.89 for a loss of about 3/4 of a pt. 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
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Darden ticker DRI @ $49.51 stop @ $49.71

Wednesday, April 6, 2011

Another Look at the TLT's

I have been watching the long bond via my favored vehicle the i-shares 20 yr bond ticker $TLT. Friday last week, I went long 1 unit at 91.53. As the daily chart below indicates:



  • we are still hugging that up sloping trend line off the 2 recent lows made in early February and early March.(blue line)
  • we also have broken up through a descending trend line from the interim highs made this month at $94.5 and 93.5 (green line) and are back filling and kissing it from above. (smallish double bottom?)

Will da boyz take it all the way down to test the 50 day(not shown on chart but resides at $90.67 and shake everyone out?
Who knows?

What I do know is I like fading all the consensus doom and gloom surrounded federal debt paper. As much as I want to to add a 2nd unit long I shall be patient and wait till a move back up through $91.60


Housekeeping notes;

On Monday I was stopped out of my 1 unit FCX short position at $56.35 for a break even trade.

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
Long 1 unit i-shares 20yr bond ticker TLT @ $91.63 stop @ $90.89
Short 1 unit Darden ticker DRI @ $49.51 stop @ $49.71

$$

Friday, April 1, 2011

The Hypocrite Buffett

I had a day now to consider, then re-consider the actions of Buffett and one of his underlings named Sokol regarding the Lubrizol deal. What does one say about this revelation except to say are you really that surprised?

When it looks like front running, when it smells like front running, it usually is front running. I usually take to task the boobs and boobs in chairs on the propaganda network CNBC but yesterday I think Joe Kernan bought or in the least borrowed a pair for the interview with Sokol. Joe 'I went to MIT' Kernan had the nerve to hit Sokol straight on about front running.

Back to the hypocrite Buffett who is in charge over at Berkshire and who Sokol supposedly reports to. I realize many still worship at the alter of the oracle and fight to fawn over him and throw rose petals at his feet but do any of you admirers recall an old Buffett quote, I think from his annual meeting but I cannot be sure, in which he stated;

“Lose money and I will forgive you, but lose even a shred of reputation and I will be ruthless”

Ruthless huh! Maybe ruthless with anyone who messes with his profit and loss statement or ruthless with anyone who messes with his trophy promotional girl Becky' Anna Nicole' Quick. I stand by my previous statement regarding the oracle and his side puppet Munger that:

'I am quite certain when the final curtain falls on this show known as the Great Ponzi, Warren Buffett and his pal Charlie Munger will do down as a couple of the biggest hypocrites ever to grace the planet.'


For those that still believe in the Tooth fairy, Peter Pan and the Easter bunny then surely you still think Wall St. is a level playing field where everyone get a fair shake and the rule of law is enforced. Might I suggest you have ample supply of your daily dose of meds, God forbid you run out and sober up to what is transpiring around you.

Wall St. has become a complete and utter free for all.

A complete sham.

I could like to sit here and opine about the downward spiral of moral fiber and ethics but if you have a clean urine sample you know about that already.

Wall St. has become a breeding ground for maggots infesting from top to bottom. I can only imagine what someone like Charlie Merrill would think if he could see what Wall St. has become today.

Don't even get me started on the eunuchs over at the SEC and the revolving door they have with Wall St. The Dept of Justice is now synonymous with MIA. They're too busy chasing down Barry Bonds. Can't make this stuff up people.

Self regulation on Wall St. many say. Right !
Just like self regulation on congress, whats that word with Rangel's case? Oh yeah, censure, then next is secret censure, then is double secret censure.

Too funny if it all were not so pathetically sad.

Idea time. How about we let MS-13, Hell's Angels, Crips, Bloods, or the Central American drug cartels self regulate themselves.

Yeah, great idea.
Many here crap all over the French, who by the way were the first to step up and recognize our independence from Britain but I digress, had it right when they invented the guillotine.

The guillotine, the ultimate in self regulation bar none !



Housekeeping notes;

I just realized my stop on Darden ticker DRI says 60.11 which should have read $50.11 so my apologies.

I am adjusted my stop on DRI down to just about breakeven at $49.71

I also adjusted my stop down on FCX to breakeven as well at $56.31

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
Long 1 unit i-shares 20yr bond ticker TLT @ $91.63 stop @ $90.89
Short 1 unit Freeport McMoran ticker FCX @ $56.40 stop @ $56.31
Short 1 unit Darden ticker DRI @ $49.51 stop @ $49.71