Morning Audibles 6.2.10 - You Need Us


"In my younger and more vulnerable years my father gave me some advice that I've been turning over in my mind ever since.

'Whenever you feel like criticizing anyone,' he told me, just remember that all the people in this world haven't had the advantages that you've had.'"

---

"The wind had blown off, leaving a loud, bright night, with wings beating in the trees and a persistent organ sound as the full bellows of the earth blew the frogs full of life. The silhouette of a moving cat wavered across the moonlight, and, turning my head to watch it, I saw that I was not alone - fifty feet away a figure has emerged from the shadow of my neighbour's mansion and was standing with his hands in his pockets regarding the silver pepper of the stars. Something in his leisurely movements and the secure position of his feet upon the lawn suggested that it was Mr. Gatsby himself, come out to determine what share was his of our local heavens."...
F Scott Fitzgerald - THE GREAT GATSBY



As the case may be... Little did CV know that the party-ers in the Hamptons over this past weekend might have been on the lookout for lifeboats...


Damn, If I'd have known, I'd have cruised right down the Potomac (with my boat)... But first, I'd have first had to get by "Staircase Rapids" (on the confluence of the Potomac & Shenendoah - about 2000 meters from CV's farm)...


Then a bit further down... (past Georgetown on the Potomac - or those other relics dedicated to "scriptors" of The Constitution of the United States [which seem idiotically UNIMPORTANT to present lawmakers] - what were their NAMES anyway?... I forget...)


Same river passes a few hundred meters by this old decrepit cemetery (I can't see why it's of any importance - even if I'm POTUS... Hey - I'd rather catch a plane out of town to visit some old cronies for an Old Style BBQ in Chicago)... Yeah baby!


Further (OTHER) of us would then travel down the mouth of the Chesapeake, round Cape Charles way & the Norfolk Naval Base (& thereby giving a salute to my departed father whom we'd laid to rest in the waters there), then, up past Assateague Island (where the WILD PONIES still roam to this day)...


And after... Past Cape May, then further to South Hampton and in to "East Egg" (where TWSWB & friends take turns passing the Grey Poupon around)...


Purpose for my visit?... Perhaps to offer my little vessel as a LIFEBOAT... Or you know... Play "Gilligan" to all the Thurston & Lovey Howells... Give them the "3 hour tour", so to speak... Or, just be simple & cordial like Nick (and soak in the atmosphere)...




Who knows what's going on in the minds of these people?... I know that polo games & Grey Poupon can be very distracting... But it would seem to CV that as far as WISDOM is concerned, they should cast an eye upon the warnings of the "tribe" of SURVIVAL CAPITAL...


In 3 words... "You NEED US" (Hell- Thurston, "The Wizaed of Wall St. himself would tell you)...





"Most of the big shore places were closed now and there were hardly any lights except the shadowy, moving glow of a ferryboat across the Sound. And as the moon rose higher the inessential houses began to melt away until gradually I became aware of the old island here that flowered once for Dutch sailors' eyes - a fresh, green breast of the new world. Its vanished trees, the trees that had made way for Gatsby's house, had once pandered in whispers to the last and greatest of all human dreams; for a transitory enchanted moment man must have held his breath in the presence of this continent, compelled into an aesthetic contemplation he neither understood nor desired, face to face for the last time in history with something commensurate to his capacity for wonder. 

And as I sat there brooding on the old, unknown world, I thought of Gatsby's wonder when he first picked out the green light at the end of Daisy's dock. He had come a long way to this blue lawn, and his dream must have seemed so close that he could hardly fail to grasp it. He did not know that it was already behind him, somewhere back in that vast obscurity beyond the city, where the dark fields of the republic rolled on under the night.

Gatsby believed in the green light, the orgastic future that year by year recedes before us. It eluded us then, but that's no matter - tomorrow we will run faster, stretch out our arms further... And one fine morning..."


"So we beat on, boats against the current... Borne back ceaselessly into the past"
(the final sentence of THE GREAT GATSBY by Francis Scott Key Fitzgerald)



197 comments:

CV said...

Apologies pro-offered, again (for this post - which says N-O-T-H-I-N-G - about Capital Markets)... (which TD & KD are doing a fine job of keeping one abreast ATM... TWSWB? I'm not sure... I haven't checked lately as to whether he still considers this a "typical recovery" or not... Maybe he's asking Brian Wesbury for his opinion?...)

Anyway... I've told you all before... I'm a POP CULTURE type of dude... I speak in "metaphors"... Heck - Jesus spoke in PARABLES (so there IS some distant reference point here, right?)...

So, if and when the markets are UNCERTAIN (hint: like NOW)... CV reserves the right to produce threads that reflect the SIX DEGREES OF KEVIN BACON (or, "JOEY HEATHERTON" as CV initiated last week)...

Here is this weeks version of "The six degrees of Joey Heatherton" (Tina Louise & Dawn Wells style)...

So now you have F SCOTT FITZGERALD connecting to GILLIGANS ISLAND (in this episode)...

Don't thank CV... Thank TWSWB (because he, in fact, provided the GLUE)...

Anonymous said...

CV, Nice post.
FWIW, it makes me want to re-read "The Great Gatsby".

Prashant

karen said...

good morning! not sure where to begin on deciphering this morning's post, CV.. I'll work on it as I get better organized.

CV said...

@karen

Very simple...

The market is going to GO DOWN... Probably not today, but soon... People's lives are going to be affected... The EAST EGGERS don't realize that yet...

The rest is just scenery to pass the time until that occurs...

I'm tired of expressing it with charts (so let's see if THIS works)...

karen said...

from Sinclair

Frustration goes both ways. The price of gold has been a disappointment to the gold bears. The action in the HUI (AMEX Gold Bug Index) has posed a threat to the short on gold share hedgies and dirty tricksters.

This morning's pop up on the euro was accepted by this mangy group as the forth entry of emergency money into the currency market in the form of intervention. That message was taken by this group as confirmation to hold the euro at $1.2150 Gold's failure to hold the highs of this morning has been taken by the discouraged gold and gold share shorts as courage to try one more time.

Discouragement goes both ways. The gold share longs have felt it for a long time. The gold share shorts cannot be too happy either.

So in rolled the short of gold, gold share hedgies and dirty tricksters to re-establish closed short positions and add to old ones.

Anonymous said...

CV-

great post- Great Falls may be a bit tough to navigate as well assuming you are taking your boat to the Chesapeake

and Assateague/Chincoteugue- been a while since I have been out that way- brings back a few memories though

karen said...

"With Everyone Expressing Their Fake Support For The Euro, Iran Is Now Openly Dumping €45 Billion"

http://tinyurl.com/36kjtxb

CV said...

@ahab

I KNEW you (only you) would mention Great Falls... :-)

72bat said...

just a touch of ennui this a.m., eh cv?

McFearless said...

I've decided....Sinclair is bat shit crazy.

72bat said...

ben22
i beg your pardon?
72bat

CV said...

@karen

Not that I mind reading about Sinclair (or anyone elses) opinion on:

- The spot gold price
- where they think the price of it is going
- how much they might need to "accumulate"
- How important that might be
- yada yada

Just think...

In 1980 golds hit $1000 an ounce... In "inflation" adjusted terms it SHOULD be over $2000 an ounce as we speak...

It's not... (In fact, it's LOST more than 30% of that value, inflation adjusted)...

Meanwhile... The cost of gasoline has tripled (since those days)... And so has the cost of a bag of rice... (both of which are arguably more important than a bar of gold when TSHTF)...

CV just wonders why all these GENIUSES like Sinclair occupy so much of their time worrying about the price of gold...

Hell... If they were REALLY smart, they'd be putting up SILOS, and/or refinery CRACKING TOWERS... Right? :-)

McFearless said...

C,

I enjoyed this post, I think I have the idea behind it.

McFearless said...

@72,

sinclair....crazy.....his opinions on markets, and especially on gold and the dollar aren't worth anything....

I'm certain others disagree, but read his stuff from last fall and my opinion might make more sense.

McFearless said...

and every single time gold goes down, or not even that, when it doesn't just go up, he always screams MANIPULATION!

For starters:

http://jsmineset.com/2009/08/19/the-countdown-to-the-implosion-of-the-dollar/

I-Man said...

Quite possibly, your best post ever.

Anonymous said...

. . .and Old Style- last time I had that was at Wrigley Field-

CV's bringing back the memories

karen said...

ben, noted your costume ideas on a previous thread!
cv.. long term gold charts on sinclair's site. there is an inflation adjusted one as well. http://www.jsmineset.com/

CV said...

@72bat

"Ennui"... Great Word...

If I ever start a TRIBE (which may happen someday)... That's going to be the name...

The Ennui Tribe (you know - like the "Mohicans" or the "Chippewa", or "Algonquin")

Anonymous said...

b22-

fwiw- I like Jesse's take this morning-

Since I do not view this market as 'real' and engaged in price discovery it is hard to operate in it with conviction.

CV said...

@karen

See? I-Man "got it"... :-)

Thanks brah! I was up until 3AM putting it together... Had to re-read a few chapters of THE GREAT GATSBY in the process...

I-Man said...

Or the Powhatan...

McFearless said...

Jesse is in the same boat as Sinclair ahab, Andy illustrated this a year ago with him....

manipulation.....

MANIPULATION!

CV said...

@I-Man

That's the cool things about Tribes...

All across the continent (no matter where you live), there's a local tribe that once called the land "their home"....

Anonymous said...

72b-

caught your comment yesterday about flying into Detroit- and all the green space-

no-one else seems too interested in this idea of whole cities turning back to pasture and farmland, prairie and wilderness-

that many American cities were transient boom towns is becoming apparent

CV said...

@McF (9:52)

yeah... I friggin BLOW GOATS as a trader so therefore the market must be MANIPULATED... lol :-)

Anonymous said...

b22-

so- you don't think Jesse's comment has any truth to it at all?

I don't know dude- I have seen so much bullshit and deception in the last couple years that my gut feeling is that it's all a show-

and none of it's real

CV said...

@ahab

that many American cities were transient boom towns is becoming apparent

That's CV's "peeve" about New Orleans...

I mean look... It practically outdid it's USEFULNESS when the "Louisiana Purchase" was signed...

Sure it's somewhat strategic (mouth of Mississippi Delta)... But MORESO because the French needed a coastal port and didn't want to get involved in having to defend something further up river...

As soon as it belonged to the United States, a better strategic option should have been considered (but never was)...

At this point it's not only sinking, but "drifting" out into the Gulf as we speak... I've heard anecdotes that say within 100 years they'll need 50 foot levees to keep the water out...

Pretty STUPID if you ask me (to commit $$ there)...

But hey, it's a GREAT POLITICAL FOOTBALL right?

#44 played that one right after Katrina!

karen said...

for our UFB file: Piper Jaffray maintained an “overweight” rating on shares of Apple, Inc. (Nasdaq: AAPL) and raised their price target from $323 to $330.

CV said...

@I-Man

BTW - your "geographical" reference to the POWHATAN was apt... (could have tossed the NANTICOKE in there as well)...

Or the SHINNECOCK (by the time you reached the Egg_...

CV said...

@karen

Sounds like PJ has some shares to distribute (and still believes there are "dupes" out there - which there probably are)

CV said...

The last two trading days...

It "looks" to CV like a falling wedge is forming (SPX)...

That ought to convince some to get bullish (especially if it ends near a 61.8% retrace of 1103 back to 1140)...

However, CV "wonders" if it's a trap...

McFearless said...

C,

I'm certain these types of calls have only just started, especially on gold. The more calls we get for gold 10k before gold even gets to 1,500 the more certain I am of this.

There is continued claim that professional traders have some sort of unfair advantage (some use the word rigged) over everyone else. It's quite a claim isnt it?

Isn't this the case with every single business that exists? The people that are "pros" have an advantage over the people that are not? Why should we assume a pro gold trader, for example, should trade just as badly as everyone else that went to Brian's part last weekend and wants to have some GLD profits? If these pros do better...is it actually unfair?

In general when it comes to market conspiracy theories I find them more often than not to be someone rationalizing their failure while they use it to defer any responsibility for being wrong.

I especially like claims like the type sinclair make, where he knows the deepest desires of these secret cabals that are taking over the world with their perfectly designed manipulation, the dates of which only sinclair knows about.

Oh Shit, a gnome just peeked at me through the office window....I'm doomed.

CV said...

@McF

Tell Sinclair that CV thinks it's "Mr. T", "Ice Cube", & "50 Cent" that are manipulating the gold market...

Anonymous said...

out to catch some sunshine and shake this cold I have-

CV- New Orleans is beat up old town- but I like it nonetheless- how many resources should be put into salvaging it? A very good question.

as an aside- anyone have any travel plans this Summer? I think b22 said he is going to LA-

I am trying to find some cheap tickets somewhere- anywhere in Europe right now seems kind of pricey

CV said...

@McF

The Romans "manipulated" practically the entire Europe & Asian subcontinents... (before they didn't)...

Hitler "manipulated" most of Europe and North Africa... (before he didn't)...

Jay-Z said...

Fiddy Cent....?

I-Man said...

Ahab, I'm hitting Kauai in September...

Cant wait.

McFearless said...

Ahab,

None of *what is real?

I don't get the comment. When the DOW failed into the 61.8% retrace, was that not real?

When so many internal indicators were illustrating extreme bullish sentiment several weeks ago and massive amounts of distribution was that not real?

Are the fibo time relationships that continue to work not real?

Was the flash crash not real, and if it wasn't, what the hell are we doing down here now....several weeks later?

Are analysts now calling for higher prices for stocks in legion not real?

When they were all lowering estimates in Q1 2009, was that not real?

point is, this idea of it not being "real" does not resonate with me at all....perhaps I'm dreaming right now though....

CV said...

@ahab

No point in going over to Europe (until the Euro gets back to 85 cents)...

Hell - CV might even BUY BACK his house in Italy that he bought for 85 Euro cents to the dollar, then sold at 1.40... (if it comes right down to it)...

I-Man said...

50 is one of my heroes, btw. Great story there...

If only he would see past the clothes, bankrolls, and hoes... tho.

CV said...

@McF

Stop worrying about these things and PASS THE DAMN BALL already...

Your arms must be getting tired there... :-)

McFearless said...

Ahab,

I've got a few trips in mind, mostly local stuff though because I'm a tight ass....maybe a trip to Florida to look at some real estate again.

CV said...

@I-Man

You can take the boy out of the hood, but it's tough to take the hood out of the boy...

CV said...

@McF

You're out of your mind buying real estate in Florida...

I-Man said...

If the SPX reverses here, then there is a good shot we close in the 1060s... if not, then longs may be able to push it up to 1082-84 or so... but there's a lot of resistance built in to the 15min charts.

And we know SPX has "issues" holding 1090...

McFearless said...

50 seems like a pretty smart business man to me, but he's no Jay-Z, nobody beats J in my book.

CV said...

@I-Man

This would be the top of that FALLING WEDGE I was talking about...

So I think you're correct...

McFearless said...

C,

No I just keep trolling there, prices aren't low enough yet......yet.

CV said...

@McF

Smart Business Man (as applied to these individuals) assumes the ways they were able to exploit the times in wave 5...

Let's see how they all do in P3... Shall we?

CV said...

@McF

Re: Prices low enough...

FREE would sound good to me...

You couldn't get me to buy anything down there at ANY price...

You can hardly INSURE anything down there... So unless the idea of building something up and getting it knocked down every decade or so appeals to you...

McFearless said...

C,
50's life may be a major asset in negative social mood....

McFearless said...

C,

I've always enjoyed Florida, like it there a lot, that's a market where due to my belief in P3 I'd see houses eventually selling for pennies on the dollar, so my time to scout is now....

AmenRa said...

SPX VOL A/D 7:1
NYSE VOL A/D 5:1
PC 0.97 and rising
Trin 0.46

Bulls desperate to keep bears in check. That's what I see.

CV said...

@McF (10:34)

You could be right... Assuming one could transition back seamlessly...

Personally, I always found the lyrics to J-Lo's "Jenny from the Block" PHONY AS HELL...

"Don't be fooled by the rocks that I got... I'm still Jenny from the Block"...

"I stayed grounded as the amounts rolled in"...

CV calls BS on that!

CV said...

@mcF

You could get yourself a nice Burmese Python for a pet :-)

bob said...

Iroquois here. CV, you must know about the three sisters? That, and their political system was matriarchal.

Mannwich said...

@I-Man: Hitting Kauai? I'm jealous. You going to do any surfing? Take a lesson if you don't know how to surf. It's a lot of fun.

And definitely hike the Na Pali Coast. Check out Waimea Canyon and do some snorkeling at Tunnels Beach. Go to Polihale State Beach on the far SW end for sunset and a beer. WELL worth it.

CV said...

@Amen (10:39)

Bulls desperate to keep bears in check. That's what I see.

I see it too... Right here (in fact)...

http://andrewschwilling.com/wp-content/uploads/2010/02/bull-on-chess-board-large-shine-2-300x266.jpg

McFearless said...

C,

J. Lo, lol, and yeah, maybe "from the block" if you are talking Rodeo Drive. 50 could be a bear market star, lots of rappers could be....boy bands...no, Justin Bieber...likely doomed.

Like Baby Baby Baby NO.

CV said...

@Amen

or here, too...

http://s3.images.com/huge.2.13109.JPG

CV said...

@Manny

Can I skip all that and go straight for the beer? :-)

I-Man said...

Bob, I have a whole plot that is strictly devoted to the 3 Sisters...

Four mounds, four corn stalks in the center, four peas/beans around the corn, squash and pumpkin in the corners of the plot.

Peas/beans use the corn stalks for support, and because they are legumes "fix" the soil with nitrogen, which provides extra fertilizer for the corn (a heavy feeder)... the squash/pumpkins provide shade/mulch for the entire bed, which protects the moisture in the soil...

Its an amazing trinity.



@ Manny

Check, check, check...

Love it down there... Mrs I's grandma has been living there since the 70s, so we stay at her place in Kapaa.

bob said...

They all store well too. History has it that the longhouses all had a pot of all three going all winter long. They could supplement their diet with game, but didn't have to, the pot was all they needed.

I-Man said...

Succotash.

Anonymous said...

CV-

maybe I should wait until the Euro gets to fiddy cent(-:!!!

I-Man- now that sounds fun- Hawaii's pretty cool

b22- dude- my impression- re unreal- is based on the entire current economic system of the developed world-

the "consumption model" so to speak- unsustainable- and corporate control of resources and governments- where- for example- water rights of an entire country (Bolivia) are privatized and people can't even collect rain water on their own land without a permit- the stuff revolutions are made of-

that people walk around thinking this is how it's supposed to be-

almost like the Matrix- oblivious- unaware that it's all a confidence game and could all collapse pretty easily-

government's will do whatever it takes to keep the dream alive

Mannwich said...

You can do that as well, cv. Just hit the beach and open a beer (or many).

Mannwich said...

Sounds great, I-Man.

bob said...

Iman,

I've been on a search for native varieties around here, there are a few that are very well protected.

72bat said...

been away for my desk for a bit...

@ ben -
sorry for the earlier attempt at humor ( a little too elliptical). was taking mock umbrage at associating bat shit with the kind of crazy that you assign to sinclair.

@ ahab -
re "American cities... transient boom towns" - when i used to fly frequently into l.a., i'd look down and envision all that sprawl returned to desert. i mean talk about unsustainable, out of sync with the ecosystem. reminded me of lima peru, also with millions congregated on a coastal desert plain, also sitting on a massive fault line

@cv -
people gave me such withering looks when post-katrina i'd voice questions over the wisdom of pouring public $ into "re-building" any of the coastal devastation. if folks want to spend their own $ on rebuilding and the cost of insuring, go for it, but public funding? insanity.

Anonymous said...

I've been meaning to get to Barcelona for a while

I-Man said...

What sounds great, is a big bowl of hawaiian fruits for breakfast... fish and poi for lunch...

Big spliff of pakalolo for supper. Mai Tai for dessert.

Chirping of tropical insects, and a lizard on the wall...

I-Man said...

Leftback day dreaming of the Mistress in a coco shawl...

bob said...

The problems with NO are hardly theirs alone. Most major US cities would lose a lot of land were the pumps to stop running. Boston, as an example. Back Bay? Used to be under water, and would quickly go back that way. Very high priced RE too.

The other thing about NO is that the problems start way up the mississippi river, they have "tamed it" but didn't think about what preventing the flooding would do to the delta, it has slowly eroded without the replenishment from the river floods every year.

bob said...

http://en.wikipedia.org/wiki/File:Oldandnewboston.jpg

Very good picture of what Boston used to be compared to what it is now.

I-Man said...

Bob, probably wont find many local (to your region) varieties, but Seeds of Change has some really good stuff.

I like Territorial Seeds as well.

I got my Hopi Blue from Seeds of Change last year, and for my "funky" corn this year I'm doing their Triple Play. I always do a white super sweet variety, also. But I like the funky ones.

I may even dry some ears this year (if the damn crows dont go buck on em again like they did last year, fuckers) to save for my own succotash mix.

Drying, canning, pickling, and storing are some things I need to work on this harvest.

Would love to be able to can some tomatoes this year.

Also want to frame in my root cellar with some custom cedar shelves.

The Ref said...

I-Man: Yellow Card.

McFearless said...

72,

lol, now that's funny.

ahab,

well, unsustainable certainly, not real.... unfortunate, but it's very real. Credit alone isn't a bad thing, we saw fantastic application of credit in the 40's and 50's, but along the timeline of social mood/waves, mood causes credit to be used improperly when optimism rages at a fever pitch. We've got three fantastic examples in modern history.

the reason people walk around thinking it is "normal" is, imo, created out of the net social mood, and to your point, that same social mood is the stuff that creates revolutions, not the credit itself, uses of this credit, for good are bad, or the direct result of mass mood....

If we want to use the Matrix then I'd use Agent Smith as the government. Sure "they" will try to keep this going, but in the end, if social mood doesn't want it, just like Smith....they will fail.

there is a party in Zion afterward....I could probably get you on the list if you want to go.

CV said...

@bob (11:02)

On top of that (besides the problems that were caused by the Army Corps of Engineers re-routing the Mississippi and screwing up the Delta)...

Anecdotally - it is now believed that the extraction of oil & gas from the shelf is actually creating a "sliding" mechanism (whereby the shelf is further tilted - essentially pulling NO out to sea)...

So what are you going to do in 200 years?

And if you answer that question by saying "Well who thinks that far ahead? - We may not even BE HERE in 200 years"...

Then well... EVEN MORE... Why throw money at a problem?

Answer: Idiot political football pandering

CV said...

But I'm sure that CV is worrying NEEDLESSLY about these things...

Because in 2008... We needed "Change"... (and we elected smart leaders who would tackle these challenging issues)...

In the same way... In 2010 and 2012, we're sure to elect a new set of "concerned" people (who will deal with these things)...

Then after that...

72bat said...

@ bob
seed savers exchange for heritage seeds

Anonymous said...

"but in the end, if social mood doesn't want it, just like Smith....they will fail."

valid point-

gotta roll- all have a good day

AmenRa said...

I spy EURUSD intervention...

AmenRa said...

S&P VOL A/D 13:1
NYSE VOL A/D 6.5:1
PC .94
TRIN .51

Look at the volume needed to keep the market up.

The euro went from 1.2205 to 1.2219 to 1.2204. CB intervention not lasting long at all.

bob said...

http://www.forexlive.com/110301/all/it-was-fun-while-it-lasted-or-perhaps-not

"If they Fed intervened in EUR/USD, it wouldn’t rally 250 pips, it would rally 600-700 pips without looking back in a market this short…"

The easier and cheaper market to do it in is the CHF.

CV said...

@Amen (11:25)

That ought to buy them a couple more days...

These days, the effectiveness of billion dollar interventions are counted in hours & days (instead of months & years)...

Anonymous said...

CV, any thoughts on oil.thanks
you are still hedge in spx, right...

CV said...

@Amen

Which brings up a point...

We were laughing earlier about the idea of "manipulation"...

An "intervention" could be viewed as a "manipulation", right?

The DIFFERENCE is between an attempt at manipulation and the notion as to whether the markets, IN THE END, are actually thus manipulated...

They ARE NOT... Why?

Because the markets, in the end, are like the rat in the labratory... Give them a lever to push (to receive a drug), and the behavior they will learn will be to keep pushing on the same lever until the drug ends up killing them...

Bernanke should have spent more time in a science lab, and less time in front of an ECON chalkboard...

I-Man said...

People with advanced degrees in economics and finance should be barred from all policy decisions, imo.

CV said...

@anon

I'm the worst in the world on oil (because my mind can't get past the apparent discrepancy of supply & demand)...

& YES I'm still in "the hedge"... I'm waiting either for a break below 1040, or a foray up into those upper gaps (1110 zone & above)... To start unwinding or adding...

I may be waiting for a few more days here...

karen said...

looking at jnk and crude i think we are topping out at 1085 now. doubt we will get to 1090.. but might go short there via faz again, laughing..

CV said...

@anon

I still like LB's idea of waiting for NFP on Friday...

Friday would also be DAY 8 (from 1040)... So we may get the last test higher around then (or possibly into Monday)...

From a FIBO day perspective it's tough to call (because 1040 was hit so early in the morning)... I don't know whether to count it as a day or not... Not that FIBO "days" are so reliable (but I like to factor the idea in)...

CV said...

@karen

LOL - FAZ

Which do you change more often? Your mind, or your shoes?

Leftback said...

Guys

Friday could cause a mini melt-up. Be careful... the 1040 base is there.
LB has put some short-term longs on and is short bonds for a while.

This could be completely wrong but we will see.
Remember many people want a nice exit price.

Good shorting opportunities are ahead!

I-Man said...

Just bumped into the 55ema on the 15min and 10min charts... that means we can dive now.

AmenRa said...

The market is trying for a short squeeze but the shorts are staying put. The chance of freefall a the close increases if they can't get the shorts to cover (IMHO). The shorts are adding positions instead of covering with each push higher.

Leftback said...

LB is not the only one who sees SPX 1150 in our future. I think Nic is on that trajectory as well, see 20 Questions at Macro Man today.

BinT said...

"In my younger and more vulnerable years my father gave me some advice that I've been turning over in my mind ever since."

..."Take that garbage out, or I'll whip your rear end."

...That comment or one like it seemed to get the desired response every single time.

By the way, this thing is leaking 6 gallons per second. Yep, per second.

http://www.huffingtonpost.com/2010/05/26/bp-oil-spill-live-feed-vi_n_590635.html

karen said...

1097 would be tops.. but 1090 should stop it dead.. and that's where i stand on that!

Leftback said...

Karen I think that is true for today, but the job number is an event risk.
Bye all, LB will be in touch from the road (train).

I-Man said...

Yeah... the intervention on that EURUSD chart is just downright terrifying...

(Until you zoom out to the 4hr or daily chart... then it just looks downright PATHETIC.)

CV said...

The "magical mystical" qualities of 1097 are well documented...

For some kooky reason, CV has it handicapped this way...

1. A move to cover the gap between 1114-1107
2. The a big plunge (down to the gap last July just above 900)

Then comes QE3... (which rallies us back up to cover the gap at 1150)...

Followed by another plunge (the REAL ONE this time)...

QE4 will come along long about the time we get into the 700's...

AmenRa said...

CV

When you consider gaps are you talking about gaps between the bodies? Or gaps where there is no overlap between shadows?

AmenRa said...

I spy a disconnect. New highs on the SPX but no new highs on the Tick.

CV said...

@Amen

the latter...

And the more recent one was only a gap on 60 minute candles (whereas last July was DAILY)...

For reference... Under certain circumstances, I might not view the gap on the 60 min candle as such... However, you know as well as I do that it "gapped" at an important juncture...

It jumped right over 1110 (overnight)... And you know the significance of 1110... Besides .09 from 1220, it was the WEEKLY CLOSE after the "flash crash"... The market held that level for 8 FIBO DAYS, then "gapped" under and hasn't really challenged since...

Ask yourself why?

CV thinks we WILL challenge it (perhaps this Friday) - we'll go up enough INTRADAY to fill that 60 minute gap, then fall and fail...

We'll be in the 900's soon thereafter...

CV said...

Eventually, we'll be back up to re-challenge 1150...

But that will only be with QE3 (which will be a response to the market plunging into the 900's)...

I'd expect that to come around July...

arbitrage789 said...

I'm thinking 1150 by the end of June.

karen said...

The third stop of the Professional Longboard Association which was scheduled to take place on the southside of the Huntington Beach Pier this weekend has suddenly been canceled due to the tough economic times. I went to the PLA website and found this posted…
“The PLA regrets to inform everyone that we have had to cancel the Huntington Beach event as well as all other remaining events in 2010, due to financial hardship and lack of sponsorship support. We would like to apologize to everyone for this last minute notice, and thank everyone for your support over the last 2 1/2 years. We will be back in 2011, so please be on the lookout for PLA updates.”

karen said...

okay! i'm thinking 1040 by the end of June.

arbitrage789 said...

If we do get to 1040, it's got to happen within a week. Or forget it.

McFearless said...

weren't the last several jobs reports supposed to be "the one"?

McFearless said...

DL,

please do the fughetabout it line again when talking about the 1040 not being taken out if we dont' get there within a week.

arbitrage789 said...

McF @ 1:30

By "fuggetaboutit", I mean that it won't happen in June or July (if it doesn't happen within a week). Go out further, anything's possible.

I think September's going to be weak, for example.

McFearless said...

I think the foregone conclusion that any announcement of QE means higher risk asset prices could really burn some people....perhaps I'm wrong and that type of announcement will push us much higher, but I think we are past the stage of that call being "easy", if there is such a thing.

mcHAPPY said...

Jobs reports are always "the one" until the "next" one.

Happy days are here again in Canada. Just received a letter from Citi Financial guaranteeing me a $7500 regardless of income or other debt. Just bring the letter in to get my money. I have not received one of these since summer 2008.

McFearless said...

DL,

guess we'll see, I see the primary trend as down now, so for me anyway, I'm not ruling anything out to the downside, especially not something that is 45 pts from here. time will tell.

I-Man said...

1090 or 1078 for today's close... whats it going to be?

I-Man said...

1070 is kind of an outlier for today...

arbitrage789 said...

I-Man,

I'd say it's a lot closer to 1090 than 1078.

If we do close @ 1090, it might be worth taking a shot on the short side (for a brief trade).

I-Man said...

Anyone else watching this broadening wedge formation on the SPX 15min?

It would imply another swing low at approx 1065 or so today or early tomorrow.

karen said...

I-Man, all i see is an h&s..

McFearless said...

I think Andy's slide 2 H&S is very valid at this point, we basically closed right on the neckline yesterday, and following his lines that he drew out now, implies prices to 1100's, and I'm still with the 1120's target.....if we can get all the way up to 1150 I'm inclined to think that we'll push closer to 1180's before going down because that inverse H&S is invalidated now and I think that's where a lot of the 1140-1150 targeting was coming from.

BinT said...

I have wasted my lunch hour watching the live feed of the spill. It is like watching the astronauts on the moon, these boys are up to their "elbows" in alligators trying to get this stuck saw loose.

I am expecting Obama to call any second with his video game expertise to explain the next contortion....

karen said...

Relative Value, according to Mr. Market

File this blog post under J for “Just Wondering.” In this case, we just wonder about the relative value decisions of Mr. Market at this particular point in time. You know Mr. Market, he is the anthropomorphic metaphor created by Benjamin Graham, the father of value investing, to explain the gyrations of the market. As Graham wrote, “Imagine you had a partner in a private business named Mr. Market. Mr. Market, the obliging fellow that he is, shows up daily to tell you what he thinks your interest in the business is worth.” Mr. Market doesn’t explain his reasoning for why it is worth X one day and Y the next, but that is what we mere mortals have to try and figure out. To take Ben Graham one step further, Mr. Market prices each asset not only against itself every day, but against other investments as well.

karen said...

ben, that wasn't the h&s i was thinking of.. but that's okay.. that other one with the push to 1140-50 isn't gonna happen, i don't think.. too set up!

arbitrage789 said...

B in T @ 1:56

Obama has called for new taxes on the oil companies.

I mean, we have to punish those bastards, right?

(Plus, it'll help pay for more entitlements).

Anonymous said...

Anybody that voted for Bush twice is a total dipshit and should never comment on political issues.

mcHAPPY said...

mcHAPPY is going to lay it all out here: we are going to 1300.

mcHAPPY said...

Bahahaha, just joking.

I'm not looking for anything higher than low 1120's.

Mannwich said...

@karen: Why do I get the feeling the event won't be back by '11 either?

karen said...

Diebold Inc. (DBD) has paid $25 million to settle Securities and Exchange Commission charges that the company engaged in a fraudulent accounting scheme to inflate earnings, the agency said in a statement.

wunsacon said...

CV, what do you make of this?

http://firedoglake.com/2010/05/31/how-dare-president-obama-skip-arlington-on-memorial-day-who-does-he-think-he-is-a-republican/

It seems like your assumption is: "only Arlington counts". Is that correct?

karen said...

Wed Jun 2 14:00:00 EDT 2010 | Briefing.com
Gains remain impressive, but the major indices have started to drift off of their recent highs. There isn't any headline or catalyst to cause the pullback, but it appears instead that some fatigue has entered trade.

Participation hasn't been as strong this session has it has in recent showings. Strong volume during the past few weeks has caused the average trading volume for the past 50 sessions on the NYSE to climb to almost 1.4 billion shares, which is more than double what has been traded so far this session.

I-Man said...

I'm with Karen.

trading diary said...

Hi Ben,
Would you please explain why you think QE2 won't inflate risky asset again, maybe in smaller scale? I am conditioned to that some leaked easy money will find its way to stock.

Thanks!

Re: I think the foregone conclusion that any announcement of QE means higher risk asset prices could really burn some people....perhaps I'm wrong and that type of announcement will push us much higher, but I think we are past the stage of that call being "easy", if there is such a thing.

wunsacon said...

CV, in order not to get in the way of conversation here, if you want to respond to my question (in my most recent post), maybe respond on this thread:

http://traders-anonymous.blogspot.com/2010/05/morning-audibles-52710-get-story.html#comments

I-Man said...

Its really kind of humorous the way EURUSD can be gamed right now...

As long as you're on the right side of it I guess.

Mannwich said...

@wunsacon: But everyone knows there's a double standard on that front. Those on the left have to bend over backwards in acquiesence to show their "patriotism", while it's assumed those on the right are already somehow "patriotic". It's just another show and farce...

karen said...

Obama Touts Big Jobs Number On Friday
By Jamie Coleman || June 2, 2010 at 17:34 GMT

First Biden, now Obama…The Administration is raising expectations of a very strong employment report come Friday.
Maybe they know the census number will be huge and are comfortable in letting the cat out of the bag. The problem they have is that the market knows the census-hires are bogus and will look principally at private-sector hiring.
Under promise, out-perform, Barry…every third-grader knows that…

I-Man said...

Whats a H&S?

I-Man said...

What is NFP?

I-Man said...

Who won Idol?

I-Man said...

Is this "breaking news" or "faking news"?

karen said...

no news is good news, I-Man.

I-Man said...

I mean really... we're going to try this 1090 thingy again?

You know, each time they do this, it only makes it harder on them. Buffoons.

arbitrage789 said...

"no news is good news"

Except when the hedge fund managers are getting the news a day before you do.

mcHAPPY said...

My eyes must be de-CV-ing me. I'm seeing a double zigzag playout almost perfectly.

arbitrage789 said...

Anyone willing to go short right here?

(Cover tomorrow)

mcHAPPY said...

DL,

Anyone willing to take a hit of crack right here?

(Hope not addicted tomorrow)

karen said...

i have a limit order in for faz at 14.88..

arbitrage789 said...

McHappy,

One hit won't get you addicted.

CV said...

@DL (2:09)...

We have to punish those companies [strike] SHAREHOLDERS...

All Obama's tax does is mean people's 401k's tank more...

So guess what? They spend less and then the government has to borrow more to pump more 'stimulus' into the economy...

You'd have learned that if you'd ever run a Dairy Queen you nincompoop!

mcHAPPY said...

DL,

The fact you know that (3:00) explains a lot. LOL

karen said...

trying for tza but not getting filled..

BinT said...

http://www.cnbc.com/id/37471499

"Because more borrowers are walking away. Yes, I know we've talked about this forever on this blog and on CNBC, and the New York Times did a piece yesterday on it, and 60 Minutes did a piece on it a few weeks ago. The fact of the matter is it's getting worse, and B of A execs are acknowledging that openly.





On the conference call to announce the program this morning, BofA's credit loss mitigation executive, Jack Schakett, said the amount of strategic defaulters (those who can pay their loans but opt not to) are "more than we have ever experienced before." He went on to say, "there is a huge incentive for customers to walk away because getting free rent and waiting out foreclosure can be very appealing to customers."

mcHAPPY said...

Actually DL, on second look your idea to short and cover tomorrow would be possible. I would not do it though because 1) I am frequently incorrect and 2) patience will be rewarded if this is playing out as I see (but don't forget 1).

BinT said...

Not only is the saw stuck, but the platform that the saw came down on in now secondarily stuck....

Sawgate?

CV said...

@wunsacon (previous)

I think it's a bad move... PERIOD... By any President...

You're talking about ONE DAY (a couple of hours), and you have a plane & helicopter at your disposal...

arbitrage789 said...

I actually did sell (short) an ESM0 at 1091.5, although I expect to go further in the red over the next 45 minutes.

BinT said...

Actually CV, I kinda figured he'd either go to Arlington, or since he'd just made such a big deal of the oil spill, that he might return to the gulf. I didn't figure with those two opportunities he'd go to Chicago. And the fact that this was labeled a "vacation", I think that is what his press secretary didn't understand would be considered a lack of judgement.....

arbitrage789 said...

"Sawgate".

What's interesting though is that the Republicans don't want to criticize Obama, since they want drilling to proceed; the Dems don't want to criticize him, because they don't want to weaken him politically.

AmenRa said...

even higher now:

S&P VOL A/D 25:1
NYSE VOL A/D 12.8:1
PC 0.89
Trin 0.35

arbitrage789 said...

AmenRa,

O.K., you have to make a prediction for the close.

AmenRa said...

This move hasn't affected gold that much...

karen said...

BO says oil company tax breaks must be rolled back.

McFearless said...

karen,

the inverse H&S was busted right away, I was a seller.....I counted over 15 blogs in one night that were covering that pattern, I was having deja vu with last summers failed H&S so I never liked the 1140 target because of it, I like the larger one on AT's slide #2 because it's a fractal of the huge H&S that's developed since 2000 in perfect form as well as perfect underlying conditions.

CV said...

@BinT

I'm not trying to pile on here, but I think it's "especially" bad in that he doesn't have a service record...

It would seem TO ME, that you'd have to make an attempt to go the extra mile...

After all, the POTUS is the "Commander in Chief"...

There are just certain things that YOU SHOULD DO...

Each passing day makes me more convinced that he was never even close to being cut out for that job...

I mean, even friggin MISS AMERICA is required to perform certain duties... You don't win MISS AMERICA and then go out and do "pole dancing" gigs...

mcHAPPY said...

Today is not the day to be shorting for tomorrow. Tomorrow on the otherhand is looking to be a great day to be shorting for the new tomorrow. (oh crap... not only have I confused myself but I jinxed the plan).

CV said...

@McF

The interesting thing to me was that on Andy's SLIDE 2, that H&S line above attaches itself to the 13:1 up day (back in March)...

Just saying...

CV is still convinced that the rally gets to that 1114 area gap... and falters... (not today), perhaps Friday or next Monday...

mcHAPPY said...

CV,

We have different ways of reaching the same conclusion, but I'm with you. I will be very much looking forward to EWI short term tonight.

It is remarkable how the double ZZ is shaping up.

Ben: Do you see it by any chance?

bob said...

http://www.forexlive.com/110578/all/obama-touts-big-jobs-number-on-friday

bob said...

topstep-

http://www.youtube.com/watch?v=gxgb5CA8lvE

McFearless said...

Hi Trading Diary,

"Would you please explain why you think QE2 won't inflate risky asset again, maybe in smaller scale?"

To keep my response general, since I can't *prove this until it happens, I want to offer up a video from yesterday:

http://www.youtube.com/user/optionmonstertv#p/u/3/fAkDDZmHkLg

Pay close attention to what exactly is said starting around the 1:30 market for the next 15-20 seconds. Simply stated, social mood (in this case fear) will trump every effort "they" attempt. They can "feel" the action in the pits, we need to remember that when we sit at our screens. What's an example of emotion overtaking "their" actions? While we can find 100's of examples how about the current price of gold, the Treasury says it's worth 42.22.....the market says the Treasury doesn't know what they are talking about.

I'm going to guess that you think a big reason that we had our 2009 rally was the implementation of QE which I can understand, but I don't operate under such assumptions when it comes to markets and my bullish call last year had exactly nothing to do with the Fed and whatever latest trend they are trying to react to. Setting aside the fact that QE has exactly 0 historical evidence of success, I can state without a doubt that the market was telling us it was bottoming last year, not the Fed.

I could point out all the reasons why I don't think it will rally this time, or even "inflate at a smaller rate" but in general I'm just saying this is idea that QE = higher stock prices is no different than taking the trend of the market being up the last 12 months and saying that since it was up the last 12 months it will be up the next 12 months. It's the same mistake of taking a trend and extrapolating it into the future forever. This is also known as predicting the past.

anyway, I hope that helps, that's what I was thinking when I posted that comment.

good luck on your trades

CV said...

@bob

Great! Big Jobs Number coming right up!

I guess that means that NO MORE QE will be necessary...

I guess the FED can start raising rates pretty soon...

Right? (rolls eyes)

bob said...

not as good as Danny

karen said...

I posted the jobs comment at 2:33, rolling MY eyes.. what will the market do with a good jobs number? flip a coin..

AmenRa said...

Funny how the ramp up in the market happened on that announcement.

karen said...

here comes my top!

McFearless said...

mcHappy,

sure I can see the double zz, it's tracking pretty well, sticking with my plan from last week which was derived from a simple ABC but can still basically apply, I think the double zz has a target of around 1130's, maybe high 1130's.

McFearless said...

Brian isn't as good as Danny, but I'm still laughing from his spot the other week where half way through he just said:

wait, can we start over

he introduced his clip by saying a lot of traders had checked out for the holiday, he didn't mention that he was one of them, but it showed, lol.

We all have those days.

karen said...

now we've got a nice cushion for a 2.5% drop tomorrow.. if that were to happen..

I-Man said...

Just got back from lunch...

Quite the ramp job.

Sow wind, reap the whirlwind.

AmenRa said...

Movements like this only happen in bear markets.

McFearless said...

From WB today: and here comes my rant

“I’m much more inclined to come down hard on the CEOs of institutions” that needed to be bailed out by taxpayers, Buffett said today at a hearing of the Financial Crisis Inquiry Commission in New York. Managers at Moody’s “made a mistake that 300 million other Americans made,” he said. Raymond McDaniel, the CEO of Moody’s, sat beside Buffett at the hearing.

Um, ok, lets see

1. You are more inclined to come down on the CEO's of the companies that needed a bailout? Then why all the praise for Lloyd? Looks to me like you were more inclined to buy them, in fact, I believe you are completely full of shit here because documents have already been released that you wrote to then Treasury Sec. Hanky with your own version of good bank bad bank that you were more than happy to be involved in....and of course profit from, and as I recall, it involved taxpayers eventually, it was just hidden a little better so all the little people couldn't notice until well after the fact.

2. 300 million americans made the same mistake as moody's?

Well, pardon my language, but go fuck yourself. Since you missed the bubble don't assume we all did.

3. The entire statement seems a contradiction to me, if 300 million americans (even kids apparently but hey, big numbers are good for dramatic effect) made the same mistake as Moody's, then in effect, they were bailing themselves out yes? If that's the case, what's the problem with using taxpayer money? Lets not try to make the masses missing the bubble equate to the same thing Moody's was doing when they were rating worthless shit paper as AAA.

more:

“What was once a bulletproof franchise may not be bulletproof,” Buffett said. “It’s still quite a franchise.”

bulletproof?
bulletproof?

this is the market guru,.... the best ever?

bulletproof?

so...I guess it was once a "screaming buy"?

Cramer anyone?

and of course:

“I’m not aware of any” fraud, Buffett said in the interview. “They made big mistakes, but who didn’t during the housing bubble.”

You see, everyone was doing it.

This plea usually failed for me growing up. How did it work for all of you, did anyone ever buy your "everyone is doing it" claim?

Chuck Prince has got nothing on St. Warren

trading diary said...
This comment has been removed by the author.
trading diary said...

Ben,
Thanks for your explaining. It makes me think again about relation between QE and stock price. But, I still believe market is a function of valuation, future expectation, sentiment, and liquidity. Looking at liquidity alone may not be enough to gauge the market. I would assume social mode, trusting for example, belongs to board sentiment.

Thank you again for educating.

McFearless said...

BR has a hilarious post up about adult programs in 3D....very funny.

McFearless said...

@TD,

Yes, I follow lots of sentiment indicators along with the waves to map what wavers call the "social mood". Daily sentiment alone trumps any fundamental analysis people are going to try right now in my opinion. There are no known models for valuation discovery in credit deflation, and those still using old models do not acknowledge that deflation can even exist.

On that idea of liquidity, one thing I remember is that despite the Fed and other central banks best efforts starting in 2007 and 2008 to provide liquidity, the market still crashed anyway. Lets not forget that global central banks got together in late 2007 to "stop" the crisis....do you recall? I remember this like it was yesterday.

BinT said...

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7716530/EU-imposes-wage-cuts-on-Spanish-Protectorate-calls-for-budget-primacy-over-sovereign-parliaments.html

EU imposes wage cuts on Spanish 'Protectorate', calls for budget primacy over sovereign parliaments


....Hmmmmm.....Everyone who didn't join the EU and is glad, raise their hand....OK...I see a number of hands up...give us just a second to get a firm count, will you?

Mannwich said...

Ya ben. That's just brutal for WB to compare "300 Million Americans" to Moody's. Last I checked it wasn't OUR JOBS to rate crappy securities. Talk about disingenuous. But, hey, he's old Uncle Warren and such a nice guy, so he wouldn't mean to do any harm now, would he?

McFearless said...

exactly manny, to compare virtually ALL Americans to the blatant outright lying that Moody's knows that they participated in...please. Not aware of any fraud? We've seen f-ing emails from people at low levels there that admitted it! Perhaps compare them to the borrowers that lied on their applications but that's not 300 million Americans, so my comment above stands.

I can't wait for this game tomorrow night. Really looking forward to this series.

McFearless said...

not directed to anyone here but I'm seeing a lot of bears on other boards justifying short trades that were giant losers today by blaming it on the jobs number "leak"

That's some weak shit right there.

these guys clearly don't read Leftback either.

Mannwich said...

@ben: Honestly, the more WB speaks, the more he reveals his true colors. He's hoping that people continue to give him a free pass (and as usual, refuse to think critically for themselves) because of his "kind old Uncle" persona but people thought John Wayne Gacey was kind too. Au contraire.

Mannwich said...

And, yes, the Finals match up should be a lot of fun. The big layoff sucks and takes some of the momentum away but it does actually help the Celtics rest up. They were pretty banged up after the Orlando series. Once this thing gets going in earnest, it is going to be really intense. Definitely could get chippy quickly out there. There's legitimate bad feelings out there, which is unusual in today's professional sports.

Who are you rooting for? Just curious.

trading diary said...

Ben,
I understand liquidity slightly different. I think liquidity means cash, not temporary loan, available to chase goods and financial assets. Since 2007 when credit market seizing up, Fed opened all kinds of "windows" and "programs". But all those programs have one common feature: they are all short term loan, from overnight to 90 days. Flooding market with such short-term loan cannot make market go up sustainably like we have seen from last March, because banks were uncertain if they can roll those loans when the loan comes due. But, when Fed started 1.75T MBS/Treasuary/Agency Bonds purchasing program since last March, they buy them off outright so that whoever sold those assets ended up with cash, They have no other uncertainty except "being inflated away". Therefore, some of them leaked into financial market and induced high stock market and lower bond price. That's how I see the difference.

I-Man said...

Bravo McFearless!

Chant down babylon.

McFearless said...

manny,

I really don't care which team wins, just excited to watch, I root for the sixers and I like the bulls so I don't have any skin in it. if Cleveland had made it I would have been rooting for them, I like more of the players on the Celtics than I do the Lakers so they probably have a slight edge for me.

@TD,

yes, all the liquidity provisions involve credit, not actual cash, we've been banging the drum on that idea forever, Hendry is right, there is a shortage of actual dollars, the Fed's primary role for the last 80 years was to foster credit expansion, not to print money....rather than getting into the specifics on the programs and guessing on where all the money came from and where it went I think we can start by saying that the Fed is not in control of interest rates nor the total supply of credit, the market is.

Further, lets say for a moment that the way you put this out there at 4:52 is exactly the way it played out. Ok. First, we are down that same road again assuming it will happen the same way if repeated. Second, people are not robots like this...people get emotional, even bank CEO's. Do you think that perhaps banks huge growth in non-performing assets so far this year might make them hesitant to put capital to work in risk assets at this stage if more debt is monetized? Perhaps, perhaps not. In any event, we are still extrapolating trends and this is a way to set yourself up for a huge financial loss. it's the same type of thinking that gets people believing in things like buy and hold and making the phrase "don't find the Fed" the 11th commandment. Sort of like the idea that Real Estate always goes up/monetizing bad loans always makes risk assets go up?

In the end I don't give this much weight because first, it implies banks are loaded up with cash as a result of Fed actions, but simple review of their balance sheets says otherwise, the CREDIT side of the ledger still rules the day. They are not flush with cash nor were they last spring.


Second, I'd also point out that there seems to be flawed reasoning behind this idea that the Fed can simply monetize all the bad debt like that without a hint of deflation or any repercussions and then we just move forward.

There is a reason the Fed does not want to be audited right now. I don't think the Fed is is trying to go under by trading in new notes for worthless loans and ruin their reserves in the process.

What has happened is they have become a slave to their role of helping move along credit expansion, and they have no other choice now, and this is not what it means to be in "control". To assume the rest of the world would not want to protect themselves from their actions if they continue on this way would not likely be wise on our part. Look again at all the headlines right now, even Iran, economic smarties that they are, are apparently getting out of Euro's.

So, I'm still in the camp that says you can't beat deflation in a credit based system. If we get hyperinflation....well, the endgame for that is the same as deflation ultimately though there is a very different way of going about preparing for that.

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