Archive - Oct 2010 - Blog entry

Google's earnings surprised everyone except BoomBustBlog readers and subscribers - and this is most likely just the beginning.

In one sense, this is old news. But seeing all of "Linda Green's" signatures rounded up in one place is still pretty eye-opening.

Devaluing the dollar by 12.5% costs US Citizens $3.75Tn of their Dollar-denominated assets in the past 5 months and even if we did hire 1.2M factory workers because it boosted exports (it didn’t and we didn’t), that would still be costing us over $3M per job!

Without an economic incentive to foreclose, it would not be in the bank shareholders best interests to pursue foreclosure even though borrowers clearly defaulted & owe money to the lender. In this scenario, even Tyler Durden, whose controversial ZeroHedge site I read and contribute to with a passion, is being too optimistic. Yeah, that’s right! You know things are bad when ZeroHedge is too optimistic! I want all to keep this in mind when pondering the release of reserves by the banks. My JPM quarterly review is still on its way, and I will share a substantial amount with the public.

Interview with Vitaliy Katsenelson on the challenges facing China and Japan and the implications to the rest of the world.

After a tumultuous 2009, oil has been one of the least volatile assets of 2010. It now appears that this crucial commodity is stretching its muscles, limbering up, and getting ready for a serious move. The net effect of the BP oil spill will be a cut of one million barrels a day of Gulf production, about 5% of US consumption. A serious run on the dollar is adding fuel to the fire. (USO), (XOM), (CVX), (OXY), (RSX)

Since March 6, 2009, the S&P 500 has seemingly been on a remarkable run, gaining 76.68% when priced in our favorite of monopoly currencies, the US dollar. However, when priced in gold, despite the daily rigging games of the government/banker cartel for the past two years, it has only managed to rise 21.64% over the same time span. When priced in silver, the S&P 500 has astonishingly lost 1.8% during the same investment period. To these enormous anomalies, we ask the question,"Will the real currency please stand up?"

The latest must have reference for the rest of us...(Important message: if you work for the Federal government, go back to sleep)

This daily report is designed to help traders find opportunities to trade against this group. The premise is very simple we are looking for 66% of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair. The pairs that we feel offer the highest opportunity for success are described in the Shortand Long Zones.

Is another French Revolution on its way and will it shake the foundations of Casino Capitalism?

Oh shit, it is on again like white on rice, stink on shit, and Black on Scholes (and for you quants, just know that Brownian motion has more than one meaning), as a flurry of blue chip companies beat earnings guesses and pushed the market higher. With the 50 day moving average now rising above the 200 day moving average the S&P has hit the fabled Golden Cross (which is kind of like the Hindenburg Omen only less fiery, with fewer McClellan Oscillators, and the exact opposite), which means technicians are expecting to be showered with returns.

It is clear that companies just aren't ramping up hiring fast enough to reduce the unemployment rate, now 9.6 percent. So where will the U.S. find jobs? Contrary to President Obama's belief, an analysis of the Industry Life Cycle and Supply Chain will show that green tech and manufacturing are unlikely the answers to unemployment.

Ben Bernanke should be relieved of his post. I say this in response to Jon Hilsenrath's latest article in the Wall Street Journal on the Fed, "Fed Chief Gets Set to Apply Lessons of Japan's History." I would re-entitle the article, "Fed Chief Gets Set to Repeat Mistakes of Japan's History."

Life imitating the art of fraud?

In case you haven't had enough, just a bit more Ben bashing