Archive - Jan 2010 - Blog entry

Pensions need leverage from anywhere they can find it, including hedge funds. Amazing how quickly they forget...

I must admit that I am surprised by the sentiment picture this week. I thought the indicators would reflect a less bullish posture amongst investors.

As James Cameron's brainchild, Avatar, continues to light up the box office the world over, relentlessly charging towards a date with damn near every conceivable box office record imaginable, the Chinese government has (rather predictably) succumb to the specter of its symbolism and attempted to pull the plug on Avatar's unparalleled success. Good luck with that CFG ~ China Film Group; ask the RIAA how 'that' worked with N.W.A.

The quasi-communist / quasi-mercantilist nation's state-run movie distributor, China Film Group, has pulled the film of the year from 1,628 2-D screens in favor of a biography of the ancient philosopher Confucius.

The recent decline in Gold has not only caused mayhem in goldbug-land, but also brought deflationists of all stripes...

I get a feeling that Buffett has been canonized into a value investor saint – investors and the media worship the ground he walks on and the air he breathes. The media are unable to get any critical quotes from his investors, and nobody wants to be caught disagreeing with the Oracle of Omaha – after all he’s been right more often than wrong – and so we only get positive puff pieces.

Felt like sprucing it up a bit so here's a snapshot of what my central 1-minute ES Workspace looks like on TS ~ TradeStation. A look at price action on the ESH10 and VIX across the: (1) NYSE (cumulative) TICK ; (2) TS bid / ask Matrix ; (3) Fibozachi Inflection Bands™ ~ FIBs ; (4) Candlestick X-Ray™ ; (5) Elite Oscillator™

Ever wonder why you suck at investing / trading / poker ? Ever wonder why your fleeting relationships / government / humanity continue to repeat the same mistakes over and over again, in a humourous refusal to heed Rita Mae Brown's "The definition of insanity is...," ? Iain McGilchrist's "The Master and his Emissary" doesn't solve today's mortgage meltdown, currency crisis, cyber wars, regulatory capture or dearth of leadership (and certainly won't help you 'breed a unicorn that defecates Kruggerands'), but it does provide an actionable blueprint for how not to repeat them (ever again).

Pretend for a moment that the US $dollar is no longer useful. With what could we settle transactions? For fun, let’s assume for a moment that we want to try something different. What about a basket of stocks and bonds? Holding a share of all future profits from those may be the best we mere mortals can do.

President Obama seems to be tone deaf and his State of the Union address was revealing. His rambling speech continued his theme of Big State control on the one hand yet preaching bipartisanship and fiscal responsibility on the other. This administration and the Democratic leadership is marching us toward European-style welfare socialism and seem incapable of compromise.

5-min VIX Charts ~ Intra-day Bottom & Close

A greater government involvement in the financial sector is not something I thought I’d ever ask for, but it has turned into a necessity in order to preserve, not destroy, capitalism.

Is Google Inc. (NASDAQ:GOOG) a Buy, Hold or Sell? Not knowing what kind of performance you’re paying for makes it challenging to answer. It would be just like asking, do I take the over/under in the Super Bowl without knowing the over/under line.

How to win the war against terrorism. Predator drones are turning the tide. It may all come down to the price of wheat. Afghanistan is a different story. Is this where our zero stock return is coming from?

The lead story this morning of ZH is "The Only Thing Better Than A Zero Hedge? Wells Fargo's "Never Lose" Economic Hedge", explaining more accounting shenanigans (if you read the links below, you will see that I have caught Wells in a few rather aggressive interpretations) related to MSR's. One thing that was noted was the inputs for valuing MSRs using interest rates as was extolled by management. Well...

The US Gov't can show 'profits' ad infinitum by endlessly EFT'ing money from the Treasury's savings account (at JPM) to the Fed's brokerage account (at GSCO) and vice versa. Or better yet, the Fed can pay the Treasury several times more by printing trillions of US dollars, buying companies on Wall Street, and achieving small dividends.

Thus, the so-called "profits" are NOT evidence that the US economy is doing well. Far from it, these profits are proof that the printers are working long hours. Moreover, the state's Dept. of Moral Hazard has taken upon itself Robert Wadlow-sized liabilities, which call into question the solvency of the entire American financial system.