Archive - Mar 2010 - Blog entry

1st Q for the SSTF is like all of last year. Bad news.

My favorite party boy economist, Nouriel Roubini, just came out with his analysis for the second half and he notes that we may be heading toward a double-dip recession. Too much negative news, he frets. I have been saying this for some time.

It would appear that European leaders are back at their usual table.

Speaking at the Bookings Institute before meeting with the US administration, Greek Prime Minister George Papandreou blamed “unprincipled speculators” and “ill-regulated” financial markets for pushing Greece to the brink of financial ruin and dragging down the euro. Along the way he convinced France’s Nicholas Sarkozy, that another financial crisis is around the corner if the CDS market is not curtailed. Sadly, we agree with the conclusion, but many European “leaders” are confusing cause and effect. Keith McCullough, at Hedgeye, explained it best yesterday when he said, “markets don’t lie; politicians do . . . hearing politicians talk about markets is like watching a southern belle try to ice fish.”

If you think that the world of crime has to be shady and underhand, you are wrong. With the beginning of the fourth world war, organised crime has globalised its activities. In this new war, politics, as the organiser of the nation state, no longer exists. Now politics serves solely in order to manage the economy, and politicians are now merely company managers. An oft misunderstand leader, Subcomandante Marcos, now Delegado Zero, tried to warn us more than 12 years ago that "it takes no more than a few minutes for companies and states to be sunk", and that they would be sunk, not by military theater operations, but by hurricanes of finance. More than a decade later, with many of his predictions now coming true, perhaps it's finally time we started listening to him.

A detailed overview of the current state of charge-offs, delinquencies and (yes) improvements in the mortgage industry - and most importantly what can be discerned from these trends...

Running our cars on moonshine is far more expensive than it looks. Cruising to Wal-Mart in our Hummers, while Africa and Asia starve. Corn grown for ethanol now occupies 10% of the total arable land in the US. The world’s largest producer, Brazil, is shut out of the US to keep our prices high. The birth of yet another entrenched lobby in Washington. Is Iowa really worth it?

As companies quietly and gradually move their pension funds out of stocks, buying long-term bonds, public pension plans are seeking higher returns to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. As they "double up to catch up", are they putting pensions at risk?

Why has the stock market rallied?

It's dump on Barney day. He deserves it.

Nations cannot sweep the credit bust problems under the sovereign rug and expect them to go away. At best, we are simply Transmogrifying one systemic risk for another. Thus, even if we succeed in curing the threat of financial contagion, all we have done is issued in a new threat of economic contagion...

China's local government to international bank, "Of course we'll stand behind that 30 billion Yuan loan your giving to our investment arm. It's government guaranteed!.... (a year or two after the deal closes...)

Syke, we were just kidding! :-)

Large cap multinational equities are the cheapest they have ever been. An exclusive interview with Barton Biggs of mega hedge fund Traxis Partners. A stronger than expected economy will take S&P 500 earnings to $90/share. Asia is the place to be. A mammoth bubble may be developing in China, but it is at least 3-5 years off. India has yet to experience its big growth spurt. Buy South Korea, Taiwan, Thailand, Turkey, and short Brazil. (OEF), (MSFT), (INTC), (CSCO), (ORCL), (FXI), (PIN), (EWY), (THD), (EWT), (EWH), (TUR), (PLND), (RSX), (EWZ), (USO).

U.S. regulators are encouraging public pension funds that control more than $2 trillion to inject capital directly into the banking system by buying failed lenders, Bloomberg said, citing people briefed on the matter. Is this the next huge financial blunder? Sure looks that way...

High-Low range comparison, Fibo time cycles & volume analysis charts of the S&P 500, ES & SPY. A bottom-line market outlook for prop traders, portfolio managers, market makers & individual investors. At day's end, if you are still trying to chase the Jones' performance off March '09 lows, what the hell else is keeping you invested in this Russian roulette equity crap-shoot? Please, please don't "invest" like Buffett, but do heed the gist of his approach to selectivity (shared in 1999), which essentially posits that ...