Archive - Apr 2010 - Blog entry

What's the possible impact of the volcano on global trade? That depends. It could be significant.

While the significance of Friday's high volume reversal has yet to be determined, the set up has the making of a market top - the majority of investors are poorly positioned and the precipitating event (i.e., the government's charges against Goldman Sachs) was not foreseen.

Though the Greek push-of-war between the ECB and IMF has been postponed until Wednesday, a new FTSE/ATHEX-CSE Banking index futures contract begins trading on Monday. With the fiscal future of Greece literally hanging in the balance, what could possibly be more fitting in the interim than the launch of a new futures contract containing the words 'Greek' and 'bank' ?

Crude futures ended at their lowest point this month Friday, as investors fled riskier assets after regulators charged Goldman Sachs with fraud. Nonetheless, industry insiders are fully expecting this still intact seasonal pattern: a rise in gas prices in the months ahead during the summer driving season (from April 1 to Sept. 30).

Don't hold your breath on any meaningful financial reform. I know, I am a cynical bastard, but the banksters control the US government, just like they control the Canadian government. It's all smoke & mirrors to appease the masses who are waking up to the fact that the greatest wealth transfer in the history of mankind continues totally unabated.

I don't believe that things happen by accident. It is all orchestrated. My thoughts on the SEC timing re GS.

Don't be Left Behind.

" in 2007 the liabilities of Barclays exceeded the UK’s GDP, the liabilities of Deutsche Bank stood at 80% of Germany’s GDP, and the liabilities of Fortis were several times larger than the GDP of its home country, Belgium ... such financial institutions may not just be “too big to fail”, but in fact “too big to exist” ... It was irrational to let Lehman Brothers fail, but it happened. Those who bet on that failure earned a substantial amount of money. So why not bet on a possible irrationality of European decision-making? "

Although it would seem that the Goldman-linked SEC case single-handedly killed the price of gold, it was only a catalyst to a technical correction that was overdue. Furthermore, gold’s long term outlook is further solidified by a couple of new “China factors.”

But they DO provide great comic relief at CNBC ...

The SEC is the Administration's hit squad to find a capitalist to scapegoat for the Great Recession. The found one in Goldman Sachs, the arch-capitalist of our time.

Is someone finally standing up to the vampire squids of the world?

Or is this yet another p.r. stunt, where deals will be cut, a few low-level patsies will be convicted, and business as usual will continue?

Only time will tell ...

Kevin Gaudet, federal director of the Canadian Taxpayers Federation, isn't surprised that there is a growing frustration felt by private-sector workers who must work longer and pay high taxes longer to provide for public- sector workers who work shorter careers and receive significantly better benefits in retirement. But the solution he proposes isn't going to rectify this great inequity - it will only ensure pension poverty for the masses.

I know I'll raise my hand to the aforementioned question. The issue is,
as I huffed and puffed about how overvalued GS is, particularly
considering the amount of risk that it faced, I got a lot of blow back. Goldman has a lot of risk surrounding it that no one wanted to recognize - until now!

I presented my thesis on China and Japan at my alma mater University of Colorado at Denver at International Executive Roundtable yesterday. Here is updated version of my China presentation.