Archive - May 20, 2010 - Blog entry

More bread and circuses ...

If you get the double dip recession that Europe and China are trying their best to deliver, you hit a home run. If the recent diabolical market action turns out to be just a vicious head fake, then they would be selling into a hole and getting killed on the next whipsaw. Only those who believe in the Easter Bunny think diversification will protect them. Cash is best hedge of all. (USO), (EEM), (SLV), (PPLT), (PALL), (JNK), (YCS) (FXE), (FXB), (FXA), (FXC), (VIX).

Bob Prechter was on Teck Ticker today telling us to "stay in cash" because we entered the "second major wave of deflation". Before you go slicing your wrists, relax, it's just the big hedgies toying with your insecurities. I got one message for these big hedge fund swingers: BRING IT ON!

This is they way I think it played out.

Your standard late night futures entertainment featuring all of our usual guests; FX trading Japanese housewives; FED 3am Cayman SPV/SIV, and our newest guest; PBoC [feat. Swiss Central Bank] with their special performance; "Prop up the Euro" [executive producer; FRBNY/Ben Bernanke]. So, relax, put the kids to bed and tune in at app. 8 pm for yet another adventure in  *que music* "The Outer Limits .... of Finance". Standard visual help offered below by our usual sponsor; Finviz.com. 

They key to recovery is debt: there is still too much of it. The Obama Administration's attempts to reinflate the housing market is causing massive distortions in that market and the data proves it. There is so much government manipulation of the housing market that much of the old risk still exists and they are creating new risks that are damaging the economy's ability to recover. Are you ready for a "bust-bust" cycle?

Mexico next? Maybe.

It may take a while, but the fictitious valuations of CRE REITs will eventually come to reflect what is actually going on in the actual physical real estate world. It may be like matter meets anti-matter, investment banking secondary offering meets bricks and mortar reality. After all, the antics in Germany and greater Europe are not doing anything to actually help the debt markets.
I think I feel another "I told'ja so" coming on...

How far will gold Run? You now no longer need to believe in wild conspiracy theories or unban legends. The long term structural demand for the yellow metal is now so well known that it has become the conventional wisdom. Surely peak gold is upon us. Next stop: $6,250. (GLD), (ABX).

Well that didn't take long. After European Commission announced last week that centralized fiscal policy is the only reasonable way to achieve Maastricht defined deficits by 2013; French president Nicolas Sarkozy is cited by Le Monde saying constitutional changes will be needed if France wishes to achieve Commissions mandated deficit of 3% by 2013.

First a glance at the macro scene in China and then a look at how our China short thesis has played out thus far. Feel free to compare my work to Goldman and the other big banks, the challenge is welcome.

Discussing the natural gas market outlook and some mitigating factors prompting oil and gas companies to drill their gas shales even in the face of weak natural gas prices.

Without getting into the politics of who’s right and who’s wrong in the Thailand conflict, let’s investigate an extremely important and underlying current of this conflict and every major economic conflict that is occurring in the world today - how a fraudulent global monetary system so significantly contributes to conditions of oppression and class division warfare.