Archive - Sep 2010 - Blog entry

Hey everybody, bank shares are rallying world wide today. The banking problems are over and bubble times are hear again, courtesy of taxpayers world wide. Many problems and the results of those problems from 2007 are present right now! Ridiculous loans, moral hazard, frail counterparties, liquidity traps, risk concentration, ralliying stock prices... Will we ever learn???

→ Washington’s Blog

A number of American soldiers are blowing the whistle on the American
military practice of indiscriminately killing Iraq civilians - by
randomly firing bullets in a 360 degree circle - anytime that an
improvised explosive device hits a U.S. soldier.

A REALLY long-term commodities play?

Stocks are headed for a big multiple compression. Go long the beneficiaries of the relentless running of the printing presses in Washington. Once the spike in interest rates starts, it will be “a big, big bear market,” that could go on for decades. An exclusive interview with the legendary hedge fund manager, Bill Fleckenstein, on Hedge Fund Radio. (GLD), (NEM), (AEM), (GG), (TBT), (TMV), (VZ), (AAPL), (FXC), (CYB), (CU).

As predicted in May, DB honors its obligation to flush good shareholder capital down the toilet.

Last week I forecast that the stock market would likely rally to test its 200-DMA. We didn’t quite get there, but that’s largely due to the fact that no one was actively trading the market last week.

Indeed, thanks to a holiday week that entailed both Labor Day and Rosh Shoshanna, market volume was truly abysmal. In fact, last week saw even lower market volume than during April 2010 top, which should give you an idea of just how few participants were involved:

This weeks analysis of the Commitment of Traders and Retail Positioning research. Tools to trade against the herd.

Buying conviction remains a big question as volume was the lowest total for any week since Christmas, 2009.

A bold idea? Or a dumb plan?

The bears were certainly back in town for the Euro, news out of Europe has been mixed. German macro data has been disappointing, showing that the overall euro area is entering a period of weaker growth. Also this past week, some European peripheral countries, and especially Portugal, Ireland, Spain and Greece, saw a rise to record levels in their 10-year bond and CDS spreads.

South Africa is popping up on the radars of several big hedge funds as one of a handful of frontier emerging markets ready to make the move to prime time. Direct investment has been pouring into the banking sector in South Africa in recent years, possibly presaging a major long term bull market. Prices are so low and earnings leverage so great that any dire political risks you can come up with have got to already be priced in. Has Armageddon been avoided, or only just postponed? (EZW), (AFK), (GAF).

British-style military impotence, Habspurg-like default or French-echoing revolution?

On Labor Day, President Obama announced a new $50-billion infrastructure plan next year as a way of a second stimulus for job creations as well as for the faltering economic recovery. However, in light of the fact that the Democrats are losing a bunch of congressional seats, and their majority, this new plan would seem more of a last-ditch effort with little substance. So far, the Obama administration has demonstrated very little understanding of the economy, markets, and business.

Nine years ago, I was in Crete, just as I am now. It was a beautiful day, until I reached home and saw utter horror on the television. There are some things that you will never forget...

The global supply of food is going from bad to worse. The torrential rains in Pakistan have been a game changer. There is a ton of cash sitting on the sidelines because so many investors are afraid of an autumn stock market crash, and are loathe to buy the top of the greatest bond bubble in history.