Archive - Jan 21, 2011 - Blog entry

In Sweden, pension problems are so 1989...

To be clear, China has proven itself EXTREMELY adept at matters of international finance/ trade. With that in mind, it won’t openly challenge the US regarding monetary policy or diplomatic matters until it holds ALL the trump cards and can openly challenge the US without exposing its economy to a massive downturn (much as it did with Japan during the fishing boat scuffle).

Most folks talk about inflation and think of the images of Weimar Germany where people literally burned money for fuel. They don’t think of starvation and food riots. But that’s exactly what’s occurring in the world right now as a result of Bernanke and his cronies attempts to keep the big banks (all of which are insolvent) in business and cranking out the bonuses.

Random thoughts

The US and China as the two current real world powers, have a push and shove relationship. This does not mean that it is directly combative, but it does mean that these two nations are bumping into each other, on all of the world’s stages, especially of late.

Speaking of people who are willing to sell their country out for a Dollar – GE had excellent earnings and I got my daily "WHUCK?!?" moment this morning when Obama named Jeff Immelt the head of his Economic Advisor Panel

Of the roughly 1,200+ (numbers change frequently with additions and closures) ETF and ETNs that can be traded, maybe 75 are truly understood and should be traded.

The rest are an exercise in futility, pandering to the masses desire for an investing elixir.

We continue to believe we are trading in extremely similar fashion to the Feb-April 2010 rally (strong support at 10-day EMA on S&P, depressed VIX, high levels of complacency, widespread overowned sectors, extreme bullishness, etc) which of course ended in a violent sell-off, and as noted yesterday we believe we are now trading at the equivalent of the April 20, 2010 point where equities are rebounding a bit off their first test of the 20-day EMA following an initial break below the 10-day EMA (see charts below).

There they go again! No sooner had we finished praising the Wall Street Journal for their blunt assessment of the coming train wreck in municipal bonds than they do a hit-job on gold.

"We have seen the stock market go up..."

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The market was down strong in the morning as both fears of rising inflation in China and common sense seemed to hurt sentiment, but then...