Archive - Apr 11, 2012 - Blog entry

The European debt struggle may have just entered a new phase. Don’t blink. Like any classy magician’s trick the idea is to get you looking one place while the real action is going on somewhere else. And that has been the recipe over the past week or so. While everyone has been watching the Spanish and Portuguese debt auctions, the real damage was done in Germany where the German government’s bid-cover ratio on a ten-year bund auction came in less than ‘one.’  

So, which is it? Are we in the midst of an epic bull run, or an epic run of bull shit. Place your bets.

Late last year, I paid a visit to Josh Brown ("The Reformed Broker") and had a pleasant chat. I went to his blog a week later and put up a comment, shown below, stating my belief that Facebook's IPO day would mark an important turning point in the market.

What makes this time different? Several items:

1. The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before.
2. The Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this is an election year).
3. The Fed’s resources are spent to the point that the only thing the Fed could do would be to announce an ENORMOUS monetary program which would cause a Crisis in of itself.

The real problem with CDS trading by large banks such as JPM is not the speculative positions but instead the vast conflict of interest between the lending side of the house and the trading side

Since the 1980s, the U.S. Has Secretly Helped Japan Build Up Its Nuclear Weapons Program ... Pretending It Was "Nuclear Energy" and "Space Exploration" ...

If we all were to make the significant decisions in our lives based upon a happiness quotient instead of the resultant monetary gain, how drastically would our world and our reality change?