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Welcome Back to Earth, Mr. Market
Thank you! Thank you, Mr. Market, for finally coming to your senses. It’s about time that you kicked your ecstasy habit and quit listening to lemmings for your financial advice and started paying attention to those suspicious, odiferous lumps that have been swept under the carpet, even if the smelling salts were a fancy imported variety.
There is a whole new subprime crisis that has only just gotten underway in Europe, with their bankrupt countries substituted for our busted banks. Chinese efforts to slow down their real estate boom threaten to throw a handful of sand in the global economy. Just as the American economy is coming off life support, the crutches that were supporting it are falling away. I’m talking about the end of the first time homebuyer tax credit, the Fed’s $1.2 trillion liquidity program, and one of the greatest stimulus budgets of all time, all in the face of heft tax increases. Thanks to this belated awakening, there are now more broken 200 day moving averages than National Rifle Association bumper stickers at a Tea Party rally.
I have to confess that my cupboard was totally bare of long side ideas in April. But it is slowly starting to fill up. Look at the generals, which have been taken out, one by one, and unceremoniously shot over the last two weeks. Look at Apple (AAPL), which I have avoided until now, because I am not inclined to join cults, which plunged $90 to its flash crash low of $195.
If Goldman Sachs (GS) is good enough for Warren Buffet, it is good enough for me. The world’s greatest publicly traded hedge fund is a definitely better buy at $137 than it was at $187. Once the Wall Street witch trials end, they’ll make a comeback and a ton of money. I can’t believe the currency of the world’s sickest country has rocketed 7% to ¥88, so the (YCS) is on the short list.
With the yield on the 30 year Treasury bond now pushing an astonishing 4%, the (TBT) is threatening its 2008 crash lows of $36. Having made three round trips in this leveraged short Treasury ETF this year, I stepped back, fearing an equity sell off could trigger a bond spike. Gong! Give that man a cigar!
Of course, it’s way too early to pull the trigger on any of this stuff, but a dead cat bounce can launch from an extremely oversold technical condition at any time. As long as there is a risk that the second I get filled on a buy, I get stopped out 10% lower, I’d rather spend my time more profitably building short lists of your next big trades.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on the “Today’s Radio Show” menu tab on the left on my home page.
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Nope, I'm a sober, straight, white, married, american, conservative, HS graduate, small business owning, tax paying, tea-partying, bible believing mother of two never incarcerated ... AKA the enemy. Always a bailor-maid never the bailee.
UHH, I meant to reply to you baserunr, but I ended up down here...oops.
No enemy here. This country needs more women like you, imo.
Nope lol.
Was in response to You Can't Handle...'s question regarding 10k. Apparently I can't hit the reply button correctly.
The big question: will the market be permitted to close below 10k today?
nope
With the failure of the bailout bailout, and moving right into the union pension bailout, after the very prosperous for banks bailout, along with the now government motors liars bailout, and considering more than 1/2 of everyone not bailed out is on the permanent welfare bailout...... this article doesn't really find any solid ground in my reality.
Not to worry. For a few thousand dollars, you too could rent a Congressman and get a personalized bailout to your own specifications. That way, your new reality now compares favorably with everyone elses!
really, please point out which one and the fee involved so I can get back to my life. I am just about finished here. Not all the way suicidal yet, but............
just sayin.
Zimmern was hitting all the places in the soup district in Seoul yesterday. He was gagging all the way. Perhaps he was thinking about his 401K. I think China keeps NK around just like we put up with that double jointed uncle, they're good for a laugh once in a while. no kidding when the japanese prime went to bejing last year, NK shot a missile over his country the day before. but these people have issues, we know that. still mr market has gotten far too cozy with them, and now we are gagging all the way.
Almost any investment that made me $1 Billion dollars instantly upon signing the paperwork would be good enough for me too. Nice logic on that one.
"If Goldman Sachs (GS) is good enough for Warren Buffet, it is good enough for me."
But Buffet doesn't own common shares of GS, does he? Not sure that any of us can cut the deal he did, so this really isn't very strong logic. If my rich uncle flies half-way around the world in first class, that doesn't mean I'm going to enjoy the flight sitting in the middle seat of the non-reclining back row near the lavs.
MHFT, these trades stink. Apple is in a bauble, and GS will not be trading come Xmas. Still, I thought the rest of your piece was touching. Yes, welcome back Mr . Market. It is so nice to see you. Unfortunately for Mr. Market, we come bearing not gifts, but hatchets and machetes.
I would hold off GS shares meantime, they have a cunning plan.
All the incompetent predictions coming out of the Squid suggests to me that they are manoeuvring their price down to a level where they can go private. They will actually be pleased to get a thumping fine for their misdemeanours.
They will also insist that Lloyd has to stay, and will defend him to the hilt (until they privatise to help the freefall -then don't be surprised to find him in a dumpster).
agreed.
BUY THE DIP FOLKS!!!
I'll buy the canyon when Dow hits 5000
PMs sure...if you want to call this a dip ;)
We're not even close to Earth -- we're not even in the Milky Way.
This sucker has another 50% or more to fall.
Printing money never works in the long term -- never has, never will.
Savers of the future are being robbed utterly blind. Don't think that this leverage bubble of three decades won't be found out as the world avoids the fraud, lies, cooked books and endless bullshit of fraud street and their chode-bankers for two generations.
school teachers and state employees being laid off en masse, private businesses still firing people at great rates, dollar strengthing compared to our export market in Europe, whole US Gulf coast soon to be completely unemployed, house prices declining again, riots in Greece, Thailand..drug gang wars in MX, Jamaica, war and terrorism in AF/Pak/Iraq, tensions between So and No Korea highest in 50 years, Iran messing around with nukes, ....
I feel a recovery coming on
I've got the point and figure of AAPL, huge triangle, close to breaking bad right now, 228 is the sell signal, these things imply a 30% drop. it still possible the triangle can break to the upside, must wait confirmation. GS is floundering well below the trend line, with a bearish obj of 124. Could bought there on a trade I think. my feeling is its headed for the 20's eventually, at around DOW 1000. There are better ultrashort than the TBT, like the 2XChina syndrome UHPIX, trades at 9 dollars, was at 93 not long ago.
keep an eye on the RTH, which is poised to fall out of bed. there are a lot of lot of overbought consumer discretionary names, and not too soon to be thinking about what a lousy christmas season this will be, tarballs in your stocking if you live on the gulf coast, layoff notices for teachers, (schools out forever, thanks Alice Cooper).Leo loves Solar, but the Chinese have a ton of inventory, and its a good time to buy, the products, not the companies. gold stocks look awful, and they should lead the way lower. I would like to own Harmony at 4 1/2. (9.30)
Earth to market:
Wake up
Time to die
Dead man walking!
That YCS is just TOO DAMN TEMPTING...!
The great thing about treasuries is that there's gonna be so many to choose from. What's a guy to do?
UST 10 are going to 2.5%
Yeah, definitely way too early to pull the trigger on AAPL, GS, and TBT. A violent punishing will be in store for those who jump in that boat I would assume...
Some violence has already occured on this leg down, if you look at the buying and selling chart. "Not TBT" seems like a good call for a little while.
I often find the "Mad" portion of MHFT's posts to be an appropriate description of his investment observations. His No. 1 prediction of a monster, once in lifetime profit to be made shorting treasuries works well if you believe in inflation and exploding interest rates any minute. Which is a questionable prediction.
To see an iconoclastic and out-of-consensus analysis, where you will find the conventional wisdom mercilessly flailed and tortured, re-read this article.
Everyone loves treasurys. The " safe haven asset ", 30 year bull, you cant go wrong. Interest rates never go up.
MrTrader is asking Mr. Madhedgefundtrader whether he has observed March 2009 - April 2010 ? A lousy 13 % correction and everybody is screaming "the world is goin under" ??? LOL ! I am ordering my Coke at McD regardless of the bulls..t I am reading, I am buying my new Hewlett Packard laptop regardless of the bulls..t I am reading and I am ordering my Apple IPad regardless of the bu..s..t I am reading. Have a nice day Madhedgefundtrader....
Oh, cool, so you see a recovery coming out of you gloomy scenario? How on earth do you come up with that idea? Oh, I know, you're one of those central bank worshippers who believe that CB's are all-powerful. You contradict yourself; they couldn't solve the first round of reality impingement, yet you think they can solve the second. Go right ahead, buy, buy, buy. That is just what I would expect a snake oil salesman to say.
Noah Vail,
Next up the MHFT he will have Leo for a guest on his Radio show.... Koolaide for two, one straw and a corner booth please.
+1. Crazy talk will be right back after the weather.
I'll daytrade but there will be no long term mutual fund investments till the SPX trades to 525 which I believe is possible within 16 months.
Why would you buy a mutual fund ? Anyone, for that matter.
EURO implosion, mega rig disaster, record CMBS defaults, Korean torpedoes, China bubble, flash fires...it is a miracle the markets are standing where they are today.
+1
Well ... it's not a miracle as much as it's "Bazookanomics". We see only central bank printing and government backstops as far as the eye can see ... nothing is real.
...Which is why it all disappears in the blink of an eye.
SON OF BERNANKE:
http://williambanzai7.blogspot.com/2010/05/son-of-bernanke.html