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Saturday, May 17, 2008

Black Russians, Lemurs, Milipedes and Lots of Rage

A quick summary of trading week. Cool stuff only of course...

Corey Rosenbloom at Afraid To Trade thinks: Indexes Confused - Trapped. I couldn't agree more. I see the same indecision in: Gravestone Doji And Cool Correlations and Fibonacci Heaven where I argue its pop or drop time. Emphasis on the DROP.

For weeks now former Fed Chairman Paul Volcker has been talking tough and slinging mud. He does not like what Bernanke has been up to at all. Calculated Risk has Volcker saying: No Reason for Complacency. The market isn't listening. Volatility, as measured by the VIX continues to drift lower. I caught it early in: Bulltards Grow Complacent: VIX Drops. When the credit crunch was just still in it's infancy I said: We Need Another Volcker and Kill The Greenspan Put, but the powers that be just did more of the same. while babbling about Moral Hazard.

Early this week I boldly announced my intent to go short Apple in: Can't Resist Apple: Way Too Ripe, Way Too Juicy. Sacrilege! Apple is sacred. I know. I know. Today, over at Slope of Hope, Tim Knight took the same bold step and suggested going short Apple for the same reasons. In New Apple Store Unveiled Corey Rosenbloom didn't get Bearish on the company, but he does express caution about the chart...

Pre-market Friday morning equities took a hit and fixed income found a bid on rumors that the last Non-Farm Payrolls had been MISCALULATED and that the real number is much much worse. NO SHJIT, maybe they'll finally scrap the Net Birth/Deaths Model crap. I can't emphasize enough how informative Paper Economy is. Check out Economic Jolt: Job Openings and Labor Turnover if you want to a grasp on the labor market. In Confidence Game, Paper Economy tackles truly dismal consumer confidence numbers.

Which reminds me: Mish does a fine job illustrating how California Leads The Way To A Consumer Bust. This is how job losses accelerate rapidly. This is how taxes accelerate upwards rapidly. By borrowing against FUTURE lottery income to sustain current ridiculous spending levels, 'The Arnold' demonstrates that despite his crazy accent he truly is Americanized. More debt clearly solves all debt problems, that is the American way!

Back to housing. New Residential Construction got the talking heads on BubbleVision all excited because the numbers came in better than expected. Somehow, a Bullish spin was put on this: "Single family housing permits, the most leading of indicators, again suggests extensive weakness in future construction activity dropping 40.07% nationally as compared to April 2007." Paper Economy doesn't get distracted by the hype.

Karl Denninger over at Market Ticker pokes fun at the ECB for noticing that "banks are exploiting its efforts to unblock the frozen funding markets by using its liquidity scheme to offload more risky assets than envisaged" in his post Fraudulent Friday. Mish took notice as well in ECB Concerned Over Swap-O-Rama Exit Strategy and the guys over at Naked Capitalism caught it as well in Quelle Surpise! Banks May Be Gaming ECB Liquidity Facility. Since this is serious stuff and it is way too late for an easy out, I poured myself a gigantic Black Russian...

The third DOUBLE Black Russian resulted in my exploring the possibility of starting my own goddamn-bank-that-has-access-to-the-goddamn-discount-window-and-can-punk-off-crappy-collateral-for-real-bling...

Then I thought about taxes and got real angry... because this fine mess can only result in higher taxes in the near future as all these losses end up being nationalized, socialized and otherwise dumped on everybody BUT those responsible for them.

The fourth double Black Russian calmed me down a bit as I realized that sweet-baby-jesus, I was in Canada... and that Canada is still running massive surpluses off that dirty commodity money. Oil, gold, copper, zinc... all of it. We just keep pumping it out as the US dollar keeps spiraling down into the abyss... and I thought maybe, just maybe ONLY YOU GUYS would get screwed in the long run.

Watch the video Lemurs Get High and substitute the following: Consumers for Lemur and Debt for Millipede. Disturbing. Freaky. Hilarious... and strangely, very very relevant. Just watch and think: LEMURE = CONSUMER and MILLIPEDE = DEBT.

I should definitely get another drink...


Anonymous said...

Speaking of Canada, are you ever gonna do a post about the implication of the crisis there, or is there any good blog you would recommend? I know it won't be the most popular post ever, but I, as someone living in canada, would be interrested in your tought.

Keep up the good work btw.

Anonymous said...

So when do we default on China, Japan, and all the other U.S debt bagholders? Let's face it - the only way out at this point is to wipe the slate clean and start over. Long live the bulltards! LOL

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