Monday, March 23, 2009

I Smell A Rat

The S&P surged over 7% today completing its best 10 day run since 1938.:

" March 23 (Bloomberg) -- U.S. stocks rallied, capping the market’s steepest two-week gain since 1938, as investors speculated the Obama administration’s plan to rid banks of toxic assets will spur growth and investor Mark Mobius said a new bull market has begun. Treasuries and the dollar fell.

Bank of America Corp. and Citigroup Inc. both soared at least 19 percent as the U.S. Treasury said it will finance as much as $1 trillion in purchases of distressed assets. Exxon Mobil Corp. and Chevron Corp. jumped more than 6.7 percent after oil rose to an almost four-month high. The Standard & Poor’s 500 Index extended its rebound from a 12-year closing low on March 9 to 22 percent as all 10 of its main industry groups advanced."

My Take:

This just hit the wires after hours:

"(US) REPORTEDLY, SEC IS WORKING ON UPDATED VERSION OF UPTICK RULE FOR APR 8TH MEETING- Could include price test which would only allow investors to short stock if Bid price is rising- Also considering circuit breakers for individual stocks to stop aggressive short selling."

I'm sorry folks but somethings smells really fishy here. Lets take a look at whats been sold to us over the past several weeks:

- Citi, BofA, and JP Morgan all come out at the same time and announce that Jan/Feb have been extremely profitable

- Congress comes out and announces the potential change/suspension of mark to market accounting.

- The Fed comes out last week and announces that they will begin buying treasuries and more MBS's.

- Bernanke and Obama hit the airwaves telling Americans that they are beginning to see signs of recovery.

- Geithner comes out today and announces his bank recovery plan which is then praised by everyone on Wall St.

- After hours we then get whacked with the potential reimplementation of the UPTICK Rule.

Sorry folks, this is all just too coincidental for me. What on earth do they plan on announcing tomorrow? Hmmm let me take a couple guesses:

- Tomorrow night perhaps Obama announces that he plans on dropping gold coins out of helicopters across the country every Thursday?

- Wait a second, that may not be enough to satisfy the debt slaves in our bloated economy. Perhaps they will up the ante and throw a $100,000 check to every taxpayer?

HA! I know I know, I got out of hand with that last one. We all know the taxpayer only gets screwed in this country. The bottom line here is this all seems waaaaay to coordinated for my taste. Something tells me the government saw some economic data that has scared the living daylights out of them. The PR machine was then put into motion.

Whats scary here folks is this: They just threw the whole kitchen sink at this problem. God help us all if it doesn't work. I mean think about what they've done: They have bought treasuries, bailed out the banks, potentially suspended M2M, and brought back the uptick rule all in one week.

WTF? Whats left? Also:

If our recovery has already started and the banks have been profitable since the beginning of the year then why do we have to do all of this? Why does the government have to once again pillage the taxpayer by using our money to allow hedge funds to leverage up and purchase worthless assets at inflated prices if the recovery has already started?

I mean according to Wall St stocks are a buy! The mustard seeds are already starting to grow. Get in now before you miss the big rally! God they are all so full of shit. Every damn one of them!
Feel free to buy into this load of BS. I'll pass thanks. IMO, here is what they are looking at:

Employment is collapsing:



Industrial Production has fallen off a cliff:




Housing prices have collapsed and still haven't reverted to the mean:


Bottom Line:

The snake oil salesmen on Wall St have somehow managed to sell Main St another bill of goods. The reason Geithner's plan was such a hit is because its a slam dunk for private equity: The taxpayer takes almost all of the risk while Wall St takes very little but keeps 50% of the profits.

Once again the taxpayer gets shafted. Obama out to be ashamed of himself. A man of the people. Ha! What a sham. He is as big a fan of Wall St as Bush was. This guy has lost almost all credibility at this point.

I have come to one conclusion after watching this whole crisis unfold: The political and wealthy elites of this nation have no remorse over what has happened, and they will continue to game the system until its destroyed.

I honestly feel like I am watching a bunch of narcissistic sociopaths run our country right into the ground.

Remember folks, 7% moves in the stock market are not healthy and this crisis is far from over. The desperation that we are witnessing makes trading stocks almost impossible. The trend is long but the fundamentals are flatout horrific so the bottom could drop out at anytime. These are the types of markets where both the bears and the bulls get slaughtered.

You can play the trend and go long here but buyer beware. My advice continues to be simple: Raise cash and tune out all of the garbage that is being sold to you by the pigmen.

29 comments:

flipdippy said...

I have never been as angry lately towards politicians as I am towards Obama.

Bush may have helped cause this problem, but Obama's administration is ensuring we make it worse.

I feel like we may be days or weeks away from a currency crisis sparked by this administration that sends the markets quite literally straight down the toilet.

A few weeks ago I thought some of the calls for civil unrest by people like Jim Rogers was far fetched, but each passing day it seems like they may end up being correct.

teddy bear said...

Paulson ~1 trillion USD (bailouts)
Obama 1 trillion USD (budget deficit)
Bernanke 1+ trillion USD (just buy-them-all)
Geithner 1 trillion USD (public-private deal)

who will be next?

this is just amazing waste of taxpayer money and market manipulation but for some f*u*cking bastards it is rather next GREAT OPPORTUNITY to get richer and richer, incredible, whilst millions of people lose their jobs and have not any savings

it does not matter ...

SHOW MUST GO ON!!!

http://tinyurl.com/crgurm

unbelivable how America has changed ;(

"Give me control over a nations currency, and I care not who makes its laws.”
Baron M.A. Rothschild

wall street bubbleheads, fat bankers, worker unions, CEOs of too big too fail bankrupt companies and talking rubbish politicians they all have the same interest to f*u*ck this nation and grab its property

a lot of people must work very hard for many hours everyday to get their livelihood and pay off debts for many years, does it make sense? whilst the other "smart assholes" just print as much money as they need from thin air

it is like modern slavery

one day it will end very, very badly

"Insanity: doing the same thing over and over again and expecting different results."
Albert Einstein

Obama & Home Prices
http://www.youtube.com/watch?v=c9EvWw6EjJU

Anonymous said...

Money is the root of all the evil. Just leave your good conscience, ethic, honesty, decency and common logic at the door before entering the Wall Street casino. We all know the stock market is heavily manipulated. It is just a legalized entity designed by the social elites to steal money from the uninformed and naive investors.

Personally, I no longer care what is right or wrong about the government/Fed policies and actions. Unless there is a social revolution against the elitists, nothing will change. Common folks will continue to be ass raped.

The best thing to do is playing along. If we can figure the direction of the game, we trade accordingly. Now that the market has jumped big in recent weeks, maybe it is a good time to get load up on SRS again. Right now it is close to a 52-week low.

Joey said...

Jeff,

Wait, I Like The $100,000 idea. I'd support that.....

RE: Trading....I'm very much hedged but nimble enough one or two tweaks in a given position can make a nice little profitable day (today, case in point).

Candidly, I kind of don't mind the current market. At least we're moving in a direction other than sideways. (pathetic, I know)

Jeff said...

"You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation. You cannot multiple wealth by dividing it."

-- Adrian Rogers, 1931

Jeff said...

Flip

Thats my fear

A dollar crash. How long are other nations going to put up with this crap?

What is the dollar really worth if we continue to print them like postage stamps?

As for the politicians, couldn't agree more. Social chaos could be very much in the cards.

Jeff said...

Teddy

Rant on man!

Love the pic...That may have to be in my next post!


It is amazing how the pigmen always end up with the assets when its all said and done. The system is so fixed.

I have a family member who is a banker and he told me Wall St always ends up with them in the end

I guess it will be no different this time.

I feel your rage Tiny!

The anger I am reading on here tonight gives me hope that maybe we will all rise up and not take it this time!

Jeff said...

Anon

SRS will be a great buy when this rally peters out. This sucker was a 3 handle at one point so I wouldn't get too interested in this until we get down into the low 40's.

My concern here is you have the Fed buying billions in mortgage paper.

Who knows how long this pump fest will continue. I have some powder waiting for the next move down.

We broke 805 on the S&P so 900 isn't out of the question here.

I would scale into SRS.

One potential trigger for a big leg down is if the republicans fight Geithner on this bank plan. This is entirely possible.

Jeff said...

Joey

Yup

This is a traders market. Congrats...

Did you buy some financial calls?

I was sick last week. I tried to get home from work to short TBT before the Fed announcement but got home too late.

I had a hunch Ben was going to fire the bazooka.

Jeff said...

Jeff

Great quote.

Crazy times aren't they? I hope you caught this leg up.

Minton Mckarkquey said...

Jeff I am speechless. The conspiracy of good news despite the ocean of bad news is just mind blowing.

Why isn't the public more pissed about this whole situation?

Minton Mckarkquey said...

By the way, it's interesting to note that all our language has deteriorated to cursing... since, what else can you do?!

Jeff said...

Minton

I saw some outrage with the AIG bonuses last week. I am hoping this all continues to build.

You are right though: America is still more concerned about who wins American Idol at this point.

Most of the sheeple have no idea how bad we are getting screwed.

Sorry about the Fuc*king cursing. I can't help it..lol

Jeff said...

UH OH

The FT just reported China is calling for a new reserve currency thats backed by the International Monetary Fund(IMF).

Yikes!

This ought to get interesting. Goodbye treasury market if this ever comes to fruition:

"China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”."

http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html?nclick_check=1

teddy bear said...

http://www.youtube.com/watch?v=rvcZiNt6ypI

interesting what this KGB trained worker said in 1984, it seems to be still up-to-date ;)

teddy bear said...

and something about our "favourite" FED ;)

http://www.youtube.com/watch?v=yP2JpY-J8MA

johndaniels said...

consumer tactical defaults.. i dont know if these guys are watching mainstreet, but wall street is in denial; in their own little world. a cirlce jerk with taxpayer money; propped up atop the pyramid. problem is, if the slaves stop carrying the master, the master falls to the ground on his ass. just the way it is.

Now people have lost the vulnerability to financial enforcment.. what can they take? my underwter house? sue me and attatch my car? my wages? im unemployed! many on "aminstreet" on now planning not just tactical walk aways as the recession digs in, and oil prices go up... but tactical credit card defaults... so the the bankers see more credit being used and trupmet a recovery... but in fact its just people maxing out their cards getting ready to stop paying... i mean, why pay on a maxed out card? they just remove the credit by the amount paid anyway.

Just let this sink in...

Jeff said...

JD

You sure gotta wonder if thats whats going on here.

Consumers say FU to the banks by spending like a rock star and then walking away.

Serves them right. They have been screwing us over for decades.

I totally can see that happening too man.

You can't take anything from someone thats already broke. Its going to be interesting to see how this all plays out.

Jeff said...

Teddy

I Like that second video.

I am beginning to think the Fed just needs to go.

They seem to do nothing but create total financial chaos.

Man, I want my country back.

gamingthemarket said...

You might find this enlightening:

Our Engineered Meltdown: End of the Beginning
http://www.gamingthemarket.com/2009/03/end-of-the-beginning.html

johndaniels said...

rumor mill has it we will be on a voucher system and the banks will be closed down by August or Sept this year. It's been substantiated by a couple different blogs out there. who knows.

johndaniels said...

those graphs resemble a reverse hockey stock. odd; we;ve been on a true hockey stick since 99....
government bubble means currency collapse; im moving into chinese yuan.. their poplation is so large they cant afford a currency collapse.

spread among yuan, dollars, some gold, and industrial precious metals

johndaniels said...

i should not that i will be holding PHYSICAL yuans; not digital. appears they have enough flexibility to track their currency weaker along with the dollar; so there may be some deals in the yuan if they weaken it with dollar. fact is, IMHO the yuan is actually a solid currency, compared to the dollar.

Jeff said...

JD

Take a look at the Krona. I think its a wise move to stay diversified here.

I like your strategy.

Anonymous said...

This is what happens when we are fed a continuous diet of fast food and half hour sitcoms, we get complacent sedentary and not able to focus on anything long enough to realize when were getting totally Fudged.
I don't think a march on capitol hill will cut it this time as most won't be able to leave their TV or be capable of walking for any extended distance.
Seriously I think the one thing the fed can't control is what we do with our money.We need to quietly start withdrawing all our savings, run up our credit cards to their limits without spending the money until this system becomes unstable to the point were they take notice that the power is where it should be with the people.
Only after they concede to complete and total transparency of this Ponsi Scheme will we return the funds into our accounts to salvage what is actually left of this country.

Anonymous said...

From Wikipedia: "Bank runs have also been used to blackmail individuals or governments; for example in 1830 when the British Government under the Duke of Wellington overturned a majority government under the orders of the king, George IV, to prevent reform (the later 1832 Reform Act), he angered reformers and so a run on the banks was threatened under the rallying cry "To stop the Duke go for gold!".

So apparently even the threat if it being orchestrated with a large collective voice will in the least make them pay attention.We need to take a civilized approach to civil unrest, no one needs to get hurt but the criminals and then only by being brought to justice.

Alex

Jeff said...

Alex

I couldn't agree more. We the people need to rise up.

This is all going to end badly.

ZMoose12 said...

Awesome post! What's your take on another Housing Fiasco? I have been reading so much about the "Housing Market Bottom" but I have no belief in it at all. People who defaulted on loans for their house who are now refinancing may end up getting screwed over and possibly have to re-default. In my opinion, that's scarier than a normal default.

Again, great post!

Jeff said...

ZMoose

I appreciate the kind words!

I think we are nowhere near a bottom in housing.

I expect prices to continue to fall and the next major leg will be triggered when interest rates rise in the treasury market as it begins to unravel.

This will take a year or two to develop in my view.