Thursday, November 18, 2010

GM Disease

Happy days are here again this morning as CNBC gets ready to throw a GM party at 9:30.

I just finished vomiting after watching an idiot from our governemnt on Bubblevision talk about how unemployment benefits are a huge positive for the economy.

The trade this morning is definitely risk on.  Here are the gold futures:


Stock futures point to a sharp open as well:


My Take:

GM is in da house so it's time for a Detroit party today.  Does anyone else find it sad that an initial stock offering is one of the only things left that can juice this crooked market?

Given the recent market volatility in stocks and bonds I often wonder if this is the only way the Wall St can make money at this point.  As the the credit markets, credit worthy borrowers, and investing banking opportunites are all evaporating perhaps gaming the market casino is the only thing left for the markets from a profitability standpoint.

Don't be fooled folks: Wall St is a ghost town right now.  I hear from the frontlines on a daily basis about how bad it is.

The Bottom Line

I continue to remain neutral and hedged in the market.  I hold gold and a little silver as my "risk on" trades.  I am short tech and the S&P 500 via QID and SDS respectively as a hedge.

I refuse to buy stocks at these lofty levels.  I think the metals are a safer "risk on" trade when the market wants to move higher.

I also own a bit of TBT and plan on increasing this position down the road because I think treasuries are toast.  I am hoping the European instability take bonds higher so that I can find a better entry point for this position.

Enjoy the Detroit/GM rally.  I'll play some Eminem in honor of it:

2 comments:

Anonymous said...

I found the fact that the market would rally on a GM IPO a head scratcher as well, I mean seriously, GM should be out of business! And then the fact that the individual investor had a hard time purchasing shares, can you say wall street scam. I certainly do not wish for anyone to be unemployed and I want American products to be successful but for GM to just be able to hit the reset button inferiorates me!! I have a friend that should probably file for bankruptcy due to massive student loan debt & yet bankruptcy laws will not let student loans be included. I just think that if a company has to file BK then they should be done and if they want to get into business again then they need to start from scratch. I'm just ranting because I am just sick of the manipulations going on in the markets, governments & managements of companies. Good luck, have a nice day!

Jeff said...

Anon

Nice rant!

I am right there with you.

The bond holders got totally screwed when GM went down thanks to the government.

They disregarded the rule of contract law and shoved this down our throat.