Pretty quiet out there. I came across this and loved it:
Saturday, December 11, 2010
Friday, December 10, 2010
DC Chaos: Bernie Sanders Blows a Gasket
It was a slow day in the stock market despite the chaos we are witnessing in Washington.
Bernie Sanders basically blew a gasket on C-Span this morning. I thought the old guy was going to pop a clot at one point as he flipped out on the TBTF banks, tax cuts, and the rest of the villains on Wall St. We still have no tax deal and it's now only a matter of days until the cuts expire.
By the end of the day, Obama basically bailed on the whole fiasco and handed the baton over to former President Bill Clinton. From a PR perspective this is another disaster for Obama who seems like he is in way over his head politically.
Leaving the scene in the middle of a crisis hardly looks presidential. Obama once again looks like weak polictial ametuer in front of the world. When the kitchen got too hot it's obvious that Bubba ws called in to take the heat because it's clear Obama can't handle it.
The bond market didn't like any of this as the 10 year sold off all day. The futures continued selling after the close:
The Bottom Line
The 5 year yields also rose sharply today as they closed at a shade under 2%.
We should be in for a helluva week next week as the big showdown in DC continues. The markets were surprisingly quiet despite the theatrics in Washington. It looks like stocks are taking a "wait and see" approach.
Nonetheless, Bubblevision was busy all day rolling out one retard out after another telling us to buy stocks for next year. Several analysts also came out with bullish calls on the markets 2011.
Should be surprised? 2010's gains are locked in for the most part. Wall St's pump machine now must get focused on 2011 as they begin working on next years fat cat bonuses.
Great idea guys! Going long from here after an 80% bounce from the lows in 1-1/2 years sure looks like a good idea to me...NOT!
I will be the first to admit that I missed out on a nice gain the past two years in stocks even though I profited along the way with metals and bonds. However, it's only a gain when you sell and at some point Wall St is going to start taking profits.
The Fed can only string this economic disaster along for so long before they destroy the dollar and Wall St knows it. Their printing policy has already created huge inflation in China, massive deficits in the USA, and sent gas prices soaring past $3 a gallon in most states.
No one can no for sure when the music stops because Ben can do a QE 3,4,5, and 6. However, this can only continue for so long before the currency is destroyed.
Don't be fooled, when the printing press no longer works this whole house of cards is going to come tumbling down. Trying to time when this happens is a fools game.
Have a great weekend and I'll see you next week.
Bernie Sanders basically blew a gasket on C-Span this morning. I thought the old guy was going to pop a clot at one point as he flipped out on the TBTF banks, tax cuts, and the rest of the villains on Wall St. We still have no tax deal and it's now only a matter of days until the cuts expire.
By the end of the day, Obama basically bailed on the whole fiasco and handed the baton over to former President Bill Clinton. From a PR perspective this is another disaster for Obama who seems like he is in way over his head politically.
Leaving the scene in the middle of a crisis hardly looks presidential. Obama once again looks like weak polictial ametuer in front of the world. When the kitchen got too hot it's obvious that Bubba ws called in to take the heat because it's clear Obama can't handle it.
The bond market didn't like any of this as the 10 year sold off all day. The futures continued selling after the close:
The Bottom Line
The 5 year yields also rose sharply today as they closed at a shade under 2%.
We should be in for a helluva week next week as the big showdown in DC continues. The markets were surprisingly quiet despite the theatrics in Washington. It looks like stocks are taking a "wait and see" approach.
Nonetheless, Bubblevision was busy all day rolling out one retard out after another telling us to buy stocks for next year. Several analysts also came out with bullish calls on the markets 2011.
Should be surprised? 2010's gains are locked in for the most part. Wall St's pump machine now must get focused on 2011 as they begin working on next years fat cat bonuses.
Great idea guys! Going long from here after an 80% bounce from the lows in 1-1/2 years sure looks like a good idea to me...NOT!
I will be the first to admit that I missed out on a nice gain the past two years in stocks even though I profited along the way with metals and bonds. However, it's only a gain when you sell and at some point Wall St is going to start taking profits.
The Fed can only string this economic disaster along for so long before they destroy the dollar and Wall St knows it. Their printing policy has already created huge inflation in China, massive deficits in the USA, and sent gas prices soaring past $3 a gallon in most states.
No one can no for sure when the music stops because Ben can do a QE 3,4,5, and 6. However, this can only continue for so long before the currency is destroyed.
Don't be fooled, when the printing press no longer works this whole house of cards is going to come tumbling down. Trying to time when this happens is a fools game.
Have a great weekend and I'll see you next week.
Thursday, December 9, 2010
Time to Take a Pause?
Let me start things with a chart of the S&P of the past 12 months:
My Take:
I think this chart is very interesting. As you can see above, we saw a huge rally this fall as the market roared back to it's post crash highs. What's interesting to me is it looks like the market is having a hard time breaking through to the upside since getting back up here.
Could we be hitting an inflection point where the trend reverses? It's to soon to tell, but what I can say is if the longer the market continues to stall up here the higher the risk is to the downside.
I think the market is realizing there are many questions that need to be answered before marching higher:
Are the bond vigilantes going to take rates higher?
Are rates rising due to a strong economic recovery or rising deficits?
How bad will housing get hit if rates keep heading north?
What will this do to the banks balance sheets?
Will QE cause inflation or will the deflationary forces of a bursting credit bubble eventually win out?
Will unemployment continue to worsen?
If unemployment continues how will this effect the consumer?
Can Europe contain the Sovereign debt crisis?
If it can't will the Euro survive?
Will QE destroy the US dollar?
Can the Fed react fast enough if inflation hits as the currency weakens?
Take Continued:
Can you blame the market from taking a pause here? The market seems to be running on fumes at this point given the risks I described above.
I loved the two tech tickers below that discuss some of the same worries:
Take Continued
I couldn't agree more with the guests above. QE2 is "criminal" and the fact that Bernanke feels he needs to go on 60 minutes and sell it makes me extremely uneasy.
Bernanke's point about being 100% in control of this situation is borderline delusional.
How could anyone be 100% certain of anything given the risks above? Some of the most brilliant hedge fund managers quit the game because the market became so uncertain. How can this guy get on air and actually say something like this?
I mean just look at their history as the commentator above brilliantly points: The Fed has always been late in reacting to key "inflection" points over the past 15 years. Their biggest mistake was holding rates down for too long which then created the housing bubble. This will likely go down in the history books as the worst policy decision in history.
In fact, after looking at their history, I am 100% sure that they will be too late to react when this all blows up in their face. God help us all when this happens.
The Bottom Line
The one thing you can count on right now is uncertainty. The Democrats have now decided to not go through with Obama's idiotic tax cut deal(thank god).
Let's hope the Democrats have enough balls to hold out long enough for a better deal. I must admit I am skeptical because in their eyes they can't afford to not do anything. The Republicans have time on their side because the clock is ticking and something must get done now.
If this thing gets strung out without compromise then my guess is the Democrats will end up eating the whole **it sandwich at the 11th hour before the critters go home for the holiday. We will see what the bond market has to say if this is how it plays out.
In the meantime, cash is king until we get more clarity around the economy. As "the credit trader" told me last week: "Now is a time to sit on capital because bigger opportunities lie ahead".
Remember, we are in the middle of a housing crash and we still have a long ways to go especially if rates keep rising. This is the 1000lb gorilla in the room that everyone keeps trying to ignore.
Every now and then he rears his ugly head, beats his chest, and reminds us how bad it really is:
My Take:
I think this chart is very interesting. As you can see above, we saw a huge rally this fall as the market roared back to it's post crash highs. What's interesting to me is it looks like the market is having a hard time breaking through to the upside since getting back up here.
Could we be hitting an inflection point where the trend reverses? It's to soon to tell, but what I can say is if the longer the market continues to stall up here the higher the risk is to the downside.
I think the market is realizing there are many questions that need to be answered before marching higher:
Are the bond vigilantes going to take rates higher?
Are rates rising due to a strong economic recovery or rising deficits?
How bad will housing get hit if rates keep heading north?
What will this do to the banks balance sheets?
Will QE cause inflation or will the deflationary forces of a bursting credit bubble eventually win out?
Will unemployment continue to worsen?
If unemployment continues how will this effect the consumer?
Can Europe contain the Sovereign debt crisis?
If it can't will the Euro survive?
Will QE destroy the US dollar?
Can the Fed react fast enough if inflation hits as the currency weakens?
Take Continued:
Can you blame the market from taking a pause here? The market seems to be running on fumes at this point given the risks I described above.
I loved the two tech tickers below that discuss some of the same worries:
Take Continued
I couldn't agree more with the guests above. QE2 is "criminal" and the fact that Bernanke feels he needs to go on 60 minutes and sell it makes me extremely uneasy.
Bernanke's point about being 100% in control of this situation is borderline delusional.
How could anyone be 100% certain of anything given the risks above? Some of the most brilliant hedge fund managers quit the game because the market became so uncertain. How can this guy get on air and actually say something like this?
I mean just look at their history as the commentator above brilliantly points: The Fed has always been late in reacting to key "inflection" points over the past 15 years. Their biggest mistake was holding rates down for too long which then created the housing bubble. This will likely go down in the history books as the worst policy decision in history.
In fact, after looking at their history, I am 100% sure that they will be too late to react when this all blows up in their face. God help us all when this happens.
The Bottom Line
The one thing you can count on right now is uncertainty. The Democrats have now decided to not go through with Obama's idiotic tax cut deal(thank god).
Let's hope the Democrats have enough balls to hold out long enough for a better deal. I must admit I am skeptical because in their eyes they can't afford to not do anything. The Republicans have time on their side because the clock is ticking and something must get done now.
If this thing gets strung out without compromise then my guess is the Democrats will end up eating the whole **it sandwich at the 11th hour before the critters go home for the holiday. We will see what the bond market has to say if this is how it plays out.
In the meantime, cash is king until we get more clarity around the economy. As "the credit trader" told me last week: "Now is a time to sit on capital because bigger opportunities lie ahead".
Remember, we are in the middle of a housing crash and we still have a long ways to go especially if rates keep rising. This is the 1000lb gorilla in the room that everyone keeps trying to ignore.
Every now and then he rears his ugly head, beats his chest, and reminds us how bad it really is:
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