In an unbelievable twist of events, following the abrupt cancelation of Thanksgiving, Christmas has been tossed aside too. The devil himself is inside of Germany and he is hell bent on an unseemly outcome to the debt crisis. The Italian yields are hardly moving this morning and Spanish yields are lower. But things do not look good. The euro is sinking again and European markets are in plunge mode.
At this point, it seems inevitable, taking Germany’s word at face value, there will be a monstrous European default. Italy needs to refinance over $300 billion in debt in 2012 and they have a big one coming up in late January. I think the Germans did the numbers and will prepare for default, instead of printing euros. Whether they are right or wrong is immaterial to me. The fact is, there is extreme downside risk to this tape.
At the same time, there are too many euro shorts. Remember when everyone was short dollars? Just about everyone I know is short euros or believes it is going lower. It is, in many ways, setting up to be the perfect short squeeze. Moreover, the market itself is close to oversold levels again and all we need is a rumor to get things going higher again. Do not think it can’t happen, ’cause it’s been happening all fucking year long.
In summary, I cannot be more bearish for 2012. Although I am still long by 75% and waiting for an end of year rally, my heart isn’t in it. I like when the market goes up, frankly, because it defies logic and reason. Bulls are very irrational and make me laugh. There is nothing like a 500 point rally off utter horse shit. The bears get all worked up, losing limbs along the way, and I find that to be the pinnacle of humor. But the fun is about to end and my job is about to get a lot harder. I’m afraid of getting tossed into a lit fireplace during one of my dip buying ventures. This is the year of the fucking train wreck. Gold and silver are now ceding to deflationary pressures coming out of Europe. The inflation trade is dead and there is nothing you or your stupid friends can do about it.
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Oh the humanity!!!
Took a flyer on SMH @29.25.
May average down a bit, if have to.
Take every fuckin’ Republican who voted against the Infrastructure program and payroll
tax cut out and shoot the dumb summbich.
Take every Tea Partier and shithead who talks about a “Balance Budget Amendment” or bitches about the deficit and slam him in the mouth with the nearest brass table lamp.
DEFLATION is the problem, shitheads!
AND QE money printing is the answer!
The Germans make the Tea Party looks like inflationistas.
nah. Won’t work anymore. Prepare for pain. There is no other option other than austerity and pain for the time being.
that’s ridiculous
Not really. At 100% debt to GDP ratio, we would have to have HUGE growth to overcome the debt drag. Yet the solution by some folks to seems to be to add MORE debt, which will create more drag. Not only will gov’t spending create a multiplier effect of less than 1, but the added debt will mitigate out any growth.
We have to cut spending. Not just the increase in spending-but we have to cut it. And we have to decrease the size of gov’t. And we have to deal with the pain and deflation it will cause. But we will come out on the other side. Pain in the near term. Prosperity for our children.
Wood speaks German. Who knew?
We never have any intention of paying off the debt. There is more debt than cash in the system. By design the system will make both big government bigger, AND big business bigger. The corruption feeds the businesses which are also all too happy to grow the government’s ability to hand them out favors, and the government is all too happy to give their campaign contributes more money, increase their own pay, and increase their own power. The system is designed to continue to go into more and more debt, or at lest that is the way it functions.
We never have any intention of paying off our debt. The government is going to inflate away their past expenses through even more borrowing, and do whatever they can to get elected… Until eventually it reaches the tipping point. They will have to monetize the debt or default eventually.
I feel however, this is just a side show. A very necessary one, but the real issue is how many years left of natural resources we have, whether or not we increase production, or find a way to decrease consumption. Increasing production eventually has it’s consequences, unless we can continue to innovate until we do more and more with less and less until we do everything with nothing, which even if possible, it probably won’t happen without pain. We are on pace to have serious issues in a few decades with base metals, and less than that with more rare metals.
Deflation starves off the credit able to buy the metals and slows production. Inflation sends everything higher until the prices escalate fast enough out of reach that consumption of them drops. Stagflation decreases credit available while increasing the price in a few specific areas. Pick your poison, eventually the consequences could be the same (without innovation) the question is a matter of timing.
To quote Kyle Bass – The real question is if Europe prints before or after a default. I don’t know which it is but I would guess after because they are aware of the number they have to print.
Agree…but then again I have seen over the mountain top, and it is the only way to go…
Coming from the douche that thinks income should be capped at $150k? Put this and all your other inane comments on the ‘pay no mind’ list.
It’s $250K, dogshit, with every dollar from every source including munies counted as income.
Are you out of your fucking mind? Cap income at 250k? How out of touch with reality are you?
He’s a socialist, he’s completely in touch with his own perspective on reality.
Fly will drop a suitcasefull of his money off at your shack
You’re lucky you’re not within slapping distance, Beavis.
I’m 100% certain you said $150k at first.
Either way, $250k or $250 milly, you’re a simpleton.
Since you mentioned it over a year ago I keep an eye out for information on “Pension Deficits” from either companies or countries. 2012 looks like a GREAT year!
Banks looking real good, especially regionals.
GS,MS,JPM all up in face of crappy news and or earnings cuts.
Hmmmmm.
can we have a louisiana style funeral for the euro with a horse drawn hearse along with pomp and circumstance for the euro fags, cause……it’s all for them ya know.
Fly, why not just stay in cash for the rest of the year and keep your 15% return, especially if your guts is not in it? Little upside reward for too much down side risk.
I fuqin BANKED COIN!! on your amatuer silver/gold slam the table long calls. Many thanks Klassy sir (with a K)….Idiot inflation trade
This fine gentlemen is Woodrow’s neighbor
Prem Watsa at Fairfax has been saying deflation all along and has the cds’s to back up his view. He made a ton in ’08 and might just do it again in ’12. Note……the FRFHF chart is deceptive, because of the special distributions.
My only long at this point. Still overwhelmingly cash.
The Rhine Maidens must get the Ring back!
Bought ALTR,more SMH,KRE etf (regional bank etf) on this big swoosh.
Gonna dump later.
Short a dull market should be the new motto
my gld holding….sucks.
but im going to buy more, because im _____.
You mean you are bearish for the first week of 2012? Any prediction longer than that is futile, imho.
Did the fool’s plunge with a fling at DROP.PK fingering that a bunch of suckas will jump willy nilly into a company dumb enough to sponsor Tiger Fucking Woods. I mean, from $0.98 it’s got one of the lowest fall to $0 margins around. Hey, if you can’t have some silly fun WTF is the point of being on this planet?
The sideways action in gold and silver seemed intentionally designed to inflict maximum pain on investors — so I did not buy any the last 6 months or so.
Deflation in the face of extreme money printing? Hey, when you own 150+ central banks worldwide that all coordinate their actions, you can make pigs fly.
Welcome to the New World Order. It’s already here. And it’s fucking all of us.
It’s funny that when one central bank attempts to replace their fiat bullshit with a gold backed currency, BIS orders NATO to immediately commence a bombardment and back a rebellion…
Getting raped and pillaged!
But still buying!
Fly, what are your thoughts on big oil at this point?
Bought last third to SMH,KRE etf at last panic swoosh.
Gonna wait with a rather large stop.
the Kyle Bass bottom !!!!
NOT 🙁
There is one way out of this for the short term.
Need I say it again? Invade Iran. Its been 10 years since we picked a fight. We are over do my good man.
regards
chuck
Kyle Bass is closer to being right than the perma-bear this time (again).
An uglier Christmas than the Thanksgiving week? UGh!
wtf,the world is gettin fleeced by who? who wins at this?