I am watching this thing you call the market, unravel in front of my eyes–amazed by its simplicity. I know exactly what should happen; but I’ve been trained to expect government to intervene and paper over this problem. If you are betting against government, opting for the “this time is different” attitude, I wish you good luck. I cannot get myself to sell short anything because we are at a cross-roads. The news might come from the Fed or even the IMF. But rest assured, it will come.
On paper, this market should be sold. There is nothing that could be done to save Greece and Spain/Italy/Portugal are next. Precious metals are not even close to a safe haven and the dollar/treasuries reign supreme. This is exactly what the good gent from across the pond, Hugh Hendry, has been predicting.
BEHOLD THE DEFLATIONARY VORTEX.
However, some things just don’t add up. Like why is LEN and RYL at new 52 week highs? If the housing market is in shambles, clearly these stocks would reflect that.
The reality is not as grim as everyone thinks. The economy is doing good, save the armies of people on food stamps. Aside from the unskilled, America’s productivity has never been higher. Our balance sheets are great and companies are expanding overseas, catering to a burgeoning middle class in China, who needs basic necessities as we did 120 years ago. A middle class is being formed and KMB stands to do a lot of business.
But none of that matters during market panics. We are intently fixed on the worst case scenario because, at the end of the day, we’re all pessimists, subject to decay and extinction. Exactly 11 years ago, I wiped out my personal trading account due to greed and fear. I will elaborate on this subject later on today.
Look at the bright side and put yourself in a position to withstand the worst case sceanrio.
My positions in PEP, KMB, LNCE, WM, WNR and YELP are up.
25 Responses to Hiding Out in Hell
Fly, what are your thoughts on the PM stocks? Is this a buying opportunity?
nevermind…I see that you addressed this in the article.
economy is doing ** well **
Not a game, a matter of right or wrong.
In the end it comes down to what moves the market?
1. The corporations that have no boundaries and can dance into poor countries to produce and then dance back to the rich to sell
2. Governments or the people that are going to buy these products that as a whole are restricted to organic growth, ageing populations, medicare, medicad and as a group locked to a specific location?
“But Germany and the rest of the EU could come up with a Marshall Plan–style package for Greece. Very little of the bailout money so far has gone to the Greeks. It has all gone to the bankers. A €23 billion package (the equivalent of 10% of Greece’s shrunken GDP) to reflate the economy would buy Greece some time. ”
Time to execute the bankers in the public squares of every country. Bring in the guillotines. I volunteer to push a wheelbarrow with the heads.
Another afternoon selloff. This shit is getting old.
Yeah. At this point I’m waiting for a strong intraday reversal on strong volume. I’d prefer to miss some of the initial move rather than guess when this market stops going down.
The economy is doing good….so doesn’t that preclude Ben from hitting the print button?
Romney is taking a debt clock around with him so you can see it rolling along as he speaks.
Going to be an interesting political year.
What’s with all the Illuminati symbolism on the site? (Devil worship) ..
I expect this from our “leaders” in government – but not ibankcoin ..
Run to gold…its safe! Oh wait…
Ok, so, aside from the fundamental problems with your analysis i.e. the lack of actual proof of anything you said, being it via Balance Sheet analysis of your claim (search the Economist for that topic: Essentially the Balance Sheet and Profit Figures are up because of cuts in R&D) or the supposed reflection of the housing market in two TWO stock prices. I mean, come on, there are more unskilled then ever before (essentially unskilled should be substituted with not employable due to lack of qualifications, but let’s not get digged down in semantics), the productivity, while up, is actually not labour but capital productivity. Finally your take on China. Have you actually looked at what they consume? And I am sorry to say this, but it is most certainly not 120 years behind the US (that would make them require the first cars). You are, my good sir, at a cross-roads: To speculate or not to speculate on sentiment analysis. Perhaps you will manage to wipe out your trading account again…
SG and A, most companies don’t shell out that much for R and D. IMHO Fly’s analysis is spot on regarding the only true issue, and that is whether there will be more cocaine or not. Sadly, Supply and true Demand has little to do with this market.
How many fucking Chinamen own cars genius?
I have been seeing it too even before I even knew who Hugh Hendry was. I hate clams. IMHO, this time it is different, Just read thru the FOMC minutes and they are happy clams, NFP is improving, cpi is stable..Operation Twist ain’t going anywhere. For IMF, they need money to do this and USA/Canada told them to screw themselves. ECB, did you listen to Draghi at the last press conf, he is saying screw you too, China tried that lame RRR cut which IMHO they shouldn’t have, that back fired. RBA wants to cut rates. BoJ wants to soften the Yen. BoE is blaming ECB for everything and won’t do QE2…I think I finally have my catch 22 of no action.
and Christine “I got a warchest” Legard, if that 1 Trillion has to go all around the world, including the biggest beneficary Mexico, how can any amount be that big to satisfy this cocaine addicted market? LTRO coke is coming off so fast.
Do you like fish tacos? I do.
Let’s see, what do we have here.
1: World financial catastrophe with countries defaulting on their debts and an entire continent teetering on the edge of a financial abyss.
2: The country we are depending on to restart the economy is a communist dictatorship.
3: High frequency trading is destroying the usefulness of the stock market as a place to invest.
4: 2% interest rates are making bonds a safe place to lose money.
This is starting to get stupid.
Well Stated Sir . “We are intently fixed on the worst case scenario because, at the end of the day, we’re all pessimists, subject to decay and extinction. ‘
I bought shares of UCO to add to the position I started yesterday (UCO calls and UCO shares). I also started a position in TNA with TNA calls (July expiration $60 strikes) and TNA shares and a position in AGQ (shares).
I will add to these positions on any further weakness.
Bears won. Again.
YELP up after hours. Combine that with a rally tomorrow through Friday and FB iPO and this thing could pop quickly. Long YELP and TRIP. Fly, as soon as I read you starting to put this on the FTK calliber trade I knew not to get flushed out too early. Thanks Fly.
Nice to see another Hugh Hendry fan around. Cheers!