Flip the Script

All that you touch, You Change/All that you Change, Changes you – Octavia E. Butler

This will probably be the hardest post to write all year.

In many ways, 2008 was more of a blessing that a curse for me and I thank God for that and I look with no small amount of apprehension into ’09 as I grow another year closer.

Another year closer to being too old to post here.

Another year closer to not being around for my seed as she grows or see mi esposita, mi corazon y fuegita.

Another year closer to finding that I’m sleeping less, eating less and finding myself moving slower.

Getting old sucks. I will not go silently one foot into that “good night”. No sir.

A Year in Review

I honestly can’t really wrap my head around what’s happened in the last year in many ways. The catalouging of businesses that have failed, agendas disrupted, fears confirmed, and wealth destroyed doesn’t do justice to the immense shift of earth beneath the feet of a great deal of the citizenry around the world.

An aquaintence I knew back in my university days once said that he was of the opinion that centuries didn’t start and stop with the calendar dates, neither did decades and he pointed out the lingering influence of the sixties on the seventies and the eighties on the nineties as proofs in point.

If that is a worthy posit to make, then perhaps this year was when we began to see the real face of the twenty first century begin to take form out of the mist of the chaos from the first eighteen months of this century and the subsequent attempts to reframe it in hues of bygone eras.

And the pervasive proof of this fact is in the pudding that was the calamitous failings of systems and methodologies that had served businesses and traders for many years. Even those who came of age during previous bear markets were stunned and de-banked when the Great Bear woke up and went hunting last fall. There were simply no previous experiences that could properly frame it regardless of the attempts to do so.

I’ll repeat that again: there were simply no previous experiences that could properly frame it, regardless of the attempts to do so.

One of my passions is mathematical modeling and the great thing about that particular mindset is that, if one is truely honest, there comes a point where something is just not model-able properly.

As a deconstructuralist, I treat most of the ink and phosphorous that parades itself as market commentary as unawarely ironic and attempt to find market plays that counter whatever agenda I see there.

And I’ve found that it’s way too easy to over think a thing.

I found that the best way to deal with 2008 would have been to have considered all equities as hats for culos.

And I honestly think that 2009 probably won’t be a whole lot different.

But you have to consider who’s words you’re reading.

About moi

I didn’t start posting until March 16 of this year, and followed that up with 83 more posts with a generally decreasing amount of commentary til my posts were being, on average, voted by four or five folks.

Then there was the election in May of which I came in last, I mean – I came in dead last.

I looked at using the Z Score to time the market, I looked at comparing the market to dog races, I noted how one can self analyse performance honestly, I even took apart Dinosaur Trader’s earnings and showed how to find out when he was probably going to lose money day trading.

Finally this month I discovered that the 5 day Moving Average works OK, and Woodshedder honed it into something better.

And a bunch of other stuff, of late I’ve been trying out slogging (synth blogging – a self made term to use machinima blog posts with text to voice audio) just to find out how that would work.

Have I made much money?

Well, my bank account is none of your business but I think I did pretty well shot calling the drop in oil and the continued rise of the Yen.

I’ve never claimed to be able to tell you where to put your money and Lord willing I’ll never go down that path.

I just point out stuff that catches my eyes and won’t leave my brain.

A Year in Front of Us

I have two points to make about 2009 and they’re pretty easy to get my mind around.

1. Be pragmatic. My motto will be Take the trade in front of your eyes.

I like Howard Lindzon’s blog for many reasons, but mostly because he is honest with himself and knows that he’s not comfortable on the short side so he seems to sit on the sidelines from time to time.

That’s being pragmatic.

Dogma will kill your bank account in a hurry.

2. Be aware of that which has changed for good and that which has not.

If you pay close attention in the coming twelve months you’ll find that more of what is called change is not and it’s the real changes that don’t look like change at all which disrupt everything.

The Takeaway

For 2009, I’m figuring that the Yen has about four months left before it collapses completely.

Come June, I expect the Yankee Peso to show everyone what it’s really going to do. Right now it’s sort of fluttering like a moth.

A worst case scenario would be both a war in the Middle East and between Russia and one of it’s neighbours to really stir things up. Things are getting impossible in Russia so stuff is going to break loose somewhere, I’m just not sure where.

About the time the Yen collapses – expect to see the Bulls gore the Bears for a good long while.

Long enough for the MSM to declare the “recession is over”.

Should that happen, start getting out the Armageddon plays because it’ll get good and ugly.

A Bunch of Shout Outs

To “The Fly” of course, who let a humble post structuralist non day trader take his turn at the helm of the Castle of PeeG.

Sir, I tried to take good care of it while I was here.

To WoodShedder, who always seemed to read my posts and had my back during my bid for the tabbed spots.

To Jeremy for the keys.

To Danny for pointing out the foolishness of the DOW.

To GW, who posts as often as Jake comments.

To my wifey, who puts up with me spending way too much time on these posts.

To my seed, keep growing – tu papi te quiero mucho.

To the TDot Daisy, for always reading.

To the rest of the fam all over the world, I love you all.

Thanks to Canadian Musicians for providing such great music this month

Artist	Song
Dead Celebrity Status	We Fall
Shad	Brother Watching
Kinnie Starr	Another’s Gone
Nelly Furtado	Ish on the Radio
Skinny Puppy	Empte
Sum 41	Fat Lip
Avril Lavinge	Best Damn Thing
Delerium ft. Jael	After All
Cadence Weapon	Black Hand
Sweatshop Union	Thing about it
Kardinall Offishall ft Lindo P	Burnt
War Party	Feelin’ Reserved
Damien	ICU
My First Earthquake	Fa La Freezing
Bryan Adams	Reggae Christmas
Fidget Punk	Mini Set of Songs
Tru Rez Crew ft. Lucie Idlout	I’m a Lucky One
Lucie Idlout	I will Rise for You

Finally Cuervo – Get off the Stage!

Finally, as I know that with every Blessing there is a curse – I give you my theme song for 2009.

Bring it.

[youtube:http://www.youtube.com/watch?v=_ypnU0zRIu4]

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The dearth of news, had it been noise would be deafening right about now. Aside from the crashing Russian economy and the escalating war in the Middle East, most newsmakers are getting ready to nurse their hangover into 2009.

Mish has some great articles that talks about two of the fabled BRIC economies, notably Russia and China though I have to admit that I find the idea of masses of Chinese factory workers relocating themselves back to the countryside a bit hard to believe. As in most times of crisis, stories have a tendency to become more extreme for the purpose of shocking the listener.

After all, it’s been one seriously ugly year for one and all and there are not a whole lot of people who are looking forward to 09 as being the year that “everything works itself out”.

It’s not even January yet, and one of the more well known online retails has filed for bankruptcy protection and over and over again the news is that there will be more of the same. If the above article is right, there will be a four hundred percent increase in retail failings in 2009 as there were in 2008.

And a happy new year to you too sir!

A lot of folks around the world are getting their knickers in knots fretting over the coming hyperinflation from central banks turning the printing presses up to 11 and letting money rip.

They point out, wisely, that the average US consumer is completely tapped out and trying with one hand to keep the job they might have (but fear they will lose if have not already lost) and with the other holding with shaky digits the report from their 401k.

Bloggers and MSM alike are wondering why everyone was wrong about China picking up the “slack” in consumerism without thinking about the whys and hows of those that make their living exporting baubles to the States in exchange for Yankee Pesos.

The bottom line is that for any exporter to make money, to keep their employees employed and their creditors happy – they need to ensure that their currency is less than the US.

A pretty hard thing to do in these days and times when the biggest printing press the world has ever seen has set it’s visage John Henry like to eradicating the US Dollar from the idea of value in anyone’s hands in an attempt to shortchange it’s creditors.

Canada Begins to Return to Normal

While the Bloomberg article purports to be sounding alarm over the failing loonie, the simple fact of the matter that the Canadian economy was not well prepared for the sudden rise to parity and it was this jump that, if nothing else, showed exactly how weak and failing the US economy had become since 2003 when the climb began.

Again, when one is an exporter to their neighbour, it generally helps businesses when their is a profit baked into the currency and a return to the 70 to 80 cent dollar range is very very good for the Canadian economies that are not commodity based.

Alberta, the Territories, and Newfoundland will probably find 2009 to be as challenging as Ontario and Quebec found 2008.

I say this to point out nothing more than the fact that the economic malaise will continue but, savvy businesspeople and traders will find ways to make money in 09.

Take the Trade in Front of your Eyes

Above all, be pragmatic in 2009 for your account and sanity’s sake.

Qsinator Update

No selling or buying signal has been hit as of yet.

Theme Song

[youtube:http://www.youtube.com/watch?v=q6a25dGU9Uc]

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[youtube:http://www.youtube.com/watch?v=6dLduDsrISU]

Takeaway

I really still like shiny metals  and the Japanese Yen.

If you want to chase news driven roller coasters, and have cat like reflexes there may be some intraday trade in USO, as for me – I will leave that one alone for now.

Theme Song

[youtube:http://www.youtube.com/watch?v=PIyCDr_ojV4]

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[youtube:http://www.youtube.com/watch?v=-Q7sBddJ7UI]
Theme Song

[youtube:http://www.youtube.com/watch?v=10Ikn0xr30k]

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It’s Christ’s Mass somewhere so I’ll give some shout outs because after it’s 23:59 on the 24th, if Christmas is your celebration than you need to spend some time with family and friends obviously.

Qsinator

Still no buy signal though it’s still 2 cents above the line and hovering.

I would like to dedicate this strategy to my dad though, in all seriousness.

So, Merry Christmas dad.

On to the News

No multimedia post today, the Laughing Crow crew is taking a siesta so you’ll have to do with simple words.

Death of Car Manufacturing in the States

You should read Fly’s post and the link to Mish’s excellent work relating to the next alphabet soup bailout called Campbell’s TALF.

[note: I think the Treasury should put more thought into the names they pick – some of them are kind of, well, annoying]

Anyways, the IHT (my favourite paper these days next to Globe and Mail) is reporting that the last SUV plant in the States just shut down.

Reeling from its financial problems and a collapsing SUV market, General Motors on Tuesday closed its factories in this city and in Moraine, Ohio, marking the passing of an era when big SUVs ruled the road. The moves followed the shutdown last Friday of Chrysler’s factory in Newark, Delaware, which produced full-size SUVs.

….

With consumers shifting rapidly to smaller, more fuel-efficient cars, GM no longer needed to produce big SUVs in Janesville as well as in a plant in Texas.

Still, some Janesville workers felt GM broke a pledge in its 2007 contract with the United Automobile Workers to keep the factory running.

“We didn’t deserve this,” said John Dohner Jr., shop chairman at UAW Local 95. “We’ve all put a lot of hard work into trying to secure a future here.”

Now, I don’t mean to be callous but who didn’t see this one coming? I mean it’s been fairly obvious for a very long time that the SUV market was like a sumo wrestler who eats every meal at a fast food place. Eventually there’s going to be a heart attack.

I won’t miss them on the road though, as far as I’m concerned – if you’re not in the Yukon and don’t have to drive through a metre of snow to get to work, you don’t need one of those things.

I can’t wait to see hip hop videos when electric cars hit the main stream.

Over in France

Rock star, President Nicolas Sarkozy has been fighting a losing battle to lengthen work weeks and get more shops to open on Sunday:

The legislation is a pet project of President Nicolas Sarkozy, whose main election slogan was “work more to earn more,” but it has built up over several weeks into a big political headache.

Sarkozy says the economic crisis has made it even more urgent to make the French labor market more flexible, encourage consumption and increase workers’ purchasing power. He says more Sunday work would help achieve all those goals.

Now, I have to give the man proper respect because he is going up hill on this regardless of what country he’s President of because who wants to support a law that means everyone works more?

But critics of the legislation, many of whom are in his own party, the Union for a Popular Movement, say Sunday should be a day for people to spend time with their families. They also say that if consumers are reluctant to spend on weekdays, they are unlikely to spend on Sundays.

And if that sounds surreal to you, it’s a more common idea than you might think.

A good deal of the world, in either a secular or religious manner expect there to be a work/life balance.

North Americans have the worst reputation in that regard for being Koyaanisqatsi.

Los Mexicanos los precios en Estados Unidos gustan.

It seems that even after the 30 percent reduction in the Mexican peso, the prices are still cheaper in the U.S.

“We can find everything we want and it’s much cheaper,” said Aurelia Peralta, a 38-year-old homemaker from Hermosillo, a city of 700,000 about 200 miles south of Tucson. Pointing to the Guitar Hero World Tour display model her teenage son was playing, she said popular Christmas gifts cost twice as much in Hermosillo.

….

“It’s extremely vital to make sure we do everything we can do to accommodate them at this time,” said George Bon, national sales manager for the Radisson Suites Tucson. “The bottom line is, we can’t afford to lose them.”

Mexican visitors spend more than $300 million a year in the Tucson metropolitan area, according to a study in 2002 by the Economic and Business Research Program at the University of Arizona.

….

The survey, which will be updated next month, found that Mexican tourists spent close to $1 billion in Arizona, far more than the $330 million spent by Arizonans in Mexico. The co-author of the 2002 report, Vera Pavlakovich-Kochi, said the report to be released in January by the Arizona Office of Tourism is one of four studies conducted over the last 30 years that have found that Mexican visitors have “very significant economic importance to Arizona.”

Garcia said Mexican shoppers coming to Tucson almost always pay in cash and many save money all year for a shopping excursion the week before Christmas. Salaried workers in Mexico also receive a mandatory bonus of at least two weeks’ pay in mid-December that helps fuel a Christmas buying spree that continues through the first week of January until the Mexican holiday of Día de los Tres Reyes on Jan. 6.

Why is it that in a time of increasing crisis the Mexicans are spending money?

“The mentality of the Mexican visitor in these times of economic crisis is very different than in the U.S.,” Garcia said. “The people in the U.S. are afraid of spending. But people in Mexico, they are used to economic devaluations, recessions and crisis. In their mind, they are not scared.”

….

Escalante said Mexicans are in a better position to weather economic turmoil because many own their homes outright and do not carry large amounts of credit card debt. “If we have it, we own it and we have already paid for it,” he said.

There is another Point to Make

I have decided that I should stop reading Karl Denninger’s Market Ticker because it’s become a travesty.

Or perhaps it always was a train wreck and I never noticed because I happened to agree with a few of his points relating to the coming economic woes in North America but, this post, was the final straw.

Here are my reasons

1. The ever growing pomposity of his posts and his actions, such as spending thousands of dollars in an attempt to prevent the bailouts he was opposed to and turning a market tracking blog into a political machine.

2. Let’s face it – if Vincenzo can help Fly here allow those of us who like to use gmail accounts, then the argument that KD uses against allowing registration by such accounts (to prevent spam) is kind of silly and very very 1990’s.

3. It’s getting pretty old hearing his old war stories about how he had a start up in the dot-com boom and saw all kinds of shenanigans. I mean, is that supposed to be “street cred”?

4. No more open letters to Congress, Karl. They’ve been marked “return to sender”

5. Come on man, there has to be another way to say “stupid” other than “mouth breather”. Use a thesaurus!

6. You were sort of an interesting vlogger in your tee shirt. When you put on a suit, you scared the ^&*$ out of me.

7. Quit comparing the US to the Weimar Republic – it’s an historical analogy that doesn’t fit

8. KD is using arguments from white supremacists to bolster his world view and his arguments.

I can probably forgive the first seven faults.

The last one? There is no recourse other than to stop reading and completely reevaluate every point that I agreed with him on.

If you didn’t read the post I linked to,  then the executive summary is that he [Karl] quotes Hal Turner, who needs no attention whatsoever. And it behooves anyone who sports the political moniker of “libertarian” to check their sources to because extremism in any form is not only bad for business but, it’s just stupid bad and Karl’s quotation only serves to validate one thing.

Fear.

Now, let’s review point 7 again.

If Karl believes that the US is quickly approaching a possible re-enactment of the birthing of one of the ugliest fascist movements known to mankind then what does that say when he turns around and quotes a living fascist and comments “I don’t like this one bit, it is way beyond “polite discourse” (and IMHO quite possibly into a realm that one should not cross) but it is entirely predictable, and unfortunately, is unlikely to be an isolated incident.”

Entirely Predictable?

Perhaps only to someone who lives in fear themselves. That is the only way that fascism can breed – through fear and the validation of that fear.

Karl’s increasingly apocalyptic posts show that he seems to be in a state of almost complete mental panic.

When he starts quoting nutbags as his arguments, it shows only that he has surrendered to his irrationality.

I have another quote for you all

To be led by a coward
is to be controlled
by all that the coward fears.

Octavia Butler

If things are going to perdition and you are willing to make money, you’ll find a way.

Perhaps you’ll learn to make the trade right in front of your eyes.

Most importantly, the hope is that you’ll take ownership of your mistakes and move on.

And not dwell in the land of the “blame the others” and the “fear of the others”.

If you do, you will not be led astray by lunatics.

The Takeaway

I still like shiny metals and the Japanese yen. Remember, the Japanese know this landscape very well.

Theme Song

[youtube:http://www.youtube.com/watch?v=9aajeb73Ad4]

Comments »

The Qsinator trading system came close but did not trigger a buy entry yesterday.

As it’s still in review, I would not have suggested using a buy signal anyways as it is the Holiday season and the exceptional lunacy of this year’s market seems to be increased as evidenced by The Fly and Chart Addict’s posts from yesterday.

Shiny metals are doing not so hateful considering the decline of the world’s reserve currency of choice and the Japanese are still trying to kill off the Yen.

More on the multimedia version of this post

[youtube:http://www.youtube.com/watch?v=cNJzr3WZFYQ]

Theme Song

I’ll take a break from Theme Songs from Canada to wish a Happy Chanukah today.

[youtube:http://www.youtube.com/watch?v=K4EJfUtYknU]

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