Alright, it seems like the benevolent Tea Part folk have decided to share their complete inability to grasp simple concepts with the world, by forced contrition on the populace. It is time to eat our peas. Following the line of Obama’s hatred for those damn jet plane flying 1%-ers, the Tea Party have chosen to one up him, by destroying the 1% in its entirety. An unfortunate and slight side effect may be to destroy the other 99% of the country in the process, but hey…sometimes sacrifices must be born for the good of everyone. So making moves for the ill of everyone is the only logical course of action.

In an attempt to honor Argentina’s dim witted socialist president Fernández de Kirchner for her blood clot, the Tea Party have magnanimously extended a show of us revisiting that countries darkest moment, a point from which it has never recovered: elective default.

Remember that one time the global economy nearly collapsed because a single line of business for US banks bet large sums of money that non-creditworthy citizens would default at abnormally low rates in exchange for paper thin margins on those loans?

Well the entire global economy and all of finance has bet gargantuan sums of money that this non-creditworthy country will never default for no fucking margins.

By all means, how do you think this ends?

Frankly, I don’t care anymore, and am all in. Lay your neck under the axe, and taunt these pussies with all your hatred. See if they have the sack to swing.

What’s the alternative? You can turn all short doubling your money with the end of civilization, just in time to burn it to stay warm? You can barter that paper desperately for some precious metals that aren’t for sale? You can get shot by rioters and have it taken off your corpse?

Because if we actually default, it’ll be to late to go out and prepare. Just think of all the mechanisms that are tied to treasuries. There will be bank failures. And a slow, agonizing process as US spending on interest careens towards $1 trillion annually.

In the meantime, staying in our means would require we basically slash in half one of the following:

The entire defense budget OR
The entire non-defense budget

The point of the matter is that if we default, this place is going to get so screwed up anyway, what does it matter? At some point if the decision were not reversed, the man you know as Cain Hammond Thaler would simply cease to exist. His 9th floor office would be deserted; the only clue that he was ever there at all being an empty safe that used to house his silver and firearms and row upon row of cleaned out bookshelves.

I would simply take up my favorite pocket watch and walking stick, and slip away into the night…never to be heard from again.

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Earlier this week on Twitter, I was no less than accosted by a deranged individual for suggesting that I would very much like a surprise Bernanke additional term. This man has dedicated himself to the proposition that we are on the verge of a near total collapse of stocks, insulting the “dip buyers” for their “stupidity”.

Amusingly, his handle was a Sesame Street character dead on the sidewalk, shot in the head.

This is fitting, as this clown has just had his skull split wide open. This is what you get for being a jackass.

How can there possibly be shorts left alive anywhere? Where are you hiding, or what pathetically small positions have you taken on that you can still get off calling yourself “short”?

The status quo has prevailed again. This charade went a little further than I thought, but it was still just a charade.

My only hesitation here is that the implementation of ACA may shock a weak recovery. I will hold a 20% cash position at all times, because of this reality. But make no mistake, I am long. Christmas is almost upon us, and Janet Yellen is a printing psychopath.

Now if you can excuse me, I have an obsene amount of money to make.

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Let’s suppose the absurd happens and we have a hard default. This would require us to ignore that Boehner knows damn well he has enough votes (Democrats plus the moderate conservatives) to pass a clean budget.

What then?

Where do we go? Because I can tell you, if the US treasury is no longer the gold standard of finance, we have bigger problems on our hands than our account values alone.

Let’s say you short this market to zero. What then? What do you plan on buying?

The treasury bill is the blood of global financial transactions, no less so than the dollar. It’s on every continent, in every country, lurking in every market, of the open or black variety.

It’s absolute craziness, I know. And now is most definitely not the moment to leverage.

But when the time comes, do you have the will to dismiss the doubt and go all in?

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Okay, so the market shattered into the close. And now we will see real blood. Not the pretend variety that has haunted us since August.

I don’t know why I decided two months ago to start edging long. It just sort of happened. If I were to be honest, waiting for a correction all spring and summer wore into my patience.

Here is the manifesto I laid out last November. It was supposed to guide my hand unwaveringly.

And then I wavered.

So now I find myself a little more than 80% long, when I was just 50% a few months shy of this. I’m still up for the year, but have had give back.

What to do, what to do?

My guess is we are long overdue a 10% correction, to test the faithful.

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There have been many calls over the last five years for a return to growth. They have all been predominantly off the mark.

However, I am willing, finally, to put my own reputation on the line and say that we are within two quarters of actual jobs growth and, perhaps, a sustainable and well needed uptick in manufacturing and services.

It is possible that I am simply being biased here. However, in my own little bubble, I am beginning to see real signs of growth.

Michigan is coming out of a thirty year maelstrom of economic catastrophe. Around the Detroit area, I am seeing revitalization as I cannot remember when. At my own place of work, suddenly, without warning, I’m having competition for parking spots. High end consumer shops are opening selling luxury furniture. Buildings are sprouting up like daisies.

It’s quite possible this is simply a mirage, as I have said. What I’m seeing may be interfering with the big picture. But when Michigan can have positive developments, I think it bodes well for the rest of the country.

Look past the immediacy of the government shutdown and looming debt ceiling. On the horizon there are finally some clear skies. If we can get to the economic prosperity growth cycle, the chatter about earnings misses and economic headwinds could all be left in the dust.

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At the beginning of the year, I stated emphatically that we were no closer to a recovery than the year prior. I further added that we would see a summer selloff that rocked the markets and shattered talk of the looming “2 quarters out” growth acceleration.

Well, summer has come and is very near gone, and it has not happened.

Thus, I must say that I was wrong.

I am not apologizing to the people I ridiculed, mind you. Because these people have just been repeating that we were 2 quarters out from a recovery every quarter for four years. In fact, I would say that this is the first time I guessed a summer market fallout since 2010 and haven’t had it materialize. Ask any gambler, eventually you hit the slots; but it doesn’t make you brilliant and rarely makes you whole.

But that doesn’t excuse my being wrong about an unmistakable market selloff. Now, we’ve had a lot of turnover, and personally I’ve experienced selloffs in my holdings over the last few months, which I have graciously taken advantage of to apply cash to add to positions.

But, we all know very well that when I said “market selloff”, what I meant was “market selloff”. Not, “turn over” or “sector rotation”.

Pleasantly listening to old records on a gramophone, sprinting over the walls of my 9th floor office, I’ve been catching up on the news.

The Syria warmongering remains nonsense. Not only do we not know who set off those chemical weapons, but even if we did, it probably wouldn’t change anything.

Consider, if you will, that the Iraq invasion was initially supported by 62% of the public in 2002 according to the Pew Research Center, while 68% of the House of Representatives approved the resolution, as did 77% of the US Senate.

Today, 9% unconditionally approve moving on Syria, while 25% approve moving on Syria “if Assad uses chemical weapons”. While this has confused some pundits, who are asking around the blogosphere, “hasn’t the US already said Assad did use chemical weapons?”, there’s actually not a contradiction here. It’s just that 16-25% of Americans, depending on the polling questions and methodology, don’t trust the US government or our intelligence apparatus to throw a stone, and think our leadership is full of shit.

Meanwhile, a solid >75% of Americans don’t care about Syria.

In summary, support for a Syria intervention could be swallowed whole by the initial surge of support for Iraq, between 2-8 times over, even though Iraq was, I am told by certain reputable acquantainces, unconditionally “THE WORST THING TO HAVE EVER HAPPENED ANYWHERE EVER”.

Back to the world of business, I am encouraged by the growth of jobs and seeming resilience of the US economy. I would still recommend having a slightly larger than normal cash position, but surely not the 50/50 allocation I was pushing earlier.

Muni bonds are getting slashed, but that is to be expected. Other than that, signs are holding up that there may be favorable outlook. Michigan itself is doing great right now, as far as manufacturing and engineering are concerned, the dead wood leadership of our cities has been set on fire, and I find I’m more optimistic than I’ve been in a while.

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