Believe me, it crossed my mind. But I’m not going to bite here.

Part of that is because I have quite enough to contend with already in terms of volatility. But besides that, this isn’t a clear buy, even with the price of Volkswagen paper down 50%.

I tend to love playing the distressed buys, but my preferred environment is different than this. I make investments in names like Anadarko Petroleum following a major accident where I could reasonably conclude there were legal protections they could hide behind that the market wasn’t factoring in. Or in companies like Ruger after some kids get shot at school and investors vastly overestimated the influence of the anti-gun lobby to spin that straw into gold.

But here everything smells wrong. The company is down big for a reason; yes the idea that governments can mandate improvements in something like engineering is fucking stupid, but they took it a step too far.

Maybe they’re not the only ones either…

We need to let this shake out. And understand that with Volkswagen, there’s no front stage guy who’s going to get the blame. No legal barrier tap and dance that slips them out of harms way. No secret save coming here.

The German government will probably protect them to some extent, but this is a big blow to them. The Germans have been huge on this green crap, public sector financing of it and all. Now, their native sons have taken a piss on the front door.

Sit it out, grab a bag of popcorn, and watch the environmentalists desperately try and erase any lines drawn between this and their regulatory initiatives.

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From the heights of the 9th Floor office, Cain Hammond Thaler glares out across the sky. I tear the shirt from my back and roar out with fury, the sound of my rage crashing against the landscape, echoing back at myself, carrying meek messages to my ears.

Cain mocks the gods, and dares them to continue this beating!

I was going to post some real bearish doomspittery …I’m talking about some seriously depressing DOW 0 lamentations. I was going to strip you of all hope and send you into the barren dessert on a 40 year pilgrimage of woe. Self-flagellation and tears were to be in the plentiful supply; cheer and optimism nil.

And then I looked up the DOW going back as far as I could. I looked up the S&P going back as far as I could. I looked up the NASDAQ too.

How weak are we!?

What is this selloff, next to seven years ago? We are having a little bear market because we get a bear market about every seven years with very high confidence. I know this, because my initial strategy from a few years ago was to be in cash by now…before I got ultra greedy making 200% in oil stocks and charged head first into my own demise. I’ll find the posts later where I laid this out and link to them.

The prophesiers of doom keep reading those burned entrails, more insistent than ever that their last 1,000 failed prophesies are just circumstantial. Not evidence of anything.

In 2014-15 yes it is true that the wall of our home has sagged in. In 2009, the roof of our house collapsed on our heads. Tell me, what terrible unforeseen disaster has the market missed which equates to that? Why am I expected to run screaming from a little wall which needs propping up when I already experienced the whole thing coming down on top of me?

Black swans happen to comfortable people in states of sloth. This market has been hyper alert, looking for the next BIG ONE every day for seven years. How afraid can I be that we’ve missed something huge when everyone is constantly looking so hard and so diligently?

BIG ONE happens when you aren’t looking. When practically no one is looking. When rules of thumb become adopted as incontrovertible LAWS OF THE UNIVERSE. Where is any of that happening?

Even such staples as “don’t fight the Fed” are questioned daily. There is an entire 24/7 cottage industry dedicated to fighting the Fed. Nothing they say is taken seriously and we have had frequent periods of high short selling going back to 2008.

With so much energy dedicated to inspecting the structure and so little commitment one way or another in terms of outlook, how do we have the potential to collapse?

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I admit it; you had me pretty worried there.

What with oil prices plunging to lows not seen since last the entire planet was on the precipice of economic catastrophe. Yes, I was sweating…profusely.

But now what do we have here? In less than a business week, oil is back. My stocks are roaring back to dead life from a state of living death. It’s not much, but at least the putrefaction is under some amount of control.

For the moment, I am not putting any of my cash reserves to work. I want the dry powder in case we go Mad Max again.

But this is constructive. Greek 10 years are yielding 8% again. China will get it under control, much to the dismay of Zerohedgers. It’s not difficult to take away freedom from people who barely have any to start with.

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Effective immediately, the 9th Floor shall be converting itself into a bond trading desk.

Under martial penalty, every comment made herein must contain in the least sense an oblique mention of at least one of the following terms:

1) Coupons (shopping excluded)
2) Face value (sexist remarks made in good fun will be admissible)
3) Maturity (not in the passing of the prepubescent into adulthood sense of the word)
4) Yield (no crop talk)

Effective immediately, every other post will just be a chart of US Treasuries.

Welcome to hell, boys and girls.

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I have bad news for you, which is that if we’re going to judge this on the level, the market is pricing in recession.

I know it sounds bad, but that is just the way things are. This is no longer about the Eurozone; even Greek debt has come back in. The EURUSD is back above where it was. Greece has been bailed out again. The entirety of the Eurozone crisis fears that were occurring at the beginning of this meltdown have subsided…but the meltdown endures.

China took that baton and is running with it. And I am sure there’s a Brazil or Vietnam in the wings waiting for their turn next.

Energy pricing is – collapsing is too weak of a word – I don’t know how to call it. Oil is gone. Coal is gone. Nuclear is gone. Solar is gone. If you’re looking for a leading indicator, that may not be an optimistic one.

I don’t know. For the moment I’ve got enough cash to be composed about this, but these are tremors we haven’t felt since 2011 at least.

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The wind rushes through the curtains, which cloak my 9th Floor office from direct light outside. The summer air is fresh and warm.

So here’s my review of the week; it was strange and fit perfectly in line with the year we’ve been having.

A Bloomberg article speculating on the looming bankruptcy of Saudi Arabia touched off a fierce rally in oil names, while oil itself continued to have the icy hand of death caressing its forehead.

I’m not exactly sure why you would speculate that a country which has no national debt to speak of would be at risk of going bankrupt any time soon. Certainly, the perseverance of US oil drilling is a thorn in the side of the Saudi’s. But those of us here in the 9th Floor had already worked out that might be the case.

The Saudi target was either their other OPEC members or else they just wanted to hang up future well development. In either case, that mission seems accomplished, and what we are seeing – finally – in media is some resistance to the idea that oil prices should go any lower.

Sure we’re all manic depressive now, but these are good signs. Oil will be back to $80 just as soon as we figure out where to put it.

I know I’ve had been in a black mood all year; but not all is going wrong with Cain Hammond Thaler, have no fear of that.

OMAB continues to experience traffic growth of about 16% per year. It’s come down a little from earlier but that is still strong and the stock should continue to outperform.

TIS was a newer position which took a bit of a 30% spill when I bought it – oops – but I liked to the name so I held on. We’re back above $26, reaching for break even and the company just announced sales increased by 45%. Income per share is up 37.5% year over year and unless I’m misreading something, that is coming straight from product sales – no financial gimmicks to speak of. I need to dig in to the numbers a little deeper to be absolutely sure of that, but for the moment I’m pretty pleased.

TIS is one of those names no one has heard of with a really boring business that is going to make me a lot of money. They make toiletry paper products, something South America is going to be in high demand for as their banana republics keep folding.

And ALDW is playing the part of the faithful hedge, now up 32% since I bought it elevated by lower oil prices and stable gas prices at the pumps.

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