I’ve decided to make a vacation of this week after Christmas, and don’t feel like staring at the stock market. There’s little I expect to see this week anyway. I want to watch what happens after people get back from their drunken holiday stupor and I definitely want to see what happens with this debt “hail-mary” that is being developed.

I’ll try to drop in once a day; and I’ll be working on updating the Talir Index (it’s a brutal travesty, but I’ll display it anyway).

Looking forward to a better (hahaha) 2012.

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The ECB just added more than 400 billion euros to the equation, and got yields of European debt jumping across the board in response, so you think it’s a good idea to buy stocks and commodities?

Now Cramer’s talking about some mythical snake that eats itself as the solution to all the world’s woes.

How bad do you think things were, if the ECB felt the need to drop that much money? How close were we to the edge? Do you clowns even think about that, when you’re pounding the buy orders or dropping snarky remarks in my comments section?

This is not an easy tape, and if you’ve managed to make money, I salute you. But don’t pretend like you’re brilliant for putting your head under a steel press and making it out alive, either.

Here’s the deal: if the ECB decides to force a rescue through the banks, we’re going to wind up with a European banking system that’s more levered than any other time in the history of the world. It will be colossal, and in order to make it a happen, between then and now a lot of regulations like capital requirements are going to have to get bent or broken.

I’m not convinced it helps, but sure, if they manage to spread out the debt over the course of a few decades, I will stop actively hedging myself and betting against a collapse of energy prices. I’ll take my lumps and move on.

But the euro is most certainly screwed. I don’t care how many people are betting against the euro, if the ECB keeps dropping money like that they’ll all be justified. And if they take the strikes against their currency to far, you will regret ever playing the long side of this market. Euro devaluations do not fundamentally aid commodity prices save where they create new demand; they definitely hurt the American economy; and they embolden the U.S. dollar significantly a.k.a. that thing that oil is priced in.

It’s possible that the currency swaps the U.S. has provided will create an out. But remember that Europe needs those euros in circulation if they intend on rolling over their debt. Burying new money in America is of limited usefulness, if the people in Europe can’t afford to let it go.

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Only boyscouts like swiss army knives. Everyone else thinks they’re crap.

Sticking with my theme of not caring about the market today, I’m going to go on a small rant that may or may not be intricately related to what I’m doing at my job this week.

You see, some of you business owners out there have this curious fascination with “technology.” Technology is like a mythological beast to you, which brings rain, gold, and sometimes a combination of the two (golden rain).

There’s only one thing you love as much as technology, and that’s secrecy. Secrecy is sexy. It sets you apart, differentiates you from the competition. Nothing is so attractive as “secret methods” to sell to your target market.

And when you marry those two great loves together, you get a bastard child so terrible I can barely look at it without vomiting: internal software.

Internal software is the epitome of love affairs in your modern day firm. It takes some menial process, analysis, or intellectual product, and codifies it with the goal of giving absolute control of that action to upper management, while at the same time retaining the mystique of the process. Which of course means that the development of the code to run this system is typically left to the oversight of as many of two individuals, who work on it when they aren’t busy playing minesweeper or reading Wikipedia.

As if the development of such a tool weren’t already hopelessly facing against the odds, these secret technologies tend to accumulate as the diversity of the firm grows. Think of them as strands of fiber; you have thirty or forty unique jobs you’d like to do, which should all be accomplished by this technology, which do to its sensitivity only a few trustworthy men and women will ever be allowed to work on.

Individually, each of these threads may work fine. However, in the process of weaving them into a tapestry, it is very unlikely that “best practices” of software design are going to be utilized. Think object oriented programming or function creation.

You get people with a tentative understanding of programming, who otherwise would not be working in any business that specializes in computer software, writing code. And they tend to write code by hardcoding and forcing outcomes, which makes the tools very fragile, rather than building sophisticated, malleable programs that can handle a wide arrangement of uses.

Basically, as each of these threads is forced to interweave with one another, they tangle and fray, and time and the elements weather them into a nearly unnavigable Gordian knot. Any usefulness of solving this knot is suspect, as the investment of time needed surely outways simply starting over from scratch.

In summary, I am staring at just such a travesty now. And like Alexander the Great, I feel as if I have little choice but to simplify the whole mess by cleaving it in two, much to the sorrow and outrage of the priests who have presented it to me.

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When I started writing on here almost one year ago, I made a declaration of promises, which included regularly using charts and graphs (pictorial instruction) and updating my performance (I have yet to publish the Talir Index for the last 3 months). I’d scold myself, but since I’m the only one with the power to grade my own commitments, I’m just going to give myself an A and move on, as if I were the New York Board of Education.

Actually, publishing my results for the 3Q would be mildly misleading, since my account started blowing up the first week after it ended. Much like if Saab were to publish financial results for the viewing pleasure of their shareholders, at this stage in the game I’d hope nobody cares that I’m not going to waste my time and will instead just look to the year end.

At any rate, my posts continue to be largely dominated by words and not graphics, because I like and prefer words to graphics. I understand some of you learn almost exclusively thanks to pictures; just like I understand that most people prefer movies to books. But you should know that I ridicule most movie goers when I’m forced to mix with them, so maybe it’s better for all of us if you grab your reading glasses and shut up.

And why am I penning a post of self-assessment anyway? Well, mostly because there’s no point in doing anything with this market right now. I haven’t been busy analyzing individual stocks or doing studies of economic trends because those things are pointless right now. Europe is such a looming issue, doing anything else is akin to hiding under your desk while a nuclear bomb is dropping down on your position.

Frankly, I’m not going to waste my life debating the potential value of “this”, or the dividend potential of “that”, or the severe mispricing of “what-have-you” when a such an obscure thing as a mood shift in fixed income investors could send the world cratering and cause a continent to unravel.

No, rather, I will be sitting here in the 9th floor, sipping on an Old Fashioned while enjoying myself and staring down the coming nuclear winter like it doesn’t concern me.

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But you will leave crude oil. It belongs to me now.

Get ready, ladies and gentlemen, because all the cards are lining up again, just like they did in August.

You have to accept something; industrial commodities cannot rally with Europe cutting off 2% of its body every month. That is unfathomable.

America notwithstanding, Europe is the biggest economy in the world. And even if I can somehow cheat myself into believing America will completely shake off Europe’s woes, that still leaves Europe dropping more than 10% of itself over the course of half a year.

And they have no plan to counteract this at all. They are strangling their citizens in austerity; I’m sure that’s going to get industry humming along again real quick…

You are all in for a real treat; you are about to witness first hand why austerity doesn’t work. Actually, I don’t think anything “works” in this situation so don’t think I’m advocating money printing or Keynesian economics either. Both routes are pretty stupid.

My opinion is that Europe is pretty fucked here. A lot of people own the same park bench, and only one of them is going to get to sit down. So now things are going to get real messy. The only true path to avoid this is to not put children in charge of your central bureaucracy to begin with…you need to steer clear of this outcome altogether.

But we’re past that, so now someone’s going to take a hit, and the numbers seem to suggest that that hit is going to be at least the magnitude of half the total outstand currency in Europe.

Or, more likely, a few select groups of “lucky” individuals are about to get wiped out, perhaps by money printing and selecting other “non-losers.”

But those wiped out individuals will be labeled, “thieves” or “evildoers” and their leaders (maybe CEOs, maybe activists) will be carted off to European prisons, so no worries. They will receive two hot meals a day and be afforded all the luxuries of cheap mattresses and one hour of exercise in the afternoon.

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This is exactly what I’ve been looking for. I don’t know why oil was able to run from the seventies back above a hundred bucks a barrel. I honestly confess I don’t understand it at all.

But it did, and I lost a ton for not respecting the move; first in huge profits I had accumulated, and then in principle.

But today brings me new life.

I had already gotten excited again, listening to first T. Boone Pickens, and later other analysts and commentators, starting to remark on the silliness of crude oil pricing where it was. I had just capitulated barely a week earlier, with the European news, and was setting up for an end of year Christmas run higher.

But after that short time, things just didn’t feel right, so I reversed again. It’s dizzying, I know, and may seem like a flip flop. Call it what you will, I still believed in the logic of lower crude oil and my heart just wasn’t in the switch.

So I put the short back on, this time by buying SCO and ERY rather than outright shorting. The results so far have been good.

And today, with crude oil collapsing as the rest of the market rallies, I’m getting what I hope is a first glimpse of a new mindset for the markets. They are coming around; it doesn’t matter that everything else is rallying because crude oil should be priced lower.

When we start to see oil regularly dropping in a rising market, then I’ll know that crude will be going back to where it was in September.

Between then and now, I’m going to make my short bigger again, because that’s the quickest path to recovering my losses this year and swinging back to new highs.

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