Look at the sources of the bailout rumors that are hitting this weekend.

The €545 billion splurge by the Fed on EU held MBS paper came from a fucking survey of dick holes with no visible channels to the Federal Reserve. Accompanying that rumor was an equally audacious lie about a €700 billion plus bailout just for little old Italy.

The European Stability Treaty sounds exactly like the the EFSF, save now it has an extra layer of hoops it has to jump through meaning it takes even longer to implement. Because things were so expedient we had time to spare, eh?

I would be more inclined to listen to this horseshit if it weren’t the ninth round of totally unsubstantiated hearsay. Fuck everyone; until I hear Bernanke say we’re getting a bailout personally, it isn’t happening.

In my heart, I just cannot believe that some stupid little bailout found stands a chance of easing this crisis. It is massive and front loaded. All this debt comes due all at once. How do you print that much without crushing the economy at the back end?

It’s like not balancing a check book. It doesn’t matter that you change your habits if you still have huge swaths of outstanding checks. Nobody cares that you found Jesus when the next one bounces.

I hope all finds you well, after a filling Thanksgiving day.

My own day was very festive, with a sumptuous meal that started around two post meridian and seemed to last until well after five. It was everything you could ask for, with our family spread out about dwelling areas; the kids rough housing while the parents caught up with one another.

And for the most part, I was good about avoiding work. I only snuck up to my study twice; once in the early morning and once around 4 pm.

What I saw was not so cheeful…

Europe was on fire most of yesterday, and it appears as if the flames have continued to burn through the night and into today. The euro is deflating and quickly. My EUO position is pushing closer to $20 in the pre-market. Gasoline and crude oil are also trading down.

I will be monitoring the situation periodically throughout the day. I have a list of tasks that I need to attend to throughout the morning and afternoon, so I will not be consistent. However, I will make it an effort to return to the 9th floor before the close.

I sold all of my AWK position, and my small GSVC position. Then I added ERY for $15.19.

Do not tempt this market; I know volume is light but that blade cuts both ways. And the market is most definitely NOT pricing in trouble in Germany.

Buy the dip and have a spear chucked through the chest of your first born son.

What an awesome series of manufacturing reports coming out of half of the developed world. Damn, I just cannot fathom why I ever doubted the rally in crude oil. I mean, Germany and China only saw the largest contraction in manufacturing utilization since 2009.

And to top it off with whip cream, Germany of all places could not sell three out of ten of their intended bonds. I mean, if Germany cannot issue debt, who can?

Actually, on second inspection, the Germany news is almost too ludicrous. Is this some sort of conspiracy? Or perhaps a bad joke?

Maybe some financiers got together and decided they’d add the spice of panic to the Germany recipe, hoping that Germany would rethink its “no money printing” position?

Well if they did, they’re completely crazy. The only way this news will be received is as I first phrased it; the failed Germany auction will cause all men and women to ask “if not Germany, then who?” Already, the yields on notes across Europe are jackknifing higher. And Merkel hasn’t changed her rhetoric in the slightest.

She already came out today supporting the ECB and their tight fisted approach.

Ladies and Gentlemen! Boys and Girls!

We are in trouble.

I hope you’re using this opportunity to shed those pesky long positions. This rally was sparked on a rumor of IMF intervention. This feeds into the line about the U.S. economy (and the good Dr. Ben) raining paper products on Europe and saving the planet by throwing ourselves on the global debt landmine.

Fat chance, folks.

Upon hearing word of this announcement, I leapt up from my office and ran out of the 9th floor, searching for the source. What I didn’t find was any sort of big pronouncement from the IMF itself.

News of this seems to have come from somewhere close to the Wallstreet Journal as they are the only publication I found, thus far, that mentioned it. But let’s roll with it and say the WSJ did its due diligence, even though I have no idea which IMF official announced the program.

The lines themselves are uninspiring. 500% or even 1,000% of quota is impressive sounding, until you define “quota”.

This lifeline is worth barely more than $60 billion to Italy. It’s worth about $30 billion to Spain. Funding wise, that’s probably enough to keep those two countries on their feet for 6 weeks, according to Zerohedge’s envelope math.

The amount of funding in time that this provides to the European debt problem is within the margin of error I’d associate with guessing how long Europe has before a meltdown to begin with.

Woah, unthinkable! U.S. GDP estimates were too high by 20%…that we know of. Incredibly, the number has been revised downward substantially. This fits nicely with my world view of statisticians being low-intellect monkeys who are too lazy to do actual investigative work. Mind you, I’m a student of mathematics, so I have no reservation in trashing some of the practices.

I have a nasty hunch on how this happened, and it all has to do with “trend analysis” and “time series.” I’ve watched the proponents of this crap first hand; I’ve sat through their lectures, read their books, looked at some of their work; and it is always the same error.

Statistics, in its truest, purest form, is simply a variation on counting. Statistics can be used to give a picture of current starting points, which is subject to error. When used appropriately, statistics can tell us how things look now…NOT what they are going to look like. The results of this exercise in linear relationships can be fruitful. However, trying to use statistics to smooth out complex behavior like that found in non-linear systems (stock markets, ecosystems, competition relationships, etc…) is a fools errand. The same problems inherent with analyzing those systems to begin with are still very much present when you try to, say, run regression over top of them…

You see this common misconception regularly, with people trying to use trends on statistics to predict things from population growth to temperatures to the cost of crude oil. It’s lazy.

Where a dedicated student would attempt to understand the behavior of the system – how things interact and what determines those interactions, using statistics only to calibrate and measure – a pure statistician takes some data, throws a mundane formula at it, and then declares all sorts of stupidity. The greek symbols have gotten prettier, but the logic and reasoning haven’t gotten better.

It makes you wonder why we let these estimates get reported at all? They aren’t useful. In fact, they build expectations and create wild mispricing. Would it have been so bad to wait an extra month and find out that GDP was only 2%, and not 2.5%? What about ADP’s huge mishap earlier this year with new jobs?

Are you all so desperate for an edge you’re willing to subject yourself to such questionable practices?

If you really want an edge, take a step back and stop taking these estimates for gospel. They’re so manipulated, so poorly conceived, so incredibly sensitive to error, and ironically so intensively followed, that one of the best things you can do to improve your performance is to tune them all out. Wait for the finalized results, and only pay attention to that.

The rash and immature chase mirages. The wise follow their nose to the water.