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Wealth Management

The Commentators Are Sheer Idiots

Honestly, who do these market commentators think they’re kidding?

Case in point, listen to this statement, then tell me what you think of it:

“But Spain is in much better shape than Italy, as measured by debt and solvency. Spain’s debt-to-GDP ratio is 60%, about half of Italy’s 120%, according to Nick Stamenkovic, fixed income strategist for RIA Capital Markets in Edinburgh.”

Where have I heard this shit before? Wait, let’s hear a little more:

“There’s a big difference between Italy and Spain in terms of the economy,” he said, noting that the eurozone’s average debt to GDP comes in around 85%. “The debt economics in Spain are a lot better.”

I can almost hear these same voices saying the exact same shit, but only six months ago.

“There’s a big difference between Greece and Italy in terms of the economy…The debt economics in Italy are a lot better…”

Everytime you get these “experts” cherping in on the “special circumstances” surrounding these trash countries, literally within a matter of months, weeks, or even days, they get every word they utter force fed back to them.

Alright then, I’m saying it. Everyone needs to shut the fuck up, right now. I know none of you people on TV know what you’re talking about; you just want to be heard. It ups your sense of self worth. But you have nothing useful to contribute. Here, I’ll send you a telegram:

Dear Everyone, Stop.

If you are thinking of making a comment about the Eurozone debt crisis, stop.

Think about what you are going to say, have said, or might be forced to say in the future, and stop.

Do you know what you are talking about? Stop. You’ll probably put your foot in your mouth. Stop.

Better yet, just, stop. Stop.

Seriously, stop…

Cain.

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Today Has The Makings Of A Washout

EU bulls are being ravaged by a total lack of progress in Europe. American bulls are realizing (just now) that the government is not going to come under control until the bond market forces a default. VP Wang is pissing all over China bull’s faces with talk of an imminent global slowdown that…miraculously…is not going to spare the world’s biggest exporter.

And now the market is slowly rolling over going into lunch.

The last time things looked like this, ERX dropped 26% in one day. But more, the very next day it dropped another 20% +. If things go the right (wrong) way, anyone caught buying this dip will have their throat lacerated and proceed to be strangulated with their own tongue (a feat for a man with a hole in their neck, I’m sure you can only imagine). Commodities and the market could proceed back to where they were trading just a month ago – abruptly.

If this market rally reverses, quaint phrases like “you’re all so bearish so I’m getting bullish” will be etched on your tomb stone as a reminder to the next generation.

Proceed with caution.

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Super Committee Failure A Dumb Excuse To Sell

Come on, you can’t really care that the “all important” body couldn’t come to an agreement? I mean, what does that say about the state of mind of people; who in their right mind thought that the super committee was actually charged with cutting anything to begin with?

I told you all back in August, the super committee was Democrats pulling the wool over the tea party. They won a huge victory that nobody seemed to see.

Game. Set. Match.

By the numbers, the tea party should have gotten everything they asked for. At the very least, they should have gotten something. But instead those retards traded a huge majority for a 50/50 voice on an asinine committee that could be overruled at a later date.

And oh yeah, failure meant the axe is to fall on all of the tea party/Republicans favorite parts of government. The Democrat’s entitlement programs weren’t even in danger. Brilliant strategy…

It was a rookie move led by freshmen Congressmen. They fucking lost months ago.

The world wasn’t really expecting anything from this, was it? It’s bad enough you all bought into the EFSF garbage, but the super committee too? Why doesn’t the market sell off next on news that the U.N. is a bloated and ineffective body that doesn’t accomplish anything?

Blimey, nine out of ten of you need remedial aid.

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I Humbly Request Assessment Of Your Skills

Sitting thoughtfully in my 9th floor office, I put pen in mouth and reconsidered my choice of words.

When I began writing this, I thought I would entitle it, “Is That All You’ve Got,” in a plainly mocking theme. However, looking back to the start of this rally in October, I don’t feel entitled to mock anyone.

I missed out on a brilliant opportunity, mostly because I didn’t believe.

I still don’t believe, actually…

But that doesn’t give me grounds to slap around the market after a two day selloff. If or when we get back to $80 crude oil, then I may get a little…boisterous. But for the time being, I should probably just keep quiet and avoid being too much of a windbag.

Still, it is reassuring (in a negative way) seeing things turn around so quickly. It’s one of the main reasons I just can’t get myself to fully let loose hedges. If and when we turn, it will be so fast there probably won’t be time.

So while I really do wish I hadn’t lost money during this rally, I also don’t respect it enough to wish I hadn’t had the coverage.

This weekend I will be keeping an eye out for news from Europe. I’m hearing too much chatter about the Germans for my comfort. Everyone knows it’s their move, but the clock is winding down and naught.

Now enjoy your break, dear readers. Savor it; it will be only a short time until our next 9th floor chat.

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Must Be Nice

The ECB floods the bond markets with fancy new euros on debt that has a 50/50 shot of not being worth the paper it’s printed on, and the euro rallies?

Damn, wish we had that kind of setup here. Hell, we have the opposite problem. Our currency isn’t being weakened at all through policy, yet bat shit crazy forex traders pump it if Bernanke’s lip quivers or his eye lid twitches.

I know the argument: “WELL…good chum; the euro is presently pricing in the collapse of the EU. So-oo MO-ST obviously, printing increases confidence that the EU will not collapse, and gives cause for it to rally.”

Sure it does.

You can’t tell me the euro is pricing in the complete dissolution of the EU at a calamitous 1.35. That’s barely the bottom of the range of values its hit over the last two years. And, frankly, I don’t know anyone who thinks the EU is going to breakup. In fact, I don’t know anyone betting on any countries leaving the EU right now either.

You want to know what a euro would look like that’s pricing in a major split of the EU?

Try something like 0.80.

Maybe a 0.90 would even be representative. You can bet your ass it won’t have a 1 in front of it. An EU that the market accepts is imploding on itself will not have a currency stronger than the United States. If you’re betting the euro rallies because of something as intangible as renewed confidence, at these prices, I guarantee you you’re early and asking for a beating.

Really, we’re at the point where lost economic activity and the immediate demand for money all but ensure the euro continues its slide. While internal demand for euros has never been higher due to debt loads, they have zero incentives for foreigners to buy in; there’s no good opportunity associated with holding European notes. If the EU had wanted to avoid that outcome, they probably should have done something about it two years ago, when the seeds for this crop of weeds were planted.

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A Lovely White And Lurid Red

As I enjoyed a burrito for lunch in my office, I noticed the lighting was more shaded than usual.

Turning my chair to face out my balcony window, I was met with the sight of a snow flurry dancing across the glass.

Of course by now, it has all dissipated. I don’t expect to get a real snow that sticks for at least another month. We’re in for an unusually warm winter, if the Farmer’s Almanac is worth its salt.

The jovial white outside did clash something awful with the bloodshed that was taking place on my screen.

I’ve lost quite enough money betting on the wrong direction, thank you very much. So if it pleases you, I’m not going to use my last bullet yet. I’m going to be patient, and wait to see if holiday cheer can overcome these serious developments in Europe. I wouldn’t be surprised if they do.

But I also told you days ago that if this market were to do anything, it would be to build up your hopes just so that it could body slam you over a frozen manger, then impale your head on a Christmas star.

At this point, I don’t think there’s anything I can do to crawl out of the 25% loss hole I flung myself into. Any huge correction in my oil and energy short positions will probably be met with equally painful drops in my longs, if things stay this severe. But because I’m short, my cash position will steadily build, providing reserves that will become deposits just as soon as I cover.

The big game plan is to turn those around at the bottom and put them to work cost averaging my existing positions and maybe taking up a new one or two, paving the way for massive gains going forward. We’ll see if things work out that way.

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