Have no fear, small cretin, for the hallowed hour of the market approaches.

What hour is it that so yields gifts to all of mankind? Why it is that coetaneous lapse of time on all open market days before the buying occurs, of course.

All praise be given to two post meridiem!

That most sacred hour when glorious buy orders appear from nowhere to shower the land with milk and honey! When villains who short stocks are smitten with thoughts of their fellow man and cover themselves in humility.

Watch and see how the market will upsurge on naught! How the many lines on the screen will align and all will be well again. Follow the lines and buy the stocks, then dance on your shitty, polymer desk tops.

Quick, castigate the non-believers and consecrate your portfolios!

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I understand the temptation for you here is to put your head in the sand and ignore what is going on in Europe, but you really cannot afford to do so.

Consider that in as little one week, two European governments could be toppled. The first, Greece’s, has already transpired. And Italian stooge Berlusconi could be gone as soon as the end of the week.

It is tempting to think of these things as positive development. Berlusconi is blatantly corrupt and Papandreou was, succinctly, a moron.

However, please remember that the timing here is terrible. The temptation is going to be for the political adversaries of these two men and their parties to step in and attempt to seize power. That could take months.

The EU will not be giving money to countries without political leadership. These massive transitions are occurring at a time when Italy and Greece cannot afford to waste time; Greece will default before Christmas, if they can’t get funding cleared, and a massive power restructuring could shake remaining confidence in Italy, breaking demand for their bonds and throwing their situation into a true crisis.

In addition to these issues, I came across some musings of another who pointed out, correctly, that the parties that replace Berlusconi or Papandreou could be much worse. Berlusconi, for all his eccentricities, is pretty moderate, compared to the hard core socialists who are waiting in reserve, biding their time, looking for an opportunity to ascend.

Read up on the confiscatory executive orders of Italian history, and understand that as bad as Italians are about paying taxes and keeping account records now, things could get significantly worse.

Basically, I’m still not seeing anything that justifies the rosy market valuations right now, nor do I see the opportunity for growth and progress that could get us to those valuations developing any time soon.

Back in 2009, I was betting against the market rally for about the first two weeks to a month of it. But I smelled fire and switched hard. I am not seeing the smoke here that indicates the economy is about to roar to life. And without those accompanying developments, I just cannot cover my short in UCO, or stop betting on the dollar.

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Really? REALLY?!

How many times are you assholes going to buy the same fucking news? Oil prices ripped off the lows on news of a Greek bailout. Then the Greek bailout was suspect, so people bought oil on the hopes of a Greek bailout. Now we have news of another bailout so people are supposedly buying oil on that.

In the U.S., we had a massive build of oil reserves, and have actually started exporting oil. So I get to hear dick journalists talking about the “sense” of higher oil prices because our excess is flooding overseas; you know, constricted local supply, I guess…

Yeah, just keep bidding it up, that makes a lot of fucking sense. I get what’s really going on here. This is a game, where no matter what happens, you contort the shit out of your body and spit out some dumb remark to justify higher oil. It’s not hard to see what you’re doing.

Fuck you.

Today U.S. Treasuries were bid up an enormous sum. Why? What scared bond investors so much that they pushed the yield on the ten year note all the way from 2.05% to 1.96%? You don’t even care, do you? Because you’re probably one of the thousands of traders who casually ignored such a warning sign to circle jerk this market higher. Like a fucking light switch…

The Italian 10 year bond yield is right now closer to 7% than 6%. What do you think the EU is going to do, when the ability to finance their member’s debt through private offerings is totally impaired? They barely have a snowball’s chance in hell as it is to raise all the money, and now the largest source of liquidity in the world – private funds – are abandoning Europe like it’s 1999. I mean, I expected Italian debt could spike without invoking too much concern (EFSF miracles, and all that) but a one day 5% rise? Will the market care when it’s 7%? What about 8%?

You can bet Germany is going to care. So why the fuck don’t you?

I don’t know when; I don’t know how. But I do know that I’m in the right. You do not have a recession in Europe and not have cheaper crude oil. You do not have a stronger dollar and not have cheaper crude oil.

It. Does. Not. Happen.

And when that day comes, where you finally get what’s coming to you, I will take the time out of my busy schedule to piss on your grave.

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You may not know it yet, but you are already dead.

The U.S. treasury yield is absolutely caving, as scared investors bid up the world’s safe haven standard.

Meanwhile, euro bonds continue to take a brutal session, as the ability of European governments to finance is questioned. This can only result in turmoil for all markets the world over.

Unless of course you’re talking about the U.S. treasury market. That’s doing fine.

In anticipation of the November turkey platter being removed from out under you, I doubled my position in EUO for $18.18, making it a full sized position, and dipping into margin in the process.

My opinion of margin trading into dollar strength is well documented; I hate the very concept. So expect some form of resolution through sales/adjustments to be pending.

Enjoy the shit show ladies and gentlemen.

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Wow! And as my second fall surprise, now CCJ is in full blown selloff mode, going into a meltdown (pun intended). It’s off about 10% as I write this, sending my portfolio is lows I have not seen in over a year.

Lovely.

I was most curious as to the reason for this anomaly, so I took some time to read through their reports.

As far as the operations of the company are concerned, everything looks dandy. They sold less uranium, but at a higher cost, and are looking to double their production by 2018. Costs are going up, but where aren’t they? So all is well…

Well not quite…

The Canadian dollar is absolutely wreaking havoc on their performance. Every one cent move against the dollar results in a $3 million earnings shift.

If you’ve been watching the currency markets lately, that translates to some serious disruption. Their latest realized earnings came in at about 60% lower than last years. Ouch.

In summary, the mere act of the Canadian dollar going to 1.10 against the U.S. dollar would result in a $30 million profit loss, totally destroying all earnings.

Since I’m anticipating a much stronger U.S. dollar that creates a sort of contradiction in my portfolio. However, I’m going to paper over it as if it were a hedge.

I still love CCJ for its business; currency issues like that can be addressed. If the CAD is going to break against the USD, then the company can plan for that. That’s what options are for, after all. Meanwhile, uranium prices continue to soar and uranium production is not meeting global need. Eventually that’s going to get the hot money back in play.

However, for the moment, things could get ugly, and I could see a very horrendous loss (yes, even worse than present) before the good times come back in play. I am still a buyer of CCJ, but in very small increments over very large gaps lower.

This trade is not for the faint of heart.

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The market is pulling out of its obligatory morning nosedive (of course) on promises by the Chinese that they will absolutely – without question – stop pegging the renminbi to the U.S. dollar – for serious this time, it will really, actually happen.

They’re going to do it…

Sure, I’ve heard this song before. If you buy this rumor, you’ll end up in exactly the same position as the last people who bought this rumor (same time last year, if I recall). In short, you are a gullible idiot.

The Chinese are not going to stop keeping the renminbi weak. They’ve build an entire form of government around mindlessly mass producing shit to sell to other countries.

To allow the yuan to appreciate would be to force the Chinese people to stand on their own and determine their own direction. It would also put a huge pressure on the Party of Mao to step up their game and start coming up with actual solutions to their problems; they have enough time coaxing foreign money and investment to make jobs for their people as it is.

And right as these management issues started to crop up making the Chinese government look weak and ineffective, it would give anyone with savings in China an abundant source of wealth, empowering them. Can you say competition? A strong currency and wealthy populace are the antithesis to a communist/socialist labor party. Why else do you think the first thing guys like Lenin, Mao, Kim, or Chavez do when coming to power is to devalue the currency?

This is just talk aimed at shoring up the euro to keep demand for euro bonds strong. Think of it like a Chinese gift. And it’s working.

But there is no such thing as strong wording…only strong actions.

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