Europe, Where?

Sticking with my “USA Kicks Ass” revelation, I just can’t be afraid of Europe.

I mean, sure Greece is now running weeks over the threshold for reaching agreements with their private creditors, and their people are rioting in the streets in opposition to any further austerity measures…measures that are being demanded by the people with the power to deny them a bailout. But I’m sure they’ll all come together and play nice just in the nick of time.

Oh, and don’t look now, but the commentators who have been parroting “Portugal is not Greece” are getting ready to eat their words – again. Rumors are that Portugal is presently hiring a consultant to help them restructure their own debt. Yes, once again, bank analysts repeating that Portugal will not restructure until they are blue in the face, it seems have indicated that restructuring is actually imminent.

If Greece and Portugal both restructure, I wonder what the Irish will do? And each country that restructures is another slap in Germany’s face. Let’s not forget, Germans are not big on these open ended commitments to the vast debts of foreign nations that, at one time, Germans used to invade for sport.

And of course, there’s the ECB. Soon, very very soon, markets will have to accept that the sums of new money being prin – er, excuse me, “loaned” – to Europe from their central bank are going to render the euro worth much less against the dollar. The latest I have heard from bank analyst “experts” is under 1.2 (I think it was 1.13). But who are we kidding? These guys are always rosy.

I’d guess par is totally attainable this year. All you need is one trillion new euros printed. Wonder what that’ll do to US manufacturing?

But you know what; I don’t care about any of these things, because America is back. We are going to punch holes through mountains, because the EU doesn’t matter to us. Mind you, I’m not putting any money on that outcome. But I will totally continue to cheerlead it.

That makes everyone feel better, right?

Okay, I’ve had enough of being a sordid and cantankerous crotch. If America wants to be the boss, then that is her obligation, and I’m there for her. From here on out, I will cheer any and all publications that contain good “USA is the greatest” type of news. Why shouldn’t I?

Meanwhile, I swear I’ll laugh in the faces of asshats pushing the collapse of America because of silly reasons, like Europe. Europe is an infected contusion. A welt on the world’s scrotum. We came to this country to escape Europeans and their non-bathing ways, so why the hell should we care that their continent will cease to exist shortly?

America will still be here, hitting grand slams, because we invented baseball. And apple pie. And not sucking at things.

What did Europe invent? They invented crapes.

Mind you this doesn’t change my portfolio at all. I was never betting directly against the U.S. markets, only oil. And sometimes betting against the euro. Now that America is all badass and shit again, I know that the Europeans will have little choice but to lie down and accept our grandness. We demand a dollar so strong, a hobo with some begged-for change can purchase the finest chateau in the French Riviera.

It is our birthright, obviously.

And we also demand oil that flows in the streets. Gold paved streets. Gold paved streets with oil flowing down them.

Even now, the U.S. is putting its big, leather sole boot on the neck of our global inferiors, reminding them, “You are unfit to clean our urinals. That’s like a bidet for heterosexual men.” We will divide up all the world’s real energy sources amongst the other “less sucky” countries of China, Russia, and Germany at 30-40% discounts to current, market set rates.

Who are markets to deny us?

We get the oil, and Italy can keep the windmills, a source of “energy” that was very popular in the 1300’s.

Yessir, optimism is the way forward.

The land outside my 9th floor office is a tepid and mild temperature and disposition. There is no snow left on the ground, although there was almost an inch of the cold powder just this weekend. That’s been the very essence of this winter; sporadic and fleeting.

And because of it, natural gas remains a dead investment.

Looking back to early September, I’ll just say that I reminded you this would happen. I actually titled the piece “The Winter That Killed Natural Gas.” And I would take a minute to cheer the source of my weather forecast – none other than the illustrious Old Farmer’s Almanac.

This is one of the oldest publications in America, and I cannot recall the last year that they blew a prediction. If you don’t read the book, you are missing out, sorely.

However, natural gas will not maintain these low price levels forever. I’d guess it is going to be a great buy soon enough. This year’s weather is a phenomenon. But at these prices, a bad year one, perhaps even two, years from now could be enough to squeeze supplies and send prices ramping. However, it is tricky with natural gas because of the storage costs adding a significant time constrain.

I’ll be looking into it and trying to figure out of buying natural gas soon is a good investment. My guess is that buying in March or April is best; although the summer is also traditionally weak, especially if crude oil and other alternative fuels take a dive. But I have a feeling that natural gas may get a demand pump soon, if only because people will be looking to add natural gas lines, as permitting, to cut their energy bills.

Moving on to today; if you haven’t noticed, you are in very deep trouble, if you are voting on a rally continuing. Crude oil has been in a steady bleed since January. I know plenty of you rushed into this rally when crude oil ran from the high $70’s back into the $90’s and, later, $100’s. You took it as an indication that the economy was improving and demand was ramping up.

I’m afraid you were mistaken. Actually, demand has not ramped up significantly, and much of what was there was the product of temporary policy (like the latest expired government tax credit for heavy capital expenditures). The cause of the run in oil was predominantly built on three factors that I have thus far identified: (1) Middle East instability (2) rerouting of the Cushing, OK supply glut and (3) the Dodd-Frank Bills’ provisions for limiting ownership of commodities through derivative products.

Each of these three causes appears to have had some impact on the run in crude oil. Yet, as we have seen consistently through European manufacturing numbers, some of the local manufacturing numbers (although not the latest, necessarily), and most recently with the DOW earnings report, demand for crude oil remains soft at best.

This rally is built on “cheap” tech and trash rockets. It will end as spectacularly as it began.

In the spring of 2010, I was on a beach in Texas when the market rally; an inexplicable and massive run in prices into the new year and “new economy” of green shoots; came to a sudden and abrupt end with price collapse that had the market bleeding all over itself. The catalyst? Greece.

Through to the summer of 2011, an equally massive rally backed by our “continued progress since the Great Recession” was met with a brutal beat down delivered at the hands of reality and a European Debt Crisis that had lingered for over a year to that point. The catalyst? Italy.

And now I can add to my little history book; the winter of 2011 into the spring of 2012 and an equally gargantuan price rally in everything from commodities to equities, based solely on a misperception of currency debasement in the US (that isn’t happening) and some not-so-atrocious numbers that may have little bearing to the economy. How does this end?

Well, I’ve got my money betting that you’re wrong – again. What will be the catalyst? Uh, just throwing something out there but – Portugal? Maybe Greece…again. Or perhaps the whole EU just coming apart.

The point is, I’ve seen this song and dance routine before, and it’s awful. I’ve booed you off the stage twice now, but you keep getting back up thinking “he just doesn’t see all my talent.” Well, you’re right. Because you haven’t shown any talent. What’s more, I’ve seen that there’s nothing to see there either, and I’ll boo you off the stage again.

This time, stay the fuck off it.

I’ve been in a very interesting meeting all morning concerning a certain reform that passed through the halls of Congress in 2009. It lasted for about an hour, and the implications of it are most intriguing. If they ever do get these exchanges up and running, I am going to have a blast watching people being filed into them getting screwed over.

That’s the thing about trying to slap a single unit of “value” on an array of products that are non-uniform (especially when that definition of value is incredibly, poorly defined). You get…inefficiencies…that can be exploited.

Ha! 2014 is going to be a shit show. There’s going to be so much movement going on, so much confusion, that there’s no way widespread abuse doesn’t come into play. Especially because the people trying to manage these exchanges don’t seem to have a clue about what it is they are doing.

The only comfort you might have is that everyone will be trying to do the same thing – so maybe you don’t notice the difference?

At any rate, I haven’t paid much attention to markets today. But I see oil, after faking you out, turned tail 180 degrees in a vertical nose dive. Ditto for the rest of the markets.

My opinion of equities and commodities has not changed in months. I’m holding short energy and oil because they are very overpriced. You can’t honestly expect to just ignore Europe. It isn’t going away, and it isn’t a small problem.

Bah! It’s no use arguing with you. I’ll just let you find out on your own.

I’m holding AEC, CLP, CCJ, SCO, ERY, physical silver, and a hefty cash position after selling out of BG and, late last year, AWK.

So Freddie Mac got caught loading up the bus on derivatives that had them directly betting against the very taxpayers that their agency was designed to “protect.”

Do you understand how absolutely disgusting this is, or were you born in a hole in the ground?

Let me say it again. Freddie Mac was caught BETTING AGAINST YOUR ABILITY TO REFINANCE.

Freddie Mac has the power, in some situations, to deny people the ability to refinance.

You little OWS shits will jump up at the first sign of banks and private institutions doing the least act you deem “unlawful;” and your assessment of unlawful is pretty broad, including pretty much every action you don’t like even if it is legal. So where is the outrage here? You’d better be feeling it.

This organization was created in part to do exactly what half of you hand-out loving little bastards crave so much. Its sole purpose in life was to pave the way for people to get into homes beyond their means, and to do the paving with other people’s money. It was very successful at it.

Some bought the line, and were more than too willing to sell their life and limbs to the cause. They got wiped out.

Now, that very same entity has been busy directly destroying the people it was supposed to help. I guess you could call that poetry.

This quasi-private institution has now officially screwed over everyone that has ever dealt with it. Its reputation crushed the government officials who worked with it (Chris Dodd). Its share price decimated the investors who were foolish enough to trust it (Bill Miller). And now, it has turned on the very people it was intended to help (you, Joey Six-pack-a-day).

So yeah, let’s have some more of these fucking things running around. The European version of this model, the great EFSF, is gearing up for launch over across the Atlantic, assuming they ever do really launch it rather than endlessly talk about launching it. Let’s expand Sallie Mae’s god-damned budget while we’re at it so it can start bailout out all the poor anthropology majors of the world who ignored every warning before dropping $80k on that Doctorates. And China needs to join in on the fun too. I want a Chinese “private company” that has unlimited government approval and can buy up all the copper and oil in the world. It’s just so sweet when private money gets leveraged by these clowns in the name of “helping the little guy” and later on gets caught crushing them with impunity.