Total Victory

As if watching crude oil crumple wasn’t enough for me, now MGM is up over 1% on an announcement that Morgan Stanley believes their room rates will increase 5% this quarter, despite economic soft-ness references.

MGM will have its day; just give it time.

AEC and AWK are shrugging off the news; CLP and BG are recovering; and the spot for silver is modestly higher.

Only CCJ challenges me.

And for the day so far, I’m up a little over .6%.

Soon, my losses for the year, at present an obnoxious (6%), will be broken under the marching feet of profitability.

Enjoy your weekend, friends. You can bet that Cain Thaler will be.

Yes, as a matter of fact, I am gloating right now. I told you that the economy was getting stiffed repeatedly through higher commodity prices, yet many of you chose to ignore my warnings, rushing into the mob to try and steal yourself some free cookies. Now, you’re going to be trampled as the herd bolts for the exits.

Myself, I’m sitting in a war tent, watching my front line setting up the trap door. As you are all haplessly steered into my forces where you will meet your demise, know that I shall be calmly dining on humus whilst flipping you the bird.

And on that note, let me say EPIC fail on the part of ADP.

According to these so called experts, we added over 150,000 jobs this month. According to the government, an organization not disposed to admitting trouble, we added less than 20,000.

That’s a difference of almost 1,000%.

How exactly did these stupid bastards miss by so much? I can only guess, but knowing the kinds of people in these sort of jobs as I do, I’d venture it’s because they are fucking lazy assholes. There’s no way anyone actually counting sample sets and using basic statistics appropriately could have been off by that much.

But counting is hard, and takes time and effort. So they probably forwent the actual work and just made up some stupid assumption that told them the 150,000 number.

“Hey, let’s just use linear regression on the last few months, that’ll show us where things are going. Hell, momentum will about get us there, no way we’re off by much…”

Take solace in knowing that ADP’s credibility is being gutted as callously as your net worth.

All we need now is a debt reduction deal to support the currency, and the final nail in your coffins will be set.

Now I’m busy, and much too distracted to sit here and watch your blood flow all morning. I’m going off to get some work accomplished.

Have fun being slaughtered.

You probably think I’m in a terrible mood today, being short oil and energy as I am. And you’d be right.

I despise being wrong…ever. It infuriates me, secretly lurking beneath my otherwise uniform composure.

Watching UCO and ERX rise up 4% as they are is aggravating and makes me want to throw furniture out of my windowsill onto people innocently passing nine floors below me. In that respect, I am very ill-suited to hedging, the act essentially being wrong somewhere on purpose, so you’re always a little right. However, in my mind, I also can overcome these emotions because I understand it’s the right positioning.

The reason being that, despite the poorly thought through conclusion reached by money managers the world over right now, a default by the U.S. government would not weaken the U.S. dollar.

Full faith and credit of the United States be damned! No one has had any faith or credit in this government for thirty years, yet the dollar continues to dominate trade. There is no suitable substitute at this point. How many of you, may I ask, have some form of money to barter with, like gold or silver or foreign notes? How many of you have a readily available substitute?

The dollar is only a metric. No one expects value from it. It is used to measure and place hold, not preserve. No one sits around thinking, hmm, I’ll hold onto these dollars today so I can use them to buy stuff when I retire. They think, hmm, I’ll buy some equity or bonds today, so God willing I don’t starve when I retire.

But therein lays opportunity. If the events unwinding in Congress lead to long term stability or default, in both cases the dollar will rally because the ability of officials to continue to damage the dollar by devaluing it will be much harder.

The metric would be secured.

Only the Fed, at that point, would be capable of destroying the USD. And I do not believe Bernanke would be complicit with such a thing. They would need to replace him before they could destroy the currency further.

And in both cases, stability or default, the price of oil could very well shit itself. Only if things continue as they have without reform does oil go higher. Combine the deficit issue with the damage high costs for energy does to business and consumerism and I’ll hold these short to 20% losses, if need be.

Meanwhile, I have no need to be as upset as I am. Thanks to MGM (+6.69%), AEC (+2.25%), CLP (+1.81%), BG (+1.53%), and silver, I’m up 1.5% today, despite my shitty hedges and cash.

This is the kind of action I live for; action where I win both ways.

My stocks are up, led by strong performance in the REITs. And my shorts in ERX and UCO are both gaining today.

Really, so long as oil corrects back downward, I don’t care what the rest of the market does at all. I prefer a green stock market with bleeding oil companies. And that’s exactly what the market needs, if any of you want to see it break out to new highs.

Gasoline can single handedly derail this recovery, assuming it wasn’t coming unglued before now. It’s in your best interests to bet against energy prices here.

I have received word that Europe will be starting a new credit rating agency.

The new rating agency will grade on a scale from Fine to Totally Completely Perfectly Fine, with the grades Hunky Dorey, and Just Dandy in between.

It is the opinion of EU officials that this will more accurately assess the status of European sovereign debt, which is of course, as issued by the countries of Europe, unquestionable and totally riskless.

This move will help crush the tyranny of Moody’s, Standard & Poors, and Fitch, bringing freedom to the great people of Europa.

The EU is busy this morning crying and throwing a tantrum, as pesky credit rating agencies looking out for the well being of their clients are obviously biased. Xenophobia is rampant in the world today, you see. Never mind that a decade of indulging in comfortable living, coupled with no ability or desire to pay back fair value for their loans, puts the rating agencies squarly in the right.

The next step will be a massive campaign to rally the “workers”, marching on those evil financial institutions for all the hardships they didn’t bring on Europe when they stopped helping out.

In the immortal words of Led Zeppelin, The Song Remains The Same.

And yet, despite this; despite China going into a Red Storm meltdown with absurd inflation bringing rioting to the front and center; despite further layoffs looming on the U.S. horizon and dollar strength…oil and equity prices seem to want to move higher.

I don’t understand it, but I know better than to fight it. I’ll hold steady, mostly long my safe assets with strategic shorts in oil and energy, just in case it all blows up. But, looking at how the market can rally off of last nights news, we are obviously going up.