Riddle Me This

Why is the dollar falling on Greek bailout news? Last I checked, that involves a massive shift of funds over to the country, much of which is coming from the IMF and is therefore a devaluation.

The U.S. dollar, for the meantime, is a static currency, so long as the Fed maintains a zero sum policy game with the bonds in its portfolio, and Congress refrains from borrowing more.

Who believes that bailing out Greece is going to be a strengthening act for the euro? It feels more like a move that will weaken the currency, despite Greek austerity.

My guess is the dollar is weakening more out of habit and reflex to the bailout, than for any good reason.

But again, the real issues everyone should be focusing on are the U.S. debt talks, and the state of affairs in China. Get your heads out of the Mediterannean.

I will go into more elaborate detail on this tonight, once I have a minute to breath. I’m too busy at work to get technical on why I seriously doubt this spike in home contracts constitutes a bottom forming in the market.

However, I will give you a gist of the idea now, to set up for later.

Basically, citizen wages are not a normal distribution. The distribution is obviously multimodal, and so you should expect several spikes in sales to occur at varying degrees of time. Yet, the small condensed areas toward to outliers which are creating these spikes likely have wide spreads between them and the more relevant, larger congregation of lower salaries, which must necessarily participate in any housing recovery in order to let it sink in.

In laymens terms, more well to do people are probably buying homes right now, but how many will they purchase, and after they have their fill, how long will it be before the next surge in homebuyers can have a turn?

Don’t get dragged into the suckers bet, ladies and gentlemen.

Did any of you really think this wouldn’t pass?

Greece has the whole planet leaning on them right now; the failed no-confidence vote of the PM more or less set this up as a certainty.

And again, this isn’t important, at all.

Has anyone else noticed that ever since the Fukushima Daiichi crisis in Japan, anytime a bird shits within 1,000 yards of a nuclear plant, it’s suddenly front page news.

We had minute by minute updates about some flood water that was encroaching on a nuclear plant’s personal space here a week or so ago. And now I get to hear how wild fires are blazing several miles away from another plant in N.M.

Assholes, there are nuclear plants all over the fucking place. If you piss yourself everytime something dangerous happens within the same region of the planet as a nuclear facility, you’re going to go through a lot of pairs of pants.

It took a massive earthquake, the fifth largest ever recorded, coupled with a resultant tsunami, to take down the Japan plant this year, an aging reactor from 40 years ago (and even then, half of the operation was kept under control). A little vanilla style tragedy like flooding or a fire isn’t going to do anything. You don’t think the engineers have thought of these common situations repeatedly before now?

You really need to calm down.

You should all celebrate as oil cuts through $90 a barrel, to the downside. This is a premonition of things to come.

“You all”, of course, is excluding anyone who levered long oil as it crossed $100 coming off of a recession.

What, did you think we’d rush back to $150 like it’s 2008? Who has the money to afford that sort of nonsense!?

But have no fear; your future contracts for oil delivery will be used for the benefit of the country, as you’re forced into fire sale liquidations, creating a most lovely supply glut to the cheers of refineries and industry everywhere.

As my last meeting comes to a close, along with my day (I’m taking an early weekend), I meet an end of the week reward, as ERX is bleeding out another 4%, all thanks to Asia joining in on the fun. They’ve decided to blast oil markets as well, following the Obama Administration’s lead.

For the day thus far I am up another .1%, as remnants of my portfolio hold onto small gains and losses elsewhere are offset.

I added to CCJ last Friday, if you didn’t catch that. As such, my cash position is below 10%, but being that I’m mostly hiding out in underpriced assets, I’m not concerned.

The dollar is continuing to rally, exactly as I said it would at the end of March. I will look avidly to the outcome of the debt ceiling argument, to give clues about forward policy and the direction of the dollar.

While I don’t believe the currency will strengthen, in the true sense of dollars being taken out of circulation or naturally occurring price decreases from increasing production, further dollar strength may still be witnessed.

Substantial bets were placed against the dollar, over the last few years. Those unwinding positions may bring further upside to the greenback yet. And world governments seem to be coordinating a full on attack against commodities alongside this strength, which may serve to make it all the more potent.