iBankCoin
Read Scott here on iBankCoin and also at http://www.createcapital.com/
Joined Jan 19, 2010
717 Blog Posts

Happy, Merry, Shitty….

Hope you are partaking in all the joy that the holiday season offers. You know, traffic, travel delays, school vacation, family, colds & the flu, etc., and those are just the normal fun and festivities. This year we also have a new government showdown and the crushing psychic misery of hurricanes and mass murder. All in all, there have been better overall holiday seasons.

But regardless of the current situation, we must continue to search out the positives, the optimistic, the opportunity ahead. Plus we must accurately forecast the twists and turns of our Centrally Managed Marketplace. It is certainly not an easy thing to do.

These past months were historic as it became the year of the tacit admission that markets live and die based on free money dictum’s instituted by the policy makers who work for the government. It is a sobering reality especially after going through life thinking that no entity is bigger than markets. And markets, as measured by the major indices, have been remarkably stable, maintaining important technical levels that encourage those who follow price to maintain a bullish posture. Even the government knows how important the techincal picture of the markets are. God forbid the 200 day is ever broken for more than one day! In fact, everyone seems to be waiting for the break in which to buy. It has been the layup trade since 2009.

So, here we are, with markets just a short distance from all time highs. Stocks move in years worth of gains or losses in minutes depending on their trend or news. But individual stock moves don’t matter much, just look at Apple. It swung to a $200 billion gain to a equal loss. Yet the major indices remains locked in its range as there is little that can shake the trillions of dollars locked in the equity index-dominated investment world.  The environment created is one of “no alternatives” for capital.

Knowing what we do about the structure and state of the investment world, it is only natural for anyone with any sense of history to tread lightly when it comes to putting the full faith into the capital markets system. Again, based on history and reality, the major indices shouldn’t be anywhere near here. Yet here they are and no news or event has been able to change that fact.

So what is an investor supposed to do? Say fuck it, buy everything and throw caution to the wind because the market won’t go down? Take it all, buy gold & silver coins and be a survivalist? Cower in the corner while watching cable news? Do absolutely nothing? Well, it depends on your circumstances. In reality, just being aware of reality is enough to keep you cautious and treading lightly. In my mind, there are few ideas that could be called “cheap”. There is literally nowhere liquid to go with your money as bonds are too expensive, commodities are too expensive, most stocks are too expensive and real estate is an illiquid falsehood with the government the only marketmaker.

And remember that everyone brought in to talk about markets in the media have their own to protect or are operating on “busted” assumptions of how markets should interrelate. When interest rates are controlled, the rest of the equasion should be considered null & void.

Look, everyone in the investment world wants to buy the dip. That is why there has been no dip since Europe began to print trillions last summer. And the dip before that was just before the last trillion dollars printed by the FED. The powers that be will not stop printing to support the last/best policy tool of the stock markets of the world. There is no choice, period.

But now that the cat is officially out of the bag, all this money printing should have a lessening impact on keeping prices forever rising. Eventually, probably in 2013, gravity may actually overtake the rising market and it will require more and more capital just to keep the market in place. Like a Junkie needs more heroin just to not feel sick. This is my sole prediction for 2013; an epic slow-motion train wreck filled with greenbacks. And no amount of innovation, financial or otherwise, can change the great reset that will eventually come. We are Japan and there is only one difference between us and them; their equity market has been quartered and ours is near all time highs.

 

 

 

 

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It’s Official

It is now a fact; investors fear not. Economic slowing, bad news and uncertainty of all types have lead to a market approaching yearly highs as the calendar year comes to a close.

Sure, there is a build up of short interest in a select group of stocks but almost every other measure of investor sentiment and positioning puts markets firmly in the complacent camp. Frankly, there has been mostly complacency for years since the financial crisis turned towards the governments stabilization and stimulative efforts. They have certainly been wildly successful by any stretch of the imagination.

The FED’s latest gambit of stimulating until employment has reached some arbitrary level is just their promise that they will buy banks non-performing assets for as long as they are owned by banks. And there is no real inflation because the newly printed money stays locked in the financial system and chasing financial assets. So, in essence, nothing really matters. It is just a question of where to liquidity is pointing to. Some days it is energy, other days it is commodities, other days it is big banks and other days it is something else.

I hate to be so “simple” in my subjective analysis, but thinking too long or too hard has been an unsuccessful investment strategy over the past year. And with Obama in office, a stalemate in Congress and another trillion dollars in free money printed by the FED and given to banks in exchange for their non-performing assets, we should expect more of the same. As the most successful investors and traders say lately; just follow price and trend. Oh happy days!

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New Yearly Highs

This is the last full week of trading for the year  and at the time of this writing, there has been no resolution of the Fiscal Cliff. Yet the SPX is up almost 30 points and the Nasdaq is up 75 points in one and one half days.

I don’t think the market has ever fallen in the last week of the year, ever. That may be a slight exaggeration but the bottom line is that with only a few more trading days left in the year, the major indices will make new highs for the year.

Some say that we remain the best house on a shitty block because the market says so. Remember that each year since the Financial Crisis began, the Fourth Quarter is heralded as the beginning of an economic recovery only for those hopes to be dashed with the reporting of First Quarter numbers. This year will be worse, with the Fourth Quarter looking shitty leading up to an even worse First Quarter.

But in this Costanza Market, with the government out of money, again, all that matters is the FED’s perversion of $85 billion free dollars to buy the crap assets from bank balance sheets. The American public has no idea that this is underway and wouldn’t understand it even if you explained it to them, speaking slowly. As long as the last, best policy tool (stock market) remains “healthy”, everything is OK. Merry Christmas!

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Anachronism

I have been a Registered Republican since I graduated college in the 1980’s. I’ve have held similar fiscal beliefs but did not hold their social mandate, even early on.

But during this past year of the Presidential election I gave up my status and became Non-Affiliated. Why? Because I could no longer stomach a political party whose main goal was to limit women’s reproductive rights.

Believe me when I tell you that nobody jumps up and down and says, “Oh goody! I’m going to have an Abortion today!” It is a medical decision. and it should not even be a political discussion, period.

Let me stop here and tell you that I am no pro-Democrat either. I disagree with most of their fiscal policy choices. But socially, they are the future of the nation.

The “old generation” that hold antiquated beliefs; you know, the ones that young people have hated for the past forty years, are dying one at a time. And like in the past, those who follow the old beliefs and traditions are fighting tooth and nail to keep them. Their attitude is, in essence, “if I’m going down I’ll take you with me.”

I will not list the issues here as you are well aware of what they are. I’m also not saying that everything the “New America” wants or believes in is right or good. Simply that it is different than those who cling to the past.

The Newtown shooting must engender change in this country and not just for gun control. Some say that the “discussion” will break the country apart. WAKE UP people, its already well underway.

 

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They Will Never Stop….

Did you listen to Saint Ben yesterday? BTW–he should shave his head, a la Jeff Macke. He would gain immeasurable respect.

There is no longer any doubt that his legacy is one of blatant market manipulation as investors are “forced” towards risk.

One Trillion Dollars a year is his promise and that is exactly our government’s spending deficit. And that is what will be eventually sucked out of markets in the massive desire for the liquidity needed to “pay the bills”.

This money is the lifeblood of markets and will keep stasis. My only concern is if the market begins to drop and the “free money” doesn’t stop the fall. What happens then? More billions per month?

Worldwide economic contraction continues, yet markets care not. Economic theory has been trashed in this Costanza world. Yet we must march on and identify winning strategies.

Either trade momentum and sell early and often, or buy beaten down stocks that will eventually find sponsorship. But be careful with the favorite stocks because they will be over-loved and subject to severe damage once everyone is in, a la Apple.

Fear not this time of the year, until after Inauguration Day, then En Guarde!

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NVDA

Breaking a multi-month downtrend right now. Looks free and clear to the $14 area, technically. And it is priced very reasonably from a valuation perspective. In fact, LULU has a bigger market value…

I will not post the chart art. You must look it up yourselves. It’ll be good for you anyway…

And if I had to guess, I would bet that INTC will buy them, eventually. How else will they get a strong foothold in the Mobile Processor Marketplace?

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