Someone once said: “hell is a place where there is no reason.” Well, this, my little internet friends, is hell—for nothing reasonable is transpiring.
For example: [[UBS]] writes down 19 billion big ones, and reports a 12 billion dollar loss, sending the stock significantly to the upside.
Or, [[LEH]] raises 3 billion dollars, under unfavorable/dilutive terms, sending the stock through the roof.
Or, the ISM and construction data, which was released this morning, was bad—but could have been worse. As a result, the market runs 300 points in your face.
Basically, we have a bunch of bottom bitches out and about buying stocks, who have no regard for the laws of reason. What’s reasonable to me is seeing [[MON]] lower. Also, it makes sense seeing gold get the “hammer of certain death.” And, I understand why commodities are weak.
The bulls are running on the notion that we are out of the mess. There is no longer a “credit crisis,” and the recession will be very shallow. Before you know it, the low rate environment will spur a new round of economic growth and we all live happily ever after.
However, the problem with that story is that it does not include potential inflationary effects of such a rapid turn around in the economy. The only reason why commodities are “somewhat tame” is due to forecasted economic weakness in the States.
If you think copper, steel, coal, natty, oil and concrete are expensive now, imagine what they will be if the U.S. was growing at a 4% clip.
My point is this: in order to pop the commodity bubble, the Fed should be raising rates, not lowering them to zero. All this jibber-jabber of a bottom is ridiculous, as long as the consumer is saddled with high finished food, gasoline, natural gas and electricity expenses.
With my money, I will buy [[FXP]] under $90, [[SRS]] under $95 and [[SKF]] under $105. Also, with commodities under pressure, I will buy more [[SMN]], [[DCR]], [[DUG]] and sell short [[POT]] and MON.
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Hey Fly
Check out BWLD today
the q’s and nya index have taken out last monday’s highs.
Dude, its the reaction to the news, not the news itself. Don’t you know that armageddon had been priced in? Damn rookie!
You should thank the running of the bulls for giving you better prices to short.
Congrats, you have officially turned into an old man bear.
All that said … this is whistling past the graveyard action. Just more games of musical chair hand grenades.
I recommend shorting LVS .. I don’t see that gambling is gonna be a big pastime with no credit, no money, no jobs. And fuck education via the overvalued pig STRA.
I was reading somewhere that they thought today’s “rally” has been caused by mutual fund markups and short covering?
Fuck you Juice.
Down 9% is NOT pricing in Armageddon.
Fly,
Although the ISM #’s sucked, the PMI from Jan-Mar average is 49.2, which corresponds to a 2.5 increase in real GDP. Remember, any PMI in excess of 41.1 shows macro-wide growth, even though manufacturing #’s contracted. (gov. cooking the books for sure)
Manufacturing prices went up substantially as it was registered as 2nd all time high and New Orders went down as well.
Look it, heres how I am looking at things. Either we get a severe recession which would contract inflation (as what the fed expects) or have a shallow recession/flat growth with hyper inflation which would inevitably lead to a recession down the road (Voulker style 20% interest rates). Pick your poison.
Oh btw, gold will fall until 820’s (only support in sight). And there is still a HUGE DISPARITY between fixed income and the equity market..there’s bound to be some reconciliation; pick your side
A lot of people got hurt today. Hopefully those dumb fucks that charge 20% to invest in an index got moved out today. The best thing about this credit burst is the collapse of these raping hedge funds.
As a side note, your MBA that you paid $400k for and had to get on your knees for is now worthless.
Today seems like a good day to go for a walk.
I agree with fly that armageddon is not priced in with stocks only down 12% peak to trough. at armageddon, we’d be down 45% like the 2000-02 period. i also agree with fly that there are a ton of low IQ dumb money managers out there (i also know a lot of these foolios). these asshats interpret news that meets expectations or slightly beats expectations as indicators of a bottom. when these people get their balls blown off they will realize how gullible they really are.
on the other hand, i would not be backing up the truck on the short positions ahead of the jobs number. i think it will be bad but if its just not so bad, stocks will continue to rally. i see resistance at 13k
April Fools rally. In the past 7 of 10 years, the first trading day in April has been positive, with an average gain of 1.21%.
The remainder of trading month averaged a 1.77% gain after the Fools rally.
Of course there was no credit crisis, or banks writing off billions and billions before this year.
Do you smell that? It’s BBQ bears, son. Nothing else on the world smells like that. I love the smell of BBQ bear in the morning.
Yes I am being lit aflame. That is all.
2 conflicting data points that have me completely mindfucked:
1. $TRAN is getting really close to party time
2. yet the consumer is dead, buried and rotting
All your base are belong to us.
What an amazing rally. This is what happens when so many smart guys, each with at least 4 screens on their desk, are positioned short.
I’m going to splurge on the “moist”, not dry, Alpo tonight.
Oil is getting bearish son. Just like fly said. TRAN going up.
Speaking of Jibber Jabber, this is over a year old and yet still, strangely relevant:
Added to FXP – 1200 total @ 86.08
http://www.rallymonkey.com/video/kenindex.swf
You will need that wee beastie to get ye over the $TRAN “hump” wee laddie.
The money rotated out of commodities into stocks. This is a planned exercise and the UBS and Deutche Bank action is a minor sidenote,although it did just pull another 250 billion of leverage. If Mars attacked today, we would have rallied, if Will Smith turned into a bad action hero, we still would have rallied. The main course in this rotation is bear meat margined out to the gills. If you can hold your margin, you will enjoy cow yourself. This is how the Bearded Clam is helping to recapitalize his friends and family who are insolvent, on bear meat.
MInute Maid.. question.. LVS is my short, but what the fuck made MGM so much better – they are not building any casinos in former Portuguese colonies in the Pacific either.
Jakey.. why is the Secretary of the Navy traveling around on pilgrimages and such.. help me interpret this one pleez.
http://www.navy.mil/search/display.asp?story_id=36007
I was being 51% sarcastic, tongue’n cheeky, Monsieur Fly persona.
Armageddon has been put off, past the future 6 months, hence the lift in future predictive equities.
Gawdamn, Calvin, don’t scare me like that. I thought you were going to link me to “Winter in Mecca” with that thing.
Thank goodness it was only a reference to possible “Nuclear Winter in Mecca” if you know what ahm sayin’.
Mike,
Either way, we are in a contractionary period right now, and we will be in one for some time. The credit contraction is going to be like having soupy shit/gas after too much coffee and bran, and you’re sitting there all day and you keep having semi-wet farts that surprise you and devestate your senses all morning. The second contraction, which is going to compound the first, is the result of tremendous economic growth – fueled by consumer spending, which has been partially subsidised by easy credit. Big balled “Commercial RE” dick swingers overcommitted to projects all over the place, thinking they were all smart and shit. Also realize that the “explosive growth” in the emerging markets is bullshit. People can’t afford Rice, what makes you think they can afford to participate in the infrastructure that China/India/Dubai (to some extent, but different)/Etc. has built over the last 7 years. When money pours into a country in order to employ cheap labor, shit gets way more expensive in that country for the middle and lower class. When that happens, fuck CHL, people need to eat.
this market is nuts! Almost makes me want to just grab some of Buffet’s stocks like KFT and BUD, and park my money in them and walk away… but tradings too fun.
Gruesome, and yet, somehow, compelling analysis.