The Banquo-Housing Connexion (sic)

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Many have claimed that there’s no end is sight for this downturn, or recession or depression– until we see an uptick in the housing sector again.

Still others claim that until the banks are “fixed” and back on their feet, we cannot experience stable economic growth through strong credit support.

It appears each claimant is at least partially right, and moreover, that each of those sectors live and die together, wrapped in a form of symbiosis that is both mutually beneficial… and destructive.

This may all be “Master of the Obvious” stuff for you, but I figured I’d bring it to illustrative life for you anyway.  There’s not been much talk of the housing sector recently on these boards, and maybe that “out of favor” status is warranted.  Whatever the case, it’s clear that both housing and the bank index are again marching in lock step, and seemingly to their doom.

First I’ll show you $BKX –– no surprise for my readers, who’ve seen my starting to ring up purchases in the anti-bank index SKF because of this very weekly (sic) chart:

 

Note now that in comparison, I won’t use the Housing Index ETF– XBH— mostly because it’s made up of a lot of non-house building stocks.  Same with another housing index–  ITB — where some 70+%  of the stocks encompassed is not home builders but instead retail accessory places like Pier 1 and Home Depot.   No, I simply took the most popular name in the home building industry– Beazer Homes (BZH)– and ran the weekly chart.  The similarities are astounding:

 

And like $BKX, it seems BZH is readying for a rebound as well.  It makes no matter, I wouldn’t trust either as far as I could throw their Chief Investor Relations Officer.  These are sectors that are ripe for shorting at any major moving average (which on the weekly charts above would be the 13 and 34-week EMA’s).

Have fun and keep an eye on both for any profitable divergences.  Make no mistake, both sectors are hurting right now and should continue to do so into the near future.  That doesn’t mean a scalp won’t be available on the upside every now and again.

My best to you all.

 

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So far, the hero is Newt Gingrich.

No, really.  Gingrich just took it to the MSNBC Obama-stooge by refusing to comment on the silly (who cares?) “single mandate vs. no mandate” debate on Obamacare, pointing out that whether or not Romney had such a mandate in his individual state, everyone on the stage was united in declaring Obamacare a disaster.  He then administered the coup de grace by saying that unless Obama got up tomorrow and called for repeal of said Obamanation, he really didn’t give a schiessflappe at all about creating jobs in this country.

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Now Michele Bachmann starting a one-upsmanshipper talking about how she’ll end Obamacare in 2012.  Not quite clear on how the heck she’s going to be able to do that, unless she’s for early inauguration or something.

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Rick Santorum has zero shot for anything higher up than the Ambassador to Botswana in the next four years, but I have to give him some ups for that answer on the dignity of poverty program reformation.   Too many people have become “throw aways” in this country, thanks to the “I gave at the office” attitude that federal government top down poverty administration allows.

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Ron Paul is trying to “set the shiv” by gigging the front runner on some letter he wrote to Hillary 30 years ago.  What a loathsome homunculur move, Dr. Paul.   Newt is right — you asshats have to stop attacking each other and stay on message about how you have to defeat Obama.   Yeah, I know your pride is stung because you feel you aren’t getting enough time.  Get over it.  You are not going to win, you are too odd and too unlikeable.  Get with the program or get gone.   No one’s going to warm to your program if you become the nasty troll on the podium.  No one but the cellar bound 27-year olds living with their mamas, I mean.

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Oy, here’s Paul again attacking Perry on perhaps his worst move as Texas gubner — the HPV inoculation mandate.   Thankfully, Paul is so worked up he’s botching the delivery on his little leprechaun rant.   Michele Bachmann’s response — and bringing up the parental rights issue — is far more devastating thanks to it’s “nice girl” delivery.    Perry gets the “half-save” by saying he was looking to “save lives,” and there was an opt-out on the order.  Weak applause ensued, probably his immediate family.

Interestingly, Romney comes in and plays real nice on the vaccine issue.  Probably angling for the Veep spot.

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For some reason they are asking Santorum about voting for the Homeland Security Act.   Maybe they felt sorry for him?    Gingrich said they screwed up his plans.   Here comes Paul on the issue, and it’s red meat for him.   If Perry or Romney win the election, I hope they make him the TSA Scold Czar so he can rip that agency a new one daily.

Paul gets a question about FEMA and disaster aid, etc.  He sort of punts (wussily, I think) by saying, bring the troops home from Afghanistan and you can pay for Fema “or whatever.”

Lame.

Huntsman scores some easy points on the TSA, but then folds into “let’s not lose sight of the bottom line-jobs.”  I admire his straightforwardness, but he is too unctuous by half.  Sorry, I just don’t trust the bugger.

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Romney!  Nice points on the immigration issue.  MOST IMPORTANT is the “turn off the magnet” quote.  That’s the amnesty promise.  You cannot start with amnesty, and not have the border secured first.  Because, God love them, that only incents the most ambituious folks to bolt across the border hoping for … the NEXT amnesty.

Newt’s answers are pretty good too, and Santorum’s as well.   You need to keep the incentive for legal immigration in place.   We want immigration, but lets get it right.   Secure the border first, THEN worry about the people who are already here.

Michelle makes an uncharacteristic verbal flub about “ceding sovereignty” — or at least that’s what I think.

Meanwhile, this asshat from Politico is trying to get the Obama camp a scare quote for the Hispanic community by asking about the “11 million already here” over and over.  Sorry pal, no one’s going to talk about marching people back over the border this night.  Some of these MSM fuggers are so lacking in cleverness.

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Funny thing is, I was typing and listening and Huntsman was talking but I thought it was Perry.  Didn’t realize how much they sounded alike.

Ron Paul addressing the drug laws and immigration.  LOL.  He’s hitting on all the loopy libertarian issues tonight.   If we had a “healthy economy” we wouldn’t have this worry?  What?

Now he’s talking about the fence keeping people in the country, as if wealthy Americans are going to flee across the Rio Grande with their moneybags on their backs or something.  The man is a mite tetched (sorry Bruce).

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Romney and Michelle making good points about the former Congressional promises to cut spending with any tax increases and how Congress has continually lied about that issue, usually by putting off the cuts til “tomorrow” while taking the tax meal today.  Very good point, Michelle.

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Huntsman just shot himself in the feet with both barrels by claiming he won’t make any promises about taxation.  I get his answer, but he’s got no standing with the GOP base as Obama’s ambassador to China.  He’s got no “cred” outside maybe Utah, so his refusal to stake out that territory comes off as untrustworthy.   His Afghanistani ad lib was unnecessary and unhelpful as well.   He wants to use Special Forces alone?  You better get more Special Forces, then.

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Shockingly, the Politico Obama-stooge is drawing the long knives on Perry again, with his “Military Adventurism” question.   I don’t think that statement hurts Perry, even with Republican base voters, as they’d largely agree after 10 years in the Middle East and Afghanistan.   Maybe he’s trying to set him up with the other people.

Mrs. Gint is commenting that Michelle is not answering the question w. regard to not liking Libyan intervention while liking Iraqi intervention.  Oops, now she is, confirming there was “no vital U.S. interest” in Libya.   True, but then she need to defend our interest in going into Iraq.

Santorum wisely bringing the whole issue back to Obama’s decision to go into Libya.  Also takes a left-handed swipe at Ron Paul and isolationism.   Battle of the Mice.

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Oops, now Huntsman is screwing himself to the floor by claiming that “certain people” in the Republican Party are “running away from science.”  I don’t think there’s anything that infuriate Republicans more than making such a condescending statement.   This clown is DONE.  What an asshat.  “I can win?”  Let’s see you get 1% in any primary first, Tan-boy.

Perry hits it on the head by putting the economic point first — that you don’t intentionally destroy the economy by attempting to cater to some unproven “effect” that has not even been remotely shown to be remediable in the first place.

Michelle backs him up by showing the stupidity of going anti-fossil fuel in an economy that is completely and irreplaceably dependent upon them.  Especially w. regard to coal — where we get 50% of our electricity today.  Yes, the stuff that powers electric cars, GreenAsshats.

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LOL!  Newt would fire the Bernank!   Fly should love that one.

And, he’s going to sell off Arizona.   Not a completely stupid plan, actually.

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Brian Airhead, the other MSNBC commentator, asks Perry about the death penalty and how Texas has executed more people than any other state.  He gets applause upon mentioning the number of executions and nearly has the vapors about it.  What a schmuly.

Perry, of course, rocks that easy pitch out of the park.  He’ll probably palm Brian Airhead a sawbuck after the show.

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Ron Paul gets his red meat question with the Federal welfare question.  He objects to welfare MANDATES, not taking care of people.   Oh yeah is he on a roll now.  And he is exactly right.  Gets his best applause line of the night.

Airhead says good night on that note.  Maybe Ron won’t be so cranky next time…

(Yeah, right).

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My best to you all.  Please feel free to continue the discussion below….

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[youtube:http://www.youtube.com/user/LearnLiberty?v=KGPa5Ob-5Ps&feature=pyv&ad=7868481249&kw=capitalism%20freedom 450 300]

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That’s the only way you’ll pry my Skiffles from me, you Happy Days Are Here Again-singing termagents!

I got rid of one half of my TZA today, because I think we are oversold,  but will I dump my SKF in a similar manner?

I will not, as I believe lovely Skiffles is a longer term hold here.   Check the monthly to see what I believe we have in store for us in the coming months:

 

I believe we may bounce around a bit here, and $BKX may even get all the way back to it’s twelve month moving average in the $45 range.  More’s the better, I say,  as I’m still not even 50% invested in Skiffles, and this is going to be the death trade going forward, by the hammers of Thor and the jockstrap of Odin.

As you can see from this chart, I think a return to the lows is all but inevitable.  However, if you extrapolate the cascade in the similar fashion as the one that precipitated the 2009 lows… well, we’ve a ways to go.

Say it with me folks… extrapolate the cascade.   Extrapolate the cascade….. EXTRAPOLATE THE CASCADE!

(Okay, don’t shout it that loud, or your wife/girlfriend/mother will think you are having difficulties with the KitchenAid dishwasher.)

I have not sold any more gold and silver… yet.  As per my announcements in The PPT,  I did add another large dollop of AUQ at the close along with a Godzilla-sized addition (temporary, to be sure) to my XRA holdings.  I think there’s something going on there, although to be clear, I know not what.  Love that late-day pennant though.

My best to you all, as always.

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[youtube:http://www.youtube.com/watch?v=u9LcKcXpCDE&feature=related 450 300]

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Not to be overBEARing, but it looks like the US Banquing sector is going to have a rough time of it in the next couple of days.  Why not take advantage of that turmoil by setting aside some silver and gold for your posterity?

Besides, who wouldn’t want to kick “JP Morgue” in the teeth by buying silver, or so the old wives tell it?
I’m not going to tell you to do anything I wouldn’t do, so I’m not imploring you to go out and swamp your local numismatic dealer with pleas for hard bullion and coin.  I think this should be a part of your overall portfolio, but I think there are adequate substitutes still available under our current very liquid market system.   Unlike our fellows above, I don’t believe SLV and GLD are “false flag” operations designed to trick one out of one’s natural incentive to purchase physical.

I could be incredibly naive, but I trust the current rule of law enough to believe the audits of these depositories are valid.  Why?  Because the idea is too much of a moneymaker to allow it to be waylaid by a lack of credibility.  Both SLV’s iShares and State Street (GLD‘s parent) have too much invested in barriers to entry here to screw up a good thing with a fraudulent audit.   I like to use Occum’s Razor when analyzing these situations, and in this case, the easiest path to big money is to establish a creditable physical substitute.  Why screw w. that?

As you know, I also believe that another liquid path to trading gains is in the highly leveraged miners.  I don’t have to remind you that the most highly leveraged vehicles in that sector are the royalty financiers to those miners — namely RGLD and SLW of gold and silver concentration respectively.

After that there are many names, but if you want to act quickly, you are best throwing dough at GDX, GDXJ and SIL, which are the large cap gold, small cap gold and silver miner ETF’s, respectively.   I point you to these names because liquidity will be king here, and there will be volatility on top of volatility in the coming weeks.

Be ready to snatch opportunity with these vehicles and yes, by shorting the banks as opportunistically as possible through SKF, and even FAZ if you dare.  Remember to keep an extremely tight leash on both, however, for they will turn and snatch out your gizzard in the blink of an unsuspecting eye.

Best to you all.

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There is no Bernank, Only Zuul

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I don’t have a lot of time this morning, so I’m just going to feature the chart I put together last night.   As you know, I’m increasingly bearish here, and more so on the financial sector than any other, primarily because they are — like our internal deficit and debt problems — another can that has been kicked down the road.

Back in 2008, when the world was melting into a hardened polystyrene ball thanks to the implosion of the easy money real estate bubble, banks were allowed to escape (some just barely) thanks to the ministrations of the Fisc and the Fed via TARP and other more nefarious and clandestine sources.   Worse, Freddie Mac and Fannie Mae, the twin dogs of Zuul the Destroyer, were allowed to remain in their positions of power “for the good of the market.”

In other words, little was done in regard to true reform save “shoring up” for “the good of the industry and the economy.”    Bad mortage loans are still on many books, and real estate prices have been frozen in a glacial slide to the sea, rather than being allowed to correct in a more natural — if radical — manner.

Ironically, it is not those mortgage time bombs which will kill the banks in the immediate term, as the “propping up” methodologies of Congress, The POTUS and the Fed are actually hurting the taxpayer while assisting lame banks.  No, it will be the regulatory overkill administered in the fecal kludge which is Dodd-Frank Reform Bill, also known as “the second 2,000+ page bill that no one read before voting through.”

To give the Congresscritter some defense however, we can’t blame them for the criminal act of not reading the bill, since there were hundreds of pages of regulations YET TO BE WRITTEN found within its pages.  In my opinion, this is the far more egregious and unconstitutional sin.   In the case of signing a law that carried unknown legislative directives in it, Congress is yielding it’s power to an unelected alphabet soup of Federal financial bureaucracy.

Banks are just now beginning to “implement” some of the new regs.  You are already familiar with the loss of revenue due to debit card restrictions, but there are other capital and revenue limiting aspects which will also affect banks both large and small.

Ultimately, this will likely lead to another round of consolidation,which is what the cronies in Congress would like, as they loathe competition and it’s messy donation collection implications.   Until then, banks will be a mess, and I would steer well clear of them.   If you are adventurous like me, you might even take an interest in their downfall:

As you know, I added to my SKiFfles the other day, along with a position in TZA and more TBT (which remains a hair shirt).   What you don’t know, unless you are a member of The PPT was that I also loaded up on EXK, GDXJ and AG calls yesterday afternoon.

Yet another reason to look into a subscription for The PPT as soon as possible.  My best to you all.

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WTF?  When we come back in a big way, we’re supposed to win the whole damn thing.

I don’t want to talk about it.

Okay, I will say one thing:  I wish I didn’t like Big Paps as much as I do.  It’s those damn ESPN commercials.

(I apologize to our foreign readers, but every now and then we’re going to talk sports and politics here.)

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I edged more to the Dark Side this day.   I added to my TBT horde… what can I say?  It’s like my own personal hair shirt.  It helps me with personal penance and such.   Reminds me of back in the day, when I was buying gold at under $300 an ounce and my dear departed Dad was laughing at me at every family gathering and occasional phone call.  Sometimes stubbornness pays off, no?

I also added to my Skiffles (SKF) horde.   I am now at about 40% of my intended position in that security.   I am not even close to the point of no return.

Lastly, I went to the Emperor Palpatine himself and bought some TZA from him today.  At the close.  It was a lot.  I don’t even want to tell you about it.  The lightning scars will likely remain for some time.

I didn’t touch anything in silver and gold.  I’m waiting to see if we’re getting some “handles” here, on what some are calling “triple top breakdowns” and what I like to call “cups w. handles.”   GDX is looking extremely appetizing here, but I will wait for it to break above that $63 range… and then I’ll probably go with GDXJ for the leverage.

Stay on your toes, and God Bless.

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