Monday, November 30, 2009

Could It Get Any Worse?

Does anyone out there get the feeling that the load on our proverbial Mule is getting a bit heavy and that our Ass is about to give out on us? It seems that the global financial system has finally reached DEFCON 9 and everyone is finally on red alert. A little hick-up in Dubai and the scramble that follows is like the roaches in the kitchen scattering when the lights come on. Anyone out there get the feeling that we are hours/days away from a real country biting the dust? How about something like AIG finally proving to be to big to save? The global financial time bomb is ticking and there will not be some super agent to come shut down the countdown at 007. We're close.

Since I am bored with the markets sideways action, and I'm not anticipating anything out of the ordinary I'll stick with the news tonight.

Zero Hedge - NY Fed Announces More Reverse Repos Coming, Spooks Stocks  - "In the coming weeks, as an extension of this work, the Federal Reserve Bank of New York plans to conduct a series of small-scale, real-value transactions with primary dealers. Like the earlier rounds of testing, this work is a matter of prudent advance planning by the Federal Reserve. It does not represent any change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future." OK, so let's read between the lines, nothing to see here, move along. As ZH addresses, the previous failure and the sheer mention of "value" is quite humorous. Like they think we have no clue and the potential results of this experiment mean nothing and should not be of any significance to anything. LOL, now that's funny. Benny Boy, care to tell us why you are doing these then? 

Washington's Blog - Climate: We Can All Agree On Two Things (Via a read in ZH) - "Everyone should read the leaked emails and rationally think through what they mean. But whatever one believes about climategate (the leaked emails showing that "tricks" were used to "hide the decline" in the climate data and the destruction of the original source data), we should all be able to agree that: (1) We should end the wars in Afghanistan and Iraq; and (2) We should not let the financial giants who caused the financial crisis to profit off of cap and trade schemes." There are several key news issues I have not touched on for one reason or another (mainly cause they so freaked me out and pissed me off I was not sure how to react). The leaked climate change emails should cause the conspiracy denialists to scurry into their cupboards and rethink every truth they have ever known (but they won't). This is as serious as it gets. With the Copenhagen meetings next week we all need to pay really close attention to what transpires. This may be the biggest event that lays the groundwork for the UN to govern our future and not our Constitution. I'm not kidding. This is huge.

The Market Ticker - They Aren't Really This Stupid, Are They?  Karl does a great job with this post. More laughable words from the Treasury its self. Again, conspiracy pundits stand up and take note, "Here is the real stunner. A senior person at Treasury said to a small group of us that it is now official Treasury policy to extend and pretend on real estate loans. In other words, the policy statement from last week says, if you can make an analysis that says even if the current value is less than the loan, if you can do a spreadsheet that shows if you extend for 3-5 years, and if the economy gets better, and if the loan can be amortized down to where the loan is no longer more than the value, then the lender does not have to take an impairment -write down. Loans are to be modified by rate reductions, deferral of reserves, deferral of amortization or what ever." This one is a must read so you will better understand the levels of false accounting and price manipulation all in the name of "better" balance sheets at any cost. And you wonder why the market keeps going up? Sadly, even with these tricks IMO the market still fails. How sad is that?

Mish -New Record Low Yield On Two Year Treasuries; Is This The Start Of A Dollar Rally?  - This is some real news relating to marker prices you need to note. "Given the US markets were closed yesterday, I have the same question floating in my mind as a day ago, wondering if this is another one day wonder rally in the dollar (and another one day wonder selloff in equities) or if this is the start of a long awaited correction in both the dollar and equities." I have been looking for this dislocation and have mentioned these actions several times in various posts over the past weeks.Keep an eye on this development.

Zero Hedge - Is Gold The New DXY Levered Intraday Speculative Bet?- Related to the above post from Mish, ZH wonders if the dollar has a new bitch?

The Pragmatic Capitalist - 5 REASONS TO EXPECT A NEAR-TERM SELL-OFF - "Strategists at Credit Suisse are currently expecting a near-term equity sell-off, but are not yet concerned about the downturn evolving into a larger bear market decline.  Why have they turned a bit more cautious?  A series of psychological, fundamental and technical events:" It is worth a look, but nothing new to the savvy technicians out there. For those of you wondering what these "super analysts" are worth and why we listen, your guess is as good as mine.

Times are getting testy. As my regular readers know, I do not expect anything bad to happen between now and Xmas. IMO they will not do anything to disrupt the non credit card wielding consumers at this time. After Xmas is over, all bets are off. On the other hand, if some EU country should decide to go bump in the middle of the night (as monsters do), chaos should ensue and there is nothing the PPT will be able to do to control the market (except shut it down as it almost did with Rule 48 last week). The boogey man is real and he's lurking (and I'm not talking about some horrifying disco king from the late 70's). It will happen overnight while you are sleeping (for Xmas sake I should have called him the Grinch). We may all wake up one morning to a closed market and then a sweet 1,000 pt plunge (remember I'm calling for at least two market closures on this next trip down.

GL out there and happy holidays.