Wednesday, July 21, 2010

Barry, Ben, China And Trading Advice?

If you did not notice Barry signed FinReg into law today. Oh joy! The lies just a keep on coming from Mr. Transparency. Lie Du Jour: "No More Taxpayer Bailouts" I feel better now, don't you?

Big Ben did nothing to help "the cause" today. Some of the questioning was political positioning for the party as some actually threw Ben under the bus. Some of the testimony was actually productive. Mostly the testimony was not pretty and reading between the lines, things are going to suck for a while. Mish has Bernanke Says Economic Outlook is "Unusually Uncertain", Fed Prepared for "Actions as Needed" where you find, " In my opinion, risks are not just "skewed" to the downside, they are enormously skewed to the downside." We're in deep shit. Deep, deep shit folks.

My haunts had some pertinent posts on China today. We can't forget our friends in the west (you know the one's that have out debt by the balls). I'm thinking when they collapse (which will be sooner than later) that is when the 'financial nuclear option' becomes real not to mention the possibility of other nuclear options as well. I found China: The US Is "Insolvent and Faces Bankruptcy" on Jesse's Cafe American. "It would most certainly be a nuclear option to outright dump Treasuries outright, and would raise the ire of what is still a formidable military power. But it is the Western mind that is so incapable of seeing the many shades of gray in every situation, the subtle gradations in a range of choices that I believe China not only sees but is already actively pursuing." As I have pointed out here numerous times, what used to be the joke of us believing anything from socialist controlled China has now been embarrassingly flopped to the US.

I don't think they are ahead of us in the recovery phase cause their RE bubble is just now collapsing. Ponzi "Shark Loans" Fuel China's Housing Bubble; Home Sales Plunge 44% in Xiamen; Bubble Busts in Tianjin from Mish has, "In my book both of those are signs not of "strong demand" but of speculative blowoff top, bubble mentality. Judging from volume that has dried up overnight, it appears China's bubble has burst." I have to ask if we can ever get reliable data from China? I mean we have the ratings agencies and the BLS, what the heck do you think you are going to get from Big Red? They are in much worse shape than we are simply because they have so many more mouths to feed. the US (and the world) have a massive credit bubble and the producers like China no longer have anyone to buy their led painted crap. I'm not sure where all this ends up, but it will not be pretty.

ZH just popped up with China Proves The Best Time To Kick A Rating Agency Corpse Is Right Before It Stinks Up The Place." Today, China proves that the best time to kick a body (or a rating agency) is just after it has been shot in the back of the head and before it is begins stinking up the place. And in doing so, it has officially put a stake in for the role of primary global credit rater, citing China's unique role as the world's primary creditor." Of course our ratings agencies are on the take and deep in the back pockets of their corporate pimps. I guess thankfully someone (that is someone with more power over our government than we the citizens have) finally stepped up to the plate and called them on it. Call it the first 'real' shot over the bow in what is to become a really agitated situation. Hey, can you blame the rest of the world? I mean it was our bought and paid for system that perpetrated the scam that bankrupted the world (and allowed the bankseters to gt away with all the loot).

My intern Rich Cash just sent me this one - Chinese rating agency strips Western nations of AAA status which explains the situation much better than the above and in more detail. thanks Rich! 

Bottom line is when China begins to feel the heat then global tensions are going to spike as well. Rhetoric will get really interesting. (aren't you glad we have Barry at the helm to manage this crisis!) With their RE collapsing (we knew it was coming, bridges to nowhere and empty malls), global demand collapsing and millions of mouths to feed their troubles will trump ours. We worry about our impending financial collapse. Should we be more worried about those we have pissed on? (well, not "we" as in the American public, but "we" being lumped in with the POS global financial Ponzi/fraud sponsors, the banksters, the government and the Fed.) This is gonna suck big time.

Now something for you traders out there. 

We all need some help, and I found two nice posts tonight that I think we all should read and heed. I'll be a better trader tomorrow cause I read them. You will be to.

Phil's Stock World has The Greatest Traders. "Trading success, comes from screen time and experience, you have to put the hours in!" I suggest that you review this and pay attention.

I then found Ego: Illusionist, Trader’s Nemesis On The Big Picture. "For the investment trader, there is only control over the individual trader’s actions (not the market’s), and more importantly, the observation and reflection of those actions for improvement and future application."

I have to dive into the charts tonight (working on getting my 10,000 hours in). At this time it looks pretty bad as the daily, 60 and 30m charts are all aligned headed south. My only issue lies in the weekly charts and where they are. Bernanke did nothing to help the cause today as we finally got some truth out of someone in DC. Earnings could still be a sticking point for the bears as they lead to false hopes of a recovery.

GL and thanks for the views!