saw it coming... and yet ...

I do feel bad that even though I've seen all this shit coming since the March and August crashes of 2007, but I didn't profit off it, and I didn't even avoid all of the damage.

I bought Euros dammit. Amazing (to even the experts) that it would take my head off like this. Nobody saw this massive dislocation coming, and when it came I thought I shouldn't over react, hold on, it won't last forever. and it won't. but....

and now ... to sell (ok, I did a bit) would be crazy because it will snap at any second.

or at least the dollar may snap, that doesn't mean the euro will surge.

what to buy ? honestly, I think about what physical objects have high resale value. Do you think my vinyl 12" collection is going up in value ? ah ... no.

the yen, dammit, I was just about to buy and got all scared (having lost all of my other bets) and now I feel its popped too much. the G7 state that they are worried, its shafting the Japanese who have already been shafted in their stock market and personal pensions.

I am tired of hearing the US citizens whining about their market. The rest of the world has suffered far worst. Actually it was all fake money, so its nice to see those annoying super-Russians cut down to size.

And, as through much of 2008, I feel like I should go short-and-hold because ... those valuations are so cheap now and greed will overwhelm fear any moment.

Not that we aren't fucked, mind. Earnings down the road, consumption and all of that.

Personally I am an immaterial girl (poetic license, I'm a dude of course). And I don't like money really. I think we will eventually evolve past money, but not in this lifetime.

I think we will defintely evolve past this casino-for-a-stock market mentality. Maybe THAT's the capitulation we are waiting for. When the whole generation of gamblers are put out to pasture (self included) and we go back to producing and getting paid for production.

The next time you are thinking "well things seem ok, maybe we'll get out of this alive. thank god I didn't panic and sell back there when fear was pandemic" .... on that day .... sell something.

Me, I'm all "money" (whatever that is):

%40 euros (grrrrrrr)
%50 $ (the dollar will survive for a while longer. it has to)
%10 gold (who knows)

Wishing I had followed my impulse to buy JPY last week. I'm trying not to trade currencies. I don't really understand them enough.

I've enjoyed being all cash for a while now. but the demon of financial armageddon doesn't like cash either, and he will hunt me down and destroy that too.

How's this for scary: CPB Cambell Soup is holding up quite well today (with major world wide crashes going on). Now what could could savvy investors be thinking ?




Seriously folks, if you haven't thought about the consequences of a complete dislocation in the way that food and retail happens in the western economies ... and how you are going to cope with that dislocation, then do so now.

Have a month worth of food on hand just in case there are interruptions to banking or food. Better safe than sorry.

Re: "The Bailout" : I am officially recalling my benefit of the doubt

They are clearly overselling it, pushing it through too fast, drumming up too much fear. I do believe the markets be fucked. I also believe this is a Shock Doctrine - style tactic to make moves at a time of crisis. Now the word is "wall street as we know it is over. end of an era" — which sounds like a whitewash.

But what are these moves worth for the US Treasury and Fed ? Do they expect to profit off of it ? Or is it Hanky Panky Paulson doing a favor for his former company GS and scraping some more shit off onto the taxpayer ?

But considering how much they SEEM to want to support the dollar (right ? or do these guys really want a weaker dollar ?) this is a dollar fucking moving.

And I have to admit, as much as I protested the War in Iraq during the run up, Colon kind of had me there for a minute thinking : "gee, maybe they really do know something about them WMDs."

I have been prepared to believe that all hell really has broken lose.

GLD gold how far up this time ?

Sold some today at $89.60
Will repurchase on the next dip.

My thinking is that many people were caught when gold crashed down, but since they are gold buyers we know they are stubborn folk who, just like me, decided to wait it out. Then they got worried (in the last few weeks) and were looking for an exit. Underwater people looking to get out. BUT they are equally scared of the dollar.

So I expect a pullback from profit taking and just a general pullback from a historically massive pulse upwards.

But I don't expect much of a pullback, because everybody knows now that the dollar rally is done, inflation is inevitable and gold will now glitter again. that's seems a foregone conclusion now.

I told you so : SKF halted trading

Previously I said that some kind of options market related accident will occur. ("with so many planes in the air, a collision is inevitable")

SKF was halted on friday because of the new short rules. Finally I figured out a bit more of how the internals work on these gadgets.

http://news.morningstar.com/articlenet/article.aspx?id=253823&pgid=rss

ProShares does not buy or short shares, they trade only in options, forwards and futures. So they need counterparties to these agreements, and those counterparties would almost certainly want to actually short the shares to gain the desired effect so that they can fullfil their end of the contract. So at the moment nobody can do that (especially GS MS MER show are ...whoops... were the primary writers/buyers of these contracts).

This means that when I scalp the frakking QID I am having no actual effect on the marketplace. You know I'm really concerned that my little 100 shares should stand up and say (as in a democracy) "you suck!" and everybody watching their screens would see the cumulative emotional cry of the land and the market will have spoken.

but no, it doesn't work like that. Everything is distributed in time in uneven ways through layers and layers of derivitives. So often times its these layers of obligations that occasionally burp because they have to and then stupid shit happens like buying up the financials as though the nightmare was over.

everybody down

Does anybody think the massive commodities sell off is meaningful ? It seems like the machines that got stuck going up are now driving it down. Are they making money dragging it all down ?

I don't buy the "global slow down" therefore oil follows grains, gold follows oil. I get the feeling "THEY" are trying to kill gold just because it will prop the dollar up, and that's their last hope.

I don't see any basis for the big dollar rally. I wouldn't be surprised if a deal was struck with the Big Holders of US Debt that they would buy dollars (and why wouldn't they want the buck propped ?) in exchange for the US protecting Fannie and Freddie.

Now it isn't for share price that those holders needed to be protected, because the share holders got killed. Its the debt of F & F, right ? That's what the Chinese hold in weight.

None of this is good for nobody.

Market of Noise

The momentum driven hedge funds have turned the market into a huge statistics and probability experiment. 60% + of trading is program driven. Many trades aren't even about the company in question; they are part of pair trades, index and ETF buys and sells. Hedge funds put together correlations expressing their ideas about relationships and this massive complex matrix is let loose on actual companies and investors. There's a lot of noise because many of the trades aren't direct statements of bullishness/bearishness regarding a specific stock, its just reactions to other shit firing off into the data space.

Everybody is feeling like the market has no memory day to day. Logical ideas and carefully considered thoughts about where capital should be moved are no longer rewarded. There is no such thing as a long trade; I don't even swing trade anymore. I sold every mutual fund and I don't like to hold ETFs overnight. I stubbornly hold gold, but the paper value via futures trading has totally abstracted the historical "gold is money" argument. Its a huge crapshoot.

That said I've been doing ok, and that's damn tough.

Well right now everything is going down, so that makes things easy. I scalp, sometimes both sides of the market (that is until I got caught on a QLD downdraft and decided to only scalp the QID dammit). DIG and DUG. I proudly extracted small change from LEH. QQQQ is below July lows today. March lows coming soon ? A bounce ? Seems logical, but logic hasn't been of much use lately.

I watch the components, TRIX, TRIN, VXN, oil, currency. Some day I will code up my ideas into cross market indicators. Or spend it all on a herd of yaks and return to the mountains where I belong.

The nature of holding investments has been steadily changing. Buy and hold is disapearing, we just scalp it as if to say in passing "yes, this guy ! great company !" or "due for a hair cut here" and then we are gone by the end of the session. We aren't going to get in a relationship. OK, that's a small segment of the capital. Retail investors (mom and pop) should leave already.

Maybe the next age of finance will be like cloud computing: money is allocated to investment vehicles and it swarms around in the most evolved and logical fashion. Humanity acheives an unsurpassed efficiency of application of capital.

Or more likely, the greedy are going to keep trying to suck the alpha out of the whole planet. Then they will leverage it further and suck the alpha out of the future (erm... aka debt) and then maybe progress to sucking the alpha out of yet to be discovered worlds and universes.

The age of human traders will soon draw to a close. It will only be algorithms. Now I would like to see algorithms with more meaninful inputs than momentum. It seems like once something starts to move it keeps going with a lot of force ("hey Long Oil Short Financials isn't working ! reverse hard !!!!").

I look at Oil and Gold and Solars going back up. Forget logic, the holdings and programs and churnings of hedge funds are more significant. We might as well direct all of our financial analysis to what THEY hold and when THEY are going to have to liquidate or reverse.

Did the PPT start the dollar rally ? Yes, and they pushed at exactly the right moment.