Still alive...

Well, I am still alive...I have been working on a very sophisticated release that is now finally in UAT mode after months and months of work. So, I have been totally overwhelmed. Additionally, there have been no market events that have played out unexpectedly so far, so not much to update there. We are still long the hedges that were put on relative to our short futures trades. I will post when we close that position and am also working on a post regarding this type of trading and its psychological basis, foundations and potential.

The market is indeed interesting here...Bonds screaming deflation. In fact, I see the Bonds Up/Sock Market up - bond/equity arb blow up as a major influence on the market dynamics right now. Correllations are either extremely tight or breaking down...these are natural symptoms of de leveraging but very unnatural to trade and difficult to accept. While all this is happening Geithner is now writing Op-Ed marketing pieces for his screenplays in the New York Times and Bernake apparently is getting into the hedge fund business properly by planning entities to purchase worthless assets and mark them fraudulently until he can figure out how to compensate for the 40% drop in the volume in money over the last year. Stimulus is creating lots of new street building projects we don't need and paying unions that we also don't need while disrupting already fragile businesses on the streets that did not really require the work to begin with. That is happening all over miami...Obama and company just get it right everytime. Good thing Obama works for Bernake...What a bunch of losers these guys are.

All interesting stuff and interesting times.

I am working a few new feature posts...so, be patient with me. One of the things that I like about trading swing systems is that you get breaks in between the trades and I have tried to use this last one to force this release into fruition. it is surprisingly difficult to concentrate fully when you have large positions on as we did in July...I was relaxed but the size of the trades was larger last month than usual which was certainly interesting. So. I apologize for my lack of posts the last few days, however, I have not had many free cycles left...and I am handicapped because I am not blessed with very many cycles to begin with. ;-)

Tankers anyone?

China must be pushing the envelope if this email we received is true. They are building new factories, new office towers, in fact the government is threatening bankers with criminal prosecution if they do not loan money for projects. Keep in mind this means the creation of even more supply and manufacturing for a world that needs much much less - not more. But these jokers can't get through their heads that making a new factory no one needs is not a good use of capital.

But if things are so great over there...why are the oil tankers sitting full and loaded waiting for weeks in the harbor?

Been interesting seeing how the talking heads are beginning to discuss the Baltic Dry Index. I am a Captain at Delta, and fly to Asia as part of my normal schedules. We are not carrying any cargo too or from Asia, and our planes were always full of "belly freight" up until this last Spring/Fall. In fact it is so severe, Northwest (Delta) is pulling out of the market as a dedicated freight carrier. Something they have done since 1947, all due to the reduction in cargo from Asia to the U.S. We recently pulled out of Guanzhou (70% of the production in the surrounding area used to go to Walmart) due to the drop off in freight shipments. 

I should tell you about the ships sitting in harbors sometime. We see literally thousands sitting empty in ports or harbors everyday flying over Tokyo, Osaka, and Nagoya Japan and Shanghai, China. On the other hand we also see Hundreds of oil tankers sitting at anchor FULL, probably being used as storage. Appreciate your observations 

Thanks,

B

thanks to http://breakpointtrades.com

European optimism - all eyes are focused on getting back to normal after the crisis was

Even as the reports come out reflecting that European consumer prices fell by the most in at least 13 years in July after energy costs declined and unemployment rose to the highest in a decade, Europeans are not focused on the potential that there will not be a recovery.


How can you recover when there is no demand? How do we know there is no demand - well there are lower prices. Much, much lower - 40% lower food costs are stunning for Germany. Yet nearly all of my European friends emotionally  dismiss any reference to future or imminent risks. Spending by Germans is occurring in a mostly normal fashion for individuals even as Nieman Marcus and Sax Fifth Avenue and other luxury stores struggle or close. Food prices have crashed in Germany, temporarily that makes consumers feel better...especially when you can receive 66% of your salary from the government welfare when you lose your job. 


But what we see is less and less value creation and more and more value combustion. Deflating food prices mean less jobs not more. Many other prices will deflate and result in less revenue, less jobs, and less payments - resulting in lower prices still, less jobs and less revenue. And on top of that we have hundreds of thousands of people in Germany with tons of time on their hands getting paid 66% of their incomes while contributing nothing to value creation is like dynamite to value creation. A double whammy create no value and sap value from the economy by using valuable capital that could be used for something productive.

Warren Buffett approves of Bernake Re-appointment

Warren Buffett the oracle of Omaha and the Berkshire Hathaway CEO was asked by Bloomberg about Ben Bernanke and the FED  he said that he supports the FED and what Ben Bernanke have done also a renomination of Ben Bernanke , he was also asked by CNBC on June 24 wether he thinks Ben Bernanke should be appointed for a second term he answered: 


watch the video interview here

"I don't see how you could do better. Yeah. He has taken decisive action at a time when really decisive action was needed, and extraordinary action, things that we hadn't done before. If he hadn't of done -- I give the Bush administration credit on this. (Former Treasury Secretary) Hank Paulson. They don't do everything perfectly. Nobody does. And we were getting balls thrown at your head by the hour. You're going to make some mistakes. But they got us through a period that, if we had different people in those jobs, I'm not so sure we would have gotten through."

Just watch what happens next...and lets see if Bernake and company caused it, made it worse, or softened the effect...I suspect it will be highly clear that a guy who thinks publicly he prevented the great depression II exactly at the start of the next leg down is not going to be viewed with any credibility. What has Mr, Buffett been smoking...i thought they did not allow that stuff in Omaha.