Thursday, August 21, 2008

Hello Out There!

It certainly has been a while! Sorry for the LONG delay, but I finally dove into the den/library room construction and as with most things it was a bit more involved than I would have wanted. The room is looking totally awesome right now, and I should be wrapping up the finish work over the next week. Good Stuff.

Are you enjoying the wild markets and things economic? I must admit being away has been tough with all that is going on that I would like to discuss, but I cannot match the fine writing and up to the minute coverage the blogs in the blogroll supply. Us them. Often. I have a few macro points to make to get some ideas out there. Thanks to all that keep checking in, hardcore fans are the best and Kevin, G, and Watchtower are some of the best readers a writer can ask for.

Who's Brilliant Idea Was This?
A while back a truly amazing mind came up with the following theorem:

"Right now the major banks/brokerages are in fact insolvent, and their stocks are zeroes. The possibility of a FED/Treasury led bailout puts some kind of value on these firms and the market action is torn between a price of zero and some other small sum."

I know, it was me of course! After a long month it has become apparent that many firms are now basically zeroes (LEH, MER, FNM, FRE) but the possibility of missing a wild 50% move up on a bailout set price is too much for many to pass up. Sad stuff which leads me to.......

Fundamentally Strong Stocks Do Not Gyrate 30% on an Almost Daily Basis
Newly formed or newly "discovered" markets in merging counties tend to have crazy volatility due to there being so little information about there particulars. Market gyrations of 30% are common as momentum players and speculators rush in and out. This is expected. The US financial system should not be one of these markets. When a stock as widely held (and I empathizes WIDELY HELD) as Fannie Mae can move 30% down one day, 25% up another, and move 80% in 6 months something is seriously wrong. The US financial stocks right now resemble a banana republic market. I do not care about the money making possibilities here (there are many) but instead want to focus on the fact that there is no tether to any reality right now for these entities. Penny stocks behave this way, not cornerstones of a financial system. This is ugly indeed.

Lowe's and Home Depot Throw in the Towel
To me the stunning drop in business at HD and Lowe's shows that finally the consumer is giving up. Drops of 25% on a yearly basis is big time stuff here. Turnaround clowns are still pinning the tail on the early 2009 donkey recovery, but secular changes do not change direction so fast. Again, an important data point.

Fall is Upon Us
As predicted here and elsewhere this has been a LONG summer. The data is deteriorating for the US economy. The housing story is getting worse. The banks are out of cash and out of time. There are things in motion that cannot be stopped (Alt-A meltdown, Bond refinancing at terrible terms, overseas funds saying "No Mas" to debt offerings). The FED and the Treasury have been exposed ass clueless and powerless. While the overall market has been ok so far, it is still vacation really. The fall is going to be wild, and volatility is going to be bad. I will have more to say in a future post, but my basic premise is that by the end of October we are going to know if we are just screwed (which stinks but can be overcome) or totally f#cked (game over). Care to place a bet?

Good Video
This is a great ultra slow motion video of a lightning strike, check it out:


Have a good night.

14 comments:

Edward Ott said...

i cannot see the video:(

Anonymous said...

GYSC

I get to see more dang lightning then I care too where i am. When I was preparing the ground for the garden I dug up a lot of sand that had been turned to glass which after having seen the same thing at work where a 12kv line came down I'm sure it was from lightning.

The markets are pretty much starting to bore me, I see the same trades go on and taken off a few days latter: run up financials, short the dollar, long commodities then we switch and do just the opposite. I guess people are making a lot of money trading but as for having any true investment merit I can't see it even in the PM's

The garden here at the house got hit by a 3/4" hail storm which did a lot of damage and the grasshoppers turned the one out at the farm into a bust but the apple trees are loaded and I'm still getting wild Asparagus.

Kevin

Anonymous said...

Hey All,

Fay Fay go away come again some other day....

http://www.nhc.noaa.gov

http://tinyurl.com/6ydn74

Well isn't it obvious folks that this THING called Gold and Silver are not going away? See anything interesting over the last few days, besides FAY that wont go away?

AU and AG. Elemental forces in the market. You can't print it or add zeros behind a real element in nature. Unless your talking about something not real. FIAT PAPER BS!

Get your preps people. Bullets, Beans and Bullion ready.

Don't wait for the next messiah to FIX it because there is no fixing this plane in mid-air flight.

G

PS: Thank you for the honorable mention. So who fails is no longer important... it what you do with that failure that counts.

david said...

good to see your post again!

Cornerstones of the financial system fluctuating like penny stocks, and yet they say everythings fine.!!!!!

watchtower said...

GYSC wrote:

"The FED and the Treasury have been exposed ass clueless and powerless."

I don't know if the "ass" was a Freudian slip or not, but it's true, the're clueless and powerless when it comes to finding their "ass" (from a hole in the ground) :)

getyourselfconnected said...

Watchtower,
I guess either the spell check missed the "ass" thing or it knew what I meant!

watchtower said...

Roger that!

watchtower said...

Because the space theme is often mentioned here I thought I'd post this:

"US-Russia chill threatens NASA space program"
by Jean-Louis Santini

WASHINGTON (AFP) - The chill left on US-Russian relations by Moscow's military incursion into Georgia could spell problems for future US access to the International Space Station, US experts said.

http://news.yahoo.com/s/afp/20080824/sc_afp/usrussiaspaceisspolitics

Anonymous said...

NO SOYUZ FOR YOU!

G

Anonymous said...

This country can't afford NASA, there is going to be a time when some else making all these programs that we simply cannot afford possible by buying our debt are going to come to and end. I don't know when but I think it's coming sooner then most think.

Kevin

watchtower said...

A WATCHTOWER SPECIAL REPORT

OK, this might not be too special but I feel compelled to mention it.
The first time I noticed this it was about three weeks ago, My wife and daughter and I loaded up in the "Griswold Family Truckster" (Honda Accord) and headed to town to eat out that night.
We usually do this every weekend out of habit as much as anything.
Low and behold for the first time that I can remember (I've been married for over twenty years) we got into one of our favorite restaurants without having to put our name on a list and wait.
If this would have happened one time I would say that it was a fluke, but for the last three weeks it has been this way.
I have heard KD talk of this phenomenon happening before down in Florida but it is strange to see it here in the "bible belt" where the housing bubble never really took off.
My guess is that the $4 a gallon gas and escalating food prices is starting to take hold.

Think dominoes (no, not the pizza), I believe that it has been set in motion but it is happening perhaps slower than I would have thought (speaking just for myself).

WATCHTOWER'S ADVICE (which is worth about what you are paying for it)...

Batten down the hatches, the leading edge of the storm is starting to invade the heartland.

Be mindful that a black swan event could really throw things for a loop.

It just makes good sense to put a little food and water back just in case (see the above).

P.S. Keep in mind that I live in an area where the only entertainment choices are A. The movie theatre B. Restaurants C. Counting how many three legged dogs are running around.
That's it, no stadium, no metropolitan theatre, no cultural activities, zip, zero, nada.

It's coming.

Anonymous said...

Can't wait for the blogs next post.

G

getyourselfconnected said...

Gentlemen,

I hope indeed to have something up today or by friday. You should all see the new den, very amazing! Perhaps I will put in a few pics. Lots of issues out there, and I sincerly hope G got out of Gold and Silver while the getting was good. Take care all and hope to have up a post.

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