Thursday, February 25, 2010

Too Cute By Half

Yes, another time shortened evening! I mentioned a while back that I would be writing less as I embarked on "lose weight/get in some kind of shape" mission through boxing training. Things started a little slow but now I am doing a full 12 three-minute rounds of assorted training modules as well as weight training and the time it takes to wrap my hands and warm up. All in all about an hour and 15 minutes or so. I am sticking to 5 times a week and this is eating up plenty of time. I wish days were about 3 hours longer!

I have tomorrow off so you know what that means. As is tonight's post will be a few quick hits and a thought on the future.

If it Does Not Work, Keep Trying
In a way I do admire Keynesian thinkers (The Keys). Faced with overwhelming evidence that their theory does not work (the ONE time it did it was WWII that stepped in and muddled history, maybe a little bit guys?) they have shown tenacity similar in style to a wounded wolverine. They just refuse to give up the ghost and move on.

This Bloomberg headline caught my eye as a punch in the face to the Keys:
Deathbed of Keynesian Economics Will Be in U.K.
The whole thing is worth a look.

Of course the Keys will never surrender and thus we have this hot on the heels of the above piece via Zero Hedge added drama headline:
Next Round Of QE In England Now A Virtual Certainty
Zero Hedge recounts a Market News story with juicy quotes such as:
"It is entirely plausible that as economic events unfold it will become clear that an even more expansionary monetary policy will be appropriate," Miles said.
"To deny such a possibility must mean that you either cannot imagine significant downside risks for economic activity and inflation - which suggests an imagination deficit disorder - or believe that monetary policy has become ineffective."
We have a winner!

I submit for evidence the following:
Japan's consumer prices fall again in January
Nobody has been better than the Japanese with regards to the money game, yet here we are:
The drop in core CPI marked Japan's 11th consecutive month of deflation
Add this to the past 20 years or so. It will work, one day!

For a related read to see the US going down the same path, check this Marshall Auerback write up that argues the US cannot ever default as long as the debt ceiling keeps being raised (???). Ok Marshall:
Bernanke Gets It Right! America Has No "Insolvency" Issue
Wow, just wow.

Brick Wall Musings
I wrote about "Pretend and Extend" hitting a brick wall and Kid Dynamite caught a Market Ticker piece that has all the goods and provides great coverage:
Reality Bites: Mark to Wishful Thinking Fails Again
KD's closing sentence:
A peripheral lesson to be learned here is that rosy projections, hopes, and anticipations do not equate to a rosy reality.

Too Cute By Half
Last Tuesday I wrote:
Bond Auction Complete = Market Rally
The recent weakness in the market indices which was jumped on by technical traders as "the break" below double headed over the shoulder boulder holder trendline was erased very fast. The culprit? US Bond Auction calendar coincides with market weakness (and dollar strength) and then as soon as the paper is sold a low volume ramp up begins in earnest once again. Almost like the whole thing is rigged, almost.
I figured that with even more debt on tap for this week we would see a weak market all week and then a Thursday afternoon ramp job once the auctions went off. I mentioned to a friend of mine maybe a TZA play until Thursday afternoon and then a switch to TNA was a viable plan here based on the idea that these movements are indeed, perhaps, maybe, a little rigged.

So I am a tin foil hat type, yes? I am a conspiracy nut that probably thinks that gold and silver prices are manipulated, yes? I am a part time blogger that should stick with his day job, yes?, well yes probably. All that said, here is the weekly S&P 500 chart via Yahoo (5-day starts last Friday; Check Monday to Thursday noon):

And the one day to show my noon time switch move (TZA to TNA):

Yeah, I'm Crazy all right!

On this note I wanted to talk about how the players involved in these ramp up/ramp down jobs may be getting too cute by half. What do I mean?

I can see a point sometime in the next year where the indices are all maybe 25-35% higher and the headlines read:
-DOW/S&P 500 nears old highs (LOL, never the Nasdaq, bubbles die LONG deaths!)
-Banker bonuses at record level due to strong stock market
-Stocks show recovery is here
and other such related items.

Too bad unemployment will be at 15%, home prices would have fallen another 15% or so, consumer confidence is at like 5 (kidding), and tax revenues have fallen even further. I think that will really be the point of recognition that this has all been make believe. It is clear now, but too many are breathing a sigh of relief as they see their 401k coming back up and the promise of jobs for everyone and a home for all still have some kind of magic grip on the masses.

On a related manipulation theme, Clusterstock's Joe Weisenthal notes:
Careful Euro Bears, Greece Will Try To Dropkick You Next Week
I agree and think Greece will try and float a debt sale next week and if they actually put it out there it will go off so much better than expected it will make people's heads spin. Of course it will matter little that it is cheaper for the US/Euro central banks to buy the entire auction than hand out a bailout to Greece but I imagine that item will not make the headlines. Then again I am CRAZY!!!!!!

Have a good night.


GawainsGhost said...

Congratulations on sticking to your regiment, GYC. I used to do a lot of martial arts, praying mantis kung fu and the like, so I know how difficult it is. But you get out of it what you put into it.

Anyway, after this wild and whacky wee, for Friday Night Entertainment I recommend some Boomtown Rats, "I Don't Like Mondays." This is a particularly brilliant performance.

Brenda Ann Spencer, yeah, I remember her. Pretty little sixteen-year old girl. Her father had given her a rifle for Christmas, and she promptly set up a sniper stand on her balcony, then shot up the elementary school across the street. Killed the principal, the janitor, two policemen, and wounded nine children. After the ordeal, which lasted six hours, she was asked why she had done such a thing.

"I don't like Mondays," was her response.

High school in the late 70s, what a nightmare. Of course, it's nothing compared to the world economy now, but the same people are involved. Someone should ask Alan Greenspan if he likes Mondays.

getyourselfconnected said...

I tell you it aint easy! I have to come home after a 10 hour day, make dinner, make tomorrows lunches, and then do my work out, shower, and then try to find a few minutes to read the news. It aint easy. The difference already is huge though so I am glad.

Scary anecdote story. Was it a Karen Carpenter song that went:
"Hangin around, rainy days and Monday's get me down"? Not sure and I have no time to look it up, lol.

Football related:
Julius Peppers, where will he end up in your opinion?

GawainsGhost said...

"Rainy days and Mondays always get me down."

As far as Peppers goes, who can say. I don't see many teams making trades or signing free agents this year, what with the looming CBA disagreement and all. This is a very deep draft, with a lot of underclassmen coming out, so I think most teams will horde draft picks and build depth.

And if there is a work stoppage next year, maybe Roger Goddell can say, "I don't like Sundays."

getyourselfconnected said...

I missed the "always"!

Come on don't cop out! Peppers is either a:
I have high hopes.

Anonymous said...

Yeah, that's Karen Carpenter.

watchtower said...

This song makes me feel like a teenager again, would you consider it for Friday Night Entertainment?

Poison's 'Talk Dirty to Me'

Good times, gooooood times : )

Disclaimer: I know next to nothing about hair/glam bands, I just like this song.

S. Gompers said...

I would still like to see Meatloafs Paradise by the dashboard lights.

I understand your regimen well, I am a southpaw that used to roll with a hell of a change up.

The solution is painfully obvious, and has been tried before, and is why our nation was founded.

Eliminate the FED.

Lincoln recognized the threat of the banking cartels when he wrote:

* “The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." Abraham Lincoln Senate document 23, Page 91. 1865

The Europeans recognized the danger to their financial cartels when the London times published in 1865 this piece regarding our government printing its own currency as Lincoln wished to do:

* "If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." - Hazard Circular - London Times 1865.

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed. U.S. Treasury Notes began being printed, and entered into circulation. Our “moneyed priests” have a different take on this order, unfortunately, we will never know the truth. Within months JFK was killed, Treasury notes were recalled, and the Federal Reserve Note ruled again.

TomOfTheNorth said...

Hi Kids,

Here's my vote as appropos of the 'death of Keyesian economics' PLUS wolverines.....

Now who else could pull THAT one off, huh?


getyourselfconnected said...

In a cosmic irony I had a generator installation consult on Wednesday abd was scheduling a natural gas powered generator to be put at the house in the next couple of weeks when a huge wind storm came Thursday night and of course knocked out the electricity!!

Of course it looks like another extended power loss time and may have power by Monday!??

Anyways I am at a hotel and pretty aggravated so I will catch you all later.

GawainsGhost said...

We all missed you last night, GYC. But I figured you were snowed in. Severe weather and power outages are harsh things to deal with. It's global warming!

watchtower said...

Glad your safe, if not inconvenienced a bit.

Not having any power blows chunks.

getyourselfconnected said...

By some miracle the power company has worked wonders and I am back at home. Much better than the 6 days power outage in the last big storm last year. Thanks for checking in.