Thursday, October 7, 2010

Goody Bag

What a busy week! Busy at work, busy tape watching, busy at home. Just busy. I need a break. Mixed goody bag tonight, too much stuff going on. Tomorrow is Friday night and thus requests are welcomed.

Extreme Kid Dynamite
Kid Dynamite has a post up today titled:
Kid Dynamite Slaughters a Cow
And no this does not involve my northern neighbor using alcohol to roll with some unsuspecting college ladies in his youth or taking some huge pot off a tourist in Las Vegas in Hold'Em, he actually helped butcher a cow! I kid (pun intended) you not! Check it out if you like but note MY WARNING, IT IS GRAPHIC! Way to go man.

Today had a few wrinkles in the tale of foreclosure fraud saga. First off, a bill was sprinted through the Senate (it had already passed the house on many occasions) that would have made changes to notary laws in relation to interstate commerce. I am no lawyer and I hate this stuff because I don't have a grasp on it, but there is evidence this new law if signed by the president could be played to help skirt around the lack of proper documentation rampant in these matters.

In a move worthy of hefty praise, President Barrack Obama used the "pocket veto" by which he will not sign the bill into law by just letting it exist in limbo. While I think the original plan for this bill may have made sense, there is NO reason now to rush it through until a better grasp on the laws regarding foreclosures can be examined. I offer well deserved thanks and praise for President Obama on this one, it was the right thing to do and went against the house, senate, and banking lobby all at the same time which I love.

Calculated Risk has a guest post by Tom Lawler up that asks:
Foreclosure-Gate: Who Will, and Who Should Pay?
Lawler has been creepy spot on with his housing sales numbers so I read him close! He thinks mortgage servicers will have to pay. That would be nice, but the taxpayer is the easier option!

I will say two things about this. First, I still believe that some new law will be passed to make all the short cuts legal and absolve the banks. There is NO WAY the banks are going to have to open the books and really be checked on this, I am not sure it is even possible. So far I am the only writer that has predicted this and has since the beginning. It does not fit the narrative that banks get clocked.

On the other hand, and second (on purpose I did that!), this story made the NBC Nightly News with Brian Williams and it lead the whole show! That is serious coverage. People are pissed about this (why now, why not before you lunatics!). There is no way a law can be done before the elections. I can see a new CONgress after the election passing a law to save the banks and then hope that voters forget (they will) but that will take time. One can hope for something real change.

SLV Was Good to Me
Back on August 30, 2010 I entered into my biggest trade ever. By trade I mean something I was using in a very short term time frame, maybe a month give or take. I was attracted to a silver play due to macro factors and this coupled nicely with an attractive chart pattern that I favor. I decided to make a move, which I covered here, to go for the gold, I mean silver!
(NOTE: In the post I stated about 50% of my trading portfolio went into this trade, and the exact number was 58%)

I placed my sell order last night for the whole position. Why?:
-My first target (most confidence) was $22 which was already passed
-My upper target was $24 which was getting a bit tired looking
-$23 split the difference, and I wanted to give NOTHING back
So here is the breakdown:
Buy $18.70, sell $22.88 (where my orders where filled)
Short term gain of 22%!

In case you are wondering, I had no idea gold and silver would get moved lower today so much, I just made the move last night.

I am ahead of my own yearly target for 10% returns and I have enough extra to rock on out to the Bahamas on October 22-October 25th so there will not be a Friday night post that week! Here is where I will be:

I would buy you all a drink, but it is all inclusive!

I Submit as Evidence Exhibit A
Some call me a nut job. Some call me a "gloom and doomer". Some label me as a pessimist. Do what you want I say.

I have spilled pixels enough on the ruinous policy of asset bubbles, I don't want to go over all that again. Instead how about a headline and a chart?

From this morning over at Reuters there was this gem which I saved a screen shot of in case it changed (it had not at time of writing; if it does change or get lost I have the picture):
Fed is banking on phony wealth effect
A nice section:
So, there you have it: pump up asset prices and hope that people spend some of the ephemeral gains. The idea that people will spend more if their houses and other assets rise in value is called the wealth effect, but this policy creates only pretend wealth.

I know plenty out there think they will of course wind up with all the loot at the end. Some will, but not me and no one I know! You cannot invest in such an environment, only bet or trade if you want to call it that. When every few years some monster percentage of your "gains" in whatever vanish, what can you do?

Pragmatic Capitalist was kind enough to supply permission to repost this chart (last one in this post) that shows the extremes which we can expect to continue should the FED/Whole crew succeed in their goals:

The red line is the "plan" for recovery. How is that going to happen?

The title of the post was excellent as well:
I can only answer, No. But they thought they did.

My man Mark is a huge believer in long term trend lines, and I am as well. I think you can figure these out on your own.

Shout Out
For my man that has a reputation as being a bit testy on the trading desk, I offer my version of:

My man!

Have a good night.


watchtower said...

That resort is looking good!

I wouldn't mind this new Ozzy song for Friday Night Entertainment:

scharfy said...

Nice work on the silver trade. Enjoy the Bahamas...

ALmost got squeezed out of my short gold position on some overnight mayhem, but ended up with a decent short from a little north of 1350 in dec gold which im taking into the number.

Lookin for a slightly better than expected NFP # tomorrow- that may put the size of QE2 on the low end, put the dollar bears on hold and force some of the weak metal longs to make a decision

Not a conspiracy theorist, but if the powers that be ever NEEDED a number going into November to be adjusted in a positive way - this would be it.

Or Gold may just rocket 30 bucks north and ruin my weekend :)

getyourselfconnected said...

All the gabbing has been about a bad number so you know its gonna beat expectations, dont play.

Long term good luck with the gold short!

scharfy said...

FYI totally on board with the metals long term, just trying to catch a little of the Hot Money exiting the party!

GawainsGhost said...

Well, this foreclosure mess is really starting to bother me. I just got ten new assignments yesterday. They're going to require a lot of research, time, money, and gas. How many of them are valid? How many of them can I sell? How long will it be before each deal closes and I finally get paid? I have no way of knowing.

True story. Last year we got assigned this house. Did the research and came to find out that the legal description, which is determinative, on the mortgage, loan documents, foreclosure papers, was actually for a commercial building across the street, not the house.

We informed the company of our finding. They said the legal description is correct. We said, no it isn't. They said, yes it is.

This back and forth went on for months. We kept telling them, you have the same legal description on all the documents, but it's not the correct legal description for the house. Finally, the company had their title insurer reseach the property. Turns out we were right.

Okay, now what? This guy didn't buy the house he lives in--he bought the building across the street! And doesn't even know it.

The company said, we'll fix the documents. How? We're talking about reams of paperwork here, going all the way back to the original sales contract.

The whole thing is a mess. And it's scandalous really. Several people made a major mistake here, starting with the listing agent, the selling agent, the lender, the title company, the list goes on.

I mean, seriously, how do you sell the wrong property? All of these people, and none of them noticed a glaring error of epic proportions. Until they sent it to us. We figured it out in a day. They denied it for months. And now the same people who created the problem are going to miraculously come up with the solution? And how are they going to do that? Document fraud.

If this is any indication of the state of affairs in the mortgage and securitization industry, we're all in for a world of hurt.

Anyway, for Friday Night Entertainment, I would like to request Sabra Cadabra, by Black Sabbath.