Hello out there! The cold has really moved in here in New England. Luckily I have tomorrow at work, then Monday and Tuesday and then I am off until 2011. I need the time off that is for sure.
I hope all is well for the regular readers and occasional stoppers by. I wanted everyone to know I am fine I just have not been really thinking about things financial for a bit. When i do it seems things remain the same anyway! I am getting pretty excited for the NFL playoff season and the New England Patriots are really doing well. Who knows what can happen this year in the playoffs? It should be wild.
With the time off I will probably write a bit more. At this point I think I am moving away from trying to change things (that worked!) and just going with what is. 3 full years is a long time to hope for change, it ain't happening. As such, my sarcastic biting wit will remain, along with my endless complaints on things government intervention and banking. I think more science, movies, and tid bits will find their way in. I will also share any trades I make as I see plenty of ways to do some damage using my tested system of "using the script" provided by "the things that have to happen". Investing for dummies as it is.
On a macro level, here are the things I am thinking that will come into play. Will they in 2011? 2015? I don't know but they are what they are. Without too much writing about them, here are some central tenets of how I see things after 3 years of on the fly education in finance:
-The Notional Issue is a huge one. What is money, derivatives, options, central bank asset swaps, leverage, and debt guarantees? Heck if I know, but many want to know now. Whether we are talking notional bets on gold which dwarf the actual metal (all hedged of course so no worries!) or just something as simple as all banks being insolvent in 1 nanosecond with mark to market accounting in place this perpetual machine of credit/debt/promises has been shown as hollow as those Palmer fake chocolate figures (chocolate flavored chocolate, gotta love it!) I love so much. In case you had no idea, here is no perpetual motion machine. I feel this is the single biggest issue facing things economic. The Notional, as I have coined it, serves only those that benefit from it. Let's face it, a monster share of all trading that is done is of limited to zero value to anything except those making the trades. They serve no function other than to generate churn and small slivers (chop marks?) of return.
-The Script is another big one. I know bond yields are rising and this means either the economy is about to rocket off past Voyager 1 at light speed or the dollar is about to lose all it's value (notional?) but don't get excited and pass out just yet. A home mortgage at 6% or 7%? Good joke, but no worries. Welcome to QE just add numbers. This of course feeds back into The Notional. Can the FED swap out enough stuff with banks so yields stay low and banks finally deploy the goods (unlimited credit)? Who knows, but that is the script. Either way, it will be more than interesting to watch.
-The Big Lie will also come into play in between the two ideas above. Right now the ECB is peeing their pants in a dark suit over the idea that senior bond holders may have to take a hair cut (just a bit off the top please!). The Big Lie is that this will make raising money impossible in the debt markets. It will, for about 5 minutes. After a restructure and a more believable plan (I did not say really possible, but more believable!) money will rush in to fund a new "hot sector". This was always possible here as well and all the "credit markets would have frozen and the world would have ended" dumb asses would have been right...for about 24 hours. What if debt holders lost big? They would DOUBLE DOWN on the next play! What is so hard to understand here? Banking is older than prostitution for a reason, it makes money when done even kind of right. You have to really mess it up to lose.
I have to say to do miss writing here most nights. Maybe there will be a Friday Night post? Who can say. Until then, sound off and try not to savage me like poor Kid Dynamite got attacked after a few contentious articles! I wanted to make a Youtube video asking "LEAVE KID ALONE!!!!!!!!!!!!!!!!" after all the drama but I know he is good to go.
Have a good night.