US Markets have reached their highest level of 2009 absurdity.We are completely out of US stocks and taking some profits abroad. Some of our clients are up enormously and we are strongly suggesting hedging to all of them.
How bizarro world have things become? How disconnected are Markets from reality? Well, I would suggest even more so than last year at this time.
And since I'm generally lazy, here is what I wrote 1 year ago today, word for word (with added visuals) and the market at 11,239.
Because, amazingly (or not) nothing fundamental has "CHANGED", besides a few trillion in US taxpayer liabilities.
In short, get out of US stocks.
And enjoy:
Wednesday, July 16, 2008
Warning: This is a Finance Post
Yes, your eyes will surely glaze over, but here we go. Just a little FYI: Did anyone tell you we are in a full blown financial crisis. No, good, let me.
Background: We've had 25 years of massive, and I mean massive credit expansion, a raging bull market starting in roughly 1980 that went parabolic in '95 and is now reversing hard, unwinding in a major way.
What has prompted me to actually start writing about it is that we have people making it worse, thinking they're making it better. Barry Ritholtz explains it best here: If this fucking link doesn't work, Google his latest Seeking Alpha piece (Fed Fiddles as Rome Burns).
Anywells, our "officials" are now trying to somehow short circuit the short sellers, which prompted a massive rally today in the worst companies on the board -the banks. I can't go into how ridiculous this is, other than to say: government intervention rallies based on ending short selling are to be sold short, preferably naked.
And yes, "naked shorting" is actually a (great) finance term, Yeah, we're talking stocks here, I warned you already about that, did you look at the title? That said if you are sitting at home and decide to buy Puts with no pants on, more power to you. And if you're standing nude in the middle of your trading floor, you are way too cool to be reading this blog.
So the question is: do you want the band-aid off fast or would you like it to take 8 fucking years. We've chosen the latter, so guess what, you cannot be long stocks or buy a house for any reason other than wanting to light hundred dollar bills on fire until around 2012 which I think is when the world ends anyway.
Here it is. We need the market to clear. That means we need the indexes down hard, we need several of the dumbest banks to fail, we need Paul Volcker to come in and jack rates, end inflation and sure up the plummeting dollar.
The guys in charge now are so compromised, so lacking in credibility, yet they keep tinkering around trying to plug holes where there are none, because guess what?
THERE'S NO MORE DAM, it's gone baby gone, you (we) are so under water, and messing around with short sellers, trying to bail out another I-bank, socializing risk is both prolonging the pain and making it worse.
But they will continue to take asinine steps like they did today because it's in their DNA. It's the strand known as the: Let's Keep Fucking Around With This Hand-Grenade Gene.
So tinker on, play politics, help out your idiot banker friends, you might get few hundred more points, maybe even a thousand, hell anything's possible, you may even get another bubble. Tinker on my friends, you cannot help yourselves, I know.
But, one thing is certain. This tinkering. . .will end in tears.
