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Panic At The Hamptons


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For Fleck today:

 

"Outlook: $ stays firm(ish) until the market starts to focus on the data, rather than nonsense Fed is feeding them. THEN Treasurys start to rally hard, 10-year back below 4%, back-end euro-dollars take off. THEN, at the same time, the dollar starts turning south again hard, regardless of problems within euroland (which will escalate, by the way, in the months ahead). THEN equities, which have been under pressure for months, start to fall dramatically. THEN, the housing sector gets whacked. THEN Greenspan, desperate to maintain some sort of legacy, starts trash-talking the dollar, finally realizing that he is trapped. THEN this entire cycle feeds on itself. THEN gold goes ballistic. Patience still required, but that is where I see it going, in a nutshell."

 

 

Fed probably will start to reverse couse and let dollar plummet!

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FWIW

 

some similarities to 1987:

-selloff Thurs before opt exp and bigger selloff Friday

-weak dollar

-record trade deficit

-Fed raising short-term rates

 

some differences:

- we were coming off new all-time bull high, not just a bear market rally like 2003-2004 was

- 30yr T-bond yields spiked from 7% to nearly 10% before that crash, making a swap of dumping stocks and buying bonds an irresistible trade, 30 yr rates are nowhere near that high now

- the stock market was the bubble of the day, everyone was chasing it -- today that's the Home bubble, stocks are not the biggest mania now, houses are

- Thurs and Fri '87 saw sharp DROP in p/c ratio, people were buying more and more calls on way down, opposite this time

- PPT did not exist

- it was seasonably weak Oct period, not Apr

- Dow div yield was much lower than now -- 1.xx% vs 6% short-term rates making flight to money markets more tempting, today it's 4% div. vs. 3% short-term rates, not as tempting yet

- shorting was not as prevalent then, short interest was lower

 

anything can happen, and I'm still bearish, but I'm not betting on a crash scenario right now, I was betting on a mini-crash from 10,800 to crack below 10,400 and now it's happened, fine, time to lock in some profits (covered AAPL short today, will re-enter when time looks right) and prepare for long slow downtrend to 7,000, timing short entries after bounces

 

I'm holding long RYVNX from 23.xx and short indexes with covered OTM puts to hedge, and naked OTM calls for extra income, and looking to short individual crap after bounces, like today shorted FNM because it recently had a nice bounce and was starting to roll over again

 

but I'm not buying put options now, maybe after the next rally in some individual cases

 

I'm most excited about donging corn because it's so low, and donging gold because it's so hated, but I just have small positions there and won't add until the big upmoves get going

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For Fleck today:

 

"Outlook: $ stays firm(ish) until the market starts to focus on the data, rather than nonsense Fed is feeding them. THEN Treasurys start to rally hard, 10-year back below 4%, back-end euro-dollars take off. THEN, at the same time, the dollar starts turning south again hard, regardless of problems within euroland (which will escalate, by the way, in the months ahead). THEN equities, which have been under pressure for months, start to fall dramatically. THEN, the housing sector gets whacked. THEN Greenspan, desperate to maintain some sort of legacy, starts trash-talking the dollar, finally realizing that he is trapped. THEN this entire cycle feeds on itself. THEN gold goes ballistic. Patience still required, but that is where I see it going, in a nutshell."

 

 

Fed probably will start to reverse couse and let dollar plummet!

I concur with that scenario.

 

Commodities started to get whacked several weeks ago, when a perception developed that a 50-bp rate hike would be forthcoming in May or June.

 

The expectation of aggressive tightening is gone now, as economic weakness emerges. Directionally, this is beneficial for commodities, and bearish for the dollar.

 

Long commods, short stocks. That's the macro plan, and I'm sticking with it.

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For Fleck today:

 

"Outlook: $ stays firm(ish) until the market starts to focus on the data, rather than nonsense Fed is feeding them. THEN Treasurys start to rally hard, 10-year back below 4%, back-end euro-dollars take off. THEN, at the same time, the dollar starts turning south again hard, regardless of problems within euroland (which will escalate, by the way, in the months ahead). THEN equities, which have been under pressure for months, start to fall dramatically. THEN, the housing sector gets whacked. THEN Greenspan, desperate to maintain some sort of legacy, starts trash-talking the dollar, finally realizing that he is trapped. THEN this entire cycle feeds on itself. THEN gold goes ballistic. Patience still required, but that is where I see it going, in a nutshell."

 

Fed probably will start to reverse couse and let dollar plummet!

 

In a similar vein:

 

The stagnant money supply growth is sending us a warning sign recession may be near.

 

Over the last six months, the $200 billion annualized acceleration in the trade deficit has kept the economy humming. Faced with an 'oil shock' as energy prices rose significantly last summer, US consumers refused to cut spending levels. Consumers then did what they do best - borrowed more. The credit to do this was essentially provided by foreigners, more specifically through foreign central banks (Japan, China, Taiwan, Korea, etc.), who indirectly supplied the cash for US consumers to go deeper into debt and keep spending at rates at, or even above, pre-oil shock levels. So the willingness and ability of US consumers, combined with the savings of foreigners, kept the economy expanding.

 

...

 

At some point the Fed will switch to fighting money supply deflation, caused by faltering credit growth, instead of worrying about goods inflation. When that happens the dollar will plunge to all time lows, as the Fed switches to expand the monetary base again. The stock market may or may not bottom at that time, depending if the Fed will succeed yet again in creating another new round of expansion for the credit bubble.

 

http://wallstreetexaminer.com/?itemid=697

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Bastard Kudlow was jsut "disucssing" with another bastard taxes. The other one said "13% flat tax for everything and everyone", Kudlow agreed. At he end the other bastard said that this 13% proposal was invented in Russia and "does very well". Kudlwo freaked out why that cant be done in the US too.

 

Oh my, Russia is really such a well doing, non-corrupt country, it really is a real model for the whole western word. NOT!

 

Holy Lord, please give more brain.

 

oh and the USA is "a well doing, non-corrurpt country" ?

 

PIGS on wall street, AIG, GM, C, IBM, FOCM manipluation, Insider dealing, stealing other countries assets (iraq), devaluing USA assets, creating bubbles, hyperinflation, ignoring global warming, drilling in alaska, creating oil peaks, twin deficits, ect, ect...

 

yeah right, the USA is the ultimate model. NOT! get real.

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Bastard Kudlow was jsut "disucssing" with another bastard taxes. The other one said "13% flat tax for everything and everyone", Kudlow agreed. At he end the other bastard said that this 13% proposal was invented in Russia and "does very well". Kudlwo freaked out why that cant be done in the US too.

 

Oh my, Russia is really such a well doing, non-corrupt country, it really is a real model for the whole western word. NOT!

 

Holy Lord, please give more brain.

 

oh and the USA is "a well doing, non-corrurpt country" ?

 

PIGS on wall street, AIG, GM, C, IBM, FOCM manipluation, Insider dealing, stealing other countries assets (iraq), devaluing USA assets, creating bubbles, hyperinflation, ignoring global warming, drilling in alaska, creating oil peaks, twin deficits.

 

yeah right, the USA is the ultimate model. NOT! get real.

what country is the ultimate model?

 

I certainly prefer U.S. to Russia.

 

perhaps discussion for Political Stool

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Bastard Kudlow was jsut "disucssing" with another bastard taxes. The other one said "13% flat tax for everything and everyone", Kudlow agreed. At he end the other bastard said that this 13% proposal was invented in Russia and "does very well". Kudlwo freaked out why that cant be done in the US too.

 

Oh my, Russia is really such a well doing, non-corrupt country, it really is a real model for the whole western word. NOT!

 

Holy Lord, please give more brain.

 

oh and the USA is "a well doing, non-corrurpt country" ?

 

PIGS on wall street, AIG, GM, C, IBM, FOCM manipluation, Insider dealing, stealing other countries assets (iraq), devaluing USA assets, creating bubbles, hyperinflation, ignoring global warming, drilling in alaska, creating oil peaks, twin deficits.

 

yeah right, the USA is the ultimate model. NOT! get real.

what country is the ultimate model?

 

I certainly prefer U.S. to Russia.

 

perhaps discussion for Political Stool

 

"Those in a glass house shouldn't throw stones."

 

i agree this is for a "political" forum, but my post was in response to that that already given on this thead, and as a bear you must surely acknowledge much of my response (and question your overt patriotism).

 

however you CANNOT dislocate US corruption with what is happening in the US markets (especially today!).

 

its ALL connected, its one and the same.

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YOU WOULD HAVE TO BE EXPECTING A FULL BLOWN MARKET CRASH MONDAY AFTER LISTENING TO "MAD" CRAMER TODAY.

 

IN SAYING THAT YOU WOULD HAVE TO RECKON THAT THE PPT WOULD BE READY TO THROW EVERYTHING THEY HAVE AT THE MARKET TO TRY AND PREVENT PANIC SETTING IN.

 

THE DAYS OF THE PPT TRYING TO IMITATE KING CANUTE ARE CLOSE TO OVER.

 

ENORMOUS DAMAGE HAS BEEN INFLICTED THE PAST 3 WEEKS.

 

THE COMING MONTHS ARE GOING TO BE A BEARS PICNIC.

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