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  • Update on the S&P 500: Tighten Stops, Pocket Profits [View article]
    The forward movement of U.S. equity markets will be manipulated by strong pressure from dollar strength/weakness. Despite the recent pop in the USD, the profitable carry trade investments into risky assets won't be unwound for some time. We'll get some guidance as to where the greenback is headed with the rhetoric out of the FOMC meeting today at 2:15 pm. The Fed Funds will almost assuredly remain low, but the language may suggest a fast tracked withdrawal of quantitative easing and thus send the dollar higher.

    Get a fresh slice on ways to profit from this outcome of the Fed meeting at:
    Dec 16, 2009. 09:23 AM | Likes Like |Link to Comment
  • Why a Stronger Dollar Is Not a Problem [View article]
    I would argue opposite to the thesis in the article, and claim that the dollar aligning directly with equities is a bad thing for the economy and markets. It means that in the short term perhaps we will see a bump higher in stocks because the economic outlook is good, but that in the medium term we will see a flight from risky assets as the carry traders wind down positions. We will also see commodities become cheaper nominally and this will cause for a re-examination of the recovery from a fundamental economic viewpoint.

    Take a look at annotated charts of the U.S. Dollar, WTI Crude Oil, the S&P 500, and the U.S. 10-yr Treasury Note:
    Dec 15, 2009. 08:51 AM | Likes Like |Link to Comment
  • Citi's Expensive TARP Exit [View article]
    It's absurd for any of the banks to be paying back TARP when the amount of consumer credit continues to drop and jobs are still being lost, but Citi group is one sick dog. Billions of dollars worth of MBS (mortgage backed securities) are floating on balance sheets around the world, untied to real value as the REO properties are being held out of the market BY THE TARP BANKS and artificially inflating the prices of the RE market. If the administration knew what they were doing they would say that the banks must liquidate a certain proportion of those REOs while the Gov had their back rather than sending them back out to weather any further damage with the toxic debt on their balance sheets ahead of mortgage resets in 2010.

    Find market moving data, announcement times, forecasts and analysis with "The Weekly Spectrum" at DiamondSlice:
    Dec 14, 2009. 05:38 PM | 3 Likes Like |Link to Comment
  • U.S. Dollar Up, Oil Down [View article]
    Also concerning the IEA, take a look at the oil forcasts popping up and down all over the place throughout the recession of the past two years...

    They are just like every other retail analyst. They are a day late and a dollar short. Somehow though their forcasts do move markets, so it's worth watching, just not basing long term macro theses around.

    Here's a piece on the diving price of crude and how to play it with a leveraged ETN:
    Dec 13, 2009. 09:43 PM | 1 Like Like |Link to Comment
  • The Wall Street Journal analyzes Goldman Sachs' (GS) dealings with AIG and finds the bank played a bigger part in fueling AIG's bad mortgage bets than it let on - even in the deals involving other banks.  [View news story]
    It should come as no surprise that Goldman had a hand in every corridor of the Mortgage Backed Security market... except they were the profiting party.
    Dec 12, 2009. 07:56 AM | Likes Like |Link to Comment
  • Government Spent $1.90 for Every $1 It Took in Last Month [View article]
    Wow lots of animosity...

    It's obvious that the U.S. Treasury's policy spending money while loaning to the semi-private Fed and hesitant foreign sovereigns won't last forever. We're spending beyond our means and it doesn't seem to be catching quite yet. The problem is that even if it does catch, the one thing we can be certain of is higher U.S. debt financing charges in the future. Whether the U.S. equity market charges forward and demand for Treasuries fall or the realization that American tax revenues will lead the system towards lower credit ratings down the road, U.S. treasuries are going to feel the worst of it and the 10-year won't escape the pain.

    The 10-year note is a benchmark debt security at the low end of a 50 year range and it's the safest play on the planet to short the security using an ETF or ETN if you have the cash to spare for some time. Some of them have leveraged exposure for the impatient among us...

    Check out for Short Treasury strategies and insights:
    Dec 11, 2009. 01:38 PM | Likes Like |Link to Comment
  • Is Debt Inherently Bad? [View article]
    To all the pundits and anarchists out there I would like to agree with many of the above points and plead for the withdraw of nominal debt figures. Yes when we start talking billions of dollars we can rally some folks who can't even comprehend the amount of money, but they probably have no clue that the average annual U.S. GDP is near $14 trillion dollars.

    The scary thing with the U.S. isn't all the 0's on the amount we've borrowed, it's the ratios. We see what it looks like when a country like Japan approaches 190% GDP... you simply start running out of options. The Fed and U.S. citizens have bought the majority of U.S. debt issued this year and gross debt levels are near 80% of GDP, a level not seen since the 1950's after we'd financed the largest war of all time.

    Don't be fooled by the cries and screams about how many 0's are on the number. Analyzing life is always a comparative exercise.
    Dec 11, 2009. 09:18 AM | Likes Like |Link to Comment
  • Today in Commodities: Crouching Tiger Hidden Commodity [View article]
    Every comment I make to an article is a well thought out contribution to the discussion, unlike the spamming I was referring to. Check out the comment history of this guy and voice your opinion:
    Dec 10, 2009. 08:40 PM | 1 Like Like |Link to Comment
  • Today in Commodities: Crouching Tiger Hidden Commodity [View article]
    Just so everyone knows all of the links to the financeopinions.blogspot site that appear on every single article with no added value to the content are made by a guy who is the most annoying member of SA and who has made alternate accounts to lead people to his personal site. You may have known him before as "cretin", which was his orignial name. His site is all links and his behavior devalues the SA we all respect.
    Dec 10, 2009. 07:44 PM | 5 Likes Like |Link to Comment
  • Time to Buy the Dollar? [View article]
    I'll buy the historical argument and have no incentive to argue against you, since my positions would benefit from a stronger dollar, yet I think we must look at the macro perspective this time around.

    It's all about the Fed baby. The U.S. Fed and the speculation concerning Fed decisions, is the only driver of dollar strength at this point, and Bernanke's hands are tied. I'm one of the dreaded realists who don't expect much cheer from the 2009 xmas season, recently rebuked as permabears, but Bernanke has expressed his desire to keep rates low for an extended period of time. Any abrupt change in his policy would shock markets, opposite of his intentions, so we won't see higher rates for a while.

    I agree that we should see some strength in the dollar in the short term, but it shouldn't be trusted as a trend change. I argue that production input commodities will continue to feel weakness amid a further falling dollar while precious metals stabilize and find higher ground, citing the harsh fundamental weakness ahead for industrial production and the winter season. Specifically, crude oil looks extremely bearish and we plan to add to crude oil short positions at $75.

    Take a look at our analysis of crude at:
    Dec 10, 2009. 04:00 PM | Likes Like |Link to Comment
  • Today in Commodities: Dust Starts to Settle [View article]
    First, in response to the above post. How is it that natural gas consumption is fixed in the winter time? Natural gas has always traded higher during cold spells and this is one correlation you can almost always count on.

    Second, WTI January contracts might make it back to $75 as carry trading bulls jump back into the market, but we've seen a shift unlike any pullback this year as traders have dumped crude futures on the market. Headline crude inventory supply numbers couldn't even hold a flame to the selling over the past few days. The weak dollar has brought crude all the way up to $80/barrel and can take it right back down to $60. Supply is high, U.S. drivers are strapped during an already tough xmas season, and winter is historically awful to long oil positions.

    Finally we're seeing a breakdown of the "everything up at the same time when the dollar goes down" trade and a return to trading based on real life economic incentives. Getting long Gold here is the only smart play if you want to bet on a weaker dollar, because Crude is a lame duck.

    Check out Diamond Slice for an update on your crude plays and an in depth look at the Double Short Oil ETF (DTO):
    Dec 10, 2009. 01:25 AM | 1 Like Like |Link to Comment
  • What Does Bloomberg Have Against Gold? [View article]
    -"Just establish a premise and go back as far as you need to go and you'll be able to rationalize nearly anything in today's financial world."

    While I agree with the author's statement that Bloomberg immaturely picked a peak for gold as the beginning of the data series, it's just plain wrong to say that over longer samples of time data mining is more convincing. In fact the opposite is true.

    One of the main reasons that trading markets is so difficult, is that most fundamental data is unavailable before 1960 and the major U.S. equity indexes only span back into the late 1800's. Over a longer period of time the start date becomes less important and the path of security appreciation becomes more valid.
    Dec 9, 2009. 04:39 PM | Likes Like |Link to Comment
  • Datamining Some Market Crashes [View article]
    I appreciate the author's candid remarks, relenting that the chart could be considered data mining, and must agree that the comparisons are just that, nuggets of mislead guidance mined from a troubled understanding of what is truly transpiring in U.S. equities.

    The bottoms for each recession were alligned as so that time equals zero on the x-axis at a price of 100. As shown, only the crashes of 1974 and arguably 2003 are comparable declines in valuations and prices. The 1982 comparison looks even more like a bull market than a recession.

    It's obtuse to suggest or believe that history will repeat itself for history's sake, when the issues facing governments, consumers and markets are most like one period of time, which is conveniently not included in the chart. As you may guess, I'm referring to the market trough of 1932 and I would have hoped it had been compared to the more modern recessions. 2008 like 1932 saw a sharp decline due to overleveraged finance and greed (unlike many other recessions) followed by a sharp recovery in equities, before anticompetitive bariers to trade and competitions truly sent the world into a great period of shock and despair due to the inwardly facing policies of global governments.

    This may not be 1932 but we all would have appreciated an inclusion on the chart, and I'd argue there are more similarities between now and that period than there are differences.

    For more insights visit
    Dec 9, 2009. 12:59 AM | 1 Like Like |Link to Comment
  • Time to Take Profits on Your Gold Positions? [View article]
    Changes have been made. Thank you for your concern...

    On Dec 08 07:26 AM S. E. Wells wrote:

    > I don't get the following statement "All said we see a shifting sentiment
    > concerning U.S. Interest rate policy (markets are beginning to anticipate
    > earlier than expected quantitative easing by the Fed)". I thought
    > quantitative easing is what the FED has been doing for some time.
    > Did you mean that markets are beginning to anticipate an earlier
    > than expected RETREAT from quantitative easing?
    Dec 8, 2009. 08:56 AM | Likes Like |Link to Comment
  • Time to Take Profits on Your Gold Positions? [View article]
    Thank you very much S.E. Wells, indeed the article was meant to read "markets are beginning to anticipate earlier than expected quantitative tightening", instead of quantitative easing.

    I would also like to take this chance to change the sentence stating that there is a "production glut moving forward" to a "production shortfall moving forward".

    Thank you to all readers for your understanding. I apologize for these misprints and greatly value your interest in my SA alpha content as well as
    Dec 8, 2009. 08:02 AM | 2 Likes Like |Link to Comment