Iconoclast421

Warning: The Coming Credit Dislocation

Oh my gods!! Another "so it begins..." thread from Karl! Looks like it is once again time to buy Citi $5 calls!

How Donahoe Broke eBay

The shill bidding is pretty bad. It is absurd that they would make it so you cannot do any research on the bidding history of the person bidding against you. It would only take a couple minutes to see if they are a legit bidder. But if the act of shill bidding (combined with relisting) results in profits for ebay, then there is your motive, and I wouldnt expect it to change. I've pretty much stopped bidding nowadays. There usually is no point to it. Either they provide a decent fair price to "buy it now" or I find someone else, or I simply dont buy at all. Isnt it ironic that ebay's auction functionality is completely broken?

HOG Is About to Catch Swine Flu

HOG's price is all about beta and has nothing to do with fundamentals. As far as technicals go, I've seen a lot worse looking charts somehow keep going up.

btw how is that TBT trade going?

Analyzing Strange Volume on the NYSE

The dollar is the arb, it has to be. If you're long AIG or any of these other stinking corpses, then you must be short the dollar.

The Next Shoe to Drop in Banking: An Options Strategy

Selling XLF calls for a nickel is quite insane. Why not just buy dec 14 calls and 16 puts. Then you make money as long as XLF rises OR falls roughly 75 cents from the recent highs. What are the odds of XLF staying within that range for the next 3 months? Ha!

All you need is one of these positions to double in order to lock in the profit. It is quite possible that they both would double at some point.

Analyzing Strange Volume on the NYSE

So the true NYSE volume, minus this garbage, is less than 4 billion. Should that be surprising for august? How much of the remaining 3.5-4 billion volume is also pure pooper scooping? And is there an easy way to chart the total NYSE volume minus these 4 stocks for the past year?

Legalized Accounting Fraud Boosted

Why even trade FAZ when XLF sep 14 puts are only 30 cents? All you need is a 7% swing to the downside and you make a lot more than the 20% you would make from FAZ? The puts would most likely expire worthless, but it is less loss than the decay of a triple leveraged instrument which in theory could gain a lot less than 20% nothing even if XLF did pull back 7%.

XLF dec 14 puts are only a dollar ffs... but even better yet UYG dec 6 puts are only a dollar. XLF would have to be up around 16 for UYG (in all its decaying glory) to get and stay above 6. But if XLF is really going to get that high, its going to be on the back of total junk. In other words, Citi would have to rocket to 6 or 7 or... 10! And C dec 5 calls are only 68 cents so it wouldnt cost much to hedge against that. That's how I'm thinking of playing it anyway... C dec 5 calls and uyg dec 6 puts.

Legalized Accounting Fraud Boosted

"Some have decided that since their credit is going to be trashed anyway they will charge their groceries and everything else on their credit cards and stop paying those too, stashing all their cash "somewhere else" and waiting for the inevitable - bankruptcy.

Yes, hiding that pay is a crime. And? So is accounting fraud - in theory."

Congrats Karl, you have discovered the driving force behind the Next Big Bubble! I've been calling it the "permanent delinquency bubble" or the "nonpayment bubble". Imagine if millions of people all charge up their credit cards and borrow all the money they can. And then they "launder" that money into the "black market"... (that place where money goes when it is no longer easily traceable.) The Fed thinks its gone but its really still there. There is your replacement for falling wages and incomes.

Then the Fed prints more money to patch up the holes on all the bank balance sheets. Now you have two chunks of the same money floating around the economy... both on wall street (represented by the banker bailouts) and on main street (represented by money "stolen" from the credit card companies and dumped into the "black market".)

Now all we need is for swine flu to come along and "eliminate" some fossil fuel demand, keeping energy prices low.

Voila: instant twilight zone recovery. With a dash of selective debt forgiveness based on political favoritism. (That is no small thing either.)

I used to joke about how the next bubble will be confirmed when banks start giving loans to people who are already are in default on a mortgage owned by that very same bank! Now I dont think it's a joke. I think we're really going to start seeing things like this happen. We're way beyond ponzi now...

The New Bull Market Fallacy

If you think the dollar is going to "strengthen violently" sometime in the next couple few months, then why not go with UUP Dec 24 calls? Should yield better than SPY puts. (SPY puts seem to have a lot of speculation priced in already.)

Monetizing the Debt: Open Market Operations and Statistics

Did Bernanke say under oath that he is not monetizing?

BUY A HYBRID - PEAK OIL IS HERE

Buy a hybrid? What good will that do? The additional complexity of a hybrid is made possible by cheap oil. Take away the cheap oil, and you lose the ability to bring a hybrid to market at any reasonable price.

Also keep in mind that a hybrid "pulls forward" energy consumption. What this means is you are making a huge upfront energy investment in the building of a hybrid drivetrain. Contrast that with gasoline, which has a simpler and cheaper drivetrain that allows you to purchase fuel as you need it, without pulling forward demand.

I'm not saying hybrids arent better.... we are making a fair trade. We're trading wasted fuel (emissions out the tailpipe) for jobs (factories for all the new drivetrain components). But all those new jobs mean new incomes and thus new energy demands, which cancels out whatever savings a hybrid might realize. Bottom line is even if the world auto fleet was ALL hybrids, we would still be just as dependent on petroleum. So it all comes down to whether oil production rates have been maxed out. Has it "hit the ceiling"? If it has, then it would be the height of folly to suggest building an entire new manufacturing infrastructure now. The HEIGHT of folly.

Rather than buying a hybrid, if you believe we hit the ceiling then you might want to consider buying a gun...

1 Month, 24 Bank Failures: Random Event or Wilting Economy?

Maybe if we get 48 bank failures in august, the DOW will break 10,000.

HFT: The High Frequency Trading Scam

Rather than stop the HFT, there is every reason to assume that over the next few years it could increase by a factor of ten. Will it matter that eventually 99.9999% of all trading will be this sort of manipulation? Nope. There is no law.

The manipulation and criminality has only just begun. It's funny that you mention the mafia and protection money. Sooner or later, the criminality will become as open as the mafia running a protection racket. It happened in Germany in the 1930s. People will and have learned to turn a blind eye to it.

Even in today's world where it is so easy to capture crime and corruption on video, it still does not matter. Already we are seeing multiple instances where blatant crimes are commited right on the camera, with the perp in full view and fully identified, and yet the victim receives nothing in the way of justice. The closest to justice he will see is having his video pulled off of youtube!

Welcome to Economic Hell

Check out this chart:

www.nowandfutures.com/...

In Q3 1922, the Weimar stock market bottomed out. Within one year it had gone up tenfold, and that's in US dollars!

Welcome to Economic Hell

Karl for all we know, Japan failed with QE precisely because they are a nation of savers. Had Japan been a debtor nation with the world reserve currency, then how does QE fail? QE bails out debtors while punishing savers. This is fact and I doubt you'd deny it. In the US, GDP is driven by DEBTORS, not savers. This is also a fact and you know it. If we were all frugal, the economy would not grow. There exists no law in nature that says we cannot simply keep printing money and creating more debt. Sure it might increase exponentially, but it pushes GDP up when it would otherwise collapse. I just do not understand why you continuously carp about our debt and other bearish things, yet you still havent responded to the imminent long term timing signal shifting to bullish as indicated on this chart:

i468.photobucket.com/a...

Note that this is an extreme bearish scenario where we lose 30 point a week yet the longterm buy signal is still generated. So its safe to say it is imminent, yet you still havent written one ticker about this. And I learned about this stupid signal from you! Lately when I read your stuff I get the same feeling I get when I watch one of those cheap hacks on tv...