Fish Gone Bad

The Imminent Equity Implosion

I have been thinking about how this rally will pan out. Options expiration is this Friday. Maybe FAZ can fall to $5 before this monster dies of a heart attack.

Putting the Stock Rally in Context

All the problems with the economy did not just go away because Obama and Bernanke were on TV.

This is from: www.marketoracle.co.uk... -
In his speech Geithner admitted that, "In our financial system, 40 percent of consumer lending has historically been available because people buy loans, put them together and sell them. Because this vital source of lending has frozen up, no plan will be successful unless it helps restart securitization markets for sound loans made to consumers and businesses -- large and small.”

40 percent! Think about that. Nearly half the credit pumped into the economy comes from securitization.

In other words, the banks ARE lending; it's just that Wall Street's credit-generating mechanism is kaput. That's why the fall-off in auto sales, consumer spending and foreign trade has been so dramatic, unlike anything anyone has ever seen before. Wall Street's credit model is broken.

Most of the bad paper and non-performing loans appear to be concentrated in the very largest banks. By some estimates Citigroup, Bank of America, JP Morgan-Chase and Wells Fargo are holding two-thirds of all the toxic mortgage-backed paper.

Leveraged ETFs: Is Tracking Error Really So Troublesome?

Direxion has 16 triple leveraged ETFs:
3X Bull:
ERX - DIREXION SHS ETF TR ENERGY BULL 3X
FAS - DIREXION SHS ETF TR FINL BULL 3X
BGU - DIREXION SHS ETF TR LARGE CAP BULL
TNA - DIREXION SHS ETF TR SM CAP BULL 3X
...
3x Bear:
ERY - DIREXION SHS ETF TR ENERGY BEAR 3X
FAZ - DIREXION SHS ETF TR FINL BEAR 3X
BGZ - DIREXION SHS ETF TR LARGE CAP BEAR
TZA - DIREXION SHS ETF TR SM CAP BEAR 3X
...
You got the bull/bear turned around. You can find descriptions here: www.direxionfunds.com