David Lentz

Options Trader Friday Outlook: Up, Up and Away

There is a chasm between those who apparently believe that the turbulence of the recent past was a "random storm", turbulence in the dynamics of market capitalism, and those who believe that there were specific practices (mostly corrupt, all insanely risky) followed by the larger players in our markets. Whichever is correct, there are consequences.

The United States of Bananamerica is now saddled with a mountain of debt that is simply unbelievable to those who understand what numbers with 12 zeroes before the decimal point imply. Unemployment seems to be fixed at the current levels for several years to come -- no one can truthfully point to a date when the number of jobs will increase, as a declining number of jobs has been our national trend for many years now.

And IF it should be the case that this recent turbulence was due to specific causes, and NOT "just a random fluctuation in the markets", what has changed to prevent the exact same thing from occurring next year, next month, next week, or on Monday? Have the banksters pulled back from the brink and are now using smaller amounts of leverage? Nope. Are they shying away from the ultra-high-leverage CDS casino? Not a chance -- they are rolling the dice to gamble their way out of their pit of toxic losses. Have they at least brought compensation in line with performance? (Don't make me laugh)

In a consumer-driven economy, how does it manage to grow when unemployment seems anchored at the current levels for as far as the eye can see? When residential mortgages continue to be devoured in a firestorm of foreclosures, that the goobermint seems to have not the slightest inclination to address? And how are small businesses, the bedrock of our commercial economy, to survive when CRE has a problem similar to the residential real estate markets, and they are unable to pry operating capital loose from the grip of the banksters?

None of this indicates in any what, shape or form that traders cannot manage a decent living. Just don't expect a rip-roaring bull market that has any degree of momentum or underlying substance to it. Things can and will turn on a dime.