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  • Wall Street R.I.P - The Bubble Is Dying At The Zero Bound [View article]
    Fear that isn't connected with physical violence, or some concern for one's health, is mostly a fear engendered by ignorance. If you "fear" the uncertainty associated with the stock market, it simply means that you lack the knowledge or skill to insure your position. The fact is that the market can fluctuate within a matrix of collective ignorance. A simple thought experiment will prove the point: suppose that every long stock allocation automatically included appropriate put coverage. The cost of insurance would be de minimus. Thus, if one can't suffer a loss, fear subsides and dissipates. This strikes me as one of the greatest of all paradoxes- especially in a world where non-stop "advice" is shouted out 24/7.
    It's actually the collective fear and ignorance of the masses that allow people like me, and bigger fish like John Paulson, to make excellent returns during times of fear.
    But the real role of the Fed is to fight fear. Their job is to circumvent panic- pure and simple. A society distracted by fear is also a national security issue. Throughout history, cultures and societies consumed by constant terror rendered them vulnerable to chaos. So, in our modern setting, central planners must continually calibrate the role of animal spirits with the darker side of basic human behavior. In Ancient Rome, the masses were appeased by the coliseum. I submit that we aren't too far removed from our modern day divergences- one of which is the high priests that provide the music by which so many bit players dance their little jigs. Again, should every utterance from these priests regarding the shift of already paltry interest rates trigger such a massive convulsion of electrons? Do we hang by such a thin thread of absurdity? And where is it that these wizards of financial alchemy wish humanity to go? Anywhere in particular? Or is it sufficient to simply circle the Emerald City in some indeterminate and redundant path?
    May 24, 2015. 12:52 PM | 3 Likes Like |Link to Comment
  • Wall Street R.I.P - The Bubble Is Dying At The Zero Bound [View article]
    Yes, the anemic wage situation and diminished future for US workers is actually counter-balanced by the health of multinationals. Just because ABC, Inc has it's historic corporate headquarters in the US is now meaningless-it's just a quirk of past history. Indeed, one can make the case that 'corporate headquarters' is really in the clouds that float over the planet. The authors analysis would be interesting if entities were separated by geography.
    The robo-trading situation is an entirely different proposition-indeed an extraordinary phenomenon light years away from the old bucket shops and brokerage houses.
    But, 'The End' (can't help but think of The Doors), will not come as a bang, but rather will be a faint, distant whimper. The globalization of central planning is still in its infancy. We have miles to go in that regard. Where we are now is that various protocols are in development stages. The afore-referenced bubbles were not synchronized. That is only happening now-and it has come about, not so much by deliberation and foresight, but by the age old reflexivity to crisis. And, so partners outside of normal jurisdictions were needed to effectuate the 'fix.' It's a fair question as to whether all of these 'experts' are but fools away from home. I can imagine Adam Smith, John Stuart Mill and a host of 18th and 19th century scholars watching this spectacle unfold- what of the 'invisible hand' and capitalistic mantra?
    Or is it nothing more sinister than creating a universal phantom zone by which the capitalistic ghosts of the past are allowed to remain ensconced as the equivalent of the Father, Son and Holy Ghost-while the blood and the passion are eviscerated. We couldn't just let GM go under could we? Or Goldman-the firm that is busy everyday doing God's work?
    So, David, I think yes to bye, bye Miss American pie-unless you are among the anointed. But we had 1963-of what a year. Or, 1969-the best year of our life. And, David, you of all people should recall the remarks of former Secretary of State, John Foster Dulles, who said back in 1939:

    "Some dilution or leveling off of the sovereignty system as it prevails in the world today must take the immediate disadvantage of those nations which now possess the preponderance of power...The establishment of a common money...would deprive our government of exclusive control over a national money...The United States must be prepared to make sacrifices afterward in setting up a world politico-economic order which would level off inequalities of economic opportunity with respect to nations."

    Of course, WWII came along-but have not circumstances conspired to bring about the Fabian utopia? Finally, David, the very last thing our friends out there doing God's work want to happen is for the game to end. I understand though that you're looking for Joe DiMaggio-but aren't we all? Alas, Joe has caught the last train to the coast.
    May 22, 2015. 02:53 PM | 7 Likes Like |Link to Comment
  • Fearless Thursday: Fiddling While Rome Burns [View article]
    Yep-until the bitter end.
    But I'll raise a glass to your health (a little later today).
    May 22, 2015. 11:30 AM | 1 Like Like |Link to Comment
  • Failing Friday: China Defaults Keep Adding Up [View article]
    Excellent thoughts Phil. We are at the dawn of the robotic age, and, in many ways, the challenges ahead will be both global and unprecedented. Those that contemplate and seek to define issues within a 20th century framework will fail.
    There is no historical template-not even the industrial revolution. Why? Because, labor could still be shifted from agriculture to machines. But, in the past, all the machines have been dumb. They all required human 'keepers.' This will no longer be the case.
    We cling tenaciously to old habits and systems-and still plan within that dimension. Our minds, and the intellectual acuity of political leaders, are currently distracted by overwhelmingly absurd issues, to wit-when will the Fed raise interest rates? How long will it take Bruce Jenner to completely transition?
    Is the stock market overvalued?
    Come on people! The question posed by Philip K. Dick is emerging from the fog of the future: "Do Androids Dream of Electric Sheep?"
    May 22, 2015. 11:22 AM | 1 Like Like |Link to Comment
  • UVXY: What The 5-To-1 Reverse Split Means For You [View article]
    After a prolonged period of losses, suffered in a long duration Fed-induced euphoria, it becomes asymptotically more difficult to regain the previous position. It's like a salmon trying to return to its spawning location-jumping mightily upstream, time after time, only to fall short of the goal.
    May 21, 2015. 05:17 PM | Likes Like |Link to Comment
  • UVXY: What The 5-To-1 Reverse Split Means For You [View article]
    It all comes down to whether the world will come to an end...or not. If it does, money won't help anybody.
    The sun ALWAYS comes out again, and you can bet your bottom dollar on shorting volatility.
    These products should, in a normal world, be used sparingly as hedge substitutes. But, like long puts, the radio-active half-life of decay just does a number on them.
    I made another boatload today shorting UVXY, as I indicated in a stocktalk earlier this morning.
    Of course, when the old ladies investment club starts shorting vix ETFs as a dominant play, it might be time to reconsider.
    May 21, 2015. 05:12 PM | Likes Like |Link to Comment
  • UVXY: What The 5-To-1 Reverse Split Means For You [View article]
    It's ok to hold thru expiration.
    But, bid/ask on most levered ETFs are egregious. Try to ride the coattails of a large trade-that will generally provide a better value.
    But, very simplistically, the reverse split is about like inflating a large raft and watching it sink-again.
    I noticed on SVXY that we're approaching an old high-so one might want to be a wee bit cautious in shorting without a hedge. Of course, even in 2008, one could have doubled down into a fortune.
    May 21, 2015. 05:03 PM | Likes Like |Link to Comment
  • Crude Oil: Don't Get Suckered Into Buying This Dip, Oil Has Further To Fall [View article]
    One's strategy today should be a function of past results. If you shorted oil several months ago, and then caught the brief pop up-congratulations. You hit a homer.
    The profits thus derived provide you with several trading possibilities. The author gave his specific tactics-which most never disclose. I indicated about a year ago that I was short oil. I also admitted that I exited too soon. I subsequently laid out a very profitable strategy (which was to accumulate UCO while shorting USO. I previously indicated that my basis in UCO got below 7. I have not sold that position, but I have recently sold SCO puts). I prefer that to shorting either USO or UCO, because I will eventually sell calls on both holdings. This tactic will produce income far in excess of any dividend stock. I will employ this strategy as long as a trading range continues. On days when oil is down, I will likely sell puts on UCO.
    So, I don't care if oil goes up or down. Or does nothing.
    May 21, 2015. 11:49 AM | 3 Likes Like |Link to Comment
  • Fearless Thursday: Fiddling While Rome Burns [View article]
    "Can we get back to reality?" Why am I playing a Sinatra song in my mind?
    Anyway, 'there is no reality, only our perception of reality." That from one of my grad school operations research professors.
    Yes, market is a tranquil sea at the moment, or a stagnant cess pool-pick your metaphor.
    The market as we know it will not survive through the next century. This slow moving epiphany has been growing in my mind for the last several years. So, enjoy the game while it lasts. I guess I was about 40, when I finally learned not to take it personally. So, when it comes to trading strategies, I'm right there with Rhett Butler (who preceded Jesse Livermore), both of whom embodied this eternal line: "Frankly, my dear, I don't give a damn."
    Actually, Livermore tells us that he wasn't married to one side or the other. And, incidentally, Sinatra will survive into the next century.
    May 21, 2015. 11:31 AM | 1 Like Like |Link to Comment
  • The Battle Of The Bulge [View article]
    Well, I think it was Gene McDaniels that noted, way back in 1961, that it took 100 lbs of clay to make a woman.
    How much clay would it take to make a prototypical woman today?
    May 20, 2015. 04:00 PM | Likes Like |Link to Comment
  • Tracking George Soros's Portfolio - Q1 2015 Update [View article]
    You started in 1955? Wow!
    May 20, 2015. 10:58 AM | Likes Like |Link to Comment
  • U.S. Equity And Economic Review For The Week Of May 11-15; A Really Unimpressive New High Edition [View article]
    He happened to be in the Blue Marlin Bar ( hotel Del Ray) when he made that observation.
    May 18, 2015. 08:25 PM | Likes Like |Link to Comment
  • The Battle Of The Bulge [View article]
    Well, you teed it up for me with your great article.
    May 18, 2015. 05:32 PM | 1 Like Like |Link to Comment
  • The Battle Of The Bulge [View article]
    I guess the "Marlboro Man", if doing an ad for Ronald today, would ride his quarterhorse thru the window, and order a double Mc Greaser (with frys). The old music would be switched to something from Pitbull, and the grizzled cowboy would stare out into the parking lot, serenely watching the sunset, and the smog.

    But, Karl was decidedly wrong about religion. The opiate of the masses is fast food, loaded with transfat.
    May 18, 2015. 11:30 AM | 2 Likes Like |Link to Comment
  • Dan Ariely: Why The Next Market Downturn May Quickly Become A Full-Blown Panic [View article]
    "Logical Song"

    When I was young, it seemed that life was so wonderful,
    A miracle, oh it was beautiful, magical.
    And all the birds in the trees, well they'd be singing so happily,
    Joyfully, playfully watching me.
    But then they sent me away to teach me how to be sensible,
    Logical, responsible, practical.
    And they showed me a world where I could be so dependable,
    Clinical, intellectual, cynical.

    There are times when all the world's asleep,
    The questions run too deep
    For such a simple man.
    Won't you please, please tell me what we've learned
    I know it sounds absurd
    But please tell me who I am.

    Now watch what you say or they'll be calling you a radical,
    Liberal, fanatical, criminal.
    Won't you sign up your name, we'd like to feel you're
    Acceptable, respectable, presentable, a vegetable!

    At night, when all the world's asleep,
    The questions run so deep
    For such a simple man.
    Won't you please, please tell me what we've learned
    I know it sounds absurd
    But please tell me who I am.

    May 18, 2015. 11:00 AM | 11 Likes Like |Link to Comment