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  • Financial Engineering, Not Fundamentals, Is Driving Markets [View article]
    I would say that one first has to have a perspective, a philosophy, a way of assimilating all phenomenon across the entire human experience. What is the essential, underlying purpose of financial engineering (whether it's China buying the market, or the USA managing S&P futures, etc). Isn't the rationale to provide the illusion of fundamentals (again, however defined, as earnings, future prospects, etc).
    If you throw in currency manipulation, you have a complete three-ring circus. It's all under the big-top, complete with clowns and jugglers (analysts, news media, Fed-heads)- It's a con, it's a hustle, it's fortune-telling and card reading. What might have been, what might yet to be. You lay your money down, you take your chances.
    But, there are rules to the game, which are to be found in a vast repository of wisdom: "To every thing there is a season, and a time to every purpose under the heaven,
    A time to be born, and a time to die; a time to plant and a time to pluck up that which is planted

    A time to cast away stones, and a time to gather stones together

    A time to get, and a time to lose; a time to keep and a time to cast away..."

    The most common violations of this wisdom are as follows: (a)not understanding that there is a time to pluck up that which is planted; and, (b)that there is a time to cast away.
    But to really understand all the brouhaha, suggested reading for today is "The Greatest Show on Earth" by Richard Dawkins.
    Aug 11, 2015. 03:54 PM | 3 Likes Like |Link to Comment
  • The Oil Price: How Low Is Low? [View article]
    It's actually pretty easy. Oil will not drop to zero. And, the corollary is that each dollar down carries a revised probability distribution, both as to time and price.
    The lower the price, the more you buy. The higher the price, the more you short.
    Hedged trades are the interim opportunity.
    But wherein do we find the bottom? Sorry, wrong question.
    Aug 11, 2015. 03:05 PM | 1 Like Like |Link to Comment
  • 4 Reasons Why Oil Will Not Trade Much Below $40 [View article]
    Agree- the constraining variable is geological. How much oil is there irrespective of who does the fraking?
    Perhaps that variable is unknown at the moment.
    Aug 10, 2015. 11:00 PM | Likes Like |Link to Comment
  • At the open [View news story]
    Aug 10, 2015. 06:12 PM | Likes Like |Link to Comment
  • Housing: The Pent-Up Demographic Demand Is There [View article]
    Had to give you a 'like' on that. I'm too old to start over.
    Aug 10, 2015. 06:10 PM | 2 Likes Like |Link to Comment
  • What's The Difference Between Fed Policy And The 'Inconvenient Truth'? [View article]
    Excellent article AND well considered thoughts and perspective expressed in the comments.
    There's also a psychological impetus created with a self- fulfilling prophecy. The world has become Fed watchers, with millions betting on the odds of a 25 bps proposition. It reminds me of the classic scene where a poor soul stands straddled across the bridge or window ledge, and the crowd below is both heckling and offering sympathy: will he leap into oblivion? The music gets louder, more intense. The faces in the crowd are turned upward, each representing some primeval emotion.
    And then- another commercial? Yikes!
    Aug 10, 2015. 09:31 AM | Likes Like |Link to Comment
  • Housing: The Pent-Up Demographic Demand Is There [View article]
    The neat thing about home ownership- I.e.having legal title to a parcel of real property- is that (a) your kids will quickly convert the prized family home to cold, hard cash upon your death, or (b) you will deed it over to the same nursing home that so many of your old buddies did- just so some attendant will feed you and haul you to the bathroom.
    But what about all the memories of 'home sweet home'?
    Well, with dementia you're not likely to recall the time the pipes froze, or the roof leaked, or you lost the battle with the property tax people.
    But, a man's home is his castle- assuming you pay the mortgage, avoid divorce and don't live next door to a meth lab.
    Aug 9, 2015. 10:42 PM | 6 Likes Like |Link to Comment
  • Dog-Day Summer: Scratch The VIX Fleas [View article]
    Great article Peter. Look forward to your thoughts on SVXY.
    Aug 9, 2015. 10:12 PM | Likes Like |Link to Comment
  • When Even The Est. Survey Slows... [View article]
    Corporate "reorganizations" began years before the financial crisis back in 2008. The crisis may have exacerbated the pre-existing trend. And certainly the mere quantity of jobs isn't nearly as important as the quality of jobs.
    Recessions in the past were typically characterized by plant layoffs, BUT the big differential between now and then is that most of the laid-off workers went back to their relatively high paying manufacturing jobs, and business continued as usual.
    Unfortunately, most of the previous high paying jobs with benefits don't exist now. Is this temporary or permanent?
    It seems that the best observation is that the trend remains rather persistent.
    Aug 9, 2015. 09:54 PM | 1 Like Like |Link to Comment
  • The Stock Market's Small Cap Problem [View article]
    Numerous pundits opined that 2015 would be the year of small cap outperformance. And, that seemed to be true- until it wasn't.
    I am on record, going back several weeks now, to sell TZA puts. I even indicated the number I sold- 500. At that time TNA had recovered back to 96 or so.
    So my TZA position is glowing a neon green color. Of course, at this point, you might consider nibbling on some TNA or IWM short puts. Remember, you don't care if you eat bear meat or bull meat. And, you just want the options to expire worthless. Leave the cheerleading to the bull or bear team.
    Aug 9, 2015. 09:35 PM | 1 Like Like |Link to Comment
  • The Seventh-Largest Economy In The World Spirals Down [View article]
    Remember the euphoria over the election months ago? Go back and check my comments- I said short EWZ.
    But "Blame it on Rio" remains one of my fav movies. And, it remains one of the most extraordinary places on Earth.
    Aug 7, 2015. 10:06 AM | 1 Like Like |Link to Comment
  • The Great Tragedy? [View article]
    Well, it is August and the nights are hot. So 'pack up the babies and grab the old ladies and everyone goes the Fed-heads? If the masses had any sense they would throw garbage- as they did in Elmer Gantry.

    Aug 6, 2015. 04:59 PM | 2 Likes Like |Link to Comment
  • The Great Tragedy? [View article]
    The central planners have tried to 'breed lilacs out of the dead ground, mixing memory and desire, stirring dull roots with spring rain.'
    But sterility is not alleviated by even a massive dosage of Viagra. Dr. Love's traveling salvation show ignited a revivalist fervor, but failed to offer redemption.
    Well, hope springs eternal, at least for the beneficiaries of this arbitrage charade. Does history not teach?
    Perhaps these intellectuals could have read "Depression and Reconstruction" (1936) by E.L. Dulles. The author noted that big business was responsible for missal location of investment funds, causing the income flow in the economy to become restricted. And, John K. Galbraith, who noted in "The Great Crash" that maldistribution of income was an underlying cause of the market collapse. If they didn't have time to read a book, there were a number of scholarly articles on the subject: "Let's Face Reality" in the Journal of Business and Economics (1932); "Distribution of Wealth" Nation's Business (October 1935); "Spiraling Reaction" Fortune (April 1934).
    Aug 6, 2015. 01:41 PM | 2 Likes Like |Link to Comment
  • Tesla: Things Are Turning Ugly Very Quickly [View article]
    Collecting on my usual put spreads. Will now reverse course to the extent of 50% of the short gains.
    Also collecting on GMCR- but reluctant to play the bull side.
    I am gradually layering in put spreads on NFLX- again.
    Can a TSLA pull anything- like a boat or dirt bike? Never tried one. I do have a couple of golf carts, though.
    Aug 6, 2015. 12:48 PM | Likes Like |Link to Comment
  • U.S. Economic Data In Decline; Rate Hike, Strong Dollar Results Of Outdated Expectations [View article]
    Most modern economic theories tend to either " hold constant" or implicitly assume away cultural changes. Humanity will play the cards dealt- hence an enormous increase in entitlements, welfare, disability, Medicaid, student loans, violent crime, etc.
    If you tell the guy that lost his job and benefits in the textile industry to flip burgers, you've just created a 'unit of sweltering resentment." He might flip burgers until he can replace what he lost- legally or otherwise.
    The small town businessman, once a pillar of his little world, fails to comprehend why he is no longer served by his local bank. He, and his many brethren, realize that they are not too big to fail. Borrowing money at virtually no cost to buy back stock is, to him, a mockery of his hard work over the years.
    The total number of people that even know what the Fed does is about equal to the number of people that can define "Manifest Destiny".
    So, the predictable destiny of the economy, and capitalism, rests not with 25bps, but rather with an ethically enriched spirit. Within that spirit is a proud- but justified- confidence. The carry-trade and stock buy backs created in the laboratory of financial alchemy ravage the soul and destroy the trust.
    Aug 5, 2015. 03:14 PM | 1 Like Like |Link to Comment