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Thursday, August 4, 2011

U G L Y... You ain't got no alibi....

Whew...-- Is it New Years Eve at about 1:44am?  The only people left at the bar are the real ugly mofo's that are hoping for some action. U G L Y looking out there on the dance floor!  Nasty! 

Nope... it's only about 10:00pm.. the ball hasn't dropped yet-- it is about to get uglier.

Yep... 2008 ugly closer than you think

Pretty soon you will hear the 'we didn't see it coming' speech from XYZ financial advisor on CNBC (who has secretly been in cash and buying scratch tickets since March).

Watching this recession part deux unfold has been like a crowd watching a B-52 bomber full of babies, old people and a nuclear warhead (odd combination I know) come in without landing gear.  You see it coming from a mile away and the approach is slow.  As soon as you notice the plane has no landing gear you point and shout.  Everyone points and shouts.  Old people, young people, teenagers, stoners, sign spinners in cow suits selling Chick-Fil-A, dogs bark, people scream... NO ONE wants the plane to crash, but all the screaming and all the sign-spinning is worthless.  Nothing you do in the crowd can stop the impending crash landing. 

Don't look now-- this will not be a 'soft landing.'

Narnia is in Jepordy

We all know that the master wizard of Fed Narnia, Ben Wizzie is going to do another QE program, QeTHRee.  He will probably announce this at the next wizard conference at Jackson Hole.  The Feds have to buy bonds to keep bond prices stable.  With no QE, T-bills will yield zero in no time.  I expect this next QE to have temporary muted upside effects on the markets, opposed to the last two QE 'attempts' that have done nothing but stroke Wall Street's woody.  Too bad QeTHRee will collapse the (global) economy that already can't afford increases in food and energy...

QeTWoo was a complete failure.  QeTHee may create a buzz, but any strain on the consumer at this point will kill any short term rallies in the market.  The consumer (yes, that is a generic term for you and I when we are shopping) was destroyed at $100 oil... WHY does anyone think another round of QE would help if/ when it raises oil to $130.

Brush off dem' shoulders

As for great buys of 2011-- here is a shout out to the post earlier this year where we PIMPED TLT @ $89 a share.  Patting my back on this one (traded over $105 today).  A good buddy who is a financial advisor at a monster bank and I traded some dialogue today about the markets and he said that bond yields are to low.  Funny how I see them being too high.  A 2.50%  yield on a 10-year T-bill sounds much better than a negative return on SPY.  I will never see eye-to-eye with the big bank FA's however, but I told him that if he wanted yield he could buy some Italian, Greek or Spanish bonds, all of which will give you a much greater yield... That is if you are the kind of person who will put their hand in a running blender if someone drops a quarter into a batch of margaritas.

Sadly, it is probably too late to move into TLT, however if you bank at NY Mellon you should avoid making deposits-- It will cost you!.  Good thing mattresses are always on sale (wait a few months for better deals!)

Get out of Europe

I'm just saying-- no need to even comment on the disaster that is happening over there... If you see a lot of Swiss, wearing mink and strait blinging in 1980's style rapper gold chains at the local Ikea this weekend, here is the reason. 

Terminal Debt Cancer

If Grandma has cancer and she makes it 6 months on a 90 day diagnosis, that is great, but it doesn't mean she is not going to die of cancer.

The world is currently washed up in terminal debt cancer.  It is a terrible diagnosis, but Europe is very sick, the US is showing horrible symptoms, Japan is (and has been on and off) life support, and Canada, Australia, India, and China are getting sicker by the second (first sign is a real estate collapse...). 

The world is not going to end, but the next few years are going to be rough...

Short term rallies at this point will be muted, but the big scare in the markets will come soon when the 'HOW WILL WE SAVE CHRISTMAS' question comes into play.  If consumers (again, you and I shopping) don't buy buy buy at Christmas all bets are off for 2012-- store closures will be more common that baseball steroid allegations in 2006.

Tell Little Timmy to save his money-- Christmas this year is going to be CHEAP!

And all the financial porn gurus said it was different this time-- we could handle $100 oil and wage losses.  The consumer was resilient because they had pent up demand.  Demand shemand... mirage recoveries are not real.   

Funny how it's different this time never ends up being different at all.

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