Monday, September 22, 2008

Goodbye my lover......

Yes, this is the end of the capitalist system as we knew it, yes it is the end of levels playing fields, yes it is the introduction of the Socialisme .... We won so much, we lost!

This weekends plan is the financial equivalent of Homeland Security Act - and Fed is the Guantanamo - a place where there is no law - no respect for human interest:

Link on code of law :

I am on TEMPORARY buying strike for all US assets. I will not/can not buy any asset from country with no code of law - The US has joined Russia on my list of countries I can not go long.

From 10.000 feet this plan:

Helps the financial institution by virtue of a plan so big its makes the Marshall plan look small - that's the back-stop for financials ...for now

Solvency still the issue at large - I do not believe you get better solvency by introducing measures which is normally safed for war-times - on contraire!

Quit a few countries has issue "threaths" to shut up or ..... --- my own compliance department already been here once this morning, but... let me say this: If there EVER was a time to write/speak and protest against what happens it's now!

This helps the wrong people - AGAIN - the croonies of Wall Street and London City gets help - where is the help for airlines industry, the car industry? There are still 4.5 mio. unsold homes - and with the US issuing unsellable debt which will take long-term US yields to 10% I do not see relief on the horizon.

Short selling ban ? What a joke! Read this 1929 Editorial from *New York Times:

The next phase is the real economy effects. I am afraid the private investor will use any rally to sell his stock portfolio (note: I certainly think he should) - and now me and my friends in the hedge fund industry will not be the bid - so expect extreme illiqudity and no bids for the poor private investors.

Be long gold, chf, jpy, crude(maybe?), cds on us assets, SHORT US dollar, short US debt(10% is coming to Theathre near you)

We were lucky to cover all shorts Thursday - on Friday we re-established 25% of max short US stocks, we bought CHF, and EUR..... we will sell US Teasuries today, buy gold and await transperency - we are on de facto buying strike - we can not go long ANY US assets for this month and next......we are 85% long cash - rest is used in NEGATIVE option plays.

Let me end by once again saying: I am no predictive powers, I hope I am totally wrong, that I am too negative, but anyone who have spent five minutes reading Thomas Kuhn's; The Structure of Scientific Revolutions ( - knows and identifies this a true PARADIGM SHIFT. When you take this fact to the next level, it becomes a utterly dire outlook.

Finally, spend 20 minutes on this interview and learn something: to prediction:

Be safe;

Med Venlig Hilsen Yours Sincerely Steen Jakobsen, Chief Investment Officer, Saxo Fund Management Saxo Bank A/S -London
40 Bank Street, 26th Floor Canary WharfLondon E14 5DA
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Anonymous said...

Very good analysis.

Anonymous said...

Hi Steen.

I am not sure the US was that capitalistic anyway, however this last moves certainly provide the final knockout punch to any economic freedom that was left.

Australia the "American Sheriff of Asia" has now joined the party on banning shorts, it was to be expected. What is even more interesting is if China decides to introduce short selling at this time, it says a lot about the political and economic shift that is taking place.

Another moronic move in the line of many moronic moves this past weeks, is the news that Goldman and Morgan Stanley have decided to transform themselves from Investment Banking to a Holding Bank Under the Supervision of the Fed.

There is absolutely no critical analysis of this to be found in the media, especially on CNBC where the the thought process resembles more with that of a parrot, repeating the headlines over and over again.

The fact that Goldman has decided to transform itself doesn't say anything about their solvency problems. Their assets and liabilities are still theirs.

Of course this is a bailout of Goldman and Morgan. In time, The Fed will absorb the garbage in their books, and give them that extra status and benefits of a holding bank, friends of Helicopter Ben and Henry Bazooka.

If this transformation where possible, outside the world of Steven Spielberg and CNBC, I also could transform my self into a billionaire, owner of some island, with a nice beach, and a nice little yacht.

Best Regards.( enjoy reading your blog as always ).

Saxo Macro said...

I love the Spielberg analogy... I wud come back as a soccer player with brains.. ;-)

t said...

Good observation about the paradigm shift. Financial shock and awe is being used at home to justify what is effectively a financial coup d'etat to create a fascist dictatorship in the financial sphere.