We should not let our fears hold us back from pursuing our hopes - JF Kennedy

Back in the land of 80% tax and winter depressions..........This does not make sense! I am a simple man by all accounts and I need things to make some kind of sense for me to enter into it, maybe that's why I never become filthy rich or make 200% returns, but somewhere deep in me I need transperency and I am none from the markets or the policy makers:

This morning starts with the Fed wanting to issue bonds- leave aside the fact Fed not authorized to do so, which havent stop them from doing things which is not kosher before, abd focus on the accountability: Who will oversee this? Who is controlling Bernanke ?

Bernanke is doing everything he wants - he feels like having a free option and he is using it - poorly........

Read Karl Denninger, Market tickers view: http://tinyurl.com/5dq93q

Market is on a bullish move and more and more people are joining the ranks of: End of year / Q1 rally ....... Be my guest. I need more than a few days of low volume trading to change my mind.....lets go through a few risk measurements:

1. 3 month T-bill trades below 0.00% -- wow, that's positive news....
2. VIX is @ 60% - wow, that's low...
3. Itrax > 1000 -- wow, that's surprisingly low...
4. Freight rates --- all of them floored-- wow, that's good news, then they can only go up...
5. Earnings is being down-graded daily - wow, cool, meaning it will go up soon....

I could go on, but clearly all of above is "good" news and I should be buying everything in sight......

Seriously the world is not analog as everyone in the US told me - it's binary: It's either Zero or 1... 1 is the condition in which fiscal policy, monetary policy, tax rebates, central bank BS works and ZERO is a situation where everyone is more concerned about losing their job than anything else....

1. Unemployment --- (0,1) = 0 --- No one outside Wall Street cares about the stock market - they want to know if they got a job or not. Everything else is irrelevant.
2. Mortgage rates -- (0,1) = 0 --- Bernanke/Paulson the Dodgy Duo, DD, is busy helping out the banks - no real help to mortgages holders.... AND even with a perfect credit score your JUMBO rate is 10.0%!
3. Pension return -- (0,1) = 0--- No one ever thought stock market would not go up forever!!!.... and now pretty much ALL public and private pensions are not only underfunded by they are also losing so much that many people needs to extend their retirement age by 2-5 years... nice job administrators..
4. Refinancing --- (0,1) =0 --- 22% of corporate debt in the US is bank debt (vs 58% for Europe)...meaning 22% of all debt needs to refinanced inside one year - I wish everyone a Merry Christmas on talking to their bank managers on extensions(maybe they can get hair extension instead?)
5. Balance sheets and real money ability to enter market --- (0,1) = 0 --- I went looking for ONE, just one bank or fund manager, willing and able to arbitrage some of the "free money" away in the fixed income market - I found none -- do you know any? This indicates that despite the rumors of big cash on the sidelines - no one willing to use it...
6. Hope (0,1) = 1 Major hopes all around - let's hope it works going to Church praying for a better day tomorrow.

Call me bitter, call me negative, call me anything but untill I understand EXACTLY how this Ponzi Scheme of printing money and moving loss' from private to public sector works out - or give me EXIT STRATEGY for the DD.....then I will be most positive guy in the world.....I am getting nervous that my S&P500 in 500 next year is too conservative... but as fortunately for you and the Hopers... I have ZERO PREDICTIVE POWERS.......

Strategy

We moved to 90% cash from 75% in the Investment Meeting yesterday - too much hope out there and too little analysis of facts..... the 10% is employed on negative markets.. we have been scaling short in S&P and Stoxx50 for the last 5% ......

It is soon Christmas... no need to risk the gains for this year.....

Safe trading,

Steen

Service in New York ? You kidding me?

Yes, it would have been a joke less than three month ago - but seems the crisis bites here - yesterday arriving in New York I had my taxi driver volentarily waiting for me while I checked in at the hotel before going to first meeting !!!!

I lived in New York for more than three years in late 1990s and never got anything but abuse day-in-day out!

Everything is 40/50% off on December 1st! Talk about crisis - and on top of that plenty of buy three pay for two deals ..... I am not the big shopper but this is close to bargain values.....

On the other hand something never change:I was "listening" to three New Yorkers discuss the world affairs and its striking how simple and full of themselves they are - Obama is "accepted" but only due to PC - political correctness - there is terrible jokes and one liners which not even I will commit to papers flying around - I must say all of the sudden I remember why I both hate and love New York.

It is great place to visit and the Americans are at large the nicest people but in a very strange way New Yorkers are the most "narrowminded" people I meet during my travels around the world. They make George from Seinfeld sound and look like a true globetrotter.....:

http://www.youtube.com/watch?v=1gjxnxKmaVQ

There is pain here, lots of pain, no one paying school fees, the Wall Street Trophy Wifes are unhappy - there is even rumors they are marrying for looks now! ----imaging sinking so low!

Paulson & Bernanke, aka The Muppet Show, goes on TV yesterday and the market sinks, and I mean sinks as they open their mouths - dealing rooms are "begging" and I mean "begging" them to shut up .........another new low for politicians and policy makers ? Absolutely! Please watch this old video:

http://www.youtube.com/watch?v=heBxMzSAuKY&feature=related

Meanwhile in Fixed Income Land - there is massive fight in on- and off the run 10 year notes, the market makers sitting tight(long the papers) while the hedge funds and bond funds sits shorts the deliverable - there is sooooo much cheap, risk free arbritrage available - but NO ONE and I mean no one to do the deals due to lack of balance sheet - there is so big deals to be had that it screams to me that this market is far worse shape than anyone even willing to earn up to...... Fixed income could catapult itself this week - yes even after 6 figures move yesterday.....watch as we move into futures roll.....

Also redemptions continues:

//www.efinancialnews.com/usedition/specialfeatures/content/3352639983/

Sitting next to senior executive in Pharma on the plane over - he was "desperate" in a positive way - saying there is NO WAY in Hell he could raise new money, but at the same time he was shown better deals than ever in his history as executive, so much so that he had hired senior banker to do his M & A - and that's fortunately the bright light here:

The well managed companies are starting to be shown the good deals - at least outside banking - meanwhile back in banking-land I keep getting pummeled for stating the obvious - banks should and will fail with or without protections from Governments - this is merely 6th inning (there are 9 innings in Baseball) - as my fellow traveler from pharma stated : I am a doctor I believe in evolution, the stronger must survive!

http://online.wsj.com/article/SB122818833059071519.html?mod=googlenews_wsj

Strategy:

Still @ 75% cash/short-term fixed income, and applying the remaining 25% into NEGATIVE market views: short eurchf, short Stoxx50, long Stoxx50 puts, short EURUSD(still), short NZD in options, still down-side in Gold.......

We remain with our S&P500 in 500 and all Westerns world interest rates in ZERO....this is the 5th wave starting - the worst one......I have been on the road extensively last one month and there is only one uniform message: This stinks ........

Safe trading,

Steen