tirsdag den 15. juli 2008

Dumb, dumber, Bernanke, Paulson & Cox

PP, Panic Paulson & BB aka Bully Bernanke at the Senate yesterday......

I had to break up my holiday and go back to office to watch this game of Russian roulette! The end game is getting closer!

Now the policy makers in all their might have decided I can't net short 17 financial companies (http://www.sec.gov/news/press/2008/2008-143.htm)

What a f...... joke! Fortunately, I, and others can still acess the CFD market outside the US, plus with the amount of stock issued by those financial companies (as a true reflection of their inadequate business models) is massive - making "borrowing" relative easy.

It is like these types think bullying me and other hedge funds will make us less right ?

I also find it interesting that several foreign banks are on the list, how so? Not sure I would like other central bank to decide over my stocks if I were ECB and BOE? Or does it mean similar action will be introduced in Europe and Japan?

As my motto always goes in times of desperation: "Justice will prevail in the long run.."

There is NOTHING logical in Fannie & Freddie rescue - debt is debt whether its on the balance sheet of Fed, the Administration or with shareholders!

It does not change the fact the asset value of FRD / FNM is collapsing - yes, there is several news stories carried by the media about how this is a safe play for the US Administration, but put in 8% default rate and things looks very different.
Shiller Composite 20 Index (Source: Bloomberg)

BB, Bully Bernanke, testimony was as per usual non-event, except from the fact the guy can't make up his mind (or his is playing to his audience?) on the economy;

Now again he is more concerned about the economy than the inflation making my bet on Dec Euro call slightly more interesting as we passed the magic 97.00 level again (97.05 now).
One year Fed rates from now (source: CS)

I do not know what posssed people to believe BB would actually hikes rates - he comes from the School of Irreponsible spending - EVERY TIME you face a mini-crisis LOWER rates is the first mantra of all its students.

Furthermore, like Greenspan, he wants to keep the job, it pays better than being non-celebrity Professor at Princeton.

On the strategy side I have to look at the SEC action in more details, but to me there still lacks some blood in the street.

Volatility needs to go higher in both equity and fx, but do note JPY finally took its expected course - breaking lower..... (USDJPY down)

I have not checked my team of "hopers" - the ones calling for buying of stocks, but if market was cheap on their metrics Friday I guess logic dictates its even cheaper today....(the ever prevalent issue of having machinical approach to game which evolves and changes every day....)

I believe next major volatility phase will be in currencies; (up)

EUR to even higher levels and JPY finally breaking down(stronger) vs EUR, GBP and USD..........but as always my predictions carry the absolute value of ZERO!

We are:

FX: Long EURUSD, short USDJPY, short GBPJPY(options) - may sell EURCHF....
EQ: Short DAX, S&P - long Pharma, mining, water..........
FI: Long Euro December US, Bunds
COM: Neutral for now.....

Good luck and may all the the dirty tricks of PP, BB, GWB not work, because as stated again and again:

This destruction of capital is the best thing that could happen long term - like a forest fire this will reignite the economy, the economic agents and their behaviour back to sound policies away from the intervention of sick masterminding central banks and politicians.

Safe wind...


0 kommentarer: