The greatest penalty of evildoing - namely, to grow into the likeness of bad men. Plato (427 BC - 347 BC), Dialogues, Theate

Dear Investors,

It is only appropriate to quote the great Plato on the morning Madoff gets gets 150 years in prison: http://tinyurl.com/lcfozs

If it was not for all the victims of Madoff - I would not get why we even bother to give the limelight to the one person who makes Charles Ponzi look like an amateur?

On the subject of Ponzi Schemes and Amateurs: Geithner and Obama is up to no good. I am increasingly getting information about deals behind closed doors in China, Japan and the Middle East - no wonder trading Macro is full-time agony these days.

The point being - there is no doubt the US administration is very concerned about the "low delta probability" of their great revival plan not working - Maybe deep down even they doubt the modern day version of Alchemy being produced in front us - hence their need to secure some long-term commitments from overseas lenders - and here China and Japan comes to mind.

Let us not forget the game has changed - until very recently the US and its capital markets (read: Banks) where the only game in town - You want leverage ? I got special offer only for you my friend.... - you know the song.... but now with global trade flows down, GDP down and the outlook for higher taxes being an almost certainty China mainly, but also Japan is looking to spend along the lines of: Think local, buy local ...

Simple mathematics dictates that demographics, growth and savings are higher in Asia than anywhere and the impact long-term will be Asia "charging" higher and higher rates to recycle their capital......and the rightful political power... something very few people seems concerned about.....this is TRUE paradigm shift - this is the end of US hegomonic powers....

For the deals behind the scene orchestrated by Geithner, Bernanke and Summers it looks increasingly like they are using play-books from the early 1980s(Volcker time...) - but more on this when I got some more research done - but clue for you: This last happened in front of major US dollar bull period ending in 1984 - (Yes, I know most of you were not even born then ....but I paid top dollar for shopping groceries in New York as a visitor- I clearly remember the 3,45 USD/DEM back then).....





The position and strategy is unchanged - it is a game of awaiting July 2/3 - or the end half-year and quarter-end which seems to gravitate markets higher - the price is to paid in July and August, at least according to my and others models for cyclical changed...

I am short EURUSD, S&P, and Crude.... none of it really working MTD back to +5 bps .....

More tomorrow.....safe trading ...

Steen

My Karma ran over your dogma. Unknown

It's kind of dramatic that Obama did not even manage to get himself 100 days of honeymoon - his administration has been mirred in mistakes and major policy confusion, but what must really hurt is the stock market reaction to him and his merry men.....- Obama speaks --- market waits -- then sell off --- Geithner speaks market sells of before, while and after.....

Change? The only change is the change left in the tax payers pockets after Obama have spend their money.... and this week is Budget Forum week - how UN-Keynesian!

First they spend the money, then they make plans for cutting back - not even good old Keynes can they get right !

Either you put the invisible hand (animal spirit) to work or not - Not even you Obama can have it both ways! - I find it extremely frightning that Obama seems so driven by spin doctors and bad advice He is for EVERYTHING the voters wants...but "believes in ?"...- my advice to you O and let us not forget I am merely a simple Europea hedge fund manager but:

• Take the loss on Geithner - cut him, not even his own Fed supports him!!!!!!!
  
• Take your loss on Summers - anyone who thinks aloud that women are inferior to men needs their head examined - plus he is so outdated he is almost fashionable
  
• Finally "pay Volcker" - the only voice of reason in your cabinet and someone whom the market will listen to.....

The rumours of Jamie Dimon in the wings is a joke - who with a job would want to join US Politics - and become colleagues with people like Barney Franks?

Meanwhile in "Fantasy Policy- Land" - i.e Fed,the US Treasury, US Government, UK Government and ECB there are plenty of plans, but as someone more clever than me wrote this morning:

"There is no way you can rebuild the financial system from top down....there are plenty of architects but we really need plumbers"....so true, so true...

1. Trichet, my "favourite" central banker in-denial: want to regulate some more: Well done Mr. President that will work: http://online.wsj.com/article/SB123538521116847221.html
   
2. Citibank is closed to being "nationalised" - what happens to sub-debt? Default clauses? Ouch, this could get worse than Lehman http://online.wsj.com/article/SB123535148618845005.html?mod=article-outset-box


3. In WSJ article headlined: Red Light flasing again we are told: a) LIBOR- Swap spread which reached high of 366 last year - saw 90 in January is now rising above 100 again b) Markit LCDX (100 leveraged loans) at close to record lows again (@ 72,5% of face) and swap pay-out now based on 40% recovery vs 20 y avg of 81% pay-back c) CMBX (25 Commercial mortgage backed securities) at new record highs - with Moodys looking to downgrade 320 bln. of securities.....nice....in other words: It aint over yet....
   
4. Government bail-outs doesn't work! Don't trust me but do read Ela Glowicka on IDEAS on http://ideas.repec.org/p/trf/wpaper/176.html - less than 40% of companies receiving aid exists 10 years later --- C'mon lets spend some more money......!
   
5. Gold - being told, mainly by my friend Antonio Savoca of UBS, that I should think of GOLD as an currency - and that it will go to 1500 and then 2000 US Dollar - You know me, not one to shy away from an outragous prediction but this is a little rich.....but I could be wrong not having exposure...but the true contrarian is flat.....
   
6. EU/EEC - let them try to sort of the mess in Eastern Europe....but with NO TREASURY the task is several fold harder than in the US - who will print the money?
   

Enough from me, only getting back into the research game... I am still looking for:

EURUSD in 1.0000 - the game will commence soon.....be ready to watch the "Trichet Horror Show".......The trailer talks of: All the mistakes which can be done will be done, no one has ever been more dogmatic when faced with REAL FACTS, see how central banking was 20 years ago, and with performers like Barroso wanting to export the European "Social economic model" we are in for a real treat not seen since Hitchcock....

S&P getting close to my minimum target of 690 - my friend Drew wants 620 minimum to be happy, and I know Drew is not one to change his mind (fortunately!)......

10 years yield in the US will flirt with 2.00% - by the way ? How are the "Bubble in fixed income" Ivory Tower people doing ?

STRATEGY:

75% cash/fixed income

25% applied aggessively negatively..

Long 1800 Stoxx50 March, short EURUSD; short S&P, long EUR/EEC - looking to increase JPY exposure...

Safe trading

Steen

PS: Did I tell you this smells like it did before LEHMAN tanked? Check this link: http://carolan.org/ Something is rotten.....

But all endings are also beginnings. We just don't know it at the time.

Dear Investors,

I do not want to make to much fuzz about it all, but it has now be announced where I will start March 1st, I am so sorry for the "secrecy" but due to stock market regulations it was needed (I was told).. but here we go: http://tinyurl.com/dfunyq

For the full press release go to: http://drop.io/j4kkrol# password: steen

This blog will recommence shortly - and I will continue to write this if for no one else then myself.....

It is strange to be off the market, not having my funds anymore, but being a trader I have some personal stakes in the market and right now true to form I am:

Short the EURUSD (from 1.2800 again)

Short EURJPY from around here...

Short S&P

Long Gold.

It is a pitty that while I am on garden leave finally Europe caves in and tanks.... -

Obama meanwhile is making mistake after mistake .... let me say again: Obama is all about hope, not substance...watching the Geithner "show" last week reminded me why I have a sincere and deep distrust in bureaucrats - they have never had a "REAL JOB", the have never lost money, and they all seem to cheat either on their wifes or on taxes..... Want me to name the "cheats" in International top jobs ?

No, it is time for Volcker to get into action if Obama needs saving - Geithner lost Fed support, East Europe and indirectly Scandinavian banks going into tail spin - It is winter Ladies and the few gents - in season and in the economic cycle... it is time to bring out the warm cloth and get ready for the Icewinter.

On that happy note - safe trading and be...careful out there..

Steen