Thursday, May 31, 2012

Late night munchies (updated)

9:47 pm (Hawaii) Had another couple of very small losses today despite being up in one at an early point, and the fact that FAZ finished the day up off its lows didn't bring me any consolation. It finally fricking dawned on me: I've been trying to time breakouts (as was the case successfully last week) instead of simply, simply trading the ranges.

Yeah. It's that fricking simple. In hindsight, of course. We are now in the midst of all this PMI economic news across the globe, not that any of it changes the banking nightmare in the Western world. It's bad enough that one Mr. Fly, who has always insisted that the puppeteers will have no choice but to print en masse sooner or later, is cautioning against hero behavior in this wretched market.

Under a do nothing scenario, stocks will crash. Economies will grind to a halt and life as you know it will change. I am fairly certain, under a full retard scenario, the markets will close, possibly for months until shit gets figured out. They’d have to do this in order to avoid bank runs.
My advice to you: keep the majority of your net worth out of the market. It’s okay to play with stocks, since we all like to gamble. But it won’t be funny if your net worth gets halted for trading for 6 months, while you starve to death in your fucking Mcmansion. This advice applies to short sellers too. Your fantastic tailwinds will be kept away from your purse, if the markets go on holiday.
A bit more from Le Fly regarding the possibility of deflation:
This is as bad as it gets. The markets are tame because people believe QE3 or some bailout is around the corner. If we do not get either, bear with me as I prepare this next sentence: WE ARE GOING DOWN 5,000 DOW POINTS IN SHORT ORDER. 
Rumors that Greece cannot secure credit to buy oil, are running rampant, and have been forced to secure it from large European corporations, with onerous conditions. Spanish and Italian credit is in danger too, which is why oil is tanking so hard. See, boys and girls, that’s what deflation does. Credit is non-existant and money becomes scarce. Food, oil and basic materials will not be delivered.

Update 11:08 pm Business Insider reports that European markets and US futures are sinking because of the PMI data. An hour ago, futures were roughly -45. They're now at -81. But really, the more this teeters off center, the closer the market gets to a reprieve from the central banksters. Or not.
Josh Brown:
In 2008, with global markets in free-fall and the Beijing Olympics looming, the Chinese Ministry of Doing Whatever The Fuck It Wants pulled a stimulus package out of its ass so large that it represented almost 20% of the country's GDP. We're talking General Tso's Shock and Awe. 
And it did the trick - a little too well. Chinese real estate and infrastructure spending went banoodles, getting to the point where they were building ghost cities just to keep the machinery cranking and home prices greatly exceeded what anyone could actually afford to pay. The central government decided enough was enough and began to use policy to tamp down on the bubble. And things haven't been the same ever since.

This story in the NY Times is more than two years old, but already Spanish citizens were stuck between a rock and a hard place, unable to return to farm labor jobs. Like China, an unprecedented construction boom preceded the inevitable downturn in the economy.

Not a pretty place for the average joes of the world. Always getting screwed over, sure 'nuff.

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