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Thursday, September 29, 2011

Good Night and Good Luck!

Going to Florida for a week....Have A Good Weekend...Will try and do some new posts soon....

Doug Casey Video

Speculator Series with Doug Casey from Cambridge House International on Vimeo.

How Much Does Your Gov't Take?

Fun With Rick Perry

Vix About To Roll Over?

I believe the fact that the VIX has made lower highs over the last few months is a good omen for volatility peaking out.  We might see the VIX spike back up to its August peak as the market breaks down below its previous lows, but I doubt it will go much further.  I am also happy to see that the 4th VIX futures contract, represented by “UX4″ above, is getting close to its 2010 highs.  I believe that the next week or so will provide a good opportunity to get short volatility.
With regards to the massive peak in volatility reached in 2008, as I have stated in prior posts, I do not believe that we will witness a complete financial freeze up like we saw in 2008.  This is an opinion and not a 99.9% confidence interval statement.  If there is one thing that 2008 should have taught you as a trader:  that you should leave your pride at the door.  Always make sure that you can survive the worst case scenario either through purchasing protection or correct position sizing.
We are two months into a market cycle that really has provided little *new* bad news.  A very ugly GDP number tomorrow or large confirmation of a double dip recession could change that significantly.

Double The Pleasure

Thursday Sept 29

Weekly Bill Settlement

8:30 AM ET

Jobless Claims
8:30 AM ET

Eric Rosengren Speaks8:30 AM ET

Charles Plosser Speaks8:30 AM ET

Farm Prices
3:00 PM ET

Money Supply
4:30 PM ET

Wednesday, September 28, 2011

Dr. Copper and China Do Not Mix Well


A father of a two-year-old girl says he was "absolutely disgusted" to find his child chewing on a used condom she picked up in a McDonald's playground.

A spokeswoman for McDonald's said the company is investigating the incident at the fast-food chain's Geraldton restaurant in Western Australia's mid-west.

The father was eating lunch at the restaurant on Saturday when his infant daughter came out of the playground with a used condom in her mouth.

"I was absolutely disgusted. Other people grabbed their kids and just about jumped the fence," the father told The West Australian newspaper.

The man said he washed the girl's hands and mouth with soap and would continue to monitor her health.

He said that when he showed the condom to a junior manager at the McDonald's restaurant, he was informed it was the second one found in the playground that day.

A McDonald's spokeswoman said the company was treating the matter "very seriously".

Cleanliness and safety were the company's top priorities, with the shift manager required to make half-hourly duty checks on all areas of the restaurant, including the dining room, rest rooms and playground, she said.

Holy Bat Man!

Gap Fill and Drop With Commodities

Tuesday, September 27, 2011

Rough and Tumble


If looks could kill, this glare would reach Mortal Kombat levels of 'Finish Him'.
This Taiwanese baseball fan was in the dog house when he dropped his little girl in favour of grabbing a baseball slogged into the crowd.
The missus, evidently, is not impressed.

You Think Our Market Is Volatile...Check Out The DAX

If you think the last several weeks have been volatile for the US markets, take a look at what's been going on in Europe.  Germany has long been considered the strongest country of the Euro region, but it has not been immune to the volatility.  As shown in the chart, the German DAX index is on pace for its fourth straight week of rising or falling 6% or more.  After all this whipsawing, however, the index is pretty much right where it was four weeks ago.

Think Your Having A Bad Day...Think Again...Imagine This

Edward Mordrake was a 19th century English nobleman who had an extra face on the back of his head. According to the story, the extra face could neither eat nor speak, but it could laugh and cry. Edward begged doctors to have his ‘devil twin’ removed, because, supposedly, it whispered horrible things to him at night, but no doctor would attempt it. He committed suicide at the age of 23 by poisoning himself because he could no longer stand having to live with the face on the back of his head.

Crime Scene That Is Under Reported


Balls In The Bulls Court Now

8:55 AM ET

Dennis Lockhart Speaks12:30 PM ET

Welcome back risk-on. Asian and European stock markets posted sharp gains Tuesday and commodities soared following Monday's U.S. rally, underscoring growing - if transient - confidence that authorities are actually making progress in tackling the eurozone debt dilemma. Transfixed with the debt crisis, markets seem willing for now to ignore an impending euro-area recession.
Rumors fly on EU debt crisis action. According to media reports, "top European officials" are preparing a detailed plan that would lever up existing EFSF money eight-to-one to buy up European sovereign debt and then issue bonds. German officials tried to downplay expectations of quick and dramatic action, while U.S. officials pushed their European counterparts to move faster to address the region's debt crisis. The ECB continues to be reluctant about large-scale intervention, and last week scaled back its purchases of government bonds to €4B, down from nearly €10B the week before.

Stuck In The Middle Again

Monday, September 26, 2011

Sign of the Times

Puck Save


Chicago Fed

Another week starts with another economic indicator slumping into recessionary territory.  Today's release of the Chicago Fed National Activity Index (which is comprised of 85 subcomponents and measures a large swath of economic activity) slipped further into negative territory.  The index has remained negative for 6 out of the last 7 months and is a feat that is only experienced in the history of the index leading up to, or just coming out of a recession.
We recently posted a blog about the likelihood of rising jobless claims and unemployment as companies fall back to cost cutting measures to protect profit margins.   Contained in today's CFNAI release is the employment situation report which showed a larger than expected decline from a .12 in July to a -.08 in August.   However, the weakness was not contained in just the employment number but spread through to consumption & housing which declined to -0.35 from -0.33 in July.  With consumption and housing making up a substantial portion of economic activity this does not bode well for the economy. 
Production-related indicators rose 0.01 in August which is a positive development until you realize that the indicator is down sharply from 0.26 in July.  This sharply negative decline will likely continue into September due to broad spread economic weakness seen in the other areas of the report. 
The 6-month average is also pushing deeply into negative territory as well sliding from a -.26 in July to -.29 in August and has remained in negative territory for 5 months running.
All in all this was not a healthy report.  Furthermore, it goes to support our view from our post on Friday that we are in now or about to be in, barring some massive government intervention program, a recession.   Investors are cautioned to remain heavily weighted toward cash and fixed income for the time being and treat market rallies as selling opportunities.

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