Ski Jump Recovery

Paul Tudor Jones pushes his chips to the middle against Goldman Sachs/Morgan Stanley.

www.bloomberg.com/apps/news?pid=20601103&sid=auGWGWlnohNo"

I guess there is a new word out for economic prospects - SKI JUMP RECOVERY, short stimulus that leads to a blip up then a worse fall later. This is all right with Geithner, Bernanke, Greenspan, and Paulson who are already out in Denver hitting the slopes.

Whats interesting and courageous here is that Tudor Jones is making a stand against the mighty Goose. Why? I am thinking its a play against man's biggest weakness - HUBRIS.

Everyone is thinking that Goldman can do no wrong, they are the greatest, they own government, etc. All of which are true.
Even I stated that they are the best traders:

tradersutra.blogspot.com/2009/08/give-goldman-credit.html"

But, what I did state here is that Goldman traders are the best, but their equity strategists are not. Abbey Joseph Cohen, who long ago was deemed irrelevant, states that the recession is ending now. She incidentally made this call after the Goldman Internal Memo on Bonus Structure was passed out. She is basing this on car sales at Manhattan Ferrari.

But she along with the Tavern On The Green/WaterClub crowd are taking a short term very slight blip up in GDP to mean all is back to normal.

3rd-4th Qtr 2008 Combined GDP = -4%
1st Qtr 2009 GDP = -6.4%
2nd Qtr 2009 GDP = -1%
3rd Qtr 2009 GDP = Expected 2.5%-3%
4th Qtr 2009 GDP = Expected 3%

After the economy fell off the cliff, and trillions pumped in later, of course we will show positive growth. But a move back to 1.5%-2% growth for 2010-2011 is more likely without further bankrupting the country. This economy needs at least 3% of GDP growth to be alive and well. Anything below that trend line figure is not getting it done, because of the inherent leveraged structure of our economy.

All of this printing/monetizing of debt and general lack of credit available to consumers is creating another 1000 year storm just a few years after the last one. What would have happened to New Orleans if another Katrina like event happened the following year? This is surely a certainty at the moment for our economy.

The simple fact that the two biggest ponzy scheme stock markets (JAPAN/US) have yet to correct is not surprising. European markets were weak this morning, China is broken, and Asia Markets are looking tired obviously mean nothing to Goldman Sachs Program Trading Machine which is back on the buy side.