Sunday, January 2, 2011

Broken Narratives - Happy New Year!

As Fridays trading day excruciatingly came to a close, the most incredible thing dawned on me. The market is completely dead. The trading in the month of December has been so boring compared to what was happening during the late spring and summer periods that watching the markets grind higher in December was like watching Jackson Pollack painting a canvas. There was no rhyme or reason for any of it. There was no starting place, no middle and no end. Even market participants were so clueless to the basic movements of the markets. They can only say its a low volume grind higher. That was the extent of the experts reasoning.

From a purely quantitative viewpoint, the trading in December has been so one sided that one has to make the case that January will be super volatile as the market will have to stand on its own two feet as there will be a two sided market in January. The sellers and offer side will be there and be there in more of a bigger role. Many market participants will have to come back and justify the December ramps ups. Will they continue to ramp up NFLX, GOOG, BIDU, AMZN, and the like?

It is quite obvious that no one was trading at all in the month of December. It was a free trade for the bulls to run up stocks, and they did just that. The sellers didn't force the action once in the whole month of December. What will happen in January is any ones guess, but one thing is for certain, what ever direction the market goes will be same direction that the machines and primary dealers want the market to go in. I heard this past week that it was a momentum market and we are just living in it. So be happy and shut up. This is clearly bullshit! This is so "NASDAQ 5000." So "SUBPRIME." So "you can buy a 1MM house with no money down."

The basic meme of the charlatans for the longest time has been:

Don't you know that the markets are rational?
That they are finely efficient?
That markets are always right?
That you can't fight the Fed.
Shorting America is unpatriotic?

This is a narrative to keep the public poor and stupid. The powers that be want more of the same business as usual to keep the power and profits flowing into their Swiss Bank Accounts. They want everyone to believe that markets are rational, efficient, and that markets without regulation and oversight are truly the way to go. Why break a good thing? The markets are up some 93% from the lows. Why screw it up now?  These charlatans in government, media, and industry will paint an economic picture that fits their busted narrative because its that busted and broken narrative that has made them so rich at the expense of the morons who actually believe in the broken narratives in the first place. Americans do not want to admit that their country has seen its best days. They do not want to admit that their are structural problem in credit, housing, and most importantly jobs. They will do what ever it takes not to take responsibility. Government seems to want to Blame China for all of the US economic problems and the electorate seems to want to blame Obama for everything else. No one wants to admit that America has lost its marbles. They seem to think that America is still an exceptional country, forget for a moment that you can't wake up in the morning and be exceptional. You actually have do exceptional things. Most think America is like a Super Model. Wake up and look the part. Its Morning in America like Reagan said.

America is long past the point of living of its looks. America used to look like Cindy Crawford. Even super models get old and gray. We may think we look like Cindy Crawford, but at what age? I prefer to say we are an aging super model trying to live off of our looks.

I believe that this is a machine led market that we are forced to live in. I keep hearing the same old broken sayings.

-Corporate profits and margins are at record levels. Well DUH! Of course when the government keeps printing money and handing it over to big business and the banks, what do you expect? Another big reason is that US Corporations get a huge chunk of their profits oversees and oversees is kicking on all cylinders. Again DUH!!!! When the Fed prints money we are in effect exporting asset price inflation oversees. Asian markets and economies have a huge inflation problem and many are in tightening cycles as we speak. The Chinese are furiously trying to curb the rampant real estate speculation and have increased bank reserves rates multiple times this year. The Chinese stock market was down 12% last year. Sooner or later the great Asian global revaluation/FED bubble trade will pop. You don't want to own equities in this scenario.

Again, the one thing I keep hearing is the same thing I kept hearing during the NASDAQ bubble and Credit Bubble years. It was....

You cant fight the Fed
Go with the trend.
Don't short a dull market.
Valuations don't matter.
The Internet will change everything.
Don't Sell America Short
The American Dream is Home Ownership
Free Markets
You cant beat em - Join em!

The only way to fight the power is to join the crowd. We all know its a giant money grab from the kleptocracy but its all good if we can join in and grab a little loot while there is some table scraps left on the counter. This is the new major narrative I have been hearing from the bullish charlatans. Forget whats right, wrong, or indifferent. How can I profit from the kleptocracy is the new meme. They have no other leg to stand on except it is what it is and its your right as an American to get yours by any means necessary.

Yes folks this is America in 2011. Happy New Year!

No comments:

Post a Comment