I'm now using a short everything approach, as I think this whole Pig Man "bite off their own noses" (Train Wreck) set up is going to come unravelled big time. I'm largely finished or am finishing up speculating on commodities, after a huge year in them.
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Sold half my corn on last week's rally, and will pull the trigger on the rest if it creeps back up (might go ahead and play for the end of month planting number). I'm going to sell GLD on a precautionary trading basis, as trading costs for my position are about half a cent a share or less. I can always get back in quickly and cheaply. I'll just hold on to a few of my PM juniors (sold half my NTO in the last hour Friday, and am going to get rid of the rest if it pops from here) that are selling for nothing, and are being munched on, but otherwise focus completely on dark side speculating, with the rest stuffed in T-Bills and directly through Treasury Direct (took me one whole fucking month to set up), no banks, no broker "money markets". I'm handling my folks accounts, and I've been averaging into TD T-bills and two year notes, and cleaning out their exposure to banks like Bankamerica. The only bank I'll let them touch is Washington Fed S&L. I'm even going to short a name like this.
stockcharts.com[l,a]daclniay[pd20,2!b50][vc60][iUc20!Lf]&pref=G
We have reached The Pinnacle of Wall Street Finance. Endless Credit and liquidity has fueled booms in virtually all asset classes everywhere – 24/7 around the globe. Indeed, Wall Street “structured finance” has mastered the powerful capacity to generate its own liquidity – to create buying power for securities and instruments it fashions and sells. And these skills, technologies and structures have been aggressively implemented across the globe. It is natural for Wall Street and market participants to extrapolate current boom-time conditions – The Heyday of Financial Engineering - far into the future. It is too easy today to forget that there are critical market dynamics at play; that market tops sow the seeds of their own demise.
We all have learned that a market top is established when “everyone” has finally bought in – literally and figuratively. When The Crowd is secure with the bullish story and enthusiastically owns the asset (classic mania), there is no one else left to buy. Prices are left to go nowhere but lower and often abruptly. Well, that’s an important aspect of market dynamics. Not as straightforward or commonly appreciated are the commanding liquidity dynamics that fuel unsustainable asset inflation and resulting distortions. This is true for individual markets tops and can be true as well for entire financial systems. |
