Wednesday, August 31, 2011

Long iPhone Short Everything Else

Opium © fintag

News comments:
It is becoming clear that the people of the West are in economic decline.

Belts are tightening and fat loss is occurring at a rapid speed. Gone are the days of being nice; now its nasty cut throat time. The Double Dip was obvious. It happened after the Great Crash and its happening again. Until the world realises that debt <> growth, then the world will prosper again. What it needs is inflation and to get that we need trade unions putting in large wage increases. We also need more anarchy. Alas, the younger generation are not capable of revolting and instead prefer emigrating (as we are seeing in Ireland and Portugal). Where is Bob Dylan? Where is Joe Strummer? Where is JFK?

But that is dull. What isn't is the shiny iPhone. The iPhone is the opium of the people. Whatever happens (war, flood, terror), as long as the people have a new iPhone they are happy and content. That is why you should short everything and go long Apple.

Odd thing is I am a Blackberry man and hate the iPhone with a passion.

Today's shorts:
RAM ROM (bloomberg)

Today's longs:
iFake (pcworld)

Irritation:
Google + still hasn't invited me.



Friday, August 26, 2011

Blondes do have more fun

Once great, now a ruin © fintag

News comments:
Most trading decisions are made using What-If's.

What if this and this and this and this then buy.

What if that and that but not this and some of that and this then sell.

Of course there are so many factors out there to consider, lines of java, c sharp, r, vba can be longer than War and Peace.

An earthquake in New York. A state of emergency in New York thanks to Irene. Worst retail sales in UK living memory. Arab spring. Steve Jobs putting viruses into all the iApples. More QE. More inflation but in the wrong places. German intransigence. Revolving door Japanese Prime Minsters.

Despite Sweden and Norway being depressive and having some of the most nasty and complicated killings and nastiness known to the thriller writer, they are apparently not as grim as everywhere else.

So today, let us all be Swedes.

Today's shorts:
Grim (telegraph)

Grimmer (telegraph)

Printing more money grimness (reuters)

Bernanke the-god-fairy grimly grimaces (bloomberg)

Blonde and blue eyed (market watch)

Today's longs:
None today.

Gossip:
iJobs to be released later this year.



Tuesday, August 23, 2011

PayPal to create new virtual gold standard

Gold bars © fintag

News comments:
OK, its not strictly true. But it may come true.

Gold is the new world currency. Unlike oil or other speculative commodities, there is something about this bling of choice that attracts frightened money. Gordon Brown, the ex prudent PM, sold half the UK's gold reserves at around $300 during 1999 to 2001. A great trade. But that is history.

What the future will hold is a new PayPal currency pegged to gold. Why not? My UK peanuts are worthless compared to that really sound currency the Yen. And the Swissie.

Today's shorts:
Brown makes a bad trade (times)

Today's longs:
Goldman prep up for legal action (telegraph)

Gossip:
Gold rolex wearers to be taxed.



Friday, August 19, 2011

Predictions and why fintag always gets them right

Just listen to me © fintag

News comments:
Trumpet. Blow. Told you so.

We are in the game of prediction. I am not going to tell you why we are so good, but we just are. So here are some random predictions that err appear to have come true ... (I am source code)

Riots in the UK
Jan 2011
fintag.com/2011/01/cuts-tax-and-red-tape-will-uk-turn-into.html

Aug 2011
As reported by the BBC.

Top Rate UK taxpayers pay 72% in tax
Dec 2010
fintag.com/2010/12/why-bother.html

Aug 2011
The telegraph catches on.

US to ban Credit Rating Agencies
Dec 2010
fintag.com/2010/12/us-to-ban-cras.html

As noted today in bloomberg

Gold is the new Essex
Apr 2011
fintag.com/2011/04/battling-against-tide.html

Gold hits new high (telegraph)

US downgraded
April 2011
fintag.com/2011/04/what-if-usd-was-downgraded.html (check out the picture)

August 2011
As reported by Reuters

Gossip:
Fintag to open up a clairvoyance business.



Thursday, August 18, 2011

Carnage: And it's only just started

Running out of pictures © fintag

News comments:
Carnage.

There is only so much safety in gold but it looks like the gold standard is back. I don't know about you but something isn't right. I had supper with a top hedgie from San Francisco and he was confused. The fundamentals are so good. Apple and Microsoft have enough cash to stop the debt problems Obama faces. Dividend yields are whacko. There is still demand for many products and services. Cash is sloshing around (except in the coffers of governments). The problem he says is tax. It is going to have to go up considerably but as Laffer shows, higher tax doesn't mean more revenue. It is often less. There needs to be a redistribution or we will have Google et al owning governments.

So the markets tank. Again. Any news that is negative is deemed bad news. It's a signal. Something big is coming. Not sure what but it could make Lehman look like a walk in the park. I hope not. The end of the Euro? Moodys moves the US to junk? Earthquake in California?

And its pissing down with rain in London.

Today's shorts:
Depression, recession, its all bloody gloomy (telegraph)

Today's longs:
Chavez blings up (bloomberg)

Gossip:
Dow to be back below 10,000 very soon.



Tuesday, August 16, 2011

Euro will be dead by end of 2011

Germany debt © fintag

News comments:
Poor old Euro.

The Sugar Daddy that could keep it alive is going to let it die. As much as the leaders of France and Germany want to keep the love-in going, the German people are saying no. They already pay 5% a year reunification tax and if the way things are going continue, they can add another 10% Euro saving tax too.

Germany was assumed to be benefiting from the Euro. Very low unemployment for starters but it too has the "high debt, low growth" disease that most of the West is suffering from.

So looks like the FX community will have to work a bit harder next year as new currency pairs come to fruition.

A great idea was the Euro but as with all things socialist, there was too much politicking and not enough rules and punishment.

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Today's shorts:
Germany falls short (bloomberg)

60% of Germans say no (telegraph)

Today's longs:
Cheap as chips equities to get even cheaper (reuters)

Gossip:
Germany to rebuild the Berlin wall.



Friday, August 12, 2011

Are you looking to work in Financial Services?

AAA good idea © fintag

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He is looking for 6 graduates to test the concept. Over 2 days you will get free heating and coffee and lots of free advice. From whether the CFA is any good to how to resize columns in Excel by shouting loudly at the screen (only kidding).

It sounds like a great way to get advice that would normally cost £3000.

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Words

Obama lightweight © fintag

News comments:
Words.

Obama is good with words except he doesn't know how to use them properly. The UK chancellor isn't a great orator but has said enough to convince the markets GBP is where it is at. The UK started to cut before anyone else (despite it really being a slow down in real terms) and so gets to keep its AAA. Waffling Americans and Continental Europeans struggle.

The UK isn't in a happy place. It isn't a happy place. But while the markets look to make beans from the distresses of others, it will turn into the new Swissie / Yen (which wants to peg with the Euro). Printing presses to the ready ...

Today's shorts:
European banks (drat, no shorting today) (telegraph)

Today's longs:
iApple to rule everything (telegraph)

Chinese iApples (reuters)

Gold (bloomberg)

Gossip:
Obama to call in sick.



Monday, August 8, 2011

Who is to blame for crash 2.0? The socialists

France debt gdp

France is next © fintag

News comments:
All this market intervention has done is make the situation even worse.

Lots of analysis as to why crash 2.0 is on its way. Here are the culprits, the ones we have been banging on about for the last 5 years.

Capitalism is brutal but it works. Trying to manipulate markets doesn't. Imagine trying to regulate the internet, probably the best example of capitalism at its best? It can be done with global cooperation (piracy for example) but the most effective way is for the people to do it. Amazingly, and history will show, collectively people are quite good at keeping the status quo and ensuring the wheels keep turning. What they don't like is meddling by red tape lovers and tax grabbing short termists who put sand in the oil.

Regulating the financial markets is the people trying to ensure there is a level playing field and this has on the whole worked. What doesn't and never has done is artificially controlling markets. Here are some examples:

The world's greatest exporter has been allowed to fix its Exchange Rate to keep its exports cheap. Come on down CHINA.

Ailing banks have been given government backed subsidies to continue. Come on down most of the UK for setting the standard.

Deflating countries allowed to print money without recourse. Come on down Ben Bernanke and Mervyn King.

Government agencies buying government and corporate debt. Come on down the ECB and the FED.

Creating global one size fits all currencies. Come on down the EURO.

Countries setting up EMU and then ignoring its own rules and so giving the green light for others to follow (Greece, Ireland, Italy, etc). Come on down FRANCE and GERMANY.

Creating a trading zone that excludes those who are not members from its benefits. Come on down EMU.

Having a credit rating system controlled by one country. Come on down the USA.

Having a historically successful capitalist country run by a socialist. Come on down the USA.

Having one global reserve currency. Come on down anyone who isn't American.

And so on...

Answer?

STOP IT.

Today's shorts:
Will the last person please turn off the lights (telegraph)

Irish, Greeks and Portuguese who gave in are livid at the help Italy is getting (telegraph)

America to be junk by end of the year (nymag)

Today's longs:
Anarchy in Tottenham (telegraph)

China is a hypocrite (reuters)

Gossip:
No country to be triple A ever again.



Sunday, August 7, 2011

America in denial that it's a dying country

Number one no more © fintag

News comments:
Good to see a Credit Rating Agency recognise that America is no better than Greece.

Only last week I said the US would be downgraded later this year. I was assuming the CRA's would be as slow as snails and follow the downgrade after the event Lehman style. Looks like one of them, S&P, was on the ball. Hats off and respect. The CRA's are back in business.

With US debt now playing second fiddle to Australia and the Isle of Man, all this liquidity talk is baffling. Yep, the risk free has always been T-Bills. But no more. Gold now takes its place.

Anyway, who is next for a downgrade?

UK and France for starters. Next week probably.

The arrogance of Obama has been staggering and since the days I saw him on the road courting hedgies for election cash, I have warned you all about how useless he is. And so he is the first American president to oversee a downgrade. The man should resign immediately.

But it seems he thinks everything will be fine. So what if Canada and Australia, France and Germany are now number 1? So what if US money market funds are second class? So what if raising debt will cost more? America is America. Number 1. Reserve currency of the world. Super power.

Soros and Buffet and many other Americans are saying it doesn't matter. Jeez, what planet are they on? You cannot have a rating system and just ignore it. What if Basel decided all tier 1 capital for the banks had to be Triple A debt? Oops, no need for American subprime crap.

Anyway, this is the beginning of the end of America. Unless of course the CRA's get in there and downgrade France and the UK and Australia and Germany and the Isle of Man, and then America will be in good company. Until then it is no better than Greece.

Today's shorts:
America is now an emerging market (bloomberg)

Greenspan, the man who got America into the mess it is in, says its business as usual (reuters)

The really useless TG decides to stay and cause more chaos (reuters)

Today's longs:
Europeans in chaos decide to have a conference call (bloomberg)

Gossip:
Obama's new election slogan "I can get back America's triple A"



Thursday, August 4, 2011

The Euro is subprime 2.0: The ECB the new AIG

Italy debt © fintag

News comments:
It is not in the UK's interest to see the Euro collapse as Europe is a huge trading partner.

It is, however, in the interests of free markets to ensure winners win; and losers lose. If the Euro is not right, it will be corrected.

The problem with the Euro is its a bit like a subprime ABS of old. The top tranche is Triple A (Germany mostly) and the rest is junk (especially France). However, as mentioned before it is in the interest of the USA for the Euro to fall and it is clear the Murdoch media in the US is scaring its population.

I learned today that most of Europe has no electricity, its people cannot afford shoes and they cannot speak English properly.

Take Italy. I have just had a delightful yacht and villa vacation and it is true the country is falling apart. It is a country of two halves (a bit like Scotland and England). The north is wealthy and the south is poor. And getting poorer as it is taxed to pay for parties.

On the surface the country is a mess. But looking at its debt to gdp ratio and it hasn't moved much in the last 5 years. So why now are yields shooting upwards? It is because when there is potential of growth, then leverage doesn't matter. That "hope" is enough to justify triple A sovereign debt. Once growth looks unlikely, the markets start looking at the debt realise, like subprime, that the underlying asset is worthless.

Thankfully it has the ECB to help it out. Italy makes payments to Brussels and in return gets a free insurance policy. Except the ECB is looking like AIG.

I was predicting a correction in September. Looks like an Italian teenager enjoying a passionate session with his girlfriend has come earlier than expected.

Today's shorts:
America puts the boot into Italy (mish)

Today's longs:
Contagion turns into a pandemic (telegraph)

Gossip:
The mafia to have a few words with someone.



Wednesday, August 3, 2011

Where is the good news?

Coyote © Looney Tunes

News comments:
Remember Road Runner? Always being chased like a pot of gold by Coyote.

Coyote was always enthusiastic that he would get his dinner. He never did though. So often he would chase Road Runner off a cliff and then appear to still be running for a few yards in thin air. He would stop, look down and crash. This is where we are with the Western stock markets. Looking down into the ravine. Ready to crash for there is nothing holding it up.

Coyote is hoping an Asian do gooder will throw out a line. But alas, the line is attached to the Chinaman's foot and is going to come crashing with him.

Apart from gold and the Swissie, there ain't much else out there of substance.

After each recession there is a new thing to pull us out. In the 80s it was the Reagan Thatcher love affair and structured products. In the mid 90's it was the end of communism and the beginning of the dot com. The 00's heralded cheap debt and sleeping regulators. So what about the 10s?

Inflation hopefully. We need strikes and defaults and new currencies. We need downgrades and upgrades (Isle of Man is a AAA?!). We need new unregulated sign your life away stealth funds. We need something because we are starting to fall ...

Today's shorts:
China hacks into America and finds nothing useful (telegraph)

China slags off America about its debt and gets silence (bloomberg)

Today's longs:
Dow is the new Coyote (reuters)

Gossip:
Obama to be the new CEO of Goldman Sachs after all.



Monday, August 1, 2011

America passes the bong around one more time

http://4.bp.blogspot.com/_FoXyvaPSnVk/S-Wh_FoY-LI/AAAAAAAC0kU/Rj2mlSSEvKI/s1600/Hummer-H2-Ultimate-Six-11.jpg

Hummer © GM

News comments:
We can now all get on with our lives.

Like a drug addict who says they will kick their habit tomorrow, the US Government has agreed to one last fix and will, yes sir, scout's honor, kick its debt lovin' ways sometime tomorrow.

The US Hummer has been given some more gas while its owners pretend they want to sell it for a Prius.

The markets will enjoy the drive until it realises later this year that the Hummer is never going to be sold.

Today's shorts:
Smug Obama gets his way (bloomberg)

Smug Tea Party gets its way (telegraph)

Today's longs:
Goldman no longer the gold standard: Lansdowne signal crash 2.0 is coming (cityam)

Gossip:
Obama to cut the deficit by outlawing the Tea Party.