Afternoon thought....China is a smooth operator

These oil deals with Russia, Brazil, Venezuala aren't just really smart, but they are cheap too.

Take the Russian deal for example:

The International Energy Agency (IEA), an energy watchdog group set up by the OECD countries, projects that oil prices will rise above $110 a barrel in real terms (more than $200 a barrel nominal) by 2030. The US's own Energy Information Administration (EIA) believes oil prices will rise above $60 a barrel in real terms by 2030. So what does China pay Russia until 2030? Less than $30 a barrel! That's dirt cheap any way you look at it.




P.S. Trying not to confuse the IEA with the EIA can be confusing at times :-)

Afternoon music..."Day n Night"

When you're 60% cash, investing gets really boring...so you gotta do something to keep yourself busy.



I am still sitting with my huge cash position, but since we just broke the bottom of our range (800 on the SP500)..I'll start to short the SP500 a little more...I plan on covering once we near the 750 area on the SP500. As of 2 minutes ago I am now 45% cash, 35% short and 20% long.

Late night thought....

China will keep buying our debt. Why? Because they are the sh*tiest stock pickers I have ever seen...just look at their investments in Blackstone and other financials?

So China's stock losses are effectively the U.S.'s gain as T-Bills (with their paltry 3% yields) be will sufficient for the risk averse Chinese. Besides if China doesn't buy up US debt to finance our recovery then they will be cutting off their largest export market...that's not gonna happen. Xie xie China, we know "you just can't quit US."



This revelation effectively nullifies my bullish position on TBT

Oh yeah and "IF" China does decide to pull out of Treasuries and walkaway from the debt table....



Hat tip to The FLY...he's a wise man.

David Cook - Light On

Still 60% cash and...

I'm lovin' it :-)



Off to go order every item on the dollar menu (aka $7 bucks worth at McDonalds)

Lesson: in this complex financial world you should always keep a sizeable cash position (15%-20%) going forward (I am talking about the next 3 years mind you). Of course, when investors are fixated on Washington, you should think about doubling your cash reserves to at least 35% given the fear political fools instill when speaking on TV.

A trip down memory lane: Cramer pre-crisis (June 2007)

I give Cramer credit for his Stop Trading Fed Rant (aka the "Rant heard around the world", but one good deed is not enough to save the man for all his other bone headed calls. The problem: Cramer is just too talkative of a guy. He wrote at The Harvard Crimson, so he clearly is opinionated, likes being the center of attention, and likes getting his thoughts heard. That's all fine and good, but Jim constantly feels the need to make predictions and forecasts (seriously does Mad Money need to be on TV everynight?) Jim's sporadic "shoot from the hip" financial analysis doesn't fly in today's complex socio-economic world. Of course, his Wall Street career certainly gave him a bit of god complex (ironically Jim admits his wifey's TA skills saved his fund from the 87 crash...surprisingly he panicked).

Anyway, here are Jim's thoughts on subprime in June 2007:

"No more than $500 billion [in suprime losses]"

"Only 10%-15% are corrupted [defaults]"

"I couldn't believe how few defaults there were. Only 150,000 defaults? We are a big country."

"The [housing] fallout has only been with New Century Financial"

"WE ARE BLOWING AN ISSUE OUT OF PROPORTION"



The lesson to Jim (and anyone else that likes to talk a little too much):

If you don't have anything meaningful to say, don't say anything at all.

Good morning....

Given all the Republican fuckery over this stimulus bill (FYI, I am a Keynesian liberal) I am very content being in cash...there is no edge in this market.

Remember that the market is irrational...

That's why I've been 60% in cash, 20% long and 20% short for a while now.

On this side we have very dire economic news:

New jobless claims jumped far more than expected last week in an already dismal labor market, and there's no relief in sight for workers as mass layoffs persist. The Labor Department reported Thursday that the number of newly jobless workers seeking benefits rose last week to a seasonally adjusted 626,000, from the previous week's upwardly revised figure of 591,000. The latest total is far more than analysts' expectations of 583,000.

Economists expect the government to issue a grim report Friday that will show the unemployment rate rose to 7.5 percent in January, up from 7.2 percent in December. That would be the highest rate in 17 years.

Yet the market is rallying because the stimulus will likely be passed.

A group of 16 senators was meeting today behind closed doors to hammer out a package of cuts. According to Collins, R-Maine, the group achieved an "in-depth scrubbing of the bill, going line by line item by item."

Emerging from the meeting for a midday break, Sen. Joe Lieberman said the group of Democrats and five Republicans were at a "breakthrough" moment.

Ohio Sen. George Voinovich, one of the moderate Republicans who participated in the closed-door meeting, told ABC News he expects the group to get behind lowering the overall size of the bill to $750 billion.

Stay patient and wait for the TA action to confirm a market breakout above SPY 850...but don't chase. Wait for the inevitable pullback to the support point (remember resistance [850 on SPY] becomes potential support for a continued uptrend).