Saturday, March 7, 2009

3/7/2009 - Stock Market Review

Another week - down another 5% or so on the Dow. It would have been a 7% loss if not for yet another heroic last thirty minutes of the day rally orchestrated no doubt by the PPT. Of course, you can see by the chart below that the first thirty minutes of the trading day and the last thirty minutes of the trading day have become the most important and most manipulated. So what's new? Volume is still not excessive and fear in the market is a non-issue. It seems that investors have reached a level of resignation or perhaps, they patiently await an Obama trampoline. It is almost like one of those trust exercises where you fall backwards and trust your mates to catch you. Well, with the Dow down over 20% for the year, investors are waiting and hoping.

Not us. Our growth portfolio is solidly in the black this year and with a little more help from the idiots that run our country, I expect a fantastic year going forward. For investors with skill, things are getting easier. The absurdity of the current economic philosophy will result in a stock market that will be burned to the ground. The idiotic notion that we can somehow mute the effects of exponentially margined borrowing over the past few years in a moronic attempt to boost economic decay by printing money like a drunkened Zimbabwean banker is simplistically preposterous. This strategy has never worked anywhere in the world and will not work now. All it does is send us all down the same rat hole as the Ponzi scheme losers find themselves in at the moment. The stock market is sensing this. So too is the bond market. Yields on the US Treasury bonds are dancing higher as the year progresses while prices of stocks are dancing like a blind man on banana peels. Meanwhile, the idiots in Washington continue to paralyze commerce further by imposing more socialized proposals and governmental interventionism. They even called in the National Guard to nationalize the rice production plants. Oh, wait a minute. That was Venezuela. Oh well, at least we can see where we are headed. The stock market does not like this sort of stupidity.

Speaking of stupidity, I read this past week that Bank of America still has five corporate jets. If you are an idiot, this fact probably doesn't bother you too much. You go along with the company line that this provides more efficient transportation for the executives. Well, duh! It would be more efficient for me to have my own corporate jet too but I don't have one. You know why? BECAUSE I CAN'T AFFORD ONE AND I DON'T EXPECT CITIZENS OF THE UNITED STATES TO BUY ME ONE!!!!! Taxpayers just gave BofA untold billions that they used to buy Merrill Lynch. Why didn't we tell them to sell the jets first? Because we are idiots lead around by the likes of pilfering nitwits like the Pelosi's and Frank's of the world. We don't have any fight in us. We think it is our right for the Dow to go up and make us rich and if a bank needs to take over another company to facilitate that process, then it is okay for us taxpayers to foot the bill. Not me. This whole process of bowing to the banks is infuriating me to the point that I may have to go out and buy a new keyboard because I am hitting these keys so hard right now this thing will be broken before I'm through! Oh, by the way - could all of you collect $140 and send it to me so I can get a new one? Isn't this the way things work nowadays? Shouldn't the taxpayers pay for everything that anybody wants?

So now we are waiting for a bottom in the markets. This is like falling down a flight of steps and every time our head hits a step, we want to think that is the 'bottom'. What then? Do we rebound back to the top? What propelled the Dow to its high of 14,000? Unbridled capitalism and unfettered regulation. What course is the current administration moving towards? Bridled capitalism and fettered regulation. Sure, things got ridiculous in the zealous attempt to super stoke GDP with the invention of derivatives but in true capitalism, there is going to be a loser. The people that played this game should now lose. Period. But no, enter the new socialism. Or, as I like to call it, the new Stupidism. Bailing out the Ponzi scheme players is supposedly in all of our best interests. If I am going to be required to bailout bad loans through cramdowns, bailouts, stimulus, 'recovery packages', or whatever, then every loan that is written should come across my desk for approval. Not Bernie Frank of Chris Dodd!!!!! We all think we can send this garbage to Frannie and Freddie Mac. Who do you think they are? They are us. We own them!! Courtesy of Hank Paulson and Ben Bernanke, they bought us a company that loses, as of their last bailout request, about $25 billion a quarter!! Are you mad yet??? You want to know what is in my best interest? I WANT THE GOVERNMENT TO GET OUT OF MY LIFE AND LEAVE ME ALONE!!!! 

What do we do? We fight. That's what we do. This is war. Our government is coming for everything we have. We must understand this and we must use our intellect. We must understand that the stock market will only flourish under capitalism and what we have now is the opposite. Where will the stock market head? Down the staircase hitting our collective heads on every step. Why is our growth portfolio up so far this year? We short the market. This is not a recommendation nor a suggestion. This is a brutal market and shorting is a brutal way to try and make money. It should only be attempted by skillful investors and skillful portfolio managers. If it was easy, everybody would do it. Just look at the chart below. You can see that the last half hour of the day belongs to someone with a big printing press and no risk of a loss. Shorting is fighting our government. Even our new White House Occupant (WHO), Mr. Obama, was out this past week telling us to buy stocks. He referred to the 'profits to earnings ratio' (whatever that is) as a sign that stocks were now cheap. Great. We are getting investment advice from an attorney. I wonder if he ever had any investment license? An investment course? A job working for an investment company? I wonder if he reads my newsletter, Barry's Bulls? I wonder if he read my book? I know I haven't seen him at any of my lectures. I went to a New Year's Eve party one time when I was younger and the guy throwing the party ran out of beer at about 10:30 PM. Everyone started to leave. The host implored everyone to stick around for the dropping of the ball a midnight. I wonder if he knew that's not why everyone was there in the first place? Capitalism is the punch bowl from which affluence drinks!

Chart courtesy

Dow - five days week ending 3/7/09 thiry minute bars.

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