Posted by: Hermit Dave at 03:26 PM | No Comments | Add Comment
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Pretty much everything with the exception of bonds ended on the highs for the year.  Final 2010 results for the wealth fund vs. the investment fund:

Year-end marks will have distorted the above figures somewhat, but at this time, the wealth fund is up almost 7% over the investment fund.  That is a huge difference for two months worth of trading.  The outright move of just over 11% is a bit on the insane side, as that projects out to nearly 70% annualized.  If one goes back to when QE2 started to get priced into the market at the beginning of September, the numbers are even more insane.  In short, this kind of trend is likely to be unsustainable, at least at this velocity.

This would be an excellent time to buy some downside protection on one's assets, if one hasn't already.  I like the June 1100 S&P 500 puts for protection, which cost around 2.5% of notional assets for 5.5 months of 'insurance'.  That being said, if the Fed keeps destroying the dollar, this trend could continue, even at this (or much greater, in the event of a currency crisis) velocity.  That's why I prefer puts as a hedge as opposed to futures, and also why I don't want to be in cash.

Anyway, hope everyone enjoys their $3+ / gallon (and rapidly increasing) gas in the coming year.  Keep focusing on gays in the military and the size of Brett Favre's peen, as that seems to be the most effective way to deal with the serious issues facing our country (eye-roll).  For the new year, I'll be giving the new Congress about one month to get serious (which they won't), then I'll be writing off politics (and the political blogosphere) for good and playing 'every man for himself'.  Good luck to all, because we're sure as shit going to need all the luck we can get.

Posted by: Hermit Dave at 02:01 PM | No Comments | Add Comment
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It's the time of the year for stupid fucking top 10 lists, which will be compounded by it being the end of a decade.  So here is a meta top ten list, in no particular order and counting up as I don't really give a flying fuck:

1. Top ten CDs or singles (of whatever passes for music in these days of autotune).
2. Top ten celebrity hotties (95% of 'em are made of fucking plastic and have a personality and talent to match).
3. Top ten movies (fuck Hollywood -- I haven't seen the inside of a movie theater in about 7 years).
4. Top ten blogs (of any type).
5. Top ten athletes or sports teams (unless it's skiing, and the entire top ten is Lindsey Vonn -- ok, you can throw Tina Maze in there also as she's a model as well as one of the best skiers in the world).  
6. Top ten anything political (you only need a bottom one for anything political and that's for everything, although I guess Barney Frank might be the top bottom, as it were).
7. Top ten consumer gadgets (useless crap I don't need).
8. Top ten anything related to investing (these are either backward looking and useless or forward looking and inevitably wrong).
9. Top ten anything to do with TV (might as well have a top ten list of ways to give yourself a lobotomy).
10. Top ten computer games (inevitably 9 shooters for which my reflexes are too old and a token MMORPG grindfest).

Posted by: Hermit Dave at 01:15 PM | No Comments | Add Comment
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Posted by: Hermit Dave at 11:22 AM | No Comments | Add Comment
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On the twelfth day of QE, Bernanke gave to me
        Twelve foreclosed houses,
        Eleven printers printing,
        Ten billion POMO,
        Nine strippers dancing,
        Eight Netflix movies,
        Seven suckers shorting,
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Merry QE to all, and to the dollar, good night!

Posted by: Hermit Dave at 10:11 AM | No Comments | Add Comment
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On the eleventh day of QE, Bernanke gave to me
        Eleven printers printing,
        Ten billion POMO,
        Nine strippers dancing,
        Eight Netflix movies,
        Seven suckers shorting,
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 11:45 AM | No Comments | Add Comment
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For guys, Dancing / Skating with the Stars is only about hot chicks in skimpy outfits, so they should just skip the bullshit and go straight to Pole Dancing with the Stars.

Posted by: Hermit Dave at 09:35 PM | No Comments | Add Comment
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My sincerest congratulations go out to Banana Ben Bernanke, who as of today, has managed to surpass his first trillion dollars in US Treasury holdings!  This makes the Fed easily the largest holder of US Treasuries in the world.  Combined with their holdings in mortgage backed securities and other assorted garbage, the Fed has over $2.5 trillion on the balance sheet.

At his current pace, by this time next year, Ben will have managed to surpass $4 trillion.  By then, gas should be well over $5/gallon and I'm sure the serial liar will still claim that there's no inflation and that he's not monetizing the national debt.  Merry Christmas, ya fucking bastard.

Posted by: Hermit Dave at 12:02 PM | No Comments | Add Comment
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On the tenth day of QE, Bernanke gave to me
        Ten billion POMO,
        Nine strippers dancing,
        Eight Netflix movies,
        Seven suckers shorting,
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 09:58 AM | No Comments | Add Comment
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On the ninth day of QE, Bernanke gave to me
        Nine strippers dancing,
        Eight Netflix movies,
        Seven suckers shorting,
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 10:46 AM | No Comments | Add Comment
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On the eighth day of QE, Bernanke gave to me
        Eight Netflix movies,
        Seven suckers shorting,
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 09:51 AM | No Comments | Add Comment
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On the seventh day of QE, Bernanke gave to me
        Seven suckers shorting,
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 12:39 PM | No Comments | Add Comment
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The stock market has become such a farce that the NYSE should just put a banner on the building:  "Sponsored by the U.S. Government".  Effectively, the government is issuing debt to buy equities, through the QE2 mechanism, in an attempt to paint the picture that pension funds are solvent.  To call the current situation fucked up would be an understatement.

I'm going to switch to a month-end posting of the fund battle results as the weekly thing is a pain in the ass, nobody reads this blog anyway, and monthly is enough for a long-term position.  For those who might care (namely me), the wealth fund is still up about 3% over the investment fund, even with all the year-end book-marking and daily precious metal raids.  I wouldn't be at all surprised to see this continue to narrow as we approach month-end.  End-of-year prints are notoriously hilarious.  Active traders will probably have a field day fading anything that's marked up too idiotically.

Posted by: Hermit Dave at 03:16 PM | No Comments | Add Comment
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On the sixth day of QE, Bernanke gave to me
        Six bankers lying,
        Five tungsten bars,
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 02:39 PM | No Comments | Add Comment
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On the fifth day of QE, Bernanke gave to me
      Five tungsten bars,
      Four Priceline flights,
      Three sick banks,
      Two trillion cash,
      And a debt-fueled market rally.

Posted by: Hermit Dave at 09:12 AM | No Comments | Add Comment
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For a lot of reasons, the market looks extremely toppy here.  I think this is an excellent low-risk point to get short (I'd use the Nasdaq), stopping out on a new local high.  Entry:  ~ 54.45 on the applicable ETF (QQQQ).  Stop: 54.70 (only about 1/2%).  Potential upside:  looking for a move to about 50 (about 8%) in the short term.  If it got there, I'd take some profits and leave a runner to target about 45 (where there'd be one hell of a lot of support).

Update (close of market): With this going enough in the right direction, it can be held (at least) overnight without much increase in initial risk.  The Qs closed at 54.17, putting the trade up about 0.7%, and about 1% away from the inital stop, giving the trade a good buffer against opening gap risk.

Update 2 (next day close of market):  Even though the Qs (miraculously) never hit the stop-loss, this trade would have to be closed out at a tiny loss at the end of business today.  There is almost no overnight gap cushion left -- holding it would change the risk/reward profile dramatically.  This is a perfect example of the type of profile I like to trade, if I'm trading on pure speculation. Small downside, big potential upside.  If I'm right about the potential reward, I can bat less than 10% on this kind of trade and still end up a big net winner over time.

Posted by: Hermit Dave at 08:58 AM | No Comments | Add Comment
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On the fourth day of QE, Bernanke gave to me
        Four Priceline flights,
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 08:45 AM | No Comments | Add Comment
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On the third day of QE, Bernanke gave to me
        Three sick banks,
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 12:47 PM | No Comments | Add Comment
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On the second day of QE, Bernanke gave to me
        Two trillion cash,
        And a debt-fueled market rally.

Posted by: Hermit Dave at 02:22 PM | No Comments | Add Comment
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On the first day of QE, Bernanke gave to me
        A debt-fueled market rally.

Posted by: Hermit Dave at 07:45 PM | No Comments | Add Comment
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