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Our Fund Managers in DC Buy National City


And now it's 20% lower. Surprised?


Hello from New York, where, if you need a "tell" for a trading low, I can share this: I was called in from my day off this morning with the futures lock-limit down. In retrospect, I should have:

a) Said "No, thanks, because this will obviously just end up being an ordinary 'down 4%' day, if only because I'm being asked to come in," or

b) Gone back to bed.

Of course, what I did instead was say yes, and started selling off wee bits of S&P 500 2x Short ETF (SDS) and Dollar Index (UUP). Wee, wee bits, as I found the open as uninspiring as everyone else did.

Which brings us to my overarching thought for the day: Stock market lows make lousy theater. The Oxymoronic Great Depression wasn't a bunch of shorts covering generational lows as spat-clad longs jumped off the Chrysler building. It was long, hideous and, ultimately, a period of not much of anything.

You don't "weather storms" by running around; you batten down and hold still. The bottom, when it comes, will look like this. Unpredictable. Untrustworthy. Impossible to really game. The opposite of mania is doing nothing. Right now the market is still fairly good theater but, if you trust it, you aren't paying enough attention.

In less moody news:

  • Fundamentally, I'm short. Nothing complicated about the reason. I simply don't believe the markets can be valued, fundamentally (governments are continuously changing rules) and are too emotional to be reliably "played". These percentage moves are truly crazy. Even prison convicts fear "crazy".

  • So why not try to short it to zero? Because once you fully load up the short, you'll hear the Breaking News alert, the market equivalent of Hulk Hogan's entrance music and the next round of "Global Stimulus" will make the market hop like a docked fish.

  • Speaking of which, Iceland just got a $2 billion stimulus package from the IMF. From what little I understand of Iceland's market seizure, $2 billion amounts to trying to melt a glacier with a cigarette.

  • National City (NCC), PNC (PNC) and the Treasury Department (USA) all jumped into a sack together and National City came out 1) partially owned by you, me and other tax-payers and 2) 20% lower. Do we get to vote on these trades next month? I'm becoming a bit disgruntled with my fund managers in DC.

  • Speaking of groups that regard themselves as Bigger Than The Market, the crude ETF (USO) is now 50% below it's broken uptrend even as OPEC vows to cut production. There's something sad but almost charming about OPEC's unwillingness to recognize its obsolescence.

  • At the risk of closing on a downer (or upper, depending on the tick), I'm still long Microsoft (MSFT), which has been "cheap" for the last 30% drop. "Good quarter, seems inexpensive, no upside catalyst to speak of." Now that's what a market gone depressing sounds like.
No positions in stocks mentioned.

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