John Carney Nails It

Some time ago, I posted an entry which explained why I thought we were facing a deflationary depression, and that the FED's actions would not cause inflation after the 2008 debt crisis, as many had argued. I had a sense then that the money the FED was creating was filling in giant debt holes, and therefore, since they were only replacing what was being lost, inflation would not be a threat.

http://econmom.blogspot.com/2009/11/inflation-vs-deflation-not-so-simple.html

Today I found a much better explanation of why neither Europe or the U.S. is facing inflation any time in the near future.

http://www.cnbc.com/id/45476620

I have not posted much lately because there just has not been much to say. Nothing has changed. The Euro zone is on the verge of collapse and will enter a Great Recession of its own, if not an outright Depression.

We will be deeply affected by these events. Our large banks are very unhealthy and I fear cannot survive another financial shock.

I believe they will be "reorganized" by the government within the next two years.

Hang on for the ride.

Obama Is A Brilliant Politician

This is not a moral opinion, not an ethical judgement, just a factual observation.

The Super Committee failed...Obama won, and won big.

The Republicans have lost the most important poker game in history.

Obama gets his spending cuts, or lack thereof...and the Republicans get another S & P downgrade. Brilliant move. (Even though I disagree with him ideologically, I can not deny his mastery of the game).

The Republicans look like terrible, uncompromising true believers (in Grover Norquist) who will not balance the budget because the 1% might annoyed.

Apparently, they can't do math...Obama can.

Sad...but Obama has won this round.

GMCR Vindication

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

http://econmom.blogspot.com/2011/10/einhorn-sets-sights-on-green-mountain.html

Love the put options! Important content is about 5 min & 40 sec in...

Just so you know, I am not short everything...I own Sprint call options and am looking to buy Intel and Cisco on pullbacks.*
*Trade at your own risk!

Another Momentum Stock Bites The Dust

I own Opentable put options. Needless to say, its performance is proof that predicting the demise of "momentum" stocks is like taking candy from a baby. (Not that I would do that!)

In after hours trading, it is down over 10%, after a poor earnings report.

http://data.cnbc.com/quotes/open

http://www.cnbc.com/id/45129906

I started buying put options in the name quite some time ago.

Why should you care? Usually, when momentum stocks start to fall apart, the S & P 500 is not far behind.

Einhorn Sets His Sights On Green Mountain Coffee

Thank you David Einhorn! I needed some extra cash!

http://www.forbes.com/sites/steveschaefer/2011/10/17/david-einhorn-drops-the-hammer-on-green-mountain-coffee/

Apparently, David saw the same thing I did going on at GMCR!

I am not sorry for saying I told you so, because had you listened, you could have made a lot of $.

Here is the proof that I told you so:

http://econmom.blogspot.com/2010/09/obvious-short.html

http://econmom.blogspot.com/2011/07/love-charts.html

http://econmom.blogspot.com/2011/06/too-much-money-chasing-returns.html

http://econmom.blogspot.com/2011/06/inflated-stocks.html

http://econmom.blogspot.com/2011/03/gmcr.html

http://econmom.blogspot.com/2010/12/qe2-working.html

http://econmom.blogspot.com/2010/09/gmcr.html

Anger At Wall Street

I knew it when TARP passed, that people would eventually figure out just how badly they had been screwed by the Government/Wall Street Alliance.

I knew that the banks would eventually pay for their moral failures, and pay dearly for taking Government handouts.

http://econmom.blogspot.com/2009/11/goldman-sachs-doing-gods-work.html

The picture above is not only disturbing, it is downright scary. To threaten violence instead of pursuing legal channels of prosecution is downright reprehensible.

However, I am not surprised. People are very angry, and we cannot misread this anger. The corrupt system we have now (Wall Street Lobbying Government for $ at the expense of the taxpayer) has got to be reformed.

Government's role in this mess must be addressed. The Government created the incentives for these firms to do wrong...and they did. The Government supported and encouraged and looked the other way in the face of market manipulation because they wanted Wall Street money for their campaigns. The average Americans are paying for these mistakes, and they shouldn't be.

Term limits, full disclosure of donations, contribution limits, and an end to financial firms lobbying privileges must be put in place...ASAP.

The Volcker rule must be reinstated immediately...before it is too late, before the anger takes over and it is too late to save REAL CAPITALISM.

http://econmom.blogspot.com/2008/12/this-is-not-capitalism.html

David Rosenberg Call

I am a fan of David Rosenberg, and here is a great article in the WSJ. Obviously, I agree with David.

http://blogs.marketwatch.com/thetell/2011/10/13/d-stands-for-deflation/