The New Economy – Food banks, panhandling, and down time

Instead of writing about how many times Ali Velshi can be wrong and still have a job, I thought better to not focus on the negatives and instead start getting into the mindset of Disintegration 2010.

Dow Now and Then

Tea Party 2009, Chicago style

What will be the trigger in the US as this financial dustbowl bears down? Rick Santelli? Glenn Beck? When do people here just say enough is enough? Obama is now snowjobbing the cable outlets by throwing out some raw beef in the form of mortgage backstopping while they sneak through another 800 billion to aid swimming pool builders and teen STD angst. This is just like the auto sector snowjob which was highly effective in diverting public discourse away from TARP (trillions) and onto a pint-sized (10s of billions) problem.

If there is going to be a Tea Party 2009, it better happen quick because we’ve crossed the high water line on this river of debt.

Rick Santelli, you’ve got some momentum. The people are listening

We oughtta move to China if we want Capitalism – Rick Santelli

Gold nuggets and Santelli gone wild today on GETV. What is next for CNBC?

“Where is our frontier spirit?” Santelli asks the non-trader hosts. Maybe all it takes is a large long bond short position pummeled into the red by Hope Inc to get mad has heck and throw punches at the CNBC desk.

First gold nugget EVER SEEN on CNBC

CNBC snowjob team headline this video as “Invest in Ancient Money”. Ancient money? Wouldn’t you rather own ancient money than obsolete money like euros or USDs? Only the first 10 seconds of this useless video are interesting. Gold or bonds? Neither pay any dividends but which one has credit risk?click here

More gold snowjobs again on CNBC. Here at “gold parties” woman of Orange County sell bling for cash. What do these woman do with the cash? Who knows, but more gold just moves into stronger hands and likely out of US hands. click here

Goldman Sachs stock way off course here at $95

When you’ve got a lock on the Fed, Treasury and inside the White House, it’s a given you get title of Master of the Universe. Goldman has out-maneuvered lesser rivals using commonly accepted practices of frontrunning the Fed, FASB funny stuff, and naked shorting their pals to oblivion. Their only rival now, JP Morgan, will soon be drowning in another wave of toxic paper. Technically insolvent, GS will eventually fall to levels where it can be swept under the Treasury’s carpet, joining former high-fiving pals like Bear Stearns, Lehman, AIG, Fannie Mae, and the thousand or so regional banks dumpstered.

Relative Performance GS and JPM

What about Geithner? Instead of being a former CEO, he’s now hiring GS lobbyists to participate in Team Hope’s thinktank.

GS snowjob here

So what am I going on about? Golden Sachs (GS) looks like it has double topped out at $95 and is destined to break new low territory. It really has no business being over $5. Take the $90 as profit on any short.

Party time! Stimulation 2009 is here

1999 all over again

All systems a go for Stimulation 2009. Financials are saved, copper pricing in new demand in construction and electronics, wheat moving from the coming hunger of overworked bridge builders. Even silver is closing the gap on gold due to its industrialness. China is back along with India. Bulk shippers are cranking on all fours.

Shorting banks is so 2008. Staying long precious metals and agricultural. Oil, once floating overhang is worked off, should crack $50.

Good luck!

Coming soon to America

thousands protest in Marseille - BBC

If only the French had bean burritos and cablevision to keep them where they belong instead of being out on the streets stirring up trouble with the bankers and government facilitators. If only the French had 24 hour news channels to keep informed on stately matters like teen tot baby killers instead of getting all roiled up about these inane bailouts. But they don’t – and they are furious. One million protesters took to the streets all across France, yet few outside know. Other than a brief report on BBC, no major news channel in the US reported on this event.

From the BBC:

Huge crowds have taken to the streets in France to protest over the handling of the economic crisis, causing disruption to rail and air services.

Unions said 2.5m workers had rallied to demand action to protect wages and jobs. Police put the total at 1m. …more here

More fraudulent accounting turned into law

Give it up for Team Larceny

First, some background courtesy of wikipedia:

Robert Edward Rubin (born August 29, 1938) served as the 70th United States Secretary of the Treasury during both the first and second Clinton administrations. Before his government service, he spent 26 years at Goldman Sachs. His most prominent post-government role was as Director and Senior Counselor of Citigroup, where he performed ongoing advisory and representational roles for the firm[1]. From November to December 2007, he served temporarily as Chairman of Citigroup.[2][3] On January 9, 2009 Citigroup announced his resignation, after having been criticized for his performance.[4] He received more than $126 million in cash and stock during his eight years at Citigroup.[4] In January 2009, Rubin was named by Marketwatch as one of the “10 most unethical people in business”

Making money and managing money are two entirely different professions. What this guy Rubin is really saying is that when these firms are directed by law to properly value their assets it’s a real drag on earnings. Much better to show big profits so the banking elite can keep raking off massive compensation for “performance”.

From Bloomberg:
“I spent my whole life at Goldman Sachs believing in mark- to-market accounting, and having said that, if you look at the experience from the last two years, I think mark-to-market accounting has led to terrible vicious cycles in asset prices,”more here

Mall operators left holding the bag

bagholder

The party favours were handed out yesterday in the commercial real estate sector after news Simon Property Group announced they had unloaded a mall. If volume begets price, the writing was on the wall that asset values for mall operators would be nosediving. Over the past year a handful of malls have traded hands compared to deals numbering in the hundreds in 2007. Yesterday SPG announced they had sold a mall for $20/sq ft versus the industry average of $135/sq ft and the stock got giddy up over 10%. Another way to look at it is SPG raised 26 million and their market cap jumped by almost a billion dollars. That’s totally stupid!!

The most vulnerable sector in real estate currently are the mall operators. Just look at the almost daily announcements of retail layoffs and bankruptcies. Credit markets continue to be frozen when these guys desperately need to refinance. Speculators are front running the bailout programs but they are mistaken to believe Team Hope will be lending a hand to the commercial real estate sector. It is politically vile to help struggling mall operators when families are being ejected from their homes. To say mall operators are completely screwed is an understatement.

From the WSJ:
Just five malls valued at $5 million or more sold in the second half of last year in the U.S., down from 68 in the second half of 2007, according to Real Capital Analytics, a New York-based real-estate-research firm.

“The market for malls is dead,” says Dan Fasulo, RCA’s managing director of research. “These properties are very capital intensive and without the debt markets it’s impossible to make them work.”read more

As always, timing the demise of the mall is not easy! Leg in on shorts on days like yesterday and ride this stock down to $5. Shorting commercial real estate along with shorting long bonds are the trading themes for 2009.

Edit: Oshkosh down 30% today along with other consumer discretionary plays. Retail sector will be the disaster of 2009.

Some respite – Financial prose from Pangloss

Good job boys

Today my friend Pangloss dug up some prescient financial prose to post here on the snow job. Check out these rhymes from 2005 – the days when everybody had the banker swagger.

08-27-2005
Pangloss On Fiat and Silver

Silver polished bright and clean,
Like a mirror how you gleam.
Fiat spawned at an alarming pace,
To bankrupt the human race.
I’m obsessed I must admit,
To fiat I won’t submit.
The federal reserve printing press,
Is not the cause of all this mess.
The fault it lies in us my friend,
for we refuse to buck the trend.
Trading in a promissory note
Is what got us in this boat.
Trade in paper if we will,
A promise we can not fulfill.
So take my silver it’s fair trade,
for the promises I’ve made.
Then in the end my debt is paid.

08-29-2005
Where We Began

Nature your a cunning creature
Past experience the teacher
Chicken little sky is falling
Dollar dropping, wars a calling
Pump the Saudi oil wells dry
Burn one drop price hits the sky
Print more money as wallpaper
Greatest ever federal caper
Like a sprinter from the block
To gold and silver people flock
This is not about endurance
They just want to buy insurance
Silver arrow from the quiver
One death blow will you deliver
To that promissory note
Keeping all the lies afloat
And you’ll wonder when it’s done
Why we’re back where we begun
Trade in silver said the preacher
Nature your a cunning creature

Pangloss