The news stories of yesterday and today have lots of clues that the decline caused by last fall's panic might be over. Existing home sales increased. Durable goods orders increased. From the past weekend, multiple bidders competed for California homes at the new, low prices. All that is news from the "real" economy.
Meanwhile, reports that short sellers actually increased their positions in recent weeks was quite intriguing. And the ideologues and marionettes of the short sellers are out in force claiming great benefits and little harm from bear raids. Or that such don't exist. One would think the Soros article yesterday would shut them up, but no, the WSJ has another silly piece today. WSJ Online: "The short-sellers probably saved us five to 10 years of poor bank earnings, writes Andy Kessler" What a dope ! They caused a panic that led to a few million people losing their jobs and destroyed a few major financial institutions. I suppose Andy Kessler would write that the Vikings invigorated Europe by looting the monasteries.
Ideology can certainly blind people to facts.
Last week's analysis in this blog on the sleazy role of AIG in the financial markets got proof in today's WSJ Online.
"Banque AIG enabled AIG to generate revenue by helping European banks lower the amount of capital they are required to hold to protect against losses on assets such as mortgage and corporate loans. ...
"In the event of a default, European banks that have done these trades with AIG could be forced to take back responsibility for billions of dollars in assets. That could require them to raise billions of dollars in capital, AIG has said.
"In May 2007, a British executive in the financial-products office in London told investors: 'For the European banks and the Asian banks, this is very much a regulatory capital arbitrage business. By structuring their businesses, whether it's their mortgage lending or their corporate loans into these sorts of trades and tranching the risk up, they're able to significantly reduce the capital they have to hold against their portfolios.' "
It was all just a scam to beat the sleepy or compromised regulators.
I made some sales in Obama Fund yesterday near the early highs of the day. Obama Fund are at 150% long and I reduced it to about 120% long. I'll reload on a serious dip. Sales: all of GE and FCT; 1/2 of MS, FCX, MT, X; 1/3 of CETV, CAB. All those positions had received had adds much lower, so were a big large. I own more GE in Fido Fund, so just chucked the Obama Fund piece.
By the way, the price of copper is over $1.80 this morning.
Word of the Day
"Monkeyshine" - noun [$10]; US Colloquial, a Mencken word.
Monkeyshine = monkey tricks or monkey business, meaning mischief.
Sentence: Monkeyshine of beefer short sellers is hazardous to the jobs of the common man.
Le Mot du Jour
"Supprimer" - verb, regular -er.
Supprimer means 1. to delete, to remove; 2. to cancel; 3. to do away with, elimnate.
La Phrase: Beaucoup de entreprises suppriment emploies en payant les primes à leurs dirigeants.
Sentence: A great many companies eliminate jobs while paying bonuses to their executives.