A Few Things...

I haven't watched color TV outside of a Celtics or Patriots game in God knows how long.

BUT I caught that show last night on the tube and found it passable.

Having spent more than my share of time sitting, thinking in bars....I found this guy's insights pretty interesting.

On an another note...

Naples, Florida is truly a beautiful place. In four words it's sunshine, golf, Christians, and homeschooling. So there lurks considerable appeal to me!

BUT there are really no jobs - not for most people anyway, and not compared to larger cities (excepting Boston).

Of course that doesn't mean there's no economic opportunity here. There certainly is.

Guess what folks, the real estate market down here (as it is elsewhere) is getting a little bit bubbly yet again, in my estimation.

Sure, it's not like 2005.

But I heard a guy the other day talk about *buying lots for 600k, building for 600k,...and flipping for over $2 million* in the nicer sections of Naples. That's a pretty good deal if you can pull it off - even once. Building time is only like 7 months.

I went for a run this morning and in 5 blocks saw no less than at least 8 *spec*/*new* homes going up.

I maintain the worst is still yet to come for house prices. Eight years after the Floridian top we still haven't fallen. Places like NYC, Washington, and other pockets have not even really gone down more than a half a notch.

*Speculation* was the culprit before.

Now it's artificially manufactured low interest rates and an inflated stock market. Once the Dow takes a nosedive, all these fossils will shudder. The bull equity run has effectively distracted all the 'old coots' from their loss of *interest income*. They'll take more notice when stocks slide, as they have been known to do.

Think I'm crazy, still calling for a stock crash after all these years?

Well, then, stay long. Sleep tight.

Oh yeah, I also had a fossil in the building tell me that he bought his condo for 108k in 1997 or so.

And he quickly added that that was the price they sold for....BACK IN 1982, as well.

My cousin in Connecticut posted that pic on Fbook.

What do y'all know about *projectors*?

I need to buy one for my classroom teaching - I think.

I'd love to just be able to project questions up on a screen or a wall from my laptop instead of printing everything out. I basically kill entire forests, single-handedly with my math teaching.

Do any of y'all have one? What do you recommend I buy? Thanks in advance

My daughter last week, on Marco Island.

Buffett - One BLIND Old Bat!

"For the last two years, I’ve seen everything except housing moving forward in the economy," Buffett, 81, told Betty Liu in a July 13 interview on Bloomberg Television. "In the last few months, the rest of the economy actually has flattened out. Housing is picking up."

Yeah, the economy has been *moving forward* the past 2 years.

What a freakin' Moron!

I guess by economy he means stock prices....but not food prices, energy prices, taxes, or debt.  And I guess he's not talking about jobs either.

This 'old coot' sees housing picking up too? Figures.  I guess he thinks mortgage rates will NEVER tick up or *extreme over-supply* simply doesn't matter.

I really do hope he's still alive when it all falls apart.

Coming To A Market Near You...

It's amazing how NOBODY in America thinks this can happen here...

That is, if they are even remotely aware of what's befallen buy-and-hold, down-averagers in Japan since the late 1980s.

People just dump money, blindly, every month/quarter, into mutual funds and haven't a clue about what exactly they are *investing* in, and what risks are entailed.

But they don't want to know either. The idea that one can passively invest and get rich is just far too appealing. It's sort of like an omnivorous couch potato thinking that simply taking a Big Pharma pill will make him healthy.

Go to 30% cash, at least...

Bear Market Rally, Over?

It's hard to believe that these bankrupt, over-valued stocks have managed to rally for 4 EFFIN' YEARS...

Whatever.

It's going to the toilet where it belongs, price-wise.

How do I know?

Because I'm no longer short, not beyond a negligible position anyway. And I have no stomach for more puts on the banks and REITs.

I myself have moved on to my tutoring and educational website endeavor. In fact I'm all in on them these days and that explains the diminished blog output.

Let me just tell y'all, that the New York economy has lost steam and is about to nosedive. All it will take is another 1,000 points off the Dow....even if it doesn't come for several more months.

And I'm not exagerrating when I say that Wall Street has never been booming like this. It's been a four year skim-fest for stock, commodity, and bond *asset managers*. Almost everyone I know in finance is still cleaning up. So we have a long, long way to fall yet. All good things do come to an end...

Get flat at least.

Sell Everything!

I'll bet you don't know ANYONE who's moving their 401k to 100% cash these days. Some might be worried but their *action-plan* probably amounts to nothing more than crossed fingers.

And I'll bet you don't know ANYONE who bought gold under $400 an ounce ten years and 1,100 points ago either.

If only I had held the 4,000 ounces I bought, and vowed to never sell, at $270 or so!

If only I had held the cotton, sugar, coffee, and cocoa I invested in 4 years ago...

See - I Am Now Officially A Commodity Investor.

Getting back to stocks...

It is indeed hard to short the averages in the spring and summertime. I feel like whenever it's a warm and sunny day out in the Northeast the market just ratchets higher. Seriously. And I've never heard anyone else point this out.

Will the market blow off even higher, castrating the scant few bears left? Who really knows? - and that's a disclaimer I hear every bear promulgate these days. People are scared $hitless to short these days and why the bleep wouldn't they be after a 2 year downtick-less, reason-defying levitation? Heck in the old days, bears would short without fear and with only the disclaimer that if it goes higher....they'll gladly sell more!

I bought some more puts on Wells Fargo last week - January 22.5s for 1.90 or so. The stock is 29.50 today.

My puts? Well they don't expire until January of 2013!

The banks were bailed out not just by direct government handouts, but also by a surging stock market (after all, they are *skimmers* too), 4% mortgage rates, FHA absorbing all their new mortgages, a now since ceased re-fi boom, and the government-sanctioned license to lie about their balance sheets.

Now all that is done and much of it is unlikely to recur going forward save for the direct government handouts.

The stock, bond, and housing market bailouts were engineered to benefit the 'old coots'.

All of us young people are still screwed but dumping our investments here is at least one act of financial self-defense we can take. Stockpiling canned goods and ammo is probably not a bad idea either!

Hope - A Get-Poor-Slowly Scheme

I was going through my *junk* recently and came across my tiny baseball/basketball card collection.

I never had much that was valuable, not being so into it, but I have always remembered that my David Robinson Rookie cards were worth something. I had thought they were worth $18 or so apiece. In fact, I had thought they were worth that right off the bat, twenty years ago when they first came out - or close to that time anyway.

So how much are they worth today?

Well, look above. $6 on Amazon!  What happened to my *investment*!?!?!?

This is what happens to a market when everyone piles in.

Baseball cards and whatnot were only valuable because NO ONE preserved/invested in them 50-70 years ago.

Sure, there's still some money to be made by savvy professionals who know how to procure autographs, flip collectibles, and whatnot.

But the passive profits from simply putting store-bought cards in plastic are over - and they've been over for 20-30 years.

The same goes for passive stock market investing.

The lumpen masses are lazy and prone to the propaganda of cherry-picked or *historical* stock returns.

I just read a nauseating post from some chick - a millionaire mommy - who thinks it prudent to assume a 10% ANNUALLY COMPOUNDED rate-of-return when making investments.

And the sad thing is....people really do want to believe her.

There's another side benefit to this no-work, no thought get-rich-slowly scheme.

That is, since one's financial outcome depends on outside factors....when things don't pan out they can simply blame their favorite bogeymen: socialists, capitalists, rich people, poor people, homeschoolers(!), et al.

Go ahead and ask anyone today what they are doing with or think about their investments.  I guarantee you that 95% of them will, in some way or another, simply convey *hope* as their current strategy.  With all that professional, licensed-and-certified advice....that's essentially the only thing being brokered.

Super-Size That Junk Argument, Please

Not too long ago I was just thinking how McDonald's successful and highly transparent sales strategy, i.e. marketing to kids, ought to be outlawed. And I say this only in the context, or from the perspective of a socialist nanny state - not because I agree with such an action.

If they (our elected fascists) are going to ban animated cigarette ads, then it's not much of a stretch to imagine them banning inorganic Happy Meals and the like. After all, McDonalds sells complete crap, and attacking them can easily be marketed by dissembling power-hungry statists as yet another attack on Big Business and Corporate America. And not long thereafter, lo and behold, I heard recently that someone, somewhere in California had banned Happy Meals - or the toys or something.

In my ignorant rants of yesteryear I used to intellectually defend Big Business but now I'm a whole lot wiser. Large monopolistic companies like McDonalds aren't a proxy for *the free market*; in fact, they are more accurately described as creations of Big Government. Mom-and-Pop restaurants can't compete with McDonalds, hence it grew, because of government regulation NOT because McDonald's is able to buy and turn around food much cheaper. Again, McDonald's buying power is a consequence rather than the origin of its size.

The same goes for Wall Street. Morons, like the self-unconscious plutocrats at Forbes, think that defending Goldman Sachs and the banks against agitating statists is a just front on the battlefield of freedom. But it's most certainly not. Wall Street in nothing more than a giant skimming entity. Income taxes are so prohibitive that folks just blindly dump money into their 401k's each month. So, again, Wall Street is also a creation of Big Government and free market apologists would be on stronger ground if they simply attacked the income tax which is the real culprit.

I'm working on an analogy...

Some enlightened Morons go and start a forest fire. Then they turn around and start cursing the spreading flames for the damage they are causing!!!

Then their political adversaries come by and assert that the raging blaze is completely natural....and to let it burn freely.

Does that tale sound familiar?

I'm no marketing guru or child psychologist but I think if Happy Meals were ever banned....the shares of McDonald's would, if not collapse, they'd suffer a healthy haircut. I think that particular *restaurant* is dying anyway. All I ever see there are grandparents and their grandkids and construction workers ordering off the Dollar Menu. Most young parents that I know steer clear of that junk.

Reality - Still Postponed Indefinitely

Wells Fargo reported its fantasy-land earnings today. Here's the money quote which is worth preserving for future reference:

"We believe quarterly provision expenses and quarterly total credit losses have peaked," Chief Credit and Risk Officer Mike Loughlin said in a press release.

Bond markets have rallied in the past year. Most of these Big Bank earnings from the likes of JPM, BAC, WFC, are from simply marking up the paper value of their fixed income - much of which is still very toxic. They aren't dumping any of these securities, so the risks of these long-term instruments have not been eliminated or even mitigated. Note the banks deceptively refer to these unrealized, and unsustainable gains as *trading profits* - as if they have a legitimate business operation, one that will consistently generate *profits*. Just wait and see. Once the bond market jitters return, all of a sudden their so-called traders will be wildly unprofitable, again.

Of course, that's not the extent of the financial legerdemain. ALL OF THESE BANKS have billions upon billions of loans held *off the books*. And guess what....those aren't exactly their *good loans*!

The banks are flat-out BANKRUPT. They misrepresent lie about profits and hide losses.

AND they are leveraged to the hilt! See prior post - Capitol Thievery - where Wells Fargo clearly admits they are levered 15 to 1 - meaning they only have $1 in the bank for every $15 of liabilities.

I don't know about y'all, but I'll take the OVER of that 15 multiple.

I bought more puts today. 2012 January 25-strikes for just under $2 apiece.

See also - Greek For Moronic Bankers.

A Skinny Bull Market

I'm not watching the market too closely at all - seeing how my shorts have been pared and transformed into *out month* put positions...

So seeing that the averages jumped this afternoon, I had to assume that my nearly *100% short* portfolio took a hit.

But my brokerage account is only showing a loss of $86.98 today....So the banks and the REITs mustn't have participated much in the rally I guess. (Or, my option marks were unrealistically favorable.)

Something must have gone up today, at least some Dow components. But I just don't follow the details anymore.

On another note, all I had to do was *think* about shorting restaurants as I did two days ago. See - Short Restaurants?...

And look at Buffalo Wild Wings, one of the nose-bleeders I profiled...

It's trading down 13% after the close after reporting earnings!

Short Restaurants?

Check out these recent levitations:









I had never heard of that last one - BJ's Restaurants - an up-and-comer out west.

Sure, the mom-and-pop cafes, diners, and restaurants have been dropping like flies, and sending their residual customers to the likes of better capitalized institutions like Panera and Chipotle...

But I submit that the if there was any genuine economic wind at the backs of these high-flyers (beyond the Fed printing dollars round the clock), that it was falling commodity prices in 2009 - including the dip in oil/gasoline.

I've had it in my mind to short eateries within this Greater Depression - because once commodity prices start rising again, they'll be absolutely dead.

Apparently, I'm not the only one waxing bearish....

Short interests today (as a percentage of float):

PNRA - 13.10%

BWLD - 25.60%

CMG - 19.00%

BJRI - 30.7%

And I found another - PF Chang's - which has 35.40% of its float shorted at the moment.



With short interest so high, I'm sure the puts ain't cheap. Still, I'm going to take a hard look at them.

Bear Hibernation?

Last week I discussed Xtrends traders Sol and Atilla. Both, a week ago anyway, were calling for a market bounce.

See - Talking Out Of Both Sides Of Each Hole and More Popcorn.

And they were absolutely right - for a couple days any way!



After closing out the prior week, well, weakly, the S&P 500 blasted straight up, regaining 30 points by Tuesday's close - without nary a downtick, mind you.

Then, obviously, it gave back all those gains by Friday's close, finishing the week down a hair - 5 full points.

So how did Atilla and Sol make out?

Well, I can't really tell. Atilla's *performance* site still has him net long, by a 2.4 to 1 ratio.

And Sol, either he didn't update his positions yet this weekend, or he didn't cash in a single share on his prescient *bounce* bet. It's hard to imagine that he came in long $88 million worth of stock, saw the S&P rise 30 points....and did not take any profits. I'll wait another day or two to see if his updated position changes.

But getting back to Atilla for a moment. He was an outspoken, all-in bear last year like myself. We were both knocking the cover off the ball through March,...he's a guy who, much like myself, got clobbered riding the triple short financial ETF - FAZ down to zero.

But here's one of the differences between me and him. I wasn't out there making grand proclamations that the market would crash *next week* as he was, week after week of this painful 10-month, bear market rally. (No, I was averting my eyes, hiding, and well aware that the strength of the bounce would make it some time before reality had another chance to set in.)



And here's another difference...

I'm not LONG now, as he his. In fact, amazingly he's long FAS - the triple financial long ETF - the inverse product of that which annilated him last year. That's quite a ballsy flip-flop, if you ask me.

And I do at least give Atilla credit for that, for the ability to *go both ways*, and for the stones to advertise his trades on the web!. Mike Shedlock won't do it. Neither will Don Luskin or Barry Ritholtz!



But if FAS craters before Atilla can get out, and he gets his tail handed to him again on a public stage by yet another levered ETF,...

I'd advise him to do what I do, and go get himself a new, anonymous moniker!

Myself still firmly encamped, and positioned, in the bear camp....I take solace in how lonely it's getting here. I take solace in that many of my ilk are calling for bounces and/or have opted for hibernation.

MS-Deflation

I don't know about you clowns, but that's what's running on my PC - the 6-7 year old version of MS-Office!

But what else would you expect from someone who drives clunkers?

Check out the Google search suggestions:



Piracy galore!

The whole slate of results aid and abet people in *not buying* the 2003 version of Excel, MS-Word, etc.

I think *torrent* is some Napster or Morpheus type of peer-to-peer file sharing network.

And *keygen*, "... generates cracks and serials online for your software to unlock it."

I'm about to buy myself a new PC - and probably one for my kids. I can't see any way that I end up springing for new Office products - not with Google Docs out there for free.



Shoot. Microsoft has been dead money for quite some time now - 11 long years!

Morons Retaining Moronic Lawyers

Yesterday, in - Wall Street Scalping - I discussed the plight of embattled Ken Lewis, former skipper of that financial Titanic Bank Of America.

Recall that when first grilled as to why he spent $40 billion for a bankrupt Merrill Lynch, Ken essentially said the government forced him into the bad deal. And this idiot even invoked *patriotism* as a reason he bent (shareholders) over. See - Ken Lewis - Interview Follow-up from exactly one year ago.

Alright, he was supposedly bullied into it - at least that was his initial, fall-back defensive position.

But what about now?

Here's his Moronic attorney Mary Jo White, from that same Zerohedge post:

...Lewis is being "public vilified by the political search for accountability for the financial meltdown." White also said that despite the initial problems with the merger-including the mounting losses that led to the government bailout-the merger has turned out to be an "unmitigated success for BofA." Merrill Lynch trading operations, like the trading operations of the other big banks, have taken advantage of historically low interest rates and borrowing costs to earn billions of dollars in profits, helping the banks to smoothe out losses from consumer and commercial real estate loans that continue to mount as economic conditions remain weak.

Did y'all get that?

At first he was *forced* into a bad deal.

But now, he's going to assert that Merrill is *earning billions*, i.e. that it was a good deal, that therefore he can't be guilty of misleading his shareholders.

Obviously, the Moron hired a real dunce to represent him! How fitting!

Here's my take:

At first, a reluctant Ken was indeed gulled into considering buying Merrill by the most savvy crooks on this over-heated planet.

But then, his greedy, egomaniacal eyes were popping with dreams of *stealing Merrill Lynch*, with dreams of running the largest financial concern in the world. Recall that he was always a hopelessly naive perma-bull; every red quarter he saw he figured to be *the bottom* - as far back as Q4 of 2007! So these *firmly held beliefs* triumphed over any concerns about shareholder disclosure. I still don't get why he didn't lower the price, at least a little bit.

And now he's got the gall, and the gap, to not only submit that Merrill Lynch is making money hand over fist (*billions* in trading), but that he should get credit for this homerun of a deal.

Believe me, Merrill Lynch IS NOT making any meaningful, sustainable money. Just y'all watch, when debt markets come to their senses....all sorts of *inherited*, *legacy* losses will materialize from Merrill, yet again. Remember, this is a company that lost $19 BILLION between July 07 and July 08. Wikipedia sums it up nicely, that's "...$52 million daily"!!!

In all likelihood Merrill's so-called profits today are merely *unrealized gains* on the fixed income junk they wrote down last year. Bond markets boomed in 2009; AND these banks were given license to mark the *assets* to whatever the bleep they felt like. In summary, Merrill still has the junk, still has the risk, and is hiding it *off the balance sheet* a la Wells Fargo and JP Morgan. See - Capitol Thievery.

For my Ken Lewis master link - click here.

Wall Street Scalping

The public desperately wants a Wall Street scalp, or twenty...

So an incumbent Big Government will eventually toss the plebs a bone.

And it looks like that bone, to start with, is Ken Lewis - the rube who was gullible and Moronic enough to do Hank Paulson and Ben Bernanke's (read: Goldman Sachs'!) dirty work.

I know Ken, probably better than he knows himself, and Ken probably thinks he's got the *goods* on those two shysters - that if he's going down, he'll bring them down as well. Or at least that he has enough to save his own a$$.

Except that's probably not going to happen. He's most certainly going down. He may seem like an unfortunate scapegoat, but he's more than sufficiently culpable.

Tyler Durden of Zerohedge nails it:

To be sure, he is guilty of not simply stepping down when he was put in the position of having to decide between his job and lying to shareholders, which is precisely what happened in those fateful days in December of 2008. For his choice to proceed with the government's plan and to betray his fiduciary responsibility, he should be punished...

I'd advise all would-be on-pilers to get a head start. Because once the market, and BAC stock, starts to collapse anew....everyone is going to jump on Ken - not only because it's warranted, but also because it'll serve as yet more timely smokescreen for the bigger criminals, i.e. Goldman Sachs and their government apparatchiks.



For my master Ken Lewis link - click here.

And thanks to West Coast Tom for sending me the link!

Hedging Against...???

Amidst the retrace today, look what some door-knob posted on XTrends:



I guess he's hedging against *profits*, or something.

I sure hope his parents hedged their retirement with other children...

Selling Out

From the Wall Street Journal last week:

Investment bankers in the U.S. have begun using equity derivatives to convert restricted shares paid as bonuses into cash, side-stepping new guidelines on remuneration which were designed to prevent bankers cashing out for at least three years, according to a headhunter.

The bankers are using over-the-counter equity derivatives strategies such as call options, put options and collars to monetise their shares now, albeit at a discount to what they would receive if they waited for the restrictions to lift.

The revelation comes as global regulators seek to put an end to large cash bonuses in favour of deferred awards which tie bankers' compensation to long-term performance.

Gustavo Dolfino, senior managing director of U.S. business services firm Accretive Solutions, said some top earners at investment banks have negotiated to receive the shares component of their bonuses in restricted stock that is already vested or soon to vest. The stock is still subject to restrictions, for example on when it can be sold in the open market. However, because it is vested, they are able to turn it into cash by trading derivatives.

It is not clear how many bankers have used this mechanism, but Dolfino said: "The vesting provision allows these executives to take advantage of a financially engineered legal loophole which lets corporate insiders with concentrated equity positions and holders of control, restricted and M&A stock to monetise that stock.

"Rather than wait three or five years for the restrictions to pass, bankers would rather take a discount of up to 50% now just to get out and do something else."

Okay, first of all, ignore that last line. There AIN'T NO bankers taking *50% discounts* on their bonuses in order to reap them today. That's ludicrous on its face.

Now, getting to the crux of this story...

It's obviously meant as a swipe at *fat cats*, at those high level executives who are making an *end around* the attempts to align their compensation with long-term stock performance. Fair enough.

But there are thousands of mid-level employees who are forced to take substantial amounts of their annual pay in the form of vesting, restricted stock.

For those of you unaware, restricted stock is usually given at the current market price. So every tick upward leading up to your bonus day is bad - it results in you getting fewer shares of stock.

And then once you get the stock, you are theoretically powerless to do anything until it vests - usually over 3-5 years, I believe 7 used to be more common. In other words, one whole year after getting the *bonus*, you can only sell, say, one-third of your allotment. Obviously, the stock can be much, much lower by the time all the shares have vested. Imagine getting 50-100k restricted stock awards every year in say Bank of America? Only to see it plumb $2.50 a share last March?



or, even worse, in Citigroup?!



What about Fannie Mae, AIG, Bear Stearns, or Lehman????!!!! All equity stakes in those have been reduced to ZERO. For wound-salt...people paid income tax (even possibly capital gains) on shares as they vested to boot!

But here's the deal....

In general, most companies would never allow an employee (esp. a high level one) to short their own company stock; they see it as a red flag for possible insider trading. But there is, I believe, a special case. Workers ARE PERMITTED to short up to an amount equal to their unvested, restricted stock. Let's just say I've executed the trade for people before.

I don't know about you Morons, but if I was a Goldman crook, and I was handed $5,000,000 in restricted stock as part of my compensation, at today's elevated price of $157(!)....I'd sure as heck try to *hedge* the risk of my vesting period!

I'd short directly against the unvested shares if possible; I'd find some OTC bookie to collar (short call, long put) my stake; or I'd try to lay off some of the risk through ETFs or other index products.

Very rarely is there *nothing one can do* in these situations. Everything can somehow be hedged. Behold the alchemy of this parlor game!

Everyone's Got A Story

There's no intellectual or academic subject more important than *history*.

So, how do homeschoolers, or at least many of us, approach it?

Answer - though biography.

Click here to read about one man's 30 year investment journey. I found it pretty interesting.

Talking Out Of Both Sides, Of Each Hole

Click graphic to enlarge.

Last week, in - Eating Popcorn - not only did I discuss trader Sol's outlook, but I also mentioned that his partner, Atilla Demiray, was waxing pretty bearish. Seven days ago, he wrote:

This type of divergence will lead a very powerful and very sharp sell off that even I may not be able to fully profit from it, despite the fact that I am the one seeing it, living it, breathing it right now. It will start in such a way that will trap the maximum number of traders on the wrong side and leave bears out of the move.

It will start in a way that the initiating move will erase all the cumulative gains one can possibly make trading this silly range during the last 2 months.

I am very confident about all these, but what I am not confident about is the sit tight part I have to do. Once this thing begins, believe me, the best way to profit from it is to shut down your computer and let your short positions stay for 5-10 days because the move will be perpendicular.

Like I said before, I don't know the exact time or place it will start but I know it will start in a week or so and it will be initiated somewhere within this range.

There you go, he called for a violent, *perpendicular* move to the downside that would start *in a week or so*. (Note, it's been a week.)

But today, I read his latest update - one in which he is now talking about *bouncing* into March. Today he writes:

But now, time to get cautious on the downside.

Yes there is massive down volume, all your oscillators are pointing to down, DMAs are turning but the only thing that matters is controlling trends.

Market will likely reverse to higher on Monday or early Tuesday from approximately where it closed on Friday. There are intermediate and short term TLs being tested across the indices.

This doesn't mean we may not see lower prices or some sort of flush. We possibly will but it will be tricky.

Say what? A 75 point bounce in the S&P from here? What happened to last weekend's perpendicular call? What happened to the drop so steep (within a week or so) that it would even *leave the bears out*???

I grant most everyone the right to change their mind.

That is, provided they have one!

More Popcorn

Recall last weekend in - Eating Popcorn - I discussed trader Sol from XTrends.

He came into this past Monday long *1600* S&P 500 emini's - a position that was worth $80,000 per point.

Here's how the index performed these past five days:



And here are his reported trades for the week:



Click image to enlarge if needed.

So it looks like Sol was able to scalp the long he carried over the weekend, making ten point on half of his position and breaking even on the other half - for a net profit of $400,000 on Monday.

Then it looks like he gave it back in the next two days - losing on two more attempts at going long, losing on three attempts to short the S&P, and he lost at bit, 51k, trying to whack gold.

His luck then turned, winning with a market short and a gold short, and then later, on Thur-Friday with a big scalp on the long side. Not counting his last few trades, the numbers show almost a $2 million profit for the week. Not bad, right?

Well, maybe it's not as good as it seems.

You see, a 1,600 long futures position, what Sol came into the week with, represents:

1,600 x 50 x 1092 = $87,360,00

That's right, it's an 87 million dollar long position.

Sure, I undertand that margin is 10% for futures, and therefore Sol's account might only have $8.7 million in it.

In that case, yeah, a $2 million weekly profit off a base account of 8-10 million would indeed represent some spectacular returns.

But it would also represent substantial risk - something no one has to explain to me, a veteran profit-eraser!

I highly doubt that Sol only as $10 million in his account. I'd wager that he has at least $20 million; and that it's not all his. (Though I could be wrong, of course.) I just think some numerical perspective is warranted before anyone anoints this guy a *great trader* - because turning $80 million into $82 million, even in a week, don't mean squat!

After giving back 200k of his profits on Friday, Sol is coming in, what seems to be, seriously long yet again this Monday. He held *overnights* in the S&P 500, the NASDAQ-100, and the RUSSELL-2,000 representing, yet again:

56,726,250 + 10,409,000 + 21,213,500 = $88,348,750

Now don't get me wrong, I respect anyone who's got the stones to publicize their trades - even if on a somewhat delayed basis.

One thing's for sure, Sol's got more balls (and brains?) than I do. I could never bring myself to come in that long in THIS MARKET.

Good luck to him. May he get out of his long before the market moves *my way*.

Barry Ritholtz - Dissembling, Self-Unconscious PARTISAN

So my buddy, that intellectual giant Barry Ritholtz...

He put up yet another unscholastic *rant* the other day. In it he accused the Wall Street Journal of being an organ of propaganda:

The politicalization of the WSJ has moved to a new and more risky phase. The paper is now in danger of being a money loser — not for its investors (tho that has already happened), but for those traders who read its content.

It used to be that articles on the Market or specific companies or various finance stories were objective and reliable and free from bias. Sure, you could always count on money losing, bat-shit crazy nonsense in the editorial pages, but that was a special area of sequestered partisans, who due to their insanity cared not a whit about how much capital their lunatic ravings lost their readers.

Regular readers know that I despise political parties, believe partisans suffer brain damage.

So the Wall Street Journal responded to his post, and essentially toppled his jerry-rigged hypothesis. Though Barry, as he always does, remained strident in his whining - and posted a couple more times on the subject.

I don't want to get carried away by the details of this little incident. Heck, I found the Wall Street Journal useless for trading/investing 14 years ago when I was only 21! I've pretty much almost never read the thing - or Barrons.

I wanted to talk about Barry - a self-declared *non-partisan*.

He's full of $hit!

In the fog and crossfire of his incessant whining, it may in fact be hard to see. But it's been long clear that he's an outright apologist for Big Government and one of those well-defined *New York [you know whats]*. Furthermore, his *partisanship* is no more evident that in his blog's thoroughly politicized comment threads. Obviously, I'm not the only one he's censored from the echo-chamber of his forum. And it didn't used to be so, well, one-sided.

Barry's not a partisan?

Well then who authored this post on his blog?



Wingnuttery???

That's as much a partisan characterization, as great as a partisan admission as one can make!



Go search his non-partisan blogging for the inverse of that *term*.



I found nothing.

I don't care if he's bashed *both Bush and Obama* or asserts that he *despises political parties*....

The guy LOOKS and quacks like a duck. (And I'd wager that this bird is no fan of *religious people* either!)

See also:

A Fight Where No One Got Hurt

Barry Don't Know Logic

Marginalizing Barry Ritholtz

Barry Ritholtz We Beg You To Stick To Stocks

Barry Ritholtz Called Me An Idiot