Don't be Short

The mood is too dark…

Are those headlights in the tunnel?




Negatives:
- Hard Asset deflation is creating havoc for investors’ ability to survive leverage: if you can’t unload the buildings, the banker is forcing liquidation of your blue-chip portfolio stocks accelerating the fall for everybody including themselves!
- No liquidity at the individual banking level prevents anybody from picking up the pieces. Buffett won't take too many body blows before he moves aside.
- Banks still cannot get a hold on the market perception that they are increasingly becoming insolvent
- Currency runs are forcing the USD and the Yen as refuge currencies which are not useful as those economies are not motors of consumption right now!


Positives:
- Market might now finally be willing to discount the Obama administration program costs… Is there money for his programs in the first place?
- Oil looks like it wants to go to $60: somebody should win at this
- Rising USD gives Fed room to lower Fed rate. Squeeze the shorts!



Option:
-A coordinated rate cut is going to be tough to cover… If Feds lead the dance with 50 bps cut and the Germans put on a modicum of a thinking hat ( if that remains an option), it would not be a good time to be short indices…
- Central banks should also buy into good stocks and not only the sick banking stocks otherwise you cross contaminate

Let’ see what the week reserves.

Don’t be short, you are going to regret it before month is out!


My 2 cents