2 is not equal to 3, not even for large values of 2. Grabel’s Law

We are in that dangerous phase where most people either wants to buy because its “cheap” relative to where it was – like this article: 10 stocks ready to rebound: http://tinyurl.com/d7c4qu or where we give-up on the downside due to ad-hoc events as I will call Bernanke & Obama speaking…..

Bernanke thinks they got all the right tool already: http://tinyurl.com/bmdosq -
May I ask why haven’t they use it yet then? Read the article and if it does not make you want to throw-upI do not what will – Stress test apperently is really an academic exercise as Mr. Bernanke does not see any of 19-20 banks being “failed” on this test – It is probably similar to a few of the other calls he has made, mistakenly, over the time like: We do not see any spill-over from the Sub-prime market http://tinyurl.com/dhujl8 Anyway it is too easy to pick on Bernanke, he is irrelevant as his own tool box is totally empty and with ZIRP his ability to do anything is toast.
In strategy land we are contemplating this whole scenario in the light of prior bear markets (the prime reason why most people “wants” to buy the market being “hope” of bear market rally: Click on charts for larger versions

The conclusion as always remains – this is different, this is deeper and this is not yet over, unfortnately, there is clearly pain in the economies, but there is also considerable “hope” – and as you know I “preach” – hope belongs in church on Sundays…and if in doubt read about home sales here: http://www.breitbart.com/article.php?id=D96IRKGG0&show_article=1 Positions: Short EURUSD, long USDMXN, short USDJPY (from today), short Gold, short Stoxx50, short S&P, long bunds….and still 75% in cash/fixed income. Very “geared” portfolio right now….let’s see where it takes us. Normal working pattern resumes from Monday, where I will start by doing Bloomberg interview in London on “Analyze that”……. Safe trading,

by Steen

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