Friday, February 27, 2009

In case you were getting too optimistic. . .

The weather is beautiful, I'm playing more music with more people and learning more tunes than ever, I'm preparing to do some paintings, and everything seems quite superb.

...but wait... what's this...?

Mike Morgan Behind Enemy Lines

Thursday, February 26, 2009

Chaos, Catastrophe, Crime and Consequences

Last week and early this week we took trading profits on our short positions. I thought we would see a move higher over the next week or two, but with what has unraveled during the past 48 hours, I now believe we are headed lower before any rally can take place. I don’t know when the rally starts, but right now the news is grim and getting much darker.

My biggest warning to everyone has been the destruction of fiduciary money – pension funds, endowments, trusts, charities, etc. The boys on Wall Street have raped these funds and filled them with junk. Junk in the form of bogus joint ventures, overpriced assets and derivatives that generated huge commissions. As this unfolds, we will enter something akin to anarchy. In fact, we are at the precipice of anarchy right now. Our politicians have joined the Economic Royalists in providing them with the means to rob us blind and leave the world in financial collapse. Moreover, since we are allowing them to keep the money, the same criminals will be the ones to profit from the global financial collapse.

With that said, we reversed course yesterday and today, and put on additional shorts in banking, builders, REITs, restaurants and even oil. I know my oil call was totally against the grain, but despite what the experts say about a technical bottom in oil and upcoming cuts by Opec . . . we are driving less, trucking less and the ships at sea are the lightest they have been in decades. In fact, we have more ships sitting at anchor than ever before. Moreover, Opec is NOT going to cut. They may say they are going to cut, but the next Opec conference will leave a bunch of greedy pikers pumping more oil to make up for the fall in prices.

For clients, we will expand on these issues on the Friday morning call.

We are seeing a meltdown on a global scale. There are seven “C” words that deserve attention.

1 – Catastrophe – Obama uses this word on a regular basis to describe what is going to happen if we don’t keep throwing more money at the problem. Little does he realize the word is reality.

2 – Confidence – Obama had the confidence of the US and the world. In Europe he had a 77% - 90% approval rating last month. That has dropped, but we have not seen a new poll. In the US, just talk to your neighbors and you will see that very few people have confidence in Obama. In fact, he loses more of our confidence every time he talks . . . and that’s a lot. His daily ObamaRamaLamas on TV have become painful. Newsweek ran a cover – The Confidence Game – How Obama Can TALK Us Out of a Depression.

I have news for you, you can’t talk your way out of this. This is not Hollywood where they can write the ending. Obama has great speech writers and he is smooth on his feet, but he lack any substance. And I will repeat . . . he has surrounded himself with huge egos that don’t play well with others . . . and they are running around the White House with scissors.

3 – Consequences – This is the key word to solving the global financial crisis. Go after the crooks like Hank Paulson that stole billions. Make them pay the consequences. I suggest we line up Paulson, Thain, Mozilla, Lewis, Sandler, Dodd, Frank and a few others. We ask them to return the money and to create laws that will be enforced. If they so no, we shoot one. I can guarantee the rest of them will run to return what these guys stole, and Dodd and Frank will crap in their pants. That’s another favorite “C” word. I know this sounds off the wall and harsh, but what thousands of men like this did is to destroy the lives of millions of people. Obama likes to compare himself to Lincoln. Well, Lincoln called men like this traitors. We shot traitors in Lincoln’s day.

4 – Crapola – This one has double significance. First, the only thing we are hearing from the talking heads on TV and the baboons in charge in Washington is . . . crapola. Second, that is what we are going to be eating while guys like Paulson will be dining on the other “Cs” . . . caviar, cake, croissants, crawfish, cheese and cognac.

5 – Collusion: secret agreement or cooperation especially for an illegal or deceitful purpose. That, my friends, sums up what we have just witnessed over the past 10 years between guys like Chris Dodd, Barney Frank, Chris Cox, Angelo Mozilla, Dick Cheney, Robert Rubin, Hank Paulson and hundreds of others. I did not include George Bush, because he was simply so out of touch with reality, that he had no clue what was going on, and he left it all to Cheney and his Buddies.

6 – Crime – With what I see and hear, I believe we will see unbelievable spikes in crime throughout the world. For the US and beyond, as the weather warms into Spring and Summer, the masses will not sit back and do nothing. To the contrary, as we are seeing in warmer climates like Madagascar, Guadalupe and Martinique, the masses are already rioting. If you think the 1969 riots were horrible, I believe this year will make that look like a kiddie parade. We now have organized gangs on top of millions of angry people. We now have millions of unemployed that have no jobs and their 401k plans have been destroyed. We now have millions of people that don’t know if they can put food on the table much longer. If Obama wants to talk about Lincoln, let him go back and consider what happened during the Civil War. And if you think we cannot fall into anarchy like that again, you are only fooling yourself.

7 – Chaos: a state of utter confusion. I think that sums up where we are at today.

Unless we go after the economic terrorist and claw the money back, we will see violence on an unprecedented scale this year. We didn’t have huge shopping malls in 1969, but the downtown shops were all looted and burned. I saw it first hand in Asbury Park, New Jersey. That was 40 years ago . . . one Biblical generation. The malls will be looted and destroyed. Grocery stores the same. I do not see anyway to avoid this . . . IF we stay on the same course we are on.

Dillon Radigan on Fast Money this evening was bold enough to say we need to go after the crooks like Paulson, Mozilla, etc. He didn’t mention them by name, but he analogized them to terrorists.

I leave you with the only “C” word we should be concentrating on . . . Consequences. If we fail to force the thieves to pay the consequences for creating a world of financial crisis, we must pay the horrible consequences of financial ruin and chaos.

And if we don’t take control of our destiny, in the end, guys like Paulson, Mozilla, Dodd and Frank still have to report to the Boss.

Romans 14:11-12 It is written: " 'As surely as I live,' says the Lord, 'every knee will bow before me; every tongue will confess to God.' So then, each of us will give an account of himself to God.

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