Client Email - Market Updates and Thoughts
Client Email - Every now and then I share a client email with the freebie email list. Below you will find an email that went out earlier this afternoon to clients. This was the second email of the day, and we held a one hour conference call this morning.
Below are two headlines. Which one do you think saw 150 times more viewers than the other?
G20 protests: Rioters loot RBS as demonstrations turn violent - G20 summit protesters looted a City office of Royal Bank of Scotland this afternoon, as a largely peaceful demonstration spilled over into bloody violence in the centre of London. - UK Telegraph - http://www.telegraph.co.uk/finance/financetopics/g20-summit/5089870/G20-protests-Rioters-loot-RBS-as-demonstrations-turn-violent.html
Ashton Kutcher squeals as chest is waxed - CNN Online - http://www.cnn.com/video/#/video/showbiz/2009/03/31/sbt.kutcher.wax.cnn
Here’s my point. I just returned from a meeting where not one person knew what the G20 was. You would laugh till boogers popped out of your nose, if I had the time to tell you what they thought it was. And that’s not all. Not one person had any clue who or what Goldman Sachs is. In fact, most thought it was a department store. OK, I’ll give you a few from the G20 poll. Here are a just a few . . . a rock band, sexual position, Bingo Lingo, fancy g-string, drug, vodka, vitamin, dance and the name of the Shuttle. I kid you not.
So when we see the market rallying like it has the last month, that is from two sources. One, it is the Wall Street boys that are skimming fiduciary money. And two, it is sheep that I met with today that truly believe we are at the bottom and everything is fine. Not one person had any clue what any of the following were:
1 - TARP - one person told me this was the name of Mork’s space ship from Mork and Mindy.
2 - TALF - five people told me this was the puppet on TV. I think it was ALF.
3 - PIPP - you guessed it . . . the singers.
4 - Derivative - the best answer was a three cushion pool shot.
5 - Commercial Mortgage Backed Security - yup, a commercial for mortgages!
6 - Mark to Market - a game show
7 - Goldman Sachs - department store
8 - Toxic Asset - the responses to this were absolutely, roll on the floor hilarious.
9 - CDO, ARS, CMO or any of a dozen others I rattled off. And once again, the responses were belly-aching funny.
10 - A trillion dollars. - Not one person knew this was 1,000 billion. Not one.
Pension Funds - Not one person thought their pensions were in any trouble. In fact, a few “sharpies” told me that the government backed up their pensions. Boy are they in for a surprise.
Detroit - Everyone agreed that it was now “under control” because Obama told them so. Everyone also agreed all three carmakers would be “just fine.”
Bank Failures - Everyone agree that worst was behind us!
Housing Markets - Sit down for this one. They all believe prices would rise this year! They all believed the worst was behind us. And they all believed buying would pick up this year.
Okay, so why am I bringing this up. Because I believe this is a key reason the markets are rallying. The sheep are buying the Suzie Orman and Cookuu Cramer stuff that you need to average in and keep buying. The first part of this, is the fiduciary money that is trying to make u for huge losses. So we are witnessing a tug-of-war this week.. I don’t know who will win. If the Doubling Down on Stupid wins, the markets rally 25% and we get crushed. If reality wins, we drop 25% from here, and we win. I know one thing . . . we are not going to trade sideways.
So What? - Well, I know today is tough with a 200 point swing and the market up 100+ points after it was down 100 on the opening. I know we are getting hit on BBY, CBRL, GS and others. But we have had some tremendous winners that more than make up for the losers. And I want you to just sit on your darn hands. NO, I want you to just turn off the tube and the computer and let this pass. Give it till Monday. Go away for a few days, and just let this all work it’s way out.
There is nothing good coming out of the G20 and nothing good from a lot of numbers we will see tomorrow and Friday. Next week is Fashion Week. Just checking to see if you are really following me. Next week kicks off earnings, but there are no earnings. Tim the Tax Cheat can’t even hold his head up and look anyone in the eye. Read the post at www.GoldmanSachs666.com These clowns are out of bullets. Let them play games today and maybe tomorrow. Look at the market leaders in equities. Listen to what buffoons like Tim the Tax Cheat are telling you. Please just sit tight.
If you want to short more, I would recommend it. We are up 100 points as I write this. It not only makes no technical sense, but it makes no sense fundamentally. I believe it is the last gasp of a drowning market. The boys and girls on Wall Street need to unwind what they did in March. But the pressure is on.
I see cracks in the REITS, builders and banks. And I love our short on USO.
If you want the top 10 for today . . . here they are:
SHORT
AXP
CTX
MET
PRU
WFMI - maybe my favorite
JPM
COF
BBY
TIF
SBUX
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