A Great Calamity is No Substitute for Great Depression II ~ The Risk Averse Alert

Tuesday, December 02, 2008

A Great Calamity is No Substitute for Great Depression II

Have you heard? We're in a recession.

Why, after $8+ trillion of stimulus, would this flea-ridden dog need play? Anyone but me notice how President-elect Carter always mentions the word "sacrifice" when commenting on the coming economic "change you can believe in?"

Sacrifice! This all hinges on everyone's docile acceptance the current period bears some similarity to recessions past. So, all we have to do is bite the bullet and everything will return to normal? Such a response can only be a prelude to social unrest.

I have got news for you. When the lender of last resort is pouring in money like there's no tomorrow ... when systemic collapse finds no other comparison than the Great Depression ... this is no recession.

So, do yourself a favor. Pay no attention to Shemp.

Now, he's probably right to suggest we are not facing Great Depression II. However, the Monetarist Monkey he's got on his back apparently keeps its hands over his eyes, preventing him from seeing how we are heading straight for something far worse than a deflationary depression: a Great Calamity ... a hyperinflationary explosion.

The two incompetents manning the monetary engine — Bernanke and Paulson — are seeing to that. In the process they are doing little more than debasing the value of an Ivy League education.

Don't be deceived by collapsing energy prices ... and commodities prices in general. It is only a matter of time before the most insidious phase of the post-Bretton Woods breakdown crisis devolves into a full-fledged hyperinflationary shock wave. Thus, your need for remaining adept and nimble in a most liquid financial arena like the stock market will never be greater...

OEX 5-min

For a sideways trading market following Monday's opening minutes RSI is behaving quite wildly. Might this be a prelude to a spectacular melt-up? Just check out the similarity of the past two days' RSI performance to Thursday - Friday, 11.20.08 - 11.21.08. Curious.

I came across an interesting data point at the Bespoke Investment Group blog in a short post highlighting how yesterday was the second worst decline of 2008. Check out my observation. Tell me what you think...

Fast Money
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Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

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Greg said...

I'm on board with you. Bought a position in SSO and just waiting for the explosion higher. Timing is everything. What is the sell point during the explosion? Thanks!

TC said...

I'm looking for a trip to the upper end of the range various indexes traded during the latter half of October. This should carry SSO into the range of $30-40.

Greg said...

Thanks Tom.

I initially bought in on 11/21 at $19 and put in a sell order that executed later in the day at $22. I obviously set my sights too low and left money on the table with the 4 day run up.

When the market tanked at the close on Monday I bought back in at $22. I appreciate your guidence as I don't want to close my position too soon this time.