US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941

Now this really is a good report. Good fundamental analysis. These guys do their homework. It's the long term picture.

http://www.sprott.com/Docs/MarketsataGlance/04_10%20Weakness%20Begets%20Weakness.pdf

Regarding the USA!

using reasonable assumptions, “roughly 93 cents of every dollar of federal revenue will be spent on the major entitlement programs and net interest costs by 2020.”8 This is news! In less than ten years, using reasonable assumptions, there will essentially be no money left to run the US government - 93% of all tax revenues the US government collects will go to pay social security, Medicare, Medicaid and the interest costs on their national debt. This implies no money left over for defense, homeland security, welfare, unemployment benefits, education or anything else we associate with the normal business of government. And the US government is rated AAA!?

I wonder who will rescue the IMF and the ECB. They can't just print money to bail out PIGS and the others...

In our opinion, as they relate to sovereign debt, the ratings provided by the agencies are highly suspect. While these agencies claim to provide ratings that consider the business credit cycle, there appears to be very little forward-looking information actually factored into their credit models. In some cases, the agency ratings end up looking absurdly optimistic. This of course should come as no surprise - we all remember the subprime mortgages that were rated AAA that are now worth pennies on the dollar.

Fascinating times ahead. Hope you own property or have good hunting skills ;)

Greece Is Just A Small Pig, Keep Eye Out For The Dog UK And The Ugly Hippo USA

"All this drama on financial markets cos of the greeks?!" I thought for a second. But I guess it's not really about Greece anymore. It's about the fact that many many states are in deep debt and the fact that the fallout from the financial crisis was just transfered to the sovereign market.

The shit has been been moved, but it still stinks. And someones going to find it. So what if the ECB and IMF "save" Greece now? What money exactely are they using? Yeah, money that will be missing in their own pocket. I understand Germans reactions. Why pay for the laissez-faire politics and head-in-sand tactics of other nations/governments.

Portugal, then Italy, how are the IMF and Germany, France going to finance handout after handout? It just doesn't make a lot of sense to me right now. With unemployment rates in those countries approaching 10-15%?!

Demonizing Goldman

I really don't see the problem. It's a market right. You have someone who thinks houses were fairly priced or cheap, so that person buys an instrument backed by mortgages for example. Then you have someone else who has come to the conclusion that housing is overpriced historically and pace is just unsustainable. They sell the mortgage backed securities.

So why the hell shouldn't these two market participants be allowed to place their bets? I've been "gambling" in the market for more than a decade (sounds dramatic) - and if I happen to place a wrong bet I don't go running to anyone saying it's unfair.

I read some US senator thinks it's not on to make money if others lose or are miserable (implicitely anyway). Well guess what, if you want that you should maybe join the communist party.

The only thing I do find a joke, is how Goldman was able to milk the US (taxpayer) by milking AIG. That was wrong. But betting against a housing bubble is not.

Context:

http://www.marketwatch.com/story/goldman-emails-show-need-for-bank-reform-dodd-2010-04-25

Mobile Phone Market - Why Nokia Is Crumbling And iPhone Is On Everyones Mind

I have this friend who works promoting different brands of mobile phones. It's a really good contact to have cos she can give me "real time" info on what consumers are asking for and more to the point buying.

Recently she was promoting Nokia phones and said that it was just unbelievable how many people have recent Nokia models explained to them and then just move on. She spoke to the shop manager cos she was worried she's somehow miss-selling it and got the answer: Don't worry about it, nearly everyone is asking for iPhones.

A week later she was promoting Samsung phones. And it seems they really do have a phone that is nearly as good as the iPhone and has the same kind of screen aswell as intuitive operating system. The difference being its much cheaper than the iPhone. But the problem is: the iPhone is always getting free advertising because a lot of apps are first developed for it, so people aren't as eager or openminded.

I was recently also speaking to a tech company who make payment apps and was told that iPhone users seem to be more communicative and open when talking to friends (i.e. marketing for them). The tech company didn't want to offend Samsung but it was clear that they weren't trying as hard for the phones produced by them. They also said that the Facebook "via iPhone" is a huge bonus for promoting that brand. (I did notice that Blackberry also have a neat little logo when someone writes a status from their phones, but the iPhone is more widespread at the moment)

Hopefully that will change, because I'm a big fan of LG and Samsung phones.

Macho Trading Is Such Fun

I love lifting a decent size offer and then being the bid. There's something about the power to have a stock do what YOU want that I find very stimulating. It's probably a character fault of mine.

I remember when I was trading client orders I loved having good size so that I could pin a stock to whatever price level I thought was appropriate for the given day.

Even better, but forbidden, would have been to lift the warrants offers before lifting any underlying offers. That's always fun because the option seller / market maker will need to buy some stock sooner or later (if it's an in the money option anyway).

I always loved when a sales would tell me: Buy the company at xy price!!

I would have had lots of fun intervening like the SNB did on EUR CHF recently. Jack the price up by 170bp in a couple of minutes. Not surprised they do it. It's fun ;)

The flip side to macho trading is trading with 15-20% and limits. That was always my nightmare. But of course from a investor standpoint that makes more sense. You don't want to be holding or pushing a stock only to see it collapse as soon as your done.

Just Something That Tickled My Mind

This is a bit off-topic.

The best kind of humor - to my mind - is when someone's looking at everyday occurrences (not currencies ;-) ) and makes it amusing by looking at it from a technical or statistical point of view. If you're familiar with the US Sitcom "The Big Bang Theory" you'll know what I mean. Check this blog post out I found by accident:

http://yesbutstill.blogspot.com/2010/03/should-we-get-chipotle-or-treehouse.html

That contrasts with a shitty film I recently watched, that has so much slapstick and clichéd jokes you want to puke at the telly. Mind you, eventually I did switch channel, after my female flat mate left for her bed.

Oh I just need to get something else off my chest. Blogs are suppose to be like diaries right? And recently I was reading one I wrote when I was 12. The silly thing was, I often just put daft things in about weather, repeating activities. The most usefull thing in hindsight was jotting down all the films I watched (a lot!) and all the books I read (not so many).

Moral of the story: more writing my mind mixed with stats seems like a good way forward...

Talk About Tight Ranges (EURCHF)

What kind of joke intervention is this then on EUR CHF .... Impossible to trade. Look at the size of spread vs last 24 hours. As soon as the hand holding it is gone, watch it take a beating to 1.4000.

Have no position, need a move to get hungry for a position. Thinking of trading the South African Rand.... Looks like a lot more fun. Or maybe I should give GBP CHF another go....

Tricked Into Selling Based On Orderbook Depth

This stock I was watching (and owning for 3rd party) had moved up 70% yoy and also had a daily gain of 4% on no news. I looked at the order book and there was something like this

Offfer

200   @ 389.5

140   @  388

3900 @ 387

Bid

190  @ 386.

290  @ 385

200  @ 383.75

240  @ 382

The point being: What I perceived as reistance at 387. So I sold my position of 1k in two 500shs lots. I should have know when I got filled immediately on first sale that something was wrong. The 2nd lot was also hit as soon as I offered.

What I think in hindsight. There's a buyer of 35-40'000 shs who puts offers in to keep the rise in check (or reinforces 387 with say 2k shs), not letting it move by more than say 4% on a daily basis. 

And I was dumb enough to fall for it.... :S 

Maybe the lesson is: Unless someone is hitting decent size bids, and them not returning, then it's a good idea to sell. However to sell and not dent price or order book bid size is a bad thing.

Drive-By Strategy In Small Caps

Recently, I tend to approach trading small caps for the third party account as a drive-by shooting or a holdup. You need to come with speed and execute the trade plan as fast as possible. Maybe one could also compare it to robbing a jewelery store. You know the time it will take the cops to turn up once the alarm is set off. When you trade small caps in big enough size you always set off someones alarm, believe me.

Anyway. I say this because I knew this trader at Goldman who said that he had this hedge fund client who made his life hard by calling him, asking for a quote of 20k, 30k or 50k shares in stocks that had traded maybe that much on a daily basis. He'd either lift or give and then be gone. The trader at Goldman would never know is the client holding on, selling elsewhere, buying more elsewhere.... That hedge fund knew, that as few people as possible know what you are doing, the better. Because the other guy will always try and fuck you, by front running or short squeezing.

I also remark it because when you trade a small cap, or even midcaps, you have traders, market makers, or even the company itself whose playground you are suddenly "intruding" in. The traders or interested parties have a way of finding out via their contacts at banks, who is doing the buying. But it takes them a minimum of several hours or couple of days. So if you can be in and out, while giving the impression to still have an interest, that's better for you.

I remember reading a book; "An American Hedge Fund" whose manager often saw large moves against his position as soon as he'd finished buying or selling. That made me think: this guy was definitely being watched. And it really often is like that. The market isn't as opaque as people often think.

EURCHF - Caught On The Right Side Of SNB Intervention

So this is what intervention looks like on Euro-Swissie. And I was long. Thank you very much dear SNB. It was about time to be honest though!

Too bad I only had 1 lot. But 169,9 pips is fine. Especially as I'd just gone to my other PC to listen to music and was kind of anoyed that price was hovering around 1.4155, several pips below my entry.

I was thinking of selling actually. Then I saw the first spike to 1.418, I mean that was already 30 pips... but I walked over to the other screen and it was 1.428. I thought I'm looking at the wrong bloody quote. Then it was 1.43309 - OKAY, I'LL TAKE IT....

So nice start to easter. Lucky start. Not exactely winning Euromillions. But still :D PS: Not a april fools joke!

Here the stats:

Open price: 1.4161

Close price: 1.43309

P/L pips: 169.9

P/L USD: 1608.38

Open time: 01-04-2010 15:01:19

Close time: 01-04-2010 17:59:42