Actionable insights straight to your inbox

Equities logo

Is Greece Kicking the Can Down the Road?

From BBE to KCDR...Or... Just another 'Too-Big-To-Fail-Free-Market-Manipulation-Scheme'? Actually, could it be both?For you who are new readers of my missives, "BBE" is what I call, the "Big

From BBE to KCDR…Or… Just another ‘Too-Big-To-Fail-Free-Market-Manipulation-Scheme’? Actually, could it be both?

For you who are new readers of my missives, “BBE” is what I call, the “Big Bernanke Experiment”. This is Big Ben’s omnipotent ability to know the ‘right’ thing to do, which is to print trillions of US dollars and give those dollars to big banks to keep them from failing, while driving up the price of commodities, in the hope that this will keep our economy from sinking back into a recession or worse. There are serious dissenting views on Big Ben’s approach. I happen to fall into the dissenting view camp.

Then, there is the European version of the BBE, which I call the KCDR. I know… this doesn’t quite roll off the tongue like BBE, but it’s the best I could come up with for an acronym of “Kick-the-Can-Down-the-Road” too-big-to-fail experiment. For the life of me, I don’t see Greece as qualifying for too-big-to-fail status. In fact it is not… so, I wonder why they (the Germans) agreed to cut the Greek debt in half. I wonder why so much latitude was (and is) given to such a small economy. Could there be more to this story? Could this be more like a finger-in-the-dike situation? Could this be, “We will do anything to keep the dominos from falling and they will surely fall as soon as ANY Euro country collapses!”? Could things be much worse than we mere mortals are being led to believe? Is this why rumors persist that Bernanke and company are nefariously plotting to indirectly bail out the cash-strapped Europeans with trillions of US dollars that will be printed out of thin air (again ) because if Europe falls into financial collapse, the dominos would jump 3000 miles and land on US shores? Is the situation so dire that Greece must be salvaged at any cost?

And, while this scene plays out… Do you not wonder why our President and his minions want to defacto Greece-ify the US? They want to turn us into the same kind of nanny state mentality as Europe. Aren’t you getting more than a bit tired of the wrong interpretation of our US Constitution which is designed to give everyone equal “opportunity”… NOT equal “outcome”? I don’t want and don’t need a government making everyone equally miserable or equally happy or equally wealthy or equally healthy or equally ugly or equally pretty or equally thin or equally fat or equally young or equally old… I want the government to get-the-_ _ _ _ out of their social equality _ _ _ _ programs, and while they are at it, get the _ _ _ _ out of my life and my business! (You can fill in the blanks with the words that most expresses your feelings about the matter.) I want to do better than the next guy… that’s why I work harder and try to work smarter. Why should I work harder or smarter than the next guy if the government is going to step in and say that ‘next guy’ deserves the fruit of my labor when he didn’t earn it? If those bozo’s protesting Wall Street think they ‘deserve’ more, then I say that no one should stand in their way, as long as they are going to work hard enough to ‘get’ more. “Happiness” is NOT a right under our Constitution… but, the “Pursuit of Happiness” is a right. No one should be ‘given’ something they did not earn. Being born in America does not guarantee you a job, a house, free healthcare, a big salary, or happiness. I say to the Wall Street protesting bums… “If you don’t work, you don’t eat.” And, by the way, for those of you that think there are no jobs available… there are more jobs available in this country than there are unemployed. Some jobs may not pay much and some (volunteer work) may not pay anything, but if you are going to take my money (in taxes) and give it to someone who is not working, then I think I have the right to tell that person to get a job and at least be contributing to society rather than living off of society indefinitely. People should be ashamed for collecting unemployment without getting a job of some kind.

And, while I am on the subject… We have become a country of whiners and victims. It is time to quit coddling those who think the government owes them happiness. Yes, there are those who cannot care for themselves and they should always be helped and we each have a responsibility in that regard. But, I do not have the time-of-day for a whiner who wants to blame his mother or his boss or Wall Street or some misdeed on his ancestry or anyone but himself. Life is hard… get over it and make something of yourself! If you don’t like your job or your income, do something about and quit whining about it. Get off your _ _ _ and do something other than take up space!

Moving on… as I climb down from my soapbox…

I often say, “The market is never wrong”, but with the stark overreaction (in my opinion) of the market’s lurch to the upside when Europe decided to give Greek bondholders a 50% haircut last week, I am having a very hard time believing that the market’s interpretation of that event was actually good news. As I alluded above, I think that it was NOT good news, and on top of that, my models are telling me that we could have several bearish weeks in front of us. I am looking very seriously at going short. Here is why:

  1. All four of the major US indexes are forecasting a down month for November. Yes… I know… November’s are notoriously up months. After all, we have “Black Friday” in November (the day after Thanksgiving) and it is almost always a big up day in the market. I may well be out of my short positions before Thanksgiving, though.
  2. Germany and Hong Kong both look to be on bullish trends, so I may look for long plays in these two regions.
  3. Even silver is beginning to get some of its luster back and might be a decent play for the next couple of months, but the models are giving mixed signals on silver… this means risk on either side of this trade is high.
  4. Copper has been and continues to be on a bullish trend. I would like to get back into copper and may do so this week.
  5. The Turner Oscillator is indicating that the market is becoming precariously overbought (more on this below).
A weekly five-point roundup of critical events in fintech, the future of finance and the next wave of banking industry transformation.