Wednesday, January 28, 2009

Jefferson...Jackson... and the Bank... Bottoms-up???

Thomas Jefferson knew the power of rich financiers... although he respected the concept of a National Bank, Jefferson also realized that a central bank could well be more dangerous than a foreign army, or battle ready militia within our own borders. Jefferson said “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” (1) While Jefferson noted the Bank of the United States established a foundation for financial stability, he also knew that it came at a price. Within a 35 year period, and six Presidents later the Bank of the United States had grown too powerful and manipulative.

For Andrew Jackson, the bank was big...too powerful... and it compromised the U.S. government. Jackson cited several areas as to the power of the bank including:

* It concentrated the nation's financial strength in a single institution.
* It exposed the government to control by foreign interests.
* It served mainly to make the rich richer.
* It exercised too much control over members of Congress.

Later, Jackson opined that the shareholders of the bank always received the benefits of the central bank, but did not share the same risks as did the American taxpayer. The members of Congress and financial elite even went as far as threatening Andrew Jackson with a depression unless he renewed the bank's charter. Financial manipulation and threats did not move Jackson, and he ended the bank. Out of all Jackson's accomplishments, Jackson cited end end of the bank as his greatest accomplishment. On his grave stone he has the words inscribed" I Killed the Bank." Please understand that the Fed is nothing more than a resurrected version of the bank that Jackson killed. And with it, the good, the bad, and the ugly.

Congress Scares Me...
If I didn't know better, I would say that Congress has been running around like a chicken with its head cut off. Not to say that its members are not well-intentioned, but there really seems to be a general theme of stabbing in the dark at this financial meltdown. TARP I did nothing more than: 1. Buy preferred shares in financial institutions. 2. Gift banks and several other institutions operating capital. There was not much benefit from the program other than keeping some of the same people who helped create this mess in power, and save their companies. While an argument can be made that systemic risk was avoided with a Wall Street collapse, massive unemployment, and a wipe out of retirement accounts, at a bare minimum it showed that Congress did want to make the situation worse. The TARP failed in solving any long-term problem. Regulations are on the way!!!

TARP II will be interesting. The wrangling thus far has floated ideas such as loan forgiveness, consumer credit forgiveness, and even new loan programs for home builders. Everyone should be suspicious when credit card companies and consumer advocacy groups are teaming up to "help." The stimulus package debate now includes pork barrel projects for the humanities and CDC. Quite often the expression has been used in DC that someone has taken their eye off the ball. While some version of this stimulus package will pass, we can only hope that this ball is knocked out of the park. At a bare minimum, states and schools will receive needed funds... for now. Unfortunately, it also established a precedent where the Federal government is increasing deficit spending in a time of peace. Surely, spending at this rate is unsustainable. I like a legacy of truth, justice, and the American way as the future we leave for our posterity, not debt and pessimism!


There are some who would like us to believe that the market bottom has been successfully tested. Only too quick to jump on the wagon, CNBC rode the rally wave as the FED fired a few more salvos today. Evidently, the BAD BANK is gaining traction on Capitol Hill. Finally, Wall Street greed may be saved at the expense of our citizenry. Maybe Wall Street and our citizenry are now synonymous now. What is good for Wall Street is good for America, and what hurts Wall Street hurts America... However, our Founding Fathers were concerned if and when institutions became so powerful, that they would consider themselves more important than the people our government was sworn to represent. If that happens, then our Democracy is compromised.

I do not think the bottom is in; not yet. GDP numbers are due later this week coupled with jobless claims. In my humble opinion, the market will still finish down for the week. T-Bills are the next bubble. Anything that is short-term government interest may go to a negative yield curve. Also, there is no guarantee that any institution besides the Treasury will finance U.S. government debt... and that is the 800 pound gorilla that just won't disappear.

Sunday, January 25, 2009

A Game of Inches... 8,000 or Bust... Shays Rebellion Revisited... Stock Watch... Economic Calendar... Seally Mattresses...

In baseball only an elite number of players were able to end the season with a .400 average. Names like Ty Cobb, Joe Jackson, Ted Williams, and Rogers Hornby belong to that elite list. Of the 12 times the magic .400 number was breached, two players (Rogers Hornsby and Ty Cobb) finished the season above this benchmark number on three separate occasions. In recent history Tony Gwynn finished the season at .394, George Brett at .390 in 1980, and Rod Carew .388 in 1978. (1)

Similar to the magic .400 number, it appears that Wall Street has drawn a line in the sand at the magic 8,000 number. This number has been tested on several occasions. November 19, 2008 stands as a key date. (2) That was a day when housing starts reached the lowest level since 1959,and the CPI marked its largest one-month decline since 1947. Since then, inter-day losses have crossed the 8,000 mark on several occasions, but the mark is always reset within a 24 hour period.

Let's face it, the news has not gotten better... and many feel it has actually gotten progressively worse. Sure the government intervened with TARP, the Big 3 bridge-loan, Obama's election, and release of the second half of TARP have all figured into the equation. Still though a steady flow of bad news should have sent this market lower. Now this mess sits squarely in Obama's lap. The issue of government transparency will be raised once again. Like Roosevelt against the back-drop of bank runs, Obama's administration may well be served to have a formal "banking holiday." (3) While FDR's plan was meant to stop bank runs, Obama's holiday would allow the banks to come clean once and for all. Obama's political capital cup is over-flowing. This is the time to make a big move. And banks need to finally come clean with bad loans, bad collateral, and faulty accounting methods. His approval rating will allow Obama to practically anything...

The Treasury and Fed, which appear to be in no way shape or form accountable to the American people must called to the carpet. The Treasury's mis-use of the original TARP funds to re-capitalize banks is the first place to start... The TARP in its original form was created to combat the mortgage and foreclosure crisis. Instead, Bush and friends exhausted their last bit of political shenanigans for a last laugh at Congress' expense. It could be that Thomas Jefferson was right. He was fearful of a class of financiers who would become so rich and powerful that they could actually manipulate the entire financial system. As mentioned before, this is the principle reason that Andrew Jackson "Killed the Bank." We have long-since blown through reporting the amount of money the Fed has printed. (4) However, the public... Congress... and the world economy for that matter is entitled to know the names of institutions which have received "additional loans" from the Fed. Furthermore, it is a necessity to find out the "true value" of the collateral that was received in those loans!!! The day that happens, could well be the last day any entity is interested in purchasing T-Bills from the U.S. government. Bloomberg's lawsuit inquiring about these loans is as much a national security issue as much as it is a question about the basic institution of democracy itself. Should that suit be denied, as Lincoln once said "When it comes to this I should prefer emigrating to some country where they make no pretence of loving liberty -- to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy." (5)

Shays Rebellion Revisited...
In the past, I have alluded to Shays Rebellion. In American History, a farmer by the name of Daniel Shays took out loan, but could not repay it. Like many states immediately after the American Revolution, Massachusetts had a tremendous amount of pressure placed on it by the debtors to increase money supply, thus allowing debtors to repay their loans with inflated dollars. The creditors preferred a tight money supply. State governments were owned by the creditors. When massive numbers of farms went into foreclosure, Shays and other Revolutionary War veterans led a rebellion against banks... Kind of scary if you think about it...

What is different now it that banks are just as broke as the debtors who borrowed the money. While Treasury ad Fed have made several attempts to re-capitalize lending institutions... then beg them to lend, the credit market has become the X variable int he equation. And I would not loan a cent to ANYONE rated below a 650 credit score.

Stock Watch
Added NEOP traded on the OTC... This little dandy out of Dublin, OH is a pure speculation play which could bring a 300-500% return, or could lose 20% of my investment. We'll know more by late February. Price .70 cents a share...

SRS showing sings of a major breakout this week as retailers are showing weakness... and demand for commercial real estate diminishes.

SCC Consumer discretionary spending tends to rise during income tax season. With unemployment, and massive amounts of debt, the consumer in spite of Obama's tax cuts will be storing money under their mattress and shopping discounts!!!

EFU Significant movement from the ECB is making this an immediate winner. I own common shares. Unless the EURO becomes the world's reserve currency tomorrow, I believe we will see continued erosion in the buying power, coupled with liquidity injections.

Continued 6/115s on British Pound Sterling...

CNK I have sell orders in at 3.8. The options are currently trading at 3.2 for March. I am pushing for an extra 20% return on premium... o.k. I'm a pig at times!!!

RYL, MDC, MLHR, FXI, WYNN Puts are still in rally mode...

MCRI... June/5s puts still looking a bit shaky... We will see what their earnings look like... remember, this company gets its revenue from Nevada... ouch!!!

*Natural Gas is looking interesting...

Economic Calendar

Monday Jan 26 Tuesday Jan 27 Wednesday Jan 28 Thursday Jan 29 Friday Jan 30

Market Focus »

Existing Home Sales
[Report][djStar]10:00 AM ET

Leading Indicators
[Report][Bullet10:00 AM ET

4-Week Bill Announcement
[Bullet11:00 AM ET

3-Month Bill Auction
[Bullet11:30 AM ET

6-Month Bill Auction
[Bullet11:30 AM ET

20-Yr TIPS Auction
[Bullet1:00 PM ET

FOMC Meeting Begins

ICSC-Goldman Store Sales
[Bullet7:45 AM ET

[Bullet8:55 AM ET

S&P Case-Shiller HPI
[djStar]9:00 AM ET

Consumer Confidence
[Report][djStar]10:00 AM ET

4-Week Bill Auction
[Bullet1:00 PM ET

2-Yr Note Auction
[Bullet1:00 PM ET

Bank Reserve Settlement

MBA Purchase Applications
[Bullet7:00 AM ET

EIA Petroleum Status Report
[djStar]10:30 AM ET

FOMC Meeting Announcement
[Report][Star]2:15 PM ET

Weekly Bill Settlement

Durable Goods Orders
[Report][Star]8:30 AM ET

Jobless Claims
[Report][djStar]8:30 AM ET

New Home Sales
[Report][djStar]10:00 AM ET

EIA Natural Gas Report
[djStar]10:30 AM ET

3-Month Bill Announcement
[Bullet11:00 AM ET

6-Month Bill Announcement
[Bullet11:00 AM ET

5-Yr Note Auction
[Bullet1:00 PM ET

Money Supply
[Bullet4:30 PM ET

20-Yr TIPS Settlement

[Report][Star]8:30 AM ET

Employment Cost Index
[Report][Bullet8:30 AM ET

[Report][Bullet9:45 AM ET

Consumer Sentiment
[Report][djStar]9:55 AM ET

Farm Prices
[Bullet3:00 PM E

Seally Mattresses Stink... We have gone through Three... 3 of them in a 24 month period!!! All have developed the same material defect... Finally, we are getting a refund!!!

Sources Referenced


Tuesday, January 20, 2009

Will a Thaw in Credit End the Crisis? TARP for the Good Banks... Stock to Watch...

The world economy in general, and the U.S. economy in particular relies on credit. Credit is the life source of much, if not all growth. However, we have all witnessed the negative impact of too much credit. According to, over-extension is defined as:
"A loan balance or total credit obligation beyond the borrower's ability to pay . In situations where the borrower has taken on more credit than he can handle, a debt consolidation loan (combining several obligations in a single loan repayable over a longer term) may be the only alternative to bankruptcy. As a rule of thumb, borrowers who pay more than one-third of their net income to repayment of consumer debt, excluding mortgage debt, may be over-extended in their ability to repay recurring household debt." (1)

As we noted, credit drives growth. The question is can the American consumer handle more credit at this point int he economic cycle? According to one Reuters report, "In spite of rising energy prices, a turbulent stock market and an
ongoing state of war, US consumers have continued to spend. While this
spending has prevented the economy from slipping, it has come at the
cost of decreased individual savings and increased personal debt." (2)
According to Reuters, one of the most influential groups driving consumer credit is aging baby boomers. This demographic has increased spending in a period when many have decreased it. This would suggest that many retailers would be best served by marketing services to this influential class.

Credit cards, which have been the key to consumer spending are adjusting their offers. According to, "The last year and one-half has been interesting in that banks are seeking the affluent, the credit worthy, and stable." (3) People who were able to qualify for cards several years ago cannot. Revolving credit at the corporate and individual level could well have run its course. A new "growth" engine must be found.

TARP for the Good Banks

Like most Americans, I am growing increasingly frustrated with the TARP Program. In general, there has been a lack of progress. Banks who received these funds have not begun to loan... There are a variety of reasons. 1. If you were a cash-poor bank, you would think twice about lending as well. 2. You are concerned about loaning money because you are uncertain about the counter-party's ability to repay the loan. 3. You would rather keep the dividend charade going for as long as possible to prop up the stock price.

There could well be a more modest proposal which would serve the good banks, punish the bad banks, and more importantly destroy the weak business models. If another TARP program were developed, and I am certain there will be a second TARP, then it should be done with the most solvent and well-run banks. The good banks should be given government loans to purchase the good assets of the bad banks, and allow the bad banks to fail. (4)

While I am certain this will create a great deal of turbulence in the world of finance, it could well be the only viable solution that truly saves the financial system. One thing is for certain, the government will not be able to bailout every group that needs it. Heck, instead of cooking the books to make them look good, there could well be a case of cooking the books for TARP funds. (5)

Stock Holdings

Options Holdings


Sunday, January 18, 2009

Over-Expansion v. Over-Contraction... A "Short" List of Retailers... Watch List...

Over-expansion v. Over-Contraction.... That is the battle of almost every economic cycle. Below is a list of companies that over-expanded during the previous economic cycle. While I am concerned about the loss of jobs, there is a great opportunity to develop new... efficient... and effective business models for the future. I will admit, that the demise of two companies will not bother me in the least.

Piercing Pagoda: Earrings are one thing... but putting extra holes in eye brows... noses... belly buttons... etc. is something else. Maybe these folks made a bundle of cash in the last trend of punching holes in the human body... but this should be a word of warning that a company can easily die with the trend as well. WWE... Roller Derby... Bungee Jumping...

Video Gallery
: I made my last visit to Video Gallery nearly one month ago. It was a last visit by choice! Over-priced items... and incompetent help put this place on the dinosaur list. As I left, I crossed a Red Box .99 cent rentals... no retail space... no workers... and all credit card transactions. Block Buster will be next... it is not a matter of if, just a matter of when!

FYI................ If you intend to give gift cards around the holidays, you need to be careful that the cards will be honored after the holidays. Stores that are planning to close after Christmas are still selling the cards through the holidays even though the cards will be worthless January 1. There is no law preventing them from doing this. On the contrary, it is referred to as 'Bankruptcy Planning). Below is a partial list of stores that you need to be cautious about.
*All information is deemed but not guaranteed to be accurate as reported by (1)

Watch List...

Look for an up market week. Followed by more horrific news. The issue of transparency will surface sooner rather than later. The Federal Reserve will have a lot of explaining to do if... if... the new administration is truly looking out for the best interests of the American people. I believe companies in general, and banks in particular are becoming "more transparent" only because their toxic assets are surfacing. Like a bad mafia movie, there are some bodies that keep re-surfacing.

SCC Continue to short consumer spending. Un-employment will be in double digits before summer.

EFU Europe will see the EURO re-set at par value with the dollar... ut-oh! Massive cuts from central banks to follow!!! Good bye social state... Hello welfare state.

SRS With a list of retailers closing shop, note that there are not a lot of others
rushing to take their place of place inside malls...

FXI... MCRI... WYNN... CNK...


Thursday, January 15, 2009

Un-American... Stock Moves...

We have all heard the term witch hunt before... During the 1950's, The Committee for Un-American Activities was nothing less than a platform to roast individuals and organizations. (1) While the committee (with the help of J. Edgar Hoover) was able to produce evidence of "Un-American" activity, little to no wrong doing was ever found. Meanwhile, careers were destroyed, friendships lost, and democracy compromised. One of the lingering questions left from the Communist Witch-hunts was "What constitutes Un-American Activity?" In a time and era where almost anything goes, there is an opportunity to define... or even re-define what the United States stands for...

For instance, on November 18, 2008 we brought the credibility of BAC's CEO Ken Lewis into question. While it is the job of many CEO's to hype their company, and serve as the point man for new initiatives, Ken Lewis should be compared to nothing more than a snake oil salesman. (See Post) Since then, BAC has refused to completely cut its dividend to shareholders. Sure the stock would get beaten up... but mergers with companies like Countrywide and Merrill Lynch come at a price. Even after MASSIVE cash infusions from the first TARP program (approximately $30 billion dollars), it appears that BAC does not have the capital to absorb the Merrill merger after all. But if House Financial Services Chairman Barney Frank has his way, the fine folks at BAC will have their cake... and eat it too!!! If there is such a thing as Un-American Activity, this would be it.

Stock Watch
Entered new positions on SRS, EFU, and SCC:

SRS currently trading at 67. 52 week high 295. 52 week low 48.63. If we beleive commercial real estate is in trouble as I do, this is a good play.

Could not fill... and this one ran too fast for me!!!
FAZ financial bear fund designed to capture 3x the inverse of the financial sector. TARP's failure to recapitalize the banks, to purchase distressed investments, means that financial institutions will need another round of beatings to come clean.

EFU The European community in general, and the central bank in particular are in reaction mode cutting rates. Fear is a phenomenal motivator... and they are scared in Europe.

SCC A bundle of stocks related to consumer discretionary spending. If you believe Obama's stimulus package will fail to deliver relief... or feel that unemployment is headed to double digits, a number of stocks are doomed. This fund has pin-pointed those that will suffer.

FXI Increased positions on the low-side...

MCRI Increased positions on 6/5s puts...

Fellow blogger Matt Callow of The Monthly Stock moved on several positions earlier this week... and even took some of his gains off of the table. Nice job Matt... I will ride a few of these a bit further!!!


Wednesday, January 14, 2009

Is There NO Shame? The Preamble...

Is There No Shame?
President George W. Bush notified Congress Jan. 12 of the intent to use the next $350 billion of the TARP money, triggering a 15-day period in which lawmakers can object. I would highly recommend that all readers notify their Congressmen (HOUSE SENATE about the MISUSE of the original TARP... The Executive Branch and Treasury old blatant lies as to how the funds would be used... While there was a general sense of shock and disgust from the public, Congress went about with the $700 Billion bailout. Congressman ignored constituents...the same people they are supposed to represent. The good news is that Bush and friends will not see any of TARP part II. Obama could well be setting the tone of his Presidency by threatening to veto any requests, amendments, or add-ons to the TARP. So much for the spirit of cooperation. I remind readers that both McCain and Obama would have done the same thing to Congress. (1) Gullible maybe, but shell-shocked for sure Congressional representatives are will wearing the ears and tail of a jackass Bush and friends made out of them after the original TARP was pushed through. Congress is only looking at a damage control measure... the question is "Who can you trust to do the right thing with TARP?"
*Please note that approval of the second half of TARP is imminent... also know that financials continued to plunge for weeks even after funds were distributed!!!

The Preamble
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

I wanted to leave readers with the wisdom of our Founding Fathers. The U.S. Constitution never promised a perfect country. It said that government would serve basic functions. Also, it would protect the blessings of liberty to themselves and the generations that came after. I hope that our nations leaders read the Preamble everyday before they take care of the nation's affairs.

Saturday, January 10, 2009

The Truth Police... The Spin won't Stop... Economic Calendar... A Special Message from Boom and Doom

The Truth Police
I had talked about it... and now have finally done it. We now have a new blog feature that actually tracks the river of lies flowing from Wall Street analysts and TV personalities. This could be entertaining... informative... and most of all build in a component of accountability that is sadly lacking!!! Please take a minute or two to check out a blog dedicated to truth...justice... and the way fallacies, dishonesty and outright lies should be recorded. This feature allows you the reader to comment on your favorite commentator who just can't get it right!!!

The Spin won't Stop...

The unemployment rate was underestimated again… 524,000 jobs were bled from the economy in December… and still that number was not right!!! The government knows it… the unemployed know it… and you know it!!!! But let’s play the game a little longer… buy them a bit of time… maybe even manufacture another rally. In the end, the credibility of Wall Street is on the line.

According to CBS News, phone and computer systems at New York, North Carolina, and Ohio outright crashed… while many other states are reporting higher than usual phone calls. Pennsylvania could become the norm where “Temporary workers and expanded the hours of its unemployment benefits hot line to accommodate a surge in the number of calls, going from 600 employees to more than 800. Officials hope to eventually have 1,100 workers answering calls.” (1) While I am hopeful that Obama’s stimulus plan will get the economy back on track… and Americans working… I am doubtful that there is a quick fix to the situation. The $1000.00 per family stimulus, in my humble opinion, would be better applied to the deficit as opposed to additional bread for the masses. In essence, the Federal government could well be creating a giant Ponzi Scheme they makes Bernie Madoff (with billions) look like a vegetable stand salesman.

Speaking of stimulus... there is on-going wrangling in Congress as we speak to Obama's stimulus package. The Republicans... not to be confused with the charlatans that really backed George W. Bush, are becoming increasingly conscientious about the long-term effects of massive government spending. (2) These are people like Jim DeMint from South Carolina, Richard Shelby from Alabama, and the ultra fiscal conservative George Voinovich from the Great State of Ohio. (see George Voinovich on I.O.U.S.A.). In the House, you can count on additional grand-standing from Ron Paul and a much lower-key Steve LaTourette from Northeastern, Ohio. Ironically, Obama's plan is drawing criticism from both side of the aisle... conservatives/liberals, Democrats/Republicans.

Economic Calendar

As far as the market goes, we saw a slide from Wednesday to Friday. I cannot see a reason to rally next week. Beige Book reports Wednesday. To remind readers the Beige Book reports current anecdotal economic conditions via each of the Federal Reserve Banks throughout the United States. Thursday's PPI should show a weakening price margin as domestic producers are going to great lengths in clearing old inventory. Should this be the case, another warning bell for deflation will be sounded. Last, and maybe the most important will be released on Friday. Michigan's Consumer Confidence Report should clearly demonstrate a weakened consumer... and one who has become more judicious in his needs. Couple these statistics with a revised unemployment report, and we will be on slippery footing for the week.

Continue to follow put options on FXI, XLI, XLY, XNG may well be a long buy opportunity as well.

A Special Message from Boom and Doom

I have seen it, read the book, and
attended a forum with David Walker, Bill Bixby and Sen. George Voinovich
discussing this subject. Please watch this movie even if you have to
record/DVR it. I applaud CNN for broadcasting this. The current
financial crisis we are in does not even compare to what is coming if we do
not address these issues. I would be willing to further discuss with
you any questions or comments you may have either before or after the
movie. I'm not trying to scare people, but people need to be aware of
what is happening. The problems will not go away by ignoring them.
Also, take some time to visit the Peter G. Peterson Foundation website
which has links below. I.O.U.S.A.


Sunday, January 4, 2009

Good Bye National City... Stock Moves... Our Buckeyes...

Good Bye National City
It's not every day that you get to split a $49.5 million dollar golden parachute. However, fourteen executives from National City Bank will "share" a pot that would average approximately $3.25 million a piece. We all know that the top guys will get more, and the low man on the totem pole will get the least... but hey even a million dollars is pretty good for watching your company get run right into the ground. Sure these men will not get the stock options anymore... and have undoubtedly watched their net worth dwindle over the past two years. Let it be known that one of Cleveland's oldest institutions... 163 years old to be exact... folded up on the watch of these 14 executives. In Cleveland's history, National City Bank was critical in helping John D. Rockefeller get Standard Oil financed... and now, it is no more. Like Bear Sterns, Lehman, and Washington Mutual I have a soft spot in my heart for the trusted employees who will undoubtedly be cleaning out their desks, and saying good bye to fellow employees with whom they were almost like family. Approximate payouts include:
Peter Raskind $8.1 million
Daniel Frate $4.2 million
Jon Gorney $3.96 million

Aside from TARP funds, National City really had no other option than to sell itself. While I do not like it, National City went down the way a troubled financial institution is supposed to... either through failure or sale. Interestingly enough, banks larger and smaller than National City received TARP monies. I know Congressmen Kucinich and LaTourette gave it their best!

Stock Moves...

I have watched 10% of my 2008 net profits ebb away over the past week. A thinly veiled rally was picked up on New Year's Eve... and continued on January 2nd. While the manufacturing report showed a continued bleeding of jobs, and a slow down in manufacturing... Wall Street rallied... Expect a violent move to the downside this week. Here are the latest moves I am considering:

XRU puts... Russia needs oil to double its current price...or Putin and friends could well lose their political clout.

FXB puts... Great Britain as well as Europe cannot get a handle on their credit crisis. The BOE has responded strongly by lowering rates... but readers know that rates are not the problem as much as it is credit worthiness...and things are much worse their than it is here.

FXE puts... while Great Britain has been moving aggressively to lower rates... the Euro is well behind the curve. Expect a major slow-down that will have a devastating effect on Europe. Unlike sovereign currencies, the Euro is a currency by committee...meaning members have to agree on the best policies...and at the end of the day, Europe has a storied history of not seeing eye to eye.

FXI puts... I increased my position here knowing that even a GDP of 5% really means a -5 to -6. While pundits would have us invest every red cent into China, beware... This country has ridden a wave of prosperity, and it could well be in for a hard landing should the R word surface.

Latin America plays... ILF, BZF, EEB, EWW, EWZ are under consideration...

Looking for a way to short T-Bills... as this over-bloated haven will not last especially if the curve is negative... I am open to suggestions!

While WYNN and MCRI have rallied, be sure the casino industry is a house of cards... and not much of the next stimulus checks will make it to the slot machines.

MLHR puts... just watching the wheels fall off here....

RYL...MDC...puts... let's face it... the housing crisis is approximately 3-5 years away from playing out... these companies are cash poor... and credit as noted is for good companies not bad ones.

SRS... looking to double down here...

SIVB and TOL are interesting plays as well. Researched by fellow blogger DC North, SIVB who once stood as the "conservative" lending institution is showing a few cracks...and could well be on the verge of a "price adjustment" to the downside. TOLL are high end houses... good for those who have a lot of money. However, this economy is not discriminating and could well be hitting the luxury home buyers as well.

The Buckeyes
The #3 ranked Texas Longhorns are -8.5 to #10 Ohio State. We know that Texas is a great team. After USC trounced Ohio State back in October... then lost again to Penn State, a #10 ranking could well have been a gift. That being said, Ohio State has been decimated...dec-im-a-ted... in their last two bowl appearances. The National title blowouts against Florida and LSU respectively have not just hurt the team's chances of getting another national title shot in the future, but it also demonstrated an inherent weakness in the Big 10 schedule. There is too much of a lull between the big Michigan game (played Thanksgiving weekend) and a bowl game. It is almost a guarantee that a Big 10 team will come in a bit flat, having nothing but practice for over an entire month... hopefully, that will be addressed not just by Ohio State, but by the Big 10 conference as well. On a positive note, Ohio State has played Texas twice in the past three years... and I am looking forward to another great game. Let's hope the Buckeyes show up to play!!!