Lordrobot (89.89)

"WTF"

September 14, 2010 – Comments (7) | RELATED TICKERS: C , GS , CSCO

WTF is not a stock symbol but a symbol of market disbelief. I find myself saying it daily and I believe it relieves stress. Try it... What the FK. 

I have no clue what makes the markets attractive. I don't know of a single stock that is worth owing or more properly buying now that won't be cheaper after Bernanke turns this country into desert.

Here is my beef today... It is the ultimate insult. All day long on Bloomberg, they were as usual of late selling smiles. That is news that triggers a rally because it is "not as bad as expected" or flatly fraudulent and misstated. "August Deficits Down" was an article that said the Bloomberg Analysts {whoever they may be} decided that the August Deficit would likely be 95 Billion dollars. It came in at 91Billion.... get the champaign and let's party and watch the rally.

But today was the topper: "Treasures Gain, Gold up, Stock rise on speculation Fed to buy more treasuries."

I don't know how to break this to Bloomberg but this is not positive news though Bloomberg posts them before the market open and immediately moves the futures up. Let me explain why this is not positive rally gasoline. 

In short this means that the treasury bond sales are showing signs of weakness. They are not filling. So the way the Fed works this transaction is they print fake money and tell everybody else its not fake money, then they bid down the yield curve making the yield go lower which is supposed to make banks lend more, thus increasing the M1 money supply which causes inflation. Meanwhile by pushing down the yield, the fed artificially pushes down the debt service on the deficits. ALL WITH THE MAGIC OF PRINTED MONEY they raise the debt ceiling. But it gets better... 

What are the chances Banks with new increased reserve requirements are going to lend? The idiot in the room says ZILCH and the idiot is 100% correct. Why lend to risky businesses when you can merely live off the treasury bond interest with nothing down, and no interest to pay.  The Taxpayer pays all.

If the economy were actually healthy, why would the Fed be buying Treasuries? Idiot again with his hand up? They wouldn't! Right again. See even an idiot knows more than the Fed. 

There is a lot of descent on the fed against more Fed intervention. So Helicopter will have the final say. But here's a secret... Bernanke stepped in on the last 30 year sale that basically went like krap. Then the new spin was that was tantamount to new stimulus. Idiot please? No way man... that's just printing money and pretending it has value! Correct again. 

Whenever you want the self-serving answer who do you ask? The idiot in the room? No, you ask Goldman.

Here is a little quote from the article. Note the Goldman perspective. Goldman sells treasuries for the gov so they will be happy to sell the to the Fed. But just look at what Goldman thinks needs to be done to the balance sheet. 

Goldman Sachs Group Inc. economist Sven Jari Stehn says the Fed could buy “at least” $1 trillion in Treasury notes, and “sizeable purchases of Treasury securities” will begin later this year or early next year.  That is a TRILLION with a T! TRI TRI TRillion. ... I am stuttering worse than Obama trying to give the asthmatic kid a Breathalyzer. ... I mean treatment. ..... Nah give the kid a Breathalyzer. 

Bernanke already has a balance sheet with 2.3 trillion showing and Goldman wants another TRILLION with a T. WTF!

In the last Fed extravaganza, six banks made out like bandits and turned in record earnings while the rest of the banks some 960 of them lost money. Now we have 800 banks in trouble. But as long as Goldman is happy then WTF...

One final thought about markets. I was looking at my screens today during the "rally" portion of the day and noted that I could not find the stocks that were rallying. I found a lot of stocks getting shorted again, specifically financials, but I could not aim at any sector that was on fire. It is as if whoever is orchestrating these "not as bad as we expected news rallies" is picking stocks with a dart board. The market fundamentals are completely broken and we seem to be living in some kind of chartland hell. Charts to me are for flakes, so yell at me; I think when you trade charts instead of stocks you have problems. It is tantamount to saying that the company fundamentals are meaningless and the chart shows all and tells all. We have gotten to the point that nothing tells anything it is basically an untradable market, the kind of markets that crash. 

In August we were treated to bogus bad news and good news that triggered every sell off. Cisco nailed earnings and sold off 15%. Today they announced a dividend without telling how much the dividend would be and they were up even though they are still scrapping bottom.

So we are left with just one more thing to say... WTF.