My Bad

The problem with trading for a living is that you get to be wrong, AND HUMBLED - a lot. Today, I fully expected that the financials would have gotten killed. I could not have been more wrong. They finished up over 8%. Then, to add insult to injury, I just sat there and looked at them - dumb founded - even though my trading partner, the Mad Scientist, had been warning me that a correction to the upside was long over due, and that perhaps the "Fortress Banks", Bank of America (the bank we feel comfortable holding our partner's money), J.P. Morgan, et al., were opportunities. Oh, well. While I am congenitally incapable of holding a bank stock for more than a couple minutes, and since the the financial index did not take out last week's highs, I guess I can be forgiven.

Trading is not like fighting with your spouse. There is no time to insist that you are right. Admit your mistakes, ASAP, and move on. Thankfully I did not have the confidence to be short (and when shorting, you REALLY must admit any error quickly or you won't have any capital left to trade with in very short order). So some of my trader's intuition was working. After all, we sold Oil rather than ride it down.

Someone out there, please, remind me that markets zig and markets zag, they don't zig and zig.

In that vein of thought, energy equities look pretty good to me. I cannot be more specific in this forum, but if you don't buy them when they are down and unloved, you cannot sell them when they are up and adored.

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I hold out no hope for a political solution to the budget, trade, US$, energy issues in the absence of a crisis. If you listen to EITHER of the presidential candidates, their proposals would lead to a $1 TRILLION+ per year budget deficit. If a courageous journalist calls them on it, their supporters scramble in to run interference. If they are caught in an outright lie, their supporters deny the lie or demur that they MUST lie in self defense. In my case I get some pretty funny, but very discouraging email. Discouraging because these folks actually BELIEVE. and you can't talk sense to a believer.

Clearly, Americans are not ready for candor from their political leaders.

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How much longer can the U.S. $ hold out? This is just one more of life's mysteries and we will have to stay tuned until we find out. It is important not to become a "believer" when investing or trading, too.

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"The damage on Wall Street is infecting all of our communities and its effects on New York state finances are devastating," the Democratic governor said in a televised address. He said he also will be "addressing the size of the state work force."

That was the Governor of New York speaking to reporters and recalling the legislature to the Capitol to address collapsing revenues.

If you think Americans are addicted to Oil, that addiction PALES in comparison to our addiction for services WE DON'T PAY FOR. We seem to insist that the rest of the world will continue to fund our deficits so that we can receive services that we have no intention of paying for. Does that sound like a sound, long term strategy to you? James Howard Kuntsler often rails about the American ideal of "getting something for nothing". Although to my knowledge, Jim has never brought this up as it applies to U.S. and state social programs, it is in this regard that he is most correct.

“Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”—Author unknown

I am an avid gardener. From a 70 by 130 foot garden plot you would be astounded by the amount of potatoes and corn, (our calorie crops) as well as every other vegitable you could possibly put in a salad or can that my garden produces. Last year we also got enough winter wheat to keep us in bread all summer with plenty left over. This small plot also produces enough feed for our chickens to keep us in eggs and meat all year. The U.S. has had gardening programs before, most notably during the Wars I and II. Our dairy goats receive little feed other than the grass and weeds around our house (we do provide hay in winter).

Now admittedly, encouraging gardening won't work in a dense city like New York, but in the counties North of New York City (I grew up 10 miles north of the NYC border) there is an abundance of ground to work into gardens. Somehow I doubt that this will be one of the proposals coming from the Governor's office. Sharon Astyk of EnergyBuletin.Net fame, has been promotting self sufficiency in upstate New York for some time now, and has a substantial following, but I doubt the Governor will be sending out bureaucrats to review her proceedures.

No, the response will be to further the addiction for as long as possible, and then when the funding is simply no longer available, the state will cut them off without alternatives. Hell of a strategy. And the Governor is Peak Oil aware. But if he talks gardening instead of continueing to demand the funding of social programs with money the state does not have, he will be unemployed. The same folks that politically support government subsidized solar and wind are in denial about where their funding is coming from, and what they are really going to do when it is gone. Amazing.

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Everything IS relative, isn't it. Oil has fallen to $122 per barrel, and people are relieved! As if the U.S. economy can function as currently contrived on $100 + per barrel oil. It can't. The rally may be over for this cycle, but that is why they call them cycles, folks. Because the wheel turns, and the it keeps on coming. For years we have had 2 cycles per year - 2 heads and 2 shoulders. My bet is that not latter than 2 heads from now Oil will break into the $175 - $200 range. How low might it go in the shoulder period? Beats me. But there has been no resolution to the oil supply problem. The next cycle might should make for interesting blog material.

Good Luck!

Mentatt (at) yahoo (dot) com