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Archive for 2011

Day 3: Shorting the Indexes 07-29-2011

All futures are down this morning.  Asian and European markets slid down on the Debt Ceiling impasse in Congress. This is serious.  A sell off is almost imminent.  I will most likely profit today but I don’t feel good about what is about to occur to this country.  There will be blood.

Day Low = (10.20)

Day High = +339.50

Closed = +226.50 / +2.6096%

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Shorting the Indexes 07-28-2011

Following a 6.2% return on my first day of betting against the market, this morning I queued the purchase of more Proshares Ultrapro shorts.  I got 50 shares of 3x inverse of the Nasdaq100 (SQQQ), 100 shares of (SRS) 3x Short Real Estate and 100 shares of (SDOW) 3x shorting the Dow30.  Hope my trades occur at or near yesterdays closes.  This is one of the few times these none-diversified funds could have changed value during premarket trading as everyone runs from their primary holdings.

Market has closed.   My Positions: +67.40 / +0.6971%

Day Low (154.00)

Day High 90.54

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Inverse Indexes

Two days ago I sold all my corporate stock positions for a 23% return earned during the previous sixty days.  Based upon the current political situation surrounding the debt ceiling I began shorting the market on Monday, July 25th betting only against indexes using 2x and 3x inverse funds.  I only trade in a cash account, no margins, only buying inverse options with settled funds just in case an 11th hour is deal is reached in Congress.  So far I’ve purchased 100 shares of ProFunds UltraPro short Russell 2000 (SRTY).  Looks to earn 300% of the inverse of the Russell 2000.  My other initial inverse buy is 100 shares of the Proshares Ultrashort S&P 500 fund (SDS).

Monday and Tuesday were flat market days with minor index losses.  My gains hovered in the lower fifty dollar range each day.  As a wrote in a comment on a CNN article: the first days will be a trickle, followed by a wave.  August 1st will be a Tsunami.  Sure enough, today picked up and I closed +$231.00.  As the market decline accelerates, and my funds become settled from Monday morning’s fire sale, I will put more into the inverses, shorting Real Estate (SRS) and finally the Dow30 (SDOW).  Today I went up 8.5%.  The next few days are going to be interesting.

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Final warning…

Japanese auto makers are restricting delivery, QE2 is ending because of inflation concerns, the debt ceiling is being used as a political obstructionist tactic.  The Dow will be in free fall below 11K within 60 days.  Shift everything to inverse indexes now or suffer the consequences.  I hate to see people (and their 401K’s) get hurt and there’s nothing but pain in the forecast.   Groupon might rally for a day or two but the reality is grim.  Fear and panic are already taking hold and as much as it sucks it is time to bet against the S&P, Russell, Dow and because of the recent contingency in the South China Sea and their adjusted currency valuation, it’s even time to bet against China.

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Groupon IPO

So Groupon filed for their IPO valued to rake in at least $750 million.  Ain’t gonna fly like LinkedIn.  When can I short it?

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Use inverse ETF’s for more than hedging in July 2011.

In preparation for July I’m going to start looking into 2x inverse ETF’s such as those from Rydex, Direxion and ProShares Ultra. Primarily Investor Sector ETF’s like SZK – 2x Inverse Consumer Goods and SKF – 2x Inverse Financials (nothing like betting against the banks).  There’s a few reasons I’m going to gamble against the markets:

  1. On June 30, the Federal Reserve is expected to shut the door on the quantitative easing program QE2.  It seems universally agreed this will lead to market volatility.
  2. There will be a sell off in stocks.  Oil prices are starting to dig in now causing Bear Sterns to issue a recommendation to go light on commodities.  If the stock and commodities markets fall together a good ETF is where to be.
  3. Bond yields will go through the roof when QE2 ends.  That will mean very few bond buyers.  Bond prices will fall and US Treasury yields will spike.  A bond sell-off in the U.S. could result in sovereign debt fears of the type seen in Greece.
  4. Last but not least, the 10,000 pound elephant in the room: The Debt Ceiling.  If for some reason we even get close to August 2 without an increase in the debt ceiling the end of QE2 will look like a tiny market adjustment.  Markets will panic, sell-offs will ensue.

Just today the ProShares UltraPro ETF’s such as SRTY (Short Russell 2000) and Powershares Crude Oil Double (DTO) closed up 9.3 and 4.91% respectively.   Due to recent successes in the market they are at or near their 52 week lows making them good deals right now.  If the politicians live up to the credit I give them they will argue the debt ceiling until the last minute or not raise it at all.  I want some of the Sept. and Oct. 2009 short fund action after Paulson’s famous “we won’t have an economy on Monday” speech.  The end of QE2 combined with the debt ceiling could make this looming “catastrophe” even more profitable.

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The Republican Parties March to Irrelevance

It’s only a matter of time now.  Republican’s have officially turned their back on the last of their thinning constituency, Baby Boomers and retirees.  The Paul Ryan call to meddle in Medicare and the ensuing support some of the party bestowed upon him for such a move was nothing less than political suicide.  Personally, I think the party line got painfully confused by the 2010 mid terms.  Sure, they took back control of the House when the Tea Party movement turned out by the bus load at the polls.  I suppose this lead the entire party to believe that the Republican base is comprised of fiscal conservatives on a dangerous mission.  The truth is the “fiscal conservative” argument from the Teabag factions was a ploy.  It was just political maneuvering to get into power so they could push a failing hyper-conservative ideological agenda.   Everyone knows it: Ban gay marriage, end abortion, ID badges declaring which church you attend.

If the Tea Party (note: They are not really a “Party” because there are so many disputing factions) were really interested in relieving the nation debt they would be interested in more than just spending cuts.  They would be interested in revenue generation.  Yes, evil taxes.  People rob banks for the same reason we should remove the tax breaks, shelters and loopholes the wealthiest now enjoy:  That’s where the money is.  By now we all realize the stale argument for trickle down economics is no less than a failure, at worst a lie.  Rich people don’t create jobs.  They create wealth by eliminating jobs for American workers under the rightful justification of profits.  Let’s end that debate once and for all.  I know, a pipe dream when arguing with so many people in politics and business benefiting from the current arrangement.  The real problem emerging is that corporations may now be turning to countries and currencies outside of the US and away from American consumers.  This, combined with wage and job loss for American workers will decimate the middle class.

Another real and growing problem for the party is a super majority of young Americans are not buying the Republican side of the argument.  Not one bit.  They are not fooled by the right wing corporate social agenda for continuous wealth aggregation at the peril of the middle class.  Government intervention in the form of legislation and subsequent regulations to add value to the American worker and protect America jobs is long overdue.  Immigration enforcement and off-shoring should both be on the table.

Now that Mitch Davis said he will not run for President in 2012 the only adult left in the room at the Republican party is exiting stage left.  Truth is the Republican party still has a candidate who could beat Obama in 2012.  It will never happen because they will not nominate Ron Paul for the ballot.  I am not staunch Ron Paul supporter but he does have genuine grass roots support and appeals to young people.  The rejection of Paul by Republicans because he does not support their ideological wedge issues and continuous funding for the military industrial complex is more evidence of how out of touch the party has become with main stream Americans.

It is hard to imagine how Republicans in Washington still believe that reducing retirement benefits while supporting never ending military engagements, continuous tax breaks for the wealthy, oil and agricultural subsidies for companies making billions in profit are what middle class Americans desire from their representation.  In some other worldly dimension there may be rational to justify their social agenda but not in this reality.  It’s an agenda being rejected by main stream Americans young and old leaving the Republican Party on the brink of irrelevance.

All this would be bad enough and then….Trump.  Donald, you should not kick a party when it’s down.

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Want to increase federal tax revenue?

Time to TAX THE CHURCHES.  It’s long overdue they pay for their meddling in politics.

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Duchess or Princess?

For those who can’t get enough of this and want to know Kate Middleton’s new official and future royal titles, I went through the exercise of researching her royal ascension.  It might surprise you.

Catherine, Duchess of Cambridge, will actually be Her Royal Highness Princess William of Wales only after William becomes Prince of Wales once his father ascends to the throne or dies, whichever comes first. Then she will be Princess of Wales. She doesn’t have to wait for William to ascend to the throne to become Princess, as many have incorrectly stated.

When Charles becomes King she automatically becomes Duchess of Cornwall and Rothsay. When William ascends to the throne she will be Queen. Since an heir can only ascend to the throne through blood Prince Phillip has been forced to remain a lowly Prince to his Queen Elizabeth. He could not take the title of King because the throne supersedes the Queens. Not so for Catherine. William will be King and she will be his Queen.

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My Fifth Decade

Four decades ago I was birthday present to my grandfather, Hon. Judge Harold Brown Singleton.  From 1971 on I spent every birthday with him during his lifetime.  It’s getting hard to remember most of my first ten years.  During the 70’s I remember jumping on my bed listening to Snoopy and the Red Baron when I was around 4-5 years old.  I remember putting on KISS makeup with Donnie Sasser and performing concerts for our parents in Bluefield, WV.  Our only instruments were buckets and cardboard keyboards.  I still remember the day we moved to Raleigh and many days in the creek and woods at the end of Beardsley Ct.  I still remember the first phone number I memorized at eight years old…847-8504, the number of my best friend who lived near the that creek.

One of my most vivid memories at eleven or twelve is when a sixth grade English teacher unknowingly stood beside a poster depicting the evolution of man while asking if I “believed in the creation”?    The whole class waited for my answer.   She insisted for one when I did not speak.  I nodded my head yes.  Even then my response was to avoid argument, debate or ridicule on the subject.  Later on I remember getting in-school suspension and after school detention for the first time for being among a group who were spitting out a second story window of Carrol middle school as a teacher walked by below.  She literally pointed me out.  Yet I was never near the window.  I was in my seat for near the front door of the classroom the entire time.   The irony is that I’ve been guilty of almost everything I was ever accused of from that day on.

At twenty I thought I was going to pick up a camera and conquer the world abroad by capturing still moments in time.  I recall my Photo Chemistry 101 and 102 instructor, Bob Heist, telling me how digital photography would never come close to the resolution of emulsion grain in my lifetime.  Bob is retired from photography instruction now.  I work exclusively with digital technology.

Then along came the bands, bar tending, and a stint outside of my element that lead me into the same closed office as Vice President Dan Quayle, Jerry Falwell and a few US Marshall’s in the Vines Center at Liberty University.  A time in my life that would affect my religious, political and social views in unexpected ways.  Irony knows no limits.  This was the time in my life when I learned who I was.  It was a decade of discovery and the start of a career path.

Thirty is when the best decade of my life began and it started when a 21 year old young woman literally just showed up at the front door of my apartment at Five Points, just above Lilly’s Pizza.   Not a bad start to my 30’s.   My very first words to her were “oh wow, you’re pretty”.   Amy just laughed.   Within a couple of weeks she never left.  Which is good because I’ll need her for at least the next 40 years.   I’m a happier person because she lets me draw upon her youth and beauty.  My only regret in the last ten years is that our sons won’t get to meet my grandfather or Amy’s father.

Life leading up to my twenties was far more of a crisis than I could ever imagine today.  I’ve  reached “mid life” but I feel no remorse for the past or apprehension for the future.  My wife is younger than me, my sons are growing bigger and stronger than me (and probably smarter but don’t tell them yet), I have a career and a boat waiting at the beach.  I am about as far from crisis as anyone can get.  Thinking back at this weekend I spent with my beautiful, young wife at the coast I can honestly say I’m happier than ever.  I have no reason or excuse not to be.

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