Fly on WallStreet

Dear Mr. Fly,
Hope you are having a nice night. For some reason, my internal Nostradamous (6th Sense) sensor is telling me something is not right and their may be something not good coming. I am familiar with the doomsday crowd and I rarely act on such things. However, I am rarely wrong when my 6th sense speaks to me late at night while sleeping. I have been making too much money over the past couple years and this concerns me. As I drive by illegals in my Mazerati the below keeps popping up in my head. I am going to put heavy shorts into COF, FNM, CFC and QID if we don't rally tomorrow and have follow through.


The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize.
 

Brent, sorry to say this (not really) but you are one fucked up critter and if you have been making too much money lately then you have spent it all on coke and meth which has caused you to think this way. Carry on thinking that way so I can continue to make money.
 

You're right. I have fucking lost my mind reading all this negative crap. It all started when I starting buying gold 2 1/2 years ago. Now I'm always interpreting things in the negative. I'm going to check myself into rehab. Talk to you later!! This is the type of coke I have been snorting.


First interest rates rise affecting the drivers of the US economy, housing, but before that auto production goes from bull to a bear markets.
This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella - Goldilocks situations.
We have witnessed the Dow rise on economic news indicating deceleration of activity. This continues until major corporations announced poor earnings, making the Dow fall faster than it rose, moving it deeply into the red.
The formula economically is inherent in #2 which is lower economic activity equals lower profits.
Lower profits leads to lower Federal Tax revenues.
Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic, rises in the US Federal Budget deficit. This is also true for cities & States as it is for the Federal government.
The increased US Federal Budget deficit in the face of a US Trade Deficit increases the US Current Account Deficit.
The US Current Account Balance is the speedometer of the money exiting the US into world markets (deficit).
It is this deficit that must be met by incoming investment in the US in any form. It could be anything from businesses, equities to Treasury instruments. We are already seeing a fall off in the situation of developing nations carrying the spending habits of industrial nations; a contradiction in terms.
If the investment by non US entities fails to meet the exiting dollars by all means, then the US must turn within to finance the shortfall.
Assuming the US turns inside to finance all maturities, interest rates will rise with the long term rates moving fastest regardless of prevailing business conditions.
This will further contract business activity and start a downward spiral of unparalleled dimension because the size of US debt already issued is of unparalleled dimension.
Therefore as you get to #12 you are automatically right back at #1. This is an economic downward spiral.
 

HANS upgraded to overweight at JP Morgan and BRCM upgraded to buy at Stifel Nicolaus. Must be something in the oatmeal the Fly eats.
 

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Ha nice, I day traded BRCM yesterday (not too successfully) and luckily closed it out around 2:30 when we went back green. Luck sure helps.