Week in Review: How Low?

How low for the S&P500?  We don’t know but doubt the lows for year are in.  The next big Fib is the 38.2% retracement of March ’09 lows at 1101.73.   That is the big number to watch.  Next would be the 50% retracement at 1018.69.

Gold?  If the Bernanke even hints at another round of quanto at Jackson Hole, “to the moon, Alice.”  We sold into the panic buying on Friday and hoping to reload at lower prices.

Take a look how oversold the DAX is!   The index is down a stunning 25 percent since the middle of July.  Thinly capitalized banks during a panic will do that to you almost every time.  Good luck this week.

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Global Trend Indicators

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‘Toon of the Day: Europe’s Imperial Couple

Only when the tide goes out do you discover who’s been swimming naked.
–  Warren Buffet

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Seriously? Swissie a Safe Haven During a Banking Crisis?

Here’s in an interesting chart, originally posted over at Zero Hedge, that makes us wonder do we really want to be long the Swiss franc during a European banking crisis?   Note the chart may be a little dated, but we think you get the picture.  Click chart for bigger picture and better resolution.

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This Market Sucks – Going Fishin’


Fug this market.  Nothing is working.   You get long and lose money.  You get short and lose money.  You get flat and you lose purchasing power as the dollar melts and commodity staples rise.   These are the kind of markets that grind your capital into hamburger as you force trades to make up losses.   There seems to be no real bid or no real offer in the markets right now.

Our bias is to sell risk as the macro picture looks ugly and deteriorating with no resolution in sight.  We’re not the only ones in this camp, which is getting crowded and there’s the rub.   This may be why the markets seem “swanned out” and not reacting to the ugly macro as they have in the past — i.e., freaking out and panicking — or it could be these risks are already priced with the latest downdraft.   As to the later, we don’t think so and neither does the bond market.    Whoever said this business was easy?

Posted in Black Swan Watch, Commodities, Crude Oil, Economics, Gold, Sovereign Debt, Sovereign Risk | Tagged , , , , | 2 Comments

Gorbachev on the End of the Soviet Union – Der Spiegel

Great interview by Der Spiegel with Mikhail Sergeyevich on the final days of the Soviet Union.   Click here for full interview.   Here are a few nuggets:

SPIEGEL: Perhaps you could fill us in on a detail from the decisive Politburo meeting following Chernenko’s death in March 1985. Ironically, it was Foreign Minister (Andrei) Gromyko who nominated you as the new party leader. Why did he do it? He didn’t like you and was envious of you. And there were other candidates?

Gorbachev: Because Gromyko was a very clever and serious person. Why was he envious of me? I don’t know. But he had recognized the signs of the times. When Chernenko was ill, I was often called upon to manage the work of the Secretariat and the Politburo, and it went well, which didn’t go unnoticed. In that regard, Chernenko even helped me. And I gathered important experience in the process. If I may modify something Voltaire once said about God: If Chernenko hadn’t existed, someone would have to have invented him…

SPIEGEL: You never discussed important issues with your wife at home?

Gorbachev: You had to go outside. We also never discussed important things openly at the dacha. When I cleared out our Moscow apartment after stepping down as president, they found all kinds of wiring in the walls. It turned out that they had been spying on me all along…

SPIEGEL: (Boris) Yeltsin, who, as Russian president, later chased you out of office, was someone you did know well.

Gorbachev: Okay, let’s talk about Yeltsin. I did in fact know him a little. Even as district leader in Sverdlovsk

SPIEGEL: … which is now Yekaterinburg …

Gorbachev: … he was already very, very self-confident. When we wanted to bring him into the national party, many advised us against it. They later elected him as party leader in Moscow. I supported it. He was energetic, and it took a long time for me to recognize my mistake. He was extremely infatuated with power, haughty and thirsting for glory, a domineering person. He always believed that he was being underestimated, and he constantly felt insulted. He should have been shunted out of the way and made an ambassador in a banana republic, where he could have smoked water pipes in peace…

SPIEGEL: Then came the coup. But the Americans had already warned you against it early enough — two months earlier, in fact. And they had even named names, including that of KGB chief Kryuchkov. Is that true?

Gorbachev: Bush called me. He referred to information from the Moscow mayor, Gavriil Popov.

SPIEGEL: You didn’t believe him?

Gorbachev: The conservatives had announced several times that they wanted to get rid of Gorbachev, and they had already tried it in various committees, but without success. By then, we had the anti-crisis program, which was supported by all republics. The new union treaty was to be signed on Aug. 20, and an extraordinary congress was to reform the party. The opponents of perestroika had suffered a defeat, and then they organized the coup.

SPIEGEL: And you chose to go on vacation in Crimea at a time like that?

Gorbachev: I thought they would be idiots to take such a risk precisely at that moment, because it would sweep them away, too. But unfortunately they were truly idiots, and they destroyed everything. And we proved ourselves to be semi-idiots, myself included. I had become exhausted after all those years. I was tired and at my limits. But I shouldn’t have gone away. It was a mistake.

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Apple cancels supply schedule of iPad 3 for 2H11 – Digitimes

Digitimes is reporting,

US-based tablet PC players Apple has recently canceled its iPad 3 supply schedule for the second half of 2011, forcing other tablet PC brand vendors that are set to launch same-level product to compete, to follow suit and delay their launch; however, supply of the iPad 2 in the second half will still be maintained at 28-30 million units, according to sources from the upstream supply chain.

Apple was originally set to launch its iPad 3 in the second half of 2011 with a supply volume of 1.5-2 million units in the third quarter and 5-6 million in the fourth quarter, but Apple’s supply chain partners have recently discovered that the related figures have all already been deleted, the sources pointed out.

The sources believe that the yield rate of the 9.7-inch panel that feature resolution of 2,048 by 1,536 may be the major reason of the supply delay since such panels are mainly supplied by Japan-based Sharp with a high price and Apple’s other supply partners Samsung Electronics and LG Display are both unable to reach a good yield. Since Apple is unable to control a certain level of supply volume, the iPad 3 is unlikely to be mass produced as scheduled, the sources added.

Sources from panel players also pointed out that the 9.7-inch panel with high resolution requires a much larger backlight source and a single edge light bar is hardly able to reach satisfaction levels. Due to iPad 3’s requirements over the physical thinness, rich color support and toughness will all conflict with the panel’s technology restrictions; therefore, this could cause a delay in the launch.

In June, LG Display supplied three million panels for the iPad 2 with Samsung supplying 1-1.5 million units and Chimei Innolux (CMI) 10,000-20,000 units. In July, LG’s supply volume dropped to 2.8 million units with Samsung maintaining its same levels, and CMI’s volume increased to 450,000-500,000 units.

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John Stewart on Ron Paul

Just in case you missed this.


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The Book of (Steve) Job(s)

The front and back cover of Walter Isaacson’s new book on Steve Jobs due to be released on November 21st.  The date was moved up from March 2011, our guess, to coincide with the iPhone 5 buying frenzy,  though some have speculated it was  Mr. Jobs’ deteriorating health.

Here’s a description from Simon & Schuster’s  website:

FROM THE AUTHOR OF THE BESTSELLING BIOGRAPHIES OF BENJAMIN FRANKLIN AND ALBERT EINSTEIN, THIS IS THE EXCLUSIVE BIOGRAPHY OF STEVE JOBS. Based on more than forty interviews with Jobs conducted over two years—as well as interviews with more than a hundred family members, friends, adversaries, competitors, and colleagues—Walter Isaacson has written a riveting story of the roller-coaster life and searingly intense personality of a creative entrepreneur whose passion for perfection and ferocious drive revolutionized six industries: personal computers, animated movies, music, phones, tablet computing, and digital publishing. At a time when America is seeking ways to sustain its innovative edge, and when societies around the world are trying to build digital-age economies, Jobs stands as the ultimate icon of inventiveness and applied imagination. He knew that the best way to create value in the twenty-first century was to connect creativity with technology. He built a company where leaps of the imagination were combined with remarkable feats of engineering. Although Jobs cooperated with this book, he asked for no control over what was written nor even the right to read it before it was published. He put nothing off-limits. He encouraged the people he knew to speak honestly. And Jobs speaks candidly, sometimes brutally so, about the people he worked with and competed against. His friends, foes, and colleagues provide an unvarnished view of the passions, perfectionism, obsessions, artistry, devilry, and compulsion for control that shaped his approach to business and the innovative products that resulted. Driven by demons, Jobs could drive those around him to fury and despair. But his personality and products were interrelated, just as Apple’s hardware and software tended to be, as if part of an integrated system. His tale is instructive and cautionary, filled with lessons about innovation, character, leadership, and values.

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Great Escape: 63 M Spend 15 min per Day as Pretend Farmers

Cool infographic from the Atlantic on The American Identity According to Social Media.

  • Americans are followers: Nearly half of all Americans are now members of at least one social network, double the proportion of just two years ago.
  • Americans have a lot to say: Nearly half (48 percent) of all bloggers are based in the U.S.
  • Americans like to give advice: 28 percent of U.S. adults say that they give advice about purchases on social networking sites.
  • Americans are nostalgic: The average Facebook user has 229 friends. While less than 10 percent are college friends, more than 20 percent are friends from high school.
  • Americans want to be distracted from reality: The more than 63 million active users of FarmVille spend an average of 15 minutes a day pretending to run a farm. Over the course of a year, that’s 5,475 minutes — the equivalent of a full-time job for over two weeks.
  • Americans love routine: Of the more than 149 million Americans actively using Facebook, 70 percent of these active users in the U.S. log on to the social network daily.
  • Americans are obsessed with celebrities: The five most followed Twitter accounts are those of Lady Gaga, Justin Bieber, barack Obama, Katy Perry, and Britney Spears.
  • Americans love television and they like others to know it: 77 percent of Americans report they use social media to share their love of a show, 65 percent use it as a platform to help save their favorite shows, and 35 percent use it to try to introduce new shows to their friends.

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