Thoughts

Financials got assaulted today - ostensibly from the Euro weakness I guess - although JPM got hit and they've got little exposure....oh well, don't let the facts stand in the way......C never lifted either.

I will freely admit that I thought the morning lows would hold, but that gave way to the now-typical "no uptick; CDS-fear-driven" selling, etc.

This market does everything but inspire confidence, which is why I'll still hang my hat on the variant upside view longer term. I'm not backing away from my loathing of the market dynamics and the broken rules. From my perch, those things (the broken/repealed rules) are still the greatest threat to what should be a very strong recovery.

I do find it curious that folks are saying all the gains this week were from the "anticipation" of a great jobs number. I guess all those other bountiful economic reports just don't matter, or these valuations - akin to the 1970's lows - (we may be lower now on a Treasury yield adjusted basis) don't matter. Or how about the massive oversold readings heading into this week?

It just doesn't matter; Hungary is insolvent! I guess it doesn't matter that many other countries have had to "restructure" in the past. If memory serves, Spain defaulted something like 5 times in the past. The market went higher.

Pretty much all of Latin American defaulted in the late 1990's. The market went higher. In fact, how did the market then go on to massive bubble heights?

A huge economy - the then Soviet Union - nearly collapsed (or did they?). I think we had an 9-12% correction on that one -- if that. Then the market went higher.

Oh yeah, those post crash 1970's valuations -- wasn't that a terrible time to buy stocks? A guy named Buffet turned a couple hundred grand into billions in less than 2 decades off of those lows.

Don't get me wrong though. In all those periods mentioned above, we had an uptick rule.......In fact, an uptick rule now would most likely equal 15% to 40% upside in the indices from here; heck, some rationality at all would equal 15% upside in the indices from here....We had circuit breakers back then, and we didn't have the CDS specter. And that is EXACTLY why we are approaching (and maybe have) 1970's type valuations......

long C - in fact; very, very long C