Thought For The Day (Week, Month, Year ...)

Greek Vote: What Happens Next.

So now we have the Greek vote done with.
It transpired exactly as I thought. Greeks elected pro-bailout parties because they want other Europeans to pay for their debt. They elected the same political parties who are responsible for this mess in the 1st place but I suppose they have no alternative. The Fox is in charge of the hen house. What happens next?
FT Alphaville has this informative piece:
http://ftalphaville.ft.com/blog/2012/06/17/1047971/greece-the-post-election-questions/
And what about the pop in Euro? Oh that? It is already climbing down. Folks will soon realise that there will not be any Central Bank money pumping come Monday and Ben is going to disappoint as well on June 20.Nothing will come out of G20 as well. It could not have been any worse for the bulls in the short term. Things did not change and the bad news is not bad enough.
Lets see where it ends by next week.
I am happily sitting out of the whole drama.

Irrational Exuberance?

Last Monday morning TNX (CBOE Interest rate 10 year note) opened at 1.63 and SPY opened at $ 134.17. This Friday TNX closed at 1.59 and SPX closed at $ 134.14. So basically SPY was flat for the week while the yield on 10 year fell another 3.5%.

Which also means, bonds and equities are moving in opposite direction once again. I have seen this many times and situations like these are not good for investing. While the bond market, which is way bigger than equity market, is worried about deflation and uncertainty, equities are showing exuberance expecting another QE. For equities, bad news is good news. That if things get bad enough, central bankers will come in with more free money. It is not a rational thinking for growth and prosperity. Japan is an example where Nikkei fell from 38000 to 9000 and like a bug in search of a wind-shield; Japan will possibly default before Europe blows up.

So what are the options we have before us? Greece is caught between the proverbial devil and deep see. If the Greeks decide that they will continue to remain debt slave for some more time and elect the same political parties which are responsible for the mess in the 1^st place, then there is no need for action from the central banks. Do equities go up further from here? If status quo is maintained, will Bernanke come out swinging on June 20^thwith QE? I have my doubts.

On the other hand, if Greeks decide to try their luck with the new hooligan and ditch Euro, (which I don’t think they will. They want their cake and eat it too. Most of them want other Europeans to pay for their debt)   there is no limit where the ball will stop rolling. Is Europe ready to call the bluff? It is a game of chicken and do we want to bet our capital on the outcome of it?

The Spanish bailout did nothing to improve the market confidence and unless there are few trillions thrown to the bon fire, it will not budge. Either way, we are screwed. It is just a question of time. I expect that the politicians and central bankers will try till it does not work anymore. You just saw what Obama just did to buy the Hispanic votes. With a stroke of a pen, he changed the definition of what is legal and illegal. Why do you think he will not pump the stock markets when the 401K of the voters is tied to the stock market? The Banksters have got the politicians by their short and curly. With each fall in share value, comes more money at ZRIP. These guardians of American freedom, TBTF banks, borrow at 0%, buy 30 year treasury and get return at 4% and give back the same treasury to the Fed as collateral.  Take few trillions of dollars, do this circular trade for few years and you are guaranteed of huge bonus and you are a genius.  Banks are healthy again even when the assets they are holding are all rotten and valueless. That is why they changed the FASB rules in the 1^st place.

How we trade and invest in such environment without losing our shirts is the challenge of our lifetime. That is why I keep telling that “Cash is King”. It does not matter if the equities go up or down for one day or for one week. So long we do not have a sustainable trend, it is better to stay out. That is the reason; I am staying out of the market till June 22^nd no matter how high the market goes. I stayed away from shorting the market when SPX broke 1284, 200 DMA and told everyone who cared to listen, not to short.  And this is my advice now. Just don’t do anything and wait for things to settle down. I may be wrong and may be too cynical but I have seen too many bad things and I can feel that the end game has started. Better be careful than greedy.  

At least I do not have any anxiety over the outcome of some stupid election. Greece has defaulted many times in the past. In fact it was the 1^st city state to default on its sovereign debt. So another Greek default will not be the last. Nor for that matter a default by Spain (16 times in History, much more than Greece) or France or for that matter US of A. Don’t be surprised, American has defaulted six times in its History and will do again in future. Only the form of default will change.  You can read it here: http://en.wikipedia.org/wiki/Sovereign_default.  So let’s enjoy the beautiful weekend with family and friends while we can. Life is too short to chase useless stuff.

Thanks for reading http://bbfinance.blogspot.com/. Please forward / re-tweet / post it on your wall and join me in twitter. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance) Lets have the conversation going.

Peut-etre Le Best Breadmaker In The Country ....

Pardon my attempt at basic French, went for a nice and easy Saturday morning hunt for the bread maker that has been given rave reviews by some of my friends. So it is with guarded expectations and muted anticipation that me and my special friend went searching for this little gem. We were not disappointed.


Its a tiny place but from what I know, they already have established a solid reputation and is supplying excellent breads to many restaurants and luxury hotels. We tried two of their four most popular breads for sandwiches, very good to excellent. A warning, their portions are generous to a tee.


The story goes that Tommy went backpacking to France but stayed on for years to learn how to make bread, so romantic, passionate ... how not to fall in love with his products.


http://tommylebaker.blogspot.com/





To get a full sense of Tommy's vision, passion and motivation, let him speak for himself:


"My passion for baking and the desire to revive the traditional values of craftsmanship in bread-making are the qualities that drive the essential spirit behind “Tommy Le Baker”.

My offerings are carefully made to restore bread-making to the highest standards of the craft. And more importantly, to recapture the original flavours sought by masters of the tradition.

Kneaded, shaped and baked on-site: the specially selected ingredients, time-tested methods, and unmistakable oven-baked freshness of Tommy Le Baker make every slice, loaf or piece of pastry truly a rare indulgence.

Modern means of production, managed with heartfelt care for the final outcome on a fussy selection of flours, grains, seeds, butters and oils allow me and my artisans to offer you the best kinds of fresh bread likely to be found anywhere in Kuala Lumpur.








In addition, where ever possible, I have been absolutely faithful to traditional recipes, while looking to support our local merchandisers and produce.

In the culmination of my time-tested methods, the finest ingredients, and a desire to produce only the best you may find in my bakery-café traditional favourites from artisanal viennoisseries, pâtisseries, gateaux de voyage, to even long-forgotten French regional specialities.

Come sit for a while here in my little bakery, surrounded by a plethora of the baker’s paraphernalia and instruments of his craft, and imbibe the sights, smells and tastes of the art of baking.

Here, you may enjoy fine coffees, popular soft drinks, and the occasional soup servings to accompany breads and pastries fresh out of Tommy Le Baker’s ovens.

Through my modest bakery, I hope you will join with me in my passion for good things, especially our breads: a significant part of culinary history that has brought joy, nutrition and life to mankind since time immemorial."





The lemon tart, which was raved by many, to me was good but not mind blowingly so. Still its a pretty good tart, 8/10. Should try. We tried their house cake, the La Joncha, or the Mona Lisa, it is simply possibly the best cake both of us have ever tasted. Its layered, it may not look like much but its divine. Each of the layers presented different textures to the whole cake and yet somehow each contributed exquisitely to the whole experience. There is the soft cream, the ice cream smooth moose, the delectable rich chocolate holding the whole cake together ... its just a wonderful cake experience. I am not exaggerating if I say this is 10/10 for a cake.





Love the guy, he is affable, personable, genuine, and you can feel his passion emanating through what he does. Love his mum too. Nice touch at the end, a personal hand written receipt, it kind of signs off on a lovely lazy afternoon, ... I am a happy boy!


Tommy Le Baker: Specializes in pre-ferments and long fermentation process to nurture the taste and to achieve the full nutritional potential of bread using what the nature has provided to his baker.
Address
B-0-7 Viva Residency,
378, Jalan Ipoh
(Opposite KLPAC)

Tel (03) 40432546

Opening hours
Tues - Fri, 10am - 8pm
Saturday, Sunday, Public Holiday , 10am - 6pm
Close on Monday

You Say That You Love Me ......

Found an exquisite poem, probably in Turkish, author unknown.

Korkuyorum	I am Afraid
Yağmuru seviyorum diyorsun,  yağmur yağınca şemsiyeni açıyorsun...  Güneşi seviyorum diyorsun,  güneş açınca gölgeye kaçıyorsun...  Rüzgarı seviyorum diyorsun,  rüzgar çıkınca pencereni kapatıyorsun...  İşte,bunun için korkuyorum;  Beni de sevdiğini söylüyorsun...	You say that you love rain,  but you open your umbrella when it rains...  You say that you love the sun,  but you find a shadow spot when the sun shines...  You say that you love the wind,  But you close your windows when wind blows...  This is why I am afraid;  You say that you love me too...

Social Media - The World Is Never The Same Anymore

BullS**t Ad Infinitum

Before we get serious, let us laugh out loud seeing the sheer stupidity all around and how the market is moving like drunken sailor with a bottle in hand. My apologies to the drunk sailor for inappropriate comparison. 

On Monday the market was down, on Tuesday the market was up, on Wednesday the market was down, today the market was up and any takers for tomorrow? If I have to guess, I would write: trend is down tomorrow. However, in my defense, I did write yesterday that if Euro holds 1.2550 levels, we will see green day.  Not that I know any better. Sometimes we just get lucky. I think I wrote sometimes back, better be lucky than smart!

But you have to give credit to the Boyz. The rumour was brilliant and like true pavlovian dogs  the market spiked up. As Josh Brown says :” Central bank rumors are like big boobs - some are real and some are fake, but most guys are happy to play either way.”  I feel bad for the guys who were short in the morning and I still maintain that there are lots of bad shorts out there who are trapped. Folks who are short from 1284 level. And it also demonstrates that the market believes in coming QE and is waiting to jump on the bandwagon. It is not a question of whether it will come; it is, when it will come.  And is the selling / correction over?  Again, my feeling is, not yet but we are getting close.

Today’s rumour fueled tape fudging was strictly for the day traders. If you are a normal human being, looking to safeguard your assets and investment, you should totally ignore it. It’s fake, fake and fake.

We are still in that triangle which I showed yesterday. I did not do anything new to it apart from today’s market action and that is all the TA you need to know.

There are few takes from all these nonsense:

·         They will again try to solve the problems of the world with more debt and liquidity because that is the only thing they know.

·         At some point deflation will give way to inflation and the monetization of debt will start in earnest. Already the Fed is buying the Treasury Notes it sold just hours back. It happened today and yesterday and they are not even trying to hide it anymore.

·         With inflation come higher interest rates. The bond trade is about to turn upside down.  Trillions are invested in bonds, much more than in equity. And the pain will be felt many times over.

·         They are desperate to maintain the status quo and losing the game. They know it and are scared. Already there is talk of capital control in Europe. Worse things will follow.

Pay particular attention to what is happening to US bonds. Europe does not really matter. I think we will see the high of TLT by June 22^nd.  If I had any investment in bonds or bond funds, I would get out in any new bond rally.  For now, just avoid the temptation to chase the momentum like plague. I keep repeating, we are not going to miss anything worthwhile and the only rule of the game: Do not lose capital. I am not touching anything in the market with a 20 ft bargepole till end of next week.

Thanks for reading http://bbfinance.blogspot.com/ . Please forward / re-tweet / post it on your wall and join me in twitter. (Twitter @ BBFinanceblog)(Stocktwits: Worldoffinance)