D-Day, Loan Sharks, and Two Tims

D-Day
Typically in the US, the term D-Day is synonymous with June 6, 1944. This was the day that US and Allied troops stormed the beaches of Normandy, to take Europe back from the Nazis...

As many of us enjoyed a sunny summer like weekend, somber remembrances and memorials were held for the thousands of US soldiers killed in the Normandy invasion. Their heroic sacrifice should never be forgotten, and when comparing Europe’s debt and a disastrously dire economic landscape, it’s ironic that Germany’s Angela Merkel was one of the key figures in bailing out the EU. Without Germany’s acceptance of the EU bailout, the entire of Europe would be in disarray.

D-Day, though, is not a term that denotes solely the invasion of Normandy; this term, D-Day, is a military term used to identify the time until an event is to occur, so D-5, would the actual DAY (D) minus 5, would be 5 days til the actual event. D-Day would indicate the actual Day of the planned event. So D-Day is the Day of Days.

I think that today could be D-Day for the markets, as the Euro seems poised to break below the 1.19 level, and any more downside toward 1.15 and, from the European Union standpoint, the dreaded PAR, $1 – 1 Euro will crumble Equity markets. Today could be D-Day, and this may be a precursor to Tim Geithners prediction to the G-20 that US needs to be more of a savings society. If the markets get crushed some more, Joe Main Street will run to the bank with his money, and that may bode well for macro economics, but very bad for short term US equities.

Tale of Two Shippies
I’m no Israeli apologist, but is the whole world going mad? I’m confused.

A few weeks back we had an International Inquiry into how a South Korean warship was sunk, leaving 46 South Korean Navy men dead. The inquiry produced a report that said there was overwhelming evidence that a North Korean submarine sank the ship. UN Secretary General Ban Ki Moon- called the report deeply troubling, but nothing was done. ZERO – ZIP- Nothing. WHY? Guess why friends, because North Koreas crazy little leader, Kim Jung “Mentally” Il, is the stepchild of CHINA. And China is in charge of the Global economy. If they don’t agree with some action against No. Korea, there won’t be action. Even though the US has called this an act of Aggression, it’s quite clear that Aggression by Chinas friends is today…. Um allowed.
Turn your attention to Israel now, the Israelis have been patrolling the Mediterranean Coast line to enforce a blockade of ships bound for Gaza for some time now. Israel has repeatedly been forthright in warning ships entering the area that they will be boarded and checked for military rockets, weapons, etc. So, when the Turkish ship tried to bust the blockade, it was another aggressive act, designed to force the Israelis to look bad. The result of this intentional action unfortunately resulted in the loss of 9 lives. This is causing a huge outrage world wide. This is what has me confused. North Korea takes aggressive pre-emptive action to sink a South Korean ship and execute 46 Navy Men and there’s no outrage. Israel Boards a ship deliberately ignoring a stated blockade and 9 people are killed and the world is up in arms. Why are two ship stories being treated so differently you ask??? It’s all about China, and we (the US) seem more and more afraid with each incident. In the neighborhood, if you’re in hock and you need to borrow money, and you can’t qualify for a standard bank loan, you go to a street lender. Often these lenders are referred to as Loan Sharks. If your LOANSHARKs friend comes to the neighborhood and beats the hell outta one of your friends and steals his girlfriend, you are helpless. Uncle Sam’s Loanshark just killed 46 of our friend’s soldiers, and we can’t do a damn thing about if. It’s a frustrating feeling, but get used to it. The deficit spending we keep engaging in is giving our LoanShark more and more power to keep our hands tied.

Turbo Tim Demands Demand
This weekend Treasury Secretary Turbo Tim Geithner was abroad, and he said something interesting to the leaders of the G-20.

“We discussed how the ongoing shift toward higher saving in the United States needs to be complemented by stronger domestic demand growth in Japan and in the European surplus countries, and by sustained growth in private demand.”

. He is signaling that there is an ongoing shift to saving in the US. While there is no empirical evidence to support this statement, it must mean that he is expecting that shift. How to get Americans to save you ask?? Well, it seems to me that, if you want people to run to the banks, you need to offer them something more than a toaster. The only thing that will stimulate savings is higher interest rates.
If the good Secretary is to be taken at face value, I think he’s signaling that rates in the US must go higher to pay people something tangible in the form of interest on their savings, and that is another bad sign for equity markets. Beware the rising rate monster.



Seymour Says
Recently I have been the fortunate recipient of a bunch of appearance on CNBC Fast Money. A fantastic producer at the show recognized that there were some unique traits in the data generated by the short sellers that use the LocateStock platform. My call at 11,200 that the market need a couple thousand point drop was provocative enough to get me a repeat appearance, and then as the markets cooperated and gave more credence to the validity of our data the daring producers called me back again and again. The markets continued to cooperate, yet the FAST MONEY crew didn’t. The idea of a newcomer coming in and being spot on seemed to make a couple of the panel members uncomfortable. Each of my appearances ended with the panel laughing at me, or shaking their heads, and even mockingly dismissing my suggestions. The last of my appearances seemed to be my swan song on CNBC Fast Money. It seemed that the idea of me representing the facts that short sellers weren’t covering was too much truth for Tim Seymour to swallow, so he tried to bitch slap me by suggesting I had a vested interest in stocks going down. Which, I don’t, as I don’t trade. The result, I haven’t been called again, but I remain hopeful. In the meantime, though, I would point out some of the great calls Tim Seymour has heaped upon the FM audience. For today…Banco Santander--- two weeks back I pointed out on Fast Money that STD was toxic to portfolios and that its 24B exposure to the Eurozone made it a great short.

Last week Timmy told FM viewers the exact opposite that STD was oversold and had room to roam to the upside. His call on STD at $10.31 – it closed Friday at $9. DOWN 13% in a week and a half. Enough Said.


Today’s HOT SHORTS

FTR – DNDN -- DCTH – PMI – BZH-- HOV