Pennies From Heaven And The Kitchen Sink

The world is all in, now we sit back and see if it works. The bull case is that we made a definitive bottom on Friday and that we have capitulated and reversed hard to the upside. Money has poured down from heaven above and everything is just swell.

The bears will claim that we may retest the lows and maybe go lower still. They will opine that housing is still a mess, unemployment will get worse, earnings will be short of expectations and that consumer is very much dead. The consumer I strongly believe is dead, and they represent 70% of the state of our economy. Who’s gonna buy “stuff’?

My feeling is that through all the drama we have experienced since the bailout bill was passed, the core problems have not been solved at all, and they will probably get worse. That doesn’t mean we can’t push up another 1000 from here, and I will trade the rallies(although I did next to nothing today). The true, easy money winners today, were the folks that got long on Friday and took a long weekend. I guess I had ample time today to get more long but my heart just wasn’t in it.

A couple of weeks ago I mentioned that it is important on a going forward basis to listen to the guys who were right on the way down because most likely they will be right on the way up. If anyone caught Burnetts interview with Julian Robertson today, a guy who has been up 25% for forever, and loves to short, you will see that it was not a ringing endorsement of the long side. He said that 80% of America is bankrupt and it will take ten to fifteen years to get out of this mess. These are the guys I listen to, not the 28 year old bull market geniuses that CNBC keeps dragging on set. Not guys like Cramer. The Cramers of the world are the problem,. They are the sheep that follow the conventional wisdom and rarely have an original thought or think outside the box.

Enjoy the fun while it last and I am rooting for continued strength but my end game is to find some more shorts at higher levels. I guess I’m a macro guy trapped in a micro body.

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