The PPI numbers rolled out this morning, and in a massive divergence from expectations, not only is there no inflation, but the numbers were deeply negative. I suppose the mainstream media, which can spin any data into good news, will celebrate this, although last time I checked with Ben Bernanke, having persistent deflation enter into our economy would be really, really bad.
One asset whose deflation I am cheerful to see is crude oil. I’ve been fixated on energy as the best bastion for bearishness, which is why I’m short XLE and XOP in size as well as some individual items like OXY and MTDR. A couple of days ago, oil looked like it was going to launch into full bull mode with a breakout, but it stalled out and began slip-sliding away, particularly with chatter about – gasp – no war with Iran. Good!
Speaking of falling assets, I direct your attention to United Healthcare, which must be one of the most despised organizations in America (although I’ve learned to be cautious about a certain young man who decided to firmly express his feelings on that matter, since apparently some Slopers aren’t fans).
This stock, which I hasten to remind you is in the esteemed company of the Dow 30 Industrials, has fallen 55%, since evidently a lot of their money was made through outright fraud. Anyone want to bet how deeply their ex-CEO was involved in these fraudulent activities? I’ll wait!
Here, let me close by snarking directly at a former hero of mine, Zerohedge. That website, which used to be the kingpin among bearish thinkers, is now nothing more than a radical right-wing shill for Goldman Sachs. They did a premium post this morning urging their readers to dive feet-first into semiconductor equities, whose index looks like this:
Now, to someone like me, if I look at a chart like that, I’ll rush over to the nearest keyboard and short it, which is precisely what I did moments ago. I am thus cheerfully short symbol SMH, which I wouldn’t have bothered doing were it not for this annoying ZH article which began in this fashion:
Heating up again. Well, yeah, there’s no debating that. A 44% rise in a matter of days is definitely heating up. Yet using that as a basis to buy AFTER the aforementioned rise seems wrong-headed to me.
But it gets worse deeper down the article…………
So what they are saying here is that the P/E fell to 19.8, then it recovered to 26, mysteriously prompting ZH to ask us, “why not take out previous recent highs of mid-30s?”
Do you realize how imbecilic such a query is? Here, I can play that game too:
The S&P 500 bottomed at 666 in March 2009. When the bear market really gets going, why not fall to 333? Answer me!
Yeah, why not. Such a rhetorical question doesn’t merit an answer. Sheesh. Maybe I should make my short position even larger, based on this blinkered, Philistine pig-ignorance.
In any case, as I pledged yesterday, I have amped up my positions. Instead of quivering and quaking in the corner of the room (whose climax was that horrible post-surrender Monday I had to endure), I have ramped up positions from 13 to 21 and am back to a 120% commitment level. I’m ready to get even more aggressive, too.
Yesterday was a great day, and we’re only a few minutes into trading Thursday and I’ve already beat yesterday’s profits.
Let’s go get ’em!
