What Did You Expect ? with update at 10:25 AM CDT
The Fed’s stress test for banks issued yesterday showed that most of the big banks are in good shape for the moment. I’m exaggerating a bit but the primary principle to keep in mind is that if you can borrow at 0 % and lend at 6 % a lot of transgressions can be covered. And guess who provided the 0 % money, your Fed supported by your tax dollars.
Gold continues to press areas on the downside where significant selling should be uncovered soon. A we all have seen, the Gold Bugs continue to believe that inflation can overcome austerity. We’ll see how that works. Currently many gold buyers are hiding in the short yen trade to keep from biting the bullet on their gold position.
Stocks continue to trace out the completion of their highs for the year as the modest economic recovery provides hope against the austerity backdrop.
10:25 AM update:
Put on shorts in stocks this morning bringing our short position in stocks to 80 percent based on cash value of portfolio. We used the double short semi-cond ETF SSG for some of it and triple short ETF TZA.