Remember the movie 300 and its famous "This is Sparta!" rallying cry? Well, this isn't Sparta. This is sarcasm.
The national tickets for this election cycle are now complete. The American chattering classes have three more months to convince us that we have a real choice. The truth is more depressing. Neither party will advocate the reforms to unfunded middle class entitlements that will prevent the bond market from rejecting the U.S. dollar. Enjoy the free entertainment while it lasts.
The Chinese government has now endorsed Ponzi finance as the final prop for its growth story. Asset-backed finance has been hard enough in the U.S. with questionable title chains for mortgages underlying the ABS in many institutions' portfolios. China thinks that's okay. The big secret is that Chinese institutions selling ABS probably also owe debt that can and will wipe them out, bringing the hard lessons of securitization full circle from across the Pacific. This new development will give knowing investors enough time to unload Chinese equities on suckers chasing the non-existent safety of ABS. I may even use whatever window exists to unwind what remains of my long FXI position, if enough idiots want to chase it at some insane valuation.
Germany is headed for recession by the end of 2012. Really? You mean, all those broke Greeks can't afford German exports anymore? Angela Merkel's gamble on a federal EU referendum is a smokescreen for the Greeks to make a quiet exit from the eurozone. Ms. Merkel may hope they will be the only nation to exit, but I'm pretty sure I know better. The German economy will sink even faster when Spain and Italy stumble through the exit.
FedEx is considered a bellwether stock because its shipping volume indicates the ability of businesses to spend. Voluntary employee buyouts at FedEx are an ominous sign that layoffs are in the near future. If logistics providers are cutting back, then so is the rest of American business. Forget everything you hear between now and Christmas about how the economy is growing, because FedEx would be hiring rather than laying off if things were so great.
BTW, Notre Dame is still worthless.
Full disclosure: Long FXI with covered calls. No position in FDX.
