[Russ Winter]

This is preposterous,  trillions of debt steadily downgraded and backed or held by central banks.  What is left, near zero return Treasuries,  is a farce and a bubble in havens combined with distorted fictitious capital at all levels.







I have to believe that this is the only case of a player being slammed by the correction in commodities and the on-going China Bust, but Dow is reporting that Barclays is about to reshuffle the base metals biz after suffering a “huge” loss in copper. Where is the other wreckage hidden?

There have been nearly 100 negative Q4 preannouncements compared to just about 25 positive announcements, a ratio near 4 that ThomsonReuters suggests is the highest in about ten years.

In terms of actionables I must say that the concepts to trade are glaringly obvious, but peak heist is evident in all manner of products to trade them. The whole ETF and ETN landscape is incredibly flawed and scam-like. This is not news, but I think it has gotten worse.  It’s as if the criminals running the financial world have gone out of their way to find more ways to fleece retail investors and I would add the smaller hedge fund complex.  Meanwhile money managers and fund rack up nice fees in a zero return world, that is if the client is lucky. Huge amounts of money are captured in 401ks and pensions.

For instance I have looked at the the inverse of the JGB and worry about the sponsor Deutsche Bank and the expense level. I have tracked the trading and as usual it looks funny.  The VIX trade is badly flawed explained here. I think an instrument like SDS can be used, but option writing tactics are necessary to help offset part of the structure flaws. I still love option selling, but we need higher implied volatility. Commodities and precious metals may be tradeable at times, but are not safe havens.

The retail mutual fund complex has had a run off totaling $132 billion for the year mostly in the last 34 weeks.   The retail customer was sucked into emerging markets and has been trashed. I would guess the average fund punter has big losses this year.  This leaves the markets more and more to algos,  hedge funds,  Government backed flim flamers and mucky mucks.  In other words impossibly rigged.

As far as 2012 goes, will we see a repeat of 2011, where little happened other than constant fleeces?  The answer:  will the US “‘safe haven” go on for another year of borrowing for nothing as the debt to GDP runs up to 110%.  With peak heist in the works, sovereign health will deteriorate rapidly at this stage.  This will end badly, very badly.  Personally I think the whole edifice collapses in “one for the ages” style sometime over the next year, so don’t cancel your subscription to the front row seat.

So the task is to avoid the fleeces, and try to stay focused on good risk-reward situations.  Speaking of fleeces, about 75% of the equity stolen by MF Global has been returned to me as of this week.  How thoughtful of them. The vultures who trade these travesties are paying 85 cents on the Dollar, seemingly implying that most if not all will be restored. I just mailed in a ridiculous, convoluted claim form to try and recovery the small amount still owed to me.



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