Thank you Mr. President!
We have a new rule at PSW and we go short whenever Bush goes on TV and he is now 11 for 11 since March in killing a rally, possibly one of the single most reliable market indicators we have. Today the President said the surge was now working so well it’s no longer a surge and he will now permanantly raise troop levels to 140,000.
Now in its sixth year, the war in Iraq has claimed the lives of more than 4,000 U.S. troops and cost (officially)more than $500 billion. An estimated 80,000 Iraqi civilians have died, and 5 million have fled their homes. In the US, we’ve lost 5M manufacturing jobs and 3 million American families have had their homes taken from them in foreclosure and another 20% have fallen behind on their mortgage payments. Mission accomplished!
Of course the President took the time to reverse the downturn in oil, that sent the energy sector down 1.5% early in the morning by banging the war drums on Iran again saying: "The regime in Tehran also has a choice to make: to live in peace with its neighbor, enjoy strong economic and cultural and religious ties, or it could continue to arm and train and fund illegal militant groups, which are terrorizing the Iraqi people and turning them against Iran. If Iran makes the right choice, America will encourage a peaceful relationship between Iran and Iraq. Iran makes the wrong choice, America will act to protect our interests and our troops and our Iraqi partners."
Not content with that, Bush also took the time to tell us we could be spending even more money: "Today, we face an enemy that is not only expansionist in its aims but has actually attacked our homeland, and intends to do so again," he said. "Yet our defense budget accounts for just over 4 per cent of our economy; less than our commitment at any point during the four decades of the Cold War."
"And if all others accepted the lie which the Party imposed—if all records told the same tale—then the lie passed into history and became truth. ‘Who controls the past’ ran the Party slogan, ‘controls the future: who controls the present controls the past." – George Orwell, 1984
I warned of all this in my Big Brother article last September back when I was chicken little warning of an impending mortgage crisis. Back then, at the top, the administration was doing everything they could to keep the markets pumped up, arresting a natural correction that would have been better for us than a series of inflationary rate cuts that has send commodity pricing and inflation flying out of control.
Anyway, so thanks to Bush for being so consistent. One day he may get on TV and actually say something that’s good for this country but at 11:57, after Bush said he was keeping 50,000 more troops than he promised in Iraq (up 50%) who would consume another 125,000 barrels a week of oil I said: "I am buying back my DIA putters based on the fact that Bush is 10 for 10 in tanking the market in the past month when he goes on TV and last time I said, when am I going to learn to short the market when I see him on TV?"
At 3:26 I got a lot more worried and we added puts: "I’m not liking the look of the Qs here. Be careful if you are overexposed to tech. The QID $46s are $1 and can be 1/2 sold against the May $44s at $3.60, which is a pretty good way to protect if you are tech heavy. XXX We just blew 12,600 and 9,100 on NYSE – there’s a sneaky sell-off brewing…."
The close was less than entusiastic and we’ll see what tomorrow will bring.
