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A short squeeze comparison of spring 2009 vs spring 2003. I built a very simple system that buys the 50 most heavily shorted SP500 component stocks and rebalances once a month. I remain skeptical this "trash is king" rally can sustain itself (at this pace).

Just for the record, I'm probably as bearish as anyone. Just laying out both cases. I personally don't buy the V-Shape pipedreams because they were built by economists fed with data of cyclical (inventory/manufacturing) post WW2 recessions, not with the little data we have on banking and credit...

The ultimate signal to short banks will be when Meredith closes her newly founded firm Meredith Whitney Advisory Group over lack of interest from clients for her research :cool:

Is this rally sustainable? Probably not at this pace, we're up what like 40% in 10 weeks. That's ~440% annualized :cool: That doesn't mean we have to go back to new lows in a big round trip. Sooner or later the rally will exhaust itself - at least temporarily, after all the underinvested and...

They will call it not V-Shaped, but the I-Shaped rebound. Overnight straight back up to 2007 employment & GDP growth.

At last, the USA will join their European brethren in economic "performance" :cool:

Some related thoughts from David Rosenberg, reflecting on Bonds & 1930s:

Tax evasion/fraud is a serious crime in the US, punishable by law with imprisonment lasting up to several years. The US has extradition treaties with most countries, the common denominator for these treaties is usually punishment by prison > 1 year. The key for extradition here is the tax...

http://www.bloomberg.com/apps/news?pid=20603037&sid=a8rRMJDegPA0 They are probably dead on. Also see UK tax increases for high income earners. People with above average wealth will look for an "exit strategy".

I understand that the process comes with a huge pile of red tape and bureaucratic headaches, but it might still be worth it. Those that are financially independent and think their US citizenship is worth so much should make a 25 (or 50, if you want to account for your children's taxes) year...

http://globaleconomicanalysis.blogspot.com/2009/05/wages-contract-in-us-uk-japan.html Wages deflating worldwide, overcapacities in global production as well as in the labor markets, real disposable incomes per capita BEST CASE will grind sideways over the intermediate-term, even accounting...

If you're young you should consider getting another passport and dropping your US passport. You will probably still have to pay 10 years worth of taxes to Uncle Sam but still -- 10 years is not forever. And your children will not be a slave to Uncle Sam neither.

The problem with the CME futures is that volume is virtually non-existant (like somebody said above, you can't take delivery, you can't arb these to the "underlying") Now I hope these ETFs - transferring funds from one trust to another to eliminate discounts/premiums - could change that but I...

ECB Emergency rate hike imminent! :cool:

http://www.latimes.com/business/nationworld/wire/sns-ap-eu-eu-rising-unemployment,0,2803604.story Looks like EUR Zone (2008: "Ve do not haw a krysis") is in for another early 1990s "jobless recovery" period The euro-zone's top economy official said Monday that Europe was "heading toward a...

I'm wondering: Does the OP have any money at risk in the markets? Or just posting, "observing" and making smart comments?

The worst feeling for me is not abiding by my trading discipline and rules and then getting punished for it. I could care less what the market is doing as long as I stick to my own trading discipline and rules. BTW: The 2003 rally took the SP500 higher by 40% over a period of 12 (!) months...

Watch the coming headlines "SP500 positive YTD -- experts call new secular bull market". Perfect to suck in all the retail money on the sidelines "You have to get back in otherwise you will miss out" :cool:

Headline 6 months later: "ECB remains reluctant to implementing alternative quantitative monetary policy measures; wants to avoid entrenching inflation expectations" :cool:

Forget those nonsense commodity bets. If you want to short the Dollar, then short the Dollar. US Dollar futures are liquid enough and trade 24 hours.