This central theme of this blog is to share with others the methodology, or at least my methodology, of trading futures contracts. To that end, I endeavor to try to keep on that very topic. However, current economic conditions are so skewed as to make the random comment here and there necessary.
We are a odd group of people, Americans. We will spend ourselves into unheard of debt, allow the government to do the same, and then panic as things begin to disintegrate. We are now in the process of unwinding one of the largest bubbles in our countries history, and the general population seems blissfully unaware of the dire situation we are in.
Of course, the last bubble burst in 2000 with the dot.com implosion. The Nasdaq has yet to reach anywhere near the highs of those times and it has been nearly eight years since that implosion. But really, who cares if Pets.com, or any other ill conceived IPO didn’t make the grade. Our current dilemma does not involve dot.coms or other such peripheral issues. No, we are now talking about the granddaddy of investment, real estate. And the future does not hold a bright and rosy outcome. Not in the short term anyway.
The level of foreclosures and potential foreclosures is at an alarming rate and the Fed and the Department of Treasury have scrambled to salvage several large institutions to prevent a market meltdown. But there are bigger fish in the pond, as it were, and Fannie Mae and Freddie Mac prices have fallen to levels that appear to make them insolvent. There are a variety of reasons for this event, the least of which is horrible overall company management. Without some infusion of capital these institutions are doomed.
The Washington-type talking heads are blithering away with all sorts of potential solutions for our maladies, and some range from just letting the institutions wither, to a complete bailout for the entire system….which would probably run into the trillions, if that of any consequence to you. Our current government is not particularly fiscally responsible, quite the contrary, and finds itself in a precarious position as it relates to MI money supply and inflation or quite possibly stagflation, as it were.
I want to emphasize that as scalping futures traders we do not particularly care about the direction of the market but are happiest when it is moving with definite speed in a fractal pattern, and the large the fractal legs, or generators the better. So cheer up, we are in good shape for likes of us and plan to prosper in the coming times.
