Two Martini Lunch

Two Martini Lunch

There’s nothing like a lunchtime speech from Ben Bernanke to make you want to head straight to the bar.

Speaking in front of the Economic Club of New York, Ben seemed downright depressed about the economic morass he has of course helped to create. His hopium seemed all but gone, claiming that he can no longer fix the problem that is the U.S. economy. Like the kid on a playground shouting, “NOT IT”, Ben took Congress to task and ran away from the looming fiscal cliff.

Claiming there’s no bullets left in his bailout gun, Ben said that Congress and the White House are on their own. Oh yeah, it’s solely their fault for leading the nation to this dire fiscal situation that could cause another recession.

From blatant blamer to obvious overstater, Ben went on to call the economic recovery "disappointingly slow" and then claimed that the fiscal cliff would in fact, be bad.

"The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery — indeed, by the reckoning of the Congressional Budget Office and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession,"

Wow, Ben thanks for that bit of wisdom! Needless to say, the markets headed south after Ben’s musings temporarily giving back some of Monday’s gains.

This came on top of news from Hewlett Packard that stunned investors. In their earnings report, HP announced that it had effectively bungled the massive acquisition of Autonomy, despite extensive prior warnings about the accounting practices of the UK firm. HP paid over $10 billion for a transaction that is now clear will provide zero income statement benefit.

But come market close, poof, all this bad news disappeared and the E-mini rallied back on miraculously light volume. The Thanksgiving holiday celebration must have started early. Like all too often, everyone will be okay with drinking on credit and letting the house figure out a way to pay.

Trade well and follow the trend, not the so-called “experts.” 

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.

Value Areas:

ES 1385.50 / 1379.00

POC… 1384.25

YM 12753 / 12703

NQ 2592.75 / 2580.25      

Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom