Talk of German shortban - there goes the upside correction, down again,

* When will they ever learn?
German authorities are alledgedly looking to apply a short ban on government debt, and major financials; banks and insurers. An act of desperation.
Thought European authorities learnt something during the latest fire emergency in 2008/2009.
Apparently not. Read my lips; banning shortselling does NOT stop assetmarkets from caving in.
Repeat and write down 10 times on the blackboard please.

This is actually becoming quite silly. If Germany, Europes hope, is coming up with these kind of silly ideas, who knows whats next. This does not bode well. All bets are off re my correction expectations. The Eur/Usd blip higher to the high 1.24;s most likely WAS the Eur/Usd correction. This could also drag the equity markets down with it.
Whats next, intervention?

I tell ya, they've got it coming,,,,, This is not looking good at all. Actually, Europe is following the kamikaze actionplan to the letter. This will all end in tears. Authorities have no plan B. This is it. This is a onewaytrip downnnnnnn. But hey, add another package, it will probably help,,,,,, right.
Markets are coming to the conclusion that current plan is not working and that the people in charge have no clue what they have done so far.


* Humans have a hard time managing huge leverage.
Now , the leverage levels might have been managable earlier on, but now we are quickly moving to very extreme levels. To think that politicians and centralbankers will be able to manage from here I do not believe is realistic, unfortunately.


*Equity analysts need to think twice.
Corporate earnings and data have come in strong, balance sheets look quite good. So far so good.
However, basic economic theory will tell you that this is merely the mirror image of the monetary stimulus that was created by governments and centralbanks.

If a government runs a deficit other agents will do well.
If you inject the corresponding deficit amount into the economy it will surely help.
However, as tight fiscal policies are introduced and stimulus is withdrawn, the economy will slow and corporate results will get hit.


* "Noone" expects the equity lows from 2009 to be challenged again.
However, if European authorities do not think twice and shift their policies to more common sense ones, I believe we will.



* New positions
- Ive bought puts on Eur/Usd, Gbp/Usd, Eur/Jpy and Gbp/Jpy on the back of this.
- Ive bought VXX ETF;s
- Ive bought QID ETF;s





As usual, good luck



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