There was a ton of negative news in our intra-day notes yesterday and, as I mentioned in the morning post – we’re very concerned that the consumer has been pushed to the edge of a cliff so, of course, we took the opportunity to get much more bearish during the day with several disaster hedges and, of course, the same DIA $120.75 puts at the same price we had so much fun with on Tuesday. We also, as noted in the morning post, had fun shorting oil at the $105 mark – over and over and over again as it moved between $105 and $104 but 5th time is a charm as they finally broke hard this morning and fell all the way to $102.32 on the last drop, which now makes winners of our USO puts as well so, like I said – Wheeeeeeeeeeeee!
So, let’s see which of the things we’ve been ignoring suddenly matter today:
- Japan’s GDP shrank 1.3% last quarter on LESS consumer spending and LESS capital investment. "Gee, I don’t know George, we raised all our prices and people bought less stuff – who’d have thunk?"
- China posts biggest trade deficit in 7 years. Prices go up and people buy less junk – even if it’s cheap junk.
- Moody’s downgrades Spanish debt. Really? Gee, we never saw that coming, did we?
- Borrowing costs for the PIIGS are back to crisis highs. Same year-old link as above.
- Only one in seven Americans believe we are in a lasting recovery and over 50% say they are WORSE OFF than they were two years ago. (And – don’t forget – they don’t even poll people)