The other day after writing a piece about how I was standing in there buying crude oil, one of my good buddies who used to be my arch rival at another dealer sent me an email with only two lines:
Subject: re: long crude
“Gutsiest move I ever saw, Mav”
—Hollwood (Top Gun)
I have to admit, it made me laugh. A lot… And just like Maverick, my cockiness did not catch up with me right away. For a couple of days it looked like I might have actually caught the bottom. But the market gods never let you off that easily, and this morning I awoke to crude oil gapping down to a new low.
I should have remembered that Maverick’s aggressiveness eventually killed Goose…
I am going to make today’s post quick. The market is hitting the point where real fear is enveloping the financial markets.
Yet I want to leave you with a chart that I recreated from the always great Martin Enlund. It is a chart of the Euro versus the spread between the US and German 10 year yield:
I was already looking for ways to get short the US dollar, and this has encouraged me to dip my toe in the water on the long side of the Euro.
Finally, it’s Friday and I am going to finish with a joke.
Bob, a middle-aged Canadian tourist on his first time in Mound House, Nevada, locates the red light district and enters the Moonlight Bunny Ranch.
The madam asks him to be seated and sends over a young lady to entertain the client. They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she gasps and runs away!
Seeing this, the madam sends over a more experienced lady to entertain the gentleman. They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she screams, No!” and walks quickly away!
The madam is surprised that this ordinary looking man has asked for something so outrageous that her two girls will have nothing to do with it.
She decides that only her most experienced lady, Lola, will do. Lola looks a bit tired, but she has never said no and it doesn’t seem likely that anything would surprise her. So the madam sends her over to Bob.
They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she screams, “NO WAY, BUDDY!” smacks him as hard as she can and literally runs away!
Madam is by now absolutely intrigued, having seen nothing like this in all her years of operating a brothel. She hasn’t done the bedroom work herself for a long time, but she did it for many years before she got into management. She’s sure she has said yes at one time or another to everything a man could possibly ask for. The challenge is irresistible.
She just has to find out what this man has wanted that has made her girls so angry. And she sees a chance she can’t pass up to show off to her employees how good she was at what they do.
So she goes over to Bob and says that she’s the best in the house and she is available. She sits and talks with him. They frolic a bit, giggle a bit, and drink a little, and she sits in his lap. And Bob leans forward and whispers in her ear, “Can I pay in Canadian dollars?”
The Canadian dollar is in free fall. It seems like it is going down 1% every day.
I don’t know where the bottom is, but when jokes like this one start circulating, it makes sense to think about watching for a change in trend.
Thanks for reading and have a great weekend,