We just a brief email conversation, and I wrote him:
I think i've read that on your block every day in october :-)
Markets up 200 S&P points in 20 days. That's completely crazy.
A massive part of my profits vanished...
Anyway, markets are not meant to be easy. It's hard, we feel a lot of pain, but what doesn't kill us make us stronger.I would add that I think we've now topped as of the futures contract trading at 1273. This is about 210 S&P points higher than the intraday low reached on the 4th of October.
210 points, in about 15 trading days.
Talk about unsustainable crazy markets.
But as Mish just wrote:
- No structural problems have been solved
- Banks most assuredly need more than 106 billion in recapitalization efforts. The idea that French banks only need to raise 8.8 billion is preposterous.
- No investors in their right mind will fund Greek and Spanish banks to the tune of 56.2 billion euros
- The haircuts were not voluntary
On my portfolio, nothing has changed except that I closed the few long positions that I had opened near the bottom, banking in about 25% gain, which is decent on non-bank shares.
Once the euphoria of the Eurozone announces comes down, markets will realize that the Eurozone has no cloth:
- Banks need more than 100 billion euros of recapitalisation (which they will certainly not get it from the market)
- This is massive understatement of what is required
- Greeks will have 50% haircut on their debt, which is not a default! And just a few months ago, it could have been 20%, but even 50% seems too small today. If tiny little, irrelevant Greece managed to make so much damage, wait for Portugal, Spain and Italy.
- France and many other sovereign should lose their AAA, unless they have also made under the table deals like they did with the corrupt ISDA.
In any case, we are living historical and extremely interesting times, and whether you are losing or making money, you should be enjoying and considering yourself lucky to be able to attend to these events.