Bookkeeping: Making Some Sales While Shaking My Head at Direction of Country

In 4 sessions this week the market has almost completely obliterated the previous 2 weeks of losses. I am laughing at last Friday's employment report now - as if those things mattered. I proclaimed I'd be looking for a bounce and then be adding some short exposure as we got closer to S&P 1070 - I am mulling it here.

My strategy was to get short somewhere between 1070 to 1080, and then abandon ship on that side of the boat, if we break north of 1080 because that would mean a new leg up. It's actually very clean technically - textbook. Thus far its played out perfectly but I have deep hesitation to short here. We have the best of the banks reporting earnings next week and since the entire American system has been subjugated to make them filthy profitable I can only imagine the cries of glee next week as Goldman Sachs (GS) and JPMorgan (JPM) raise the heads of the shorts on poles with their massive profits. Remember we are pretending balance sheets don't matter anymore for banks since we changed a few accounting rules... so its a tough one here. As we wrote in our weekend summary, the question will not be about "beating numbers" because analysts simply have no clue how beneficial chopping employees to the bone will be - but does valuation even matter anymore? Just because a consumer discretionary company beats analysts by 3 cents should I really bid it up... if it's already valued at 60x forward estimates? So far the market seems to say yes since they have nothing else to do with all the fiat currency Ben is printing for us.

I have a ton of cash so rather than shorting for now I am going to follow the same strategy (over S&P 1080, under 1080) but instead of getting short, I'm going to simply sell some long exposure into the strength and use the massive cash hoards as a cushion against any downfall.

Sold half of BHP Billiton (BHP) position; recall we bought a chunk last Friday when the monthly employment report mattered for a few hours. Technically its rallied to a recent high; either a double top is forming or we are about to start a new leg up - if its a new leg, we'll get back in.

Sold 1/3rd our gold position in Powershares DB Gold Double Long (DGP) - what a run. I have to sit back and assess this, with the US dollar the black sheep of the world this could just keep going but I want to lock in some profits.

Sold 1/3rd our silver position, Ultra Silver Proshares (AGQ) - all the same comments as gold; this has been a monster the past 4 sessions: +25%.

Sold 1/3rd of Blackstone Group (BX) - as with BHP Billiton; we added to this position Friday on the selloff and now exiting.

Sold 40% of Starent Networks (STAR); will look to rebuy on any pullback closer to a moving average.

Sold 1/4th of Discover Financial (DFS) - same game plan as Starent for buybacks.

Sold just under a third of E-House Holdings (EJ); same strategy to buyback as STAR, DFS

Also sold a levered long (ETF TNA) which I bought earlier in the week.

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While I'm enjoying having a "hot hand" in the stock market, I am actually profoundly distressed about what is going on in the real world. It's just seemed to have become a game of sacrificing the long term of the country to create an illusion in the now. There are 2 parallel universes - the Wall Street world and the Main Street; watching one gloat while the other suffers is surreal. We are creating such massive issues for our future I cannot believe it anymore - but much like 1999 it didn't matter until the *bleep* hit the fan. You could not short in 1999 and right now you cannot short here for anything longer than a few days. When the bill comes due for what we are doing, I expect to derive massive profits from the short side ala 2000-2002. But when this period's March 2000 is, I don't know.

I honestly just feel sad when I think about what is being done and how the masses don't care or don't understand. Yesterday there were rumors that the government was handing out $3000 checks in Detroit; in fact it was a $15M program (application process) to help people facing foreclosure and the like... there was a stampede of 50,000 people for 3,500 slots. This country is a mess. When it all comes to a head is unknowable but I become more distressed on our long run future by the day.

• The lure of federal cash assistance for needy Detroit families sparked pandemonium Wednesday at Cobo Center, as hundreds of city residents pushed, jostled and trampled others in a rush to apply for the aid.
• In a scene that spoke volumes about the despair of one of the nation's poorest cities, about 50,000 Detroiters descended on downtown to pick up 5,000 applications in hopes of enrolling in a federal program that pays a few hundred to a few thousand dollars to low-income residents to help pay rent and utilities.
• Wednesday's line stretched for blocks and before the process could be completed at least six people were taken away by ambulance, 150 police were called to the scene and the city stopped distributing applications before noon.
• The mayhem seemed to reflect the desperation of a city in which one in three lives in poverty and 28.7 percent are unemployed. Others said it was exacerbated by rumors the government was literally handing out cash.
• Walt Williams, 51, arrived at Cobo before sunrise to get a good spot for the 10 a.m. opening of the doors. "This morning, I seen the curtain pulled back on the misery," a bewildered Williams said. "People fighting over a line; people threatening to shoot each other -- is this what we've come to?"

These scenes are akin to the ones when American helicopters drop food and aid on refugee camps or victims of typhoons in some far off poor country. Desperate people reaching out their hands hoping a box falls somewhere near them. Except the helicopter with the aid is inside a building.... inside the richest country on Earth.