Tuesday, July 8, 2008

Can You Handle A Look in the Abyss? --IFCN Wk 31 -Tue- Equity: $706.20

These following quotes are all very true, and it is terrific that “Wall Street” was so expertly done. I tend to side with Gekko in the film, who would be considered a choir boy compared to the hi-jinx played today by operators in the markets.

Gordon Gekko: “The richest one percent of this country owns half our country's wealth, five trillion (dated) dollars. One-third of that comes from hard work, two-thirds comes from inheritance, interest on interest accumulating to widows and idiot sons-- and what I do, stock and real estate speculation.”

“You've got ninety percent of the American public out there with little or no net worth. “

“I create nothing. I own. “

“We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it.”

“Now, you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you. “

Bud Fox: “How much is enough? “
Gordon Gekko: “It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.”

Later, when Bud Fox is about to meet the authorities for his financial transactions, he meets Lou Mannheim, a sage of the Wall Street-that-was.

Lou Mannheim cryptically states: “Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss.” (Side note: only those who push the envelope in life ever visit the view of the “abyss”. Which can be good or bad. The greatest opportunities come from mortal reflection.)

Many major financial players are looking into their own personal abyss. Various ones have bet their lives on the Euro, high prices for crude oil, and lower global interest rates. If they find that those positions may not be the absolutes they figured, they will end up finding their character, and make their moves.

Which will create years of opportunity for the rest of us.

Two more FirstStrike trades stopped out, the short Gbp/Jpy and the short Usd/Chf.

As I stated yesterday, I'm not surprised.

We'll see if the last trade survives the end of today.

The following are this week's FirstStrike entries:
  • Eur/Usd: long @ 1.5691, stop 1.5631. Trade in progress.
  • Gbp/Jpy: short @ 211.23, stopped out at 212.13 for a 90 pip loss.
  • Gbp/Usd: short @ 1.9717, stopped out at 1.9777 for a 60 pip loss.
  • Usd/Chf: short @ 1.0251, stopped out at 1.0311 for a 60 pip loss.
  • Usd/Jpy: long @ 107.75, stopped out at 107.15 for a 60 pip loss.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $706.20.

Have a good evening.

Joel Rensink

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