don’t like these short etf’s one bit

http://j2eewebprogrammer.blogspot.com/2008/12/investing-in-fazfas.html

HIGHLIGHTS

US auto sales drop 36% in 2008 – better than feared
US President Elect Obama: Expects “sobering” unemployment number
US November construction spending drop 0.6% – better than expected

COMMENTS
The 2009 trading year has started with a notable confusion. The bang of buying equities, selling bonds, selling USD and buying commodities reversed somewhat today – indicating that trees don’t always grow to the sky especially in a jungle. The arguments for money being put to work January 2 and changing January 5th don’t mix well with too much cash and too much pessimism. We remain in a jungle of correlations conundrums raining down on the risk appetites of the rational investor. 1) Equities did better than many expected today – as they managed to look at the real data releases and find some hope that construction spending wasn’t as bad as feared thanks to the non-residential growth. 4Q GDP may be better than the 6% feared and priced because of this report. Throw in that auto sales were better than feared thanks to the discounting and down 36% y/y seems like a win. Equities seem to be content in a massive sector rotation. Not a shock that energy won out today with oil up 2% while utilities suffered as bonds cratered again. The dispersion over volatility trade will be something that makes the jungle thick with trading confusion. 2) Bonds didn’t like supply. The news that the US Treasury intends to sell $30 bn in 3Y and reopen a 10Y for $16 bn led to another 20 bps pain trade in the 30Y. The move in rates is the biggest in 15 years. Supply of $2 trillion this year before the real spending of the Obama $800 bn stimulus spooks many to think about rates requiring a premium. Throw in the Barron’s article and you get a market that believes in a bubble pop. 3) The real bubble is cash? What seems clear to anyone chasing yields and returns in 2009 is that safe havens are confusing. Look at 1M rates – sub 5 bps. The opportunity cost of staying in cash isn’t yet high enough to convince the world to rush to other trades. Deflation vs. efforts at reflation continue to hangover the USD. The FX market voted for more deflation today – as the EUR gave back all its December gains breaking the key 1.3840 support and the 1.3620 100 day moving average. We close below both and open up a test of 1.32-1.35 zone. The demand for EUR into year end may be one of the funding stories of the 2008 credit crunch. What happens in 2009 will be about confusing correlations with value. The GS Research call today for trade number 8 – short EUR against a basket of NOK, SEK, GBP – made money today. Even more was found in the short USD/CAD and long AUD positions – both of which have been tactically discussed by the GS team as well. The mixture of EUR/CAD and EUR/AUD in describing a world concerned about value and reflation leaves commodity linked currencies in a special place so far in 2009. Stay tuned as we have plenty of news yet to come this week with BOE, US employment and global Service PMIs – all likely to test the theory that we have already repriced a recovery before we know the depths of this great recession.

CURRENCIES
Cross Low High
EUR/USD 1.3546 1.3697 Close: 1.3604
USD/JPY 92.85 93.58 Close: 93.17
EUR/JPY 126.38 127.57 Close: 126.75
GBP/USD 1.4475 1.4740 Close: 1.4725
EUR/GBP 0.9231 0.9420 Close: 0.9239
USD/CHF 1.1000 1.1117 Close: 1.1084
EUR/CHF 1.4997 1.5087 Close: 1.5078
AUD/USD 0.7062 0.7183 Close: 0.7151
USD/CAD 1.1867 1.2179 Close: 1.1892
NZD/USD 0.5808 0.5918 Close: 0.5897

Otherwise, I gamble with some hot leads!!!

So no playing any sides yet. I just own TBT from 36. and long term SPY puts.

Also, remember that it takes a 100% rise to recover a 50% drop.