7 May Scott Whisky night

attended a function by a Scottish Whisky in collaboration with my private banker. The event is held at a swanky seaside resort, something like Sausilito with lots of private yatches, and also a lot of newly built condos.

It was time indeed for the Bank, as market has recovered, and everybody is scrambling to buy, probably they have front run this recovery as well.

Then Banker also bought Citi at 4 dollars before 9 March and holding. A lot of this frontline banking staff invest to supplement their commssions. I had to put on a brave front and says that Citi is a good buy in 2-3 years time frame.

After a few round of Whisky, I annouce that now is the good time to buy stocks to the table.

One Banker was saying "after the recession", the portion of Whisky has shrunk.

I had a good night with 3 glasses of Carbonet, and at least 5 tiny glasses of Whisky. Then I drove and lost my way amidst the cluster of Condos in the night. I saw lots of empty units, (some occupied) and a lot more coming.

Then it reminded my of Roubini talk of "excess capacity" this week.

One of Banks biggest customers are the Real Estate developers. The Real Estate developers literally loan the entire cost of development. When they cannot sell they carry the major portion of the loan on their books. Banks also carry the "Bad Loan" and most unwilling to foreclose on the developers.

The property boom has yet to deflate, at least the Banks and Developers are hiding them under their cloak.

There are recent news from LA, California of people bidding up foreclosed properties. These evidence may be staged, or a few out of the millions of forecloased homes on the books of the Banks. When foreclosed homes sell at bargaining prices, the entire neighbourhoold suffers.

When people starts losing jobs, or bosses less confident of their next pay, they are less willing to loan to buy properties. ( I jst read in Financial Times today that some analyst say the recovery in properties would be faster than expected).

Hence literally the Banks are insolvent. And the Banks and Governments are hopping that the reflation, with time would raise capital, improve confidence.

The market is on a thread of Confidence or Trust.

What trust is there if denail of "Mark to Market" prevails ? and Banks can manipulate their books, earnings to deceive the majority of the Public. Anyway, the Public got to gain because of the better 401K.

Unless you can print monies accepted by the Public, you would not want to get in the way of the Big Game. As a trader, you would just ride along and put in Trailing Stops.

Bernanke spoke yesterday and gave a positive spin, so did Geithner. (as I did at my table).

When the Game end, it is going to be awfully painful. When it end, think the FED would be history. It started in the last Depression and it would end with the next.

Meanwhile waiting for my QQQQ at 38.