In lieu of a film trailer (which is coming!) below are 100 screen shots from the documentary film that I just finished co-directing:

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Feedback from an old pro trader:

In 35 years I have never seen so much corruption in the former free markets. Never!!!!!! I had the ES nailed so at least I can eat a few more months. I have a friend running a $1 billion hedge fund that 5 weeks ago was plus 18% YTD. He is now running $600 Million and it’s not because of withdrawals. 41% drawdown! 5 weeks!

If people start to feel the game is rigged, why play? The consequences of these bailouts are not good and I am not just talking of the trader mentioned above. The issue is one of trust and trust is disappearing.

I included this 2004 “Economist” article excerpt in my November 2005 expanded edition of my first book “Trend Following”:

“The size of banks bets is rising rapidly the world over. This is because potential returns have fallen as fast as markets have risen, so banks have had to bet more in order to continue generating huge profits. The present situation is not dissimilar to the one that preceded the collapse of LTCM . . . banks are walking themselves to the edge of the cliff. This is because as all past financial crises have shown the risk-management models they use woefully underestimate the savage effects of big shocks, when everybody is trying to wriggle out of their positions at the same time . . . By regulatory fiat, when banks positions sour they must either stump up more capital or reduce their exposures. Invariably, when markets are panicking, they do the latter. Since everyone else is heading for the exits at the same time, these become more than a little crowded, moving prices against those trying to get out, and requiring still more unwinding of positions. It has happened many times before with more or less calamitous consequences . . . It could well happen again. There are any number of potential flash points: a rout in the dollar, say, or a huge spike in the oil price, or a big emerging market getting into trouble again. If it does happen, the chain reaction could be particularly devastating this time.”

Now that was a great prediction!

The powers that be said the same thing during the LTCM crisis 10 years ago.

From Trader Daily comes some nice sarcasm:

Stocks have lost $3 trillion in value globally this week and someone’s got to pay for that. But who? The hedge funds, of course. After all, didn’t they bring us tooth decay, Lou Gherig’s disease, cancer and government-created killer nano robot infection? The answer is yes, naturally. Certainly stocks taking such a beating is not an indication of their lack of desirability (really, who does not want to buy a boatload of financials right now?) but of the presence of pernicious forces at work that must be stamped out. Here’s how the U.S. and U.K. are once again teaming up to fight the latest wave of global evildoers. Think of them as financial terrorists. And remember, we are not halting the basic functions of our beloved financial system without good reason. We are fighting for our freedom.

Times are crazy. Stocks up. Stocks down. Bonds up. Bonds down. Commodities up. Commodities down. Extreme volatility is everywhere. Does anyone really think that prediction is remotely possible? Does anyone really think the best way to weather this storm is to “buy and hold” long only? Does that feel like a solution? The Turtles may have started back in the early 1980s, but the messages and lessons derived from their success then and now are timeless.

A deal to translate “The Complete TurtleTrader” into Simplified Chinese has been reached.

Let me get this straight. Investment banks make really bad bets on real estate, their common stock is shorted into oblivion, so now we “probe” the short sellers?

My film is done. Trailer soon.

So if AIG can’t fulfill its end of the life line given to it by the United States government what happens? Well, that’s simple. The U.S. government will own the largest insurance company in the world. Think about how disgusting that fact is for the country that likes to crow about being a beacon of capitalism.

Fannie and Freddie looked so good on paper (the fundamentals), but oh what secrets they were masking. As usual though the charts were always telling the truth even when the CEOs were not.

Michael Gibbons sent me this note today (that he sent his subscribers):

“…you should know that I rarely (if ever) talk about the news. My view as a trader for 38 years is that market moves create the news, not that the news creates market moves. Therefore, to say that this news event caused the market to do thus and so – is absurd. No one knows why the markets do anything (although many traders with great hubris think they know), but it is a claim that cannot be epistemologically defended in my view. I have made immense trading profits for my clients and myself precisely because I do not listen to the news or any outside influences. I follow a 100% non-emotional and highly disciplined mechanical trading strategy. And finally, to make money trading, we need only to know that markets move- not why they move. All of my trading methods are primarily based on price because price is reality. Trends in motion will stay in motion until they reverse.”