The Empires are not to be trusted again

This link below is to a very interesting interview with Putin. He is definitely a diplomat and civil reformer who has his country’s best at hand. His task to put back together a country that was economically destroyed is not really getting much support abroad. My thoughts on the Georgian standoff are ranging from support for Russia to not trusting Russia and then to not trusting we, America are honest about what we actually have in mind in that region. It must be very expensive to run an Empire, be it Russian or American, although there will be friends of the government, who will make out the best. We crush little countries, play with their leaders, and destroy their aspirations for ethnic independence and self-preservation. The whole issue of how unhealthy human society/order is, and how many people will suffer, when greedy special interests dictate direction is rather sad. This is a very difficult topic, where the difference between what is the right vs. what is the wrong are not clear at all. What seems clear is when money and nationalism come into question, there are no people that can to be trusted in politics. No world leaders are to be trusted unless they submit to, rebuild and follow the United Nations.

Charlie Munger, new oil VIX and my thoughts

The market is strutting along in what I see as a bear market rally. However, we are watching the levels because what appears as a rally might transform into a full-blown bull run, if commodities and oil keep going down, which i don’t expect to continue for too long. Here is a chart for gold from Trader Mark:


Gold is also falling because it just needed to in order to stay in a long-term bull trend. It is also falling because of the stronger dollar in the past weeks. Equity gains during dollar bull markets (20% rally preceded by a 20% decline) are much greater than dollar bears (20% decline preceded by a 20% rally).The average return of the S&P 500 during dollar bull markets is over 80%. During dollar declines, the average return is less than 20%.
This is the latest must-see interview with Charles Munger, the guy behind Warren Buffett and his partner in the establishment. There is so much wisdom here, I can hardly write more about it.

Direct link to Munger video
For those traders interested in trading or understanding oil, please start tracking the Crude Oil VIX index which the CBOE realeased recently. On days when oil prices have a big swing, the index, called the Crude Oil VIX, tends to respond dramatically. It spiked 25.8% on June 6, based on historical data, when oil shot up $11. When crude tumbled for four sessions in a row last month, the index jacked up 13% and hit a record on July 17. Not surprisingly given the wild swings in crude recently, the volatility index has surged 66% since last May, based on historical figures. The index is based on the weighted prices of all out-of-the-money but non-zero options on the U.S. Oil Fund, the biggest oil exchange-traded fund.