Featured Trades: (LAS VEGAS STRATEGY LUNCH REVIEW)

 

1) Las Vegas Strategy Luncheon Review. It has been a full life. What else could I conclude, finding myself in a luxury suite at the Las Vegas Wynn Hotel with two dozen drunken twenty something's playing 'beer pong' at 2:00 am? It is amazing what some people can do with a ping pong ball.

If there was ever a city that needed a jolt of adrenaline for its economy like the annual Consumer Electronics Show, it is Sin City. Some 130,000 free spending techno geeks made sure that the casinos were packed, every top rate restaurant was sold out, and there was an hour wait to buy jet fuel for private aircraft at the airport. I overheard one lovely woman calling friends on the east coast urging them to fly out asap, as there 'were men everywhere!' I was so busy visiting with investors and subscribers that I didn't even have time to take advantage of a free invitation to the adult entertainment convention down the street to meet the porn stars. Now that is busy!

Every time I visit Las Vegas I feel like I'm an extra in the filming of the sequel of The Bachelor. While having breakfast, I couldn't help but notice a young man, nicely dressed in a suit and a tie, passed out in a rubber dingy floating in the middle of the swimming pool. Buddies were calling to him to paddle shoreward, eliciting only dull groans. A friend walked into the ladies room to find one hottie dressed to kill, but passed out on the floor, while a companion snorted cocaine. And why are they burning so much incense in a no smoking hotel?

On every trip here I always make my rounds speaking to blackjack dealers, waiters, cocktail hostesses, real estate agents, pit bosses, showgirls, and masseuses to get a grass roots read on the real economy. You can see from the pain in their eyes that these people have been through a financial meat grinder. I won't call it a 'thousand yard stare', but it is something close. The City Center and the Bellagio completed high rise condo towers, which are now mothballed. The Venetian Hotel is blighted with the skeletal remains of a new tower whose funding was pulled somewhere around the eighth floor. A clueless investor group sunk at least $3 billion into the massive and nearly completed a 3,339 room, 68 story Fontainebleau Resort, which now sits abandoned. Raider Carl Icahn bought the project for pennies at a fire sale, and is currently stripping it of assets. Instead of laying off 25% of his staff, Steve Wynn wisely cut everyone's shift from eight hours down to six to keep them all eating. One heard stories of desperate friends moving out of foreclosed homes at midnight to avoid the judgmental stares and shame from their neighbors.

The strategy lunch was held amidst a fleet of new Lamborghini's at the Dal Toro restaurant, with the meticulous service enjoyed by all. I never cease to be impressed with the sophistication of the readers who attend these functions. Almost all by now have upgraded to the 'Macro Millionaire' service, and as a result were rolling in new trading profits. Most sank their teeth into the (TBT) trade for an appetizer, feasted on Bank of America (BAC) as a main course, and gorged on Cisco System (CSCO) as a desert. There was much discussion on how long the gravy train will last, and the dozen or so factors that could derail it. Linda won the prize for the greatest distance traveled to the event, some 591 miles from Marin County, California. Spend you Zimbabwean dollars well.

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Lunch With the Lamborghini's

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2011 GLOBAL FORECAST

Featured Trades: (SPX), (QQQQ),(CSCO), (XLF), (BAC), (EEM),(EWZ), (RSX), (PIN), (FXI), (TUR), (EWY), (EWT), (IDX), (GS), (MS),
(TBT), (JNK), (PHB), (HYG), (PCY),
(FXC), (FXA), (YCS), (FXY), (CYB),
(FCX), (VALE), (DIG), (RIG), (JOY), (KOL), (CCJ), (FSLR), (UNG), (JJG), (MOO), (DBA), (MOS), (MON), (AGU), (POT), (CCJ), (NLR), (PHO), (FIW), (CORN),
(GLD), (DGP), (SLV), (PTM), (PALL), (ESS)

 

The Thumbnail Portfolio

Equities
Bonds
Currencies
Commodities
Precious Metals
Real Estate

1) The Economy. What a difference a quarter makes! It was only last summer that the Golden Gate Bridge Authority closed down its suicide hotline because it kept exceeding its plan minutes. Now, happy days are here again. Of course, you have two guys to thank for this love fest of all asset classes. Ben Bernanke's quantitative easing unleashed $600 billion worth of bond buying on the markets, the net effect will be to add 1% to GDP growth in 2011. Barrack Obama's tax compromise with the Republicans easily adds another 1%. So literally in the span of one week I was forced to ratchet up my own forecast for economic activity from a flaccid 2% to a positively virile 4%.

Cancelled Because of Lack of Interest

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I saw all this setting up last summer, which is why I suddenly flipped to a bullish stance on global equities on September 1 (click here for 'My Equity Scenario for the Rest of 2010' and click here for 'Bring on the Bernanke Put' ). Once the tax deal was made I knew the market would rally for the rest of the year, close on its highs, and continue well into the next. That is exactly what we have gotten so far.

Going forward, we are looking at the best macro trading environment of all time. Here are the reasons why:

1) Government policies have created a Goldilocks scenario on steroids: massive stimulus with zero inflation.
2) Global growth at should reach a heady 5% rate, the best in years.
3) Financial markets have suddenly had to price in an upgrade in US growth from 2% to 4%, and are rushing to catch up with the new reality.
4) Asian economies will see blistering growth rates of 5%-10%.
5) Europe Dead in the water at 1% growth.
6) Liquidity is huge, with $2 trillion is sitting on the sidelines, so there is plenty of dry powder to keep the fireworks going for a while.

Suddenly, Goldilocks is Taking Steroids

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So, party on like there is no tomorrow, and consequence is a corny game show. However, the prudent will be anticipating the inevitable hangover, potentially a horrendous one. This is why the current rally will end, possibly as early has the first quarter.

1) The fundamentals are now so obvious that you can expect everyone to pile in, giving us a year that is front end loaded in every asset class performance. Then you can look for trouble in River City.
2) The market can still spread the joy if the ten year Treasury bond yields up to 4%. Take it to 5%, a real possibility, and it is game over. Move this certainty forward if the blatant runaway inflation in all commodities, food, and energy start to feed into headlines numbers, like the CPI.
3) Crude oil prices of $100 a barrel are now a given. Take them to $120 or more, and look out below.
4) Obama has provided states and municipalities with $400 billion in emergency funding over the last two years. That is now expiring, and with a Republican House of Representatives, there is zero chance this will be renewed, quickly chopping a gut punching 3% off GDP growth.
5) You can count on another European country to blow up. This is what cost us two quarters last year. Personally, I think that in Spain, the rain will fall mainly on the plain.
6) The US government will soon hit its $14.3 trillion debt ceiling. Expect Republicans to refuse to raise it and make maximum hay out of this. This will spook foreign investors in American stocks and bonds and the dollar. After all, if you can't own it, then you have to break it.
7) We have had a one way market for so long that the quant crowd is going to be baying for a reversion to the mean.
8) The QE2 well will start to run dry. Worst case, after watching stock prices go ballistic, Ben Bernanke decides that his reflationary program is working so well that he can afford to end it early, downsizing it to QE 1 ?.
9) This is the most important point of all: All of these are likely to hit the market at the same time, sometime in March or April.

This is why I think 2011 is setting up for a repeat of 2010. Think of it as 'V' shaped 'ground hog year', much like we saw in 2010. A supercharged first quarter is followed by two anesthetic ones. Whether we can find a new set of drivers over the summer will determine if we see a strong fourth quarter and another Santa Claus rally, or lapse back into a double dip and a lost decade. Watch this space.

 

But How Long Will the Fireworks Last?

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2) Equities (SPX), (QQQQ),(CSCO), (XLF), (BAC), (EEM),(EWZ), (RSX), (PIN), (FXI), (TUR), (EWY), (EWT), (IDX), (GS), (MS). Quantitative easing and our renewed low tax rates seem to be favoring equities more than any other asset class. So on the global stage I want to buy the preeminent lagging market, and that is the US. US corporations are making money hand over fist right now, as incredibly aggressive cost cutting drops straight to the bottom line. Free cash flows are rising at an amazing 20% to 30% a year.

Yet, with earnings for the S&P 500 expected to come in at $95 a share, that puts price earnings multiples at 13.3, towards the low end of its historic 10-20 range. A chip shot takes the (SPX) up 12% to 1,400. If it really get the bit between its teeth, a challenge of the all time high at 1,475 is not impossible before we see a major pull back. That would set up a double top that could define the year, if not the decade.

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Furthermore, I want to buy the principal lagging sector in the lagging market, and that is financials (XLF), (BAC). I expect the brokers to do well in this environment, like Goldman Sachs (GS) and Morgan Stanley (MS), as rising stock prices bring rising trading volumes. This will be the year that Goldman Sachs outperforms gold.

To round out the portfolio, I want to own technology (QQQQ), (CSCO), energy (COP), (XOM), and (OXY), and commodity producing stocks. This is a rising tide that will not lift all boats, so I prefer a few rifle shots in these specific areas.

I expect emerging markets to do well again, but not to deliver the unbelievable triple digit returns we saw in 2010. Think the BRIC's, Brazil (EWZ), Russia (RSX), India (PIN), and China (FXI), with South Korea (EWY), Taiwan (EWT), Turkey (TUR), and Indonesia (IDX) thrown in for a more sophisticated flavor. But as long as China is fighting inflation with interest rate hikes and monetary tightening, performance here is likely to be muted. Keep an itchy trigger finger on your mouse, because when the turn comes, there will be no place to hide. And beat the rush by booking that house in the Hamptons, the lakefront property at Tahoe, or the mega yacht in the Mediterranean, early.

It's Off to the Races for US Equities

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3) Bonds (TBT), (JNK), (PHB), (HYG), (PCY). Shorting the world's most overvalued asset has got to be the big trade for 2011. I'm talking about 30 year US Treasury bonds. The relentless whirring of the printing presses is so loud that they keep me awake at night, even though, according to Mapquest, I live 2,804.08 miles away.

What will be unique with this meltdown is that it will be the first collapse of a bond market in history in a deflationary environment. It is not inflationary fears that will execute the coup de grace for the long bond, it will be the sheer volume of issuance. The Feds have to sell nearly $2.5 trillion of debt to cover a massive budget deficit and to refund maturing paper, easily the largest amount in history.

Pile on top of that billions more in offerings from states and municipalities bleeding white. By end 2010 total government debt will rocket to a staggering 350% of GDP. At some point, the world runs out of buyers. The ten year Treasury bond yield began its inexorable climb last summer from 2.4% to today's 3.4%, and it is clearly on its way to 4.20% or higher.? Even Moody's is talking about a ratings downgrade for the US debt, not that we should give that disgraced institution any credibility whatsoever. It's just a question of how many sticks it takes to break a camel's back.

I am a worshipper of the (TBT), a 200% leveraged bet that long bonds are going down. It has clawed its way back up from $30 to $41, and $52 looks like a chip shot for the first half. Longer term this ETF could hit $200. If interest rates double from the current levels, a virtual certainty, so does America's debt service, from the current 4% to 8% of the budget. If we continue on our current borrowing path, it double's again to 16%, a figure equal to our total defense spending, or some $800 billion a year. That's when the sushi really hits the fan.

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Corporate debt, which see interest rates moved more by credit quality considerations than the yield curve, will continue to trade like high yielding equities, as they did for most of 2010. After last year's cornucopia of bankruptcies seen during the crash, investors are also showing a preference for paying up for securities more senior in the capital structure. That means you're going to have to employ an equity type strategy for this corner of the fixed income market. The global liquidity surge that free money is spawning will boost corporate bonds as much as equities, knocking yields down further.

With the world still in risk accumulation mode, that augers well for the riskiest corner of asset class - junk bonds, whose default rates are not coming in anywhere near where they were predicted just a few months ago. Buy the junk ETF's like (JNK), (PHB), and the (HYG) here for a trade. But don't expect a lot. This could be a year when your principal show zip appreciation and your total income comes entirely from the coupon, which is still running at a loft 7.5% Just don't forget to unload at the first sign of an equity market collapse.

As for municipal bonds, we have only entered round one of a decade of fiscal woes by local government. Still, there is a case for owning munis. No matter what anyone says, taxes are going up, and when they do, this will increase muni values. So if you hate paying taxes, go ahead and buy this exempt paper, but only with the expectation of holding it to maturity. Liquidity could get pretty thin along the way.

Perhaps the best place to live in bond world is in emerging market debt, where you can participate via the (PCY). At least there, you have the tailwinds of strong economies, little outstanding debt, appreciating currencies, and already high interest rates.

4) Currencies (FXC), (FXA), (YCS), (FXY), (CYB). Any trader will tell you to never bet against the trend, and the overwhelming direction for the US dollar for the last 230 years has been down. The only question is how far, how fast. Going short the currency of the world's largest borrower, running the greatest trade and current account deficits in history, with a diminishing long term growth rate is a no brainer.

But once it became every hedge fund trader's free lunch, and positions became so lopsided against the buck, a reversal was inevitable. We seem to be solidly in one of those periodic corrections, which began a months ago, and could continue for several more months, or even years. The euro has its own particular problems, with the cost of a generous social safety net sending EC budget deficits careening. Just look at Greece, with a budget deficit of 12.7% of GDP against the 3% it promised on admission to the once exclusive club. Unwinding of 'hot' longs could easily take us to the $1.20's against the euro, and new momentum driven longs could take us to the $1.10's.

For me, the big currency trade of the year will be to short the Japanese yen. The problems in the Land of the Raising Sun are almost too numerous to count: the world's highest debt to GDP ratio, a horrific demographic problem, and flagging export competitiveness against neighboring China and South Korea, and the world's lowest developed country economic growth rate. Most importantly, Japanese interest rates are likely to remain etched in stone near zero, while rates in the rest of the world rise. That creates a big carry trade that every hedge fund will be gunning for, leading to yen selling and dollar buying in large size.

My play here is a double leveraged short yen ETF, the (YCS), which last traded at $16, and will trade at $24 if the yen drops from ?80 to ?100, as I expect.

For a sleeper, buy the Chinese Yuan ETF (CYB) for your back book, but don't expect more than single digit returns. The middle Kingdom with move Heaven and earth to keep its appreciation modest to maintain their crucial export competitiveness.

Do They Know?

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5) Commodities (FCX), (VALE), (DIG), (RIG), (JOY), (KOL), (CCJ), (FSLR), (UNG), (JJG), (MOO), (DBA), (MOS), (MON), (AGU), (POT), (CCJ), (NLR), (PHO), (FIW), (CORN). This is my favorite asset class for the next decade, as investors increasingly catch on to the secular move out of paper assets into hard ones. Don't buy anything that can be manufactured with a printing press. Focus instead on assets that are in short supply, are enjoying an exponential growth in demand, and take five years to bring new supply online. The Malthusian argument on population growth also applies to commodities; hyperbolic demand inevitably overwhelms linear supply growth.

Of course, we're already eight years into what is probably a 20 year secular bull market for commodities and these things are no longer as cheap as they once were. You'll never buy copper again at 85 cents a pound, versus today's $4.45. Many commodities, like cotton and rare earths saw triple digit returns in 2010, so don't expect a repeat this year. You are going to have to allow these things to breathe. Ultimately this is a demographic play that cashes in on rising standards of living in the biggest and highest growth emerging markets. You can start with the traditional base commodities of copper and iron ore.

The derivative equity plays here are Freeport McMoRan (FCX) and Companhia Vale do Rio Doce (VALE). Add the energies of oil (DIG), coal (KOL), uranium (NLR), and the equities Transocean (RIG), Joy Global (JOY), and Cameco (CCJ). Oil has in fact become the new global de facto currency (along with gold), and probably $30 of the current $90 price reflects monetary demand, on top of $60 worth of actual demand from consumers. That will help it grind to $100 sometime in early 2010, and we could spike as high as $120.

Don't forget alternative energy, which will see stocks dragged up by the impending spike in energy prices. My favorite here is First Solar (FSLR). Skip natural gas (UNG), because the discovery of a new 100 year supply from fracting and horizontal drilling in shale formations is going to overhang this subsector for a long time.

The food commodities are also a great long term Malthusian play, with corn (CORN), wheat, and soybeans (JJG) coming off the back of great returns in 2010. These can be played through the futures or the ETF's (MOO) and (DBA), and the stocks Mosaic (MOS), Monsanto (MON), Potash (POT), and Agrium (AGU). The grain ETF (JJG) is another handy play. Through an unconventional commodity play, the impending shortage of water will make the energy crisis look like a cake walk. You can participate in this most liquid of asset with the ETF's (PHO) and (FIW).

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6) Precious Metals (GLD), (DGP), (SLV), (PTM), (PALL). With gold's whopping great $50, 4% pull back yesterday, I have been deluged by readers asking if this was the peak, if it was the final blow off top, and if gold is finished as an asset class. My answers are no, never, and not on your life. Obama has not suddenly become a paragon of fiscal restraint. Bernanke has not morphed into a tightwad overnight. When I pull a dollar bill out of my wallet, it's as limp as ever.

If you forgot to buy gold at $35, $300, or $800, another entry point is setting up for those who, so far, have missed the gravy train. Let's face it, the precious metals have a severely overbought condition to work off before we make substantial new highs. Remember, the is the asset class that takes the escalator up and the elevator down, and sometimes the window. We could be seeing a replay of 2010, where the yellow metal traded in a sideways range for many months before blasting through to a new all time high and quickly tacking on 25%. Start scaling in around the 200 day moving average at $1,261.

 

If the institutional world devotes just 5% of their asset to a weighting in the yellow metal, and an emerging market central bank bidding war for gold reserves continues, it has to fly to at least $2,300, the inflation adjusted all time high, or higher. ETF players can look at the 1X (GLD) or the 2X leveraged gold (DGP).

I would also be using the next bout of weakness to pick up the high beta, more volatile precious metal silver (SLV), which I think could hit $50 in the foreseeable future. Silver's 200 day moving average is all the way down at $21, so I doubt it will ever get there. The $50 day moving average at $27 might be a more realistic reentry point. Palladium (PALL) and platinum (PPLT)), which have their own auto related long term fundamentals working in their favor.

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7) Real Estate (ESS). The agony is going to continue in this world of hurt, and any allocation to either residential or commercial real estate is going to be dead money for the next decade. If you strip away the industry fig leaves, and ignore the paid apologists, the excesses in this sector are truly of Biblical proportions. 'Official,' shadow, and bank inventories, and another 1.5 million imminent option arm induced foreclosures, probably mean there is five years worth of supply out there.

Bankrupt Fannie Mae is taking down 75% of the new mortgage in the secondary market, the FHA is taking almost all of the rest, and there is no way the socialization of the mortgage market can continue indefinitely. The jumbo market has ceased to exist except at whopping big premiums, and it is raining McMansions in tony neighborhoods everywhere.

The demographic pressure of 80 million retiring and downsizing baby boomers easily add another five years of supply. The commercial sector is even worse, with valuations off 50%, some 5% of the industry's $1.8 trillion loan book in default, and cap rates soaring from 5% to 8-9%. The refinancing needs of this industry are gargantuan, and except for some triple 'A' paper taken down by the TALF, there is no bid other than from the vultures inhabiting the distressed world.

No one seems to be taking into consideration the fact that huge chunks of the office market are being permanently emptied out by the Internet, which is sending people home to work, transferring their jobs overseas, or vaporizing them altogether. If the liquidity induced surge in stock prices continues, I might even be enticed into shorting some of the big listed REITS, like Essex Properties (EES), which has nearly doubled from its lows, and is choking on its high prices California exposure.

Only buy a home if your wife is nagging you about living in that cardboard box under the freeway overpass. But expect to put up your first born child as collateral, and bring in your entire extended family in as cosigners, if you want to get a bank loan.

Featured Trades: (THE BANK OF AMERICA MELT UP), (BAC)

3) The Bank of America Settlement is Huge. For those Macro Millionaires who bought the (BAC) March, 2011 $12-$14 call spread that I recommended on December 7, this is your big payday. The North Carolina based 'too big to fail' bank announced a settlement with government agencies Fannie Mae and Freddie Mac over claims that (BAC) failed to adequately disclose the risks on 787,000 home mortgages they bought. Estimates of (BAC's) potential liability from the suit ranged up to $250 billion, and likely criminal prosecution of senior management. The settlement amount came in at only $3 billion.

Needless to say, this is a hugely positive development for the stock, which opened up 6% Monday morning, and is now up $2.54, or 22% from my initial trade alert. The March call spread has skyrocketed from 56 cents to $1.40, a gain of 150% in four weeks. Those who sold the March, 2011 $10 puts against the position made even more. I bet you didn't think your first trade in a new, untested, and unknown program would generate the best trade of your life. But I did.

I just ran the numbers on the Macro Millionaire portfolio, and in your first month you have earned a total return of nearly 17%. Of this, nearly half, or 7.50%, is accounted for by the (BAC) position. At this point, the spread is worth $1.40 out of a potential maximum value of $2 on expiration. So you have already wrested 70% of the potential profit from the trade.

I am convinced the call spread will expire at its $2 maximum value on March 18. But when you make this much money this fast, and one position accounts for such an outsized portion of your total performance, it becomes a risk control issue. So the more cautious among you might consider cutting half the position. I am going to hang on for the 'E ticket' ride for now, but when I bail, you'll be the first to know.

Well done, Macro millionaires!

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Featured Trades: (FRONTIER MARKETS), (EEM)

3) The 'Frontier' Markets are Beckoning. A quick look at the world's top performing stock markets during the first half of 2010 will not exactly ring bells for many investors. Bangladesh came in tops with a 40.7% gain, followed by Sri Lanka (34.6%), and Venezuela (18%). You have to get down to Chile, number four, to find an ETF (ECH), and to Thailand (TF), to find a fund peripherally covered in this letter (click here for the link). Only two of the top nine countries have dedicated funds.

Having a hard time finding any of these in your portfolio? Therein lies the problem.? This is turning into a year when the world's least liquid, most untradeable countries offering minimal amounts of public information and disclosure, are bringing in the best returns, shutting most of us out.

The Lilliputian size of these markets, where total market capitalization is less than that of a single medium sized company in the west, is keeping the big institutions out. The best gains are increasingly coming from outside the mainstream BRIC countries of Brazil, Russia, India, and China, which are becoming increasingly crowded with foreign index funds, ETF's, hedge funds, and even individual investors fleeing subpar performance in the US.

These are being labeled as 'frontier' or 'pre-emerging' markets by early stage investors. Jim O'Neill at Goldman Sachs, who originally coined the term 'BRIC' a decade ago, refers to several of them as the 'N-11' (click here for 'Goodbye BRIC's, Hello N-11').

They all offer the same story; an emerging middle class bursting on to the world economy, generating white hot growth rates like those seen in Japan (EWJ) in the fifties, Singapore (EWS) in the seventies, or China (FXI) today. These countries typically offer great infrastructure plays in banking, telecommunications, and construction.

Expect to hear a lot more about these markets in the future, and for your investment lives to become complicated as a result.

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The Frontier Markets Are Beckoning

Featured Trades: (FOR PROFIT EDUCATION)

3) The Big Hedge Fund Killing in For Profit Education. Hedge funds have made huge profits this year by shorting the for-profit educational sector.

The industry was ripe for the taking. For two decades, for-profit schools have lured gullible students with inflated promises of impressive sounding degrees which they pay exorbitant tuition to obtain. In education's version of the subprime crisis, creative financial aid departments obtained cheap government loans to finance the entire program.

There are now over 2 million attending these institutions, accounting for 10% of all higher education in the US, and the profits that have poured in have been absolutely massive. Early investors rode the IPO train all the way to the bank. The problems arose when few students ever achieved these laudable goals.

According to Department of Education statistics, 55% of US college students obtain a degree within six years. At the University of Phoenix (click here for their website at http://www.phoenix.edu/ ), with 400,000 students, the largest for-profit university, only 36% meet this deadline, only 6% at some campuses, and a mere 4% of online students. Dropouts end up defaulting on loans that can amount to as much as $100,000 for a worthless, incomplete bachelor's degrees, and up to $200,000 for advanced degrees.

It now looks like the gravy train is about to end. Secretary of Education Arne Duncan has promised a crack down on the industry, bringing in more regulation and prosecutions of deceptive marketing practices, where degree programs are sold like time shares. The leading accreditation organizations are also having second thoughts about the for-profits, where 95% of the instructors are part time and tenure is unknown. Complaints are rife about shoddy teaching standards and missing doctorates.

The government has funded $750 billion in student loans, and while 10% of public university loans go unpaid, the default rate at for profit schools is thought to be as high as 50%. Starve these schools of subsidized government funding, and their shares are history. And just try and get a job with one of these Mickey Mouse degrees.

Some of the worst offenders have already seen cataclysmic declines in their share prices this year, like Apollo Group (APOL), -37%, Capella Education (CPLA), -45%, and DeVry (DV), -37%. And a Republican win of the House of Representatives in November has enabled these stocks to rally in the hope that this will cause some heat to disappear.

There is no trade in these stocks here, as they have already fallen too far to make them attractive shorts, and I don't want to touch the long side with a bargepole. However it is a great example of how the hedge fund industry performs a public service by ferreting out corrupt practices and crooked management and taking their capital away by crashing their stocks. Making a few hundred million dollars along the way is nice too. Call it creative destruction with a turbocharger.

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