ROADS, BRIDGES AND SCHOOLS

Blogger is not allowing me to upload any charts so far today ( I did get one by them somehow ), check back in later. These types of things normally resolve themselves.

The point of today's post is based on something I read last night, an article written by Michael Lewis

www.vanityfair.com/business/features/2011/11/michael-lewis-201111

about what has led us all to this bad economic place we are in. As I listened to the push for building new roads, bridges and schools the following thought occurred to me. I bet most people do not understand what is actually the biggest problem with doing this. The reason most people don't understand what I am about to explain, is that they have not worked in sectors of the economy where they came into contact with this problem.

Certified Payroll/Prevailing Wage

From a political standpoint it strikes me as very odd that the conservatives do not bring this up. Why don't they just say, "we will sign the bill with one asterisk, remove the mandate that union workers be used." Allow the money that is going to be spent to be competitively bid. If union based contractors can fairly win the sub contracts then so be it. However, since in many cases the wages are double, it is doubtful that would happen. I have nothing against union workers per se other than I don't think they should by payed double what non union workers what do the same job for, just because they have political leverage. This is where the whole union scenario has gone south. It has gone from a noble idea that workers need to be protected, to extortion.

The reality is whatever jobs would be created by this bill, if there were any, would certainly be larger if the wages to pay the people were half the amount wouldn't you think? Wouldn't we be able to help more people and get more done? Of course. Mandating in public works projects that unions be used means we get about half the bang for the buck. It is nothing more than a payoff to constituents. Now I am sure there must be some other payoff on the other side as to why they do not point this out. I am calling Congressman Issa's office today to ask this exact question. However, I bet most people do not realize that these contracts are mandated to be this and as a result we dramatically over pay to get them done just to appease unions.

 At some point, and we are obviously well beyond that point now, this type of stuff has to stop. I am very worried about where all this is going, and I am glad that it does not effect trading too much. The end of all of this is not going to be pretty. Greece has come ashore now so be careful and be safe. I hope this will all remain non-violent, but I doubt it will. Read the above article about what has happened to that one California city, this is going to happen elsewhere. This is no longer an issue of political sides, both sides know this can't go on anymore now and biting the bullet is not the american way. As we can we with the prospect of doing so on the horizon, those who are effected are getting very angry. Anyone who thought this would not happen here, ought to wake up. I don't feel sorry for those who have to "give in" and approach what most of us already have on our hands, providing for our own retirements.

Here is the updated Sugar chart ( the one I got past Blogger today ) with another day having elapsed. As you can see what I am looking for is a down close bar. I have no idea if one will occur today or not. If one does, I do like the long above it's high for tomorrow. There is one clear fly in the ointment here and I am not completely clear on what to make of it, the COT Synthetic. This is heavily in the sell zone on a decline which is unusual.

What it should mean is that we are going lower here. However, I have not studied this enough to be able to make a definitive conclusion. By the general rule I have established with this of take the last signal, that would negate this trade since the last signal is clearly sell. This requires some more review by me before tomorrow to make a final decision. Maybe we won't close down which takes me off the hook anyway.

I also wanted to post a chart of the Yen, which appears to be setup for a sell to me if we break down from this area. It does not appear this will happen today at press time here.

Also I had been talking about shorting the interest rate markets and those did provide entries a couple of days ago for those looking to make those trades. The indexes are still a mess, we just had the false trap breakout of the lows and quick reversal, and are now back in the middle of the trading range. Ironically, had I kept all of my shorts and trailed stops I would have been taken out of all the trades at the same place I exited them Friday.

It does appear to be now that price is speaking pretty loudly. I think we buy the dip now for a good ride up that should last several months. When you have something not going "where it should" it tells us to look the other direction. We had the recipe for a big waterfall and have not gotten it. We have the presidential cycle still out there telling us we should close up for the year, so time to get long give or take a week or two here.

It does appear the sell the VIX parameters are not going to be hit unless we happen to free fall Friday after the NFP report, since we are rallying nicely here. However, we can see that things can change quickly from day to day so we never know what tomorrow will bring.

I just tried for about the 30th time to load the other charts and it is just a non starter today unfortunately.

I guess I strayed off the non political discourse path I promised not to go down, but is it Bloggers fault for not allowing me to get any charts through today. It has indeed been a teachable moment for me, I have learned to blame others just like he does when he teaches us.

Peace Out