Get Down

Flash Rabbit indulged in his usual bad habit of profit-taking too early last week, leaving what could have been really juicy shorts only marginally in the money before he cut them off. He came out of Barratt Developments, EasyJet, DSG International and Legal and General far too early - he's back in and short the lot of them again now but missed out on a big jump downwards. By far the most profitable has been a short in MBIA which plunged to an alltime low of 3.64 today before recovering - why anyone would want to invest in dodgy credit insurance is beyond the rabbit - on the other hand a number of institutional investors desperate to avoid the fallout from their insurer going bust might want to prop it up as best they can...but Flash remains resolutely short on both AMBAC and MBIA, although he took a bit of profit this afternoon. The biggest mistake was to take profit on the remaining Dow and FTSE short positions only to see both indices plummet - this was partly because the rabbit was too busy burrowing elsewhere to keep his eyes on the screen and so decided to bale out for the sake of safety. What a shame. He's been looking for another point to go short again but just keeps losing money in the process. The market hasn't quite got to a capitulation point but it's doing its best to avoid total destruction, although why $140 a barrel oil isn't enough of a warning it is impossible to tell. Perhaps Thursday will be another pivot point and lurch southwards...the data certainly doesn't look like it's going to get any better. Right now he continues to maintain that EasyJet, DSG, Barratt and - the biggest bet of all - Thomas Cook - which finally paid off today - are doomed. All exposed to weak consumer demand, high inflation, high oil, and all pitched at exactly the segment of the customer base which is in the most debt and in the most trouble. As the customer, so the company...