Well I should have had the courage of my convictions on the TLT calls. It was a profitable trade, but would have been much more so if I had held through the PPI and CPI reports. And it would have made me feel better while my puts were getting murdered the last three days. Let your profits run.

At some point, the market is going to figure out that these soft reports are due to a rapidly weakening US economy. Housing starts were weak, the Mortgage Bankers’ Association showed purchase mortgages falling again this week, although refis were up as desperate housewives lined up at the ATM, rushing for money before it runs out. The yield curve is solidly inverted and the prospects for recession are excellent.