This Week in Barrons – 07_26_09:
Thoughts:
"I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson, after signing the Federal Reserve Act
- Another 554,000 people had to apply for unemployment benefits, topping 5 Million in 2 years – but to the ‘talking heads’ that meant that unemployment was slowing!
- Existing home sales were up 3.6% - of course 50% of those were foreclosures
- The FHA is back to taking 3% down and securing 120% on mortgages (isn’t that how we got in this mess?)
- Revenues for our top-line companies such as Caterpillar FELL over 40% - and there were cheers for ‘not as bad as it could have been’ and ‘they beat their estimates’
- Remember 1999 – another time when ‘earnings didn’t matter’ – until THEY DID.
- Microsoft – for the first time since going public – had their revenues decline – and their profits fall 29%
- AND then we had half of New Jersey’s leaders and politicians thrown in jail for everything from bribery to selling body parts.
- MANY of the top-line brokerage houses – Morgan Stanley, Charles Schwab, Credit Suisse are facing criminal charges
- AND there are over 35 criminal and civil investigations into issues including suspected accounting fraud, and public corruption concerning the dispersed TARP funds.
- BUT – there is no sign of investigating Goldman for their trading programs!
Remember – the Government can only directly influence it's people if they 1) want to be led around, or 2) are so financially destitute they have no choice but to rely on them. And remember ‘Hope’ – the ability to show you the light at the end of the tunnel – those ‘green shoots’ → just ask any of your local businesses if they are rolling in the dough or if things seem to be slowly getting better – you know that answer.
However, there are still hundreds of trillions worth of derivatives floating around the world like a ticking time bombs, that no one knows how to price, nor even how many institutions are still solvent enough to cover them. While the US taxpayer had to bailout a bankrupt AIG, AIG then paid off Goldman on a $12 billion CDS scheme, (because NO ONE rips off Goldman – NO ONE). FYI – if you wondered – ‘mark to market’ accounting is STILL suspended. It is presumed that Commercial Loan losses will exceed $30 Billion by the end of 2009 – with some 500 regional banks likely to go under. Alt A loans are defaulting faster than subprime, and some 600,000 more foreclosures could be being kept intentionally "off the market" to keep from lowering existing home values. Factually: Regulators on Friday shut six banks in Georgia and a small bank in New York state, raising to 64 the number of federally insured banks to fail this year.
And yes – I realize that the market “looks forward 6 months".
Now The Market:
On Thursday the DOW closed over 9,000 for the first time since the beginning of the year. You all probably know the arguments. We are technically overbought in the short term. This run has been blistering, making advances over two weeks not seen in a decade. We have been long the entire run, but that doesn't answer the question – is this coming week one of serious profit taking, or is it the pure lust to "get in before the train leaves the station" so great that we just continue higher?
We feel that "overall" the run isn't over yet and the market is going to go higher, possibly much higher. But, in the very short term such as this coming week, logic tells us that a profit taking smack-down "should" occur. And judging by how they defended that 9,000 level they achieved on Thursday, I'm guessing that we might see a "pause" here, as they try and build a new base at this level, and then once again push us higher. For every day that 9K doesn't fall, you can consider that another bullet in their ammo belt, to be used to blast us higher again. But just as importantly, if we were to see 9K fail, and experience a good "whoopin" of say 300 points, I'd think that dip would be completely buyable!
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Auto Stop
- we’re holding NGD (a gold miner) with No Automatic Stop
- we’re holding MOO (agricultural business ETF)
- we’re hold XLK (a technology (minus healthcare) ETF)
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re very slightly underwater here)
- we’re holding CSCO @ 19.20 / hard stop @ 19.80
- we’re holding DIA’s @ 84.45 with a 88.60 stop
- we’re holding SPY’s @ 91.97 with a 96.00 stop
- we’re holding QQQQ @ 36.26 with a 38.00 stop
- If you’re brave and looking for somewhere to go long ☺ …
- FRO on a bounce up to 22.15 is interesting
- SGR over 30.00 looks okay
- UYM over 22.00 is good
- And SUN over 25.00 could make sense
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Sunday, July 26, 2009
Sunday, July 19, 2009
This Week in Barrons – 07_19_09:
Thoughts:
Nowhere but in the U.S. could (arguably) the 2nd most powerful man in the world – Vice President R. Biden – utter the words – “We have to spend more money to keep from going bankrupt!” And when given the chance to retract it said: “Yes, that’s what I’m telling you.” With minds like this leading our comeback – is it any wonder why the rest of the world has had to "lend" us $2B per day to keep us solvent? Someone should tell ‘good ole Joe’ that in the real world – if you spend money you don't have, soon you are insolvent. OK ‘Joe’ back into the real world – it’s 2009 and:
- We've shed 5 million jobs.
- Unemployment is almost 20% in real terms.
- Our nation is virtually bankrupt, running more deficits than all the last 100 years COMBINED.
- Our National debt is now 95 TRILLION dollars
- Our Tax revenues are shrinking by 30%.
- There is still $600 trillion worth of derivatives that no one can accurately price, hiding in the shadows.
- Manufacturing is virtually dead.
- Commercial real estate is imploding.
- Sheila Blair of the FDIC said that 500 more banks will fail.
- Credit card delinquencies hit another all time high, foreclosure notices hit 1.5 MILLION households in just the first 6 months of the year, a 15% jump from last year.
- AND Goldman Sachs raped (oops) reaped the largest profits in their history.
The Congressional Budget Office (CBO) said the following this week: “Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.” And yet despite this - Obama pushes forward for Cap and Trade legislation and with nationalized Healthcare. The CBO itself said: “The health care overhauls released to date would increase, not reduce, the burgeoning long-term health costs facing the government.” AND – in my world – NONE of this was by accident, and I’ll revert to the old Boy Scout Motto – “Be Prepared.”
The Market:
We’re in earnings season, where companies tell the world how their last quarter went and how much money they made. 72% of the companies that have reported have beaten their estimates. But let’s take a peek ourselves – at just one ‘bell weather’ company – GE – who was reported to have ‘blown the doors off” estimates. The Headline Number: “GE’s 2nd quarter results – earned 26 cents per share – beating the estimates by 3 cents on revenues of over $39Billion.” The Reality was: GE’s net income fell 47 percent, to $2.9 billion, down from $5.4 billion a year ago. The company's revenue fell 17 percent, to $39.08 billion, and after adjusting for a stronger dollar, which reduces the value of overseas sales, sales were down 12 percent from the previous year. In a conference call with analysts, company executives said they expected industrial equipment orders to be off about 25 percent for the year. The finance business was the biggest drag on G.E.'s results as its operating profits fell 80 percent, to $590 million, down from $2.9 billion a year ago. And revenue in the finance unit, which includes home mortgages in Britain and private-label credit cards in the United States, declined 29 percent, to less than $12.8 billion, from nearly $18 billion.” So GE’s profits plunged 47%, cut their dividend, lost their AAA rating, revenue fell 17%, finance arm profits fell 80%, but they BEAT the estimates.
The Point is that today it’s ALL about the psychology of the market – and where the government (temporarily) wants the market to go. As always the question is the same, what's next? After the market has gone up 5 days in a row - some form of logic has to enter the picture – yes? In other words, at some point you are going to get a down day, that's just life. But here's the deeper question, the chart slaves were convinced we were going to plunge 1000 points – and the economic news agrees with that, it's all horrible. Yet the market roars for 700 points upward. Now consider the psychology. The shorts that just got burned are now screaming that this is just a bounce, nothing more. Those same shorts are salivating over the idea of reshorting, so they can make their money back. Even the smarter one's didn’t short the last time are now talking about how smart they were to hold off, so they could short this bounce from even higher. Is the market going to reward them?
Considering how bad earnings really are, the economic reports (horrific) – this market should fall like a rock. Is it going to be that accommodating? I doubt it. Our guess is that after an overbought pull down, that adjusts for the recent move up, this thing roars again, eventually taking us to the 9600 level. By then all the shorts will have been chewed up, and all the people that missed the last move will have bought in, so it could THEN roll over and land downward.
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Stop
- we’re holding NGD (a gold miner) from $2.59 and will be doubling up on Monday with this
- we’re holding MOO (agricultural business ETF)
- we’re hold XLK (a technology (minus healthcare) ETF)
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re underwater here)
- we’re holding CSCO @ 19.20 / hard stop @ 19.80
I really wanted to see some ‘red’ on Friday in order to purchase about 20 contracts of the August 80 DIA calls. I wanted to do this on a down day – and on the next decent pullback, even if it's just 100 points I will buy some contracts on the August DIA 80 calls. They were just 6.80 an hour ago, so it's costing you 80 cents a share to gamble on them going much higher in a month. I think I like that gamble.
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com/
Thoughts:
Nowhere but in the U.S. could (arguably) the 2nd most powerful man in the world – Vice President R. Biden – utter the words – “We have to spend more money to keep from going bankrupt!” And when given the chance to retract it said: “Yes, that’s what I’m telling you.” With minds like this leading our comeback – is it any wonder why the rest of the world has had to "lend" us $2B per day to keep us solvent? Someone should tell ‘good ole Joe’ that in the real world – if you spend money you don't have, soon you are insolvent. OK ‘Joe’ back into the real world – it’s 2009 and:
- We've shed 5 million jobs.
- Unemployment is almost 20% in real terms.
- Our nation is virtually bankrupt, running more deficits than all the last 100 years COMBINED.
- Our National debt is now 95 TRILLION dollars
- Our Tax revenues are shrinking by 30%.
- There is still $600 trillion worth of derivatives that no one can accurately price, hiding in the shadows.
- Manufacturing is virtually dead.
- Commercial real estate is imploding.
- Sheila Blair of the FDIC said that 500 more banks will fail.
- Credit card delinquencies hit another all time high, foreclosure notices hit 1.5 MILLION households in just the first 6 months of the year, a 15% jump from last year.
- AND Goldman Sachs raped (oops) reaped the largest profits in their history.
The Congressional Budget Office (CBO) said the following this week: “Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.” And yet despite this - Obama pushes forward for Cap and Trade legislation and with nationalized Healthcare. The CBO itself said: “The health care overhauls released to date would increase, not reduce, the burgeoning long-term health costs facing the government.” AND – in my world – NONE of this was by accident, and I’ll revert to the old Boy Scout Motto – “Be Prepared.”
The Market:
We’re in earnings season, where companies tell the world how their last quarter went and how much money they made. 72% of the companies that have reported have beaten their estimates. But let’s take a peek ourselves – at just one ‘bell weather’ company – GE – who was reported to have ‘blown the doors off” estimates. The Headline Number: “GE’s 2nd quarter results – earned 26 cents per share – beating the estimates by 3 cents on revenues of over $39Billion.” The Reality was: GE’s net income fell 47 percent, to $2.9 billion, down from $5.4 billion a year ago. The company's revenue fell 17 percent, to $39.08 billion, and after adjusting for a stronger dollar, which reduces the value of overseas sales, sales were down 12 percent from the previous year. In a conference call with analysts, company executives said they expected industrial equipment orders to be off about 25 percent for the year. The finance business was the biggest drag on G.E.'s results as its operating profits fell 80 percent, to $590 million, down from $2.9 billion a year ago. And revenue in the finance unit, which includes home mortgages in Britain and private-label credit cards in the United States, declined 29 percent, to less than $12.8 billion, from nearly $18 billion.” So GE’s profits plunged 47%, cut their dividend, lost their AAA rating, revenue fell 17%, finance arm profits fell 80%, but they BEAT the estimates.
The Point is that today it’s ALL about the psychology of the market – and where the government (temporarily) wants the market to go. As always the question is the same, what's next? After the market has gone up 5 days in a row - some form of logic has to enter the picture – yes? In other words, at some point you are going to get a down day, that's just life. But here's the deeper question, the chart slaves were convinced we were going to plunge 1000 points – and the economic news agrees with that, it's all horrible. Yet the market roars for 700 points upward. Now consider the psychology. The shorts that just got burned are now screaming that this is just a bounce, nothing more. Those same shorts are salivating over the idea of reshorting, so they can make their money back. Even the smarter one's didn’t short the last time are now talking about how smart they were to hold off, so they could short this bounce from even higher. Is the market going to reward them?
Considering how bad earnings really are, the economic reports (horrific) – this market should fall like a rock. Is it going to be that accommodating? I doubt it. Our guess is that after an overbought pull down, that adjusts for the recent move up, this thing roars again, eventually taking us to the 9600 level. By then all the shorts will have been chewed up, and all the people that missed the last move will have bought in, so it could THEN roll over and land downward.
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Stop
- we’re holding NGD (a gold miner) from $2.59 and will be doubling up on Monday with this
- we’re holding MOO (agricultural business ETF)
- we’re hold XLK (a technology (minus healthcare) ETF)
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re underwater here)
- we’re holding CSCO @ 19.20 / hard stop @ 19.80
I really wanted to see some ‘red’ on Friday in order to purchase about 20 contracts of the August 80 DIA calls. I wanted to do this on a down day – and on the next decent pullback, even if it's just 100 points I will buy some contracts on the August DIA 80 calls. They were just 6.80 an hour ago, so it's costing you 80 cents a share to gamble on them going much higher in a month. I think I like that gamble.
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com/
Sunday, July 12, 2009
This Week in Barrons – 07_12_09:
Thoughts:
The FED is a private institution that is above the law and accountable to no one (not even the President of the U.S. can see their books). Ron Paul recently introduced a bill where Congress could finally audit the FED. Well this has the FED freaking out. BUT surprising the bill did get by the House and now goes to the Senate. Now with Obama's popularity is falling like a stone, some senators are wondering if they should be connected so closely to Obama and the FED. What’s interesting is that the FED Vice President Donald Kohn – on Thursday – warned that if this bill goes through - the economy would suffer massively. Now you have to ask yourself – Why? Mr. Kohn goes on to say: “this bill could cast a chill on monetary policy deliberations by making officials nervous as ideas they throw around behind closed doors could become public. Any substantial erosion of the Federal Reserve's monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation.” Now, why would Mr. Kohn fear inflation simply by us viewing their books? Well, because the FED is printing money like it’s going out of style! If we were to actually see the true amount of their printing, the true destinations of all that money, inflation would be pegged at 14%+ at least and send the world into a very dismal place.
Does the FED equal Goldman Sachs? Potentially some of you have read the article in Rolling Stone magazine about Goldman Sachs (GS) and how they've raped the America's taxpayer for the last 120 years. Now, let’s look at some Goldman Alumni: Jim Cramer, Timothy Geithner, Henry Paulson, Zoellick (president of the World bank), countless White house Chief of staff's, Jon S. Corzine (who has bankrupted NJ) – many more. Now, could it be possible that they used any of their influence to obtain inside information? But what about the matter of last week of the FBI arresting Sergey Aleynikov, a former VP at Goldman Sachs. Aleynikov uploaded secret algorithms used by Goldman Sachs that run automated stock and commodities trading. The data was uploaded to a server in Europe. Shortly after the deed was done, Aleynikov resigned from his $400,000 per year job at Goldman. Now, I bet that this is much more than your garden-variety techno theft – so let’s connect a few dots. Two weeks ago I reported to you that Goldman was set to pay out the highest bonuses in their 140 year history. This at a time when the economy is in the pits, Wall Street has laid off a zillion people, the average returns are negative, and the banking industry was pleading for bail outs or the world would end. So how did they amass these bonuses? Well it's because they are such tremendous traders that there were many days they were making 100,000,000 a day. Yes you got that right, one hundred million in a day. Now this is the same outfit that didn't see any troubles in the mortgage market, CDO's, Swaps, or derivatives, yet they were making more money than any time in their history. Then Aleynikov hit the press which read: "The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways," stated U.S. Attorney Joseph Facciponti. Well – since Goldman built it – we must assume that they have that ability – yes? At the same time the market published a report about program trading – with Goldman leading the category each week doing 400% more program trades than their next rival. The next report (the very next report) Goldman wasn’t even listed. They went from being the top dog leader to not even being listed. Then the market came out and announced they weren't even going to post the list any more, it wasn't "valuable" any longer! Finally - last week, the NYSE had to keep the market open for an extra 15 minutes after the official close to "work out" some irregularities. OK, so Goldman is making billions in the worst recession since the 30's. They top the charts for program trading. Their program is stolen. The Attorney General says it has the ability to manipulate markets. Goldman suddenly disappears from the program trading charts, and then the charts are instantly discontinued. Then the market stays open longer to fix a glitch. Now what if because of Goldman’s particular situation of being a special liquidity supplier to the NYSE, and their inclusion in the Presidents working group on financial markets, their new hot software could "sniff" out stock orders milliseconds before the order is executed, and then their black boxes fire off just ahead of it? In effect they would be able to sneak in just ahead of a legitimate order, and scoop profits and be gone all in the space of a single second. Isn’t that what Aleynikov stole – and then they had to shut down the reporting and ‘disconnect’ the software from the exchange so that Alynikov’s buddies couldn’t muscle in on the Goldman Gold-Mine!
The Markets:
America is bankrupt. "According to the CBO, over the next SEVENTY fiscal years, the federal government will NEVER have a surplus. Rather, the United States will continue to suffer massive, escalating, multi-hundred billion dollar losses (deficits) each and every year for the next SEVEN DECADES, which is when the budget projection stops.”
So Goldman rapes and pillages us while The FED remains locked behind closed doors, and the U.S. is broke beyond repair, to the point where if taxes were 100% of personal income the books wouldn't balance. To make matters genuinely more abstract and absurd, Obama wants to push for universal healthcare, costing trillions we don't have. Yet despite all this, for the most part the American people aren't awake yet.
But the point is simple – the economy will NOT get better. Sure there will be bumps and glimmers of hope, etc, but in the long run, we're on a headlong rush to the ultimate depression.
As far as the stock market goes, here lies the great dichotomy. The market belongs at DOW 4000, but fights daily to move higher. You see the manipulations; you know about the PPT and Goldman, JPM suppressing silver/gold, and buying futures when it suits them. You see companies reporting that revenues are down 50%, but once again their earnings were "better than expected”. If you believe that the market’s current purpose is to punish the most people - then you’d love to see a really big fast sharp sell off that really scares people out – and that would signal your buying opportunity. The problem here is that Obama and the boys are pumping so much money into the system to give the appearance we're going to make it, each good attempt at the "big" sell off gets short circuited.
That said however, I’m hearing more and more "bearish talk" on TV, and therefore we're probably getting closer to a short term bottom that reverses higher soon. We want to catch that next wave up for sure, but be patient and let it develop. Above all remain safe, use smaller positions and move "fast". We're coming into the strong part of earnings reporting season, and it will be interesting to see how it all gets "spun". This "ain't your daddy's market" any longer.
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Stop
- we’re holding NGD (a gold miner) from $2.59 and will be doubling up on Monday with this
- we’re holding MOO (agricultural business ETF)
- we’re hold XLK (a technology (minus healthcare) ETF)
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re underwater here)
o we’re underwater on a couple – just thinking that there’s an easier market move UP and Down at this point
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com/
Thoughts:
The FED is a private institution that is above the law and accountable to no one (not even the President of the U.S. can see their books). Ron Paul recently introduced a bill where Congress could finally audit the FED. Well this has the FED freaking out. BUT surprising the bill did get by the House and now goes to the Senate. Now with Obama's popularity is falling like a stone, some senators are wondering if they should be connected so closely to Obama and the FED. What’s interesting is that the FED Vice President Donald Kohn – on Thursday – warned that if this bill goes through - the economy would suffer massively. Now you have to ask yourself – Why? Mr. Kohn goes on to say: “this bill could cast a chill on monetary policy deliberations by making officials nervous as ideas they throw around behind closed doors could become public. Any substantial erosion of the Federal Reserve's monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation.” Now, why would Mr. Kohn fear inflation simply by us viewing their books? Well, because the FED is printing money like it’s going out of style! If we were to actually see the true amount of their printing, the true destinations of all that money, inflation would be pegged at 14%+ at least and send the world into a very dismal place.
Does the FED equal Goldman Sachs? Potentially some of you have read the article in Rolling Stone magazine about Goldman Sachs (GS) and how they've raped the America's taxpayer for the last 120 years. Now, let’s look at some Goldman Alumni: Jim Cramer, Timothy Geithner, Henry Paulson, Zoellick (president of the World bank), countless White house Chief of staff's, Jon S. Corzine (who has bankrupted NJ) – many more. Now, could it be possible that they used any of their influence to obtain inside information? But what about the matter of last week of the FBI arresting Sergey Aleynikov, a former VP at Goldman Sachs. Aleynikov uploaded secret algorithms used by Goldman Sachs that run automated stock and commodities trading. The data was uploaded to a server in Europe. Shortly after the deed was done, Aleynikov resigned from his $400,000 per year job at Goldman. Now, I bet that this is much more than your garden-variety techno theft – so let’s connect a few dots. Two weeks ago I reported to you that Goldman was set to pay out the highest bonuses in their 140 year history. This at a time when the economy is in the pits, Wall Street has laid off a zillion people, the average returns are negative, and the banking industry was pleading for bail outs or the world would end. So how did they amass these bonuses? Well it's because they are such tremendous traders that there were many days they were making 100,000,000 a day. Yes you got that right, one hundred million in a day. Now this is the same outfit that didn't see any troubles in the mortgage market, CDO's, Swaps, or derivatives, yet they were making more money than any time in their history. Then Aleynikov hit the press which read: "The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways," stated U.S. Attorney Joseph Facciponti. Well – since Goldman built it – we must assume that they have that ability – yes? At the same time the market published a report about program trading – with Goldman leading the category each week doing 400% more program trades than their next rival. The next report (the very next report) Goldman wasn’t even listed. They went from being the top dog leader to not even being listed. Then the market came out and announced they weren't even going to post the list any more, it wasn't "valuable" any longer! Finally - last week, the NYSE had to keep the market open for an extra 15 minutes after the official close to "work out" some irregularities. OK, so Goldman is making billions in the worst recession since the 30's. They top the charts for program trading. Their program is stolen. The Attorney General says it has the ability to manipulate markets. Goldman suddenly disappears from the program trading charts, and then the charts are instantly discontinued. Then the market stays open longer to fix a glitch. Now what if because of Goldman’s particular situation of being a special liquidity supplier to the NYSE, and their inclusion in the Presidents working group on financial markets, their new hot software could "sniff" out stock orders milliseconds before the order is executed, and then their black boxes fire off just ahead of it? In effect they would be able to sneak in just ahead of a legitimate order, and scoop profits and be gone all in the space of a single second. Isn’t that what Aleynikov stole – and then they had to shut down the reporting and ‘disconnect’ the software from the exchange so that Alynikov’s buddies couldn’t muscle in on the Goldman Gold-Mine!
The Markets:
America is bankrupt. "According to the CBO, over the next SEVENTY fiscal years, the federal government will NEVER have a surplus. Rather, the United States will continue to suffer massive, escalating, multi-hundred billion dollar losses (deficits) each and every year for the next SEVEN DECADES, which is when the budget projection stops.”
So Goldman rapes and pillages us while The FED remains locked behind closed doors, and the U.S. is broke beyond repair, to the point where if taxes were 100% of personal income the books wouldn't balance. To make matters genuinely more abstract and absurd, Obama wants to push for universal healthcare, costing trillions we don't have. Yet despite all this, for the most part the American people aren't awake yet.
But the point is simple – the economy will NOT get better. Sure there will be bumps and glimmers of hope, etc, but in the long run, we're on a headlong rush to the ultimate depression.
As far as the stock market goes, here lies the great dichotomy. The market belongs at DOW 4000, but fights daily to move higher. You see the manipulations; you know about the PPT and Goldman, JPM suppressing silver/gold, and buying futures when it suits them. You see companies reporting that revenues are down 50%, but once again their earnings were "better than expected”. If you believe that the market’s current purpose is to punish the most people - then you’d love to see a really big fast sharp sell off that really scares people out – and that would signal your buying opportunity. The problem here is that Obama and the boys are pumping so much money into the system to give the appearance we're going to make it, each good attempt at the "big" sell off gets short circuited.
That said however, I’m hearing more and more "bearish talk" on TV, and therefore we're probably getting closer to a short term bottom that reverses higher soon. We want to catch that next wave up for sure, but be patient and let it develop. Above all remain safe, use smaller positions and move "fast". We're coming into the strong part of earnings reporting season, and it will be interesting to see how it all gets "spun". This "ain't your daddy's market" any longer.
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Stop
- we’re holding NGD (a gold miner) from $2.59 and will be doubling up on Monday with this
- we’re holding MOO (agricultural business ETF)
- we’re hold XLK (a technology (minus healthcare) ETF)
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re underwater here)
o we’re underwater on a couple – just thinking that there’s an easier market move UP and Down at this point
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com/
Sunday, July 5, 2009
This Week in Barrons – 07_05_09:
Thoughts:
Over the past 8 years of putting out these letters, we've talked about so many issues that have changed over the years that it's impossible to count them. But what is somewhat bothersome is that right now in 2009, each day is bringing us more laws, regulations, and policies that make most of the last 8 years worth of them look small in comparison. Healthcare reform, Cap and Trade, the Government's take over of the auto business, the bail outs, the stimulus packages, come to mind. But frankly it's the "little things" that continue to change on a day by day basis that often goes by without as much as a whimper that bothers me the most.
There's an old question: "How do you boil a frog?" The answer is that you put the little guy in a pot and slowly bring the temperature up a little at a time. The frog doesn't jump out of the pot and "change" his environment, he just keeps adapting to the higher temps until one moment when the poor guy's "cooked". Then it's too late. This is what's happening to all of us – “a little here and a little there”. No one seems to notice, until one day, when they look around and discover that they've been cooked. As we speak, people all around are waking up to being "economically cooked". Americans are starting to ask questions:
- “What do you mean the Federal Reserve isn't Federal? Isn't it a part of our Government?" No.
- "What do you mean our Constitution says only the Treasury should be in charge of our money, does it really?" Yes.
- "Are you telling me that a small group of PRIVATE bankers actually run our money and policy??" Yes.
We celebrate "Independence Day" because incredible men took incredible chances and decided they needed to break away from the Bankers and Government of the old world. This small group – turned the tide on what was arguably the most powerful military on earth at that time. Now (after 233 years), 1 out of every 6 dollars of income in the U.S. is a Government handout. The Government owns 72% of General Motors. The Government owns banks and wants to own the Healthcare Industry. I hope that Americans will get very tired of Government running their lives, and of the words “me, me, me” and “it wasn’t my fault”, but rather adopt the stance and thinking of the original “Independence Day’ers” that fought against immeasurable odds – and won!
The Market:
WASHINGTON (Reuters) - U.S. bank regulators closed seven institutions on Thursday, including six banks in Illinois controlled by one family and a small bank in Dallas, bringing the total number of U.S. bank failures to 52 so far this year.
But worse than failing banks, (however equally on the shoulders of the American taxpayer) comes the Cap and Trade Bill. Welcome to the new bubble – the “Green Bubble.” This bill REQUIRES the EPA to establish environmental standards for residences. To enforce this ‘code’ they are going to hire an army of people to go door to door and do energy audits. They have the right to demand you produce your energy bills. They have the right to demand access to your house and inspect your appliances, number of rooms, carpets, foundation, etc. You cannot refuse this. Then they will tell you what improvements will be made to bring you up to code. Oh, where does the money come from to make the changes to your homes and to those of commercial properties? O’bama hasn’t answered that question, it goes hand in hand with ‘fiscal responsibility’ and we’re clearly not in that chapter of the book yet! The bill instructs the EPA to regulate greenhouse-gas emissions from mobile sources such as cars, trucks, buses, dirt bikes, snowmobiles, boats, planes, lawn equipment, etc. The secretary of energy is required to establish a large-scale vehicle electrification program and to provide "such sums as may be necessary" for the manufacture of plug-in electric-drive vehicles, including another $25 billion for "advanced technology vehicle" loans. The bill creates: a new United States Global Change Research Program, a National Climate Change Adaptation Program, a National Climate Service, Natural Resources Climate Change Adaptation Strategy office at the White House, and an International Climate Change Adaptation Program at the State Department.
It’s estimated that our energy costs will rise between $1,200 and $2,000 dollars a year, and the costs for the set-up and infrastructure are unimaginable.
The interesting issue now (as the bill goes to the Senate) is that Obama's popularity is falling like a stone, and a politician’s main job is to remain a politician (get re-elected). So if they feel that voting ‘for’ this bill would cost them their job, well it’s interesting to think about.
Bottom Line: GREEN is the next bubble!
Last week in the Market: We saw the TLT (which is a bond ETF (exchange traded fund)) rally from 89 to 95 as the investors that were scared to death of the market, sought the safety of bonds. The mechanics of how all this plays out is really quite interesting. We've just come through one of the most powerful bear market bounces in 70 years, taking us from 6,443 in March to 8,900 in June on the DOW. Now we've backfilled a bit. However, it’s undeniable that a large percentage of people are upset that they missed that massive 2,400-point jump. They are desperate to not miss any more upside, so they'll view pullbacks as a buying opportunity. In other words, despite the fact we “should” fall for another 1,000 points, the chances of that are pretty slim. In other words, any downdraft here should be cut shorter than it would have otherwise run.
I still believe that "overall" we have a date with a higher market. The administration wants it, the Bankers want it and Wall Street wants it. But if the TLT bond fund busts up and over 95 and continues higher, it's showing me that in the near term there are enough people trying to hide that we could indeed take a hit to the downside that takes us under DOW 8K for a period of time. Then they’ll rush in to buy that "dip" and send us hurtling back to 9K+ in short order.
So in the immediate term, we're in no mans land that could go either way. However, in the longer term, I think they'll manipulate, hype and stimulus us to where the market runs for a new high for the year.
Use the boundaries of 8K and 8.5K on the DOW as an indicator. Right now we're smack in the middle at 8280. I wouldn’t get insanely long until 8500 is taken out, and I wouldn't get short until 8K really fails.
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Stop
- we’re holding NGD (a gold miner) from $2.59
- we’re holding MOO (agricultural business ETF) – from $32
- we’re hold XLK (a technology (minus healthcare) ETF) – from $17
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re underwater here) – from $32
- we’re thinking about: ADTN – but this market is tough to commit to right now – so we’re just looking ☺
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com/
Thoughts:
Over the past 8 years of putting out these letters, we've talked about so many issues that have changed over the years that it's impossible to count them. But what is somewhat bothersome is that right now in 2009, each day is bringing us more laws, regulations, and policies that make most of the last 8 years worth of them look small in comparison. Healthcare reform, Cap and Trade, the Government's take over of the auto business, the bail outs, the stimulus packages, come to mind. But frankly it's the "little things" that continue to change on a day by day basis that often goes by without as much as a whimper that bothers me the most.
There's an old question: "How do you boil a frog?" The answer is that you put the little guy in a pot and slowly bring the temperature up a little at a time. The frog doesn't jump out of the pot and "change" his environment, he just keeps adapting to the higher temps until one moment when the poor guy's "cooked". Then it's too late. This is what's happening to all of us – “a little here and a little there”. No one seems to notice, until one day, when they look around and discover that they've been cooked. As we speak, people all around are waking up to being "economically cooked". Americans are starting to ask questions:
- “What do you mean the Federal Reserve isn't Federal? Isn't it a part of our Government?" No.
- "What do you mean our Constitution says only the Treasury should be in charge of our money, does it really?" Yes.
- "Are you telling me that a small group of PRIVATE bankers actually run our money and policy??" Yes.
We celebrate "Independence Day" because incredible men took incredible chances and decided they needed to break away from the Bankers and Government of the old world. This small group – turned the tide on what was arguably the most powerful military on earth at that time. Now (after 233 years), 1 out of every 6 dollars of income in the U.S. is a Government handout. The Government owns 72% of General Motors. The Government owns banks and wants to own the Healthcare Industry. I hope that Americans will get very tired of Government running their lives, and of the words “me, me, me” and “it wasn’t my fault”, but rather adopt the stance and thinking of the original “Independence Day’ers” that fought against immeasurable odds – and won!
The Market:
WASHINGTON (Reuters) - U.S. bank regulators closed seven institutions on Thursday, including six banks in Illinois controlled by one family and a small bank in Dallas, bringing the total number of U.S. bank failures to 52 so far this year.
But worse than failing banks, (however equally on the shoulders of the American taxpayer) comes the Cap and Trade Bill. Welcome to the new bubble – the “Green Bubble.” This bill REQUIRES the EPA to establish environmental standards for residences. To enforce this ‘code’ they are going to hire an army of people to go door to door and do energy audits. They have the right to demand you produce your energy bills. They have the right to demand access to your house and inspect your appliances, number of rooms, carpets, foundation, etc. You cannot refuse this. Then they will tell you what improvements will be made to bring you up to code. Oh, where does the money come from to make the changes to your homes and to those of commercial properties? O’bama hasn’t answered that question, it goes hand in hand with ‘fiscal responsibility’ and we’re clearly not in that chapter of the book yet! The bill instructs the EPA to regulate greenhouse-gas emissions from mobile sources such as cars, trucks, buses, dirt bikes, snowmobiles, boats, planes, lawn equipment, etc. The secretary of energy is required to establish a large-scale vehicle electrification program and to provide "such sums as may be necessary" for the manufacture of plug-in electric-drive vehicles, including another $25 billion for "advanced technology vehicle" loans. The bill creates: a new United States Global Change Research Program, a National Climate Change Adaptation Program, a National Climate Service, Natural Resources Climate Change Adaptation Strategy office at the White House, and an International Climate Change Adaptation Program at the State Department.
It’s estimated that our energy costs will rise between $1,200 and $2,000 dollars a year, and the costs for the set-up and infrastructure are unimaginable.
The interesting issue now (as the bill goes to the Senate) is that Obama's popularity is falling like a stone, and a politician’s main job is to remain a politician (get re-elected). So if they feel that voting ‘for’ this bill would cost them their job, well it’s interesting to think about.
Bottom Line: GREEN is the next bubble!
Last week in the Market: We saw the TLT (which is a bond ETF (exchange traded fund)) rally from 89 to 95 as the investors that were scared to death of the market, sought the safety of bonds. The mechanics of how all this plays out is really quite interesting. We've just come through one of the most powerful bear market bounces in 70 years, taking us from 6,443 in March to 8,900 in June on the DOW. Now we've backfilled a bit. However, it’s undeniable that a large percentage of people are upset that they missed that massive 2,400-point jump. They are desperate to not miss any more upside, so they'll view pullbacks as a buying opportunity. In other words, despite the fact we “should” fall for another 1,000 points, the chances of that are pretty slim. In other words, any downdraft here should be cut shorter than it would have otherwise run.
I still believe that "overall" we have a date with a higher market. The administration wants it, the Bankers want it and Wall Street wants it. But if the TLT bond fund busts up and over 95 and continues higher, it's showing me that in the near term there are enough people trying to hide that we could indeed take a hit to the downside that takes us under DOW 8K for a period of time. Then they’ll rush in to buy that "dip" and send us hurtling back to 9K+ in short order.
So in the immediate term, we're in no mans land that could go either way. However, in the longer term, I think they'll manipulate, hype and stimulus us to where the market runs for a new high for the year.
Use the boundaries of 8K and 8.5K on the DOW as an indicator. Right now we're smack in the middle at 8280. I wouldn’t get insanely long until 8500 is taken out, and I wouldn't get short until 8K really fails.
TIPS:
- we’re holding the GDX (a basket of gold mining stocks) with No Stop
- we’re holding NGD (a gold miner) from $2.59
- we’re holding MOO (agricultural business ETF) – from $32
- we’re hold XLK (a technology (minus healthcare) ETF) – from $17
- we’re holding IPI (a potash hold – again in the agricultural theme – we’re underwater here) – from $32
- we’re thinking about: ADTN – but this market is tough to commit to right now – so we’re just looking ☺
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com/
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