Morning Call [7:07am ET] How would you or I like to arrive at the office this morning knowing that the full weight of government regulators in the US, UK, Germany and Canada are going to come crashing down on your company’s reputation like a ton of bricks, where the Prime Minister of England accuses your firm of ‘moral bankruptcy’ on international TV and recent US presidential hopeful Senator John McCain refers to you as a group of double-dealing scum. Clearly the world is upset by this, and traders on Friday knew it as they hammered the market values of the whole of Humungous Bank & Broker (HB&B).
http://www.nydailynews.com/money/2010/04/19/2010-04-19_englands_gordon_b...
Asia-Pacific markets also recoiled, although the Shanghai Composite added to its angst by also reacting to regulator moves in that country to pop the real estate bubble by sending the index down a whopping -4.79%.
At this point in the day, European equity markets are down hard as well but the losses are contained at an average pull-back of about -0.5%.
Spot Gold is getting hammered as one would expect when speculators get worried.
Wall Street firms have always traded against the order flow, so the only thing new in the Goldman Sachs case is that this time there is evidence apparently that Goldman Sachs caused the independent traders to make a certain order that the firm exploited. I call it lining up your ducks before you blast away. Goldman Sachs as the hunter; the rest of us the prey, at it were.
And now the hunted are becoming the hunters, and the once mighty firm of Rubin, Paulson, Blankfein et al may die. At the very least, there will be a lot of blank stares on the elevator heading to the desk this morning in the Goldman Sachs building and wherever else their 35,000 staff are employed.
While you all await the raising of the GS white flag, I recommend you watch your own portfolios today. If you have been bullish, the best you can hope for is a sharp plunge and then an immediate snap back. What you don’t want to see is prices hang in close to support as that will likely lead to a grinding action lower as politicians and regulators pile on. The Bears on the other hand are not looking at this situation as a trap. They expect the Bulls to fight. This week will prove even more interesting than most.
CTA Trading Desk Post-Close Report
Once again early morning weakness in equity prices brought buyers into the marketplace as the S&P neared important near-term support around 1180. With several financial news outlets speculating about what other firms are going to be dragged into the Goldman Sachs fraud investigation, Bears had the opportunity to create some downside momentum once Friday’s lows were penetrated. However, selling abruptly dried up with eager Bulls lifting offers as prices began to stair-step higher. Most popular averages finished at their highs of the day (S&P+5.39%)
While many stocks lifted, three economically sensitive companies we have been closely monitoring remained under pressure again today. US Steel (X-3.16%), Freeport McMoran (FCX-0.47%), and Cliffs Natural Resources (CLF-2.17%) significantly underperformed the broader averages, signaling that investors are selling riskier stocks, perhaps rotating into stodgy blue chip companies such as Johnson and Johnson (JNJ+1.55%). Day traders should anticipate some sort of bounce to materialize in X, FCX, and CLF as their RSI 7 readings of 21.25, 29.55, and 34.5 are at or nearing oversold levels. Once an oversold bounce occurs and prices subsequently take out the lows reached on this swing, a far more serious intermediate decline should commence.
Resistance remains up at 1225 with support at 1180, as traders await earnings reports from most of the Fortune 500 companies.
Have a great evening.
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Comments
I wonder if HB&B employees are any better prepared than most?
"We're at the end of the holiday so we've spent all our money," a weary-eyed Andrew said, as he sat with his family next to the Qantas customer service counter at Sydney Airport. "Because that's what you do on holiday."
Airplanes stop and tourists are reduced to begging for food from airport officials:
"Airport officials came by Monday and offered a tour of the airport to kill time.
"This is not what we need," Ribard said. "We want a bowl of rice.""
http://finance.yahoo.com/news/Volcano-flight-chaos...
what a strangely unprepared world we live in. Although Army time gave me an idea as to covering one's rear in planning, Vad has been instrumental in me now looking at what can/does go wrong and implementing solutions to improve my trading. This thinking is spilling over into other matters as well.
Given the history of tag team volcanic activity in Iceland, I'm now seriously considering a chest freezer and stocking a reserve of frozen and preserved foods in the house instead of relying on the shops daily for the essentials. If one of the volcanoes next door erupt in unison, could be a cold - and worst case scenario - hungry year. Such a natural, and admittedly unusual, event combined with the can-kicking economics that lead us down unhappy and unstable roads are convincing me that a little more household preparation is required on my part.
Bear Stearns refused to create the Paulson CDO: Immoral, unethic
Wall St Manna reports on the Book The greatest Trade Ever by Greg Zuckerman:
"On Page 179, Zuckerman describes Paulson's extensive meetings with banks including Goldman, Bear Stearns, and Deutsche Bank to "ask if they could create CDOs that Paulson & Co. could essentially bet against. Ironically, it was Bear Stearns that rejected the offer; Bear Stearns worried that Paulson would want especially ugly mortgages for the CDOs, like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team ... he felt it would be improper." Eichel told Zuckerman,
'It didn't pass our ethics standards; it was a reputation issue, and it didn't pass our moral compass.' "
(Amazon link: http://tinyurl.com/thegreatesttrade)
Goldman staff will benefit from almost half the investment bank
first-quarter revenues. Goldman Sachs finds $5bn for pay and bonuses amid fraud investigation:
http://tinyurl.com/y2h9wr7
Scene of the crime/ Cash is still king
Scanning the blogs and media stories over the weekend/this morning, it's clear no one has more than an opinion on either last Friday's developments, or the market reaction(s) to them.
A crime scene can take a long time to decipher. Your own 'take' will develop on its own time. Is there any need to put money at risk right now? 100% cash can help keep you objective as the clues/ticks come in.
Re: I wonder if HB&B employees are any better prepared than ...
Les,
Better make it freeze-dried food. Our last power outage here for only 5 days took out anything we had in cold storage.
We are nearly all as vulnerable as those now in airports. While I don't like our involvement in the Middle East, our entire nation is totally oil dependent for transportation, food, everything!
Living off the land amounts to being able to locate a McDonald's.
For most this applies to their investments as well and we may protect our money a bit better, but for the basic necessities city dwellers are at the mercy of events beyond our control.
If I were a terrorist I would forget bombs on planes and go for the basics of life — I think they know that! Homeland Security is a cruel political joke.
The SEC is the traffic cop
"The SEC is the traffic cop that puts the judicial system on notice that something is wrong here."
I sincerely hope your confidence in the SEC is justified. I see many friends and relatives who have really been hurt by this whole process — life savings, jobs and homes lost and no relief in sight. Some are too old to ever recover — two are over 90 and are seeing their children and grandchildren severely damaged as well. Ant the threat continues to spread.
The SEC avoided the Madoff issue for eight long years, has there been real change within the agency which you know of that gives you cause to believe they will pursue this meaningfully?
Dow 10999 Party hats!
I have mine ready.
Bob
Cara 100 Ratings Changes
Good morning.
Not much to report, so far:
AAPL - PT Raised from $295 to $305 @ Kaufman Bros. Buy
VANCOUVER BUBBLE?
ALOHA!!
Here is a real estate test ...
LINK: http://www.crackshackormansion.com/
Man, I thought Silicone Valley real estate was a joke! Are there any Canucks here that live in Vancouver? Is this for real?
Re: Cara 100 Ratings Changes
You may get a chance to start your celebration today.
Re: Dow 10999 Party hats!
Too funny, Bob.
Re: Dow 10999 Party hats!
I'll use the same I had for the upside break - it was still on the desk, with champagne spots and all
Cara 100 Update (Final)
AAPL - PT Raised from $280 to $300 @ Thomas Weisel. Overweight
APA - target cut, estimates higher at Barclays. APA price target trimmed by a dollar to $131 after the company announced a merger with Mariner Energy. 2010 and 2011 EPS estimates lifted to $9.40 and $9.70, respectively. Reiterate Overweight rating.
BRCM - PT Raised from $36 to $42 @ Broadpoint. Buy
CTSH - Downgraded at Goldman Sached from Buy to Neutral. Valuation call, based on a $57 price target. Even so, estimates were raised, because of higher sales expectations.
JNPR - PT Raised from $30.50 to $35 @ Canaccord Adams. Hold
INDICATOR
ALOHA!!
I have been up early here in Hawaii to see what sort of moves the GS debacle will have on the markets.
All morning one of my short term gold indicator which I call the Kitco Currency Indicator has been stuck on the cusp of 9/10 which is not confirming the downward move for USD/POG. Oil is down and the USD is(.37) up about as much as it was on Friday when the POG was down $25, but the POG and POS are not cooperating with the USD in the same fashion as Friday. Now the DOW is up a lot more ...
Then Barry Ritholtz is analyzing the new NewsWeek cover that says AMERICA IS BACK! If real jobs mean anything in this recovery then the NFIB SENTIMENT INDICATOR went down 1.2 points to 86 for the month of March, the lowest its been in history. But the AMERICA IS BACK article mainly uses the stock market as an indicator for the economic recovery. As I recall there were a few stock market rallies during the Great Depression. In the end fundamentals like "no jobs" won out not the stock market in the 1930s as a measure of America's economic recovery. Of course a World War changed that.
Go here and read this on that subject ...
LINK: http://cunningrealist.blogspot.com/
Good night!
Re: VANCOUVER BUBBLE?
Kaimu,
I'm not from Vancouver, but yes, it's as real as any bubble is. The mass delusion of 91% of Canadians who think a house is a good investment, and the 24% who are relying on their house as a primary form of retirement income is also real. Most major Canadian cities have significantly over-priced house prices by any reasonable metric.
In 2008 as the housing sector began to pull back the Canadian federal government pushed subprime lending in a big way as part of the stimulus package. Think zero down, 40 year amortizations, but with short term rates, often 2-3 years before adjustment to current rates, which are now moving up. The feds later got religion and went more conservative -- 5% down, 35 year amortizations ;-). (There are more stringent rules effective today, but they affect primarily investment properties.)
Don't believe everything you read about the "conservative Canadians". The Canadian household debt is not significantly lower than American, and the average Canadian house is twice the price of an equivalent house in the USA. In recent years the average household equity of newly purchased homes was ony 6%. Canadians have no mortgage interest deductibility for personal residences, and mortgage rates are generally higher than American.
Here's a blog entry with a table of Canadian house prices relative to household income (considerable other entertaining info on this blog):
http://www.greaterfool.ca/2010/04/06/financial-adv...
Here's another site where some data on Canadian debt and Canadian housing has been gathered and discussed:
http://americacanada.blogspot.com/
Re: VANCOUVER BUBBLE?
holy moly! And I thought LA was bad....
GCI
Back in at $18.04 after plunging from market pull back on Friday, despite earnings of $0.50 beating estimates of $0.41 and the CEO saying the advertising market was coming back in the U.S. and U.K.
team,
noticed your interest in mon, last week... tough call... I was out at $ 71.20 from Q results.. some chartists have it going to $ 57.. I am more inclined to see if the $ 61.50 area is reached ( as that would be 10 x E ), and definite buy at $ 59.00 area..... they are focused more-so on seed development vs. herbicide at this stage, although both are good rev. producers... don't believe negative regulatory sentiment will be long term.. will watch Mos, and looking at $ 51.20 area, on a flush...
The Piotroski method - Thanks Tele (repost)
Submitted by Seeker (9 comments) on Mon, 04/19/2010 - 03:15 #61146
"The Piotroski method is currently the 3rd most successful value investing system, tracked monthly for the last 10 years by the American Association for Individual Investors (AAII). Over the last 10 years it showed 1,069% return, versus O'Neils CANSLIM (1,489%) and the Zweig method (1,800%).
CANSLIM and Zweig are however BULL MARKET investment strategies, and Piotroski is the only BEAR MARKET screen tracked by the AAII. Since we are in the throes of the 2nd largest bear market in 20 years on the JSE, we are very interested in Piotroski's methods!"
Source:http://powerstox.blogspot.com/2008/10/piotroski-performance.html
Current List of highest scores of Piotroski method:
http://charts.grahaminvestor.com/topscores.php
What is interesting is "APPLE" is on this list and near the top!
Just found a good list of screens here:
http://members.cox.net/econisvoodoo/piotroski/
(anyone know a better list?)
Re: VANCOUVER BUBBLE?
Kaimu, I am in Vancouver and yes it is the #1 talked about investment vehicle here.
Even during the crisis the prices "hardly" declined (5-10% at most.)
There was the Olympic too so that might have help prop it up but games are over now and it is still a HOT HOT market (multi offers and sales in weeks if not days).
The age old rule times 3 gross income for a house or divide by 3 gross inc. for a car purchase is not working in Vancouver. There are as many bulls (if not more) as there are bears. Currently the bulls on housing in Vancouver are winning hands down. There has be calls of over price for the last 5 if not 10 years but still prices have not come down so trends and bubbles last a lot longer than one thinks.
PS. HST is coming to BC so that might dampen it a few % over the next few months but the bubble is still 12-18 months from popping unless a major crisis happens that links to and takes Vancouver with it.
Re: The Piotroski method - Thanks Tele (repost)
And thanks to you Seeker for posting this last night and reposting this AM. The Graham Investor site provides info on the actual ticker symbols currently in a Piotroski scan. It will take me some time to analyze this info and the other site too. I will put those ranked 7 or 8 into the FinViz screener to sort out which are most appealing and timely. A cursory chart of two of them shows that ACV has a high daily RSI-7 while PLL is below 30.
Re: The Piotroski method - Thanks Tele (repost)
Seeker
There's the GARP screen (FREE), which I use. Drill down to "Piotroski F-Score".
http://tinyurl.com/y7tvahx
Re: INDICATOR
Kaimu,
Haven't heard of the "Kitco Currency Indicator" before, a search didn't produce anything, is it proprietary?
Regards,
Re: The Piotroski method - Thanks Tele (repost)
Everyone thanks for all the other sources. If you want the screens that produce those numbers, it is at aaii.com.
No affiliation other than being a life member.
Re: team,
team.. I am looking at these not based on a market bomb... If so, who knows ?... however, the $ 45 - $ 47 area in Mos looks decent if Dow trends back to 10,000....
Not So Many Choices
- Breadth poor
- Dollar up
- Banks down
- Volatility up
even short-term attempts at rallies (e.g. MA) getting snuffed
So it's either out today or short...just sayin'
Bill: was the walk-through posted somewhere re: IB? Thx in advance.
Re: team,
Baz - one trade that I think would work well is an options straddle on MON. It seems to me that the company is in the midst of a big slide down due to competition, etc., with the chance of a bounce always there.
REDF
Volume is up nicely today and the stock is also up...1 of only a few on my list that is up. I still believe the stock is significantly undervalued given cash on hand, a rebounding advertising market, a strategic move to focus on search ads on their website, and a big push being made in India toward Internet access for the people of India. Keep in mind that their market is potentially just as big as China and they have significantly fewer people online. I don't think REDF will be the winner, but an exponentially growing market can only help them.
FD:
Long at about $2.73.
Set up for more decline
Just completed a small H&S that should be sufficient to blow thru all near-term support. 1175 critical. EW count is W3 down in the beginning of a higher degree W1 down, until evidence proves otherwise.
Who were the buyers this AM? Who are the geniuses buying C?
Re: Set up for more decline
"Who were the buyers this AM? Who are the geniuses buying C?"
I was long C for 15 minutes. Stopped out at B/E. Although I didn't make any money a well executed trade.IMHO
Bob
C
Bob: That's the kind of time in C that makes sense to me. Massive volume!
RSI and FullSTO sell signals. Move from -BB to +BB and throwover. Watch 50-200 crossover for non-confirmation and dump. Not my cup of tea.
Force13 turned negative. Momo players now skiing uphill. If I were shorting individual names, it would be on the list.
Re: Dow 10999 Party hats!
Bob,
market better stop crossing 11K back and forth several times a day - no liver is THAT resilient.
SZK SCC
Adding to these for longer term hold than the 3x. They have reversed far enough to give me a bit of confidence. EDZ and TZA looking good today.
USL USO
Crude has continue to roll over as I expected from last weeks cycles charts.
IYT has come off it's cocaine high as well. Gold weak. "All one market" trade suggests the equity indicies and the CRB will be headed lower behind crude. Effect of FEDs money pump is wearing off. New debt issuance now results in a negative return of GDP, with non-pumped GDP running -10%. I haven't seen any recent velocity numbers, but it it stays low, we may beheaded into the deflationary implosion mode. $CRB failing to exceed January's high by fall is the tell.
http://tinyurl.com/y59tjfh
Re: VANCOUVER BUBBLE?
i lived out in Vancouver for a few years back in the late 90's and even then all people could talk about was a real estate bubble.
what people fail to realize is that north american cities are becoming, albeit very slowly similar to the euro counterparts.
take people attempting to purchase homes in london, bursells, paris and rome, do you really believe they view it as some sort of toxic bubble because a family of four can only expect to buy an apartment instead of a nice house close to the city?
its a matter of expectations, and people fail to accept that cites like new york didnt become impossibly expensive over night, they developed as the city did and eventually only the truly wealthy could afford a nice 4 bedroom townhouse in manhattan while upper middle class families moved to the borroughs.
to people living on the west coast, they are naturally bounded by nature in places like vancouver, development is less dense just outside of the downtown condo-dominated core. its less to do with this bubble that has been brewing for 40 years there and more to do with expectations.
the house i grew up in was considered a distant suburb of toronto at the time because it took 5 minutes by bike to reach the TO border, 30 years later its a hot area for families who want to be close to the city because it only takes 45 minutes in rush hour to get downtown, where the norm is 1-1.5 hours. development is the name of the game adn that house moved up exponentially in value because of that and whatever whims of the housing bubble were happening. 30 years on, after a serious recession the house is still worth much much more and rising,
given this reality id worry less about a few % here and there and more about the bigger picture. when we say the market will get hit with %15 downdrafts, ask yourself if that really matters longer term because prices continue to rise as populations grow and development continues.
people have barked about the decline of manufacturing in ontario for 50 years, its always gloom and doom, yet somehow manufacturing is still producing jobs, more $$ and expanding industrial zones in toronto's western suburbs. car factories are cutting back in one breath and opening in an other. hamilton is still around despite loosing the steel making, what was once dominated by blue collar production now enjoys an exploding health-sciences economy contributing more money and jobs than stelco ever did.
people who did nothing but harp on the loss of jobs and manufacturing missed the boats that led to explosions in development and construction that have ensued in southern ontario's supposed rust belt for the past 2 decades.
people have bemoaned since the late 1800's about the decline of America all while it rose to prominence and Britania faltered. does it mean america wont decline? who is to say, the decline may be a relative one. other nations may simply catch up to america's properity faster, making a more even playing field.
to those who see china as a threat neglect to appreciate that much of china's growth the past 30 years has been answered by an American economy that has grown as well. scandals and mismanagement aside, the EU is suffering more, so how exactly will china's growth hurt the US because we have historical examples of just the opposite.
if things collapse, then all the pieces get taken down accept the US dollar. those who think Gold and gold stocks will rise heavily along side a surging US dollar are living in fantasy.
'Si' on C
"Who were the buyers this AM? Who are the geniuses buying C?"
I admit to being a buyer, but not to being a genius.
My wife opened a position last Friday at 4.52. I opened a position pre-market this morning at 4.57. The key word is 'opened.' (Also opened a position for the 8-year-old at 4.39 earlier in the month.)
My thoughts on this? The 8-year-old has 7% of his portfolio in C, and it's a definite 10-15 year play. My wife (who generally plays with much longer horizons that I do) is positive on C over the next few years. My own position, which I have day traded the past two weeks, will now be geared towards a swing trade (as opposed to a day trade).
Re: 'Si' on C
2nd - Great trades on those. I have to admit I was very skeptical about the position when you posted about it but who am I to tell that to anyone?! My initial thought was they have way too many shares outstanding to make a big move up and I guess I still kind of think that to be the case. Then again, I don't know enough about the warrants/etc with regards to the company so maybe the total shares outstanding can go down???
Re: 'Si' on C
The basis for the 8-year-old is actually 4.29, opened April 6th. Just wanted to be fair to the little guy.
Re: SZK SCC
What about FAZ?
Re: Dow 10999 Party hats!
Vad yes. I am having a haberdashery dilemma. Looks like Mr. Market made up its mind for today. I did find another hat to wear that the Reality people will appreciate if I try to trade C again.
Re: 'Si' on C
tof- Thanks. If you think about it, skepticism is what gives us those great entry prices. No skepticism, no bargains.
Re: Dow 10999 Party hats!
They're going to slap you with a wet trout for that one.
Re: 'Si' on C
tof- Not that I'm bullish on the markets right now. C is my only position, and a very small one at that. I am taking a look at GOOG, however.
Re: Dow 10999 Party hats!
Trout one is the best.
As for the market making up its mind, well... we had triple whammy over the weekend:
- GS debacle;
- China real estate tightening;
- European airlines troubles
... and with all this market goes green? If it can finish green, I don't know about that reversal...
Re: Dow 10999 Party hats!
Yea I agree. I will throw away the dead bull hat while repeating "Buy the dip, Buy the dip."
Bob
Re: VANCOUVER BUBBLE?
Paradigms
Vcvr: per Dr Cosa: bounded by mountains, ocean and US border. Can't expand geographically.
flat real estate prices have existed for periods of 4-8yrs of consolidation (1980's and 1990's)
Market is being driven by Chinese who want to park some cash....and wife stays here and puts kids in school. When the oldest reaches 15-18 depending on maturity, mother goes back to doing what she likes best: making money. I've never heard of the kids wrecking the place even if mom goes back to China and leaves them. Will this flow ever dry up?
Local realtor pow wow: Some realtors selling their homes and renting for a few years for this to blow off. Contrarian indicator? Graph looks parabolic last 12 months.
Bike riding yesterday, saw only one house for sale, (a mansion of 1000sq ft/floor) with a sold sign.
Vancovuer has always been expensive and a little out of reach of the average.
Many ESL students here from Asia, university grad school types, young immigrants. It's one of our industries that thrives. Asians love education. Especially western style which is less competitive and allows more creative and free thinking. Growth in knowledge based industries in Vancouver, and so it goes. my 2 cents
Re: VANCOUVER BUBBLE?
Substitute 'SF Peninsula' for 'Vcvr,' and you might use the same paradigm.
Goldman & Volcanos
"Goldman and volcano take down oil prices"
Goldman & Volcano?
Sorry, but does anyone else find the title of this AP report absurdly hilarious (except for the financial reality of it's implications for those who it impacts)?
And clearly, seconding Vad's observation that there have been a great deal of negatives tossed into the soup and yet the dow is UP...How we close will be important...
So if a volcano & GS fraud can't suppress this irrepressible market, what will?
But these little worries at least helped with the 10 year banging on 4%, didn't it?
Wonder what happens next?
just fyi: http://tinyurl.com/y4gppg8
Re: Dow 10999 Party hats!
"Buy the dip" is exactly what we did today and killed it. GS, WFC, LVS, AIG - everything worked like charm. To be fair, won one on a short side too - JPM
Re: 'Si' on C
I hear you...picking spots is the best way to go right now it seems. heightened regulation is only going to cause a lower ceiling for this market so I think we have to cap our upside predictions. However, in looking at the facts that have been presented on the GS case, it really doesn't seem like they did anything wrong.
RE: GOOG - don't ask for my opinion on that. I was smacked a couple of times by it. Longer term, though, I really do like the company. It has $90/share in cash and is trading at like 15 times earnings ex-cash. Not bad for one of the best companies out there.
Re: Dow 10999 Party hats!
Nice work, Vad. Especially on GS, which I didn't have the guts to trade.
Re: Dow 10999 Party hats!
I thought I had guts with my +$1.00 trade on it... until one of our guys hit it for +$3.24, decent size too. I covered my head with ashes and went in the dark corner to contemplate the meaning of "guts", do some navel-gazing and soul-searching
Re: Dow 10999 Party hats!
LOL. See that's the kind of opening paragraph you want for 'Tao-' anyone who reads that on the first page will buy the book and keep reading. ;)
Re: VANCOUVER BUBBLE?
ALOHA!!
Thanks for the "fact sheet" on Vancouver ...
I do not know if those photos are representative of the actual properties listed at prices like $1.3mil but practically all those photos portray those "mansions" as absolute "dumps"! I can only guess that it is the "land" and not the house that is valuable, because if I bought one of those homes the first thing I would do is bulldoze most of them. At best they look like "fixer-uppers" for $1.3mil! Here in the US real estate "hot zones" like Las Vegas or Southern California etc ... $1.3mil back at the top of the market got you a pretty nice home not a fixer-upper. What must a 1/4 acre vacant lot go for in Vancouver on average?
Being an American out of touch with Canada am I to conclude there "is" a SubPrime-esque type real estate market going on in certain Canadian cities? Even with 5% down that is lower than what I have ever paid for real estate in my lifetime. Minimum was always 10% down. On rental property I had to come up with 20% down minimum.
Right now in Hawaii we did not get hit like Las Vegas and Miami with SubPrime. I think it was because there are no major Wall Street banks here ... not even a Bank America. Mainly Bank of Hawaii and First Hawaiian and a few more regional types. Real estate here on the Big Island is kind of in limbo. We have some 1/2 acre parcels in one of the best subdivisions on this side of the island and I notice the price is still more than double what we paid for back in 2005. If I had $1.3mil CDN I could buy a really beautiful place here on the Hilo side ... oceanfront even! Heck, I could buy 16 rentable houses in Vegas with $1.3mil CDN!
"if things collapse, then all the pieces get taken down accept the US dollar."
That depends on what sort of "collapse" and what the monetary landscape looks like prior. If the major TBTF banks are BK then that would change the dynamic. If sovereigns including the USA have lost their AAAs then that also changes the dynamic. All "collapses" are not created equal. Right now the "biz as usual" complacency bias is deafening! Clicking on any POG denominated in any currency shows a "monetary drift" effect is terms of not speculation but store of value when viewed long term.
In August of 1976 the POG bottomed at $100USD per ounce and by Jan 1980 was at $850, which took about 3.5 years duration to peak. The POG has not seen $100USD since 1976. After the POG peaked in 1980 it descended to $290USD by June 1982. The current peak duration is now three times the base that it was in 1980. I would not define a ten year monetary "buy and hold" as speculative. There is something more than a "corner the market" attitude at play now as opposed to the Hunt Bros days. The "backside" of this "gold bubble" has a more fundamental basis wrapped in exponential debt and derivative accumulation by every global government and major bank with the US Treasury leading the charge in just pure dollar volumes, never mind per-capita, never mind %GDP. Isn't it "dollars" that are required to pay off the internal and external debt of America. Adding internal, external and debt guarantees the US Treasury is "all in" for $43.3TRIL USD right now. If the USD was "not" the global reserve currency we would be Greece today. You can thank the generations that won WW1 and WW2 for our "reserve currency" status. You can also thank the likes of GM, FORD and BOEING, but not the "modern unionized" version who would probably go on strike for WW3.
BOEING
I think I will add BOEING to my list of ANTI-TRUST companies like STANDARD OIL. It seems this happened to Boeing in the 1930s ...
"In 1933 the revolutionary Boeing 247 was introduced, the first truly modern airliner. It was much faster, safer, and easier to fly than other passenger aircraft. For example, it was the first twin engine passenger aircraft that could fly on one engine. In an era of unreliable engines, this vastly improved flight safety. Boeing built the first sixty aircraft exclusively for its own airline operations. This badly hurt competing airlines, and was typical of the anti-competitive corporate behavior that the US government sought to prohibit at the time.
The Air Mail Act of 1934 prohibited airlines and manufacturers from being under the same corporate umbrella, so the company split into three smaller companies - Boeing Airplane Company, United Airlines, and United Aircraft Corporation, the precursor to United Technologies. As a result, William Boeing sold off his shares and left Boeing. Claire Egtvedt, who had became Boeing's president in 1933, became the chairman as well. He believed the company's future was in building bigger planes.
Bigger indeed!
Who else has the "bigger" game plan? Why is it only US FED private member banks enjoy the last private industry monopoly status? Every other US business sector has either been split up or killed off. Who died and made them King?
Re: VANCOUVER BUBBLE?
Canada applies a few more safety levers aside of downpayment. A buyer must qualify for 5 years fixed, 25 years amortization mortgage, even if he can obtain better rate at the moment - that protects to an extent from finding oneself unable to make payments when rates start rising. Criteria of qualification is a % of liabilities vs income. Under certain circumstances a more risky buyer must also obtain a mortgage insurance from Canada Home and Mortgage Association. Downpayment itself is not necessary that low for everyone either - self-employed for instance often have to pay 30%. There are a few more, don't remember them all... Overall, we are probably not immune but a bit better protected against bubble bursting.
As for what kind of houses cost what, I'd suggest using mls.ca instead of that site... it has been created specifically to find the most outrageous cases. Not that they are a lie but they are selected for the purpose. And yes, a lot of such purchases are made to immediately bulldoze the thing and build a new one.
Re: 'Si' on C
"in looking at the facts that have been presented on the GS case, it really doesn't seem like they did anything wrong."
The facts have not yet emerged. I read the complaint. It is sufficient to withstand a motion for summary judgment and to open the door to wide ranging discovery proceedings under which the facts will emerge. This is a far stronger case than the one P&G won against Bankers Trust.
In the 1990s Procter and Gamble sued Bankers trust for a $100 million on a failed derivatives contract that P&G said they did not understand. A lot of people downplayed P&Gs case. They said P&G was too sophisticated an investor to expect to win under such a claim.
But in the discovery process P&G "discovered a number of taped conversations between traders boasting of how much money they were making from these deals and how little Procter & Gamble understood they were at risk".
"The tapes recorded Kevin Hudson, the trader who sold Procter & Gamble the two contracts, saying, "It's like Russian roulette, and I keep putting another bullet in the revolver every time I do one of these.'"
http://tiny.cc/ba2xp
Goldman? What Goldman?
Come’ on? You still haven't figured out this tape yet have you? :)
http://finance.yahoo.com/echarts?s=GS#chart1:symbo...
Re: VANCOUVER BUBBLE?
South of the border post bubble bargain anyone?
The run up in Vancouver and BC values has astounded those of us livng just south of the Canadian border. The Peace Arch is a huge white symbol of our open doors. Today we have hopes that our real estate industry will be blessed with the Canuck hordes coming south for our bargains. Serious bargains they are if you compare what these long term holds will be worth in a year or three. But 'worth' being relative, the main reason Canadians love our fair county is the access to fine views, water sports and more golf courses per capita than an hour from Vancouver for a fraction of the cost to buy in similar Canadian towns 4 hours away. I am going to risk posting a link to a property that I think has just amazing potential. The project was launched in October 2008 with no takers due to crash and high price tag. Original ticket on homes breaking $1M. The plans are for modern green homes in a PUD (Planned Unit Development)with management on site and full security, gates, lanscaping etc for the second home market. The trick is financing for Canadians. Which is where I come naturally. Of course, those with cash can just walk over, no question asked! I am fully disclosing my involvement as a potential financier, so please feel free to ignore this if you find it too self serving. I am not selling real estate. I do think this project is an amazing opportunity to anyone wanting a fantastic first or second home in $300-$350K price range. NYUgrad where are you? Austin can't beat this! Of course you have to love our foggier winters but that's what makes it so green and glorious this time of year!
http://wwww.liveathorizon.com
FAZ
I had dumped FAZ Fri. along with SPXU, expecting a FED pump. I think the financials will collapse at some point, but not for a while. SRS looks like another FED attack, and yes I think the PPT naked shorts the inverses complicit with the SEC. Will have to see how the bounce follows through the rest of the week. Could be the 11 week mid-trading cycle dip is in.
Commodities signaling the trend is down, with huge bullish volume on SMN. $CRB, DBC down. I don't think Gold will hold 1100. PPT playing "whack a mole" missed SMN.
Excel Tools Continued (embedded Browser)
Hi,
I just figured out how add an embedded web browser into my excel trading sheet. I usually work off of my laptop so I need to squeeze as much info onto one screen as possible.
Well I created this to display FINVIZ news feeds page on my excel sheet. It will also allow me to display information that is generated via scripts (i.e. Heat maps) and cannot be easily linked using simpler methods.
Cheers
NO
Re: VANCOUVER BUBBLE?
Kaimu,
FYI lots of subprime lenders funded loans in Hawaii! I funded a construction loan (not subprime) via IndyMac before their spectacular fall. Just sayin you might not know that people who couldn't get a loan at a local Hawaii bank always had the infamous internet lenders (and friends on the mainland) to find their resources.
Cheers.
Semiahmoo, WA
loannetter- Thank you so much for bringing the development (and the area itself) to our attention.
For those of us who may be considering the homes as income property to be converted in the future to a first or second home- how robust is the rental market in Semiahmoo, and what price range would you expect the homes to rent for?
Bigger Mac
MCD hit a 5 year high today. So did PNRA.
arry had good news
afterhours...
Re: VANCOUVER BUBBLE?
you guys are deluded into thinking that you can only find dumps in vancouver for 1 mil,
speaking of 1.3 million dollar dumps, heres a 2 bedroom, 3 bathroom banger i found, downtown overlooking grandville island, some of the best views in the city.
http://www.realtor.ca/propertyDetails.aspx?propert...
now heres something more along the lines of what some of you are looking at, not much, 1.4 million, smallish home w/ stucco. what you dont realize is the area this is in would be along the lines of a forest hill or rosedale in toronto multiplied by 2. the level of city services, schools and relative security you enjoy in this city are unparalleled in north america, it doesnt cost 1.4 million for nothing. people with money want ot live in these kinds of places.
http://www.realtor.ca/propertyDetails.aspx?propert...
this is similar to san fran, it enjoys benefits of a city that draws people in for specific reasons. toronto draws in people for jobs or school or family, rarely because of the lake!!! though it is beautiful from my office window watching planes take off from the island airport... but it doesnt compare to the lush landscape of the west coast. so long as you dont mind the rain... though i hear victoria is much much better in that regard, and ill bet homes are expensive there too!!! math always makes more sense!!!
Re: VANCOUVER BUBBLE?
ALOHA!!
Thanks for the insight. That $1.4MIL 5bed with 2500 sq ft looks as if it may be a "shotgun" floor plan, narrow and long. Yes, no doubt the views at Grandville Island are exceptional. I see management fees are $530/month, what would be the property tax or is there none in Canada?
Here is what you get for $1.5MIL about 15 minutes drive from where I live ... The Dolphin House at Kapoho, which is a very nice area. Note the property tax.
LINK: http://tinyurl.com/y5gc7j3
A favorite surf spot on my side of the island for $1.2MIL ...
LINK: http://tinyurl.com/y6jao5u
Here is one over on the Kona side where I have been surfing before in front of this house. You can't get closer to the surf than this. Just jump off your deck!
LINK: http://tinyurl.com/yyjvar6
Then there is this completely insane 9Bed/9Bath Mega Mansion fantasy house here on the Big Island! Way out of my price range and the property tax is a little on the high side for my taste!
LINK: http://tinyurl.com/yyoptzt
Re: VANCOUVER BUBBLE?
Everyone has their own vision of Valhala. Mine is 15,000 acres in the bluestem of the upland flint hills north of Wichita. I border the Koch family holdings. They own the really BIG acreage. Mine is just a puddle with a bunch of black steers.
No offense loanetter but I couldn't live in a 1,500 sq ft wooden crackerbox where the sun don't shine. Especially for $258.00 a square ft. The profit margins on this development must be HUGE. I guess the developers took at least a 40% fee for being so perspicacious. It was no doubt banked up front from an appraisal. Find out who owns the debt and perhaps we can offer 20 cents on the buck and make some real money on this concubine hideaway heaven.
Speaking of warlords, the NY crime family, Goldman Sachs, is even now ratting out the other members of the syndicate in hopes that the 'problem' will be viewed as systemic and not specific. Spreading the blame lessens the potential bite on any one family.
A question is raised. Is Goldman 'safe'? With so so many municipalities having to slash budgets, how do you defend against the backlash of a rusticated government employee? Do they prohibit travel to states with concealed carry laws? No doubt senior management is packing. I recommend the Glock 10mm.
Re: Semiahmoo, WA
2nd Ave,
Once a project of this caliber is successful, there will be a sea change in tourism, which I figure (modest expertise aside) will stimulate a demand for temporary rentals and this place is set up for that. Golf in two directions, copious places to park the yacht. Homes of this character would rent for more than the mortage for sure--at least $2000 a month but I'd guess $1500 for a weekend easy. Thinking of taking a dip? A Canadian family, say two families could buy one of the double suite homes and use up their 6 months south each. Our winters are blissfully short and we DO have more sunny days than Seattle. Hey--I'll find a tenant for yours if you don't mind cats (! mine).
Re: VANCOUVER BUBBLE?
Ross, To some of us size is not really the issue. Actually we have more sun here than Seattle by far and a more temperate outlook as well. Of course if you don't like things 'green' as in sustainable then this is not your ideal. If you want the whole enchilada it's on the hoof for a cool $25 Million and I can make the connection. Call me!
Cara 100 Ratings Changes
Good morning.
AET - Wedbush Initiates Coverage with a Neutral. PT = $34
POT - Upgraded to Hold @ Soleil. PT = $100
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Zacks on BRCM (Cara 100):
Bull of the Day
Broadcom Corp. (BRCM)
By: Zacks Equity Research
April 20, 2010
BRCM
The basic underlying theme to watch at Broadcom continues to be the progress with the launch of new, more highly integrated products at more advanced progress geometries. Order patterns have normalized after a dismal 2009 which saw inventory corrections by most OEMs.
The second half of 2009 witnessed a bit of recovery and we expect demand will improve significantly in 2010. Broadcom recently initiated a quarterly dividend of 8 cents per share, which translates to a dividend yield of 0.9%.
In view of the expected strong recovery in the semiconductor industry and Broadcom's market leadership position, we upgrade our rating to Outperform from Neutral.