[7:45am ET] The only thing too big to fail, apparently, is the US government because as long as it back-stops the egregious behavior of Humungous Bank & Broker (HB&B), the Fed will continue to print money, diluting the value of that money of course, but that’s not the Fed’s main concern. What would we do if the U.S. government failed?
In order to stay in control, government in the U.S., has recently taken control of the auto industry, the insurance industry and, soon to come, the healthcare industry. The number of industries that government in the U.S. has taken over now is phenomenal when you think of it, including the industrial-military complex they staff with troops that of course need weapons, house mortgage industry, the postal service, even schools, which is not a federal mandate. The list is endless.
Now more than half the states in the U.S. are insolvent, which is another take-over in the sense that without Federal aid (and strings attached), these state governments would have to shut down.
Should the U.S. government fail, I believe anarchy would be the next stage. I cannot fathom that; so I think the government, no matter how big, will not fail. It's just a matter of the consequences of not failing that we also have to consider.
I am thinking of this today a bit more than usual for two reasons.
As a rule, government cannot do anything as effectively or efficiently as a well-regulated private sector. Today Neil Barofsky, special inspector general for Treasury's financial sector rescue, aka sigTARP, has reported on the hidden costs to the taxpayer for bailing out HB&B and many of their biggest associates/clients. The paragraphs at the end under the “political distrust” heading should be re-read. The CNNMoney.com writer makes a good point but has omitted reference to financial system and capital market system distrust, which I suppose would be an endless discussion.
I am also thinking that the Fed, which printed this money, only to see the majority of it not go to bank lending where it was intended, but to buying up shares in the equity market, which Treasury thought was not such a bad thing as sales of shares at higher prices yield taxable profits, now must realize the jig is up. If mega billions of dollars sloshing around in the hands of speculators are not soon taken back, the Fed knows that commodity prices will get right out of control, with prices of consumables like oil soon bringing on price inflation. At that point, interest rates, which have been kept artificially low in order to help HB&B recover, will have to be lifted, and sad to say the Treasury, i.e., the US taxpayer, could not afford it. So, cut off the funding at the top and all those programs that are dependent on it, like the military, the state governments, and on and on, would shrivel up. Yes, the U.S. is one step away from anarchy if that top level funding is ever cut off.
So, given that the Fed now must go back to HB&B and pull in the money they have lent to speculators, the inevitable will happen. Capital market prices will fall. Remember, the choice is a market pull-back or anarchy.
I think Ben Bernanke let us know a week ago that the tightening was going to happen. I said at the time that if you trust the man for being good on his word you don’t want to be in the equity market.
A couple weeks ago, when the S&P was 950, I opined that a pull-back of 100 or 150 points would shatter the confidence of investors. But, 150 points shaved from 1100 puts the market back to 950, where it was on July 20, exactly 13 weeks ago. My how time flies!
My point is that investors would accept a re-set of just 13 weeks (the S&P back to 950) if that will help the Fed stave the inevitable interest rate rise. But, if it happens, are you protected? Do you have tight stops? Have you lined up your stock sales and put buys? If you haven’t done that by now, you have put your portfolio at risk.
Wealth management is foremost about risk management. I call it Job #1.
Comments
Mervyn King
Mervyn hits out at the banks and the Labour government.
(Edit :Its good to see someone come out fighting against HB&B it is Trafalgar Day after all)
"The Governor of the Bank of England last night called for big banks to be broken up, putting himself on a collision course with the Government.
Mervyn King was scathing about Labour's failure to reform the banking system and get to grips with spiralling debt.
He stunned ministers in a hard-hitting speech by suggesting their refusal to hive off the 'casino' investment arms from High Street banks could lead to a crisis 'even worse than the one we have experienced'.
And he warned that rapid increases in the national debt meant Britons would be paying to clear up the mess 'for a generation'."
http://tinyurl.com/yguqabq
Cara 100 Ratings Changes
Good morning.
PAYX - RBC Initiates Coverage with a Sector Perform
SNDK - PT Raised from $15 to $17 @ Auriga U.S.A. - Sell
UTX - PT Raised from $69 to $71 @ FBR Capital. Market Perform
------------------------
A short report on Hecla Mining (HL):
http://tinyurl.com/yl9h4em
Frontline
My favorite is their coverage of "Tankman" from several years ago.
This one is very good as well.
"The Warning"
HB&B have to be upset with this sort of coverage.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
My shorts weep for their pain this morning and bonuses.
http://www.pbs.org/wgbh/pages/frontline/tankman/
Above is the link to Tankman.
Kaimu, the Lady you sent flowers to on my behalf had her restaurant fail unfortunately. She, her daughter and countless pets are residing with me and life is very good. I thank you, Sir. We are doing well and making a very honest (albeit sometimes stressful) shot at a long term life together. One of the best things to enter my life recently due to Kaimu and Mr. Cara's blog. She kept the orchids for over a month because they were so beautiful. She was very impressed and grateful, especially after I told her the story of your generosity and how they got there.
Thnk Mr. Cara for this blog.
Apology for not making the URL's tiny.
Edited to fix a typo and add Kaimu's orchids caused the shedding of very many happy tears. Yes, a sappy happy personal post.
MBA Purchase Applications
Released on 10/21/2009 7:00:00 AM For wk10/16, 2009
Prior Actual
Purchase Index - W/W Change -5.0 % -7.6 %
Highlights
Housing data may be taking a turn for the worse. MBA's purchase application index has been moving backward the last two weeks, down a steep 7.6 percent in the Oct. 16 week. The unadjusted index, reflecting the Columbus Day holiday, fell 16.7 percent. The refinance index also fell in the week, down an adjusted 16.8 percent. Mortgage rates all moved higher including for 30-year fixed loans which rose 5 basis points to 5.07 percent. Existing home sales, to be released Friday, will offer the next look at the housing sector.
Re: MBA Purchase Applications
Thanks for posting these every day...very helpful in terms of the big picture
Futures rising
...
you there, off the dance floor!
Gold is getting a pounding this morning, modestly confounding my short oil long gold trade. As of this moment, down -9 to 1050.
Cara 100 Update
CSCO - Upgraded to Outperform @ Wedbush Morgan. PT Raised from $25 to $28
Galleon
Winding down hedge funds...how big are their funds? Will their selling have an effect on the market?
Retracement to 950 Seems OK, Unless . . .
A 15% correction is about what most people seem to expect. But there is just too much anger everywhere you turn. The anger is not just on blogs its also on the street. I hear people in supermarkets and malls express their anger. They now understand that all the legislation enacted since TARP was enacted without their consent, and in spite of the overt objection of the People. They have no idea how they will be forced to pay for TARP and the other programs that protect the financial class, but they do know they will be forced to do so. If the plunder of the middle class stopped with TARP and such other programs I would not be concerned about all the anger.
But now under health care reform 40 million or so working poor and their employers will be forced under the threat of financial and other penalties into a broken health care system. They know they are not being forced into the system for their benefit but primarily to bolster the profits of pharma and insurers. Furthermore, with health care "reform" the veil of how the middle class will be forced to pay has been drawn back and every option is just plain ugly.
In addition to all this Obama is being pressured to send a lot more troops into an Afgan war that the People now oppose.
So, my gut says if the government somehow controls middle class anger S&P 950 seems OK, but if the anger erupts into violence 950 won't hold.
Gulp?
http://www.usdebtclock.org/
Re: Frontline
JVS3,
I hope all works out the best for you and your restaurateur friend to whom you directed kaimu's gift of beautiful orchids.
And I thank you for pointing out the link to the Frontline piece on Brooksley Born:
http://www.pbs.org/wgbh/pages/frontline/warning/view/
I received this mail from someone else today:
Frontline profiled Ms. Born as follows:
In my view, a well-regulated capital market will always self-correct. We don’t need, nor do we want, the Interventionists to play a role. Our capital markets are being destroyed by those people. The nonsense must stop.
Civil servants like Brooksley Born, who are the good ones, must be allowed to do the job we need done and the rest will take care of itself.
Re: Frontline
More mail re the PBS documentary 'The Warning'.
Hi Bill: last night, I watched the PBS documentary 'The Warning'. Throughout the entire short hour (it could easily have been 3 hours), all I could think about was everything you've been saying over the past couple of years.
I have to say it was the first time that a television program had left me both disgusted and sick in the stomach at the same time.
When BROOKSLEY BORN said that she would not disclose her conversations with Greenspan, I immediately wondered what kind of threats she may have received, she being the astute lawyer). I would love to have been a fly on the wall.
The show left me with more questions than answers - though it did a great job of demonstrating how Greenspan was ultimately a failure as Fed chairman. I can't seem to answer whether the issue was hubris, power, incompetence, the protection of the elite friends of Greenspan/Rubin/Summers, or all of the above.
The bigger question is similar to the point Iacocca made: are we collectively too passive, complacent and/or powerless to affect this blatant corruption.
I find it truly frightening that the supposed 'greatest country on earth' is in such a mess - and Canada's biggest trading partner to boot.
Frontline certainly could offer Micheal Moore a lesson in film making too.
http://www.pbs.org/wgbh/pages/frontline/warning/
Re: you there, off the dance floor!
dave- Your long gold/short oil trade seems to have righted itself.
Fidelity prints the 52-wk high on DIA as 105.90?
Apparently the 105.90 occurred yesterday?
Cara 100 Update (Final)
CHRW - estimates reduced at Morgan Stanley through 2011. Company is seeing slower volume growth and weak pricing. Equal-weight rating.
KO - numbers boosted at Government Sachs. Shares of KO now seen reaching $62. Estimates also increased, as volume growth should accelerate in 2010, along with an improving economy. Buy rating.
SNDK - estimates raised at Government Sachs through 2010. Tight NAND supply should support prices. Buy rating and $24 price target.
UTX - price target raised at Barclays to $76 from $60. 2010 EPS estimate cut to $4.50 from $4.55, maintain 2009 at $4.10. Reiterate Overweight rating.
UTX - numbers boosted at Citigroup. Shares now seen reaching $76. Estimates also raised, to reflect better margin execution. Buy rating.
BZ Real
Re Brazilian real and Brazilian Gov't imposing a 2% tax on capital inflows...
Daily Pfennig view:
About a week ago or so, “Brazil's Central Banker had mentioned the need to raise interest rates 200 Basis Points (or 2%)... So... The Gov't sees the real responding to that comment, and thinks, "Oh my God, we've got a big problem when rates really do go up 2%, for this real will skyrocket! What's a Gov't to do? Ahhh, we'll impose a tax to offset the rate hikes, thus currency neutrality.”
Re: you there, off the dance floor!
2nd, and others
Why is the British Pound on such a moonshot? What happened in the oil market at 7:30am, which sank the Dollar? What happened to gold at 9am? A couple of positive banks earnings reports and all of a sudden the Bloomberg reporters start reading hyper-bullish scripts and the market zooms and the Dollar tanks? Is that what this is all about? Bloomberg people now have no problem shouting "Wow!"
What is happening is Stimulus 2.0, all from Washington. To be specific, from the Office of Nancy Pelosi. More intervention, and media is playing it up as much as they can.
The market is such a crock right now, the people who are manipulating it obviously have no self-respect.
dollar blues
Well the buck tanked hard this morning - down 0.5% in very little time - turning what was a negative open into one of those SPX spikes sure to dismay the poor, unfortunate short sellers. I'm sure they'll say it was something to do with Yahoo's earnings or some such, but for my money, it was the buck.
Let's just say I got stopped out pretty much across the board. :)
Re: you there, off the dance floor!
British pound sterling moving yesterday and today
10/21/2009 WSJ excerpt: TORONTO – “The pound was substantially stronger against the dollar Wednesday morning after bullish minutes from the Bank of England, while the euro was flat after relinquishing earlier gains as stock markets retreat.
The pound hit a high of $1.6592 overnight, its highest level since mid-September, according to EBS via CQG, after the minutes from the Bank of England's last meeting suggested it may not extend its £175 billion asset-purchase program next month, as had been widely expected.
"It wasn't really anything out of ordinary in the Bank of England minutes, but it was enough that it wasn't dovish and they're holding the line" on further asset purchases, said Steve Butler, director of foreign at Scotia Capital in Toronto.”
http://tinyurl.com/yfmzb7e
BTW, I was considering shorting the FXB yesterday, but didn't like the movement . . . something didn't seem right . . . now I understand.
Re: Mervyn King
Gordon Browns response to Mervyn King.
"Gordon Brown rebuffs Mervyn King's suggestion that banks need breaking up."
"Mr Brown told MPs that "the difference between having a retail and investment bank is not the cause of the problem."
The Prime Minister added that "the cause of the problem is that banks have been insufficiently regulated at a global level."
http://tinyurl.com/yzasmjm
FCX
looking good this morning as it earnings were up 77% and beat expectations
There is a solution tpart of the mess
FD I am huge supporter of Paul Volcker and put him on the same level as Brooksley Born. To all those idealists who figure a whole lot of additional regulations on top of the ones that aren't being enforced will help rid us of too big to fail and gross bankster pay, read on a solution is here but only one person is prepared to take it on:
When US major bank CEOs check the closet before going to bed, its not the Boogeyman they’re looking for, its former Treasury Chairman Paul Volker. Volker has been a very public critic of the banks’ recent practice of using depositor money for hedge fund-like activities and has gone so far as to call for the reinstatement of the Glass Steagall Act . As "the man who beat inflation", Mr Volker’s view, unlike that of Michael Moore’s, cannot be dismissed by the industry as leftist camp. The NY Times today presents a full profile of his recent lobbying efforts in "Volcker fails to sell a bank strategy" [to the White House]. This is speculation, but we suspect that President Obama is keeping Mr. Volcker in the back room as an open threat, as in ‘start playing ball or I’ll let him out of his cage’. (cynically, we suggest the possibility of opening the cage door just as the 2012 re-election campaign hits full throttle). In any event, it is perfectly clear because of the $140 billion the big investment banks intend to pay in bonuses, that they have dramatically underestimated populist rage at the financial bailout.
http://www.nytimes.com/2009/10/21/business/21volck...
Re: you there, off the dance floor!
"The market is such a crock right now, the people who are manipulating it obviously have no self-respect."
What's the matter Bill, you don't want to buy a company like CAT at 30 times 2010 estimated earnings!?!?
Moves From The Bullpen
Sold my ROM shares this morning.
This was one of 3 big mistakes I made a little over a year ago, the other 2 being UYM and UXI. As Hubert Humphrey might say, "I'm pleased as punch" to be out of ROM with a small profit.
My accounts are up over 39% Y-T-D, and I'm trying to protect profits. I want to short this market so badly, but haven't been able to pull the trigger as of yet.
This market is insane.....trying to keep in mind the sage advice of the late Hunter S. Thompson, "When the going gets weird, the weird turn pro".
Regards,
BH
Stopped out here too
AAPL is flying this morning which didn't help my QID from yesterday. S&P 1100 looks like the next subplot.
Re: dollar blues
That was a fast and sharp and deep reversal. The best strategy for a day trader it seems is to fade the pre-market bias. Scalp what you can and wait for the next set up.
I went long TZA after the sharp drop. Too early. The MAs on the five minute chart has provided good signals recently. As I write, the buy signal still hasn't fired. I may regret my lack of patience.
Re: Moves From The Bullpen
Thanks for the HST quote.
Like you say, and as Vad has advised, until the market finds true direction the best we can do is preserve capital and maybe hit a few singles here and there.
I'm just happy just to have an infield hit now and then.
Re: Frontline
ALOHA!!
JVS3-Happy to give back ...
All the best for the future.
Re: Mervyn King
Re: The Prime Minister added that "the cause of the problem is that banks have been insufficiently regulated at a global level."
If the prime ministers, presidents and their sycophants would lay off the regulators, the financial mess would not have happened. The market would have corrected on its own. But no, that wasn't good enough for people like Gordon Brown, Barney Frank, and the rest. Now, not only do they refuse to be held accountable, they are rubbing the mess in the faces of the people they stopped from doing the job we needed in the first place.
Gordon Brown is a sick man. Alan Greenspan is another. These people, and their crowd, refuse to focus on the problem, which is, and has always been, conflict of interest. It has run rampant and the regulators are being stopped from putting an end to it.
Meanwhile, we are being forced to trade by the day, which is ridiculous.
Re: you there, off the dance floor!
Well, the EIA petroleum status report, while appearing to the innocent eye as a humdrum, nothing-happened-here sort of affair, resulted in an astonishing spike in oil. And here I'd been told that my long gold short oil trade had righted itself. JINX!!
Hopefully it will re-right itself once Goldman is done selling off their oil equities. This place really is a casino.
Econoday report:
Crude oil inventories: prior +0.4M barrels, actual +1.3M barrels
EIA Petroleum Status Report
Released on 10/21/2009 10:30:00 AM For wk10/16, 2009
Prior Actual
Crude oil inventories (weekly change) 0.4 M barrels 1.3 M barrels
A different angle to the health care reform issue
http://tiny.cc/sgAQS
"If you live in New York State and don't have health insurance but earn too much money to qualify for subsidized state insurance, you can always reduce your costs sharply by moving to Connecticut. There, you'll pay $7,750 a year for a family policy that would cost you $12,250 in New York State.
If you are in the same boat in New Jersey, you can decamp next door to Pennsylvania and reduce your insurance bite from nearly $10,500 a year for family coverage to $6,500. Or, if you prefer a bare-bones high deductible policy, you can pay a mere $800 a year in Pennsylvania for your family coverage.
All of this talk of health reform in Washington has created the illusion that we have a single health care system in America with prices that are roughly similar once adjusted for local costs of living. But in fact we have 50 different health care systems. Our states, through their insurance commissioners and legislatures, exercise enormous influence over the shape of health insurance by mandating to residents and businesses what kind of coverage they must have, and to insurance companies what kind of illnesses and therapies they must cover."
This issue has more thorns than a hedge of rose bushes.
Re: you there, off the dance floor!
It did right itself. For a moment. Can't be held responsible for what happens 5 minutes later, it's a moving ship ;)
Parabolic Rise
Is this in the cards? Could it hit 1120 today or tomorrow? That would probably be a very bad thing for the market in the short term...Look at the Shanghai Composite as a guide for what happens after the parabolic rise.
Gasoline - <UGA>
The etf for Gasoline is . Its chart appears to track the Gasoline Index, $GASO, fairly well except that the etf seems now to be at a premium relative to the Index. (See chart attachment). If the $US falls, then commodities, including Oil and Gasoline should break out; so, this premium just might indicate certain buyers foreknowledge. OTH, if the $Dollar rises, then this could indicate a “bull trap” in UGA.
Here’s some notes:
- I’ve overlayed OBV (wkly) on top of the RSI(7); not orthodox, but who cares? It is usually a good confirmation on RSI signals, I think. Both are still rising, BUT the RSI (in pink) is divergent to price.
- Note the “cup and handle” on the Gasoline Index ($GASO); but no break out yet of handle.
- Note the break out up already on UGA
Caution: Watch $Dollar direction for more than just a few minutes and form your own opinions (please share).
spot
Re: you there, off the dance floor!
Relax Dave I think you have a politically-viable trade. We had a chief poohbah in Saudi Arabia come on the news yesterday saying oil at $80 was too high and would hurt the Great Reflation. They'll see to it that it's not going above $80, likely by agreement with the US gov, which after all helps keep the Saudi wife-whippers in power. The Saudis also hate the Iranians and a cap on oil prices will spank the mad mullahs in Tehran, so it's a double win. I also suspect the Saudi King has quite a bit of gold on deposit at GS, so that ought to keep that Wall St. shark in line.
Re: Mervyn King
As you say Bill we are forced to trade short term, just sold AMAG for $37.45 I bought yesterday for $36. I just dont feel comfortable holding stocks at these rarefied levels,using tight stops is a must.
BGZ
Bought at $18.85
Re: you there, off the dance floor!
teamonfuego
Re: "What's the matter Bill, you don't want to buy a company like CAT at 30 times 2010 estimated earnings!?!?"
The average PE for CAT is in the low teens, and it seldom goes above 20. But there is a lot more to this than meets the eye. Independent traders are confounded because prices are moving on pure b.s. Fourteen weeks ago (7/14), when Value Line created its report on CAT, the price was $31.93. Today the price was $59.81 when I last checked. That's a gain of +87.3% in a quarter. This week VL will update their CAT report. Interestingly, in their last report, the analyst had just downgraded the technical outlook rating to a "5" (lowest) and a couple weeks earlier had downgraded CAT's fundamental timeliness rating to a "5" (lowest). He wrote in the report published July 24: "We advise investors to stay on the sideline... we are cautiously optimistic quarterly sales will soon hit bottom... the company is slashing costs and endeavoring to preserve cash... reducing production runs, shortening work weeks, laying off workers, (etc)..."
On that basis, and I happen to believe that Value Line has fairly good analysts and a good track record over the years, there was no reason for the recent moonshot in the CAT price. Wall St analysts agreed with the VL report. Thirteen weeks ago, 14 rated the company a Hold, 4 a Buy/Strong Buy and 5 an Underperform/Sell. The overall rating was about 3 on a scale of 5. Last week it was 2.8 (a very weak hold).
So, what's happening here? Yesterday at the open, the stock gapped from 58 (over-bought) to a nose-bleeding height of 61.
Why? The sales guidance for 2009 is $32-33 billion, but even VL had it estimated at $35 bil in their 7/24 report. And sales for 2008 were $51.234 billion. Earnings were a surprise at $0.64, but they were also $1.39 in the comparable year earlier quarter.
Right at the pre-market peak in hype, Reuters ran a headline story: "Will cash-rich CAT bankroll cash-poor suppliers?" Do you believe that garbage? CAT has been desperately trying to conserve cash, and their balance sheet is rated only A (not A+ or A++) and the Safety rating is only a "3" because the cash on hand equals only the accounts payable. In fact the company's quick assets (cash and receivables -- the one's they have difficulty collecting) are $20 bil and the current liabilities are $22 bil. So CAT is hardly a cash-rich company, and their sales have plummeted because the economy is in crisis and their distributors are going out of business left, right and center.
So, what the heck is going on here? This is all about Stimulus 2.0. If you want to buy the risk, go ahead. As for CAT and others like it, I'll pass thank you.
Re: you there, off the dance floor!
Bill - I hope you noted my sarcasm. That is one inflated stock right there...
Re: BGZ
Doubled down at $18.94.
Re: you there, off the dance floor!
teamonfuego,
The sarcasm was obvious. I just took the opportunity to explain why you, me and everybody ought to be conscious of what's happening here.
Govt must think they can take control of everything. Maybe short term; in the end it's a disaster.
Today is a gift
To sell into strength and go take a vacation. Or if you are me, add puts or short ETF calls.
Unlike a wall st trader I don't have to chase prices in fear of my wall st job and tax payer bonus.
Reporting from akamai conference via iPhone
Dollar Down, Equities Down?
Could today be the day?
GS is a tell if there ever was one...down almost $2 now.
FD: Long BGZ and SPY Puts to offset SPY. 40% cash otherwise...
Re: you there, off the dance floor!
THE PLAN
- Keep rates low ...to...
- Get people back into homes ...and...
- Allow debt to be refinanced cheaply...and...
- If nobody will buy new debt (ie mortgages) become the lender of last resort...
- and if the dollar falls ...so be it...
- Because as the world's biggest landlord the Fed and bank protector must never stop the game.
Does anyone have a single thing that suggests this is not THE PLAN?
BTW, when the market is allowed to drop, it wont be because a change in THE PLAN but it will be to get political support ready for QE 2.0, Housing Stimulus 2.0, Bailouts 2.0!
Cats, German Shepherds, and This Market
Being a Bear is kind of like being this cat in front of a pack of Pomo Pumped Banksta's trying to reach critical mass and get retail to pour back into this thing we call a market.
This may not be "the top" but it certainly could be.
The Fib and Horizontal Resistances are some of the strongest yet presented to this advance.
The reverse holds true....is these lines are broken then retail may very well rush in to stage the final debacle.
http://oahutrading.blogspot.com/2009/10/some-old-f...
Stocks rise as profits at banks provide boost
http://bit.ly/2GKsUX
where is my taxpayer cut?
Re: you there, off the dance floor!
AND...too let the cash pumped HBB buy up more companies on the cheap!
Matt Taibbi on naked short-selling
One of the biggest complaints of people who care about these things, like David Patch, is about the naked short-selling. Unchecked, this problem has been rampant in equity markets forever, always sucking the capital out of start-up and early-stage public companies that need that capital, but more recently has focused on large cap companies and even gold. Writing for Rolling Stone this month, Matt Taibbi lays out a story you need to understand.
http://www.rollingstone.com/politics/story/3048151...
The reprobates behind these scams are aware that technology exists today for real-time trading, clearing and settlement. But they know that Humungous Bank & Broker (HB&B) are purposefully allowing a system of failed trades, so the problem is escalating.
From penny stocks to Bear Stearns and Lehman Brothers, what's next in the progression of increasingly larger scams? Obviously the Fed doesn't care because they are doing the same by creating an asset out of air.
Magical Thinking
What is the contemporary 'conundrum'? I think there are plenty...
- Can you have long-term asset inflation (via liquidity policy) without 'cost of living' inflation?
- At what point does 'social mood' become openly hostile to those profiteering at public expense (privatization of profits, socialization of risk)?
- In a world of 'competitive devaluation' how do US economic competitors accept the constant dollar devaluation (unless they too are recycling into US equities)?
- Where has all the bad debt gone? Gone to John Q. Public via FNM, FRE, AIG, GM, and MBS buying by the Fed?
Re: Matt Taibbi on naked short-selling
Cohesive article by Taibbi leaves me thinking GS now can bring any NYSE listed bluechip corp to its knees with naked shorts and SEC counter attack prevention. CIT is a sitting duck. Only hope is for a backlash at the midterm election against the GS congressional kingpins.
dollar and spx today
So what I'm seeing today is basically a commodity-driven rally, with the rest of the market barely above water. With the buck down 0.85%, the best they got out of it was SPX +5 to 1097. Semiconductors and homebuilders are even down on the day.
The buck broke through the year low and continued down, yet at this point the only things to respond seriously is PM and oil and the related commodity stocks.
Will there come a time when the buck falls, and SPX falls along with it?
Re: dollar and spx today
Hate to sound like a broken record but in 1987 oct. Both fell like a knife through butter.
What did I do with The Money Market I closed ?
I'm breaking ground on a lot at one of the highest elevations in NC... Passive and standard solar will be incorporated in the house design... I can ride my bike to town... My dog will be able to walk with me without getting shot or run-over.. and the waters in the lakes are clean... I will do all the work after the foundation and framer crews are done... I will do remodeling and repair work for a living, and sleep well at night...
Dollar and Dow - "Daily Show" summed it pretty well
Here is a link to the "DAily Show" when it commented on Dow hitting 10,000 and its relationship to the Dollar:
http://www.thedailyshow.com/watch/thu-october-15-2...
Beige book
WASHINGTON (MarketWatch) -- Small and scattered improvements are taking place in the economy throughout the country, according to the latest Federal Reserve 'beige book' report released on Wednesday. Leading the way are the residential real estate market and the manufacturing sector, the report said. Commercial real estate was the weakest sector. Banking continued to falter, with weak loan demand and eroding credit quality. Most districts reported little or no increase to either wage or prices pressures and there were even reports of downward price pressures
Re: What did I do with The Money Market I closed ?
Aloha and Congratulations! Time to enjoy life and deal in real things.Looking to do the same likely in Wa state. Thanks for all you have taught me just by participating here.
sold some SRS puts
I forgot the major insight I got at the beginning of 2009 about making money in the market: sell hope (options)! Trading with stops turned out not to be an easy way of making money, since being stopped out on negative trades takes a big chunk of money from the positive trades, and the net effect over a month is not necessarily positive. At the same time, selling options for 5%-10% premium per month, every month, will surely add up. So I just sold 5 contracts of November SRS $9 puts. Starting it small so that I can then sell more contracts if SRS goes below $9.
Re: What did I do with The Money Market I closed ?
Spent some Winter time in some of the lower elevations of those mountains - brrrrrrr, but loved it anyway.
If I planned to do what you are doing, I would buy some snow tire studs to hammer into my bicycle tires and buy a fur coat for my dog.
Good luck!
spot
XLE volume spike
I think HB&B just dumped all their XLE at the high today. Look at the volume spike at 2:00 PM ET.
More Beige book
Highlights
The Fed's Beige Book prepared for the upcoming November 3-4 FOMC policy meeting reported most Districts "indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels." Gains in economic activity generally outnumber declines. Leading the improvement were more positive reports in residential real estate and manufacturing. Consumer spending and nonfinancial services were mixed. Commercial real estate was reported to be one of the weakest sectors.
Looking ahead for expectations for holiday sales, reports were mixed.
"Chicago anticipated improved sales, while Philadelphia retailers expected consumers to limit spending. However, Third District merchants also noted that store traffic increased recently. Atlanta reported that two-thirds of contacts expected flat or declining sales over the next three months."
Labor market conditions were generally reported as weak or mixed across Fed Districts. While employment activity is soft, some Districts reports a slowdown in layoffs and others indicated signs of improvement in contract and temporary employment. Wage and price pressures were generally described as subdued.
Inflation is subdued other than for some commodities.
"Prices followed a similar pattern to wages, with reports of little significant pressure on either input or output prices, although moderate increases were observed for materials prices."
Overall, the Fed's Beige Book reports a sluggish economy that is slowly moving along recovery. Sectors are mixed with the consumer sector soft but stable. Housing is improving from low levels of activity but commercial real estate appears to be in decline. The biggest positive is the moderate rebound in manufacturing. With few signs of inflation, the Fed is able to maintain its current policy stance-very low interest rates-for some time. Today's Beige Book does little to change the view that the economy is in a slow recovery.
HBB's Good Ol' Boys In The Senate
Just received this message from the Audit The Fed Coalition:
Take Action to Defend a Legitimate Audit
Dear Supporter of Transparency,
On Tuesday, Senators Jeff Merkley (D-OR) and Bob Corker (R-TN) introduced "The Federal Reserve Accountability Act," an attempt to derail HR 1207/S 604 by passing a bill that prevents a full audit and full transparency from America's secretive central bank.
While language in this bill would permit a limited audit of the Fed's actions in the Troubled Asset Relief Program (TARP) and similar high profile bailouts, it would not allow an audit to review the Fed's inflation of the money supply or its agreements with foreign central banks, among other shortcomings.
Additionally, the names of the institutions who received the funds would not be available until one year after each "emergency" program ended, which is nowhere in sight.
Click here to get the contact information for your senators and urge them not to support this attempt at stopping our historic effort to force the Fed into a full scale audit.
Seventy-five percent of the American people, over two thirds of the House of Representatives, and over a quarter of the Senate support Ron Paul's Audit the Fed legislation.
With those historic levels of support, there is no excuse for settling for anything less than a full Audit the Fed bill. Anything less is merely an attempt to stop our efforts as we get closer to passage of a real bill.
Let your senators know you expect them to support the American people's demand for full transparency, not some watered down measure designed to stop a full audit! Click here to take action!
Sincerely,
The Audit the Fed Coalition
took profit on some ECU.TO
Finally, ECU.TO started moving and gave me a decent enough profit so as to "book it." I bought 4000 shares in March 09 at CAD$0.5 and then added 2000 shares in June 09 at CAD$0.62. Now, I sold 2000 at CAD$0.84. Will sell 2000 more shares at CAD$1 and then 2000 more at CAD$1.50 or if ECU drops below CAD$1 after rising above it.
Commodity ETFs
Tracking of all commodity ETFs on the market: http://nexalogic.com/commodity.html
Leading the way this year YTD... Lead (LD). Who would have guessed. Forget Lithium, the 'in' thing was lead.
EVOLVING GOLD
Evolving Gold Intersects 36.6 meters at 4.11 gpt Au included in 175.3 Meters of 1.86 gpt Gold at Rattlesnake Hills
http://www.newswire.ca/en/releases/archive/October...
Mixing an ERY/FXP/TYP/TZA cocktail
10.15/8.10/11.13/11.09
Bottoms up!
UAUA
Just noticed that UAUA is getting crushed today, the day after the stock jumped up on the earnings announcement. I think those that particpated in the recent share offering at $7.24 must have been unloading into yesterdays actions. Shares traded above $8 yesterday and are now down in the mid-$6 range! Other airlines getting crushed today too.
Re: What did I do with The Money Market I closed ?
Hi, Justl, Thank you... my cousin and her husband ( in Alaska ) are restoring a home on Bainbridge Island ( Wash )... She tells me how beautiful the area is... I will get to visit them one day... Good Luck !
picked up a lot of SRS for a short day trade at $9.43
There is a clear intraday support for SRS at $9.40, so I'll take this position off if that support is broken.
Tech candidates for shorting?
RIMM, INTC?
Any other recommendations of weak stocks/charts? I need to be prepared.
Dr. Harold Urschel, Jr. appointed
to ASTM Board of Directors, yesterday...
Re: dollar blues
Closed my TZA at a small profit. As I suspected, my entry was early and I could have gotten a bigger piece of the recovery in later trading. But I'll take the bunt.
Watching the short-term charts for next trade.
Update: Oooops! ;(
Bernanke Guilty of Coercion and Market Manipulation
I posted this one last night but noticed no one yet commented on the content of the article, Any chance any of the names mentioned in the article will ever be charged by US court?? Just Wondering.. Please read below:
Bernanke Guilty of Coercion and Market Manipulation
by Mike Shedlock
In April Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis I made the case that BAC chairman Lewis was guilty of fraud and Paulson was guilty of coercion in regards to the shotgun wedding between Bank of America and Merrill Lynch.
The case against Bernanke was weaker because of Bernanke's selective memory. When confronted by Congress with his role in this mess, Bernanke defense was that he did not remember what he said while Paulson called Bank of America a "Turn in the Punchbowl".
Please see Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl" for details.
In July, Paulson attempted to defend himself, and in doing so Paulson Admitted Coercion. I asked again "Where are the Indictments?"
Today, I am asking the same thing again.
Please consider Bank of America Told Aid May Help Stock, E-Mail Shows.
Bank of America Corp. signed off on its government-assisted purchase of Merrill Lynch & Co. after U.S. regulators said the deal might boost the shares, e-mails from two executives showed. Instead, the stock collapsed.
"The chairman of the Federal Reserve indicated it would be structured in a manner such that BAC stock should go up when announced," Chief Financial Officer Joe Price said in a Dec. 29 e-mail to executives of the Charlotte, North Carolina-based bank, including Chief Executive Officer Kenneth D. Lewis.
The e-mails are among more than 1,000 pages of documents sent last week to the House Oversight Committee. Bloomberg News was provided a portion of what the committee received in its investigation of the Merrill acquisition. A hearing is scheduled Oct. 22 at which two Bank of America directors and former General Counsel Timothy Mayopoulos are to appear.
"The strategic wisdom of the Bank of America-Merrill Lynch deal is now obvious to everyone," bank spokesman Lawrence Di Rita said in an interview. "These documents and e-mails reveal the good faith deliberations among those who understood that first."
Bank of America provided documents to the committee Oct. 16 after agreeing to forego its right to keep discussions with its lawyers confidential. The bank didn't make the documents public.
The documents include "talking points" prepared by the bank's law firm to be used by Lewis for a conversation in late December with Paulson about Merrill's worsening finances. The memo and Price's notes suggest the bank consider lowering the price for Merrill if Bank of America couldn't cancel the transaction. The deal took effect Jan. 1 without any repricing.
Other documents citing internal bank discussions note that incoming Treasury Secretary Timothy Geithner, then president of the Fed Bank of New York, and incoming National Economic Council Director Lawrence Summers endorsed providing guarantees to Bank of America. Geithner and Summers took office after President Barack Obama was inaugurated on Jan. 20.
Taxpayers 'Foot Bill'
"The Bank of America-Merrill Lynch merger was the outcome of a collaborative effort orchestrated by Ken Lewis, Henry Paulson, Ben Bernanke, Timothy Geithner and Larry Summers," said Kurt Bardella, spokesman for U.S. Representative Darrell Issa, ranking Republican member of the panel. "As a result of this collaboration, the taxpayers ended up footing the bill so Bank of America didn't have to absorb Merrill Lynch's losses."
http://globaleconomicanalysis.blogspot.com
Re: picked up a lot of SRS for a short day trade at $9.43
Whoa!.... Hope you held till 3.20pm! Was thinking of adding and following you in. My basis is 9.36. Missed the lift off.
off SRS at $9.53
for a gain of 0.25% in my portfolio. Completely erased the "injury" from Monday's FAZ trade and left me with "net gain" of 0.12% in my portfolio. I wish every 30 minute trade would end that way...
Re: Tech candidates for shorting?
IBM?
Probably the wrong move
but i'm going to hold on to my shorts/puts.
Re: picked up a lot of SRS for a short day trade at $9.43
photogray, I held onto my SRS when it dipped down to $9.39 only because on Monday, when I sold my FAZ in a similar situation, it zoomed up right away. So I figured I'll give SRS 5 minutes to make sure it stays below $9.40 before actually taking off my position. That was a risky business, of course, since in 5 minutes it could have dropped down vertically to $9.30. But I had the feeling that HB&B only wanted to play a cheap trick on me and didn't really want to take SRS down to new lows and keep it there.
very thoughtful speech by David Einhorn on GOLD, etc.
http://themessthatgreenspanmade.blogspot.com/
today's lead story. (BTW, this blog has been going for YEARS. I love the title.) - Jock
PS: Einhorn is BRILLIANT. He shorted Lehman from way long ago to the end. the link leads you to the full speech, which is definitely worth reading.
I think every smart, rich person in the world is quietly moving into gold.
distribution phase in the market?
As Bill was pointing out for a while now, when the market gaps high and then steadily sells down -- we have a distribution mind set at HB&B. Today is yet another example of it, and when we get such examples on most days over the past few weeks, that may add up to a long-term market top, as a new leg up is unlikely when HB&B is firmly entrenched in a distributional mind set.
Let me guess
What happened at 3:15 today? Was it the Obama speech that he was taking over small banks and credit unions with assets over $1 billion so they could do the job his henchmen ripped away from CIT? Or, maybe it was the nth time today that Nancy Pelosi was interviewed and/or her prior interviews were repeated, and that broke the mirror on the wall?
Red close today...
... after such strong opening is as bearish sign as it gets. My morning comment on that:
[09:55] {Threei} my working assumption at this point is:
it's not a rally anymore,
it's last shakeouts before plunging.
Market won't make it too easy for shorts. Thus these sharp spikes, gaps up etc - but we are getting there. Volume increase again, and interestingly enough - sharp intraday volume increase when the plunge started.
Re: Let me guess
Or maybe it could be this article on Bloomberg: Treasury Said to Set Pay Cuts for Aid Recipients’ Executives
http://www.bloomberg.com/apps/news?pid=email_en&si...
Re: Let me guess
U.S. to Order Steep Pay Cuts at Firms That Got Most Aid
Responding to the growing furor over the paychecks of
executives at companies that received billions of dollars in
federal bailouts, the Obama administration will order the
companies that received the most aid to deeply slash the
compensation to their highest paid executives, an official
involved in the decision said on Wednesday.
SPY Volume
Very heavy selling volume in SPY
Hey NYU
Here is your down day with a dive in the dollar...congrats on the call!
Re: Let me guess
15:24 EDT WFC theflyonthewall.com: Correction: Wells Fargo downgraded to Sell from Neutral at Rochdale
Rochdale analyst Dick Bove downgraded shares of Wells Fargo to Sell from Neutral following the company’s Q3 results. Shares were not downgraded to Hold as previously reported. :theflyonthewall.com
Re: Hey NYU
Thx. It is my belief we are only watching the batting practice. I have no downside targets or advice. This isn't about Elliott wave which I have been reading either.
I keep looking at the 1987 chart vs now. Looks like the same song but only remixed. And the underlying fundamentals (housing, credit, consumer, unemployment, geo political, etc) are worse now than in 87.
And afteR I curiously charted the usd from 87 vs now. I just realized there may be no usd strength giving the warning. It may not be the same song but it could rhyme.
Re: Let me guess
I'm not buying this as the cause. No disrespect to Dick Bove but this guy was calling Citigroup a strong buy at $30 a share and keep his buy all the way down.
I think it's just people selling and taking profits. Today's action was very negative in my opinion and could continue.
Goldman Sachs Quietly Pulls Out of Commodities
http://tinyurl.com/yk6rsjj
There is a special place for this man when he passses on!
http://tinyurl.com/yfvvlf6
Re: Mixing an ERY/FXP/TYP/TZA cocktail
Aloha 2nd, I had my fingers in the olive jar at 21.58QID to add to your cocktail. I was waiting for a little lower price so I could set a stop close to today's low after purchase with just a little spread.
Instead QID took off and I bought(1/2 of planned) just above the the opening day 30 minute OR high21.81. Now I have to decide where I put the stop up here. And at what price and when/if I buy 1/2 position more.
My plan had been to buy full position at close when they pumped up the Q's and set stop just below today's low. Too bad the market didn't play along. I did identify my fear of lost capitol waiting to buy closer to low of the day(21.24) when QID was around 21.51and my fear of loss of money I could have made when I pulled the trigger and used the 30 minute OR high as justification even though it was end of day.
I understand I need to work on both still just learning.
With STOP LOSS I can afford the education,it's cheaper than my daughter's New York tuition!
Re: Let me guess
This just might be part of it....
U.S. Stocks Erase Gains in Final Hour as Bove Cuts Wells Fargo http://bit.ly/1DelpN
Pay Czar to Slash Comp at 7 firms? Where is #8? Govt Sachs?
http://bit.ly/4egc03
if I recall they had to bail out AIG to pay GS as the counterparty. So you need to chalk that up to them too.
Apologies on getting the unemployment data timing wrong. it is tomorrow. Why do i sense the sell off had nothing to do with Obama, Healthcare, or anything the news was reporting. Just complete exhaustion. No more suckers to buy.
And let's see if these crooks simply push out the pay and hide it with creative finance.
Re: Let me guess
Yup, I think that did it, the man has spoken live on FOX TV, see link below:
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=2...
Prosecutor Preet Bharara Is The New Wall Street Nightmare
Could this be a ray of some social equity returning to markets?
http://www.businessinsider.com/wall-street-should-...
Re: There is a special place for this man when he passses on!
How come this man Hank Paulson is not being tried for treason and passing insider information to Goldman Sachs???, even worse, how come GS top executives and top traders are not being tried for INSIDER TRADING acting on the same info that were passed to them by this man. Can we all or at least someone speak up and pursue this matter legally. I just wonder!!!!!
Re: Hey NYU
I think you might be on to something as it seems like from what I read/listen to people are watching to see firmness in the dollar before shorting/selling and this might be the wrong thing to do. I mentioned in the past that the markets and dollar can go higher and the inverse is true.
Also, I think everyone and their sister is expecting a 3% to 5% pullback and people could be unpleasantly surprised if it turns out to be more than that...
Re: There is a special place for this man when he passses on!
Thanks Bev. Your posts are always worth clicking into. On this one I drilled down a little deeper. Heres a quote from a Goldman Sacks vp in England from a discussion on ethics and compensation........Lord Griffiths said the general public should “tolerate the inequality as a way to achieve greater prosperity for all”
from http://preview.tinyurl.com/yf49d77
Re: Mixing an ERY/FXP/TYP/TZA cocktail/ OFF after-hours
justlearning-
(a) I'm taking it all off the table after hours. I spent a few minutes trying to game the overnight market, and it's 50/50 whether it continues down tomorrow, or gets bought like every other sell-off (Vad's crystal ball notwithstanding).
(b) To be honest, if I had been watching the market in the last hour, I would probably have sold even sooner.
(c) As a side note, I considered posting "Red close" earlier today, around 11 am PDT. But (i) I couldn't come up with a good reason apart from sixth sense, and (ii) I didn't want to risk the embarrassment of being wrong. Next time I'll go back to my early posting days and throw it out there anyway. (I did, however, put my money where my sixth sense was, and post the ultrashort buys. Glad you reached for the olive jar. Martini it is!)
Re: Mixing an ERY/FXP/TYP/TZA cocktail/ OFF after-hours
"As a side note, I considered posting "Red close" earlier today, around 11 am PDT. But (i) I couldn't come up with a good reason apart from sixth sense"
This is much like my post a while ago about hearing some guy on CNBC on March 6th I think saying he met with his whole team regarding what could possibly be a positive in the market and he said they couldn't come up with any so they were shorting at will...that was my signal to buy WFC and USB at $8ish/each for a trade. I'm not so sure the bullishness is quite as widespread now but there are certainly few if any reasons to be bearish...
Re: Mixing an ERY/FXP/TYP/TZA cocktail/ OFF after-hours
I'm taking SPX weakness on dollar weakness as a sign of a trend change. This, along with the selling of many of the "good earnings reports" news this week, I'm more into holding my shorts for longer periods of time. I re-added my shorts once I saw that the dollar weakness did not result in a sustainable SPX rally.
Re: Mixing an ERY/FXP/TYP/TZA cocktail/ OFF after-hours
tof- We had exactly three days to buy WFC with an 8-handle in March. But three days is a long time. I'm going to be quick to jump back into the short side on continuing weakness.
Paulson - AIG
Hi Everyone,
Followed the blog for several years and then basically turned off the computer for about a year because of my disgust about the bailout scam. Started reading the blog again after Dow 10000 to see what the community is collaboratively thinking.
Beg my indulgence but when the bailout was happening, Does anyone know how much, if any, scrutiny was directed at Paulson for throwing so much money at AIG only to have it redirect to Goldman?
The markets will continue to cultivate class warfare until, as many have pointed out here - Bad business is allowed to fail and natural market forces are allowed to prevail. Greenspan was a jackass and the rest of the world was foolish for putting him on a pedastool. Hard work and real assets create wealth which pushes investment and innovation.
Bill Gates continues to be my hero. Although his style was take no prisoners and he "borrowed" the windows/GUI concept, there was no lack of hard work. Then after creating a great corporation and reaping the monetary benefits, he basically setup a scenario to promote mankind amongst the most needy and deserving by giving it all away.
A true robin hood.
Wednesday's worse, Thursday's also sad>>Yet another bear trap?
Let's say you're a bear, but you've been patient, waiting for a clear trend reversal.
You spent the first 6 hours of the trading day smiling to yourself, watching bears get trampled yet again.
Suddenly, the indexes start dropping (seemingly) straight down. Well, so what? You expected this. Almost positive the dip-buyers will turn it around. Yeah, there it is, around 1230 pm (PDT), the indexes start turning up, right on schedule. 2-3 minutes later, the selling resumes on even higher volume. You stop patting yourself on the back and start rubbing your forehead. Here it is, the sell-off, and you're a schmuck for sitting there with analysis paralysis? No way! You reach for the mouse and start clicking away. FXP! It jumps higher as soon as you buy it! Then buy some more! TZA! TYP! ERY! They're all moving higher. You're caught up in the emotions of the closing minutes. Damn the torpedos, full speed ahead! And it turns out you're right! They all close at the high of the day. After hours, even higher! ALL IN (baby)!
That would be one way to trap the remaining bears. That's how I would design it.
Thursday morning, gap up to 1100 and never look back...
Re: Wednesay's worse, Thursday's all so sad>>Yet another ...
That's so evilishly-looking, it almost feels right, lol.
My bet though: it's not the way it's going to develop. Nearest days won't be easy for bears still, "nerve-wrecking" is more like it... but as trend establishes itself trading on a short side with occasional bounces will become business as usual. That's going to be that same my favorite part of the trend - clearly defined and readable. I just don't think bears are going to see the retest of March lows as many seem to expect. Nothing earth-shuttering and history-making, just your garden variety downtrend for a while, erasing the excesses of the uptrend, getting rid of overconfident bulls...
Re: Wednesday's worse, Thursday's all so sad>>Yet another ...
"That's so evilishly-looking, it almost feels right, lol.
My bet though: it's not the way it's going to develop."
What happened to 'Welcome to the dark side?'
Re: Wednesay's worse, Thursday's all so sad>>Yet another ...
The other possibility: tomorrow opens up slightly higher and stays that way. Bears see that the dip buyers are back for a push to 1,120, the mark everyone has set their eyes on. Then the late afternoon rolls around and another precipitous drop comes in. The bears on the sideline are left there, having expected the rise to 1,120. All of a sudden the market is down 4% from the highs and half way to the near term bottom.
Like Vad I agree that the downturn will not be great but it will be larger than the prior 3 to 5% dips. I'm thinking somewhere around 8 to 12%. If you look at the pullback in July 1975, it went straight down for about 15 trading days after trending up for 9 months or so. Bears most likely covered early and bulls most likely bought the dips too early, confusing both sides of the trade.
Re: Wednesday's worse, Thursday's all so sad>>Yet another ...
"What happened to 'Welcome to the dark side?'"
IMO, dark side becomes darker, or double-dark if you will: this time around the darkness is in doing logical thing after months and months of being illogical and training everyone to accept it as a new logic. Now, THAT'S evilish!
As for the mechanics, I like TOF's scenario very much. It's perfectly aligned with the concept of market trying to move with as few participants on board as possible.
Thursday earnings reports
Earnings reports scheduled for Thursday include:
Bristol-Myers Squibb (BMY), Credit Suisse (CS), Delta Air Lines (DAL), Dow Chemical (DOW), Fifth Third Bancorp (FITB), Hershey (HSY), JetBlue Airways (JBLU), McDonalds's (MCD), 3M Corp. (MMM), Merck & Co. (MRK), Occidental Petroleum (OXY), Phillip Morris (PM), Potash (POT), Raytheon (RTN), Schering-Plough (SGP), SunTrust (STI), AT&T (T), The Travelers Companies (TRV), Union Pacific (UNP), United Parcel Service (UPS), and Xerox (XRX) with American Express (AXP), Amazon.com (AMZN), Burlington Northern Santa Fe (BNI) and Juniper Networks (JNPR) after the bell.
"Volcker’s Voice Fails to Sell a Bank Strategy" There's no hope
If we cannot turn the top leader and his staff, when we have Volker on a speed dial to the President, the only way is a full out work stoppage type revolt.
"So Mr. Volcker scoffs at the reports that he is losing clout. “I did not have influence to start with,” he said."
EXCERPT:
Mr. Volcker’s proposal would roll back the nation’s commercial banks to an earlier era, when they were restricted to commercial banking and prohibited from engaging in risky Wall Street activities.
The Obama team, in contrast, would let the giants survive, but would regulate them extensively, so they could not get themselves and the nation into trouble again. While the administration’s proposal languishes, giants like Goldman Sachs have re-engaged in old trading practices, once again earning big profits and planning big bonuses.
Mr. Volcker argues that regulation by itself will not work. Sooner or later, the giants, in pursuit of profits, will get into trouble. The administration should accept this and shield commercial banking from Wall Street’s wild ways.
“The banks are there to serve the public,” Mr. Volcker said, “and that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties” and ultimately fails.
The only viable solution, in the Volcker view, is to break up the giants. JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. Goldman Sachs could no longer be a bank holding company. It’s a tall order, and to achieve it Congress would have to enact a modern-day version of the 1933 Glass-Steagall Act, which mandated separation.
http://bit.ly/4cllHb
Re: Wednesday's worse, Thursday's all so sad>>Yet another ...
Well I'm going to watch the correlations like a hawk, and see what's still working and what is not. Does the market move inversely to the buck? How about oil? What do they have as an excuse to move the market?
Tomorrow we get:
0830 Jobless claims
1000 FHFA House Price Index
1000 Leading Indicators
1030 EIA natgas report
1100 6 auction announcements
Today, for instance, the Petroleum Status Report was used to drive oil equity prices. What will they use tomorrow, and in which direction? And how will the market react to good earnings news? Intel was the second coming - tech-tastic as I recall. Alcoa, Goldman Sachs, JPM - all those stocks are down briskly since the happy news was released. Will this trend continue?
That's what I'm watching tomorrow.
Re: "Volcker’s Voice Fails to Sell a Bank Strategy" There's ...
I wonder if Paul Volcker and Mervyn King have been chatting it up. Sounds a lot like what Mervyn had to say in an earlier link.
I think Goldman's commodity reduction is pretty Big news,
as they are the custodian of the markets... Whether or not todays drop was a result of this news, you can bet people are taking notice... You can also bet, the Goldman traders have already established massive contra-positions...
Korea Nat. Oil Co. buys Harvest Energy trust, 47% cash premium
CALGARY, ALBERTA--(Marketwire - 10/21/09) - Harvest Energy Trust ("Harvest") (TSX:HTE.UN - News) (NYSE:HTE - News) today announces that it has entered into an agreement (the "Arrangement Agreement") with Korea National Oil Corporation ("KNOC") for the purchase of all the issued and outstanding trust units (the "Units") at a price of C$10.00 per Unit for a total cash consideration of approximately C$1.8 billion plus the assumption of C$2.3 billion of debt. The Arrangement Agreement will be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). The Arrangement represents a 47% premium over the 30-day weighted average trading price of the Units on the Toronto Stock Exchange up to and including October 20, 2009.
FD, I do own some and will probably sell in the next few days rather than wait for the cash, tried to enter a sell order tonight at $10 but the system won't take my order, probably because it thinks its too far away from the current market price, will try again in the morning.
Synthetically Generated Short Squeezes
See Denninger talking about the Taibbi article:
http://market-ticker.denninger.net/
The Chart Pattern Trader - Oct 21 up
http://bit.ly/4kzWRh
Goldman Sachs’s Griffiths Says"Inequality Helps All"
Check out Griffith at 3:17 min marker. Unbelievable. He should have a dosage of his own medicine.
http://bit.ly/1jwvEF
Dylan then urges us to take action and withdraw our money out of big banks and into smaller regionals.
Stop using credit cards.
Call/Email congressman
CAT comments
Having read the CAT earnings release, I wanted to share some info from it.
1. "Governments introduced more than $3.5 Trillion in muli-year stimulus programs with most of the expected impact in the last thalf of 2009 and into 2010."
2. CAT earnings included a credit for income taxes. If you use the same income tax rate from last year, it would reduce their earnings from $.64/ share to $.27/share. CAT had a LIFO inventory decrement benefit os $120 million, or $.16/share. This is not the stuff of a strong recovery..good financial engineering though.
3. "The severe recession left the world economy with vast amounts of unused capacity. As a result, inflation is unlikely to develop into a serious problem, no matter how fast the recovery." Translated it means CAT has no pricing power for the forseeable future. Workers better not get their hopes up for a salary increase for the next couple of years.
4. "We project housing starts of about 1 million units in 2010, up from around 600,000 units in 2009." They must be expecting a heck of a fire season in California this year.
5. "We expect further inventory reductions during the fourth quarter".
6. "At the end of the Q3 2009, past dues (receivables) were 5.79 percent, compared with 5.53 percent at the end of the second quarter. Bad debt write-offs, net of recoveries, were $65 million for Q3 2009, up from $55 in Q2 2009. At the end of Q3 2009, CAT Financial's allowance for credit losses totaled $381 million, compared with $390 million at the end of Q2 2009. At the end of Q3 2009, CAT Financial's allowance for credit losses totaled $381 mil, compared with $390 mil at the end of Q2 2009. (CAT's total receivables decreased from $14 bil to $13 Bil at Q3 2009)." Delinquencies and write-offs are still increasing, again, not the stuff of V shaped economic recoveries.
Fleck......
.... https://www.fleckensteincapital.com/dailyrap.aspx
Re: Goldman Sachs’s Griffiths Says"Inequality Helps All"
Is there full text of that speech somewhere?
This kind of quote cited with unknown context makes me immediately suspicious. All too often this trick is used to advance someone's agenda. I can think of many possible contexts in which that quote is absolutely accurate.
Re: Goldman Sachs’s Griffiths Says"Inequality Helps All"
It's deja vu all over again for me.
Reuters, http://bit.ly/1qJDjN
Guardian, http://bit.ly/10oI4z
I am just passing the video. I didn't edit/splice it.
Re: Hey NYU
I just put all the charts into 1 jpeg for easy 1 page viewing.
Hm. Bove called WFC "a standout" 9 hours before downgrade
How does this work again? Are there any rules?
http://bit.ly/19bccz
Re: Goldman Sachs’s Griffiths Says"Inequality Helps All"
Why so defensive... surely you don't expect us to accept any opinion item without discussion. None of that is a gospel. Not many things are what they seem to be.
For instance:
- I consider the governmental sponsorship of the outrage against Wall Street the embodiment of hypocrisy. If I had to assign shares of culpability in this whole debacle, I would have given bigger share to government/Congress.
- reading Guardian article, I can't help but agree with Griffiths's position in big picture, philosophical sense, no matter what today's political climate dictates.
- can't omit noticing that that same article ends with this: "The chairman of the Financial Services Authority (FSA), Lord Turner, who was also present at the meeting, called once again for a global tax on financial transactions. He said that such a so-called "Tobin tax" could redistribute bank profits to help fight world poverty and climate change." Well, if I have to pick sides in this fight - I won't pick Turner's.
Re: Goldman Sachs’s Griffiths Says"Inequality Helps All"
not defensive. Just jittery. Not much sleep the past 48 hours because of this trade show. I cant wait to get back home tomorrow and sleep in my own bed.
preparing to take profits on FAZ
Since FAZ loses a lot on fluctuations, I decided to place a sell stop limit order on the shares I purchased at $19.06 on Tuesday, with a stop at $20.06 and limit at $20.
preparing to sell short some FCX
FCX had a nice run since the beginning of October and is due for a pullback. I just placed a sell short stop limit order on it with a stop at $79 and limit $78.95, with the exit strategy of covering my short if FCX rises above $80 (to a new high) after triggering my order at $79 (this would mean that FCX is not ready to go down yet).
Madoff's workplace was rife with cocaine, sex
# Lawsuit seeks punitive damages, compensation on behalf of former investors
# Starting in '70s, Madoff sent employees to buy drugs for company use, suit alleges
# Lawsuit: Madoff used money stolen from investors to pay for escorts and masseuses
# Madoff now eating prison pizza cooked by a convicted child molester, lawsuit says http://bit.ly/3fYXAU
Attorneys Joseph Cochett and Nancy Fineman filed the complaint based on an investigation, including a four-hour interview with Madoff in prison in July, that they conducted for former investors. They also allege that major financial institutions, including KPMG, the Bank of New York and JP Morgan Chase, were aware that Madoff was transferring stolen funds to his London office for personal purchases.
According to the complaint, Madoff transferred funds to London to buy extravagant personal items.
Storched Earth Policy Continues
http://ronsen.blogspot.com/2009/10/mole.html