Wednesday, December 31, 2008
Is the World comming to an end? Not in the first Quarter
Why you say ?...because the man owns stock from the massive tax loss selling at the end of this year. I think the thaw is comming in the first quarter. The world will really be saved and the market will act like it. The folks will buy back the stock they sold because they will be told that its OK to come back in. That's when Mikey sells. I'll let you know. The beat goes on Mikey
Friday, December 26, 2008
Mikey is on Vacation
The action will begin in January I believe they first move will be down to tell us that things are bad and there is no hope. I view every sell off as a buying opportunity. Oil looks real good to me now. Thanks to Yo Yo for telling me to buy DXO at 1.75. That was my second buy. Bye for now be safe...and remember the beat goes on.
Mikey
Mikey
Wednesday, December 24, 2008
Remember this Forecast....BAH Humbug
Forget about the good. It’s about the bad and the ugly when it comes to the US economy next year. The big questions are how ugly things will get and how they’ll compare to recessions of the past.
Ever since the collapse of Lehman Brothers in mid-September, economists have been scrambling to revise their forecasts, and its all been for the worse.
“The economy is in a bit of a free fall,” says Nariman Behravesh, chief economist at Global Insight.
Bank of America’s chief economist Mickey Levy is forecasting a decline in every quarter of 2009 and doesn’t see a return to trend, or normal, growth until early to mid 2010.
"The enormous correction in housing will continue through next summer," accompanied by a "rapid rise in unemployment and declining corporate profits," Levy says.
History In The Making?
Current conditions, as well as the outlook, are bad enough that there’s significant debate over how deep the recession will be.
Global Insight’s outlook assumes President-elect Barack Obama and Co. “do something big, bold and swift,” explains Behravesh. “If they don’t, then for sure this is the worst recession in the Cold War period.”
That would top those of the 1973-1975 and 1980-1982 periods. In the former, the jobless rate was above 10-percent for 10 consecutive months; in the latter, the economy didn’t grow for two consecutive years.
The rebounds from those two recessions, however, were powerful, marked by strong growth for a couple of years thereafter with housing leading the way.
Residential investment, aka housing, averaged some 22 percent growth in the 1976-1977period and 23 percent in the 1983-1984 period.
“With another eight months of declines in home prices, you start to get some modest pickup in sales, followed by a stabilization in construction, not a bounceback,” warns Levy.
Another key yardstick of any recession is unemployment. The jobless rate is widely expected to rise steadily from its current rate of 6.7 percent to 9-percent in 2009 or early 2010. If so, that would be double the expansionary low of 4.4 percent set in December 2006—something that didn’t happen in either of the past two recessions.
While the doom-and-gloom camp is looking crowded these days, it's difficult to find someone with a rosy scenario. At best, there’s guarded optimism.
“The recession will end sometime in the first quarter, followed by a not great-shakes recovery,” says Ram Bhagavatula, managing director at Combinatorics Capital. “There’s room for optimism. Both the Fed and Treasury have done a lot more than they usually do at this point in the cycle."
That might help explain the Fed’s latest quarterly forecast, released at the end of October.
What it calls its central view, what might be considered a median, puts real 2009 GDP in a range of –0.2 to 1.1 percent. The full spectrum of members’ views runs from -1.0 to 1.8 percent.
At best, the Fed’s survey is approximate, reflecting “higher than normal” uncertainty about economic activity (the margin of error is plus/minus 1.3 percent).
At worst, the Fed’s forecast is hopelessly dated, like those of the Congressional Budget Office and the International Monetary Fund, both of which will be updating their numbers in early January. The IMF wouldn’t comment for this story.
Mikey's Market forecast for next year
Heren is the definition of BAH Humbug:Something intended to deceive; a hoax or fraud.
A person who claims to be other than what he or she is; an impostor.
Nonsense; rubbish.
Pretense; deception
Well that is what I think if the analysts and the economists. Not just now but it is their full time job. That job is deception. The fact that Bernie Madoff the great deciever is being unleashed on the public now is quite fitting.
Lets review what happened to the stock market in the recession of 1973 to 1975.
The market bottomed in December 1974 at 570 and by July of 1975 it was 888. The prior peak had been January of 1973 at 1066. The decline from the peak in 1973 to the low in 1974 was 53%. The rally into July of the following year was recovered 2/3 of the decline. By January of 2006 the market returned to 975 almost completely recovering the entire loss. If you take the time to review the news in Dec 1974 you will see some simlariites to today. The analysts were to say the least negative then.
In the recession of 1980 to 1982 the market peaked in April 1981 at 1030 and bottomed in Aug of 1982 at 769 for a decline of 261 points or 25%. In May of 1983 we were at 1100 completly eraseing the decline. In both cases the rates were being forced lower and the housing market was in trouble.
This recession started in Dec of 2007 and we are one year into it. The market has declined from 14200 in Oct 2007 and the low was 7450 in Oct 2008. A decline of 53% ...sound familiar. A 2/3 retracement would put us at about 12000. That would be the minumun I would expect to see in the next year. I think that they are being much more agressive here than they were in those other 2 bear markets.
The one thing you can count on is that the economists are the last ones to know when there is going to be a ressession and when we come out of it. Remember they just figured out we were in a recession in November of this year. That was 11 months after they said it started. These same guys were saying that the global economy would save the day. Now just in time for tax loss selling the doom and gloom is replacing Xmas cheer. Bernie Madoff is the Grinch who stole Xmas and every story is not the night before Xmas. A lump of coal for every stocking they say.
I think next year is the turnaround year in housing and the stage will be set for a turnaround in the economy. I am staying away from the tax seller but looking for opportunities at the beginning of next year. Merry Xmas......The Beat goes on Mikey
Ever since the collapse of Lehman Brothers in mid-September, economists have been scrambling to revise their forecasts, and its all been for the worse.
“The economy is in a bit of a free fall,” says Nariman Behravesh, chief economist at Global Insight.
Bank of America’s chief economist Mickey Levy is forecasting a decline in every quarter of 2009 and doesn’t see a return to trend, or normal, growth until early to mid 2010.
"The enormous correction in housing will continue through next summer," accompanied by a "rapid rise in unemployment and declining corporate profits," Levy says.
History In The Making?
Current conditions, as well as the outlook, are bad enough that there’s significant debate over how deep the recession will be.
Global Insight’s outlook assumes President-elect Barack Obama and Co. “do something big, bold and swift,” explains Behravesh. “If they don’t, then for sure this is the worst recession in the Cold War period.”
That would top those of the 1973-1975 and 1980-1982 periods. In the former, the jobless rate was above 10-percent for 10 consecutive months; in the latter, the economy didn’t grow for two consecutive years.
The rebounds from those two recessions, however, were powerful, marked by strong growth for a couple of years thereafter with housing leading the way.
Residential investment, aka housing, averaged some 22 percent growth in the 1976-1977period and 23 percent in the 1983-1984 period.
“With another eight months of declines in home prices, you start to get some modest pickup in sales, followed by a stabilization in construction, not a bounceback,” warns Levy.
Another key yardstick of any recession is unemployment. The jobless rate is widely expected to rise steadily from its current rate of 6.7 percent to 9-percent in 2009 or early 2010. If so, that would be double the expansionary low of 4.4 percent set in December 2006—something that didn’t happen in either of the past two recessions.
While the doom-and-gloom camp is looking crowded these days, it's difficult to find someone with a rosy scenario. At best, there’s guarded optimism.
“The recession will end sometime in the first quarter, followed by a not great-shakes recovery,” says Ram Bhagavatula, managing director at Combinatorics Capital. “There’s room for optimism. Both the Fed and Treasury have done a lot more than they usually do at this point in the cycle."
That might help explain the Fed’s latest quarterly forecast, released at the end of October.
What it calls its central view, what might be considered a median, puts real 2009 GDP in a range of –0.2 to 1.1 percent. The full spectrum of members’ views runs from -1.0 to 1.8 percent.
At best, the Fed’s survey is approximate, reflecting “higher than normal” uncertainty about economic activity (the margin of error is plus/minus 1.3 percent).
At worst, the Fed’s forecast is hopelessly dated, like those of the Congressional Budget Office and the International Monetary Fund, both of which will be updating their numbers in early January. The IMF wouldn’t comment for this story.
Mikey's Market forecast for next year
Heren is the definition of BAH Humbug:Something intended to deceive; a hoax or fraud.
A person who claims to be other than what he or she is; an impostor.
Nonsense; rubbish.
Pretense; deception
Well that is what I think if the analysts and the economists. Not just now but it is their full time job. That job is deception. The fact that Bernie Madoff the great deciever is being unleashed on the public now is quite fitting.
Lets review what happened to the stock market in the recession of 1973 to 1975.
The market bottomed in December 1974 at 570 and by July of 1975 it was 888. The prior peak had been January of 1973 at 1066. The decline from the peak in 1973 to the low in 1974 was 53%. The rally into July of the following year was recovered 2/3 of the decline. By January of 2006 the market returned to 975 almost completely recovering the entire loss. If you take the time to review the news in Dec 1974 you will see some simlariites to today. The analysts were to say the least negative then.
In the recession of 1980 to 1982 the market peaked in April 1981 at 1030 and bottomed in Aug of 1982 at 769 for a decline of 261 points or 25%. In May of 1983 we were at 1100 completly eraseing the decline. In both cases the rates were being forced lower and the housing market was in trouble.
This recession started in Dec of 2007 and we are one year into it. The market has declined from 14200 in Oct 2007 and the low was 7450 in Oct 2008. A decline of 53% ...sound familiar. A 2/3 retracement would put us at about 12000. That would be the minumun I would expect to see in the next year. I think that they are being much more agressive here than they were in those other 2 bear markets.
The one thing you can count on is that the economists are the last ones to know when there is going to be a ressession and when we come out of it. Remember they just figured out we were in a recession in November of this year. That was 11 months after they said it started. These same guys were saying that the global economy would save the day. Now just in time for tax loss selling the doom and gloom is replacing Xmas cheer. Bernie Madoff is the Grinch who stole Xmas and every story is not the night before Xmas. A lump of coal for every stocking they say.
I think next year is the turnaround year in housing and the stage will be set for a turnaround in the economy. I am staying away from the tax seller but looking for opportunities at the beginning of next year. Merry Xmas......The Beat goes on Mikey
Monday, December 22, 2008
Tax loss seller do your thing
All the deals have been done the rates are lower the credit markets are thawing the Fed is buying everything in sight and the world is a safer place, but wait. The news is still bad and will not help anyway, so lets pull prices back and give the tax loss folks time to sell because you can always buy it back later and nothing is going to happen in the next 31 days right? Stay tuned and let the tax loss boys sell to the insiders in the next week and let's bring on those analysts and those downgrades. That's what should happen. Let the stock get into strong hands now. I am going to take the rest of the day off...boring. Mikey
Auto Bailout and predictable price action
DJIA 8569 -9.32 VIX 43.16 GM 3.76 -.73
The Good news is we got the money the bad news is we are broke. Now the game begins of restructuring and busting the unions. In this part of the drama they make it look like the Auto companies are worthless. Just when you thought it was OK to step in the water. Look at he following from CNBC website.
GM Equity May Be Wiped Out: Credit Suisse
General Motors' equity may be largely if not entirely wiped out as it complies with the restructuring targets laid out in the federal auto bailout, an analyst at Credit Suisse said, cutting his price target to $1 and his rating to "underperformed."
GM 3.84 -0.65 (-14.48%) ] shares were down about 11 percent at $3.99 in early trading.
"Over the next two months...it will become increasingly clear that the enormous sacrifice of value on the part of the union and bondholders will require the complete or near-complete elimination of the existing GM equity," analyst Christopher Ceraso wrote in a note titled "Game Over for Existing Equity."
The U.S. government on Friday came to the rescue of U.S. automakers with $17.4 billion in emergency loans, some $13.4 billion of which will be made available in December and January, taken from a $700 billion Wall Street bailout fund originally designed to rescue struggling financial institutions.
The government attached a string of conditions to the three-year loans and set a deadline of March 31 for the automakers to prove they can restructure enough to ensure their survival or have the loans called back.
As part of the rescue, GM is required to reduce debt by two-thirds via debt-for-equity swaps, pay half of the contributions to a retiree health care trust using stock, make union workers' wages competitive with foreign automakers and eliminate the union jobs bank, which pays laid-off workers.
"If GM and its stakeholders can navigate through a tricky set of negotiations, and all parties can agree to sacrifice value in a manner consistent with the targets laid out by the government, we still arrive at a discounted cash flow-derived equity value of less than one dollar per share," Ceraso said.
If the bondholders and unions cannot come to an agreement over the amount of value to be sacrificed, GM may still end up in bankruptcy court, Ceraso said.
Ceraso previously rated the stock "neutral" with a price target of $2.
Hey Cerasco what was your rating on GM 2 years ago? I'll bet is wasn't 1 buck. Besides you slashed your target price by one buck to 1 big whoopy. I love this BS they all complain that GM is not doing anything to get with the times and when it is in a real position to do so they say its worthless. Of course now the stock pulls back and as the company works over the unions. The union positions is weak and their man is President now.
I am a wild and crazy guy so don't take my word for it but I am looking to add on to the stock but now just yet I think that the stock will pull back in the near term they need to do this to make the story look real. Let the price and these phony analysts tell everybody the stock is worthless and let them pull the price back for a while but in my demented mind the stock will be a home run 3 years down the road.
At some point there will be an agreement between the union and bondholders and there will be an equity swap. When that happens I will tell you one thing that equity position by the unions and the bondholders is a winner. Why? because it has to be. I will be looking at GM senior bonds when the negotiations look bad.
That is they way the game is played. Then you will see Analysts like Cerasco tell you that they did it and the prospects for the company have improved and they will raise their target price to lets say 25 bucks. This gives them the excuse to make that equity position that they are going to negotiate real and get their money back. A lot of folks need that stock to do well. That is what is going on behind closed doors now.
It will take time and the stock price will not excite you in the near term but this is the way Capitalism is played. The US auto industry will survive and believe it or not prosper. This is the long term view and as an investor it is best to understand that this all takes time to play out.
The Good news is we got the money the bad news is we are broke. Now the game begins of restructuring and busting the unions. In this part of the drama they make it look like the Auto companies are worthless. Just when you thought it was OK to step in the water. Look at he following from CNBC website.
GM Equity May Be Wiped Out: Credit Suisse
General Motors' equity may be largely if not entirely wiped out as it complies with the restructuring targets laid out in the federal auto bailout, an analyst at Credit Suisse said, cutting his price target to $1 and his rating to "underperformed."
GM 3.84 -0.65 (-14.48%) ] shares were down about 11 percent at $3.99 in early trading.
"Over the next two months...it will become increasingly clear that the enormous sacrifice of value on the part of the union and bondholders will require the complete or near-complete elimination of the existing GM equity," analyst Christopher Ceraso wrote in a note titled "Game Over for Existing Equity."
The U.S. government on Friday came to the rescue of U.S. automakers with $17.4 billion in emergency loans, some $13.4 billion of which will be made available in December and January, taken from a $700 billion Wall Street bailout fund originally designed to rescue struggling financial institutions.
The government attached a string of conditions to the three-year loans and set a deadline of March 31 for the automakers to prove they can restructure enough to ensure their survival or have the loans called back.
As part of the rescue, GM is required to reduce debt by two-thirds via debt-for-equity swaps, pay half of the contributions to a retiree health care trust using stock, make union workers' wages competitive with foreign automakers and eliminate the union jobs bank, which pays laid-off workers.
"If GM and its stakeholders can navigate through a tricky set of negotiations, and all parties can agree to sacrifice value in a manner consistent with the targets laid out by the government, we still arrive at a discounted cash flow-derived equity value of less than one dollar per share," Ceraso said.
If the bondholders and unions cannot come to an agreement over the amount of value to be sacrificed, GM may still end up in bankruptcy court, Ceraso said.
Ceraso previously rated the stock "neutral" with a price target of $2.
Hey Cerasco what was your rating on GM 2 years ago? I'll bet is wasn't 1 buck. Besides you slashed your target price by one buck to 1 big whoopy. I love this BS they all complain that GM is not doing anything to get with the times and when it is in a real position to do so they say its worthless. Of course now the stock pulls back and as the company works over the unions. The union positions is weak and their man is President now.
I am a wild and crazy guy so don't take my word for it but I am looking to add on to the stock but now just yet I think that the stock will pull back in the near term they need to do this to make the story look real. Let the price and these phony analysts tell everybody the stock is worthless and let them pull the price back for a while but in my demented mind the stock will be a home run 3 years down the road.
At some point there will be an agreement between the union and bondholders and there will be an equity swap. When that happens I will tell you one thing that equity position by the unions and the bondholders is a winner. Why? because it has to be. I will be looking at GM senior bonds when the negotiations look bad.
That is they way the game is played. Then you will see Analysts like Cerasco tell you that they did it and the prospects for the company have improved and they will raise their target price to lets say 25 bucks. This gives them the excuse to make that equity position that they are going to negotiate real and get their money back. A lot of folks need that stock to do well. That is what is going on behind closed doors now.
It will take time and the stock price will not excite you in the near term but this is the way Capitalism is played. The US auto industry will survive and believe it or not prosper. This is the long term view and as an investor it is best to understand that this all takes time to play out.
Friday, December 19, 2008
Good News Corporate Bond market thawing and VIX breaking down
DJIA 8633+28 VIX 43.44 (alrighty) Gold 838 -22.60 Okeydokey Oil 42.31 +.64
Despite the Bad news Bernie good things are happening to credit markets. The focus has left this area but that is where the action really is. Bond funds are turning up in a hurry. The Fed statement was drowned out by Bad News Berie but it is the real deal. The VIX used to a topic of conversation has faded into the background as "concern" falls. The VIX is dropping in a hurry now and that is the real good measurement of what is going on now not the scandal.
Oil and Gold should go in opposite directions now. Oil clearly is bottoming to me and I bought the pullback of of the first move yesterday. I think the whole market bottomed and I will look to buy stocks that I like that get slammed in the near term. INTC and GE are on my buy list. Also, I am watching the banks like Citi because of the Scandal to buy on hits. Love the action here and I remain very buillish. The beat goes on Mikey
Despite the Bad news Bernie good things are happening to credit markets. The focus has left this area but that is where the action really is. Bond funds are turning up in a hurry. The Fed statement was drowned out by Bad News Berie but it is the real deal. The VIX used to a topic of conversation has faded into the background as "concern" falls. The VIX is dropping in a hurry now and that is the real good measurement of what is going on now not the scandal.
Oil and Gold should go in opposite directions now. Oil clearly is bottoming to me and I bought the pullback of of the first move yesterday. I think the whole market bottomed and I will look to buy stocks that I like that get slammed in the near term. INTC and GE are on my buy list. Also, I am watching the banks like Citi because of the Scandal to buy on hits. Love the action here and I remain very buillish. The beat goes on Mikey
Thursday, December 18, 2008
GE Debt Downgraded.OOOOOOOH MY!!! The Wall of Worry is alive
The S&P down graded GE debt OHHHHH MY!!!!!!!!! What do I do Mikey..... I don't know but I will wait 2 days and buy the Hell out of it. This has been a public service announcement by Mikey on the Mikey broadcasting network. I like the stock and the debt.
This adds to the wall of worry. There is no focus on the collapsing mortgage rates and the thawing of the credit markets though. Remember that biggy. The big thaw is starting. This news on GE and Madoff scandal is a diversion. Keep your eye on the ball low rates and lots of money is here and it WILL make a difference.They have already taken the focus off the Fed cut and statement.I will use sell offs on this kind of bad news to add on to my positions bought DXO at 2.79 today looking to buy GE and INTC and SSO over the next couple of trading days. The beat goes on ....Mikey
This adds to the wall of worry. There is no focus on the collapsing mortgage rates and the thawing of the credit markets though. Remember that biggy. The big thaw is starting. This news on GE and Madoff scandal is a diversion. Keep your eye on the ball low rates and lots of money is here and it WILL make a difference.They have already taken the focus off the Fed cut and statement.I will use sell offs on this kind of bad news to add on to my positions bought DXO at 2.79 today looking to buy GE and INTC and SSO over the next couple of trading days. The beat goes on ....Mikey
This is an Outrage...Where are the regulators
How did the SEC miss Bernie Madoff. This is an outrage. It must never happen again. We need to change the rule and increase oversight so that we can restore confidence in the system. We need new leadership and a new beginning and next time stop the abuse of the average investor.
Okey dokey. I have heard this after every major business cycle breaks down. At the end of the cycle Mom and Pop investor gets their butt kicked. The old story breaks down and the mess is cleaned up and a new story emerges. Gee you would think that the "regulators" would know this by now.
The only way you get to be a regulator is if you are corrupt or brain dead. The last cycle the Global Economic growth commodity Para dime story has ended and the house of cards that was created by the system has come unglued. The purpose of this story was to get investors to pour money into this "space" as the analyst call it. It was not an accident that all the news and all the analysts of every major broker blatantly touted this news for a 2 year period. The result was that the emerging markets in China,India,Brazil,Russia, Dubai and ...you name it took off and grew at an uncontrollable rate. This was by design not an accident.
There was so much money directed into these areas and away from the US that the US became a credit card nation. The inflation story in the US was aided by unregulated loans to real estate. These loans drove prices of real estate to a bubble and financed the expansion of the emerging economies. This was by design not by accident.
The results of this plan were highly predictable to just about anyone even brain dead regulators. The truth is that the Fed encouraged this and the results obviously known to them. The bubble was created because that is the way that the big story always ends. Then the SEC and the "law enforcement officials" swoop down and round up one or two of the biggest idiots that were running their own private scam and they become the face of everything that was wrong with the system.
The public attention is then focused on these bad guys that did these awful things and the real crooks ...The Fed and their buddies slip away from the spotlight. I works great the Attorney General from one state emerges to extract "justice" from the bad guys and save the day. They then get to run for the Senate or maybe even President, unless they get caught with a bunch of hookers in a downtown swanky hotel using the company credit card.
Now the FED comes to the rescue when the fear and horror emerges for the market meltdown and drives interest rates to a level that allows the government to borrow money for nothing and that in turn finance the next story. The rates are pegged down and then the scared and untrusting investors are told by the experts to be safe with there money. They they invest what is left of their money into "safe investments and the Fed and they buddies buy equities to "save the system". A story of hope and caring and here we go again and the Fed and the boys make a killing. When they are ready to sell the turnaround story get legs and the analyst..you know Cramer and the like star bring in the sheep.
I am not judging them because I am not a worthy of doing so. It is just the way it is done and as long as they can get away with it it will keep on happening. By the way, the good thing that comes out of this is that the World economy has been started and after they get their butt kicks just as we just did thing will work out and they will be part of the rat race.
By the way if you are a con man the best thing you can do to get credibility is to donate large amounts of money to charities. That makes you look like a good guy. The charities look the other way and just take the money. When they get their clock cleaned it is because the man in charge of administering that charity stuck around to long and got burned. Its tricky business this public morality thing. The discussing about this is for someone else and beyond the scope of Mikey the Market Shadow.
Mikey the Market Shadow is trying to tell you were the story is going in the future. The Gurus of the Obvious (Cramer..Meridith Whitney and so forth) are telling you what happened to the story in the past. Mikey is not a visionary but Mikey has seen it all before and they never change their act. You will see the Gurus on TV but you will never see Mikey. The Guru's will always look right in the beginning and the prices will confirm them. In the end, they sneak out the back door and the story changes but guess what no one ever says hey Cramer remember when you said.....? That accountability would mess up their game. The amazing thing to me is that it works every time and no one remembers how they were duped before.
Where are we now. The Fed and their buddies are selling debt very cheaply to buy equities particularly the bank stocks and real estate and save the system because they are big hearted guys.
Thought you should know don't be a victim....The beat goes on....Mikey
Okey dokey. I have heard this after every major business cycle breaks down. At the end of the cycle Mom and Pop investor gets their butt kicked. The old story breaks down and the mess is cleaned up and a new story emerges. Gee you would think that the "regulators" would know this by now.
The only way you get to be a regulator is if you are corrupt or brain dead. The last cycle the Global Economic growth commodity Para dime story has ended and the house of cards that was created by the system has come unglued. The purpose of this story was to get investors to pour money into this "space" as the analyst call it. It was not an accident that all the news and all the analysts of every major broker blatantly touted this news for a 2 year period. The result was that the emerging markets in China,India,Brazil,Russia, Dubai and ...you name it took off and grew at an uncontrollable rate. This was by design not an accident.
There was so much money directed into these areas and away from the US that the US became a credit card nation. The inflation story in the US was aided by unregulated loans to real estate. These loans drove prices of real estate to a bubble and financed the expansion of the emerging economies. This was by design not by accident.
The results of this plan were highly predictable to just about anyone even brain dead regulators. The truth is that the Fed encouraged this and the results obviously known to them. The bubble was created because that is the way that the big story always ends. Then the SEC and the "law enforcement officials" swoop down and round up one or two of the biggest idiots that were running their own private scam and they become the face of everything that was wrong with the system.
The public attention is then focused on these bad guys that did these awful things and the real crooks ...The Fed and their buddies slip away from the spotlight. I works great the Attorney General from one state emerges to extract "justice" from the bad guys and save the day. They then get to run for the Senate or maybe even President, unless they get caught with a bunch of hookers in a downtown swanky hotel using the company credit card.
Now the FED comes to the rescue when the fear and horror emerges for the market meltdown and drives interest rates to a level that allows the government to borrow money for nothing and that in turn finance the next story. The rates are pegged down and then the scared and untrusting investors are told by the experts to be safe with there money. They they invest what is left of their money into "safe investments and the Fed and they buddies buy equities to "save the system". A story of hope and caring and here we go again and the Fed and the boys make a killing. When they are ready to sell the turnaround story get legs and the analyst..you know Cramer and the like star bring in the sheep.
I am not judging them because I am not a worthy of doing so. It is just the way it is done and as long as they can get away with it it will keep on happening. By the way, the good thing that comes out of this is that the World economy has been started and after they get their butt kicks just as we just did thing will work out and they will be part of the rat race.
By the way if you are a con man the best thing you can do to get credibility is to donate large amounts of money to charities. That makes you look like a good guy. The charities look the other way and just take the money. When they get their clock cleaned it is because the man in charge of administering that charity stuck around to long and got burned. Its tricky business this public morality thing. The discussing about this is for someone else and beyond the scope of Mikey the Market Shadow.
Mikey the Market Shadow is trying to tell you were the story is going in the future. The Gurus of the Obvious (Cramer..Meridith Whitney and so forth) are telling you what happened to the story in the past. Mikey is not a visionary but Mikey has seen it all before and they never change their act. You will see the Gurus on TV but you will never see Mikey. The Guru's will always look right in the beginning and the prices will confirm them. In the end, they sneak out the back door and the story changes but guess what no one ever says hey Cramer remember when you said.....? That accountability would mess up their game. The amazing thing to me is that it works every time and no one remembers how they were duped before.
Where are we now. The Fed and their buddies are selling debt very cheaply to buy equities particularly the bank stocks and real estate and save the system because they are big hearted guys.
Thought you should know don't be a victim....The beat goes on....Mikey
Wednesday, December 17, 2008
Mikey the Cynic weighs in on Bernie Madoff Scandal
In my mind this has been know for a very long time. The timing of the story co insides with the you can't trust anybody with your money story that is now making people be "safe" with their money. You know Martha you just can't trust anybody now adays.
This could have broken 2 years ago but that would have spooked investors and at that time the system was selling its global para dime story. The system wanted to keep investors in the market and not spook them out of it. There are many examples of this from Enron to Martha Stewart that break after the market has had a big sell off. These stories become the cover story to keep investors out as the market moves higher. It is a standard ploy of the wizard behind the curtain.
I heard a Maddoff investor on TV saying that he lost everything but if you were in the stock market or real estate market you still have something left. Oh that should make us feel better that we had our money with reputable Mutual Fund company's that told us that everything was OK and said invest for the long term and we only lost 50%. You know Martha thank God we only lost 50% we have something to be thankful for. Look at those poor idiots that invested with Berie.
You always see these confidence breakers after the market has bottomed. Here it is again and you know...the beat goes on...Mikey
This could have broken 2 years ago but that would have spooked investors and at that time the system was selling its global para dime story. The system wanted to keep investors in the market and not spook them out of it. There are many examples of this from Enron to Martha Stewart that break after the market has had a big sell off. These stories become the cover story to keep investors out as the market moves higher. It is a standard ploy of the wizard behind the curtain.
I heard a Maddoff investor on TV saying that he lost everything but if you were in the stock market or real estate market you still have something left. Oh that should make us feel better that we had our money with reputable Mutual Fund company's that told us that everything was OK and said invest for the long term and we only lost 50%. You know Martha thank God we only lost 50% we have something to be thankful for. Look at those poor idiots that invested with Berie.
You always see these confidence breakers after the market has bottomed. Here it is again and you know...the beat goes on...Mikey
Moving up the ladder of success
Think about this. "Investors are hiding out in Gold and government bonds because the news is so bad and they are told to be safe with their money. At some point the lower rates kick in the economy and the housing market. The news starts to turn good and folks say hey I am making no interest on my money. What the hell am I doing. They they step out of governments to CD's because they pay more. The next step is into tax free and corporates and then into equity becasue they need to make more money.
That is the cycle and all that money is at the bottom of the rung in waiting to be told to move up the ladder. It will take time but it will happen the move yesterday was a giant step to nudge money out of the Government and start the move up the ladder.
That is the cycle and all that money is at the bottom of the rung in waiting to be told to move up the ladder. It will take time but it will happen the move yesterday was a giant step to nudge money out of the Government and start the move up the ladder.
Look at these rates... Holy Mackerel Andy
US3M 3-Month T-Bill 0.005
US6M 6-Month T-Bill 0.19
US2Y 2-Yr T-Note 0.62681
US5Y 5-Yr T-Note 1.2196
US10Y 10-Yr T-Note 2.127
US30Y 30-Yr T-Bond 2.6319
The 30 year is 2.65% My God.
The banks are getting their money for free and the Fed say we are going to keep them there as long as it takes. I will sleep like a baby under these conditions.
About oil 42.29 it looks cheap as hell to me now. DXO is 3.10 DIG is 32.24
Looking to buy on sharp hits. DXO at 2.80 DIG at 28.56
UYM at 16.59 looks like a coiled snake ready to strike. Still below the 50 day now at 17.13 and falling. I will buy dips below the 20 day now at 12.96 but rising.
Gold now in my shorting zone 874.90 +32.20 will be adding to my DZZ soon now at 25.70
UYG 5.96 looking for 10 to 11 by April will add on on sharp sell offs below 20 day now at 5.43
XHB 12.99 (House builders ETF) looking to buy on sell off below 20 day now at 11.68 and rising.
SSO 26.64 Looking to buy sell offs below the 20 day now at 24.48
URE 6.01 (Real estate ETF) 20 day at 5.23 and rising like it below this average.
On CNBC they are still trying to figure out if this rally is for real and we are 1500damn points off the low...Hello!!!!I am fine until they figure it out.
US6M 6-Month T-Bill 0.19
US2Y 2-Yr T-Note 0.62681
US5Y 5-Yr T-Note 1.2196
US10Y 10-Yr T-Note 2.127
US30Y 30-Yr T-Bond 2.6319
The 30 year is 2.65% My God.
The banks are getting their money for free and the Fed say we are going to keep them there as long as it takes. I will sleep like a baby under these conditions.
About oil 42.29 it looks cheap as hell to me now. DXO is 3.10 DIG is 32.24
Looking to buy on sharp hits. DXO at 2.80 DIG at 28.56
UYM at 16.59 looks like a coiled snake ready to strike. Still below the 50 day now at 17.13 and falling. I will buy dips below the 20 day now at 12.96 but rising.
Gold now in my shorting zone 874.90 +32.20 will be adding to my DZZ soon now at 25.70
UYG 5.96 looking for 10 to 11 by April will add on on sharp sell offs below 20 day now at 5.43
XHB 12.99 (House builders ETF) looking to buy on sell off below 20 day now at 11.68 and rising.
SSO 26.64 Looking to buy sell offs below the 20 day now at 24.48
URE 6.01 (Real estate ETF) 20 day at 5.23 and rising like it below this average.
On CNBC they are still trying to figure out if this rally is for real and we are 1500damn points off the low...Hello!!!!I am fine until they figure it out.
Tuesday, December 16, 2008
Fed cuts rates means business
Fed Cuts Key Interest Rate To Between Zero and 0.25
The Federal Reserve slashed the target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.
The central bank reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October.
CNBC.com
--------------------------------------------------------------------------------
Federal Reserve Chairman Ben Bernanke and his colleagues also pledged to use "all available tools" as they struggle to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century.
"There is no more room to cut rates, as the target cannot go negative," said economist Chris Rupkey of Bank of Tokyo-Mitsubishi. "Quantitative easing will be the new way for the Fed to stimulate the economy going forward."
In its statement, the Fed underscored its committment to use extraordinary measures, including using its balance sheet to support the credit markets. The Fed restated its intention to buy large quantities of mortgage-related debt to lower rates on home loans, a plan it first mentioned more than three weeks ago.
The program to buy $600 billion in debt and mortgage-backed securities from mortgage giants Fannie Mae [FNM 0.73 --- UNCH (0) ] and Freddie Mac [FRE 0.72 --- UNCH (0) ] already has helped pushed mortgage rates down.
The Fed, however, remained cautious about another unusual measure, which Bernanke first floated two weeks ago. The statement said the central bank was still "considering" buying long-term Treasury securities, which is also thought to be aimed at lowering borrowing costs by going around commercial banks.
By boosting the quantity of money in the financial system, the Fed has engaged in so-called "quantitative easing" to provide economic relief. The Fed's balance sheet has ballooned to $2.2 trillion, from close to $900 billion in September, reflecting efforts to mend the financial system.
The Fed's unusual decision to establish a target range for the federal funds rate rather than a set level is a clear response to recent market conditions where the rate has actually traded well below the desired target.
The Fed is "acknowledging that", Bob Doll of BlackRock told CNBC. In recent days, the rate has been solidly below 0.25 percent. In an accompanying statement, the Fed signaled its intentions by saying circumstances "warrant" keeping interest rates low for "some time."
The Fed empoyed a similar telegraphing approach during the 2003 period when there were worries about inflation. That successfully managed the market's expectations.
Doll says the Fed is trying to get investors to buy a broader range of debt products than Treasuries, which have benefitted from an enormous flight to safety in recent months.
If successful, investors will move to government agency securities and then corporate bonds, which market strategists say is a necessary precondition to any sustainable improvement in stock prices.
The Federal Reserve slashed the target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.
The central bank reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October.
CNBC.com
--------------------------------------------------------------------------------
Federal Reserve Chairman Ben Bernanke and his colleagues also pledged to use "all available tools" as they struggle to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century.
"There is no more room to cut rates, as the target cannot go negative," said economist Chris Rupkey of Bank of Tokyo-Mitsubishi. "Quantitative easing will be the new way for the Fed to stimulate the economy going forward."
In its statement, the Fed underscored its committment to use extraordinary measures, including using its balance sheet to support the credit markets. The Fed restated its intention to buy large quantities of mortgage-related debt to lower rates on home loans, a plan it first mentioned more than three weeks ago.
The program to buy $600 billion in debt and mortgage-backed securities from mortgage giants Fannie Mae [FNM 0.73 --- UNCH (0) ] and Freddie Mac [FRE 0.72 --- UNCH (0) ] already has helped pushed mortgage rates down.
The Fed, however, remained cautious about another unusual measure, which Bernanke first floated two weeks ago. The statement said the central bank was still "considering" buying long-term Treasury securities, which is also thought to be aimed at lowering borrowing costs by going around commercial banks.
By boosting the quantity of money in the financial system, the Fed has engaged in so-called "quantitative easing" to provide economic relief. The Fed's balance sheet has ballooned to $2.2 trillion, from close to $900 billion in September, reflecting efforts to mend the financial system.
The Fed's unusual decision to establish a target range for the federal funds rate rather than a set level is a clear response to recent market conditions where the rate has actually traded well below the desired target.
The Fed is "acknowledging that", Bob Doll of BlackRock told CNBC. In recent days, the rate has been solidly below 0.25 percent. In an accompanying statement, the Fed signaled its intentions by saying circumstances "warrant" keeping interest rates low for "some time."
The Fed empoyed a similar telegraphing approach during the 2003 period when there were worries about inflation. That successfully managed the market's expectations.
Doll says the Fed is trying to get investors to buy a broader range of debt products than Treasuries, which have benefitted from an enormous flight to safety in recent months.
If successful, investors will move to government agency securities and then corporate bonds, which market strategists say is a necessary precondition to any sustainable improvement in stock prices.
Fed Rate decision today
Stocks rose Tuesday, even after dismal reports on CPI and housing starts, as investors hope for new direction from the Federal Reserve when the central bank delivers its decision on interest rates today.
Major U.S. Indexes.DJIA8675.48110.95+1.3%471,794,000.NCOMP1544.3636.02+2.39%335,382,500.SPX884.0415.47+1.78%1,846,292,900
Goldman Sachs [GS 74.37 7.91 (+11.9%) ] reported a quarterly loss of $4.97 a share, well off the $3.73-per-share loss expected. Still, its shares rose about 5 percent.
Morgan Stanley [MS 14.94 1.30 (+9.54%) ] reports earnings on Wednesday; analysts expect a loss of 34 cents a share, according to Thomson Financial.
"Expectations are very low for the sector today and that may mean there's some kind of a floor set here," Robert Lutts, chief investment officer at Cabot Money Management in Salem, Mass., told Reuters.
Citigroup [C 7.80 0.40 (+5.41%) ] shares rose after the bank said it was going to sell its Japan trust banking unit.
Bank of America [BAC 13.77 -0.34 (-2.41%) ] shares ticked higher, even after Friedman, Billings, Ramsey slapped the stock with an "underperform" rating, saying the bank's equity ratio is too low and that it will have to raise a "substantial" amount of capital, which would dilute existing shareholder value.
On the economic front, housing starts plunged 18.9 percent last month to a record low annual rate of 625,000 units, as building permits dropped 15.6 percent.
Consumer prices tumbled 1.7 percent in November, the second straight record drop, amid a 17-percent decline in energy costs. Excluding volatile food and energy prices, core CPI was flat.
>> CPI Breakdown: Where prices are rising—and falling
But the market isn't really worried about inflation data, it's preoccupied with what the Fed's going to say today.
Analysts expect the Fed to slash its target for the federal-funds rate by half a percentage point, which would bring the rate close to zero.
And, while the language in the accompanying statement is always closely watched, it's not about the syntax on economic growth or inflation today — it's about what the Fed will say it plans to do, besides slashing interest rates, about the economic slump.
Market watchers are hoping the Fed signals plans for quantitative easing measures, which essentially involves printing more money, to restore growth and signal an end to the ongoing recession.
The typical market response is to rally into the news and top out on the announcement. It wouldn't surprise me if that happened today. Just another faliure on the Wall of Worry. You know woe is me it's hopeless. Well it isn't but as long as we work our way higher it will seem that way. Regardless of the reaction today I think we go higher in the future. I am staying long my positions. Mikey
Major U.S. Indexes.DJIA8675.48110.95+1.3%471,794,000.NCOMP1544.3636.02+2.39%335,382,500.SPX884.0415.47+1.78%1,846,292,900
Goldman Sachs [GS 74.37 7.91 (+11.9%) ] reported a quarterly loss of $4.97 a share, well off the $3.73-per-share loss expected. Still, its shares rose about 5 percent.
Morgan Stanley [MS 14.94 1.30 (+9.54%) ] reports earnings on Wednesday; analysts expect a loss of 34 cents a share, according to Thomson Financial.
"Expectations are very low for the sector today and that may mean there's some kind of a floor set here," Robert Lutts, chief investment officer at Cabot Money Management in Salem, Mass., told Reuters.
Citigroup [C 7.80 0.40 (+5.41%) ] shares rose after the bank said it was going to sell its Japan trust banking unit.
Bank of America [BAC 13.77 -0.34 (-2.41%) ] shares ticked higher, even after Friedman, Billings, Ramsey slapped the stock with an "underperform" rating, saying the bank's equity ratio is too low and that it will have to raise a "substantial" amount of capital, which would dilute existing shareholder value.
On the economic front, housing starts plunged 18.9 percent last month to a record low annual rate of 625,000 units, as building permits dropped 15.6 percent.
Consumer prices tumbled 1.7 percent in November, the second straight record drop, amid a 17-percent decline in energy costs. Excluding volatile food and energy prices, core CPI was flat.
>> CPI Breakdown: Where prices are rising—and falling
But the market isn't really worried about inflation data, it's preoccupied with what the Fed's going to say today.
Analysts expect the Fed to slash its target for the federal-funds rate by half a percentage point, which would bring the rate close to zero.
And, while the language in the accompanying statement is always closely watched, it's not about the syntax on economic growth or inflation today — it's about what the Fed will say it plans to do, besides slashing interest rates, about the economic slump.
Market watchers are hoping the Fed signals plans for quantitative easing measures, which essentially involves printing more money, to restore growth and signal an end to the ongoing recession.
The typical market response is to rally into the news and top out on the announcement. It wouldn't surprise me if that happened today. Just another faliure on the Wall of Worry. You know woe is me it's hopeless. Well it isn't but as long as we work our way higher it will seem that way. Regardless of the reaction today I think we go higher in the future. I am staying long my positions. Mikey
Monday, December 15, 2008
This is options Expiration week
The market has a decidedly negative tone to it but prices are pulling back slowly. I do not detect a play here now as they are keeping both sides guessing
More Bad News..Berie Madoff.. Why now? Mikey explains
DJIA 8550 -79 VIX 57.26 Gold 840.40 +19.90 Oil 48.32 +2.01
Madoff Victims: Big Banks, Hedge Funds, Celebrities
The list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes is growing, snaring some of the world's biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.
AP Graphics
Bernard Madoff
--------------------------------------------------------------------------------
The alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to the Wall Street Journal.
Among the world's biggest banking institutions, Britain's HSBC Holdings, Royal Bank of Scotland Groupand Man Group, Spain's Grupo Santander, France's BNP Paribas and Japan's Nomura Holdings all reported that they had fallen victim to Madoff's alleged $50 billion Ponzi scheme.
The 70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.
Some investors claim they've been wiped out, while others are still likely to come forward.
"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.
The extent of the potential damage prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier.
"I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job," Nicola Horlick, the manager of Bramdean Alternatives, which has 9 percent of its funds invested in Madoff's scheme, told the British Broadcasting Corp.
"All through the credit crunch this has been apparent," Horlick added. "This is the biggest financial scandal, probably, in the history of the markets."
Mikey Says:
This adds to the wall of worry. Cash is on the sidlines and is scared to death.
On the good news side the Fed is getting ready to cut rates again but the way it is being reported is that it is not a good thing. When the Fed started to cut the rates in Aug 2007 it was a good thing.
Gold is having it way now at 825 but in my mind it is just returning to its beakdown and will meet resistance near these levels. Gold and bonds are the last investment standing and that is where they are all hiding. Last year they were all hiding in Oil and the commodities and we know how that one turned out. Patience is the key and I will look to add on to my DZZ somewhere is the mid to low 20's if it gets there.
Last night 60 Minutes aired a doomsday report on the next wave of mortgage failures, That would be true expect one thing. THE RATES WILL RESET LOWER THAN WHEN THEY WERE MADE. A fact they did not mention.
In summary, this story is timed perfectly with the be safe senario. It tells you you can't trust anyone and nothing is safe. Driving interest rates lower. As I write this the 30 bond is at 2.98%. Again rotten stories appear and drive rates lower when they need to be lower. They now say lower rates don't matter. Mikey says they do.
Cramers Says
Cramer: This Game Is Rigged
Everyday investors are losing faith in the market, Cramer said during Thursday’s Mad Money. They’re cashing out and taking their money elsewhere.
Who can blame them? Big money managers are pushing stocks up and down on a whim without regard for the underlying companies’ fundamentals.
It is this total disconnect between the market and basic investing principles that has made it hard for the little guy to trust stocks, Cramer said. To them, it looks like the big money is manipulating the action.
Cramer blames lack of regulation. The Securities and Exchange Commission under the chairmanship of Christopher Cox has done away with virtually any and all regulation that democratized the market and leveled the playing field. Only a complete reversal will restore trust.
“You do have every reason to distrust everything this market throws at you,” Cramer told viewers.
Mikey says:
This is the message and Cramer is another Capt Obvious
They will continue to hammer this message down our throats until everyone has bought it. I have seen this movie before and know how it ends. I will give away the ending...It ends good. Mikey
The beat goes on ....Mikey
Madoff Victims: Big Banks, Hedge Funds, Celebrities
The list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes is growing, snaring some of the world's biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.
AP Graphics
Bernard Madoff
--------------------------------------------------------------------------------
The alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to the Wall Street Journal.
Among the world's biggest banking institutions, Britain's HSBC Holdings, Royal Bank of Scotland Groupand Man Group, Spain's Grupo Santander, France's BNP Paribas and Japan's Nomura Holdings all reported that they had fallen victim to Madoff's alleged $50 billion Ponzi scheme.
The 70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.
Some investors claim they've been wiped out, while others are still likely to come forward.
"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.
The extent of the potential damage prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier.
"I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job," Nicola Horlick, the manager of Bramdean Alternatives, which has 9 percent of its funds invested in Madoff's scheme, told the British Broadcasting Corp.
"All through the credit crunch this has been apparent," Horlick added. "This is the biggest financial scandal, probably, in the history of the markets."
Mikey Says:
This adds to the wall of worry. Cash is on the sidlines and is scared to death.
On the good news side the Fed is getting ready to cut rates again but the way it is being reported is that it is not a good thing. When the Fed started to cut the rates in Aug 2007 it was a good thing.
Gold is having it way now at 825 but in my mind it is just returning to its beakdown and will meet resistance near these levels. Gold and bonds are the last investment standing and that is where they are all hiding. Last year they were all hiding in Oil and the commodities and we know how that one turned out. Patience is the key and I will look to add on to my DZZ somewhere is the mid to low 20's if it gets there.
Last night 60 Minutes aired a doomsday report on the next wave of mortgage failures, That would be true expect one thing. THE RATES WILL RESET LOWER THAN WHEN THEY WERE MADE. A fact they did not mention.
In summary, this story is timed perfectly with the be safe senario. It tells you you can't trust anyone and nothing is safe. Driving interest rates lower. As I write this the 30 bond is at 2.98%. Again rotten stories appear and drive rates lower when they need to be lower. They now say lower rates don't matter. Mikey says they do.
Cramers Says
Cramer: This Game Is Rigged
Everyday investors are losing faith in the market, Cramer said during Thursday’s Mad Money. They’re cashing out and taking their money elsewhere.
Who can blame them? Big money managers are pushing stocks up and down on a whim without regard for the underlying companies’ fundamentals.
It is this total disconnect between the market and basic investing principles that has made it hard for the little guy to trust stocks, Cramer said. To them, it looks like the big money is manipulating the action.
Cramer blames lack of regulation. The Securities and Exchange Commission under the chairmanship of Christopher Cox has done away with virtually any and all regulation that democratized the market and leveled the playing field. Only a complete reversal will restore trust.
“You do have every reason to distrust everything this market throws at you,” Cramer told viewers.
Mikey says:
This is the message and Cramer is another Capt Obvious
They will continue to hammer this message down our throats until everyone has bought it. I have seen this movie before and know how it ends. I will give away the ending...It ends good. Mikey
The beat goes on ....Mikey
Friday, December 12, 2008
Market hangs in there ...Wall of worry still intact
Close DJIA 8601 +38 VIX 55.08 Gold 818 -8.60 Oil 46.49 -1.49
Great action plenty of reasons to sell nice consolidation for the week. Gold you have a problem when the bad news stops. VIX is in a downtrend breaking the 50 day the market should break out soon. Have a good week. The beat goes on ....Mikey
Great action plenty of reasons to sell nice consolidation for the week. Gold you have a problem when the bad news stops. VIX is in a downtrend breaking the 50 day the market should break out soon. Have a good week. The beat goes on ....Mikey
Auto bailout power play
DJIA 8406 -148 VIX 58.32 Gold 818-8.60 Oil 43.55 -4.43
Auto bailout drama is about setting the stage for union givebacks. You know you can have something bad or nothing good. The process when finished will set up the auto companies for profitablity for the next cycle. GM is a buy here not a trade. It is a long term hold that will be a 10 to 1 if you are willing to hold for 3 years. The last one I did like this was AMR in 2003. The stock was 1.40 in March 2003 and by Jan of 2007 it traded at 40. Oh by the way it lost money the whole time. I see GM being the same thing here. Of course, the autos will be bailed out. Of course, the economy will be bailed out. We are bottoming now and when you bottom you keep getting the same old bad news and will get these slams down just when you think things are improving. It is the nature of the beast. The strategy is to buy these slams and hold on.
The same thing is happening to the banks. Over the past few days the alot of "analysts" have downgrade the banks. Tell me something I don't know you bozos. The slams on these downgrades are buys. The insiders and buying each of these hits if you let fear rule you decisions they get the stock. We are going higher...Mikey
Added to GM at 3.11
Auto bailout drama is about setting the stage for union givebacks. You know you can have something bad or nothing good. The process when finished will set up the auto companies for profitablity for the next cycle. GM is a buy here not a trade. It is a long term hold that will be a 10 to 1 if you are willing to hold for 3 years. The last one I did like this was AMR in 2003. The stock was 1.40 in March 2003 and by Jan of 2007 it traded at 40. Oh by the way it lost money the whole time. I see GM being the same thing here. Of course, the autos will be bailed out. Of course, the economy will be bailed out. We are bottoming now and when you bottom you keep getting the same old bad news and will get these slams down just when you think things are improving. It is the nature of the beast. The strategy is to buy these slams and hold on.
The same thing is happening to the banks. Over the past few days the alot of "analysts" have downgrade the banks. Tell me something I don't know you bozos. The slams on these downgrades are buys. The insiders and buying each of these hits if you let fear rule you decisions they get the stock. We are going higher...Mikey
Added to GM at 3.11
Thursday, December 11, 2008
Treasuries at Zero and Fannie Mae debt at 5 come on...
The Fed is Fannie Mae and when the Nay Bobs of Negativity figure this one out there will be a tidal wave of money gushing into the mortage market. Think about that one Meridith Whitney (Guru of the Obvious) you moron. Think that will be bad for the banks and real estate. The Mikey BS meter can't go any higher. Jesus the real estate market is set to explode. That Meridith ruins your world is comming to an end story. Count on it the hand is already dealt. Have a good damn day everyody. The beat goes on ....Mikey
OH Yeah forgot to tell you adding to my FNM and FRE at .70
Want to buy GM at about 3.50
OH Yeah forgot to tell you adding to my FNM and FRE at .70
Want to buy GM at about 3.50
New Indicator....The Mikey BS meter
The Mikey BS meter runs from a scale of 1 to 10. A 1 means that Mikey agrees with the line of BS that the system is spreading. A 10 means that Mikey is calling complete BS on the system. This week when there were fears on deflation and talk of oil going to 10 bucks the Mikey meter hit a solid 10. My best buys are when the meter is over 8. A 10 is very rare.
Deflation takes a break.. "Money for nothing and the Chicks for free"
DJIA 8723 -39 VIX 55.72 (rolling Over) Gold 827.30 Oil 45.71 +2.19
If you are watching the commodities and the UYM and DIG you see definite strength over the past 4 days. Money for free will do it every time.
"Money for nothing and the chicks for free".
We gotta install microwave ovens
Custom kitchens deliveries
We gotta move these refrigerators
We gotta move these color tvs
That is the new motto for the Fed. Lets see how deflation does in this kind of environment. The dollar doesn't like it but the economy will
Getting pullbacks on the financials now looking for a place to add on to these. Free money helps everything now. Looking to buy FDX after bad news yesterday but it is out in front so will wait for some sign of a turn....Mikey
By the way regarding my call of 9900. It is not going to happen real soon . I would expect some backing and filling first. I think we are in an intermediate advance and they will keep the news bad for a while. You will know when to sell because they will tell you that everything is going to be OK. We are a long way from that now. So I still have the safety clicked on on the sell trigger. I am looking to add on on AA and IP on any pullbacks. IP in the low's 11's and AA in the low 9's
PS A gallon of Gas will hit 1.90 soon
If you are watching the commodities and the UYM and DIG you see definite strength over the past 4 days. Money for free will do it every time.
"Money for nothing and the chicks for free".
We gotta install microwave ovens
Custom kitchens deliveries
We gotta move these refrigerators
We gotta move these color tvs
That is the new motto for the Fed. Lets see how deflation does in this kind of environment. The dollar doesn't like it but the economy will
Getting pullbacks on the financials now looking for a place to add on to these. Free money helps everything now. Looking to buy FDX after bad news yesterday but it is out in front so will wait for some sign of a turn....Mikey
By the way regarding my call of 9900. It is not going to happen real soon . I would expect some backing and filling first. I think we are in an intermediate advance and they will keep the news bad for a while. You will know when to sell because they will tell you that everything is going to be OK. We are a long way from that now. So I still have the safety clicked on on the sell trigger. I am looking to add on on AA and IP on any pullbacks. IP in the low's 11's and AA in the low 9's
PS A gallon of Gas will hit 1.90 soon
Wednesday, December 10, 2008
Mikey Calls the ball at 9900
DJIA 8707 +16 VIX 56.92
I will tell you in advance that I am selling most of my long positions at DJIA 9900.
expect a nasty sell off from there.
I will tell you in advance that I am selling most of my long positions at DJIA 9900.
expect a nasty sell off from there.
The T Boone Pickens of the Banking Industry... Then new Guru of the Obvious
Whitney: Banks On Life Support Next 18 Months
Influential bank analyst Meredith Whitney remains bearish about the economy, and her outlook for the banks that "lubricate the economy" is grim.
"The big banks are going to be on life support for at least 18 months, if not 36 months,"
Oppenheimer's executive director of equity research told CNBC Wednesday morning. "The big banks will not fail, but the big banks will not grow, in my opinion, for at least another two years."
She echoed other analysts who see the funds from the TARP program being used to fill holes, and do nothing to stimulate the economy.
"You've had massive asset deflation," she said. "There's more of this to come
Remember when T Boone said oil was going to 100 and it did and remember when T Boone said it was going to 120 and it did and remember when T Boone said oil was going to 150 and it almost did (148). Well T Boone and all that followed him are damn near broke now.
The new Guru of the obvious is Meredith Whitney. She has been saying bad things about the banking industry for a long tine now and has burst onto the seen as the Guru of banking. This is her last remark on banking. It is interesting that she has all of this credibility now and did not before. Hey Meridith I have some advise for you: Don't believe your own BS this time. She will overstay her spiel just like T Boone. I have seen this a million times a Guru emerges and gains their credibility on one major event and spends the next 20 years blowing people up. They end up on the scrap heap of the obvious. Richard Russell, T Boone, Joe Granville,Elain Garzerelli, ET Al.
DJIA 8815 +120 VIX 57.14 Gold 803.80 +29.60 Oil 44.26 +2.19
Meanwhile back in the market it looks to me that we have an intermediate advance going still climbing that Wall of Worry. Thanks for the worry Meridith
Regarding yesterday's post on the Treasury getting money for free because of deflation worries. That is the biggest joke I have seen in the last 35 years of watching the market. That will be the cover story for rallying the commodities market. I can hear them now ...Hey did you see the T Bill market trading at zero it must mean that this deflation thing is for real. DOE!!!! GIVE ME A BREAK.
Influential bank analyst Meredith Whitney remains bearish about the economy, and her outlook for the banks that "lubricate the economy" is grim.
"The big banks are going to be on life support for at least 18 months, if not 36 months,"
Oppenheimer's executive director of equity research told CNBC Wednesday morning. "The big banks will not fail, but the big banks will not grow, in my opinion, for at least another two years."
She echoed other analysts who see the funds from the TARP program being used to fill holes, and do nothing to stimulate the economy.
"You've had massive asset deflation," she said. "There's more of this to come
Remember when T Boone said oil was going to 100 and it did and remember when T Boone said it was going to 120 and it did and remember when T Boone said oil was going to 150 and it almost did (148). Well T Boone and all that followed him are damn near broke now.
The new Guru of the obvious is Meredith Whitney. She has been saying bad things about the banking industry for a long tine now and has burst onto the seen as the Guru of banking. This is her last remark on banking. It is interesting that she has all of this credibility now and did not before. Hey Meridith I have some advise for you: Don't believe your own BS this time. She will overstay her spiel just like T Boone. I have seen this a million times a Guru emerges and gains their credibility on one major event and spends the next 20 years blowing people up. They end up on the scrap heap of the obvious. Richard Russell, T Boone, Joe Granville,Elain Garzerelli, ET Al.
DJIA 8815 +120 VIX 57.14 Gold 803.80 +29.60 Oil 44.26 +2.19
Meanwhile back in the market it looks to me that we have an intermediate advance going still climbing that Wall of Worry. Thanks for the worry Meridith
Regarding yesterday's post on the Treasury getting money for free because of deflation worries. That is the biggest joke I have seen in the last 35 years of watching the market. That will be the cover story for rallying the commodities market. I can hear them now ...Hey did you see the T Bill market trading at zero it must mean that this deflation thing is for real. DOE!!!! GIVE ME A BREAK.
Tuesday, December 9, 2008
My comment: Lou who zerrrrrrrrrrrr!!!!
Investors fearful of deflation and riskier assets scrambled to hand over cash to the U.S. Treasury in return for no interest at an auction Tuesday, while some T-bill rates fell below zero in the market.
Pressures on fund managers to stock up on the safest possible assets in advance of year-end book-balancing added to the bid for government securities, traders said.
The U.S. Treasury Department said it sold four-week bills at a high rate of 0.000 percent, a level never before seen, in a $30 billion auction. Watch the accompanying video for more.
When Treasury bill rates turn negative it shows that investors are so concerned about the safety of other assets that they are willing to effectively pay the U.S. government a fee to look after their money.
Rates for three-month bills in the market fell below zero, according to fixed-income trading platform Tradeweb.
RELATED LINKS
"There is just a continuing flight to safety with money that needs to be invested. Money funds want it to be invested rather than under the mattress, which is continuing to push rates lower,'' said Lou Brien, a market strategist with DRW Trading Group in Chicago.
"There is the uncertainty of counterparty risk and concern over the possibility of deflation,'' he said.
Counterparty risk is the distrust among banks and other lenders that the party on the other side of a trade might not repay funds.
Bill rates fell to zero in mid-September when Lehman Brothers collapsed, sending panicked investors to the relative safety of government paper.
"There's still a ton of fear. People are now paying the government to take their money. Something is wrong,'' said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"For the Treasury, it's great financing. For everyone, it's not a good sign that things will get better ...That's fool optimism. A quick recovery is not going to happen,'' said Rudy Narvas, senior strategist at 4Cast in New York.
I am putting out the word Mikey wants to borrow money and have you pay me. Give me a break!!!! What a racket and investors are betting against the Fed that can get money and all it wants for stinking nothing? I'll bet with the Fed on this one.
The beat goes on ...........Mikey
Pressures on fund managers to stock up on the safest possible assets in advance of year-end book-balancing added to the bid for government securities, traders said.
The U.S. Treasury Department said it sold four-week bills at a high rate of 0.000 percent, a level never before seen, in a $30 billion auction. Watch the accompanying video for more.
When Treasury bill rates turn negative it shows that investors are so concerned about the safety of other assets that they are willing to effectively pay the U.S. government a fee to look after their money.
Rates for three-month bills in the market fell below zero, according to fixed-income trading platform Tradeweb.
RELATED LINKS
"There is just a continuing flight to safety with money that needs to be invested. Money funds want it to be invested rather than under the mattress, which is continuing to push rates lower,'' said Lou Brien, a market strategist with DRW Trading Group in Chicago.
"There is the uncertainty of counterparty risk and concern over the possibility of deflation,'' he said.
Counterparty risk is the distrust among banks and other lenders that the party on the other side of a trade might not repay funds.
Bill rates fell to zero in mid-September when Lehman Brothers collapsed, sending panicked investors to the relative safety of government paper.
"There's still a ton of fear. People are now paying the government to take their money. Something is wrong,'' said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"For the Treasury, it's great financing. For everyone, it's not a good sign that things will get better ...That's fool optimism. A quick recovery is not going to happen,'' said Rudy Narvas, senior strategist at 4Cast in New York.
I am putting out the word Mikey wants to borrow money and have you pay me. Give me a break!!!! What a racket and investors are betting against the Fed that can get money and all it wants for stinking nothing? I'll bet with the Fed on this one.
The beat goes on ...........Mikey
Patient is responding to medication
DJIA 8863 -69 VIX 57.26 (falling) Gold 771.70 +2.40 Oil 44.28 +.57
Market feels to me that life is returning as all segments seem to be reviving. No one has bought this thing yet and there is a ton of money on the sidelines, all the right things for a great rally. I like what I see now. Financials are leading the way and the commodities stocks are looking like they want to play now. Watch the UYM and DIG here. They should be players now as I believe the market will focus more on things to come rather than the bad news of the past.
Market feels to me that life is returning as all segments seem to be reviving. No one has bought this thing yet and there is a ton of money on the sidelines, all the right things for a great rally. I like what I see now. Financials are leading the way and the commodities stocks are looking like they want to play now. Watch the UYM and DIG here. They should be players now as I believe the market will focus more on things to come rather than the bad news of the past.
Monday, December 8, 2008
The Storm is Over
DJIA 8859 +223 VIX 59.34 Gold 769.50 +17.30 Oil 42.84 +2.04
Todays weather report:
The storm has passed and clear skys are ahead but rumors of another storm will be persistant in the near term. Accuweather predicts that there are no severe storms ahead.
This is the news today: The tone is decisively calmer
From CNBC:
It is probably no coincidence that the interim bottom for the equity market was set the day before President-elect Barack Obama began a series of public announcements and appearances meant to address the economic and financial crisis, stabilize the financial markets, and shore up confidence.
The low, of course, was set on November 20th, the day before Obama announced that Timothy Geithner would be his nominee to become U.S. Treasury Secretary. I said on the following day that Obama's announcement could mark the turn and that beyond Geithner's appointment what was important was Obama's quick rollout of his economic team, which cast the President-elect as an activist on the financial crisis, having moved quickly and with conviction.
The tone that Obama set will likely continue to benefit the financial markets for weeks to come, although there will be plenty of obstacles along the way. Nevertheless, Friday's dreadful jobs report has reinforced Obama's mandate to act decisively, and all indications are that he will. In addition, the Federal Reserve has been empowered by the news and it will likely make further forays into the realm of quantitative easing and will likely expand its program of purchasing securities, targeting long-term rates, and of funding the consumer and business lending markets.
Go with for now it will get alot better in the next 2 months. The beat goes on ...Mikey
11:48 UYM could be an eye popper here at 13.96
Like SAA at 21.06 and FCX at 20.83
Gas prices rising today ...Film at 11
Todays weather report:
The storm has passed and clear skys are ahead but rumors of another storm will be persistant in the near term. Accuweather predicts that there are no severe storms ahead.
This is the news today: The tone is decisively calmer
From CNBC:
It is probably no coincidence that the interim bottom for the equity market was set the day before President-elect Barack Obama began a series of public announcements and appearances meant to address the economic and financial crisis, stabilize the financial markets, and shore up confidence.
The low, of course, was set on November 20th, the day before Obama announced that Timothy Geithner would be his nominee to become U.S. Treasury Secretary. I said on the following day that Obama's announcement could mark the turn and that beyond Geithner's appointment what was important was Obama's quick rollout of his economic team, which cast the President-elect as an activist on the financial crisis, having moved quickly and with conviction.
The tone that Obama set will likely continue to benefit the financial markets for weeks to come, although there will be plenty of obstacles along the way. Nevertheless, Friday's dreadful jobs report has reinforced Obama's mandate to act decisively, and all indications are that he will. In addition, the Federal Reserve has been empowered by the news and it will likely make further forays into the realm of quantitative easing and will likely expand its program of purchasing securities, targeting long-term rates, and of funding the consumer and business lending markets.
Go with for now it will get alot better in the next 2 months. The beat goes on ...Mikey
11:48 UYM could be an eye popper here at 13.96
Like SAA at 21.06 and FCX at 20.83
Gas prices rising today ...Film at 11
Friday, December 5, 2008
Dow Gains Nearly 300 After Late-Day Rally
Stocks shot up like a rocket in the final hour of trading, shrugging off earlier losses triggered by the biggest monthly job loss in 34 years and the highest percentage of delinquent mortgages on record.
The Dow Jones Industrial Average gained nearly 300 points, after being down as much as 200 earlier. The S&P 500 index and Nasdaq also finished higher.
The Dow dropped more than 215 points in the previous session, snapping a two-day winning streak.
I like that word rocket. Kind of catchy don't you think. See you next week hope we get more bad news. Wink Wink The beat goes on.........Mikey
Stocks shot up like a rocket in the final hour of trading, shrugging off earlier losses triggered by the biggest monthly job loss in 34 years and the highest percentage of delinquent mortgages on record.
The Dow Jones Industrial Average gained nearly 300 points, after being down as much as 200 earlier. The S&P 500 index and Nasdaq also finished higher.
The Dow dropped more than 215 points in the previous session, snapping a two-day winning streak.
I like that word rocket. Kind of catchy don't you think. See you next week hope we get more bad news. Wink Wink The beat goes on.........Mikey
Congress Critical of Auto makers? Give me a break!
I am listening to the esteemed Senators and Congressman criticize the Auto industry for putting the auto industry in trouble. Wait a minute boys take a look at what you did to the economy. As far as needing a loan geez how big is the deficit going to be? The is the Theater of the Absurd in comedy form. Hypocrite does not even describe it.
Selloff in Oil from here is complete BS
Oil 41.60 -2.07
I am adding to DIG at 22.31 and DXO at 2.58
11:56 Buying first buy of UGA 18.27 That's right long gasoline
I am adding to DIG at 22.31 and DXO at 2.58
11:56 Buying first buy of UGA 18.27 That's right long gasoline
Interest rate check
3 month Bills .1%
6 Month .255%
2 Year .8118%
5 Year 1.513%
10 Year 2.5513%
30 Year 3.038%
Thought you should know what the Government is borrowing money for now. By the way the average spread between 30 year Bonds and 30 Year mortgages is about 1.25% so you can see that my call of 4.25% 30 year mortgages is in the ballpark now.
After the new stimulus package is announced at 600 or so billion combined with 4.25% 30 year mortgages I would guess that the market at some point wakes up and takes off like a rocket ship to the moon. Right now the rocket is on the launching pad and massive amounts of fuel are being loaded. Ignition is when the mortgages are refied and the tax cuts and tax law changes kick in.
In my opinion, this market and particularly the financials are an opportunity that we won't see for a long long time. The UYG 5.40 is going to be a monster.
6 Month .255%
2 Year .8118%
5 Year 1.513%
10 Year 2.5513%
30 Year 3.038%
Thought you should know what the Government is borrowing money for now. By the way the average spread between 30 year Bonds and 30 Year mortgages is about 1.25% so you can see that my call of 4.25% 30 year mortgages is in the ballpark now.
After the new stimulus package is announced at 600 or so billion combined with 4.25% 30 year mortgages I would guess that the market at some point wakes up and takes off like a rocket ship to the moon. Right now the rocket is on the launching pad and massive amounts of fuel are being loaded. Ignition is when the mortgages are refied and the tax cuts and tax law changes kick in.
In my opinion, this market and particularly the financials are an opportunity that we won't see for a long long time. The UYG 5.40 is going to be a monster.
Jobs Bad Oh MY!!!..Keep your eye on the Financials
Stocks fell sharply Friday after the biggest monthly job loss in 34 years and the highest percentage of delinquent mortgages on record.
The Dow Jones Industrial Average opened down about 90 points after the jobs report then doubled that after the mortgage-delinquency report came out at 10am.
The Dow dropped more than 215 points in the previous session, snapping a two-day winning streak.
Major U.S. Indexes.DJIA8193.05-183.19-2.19%315,001,000.NCOMP1419.8-25.76-1.78%225,030,300.SPX827.24-17.98-2.13%1,167,713,500
The number of delinquent mortgage loans, which means at least one payment past due, jumped to 6.99 percent in the third quarter from 5.59 percent a year earlier, the Mortgage Bankers Association reported. That was the highest in the history of the MBA survey. The number of mortgages in foreclosure rose to 2.97 percent from 1.69 percent a year ago.
Subprime mortgages were one of the biggest culprits, with 20 percent of those mortgages in delinquency.
"We haven't gone into past recessions with a housing market in as bad of a shape," Jay Brinkmann, chief economist at the MBA, told Reuters in an interview.
Economists said that job losses will only exacerbate mortgage deliquencies and foreclosures in the coming months.
Employers cut 533,000 jobs from nonfarm payrolls in November, the sharpest job loss since December 1974 and much more than the 340,000 decline economists had expected. The unemployment rate rose to 6.7 percent from 6.5 percent.
The prior two months' job losses were revise to show that a total of 199,000 more jobs were lost than previously thought in September and October. That means 1.25 million jobs were lost in the last three months alone, bringing the total to nearly 2 million since the start of the year.
"This is an eye-poppingly bad number," Art Hogan, chief market analyst at Jefferies, told CNBC. "Everybody seems to be coming out and cutting 10-percent of their workforce — at least. ... Does that mean we’re going to see on average for the next six months a job-loss number in the 500s? No. I think we stabilize at some point, probably in the first half of next year where that number is going to start to work its way back to the 200,000-job (loss) range."
Hogan added that the stimulus packages being worked on now, which will get dumped on the Obama administration’s lap on day one, will help make that happen, as opposed to having to wait to see what the administration does in the first 100 days.
DJIA 8181 -196
Financial index XLF 11.88 +.01 UYG 5.29 -.02 XHB(Housing ETF) 12.22 -.28
Tail end stocks nearsing lows..oil ..commdoities. Financials Housing Showing strength. Watch these to give clues about DJIA.
Of course, I am biased but as I look at these charts I see that they are turning up
The Dow Jones Industrial Average opened down about 90 points after the jobs report then doubled that after the mortgage-delinquency report came out at 10am.
The Dow dropped more than 215 points in the previous session, snapping a two-day winning streak.
Major U.S. Indexes.DJIA8193.05-183.19-2.19%315,001,000.NCOMP1419.8-25.76-1.78%225,030,300.SPX827.24-17.98-2.13%1,167,713,500
The number of delinquent mortgage loans, which means at least one payment past due, jumped to 6.99 percent in the third quarter from 5.59 percent a year earlier, the Mortgage Bankers Association reported. That was the highest in the history of the MBA survey. The number of mortgages in foreclosure rose to 2.97 percent from 1.69 percent a year ago.
Subprime mortgages were one of the biggest culprits, with 20 percent of those mortgages in delinquency.
"We haven't gone into past recessions with a housing market in as bad of a shape," Jay Brinkmann, chief economist at the MBA, told Reuters in an interview.
Economists said that job losses will only exacerbate mortgage deliquencies and foreclosures in the coming months.
Employers cut 533,000 jobs from nonfarm payrolls in November, the sharpest job loss since December 1974 and much more than the 340,000 decline economists had expected. The unemployment rate rose to 6.7 percent from 6.5 percent.
The prior two months' job losses were revise to show that a total of 199,000 more jobs were lost than previously thought in September and October. That means 1.25 million jobs were lost in the last three months alone, bringing the total to nearly 2 million since the start of the year.
"This is an eye-poppingly bad number," Art Hogan, chief market analyst at Jefferies, told CNBC. "Everybody seems to be coming out and cutting 10-percent of their workforce — at least. ... Does that mean we’re going to see on average for the next six months a job-loss number in the 500s? No. I think we stabilize at some point, probably in the first half of next year where that number is going to start to work its way back to the 200,000-job (loss) range."
Hogan added that the stimulus packages being worked on now, which will get dumped on the Obama administration’s lap on day one, will help make that happen, as opposed to having to wait to see what the administration does in the first 100 days.
DJIA 8181 -196
Financial index XLF 11.88 +.01 UYG 5.29 -.02 XHB(Housing ETF) 12.22 -.28
Tail end stocks nearsing lows..oil ..commdoities. Financials Housing Showing strength. Watch these to give clues about DJIA.
Of course, I am biased but as I look at these charts I see that they are turning up
Thursday, December 4, 2008
9000 by the end of next week?
DJIA 8571 -19.12
Some of the early stocks I follow have moved up to their 50 day average. The 50 day for the DJIA is 9040. That would be a nice Xmas present.
7:40 Adding to MS 14, SSO 24.95
9:00 Adding to ABK 1.55
Some of the early stocks I follow have moved up to their 50 day average. The 50 day for the DJIA is 9040. That would be a nice Xmas present.
7:40 Adding to MS 14, SSO 24.95
9:00 Adding to ABK 1.55
News remains bad ..Keep your eye on Financial, Retail and Housing Stocks
DJIA 8566 -31 VIX 61.15 Gold
From AP
There are ample reasons for America's shoppers to act like grinches this holiday season, with lost jobs, wilting retirement accounts and shrinking home values topping the list.
And if anyone needed more evidence of consumers' weary state and the nation's deteriorating job market, they got it Thursday with the latest batch of bleak economic data.
The number of newly laid-off people signing up for unemployment benefits last week dropped by 21,000 to 509,000, the Labor Department reported. Even with the drop—which was better than the increase economists were forecasting—the level of jobless applications was still quite high and pointed to a deeply troubled employment climate.
The number of people continuing to draw unemployment benefits last week climbed to 4.09 million, a 26-year high.
OK things are bad but watch the lead group of stocks. The XHB 12.83 +.84(Homebuilders ETF) is turning the corner. The XLF 12.12 +.12 (financial ETF)is right behind it. They are showing you the bad news and holding down the tail end stocks while they rally the front end. This is the exact opposite of the top when the oil and commodity stocks held up as the financials and housing sold off. I am staying heavy in the front end groups but believe that before this is over everything will go.
From AP
There are ample reasons for America's shoppers to act like grinches this holiday season, with lost jobs, wilting retirement accounts and shrinking home values topping the list.
And if anyone needed more evidence of consumers' weary state and the nation's deteriorating job market, they got it Thursday with the latest batch of bleak economic data.
The number of newly laid-off people signing up for unemployment benefits last week dropped by 21,000 to 509,000, the Labor Department reported. Even with the drop—which was better than the increase economists were forecasting—the level of jobless applications was still quite high and pointed to a deeply troubled employment climate.
The number of people continuing to draw unemployment benefits last week climbed to 4.09 million, a 26-year high.
OK things are bad but watch the lead group of stocks. The XHB 12.83 +.84(Homebuilders ETF) is turning the corner. The XLF 12.12 +.12 (financial ETF)is right behind it. They are showing you the bad news and holding down the tail end stocks while they rally the front end. This is the exact opposite of the top when the oil and commodity stocks held up as the financials and housing sold off. I am staying heavy in the front end groups but believe that before this is over everything will go.
Wednesday, December 3, 2008
This is recession week.
The country's economic picture has darkened further as Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.
The Federal Reserve's new snapshot of business conditions nationwide, released Wednesday, suggested the economy was sinking deeper into recession.
"Economic activity weakened across all Federal Reserve districts," the report concluded.
The Fed didn't use the word "recession," but just two days earlier the National Bureau of Economic Research declared what many Americans already knew in their bones: that the country had been suffering through one since last December.
Where I think we are now: The Financials are gaining relative strength as are the reatailers and are losing the focus as the disaster area. Now the focus has changed to the economically sensative stocks. The commodity and cyclicals. This is good stuff it means that the first fphase of the market decline has been arrested. The next medicine will be directed toward the economy. You can get a hint of that by reading the previous post.
The Federal Reserve's new snapshot of business conditions nationwide, released Wednesday, suggested the economy was sinking deeper into recession.
"Economic activity weakened across all Federal Reserve districts," the report concluded.
The Fed didn't use the word "recession," but just two days earlier the National Bureau of Economic Research declared what many Americans already knew in their bones: that the country had been suffering through one since last December.
Where I think we are now: The Financials are gaining relative strength as are the reatailers and are losing the focus as the disaster area. Now the focus has changed to the economically sensative stocks. The commodity and cyclicals. This is good stuff it means that the first fphase of the market decline has been arrested. The next medicine will be directed toward the economy. You can get a hint of that by reading the previous post.
This sums it up pretty good
What Fed, Treasury May Do Next to Ease Credit Crisis
Even as Congress leans toward approving a controversial auto industry bailout and Democrats prepare a massive stimulus package, the heads of the Federal Reserve and Treasury are signaling that they, too, are planning more steps to ease credit and jump-start the economy.
With most economists expecting the Fed to cut the federal funds rate again at its mid-December meeting, the big buzz involves what new credit-easing measures may be in the works.
What the Fed Can Do Besides Cut Rates
Thus far this week, both Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke have either hinted at or made vague references to new measures. And given their use of innovative tools in trying to manage the crisis to date, it’s likely the two policymakers will continue to try as many things as possible.
“They've got to save this thing right now; they can't let the momentum get away from them,” says veteran money manager Jim Awad of Zephyr Management. “And, yes I think they're going to throw everything at it.”
Though some of the previous measures have had little—if any, impact—say economists, it’s the cumulative effect that counts: New measures will underscore that approach and also show leadership during the presidential transition period.
“They want to give people the encouragement that there’s more they can do, that they’re not out of bullets,” says economist Christopher Rupkey of Bank of Mitsubishi-Tokyo.
Bullets, yes. Silver bullets, no—or at least not yet. Here’s a look at what policymakers might do in the near term—as well as the obstacles involved—and the big guns they may have to resort to in the end.
Housing, Housing, Housing
Economists say even though Bernanke and Paulson have taken expensive and aggressive steps to prop up financial institutions, they have yet to result in much lending.
“The banks are like the roach motels—the money goes in and doesn't come out, the rate cuts go in and don't come out,” quips Fact & Opinion Chief Economist Robert Brusca, in a twist on the snappy ad slogan for the innovative pest control product.
Changing that is now the biggest challenge and the current focus. That a point was underscored by recent measures, such as buying mortgage-backed securities, as well as comments by Bernanke and Paulson about forthcoming steps.
In a speech this week, Paulson said they are developing “additional programs to strengthen … so that lending flows into our economy.”
On the same day, Bernanke talked about “helping to spur aggregate demand,” saying the Fed could buy longer-term Treasury or agency securities on the open market in substantial quantities. Economists say the clear goal would be to lower mortgage rates, although there’s significant disagreement about whether it would work.
“The Fed is trying to do what it can do to send a message to banks that it wants rates lower,” says Brusca.
Perhaps by no coincidence, such a move—what some call quantitative easing—was essentially endorsed by St. Louis Federal Reserve President James Bullard Tuesday.
“They can and should and probably will do more to deal with mortgages,” says Robert Glauber, a top Treasury Dept official in the first Bush Administration. “They need to find ways to restructure whole loans, as the FDIC is doing.”
Paulson has repeatedly stressed the important role of the housing market in the financial crisis but has been criticized for doing little, if anything, to aid homeowners.
Glauber and others point out that officials have been thwarted by a system that encouraged the massive securitization of mortgages and other loans, which complicates their restructuring.
“It creates bureaucratic and legal impediments,“ says Glauber. “It makes it hard to change the terms.”
Others suggest policymakers need to do more to support the corporate bond market. Brusca, for one, says there could be more direct government lending, such as financing the commercial paper of auto companies.
“What they're struggling with now is the credit universe of Fortune 500 companies whose credit costs have gone through the roof,” says Rupkey.
"You can judge success when corporates do better than Treasurys," adds Awad. "And when corporate bonds do better, stocks will follow.”
David Zalubowski / AP
--------------------------------------------------------------------------------
Silver Bullets, Drastic Steps
Some say bolder, more drastic steps are needed.
Solving the lending problem, for instance, might require allowing Fannie Mae and Freddie Mac to lend money, rather than simply guarantee mortgages, or nationalizing the banks, given the amount of aid that's been given to ones like Citigroup [C 7.30 0.08 (+1.04%) ].
Others say the mark-to-market accounting rule must go.
“The failure to force the SEC to get on the same page with the rest of government by suspending its failed and highly destruction market value accounting rules outweighs all of the other failures combined,” says former FDIC Chairman William Isaac. “It is insane to be using taxpayer funds to recapitalize financial companies when the SEC is allowed to continue destroying the capital almost as fast as it is being put in."
The so-called Wall Street bailout legislation creating the TARP restated the SEC’s authority to drop mark to market if it was in the interest of taxpayers as well as investors. The European Union almost did it before a last minute retreat.
Such a move clearly has global implications. It might also need to wait for a new Congress, and president, not to mention, SEC chairman. Together, that may put it in the remedies-of-last resort category.
Short term, the he best measure of success may be what doesn’t happen as opposed to what does happen. Many consider another major corporate failure—on the scale of Lehman Brothers—would be a major blow.
“You have liquidity,” says Awad. “What you don't have is confidence.”
Even as Congress leans toward approving a controversial auto industry bailout and Democrats prepare a massive stimulus package, the heads of the Federal Reserve and Treasury are signaling that they, too, are planning more steps to ease credit and jump-start the economy.
With most economists expecting the Fed to cut the federal funds rate again at its mid-December meeting, the big buzz involves what new credit-easing measures may be in the works.
What the Fed Can Do Besides Cut Rates
Thus far this week, both Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke have either hinted at or made vague references to new measures. And given their use of innovative tools in trying to manage the crisis to date, it’s likely the two policymakers will continue to try as many things as possible.
“They've got to save this thing right now; they can't let the momentum get away from them,” says veteran money manager Jim Awad of Zephyr Management. “And, yes I think they're going to throw everything at it.”
Though some of the previous measures have had little—if any, impact—say economists, it’s the cumulative effect that counts: New measures will underscore that approach and also show leadership during the presidential transition period.
“They want to give people the encouragement that there’s more they can do, that they’re not out of bullets,” says economist Christopher Rupkey of Bank of Mitsubishi-Tokyo.
Bullets, yes. Silver bullets, no—or at least not yet. Here’s a look at what policymakers might do in the near term—as well as the obstacles involved—and the big guns they may have to resort to in the end.
Housing, Housing, Housing
Economists say even though Bernanke and Paulson have taken expensive and aggressive steps to prop up financial institutions, they have yet to result in much lending.
“The banks are like the roach motels—the money goes in and doesn't come out, the rate cuts go in and don't come out,” quips Fact & Opinion Chief Economist Robert Brusca, in a twist on the snappy ad slogan for the innovative pest control product.
Changing that is now the biggest challenge and the current focus. That a point was underscored by recent measures, such as buying mortgage-backed securities, as well as comments by Bernanke and Paulson about forthcoming steps.
In a speech this week, Paulson said they are developing “additional programs to strengthen … so that lending flows into our economy.”
On the same day, Bernanke talked about “helping to spur aggregate demand,” saying the Fed could buy longer-term Treasury or agency securities on the open market in substantial quantities. Economists say the clear goal would be to lower mortgage rates, although there’s significant disagreement about whether it would work.
“The Fed is trying to do what it can do to send a message to banks that it wants rates lower,” says Brusca.
Perhaps by no coincidence, such a move—what some call quantitative easing—was essentially endorsed by St. Louis Federal Reserve President James Bullard Tuesday.
“They can and should and probably will do more to deal with mortgages,” says Robert Glauber, a top Treasury Dept official in the first Bush Administration. “They need to find ways to restructure whole loans, as the FDIC is doing.”
Paulson has repeatedly stressed the important role of the housing market in the financial crisis but has been criticized for doing little, if anything, to aid homeowners.
Glauber and others point out that officials have been thwarted by a system that encouraged the massive securitization of mortgages and other loans, which complicates their restructuring.
“It creates bureaucratic and legal impediments,“ says Glauber. “It makes it hard to change the terms.”
Others suggest policymakers need to do more to support the corporate bond market. Brusca, for one, says there could be more direct government lending, such as financing the commercial paper of auto companies.
“What they're struggling with now is the credit universe of Fortune 500 companies whose credit costs have gone through the roof,” says Rupkey.
"You can judge success when corporates do better than Treasurys," adds Awad. "And when corporate bonds do better, stocks will follow.”
David Zalubowski / AP
--------------------------------------------------------------------------------
Silver Bullets, Drastic Steps
Some say bolder, more drastic steps are needed.
Solving the lending problem, for instance, might require allowing Fannie Mae and Freddie Mac to lend money, rather than simply guarantee mortgages, or nationalizing the banks, given the amount of aid that's been given to ones like Citigroup [C 7.30 0.08 (+1.04%) ].
Others say the mark-to-market accounting rule must go.
“The failure to force the SEC to get on the same page with the rest of government by suspending its failed and highly destruction market value accounting rules outweighs all of the other failures combined,” says former FDIC Chairman William Isaac. “It is insane to be using taxpayer funds to recapitalize financial companies when the SEC is allowed to continue destroying the capital almost as fast as it is being put in."
The so-called Wall Street bailout legislation creating the TARP restated the SEC’s authority to drop mark to market if it was in the interest of taxpayers as well as investors. The European Union almost did it before a last minute retreat.
Such a move clearly has global implications. It might also need to wait for a new Congress, and president, not to mention, SEC chairman. Together, that may put it in the remedies-of-last resort category.
Short term, the he best measure of success may be what doesn’t happen as opposed to what does happen. Many consider another major corporate failure—on the scale of Lehman Brothers—would be a major blow.
“You have liquidity,” says Awad. “What you don't have is confidence.”
Clawing our way up the Wall of Worry
DJIA 8521 +100 VIX 61.05 Gold 773 -9.80 Oil 47.16 +.20
Remember that old saying I don't hear it being used but I am going to use it now. We have alot to worry about don't we. The list is long. I am betting on the boys(The Fed) and lets claw our way up. The beat goes on.......Mikey
9:00 DIG 27.98 Looks ready
Remember that old saying I don't hear it being used but I am going to use it now. We have alot to worry about don't we. The list is long. I am betting on the boys(The Fed) and lets claw our way up. The beat goes on.......Mikey
9:00 DIG 27.98 Looks ready
Point Counter Point
Point...Old News
Job Weakness, RIMM Outlook Pound Stocks
Stocks opened sharply lower as the looming spectre of disastrous job numbers hindered hopes for a December rally. Major indexes were off about 1.5 percent each, with weakness centered on large banks and technology, where a gloomy outlook from Research in Motion dragged the Nasdaq tech barometer down more than 30 points.
Major U.S. Indexes.DJIA8280.11-138.98-1.65%148,402,000.NCOMP1426.8-23.00-1.59%101,932,600.SPX832.22-16.59-1.95%509,406,000
As the market awaits Friday's Labor Department jobs number, separate private reports showed joblessness in November hitting seven-year highs, while a productivity report indicated worker output slowing though not by as much as analysts had thought.
Counterpoint...New News
President-elect Barack Obama said his economic recovery plan would include tax cuts and increased federal spending, but speed was of the utmost importance. He also said that state governors would have a role in shaping the stimulus plan.
At the same time, mortgage applications staged their largest one-week surge ever, gaining 112 percent as refinancings soared 203 percent following aggressive government moves to buy mortgage-backed securities. Mortgage rates for a 30-year loan fell to 5.47 percent in November.
They keep telling us that the rally is not comming. I find that intersting because who in the hell is looking for a rally with all this bad news and the economy in a recession. I remain bullish and choose to look at the new news.
Stocks that interest me if we turn the corner are ABK 1.31, MBI 5.70, AIG 1.91, MTG 2.17, YRCW 4.50 DXO 3.07 BBY 19.92 RIMM 36.57 INTC 12.94 MS 12.59.
Added to MBI at 5.81
Job Weakness, RIMM Outlook Pound Stocks
Stocks opened sharply lower as the looming spectre of disastrous job numbers hindered hopes for a December rally. Major indexes were off about 1.5 percent each, with weakness centered on large banks and technology, where a gloomy outlook from Research in Motion dragged the Nasdaq tech barometer down more than 30 points.
Major U.S. Indexes.DJIA8280.11-138.98-1.65%148,402,000.NCOMP1426.8-23.00-1.59%101,932,600.SPX832.22-16.59-1.95%509,406,000
As the market awaits Friday's Labor Department jobs number, separate private reports showed joblessness in November hitting seven-year highs, while a productivity report indicated worker output slowing though not by as much as analysts had thought.
Counterpoint...New News
President-elect Barack Obama said his economic recovery plan would include tax cuts and increased federal spending, but speed was of the utmost importance. He also said that state governors would have a role in shaping the stimulus plan.
At the same time, mortgage applications staged their largest one-week surge ever, gaining 112 percent as refinancings soared 203 percent following aggressive government moves to buy mortgage-backed securities. Mortgage rates for a 30-year loan fell to 5.47 percent in November.
They keep telling us that the rally is not comming. I find that intersting because who in the hell is looking for a rally with all this bad news and the economy in a recession. I remain bullish and choose to look at the new news.
Stocks that interest me if we turn the corner are ABK 1.31, MBI 5.70, AIG 1.91, MTG 2.17, YRCW 4.50 DXO 3.07 BBY 19.92 RIMM 36.57 INTC 12.94 MS 12.59.
Added to MBI at 5.81
Tuesday, December 2, 2008
DJIA to rally 40%
Charts Predict: Dow 40% Rally to Start on Dec. 15
The Dow Industrial Average is poised for an extended bear-market rally that could see the index gain as much as 40 percent, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC. But don't buy until December 15, Jadeja warned.
"There's a very very very strong rally in the making and it's going to last all the way up into next year into the July period," Jadeja said.
"We can see almost a 25 to 40 percent corrective rally coming up," he said.
The rally will start in or around the week of December 15, but there could be further weakness before then, Jadeja said.
The Dow [.DJIA 8178.64 29.55 (+0.36%) ] could slump to 6,800 or 6,400 in the next two weeks as the index forms a bottom before its half-year upswing, he said.
Once the Dow has rallied during the first half of the year it could then retest lows in the second half, he said.
Hey Jadeja if the rally started before then say last week you would miss it. I am not sweating the retest if it happens so be it.
The Dow Industrial Average is poised for an extended bear-market rally that could see the index gain as much as 40 percent, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC. But don't buy until December 15, Jadeja warned.
"There's a very very very strong rally in the making and it's going to last all the way up into next year into the July period," Jadeja said.
"We can see almost a 25 to 40 percent corrective rally coming up," he said.
The rally will start in or around the week of December 15, but there could be further weakness before then, Jadeja said.
The Dow [.DJIA 8178.64 29.55 (+0.36%) ] could slump to 6,800 or 6,400 in the next two weeks as the index forms a bottom before its half-year upswing, he said.
Once the Dow has rallied during the first half of the year it could then retest lows in the second half, he said.
Hey Jadeja if the rally started before then say last week you would miss it. I am not sweating the retest if it happens so be it.
Remember "Don't fight the Fed and lower oil prices are good
DJIA 8216 That was at the top. When we topped in Jul of 2007 every sell off was met with a big rally as the Fed cut rates. The message was don't fight the Fed.The experts then said the sell off was temporary and hold for the long term. Now the Fed has cut the rates to 1% they are monetizing ever thing in sight and the oil prices have dropped to 50 bucks. This is incredibly stimulative. Guess what, every time the Fed does something the market has a one day rally and then sells off.
The mid set of the investor is to put their money in T Bills at less than 1%. Why? Now, the experts they say be safe avoid risk and they don't even mention the Fed. Its not hard to predict the outcome here. Listen to the experts they will give you the answer.
The mid set of the investor is to put their money in T Bills at less than 1%. Why? Now, the experts they say be safe avoid risk and they don't even mention the Fed. Its not hard to predict the outcome here. Listen to the experts they will give you the answer.
Market up on bargain hunting
Stocks Rebound Amid Bargain Hunting
02 Dec 2008 | 12:59 PM ET Text Size Stocks rose sharply Tuesday as investors scooped up beaten-down stocks after the prior session's sell off that saw the Dow give back 700 points.
Major U.S. Indexes.DJIA8387.47238.38+2.93%699,739,000.NCOMP1446.3748.30+3.45%404,178,800.SPX844.9328.72+3.52%2,298,272,500
The Dow Jones Industrial Average was up 50-75 points in the first hour or so of trading, then jumped another 100 points or so after Ford [F 2.80 0.25 (+9.8%) ] CEO Alan Mulally said his company has enough money to get through 2009 and may not need help from the government.
But analysts said the bounce was likely to be temporary and that stocks may test the lows reached in October again.
"No doubt we can continue to have a short-term rally, but… if we look at the global economy, contraction is on the way, corporate earnings are coming down sharply," independent strategist Bob McKee said on CNBC.
I love rallies that go up for no apparent reason. For the technicians the 10 day is holding DJIA 8310 and is rising for the second day. This is a good place to launch a new rally,If we can get back up to 8800 by the end of the week the longs will be in charge for the first time since this hit started.
02 Dec 2008 | 12:59 PM ET Text Size Stocks rose sharply Tuesday as investors scooped up beaten-down stocks after the prior session's sell off that saw the Dow give back 700 points.
Major U.S. Indexes.DJIA8387.47238.38+2.93%699,739,000.NCOMP1446.3748.30+3.45%404,178,800.SPX844.9328.72+3.52%2,298,272,500
The Dow Jones Industrial Average was up 50-75 points in the first hour or so of trading, then jumped another 100 points or so after Ford [F 2.80 0.25 (+9.8%) ] CEO Alan Mulally said his company has enough money to get through 2009 and may not need help from the government.
But analysts said the bounce was likely to be temporary and that stocks may test the lows reached in October again.
"No doubt we can continue to have a short-term rally, but… if we look at the global economy, contraction is on the way, corporate earnings are coming down sharply," independent strategist Bob McKee said on CNBC.
I love rallies that go up for no apparent reason. For the technicians the 10 day is holding DJIA 8310 and is rising for the second day. This is a good place to launch a new rally,If we can get back up to 8800 by the end of the week the longs will be in charge for the first time since this hit started.
Monday, December 1, 2008
This just in...We are in a recession.. The Big Con
The National Bureau of Economic Research says the recession began in Dec 2007. Go back and read the comments by Bernakie and Bush for the last half of 2007. This was after the blow up in the subprime markets in early 2007. Now is the opposite of the early 2007 time period. Thre is a repairing of the financial markets but the economy is not OK.
Gold is getting wacked again giving us the impression that deflation is comming. This is part of the reason that they can raise money so cheaply. The Fed wants to give the impression that there is a deflation and you need to be safe with your money. The net result is that all the money runs into US treasuries and lets them finance the next expansion for nothing. The TARP is being financed with cheap rates. At the same time the governments are buying an equity position in everything at fire sale prices.
Give me unlimited amounts of money at 10 year rates of 1.8% and I think I will be OK. In a couple of years this is what we will look back on but few will remember. The beat goes on...Mikey
Gold is getting wacked again giving us the impression that deflation is comming. This is part of the reason that they can raise money so cheaply. The Fed wants to give the impression that there is a deflation and you need to be safe with your money. The net result is that all the money runs into US treasuries and lets them finance the next expansion for nothing. The TARP is being financed with cheap rates. At the same time the governments are buying an equity position in everything at fire sale prices.
Give me unlimited amounts of money at 10 year rates of 1.8% and I think I will be OK. In a couple of years this is what we will look back on but few will remember. The beat goes on...Mikey
Tug of War
DJIA 8485 -341 VIX 62.01 Gold 783.60 -35.40 Oil 50.75 -3.68
The war of bad economic news vs goverment intervention continues. The news on the economy worsens and the response by the central banks increases. Current stock prices reflect the bad news and then some. The interesting thing is that the US is financing all of this stimulus with incredibally cheap money. The ten year note is 2.92 and the 30 year is 3.43. The idea by the system is to get money flowing into treasuries and out of equity. There is a change of ownership going on now. The cheap money will finance the next expansion and the new owners will reap the rewards.
The DJIA rallied above the 10 day average and slightly above the 20 day. The 10 day is at about 8330 where I think it will find support. I think last week broke the back of the decline and this is just a pullback off that move. Still holding long positions will keep you posted.
The war of bad economic news vs goverment intervention continues. The news on the economy worsens and the response by the central banks increases. Current stock prices reflect the bad news and then some. The interesting thing is that the US is financing all of this stimulus with incredibally cheap money. The ten year note is 2.92 and the 30 year is 3.43. The idea by the system is to get money flowing into treasuries and out of equity. There is a change of ownership going on now. The cheap money will finance the next expansion and the new owners will reap the rewards.
The DJIA rallied above the 10 day average and slightly above the 20 day. The 10 day is at about 8330 where I think it will find support. I think last week broke the back of the decline and this is just a pullback off that move. Still holding long positions will keep you posted.
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