This is a simple rule and easy to remember. It takes 2 years for the masses and experts to believe something. The nature of the markets is to bubble. A market bubbles when everyone believes the same thing and acts on it. This is manifested in the charts by a straight up exponential move in price that has its biggest spike at the end of the move.
An example of this would be the price move of INTC that ended in 8/00 at 75.81. The believe there was in tech and that even though it was extended it was good for the long term. The stock broke the trend in 9/00 and was at 12.95 in Sep of 2002. The crowd finally believed in 9/02 that the tech story was not valid anymore.
The oil/commodities/emerging market story topped in 5/08 it had bubbled for the prior 2 1/2 years from Oct 2005. The experts still believe that story. They are still selling inflation and world growth. According to Mikey's rule of 2 it will not bottom out until May 2010. If you look at the EEM as an emerging market surrogate then you would expect it to drop to 10 by May of 2010. That is when the story will no longer be believed and we can have some kind of tradeable rally.
The same applies to Oil, China, Gold, Silver, Agg, and Cyclical. They are about 1 year and 65% from their lows.
Mikey
Tuesday, June 30, 2009
Experts touts Techs
DJIA 8407 -122 SPX 914 -12.60 VIX 27.34 Gold 928.40 -12.40 Oil 69.33 -2.16 Dollar Index 80.51 .3050 TLT (Long Term Gov Bonds)94.69 -.03 IEF (7-10 Yr Gov Bonds)90.77 -.13
As Rally Stalls, Tech May Be The Answer
With questions looming over whether Wall Street's three-month rally is running out steam, some portfolio managers are turning to technology as a way to ride out the next stock market cycle.
After jumping as much as 35 percent off the March lows, stocks have been in the doldrums lately, trading in a tight range as investors ponder data points that mostly show a tepid economic recovery at best.
Technology stocks, though, have taken on a fairly strong leadership position, and the fundamentals of the industry are indicating that could continue.
"From a fundamental standpoint, the good thing about technologies is they're typically low-leveraged," said Peter Miralles, president of Atlanta Wealth Consultants. "Since this has been a credit and leverage problem in this recession, technology actually is doing pretty well compared to some of the other groups. That trend will continue."
In both broad and narrow comparisons, tech has outperformed both during the massive stock market collapse off the October 2007 historic highs and through the spring 2009 rally.
The Nasdaq tech gauge is up roughly 31 percent since its March 9 low, while the Standard & Poor's 500 is up 27 percent and the Dow industrials have gained 22 percent over the same period. Even as the stock market dropped Tuesday, the Nasdaq's losses were only about half those of its counterparts.
Similarly, tech-based exchange-traded funds also have been among the market's leaders, occupying top spots in both percentage gains and total performance this year.
The Direxion Daily Technology Bull 3X [TYH 88.64 -2.46 (-2.7%) ] is the fourth-largest gainer by percentage this year of all ETFs, surging about 64 percent. The fund tracks the small-cap Russell 1000 Technology Index.
Similarly, the Ultra Technology ProShares [ROM 31.76 -0.61 (-1.88%) ] ETF, which provides twice the performance of the Dow technology index, has popped 49 percent in 2009 and is also in the top 20 percentage gainers, according to Morningstar.
The more closely followed and much higher volume tech ETF, the PowerShares QQQQ [QQQQ 36.23 -0.22 (-0.6%) ] that follows the Nasdaq, is up 22 percent for the year. The Qs, as the ETF is known, has moved into a bullish position according to its 80-day and 200-day moving averages, according to Schaeffer's Investment Research in Cincinnati.
"Despite this outperformance, investors continue to overlook and to bet against the shares," Schaeffer's wrote in an analysis for clients.
The company is bullish on techs, saying options trading also is showing higher trends for the group. Schaeffer's specifically recommends Palm [PALM 16.2199 0.3999 (+2.53%) ], Synaptics [SYNA 37.90 -0.41 (-1.07%) ], Juniper Networks [JNPR 23.4229 -0.2071 (-0.88%) ] and Priceline.com [PCLN 111.12 -3.53 (-3.08%) ].
To be sure, there are some caution signals out there for tech: Some are suspicious of the sector precisely because of how strong its run has been and caution that a pullback, much like many have been predicting for the broader market, could be in the makings.
The fears, though, seem to be more confined to the short term, and many remain bullish for technology over the longer haul.
"We're getting mixed signals from the technology sector at least in near-term outlook," said Steven Roge, portfolio manager at Roge Partners in Omaha, Neb. "From a growth perspective on the short term, things are looking fairly neutral. From a long-term perspective, we're slightly bullish on the technology sector at this time."
Roge thinks any move higher in stocks is likely to continue to come from the beaten-down sectors that still have room to run.
As for technology, there is some indication of bumpiness ahead, but there's large options put interest at the 35 strike for the QQQQ ETF, just below its current level.
"In most recessions you're going to see technology become a leader, but of course with tremendous volatility like technology has always had," said Miralles, who sees chip companies as being cyclical while hand-held devices "is where the action is."
As financial companies continue to battle their way through the minefield of credit issues and inflation, technology companies that historically have low exposure to leverage and even inflation are likely to persevere.
"One thing that makes us slightly bullish is the balance sheets of these companies, and valuations are still relatively compelling," Roge said. "Typically technology companies keep more cash on their balance sheets, so they have a lot of room to work with."
Well now as the world burns the experts are going to hide in the oasis of the techs.
So Again where are they hiding
Energy XLE 47.55
Techs QQQQ 36.24 XLK 18.14 ROM 31.87
Emerging Markets EEM 32.14 FXI 38.14 EWZ 52.79
Commodities GLD 91.21 USO 37.70
That is exactly where they were hiding just before the crash last year. The song remains the same except the economy has broken now and the results will be the same as last year.
I think great shorts in here are the TYH 88.67 -2.43, the QQQQ 36.24,the XLE 47.55, the GLD 91.21, and the EEM 32.14. The QQQQ broke down at about 39 in late Sept so a rally to that area is possible, The charts on oil and tech are identical and they like both. The XLE (oil index) broke down at 61 at the same time it had a recent high of 55. The EEM broke at 35 also on late Sept. Again the charts all look the same and are just in a snap back rally.
The beat goes on....Mikey
As Rally Stalls, Tech May Be The Answer
With questions looming over whether Wall Street's three-month rally is running out steam, some portfolio managers are turning to technology as a way to ride out the next stock market cycle.
After jumping as much as 35 percent off the March lows, stocks have been in the doldrums lately, trading in a tight range as investors ponder data points that mostly show a tepid economic recovery at best.
Technology stocks, though, have taken on a fairly strong leadership position, and the fundamentals of the industry are indicating that could continue.
"From a fundamental standpoint, the good thing about technologies is they're typically low-leveraged," said Peter Miralles, president of Atlanta Wealth Consultants. "Since this has been a credit and leverage problem in this recession, technology actually is doing pretty well compared to some of the other groups. That trend will continue."
In both broad and narrow comparisons, tech has outperformed both during the massive stock market collapse off the October 2007 historic highs and through the spring 2009 rally.
The Nasdaq tech gauge is up roughly 31 percent since its March 9 low, while the Standard & Poor's 500 is up 27 percent and the Dow industrials have gained 22 percent over the same period. Even as the stock market dropped Tuesday, the Nasdaq's losses were only about half those of its counterparts.
Similarly, tech-based exchange-traded funds also have been among the market's leaders, occupying top spots in both percentage gains and total performance this year.
The Direxion Daily Technology Bull 3X [TYH 88.64 -2.46 (-2.7%) ] is the fourth-largest gainer by percentage this year of all ETFs, surging about 64 percent. The fund tracks the small-cap Russell 1000 Technology Index.
Similarly, the Ultra Technology ProShares [ROM 31.76 -0.61 (-1.88%) ] ETF, which provides twice the performance of the Dow technology index, has popped 49 percent in 2009 and is also in the top 20 percentage gainers, according to Morningstar.
The more closely followed and much higher volume tech ETF, the PowerShares QQQQ [QQQQ 36.23 -0.22 (-0.6%) ] that follows the Nasdaq, is up 22 percent for the year. The Qs, as the ETF is known, has moved into a bullish position according to its 80-day and 200-day moving averages, according to Schaeffer's Investment Research in Cincinnati.
"Despite this outperformance, investors continue to overlook and to bet against the shares," Schaeffer's wrote in an analysis for clients.
The company is bullish on techs, saying options trading also is showing higher trends for the group. Schaeffer's specifically recommends Palm [PALM 16.2199 0.3999 (+2.53%) ], Synaptics [SYNA 37.90 -0.41 (-1.07%) ], Juniper Networks [JNPR 23.4229 -0.2071 (-0.88%) ] and Priceline.com [PCLN 111.12 -3.53 (-3.08%) ].
To be sure, there are some caution signals out there for tech: Some are suspicious of the sector precisely because of how strong its run has been and caution that a pullback, much like many have been predicting for the broader market, could be in the makings.
The fears, though, seem to be more confined to the short term, and many remain bullish for technology over the longer haul.
"We're getting mixed signals from the technology sector at least in near-term outlook," said Steven Roge, portfolio manager at Roge Partners in Omaha, Neb. "From a growth perspective on the short term, things are looking fairly neutral. From a long-term perspective, we're slightly bullish on the technology sector at this time."
Roge thinks any move higher in stocks is likely to continue to come from the beaten-down sectors that still have room to run.
As for technology, there is some indication of bumpiness ahead, but there's large options put interest at the 35 strike for the QQQQ ETF, just below its current level.
"In most recessions you're going to see technology become a leader, but of course with tremendous volatility like technology has always had," said Miralles, who sees chip companies as being cyclical while hand-held devices "is where the action is."
As financial companies continue to battle their way through the minefield of credit issues and inflation, technology companies that historically have low exposure to leverage and even inflation are likely to persevere.
"One thing that makes us slightly bullish is the balance sheets of these companies, and valuations are still relatively compelling," Roge said. "Typically technology companies keep more cash on their balance sheets, so they have a lot of room to work with."
Well now as the world burns the experts are going to hide in the oasis of the techs.
So Again where are they hiding
Energy XLE 47.55
Techs QQQQ 36.24 XLK 18.14 ROM 31.87
Emerging Markets EEM 32.14 FXI 38.14 EWZ 52.79
Commodities GLD 91.21 USO 37.70
That is exactly where they were hiding just before the crash last year. The song remains the same except the economy has broken now and the results will be the same as last year.
I think great shorts in here are the TYH 88.67 -2.43, the QQQQ 36.24,the XLE 47.55, the GLD 91.21, and the EEM 32.14. The QQQQ broke down at about 39 in late Sept so a rally to that area is possible, The charts on oil and tech are identical and they like both. The XLE (oil index) broke down at 61 at the same time it had a recent high of 55. The EEM broke at 35 also on late Sept. Again the charts all look the same and are just in a snap back rally.
The beat goes on....Mikey
Monday, June 29, 2009
Putting Lipstick on a Pig
DJIA 8527 +89.55 SPX 924.29 +8.39 VIX 25.88 Gold 937.20 -3.20 Oil 71.01 +1.85 Dollar Index 80.24 +.13 TLT (Long Term Gov Bonds)95.05 +.46 IEF (7-10 Yr Gov Bonds)90.89 +.17
The market rallying now to the end of the Quarter is window dressing and is like putting lipstick on a pig. Every honk they have on is touting some kind of energy play. The charts on most of these look real toppy to me. In fact as we close the Quarter the consensus is looking for the following.
1) A mild pullback in the market that should be bought
2) An economy that is going to recover later this year or early next year.
3) A chronically weak dollar that is going to push up commodities.
Groups they like:
1) Energy..their favorite They like it all Oil service, Clean energy, Producers.
2) Techs ..They love AAPL 142
3) Banks .. They are touting BAC 12.91 and WFC 24.52
They believe that we are going to turn up and you have to buy them before the rush starts and we actually start growing. That is the theme as end of the Quarter window dressing puts lipstick on this pig. Soooooooeeeee PIG PIG
The beat goes on ....Mikey
The market rallying now to the end of the Quarter is window dressing and is like putting lipstick on a pig. Every honk they have on is touting some kind of energy play. The charts on most of these look real toppy to me. In fact as we close the Quarter the consensus is looking for the following.
1) A mild pullback in the market that should be bought
2) An economy that is going to recover later this year or early next year.
3) A chronically weak dollar that is going to push up commodities.
Groups they like:
1) Energy..their favorite They like it all Oil service, Clean energy, Producers.
2) Techs ..They love AAPL 142
3) Banks .. They are touting BAC 12.91 and WFC 24.52
They believe that we are going to turn up and you have to buy them before the rush starts and we actually start growing. That is the theme as end of the Quarter window dressing puts lipstick on this pig. Soooooooeeeee PIG PIG
The beat goes on ....Mikey
Sunday, June 28, 2009
What Cramer Likes....For the Record
Cramer's Predictions: The Rest of '09
While media coverage may be reflective, Cramer said Friday, investors need to be predictive. Instead of simply reading today’s headlines, they need to figure out what the headlines will be six months from now. That’s the strategy he employed as a hedge fund manager, and he tries to teach viewers how it’s done on Mad Money.
This is how Wall Street operates – looking forward – and the approach is evident in the latest wave of research, which, as we approach July 1, has focused more and more on the second half of the year. Never to be left out, Cramer used part of today’s show to offer his own predictions for the third and fourth quarters.
First, foreclosures should peak, housing should bottom, and the biggest winners will be the banks. When the credit crisis was at its worse and homeowners were defaulting on their loans, their foreclosed homes weighed heavily on banks’ balance sheets. But as prices stabilize, and possibly even rise, those homes can be sold, fetching a decent market rate. That puts financials like Wells Fargo [WFC 23.87 0.07 (+0.29%) ], which Cramer told viewers to consider buying, in great position for a rebound.
California, Florida, Nevada and Arizona comprise 50% of the US housing market, and they were the hardest-hit areas during the downturn. But over the past three months, prices in all four states have stabilized, and sales picked up significantly. That, too, is another reason to like certain banks, though Cramer thinks it also bodes well for NVR [NVR 499.08 -10.67 (-2.09%) ]. This real-estate firm operates in the Washington, D.C. area, and it’s a play on increased hiring by the federal government. Cramer expects “huge upside surprises” from NVR, though he cautioned viewers to use limit orders when buying – NVR sells for $500 a share.
The news out of trucking these days shows manufacturing near an all-time low, which is why the Street has shunned stocks like Paccar [PCAR 31.54 -0.69 (-2.14%) ]. But Cramer said that’s all the more reason to like it. PCAR holds $4.65 in cash, has paid out $3.5 billion in dividends over the past 10 years, and he thinks the stock is “about to roar.” He predicted this $31 name would reach $40 in a month.
Other themes worth watching in the second half of 2009: smartphones, which will benefit Apple [AAPL 142.44 2.58 (+1.84%) ] and its iPhone component makers; health care, now that President Obama’s proposed legislation looks less damaging than expected to the companies involved; and natural gas, because it’s so cheap.
Now, if you read today’s headlines, none of these picks would seem to make sense. But Cramer’s more concerned with the future. And while that poses some risks, those risks are an inherent part of investing. It’s just a question of how you manage them.
“If you want to make money,” Cramer said, “you need to take a chance. Sometimes you will be wrong, but if you never try…you'll never be right.”
The news over the last 3 months has improved. The is the result of what the Fed did at the end of last year. Over the past 3 months they have tightened and long rates have spiked. That has not been reflected yet in the numbers for that last part of the year. As I look out over the next 6 months I see nothing that indicates any kind of a recovery. If the market does not get the recovery they are looking for we blow out the lows.
The recovery is a bad guess and the boys are pushing it. It has been my experience that the economy will recover and they will tell you that it isn't. That is the way it is done. Cramer works for the boys and I wanted to document these comments now so you can look back at them at the end of the year. By the way trying to call a turn in a major trend is not the way a hedge fund manager makes money. That is a bald face lie.
The beat goes on ...Mikey
While media coverage may be reflective, Cramer said Friday, investors need to be predictive. Instead of simply reading today’s headlines, they need to figure out what the headlines will be six months from now. That’s the strategy he employed as a hedge fund manager, and he tries to teach viewers how it’s done on Mad Money.
This is how Wall Street operates – looking forward – and the approach is evident in the latest wave of research, which, as we approach July 1, has focused more and more on the second half of the year. Never to be left out, Cramer used part of today’s show to offer his own predictions for the third and fourth quarters.
First, foreclosures should peak, housing should bottom, and the biggest winners will be the banks. When the credit crisis was at its worse and homeowners were defaulting on their loans, their foreclosed homes weighed heavily on banks’ balance sheets. But as prices stabilize, and possibly even rise, those homes can be sold, fetching a decent market rate. That puts financials like Wells Fargo [WFC 23.87 0.07 (+0.29%) ], which Cramer told viewers to consider buying, in great position for a rebound.
California, Florida, Nevada and Arizona comprise 50% of the US housing market, and they were the hardest-hit areas during the downturn. But over the past three months, prices in all four states have stabilized, and sales picked up significantly. That, too, is another reason to like certain banks, though Cramer thinks it also bodes well for NVR [NVR 499.08 -10.67 (-2.09%) ]. This real-estate firm operates in the Washington, D.C. area, and it’s a play on increased hiring by the federal government. Cramer expects “huge upside surprises” from NVR, though he cautioned viewers to use limit orders when buying – NVR sells for $500 a share.
The news out of trucking these days shows manufacturing near an all-time low, which is why the Street has shunned stocks like Paccar [PCAR 31.54 -0.69 (-2.14%) ]. But Cramer said that’s all the more reason to like it. PCAR holds $4.65 in cash, has paid out $3.5 billion in dividends over the past 10 years, and he thinks the stock is “about to roar.” He predicted this $31 name would reach $40 in a month.
Other themes worth watching in the second half of 2009: smartphones, which will benefit Apple [AAPL 142.44 2.58 (+1.84%) ] and its iPhone component makers; health care, now that President Obama’s proposed legislation looks less damaging than expected to the companies involved; and natural gas, because it’s so cheap.
Now, if you read today’s headlines, none of these picks would seem to make sense. But Cramer’s more concerned with the future. And while that poses some risks, those risks are an inherent part of investing. It’s just a question of how you manage them.
“If you want to make money,” Cramer said, “you need to take a chance. Sometimes you will be wrong, but if you never try…you'll never be right.”
The news over the last 3 months has improved. The is the result of what the Fed did at the end of last year. Over the past 3 months they have tightened and long rates have spiked. That has not been reflected yet in the numbers for that last part of the year. As I look out over the next 6 months I see nothing that indicates any kind of a recovery. If the market does not get the recovery they are looking for we blow out the lows.
The recovery is a bad guess and the boys are pushing it. It has been my experience that the economy will recover and they will tell you that it isn't. That is the way it is done. Cramer works for the boys and I wanted to document these comments now so you can look back at them at the end of the year. By the way trying to call a turn in a major trend is not the way a hedge fund manager makes money. That is a bald face lie.
The beat goes on ...Mikey
Thursday, June 25, 2009
They are hiding out in the Energy Plays
I am seeing all kinds of recommendations for every type of energy company you can imagine. Clean energy, Coal, Oil producers, Solar, even Nuclear. Yes that is where the big money is they say. That is all fine and good if oil prices continue up. The problem is that oil prices are going to take out the lows and end up at $25 or lower.
These stocks were the last to bubble in the market top of 2008. They remind me of the top in housing one year after they topped in 2006. They were all saying that they had bottomed (including Cramer) and they looked cheap because they were down 50%from their highs. Well now they are 90% off of the highs. That is the nature of bubbles. Investors look at the price pullback as cheap but once a bubble has burst it will not come back. The oil bubble has burst and we have had a rally. The experts are using this rally to unload the energy plays. Oil continues to be one of my favorite shorts now.
The Oil index XLE 47.34 has dropped 15% in the last 10 days the price of oil topped at 72.68 on 6/11 and is now 69.52 or about 4% off of its high. Oil prices lag the stocks so in my mind the best play now is the SCO 17.34 which is double oil short. In the end a bad economy cannot support high oil prices.
The process last year was supported by alot of leverage. This time deleveraging is taking place and the money flow even for the speculators is not going to be there. Oil is an asset play just like real estate. Real estate was supported by mountains of debt and so was oil and the commodities market. Take that debt away and the whole underlying asset collapses. Debt is going to be liquidated not increased now and it is going to take years for this to happen. So I like oil as a long term short very much just like I liked real estate short in 2005. Its the same thing.
Order to short SLM at 11
The beat goes on... Mikey
These stocks were the last to bubble in the market top of 2008. They remind me of the top in housing one year after they topped in 2006. They were all saying that they had bottomed (including Cramer) and they looked cheap because they were down 50%from their highs. Well now they are 90% off of the highs. That is the nature of bubbles. Investors look at the price pullback as cheap but once a bubble has burst it will not come back. The oil bubble has burst and we have had a rally. The experts are using this rally to unload the energy plays. Oil continues to be one of my favorite shorts now.
The Oil index XLE 47.34 has dropped 15% in the last 10 days the price of oil topped at 72.68 on 6/11 and is now 69.52 or about 4% off of its high. Oil prices lag the stocks so in my mind the best play now is the SCO 17.34 which is double oil short. In the end a bad economy cannot support high oil prices.
The process last year was supported by alot of leverage. This time deleveraging is taking place and the money flow even for the speculators is not going to be there. Oil is an asset play just like real estate. Real estate was supported by mountains of debt and so was oil and the commodities market. Take that debt away and the whole underlying asset collapses. Debt is going to be liquidated not increased now and it is going to take years for this to happen. So I like oil as a long term short very much just like I liked real estate short in 2005. Its the same thing.
Order to short SLM at 11
The beat goes on... Mikey
Wednesday, June 24, 2009
S&P on its way to 825
S&P 898.16 +3.00
I'd say its over now and I expect a move to 825 before we have a good bounce. The Durable good rally is weak. We are down 22% year over year on this number and they are touting it as good. The economy has had it. The market is rallying every day on "good" news. That is not good. This thing looks to me like it is starting to come unglued. I'd say support is at 825 for now and that will just produce a bounce.
Added to FXP @ 13
Shorted AXP @ 23
Short AAPL 136
Mikey
I'd say its over now and I expect a move to 825 before we have a good bounce. The Durable good rally is weak. We are down 22% year over year on this number and they are touting it as good. The economy has had it. The market is rallying every day on "good" news. That is not good. This thing looks to me like it is starting to come unglued. I'd say support is at 825 for now and that will just produce a bounce.
Added to FXP @ 13
Shorted AXP @ 23
Short AAPL 136
Mikey
Tuesday, June 23, 2009
What every body knows...Protect yourself from inflation
I feel like I am the only one in the theater that knows the ending to this movie. Every day some expert touts an inflation protecting investment. Today on CNBC website it was the oil service companies. Today the dollar is getting hit and the commodity plays are up. I am using this to begin my first short on oil. Bought the SCO (double short oil) @ 17.30.
Have you heard one voice saying protect yourself from Deflation? The economies of the world are deleveraging and that means deflation not inflation. That is what is out in front of us now and the boys want out of their inflation plays.
The beat goes on...Mikey
Have you heard one voice saying protect yourself from Deflation? The economies of the world are deleveraging and that means deflation not inflation. That is what is out in front of us now and the boys want out of their inflation plays.
The beat goes on...Mikey
Monday, June 22, 2009
S & P closes below 50 day average...Gold on the edge of a 7 month trendline
DJIA 8339 -200 SPX 893.04 -28.19 VIX 31.86 Gold 921 -15 Oil 37.35 -2.65 Dollar Index 81.14 +.61 TLT (Long Term Gov Bonds) 92.60 +.91 IEF (7-10 Yr Gov Bonds)89.53 +.48
The S&P closed today below its 50 day average for the first time since March 20th. This is not a definitive signal that there is a break in trend but it is a crack in the intermediate uptrend that started on March 6th. The price is now starting to follow the sagging economy despite the experts opinions that we are bottoming and the worst is over. The worst is not over. The worst is yet to come. How and when they manifest that with price is any one's guess.
Notice also how Gold is dropping with little fanfare. It is now $70 off of is Feb 20th high. That is interesting because they have been saying to be in Gold as the Fed is printing more and more dollars. What's up with that Gold Bugs??? The TLT has rallied almost 6% on the last week as the Treasury announces a 100 billion auction. Alice in wonderland? Someone with big bucks is buying the dollar and bonds now.
Trends
Long term:Down
Intermediate term: Flat and weakening
Short term: Down
Gold
Long term Flat
Intermediate Flat and weakening
Short term Down
When this story ends it won't end with inflation but deflation.
No changes today, MCD getting closer to breaking down. The 90 day is at 55.25, using a close below that as my entry point. I am selling my GLL and swaping it into DZZ because the proshares are not performing the way that they should. Proshares are very dissapointing in their movement relative to the indexes.
Gold closed just below a trendline that is drawn from its low on November 13, 2008 through its low of April 17th of 2009. This is also just below the 90 and 50 day averages. If it closes below 900 the intermediate term turns negative. It could get interesting on the downside soon.
The beat goes on ...Mikey
The S&P closed today below its 50 day average for the first time since March 20th. This is not a definitive signal that there is a break in trend but it is a crack in the intermediate uptrend that started on March 6th. The price is now starting to follow the sagging economy despite the experts opinions that we are bottoming and the worst is over. The worst is not over. The worst is yet to come. How and when they manifest that with price is any one's guess.
Notice also how Gold is dropping with little fanfare. It is now $70 off of is Feb 20th high. That is interesting because they have been saying to be in Gold as the Fed is printing more and more dollars. What's up with that Gold Bugs??? The TLT has rallied almost 6% on the last week as the Treasury announces a 100 billion auction. Alice in wonderland? Someone with big bucks is buying the dollar and bonds now.
Trends
Long term:Down
Intermediate term: Flat and weakening
Short term: Down
Gold
Long term Flat
Intermediate Flat and weakening
Short term Down
When this story ends it won't end with inflation but deflation.
No changes today, MCD getting closer to breaking down. The 90 day is at 55.25, using a close below that as my entry point. I am selling my GLL and swaping it into DZZ because the proshares are not performing the way that they should. Proshares are very dissapointing in their movement relative to the indexes.
Gold closed just below a trendline that is drawn from its low on November 13, 2008 through its low of April 17th of 2009. This is also just below the 90 and 50 day averages. If it closes below 900 the intermediate term turns negative. It could get interesting on the downside soon.
The beat goes on ...Mikey
Friday, June 19, 2009
Talking about the consumer and the economy...Where's the Love?
They say we are going to recover. Let's examine what is happening to the consumer because the consumer is 75% of the economy.
1) No break in interest rates to refi
2) Higher gas prices
3) Job losses...11.5% rate in California
4) Working less hours..less income
The consumer has seen his mortgage rates go up and their main asset their house drop. The administration and congress and all the honks and experts say will recover. I say if that is true Where is the Love??
Bottom line is that there is nothing that tells us this thing is going to recover other than the "expert" telling us that it is. If they are wrong the market is 50% over priced. The most overpriced stocks are oil gold and the commodities if we don't recover.
What are the experts telling us to buy Gold or stocks and sell bonds. Hey that's a great idea except THE WORLD ECONOMY IS GOING TO HELL right now. These same experts told us not to buy bonds in 2007 and told us to do what?...Buy Gold, the stock market and commodities.
That is all I have today no new positions.
The beat goes on ...Mikey
1) No break in interest rates to refi
2) Higher gas prices
3) Job losses...11.5% rate in California
4) Working less hours..less income
The consumer has seen his mortgage rates go up and their main asset their house drop. The administration and congress and all the honks and experts say will recover. I say if that is true Where is the Love??
Bottom line is that there is nothing that tells us this thing is going to recover other than the "expert" telling us that it is. If they are wrong the market is 50% over priced. The most overpriced stocks are oil gold and the commodities if we don't recover.
What are the experts telling us to buy Gold or stocks and sell bonds. Hey that's a great idea except THE WORLD ECONOMY IS GOING TO HELL right now. These same experts told us not to buy bonds in 2007 and told us to do what?...Buy Gold, the stock market and commodities.
That is all I have today no new positions.
The beat goes on ...Mikey
Thursday, June 18, 2009
What I know and what I don't know
DJIA 8566 +69.76 SPX 918.30 +7.57 VIX 30.18 -1.35 Gold 936.90 +.90 Oil 71.25 +.22Dollar Index 80.67 +.09 TLT (Long Term Gov Bonds) 90.84 -1.00 IEF (7-10 Yr Gov Bonds)
Stock MarketTrends
Long Term Trend Down
Intermediate Term Trend UP
Short Term Trend Flat
What I know.
1. The economy is in bad shape and has not bottomed.
2. The "experts" are telling us that we are bottoming
3. The long term trend of the market and commodities is down.
4. The prices for most stocks and the market is approaching their falling 200 day averages and their long term trends are down.
5. The bubble in Real Estate burst in 2006 and is still bouncing along the bottom
6. Real Estate leads any recovery.
7. The economy is 75% consumer driven.
8 The consumer bubble burst in early 2008
9 The debt bubble burst in 2008
10. The oil / commodities bubble burst in late 2008
11 The "experts" are telling us to worry about inflation and buy Gold and oil. Every yahoo is the world is short the dollar and long gold.
12.The Tech bubble burst in 2001 and is still bouncing around its low
13.The Japan stock market bubbled in 1989 hitting a peak of 38915 and is now 9703.
14. Once you have a bubble is takes a long long time to repair it
15. There has been a record amount of stock and bonds sold in the past month.
16. The market, commodities, oil, and Gold are going to take out their lows.
17. The BRIC's bubbled in 2008...(emerging markets)
18. The "experts" are touting the BRIC's
19 The public is still long and has not liquidated
20. The experts do not like the Government bond market but do like the corporate and Junk bond market.
21. Corporations are selling alot of bonds.
22. The experts say that the FED will not buy down the long term bond market
What I don't know
1. How and when the markets are going to get there.
I think it is enough to know I will leave the when up to them. We could rally 1000 point up from here and then crash or we can roll over and selloff from here. My guess is that by sometime this fall we will have taken out the lows by 5% or so. The point is that history tells us that after a major bubble it takes years to recover.
We have bubbled in many areas over the past 4 years and it will take years to recover from this. The only time you` trade from the long side after a bubble is when it is extremely oversold and usually the first oversold rally is the best one. I think that this bounce that we have had is the best one we are going to see..period.
The public is still locked into their 401K plans and has done nothing to extract themselves from the destruction. They have a chance to come out with some money now but are being told to hang in there because we are bottoming. I will tell you this we will not bottom until the public gives up and liquidates at the low whenever that is.
It is my belief that this mess will end up in a deflation/depression and not the inflationary growth they are telling us. There is alot of BS they can pull to prop up the numbers like the clunkers for cash scam but in the end nature has to take its course. I think the play here is long term governments TLT & IEF and short commodities. I particularly like the short Gold play here.
MCD 58.62 is forming a huge head and shoulders top. The the left shoulder was from April of 2008 to July 2008 from 56 to 62. The head is was at 62 to 66 from Aug 2008 to Oct 2008. The right should is forming now with the neckline being at 56. The top of the right shoulder is at 60-62. That is a good shorting zone to me. If the stock rallies into that 60 to 62 area or falls below the neckline at 56 I will short. The 200 month average is just above 30 and the breakout in 2006 was at 36. My objective will be somewhere in that 30 to 36 area.
The beat goes on... Mikey
Stock MarketTrends
Long Term Trend Down
Intermediate Term Trend UP
Short Term Trend Flat
What I know.
1. The economy is in bad shape and has not bottomed.
2. The "experts" are telling us that we are bottoming
3. The long term trend of the market and commodities is down.
4. The prices for most stocks and the market is approaching their falling 200 day averages and their long term trends are down.
5. The bubble in Real Estate burst in 2006 and is still bouncing along the bottom
6. Real Estate leads any recovery.
7. The economy is 75% consumer driven.
8 The consumer bubble burst in early 2008
9 The debt bubble burst in 2008
10. The oil / commodities bubble burst in late 2008
11 The "experts" are telling us to worry about inflation and buy Gold and oil. Every yahoo is the world is short the dollar and long gold.
12.The Tech bubble burst in 2001 and is still bouncing around its low
13.The Japan stock market bubbled in 1989 hitting a peak of 38915 and is now 9703.
14. Once you have a bubble is takes a long long time to repair it
15. There has been a record amount of stock and bonds sold in the past month.
16. The market, commodities, oil, and Gold are going to take out their lows.
17. The BRIC's bubbled in 2008...(emerging markets)
18. The "experts" are touting the BRIC's
19 The public is still long and has not liquidated
20. The experts do not like the Government bond market but do like the corporate and Junk bond market.
21. Corporations are selling alot of bonds.
22. The experts say that the FED will not buy down the long term bond market
What I don't know
1. How and when the markets are going to get there.
I think it is enough to know I will leave the when up to them. We could rally 1000 point up from here and then crash or we can roll over and selloff from here. My guess is that by sometime this fall we will have taken out the lows by 5% or so. The point is that history tells us that after a major bubble it takes years to recover.
We have bubbled in many areas over the past 4 years and it will take years to recover from this. The only time you` trade from the long side after a bubble is when it is extremely oversold and usually the first oversold rally is the best one. I think that this bounce that we have had is the best one we are going to see..period.
The public is still locked into their 401K plans and has done nothing to extract themselves from the destruction. They have a chance to come out with some money now but are being told to hang in there because we are bottoming. I will tell you this we will not bottom until the public gives up and liquidates at the low whenever that is.
It is my belief that this mess will end up in a deflation/depression and not the inflationary growth they are telling us. There is alot of BS they can pull to prop up the numbers like the clunkers for cash scam but in the end nature has to take its course. I think the play here is long term governments TLT & IEF and short commodities. I particularly like the short Gold play here.
MCD 58.62 is forming a huge head and shoulders top. The the left shoulder was from April of 2008 to July 2008 from 56 to 62. The head is was at 62 to 66 from Aug 2008 to Oct 2008. The right should is forming now with the neckline being at 56. The top of the right shoulder is at 60-62. That is a good shorting zone to me. If the stock rallies into that 60 to 62 area or falls below the neckline at 56 I will short. The 200 month average is just above 30 and the breakout in 2006 was at 36. My objective will be somewhere in that 30 to 36 area.
The beat goes on... Mikey
Wednesday, June 17, 2009
China stimulus ...No Ticky No Closey
Beijing Orders 'Buy China' for Stimulus Projects
China has imposed a requirement for its stimulus projects to use domestically made goods -- a move that could strain ties with trading partners after Beijing criticized Washington's "Buy American" stimulus conditions.
Projects must obtain official permission to use imported goods, said an order issued by China's main planning agency and either other government bodies.
Foreign business groups worry that foreign suppliers of construction equipment and other goods might be excluded from projects financed by Beijing's 4 trillion yuan (US$586 billion) stimulus. Foreign producers of wind turbines say they have been shut out of bidding on a $5 billion stimulus-financed power project, even though their factories are in China.
"Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China," says the government order. "Projects that really need to buy imports should be approved by the relevant government departments before purchasing activity starts."
The order, dated June 1, was reported this week by state media.
Beijing promised in February to treat foreign and domestic goods equally in purchasing for stimulus projects and has appealed to other governments to support free trade.
China criticized Washington in February for requiring stimulus-financed projects to use American-made iron and steel. The main Chinese state news agency labeled such conditions "poison" to efforts to solve the global economic crisis.
China's World Trade Organization obligations require it to treat foreign and domestic goods equally in commercial trade. But it has not signed a WTO treaty that extends such requirements to government procurement, which might limit the ability of foreign governments to challenge Beijing's order on legal grounds.
The American and European chambers of commerce in China and spokespeople for the American Embassy and European Union mission did not immediately respond to requests for comment.
Free trade or trade war?
China has imposed a requirement for its stimulus projects to use domestically made goods -- a move that could strain ties with trading partners after Beijing criticized Washington's "Buy American" stimulus conditions.
Projects must obtain official permission to use imported goods, said an order issued by China's main planning agency and either other government bodies.
Foreign business groups worry that foreign suppliers of construction equipment and other goods might be excluded from projects financed by Beijing's 4 trillion yuan (US$586 billion) stimulus. Foreign producers of wind turbines say they have been shut out of bidding on a $5 billion stimulus-financed power project, even though their factories are in China.
"Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China," says the government order. "Projects that really need to buy imports should be approved by the relevant government departments before purchasing activity starts."
The order, dated June 1, was reported this week by state media.
Beijing promised in February to treat foreign and domestic goods equally in purchasing for stimulus projects and has appealed to other governments to support free trade.
China criticized Washington in February for requiring stimulus-financed projects to use American-made iron and steel. The main Chinese state news agency labeled such conditions "poison" to efforts to solve the global economic crisis.
China's World Trade Organization obligations require it to treat foreign and domestic goods equally in commercial trade. But it has not signed a WTO treaty that extends such requirements to government procurement, which might limit the ability of foreign governments to challenge Beijing's order on legal grounds.
The American and European chambers of commerce in China and spokespeople for the American Embassy and European Union mission did not immediately respond to requests for comment.
Free trade or trade war?
Headlines for today ...A recovery???
DJIA 8512.53 +6.12 SPX 910.51 -1.46 VIX 31.83 Gold 932.50 +.30 Oil 69.50 -.97 Dollar Index 81.15 +.02 TLT (Long Term Gov Bonds) 92.76+.40 IEF (7-10 Yr Gov Bonds) 90.19 +
.226
Oil Prices Fall Toward $69 After Jump In US Gasoline Supply The price of a barrel of oil fell belwo $70 Wednesday following official government data that showed a wider-than-expected fall in crude stockpiles last week, but a surprise gain in gasoline supply.
FedEx Posts Loss, Gives Outlook Below Street
Wells Fargo, PNC Among 22 Banks Downgraded by S&P
Mortgage Applications Plunge to Near 7-Month Low
Remember when this rally started we had seen a big rise in Mortgage applications. That is the fuel for the consumer. Now we are at 7 month lows.
The fundamentals are deteriorating now. Their recovery story is starting to crack
I must also report that the honks on CNBC are turning negative now so it would not surprise me to see a rally now. No new buys today
Mikey
.226
Oil Prices Fall Toward $69 After Jump In US Gasoline Supply The price of a barrel of oil fell belwo $70 Wednesday following official government data that showed a wider-than-expected fall in crude stockpiles last week, but a surprise gain in gasoline supply.
FedEx Posts Loss, Gives Outlook Below Street
Wells Fargo, PNC Among 22 Banks Downgraded by S&P
Mortgage Applications Plunge to Near 7-Month Low
Remember when this rally started we had seen a big rise in Mortgage applications. That is the fuel for the consumer. Now we are at 7 month lows.
The fundamentals are deteriorating now. Their recovery story is starting to crack
I must also report that the honks on CNBC are turning negative now so it would not surprise me to see a rally now. No new buys today
Mikey
Tuesday, June 16, 2009
Sell Off continues Pros looking to buy the pullback
DJIA 8542 -71.64 SPX 916.39 -7.46 VIX 32.54 +1.73 Gold 933 + 5.50 Oil 70.59 -.03Dollar Index 81.14 -.41 TLT (Long Term Gov Bonds) 91.83 +.1.05 IEF (7-10 Yr Gov Bonds) 89.84 +.37
Charts: S&P to Fall to 880 then Bull May Return
The recent rally in the S&P 500 seems to have reached a peak for now and could fall back toward 880 points, but after that pullback the bull market will probably be back, Roelof van den Akker, chartist at ING Wholesale Banking, told CNBC.
“Yesterday’s close below 928 is suggesting the development of a top formation, which in the S&P is pointing to a likely end of this rally,” he said.
A close below 880 points on the S&P [.SPX 915.64 -8.08 (-0.87%) ] would trigger a minor sell signal for a decline to around 810, 800 points, Akker said.
A dip to 800 points would mean the rally from March lows would have retraced around 50 percent, Akker pointed out. Once that pullback has been achieved, it could signal the start of a fresh uptrend, he said.
“Only a close below the November lows of 750 would be bearish and that would suggest that the longer-term bear market could be resumed,” he said. “But we expect the development of a higher low around 810 to 800.”
Starting to think this was the top. My guess is that by mid summer we we take out the lows in the S&P. I would expect the financials to retest the lows and hold and the oils, gold, and commodities to be weaker. The dollar should take out is recent highs and the world recovery should be call into question.
Notice that the "pro" in this article gave us a support at 880 and then a support at 800 to 810 and said he would turn bearish below 750. I think that is the message they are trying to put out now.
Mikey
Bought FAZ (3X financials short) @4.84
Charts: S&P to Fall to 880 then Bull May Return
The recent rally in the S&P 500 seems to have reached a peak for now and could fall back toward 880 points, but after that pullback the bull market will probably be back, Roelof van den Akker, chartist at ING Wholesale Banking, told CNBC.
“Yesterday’s close below 928 is suggesting the development of a top formation, which in the S&P is pointing to a likely end of this rally,” he said.
A close below 880 points on the S&P [.SPX 915.64 -8.08 (-0.87%) ] would trigger a minor sell signal for a decline to around 810, 800 points, Akker said.
A dip to 800 points would mean the rally from March lows would have retraced around 50 percent, Akker pointed out. Once that pullback has been achieved, it could signal the start of a fresh uptrend, he said.
“Only a close below the November lows of 750 would be bearish and that would suggest that the longer-term bear market could be resumed,” he said. “But we expect the development of a higher low around 810 to 800.”
Starting to think this was the top. My guess is that by mid summer we we take out the lows in the S&P. I would expect the financials to retest the lows and hold and the oils, gold, and commodities to be weaker. The dollar should take out is recent highs and the world recovery should be call into question.
Notice that the "pro" in this article gave us a support at 880 and then a support at 800 to 810 and said he would turn bearish below 750. I think that is the message they are trying to put out now.
Mikey
Bought FAZ (3X financials short) @4.84
Monday, June 15, 2009
How to know when the economy is growing
You will know when the economy is growing WHEN THEY RAISE THE INTEREST RATES. That is a long time off. They started to raise the rates in June of 2004. They told us then "don't fight the Fed" they are slowing the economy. In June of 2004 when they started to raise the rates the stock market was right at 10000.
The economy topped in Q4 of 2007. Buy the way they started lowering the rates in August of 2007. The following Qtr the GDP declined. The stock market topped in Oct 2007 at 14200. They told us then don't fight the Fed that they would save the day...remember? Well the rates are still down and they are saying we have a recovery coming. NOT! It is better to be late to the party than early.
To be an economic wiz just watch the rates.
Mikey
The economy topped in Q4 of 2007. Buy the way they started lowering the rates in August of 2007. The following Qtr the GDP declined. The stock market topped in Oct 2007 at 14200. They told us then don't fight the Fed that they would save the day...remember? Well the rates are still down and they are saying we have a recovery coming. NOT! It is better to be late to the party than early.
To be an economic wiz just watch the rates.
Mikey
The View from the IMF Chief
Worst of Crisis May Be Yet to Come: IMF Chief
The head of the IMF questioned on Monday debate about when to roll back stimulus spending, saying the world economy had yet to weather the worst of a recession that claimed a record number of European jobs.
The 16-country euro zone lost a record 1.22 million jobs in the first quarter, official data showed. The number of employed fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995.
"Markedly weakening labor markets are a major threat to recovery prospects in the euro zone," said Howard Archer, economist at IHS Global Insight. Data were little better in the United States.
The factory sector in New York state shrank at a more severe rate in June than the previous month, the New York Federal Reserve said in a report.
The New York Fed's "Empire State" general business conditions index fell to minus 9.41 in June from minus 4.55 in May. The survey of manufacturing plants in the state is one of the earliest monthly sign posts to U.S. factory conditions.
Further underlining the fragile state of the global economy, an influential economist said China would not see a rapid rebound and South Korea's finance minister said its economy was still sliding, although the pace had slowed.
But in southern Italy, Group of Eight finance ministers meeting at the weekend described their economies in the most positive terms since the collapse of U.S. bank Lehman Brothers nine months ago heightened the world's worst financial crisis since the Great Depression of the 1930s.
"Their (G8) stance is that we are beginning to see some green shoots but nevertheless we have to be cautious," International Monetary Fund chief Dominique Strauss-Kahn said during a visit to Kazakhstan. "The large part of the worst is not yet behind us."
Keep the Stimulus for Now
In its annual consultation with the United States, the IMF said policy-makers were correct to keep stimulus flowing for now, but would need to turn their attention to the threat of ballooning deficits once the crisis has passed.
"The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010," the IMF said at the conclusion of annual discussions with the U.S. The Fund projected the U.S. economy would contract by 2.5 percent this year, with a modest expansion in 2010 of 0.75 percent.
This compares to the IMF's April forecast for the United States, which projected the economy to shrink by 2.8 percent in 2009 and show zero growth next year.
It said Washington's fiscal boost would lift annual gross domestic product by 1 percent in 2009 and 0.25 percent in 2010.
Still, the IMF said the outlook for the U.S. economy is marked by an unusual level of uncertainty and a recovery could be clouded by further home foreclosures and falls in house prices along with rising unemployment.
If economic activity failed to pick up, the IMF said additional fiscal stimulus measures should be considered while the U.S. Federal Reserve should maintain its current level of low interest rates.
As the economy starts to strengthen and a recovery is clearly under way, the IMF said the U.S. should develop and communicate an exit strategy to withdraw monetary stimulus.
The Fund forecast that over 2009-2011 the federal deficit will average 9 percent of gross domestic product and that debt held by the public will nearly double to 75 percent of GDP.
Pressure Building
Pressure has been building in the G8, particularly from fiscally conservative nations such as Germany and Canada, for plans to wind down stimulus as soon as it is no longer needed. But ministers in Lecce differed over how quickly to start rolling back state spending plans and hiking interest rates.
Treasury Secretary Timothy Geithner indicated the United States was unlikely to tighten policy soon, saying: "It is too early to shift toward policy restraint."
Writing in the Washington Post on Monday, Geithner said a sweeping financial regulation reform plan to be released this week would target capital requirements, securitization and other problem areas blamed for the global financial crisis.
The largest and most interconnected firms could expect to face more stringent requirements. While regulatory changes may be in the offing, most experts say they do not expect major tightening of fiscal and monetary policy in the developed world before next year.
According to media, France is headed in the opposite direction. Paris plans to pump an extra 3.5 billion euros ($4.92 billion) into stimulus measures earmarked for 2010, Les Echos newspaper reported on Sunday.
Fragile
Li Yang, a former adviser to the People's Bank of China, said he expected China's recovery to be "W-shaped" — meaning growth will falter once fiscal and monetary stimulus wears off, before regaining momentum.
"China should not count on a turnaround of external demand to bring about its recovery," Li, director of the finance institute at the Chinese Academy of Social Sciences, was quoted by the Shanghai Securities News as saying.
South Korean Finance Minister Yoon Jeung-hyun said it was too early to consider reversing stimulus policies.
"The economy is certainly still sliding, although the pace of decline is slowing," he said. "Let me make it clear that we are not at the stage for a change in the aggressive fiscal stimulus and financial easing policy stance." Aviation leaders attended the Paris Air Show on Monday hoping for new business to bolster a ravaged industry.
"It is ... in the hands of the travelling public, who are voting with their feet and not getting on planes or buying tickets," said Richard Aboulafia, vice president at U.S. aerospace and defense consultancy Teal Group.
European shares shed 1.5 percent, Tokyo's Nikkei closed 1 percent lower and U.S. stock futures pointed to a sharply lower open on Wall Street.
The European benchmark index is up 35.9 percent from the lifetime low it hit on March 9, as investors have become less gloomy on the prospects for economic recovery.
"We've verified that markets have bottomed out but we have yet to see what sort of form the recovery will take and we need clear proof that it will continue," said Masayoshi Okamoto, head of trading at Jujiya Securities.
The EURO tanked today because their economy is falling faster than ours. So much for the weak dollar theory. You will know when the economy is growing WHEN THEY RAISE THE INTEREST RATES. That is a long time off. The started to raise the rates in June of 2004 the economy topped in Q4 of 2007. Buy the way they started lowering the rates in August of 2007. The following Qtr the GDP declined. They told us then don't fight the Fed that they would save the day...remember? Well the rates are still down. That is all you need to know about the state of the economy.
To know the economy is growing wait for the Fed to raise rates.
Mikey
The head of the IMF questioned on Monday debate about when to roll back stimulus spending, saying the world economy had yet to weather the worst of a recession that claimed a record number of European jobs.
The 16-country euro zone lost a record 1.22 million jobs in the first quarter, official data showed. The number of employed fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995.
"Markedly weakening labor markets are a major threat to recovery prospects in the euro zone," said Howard Archer, economist at IHS Global Insight. Data were little better in the United States.
The factory sector in New York state shrank at a more severe rate in June than the previous month, the New York Federal Reserve said in a report.
The New York Fed's "Empire State" general business conditions index fell to minus 9.41 in June from minus 4.55 in May. The survey of manufacturing plants in the state is one of the earliest monthly sign posts to U.S. factory conditions.
Further underlining the fragile state of the global economy, an influential economist said China would not see a rapid rebound and South Korea's finance minister said its economy was still sliding, although the pace had slowed.
But in southern Italy, Group of Eight finance ministers meeting at the weekend described their economies in the most positive terms since the collapse of U.S. bank Lehman Brothers nine months ago heightened the world's worst financial crisis since the Great Depression of the 1930s.
"Their (G8) stance is that we are beginning to see some green shoots but nevertheless we have to be cautious," International Monetary Fund chief Dominique Strauss-Kahn said during a visit to Kazakhstan. "The large part of the worst is not yet behind us."
Keep the Stimulus for Now
In its annual consultation with the United States, the IMF said policy-makers were correct to keep stimulus flowing for now, but would need to turn their attention to the threat of ballooning deficits once the crisis has passed.
"The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010," the IMF said at the conclusion of annual discussions with the U.S. The Fund projected the U.S. economy would contract by 2.5 percent this year, with a modest expansion in 2010 of 0.75 percent.
This compares to the IMF's April forecast for the United States, which projected the economy to shrink by 2.8 percent in 2009 and show zero growth next year.
It said Washington's fiscal boost would lift annual gross domestic product by 1 percent in 2009 and 0.25 percent in 2010.
Still, the IMF said the outlook for the U.S. economy is marked by an unusual level of uncertainty and a recovery could be clouded by further home foreclosures and falls in house prices along with rising unemployment.
If economic activity failed to pick up, the IMF said additional fiscal stimulus measures should be considered while the U.S. Federal Reserve should maintain its current level of low interest rates.
As the economy starts to strengthen and a recovery is clearly under way, the IMF said the U.S. should develop and communicate an exit strategy to withdraw monetary stimulus.
The Fund forecast that over 2009-2011 the federal deficit will average 9 percent of gross domestic product and that debt held by the public will nearly double to 75 percent of GDP.
Pressure Building
Pressure has been building in the G8, particularly from fiscally conservative nations such as Germany and Canada, for plans to wind down stimulus as soon as it is no longer needed. But ministers in Lecce differed over how quickly to start rolling back state spending plans and hiking interest rates.
Treasury Secretary Timothy Geithner indicated the United States was unlikely to tighten policy soon, saying: "It is too early to shift toward policy restraint."
Writing in the Washington Post on Monday, Geithner said a sweeping financial regulation reform plan to be released this week would target capital requirements, securitization and other problem areas blamed for the global financial crisis.
The largest and most interconnected firms could expect to face more stringent requirements. While regulatory changes may be in the offing, most experts say they do not expect major tightening of fiscal and monetary policy in the developed world before next year.
According to media, France is headed in the opposite direction. Paris plans to pump an extra 3.5 billion euros ($4.92 billion) into stimulus measures earmarked for 2010, Les Echos newspaper reported on Sunday.
Fragile
Li Yang, a former adviser to the People's Bank of China, said he expected China's recovery to be "W-shaped" — meaning growth will falter once fiscal and monetary stimulus wears off, before regaining momentum.
"China should not count on a turnaround of external demand to bring about its recovery," Li, director of the finance institute at the Chinese Academy of Social Sciences, was quoted by the Shanghai Securities News as saying.
South Korean Finance Minister Yoon Jeung-hyun said it was too early to consider reversing stimulus policies.
"The economy is certainly still sliding, although the pace of decline is slowing," he said. "Let me make it clear that we are not at the stage for a change in the aggressive fiscal stimulus and financial easing policy stance." Aviation leaders attended the Paris Air Show on Monday hoping for new business to bolster a ravaged industry.
"It is ... in the hands of the travelling public, who are voting with their feet and not getting on planes or buying tickets," said Richard Aboulafia, vice president at U.S. aerospace and defense consultancy Teal Group.
European shares shed 1.5 percent, Tokyo's Nikkei closed 1 percent lower and U.S. stock futures pointed to a sharply lower open on Wall Street.
The European benchmark index is up 35.9 percent from the lifetime low it hit on March 9, as investors have become less gloomy on the prospects for economic recovery.
"We've verified that markets have bottomed out but we have yet to see what sort of form the recovery will take and we need clear proof that it will continue," said Masayoshi Okamoto, head of trading at Jujiya Securities.
The EURO tanked today because their economy is falling faster than ours. So much for the weak dollar theory. You will know when the economy is growing WHEN THEY RAISE THE INTEREST RATES. That is a long time off. The started to raise the rates in June of 2004 the economy topped in Q4 of 2007. Buy the way they started lowering the rates in August of 2007. The following Qtr the GDP declined. They told us then don't fight the Fed that they would save the day...remember? Well the rates are still down. That is all you need to know about the state of the economy.
To know the economy is growing wait for the Fed to raise rates.
Mikey
Credit Card Default Rate Hits Record High..How does tht fit in with the recovery story???
U.S. credit card defaults rose to record highs in May, with a steep deterioration of Bank of America's lending portfolio, in another sign that consumers remain under severe stress.
Delinquency rates—an indicator of future credit losses—fell across the industry, but analysts said the decline was due to a seasonal trend, as consumers used tax refunds to pay back debts, and they expect delinquencies to go up again in coming months.
Bank of America—the largest U.S. bank—said its default rate, those loans the company does not expect to be paid back, soared to 12.50 percent in May from 10.47 percent in April.
In addition, American Express, which accounts for nearly a quarter of credit and charge card sales volume in the United States, said its default rate rose to 10.4 percent from 9.90, according to a regulatory filing based on the performance of credit card loans that were securitized.
Credit card losses usually follow the trend of unemployment, which rose in May to a 26-year high of 9.4 percent and is expected to peak near 10 percent by the end of 2009.
If credit card losses across the industry surpass 10 percent this year, as analysts and bank executives expect, loan losses could top $70 billion. (More TARP money?)
Until lenders show stabilization then trend-bucking improvement over a several month period, we remain bearish on credit card lenders—and the U.S. consumer,' said John Williams, an analyst at Macquarie Research.
We continue to believe that macro challenges and credit quality concerns will pressure U.S. card issuers over the next 12 months,' he added. 'We expect further challenges as unemployment ticks up.'
However, some smaller credit card companies such as Capital One and Discover reported defaults rates grew less than expected.
Capital One said its credit card default rate rose to 9.41 percent from 8.56 percent, while Discover said its charge-off rate increased to 8.91 percent from 8.26 percent.
JPMorgan Chase—the second-largest U.S. bank and the biggest issuer of Visa-branded credit cards—said its default rate rose to 8.36 percent in May from 8.07 percent in April, but it still holds the best performance among the largest credit card companies.
Credit card lenders are trying to protect themselves by tightening credit limits, raising standards and closing accounts. They have also been slashing rewards, increasing interest rates and boosting fees to cushion against further losses.
That will be a plus for an economy that lives on credit. Retail sales will increase because gas prices have doubled. The consumer is paying twice as much is gas and has less credit because the banks,that are getting free money from the Fed, are closing accounts and raising interest rates. That means more defaults and a whole lot of pissed off people. Add to that the coming commercial loan meltdown and that is what we are staring at now. That is not what you are hearing in he financial press is it?
Oh say it isn't so that B Of A has its default rate, those loans the company does not expect to be paid back, soar to 12.50 percent in May from 10.47 percent in April. That's 12% Santa Maria!!! The "good news" is Capital One said its credit card default rate rose to "only" 9.41 percent from 8.56 percent, while Discover said its charge-off rate increased to "only" 8.91 percent from 8.26 percent. That was better than expected. YIKES!!!!!
Just after they all said it would triple because the "earnings power" was so strong. It may still triple but it might triple from 1.
The beat goes on ....Mikey
Delinquency rates—an indicator of future credit losses—fell across the industry, but analysts said the decline was due to a seasonal trend, as consumers used tax refunds to pay back debts, and they expect delinquencies to go up again in coming months.
Bank of America—the largest U.S. bank—said its default rate, those loans the company does not expect to be paid back, soared to 12.50 percent in May from 10.47 percent in April.
In addition, American Express, which accounts for nearly a quarter of credit and charge card sales volume in the United States, said its default rate rose to 10.4 percent from 9.90, according to a regulatory filing based on the performance of credit card loans that were securitized.
Credit card losses usually follow the trend of unemployment, which rose in May to a 26-year high of 9.4 percent and is expected to peak near 10 percent by the end of 2009.
If credit card losses across the industry surpass 10 percent this year, as analysts and bank executives expect, loan losses could top $70 billion. (More TARP money?)
Until lenders show stabilization then trend-bucking improvement over a several month period, we remain bearish on credit card lenders—and the U.S. consumer,' said John Williams, an analyst at Macquarie Research.
We continue to believe that macro challenges and credit quality concerns will pressure U.S. card issuers over the next 12 months,' he added. 'We expect further challenges as unemployment ticks up.'
However, some smaller credit card companies such as Capital One and Discover reported defaults rates grew less than expected.
Capital One said its credit card default rate rose to 9.41 percent from 8.56 percent, while Discover said its charge-off rate increased to 8.91 percent from 8.26 percent.
JPMorgan Chase—the second-largest U.S. bank and the biggest issuer of Visa-branded credit cards—said its default rate rose to 8.36 percent in May from 8.07 percent in April, but it still holds the best performance among the largest credit card companies.
Credit card lenders are trying to protect themselves by tightening credit limits, raising standards and closing accounts. They have also been slashing rewards, increasing interest rates and boosting fees to cushion against further losses.
That will be a plus for an economy that lives on credit. Retail sales will increase because gas prices have doubled. The consumer is paying twice as much is gas and has less credit because the banks,that are getting free money from the Fed, are closing accounts and raising interest rates. That means more defaults and a whole lot of pissed off people. Add to that the coming commercial loan meltdown and that is what we are staring at now. That is not what you are hearing in he financial press is it?
Oh say it isn't so that B Of A has its default rate, those loans the company does not expect to be paid back, soar to 12.50 percent in May from 10.47 percent in April. That's 12% Santa Maria!!! The "good news" is Capital One said its credit card default rate rose to "only" 9.41 percent from 8.56 percent, while Discover said its charge-off rate increased to "only" 8.91 percent from 8.26 percent. That was better than expected. YIKES!!!!!
Just after they all said it would triple because the "earnings power" was so strong. It may still triple but it might triple from 1.
The beat goes on ....Mikey
Market,Gold, Oil and Commodities Pulling back as dollar rallies
DJIA 8603 -195.52 SPX 922.16 -23.99 VIX 30.98 +2.85 Gold 929-11.70 Oil 70.35 -1.69Dollar Index 81.57 +.98 TLT (Long Term Gov Bonds) 90.64 +.67 IEF (7-10 Yr Gov Bonds) 89.45 +.38
The stock market is making a 2 week low today and the dollar is making a 3 week high against the EURO and Gold is making a 1 month low. This is all happening with the backdrop of bullish news for the Market and Gold and bearish news for the Dollar. This is very interesting and too early to say that the trends have all changed. We need to listen now and see how the "pros" react. Do they tell us to buy the pullback and not worry or do they tell us to bail out. So far they are saying nothing has changed. I am leaning towards the idea that this may be it but have done nothing today.
Pulled the plug on my Citi buy at 3.25 because of market action.
Mikey
The stock market is making a 2 week low today and the dollar is making a 3 week high against the EURO and Gold is making a 1 month low. This is all happening with the backdrop of bullish news for the Market and Gold and bearish news for the Dollar. This is very interesting and too early to say that the trends have all changed. We need to listen now and see how the "pros" react. Do they tell us to buy the pullback and not worry or do they tell us to bail out. So far they are saying nothing has changed. I am leaning towards the idea that this may be it but have done nothing today.
Pulled the plug on my Citi buy at 3.25 because of market action.
Mikey
Friday, June 12, 2009
CNBC touts Africa
Look at my post of 5/21 Arron Burnett CNBC anchor was in Africa. They touted AFK then 25.14. Today CNBC again spotlights Africa. The AFK is now 28.15 so it is going up. I would assume we will hear more and more about this. Remember that by investing in Africa, China, India money is being sent to those countries. The process of spreading the wealth around the world and OUT of the US continues. This has been going on for quite some time. The investment capital is leaving this country and being replaced in the from of debt by our consumers and our government.
Anyway before I get on my soapbox I will just document this process now and leave it at that. We are now 2 weeks into the sales job for Africa.
Mikey
Order to buy C at 3.25 as I expect it to rally after the conversion.
Anyway before I get on my soapbox I will just document this process now and leave it at that. We are now 2 weeks into the sales job for Africa.
Mikey
Order to buy C at 3.25 as I expect it to rally after the conversion.
Gold sneaking lower...at a 4 month LOW
DJIA 8765.18 -4.01 SPX 941.22 -3.71 VIX 27.90-.21 Gold 938.90 -23.10 Oil 71.76-.92 Dollar Index 80.10 -.67 TLT (Long Term Gov Bonds) 90.57 +1.08 IEF (7-10 Yr Gov Bonds) 89.28 +.68
Gold is sneaking lower down 23.10 at 938.90. That means that it is lower than the close of Feb 17th. Thus after all this dollar and inflation hype Gold is now DOWN FOR THE LAST 4 MONTHS. To me a close below 880 completes the top. Of course the sell off does not make sense given the news background so the odds that it will continue lower now are alot higher than the hit we had last year. This is also reinforces my opinion that the Fed is tightening not easing. I would expect oil to also follow Gold lower but it looks like it is 2 weeks behind.
The bottom line here is that after all that hype I will believe any sell off in the commodities and the market. Notice that the VIX 27.90 has continued to fall which is an indication that the players fear levels are falling. A VIX in the low 20 area would be a nice place to start shorting the market.
I don't know how they play their hand here but if oil drops and interest rates fall AND they tell you this is a good thing that would be a good cover story to move the market lower. Right now there are too many negatives to a market sell off.
The beat goes on...Mikey
Gold is sneaking lower down 23.10 at 938.90. That means that it is lower than the close of Feb 17th. Thus after all this dollar and inflation hype Gold is now DOWN FOR THE LAST 4 MONTHS. To me a close below 880 completes the top. Of course the sell off does not make sense given the news background so the odds that it will continue lower now are alot higher than the hit we had last year. This is also reinforces my opinion that the Fed is tightening not easing. I would expect oil to also follow Gold lower but it looks like it is 2 weeks behind.
The bottom line here is that after all that hype I will believe any sell off in the commodities and the market. Notice that the VIX 27.90 has continued to fall which is an indication that the players fear levels are falling. A VIX in the low 20 area would be a nice place to start shorting the market.
I don't know how they play their hand here but if oil drops and interest rates fall AND they tell you this is a good thing that would be a good cover story to move the market lower. Right now there are too many negatives to a market sell off.
The beat goes on...Mikey
The Truman Show...Bank of America rallies right on Schedule
Bank of America 13.62 is up .65 today after Christoff...errr Cramer and every bozo in the world reccoed it. Remember they just sold 1 zillion shares on a offering and the boys that bought them are long the stock. There is talk that they may be able to pay back TARP and make alot of money (the fufu name is earnings power). So First you ring the bell and then you give them price movement. TADA the boys jump out as the traders chase the stock because its cheap and they don't want to miss it. Remember in March they said it was going to be nationalized. Oh how times change , but in 3 months????
Thursday, June 11, 2009
Big Increases in Fed Bond Purchases Unlikely: Report That's a good reason not to buy bonds...right
U.S. Federal Reserve officials are not likely to considerably increase purchases of U.S. Treasurys and mortgage-backed securities when they meet in late June, the Wall Street Journal reported on its website.
However, facing rising bond yields and fresh signs of an improving economy, officials could make other adjustments, the paper said, without citing any sources.
At their June 23-24 meeting in Washington, Fed officials may discuss stretching purchases of Treasury securities or mortgage-backed securities over a longer period of time, the paper said, adding that such a move would avoid an abrupt end to the buying and give the Fed time to assess the outlook.
The Fed has pledged to buy $300 billion of longer-term Treasury securities by autumn and $1.45 trillion of mortgage debt by the end of this year.
The Fed has so far purchased $156.5 billion of government bonds, according to the paper.
Officials could also change the mix of their purchases, the Journal said.
At the last Fed meeting on April 28-29, some policy-makers favored increasing the scale of the Treasuries buying to support the recovery, minutes of that gathering showed, but the consensus at that time was to wait and see.
Any decision to go or stay on hold will depend on how the Fed diagnoses a recent steepening in the yield curve, which measures the spread between yields on short- and longer-term government debt.
Atlanta Federal Reserve President Dennis Lockhart said on Thursday he was open-minded about increasing central bank purchases of Treasury securities, and troubled by rising mortgage rates amid higher bond yields.
Government bond yields are often used as benchmarks for loans such as mortgages, and some analysts worry that higher borrowing costs for businesses and consumers could stunt an economic recovery.
As you know I like the bond market here and now these articles pop up. If it wasn't enough to say that the US would not have a AAA rating and the dollar is going to collapse. I would remind you that in January of this year they announced that the Fed was going to buy long term debt. Guess what now they are going to do after the crap got kick out of them over the past 3 months. They closed the year out at 119.35. That is a decline of 26% or just about the gain in the stock market.
TLT ( Long term Governments) are at 88.48
However, facing rising bond yields and fresh signs of an improving economy, officials could make other adjustments, the paper said, without citing any sources.
At their June 23-24 meeting in Washington, Fed officials may discuss stretching purchases of Treasury securities or mortgage-backed securities over a longer period of time, the paper said, adding that such a move would avoid an abrupt end to the buying and give the Fed time to assess the outlook.
The Fed has pledged to buy $300 billion of longer-term Treasury securities by autumn and $1.45 trillion of mortgage debt by the end of this year.
The Fed has so far purchased $156.5 billion of government bonds, according to the paper.
Officials could also change the mix of their purchases, the Journal said.
At the last Fed meeting on April 28-29, some policy-makers favored increasing the scale of the Treasuries buying to support the recovery, minutes of that gathering showed, but the consensus at that time was to wait and see.
Any decision to go or stay on hold will depend on how the Fed diagnoses a recent steepening in the yield curve, which measures the spread between yields on short- and longer-term government debt.
Atlanta Federal Reserve President Dennis Lockhart said on Thursday he was open-minded about increasing central bank purchases of Treasury securities, and troubled by rising mortgage rates amid higher bond yields.
Government bond yields are often used as benchmarks for loans such as mortgages, and some analysts worry that higher borrowing costs for businesses and consumers could stunt an economic recovery.
As you know I like the bond market here and now these articles pop up. If it wasn't enough to say that the US would not have a AAA rating and the dollar is going to collapse. I would remind you that in January of this year they announced that the Fed was going to buy long term debt. Guess what now they are going to do after the crap got kick out of them over the past 3 months. They closed the year out at 119.35. That is a decline of 26% or just about the gain in the stock market.
TLT ( Long term Governments) are at 88.48
Cramer, Buy the cyclicals and an added bonus B Of A could triple
Cramer: Buy Cyclical Stocks Now
Investors should start buying stocks that will bounce when the economy recovers, Cramer said on Thursday. If they wait too long, they’ll miss the move.
The gamble, of course, is always a matter of how long that recovery will take. A recession that lasts longer than expected could hurt the rest of your portfolio. So even when speculating about a turn in the economy, investors still want to play a bit of defense, such as with a dividend.
That’s why Cramer likes PPG Industries [PPG 45.45 0.20 (+0.44%) ]. This chemicals and specialty-chemicals maker is a classic cyclical play, but PPG also offers a 4.6% dividend yield. Between that backstop and the company’s potential to significantly grow earnings when the downturn’s done, investors might be getting the best of both worlds here.
BofA Shares Can Triple: Bank AnalystPublished: Thursday, 11 Jun 2009
Bank of America's Ken Lewis testified at a U.S. House Oversight and Government Reform Committee hearing on the financial giant's acquisition of Merrill Lynch.
But Anthony Polini, bank analyst of Raymond James & Associates, said the hearing is more of a clearing of grievances—and recommended investors buy BofA stock.
“I’ve been following banks for more than 20 years and I’ve never seen a company come out of a recession with so much core earnings power and so much strength,” Polini told CNBC.
“Bank of America [BAC 12.97 0.99 (+8.26%) ] looks like an easy double in a year and it looks like a triple in 2 years from this level.”
“We look at the core earnings power,” he said. “Going forth, the political risk factors, the regulatory risk factors, the economic risk factors — they’re all improving.”
Cramer on B of A
Forget about Ken Lewis’ congressional testimony. The only Bank of America news Cramer cares about right now is Morgan Stanley’s declaration that the earnings estimates are too low.
That’s right – on Thursday Morgan went to a “Street high,” which is a bold earnings prediction far above any other presently in the market. It means that Morgan expects the stock to go much, much higher.
The earnings will come in 2010, Morgan Stanley analyst Betsy Graseck said. She predicted that Bank of America [BAC 12.97 0.99 (+8.26%) ] would generate $2.54 a share next year, a big jump over analysts’ average estimate of about $1. The legendary Meredith Whitney predicts just 20 cents or so. And Graseck’s call is still a full 25 cents higher than the previous top estimate, $2.19, from Wachovia.
Why the confidence? Graseck said mortgage fees, interest rate curves, the net interest margin and the Merrill Lynch acquisition are all contributing to the resurrection of BAC. Yes, even the much-maligned Merrill is playing its part, as the retail and investment banking business continues to grow. The brokerage, it seems, is merging well with Bank of America after all.
Not bad for a bank that some people thought was destined for nationalization. Cramer also likes the potential for BofA’s OREO – other real estate owned – to be a positive here. During tough times, banks are forced to take charges against their OREO. But when the market turns up, as it is now, and home sales take off, banks can unload their OREO. That could push the stock higher.
If all of this happens according to plan, Bank of America might be in position pay back its borrowed TARP funds – possibly as soon as this year’s Q4. That alone would boost earnings, and, in turn, the stock. A possible change in attitude from Wall Street’s other analysts, say, Meredith Whitney, offers another catalyst for BAC. If the stock gets just half the multiple of BofA’s peers, the share price could reach $20.
I am posting these for the record so you can look back at them in 6 months and see what is going on. Cramer likes the cyclicals "Investors should start buying stocks that will bounce when the economy recovers"....or you could miss them...What!!!!
The Remember that B of A just rallied from 3.5 to 15 and just sold 1 zillion shares and now the analysts recco the thing. Santa Maria !!!!
The message is the same don't miss the recovery. In the 30 years that I have followed these guys they have never hung out a sign at the bottom that said buy me.
Bottoms say we are going lower don't buy, not this is it buy now before it gets away from you.
Investors should start buying stocks that will bounce when the economy recovers, Cramer said on Thursday. If they wait too long, they’ll miss the move.
The gamble, of course, is always a matter of how long that recovery will take. A recession that lasts longer than expected could hurt the rest of your portfolio. So even when speculating about a turn in the economy, investors still want to play a bit of defense, such as with a dividend.
That’s why Cramer likes PPG Industries [PPG 45.45 0.20 (+0.44%) ]. This chemicals and specialty-chemicals maker is a classic cyclical play, but PPG also offers a 4.6% dividend yield. Between that backstop and the company’s potential to significantly grow earnings when the downturn’s done, investors might be getting the best of both worlds here.
BofA Shares Can Triple: Bank AnalystPublished: Thursday, 11 Jun 2009
Bank of America's Ken Lewis testified at a U.S. House Oversight and Government Reform Committee hearing on the financial giant's acquisition of Merrill Lynch.
But Anthony Polini, bank analyst of Raymond James & Associates, said the hearing is more of a clearing of grievances—and recommended investors buy BofA stock.
“I’ve been following banks for more than 20 years and I’ve never seen a company come out of a recession with so much core earnings power and so much strength,” Polini told CNBC.
“Bank of America [BAC 12.97 0.99 (+8.26%) ] looks like an easy double in a year and it looks like a triple in 2 years from this level.”
“We look at the core earnings power,” he said. “Going forth, the political risk factors, the regulatory risk factors, the economic risk factors — they’re all improving.”
Cramer on B of A
Forget about Ken Lewis’ congressional testimony. The only Bank of America news Cramer cares about right now is Morgan Stanley’s declaration that the earnings estimates are too low.
That’s right – on Thursday Morgan went to a “Street high,” which is a bold earnings prediction far above any other presently in the market. It means that Morgan expects the stock to go much, much higher.
The earnings will come in 2010, Morgan Stanley analyst Betsy Graseck said. She predicted that Bank of America [BAC 12.97 0.99 (+8.26%) ] would generate $2.54 a share next year, a big jump over analysts’ average estimate of about $1. The legendary Meredith Whitney predicts just 20 cents or so. And Graseck’s call is still a full 25 cents higher than the previous top estimate, $2.19, from Wachovia.
Why the confidence? Graseck said mortgage fees, interest rate curves, the net interest margin and the Merrill Lynch acquisition are all contributing to the resurrection of BAC. Yes, even the much-maligned Merrill is playing its part, as the retail and investment banking business continues to grow. The brokerage, it seems, is merging well with Bank of America after all.
Not bad for a bank that some people thought was destined for nationalization. Cramer also likes the potential for BofA’s OREO – other real estate owned – to be a positive here. During tough times, banks are forced to take charges against their OREO. But when the market turns up, as it is now, and home sales take off, banks can unload their OREO. That could push the stock higher.
If all of this happens according to plan, Bank of America might be in position pay back its borrowed TARP funds – possibly as soon as this year’s Q4. That alone would boost earnings, and, in turn, the stock. A possible change in attitude from Wall Street’s other analysts, say, Meredith Whitney, offers another catalyst for BAC. If the stock gets just half the multiple of BofA’s peers, the share price could reach $20.
I am posting these for the record so you can look back at them in 6 months and see what is going on. Cramer likes the cyclicals "Investors should start buying stocks that will bounce when the economy recovers"....or you could miss them...What!!!!
The Remember that B of A just rallied from 3.5 to 15 and just sold 1 zillion shares and now the analysts recco the thing. Santa Maria !!!!
The message is the same don't miss the recovery. In the 30 years that I have followed these guys they have never hung out a sign at the bottom that said buy me.
Bottoms say we are going lower don't buy, not this is it buy now before it gets away from you.
More Bullish "Experts" join the party
We’re “absolutely in a bull market” and U.S. stocks will rally for another couple of years, said Laszlo Birinyi, president of Birinyi Associates.
Birinyi said while investors think that the market "climbs a wall of worry," the market actually fights against a "wall of anxiety."
“Anxiety is in the part of the people who have missed the rally,” Birinyi told CNBC. “And they’re trying to talk the market down so that they can get back in.”
Second Opinion:
Dow at 12,000 By Sept.—Here's What to Buy: Strategist
He advised investors to look at individual stocks and not groups or overviews.
“One of the things we’ve found is that ETFs are terribly inefficient,” he said. “We’re all sold on the idea that if you liked oil at the beginning of the year, and you bought the USO ETF [USO 39.68 0.71 (+1.82%) ] — it’s flat. Oil’s up almost 40 percent! We find that 25 percent of the trading days, even the SPDRs don’t track the S&P by 20 basis points or more.”
Recommendations:
Wells Fargo [WFC 25.02 0.11 (+0.44%) ]
JPMorgan Chase [JPM 34.94 0.10 (+0.29%) ]
BlackRock [BLK 182.60 4.08 (+2.29%) ]
Goldman Sachs [GS 145.15 -1.53 (-1.04%) ]
Deere [DE 45.08 -0.63 (-1.38%) ]
Hermes
Energy Drillers
Notice is is about missing something not the the economy is going to hell in a hand basket. Its all about price now and the bull market. Little attention is being paid to sorry state of the consumer that carries the whole thing. As I said before the Fed is tightening not easing now as validated by the consumer borrowing numbers for the past 2 months. The consumer is falling off a cliff. I will continue to say the problem is going to be deflation and not inflation. You can see that the hype is all about inflation. What they are doing now is trying to get the system liquid for the consumer blowup that is going to happen.
The next bottom will be one of deflation/depression not inflation/growth.
Mikey
Birinyi said while investors think that the market "climbs a wall of worry," the market actually fights against a "wall of anxiety."
“Anxiety is in the part of the people who have missed the rally,” Birinyi told CNBC. “And they’re trying to talk the market down so that they can get back in.”
Second Opinion:
Dow at 12,000 By Sept.—Here's What to Buy: Strategist
He advised investors to look at individual stocks and not groups or overviews.
“One of the things we’ve found is that ETFs are terribly inefficient,” he said. “We’re all sold on the idea that if you liked oil at the beginning of the year, and you bought the USO ETF [USO 39.68 0.71 (+1.82%) ] — it’s flat. Oil’s up almost 40 percent! We find that 25 percent of the trading days, even the SPDRs don’t track the S&P by 20 basis points or more.”
Recommendations:
Wells Fargo [WFC 25.02 0.11 (+0.44%) ]
JPMorgan Chase [JPM 34.94 0.10 (+0.29%) ]
BlackRock [BLK 182.60 4.08 (+2.29%) ]
Goldman Sachs [GS 145.15 -1.53 (-1.04%) ]
Deere [DE 45.08 -0.63 (-1.38%) ]
Hermes
Energy Drillers
Notice is is about missing something not the the economy is going to hell in a hand basket. Its all about price now and the bull market. Little attention is being paid to sorry state of the consumer that carries the whole thing. As I said before the Fed is tightening not easing now as validated by the consumer borrowing numbers for the past 2 months. The consumer is falling off a cliff. I will continue to say the problem is going to be deflation and not inflation. You can see that the hype is all about inflation. What they are doing now is trying to get the system liquid for the consumer blowup that is going to happen.
The next bottom will be one of deflation/depression not inflation/growth.
Mikey
30 Treasury Auction goes well...Well Well
Treasury Prices Extend Gains After Strong 30-Year Auction
U.S. Treasury prices rose sharply Thursday in a rally fueled by a solid auction of 30-year debt, which assuaged some worries over the cost of financing the nation's rising budget deficit.
The $11 billion sale was the first reopening of a 30-year issue since the government announced in April that it was moving to monthly sales of long bonds. The sale appeared to benefit from a steep sell-off in recent days that cheapened up the market.
This week has also been the first test of the government's long-term borrowing ability since investors began to wonder last month whether the United States' prized AAA credit rating may be living on borrowed time.
A sloppy 10-year auction on Wednesday raised some concerns but the 30-year sale followed up strongly, leaving some fixed income investors heartened.
"The auction results were pretty decent," said Leonard Santow, managing director at Griggs & Santow in New York. "The long rates have backed up about 100 basis points in the last month or so. After that backing up you will draw in some lurking buyers who wanted to get issues on the cheap."
The 30-year long bond rallied in the final minutes before the sale to stand more than one full point higher in price on the day when the results were announced. It was last up 1-8/32, yielding 4.69 percent versus 4.78 percent at Wednesday's close.
The benchmark 10-year note was last up 28/32, yielding 3.84 percent, versus 3.96 percent on Wednesday.
U.S. Treasury prices rose sharply Thursday in a rally fueled by a solid auction of 30-year debt, which assuaged some worries over the cost of financing the nation's rising budget deficit.
The $11 billion sale was the first reopening of a 30-year issue since the government announced in April that it was moving to monthly sales of long bonds. The sale appeared to benefit from a steep sell-off in recent days that cheapened up the market.
This week has also been the first test of the government's long-term borrowing ability since investors began to wonder last month whether the United States' prized AAA credit rating may be living on borrowed time.
A sloppy 10-year auction on Wednesday raised some concerns but the 30-year sale followed up strongly, leaving some fixed income investors heartened.
"The auction results were pretty decent," said Leonard Santow, managing director at Griggs & Santow in New York. "The long rates have backed up about 100 basis points in the last month or so. After that backing up you will draw in some lurking buyers who wanted to get issues on the cheap."
The 30-year long bond rallied in the final minutes before the sale to stand more than one full point higher in price on the day when the results were announced. It was last up 1-8/32, yielding 4.69 percent versus 4.78 percent at Wednesday's close.
The benchmark 10-year note was last up 28/32, yielding 3.84 percent, versus 3.96 percent on Wednesday.
Market Breaking out...They are given us a long time to get in
DJIA 8818.18 +79 SPX 949.68 +10.58 VIX 27.55 -.91 Gold 956.40 +1.70 Oil 72.50 +1.15 Dollar Index 79.69 -.65 TLT (Long Term Gov Bonds) 88.48 +.29 IEF (7-10 Yr Gov Bonds) 88.32 +.32
The market is breaking out and has been doing so for the past week. Past experience has taught me that if it is breaking out you don't get this much time to buy it. Gold is now lagging as oil and the "economic" recover with inflation story is being blasted out into the universe. Still respecting their move into this presentation here but will be shorting soon. The next big move is on the downside as the "economic recovery" flames out and the stock market tanks again.
Bought DUG @ 15.29 Next buy 11.24 will also buy on weakness after this type of hype.
Love the bonds here TLT 88.48 IEF 88.32 both yield about 4%. They are saying that higher oil prices and high interest rates are going to hurt the recovery and the market rally. I am getting the idea that when oil rolls over and the interest rates start to fall they will tell you that that is a good thing and make it seem logical to buy the pullback. What I am saying is when I see oil top and the bonds rally if the market rallies with that I will short into it.
Mikey
The market is breaking out and has been doing so for the past week. Past experience has taught me that if it is breaking out you don't get this much time to buy it. Gold is now lagging as oil and the "economic" recover with inflation story is being blasted out into the universe. Still respecting their move into this presentation here but will be shorting soon. The next big move is on the downside as the "economic recovery" flames out and the stock market tanks again.
Bought DUG @ 15.29 Next buy 11.24 will also buy on weakness after this type of hype.
Love the bonds here TLT 88.48 IEF 88.32 both yield about 4%. They are saying that higher oil prices and high interest rates are going to hurt the recovery and the market rally. I am getting the idea that when oil rolls over and the interest rates start to fall they will tell you that that is a good thing and make it seem logical to buy the pullback. What I am saying is when I see oil top and the bonds rally if the market rallies with that I will short into it.
Mikey
Wednesday, June 10, 2009
More bullish analysts chime in DJIA to 12000 by Sept..Oh Goodie
Dow Will Reach 12,000 By September: Strategist
Mike Rubino, president of Rubino Financial, and Harry Clark, president and CEO of Clark Capital Management Group, shared their market strategies and investment recommendations in a bulls vs. bears discussion.
“The sky is not falling — it’s rising,” Clark told CNBC. He believes that the Dow will reach 12,000 by September or October of this year.
“Ninety percent of all stocks are above their 10-day moving average, which means we’re not going to have any more corrections above 5 to 6 percent—that’s historically a fact,” he said.
Clark said consumers have hit their lowest point and will start spending again, which is a bullish sign.
Second Opinion:
On the other hand, Rubino said while he is bullish in the short-term, there are still economic reasons behind his longer bearish outlook.
“Unemployment rate is rising, the housing market is horrible, banks aren’t lending, consumers aren’t spending, and to top it all off — we have the communization of the American economy,” said Rubino.
Recommendations:
Clark Likes:
Metals, Mining, Steel and Coal ETFs
Consumer Discretionary
Financials
Emerging Markets
Rubino Likes:
Energy—Especially Oil
Emerging Markets—Especially Asia
Look at the stocks they like. Isn't it interesting that they all like the same things? It is almost like they are getting their ideas from the same source. I would think that maybe that source is selling these stocks.
Mikey
Mike Rubino, president of Rubino Financial, and Harry Clark, president and CEO of Clark Capital Management Group, shared their market strategies and investment recommendations in a bulls vs. bears discussion.
“The sky is not falling — it’s rising,” Clark told CNBC. He believes that the Dow will reach 12,000 by September or October of this year.
“Ninety percent of all stocks are above their 10-day moving average, which means we’re not going to have any more corrections above 5 to 6 percent—that’s historically a fact,” he said.
Clark said consumers have hit their lowest point and will start spending again, which is a bullish sign.
Second Opinion:
On the other hand, Rubino said while he is bullish in the short-term, there are still economic reasons behind his longer bearish outlook.
“Unemployment rate is rising, the housing market is horrible, banks aren’t lending, consumers aren’t spending, and to top it all off — we have the communization of the American economy,” said Rubino.
Recommendations:
Clark Likes:
Metals, Mining, Steel and Coal ETFs
Consumer Discretionary
Financials
Emerging Markets
Rubino Likes:
Energy—Especially Oil
Emerging Markets—Especially Asia
Look at the stocks they like. Isn't it interesting that they all like the same things? It is almost like they are getting their ideas from the same source. I would think that maybe that source is selling these stocks.
Mikey
China, China, How I love you, How I love you, my dear old China
Chinese investment surged in May on the back of government pump-priming and a recovery in the property sector, providing fresh evidence that the world's third-largest economy is leading others on the path to recovery.
Investment in urban areas in fixed assets such as apartment buildings and roads rose 32.9 percent in the first five months from a year earlier, compared with a 30.5 percent rise in the first four months, the National Bureau of Statistics said on Thursday.
Economists said that translated into a 40 percent leap in May alone. Adjusted for inflation, the increase was even greater because Chinese prices have been falling for several months.
"I think this is a welcome sign of momentum building in the Chinese economy, and it's good for the global outlook," said David Cohen with Action Economics in Singapore.
The median forecast of economists polled by Reuters was for a rise of 31.0 percent, but the figure of 32.9 percent had been whispered in China's financial markets all week.
Given that rumors of Wednesday's inflation figures also proved to be spot on, the accuracy of the leak lends credence to talk in the market -- reported by two newspapers -- that data on Friday will show industrial production rose 8.9 percent in the year to May. That would be the sharpest rise since September.
The MSCI index of Asia Pacific stocks outside Japan was up 0.6 percent, adding to gains in global markets a day earlier in anticipation of a strong industrial production report.
Economists attributed the strength in investment to the government's 4 trillion yuan ($585 billion) economic stimulus plan, announced in November, and an associated record surge in credit growth from the state-dominated banking system.
The need for strong domestic stimulus was underscored by customs data showing that exports and imports fell in May from year-earlier levels for the seventh month in a row -- and at an accelerating pace.
"External demand remains weak as the U.S. and European economies are still contracting, so it'll be hard for China's exports to see a quick rebound," said Feng Yuming, an economist with Orient Securities in Shanghai.
Exports fell 26.4 percent from May 2008, while imports fell 25.2 percent, resulting in a trade surplus of $13.4 billion, compared with $13.1 billion in April and $18.6 billion in March.
Economists had expected a $14.8 billion surplus based on a 23.1 percent fall in exports and a 22 percent drop in imports from year-earlier levels.
After seasonal adjustment, however, exports rose 0.2 percent in May from April and imports rose 4.4 percent, customs said.
If you remember late 2007 and 2008 the emerging markets and China was going to save the day. This is just a rerun of the same old song and dance complete with the dollar sell off and the commodity rally. The only problem is that if you would have bought that hype you would be down a cool 50%. Well that song worked then so they are going to replay it now. China, China, How I love How I love you my dear old China.
The beat goes on...Mikey
Investment in urban areas in fixed assets such as apartment buildings and roads rose 32.9 percent in the first five months from a year earlier, compared with a 30.5 percent rise in the first four months, the National Bureau of Statistics said on Thursday.
Economists said that translated into a 40 percent leap in May alone. Adjusted for inflation, the increase was even greater because Chinese prices have been falling for several months.
"I think this is a welcome sign of momentum building in the Chinese economy, and it's good for the global outlook," said David Cohen with Action Economics in Singapore.
The median forecast of economists polled by Reuters was for a rise of 31.0 percent, but the figure of 32.9 percent had been whispered in China's financial markets all week.
Given that rumors of Wednesday's inflation figures also proved to be spot on, the accuracy of the leak lends credence to talk in the market -- reported by two newspapers -- that data on Friday will show industrial production rose 8.9 percent in the year to May. That would be the sharpest rise since September.
The MSCI index of Asia Pacific stocks outside Japan was up 0.6 percent, adding to gains in global markets a day earlier in anticipation of a strong industrial production report.
Economists attributed the strength in investment to the government's 4 trillion yuan ($585 billion) economic stimulus plan, announced in November, and an associated record surge in credit growth from the state-dominated banking system.
The need for strong domestic stimulus was underscored by customs data showing that exports and imports fell in May from year-earlier levels for the seventh month in a row -- and at an accelerating pace.
"External demand remains weak as the U.S. and European economies are still contracting, so it'll be hard for China's exports to see a quick rebound," said Feng Yuming, an economist with Orient Securities in Shanghai.
Exports fell 26.4 percent from May 2008, while imports fell 25.2 percent, resulting in a trade surplus of $13.4 billion, compared with $13.1 billion in April and $18.6 billion in March.
Economists had expected a $14.8 billion surplus based on a 23.1 percent fall in exports and a 22 percent drop in imports from year-earlier levels.
After seasonal adjustment, however, exports rose 0.2 percent in May from April and imports rose 4.4 percent, customs said.
If you remember late 2007 and 2008 the emerging markets and China was going to save the day. This is just a rerun of the same old song and dance complete with the dollar sell off and the commodity rally. The only problem is that if you would have bought that hype you would be down a cool 50%. Well that song worked then so they are going to replay it now. China, China, How I love How I love you my dear old China.
The beat goes on...Mikey
Pros think a pull back is a good thing...Lookout!!!
After Rocking the Rally, Pros Are Hoping for Stock Pullback
After enjoying a three-month ride off the March lows, Wall Street is now bracing for payback time—a mild retreat that many market experts actually think would be healthy.
Since the market ricocheted off its March 9 lows, Wall Street has been debating when the market would see a pullback and what it would mean.
The pullback has been seen as an inevitability, but hasn't happened yet due to a number of factors, in particular the breaking of technical levels that has prevented the averages from taking any major dips.
Recent events, though, including gyrations in the market for US Treasurys and concerns over inflation, has lent more credence to the notion that a pullback is looming ever closer.
"We're in this cross current. There's still a ton of money on the sidelines. A lot of professionals don't believe this rally is true," said John Buckingham, chief investment officer at Al Frank Asset Management in Laguna Beach, Calif. "A retest of the lows from here would be an awful downturn. Even if you had a 10 or 15 percent downturn that would hurt."
"From a short-term perspective, it's anybody's guess," he added. "If I had to be a betting man on the near term I would say we're due for a modest pullback."
The 10 percent or more figure seems to have the most traction on the Street; Standard & Poor's chief investment strategist Sam Stovall earlier told CNBC he thinks a 15 percent pullback is in order "before I can breathe a sigh of relief and believe we're headed higher again."
A modest pullback, then, would be seen as a sign that the last three months have constituted not merely a bear rally but constructive steps toward forming a bull market.
Market pros are citing a variety of reasons for the impending pullback, from continued weakness in employment to uncertainty on government policies to simple gravity--what goes up eventually must come down, at least to some extent.
"Would you want to buy a stock now after a 30, 40 percent move? What's really changed?" Dave Rovelli, managing director of US equity trading at Canaccord Adams, told CNBC. "The credit market has eased obviously, but at the same time oil's going higher again, on it's way back to 80, 90 dollars a barrel...We have a lot of things we're not sure of."
Rovelli believes the market will draw a line in the sand when the Standard & Poor's 500 approaches 1,000.
Indeed, psychological as well as technical barriers seem to be more in control of the market than fundamentals these days.
Wall Street continues to rally on news that might otherwise be considered negative, while occasionally retreating at various resistance levels that can seem arbitrary to the casual observer but are very real to those in the pits.
The indexes were lower Thursday as oil prices continued their march higher, worrying investors that consumers would slow their spending habits.
A natural and perhaps less violent pullback may have happened sooner, but the indexes were propped up after more and more stocks began eclipsing their 200-day moving averages, a point the S&P passed last week for the first time in nearly a year.
Remember when we started this move they we afraid of the downside and now they want in on a sell off. Get the wording of the article...a mild retreat, a modest pullback...now that is not scary is it? Plus as an added bonus There's still a ton of money on the sidelines. How could it be that bad, alrighty then.
The verdict is still out until we either "breakout" to the upside with volume or sell off 10%. I still have only placed limited bets shorting Silver, Gold and China. I have not yet shorted the market. If we get a 10% sell off and they tell us to buy I will start shorting the market. For now I am 7% short 93% cash and waiting for the game to begin. I am itching to get my hands on oil short but have only a tiny position in the DUG (Oil Index short)
The beat goes on.... Mikey
After enjoying a three-month ride off the March lows, Wall Street is now bracing for payback time—a mild retreat that many market experts actually think would be healthy.
Since the market ricocheted off its March 9 lows, Wall Street has been debating when the market would see a pullback and what it would mean.
The pullback has been seen as an inevitability, but hasn't happened yet due to a number of factors, in particular the breaking of technical levels that has prevented the averages from taking any major dips.
Recent events, though, including gyrations in the market for US Treasurys and concerns over inflation, has lent more credence to the notion that a pullback is looming ever closer.
"We're in this cross current. There's still a ton of money on the sidelines. A lot of professionals don't believe this rally is true," said John Buckingham, chief investment officer at Al Frank Asset Management in Laguna Beach, Calif. "A retest of the lows from here would be an awful downturn. Even if you had a 10 or 15 percent downturn that would hurt."
"From a short-term perspective, it's anybody's guess," he added. "If I had to be a betting man on the near term I would say we're due for a modest pullback."
The 10 percent or more figure seems to have the most traction on the Street; Standard & Poor's chief investment strategist Sam Stovall earlier told CNBC he thinks a 15 percent pullback is in order "before I can breathe a sigh of relief and believe we're headed higher again."
A modest pullback, then, would be seen as a sign that the last three months have constituted not merely a bear rally but constructive steps toward forming a bull market.
Market pros are citing a variety of reasons for the impending pullback, from continued weakness in employment to uncertainty on government policies to simple gravity--what goes up eventually must come down, at least to some extent.
"Would you want to buy a stock now after a 30, 40 percent move? What's really changed?" Dave Rovelli, managing director of US equity trading at Canaccord Adams, told CNBC. "The credit market has eased obviously, but at the same time oil's going higher again, on it's way back to 80, 90 dollars a barrel...We have a lot of things we're not sure of."
Rovelli believes the market will draw a line in the sand when the Standard & Poor's 500 approaches 1,000.
Indeed, psychological as well as technical barriers seem to be more in control of the market than fundamentals these days.
Wall Street continues to rally on news that might otherwise be considered negative, while occasionally retreating at various resistance levels that can seem arbitrary to the casual observer but are very real to those in the pits.
The indexes were lower Thursday as oil prices continued their march higher, worrying investors that consumers would slow their spending habits.
A natural and perhaps less violent pullback may have happened sooner, but the indexes were propped up after more and more stocks began eclipsing their 200-day moving averages, a point the S&P passed last week for the first time in nearly a year.
Remember when we started this move they we afraid of the downside and now they want in on a sell off. Get the wording of the article...a mild retreat, a modest pullback...now that is not scary is it? Plus as an added bonus There's still a ton of money on the sidelines. How could it be that bad, alrighty then.
The verdict is still out until we either "breakout" to the upside with volume or sell off 10%. I still have only placed limited bets shorting Silver, Gold and China. I have not yet shorted the market. If we get a 10% sell off and they tell us to buy I will start shorting the market. For now I am 7% short 93% cash and waiting for the game to begin. I am itching to get my hands on oil short but have only a tiny position in the DUG (Oil Index short)
The beat goes on.... Mikey
Stock market sell off blamed on 10 year auction
Treasury Holds 'Awful' Auction: 10-Year Yield Hits 3.99%
US Treasury prices fell on Wednesday, sending benchmark yields to eight-month highs, after an auction of 10-year notes heightened concerns about the cost of financing the burgeoning U.S. budget deficit.
It was the first test of the government's long-term borrowing ability since investors began to wonder last month whether the United States' prized AAA credit rating may be living on borrowed time.
By some measures the auction went well, with high demand overall and a proxy for foreign interest, the indirect bidding, very robust, especially for the reopening of a previously issued security.
The main downside was that the high yield at the auction was above market expectations. This "tail," as it is known in the market, showed investors wanted the government to pay a premium to get the bonds sold and tipped the balance for a negative interpretation of the sale.
The Treasury said it sold $19 billion in 10-year notes at a high yield of 3.99 percent, the highest of the year.
That yield was higher than where the when-issued note was trading prior to the auction, suggesting that the Treasury Department had to offer a concession to buyers.
"Auction awful," said Andrew Brenner, senior vice president of MF Global in New York.
The bid-to-cover ratio was 2.62, better than the average bid-to-cover ratio of the last six re-openings of 10-year notes, which was 2.42, suggesting that the Treasury Department had to offer a concession to buyers.
"The auction was weak. It wasn't shocking," said John Spinello, chief fixed-income technical strategist at Jeffries. "There's some negative psychology. It is trading underwater right now."
The results run somewhat counter to recent auctions, though investors have been fairly consistent about which end of the yield curve they favor.
Longer-dated Treasurys have languished amid fears that inflation could creep into the marketplace in the coming years, due to large issuance of government debt to pay for stimulus and bailout programs.
Shorter-dated Treasurys are more popular because investors fear that they could lose money in real terms over the long haul if the rate inflation exceeds bond yields.
The weak auction put pressure on both stocks and bonds.
The Dow Jones industrial average fell more than 70 points. The government had to lure buyers with a higher yield than the market anticipated.
Investors are concerned the government's debt load will become untenable, leading to higher inflation and soaring interest rates. Rising rates could hamper the economy's recovery.
I LIKE THE BOND MARKET HERE. IEF (10 Yr Bonds) 88.03 -.49
US Treasury prices fell on Wednesday, sending benchmark yields to eight-month highs, after an auction of 10-year notes heightened concerns about the cost of financing the burgeoning U.S. budget deficit.
It was the first test of the government's long-term borrowing ability since investors began to wonder last month whether the United States' prized AAA credit rating may be living on borrowed time.
By some measures the auction went well, with high demand overall and a proxy for foreign interest, the indirect bidding, very robust, especially for the reopening of a previously issued security.
The main downside was that the high yield at the auction was above market expectations. This "tail," as it is known in the market, showed investors wanted the government to pay a premium to get the bonds sold and tipped the balance for a negative interpretation of the sale.
The Treasury said it sold $19 billion in 10-year notes at a high yield of 3.99 percent, the highest of the year.
That yield was higher than where the when-issued note was trading prior to the auction, suggesting that the Treasury Department had to offer a concession to buyers.
"Auction awful," said Andrew Brenner, senior vice president of MF Global in New York.
The bid-to-cover ratio was 2.62, better than the average bid-to-cover ratio of the last six re-openings of 10-year notes, which was 2.42, suggesting that the Treasury Department had to offer a concession to buyers.
"The auction was weak. It wasn't shocking," said John Spinello, chief fixed-income technical strategist at Jeffries. "There's some negative psychology. It is trading underwater right now."
The results run somewhat counter to recent auctions, though investors have been fairly consistent about which end of the yield curve they favor.
Longer-dated Treasurys have languished amid fears that inflation could creep into the marketplace in the coming years, due to large issuance of government debt to pay for stimulus and bailout programs.
Shorter-dated Treasurys are more popular because investors fear that they could lose money in real terms over the long haul if the rate inflation exceeds bond yields.
The weak auction put pressure on both stocks and bonds.
The Dow Jones industrial average fell more than 70 points. The government had to lure buyers with a higher yield than the market anticipated.
Investors are concerned the government's debt load will become untenable, leading to higher inflation and soaring interest rates. Rising rates could hamper the economy's recovery.
I LIKE THE BOND MARKET HERE. IEF (10 Yr Bonds) 88.03 -.49
Slow Roll?
DJIA 8732 -30.16 SPX 937.98 -4.45 VIX 28.83 +.56 Gold 953.30 -1.40 Oil71.40 +1.39 Dollar Index 80.28 +.455 TLT (Long Term Gov Bonds) 88.27 -1.33 IEF (7-10 Yr Gov Bonds) 88.05 -.48
There are signs that we are rolling over. Retailers like JWN and JCP topped in early May. The housing stocks also topped in early May KBH hit 19.57 and is now 14.91. Stocks like MON hit 93 and is now 85. The Financials also topped in Early May with the XLF hitting 13.07 and is now 12.33.
What is carrying the market is the oils and cyclicals. The oil index XLE 52.79 has not pulled back and is near its high. The weak dollar hype has propped up those groups. It is still too early to call a top but there are cracks appearing now. This may be a slow roll off of the top. If we do sell off 10% lets see what they say. If they say buy the pullback then I will say that the top is set.
added to FXP @ 12.27(China Short)
Will pass on AEM short but think it has had it
Added to GLL @14.67 (Gold Short)
Mikey
There are signs that we are rolling over. Retailers like JWN and JCP topped in early May. The housing stocks also topped in early May KBH hit 19.57 and is now 14.91. Stocks like MON hit 93 and is now 85. The Financials also topped in Early May with the XLF hitting 13.07 and is now 12.33.
What is carrying the market is the oils and cyclicals. The oil index XLE 52.79 has not pulled back and is near its high. The weak dollar hype has propped up those groups. It is still too early to call a top but there are cracks appearing now. This may be a slow roll off of the top. If we do sell off 10% lets see what they say. If they say buy the pullback then I will say that the top is set.
added to FXP @ 12.27(China Short)
Will pass on AEM short but think it has had it
Added to GLL @14.67 (Gold Short)
Mikey
For all you Gamblers out there
If Lakers Win, Sportsbook Loses $400K
Sick of seeing all the action on the Los Angeles Lakers to win the championship, Bodog Sportsbook manager Richard Gardner decided to do something about it.
Anyone who placed a bet on any other team to win the title would get $50 back from Bodog if Kobe and his boys ended up hoisting the trophy. It's why, besides the players and the team executives themselves, Gardner probably has the most on the line.
Gardner was undoubtedly happy that the Orlando Magic won game three last night, though the oddsmaker knows the odds are against him.
"(Lakers coach) Phil Jackson is 43-0 in the playoffs when his team starts the series with a 1-0 lead, which is an unenviable position to be if you play for the Orlando Magic or if you’re the Bodog Sportsbook," Gardner said. "We had over 8,000 players take us up on our pre-playoff promotion."
The total damage if the Lakers win? Gardner already knows the number down to the cent: $394,411.50.
On another Finals gambling note, a slew of people who took the Lakers as four-point underdogs last night came away with nothing thanks to what happened in the final seconds.
Kobe Bryant reduced the Magic lead to a two-point deficit with a half of a second to go and it seemed like the game was over. But the refs put fractions of a second back on the clock, Rashard Lewis was fouled and he hit both shots. The final was 108-104. And everyone who thought they were cashing in with the Lakers and the points were disappointed.
I don't think the word dissapointed sums it up....Mikey
Sick of seeing all the action on the Los Angeles Lakers to win the championship, Bodog Sportsbook manager Richard Gardner decided to do something about it.
Anyone who placed a bet on any other team to win the title would get $50 back from Bodog if Kobe and his boys ended up hoisting the trophy. It's why, besides the players and the team executives themselves, Gardner probably has the most on the line.
Gardner was undoubtedly happy that the Orlando Magic won game three last night, though the oddsmaker knows the odds are against him.
"(Lakers coach) Phil Jackson is 43-0 in the playoffs when his team starts the series with a 1-0 lead, which is an unenviable position to be if you play for the Orlando Magic or if you’re the Bodog Sportsbook," Gardner said. "We had over 8,000 players take us up on our pre-playoff promotion."
The total damage if the Lakers win? Gardner already knows the number down to the cent: $394,411.50.
On another Finals gambling note, a slew of people who took the Lakers as four-point underdogs last night came away with nothing thanks to what happened in the final seconds.
Kobe Bryant reduced the Magic lead to a two-point deficit with a half of a second to go and it seemed like the game was over. But the refs put fractions of a second back on the clock, Rashard Lewis was fouled and he hit both shots. The final was 108-104. And everyone who thought they were cashing in with the Lakers and the points were disappointed.
I don't think the word dissapointed sums it up....Mikey
Here comes the Oil Hype
Oil May Top $250, Says Gazprom CEO
A shortage of oil and gas investment means the sector will fail to meet demand when the global economy begins to recover, Gazprom Chief Executive Alexei Miller said on Wednesday.
There are no guarantees that further increases in oil demand will be supported by a sufficient growth in investments, the head of the Russian natural gas giant said.
Nobody has solved the issue of the "2012 supply gap" which may emerge later than thought but which will be deeper.
"It means prices may even jump over the $250 hurdle we have forecast a year ago," Miller said in a written text of a speech at a conference in Italy on the financial crisis and energy.
"Expectations remain that trimmed capital expenditure programmes of international oil majors caused by the high volatility of the crude oil market will reduce production capacities and oil supply on the market in three to five years," Miller said.
Investments into geological exploration and production in the global oil and gas sector will fall by more than 20 percent in 2009, he said.
"If capital expenditure is not restored the forecast of '$150 per barrel of oil in two, three years' voiced by Saudi Arabian representatives ... will come true," Miller said.
The Gazprom CEO said there were grounds for believing the oil price would rise to $85per barrel by the end of 2009 while the market had pinpointed $100 per barrel as benchmark price in 2010.
With increasingly higher development costs, investment in startup oilfields have to reach some $400 billion per year, he said.
"As long as the market is excessively volatile it is absolutely clear that existing reserves will not be developed rapidly enough to satisfy the expected demand," he said.
Miller said the pricing system on the oil market needed to be radically revised, especially since the oil price reflected financial transactions on the equity market.
Miller urged the use of long-term contracts for the oil market to support the creation of a unified settlement and payment system.
"We should consider the reform of the existing system of linking oil prices to only one currency" in favour of a multi-currency settlement system, he said.
A new Oil Exchange of producing countries trading physical volumes needed to be created in light of the monopoly position of the major NYMEX trade floor.
All I can say is that from 2006 to 2008 a hell of a lot of money went into the ground to find oil. Now we are so afraid of oil going back to 150 that we are going green and looking for alternatives. The economy being what it is will also dampen demand. All we need to short oil now is for Israel and Iran to pop up again.
Mikey
A shortage of oil and gas investment means the sector will fail to meet demand when the global economy begins to recover, Gazprom Chief Executive Alexei Miller said on Wednesday.
There are no guarantees that further increases in oil demand will be supported by a sufficient growth in investments, the head of the Russian natural gas giant said.
Nobody has solved the issue of the "2012 supply gap" which may emerge later than thought but which will be deeper.
"It means prices may even jump over the $250 hurdle we have forecast a year ago," Miller said in a written text of a speech at a conference in Italy on the financial crisis and energy.
"Expectations remain that trimmed capital expenditure programmes of international oil majors caused by the high volatility of the crude oil market will reduce production capacities and oil supply on the market in three to five years," Miller said.
Investments into geological exploration and production in the global oil and gas sector will fall by more than 20 percent in 2009, he said.
"If capital expenditure is not restored the forecast of '$150 per barrel of oil in two, three years' voiced by Saudi Arabian representatives ... will come true," Miller said.
The Gazprom CEO said there were grounds for believing the oil price would rise to $85per barrel by the end of 2009 while the market had pinpointed $100 per barrel as benchmark price in 2010.
With increasingly higher development costs, investment in startup oilfields have to reach some $400 billion per year, he said.
"As long as the market is excessively volatile it is absolutely clear that existing reserves will not be developed rapidly enough to satisfy the expected demand," he said.
Miller said the pricing system on the oil market needed to be radically revised, especially since the oil price reflected financial transactions on the equity market.
Miller urged the use of long-term contracts for the oil market to support the creation of a unified settlement and payment system.
"We should consider the reform of the existing system of linking oil prices to only one currency" in favour of a multi-currency settlement system, he said.
A new Oil Exchange of producing countries trading physical volumes needed to be created in light of the monopoly position of the major NYMEX trade floor.
All I can say is that from 2006 to 2008 a hell of a lot of money went into the ground to find oil. Now we are so afraid of oil going back to 150 that we are going green and looking for alternatives. The economy being what it is will also dampen demand. All we need to short oil now is for Israel and Iran to pop up again.
Mikey
Citi Makes $58 Billion Swap Deal With Government
Citigroup began a long-delayed $58 billion stock swap on Wednesday that is expected to make the U.S. government the bank's largest shareholder by far with a 34 percent stake.
The nation's third-largest bank plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.
Citigroup's swap could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange expires July 24.
Separately, Citigroup [C 3.54 0.13 (+3.81%) ] said it has adopted a three-year plan to preserve tax benefits, which it said was designed to discourage shareholders other than the government from amassing a 5 percent stake or adding to such a stake.
The New York-based bank said the stock swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity.
Citigroup had planned to begin the swap in April. It delayed the start after the Federal Deposit Insurance Corp threatened to downgrade a government rating for the bank, but that matter was resolved.
The bank agreed to the swap in February as part of a federal bailout, after $37.5 billion of losses in the previous five quarters. That bailout came after Citigroup had taken $45 billion from the Troubled Asset Relief Program (TARP).
Citigroup's exchange offer originally called for a swap of as much as $52.5 billion of preferred stock into common stock at a conversion price of $3.25 per share.
The bank increased the offering's size after regulators last month told it to raise a $5.5 billion buffer following a "stress test" of its ability to handle a deep recession.
Federal regulators on Tuesday allowed nine other banks that underwent similar tests, including larger rival JPMorgan Chase [JPM 35.13 -0.13 (-0.37%) ], to repay their TARP money.
The nation's third-largest bank plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.
Citigroup's swap could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange expires July 24.
Separately, Citigroup [C 3.54 0.13 (+3.81%) ] said it has adopted a three-year plan to preserve tax benefits, which it said was designed to discourage shareholders other than the government from amassing a 5 percent stake or adding to such a stake.
The New York-based bank said the stock swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity.
Citigroup had planned to begin the swap in April. It delayed the start after the Federal Deposit Insurance Corp threatened to downgrade a government rating for the bank, but that matter was resolved.
The bank agreed to the swap in February as part of a federal bailout, after $37.5 billion of losses in the previous five quarters. That bailout came after Citigroup had taken $45 billion from the Troubled Asset Relief Program (TARP).
Citigroup's exchange offer originally called for a swap of as much as $52.5 billion of preferred stock into common stock at a conversion price of $3.25 per share.
The bank increased the offering's size after regulators last month told it to raise a $5.5 billion buffer following a "stress test" of its ability to handle a deep recession.
Federal regulators on Tuesday allowed nine other banks that underwent similar tests, including larger rival JPMorgan Chase [JPM 35.13 -0.13 (-0.37%) ], to repay their TARP money.
Tuesday, June 9, 2009
Banks being recommended
Bank Stocks that Look Attractive: Analyst
Bank stocks might be volatile, but investors should be exposed to them right now, said David George, senior research analyst at Robert W. Baird. (See his stock recommendations, below.)
“These stocks are up a lot from the March lows — but they’re down 50 to 60 percent from their 2007 peak, so we still think there’s some value in the sector. This is a group that you do want to have exposure to,” George told CNBC.
George said although the stocks aren’t necessarily going to be a “straight line up,” they are reasonably priced on what they earn in a normal economic environment.
“These stocks have underperformed largely because of capital adequacy concerns, but given all the capital that has been raised, we think that’s an issue that’s really off the table,” he said.
“Furthermore, there’s some favorable areas of the financials services sector that are performing well right now, namely mortgage banking, as well as debt and equity capital market.”
Recommendations:
Bank of America [BAC 12.01 -0.05 (-0.41%) ]
Wells Fargo [WFC 25.4427 0.0527 (+0.21%) ]
JPMorgan Chase [JPM 35.33 -0.06 (-0.17%) ]
PNC Financial Services [PNC 43.97 0.59 (+1.36%) ]
These are very timely picks considering that that all had massive stock offerings recently. Remember why the bank stocks had to rally...because they needed the money. Then magically the earnings turned good in the first quarter and now the banks began to pay back TARP. The boys want out of these stocks now so here comes the recco's.
By the way Citi is going to convert its preferred to common soon at 3.25. I would expect it to rally after that conversion.
Mikey
Bank stocks might be volatile, but investors should be exposed to them right now, said David George, senior research analyst at Robert W. Baird. (See his stock recommendations, below.)
“These stocks are up a lot from the March lows — but they’re down 50 to 60 percent from their 2007 peak, so we still think there’s some value in the sector. This is a group that you do want to have exposure to,” George told CNBC.
George said although the stocks aren’t necessarily going to be a “straight line up,” they are reasonably priced on what they earn in a normal economic environment.
“These stocks have underperformed largely because of capital adequacy concerns, but given all the capital that has been raised, we think that’s an issue that’s really off the table,” he said.
“Furthermore, there’s some favorable areas of the financials services sector that are performing well right now, namely mortgage banking, as well as debt and equity capital market.”
Recommendations:
Bank of America [BAC 12.01 -0.05 (-0.41%) ]
Wells Fargo [WFC 25.4427 0.0527 (+0.21%) ]
JPMorgan Chase [JPM 35.33 -0.06 (-0.17%) ]
PNC Financial Services [PNC 43.97 0.59 (+1.36%) ]
These are very timely picks considering that that all had massive stock offerings recently. Remember why the bank stocks had to rally...because they needed the money. Then magically the earnings turned good in the first quarter and now the banks began to pay back TARP. The boys want out of these stocks now so here comes the recco's.
By the way Citi is going to convert its preferred to common soon at 3.25. I would expect it to rally after that conversion.
Mikey
The Eye of the Storm
DJIA 8742 +-21.01 SPX 937.73 -1.36 VIX 29.47 -.28 Gold 956.50 +4.00 Oil 69.17
+1.08.43 Dollar Index 80.16 -.08 TLT (Long Term Gov Bonds) 90.20 +.59 IEF (7-10 Yr Gov Bonds) 88.70 +.55
The 200 day on the SPX is at 916.62. We were at 929 on May 8 th. If you remember my posts in early May the talk was that normally you sell in May and go away but not this year. That was after the rally in April that took us from 666 to 888. That was a 33% move off of the low. The "experts" have since turned bullish and 90% of the "economists" are touting a bottom in the economy later this year.
The banks are paying back TARP and the crisis is over. Now all we have to do is sit back and invest for the long term. That is the message. The way you are suppose to invest is by investing in inflation, you know the drill Oil, Gold, emerging markets. That is the same nonsense they told us in 2007 and 2008. How did that do for you. This is the same old song with the same old "experts" helping the boys get out of all that stock they had to buy last year. This is an engineered rally that is doomed.
The question of when this charade will end is anybodies guess but it will end and those who buy the recovery/inflation idea will get burned again. For now the ship rolls on over calm waters....This is the eye of the storm.
Mikey
+1.08.43 Dollar Index 80.16 -.08 TLT (Long Term Gov Bonds) 90.20 +.59 IEF (7-10 Yr Gov Bonds) 88.70 +.55
The 200 day on the SPX is at 916.62. We were at 929 on May 8 th. If you remember my posts in early May the talk was that normally you sell in May and go away but not this year. That was after the rally in April that took us from 666 to 888. That was a 33% move off of the low. The "experts" have since turned bullish and 90% of the "economists" are touting a bottom in the economy later this year.
The banks are paying back TARP and the crisis is over. Now all we have to do is sit back and invest for the long term. That is the message. The way you are suppose to invest is by investing in inflation, you know the drill Oil, Gold, emerging markets. That is the same nonsense they told us in 2007 and 2008. How did that do for you. This is the same old song with the same old "experts" helping the boys get out of all that stock they had to buy last year. This is an engineered rally that is doomed.
The question of when this charade will end is anybodies guess but it will end and those who buy the recovery/inflation idea will get burned again. For now the ship rolls on over calm waters....This is the eye of the storm.
Mikey
Sunday, June 7, 2009
TW3 That Was The Week That Was
To summarize what I have been reading for the past week.
1) The Fed is printing buckets of money
2) The economy is bottoming soon (90% of economist predict it)
3) The dollar is going to hell in a hand basket (everyone agrees on this one)
4) The stock market is now in a bull market
5) Inflation is coming, inflation is coming
They are telling us to buy
1) Gold
2) Commodities
3) Emerging Markets
4) Industrials
5) Techs
6) The banks
7) Junk bonds ...Yikes!
They are telling us to sell:
1) The dollar
2) Government Bonds
The recession by any standard is still going strong and they tell us to invest for a raging bull market. All of this is happening as the S&P is rallying up to its falling 200 day average. The economic and stock market trends are clearly down. The bubbles of real estate, consumer and commodities have burst. When a bubble bursts it takes years to repair it.
The real estate bubble topped in 2005 and it is now in its 4Th year from the top. It will bottom at least 2 years ahead of the stock market and the economy. The stock market topped in 2008. It is not even 1 year from the top. It has just had its first big hit, similar to the hit in real estate in the middle of 2006.
You can look at a chart on KBH in the Oct 2006 to Jan of 2007 and get an idea of what is to come for the stock market over the next 2 years. They were telling us then that the real estate market had bottomed there. KBH rallied from 38 to 56 during that period. They told us to look at the housing stocks because they are telling us that the housing market was bottoming. The low was in 11/28/2008 at 6.90.
What is happening now. The experts say the economy is bottoming and to watch out for inflation. The commodities topped in the summer of 2008. We are not quite a year into that move and they tell us it is bottoming. Sound familiar? I think commodities have the same fate as KBH from late 2006 to now.
These experts clearly have an agenda and it is to spread a false message that the end of the recession and the beginning of inflation is near. The purpose is to allow the recapitalization of the system so it can tide itself over for the next hit.
These are the same experts that in Feb 2007 AFTER THE SUB PRIME LOAN CRISIS told us that it would not affect the world economy and that even if we had a recession it would be A MILD ONE. That was also the prediction of the President and of the FEDERAL RESERVE BOARD CHAIRMAN. They kept telling us that message through the summer of 2008. The public was 80% invested in stock in their retirement plans right up until the crash. They never saw it coming because they were told it was going to be OK.
These same experts said in early 2004 that that expansion was doomed because of a jobless recovery. Well now there is no recovery and jobs numbers are tanking. The commodities markets in 2004 acted sluggish and they were telling us to sell them because the economy would not grow.
Now what are the experts talking about...Inflation Isn't it interesting that ALL OF THE EXPERTS are now talking about inflation. The fact that they are doing so in the middle of a recession that is probably going to turn into a depression is more than a joke it is a lie. The public will be in Gold and will sell their bonds, buy Gold oil and commodities to seek a higher return to offset inflation. They will not see this DEFLATION coming BECAUSE THEY ARE BEING TOLD TO LOOK FOR INFLATION. They will be blindsided again. The people I talk to all think oil is going back to the highs. Those same people said the same thing about real estate in late 2006.
I am not saying that commodities will crack tomorrow because the timing of this thing is up to them. They can move them higher and set the hook even more. This thing can get more ridiculous than it is now. What I am saying is that the end game is deflation not inflation as we are being told. I am certain of that much.
The source of business news is the same and has the same agenda. If you do not fit in with that agenda you will not get published. I will continue to blog on for free.
The beat goes on.....Mikey
1) The Fed is printing buckets of money
2) The economy is bottoming soon (90% of economist predict it)
3) The dollar is going to hell in a hand basket (everyone agrees on this one)
4) The stock market is now in a bull market
5) Inflation is coming, inflation is coming
They are telling us to buy
1) Gold
2) Commodities
3) Emerging Markets
4) Industrials
5) Techs
6) The banks
7) Junk bonds ...Yikes!
They are telling us to sell:
1) The dollar
2) Government Bonds
The recession by any standard is still going strong and they tell us to invest for a raging bull market. All of this is happening as the S&P is rallying up to its falling 200 day average. The economic and stock market trends are clearly down. The bubbles of real estate, consumer and commodities have burst. When a bubble bursts it takes years to repair it.
The real estate bubble topped in 2005 and it is now in its 4Th year from the top. It will bottom at least 2 years ahead of the stock market and the economy. The stock market topped in 2008. It is not even 1 year from the top. It has just had its first big hit, similar to the hit in real estate in the middle of 2006.
You can look at a chart on KBH in the Oct 2006 to Jan of 2007 and get an idea of what is to come for the stock market over the next 2 years. They were telling us then that the real estate market had bottomed there. KBH rallied from 38 to 56 during that period. They told us to look at the housing stocks because they are telling us that the housing market was bottoming. The low was in 11/28/2008 at 6.90.
What is happening now. The experts say the economy is bottoming and to watch out for inflation. The commodities topped in the summer of 2008. We are not quite a year into that move and they tell us it is bottoming. Sound familiar? I think commodities have the same fate as KBH from late 2006 to now.
These experts clearly have an agenda and it is to spread a false message that the end of the recession and the beginning of inflation is near. The purpose is to allow the recapitalization of the system so it can tide itself over for the next hit.
These are the same experts that in Feb 2007 AFTER THE SUB PRIME LOAN CRISIS told us that it would not affect the world economy and that even if we had a recession it would be A MILD ONE. That was also the prediction of the President and of the FEDERAL RESERVE BOARD CHAIRMAN. They kept telling us that message through the summer of 2008. The public was 80% invested in stock in their retirement plans right up until the crash. They never saw it coming because they were told it was going to be OK.
These same experts said in early 2004 that that expansion was doomed because of a jobless recovery. Well now there is no recovery and jobs numbers are tanking. The commodities markets in 2004 acted sluggish and they were telling us to sell them because the economy would not grow.
Now what are the experts talking about...Inflation Isn't it interesting that ALL OF THE EXPERTS are now talking about inflation. The fact that they are doing so in the middle of a recession that is probably going to turn into a depression is more than a joke it is a lie. The public will be in Gold and will sell their bonds, buy Gold oil and commodities to seek a higher return to offset inflation. They will not see this DEFLATION coming BECAUSE THEY ARE BEING TOLD TO LOOK FOR INFLATION. They will be blindsided again. The people I talk to all think oil is going back to the highs. Those same people said the same thing about real estate in late 2006.
I am not saying that commodities will crack tomorrow because the timing of this thing is up to them. They can move them higher and set the hook even more. This thing can get more ridiculous than it is now. What I am saying is that the end game is deflation not inflation as we are being told. I am certain of that much.
The source of business news is the same and has the same agenda. If you do not fit in with that agenda you will not get published. I will continue to blog on for free.
The beat goes on.....Mikey
Saturday, June 6, 2009
Bottoming? Santa Maria! Look at this
Consumer Credit Plunges by $15.7 Billion
Borrowing by consumers fell by $15.7 billion in April as U.S. households continued to trim spending and put away their credit cards amid a severe recession.
The Federal Reserve said Friday the April decline was the second largest ever in dollar terms following March's drop of $16.6 billion. March's decline originally was reported as $11.1 billion, which had been the most on records dating to 1943.
The April decline was more than double the $6 billion drop that economists had expected. Analysts believe consumers will remain cautious as long as the unemployment rate keeps rising, which it did again in May.
In percentage terms, consumer credit fell at an annual rate of 7.4 percent in April, following a 7.8 percent drop in March. The two declines were the largest since an 8.1percent drop in December 1990.
Households have been spending less and saving more as they try to replenish their nest eggs in the face of huge declines in home values and investment holdings.
Americans' personal savings rate jumped to 5.7 percent in April, the highest since February 1995, according to government data released earlier this week. The level of savings — $620.2 billion — was the most on records dating to January 1959.
The category in Friday's report that includes credit card debt dropped at an annual rate of 11 percent in April, following an 11.2 percent plunge in March.
Auto loans and other non-revolving credit fell at an annual rate of 5.3 percent, following a 5.8 percent decline in March.
In a separate report, the government said the jobless rate jumped to a 25-year high of 9.4 percent in May as employers cut a net total of 345,000 jobs.
The payroll job loss was the smallest since September and a sign that the recession, already the longest since World War II, could be starting to bottom out. Some economists believe the economy may be close to resuming growth although they expect the expansion will be weak to start, given all the problems facing the financial sector and the housing industry.
The $15.7 billion drop in consumer borrowing in April left total consumer credit at $2.52 trillion. The Fed's measure of consumer credit does not include home mortgages or other loans secured by real estate.
Let's see the economy is 80% consumer driven and the borrowing by consumers fell the most since 1943 for 2 months in a row. Then unemployment went to a 25 year high and the "experts" say the economy is bottoming. Santa Maria!!! They must be on somebodies payroll. Well Mikey is not and this is not good. This looks ugly and at some point this thing blows up again and it won't be inflationary.
The contraction in consumer credit is a sign that the Fed is TIGHTENING and not easing. The weakness in the dollar is precursor to a weak economy not inflation. The emerging markets are the manufacturing sector to supply an engine driven by our consumer. Our consumer is tapped out thus the world economy is going to get drilled. Inflation is the least of our worries deflation is. Through all of this they are telling us the economy is bottoming?
That is the basis for my investment strategy. To short Gold, Emerging markets and commodities.
The beat goes on ....MIkey
Borrowing by consumers fell by $15.7 billion in April as U.S. households continued to trim spending and put away their credit cards amid a severe recession.
The Federal Reserve said Friday the April decline was the second largest ever in dollar terms following March's drop of $16.6 billion. March's decline originally was reported as $11.1 billion, which had been the most on records dating to 1943.
The April decline was more than double the $6 billion drop that economists had expected. Analysts believe consumers will remain cautious as long as the unemployment rate keeps rising, which it did again in May.
In percentage terms, consumer credit fell at an annual rate of 7.4 percent in April, following a 7.8 percent drop in March. The two declines were the largest since an 8.1percent drop in December 1990.
Households have been spending less and saving more as they try to replenish their nest eggs in the face of huge declines in home values and investment holdings.
Americans' personal savings rate jumped to 5.7 percent in April, the highest since February 1995, according to government data released earlier this week. The level of savings — $620.2 billion — was the most on records dating to January 1959.
The category in Friday's report that includes credit card debt dropped at an annual rate of 11 percent in April, following an 11.2 percent plunge in March.
Auto loans and other non-revolving credit fell at an annual rate of 5.3 percent, following a 5.8 percent decline in March.
In a separate report, the government said the jobless rate jumped to a 25-year high of 9.4 percent in May as employers cut a net total of 345,000 jobs.
The payroll job loss was the smallest since September and a sign that the recession, already the longest since World War II, could be starting to bottom out. Some economists believe the economy may be close to resuming growth although they expect the expansion will be weak to start, given all the problems facing the financial sector and the housing industry.
The $15.7 billion drop in consumer borrowing in April left total consumer credit at $2.52 trillion. The Fed's measure of consumer credit does not include home mortgages or other loans secured by real estate.
Let's see the economy is 80% consumer driven and the borrowing by consumers fell the most since 1943 for 2 months in a row. Then unemployment went to a 25 year high and the "experts" say the economy is bottoming. Santa Maria!!! They must be on somebodies payroll. Well Mikey is not and this is not good. This looks ugly and at some point this thing blows up again and it won't be inflationary.
The contraction in consumer credit is a sign that the Fed is TIGHTENING and not easing. The weakness in the dollar is precursor to a weak economy not inflation. The emerging markets are the manufacturing sector to supply an engine driven by our consumer. Our consumer is tapped out thus the world economy is going to get drilled. Inflation is the least of our worries deflation is. Through all of this they are telling us the economy is bottoming?
That is the basis for my investment strategy. To short Gold, Emerging markets and commodities.
The beat goes on ....MIkey
Dr. Spin: Cramer: Why 9.4% Unemployment Is Good or It must be good the market didn't sell off
DJIA 8763 +12.89 SPX 940.09 -2.37 VIX 29.62 -.56 Gold 956.70 -25.60 Oil 68.38 -.43Dollar Index 80.73 +1.25 TLT (Long Term Gov Bonds) 89.84 -.69 IEF (7-10 Yr Gov Bonds)
88.60 -.89
Some investors may wonder how the highest unemployment rate since 1983 is a positive. Yet that is exactly how Friday played out, as monthly jobless numbers reached 9.4% and the market edged higher. Cramer’s theory: The layoffs are largely over, Wall Street knows it, and stocks were bought and sold accordingly.
Consider this: The Lehman Brothers collapse was an eye-opener for everyone, not just the financial sector. When that comet hit, CEOs across the entire economic spectrum adopted a bunker mentality and started to make massive cuts in preparation for a worst-case scenario. The first and most obvious target was the workforce, and companies slashed jobs big and deep.
Thanks to responsive governments the world over, though, a second round of layoffs wasn’t needed. Stimulus programs spared us that trouble, and President Obama’s decision to save General Motors [GMGMQ 0.865 0.119 (+15.95%) ] and Chrysler – and as a result, their suppliers – was a big help, too. This prevented the U.S. unemployment rate from reaching Great Depression levels, which were 33%, and instead kept us under 10%. All this despite the near collapse of the entire financial sector, a bursting housing bubble, retail’s decline and those problems in Detroit.
Not bad, right? At least that’s how the market saw it. And that’s why stocks finished the day in positive territory. Cramer wasn’t making light of the 343,000 Americans who lost their jobs in May. But overall there are now fewer people in danger of foreclosure, though more are able to spend money and pay taxes.
“Believe it or not,” he said, “that’s bullish.”
This doesn’t mean it’s all up from here. The recession is not over yet. Today’s jobs report was only a signal that the mass firings are done. Of course, Wall Street never waits, and that will benefit stocks. Cramer offered ways to play it.
Buy B.O.A.T. – Banks, Oil, Aerospace and Tech – if you think the economy will come roaring back. JPMorgan Chase [JPM 34.55 -0.80 (-2.26%) ], ConocoPhillips [COP 45.00 -0.97 (-2.11%) ], Boeing [BA 52.65 2.08 (+4.11%) ] and Apple [AAPL 144.67 0.93 (+0.65%) ] work for believers in this thesis.
Worried about inflation? If so, you must think the economy is actually too strong. But still, Cramer recommended Agnico-Eagle Mines [AEM 57.36 -3.09 (-5.11%) ], SDPR Gold Shares [GLD 93.71 -2.52 (-2.62%) ] or gold bullion for those in this camp.
Lastly, Johnson & Johnson [JNJ 55.93 0.09 (+0.16%) ], Colgate-Palmolive [CL 70.90 -0.42 (-0.59%) ] and Hershey [HSY 34.87 -0.27 (-0.77%) ] are the stocks to buy for anyone feeling a bit more cautious. These are classic defensive names for anyone who is not as bullish on the economy.
Consider this a portfolio for the market as it is right now. Throw in a small cash position, too. No one really knows which way we’ll go, Cramer said. So we need to be ready when we find out.
I will tell you again. This guy said the same thing about Real Estate in the summer/Fall of 2006. The message was the same. It is bad but the stocks are going up and that tells you the market has bottomed. I like the idea that he is touting Gold. He also likes the banks whick is interesting after they sold their stock to pay back TARP.
This week the experts told us that the market is bullish, the economy is bottoming and inflation and a lower dollar is on the way. The FED is flooding the market with dollars and watch out for the flood. Mikey says the worst is yet to come. Watch the fire not the flood. I think it is time to move out of the market and into cash and bonds. The Fed was supposed to buy down the bonds remember. They let them get hammered now I think they are buying just as the touts tell us that we should sell our bonds and worry about inflation. Makes you wonder who these experts are working for, eh? I tell ya this stuff never stops.
I am starting to quoite long and intermediate government bonds now. TLT (Long Term Gov Bonds) 89.84 -.69 IEF (7-10 Yr Gov Bonds)88.60 -.89 so you can track them.
Here are some rates
US Treasury Indexes
Name Discount/Price Change Yield
3-Month U.S. Treasury Bill 0.19 +0.05 0.19%
6-Month U.S. Treasury Bill 0.33 +0.07 0.33%
2-Year U.S. Treasury Note 99.16 -0.66 1.30%
5-Year U.S. Treasury Note 97.28 -1.16 2.83%
10-Year U.S. Treasury Note 94.16 -1.00 3.83%
30-Year U.S. Treasury Bond 93.78 -0.81 4.63%
I did very little this week added to ZSL(silver short) @7.67 and Shorted F @6.15
Mikey
88.60 -.89
Some investors may wonder how the highest unemployment rate since 1983 is a positive. Yet that is exactly how Friday played out, as monthly jobless numbers reached 9.4% and the market edged higher. Cramer’s theory: The layoffs are largely over, Wall Street knows it, and stocks were bought and sold accordingly.
Consider this: The Lehman Brothers collapse was an eye-opener for everyone, not just the financial sector. When that comet hit, CEOs across the entire economic spectrum adopted a bunker mentality and started to make massive cuts in preparation for a worst-case scenario. The first and most obvious target was the workforce, and companies slashed jobs big and deep.
Thanks to responsive governments the world over, though, a second round of layoffs wasn’t needed. Stimulus programs spared us that trouble, and President Obama’s decision to save General Motors [GMGMQ 0.865 0.119 (+15.95%) ] and Chrysler – and as a result, their suppliers – was a big help, too. This prevented the U.S. unemployment rate from reaching Great Depression levels, which were 33%, and instead kept us under 10%. All this despite the near collapse of the entire financial sector, a bursting housing bubble, retail’s decline and those problems in Detroit.
Not bad, right? At least that’s how the market saw it. And that’s why stocks finished the day in positive territory. Cramer wasn’t making light of the 343,000 Americans who lost their jobs in May. But overall there are now fewer people in danger of foreclosure, though more are able to spend money and pay taxes.
“Believe it or not,” he said, “that’s bullish.”
This doesn’t mean it’s all up from here. The recession is not over yet. Today’s jobs report was only a signal that the mass firings are done. Of course, Wall Street never waits, and that will benefit stocks. Cramer offered ways to play it.
Buy B.O.A.T. – Banks, Oil, Aerospace and Tech – if you think the economy will come roaring back. JPMorgan Chase [JPM 34.55 -0.80 (-2.26%) ], ConocoPhillips [COP 45.00 -0.97 (-2.11%) ], Boeing [BA 52.65 2.08 (+4.11%) ] and Apple [AAPL 144.67 0.93 (+0.65%) ] work for believers in this thesis.
Worried about inflation? If so, you must think the economy is actually too strong. But still, Cramer recommended Agnico-Eagle Mines [AEM 57.36 -3.09 (-5.11%) ], SDPR Gold Shares [GLD 93.71 -2.52 (-2.62%) ] or gold bullion for those in this camp.
Lastly, Johnson & Johnson [JNJ 55.93 0.09 (+0.16%) ], Colgate-Palmolive [CL 70.90 -0.42 (-0.59%) ] and Hershey [HSY 34.87 -0.27 (-0.77%) ] are the stocks to buy for anyone feeling a bit more cautious. These are classic defensive names for anyone who is not as bullish on the economy.
Consider this a portfolio for the market as it is right now. Throw in a small cash position, too. No one really knows which way we’ll go, Cramer said. So we need to be ready when we find out.
I will tell you again. This guy said the same thing about Real Estate in the summer/Fall of 2006. The message was the same. It is bad but the stocks are going up and that tells you the market has bottomed. I like the idea that he is touting Gold. He also likes the banks whick is interesting after they sold their stock to pay back TARP.
This week the experts told us that the market is bullish, the economy is bottoming and inflation and a lower dollar is on the way. The FED is flooding the market with dollars and watch out for the flood. Mikey says the worst is yet to come. Watch the fire not the flood. I think it is time to move out of the market and into cash and bonds. The Fed was supposed to buy down the bonds remember. They let them get hammered now I think they are buying just as the touts tell us that we should sell our bonds and worry about inflation. Makes you wonder who these experts are working for, eh? I tell ya this stuff never stops.
I am starting to quoite long and intermediate government bonds now. TLT (Long Term Gov Bonds) 89.84 -.69 IEF (7-10 Yr Gov Bonds)88.60 -.89 so you can track them.
Here are some rates
US Treasury Indexes
Name Discount/Price Change Yield
3-Month U.S. Treasury Bill 0.19 +0.05 0.19%
6-Month U.S. Treasury Bill 0.33 +0.07 0.33%
2-Year U.S. Treasury Note 99.16 -0.66 1.30%
5-Year U.S. Treasury Note 97.28 -1.16 2.83%
10-Year U.S. Treasury Note 94.16 -1.00 3.83%
30-Year U.S. Treasury Bond 93.78 -0.81 4.63%
I did very little this week added to ZSL(silver short) @7.67 and Shorted F @6.15
Mikey
Friday, June 5, 2009
Fed and Infaltion analogy...Flood or Fire
The big story is that the Fed is printing money by the bucket fulls and it is going to cause inflation. The analogy to that would be that if the collapse of the economy ia a raging fire and the FED printing money is the water being poured on that fire then the experts are telling us to worry about a flood. In essence they are telling us to worry about a flood as our house burns down.
I am not worried about the flood I am worried about the fire. This is of course what they should be telling us now. They are are always there to help.
The beat goes on ...Mikey
I am not worried about the flood I am worried about the fire. This is of course what they should be telling us now. They are are always there to help.
The beat goes on ...Mikey
New Message....Expert and market guru Jim Rodgers says Dont Short the Market
DJIA 8775 +25 SPX 941.57 -.95 VIX 30.29 Gold 962 -20.30 Silver 15.11 -.51 Oil 67.98 -.83 Dollar Index 80.41 +.96 TLT 8996 -.57 IEF 88.70 -.79
Dollar Crisis Looming — Don't Short the Market: Jim Rogers
I’m afraid they're printing so much money that stocks could go to 20,000 or 30,000," Rogers said. "Of course it would be in worthless money, but it could happen and you could lose a lot of money being short."
Rogers typically holds both long and short positions, but his perception of global currencies' instability has led him to pull out all his shorts, he said. The last time he can remember doing so was before the market fiasco in 1987.
Rogers called the US dollar a "terribly flawed currency," adding that it could be the starting point for the next currency crisis.
"I would suspect that somewhere along the line...someone's going to say, 'I'm going to start selling mine before everybody else does,'" Rogers said. "That's when you have a currency crisis."
But instead of pouring money into stocks, Rogers said investors should turn toward commodities. This sector will lead the recovery if the global economy improves, and if it doesn't, they'll still be the best place because of inflation, he said.
Rogers' Recommendations:
Gold
Silver
Agriculture
Natural Gas
China: He has been buying into the country for 20 years
Bonds: "That's how I'm going to protect myself, eventually, is short bonds."
I am speechless..well almost. Man I have heard everything now.The same old message Buy Gold oil and commodities and sell the dollar. We are hearing this every day now. Now they put out this message of don't short the market. That's a good one. That is why I am posting this crap. To document this message when they blow this stuff away.
By the way this guy was saying the same thing with commodities on their highs last year. After all of this printing the dollar is about the same level it has been for the past year. The Euro hit a high of 1.60 and is 1.40 today so it has declined 10% against the dollar.
They are trashing the dollar big time and that is what makes sense to mom and pop investor. Mikey says that we are going to have a deflation and the dollar will be the strongest currency as the economies of the world go into the tank.
PS The article says that Jim has been short the market since 1987 Jesus the DJIA was 2000 in 1987. It fricken went to 14000 Jimmy. Now after about 6 bubbles you are not short????? Now there is a guy that has his act together. Notice he wants to short bonds. All I can say is the bond market is ready to rumble when he shorts it.
Added to ZSL today @ 7.67 first buy was 9.42 still have a buy in at 6.54.
I am not short the market yet will let you know. I am thinking that I may start with the SPX in the 950 to 1000 area we are now at 946.06.
Dollar Crisis Looming — Don't Short the Market: Jim Rogers
I’m afraid they're printing so much money that stocks could go to 20,000 or 30,000," Rogers said. "Of course it would be in worthless money, but it could happen and you could lose a lot of money being short."
Rogers typically holds both long and short positions, but his perception of global currencies' instability has led him to pull out all his shorts, he said. The last time he can remember doing so was before the market fiasco in 1987.
Rogers called the US dollar a "terribly flawed currency," adding that it could be the starting point for the next currency crisis.
"I would suspect that somewhere along the line...someone's going to say, 'I'm going to start selling mine before everybody else does,'" Rogers said. "That's when you have a currency crisis."
But instead of pouring money into stocks, Rogers said investors should turn toward commodities. This sector will lead the recovery if the global economy improves, and if it doesn't, they'll still be the best place because of inflation, he said.
Rogers' Recommendations:
Gold
Silver
Agriculture
Natural Gas
China: He has been buying into the country for 20 years
Bonds: "That's how I'm going to protect myself, eventually, is short bonds."
I am speechless..well almost. Man I have heard everything now.The same old message Buy Gold oil and commodities and sell the dollar. We are hearing this every day now. Now they put out this message of don't short the market. That's a good one. That is why I am posting this crap. To document this message when they blow this stuff away.
By the way this guy was saying the same thing with commodities on their highs last year. After all of this printing the dollar is about the same level it has been for the past year. The Euro hit a high of 1.60 and is 1.40 today so it has declined 10% against the dollar.
They are trashing the dollar big time and that is what makes sense to mom and pop investor. Mikey says that we are going to have a deflation and the dollar will be the strongest currency as the economies of the world go into the tank.
PS The article says that Jim has been short the market since 1987 Jesus the DJIA was 2000 in 1987. It fricken went to 14000 Jimmy. Now after about 6 bubbles you are not short????? Now there is a guy that has his act together. Notice he wants to short bonds. All I can say is the bond market is ready to rumble when he shorts it.
Added to ZSL today @ 7.67 first buy was 9.42 still have a buy in at 6.54.
I am not short the market yet will let you know. I am thinking that I may start with the SPX in the 950 to 1000 area we are now at 946.06.
Thursday, June 4, 2009
They like Oil Service now ..How predictable
Buy These Oil Services Stocks Now: Analyst
Oil services stocks are the place to be for investors to profit from the runup, said Kurt Hallead, oil services analyst at RBC Capital Markets.
“With economic green shoots coming up, that means energy demands are going to start picking up and that’s why oil prices have run,” Hallead told CNBC.
When companies put more oil rigs to work, they will experience pricing power, said Hallead.
“What I’ve seen from the investment community is that we’re starting to anticipate an improvement in the rig count here in the U.S. and that improvement in the rig count is going to lead to some pricing power and earnings momentum,” he said.
He said that as an investor, it is better to be early in the stocks than later.
“That’s where you can generate your excess return,” he said.
See Latest Oil Prices Here
Recommendations:
Weatherford [WFT 20.85 0.85 (+4.25%) ]
Schlumberger [SLB 58.31 1.42 (+2.5%) ]
Smith International [SII 29.68 1.01 (+3.52%) ]
All I can say is this is a joke. Who makes this stuff up? Green shoots. The only green shoots I see are Green Parachutes as the boys jump out of the oil stocks before the plane crashes!!
Don't get me wrong I would expect them to run these stocks up in the near term to create excitment but the big money will be made by shorting this run up not trading the short term rally.
The beat goes on...Mikey
Oil services stocks are the place to be for investors to profit from the runup, said Kurt Hallead, oil services analyst at RBC Capital Markets.
“With economic green shoots coming up, that means energy demands are going to start picking up and that’s why oil prices have run,” Hallead told CNBC.
When companies put more oil rigs to work, they will experience pricing power, said Hallead.
“What I’ve seen from the investment community is that we’re starting to anticipate an improvement in the rig count here in the U.S. and that improvement in the rig count is going to lead to some pricing power and earnings momentum,” he said.
He said that as an investor, it is better to be early in the stocks than later.
“That’s where you can generate your excess return,” he said.
See Latest Oil Prices Here
Recommendations:
Weatherford [WFT 20.85 0.85 (+4.25%) ]
Schlumberger [SLB 58.31 1.42 (+2.5%) ]
Smith International [SII 29.68 1.01 (+3.52%) ]
All I can say is this is a joke. Who makes this stuff up? Green shoots. The only green shoots I see are Green Parachutes as the boys jump out of the oil stocks before the plane crashes!!
Don't get me wrong I would expect them to run these stocks up in the near term to create excitment but the big money will be made by shorting this run up not trading the short term rally.
The beat goes on...Mikey
Sound Familiar?
IS a Bull Market — Here's What to Buy: Experts
Take advantage of the recent market gains, said Sean Clark, chief investment officer of Clark Capital Management, and Michael Yoshikami, president and chief investment strategist of YCMNET Advisors. (See their investment recommendations, below.)
“It is a bull market — we’ve been saying that this is a cyclical bull market within an overall secular bear,” Clark told CNBC.
“There’s a lot of positive to look at: risk is beginning to come back into the market, and we’re beginning to see the money that used to be on the sideline slowly filter back into the market.”
Clark said investors should be buying into the dips because he expects the markets to trade higher into the summer and into early fall.
Pros Say: US Banks Now 'Less Risky'
“We’re still on an uptrend,” agreed Yoshikami. “The market has seen its lows and continues to show evidence, including unemployment numbers, that things are stabilizing and recovery is around the corner.”
Yoshikami advised investors to follow the reflation, inflation and infrastructure trade path.
Recommendations:
Clark Likes:
Fixed Income—Especially corporate junk bonds
Emerging Markets—"The emerging markets are the economic engines of the future. As such, those are the primary benefactors of the improving economic landscape," said Clark.
iShares MSCI Emerging Markets Index [EEM 33.56 0.63 (+1.91%) ]
Commodities—“We’re focused and drilled in on the China demand theme. We own commodities and we like commodities. We own oil, heating oil, copper, agriculture, silver,” he said. Clark said gold also looks attractive
Isn't it funny that that they all like the same things. Buy the way Junk bond>>>give me a break!
Take advantage of the recent market gains, said Sean Clark, chief investment officer of Clark Capital Management, and Michael Yoshikami, president and chief investment strategist of YCMNET Advisors. (See their investment recommendations, below.)
“It is a bull market — we’ve been saying that this is a cyclical bull market within an overall secular bear,” Clark told CNBC.
“There’s a lot of positive to look at: risk is beginning to come back into the market, and we’re beginning to see the money that used to be on the sideline slowly filter back into the market.”
Clark said investors should be buying into the dips because he expects the markets to trade higher into the summer and into early fall.
Pros Say: US Banks Now 'Less Risky'
“We’re still on an uptrend,” agreed Yoshikami. “The market has seen its lows and continues to show evidence, including unemployment numbers, that things are stabilizing and recovery is around the corner.”
Yoshikami advised investors to follow the reflation, inflation and infrastructure trade path.
Recommendations:
Clark Likes:
Fixed Income—Especially corporate junk bonds
Emerging Markets—"The emerging markets are the economic engines of the future. As such, those are the primary benefactors of the improving economic landscape," said Clark.
iShares MSCI Emerging Markets Index [EEM 33.56 0.63 (+1.91%) ]
Commodities—“We’re focused and drilled in on the China demand theme. We own commodities and we like commodities. We own oil, heating oil, copper, agriculture, silver,” he said. Clark said gold also looks attractive
Isn't it funny that that they all like the same things. Buy the way Junk bond>>>give me a break!
More Good news Spins and expert buy recomendations
DJIA 8688 +13.37 SPX 935.59 +3.88 VIX 30.52 -.50 Gold 977.50 +11.90 Oil 68.34 +2.22 Dollar Index 79.55 +.05 TLT (Long Term Gov Bonds)91.33 -1.11 IEF (7-10 Yr Gov Bonds)89.92 -.31
Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose at a stronger-than-expected pace in the first quarter, data showed on Thursday, supporting budding hope that the recession was losing force.
Initial claims for state unemployment insurance benefits fell 4,000 to 621,000 in the week ended May 30, the Labor Department said.
The week covered the Memorial Day holiday, which could have had an impact on the data.
There was even more goods news in the report as the number of people staying on the benefit rolls after collecting an initial week of aid fell for the first time since January.
In another report, the department said non-farm productivity was much stronger than initially estimated in the first quarter.
"It's good news with respect to the fact that we're looking like we turned the corner in terms of the claims. That's a sign that we're close to the end of the recession, if it holds, and we're also seeing that kind of data in other indicators," said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.
Developing Market Investors Ride Wave Of Optimism
If investors in New York and London are seeing the first delicate signs of a recovery, their counterparts in developing countries say they are witnessing a full-on spring.
After a crushing fall in the last year and a half, stock markets in developing countries are riding a wave of optimism that the recovery of the global economy is at hand and being led by the developing world, especially China.
Though emerging markets remain far below the lofty highs they attained more than a year ago, investors are again viewing their chances of growth as better than those of the United States or Europe.
As a result, the Indian Nifty stock index has jumped by 64 percent in the last three months. China’s CSI 300 index of shares in Shanghai and Shenzhen has risen 37 percent and Brazil’s Bovespa increased 41 percent over the same period. By comparison, the Standard & Poor’s 500’s gain of 28 percent looks modest.
“There was a stampede for the exits in the fourth quarter,” said Gonzalo S. Pangaro, portfolio manager of the T. Rowe Price Emerging Markets Stock Fund. “The market is starting to realize that although these markets face issues, they are manageable issues.”
So much so that analysts have attributed some of the recent gains in the S.& P. to investors’ belief that the Chinese economy is improving. It is not just China that is generating optimism. A lot of improving economic data is bolstering developing countries. While industrial production has rebounded in China, so have car sales in India and retail sales in Brazil.
Could all this be irrational exuberance? Current valuations are extremely rich: the price of stocks on the Indian Nifty is more than 20 times earnings. Prices are nearly 21 times earnings on the Bovespa and 29 times earnings on the CSI 300.
The optimistic view is that these price-to-earnings ratios reflect the return of an appetite for risk in the markets, which normally accompanies a more positive outlook, and a belief that these countries are ready to resume strong economic growth.
The skeptical outlook is that the economies would have to leap to double-digit growth rates to justify these valuations and that that could only mean a bubble was forming.
Emerging markets generally swing more wildly, in both directions, than developed countries do. And each of the big developing economies, the so-called BRIC countries, Brazil, Russia, India and China, face weaknesses that could stunt any recovery.
Exports and foreign investment flows, for instance, which are critical for many developing countries, remain anemic. Government spending has taken up some of the slack, but rising fiscal deficits in places like India could limit how much more policy makers can do to stimulate their economies.
No new buys or shorts today
Orders to buy:
FXP 10.28
GLL 10.78
ZSL 6.54
DUG 15.29 and 11.74
SCO 10.84
Looking to Short:
BA @ 55
MCD @ 62
AEM @ 63
Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose at a stronger-than-expected pace in the first quarter, data showed on Thursday, supporting budding hope that the recession was losing force.
Initial claims for state unemployment insurance benefits fell 4,000 to 621,000 in the week ended May 30, the Labor Department said.
The week covered the Memorial Day holiday, which could have had an impact on the data.
There was even more goods news in the report as the number of people staying on the benefit rolls after collecting an initial week of aid fell for the first time since January.
In another report, the department said non-farm productivity was much stronger than initially estimated in the first quarter.
"It's good news with respect to the fact that we're looking like we turned the corner in terms of the claims. That's a sign that we're close to the end of the recession, if it holds, and we're also seeing that kind of data in other indicators," said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.
Developing Market Investors Ride Wave Of Optimism
If investors in New York and London are seeing the first delicate signs of a recovery, their counterparts in developing countries say they are witnessing a full-on spring.
After a crushing fall in the last year and a half, stock markets in developing countries are riding a wave of optimism that the recovery of the global economy is at hand and being led by the developing world, especially China.
Though emerging markets remain far below the lofty highs they attained more than a year ago, investors are again viewing their chances of growth as better than those of the United States or Europe.
As a result, the Indian Nifty stock index has jumped by 64 percent in the last three months. China’s CSI 300 index of shares in Shanghai and Shenzhen has risen 37 percent and Brazil’s Bovespa increased 41 percent over the same period. By comparison, the Standard & Poor’s 500’s gain of 28 percent looks modest.
“There was a stampede for the exits in the fourth quarter,” said Gonzalo S. Pangaro, portfolio manager of the T. Rowe Price Emerging Markets Stock Fund. “The market is starting to realize that although these markets face issues, they are manageable issues.”
So much so that analysts have attributed some of the recent gains in the S.& P. to investors’ belief that the Chinese economy is improving. It is not just China that is generating optimism. A lot of improving economic data is bolstering developing countries. While industrial production has rebounded in China, so have car sales in India and retail sales in Brazil.
Could all this be irrational exuberance? Current valuations are extremely rich: the price of stocks on the Indian Nifty is more than 20 times earnings. Prices are nearly 21 times earnings on the Bovespa and 29 times earnings on the CSI 300.
The optimistic view is that these price-to-earnings ratios reflect the return of an appetite for risk in the markets, which normally accompanies a more positive outlook, and a belief that these countries are ready to resume strong economic growth.
The skeptical outlook is that the economies would have to leap to double-digit growth rates to justify these valuations and that that could only mean a bubble was forming.
Emerging markets generally swing more wildly, in both directions, than developed countries do. And each of the big developing economies, the so-called BRIC countries, Brazil, Russia, India and China, face weaknesses that could stunt any recovery.
Exports and foreign investment flows, for instance, which are critical for many developing countries, remain anemic. Government spending has taken up some of the slack, but rising fiscal deficits in places like India could limit how much more policy makers can do to stimulate their economies.
No new buys or shorts today
Orders to buy:
FXP 10.28
GLL 10.78
ZSL 6.54
DUG 15.29 and 11.74
SCO 10.84
Looking to Short:
BA @ 55
MCD @ 62
AEM @ 63
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