They still don't know what caused the decline...Its the economy stupid

DJIA 10136 SPX 10859.41 Nasdaq 2257.04 VIX 32.07 Gold 1219 Silver 18.56 Oil 74.15 RBOB(retail gas)2.02 Nat Gas 4.374 DBC (Commodities)21.98

Dollar Index 86.70 EURO 1.2276 Brit Pound 1.4533 Aussie.8414 IEV(Europe Index 32.64 EEM (Emerging Market Index)38.12 EWZ (Brazil)63.61 FXI (China Index)39.32

TLT (LT US Bonds)96.58 IEF (7-10 yr US Bonds)93.10

GDX(Gold Miners) 49.83 IYR (Real estate)50.03 (XLF Financials)14.89 XLE (Oil) 53.05 XLB (Materials)30.84 XRT (Retail)40.64 XLK (Tech) 21.71 XLV (Health care) 28.87

Here are the comments I saw from some of the experts regarding the action in May and what they think is coming. The one comment that I found interesting was that they still do not know what caused the flash crash in May. I will tell you before this decline is over they will know what caused it.


Investors can be forgiven for a little deja vu: In the month of the Flash Crash, wild swings in volatility and incessant talk about risks to the entire financial system, May seemed like a trip back to the bad old days.

The wild and crazy month saw the market rise or fall more than 1.5 percent on nearly half the trading sessions. Major indexes put together their worst May since 1940, and the view from the playing field looked even worse.

"The S&P 500's rollercoaster ride this month is reminiscent of the Cyclone on Coney Island," said Mike O'Rourke, chief strategist at BTIG in New York, in his morning note. "If you ever rode the Cyclone, you know that the truly scary part of the ride was not how high or fast the coaster went, but the fear that it would fall apart at any moment."

"If you want a correction you're going to get one," said Linda Duessel, equity market strategist at Federated Investors in Pittsburgh. "We were well overbought. Sentiment measures were getting too high. We were overdue for a correction. It was all in line."

Duessel is sticking to her projection of 1,350 on the S&P by year's end, though she acknowledged that investors have a right to be concerned about the Flash Crash and the mystery that continues to surround the stunning event.

"The event itself is worthy (of concern) but I don't hear many people talking about it," she said. "We should worry about that and why we haven't figured it out."

The market finds itself entering a normally pretty easy time for investors. June and August are usually about average, but July tops the rest of the calendar for stock performance.

Sam Stovall, S&P's chief market strategist, said a "summer sprint" could well be in the cards, and at the least believes worries that the market reverting to financial crisis mode is unlikely.
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They talk about the roller coaster ride like it is some kind of fun thing. Hey. it was wide and crazy. It is never any fun when you lose your money. I mentioned that I thought this decline was about over in the near term. I still believe this but in no way do I think that we have any sustainable rally from here. I took some money off of the table but still have half of my shorts. I am not looking to get long but the nature of the ETF's that I am trading is so volatile that I feel they need to be traded.

The Real Estate Market has been looking for a bottom for the last 3 years and still is bouncing around the lows. The banks have been holding foreclosures down and controlling the descent of the market. The derivative market that caused the whole mess was not dealt with but swept under the carpet. Corporate earnings are coming at the expense workers being cut back and wages being cut. Just check out the employment numbers and they still though don't know what caused the decline.

The commodities markets are in full retreat and the emerging markets have rolled over. This is not a pretty picture. What is causing this decline is a world wide economic decline cause by the bad debt that was created by the last consumer and asset bubble. That debt and asset bubble burst and the governments of the world took on the debt to stabilize their economies. That was not a good decision. This shift is that last one in this game of hot potato as no one is left to throw the potato to.

What happens now is the deflation of this debt and asset bubble. Yes, I said DEFLATION which is not what the story that the system is telling.

Here comes the Put busters.....errr Bargin Hunters

DJIA 10220 +245.69 SPX 1098.40 +30.15 Nasdaq2266.64 +70.80 VIX 29.55 -5.44 Gold 1211 -1.50 Silver 18.45 +.144 Oil 74.14 +2.63 RBOB(retail gas)2.02 +.0633 Nat Gas 4.289 +.108 DBC (Commodities)22.12 +.60

Dollar Index 86.20 -.91 EURO 1.2386 +.0232 Brit Pound 1.4598 +.023 Aussie.8494 +.028
IEV(Europe Index 33.17 +1.80 EEM (Emerging Market Index)38.46 +1.93 EWZ (Brazil)63.51 +3.41 FXI (China Index)39.64 +1.72

TLT (LT US Bonds)96.51 -1.75 IEF (7-10 yr US Bonds)92.74 -.83

GDX(Gold Miners) 50.28 +1.29 IYR (Real estate)50.24 +2.14 (XLF Financials)14.88 +.52 XLE (Oil) 53.70 +1.83 XLB (Materials)30.93 +.82 XRT (Retail)40.57 +1.31 XLK (Tech) 21.76 +66 XLV (Health care) 28.90 +.47

If there's something strange
in your financial hood
Who can ya call?
Putbusters
If there's something weird
and prices don't look good
Who can ya call?
Putbusters
I ain't afraid of no decline
I ain't afraid of no decline

If you're seeing things
running through your head
Who can ya call?
Putbusters
If you see you world getting blown away
Who can ya call?
Putbusters

Here come the Put busters(Bargin Hunters)

Investors Find Big Bargains; Intel Jumps

Investors grew reassured that China wasn't about to reignite fears about European debt and bargain-hunters swooped in to push stocks higher by 2 percent or more.

The biggest gains coming from energy and financials. Utilities and consumer staples underperformed, though all 10 S&P sectors rose at least 1 percent.

Separate economic reports showed the employment recovery remains lackluster and first-quarter growth was a bit slower than originally thought. That helped temper sentiment somewhat but wasn't enough to keep away the bargain hunters.

Let's hear it for the Putbusters.

Please note the strength in the EURO, Pound and Aussie. The commodity complex is strong today with oil the leader up 2.63. Gold 1211 -1.50 is down on the day.

Mikey

This decline looks done in the short term

DJIA10136 +92.43 SPX 1086 +12.35 Nasdaq 2241 +30.57 VIX 31.38 -3.23 Gold 1212.80 +14.80 Silver 18.27 +.489 Oil 71.31 +2.56 RBOB(retail gas)1.96 +.04 Nat Gas 4.20 +.15DBC (Commodities)21.60 +.31 EURO 1.2237

I think the decline is about over for this period. I think they know we are in a correction and are not looking up now. The VIX got up to 48 on this last sell off and in a bear market this is as bad as it normally gets(crash excepted). I would look for something in the low 20's to start building my shorts back up again.

So I think we rally. Not too much maybe 10700 or so. It may stay up until early July. I have sold half of my double shorts and will look to get in on a market rally. I am adding to my DZZ 11.20 and ZSL 34.97 and expect Gold to get clocked when the resolve Europe.

I think the next part of this story will have Europe appear to get their act together and the market to respond with a good rally to tell the players that it was just Europe that caused the sell off and nothing is wrong with our economy. I believe that we have big problems ahead and that before it is over we will either be in a recession again or everyone including the market will believe it.

In this phase, that we are in now, I expect the EURO 1.2237 to rally and Gold 1213 to get nailed. The sell off in Gold will have nothing to do with the EURO rally and no one and I mean no one will believe the sell off.

In summary, I think on balance June is an up month for stocks and a down month for Gold. Where are the players lined up ...just the opposite.

Mikey

Andrew Cuomo runs for Governor..See my blog of May 14th

Cuomo For Governor
Saturday, May 22, 2010

In what is certainly a symbolic measure, New York Attorney General Andrew Cuomo announced his candidacy for governor in front of the Manhattan courthouse named for Boss Tweed, the corrupt political boss of Tammany Hall

Mr. Cuomo said he was seeking not only to lead New York but to remake a state paralyzed by political scandal and disproportionately burdened by financial crisis.

Mr. Cuomo, a Democrat, said he would pressure lawmakers this fall to state publicly whether they would embrace essential ethics changes, including disclosing their outside income, ceding control of redistricting to an independent panel and submitting to an outside ethics monitor.

A former secretary of Housing and Urban Affairs in the Clinton administration, Cuomo has amassed a $16-million war chest and reportedly has been maneuvering behind the scenes to control who else will be on the Democratic ticket with him this fall.

Cuomo, 52, ran unsuccessfully for governor in 2002 and many expected him to try again in 2006. But he steered clear of the race when then-Attorney Gen. Eliot Spitzer got in. Spitzer was elected but resigned in March 2008 after 14 months as governor when reports surfaced that he was a client of a high-priced prostitution ring.


The beat goes on and never changes

Mikey

THIS IS INFLATION????

Remember inflation and the Fed printing all those dollars. Take a look at these charts:


The Fed Printing???? This is the dollar index


Crude oil is dropping



CRB the commodities index falling



Long rates falling...30 Yr bonds rallying



Copper The industrial metal falling



GOLD.. THE NEXT INFLATION HEDGE TO GET CLOCKED



THE DZZ(DOUBLE SHORT GOLD) IS 12.00





What has been the message and what does the public believe? They believe we are going to have inflation and they have been told and are buying inflation hedges. They have been told that the economy is recovering and that interest rates are going to rise. That is not what is happening as you can see by looking at these charts. GOLD IS NEXT.
Mikey

The question is ????

DJIA 10068 -376.36 SPX 1071.59 -43.46 Nasdaq 2204.01 -94.36 VIX 45.79 +10.47 Gold 1188.60 -4.50 Silver 17.69 -.03 Oil 70.14 -.66 RBOB(retail gas)1.944 -.02 Nat Gas 4.10 -.033 DBC (Commodities)21.26 -.45


Dollar Index 85.68 -.02 EURO 1.2593 +.0133 Brit Pound 1.4408 +.0064 Aussie.8335 +.026
IEV(Europe Index 32.08 -1.04 EEM (Emerging Market Index)36.16 -1.89 EWZ (Brazil)57.63 -3.94 FXI (China Index)37.02 -1.34

TLT (LT US Bonds) 98.33 +2.03 IEF (7-10 yr US Bonds)93.39 +.90

GDX(Gold Miners) 47.04 -2.40 IYR (Real estate)47.24 -2.40 (XLF Financials) 14.24 -.89XLE (Oil) 52.16 -2.44 XLB (Materials)29.64 -1.41 XRT (Retail)38.92 -1.05 XLK (Tech) 21.31 -.70 XLV (Health care) 28.73 -.83


The pros are trying to figure out where to buy. What does that mean? It means that they are not afraid of this correction. They view it as a pullback and are looking for buying opportunities. Here are two articles on that subject

The first is from Cramer:

As bad as Thursday was for the markets, with the Dow plummeting 376 points and the S&P 500 losing almost 4%, Cramer still isn’t bullish on most stocks.

“It just hasn’t come down enough to make buying compelling,” the Mad Money host said, “or even particularly secure.”

He likened the Dow to a stock. If any other stock soared to $11 from $6.50 and then pulled back to just $10 – which is the same track that the index has followed since March 2009 – most investors would wait for it to dip to $9. And that’s just what is happening now.

“We’re barely down for the year,” Cramer said. “Despite the grinding agony of the action, we’re hardly in anything called bear-market territory, down just 10% from our high. Frankly, it’s a totally normal, run-of-the-mill correction.”

He might take a different approach if the market leaders that worked after that March 2009 bottom – oil, banks and tech – were working now, but they’re not. So we’re in a bit of a “no man’s land.” Stocks are down, but not enough to make them attractive. In fact, he’s only recommending accidentally high-yielders for the time being.

They won’t be attractive either, Cramer said, until “something truly bad happens,” meaning European governments and banks finally capitulate and that situation is resolved. Once we get that, though, “You cannot be as negative.”

3M [MMM 79.58 -2.96 (-3.59%) ] serves as a perfect example. The stock yields only 2.6% and trades at 14 times earnings with a 12% long-term growth rate, a slight premium to growth. It isn’t particularly cheap, and the uncertainty in Europe and China could mean the earnings estimates are too high.

When will triple-M be a buy? Not until the yield crosses 4% or it trades through that growth rate. Also, Cramer said he wanted to see proof in the charts that the stock has held at this level before. And, most importantly, we need those bad events to happen. Then the odds will be better. Until then, you can afford to wait.

“We’re still in no man’s land,” Cramer said. “No reason to get aggressive


Cramer calls it a run of the mill correction and says we have not come down far enough to make buying compelling. Notice that he never mentions that he has sold or that selling is something the reader should do. He is saying not to worry but don't buy yet. He is also saying don't buy here which makes me think that we have a rally comming.

The next article says:

How Low Can the Market Go? Pros Say Slide Hasn't Stopped

With technical barriers continuing to give way and the May 6 "flash-crash" fluke looking like not so much of a fluke anymore, market watchers were left Thursday wondering how much worse things could get.

Forecasts varied substantially but few thought there was much to stand in the way of a further move down that would bring the major indexes officially into correction territory, or 10 percent off their most recent highs.

Standard & Poor's said the correction could total 15 percent by the time all is said and done, sending its benchmark S&P 500 [.SPX 1071.59 -43.46 (-3.9%) ] to the 1035 range.

Others weren't quite so pessimistic, but worry seemed to be the word as a confluence of bad news proved a toxic mix that ended a powerful 14-month rally.
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They are worried about the correction but are saying that we correct 15% from the highs which is only another 5%. Again there is a mention of a correction but no advice to sell. They also say don't buy here which agbain to me means we may have a rally now.

What has happened is that the experts have been caught long and are trapped. They have not capitulated but are looking lower now. They are looking for the low not looking to sell their long positions.

Cramer is looking to buy accidental high yielders. I find that very strange coming from him because that means that those stocks would have to completely broken down technically for him to buy. Most professional traders would never buy a breakdown.

That would mean that he would be looking at buying something that is "cheap". Cheap stocks are not winners. They go from cheap to Oh My God! before they bottom. Then they ream you out and stay in the doldrums for a year before they can rally. This is a departure from Cramers stick where he normally buy the hot stocks that have high growth rates and buys the breakouts.

The current message is that Europe is to blame for the sell off and I think if there is the appearance of a solution for Europe they would all feel much better. The VIX is at a healthy 45.79 so it would not surprise me to see a rally soon especially when the "pros" would not buy here as the two articles mentioned. I see alot of stocks back to their July 2009 breakouts and if the DJIA does the same thing that means 8800.

The fact is that the longs are trapped and are praying for the correction to end but are not selling. That means this thing has more to go. This "correction" is a resumption of the primary Bear market that started in Sept of 2008. The bounce is over and you would expect a retest of the lows of 2009 at 6600.

I am not hearing the "Pros" say this now. They are saying to buy lower when things settle down. The "Pros" are not giving us a drop dead number. When they are ready to bottom this thing for real they will give us an urgent message to get out and save ourselves.

They will tell us that we could sell off significantly and tell us if we drop below a certain number that there will be blood in the streets. That will be followed by 5months more of a sell off. During that 5 months the world will be coming to and end. The public will be completely fed up and dump there stocks. That is what you hear at lows not buy accidental high yielders. That is like buying a Mercedes after it has been totaled in an accident. I would like to buy one but not cheap after a crash.

We are no where close to this now. We have just had the kick off to this sell off. They are not telling us our economy is in bad shape and in fact are saying when you get the opportunity to buy a cheap stock do it. Remember what Mikey says about cheap. It goes to Oh My God and hammers you for 1 year before you buy.

Stay in cash and be safe because prices have a long way to go in terms of price and time before you should buy anything. Don't chase any near trm rallys. Cash pays less than .25% but that will out perform stocks, corporate bonds, and Muni bonds, which I think are going to be disasters.

Mikey

Gold on the edge of the cliff

The yellow metal is at the tipping point now at 1185, Gold bugs look at Platinum chart

Mikey

This is options expirations week an upside surprise is possible

This is options expirations week do not be surprised if we rally into friday. Regardless of this bounce or not this sell off looks very real and can go alot further. THEY ARE BLAMING THIS ON EUROPE BUT DON'T BELIEVE THEM THIS IS ABOUT OUR ECONOMY GOING BACK IN THE TANK.

Mikey

Sell Signal on Gold and Silver

DJIA 10354 -156.74 SPX 1103.95 -17.44 Nasdaq 2272.95 -44 VIX 37.44 +3.89 Gold 1189 -25.10 Silver 18.08 -.799 Oil 68.12 -1.29 RBOB(retail gas)2.02 -.015 Nat Gas 4.22 -.115DBC (Commodities)21.56 -.34

Dollar 84.33 -.33 EURO1.2324 +.0123 Brit Pound 1.2324 +.0039 Aussie .8392 -.0221
IEV(Europe Index 32.79 -.19 EEM (Emerging Market Index)37.62 -.81 EWZ (Brazil)60.97 -2.11 FXI (China Index)38.06 -.38
TLT (LT US Bonds) 96.88 +.90 IEF (7-10 yr US Bonds)92.80 +.39

GDX(Gold Miners) 48.69 -2.80 IYR (Real estate)48.80 -1.27 (XLF Financials) 14.76 -.17 XLE (Oil) 53.92 -1.31 XLB (Materials)30.51 -.54 XRT (Retail)39.49 -.72 XLK (Tech) 21.90 -.28 XLV (Health care) 29.57 -.16


Gold is trading at 1189.50 and Silver is at 18.01. This is enough to give me a sell signal. I suspect that Gold goes straight to 1080 from here.

How the game is played.... Let's pretend it didn't happen and move on

It is starting to feel as if everyone on Wall Street is under investigation by someone for something.

News on Thursday that New York State prosecutors are examining whether eight banks hoodwinked credit ratings agencies opened yet another front in what is fast becoming the legal battle of a decade for the big names of finance.

Not since the conflicts at the center of Wall Street stock research were laid bare a decade ago, eventually resulting in a $1.4 billion industrywide settlement, have so many investigations swirled across the financial landscape.

Nearly two years after Washington rescued big banks with billions of taxpayer dollars, half a dozen government agencies are still trying, with mixed success, to peel back the layers of the collapse to determine who, if anyone, broke the rules.

The Securities and Exchange Commission, the Justice Department, the United States attorney’s office and more are examining how banks created, rated, sold and traded mortgage securities that turned out to be some of the worst investments ever devised.

Virtually all of the investigations, criminal as well as civil, are in their early stages, and investigators concede that their job is daunting. The S.E.C. has been examining major banks’ mortgage operations since last summer, but so far, it has filed a civil fraud claim against just one big player: Goldman Sachs [GS 142.51 -2.14 (-1.48%) ]. Goldman has vowed to fight.

But legal experts * (defined below)are already starting to handicap potential outcomes, not only for Goldman but for the broader industry as well. Many suggest that Wall Street banks may seek a global settlement akin to the 2002 agreement related to stock research. Indeed, Wall Street executives are already discussing among themselves what the broad contours of such a settlement might look like.

“I would be stunned if any of these cases go to trial,” said Frank Partnoy, a professor of law at the University of San Diego. “I think Wall Street needs to put this scandal behind it as quickly as possible and move on.”

As part of the 2002 settlement, 10 banks paid $1.4 billion total and pledged to change the way their analysts and investment bankers interacted to prevent conflicts of interest. This time, the price of any settlement would probably be higher and also come with a series of structural reforms.

David Boies, chairman of the law firm Boies, Schiller & Flexner, represented the government in its case against Microsoft [MSFT 28.895 -0.345 (-1.18%) ] and is now part of a federal challenge to California’s same-sex marriage ban. He said a settlement by banks might be painful but would ultimately be something Wall Street could live with. “The settlement may be bad for everyone, but not disastrous for anyone,” he said.

A settlement also would let the S.E.C. declare victory without having to bring a series of complex cases. The public, however, might never learn what really went wrong.

“The government doesn’t have the personnel to simultaneously prosecute several investment banks,” said John C. Coffee, a Columbia Law School professor.

The latest salvo came on Thursday from Andrew M. Cuomo, the New York attorney general. His office began an investigation into whether banks misled major ratings agencies to inflate the grades of subprime-linked investments.

Many Americans are probably already wondering why this has taken so long. The answer is that these cases are tricky, like the investments at the center of them.

But regulators also concede that they were reluctant to pursue banks aggressively until the financial industry stabilized. The S.E.C., for one, is now eager to prove that it is on its game after failing to spot the global Ponzi scheme orchestrated by Bernard L. Madoff, or head off the Wall Street excesses that nearly sank the entire economy.

The stakes are high for both sides. At a minimum, the failure to secure a civil verdict, or at least a mammoth settlement, would be another humiliation for regulators.

Wall Street wants to put this season of scandal behind it. That is particularly so given the debate over new financial regulations that is under way on Capitol Hill. The steady flow of new allegations could strengthen calls for tougher rules.

Even worse would be a criminal charge, which could put a firm out of business even if that firm were ultimately found not guilty, as was the case with the accounting giant Arthur Andersen after the fraud at Enron.

“No firm in the financial services field has the stomach for a criminal trial,” Mr. Coffee said.

Bankers have been reluctant until now to take their case to the public. But that is changing as Wall Street chieftains like Lloyd C. Blankfein of Goldman take to the airwaves and New York politicians warn that the city’s economy will be endangered by the attack on some of the city’s biggest employers and taxpayers.

“In New York, Wall Street is Main Street,” Gov. David A. Paterson has said. “You don’t hear anybody in New England complaining about clam chowder.”

There are broader political consequences as well. At the top, there is President Obama, who was backed by much of Wall Street in 2008. Many of those supporters now privately say they are disillusioned and frustrated by his attacks on their industry, which remains a vital source of campaign contributions for both parties.

Closer to home, the man who hopes to succeed Mr. Paterson, Mr. Cuomo, is painting himself as the new sheriff of Wall Street. Another attorney general, Eliot Spitzer, rode a series of Wall Street investigations to the governor’s mansion in 2006.

But ultimately, it is what Wall Street does best — making money — that is already on trial in the court of public opinion.

Put simply, the allegations against Wall Street were prompted by evidence that the firms may have devised and sold securities to investors without telling them they were simultaneously betting against them.

Wall Street firms typically play both sides of trades, whether to help buyers and sellers of everything from simple stocks to complicated derivatives complete their transactions, or to make proprietary bets on whether they would rise or fall.

These activities form half of the four-legged stool on which Wall Street’s profits and revenue rest, the others being advising on mergers and acquisitions and helping companies issue stocks, bonds and other securities.

“This case is a huge deal. It has the potential to be the mother of all Wall Street investigations,” said Mr. Partnoy of the University of San Diego. “The worry is that the government will go after dealings that Wall Street thought were insulated from review.”

Even some Wall Street executives concede that all the scrutiny makes proprietary trading a bit dubious. “The 20 guys in the room with the shades drawn are toast,” one senior executive of a major bank said.

This is the way every cycle ends. The crooks agree to a settlement with the politicians who they bribed to pull off the scam. Then the attorney General of some state who knew about the whole thing from the beginning gets elected to the Senate.

A few of the evildoers are paraded before congress and the Senate and testify to the outraged Congressman and Senators. This takes good acting on their part because they knew about it from the start.

They the legal experts* say lets make a deal and start over. Let's let bygones be bygones and pass a new law so it will never happen again. The crooks*(defined below) company pays a fine. The crook has to give back some of their stolen money, they call it a fine. The money they pay in fines is to the government. That money is then ear marked to some pork barrel project for each Senator and Congressman.

Maybe one or two go to jail and they blame the whole mess on them. The reality was the EVERYONE was doing it and they all kept quiet. They all say they were hoodwinked and did not know a thing about it. Once the new laws are passed the whole thing starts all over again. The politicians, the investment bankers, the lawyers, the investment experts (Cramers of the World), and the Media all get to rip off the public once again.

Now there are people that blow the whistle as it is going on. Those people are whistle blowers*(defined below). The WB's see it as it happens. It is so obvious to them but it never makes the media. The media is busily touting the scam to the public as a get rich investment and the public buys the message hook line and sinker.

The power of the media is mindboggeling. We live in a society of Zombies that are pushed around like a school of fish. The WB can scream to the top of his lungs and no one hears him. The WB has no credibility the media does. The crooks control the media and they are paid to sell the message. The Media is not payed to tell the truth. It is paid to tell the crooks story. The public takes what they hear as the truth.

There is much much more involved in this but it all makes up a system that lives on the hard work of honest people who are kept in the dark and fed mushrooms. That is the job of the professionals...the Lawyers, the Judges, the Investment Experts, the learned Economists, Federal Reserve Board chairman, the Media, and our esteemed Elected Representatives.


* Legal experts are the guys that let the crooks out of jail
* Crooks are CEO's and those who assist them
* Whistle blowers are idiots


The beat goes on

Mikey

Sell signal on Gold is now a close below 1183

I am pushing up my sell signal on Gold to a close below 1183. The target on the first hit would be 1080 to 1060. I expect a good bounce from there but will not cover

Mikey

Bank earnings real or memorex

Read this article by Diana Olick from the CNBC website

Banks Ignore Delinquent Borrowers

Some encouraging signs on the foreclosure front may not be as rosy as some are reporting.

RealtyTrac, the online foreclosure sale site, shows a 9 percent dip in the number of properties with foreclosure filings in April, month-to-month.

The driver of that dip is a big drop in new notices of default.

The final stage of foreclosure, that is bank repossessions (REO) shot up to a new record high, up 45 percent from a year ago.

When I first read the report I thought, okay, we knew there was a big pipeline of loans that would not get modified and would have to come out the end at some point; now is that point. The fact that fewer loans are going into the pipeline should be our focus, and that's a positive. That's what I thought until I interviewed RealtyTrac's Rick Sharga.

"People are sitting in their houses not paying their mortgages, and the banks are letting those delinquencies extend longer and longer periods of time before they put them in foreclosure," Sharga told me.

That, he adds, is the main reason we're seeing lower numbers of new defaults.

The borrowers are in default, but the banks aren't paying attention, so they don't show up in the numbers.

He goes on -

"The fact that we have six to six and a half million loans that are either seriously delinquent or in foreclosure also suggests we are not nearly out of the woods. If we just started to absorb that inventory at the pace we're currently seeing new foreclosure proceedings we have about a 50 to 55 month supply of loans that yet have yet to be processed, so we have a way to go before we are out of the mess."

A lot of folks are either falling out of the trial modification period or not qualifying in the first place, and those loans are moving quickly to bank repossession.

California-based mortgage analyst Mark Hanson adds perspective with a look at "cancelled foreclosures."

These are not tracked by RealtyTrac, but they "bite right out of Notices of Default and foreclosures, so to get a real idea of how 'credit' is doing, you have to add a certain percentage back."

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What is happening is that the banks are booking trading profits and not taking loan losses. That is a fact and it pumps up their earnings. Their earning are being driven by gaming the market while they ignore the losses. Their earnings are a scam just like the recovery.

Mikey

Investment Banking is a dirty business

In my last post the article mentioned that in the first quarter of 2010 JPMorgan achieved a loss-free quarter in its trading unit — making an average of $118 million a day, nearly $5 million an hour and the Goldman Sac trading desk recorded a profit of at least $25 million (£16.8 million) on each of the quarter’s 63 working days, making more than $100 million a day on 35 occasions.The 14 largest global investment banks reported $78.8 billion first-quarter revenues, their best numbers in three years and just 1 percent shy of the record.

The record was in the first quarter of 2007. Do you remember what was happening in the first quarter of 2007? The sub prime loans were blowing up. They were blowing up because the real estate values were going in the tank. The big banks at the time denied that they had a problem. The Fed Chairman said that the problem was contained.

The sellers came out of the woodwork in Feb of 2007 when this started to break. However, in that quarter the investment banks were making big money. They were doing the business that investment banks do. Trade the markets. I should say manipulate the markets. It was 1 year later that Bear Sterns collapsed. Who bought them out??? How about our old buddy JP Morgan.

Bear Stearns pioneered the securitization and asset-backed securities markets, and as investor losses mounted in those markets in 2006 and 2007, the company actually increased its exposure, especially the mortgage-backed assets that were central to the subprime mortgage crisis. In March 2008, the Federal Reserve Bank of New York provided an emergency loan to try to avert a sudden collapse of the company. The company could not be saved, however, and was sold to JPMorgan Chase for as low as ten dollars per share, a price far below the 52-week high of $133.20 per share, traded before the crisis, although not as low as the two dollars per share originally agreed upon by Bear Stearns and JP Morgan Chase.

That made Chase an investment bank. The job of an investment bank is to ramrod stocks down the public throat. The IB's did a good job doing that in the first quarter of 2007. The government covered the problem up from early 2007 and the IB's made sure that the public did not see what was going on by propping up the market. Fast forward to today the same guys are doing the same thing.

The trading accounts of JPMorgan and Goldman Sacs sounds alot like the trading accounts that Madoff managed, don't you think?

Mikey

Why the Banks are not making loans

The little guy can't get a loan. Why? Read this:

Goldman Sachs and JPMorgan Chase Roar Ahead
The trading operations of Goldman Sachs and JPMorgan Chase made money every single business day in the first quarter, a feat that was a first for the companies and underlines the boom in Wall Street’s investment banking revenues.

Now what is interesting about that is that the market had a big hit from Jan 19th to Fed 5th. That means that they were short in that time frame.

Goldman’s [GS 143.89 0.06 (+0.04%) ] trading desk recorded a profit of at least $25 million (£16.8 million) on each of the quarter’s 63 working days, making more than $100 million a day on 35 occasions, according to a regulatory filing issued on Monday.

The result, following a series of regulatory probes into Goldman’s trading activities, could fuel criticism of its business model and market behavior.....Duh!!!!

However, JPMorgan [JPM 42.06 0.11 (+0.26%) ] also achieved a loss-free quarter in its trading unit — making an average of $118 million a day, nearly $5 million an hour — as it built on the gains made during the financial crisis when rivals faltered or failed.Goldman’s executives said the trading performance had been due to its robust risk management and booming markets.

What the hell does that mean!!

The 14 largest global investment banks reported $78.8 billion first-quarter revenues, their best numbers in three years and just 1 percent shy of the record.

Financial Bill Makes Bank Tax More Likely
Analysts said the resurgence might give ammunition to politicians who want to impose a global banking tax and could strengthen the hand of regulators seeking to force banks to hold more capital and liquid assets against future problems. Really how about a bill that says the banks have to use their profit to lower interest rates that they charge on their credit cards

“At a time when many individuals are still having to tighten their belts... this increases the attractions of forcing the banks to carry a higher share of the burden,” said Richard Reid, research director at the International Centre for Financial Regulation.

Goldman, which is already facing civil fraud charges from U.S. regulators over a mortgage-backed security, could also face particular calls to rein in its operations.

Morgan Stanley analysts found that Goldman had continued to lead the pack in revenue overall in the first quarter as industry leader in equities and in fixed income, currencies and commodities (FICC).
JPMorgan was top for advisory investment banking work, while UBS and Bank of America [BAC 17.31 0.01 (+0.06%) ] also made strong gains.

The composition of bank revenues has changed significantly since 17 global investment banks set the peak of $80 billion in the first quarter of 2007.

Take a look at the stock market chart in the first quarter of 2007(between the red lines): Does this look familiar? How about the first quarter of this year. What happened after the record trading profits and where are those profits?





FICC revenues now account for 61 percent of investment banking revenues globally, compared with about half before the crisis.
FICC division revenues rose by 7 percent year on year to $49 billion for the 14 global banks.

The first quarter is traditionally the strongest for investment banks, providing up to one-third of annual profits.

The banks are gambling with taxpayer money and I might say that in my mind are a stock market cartel using the stock market as a cash cow. The government is backing the whole thing with taxpayer money. If you could make that kind of money would you loan it to a guy that has trouble paying his bills? When things go bad who pays for it? In the mean time, party on bankers.

If Goldman or JP Morgan were playing Texas Hold Em they have have just pulled the equivalent of winning 63 hands in a row. If you were playing some one that won 63 hands in a row then you might think they were cheating. I wonder how they did on the recent hit????

Mikey

What next?...Gold gets clocked.

My guess is that they will hold this thing up for a week or two to give the bailout credibility. The problem in Europe was not what caused the sell off but that is what the message is. Now what they need to do is knock the crap out of Gold to give this bailout more credibility. I would say that Gold is going to get hammered within a week or two.

Look at these charts, which one is out of place?

Dollar..Bottomed in late 2009



Commodities..Stopped going up with the low in the dollar in late 2009



Soybeans topped with dollar low


Corn topped with dollar low



Copper topped with dollar low




Gold..Swimming upstream and ignoring the dollar rally



Gold and the dollar are going in the same direction. The commodities markets are trading inversely to the dollar. Gold is the only one swimming upstream. The IMF is selling Gold maybe to pay for Europe????? Gold is a source of funds. Either the dollar is right or Gold is. You can't pay you bills with Gold.



Mikey

Bailouts, Bailout, Bailouts or Extending and Pretending

Have you ever loaned money to someone who was down on their luck? If you have then you know that you will never see that money again. What you will see is that they will ask you for more money later. If you lend them more money everything is OK for a while but eventually they will ask you for more money. Why? Because they did not solve their problem. If you give them that money it creates a vicious cycle and in the end they will take you down with them. The only to handle it is to let the person go down on their own and not let them take you with them.

The sovereign governments of the would are enabling bad financial behavior to continue. They are not allowing the bad actors to take their medicine. This will not help the situation. It only prolongs the agony. The same thing happened to the US with Lehman. The system started to seize up and they panicked and bailout out the banks. The bank are back trading the markets with FDIC money. That will end up being added to the national debt. That did not solve anything it only prolonged the problem. The problem is still their. NOTHING has been done to solve the problem.

Today Eurpoe bailout out Greece and Greece is pretending to solve their problem. This is what we are doing in the US. We are extending and pretending. This solves nothing it only prolongs the agony.

Today the IMF and European union thew debt at a debt problem Why? They bought a SXXT load of bond of Greece, Protugal, Italy and Spain bonds before the deal this weekend. Those bonds are up big today. That is the game. That works in the short term but not the long run.

The beat goes on

Mikey

Europe bailed out

DJIA 10725 +344.78 SPX 1150.74 -39.82 Nasdaq 2352.74 + 89.30 VIX 29.99 -10.96 Gold 1208.30 1202 -8.30 Silver 18.56 +.11 Oil 76.16 +1.05 RBOB(retail gas)2.15 +.03 Nat Gas 4.22 +.20 DBC (Commodities)23.10 +.32

Dollar 84.33 -.33 EURO 1.28 +.006 Brit Pound 1.4859 +.0051 Aussie ..9015 +.0162
IEV(Europe Index35.08 +2.48 EEM (Emerging Market Index)40.80 +2.41 EWZ (Brazil)68.60 4.73 FXI (China Index)40.11 +1.88

TLT (LT US Bonds) 93.83 -1.76 IEF (7-10 yr US Bonds)91.33 -.59

GDX(Gold Miners) 50.02 +.89 IYR (Real estate)51.92 +2.31 (XLF Financials) 15.72 +.63 XLE (Oil) 56.67 +.68 XLB (Materials) 32.28 +1.15 XRT (Retail)41.53 +1.74 XLK (Tech) 22.65 +.85 XLV (Health care) 33.33 +.60

Financial markets soared across the globe Monday after the European Union and International Monetary Fund ag"The EU has taken a decisive action to stamp out the speculative attack against the euro and this should be sufficient to bring some calm into the market," said Klaus Wiener, head of research at Generali Investments. "It has sent a very strong message to the market that the euro will not be allowed to fail." Agreed to a $1 trillion emergency bailout to stop the debt crisis from spreading.

The rescue, hammered out by European Union finance ministers, central bankers and the International Monetary Fund in marathon talks at the weekend, was the largest package in over two years since G20 leaders threw money at the global economy following the collapse of Lehman Brothers. EU Monetary Affairs Commissioner Olli Rehn told a news conference the package of measures "proves we shall defend the euro whatever it takes".The $1 trillion package consists of 440 billion euros in guarantees from euro area states, plus 60 billion euros in a European instrument.

EU finance ministers said the International Monetary Fund was expected to contribute 220 billion euros, taking the total to 720 billion euros, or around $1 trillion.

Both the EU and the IMF has already approved a 100 billion euro package to support Greece, whose budget deficit blew out last year to 13.6 percent of GDP.

To secure the funds, Greece has committed to deep budget cuts that have already caused violent public protests in the country as it moves to get the deficit back down to the EU limit of 3 percent.

We now see ... wolfpack behaviors, and if we will not stop these packs, even if it is self-inflicted weakness, they will tear the weaker countries apart," Swedish Finance Minister Anders Borg told reporters in Brussels before the EU meeting.

Economists estimate that if Portugal, Ireland and Spain eventually come to require bailouts similar to Greece's, the total cost could be some 500 billion euros.

Greece has agreed to a deficit of 3% last year it was 13.6%. How do you think their economy will look if they CUT spending? They also need to back Portugal, Ireland and Spain. I assume they will cut spending too?

The money here is going to rollover debt that produces nothing. It is a temporary fix. They say "we shall defend the euro whatever it takes". The EURO is rallying today but in the long run Europe has solved nothing. They are extending and pretending. How to you solve a debt problem? They say create more debt.


This is a chart of the DJIA. Look at the 9/22/08 in the center of that chart. That was the TARP bailout.




Mikey

Mikey Vs Cramer

DJIA 10380.43 -139.89 SPX 1110.88 -17.27 Nasdaq 2265.64 -54 VIX 40.95 +8.15 Gold 1208.30 -2.10 Silver 18.41 -.04 Oil 75.40 +.30 RBOB(retail gas)2.1318 unch Nat Gas 3.99 -.02 DBC (Commodities) 22.78 -.11

Dollar 84.65 unch EURO 1.2996 +.0010 Brit Pound 1.4769 -.30 Aussie .8871 +.0047
IEV(Europe Index 32.60 -.19 EEM (Emerging Market Index) 38.19 +.20 EWZ (Brazil)63.90 -.43 FXI (China Index)38.24 +.49

TLT (LT US Bonds) 95.58 -1.21 IEF (7-10 yr US Bonds)91.92 -.25

GDX(Gold Miners) 49.13 -.80 IYR (Real estate) 49.61 -.84 (XLF Financials) 15.09 -.17 XLE (Oil) 54.99 -1.06 XLB (Materials) 31.13 -.35 XRT (Retail)39.79 -1.05 XLK (Tech) 21.75 -.49 XLV (Health care) 29.72 -.40

Cramer: Don’t Buy Till Dow 9,000
Published: Friday, 7 May 2010

The Dow’s intraday collapse of nearly 1,000 points on Thursday offered a clue into what investors truly think of this market, Cramer said during Mad Money. In short, they assumed the move was legit, and not some computer error.

These people believed that Procter & Gamble [PG 60.31 -0.44 (-0.72%) ] deserved to plummet to $47 from the low $60s, that the Dow’s decline was the natural result of Europe’s debt troubles and the riots in Greece. They showed they had no confidence in the markets, no conviction at all.

“And that’s deadly for stocks,” Cramer said.

But he was quick to point out the differences between the Europe Union and the US. While Cramer wouldn’t disregard the Continent’s affect on the American markets, he did note we’re much stronger than the EU right now. Employment’s getting better, housing is improving, and business is ticking up. So as scary as yesterday’s intraday plunge may have been, it was not the stuff of late 2008/early 2009, when the market had a fundamental reason for being that low.

That means, as bad as Europe is right now, there’s a level at which that contagion is baked in and stocks look interesting, and Cramer thinks we saw that level yesterday: Dow 9,000. And he said he doubted it was out of the realm of possibility that we could pull back to that level. Therefore, investors should wait for the decline before they buy anything again, other than his preferred accidental high-yielders.

In the end, though, people need to keep in mind that the American markets and economy continue to improve. The US is not the EU.

“Our markets will stop their declines sooner,” Cramer said, “and rebound harder than any of the markets over there.”


Take a look at this chart:



Number 1: I think the 9000 number was a Freudian slip. I think he meant to say 9900.

Number 2 Remember the relentless rally? That started in early Feb. 9900 would wipe that relentless rally out in less than a week.

Number 3 The damn fool is looking to buy

Number 4 The whole uptrend from July of 2009 will be wiped out and in a hurry and all the buyers of that good news will be trapped.

Number 5 The public will be told to buy the pullback. It is already starting.

Number 6 The economy will double dip and the market will take out its March 2009 lows.


What happened this week was was they call the initial impulse sell off. The bigger the sell off the bigger the credibility. It was a kick off for the down trend and it was a big one. I am thinking this sell off lasts for a long time. The economic news has been good the earnings have been good so say the experts. Like Cramer says look to buy 9000 because "in the end, though, people need to keep in mind that the American markets and economy continue to improve. The US is not the EU."

The problem with that is that the problem is going to be worldwide. Just take a look at the beating the markets in Brazil and China took. Take a look at the meltdown in the commodities. I have said it before and I will continue to say it this is a deflation not an inflation that we are staring at.

The ability of the banks to extend credit has been severely hindered. Cash is king and the credit card business is going to wither up. We have been conditioned to expect inflation and that is the way it normally works. Not this time.


Mikey

Gold Bugs...Now they are going to push your button

In news today the same guy that pushed the stock market button is being transferred to the Gold trading pit. We all know what happens when he pushes the button right? A trade below 1133 will give him itchy fingers. Get ready because when he pushes the button we will be at 1050 in a hurry. When we get that 1130 print you know I will be buying the DZZ at that very moment. The GDX 48.76 -1.20 (Gold Miners) is already weak I will short that on a trade below 47.50


Mikey

DJIA bounces off 200 day in a one day sell off

I thought we would go to the 200 day but I thought it would take more than one day. The DJIA was down nearly 1000 points inter day today before bouncing and as I write this we are down a paltry 400 points at 10470. I know for a fact that the shorts are covering and the longs are buying "cheap" now. Remember buy the pullback. The only problem is that this is the BEGINNING of the sell off and not the end. I did not sell any of my positions on the hit I will add to my shorts on rallies. I don't think we rally too much from here but that does not matter.

This is the beginning of the sell off and not the end. What they are going to tell us now is that they have the problem contained in Europe and our economy is OK and everything will be OK. Okey Dokey. Just like every thing was OK when sub prime started to blow in early 2007. Same old guys same old tired lies. I really don't think this rally goes too far. The shorts missed this one and want to see 10800 before they short. The longs had buy orders waiting under the market get filled and the shorts that were in covered.


The market ONLY closed down 347 at 10549. It amazing that a decline of 347 feels so good. That is the WIZARD at work.
Mikey

Back to the Breakout

DJIA 10789 -77.92 SPX 1155.32 -10.43 Nasdaq 2377 -23.76 VIX 26.18 +1.27 Gold 1196.6 +21.60 Silver 17.60 +.06 Oil 78.87 -.82 Nat Gas 3.88 -.10 DBC (Commodities) 23.19 -.17
Dollar 84.79 +.595 EURO 1.2691 -.96 Brit Pound 1.4861 -.017 Aussie .8957 -.0098
IEV(Europe Index 34.02 -.62 EEM (Emerging Market Index) 39.05 -.58 EWZ (Brazil)65.73 -1.46 FXI (China Index)38.67 -.39

TLT (LT US Bonds) 94.79 +.91 IEF (7-10 yr US Bonds)91.56 +.39

GDX(Gold Miners) 50.32 +1.08 IYR (Real estate) 51.44 -1.11 (XLF Financials) 15.69 -.24 XLE (Oil) 57.54 -.49 XLB (Materials) 32.48 -.07 XRT (Retail)41.67 -.84 XLK (Tech) 22.85 -.08 XLV (Health care) 30.86 -.09

The DJIA is below the 50 day and back to its 10730 breakout of 3/18. This is were most traders expect a bounce and who knows maybe we get a bounce here. I am not so sure that they get a tradeable bounce here. I don't think the shorts are shorting here either. If that is true then we will go right through this area and then the selling begins. Most charts I see hang in there for a few days and then sell off to their 200 day average. The 200 day on the DJIA is just below 10200.

The move in Gold today is a hook rally. The public is being told to hold their stocks and buy Gold as a hedge. Cramer (Captain Obvious) just posted that on his website this week and ringy dingy presto Gold takes off. I believe that they should be selling their stocks and Gold. I still am not shorting Gold now but again my sell signal is at 1133. At some point, I may raise that signal. Notice the strength in the bond market and the dollar here. There is notable weakness in all of the foreign markets and commodities.

The public is in commodities and foreign stocks remember. The public will not sell them because they know that the FED is printing all that money. They must be printing because golly gee look at Gold go up. In the meantime they are getting their butts kicked. The rally here in Gold preserves their inflation story, which as I have mentioned many times on this blog, is the wrong story. The problem will be deflation not inflation. The public is now adding to their Gold positions to protect there stock portfolios. NOT A GOOD IDEA!!!!

Note: I am raising my sell signal on Gold to a close below yesterdays low of 1156.20
If Gold closes below 1156.20 I will buy the DZZ

Mikey

Sell signal

DJIA 10873 -53.29 SPX 1167.89 -17.29 Nasdaq 2404 -19.87 VIX 25.43 +1.59 Gold 1175 +5.80 Silver 17.11 -.48 Oil 80 -2.73 Nat Gas 4.07 -.06 DBC (Commodities) 23.36 -.53

The DJIA 10882 is just above its 50 day at 10833. It bounced off that number this morning. The sell off is broadening and leaders like V 86.75 has reversed its breakout of 3/8 and is now under its 50 day. This all is happening as they tout that earnings and the recovery is complete. In my mind, we have clearly broken down. I don't think the traders will buy that until we close below 10700. That is where the rats start jumpimg off of the ship.

Oil is reversing its oil spill rally and so I bought the SCO today at 12.70. Gold looks like it is next. The whole world owns it to protect themselves from inflation when it is deflation that will be the problem. I will add to my GLL if we close lower than April 16 low.


The SRS(real estate) 26.15 looks real interesting here and so does the TZA 6.34(small cap bear) will wait for a close below 10700 to buy them.

Mikey

Sell off blamed on Greece..I don't think so

DJIA 10897 -254 SPX 1171.04 -31.22 Nasdaq 2416.49 -82.61 VIX 24.98 +4.81 Gold 1171.90 -11.40 Silver 17.97 -11.40 Oil 82.91 -3.28 Nat Gas 4.009 +.009 DBC (Commodities) 23.90 -.65

Dollar 83.38 +.98 EURO 1.3006 -.028 Brit Pound 1.5173 -.008 Aussie .9101 -.0165

IEV(Europe Index35.52 -1.57 EEM (Emerging Market Index) 40.36 -1.92 EWZ (Brazil)68.23 -3.57 FXI (China Index)39.49 -1.72

TLT (LT US Bonds) 93.01 +1.32 IEF (7-10 yr US Bonds)90.76 +.55

GDX(Gold Miners) 49.05 -.83 IYR (Real estate) 53.14 -1.46 (XLF Financials) 16.02 -.45XLE (Oil) 58.72 -1.85 XLB (Materials) 32.62 -1.35 XRT (Retail)42.58 -.99 XLK (Tech) 22.96 -.75 XLV (Health care) 30.85 -.17



They are blaming this sell off on Greece but look at these charts

Brazil



Freeport Copper and Gold



China



Copper



Google




Something does not add up with their picture of world economic growth does it? The next charts to look like these are the DJIA and Gold. Gold is down today why? The reason is deflation and economic slow down. The Cramers of the world buying Gold now are in for a big surprise.



It looks like I will get my sell signal today with a close below 10970. I am moving my sell on Gold to a close below the April 19 low of 1133

Mikey

A big move is coming

The action in the market over the past few week indicates that a big move is coming. We are swinging between 11250 and 10970 like a deer caught between a Lion and a Tiger. Back and forth we go, sell no buy, no sell, no buy. All of this movement will get the traders to stop chasing the spikes. The news alternates between good and bad from day to day.

At some point the shorts would not chase a sell off on a Nuclear war. The sellers will be convinced that every sell off will come back. That is the point of this. They just give up trying to figure it out and keep the positions they have which at this point are long. In the meantime distribution days are piling up as the institutions sell into the rallies.

Last week they brought up the annual question of sell in May and go away. Today is the first trading day in May and here is what they are saying:

Investors conditioned to backing out of the market as the summer looms might want to rethink their positions after what happened in 2009.

Those adhering to the strategy of "sell in May and go away" until after the summer got crushed last year, missing a 17 percent gain in the Standard & Poor's 500 [.SPX 1204.17 16.01 (+1.35%) ] en route to a relentless rally that continues into the beginning of the new month.

While calls persist that the market has gotten overvalued, many advisors see themselves hanging in—if with a bit more conservative strategy.

"We're going to stick around for a while even though technically we see the market as overextended," says Emily Sanders, president of Sanders Financial Management in Atlanta. "The equity market is still involved in a melt-up situation and as such we're not going to take our clients' exposure away."

Sell-in-May is a strategy that has had mixed results over the years.

It is true that the market as a whole underperforms in the May-October time frame as compared to November-April.

Since 1928, the S&P has gained 1.9 percent in May-October versus 5.1 percent the rest of the year. In the past 10 years the trend is a bit more pronounced with the disparity being 1.4 percent to 6.4 percent respectively.

But investors who have employed the strategy with the entire index have missed market trends that benefit investors who change their allocation into particular sectors rather than just pulling back into money markets or other safe-haven assets.

Investors who invested in the entire S&P index from November until April and then split their portfolios equally between consumer staples [XLP 27.85 0.22 (+0.8%) ] and health care [XLV 31.15 0.27 (+0.87%) ] from May to October realized a compound annual return of 10.8 percent per year for the past 20 years, according to recent research from S&P's chief investment strategist Sam Stovall.

Those who played the entire S&P for the 20-year period would have realized compound gains of 6.7 percent.

There you have it the experts say hang in there because you May miss something good. I like the terms they use to describe the rally. They call it a relentless rally. A synonym for a relentless market is topping or bottoming. When you here the word relentless get ready for a change. Who do you think that statement is pointed at? The shorts or the longs?

Mikey

Thank God They saved Greece

DJIA 1168.38 +159.77 SPX 1203.38 +16.69 Nasdaq 2501.33 +40.34 VIX 19.71 -2.34 Gold 1183.20 +2.50 Silver 18.84 +.20 Oil 85.32 +86.79 +.64 Nat Gas 3.985 +.06 DBC (Commodities) 24.60 +.16

Dollar 82.51 +.519 EURO1.3194 -.0114 Brit Pound 1.539 -.0034 Aussie .9256 -.00259

IEV(Europe Index)37.16 +.33 EEM (Emerging Market Index) 42.31 +.29 EWZ (Brazil)71.93 -.32 FXI (China Index)41.14 +.30

TLT (LT US Bonds) 90.75 +.05 IEF (7-10 yr US Bonds)90 -.02

GDX(Gold Miners) 49.80 -.71 IYR (Real estate) 54.72 +1.76 (XLF Financials) 16.43 +.28
XLE (Oil) 60.68 +.78 XLB (Materials) 33.90 -.08 XRT (Retail) 43.65 +.89 XLK (Tech) 23.74 +.36 XLV (Health care) 31.10 +.22

European countries agreed to an aid package worth 110 billion-euro ($146.5 billion) for Greece, the biggest-ever bailout of a country. The ECB said it would accept all bonds — even junk-status — as security for loans. Well now that is certainly good news. We dodged a bullet on that one. It kind of reminds me of Bank of America buying Countrywide credit.

In other news, Warren Buffett defended Goldman Sachs [GS 150.05 4.85 (+3.34%) over the weekend, saying the bank's behavior does not warrant public fury. Goldman shares rebounded today, after sliding nearly 10 percent last week, leading an aggressive market selloff on Friday. Buffett also presented an upbeat outlook for the U.S. economy, among a number of other comments.

The Wall Street Journal reports that General Growth Properties [GGP 15.66 -0.04 (-0.25%) ] is favoring the bankruptcy recovery plan put forth by Brookfield Asset Management rather than a competing offer from Simon Property Group [SPG 92.62 +3.69that is great news for SPG because that means it does not have to buy more commercial property.

As they say on CNBC today the relentless rally continues.


Mikey

Mikey Vs Cramer

Crramer is recommending Gold stocks specifically AEM (63.16) as a hedge against Greece. I just makes all the sense in the world doesn't it? Here's what he said on Mad Money.

Cramer doesn’t think that Europe’s debt woes are a reason to sell North American stocks, but the ailing countries of Greece, Spain and Portugal may warrant a look at the gold miners.

After all, gold acts as insurance against both inflation and a volatile economy. It’s also one of Cramer’s big themes of 2010, as governments around the world continue to print money and devalue their currencies. And he has no doubt that the happenings across the pond will make people crave this precious metal.

Now, investors could play gold through the SPDR Gold Shares(GLD 115.36) exchange-traded fund, which tracks the price of gold, or they could buy a miner like Agnico-Eagle Mines [AEM 63.16 -0.61 (-0.96%) ]. Granted, these companies can screw up no matter how much the market’s paying for bullion, but they can also offer more upside when they boost their production.

Golly gee how can you lose gold acts as insurance against both inflation and a volatile economy and double bonus time it is Crammer's big themes of 2010. I remember Cramer's big theme in 2007 was NYX and TM Here are the charts of those two stocks. The tops are in early 2007. What makes Cramer look good is that he was on the stock at 80 in late 2006. That run got alot of suckers...err investors to buy it. The charts look amazingly similar don't they. One makes cars and the other one distributes capital to the masses. The charts say they are in the same business. Go figure.






Mikey says that we will have deflation and an economy that is going to sink like a rock over the next 2 years. I guess that puts me on the other side of the two icons Buffet and Cramer. I would assume that Gold goes higher in the short term because the master is touting it now but in the long term it is a disaster. . Maybe Gold will have a run like TM and NYX did in late 2006 but the net net is that in the end the believers are going to buy the pullback right into the ground. Remember the sell signal for Gold is at 1060 If it drops below that number it is a dead duck.

What Cramer is saying is hold your stocks and buy Gold as a Hedge. Don't sell because the sell off is not about our economy it is about Europe. Cramer is Captain obvious how can you not believe Captain Obvious?

Mikey

The boys play the Buffett card.

When all else fails play the Buffett card. That will be a good excuse to rally the market on Monday. They will use this to get prices up because this market is the Titanic and Buffett is the captain of an unsinkable ship. The problem is with the cheap rivets they used during construction.

Warren Buffett Defends Goldman Sachs At Berkshire Shareholders Meeting

Warren Buffett spoke to reporters Saturday morning in Omaha before his annual meeting with Berkshire Hathaway shareholders

Warren Buffett is defending Goldman Sachs before shareholders at the Berkshire Hathaway annual meeting in Omaha, saying, "It's hard for me to get terribly sympathetic" with the alleged victim in the SEC's case against the Wall Street giant.

He began his marathon 5-hour (excluding lunch break) question-and-answer session with a lengthy explanation of the Goldman transaction at the center of the SEC's fraud allegations against the firm, using a Berkshire deal involving Lehman as an example.

While he concedes the SEC's accusations have "hurt" Goldman's reputation, he does not "hold against Goldman" the fact that it has been sued by the SEC. The Justice Department has also opened a criminal inquiry into Goldman's trading. Mikey thinks they should invetigate Buffett and Cramers trading activites.

Buffett says it shouldn't matter who is on the other side of a deal, and adds it's "hard for me to get terribly sympathetic" for ABN Amro, the firm identified by the SEC as the victim in the Goldman case.

Asked whether the controversy will affect Berkshire's investment in Goldman, he replies that ironically it is helping, because it makes it less likely Goldman will completely pay off the loan, a move that would cut off the stream of large dividend payments Berkshire is getting. "We love the investment."

Berkshire loaned $5 billion to Goldman in September of 2008 and receives a dividend of 10 percent a year. Berkshire also got warrants to buy Goldman shares at $115 each. Their value fluctuates with Goldman's common stock price. The loan dividends are not affected by the stock price.

Buffett does say he might change his mind about Goldman if the SEC charges "lead to something more serious."

Buffett also says the economy has shown significant improvement starting in March, with Berkshire companies "picking up steam."
He's also given a preview of next Friday's first quarter earnings release. Berkshire expects Q1 earnings of $3.633 billion, reversing last year's $1.5 billion Q1 loss, and operating earnings of $2.222 billion.

The company racked up $1.411 billion in investment and derivative gains in the quarter.

And he repeats his belief that investors shouldn't focus on quarterly earnings.

You wouldn't think that just because the kindly old gentleman invested 5 billion in GS would have anything to do with his opinion? Nah...I sincerely hope that Buffett gets his chance to buy GS at 115 because he deserves it. By the way remember all the choo choos he bought and the GE with the preferred? That stuff wouldn't go bad either would it? Nah...Well stay tuned because I think this thing will get ugly.

By the way, the Goldman problem and the Greece problem won't be the reason this thing goes down. It is the bad economy but that will surface later on down the road.
Mikey