Investors 411 Blog

by Barr Jozwicki
March 31, 2009

Market Updates – Super Tankers

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , ,

The more you know about investing, the more you realize that everyone else (especially the more $ they have or control) knows more, has a bigger support team , more computers, better access to data and knows how to bend/manipulate whatever they are investing in.  These wealthy investors/entities/countries are like huge slow moving/turning super tankers. Therefore, your advantage is to recognize which way the fleet of tankers is moving and get their first.

Baltic Dry Sea Index

Nothing could be less exciting than something called the BDI.  But it is one way to measure the FLOW of money or direction our globalized world is moving in. The top 20 economic countries are meeting in London (see comments by “Critic” from London on right side of blog) The G 20 meets later this week and perhaps the drop in the BDI shows how fractured or nationalized the worldwide response to the recession is.  (Lots more below on BDI under fundamentals)

Money Flows

  • To start realize that the standard of living just in the USA has or will drop from 20 to 50%. My guesstimate is combining the loss in home value, investments, jobs and the increase in debt. 
  • Other countries, especially those like England, Iceland, and Eastern European countries whose banks adopted the same “free market” unregulated, over leveraged financial system are in worse shape. 
  • Protectionism, just like in the Great Depression stops money flows, and we are a global economy. The world wide recession’s greatest danger is nationalism stopping money flows.
  • Money flows best when goods are bought and sold. The more people that spend  money the faster it flows. When money is hoarded by an oligarchy or debt is forced on working folks money flows dry up.
  • The major question emerging from our “Great Recession” is how to get the money flowing again and whose going to pay for the past mistakes.

Investment Choices

 Our huge debt, over leveraging and reliance on credit before the meltdown hit has put this country in much worse long term position to fix the problems created. This is why Investors411 recommends using hedges (ETF’s that short the markets – see Position sections) when markets rally to far too fast in the USA.

This is also why Investors411 recommends in Brazil and especially China (see Positions section of blog). They don’t have debt, but do have other resources.

Gold, GLD, is also recommended because in the long term all the money thrown by super takers (governments and other entities) to fix the problem is going to create inflation and devalue currency. This usually makes gold and other commodities more valuable. 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

 

Index Percentage % Volume
Dow -3.27% up
NASDQ -2.81% down
S&P500 -3.48% up
Russell2000 -3.04% -

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Technicals & Fundamentals

Monday was a significant meltdown day. When you put it together with Friday losses total over 5% for the major US indexes.  The same for most of the rest of the world.  Volume, the chief confirmation factor of a price move was below average (Dow was at its 50 day moving average). Technically, volume is still not confirming the significant price move lower.

The S&P 500 did close just below its 50 day moving average – support level (50 day MA 791 & closing 788-see link to chart on side of blog). Technicals, still look good, but…

Fundamentally, all the companies related to financials from GE to AIG saw what happened to GM. Obama administration got a whole lot tougher than they expected and financial giants worried the same could happen to them. GM was supposed have some sort of special protection because of the close relationship between Democrats and unions.

Remember the bottom line issue is who pays to fix the problem created by the over leveraged crooks in the US financial companies – You (taxpayer), stock/bond holders, employees, some foreign entity, etc. and  how much will each group pay? – Stock markets in the short term go up the more taxpayers pay and the less transparent companies have to be.

Baltic Dry (Sea) Index - (see chart link on side of blog)  This rather obscure chart measures the flow of goods across the world. 

Why its so important is that we are in a world wide recession and if the flow of goods increases, its a sign of things improving. PROTECTIONISM or the lack of trade hinders the flow of money and the creation of wealth.  So when this index starts to deteriorate we have a problem.  

The BDI is also important because it is more of a leading indicator rather than a lagging indicator.  Check it out and compare it to the major US indexes. It’s not perfect, but the BDI usually moves in one direction before worldwide stock indexes. Why not if the flow of trade dries up a nation’s economy will suffer.

Here’s the problemthe BDI since 3/10/09 has done nothing but decline – from 2298 to 1646. Very bad news for world trade and stock market bulls. Before we had our three week rally this month the BDI was slowly building off a bottom around 660 and rose significantly in February an then continued up in March.  

Reading the Tea Leaves – In the shorter term – Thursday the gov’t committee (Its called something like FASBY) meets to supposedly change Mark to Market accounting.  This should give financials a boost.  But longer term watch the BDI, if it keeps falling so will worldwide stocks.

Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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March 30, 2009

Market Updates – What’s Wrong with America?

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , ,

Government rejects GM/Chrysler bailout plan. The G 20 meets. Asking the wrong questions – What’s wrong with our prisons/justice system? The real question - What’s wrong with the USA? The “Quiet Coup’s”  ominous forecast referenced in Sunday’s blog deserves further consideration. One solution that prevented/delayed the downfall of the Roman Empire.

 

Rejecting Autos & G 20

(see  fundamental section below)

What’s Wrong with the USA?

Parade (the Sunday news magazine/supplement in many newspapers) headlined What’s Wrong with Our Prisons? Investors411 asked what’s wrong with our Justice System Friday?

Yes our justice system is a “national disgrace” (Sen. Jim Webb)   Our rate of imprisonment is “5 times the world’s average… Either we are the most evil people on the earth or we are doing something very wrong.”  (headline from front page of  Parade) The real question is what wrong or what’s happened to America’s culture? Webb has some good ideas, but the roots of this problem go well beyond the justice system. 

  • Why are we so violent, 
  • Why are we so fearful?
  • Why are we so focused on me instead of we?  
  • Why do we focus on retaliation instead of mediation?
  • Why is mob mentality growing and individual accoutability vanishing?

I’m sure you could add to this list. 

The Quiet Coup

Here’s the conclusion of the MIT professor Simon Johnson’s editorial

What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

How a Roman General Beat the Terrorists.

Pompey in 67 BC beat the terrorist pirates who threatened to destroy Rome. Here’s how

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

 

Index Percentage % Volume
Dow -1.87% down
NASDQ -2.63% down
S&P500 -2.03% down
Russell2000 -3.66% -

-

Technicals & Fundamentals

Technically,The price decline may look bad and Friday’s loss was almost as large as Thursday’s gains for the major indexes.  But volume fell well below average.  That’s good technical news for bulls 

In fact if you look at the leading index , the NASDQ (click on chart at side of blog) you’ll notice that there are at least three days in the past few weeks that had both big rallies and big + increased volume (those vertical green bars on the chart).  Technically, this is a about as good a sign as you can get that markets will move higher.  So buying into dips seems to still be a good strategy even though we are close to Dow 8,000 (See Positions section of blog)

The NASDQ is at 1545 (the leading index)and the two resistance levels that need to get taken (see chart) out are 1587 and 1598 to make bulls happy.  On the downside the S&P 500 is at 815  (the lagging index) with its support levels 50 day moving average at about 791 and the big 741 support level.

So technically things are looking good. but unfortunately …

Fundamentally, globalization has made this a worldwide recession.  

G 20 (basically top 20 economic countries that make up 85% of worlds GDP) meet Thursday and it sure looks like its not going to be pretty or coordinated.  The discord among these nations on how to collectively reply to the recession has sent the Japanese stocks (world’s #2 economy)  down 4.5% Monday and there were similar Asian losses. Europe down 2% to 2.5% on this and auto news.

Europe is going to call for more regulations, the US more stimulus, and China more power.  The biggest problem would be more worldwide  PROTECTIONISM. How markets move on news is one of the top two (the other is volume) indicators of market direction.

Auto’s - Stunning news as Obama administration gets tougher with autos. The GM CEO is falling on his sword - .  

Both GM or Chrysler’ s plans were rejected. Majority of GM board member will be replaced.  Debt holders, unions and others are going to have to give more.  Looks like government is going to stand behind GM cars, but the restructuring is going to be a lot tougher than originally expected –  ”pre packaged bankruptcy possible. Gov’t will stand behind warrantees  on cars. Message to Chrysler – you’re NOT too big to fail. See BusinessWeek story

The 11:00 AM Obama announcement is going to be a market mover.

This could become a bigger mess because many bond holder’s bonds were bundled and sold as credit default swaps.

Looks like the government is going to try to run a “surgical” bankruptcy on GM.

Here’s why this news is so bad for the markets short term - All the financials are now worried that they too will get treated like Autos. After all, Obama/Democrats are suppose to be pro union. So far financials have been treated with kid gloves. See Investors411 posts over the last few weeks. Financials are going to be worried that Obama administration will get tough with them too.

Reading the Tea Leaves – Good technicals, but overbought markets, G 20 discord and rejection of auto bailout sure looks like its going to overwhelm markets. S&P 500 741 support level is the line in the sand.  If we close below 790 we will probably test 741. This is not shaping up to be a good week for stocks. The icing on this collapsing cake is the monthly jobs # at end of week.

Potential new guidelines for Mark to Market come out on Thursday. This could turn around what’s setting up to be an ugly week. 

For Longer term Outlook – see Thursday’s blog.

Short Term – Time for more caution and to start protecting some of the gains over the last three weeks. 

Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING


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March 29, 2009

Market Updates – 3 Editorials

Author: Barr Jozwicki - Categories: Market Update - Tags: , ,

Over the weekend three outstanding editorials with different economic points of views have surfaced.  Each editorial outlines the economic problems created in the USA, their solutions and their impact on the world.  What this country does now is going to impact YOUR investments, YOUR job, and YOUR well being for decades to come. The better informed YOU are, the better decision YOU can make about YOUR future.

  • Joe Nocera each Saturday writes and outstanding business column for the NYT. His piece this week – This Time, This Time, Geithner’s Plans for Banks Makes Sense. Nocera takes on the critics and supports FDIC chairwomen Sheila Bair who thinks that “this[Geithner's plan] is a necessary cleansing process.” His conclusion after admitting the plan has flaws -”But it represents the beginning of something we should be applauding, not condemning: cold, hard reality.”

  • Robert Reich who served as Labor Secretary in the Clinton administration and is an influential Berkeley economist writes an outstanding editorial in the WSJ. He writes about Obama’s Focus on Improving Human Capital. Reich/Obama want to build the economy from the bottom up. He repeats his often used statistic. “In 1980, before Reagan took office, the highest-paid 1% took home 9% of total national income. By 2007, before the economy melted down, the richest 1% was taking home 22%.”

  • Simon Johnson an extremely influential professor from MIT’s School of Management writes outstanding piece in the Atlantic - The Quiet Coup Johnson explains the solution  the International Monetary Fund (IMF) would enforce if their hands were not tied by politics. The IMF has been through this senerio many times before when a rich oligarchy takes over an emerging market. This time that financial oligarchy is in the USA and the implication of what happens is global. (more on SJ Monday)

______________

AS ALWAYS, DO YOUR OWN RESEARCH BEFOE INVESTING

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March 27, 2009

Market Update – A National Disgrace – US Justice

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , ,

“A National Disgrace “- The American Justice System. South Park – Bailout video. Update on Iraq. A Berlin wall separating 39 million Hispanics from 135 million Mexicans. Pat Buchanan solution to the drug problem. The rising Red River. Over bought stocks market’s short term outlook 

Lady of JusticeLady Justice by Rodringo Duran

“A National Disgrace” US Justice System

Senator Jim Webb (D VA) words at the introduction of the 2009 National Criminal Justice Act. Webb - With 5% of the world’s population, our country now houses 25% of the world’s reported prisoners. That’s just his opening in a laundry list of problems

Of course you’re wondering if any of the criminals who run the Shadow Banking System and robbed Americans of trillions will ever see the inside of a prison.  We, by far, run the largest police state of any civilized democracy, but if you’re wealthy shadow banker?

South Park – Bailout

 A 30 second You Tube video

Iraq’s Civil war

American corporate media has ignored the fact that the Shia have almost wiped out the Sunni’s in a bloody civil war that is still simmering. Baghdad once a majority Sunni city has now less than 15% Sunni according to Juan Cole’s Informed Comment blog. The latest on the Iranian backed Shia’s that control a fearful and divided Iraq/Baghdad – AP story

Mexico

Far more relevant than Shia dominating Sunni’s in Iraq to the US will be the 39 million Hispanics in the USA we are trying to separate from the 135 million Mexican’s by a wall. We will have to turn into what communist East Germany was when they erected the Berlin Wall to make this work or find a different solution.

Hillary Clinton is leading a diplomatic effort to Mexico that will culminate with an Obama visit. ” Clinton – “The U.S. shares responsibility for its neighbor’s drug violence. Now we must be just as smart about our ‘help.’” More from LA Times on Clinton and the Mexico Message

Hillary, is winning kudos as Secretary of State,

Solution to the Drug problem

Conservative/Libiterian Pat Buchanan often offers a choice in solving the “weed” problem.

  •  Do what chairman Mao did and kill all the dealers and users
  • Legalize it like cigarettes & alcohol, then tax it.

Legalizing pot would take a whole lot of business away from the violent Mexican cartels that operate in 230 American communities and account the 1200% increase in drug offenders in the USA since 1980. (stat source Jim Webb, point of view – mine)

The Red River

Just turn on the weather channel. The Red River in Fargo/Moorhead is cresting above 40 ft. (new record) in 6 below zero temperatures this AM. Best wishes to several bloggers and a grandson & granddaughter who live a few hundred yards from this river.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

-

Index Percentage % Volume
Dow +2.25% down
NASDQ +3.80% up
S&P500 +2.33% down
Russell2000 +4.40% -

-

Technicals & Fundamentals

Message to stock Market – from the 60′s  song “Feeling Groovy” – Slow down, you’re moving to fast… You’ve got to make the morning (rally) last.

Almost every technical analyst likes to see consolidation before moving higher.  This kind of one directional short term bull market is prone to a quick sharp correction.

Reading the Tea Leaves – We are nearing the end of the quarter and a major decision on changing to a less transparent (revising mark to market accounting) accounting system in early April.  Both are short term reasons for the bears to hide.

Mutual and pension fund manager will want to show their clients that they have some winners in their portfolio.  So historically they buy them (winning stocks) at the end of the quarter. These managers are sitting on a lot of cash. So it looks like they have been and will buy till April 1.

 As mentioned before less transparency is good for banks bottom lines – they do not have to show those toxic assets as liabilities. It looks like major changes in mark to market accounting will occur. Some of this is already built into stock prices, but right now we are in a positive trend so up to the meeting stocks should move up.

These two factors should blunt a major sell off of an overbought market that is due for at least some sort of correction.  We could see some wild swings in the next few trading days as the quarter closes on the last day of March – Tuesday.

For Longer Term Outlook see yesterday’s blog.

Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 


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March 26, 2009

Market Updates – The Big Takeover

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , ,

THE BIG TAKEOVER- “The global economic crisis isn’t about money, its about power. How Wall Street insiders are using the bailout to stage a revolution.” The growing tent cities across America – a slide show.  Also an overview or reading the tea leaves of the US economy and the stock market – a longer term view. 

Photo

(photo from Rolling Stone)

The Big Takeover

Matt Taibbi piece in the Rolling Stone is a must read for anyone who wants to understand why your lives will change dramatically over the next decade. 

First you have to check out the comments by Robert Sadinsky on the right hand side of the blog. In passionate colorful terms he offers in a much shorter vision/comments on Taibbi’s Big Takeover.

Shantytown

(NYT photo)

Tent Cities of California

As the unemployment rate keeps growing, tent cities are spring up around the country. The NYT has a slide show of this growing problem in hard hit California.  

Even supposedly healthy tech giant IBM is accelerating laying offs - another 5,000 people.

 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

-

Index Percentage % Volume
Dow +1.17% up
NASDQ +0.82% up
S&P500 +0.95% up
Russell2000 +2.34% -

-

Technicals & Fundamentals

While gains were moderate volume was above average and higher. An erratic, (big swings throughout the day) but good day for bulls.

XLF the financial ETF is way out in front leading current rally. Now up over +55%.

April 2nd is when the committee meets to talk about/change  Market to Market accounting. – Stocks, especially financials should rally in front of this.  What usually happens is they sell on the news.

Reading the Longer Term Tea Leaves -

As mentioned so many times before this is not the old typical buy and hold stock market. That does not mean you can’t make money.  The Big Takeover by Wall Street or Shadow Bankers should be  a major accelerant to stock prices in the short term.  

Bernanke, Geithner,Summers & Obama may talk tough (ex. AIG), but they are dumping truckloads of money all over the the individuals who Bob Sadinsky so colorfully stated “we should just let the Wall St . pros handle it? – I wouldn’t let them walk my dog. They are the ones who pissed all over the floor, not my dog!”

Nevertheless stocks will rally, and the economic situation will improve. Even Dr. Doom (Nouriel Roubini) is cautiously optimistic that Geithner’s toxic asset elimination plan has a chance of succeeding.

So put on your rally caps it looks like the rally may have short term legs.  GDP for this quarter may even hit a negative 8% or 9%.  But the situation will improve with the gov’t stimulus and The Big Takeover. This will mean a growth in GDP from say -8.5 to perhaps  a positive GDP.  This +8.5% growth in GDP will rally stocks.

The longer term problem is the phenomenal amount of debt built up under Bush, the baking scum that built more debt by over leveraging, and the huge amount of taxpayer capital its going to take to shovel us out of this hole.

Once the initial, we’ve averted global economic meltdown is over, the US because of its debt and unfunded mandates will be in a poor position to grow. The same Shadow Bankers & company will be in power. Add to this, relative to other countries, we are over dependent on oil, falling behind in education and have no universal health care.


 

Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

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March 25, 2009

Market Updates- How many more bubbles have to burst?

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , ,

Today - How many more bubbles have to burst before we take action? Obama’s getting hammered by the far left, far right, & reporters  - yet he pulls off another another press conference with grace, substance, and and purpose. YOUR comments bring up some different and provocative points of view.  The one chart or index that’s on the cutting edge of the rally .  IBM and Green technology. 

Photo

Meet The Press

You can read a full transcript of last night’s press conference here. American’s demands microwave solutions and turning around the economy is not something that’s going to happen overnight. The last 8 years built a massive deficit and a massive financial problem. What Barack showed was a command not only as a communicator but in the details of what he’s trying to accomplish.

Obviously, this blog takes its shots at his administration, but I truly hope he succeeds.

You

Three different comments bring up well reasoned and different points of view. See comment section on the side of blog. 

  • Popeye – References a Bill Gross article (check out the graph in the editorial) on Shadow Banks
  • Fred Mays – Seemed to know exactly what Obama would say in his press conference and called for patience and long term thinking.
  • ewanapat - Also defended Obama and brought up his editorial that was published in 31 papers across the world.

The One Chart

Will the stock rally fizzle again? There’s one chart that’s on the cutting edge. See technical analysis section below.

IBM goes Green

IBM hops aboard high-speed rail

IBM is helping to build high speed energy efficient trains in China, Taiwan and the Netherlands. Also this is going to mean a lot of new jobs for those countries. One wonders how much of Obama’s alternative energy proposals will get cut from the budget. Full story from CNET

Cyclical vs. Structural

There are those who think that all we have to do is do nothing, others believe the shadow banking system will fix itself, others think the only problem is toxic assets. These are all reactionary solutions 

Investors411 looks at economics structurally. Granted its hard to structurally solve economic problems like energy, education and heath care with the deficit we’ve built up.  But unless we structurally change the bubbles will keep bursting and America will keep sinking. For more see Overview section of blog.

How many more bubbles have to burst before we deal with the structural problems?

________________

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

-

Index Percentage % Volume
Dow -1.49% down
NASDQ -2.52% down
S&P500 -2.03% down
Russell2000 -3.91% -

-

Technicals & Fundamentals

Stocks retreated and volume dropped.  Well over 1/2 the gains of Monday’s huge rally held up. The dip was a bit too large, but the fall in volume is just what you want to see if you are bullish or long the markets.

We are reaching one of those critical inflection points. Over the past 6 months stocks have rallied twice over 20% only to fall back into the bear market. This is the third attempt (+21%) at a breakout. There is one chart that’s on the cutting edge. If we can break the series of lower lows and lower highs on this leading index there is hope that we can end the bear market cycle.

The One Chart

It’s the NASDQ. It is leading the other indexes in performance since the bear market began.  If you look at the chart (see left hand side of blog) you’ll notice a series of lower highs on the NASDQ that started in early 2009

  • Early Jan. high of 1665,63
  • Early Feb. high of 1598.50
  • Two days ago high of 1555.77
Notice this sets up a series of lower highs.  If we can break this on the leading index then, technically, there is hope that the other indexes will follow. So NASDQ 1598.50 is the magic number or resistance level we need to rise above.
Secondary IndicatorsThe Baltic Dry Sea Index (measures flow of trade) rallied before the markets turned and over the last 5 days it’s started to fall again (see chart at side of blog)
Reading the Tea Leaves – We’ve reached the area where the other rallies have run out of steam. So what happens over the next few days is critical.  741 is the line in the sand downside benchmark on the S &P 500.  There is a less significant support level at 804 – just 2 points above where the SPX now is.
 
Best move for stocks today would be a flat to slightly higher.

Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

 


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March 24, 2009

Market Update – Masters of the Universe

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , , ,

Below is your very own collection of photos of the men who have privatized the profits and socialized the risk.  The Masters of the Universe who have rescued the dishonest and  greedy banks, kept the financial system afloat,  and created an explosive rally on Wall Street by moving in the shadows and stripping away financial transparency. Of course that’s just how they helped create the financial meltdown in the first place.

The Masters of the Universe

 

Timothy Geithner Lawrence Summers  

Henry Paulson

(above photos – Tim Geithner, Larry Summers, Hank Paulson)

“To the Moon Alice”

was Ralph Kramdon’s (John Herbert “Jackie” Gleason Jr.) famous line.  That’s just where the stock market is now going. See technicals and fundamentals below.

Masters of the Universe

was , of course, was the term author Tom Wolfe used in to describe all  the greed, arrogance, and shadow deals that personified Wall Street in the 1980′s. Since Obama’s took office his boys (Summer’s & Geithner), like Paulson before them, have become the personification of Wolf’s term.

Nobel Prize winner Paul Krugman  in an editorial entitled “Zombie Financial Ideas” states “ Every plan we’ve heard from Treasury amounts to the same thing — an attempt to socialize the losses while privatizing the gains.”

Arianna Huffington In her editorial pleads with Obama to take the “steering wheel out  of Geithner’s hands.”  She chronicles the war within the Obama administration between Axelrod and Geithner/Summers over AIG, Wall Street bonuses and just who is going to pay to fix the worldwide financial problem. Right now the fixer sure looks like YOU (the taxpayer) your children and your chldren’s children. 

John Bogel (legendary founder of Vanguard) - This AM on CNBC – The solution gets the government back in the shadow banking business

The solution, brings the world’s financial system back from the brink and ignites a Wall Street rally lead by the financials that scammed the world.  Probably later rather than sooner ordinary folks are going to realize how big the bill will be. 

A whole lot more on this later and since we’re all in this together you can lead the conversation by  submitting YOUR editorial/comments at the bottom of the blog.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

-

Index Percentage % Volume
Dow +6.84% flat
NASDQ +6.76% down
S&P500 +7.08% down
Russell2000 +8.40% -

-

Technicals & Fundamentals

XLF (ETF) the beaten up financial sector (institutions full of toxic,over leveraged debt) continues to lead this rally – up an enormous +16.4% yesterday. 

Big rally, again with little volume. Volume was above average. Volume, the #1 confirmation factor did not confirm the rally.  This signals that the market is full for traders and the long term investors are sitting on the sidelines.

Still Critical to all this in that major major 741 support level on the S&P 500. The SPX (see chart at side of blog) ended the day at 822.  Technically the SPX broke through two significant resistance levels (the 50 day moving average & the 804 Jan. low).

Reading the Tea Leaves - Exactly the same as early last week - Allowing for less transparent accounting is fundamentally going to help those corrupt banks and ripple positively through out  the markets. As mentioned before we’ve recently had +20 and +28% rallies and the current bear market rally has reached over 21% on the benchmark S&P 500  

Bottom Line - Again the same as last week. Ride the wave   Psychologically, the most likely senerio is a dip after a large gain that greedy traders (caution there is a big difference between traders and long term investors) will buy into. Volume did NOT confirmed yesterday rally. 

Fundamentally three factors have acted like dropping nukes on the bear’s forest. Spring has sprung and the bombed out bears seem to be moving back to their cage and hibernation. 

  1. The Fed flooding the markets with cash
  2. The growing political will to remove mark to market accounting
  3. The Masters of the Universe running Obama’s economic policy

Long Term Outlook = CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

 



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March 23, 2009

Market Update Summers= Paulson = Wall St = Failure

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Got stuck in a massive traffic jam late last night. A major wreck on the CT/MA border. So this Investors411 is short and sweet.  

 

One editorial to bring to your attention is by American Prospect editor Bob Kuttner.  He sees team Obama’ – Rubin +Summers+ Geithner = Paulson = AIG = Wall Street.  The good news in all this – the stock markets in the short run should move higher. The bad news is the taxpayers are going to pay for Wall Street mistakes. 

What, Summers and Geithner have done is “double down” on the Paulson/Bush plan and the recent AIG debacle is just the latest example of this.  He’s disappointed with new TARP plan and offers an alternative that seems to “winning converts through out the political spectrum. 

Kuttner concludes “Barack Obama is a president of great promise, reassurance, and political skill. In the next few weeks, we will learn how he performs in a crisis that is being worsened by his own appointees.”

Long Term Outlook CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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March 19, 2009

Market Updates – Health Care

Author: Barr Jozwicki - Categories: Market Update - Tags: ,

I’m away on a business trip till Monday so we have a guest blogger today.  Abby Gold is a PhD in Public Heath that works for both ND State Univ. and MN State Univ. She has posted several comments on Health Care on the Investors411 blog.  

       HEALTH CARE        

Think about all of the things we value as public goods in our country: roads, parks, schools, sanitation services, safety services, and clean water, just to name a few. As a society, we cannot live without these public goods. We also cannot live without health care. Yet health care has never really fallen into the category of a public good. This has cost us dearly.  

For a long time in the United States, we have treated access to health care as a privilege rather than as a right. As employer-based insurance has weakened and the ranks of the uninsured have grown, our national dialogue on health care has shifted as well. We are referred to as health care “consumers,” rather than patients, and care itself has been turned into just one more commodity for us to buy. The societal consequences related to this position are numerous, including the high utilization of expensive emergency care, children getting preventable diseases such as whooping cough, and a skyrocketing diabetes rate.

The historical hesitation of our lawmakers to pass meaningful legislation to create a fair and equitable health care system stems back to at least Eisenhower’s time, when the paranoia over “socialism” was just as alive then as it is today. David Oshinsky, in his book, “Polio: An American Story,” describes the polio vaccination’s seedy and complicated history. When it came to time to administer the vaccination on a widespread scale, researchers wanted to inoculate school children for free. Eisenhower was afraid to provide funding for free vaccination, thinking that it was too “socialistic.”  Never mind that the worst polio cases were primarily found in privileged children who were unexposed to the virus or other germs that could have sparked their own acquired immunity.

We don’t have a national health care system because people are afraid of socialism, and not because of a reasoned argument against assuring accessing to health care for all. But health care is not just about health insurance coverage; it also encompasses the care itself, including readily available, quality primary care. Do you have health insurance? If you are one of the 45 million Americans without health insurance, what sorts of things do you avoid or delay? Check-ups? Visits to the doctor when sick? Annual check-ups, even for young adults, are an important way to prevent disease. Annual exams for men should include sexually transmitted infection and testicular cancer screenings (of which younger men are particularly susceptible). Annual exams for women include pap smears, breast exams, and sexually transmitted infection screening. Early detection of most diseases can save lives and be far less costly to treat than later detection. 

Even worse, what if something catastrophic happens like you fall off a ladder and break your back, cut your finger with a knife while making dinner, or you get cancer?  Some things are more affordable to pay on your own, like stitches in your finger. But, some things are so costly that you will surely be paying the bill for a long time.

My sister, Katie, was diagnosed with breast cancer at age 31. Thankfully, she felt the lump on her own. Mammograms in women under 40 are not routine. She was diagnosed with a fairly treatable, early form of breast cancer. At the time, she was in business school and had just given up her comprehensive health insurance in exchange for the university’s student health plan, which only covered up to $100,000 of all medical costs. Initially, she felt comfortable with her decision to save some money on health insurance because of her youth and good health. The cancer changed that story. The cost of her cancer treatment was twice the amount covered by the university sponsored health insurance.

We need to transform our health care system. As much as we try to squeeze health care into a free market system where we shop around for the best deals, we will fail to solve the problem of providing coverage for all citizens. Nobody should live in fear of a bill causing us to forgo important medical treatment. This puts everyone at risk. If someone has strep throat, tuberculosis, or HIV we need to know who they are and treat them in order to prevent the spread of these potentially deadly diseases.

It’s so simple, yet so complicated. The ideal to cover everyone is simple, but the politics of covering everyone are complicated. We need to de-politicize the process. The question of who receives coverage and who doesn’t receive coverage furthers the disparity between rich and poor in this country. Family HealthCare Center in Fargo has estimated that over 22,000 people in our community do not have access to health insurance and do not have a medical home.

Now that the middle class is affected, maybe we’ll see some change. With heavy job losses in the professional world, people are losing their employee-based health insurance coverage at a rapid pace. Also, smaller employers are being choked by the high cost of insurance for their employees and opting out of paying for their insurance and maybe moving toward offering the option of health savings accounts.

A little bit about health savings accounts (HSAs) . . . HSAs are a free market approach to health care. Employers who offer this as a “benefit,” provide high-deductible catastrophic health insurance to their employees while at the same time deduct pre-tax money from paychecks that goes into an account to pay for any medical services accrued below the deductible. This approach might work for young, healthy people who rarely use the health system. The idea behind HSAs is that if people pay for more of their own health care they shop around for a clinic or doctor to find the best deal creating competition and driving down health care costs. Also, if you are young and healthy, you can save money in your HSA for many years almost like an IRA, so when it comes time to pay for costly health care expenses when you are older, you’ll have the money saved. This approach leaves out a great majority of Americans who need to utilize the health care system on a regular basis. In other words, it is inequitable. We need an equitable system that serves everyone.

Other countries view health care as a right, and their per person health care costs are a lot lower than ours, at least in part because they focus more on prevention and primary care. Our system is backward; only 2% of medical dollars are spent on prevention and public health measures. If we had a health care system that focused on preventing diseases before they emerge, our costs would surely go down. Instead of health care costs strangling state, local, and small business budgets, we could have a system that provides for everyone while also emphasizing prevention, leading to a healthier nation.

Right now, we have the opportunity to find a solution to our health care crisis and build a health care system that works for everyone. President Obama and the Congress have already taken a few small steps: they passed an expansion of the State Children’s Health Insurance Program (SCHIP) to cover millions more children. Also, the stimulus package included funding for the development of secure electronic medical records that will lead to better information management, and funded prevention and wellness efforts.

But that is only a start. Our leaders need to set a goal of passing comprehensive health care reform by the end of this year. The real debate is about to begin. Americans are coming together to have a conversation about how we can find a unique American solution to our health care crisis. It is time that we finally acknowledge and value our health as an American right, and provide quality, affordable health care for every man, woman, and child in America in a way that makes our economy stronger, and fairer, for the future. 

 

Long Term Outlook = CAUTIOUSLY BEARISH

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

 




 

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March 18, 2009

Market Updates – Stand By Me

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , ,

 Stand by Me - There’s been a lot of bad economic news out there and  few bright spots.  So today  take a look at this you tube video that’s been viewed by almost 8 million people around the world since early last November. It expresses the same sentiment that the CEO and workers in a Boston hospital did when confronted by job cuts.( Thanks to Stewart E. for comments) Here’s today’s good, bad and ugly.


Iraqi Women

Kudos to Hillary Clinton

Dawn (Pakistan news outlet) and other worldwide outlets are giving Hillary Clinton lots of credit in defussing the tensions over the “Long March” and the reinstatement of the Supreme Court in Pakistan.

_____________ 

Mission Accomplished.

If there is anyone who believes, like Cheney/Bush the Mission was accomplished in Iraq read Juan Cole’s editorial. He doesn’t even include the $3 trillion dollar cost and the loss/critical injuries of American lives. Above photo on how women are now treated in Iraq from Juan Cole.

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AIG AIG AIG

Lots of you have sent me personal emails over housing solutions and the growing anger over AIG. Several of you sent in the Sand By Me Video Two new bloggers  have sent in comments to the blog that deserve recognition. “We’re all in this together.”

Bob R – offers a outlet to express your anger over AIG by signing onto a petition. Link here

Scott H - offers an excellent editorial by Dean Baker on why politicians should be far more concerned over the staggering sums of $ that go into the bailouts.  He also has some eye opening stats on AIG.

I’ll try to get some of the comments many of you have sent in privately published ASAP.

_____________

The Coverup

The Good, the Bad, and the Ugly on Mark to Market Accounting.

Undoubtedly, removing  Mark to Market Accounting will juice the financial sector and consequently the stock market. Just the fact that Dems. and Reps. in a congressional hearing called for changes has sent all the banks that traded in toxic assets soaring. Citgroup alone is up almost 100% in a week. Hopefully, more loans will now get made.  Obama and his economic crew are getting pats on the back as stocks soar.

What removing mark to market does is remove transparency. AIG will no longer have to account for major losses and hopefully when housing stabilizes the assets will be more valuable. The real question is will the crooks, who should be in jail, use this lack of transparency to continue over leveraging and making huge profits/bonuses?  

In China they took out the CEO and COO of a milk company who sold tainted milk and shot them. In the USA the crooks are rewarded by bailouts, bonuses and now a coverup.  The good banks who played by the rules will now be lumped together with the bad banks. Isn’t it the lack of transparency that got us in this mess in the first place?

____________

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

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Index Percentage % Volume
Dow +2.48% down
NASDQ +4.14% down
S&P500 +3.12% down
Russell2000 +4.46% -

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Technicals & Fundamentals

XLF (ETF) the beaten up financial sector continues to lead this rally – up over 30% last week. Up 6.5% yesterday. 

Big rally with little volume. Volume, the #1 confirmation factor did not confirm the rally. 

Critical to all this in that major major 741 support level on the S&P 500. S&P 500 now at 778 We have gone well above this “mother of all resistance/support levels.”

Fed meets today.

Reading the Tea Leaves - Allowing for less transparent accounting is fundamentally going to help those corrupt banks and ripple positively through out  the markets. As mentioned before we’ve recently had +20 and +28% rallies and the current bear market rally has reached +14%.  Technically its important that we are again above the 2003 lows.  

Bottom Line – Ride the wave – Technically, there are no major resistance levels till the SPX hits its 50 day moving average at 806. Short term momentum with the bulls.  

Long Term Outlook will be upgraded to CAUTIOUSLY BEARISH if we continue to trade above 741.

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Long Term Outlook BEARS RULE

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog 

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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