Investors 411 Blog

What’s Up? Sorry, Limited time this AM – While Mondays have been good days for stocks recently – the NASDQ is showing signs of rolling over and dragging the rest of the indexes with it. Some sort of a correction likely this week: Barak Spock Obama vs the ideologues.

NYT photo

Barak “Spock” Obama

It’s amazing how many analogies there are out there comparing Obama & his administration to Spock and the “Federation.” Both my grandson and I loved the movie. 

Like Spock & the Federation in the movie and TV series, Obama faces external challenges. There are many external threats, but for Obama who keeps his cool like Spock, the internal threats seem to be far more sinister. 

The far right wing that rules the Republican party has doggedly held onto the “you’re either with us or against us” mantra that every alien villain has had in the Star Trek series. The real threat to Obama and America is those who openly hope “Obama fails.” If he fails so does America.

It’s one thing to criticize his conduct or to think what his administration does will not work (this blog often does), but its hugely different to hope for failure.

Rush Limbaugh, openly promotes this division (Failure) among Americans. What’s frightening is how powerful he is among Republicans.(see past updates) The far left has its wacko’s, but they never came close to devouring the Democratic party or moderates in the USA.

Media Matters has stood up to this group of ideologues for years. Their latest fight is against CBS sport analyst David Feherty who suggest “any US soldier would kill [Democratic leaders] “Reid and Pelosi.”

STOCKS

Sorry, ran out of time. Outlook for week – reversal of bullish trend. See Positions section for changes made over weekend.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

LOL Funny - Saturday night’s White House Corespondent’s dinner. 

 Obama could make it as a late night talk show host. Some real zingers at Republicans, the press and his own administration. You can view it all on C Span -link here or the huffington post  Obama starts at about 14 minutes into the video.

Comedian Wanda Sykez roast of  Obama, his administration, Palin etc. directly follows. She really nails Rush Limbaugh. She also brings down the house.

WHAT’S UP? – Let’s take a day off from bashing, thrashing and smashing politics & economics. Looking at the lighter side – Swine Flu kisses; Obama and bankers; Obama changes middle name; Late night  comedians on politics; and how I created the Iraq war.

Is Swine Flu transmitted by Oinkers? 

No – So kids, find a pig & lick, lick, lick 

Barack Obama in a private meeting with bankers – “my administration is the only thing standing between you and pitch forks.” (Fortune magazine pg.64)

The Co – Star of the New Star Trek Movie

Salon composite/AP Photo

Barak “Spock” Obama

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From Late Night TV – About the replacement of a new Supreme Court Justice. (from About.com:Political Humor)

“A vacancy on the Supreme Court. This is something we haven’t seen in a while. Let’s just hope the president is better at picking a justice than the justices were at picking a president.” –Jay Leno

“They say President Obama will most likely pick a woman. And I think that’s probably true, because today, Clarence Thomas was seen renting porn.” –Bill Maher

“Barack Obama may choose Hillary Clinton as Souter’s replacement. So the big question now is, well, can she make the transition from pantsuits to robes.” –David Letterman

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Just ask my kids and Grandchildren – Everything I say is absolutely true.

The one time I ran into Cheney and Bush was in the 2000 campaign.  They were planning Iraq war. Bush turned to me and said,  ”We plan to kill millions of Muslim’s and one sculptor.” Being a sculptor I asked why kill a sculptor? Cheney turned to Bush and said,  ”See I told you liberals wouldn’t care about the Muslims.”

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STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals

Major markets retreated in huge volume. What Wall Street calls a “distribution” day. A significant loss in increased above average volume. = Bear’s dance.

XLF - The ETF that tracks financials (mostly shadow banks ) fell -2.88% in increased, above average volume.

Monthly Jobs Report – (breaking news 8;30 EST) -539,000 jobs is bad but below expectations. Rate now up to -8.9%. from 8.5%. Last month revised down a bit. (699,000 to 663,000)

Best spin – third month in a row job loss declined and smallest loss since Oct.. Better than expected news good for stocks

Stress Test

The big news is the announcement of the ”Stress Test” on 19 biggest Shadow Banks. You can read about some analysis here (NYT) & here (Tim Geithner) & here.(Simon Johnson)  Obviously, I’d pick Simon Johnson’s to read.

What’s good is bad - The stress test basically mandates that banks have a certain amount of capital on hand. This is good because it keeps them from being over leveraged. However, as banks raise the capital to meet this quasi mandate they will have a difficult time loaning out $ because loans are liabilities.

10 of the 19 big Shadow banks were found to be a total of $75 billion short. Why it’s easy to be skeptical of this number is the introduction of “mark to market” accounting and the fact that when relatively smaller Lehman Brothers went belly up they had @ $400 billion in over leveraged debt.

Bottom Line – Wall Street investors have accepted these numbers and bullish for stocks.

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Repeat - All  Investor 411 positions (except GLD) are outperforming the benchmark S&P 500 by a wide margin. See Positions.

Repeat – The $64 Trillion dollar question - We have rapidly created an incredibly massive subsidy system for America’s Shadow Institutions – How do we disconnect from these wealthy welfare recipients?

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

WHAT’S UP? – 5 Top Lists – #1 foreign crisis: top 19 Financials & the Stress test; Top 25 Subprime Lenders; Top Renewable Energy Resources; Top guy back in the fight; The $64 Million,Billion, or Trillion dollar question

   Top of the List of Foreign Problems

Nuclear armed Pakistan is the # 1 Foreign policy problem today.  This whole area of the world has deteriorated as the USA fiddled and diddled in Iraq for 7 years. Yesterday’s NYT editorial.

        Stress Test on Top 19 Financials

What has turned into little more than a PR event for the Shadow Banks and our government will be announced today. We’ve given them Shadows trillions, the banks can mark to market any assets, and history suggest every time we rate this crisis the reality is worse. The NYT has 6 analysts debate, including Simon Johnson. 

        The Top 25 Subprime Lenders

Photos – Tweeter.com

Here’s the list from BusinessWeek of the top 25 Subprime leanders. Countrywide is #1. Is your bank there?

     Top 10 Renewable Energy Resources

Photo timesunion.com

A list of the top 10 Renewable Energy Resources from Listverse

 Top Guy You Want To See Back Fighting

He’s back, Eliot Spitzer, Former NY governor and Wall Street fighter, who had trouble with hookers is back on the air. This is the kind of tough guy who is unafraid of going after Wall Street. He along with our #1 hope for justice  Elizabeth Warren (see past updates) are on  CNBC this AM. Obviously the financial channel has felt the heat of criticism (Jon Stewart etc) and is now at least letting the other side be heard. Also Simon Johnson & Arianna Huffington are guests this AM.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals

Now starting to worry that we are going up too far too fast.  Another significant rally in increased above average volume. NASDQ rally was minor. We are in the middle of a bullish stampede. Enjoy for now, but remember the bulls can get stampeded off a cliff. 

XLF - The ETF that tracks financials (mostly shadow banks ) continued its breakout move +7.96% Usually,you buy the rumor and sell the news.  In this case the announcement of the Stress Test is the news. Expect a correction.

All other Investor 411 positions (except GLD) are outperforming the benchmark S&P 500 by a wide margin. See Positions.

The $64 Trillion dollar question – We have rapidly created an incrediblymassive subsidy system for America’s Shadow Institutions – How do we disconnect from these wealthy welfare recipients.

NB – Dow member GM is dong a reverse 100 to 1 stock split. Because of the way the Dow is computed GM will go from last to first of the 30 Dow stocks. This is going to mess things up. Investors411 will focus on benchmark S&P 500.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

WHAT’S UP? - The Upcoming War – Shadow banks vs. the ordinary American Taxpayers: We are loosing; Simon Johnson (again) and “The Quit Coup;” Privatizing gains and socializing risk; The major issues between the shadow banks and us. Your questions on investing – When to invest & the long term outlook.

Still the best article out there describing how the shadow banks are winning  The Quiet Coup comes from Simon Johnson (former head of IMF and MIT prof)

Your Questions

 Popeye raises some interesting questions in comments section of blog.

•  Be more specific as to when to invest - The Positions section of the blog carries some specific recommendations. However I simply do not have the time to watch stocks and exactly determine when a “Buy the Dip” opportunity exactly occurs.  Also, each of you is a different kind of investor/trader. What you do depends on your level of risk.
• What about the long term? – Unless we radically change the shadow institutions privatizing gains and you socializing losses, the American economy as we know it is doomed to oblivion. What will emerge is a wealthy oligarchy and a poorer underclass. Far more bullish on some foreign economies that are building their middle classes than America’s that is diminishing its middle class. See Overview section of blog. Hope Obama can change this. (See above – The Upcoming war) More on this later.
• I try to change the Positions section each weekend. The Changes are in plum. Check it out. I do realize some of this can be unclear to less sophisticated investors/traders. So either make a comment on the blog or privately send me email. 

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals

Major markets held onto most of their gains from the “Wowie Zowie” rally as volume dropped a bit. Consolidation after a major rally is bullish for equities. As long as we hold onto at least 50% of Friday & Monday’s gains the bulls are in charge of short term momentum.

XLF - The ETF that tracks financials (mostly shadow banks )Broke out of its consolidation pattern Monday and fell  -1,45% in decreased volume yesterday.  Again it looks like consolidation after a big move higher. 

Reading the tea leaves - [Longer term]  As stated in Strategy section (click on Strategy at top of blog – mostly written at the start of 2009) Dow 8000 is basically the cut off line. Below 8,000 slowly adding to positions or “nibbling” was suggested.  The Dow is now at 8,410.  

Therefore, Longer term investors should be more cautious about buying the dips. The Dow unlike the benchmark S&P 500 has not yet reached its yearly high at around 9,000. It is the trailing index.  It does have some wiggle room to move higher.

Markets are dynamic and right now Dow 9000 is probably going to be the new standard instead of 8000.  The 8000 was the standard at the beginning of the year.

It  looks like the Dow (30 major companies) will get dragged along higher by the other 3 major indexes. Short term momentum is still clearly  with the bulls. 9000 is not impossible and neither is 9654 (the November 2008 high). However -

Bottom Line – The rapidity of the bulls momentum will probably slow the higher we go.  Shadow banks  and China are still leading the bulls.  

At some point in time this year the major WAR between shadow banks and  the taxpayers over regulating financials and their size will happen. This in the short term will negatively impact stocks and in the long term impact the viability of our economy. (See above) Lots of the negatives in America’s economy are still growing.

Example – Right now according to WSJ 20% of homeowners have bigger mortgages  than the home are worth

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

WHAT’S UP – China leading world out of recession; Huge stimulus and Chinese banks loan package has dramatic positive short term impact on stocks; Shadow banks are winning in their tug of ear with Obama’s administration: Stress test results; Investors411 recommended positions have possibly best day ever!

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China

Chinese Banks are lending money - big time They were not nearly as over leveraged as American shadow banks and China. Their stimulus which is bigger per capita than the USA’s is also helping turning the Chinese economy. A second stimulus package is projected soon. Some outstanding growth stats announced yesterday. Some details on China’s stock’s explosion higher yesterday here and here

For more see 4/16 Investors411 blog on China or (recommended) Positions section of blog

Bottom Line – China is leading the rest of the world out of the recession. In the long run this much stimulus is going to be inflationary.

Shadow Banks

There’s the good, the bad and the ugly about shadow banks. But the the good is the fact that they are leadings stocks higher, It seems in the tug of war between increased governance  by our government and allowing US banks to continue to move in the shadows is moving in one direction –  the Shadow’s are winning, NYT story.

Stress Test

Shadow bank, Wells Fargo was thought to be one of the banks that failed the government’s “Stress Test” and it moves up +24% on the stock market.  Talk about moving higher on bad news = great for stocks.

“The U.S. is expected to direct about 10 of the 19 banks undergoing government stress tests to boost their capital, according to several people familiar with the matter”    Full WSJ story

Why Tom Friedman is Wrong (part 2)

Sorry Started this when my server/modem went crazy on me last Thursday. See his editorial “A Tortuous Compromise.” in which he invisions a decent wesern US democracy in Iraq. 

Imagine Rush Limbaugh and the far right coming together as “brothers” with Move On and the far left. Multiply that times 10 and add a mountain full of oil money/power to fight over and you have how the Shia feel about the Sunni’s in Iraq.

What happened is the Shia (60% of the population) kicked ass in a civil war over the Sunni’s (20% of the population and Saddam’s group) Add to this years/decades of mass killings. This is almost as bad as imagining Hamas and Israel coming together in one democratic love fest. 

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals

China (FXI =+8.95%) (see April 16th blog)and Financials (shadow banks) added high octane jet fuel to last week’s breakout.

S&P 500 turns positive for the year! SPX closes at 907 – First major technical resistance level at @ 940 (an old high and close to the 50 day moving average)

XLF - The ETF that tracks financials (mostly shadow banks )Broke out of its consolidation pattern and rose +10.14% in increased above average volume.  Therefore, volume confirmed a huge breakout. If you’re in recommended ETF’s that do 2x & 3x what the XLF day you did spectacular. (see positions)

The XFL had been consolidating between @ 9.4 & 11.3. XFL closed  above breakout levels at 11.73 .

A Wowie Zowie Rally!

Wow! Yesterday was a fabulous day for Investor’s 411 recommended Positions.

See Positions at top of blog. Most Investors411 recommended  positions did 2 to 4+ times better than US markets. Both China and Financials are recommended ETF’s (see positions) 

Even GEX (alternative energy) was up +9.95%.  Also Brazil (EWZ) was up +5.98%.

Reading the tea leaves - Obviously, would love see stock positions hold onto their gains and not rocket higher or lower. Moving too far too fast is reason for concern. Consolidation over a few weeks is best in the long term for bulls.  

Those shorter term traders should obviously book some profits soon. Why be greedy? There should be a whole lot of traders buying the first dip today.  Let’s see what happens after that.

Caution – Don’t get all caught up in this good news. There are massive economic problems out there in the USA and many foreign countries.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !