American Workers/Taxpayers

Inequality and the Financial Crisis

MIT economic Professor Daron Acemoglu, has a fabulous worksheet on the causes of the financial meltdown and long term structural problems in the USA.

American media ignores people like Dr. Acemoglu, and instead almost always uses some paid economist from and industry and/or right wing backed think tank that is in business because to serve their backers.

Thoughts on Inequity and the Financial Crisis excerpts below from his science based analysis.

“who rules today… The rich elite like in the Gilded Age….

In the aftermath, consistent with the alternative hypothesis, many of the key financial players were bailed out, but low income house owners were not and there has been powerful political resistance to extension of unemployment benefits.”


Two Alternative’s to Obama’s

State of the Union.

Paul Krugman in NYT excerpts

Consider: A corporate leader who increases profits by slashing his work force is thought to be successful…Who, exactly, considers this economic success?…

[GE] with fewer than half its workers based in the United States and less than half its revenues coming from U.S. operations, G.E.’s fortunes have very little to do with U.S. prosperity….

The financial crisis of 2008 was a teachable moment, an object lesson in what can go wrong if you trust a market economy to regulate itself. Nor should we forget that highly regulated economies, like Germany, did a much better job than we did at sustaining employment after the crisis hit.”

Robert Reich in Common Dreams excerpts

He [Obama] should point out that the U.S. economy is now twice as large as it was in 1980 but the real median wage has barely budged…

In the late 1970s, the richest 1 percent of Americans got about 9 percent of total income. By the start of the Great Recession they received more than 23 percent. Wealth is even more concentrated….

Many thanks ti Jim J in the comments section of Friday’s blog (scroll down to comments) for bring us all stats on GE, Paul R for mentioning a Robert Reich editorial and JS for his reply.

The major issue we have to fix the problem of Jobs, Jobs, Jobs is that Globalized American companies like GE  no longer need American Labor and even more critical now they no longer need the American consumer to grow.

This is your wake up and smell the coffee moment. GE and a host of other so called “American” corporate giants are no longer American. Even though these companies originate in the USA the use of the word “American” is little more than a propaganda tool.

They are globalized corporate giants who will suck what they can from Americans (any anywhere else) for the bottom line of profits. Like it or not that’s the system.  History has show this to be true in the past. This globalization of corporate so called “America” companies is a trend that is RAPIDLY INCREASING.

Like they say “no worries its just business.”

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KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Index Percentage Volume
Dow +0.41% up
NASDQ -0.55% down
S&P 500 +0.24% up
Russell 2000 -0.63% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • Technology, small caps,  high Beta (fast growing), emerging markets & commodities all took it on the chin yesterday and last week. A significant correction underway
  • Tech leaders AAPL & AMZN both lost 6% last week.
  • Monday’s have historically been the best day of the week as earnings season continues.
  • We have what may be a shift of leadership into major US companies and the too big to fail financials that enjoy government and Fed support.
  • Here’s how the week sets up from Seeking Alpha’s John Nyaradi
  • Still endorsing the concept that the Fed’s POMO [schedule] is and will be the key factor in keeping a long term rally going. (see Investors411 for past months).
  • The Fed’s POMO (QE 2) is also a major factor in driving inflation in emerging markets (see Friday’s Investors411)
  • From Friday - Key factor of dayInflation fears
  • Obama’s State of the Union is the big political news of the week. (Tuesday)

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Significant Shorter Term Forecasting Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose a small +0.24%.]  The two week dramatic fall of the dollar continued significantly Friday – Dollar down -0.71%. For stocks this is = Bullish
  • McClellan Index – (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.]  MO rose slightly to -29.20. We are approaching -60 and a buy signal. Outlook (overall overbought/oversold forecast tool for stocks) still = Neutral

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Reading The Tea Leaves

The dollar is falling like a stone and that’s good for American exporting companies. There are still growing inflation fears in part brought on by our Fed’s quantitive easing. (see Friday’s Investors411)

“Don’t fight the Fed” is an old Wall Street axiom. The falling dollar and the special “gifts” shadow financials (latest example Friday GE earnings, stock up +7%)

Again many major analysts (far more renowned and knowledgeable than me) from Nyaradi (today) to a real big name DeMark last week are calling for a much more significant correction.

The falling dollar, the strength in major exporters, and the Fed ( behind these factors & pumping up financials) will keep correction minor. So if the MO dips down some more close to -60 I’ll be nibbling.


What to watch today

Dow Index - From Friday - Almost all sectors that may be negatively impacted from Emerging market inflation – high growth stocks, commodities, China, gold – have faltered this week. The big holdout is this minor meltdown are the giant Dow companies.

AAPL - breaking below its 50 Day Moving Average would be trouble. It fell -1.79% Friday & rising 50DMA is a bit over 1% lower. Look for some upside strength at its 50 DMA/support level. So the bounce or non bounce off the 50 DMA is the cutting edge today and for the week

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Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

(I do manage 6 accounts that have other positions).

Current ETF Positions. (oldest held positions listed first)(see comments section where all trades are first announced)

  • UWM - (2x small cap stocks) Sold last 1/2 at 44.50 for +6% gain
  • REMX - (rare earth metals) Did not sell last 1/2, but will place another 2% trailing stop on this ETF today. (already almost -2% loss on last 1/2)

Under consideration -

DDM - (2x DOW) The trend to big cap stocks is apparent. A buy ,but a bit overbought right now

UCO -(2x oil prices) All commodities, are under pressure from inflation worries in emerging markets. Sitting on 50 DMA, More cold and snow for East cost should create a bounce.

REMX (Rare Earth ETF) –  Rare commodity used in everything from some TV’s to hybrid cars.

FAS (3x financials) & UYG (ETF that does 2x financials) XLF is the financial ETF. - Shadow banks have numerous advantages. – Opaque, special help from Fed and your still on the bottom line to bailout too big to fail institutions.  This sector is being manipulated higher by Fed. Those that can overcome ethic problems with shadow banks could consider buying. Yes, this is another bubble building.

DGP – (ETF is 2X gold)

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Look for Paul R’s always enlightening remarks on stocks and sectors in the comments section of the blog. See POSITION section of blog for lists of potential stocks & ETF’s including ”YOUR Stock List.” (YSL#3)

Longer Term Outlook - CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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