PHOTO Ted Kaufman says banks should never again be

Senator Ted Kaufman -” The Most Important Person You’ve Never Heard Of.” - ABC

Investors411 readers have heard this name many times.

Too Big To Fail

Moody’s, has come out with a report that Congress has NOT solved the Too Big To Fail Shadow Bank Problem. A team led by Moody’s (one of 3 major credit rating agencies in USA) big wig Robert Young concludes:

“[A] key issue that challenges the feasibility of the proposed legislation is that it would not fully eliminate the issue of interconnectedness, nor is it likely that resolution authority could fully eliminate the systemic implications of allowing a large and/or highly interconnected firm to default, especially with respect to large international groups, and it certainly would not eliminate the risk of contagion,”

Shahien Nasiripor writing in the Huffington Post point out some obvious and alarming statistics. The 4 major shadow banks alone are growing and now control $7.7+ trillion dollars of money. [$7,700,000,000,000] Relativity = Lehman Brothers who collapsed in 2008 controlled $400+ billion. Therefore, each of these major  banks is @ 5+ times large than Lehman’s.

Now think, of the people/ businesses who have their savings in each of these major over leveraged shadow banks. If one goes down, like Lehman panic will certainly spread to others. Bada BingBada Bang, Bada BOOM!

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!

Index Percentage Volume
Dow +0.06% down
NASDQ +0.96% up
S&P 500 +0,41% down
Russell 2000 +1.04% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Mantra – Volume has not worked as confirmation factor for many many moons. = Neutral

Lack of volume shows hedge funds and giant institutions with their high speed computers are the dominating the US stock markets. Most average investors have long since got out.

As predicted, (it was no surprise) yesterday markets held onto the significant gains of the day before. = Bullish

A major French bank got toasted this AM because of  derivatives. Emphasis on the word French = Bearish

All eyes on monthly jobs report - Its safe to say this number is massaged or manipulated to a degree by whatever administration is in power. Comparing the USA’s unemployment rate with other countries is like comparing apples and oranges because of the different ways each country compute/massages its unemployment number.

The Employment Report- 8:30 EST  - +431,000 jobs, Employment number down to -9.7%, Private sector jobs only +20,000. Most jobs created by census. = WEAK Report – Worse than expected.

Significant Indexes

  • McClellan Oscillator rose to +9.43 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -  This is first time the MO has turned green (entered positive territory) in over a month. Momentum is up, but bottom line – this is NEUTRAL territory -   How the MO works.
  • US Dollar –  The dollar rose a significant +0.52% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Currency markets are now being directly manipulated by out Fed and other central banks. This manipulation is to keep the Euro from falling. Dollar  at $87.25 Chart shows at least 6 attempted breakouts above @87.5 have failed in last 2  1/2 weeks. = Bullish.

Reading the Tea Leaves - – Stocks are focused on the jobs report.  Since stocks have rallied into the into todays jobs report, it would be logical for the Central Banks to allow the dollar to rise to a new high with a decent jobs report. Momentum is up for the MO and this currently translate to a short term positive for stocks.

Since Obama administration (leaked?) and Wall Street have built into the recent rally a much better than expected jobs report expect the following.

  • Worse than expected numbers – Stocks take big initial hit, but US employment is not really a major factor in shorter term US stock prices – Hedge funds and giant institutions are far more worries about the monsters mentioned yesterday.
  • Better than expected numbers – Would have to be blowout numbers. Really good numbers already built into stock prices. A blowout number will send the dollar and stocks soaring. Sometime during the day major players will realize that a soaring dollar will hurt stocks (even central bank intervention can’t stop a massive run) and this will temper gains.
  • Obviously, better than expected numbers is good for the long term economic well being of the USA.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have NOT had a chance to update this/last weeks trade. You can find results in individual post over last two weeks

Consider ETF’s that short the markets.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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