Follow The Money

A Short History

  • In the name of “Free markets” or crony/casino capitalism (don’t even think of regulating the giant companies because we will simply NOT steal the unguarded money laying on the table to crush our competitors & increase our wealth) and led by Alan Greenspan, congress deregulated the banking industry over a decade ago. (Lots of Dems and Reps. to blame)
  • Globalization was roaring – jobs once done in the USA were outsourced.
  • To make up for this loss of revenue/jobs/GDP growth, we over leveraged everything from our banking system to our personal lives for almost a decade. Huge debt is the result
  • In 2008 it all came crashing down as we stood at the brink of a second great depression. Alan Greenspan, the maestro himself, admitted  free markets or crony/casino capitalism could NOT regulate itself. Here’s a video of his testimony.
  • But Globalization still roars creating job growth abroad. American consumer starts to save a bit more. This increases unemployment even more.
  • Banking system and head bank (The Fed) stay in shadows and weak reform is instituted. Crony capitalism reemerges and screams/fear mongers about deficits they played a or the prime role in creating. (this is all pat of globalization megatrend)
  • Money is thrown at debt problem – TARP, Obama Stimulus, the Fed (The later is by far the biggest money thrower) and crisis temporarily averted, but crony/casino capitalists – the fox (a pun) – is still in charge of the hen house.
  • Americans realize risk (crony capitalism) is privatized and debt brought about by that risk (crony capitalists) is socialized. Americans are angry, outraged and confused but haven’t a clue as to how they got cheated.

The money juicing all this - In 2006 Charles Koch revealed he was a moving force behind the  crony/casino capitalism  movement. One of the Koch Brothers actually ran as an independent against Ronald Reagan.  One of the the best detailed, yet incomplete histories, of the wealthy oligarchy that is taking over the nation can be found at a blog called Think Progress. Link here & here (above phot from Think Progress)

YOUR Comments

Its settled - consensus – the Paladino emails are scum. You have bigger fish to fry and topics to discuss. I really hope his name is not mentioned again, except when he gets toasted in his election bid

KISS & Stocks (Keep It Simple Stupid)

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



Index Percentage Volume
Dow +1.18% down
NASDQ +0.84% down
S&P +1.05% down
Russell 2000 +1.15% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

US Stock Markets -

Back to the stock pattern we know so well – Stocks up and volume down. This pattern has worked for months. I was surprised fundamentally that China raising rates two days ago did not have a bigger effect, but yesterday is a sign that the old formula has returned.

Its hard to bet against any Fed manipulated market. The print and dump the money. Some of it finds its way into stocks and they go up. The Fed said it printed just a little yesterday. Enough to remind major players they were around. The opaque Fed has many was of injecting cash into the economic system – We will never know them because congresses attempt to audit the Fed went down in flames a few months ago.

Perhaps the only Dow stock that fell yesterday ) at @ 2:00PM EST it was the only one down) was BAC fell (-0.42%) The opaque shadow bank is feeling the heat from the new mortgage/foreclose crisis.

AAPL –  This is the leading American stock. Its built a short term range between @300 and 320. Yesterday it was up +0.34 and closed smack dab in middle of range at 310.53. As AAPL goes so go tech stocks

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] The dollar fell a massive -1.30% yesterday. This eliminated almost 80% of the titanic gains of the previous day. (More below in Tea Leaves section) Trend for stocks = Bearish/Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China, emerging markets, exporting countries] Fell a minor -0.55% yesterday. An 8 week bull run, then a two week fall. A very slight stutter and now moving up. Bullish trend starting to fade a bit, but still = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] Rose to -3.12 yesterday. Lot of room to move both higher and lower. Location= NEUTRAL

Reading Tea Leaves.

From yesterday – “A totally new element emerged from the #1 emerging market raising interest rates blew up the bullish pattern. After this settles the print and dump Fed will again take charge.” It looks like the quantitative easing and/0r the print and dump money is back dominating trading patterns. Earning & what China does will have an impact, but the Fed’s currency print and dump forces the dollar ( currency is a traded market many times larger than stocks)lower and stocks higher.

UUP continues to be the dollar tracking ETF to watch


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)

  • EWS (Singapore)
  • SSO (2x what S&P does)

Going to add to positions today, hopefully on a dip. (see past Investors411 for options or look at Positions section of blog) I’d love the MO to be lower. Preferably at or near -60. But, it is to the benefit of both the High Frequency Traders (they make money with huge trades in microseconds) and the Fed to manipulate stocks higher.

  • The HFT’s are not going to kill the goose that lays golden eggs for them the stock market.
  • The opaque Fed actually  has the rough data on just how over leveraged the opaque shadow banks still are. The fact that the Fed is into QE 2 (QE 2 = the on the surface print and dump money – the rest is hidden and we really don’t know the grand total print and dump which is collectively easily in the trillions) says the shadows still need bailout protection.

Look for Paul R’s always enlightening comments on stocks (YOUR stock List can always be found in the POSITIONS section of blog) and sectors in the comments section.

One simple rule when investing in stocks/ETF’s that are trending higher. Do NOT by over extended stocks/ETF’s.

This is NOT an all clear signal. Use caution and if you can handle risk nibble.

Longer Term Outlook - CAUTIOUSLY BULLISH


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