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Senate Fails to Break Shadows

3 Republicans and 30 Democrats stood up to the mega Shadow banks & their lobby yesterday in support of the Kaufman/ Sherod Brown legislation to break these massive financials. Senate Finance Committee Minority leader Richard Shelby (R) & Senate Majority leader Harry Reid (D) vote yes. The above link has a list on how YOUR Senator voted.

Opposition came from the vast majority of Republicans and the Summers/Obama White house. This whole group is owned by  and protects the Shadows.

Hopefully Main Street can still win some crumbs or a pice of the toast instead of getting toasted in the finacial regulatory legislation.

Greece vs. USA

Greece’s problems are many ways are similar to the USA. The major difference is in the solution.

The central Bank of the USA can print money and loan it out at @0% to shadow banks who take that $ and not so secretly invest most of it in highly leveraged derivatives instead of less profitable loans to small business and consumers.

Greece can’t print money to bail itself out like the USA. It is under the jurisdiction of the European Central Bank (ECB). Therefore, it can only get TARP like loans from other countries and the IMF.

Some where down the line all the $ we print are going to slap us with inflation. But for now its kept us from sinking.

EU Contagion

The 2008 collapse has created massive problems for PIIGS and former Russian satellite countries. Example Spain’s unemployment is at 20% Yesterday’s map of debt obligation is the tip of interconnected obligations that spread worldwide and are exacerbated by derivatives sold on that debt.

Nobel Prize winner, Paul Krugman has an excellent editorial. Krugman recognizes the European Union’s main problem

“The problem, as obvious in prospect as it is now, is that Europe lacks some of the key attributes of a successful currency area. Above all, it lacks a central government.”

He goes on and explains how Greece is different than our governments bailout/relationship with California. The only logical endgame is -

“Greece leaving the Euro…unless European leaders are able and willing to act far more boldly than anything we’ve seen so far.”

Another possible solution from MIT’s Simon Johnson & co author.

Bottom Line for InvestorsFundamentally its hard to see a bottom until some resolution comes to pass. Till then, we will all be slowly twisting in the wind.

KISS & Stocks (Keep It Simple Stupid)

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


Index Percentage Volume
Dow -3.20% up
NASDQ -3.44% up
S&P 500 -3.24% up
Russell 2000 -3.77% -

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

Technicals, Fundamentals & Analysis

See Positions for changes made each weekend

Massive loss in massive selling. Technically, we have gone elliptical to the downside. On a pure technical basis we are near the end of the downside move. = Bullish

However both fundamentally and psychologically the stocks across the world have been damaged and hopes of a V shaped worldwide economic recovery have turned into U‘s, W‘s L‘s and perhaps worse. The entire group of talking heads on CNBC, the #1 financial cheerleading channel, looked liked deers caught in the headlights. The trotted out Nourille Roubini (a Dr. Doom) to jawbone this AM. = BEARISH

Failing to break massive shadow banks = Bullish

A technical glitch caused caused a massive 1000 point drop in the DOW (similar drops on all indexes)

Therefore, its hard to see any rally NOT getting sold into and another low on the way. Stocks broke through support levels like a knife through butter. The only piece of good news is in the short term stocks are getting so technically oversold that they are close to running out of sellers.

Monthly Unemployment rate up to 9.9% But non farm payrolls up +290,000 This is a STRONG number (@+180,000 was expected) and other months were revised upward. When Obama took office it was over -700,000 I have no idea why such a strong jump in numbers equates to a rise in unemployment. But end result = Bullish

  • McClellan Oscillator fell dramatically  to -113.71 yesterday.  [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. – In the last three years the MO has only reached pass this level 3 times –  10/08, 3/09, & 10/09
  • US Dollar – rose another massive +0.87%. This marks the 4th day in a row of huge gains. You have to go back to the 2008 stock meltdown to see anything similar. [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules Rising dollar almost always = falling stocks. The dollar is rising mainly because of the fluctuations in European currencies = Greek debt.

Bottom Line -Roller Coaster Rally day, but real long term fundamental problem from Greece spreading.


The  Positions Section = latest buys and sells – (Revised positions last weekend) - These are positions I actually own

The DANGER WILL ROBINSON, DANGER DANGER SIGNAL is as many of you long time readers know is the signal to duck and cover. It the strongest warning Investors411 gives of impending doom.  Investors sold its remaining position in EWZ (Brazil) near the open yesterday for a loss.

Long term what’s happened is bad for US markets - The higher dollar is a killer for any US company that makes profits abroad and will take a chunk out of economic recovery including job growth. Until we see a measurable reversal in the dollar both stocks and our economy are going to have trouble.

Gold has become a proxy currency and Investors411 mentioned last week GLD was a good investment, but never pulled the trigger. A buy the dip ETF

Today, Investors will start nibbling on IMAX & perhaps ESRX on any further dips. Both stocks have compelling reasons for long term growth, except in another world wide meltdown. This may be a shorter term trade

Caution – There is probably more major downside to this market because of Greece. The first major rally will get sold into & Investors will use ETF’s that short the market when this occurs. Example SDS = @2x shorts the S&P 500.

Long Term Outlook = NEUTRAL


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