Columnist Frank Rich

Frank Rich

“The… Obsessed and the Deranged

There is a symbiotic relationship between governments and capitalism. Without the checks and balances, or regulations from government capitalism will allow greed to run wild. The catastrophic 2008 economic meltdown was just another example of the long line of history that keeps repeating itself. Obviously capitalism works economically better that pure socialism, but when human being whose only bottom line is profit are left alone their schemes explode in bubbles of over leveraged greed.

The NYT’s Frank Rich has another excellent editorial similar to the one in Investors411 last Monday. His focus was on Francis Joseph Stack III, the terrorist/right wing hero who drove his own plane (he was rich enough to own a plane) into an IRS building to protest his tax situation. Rich has a far more extensive list of anti tax right wing zealots and politicians who give Stack III a pass or praise.  Urge you to read his editorial  It’s enough to make you wonder who is palling around with terrorists now.

George Soros

Economic Hit Men

(Part 2)

Banks are the good guys – It’s the loan sharks, or almost  totally unregulated entities that bring economic systems, taxpayers and countries to their knees that are the economic villains. Technological innovation is great for financial institutions, but unregulated it can also create over leveraged Frankensteins from AIG to Lehman Brothers.

Niall Ferguson, in his book The Ascent of Money points to two other financial entities that are today’s “economic hit men” – Hedge Funds and Sovereign Wealth Funds. Both can place massive amounts of highly leveraged capital in short positions against a currency,stock,  bond, or country.

  • Hedge funds are almost totally unregulated entities that pool money of ultra wealth individuals and can leverage it in a multitude of ways. There are thousands of the hedge funds who often take highly leveraged short positions on for example the survival of Greek bonds. (A current example). The “capo dei capo” of hedge funds is multi billionaire George Soros (also a major Dem. fund raiser)
  • Sovereign Wealth Funds have even more capital than and they can use their power as an economic weapon to take over or crush other economic entities.  “More powerful” than hedge funds and centered primarily in Arab dictatorship’s and China their power is staggering. Ferguson cites (page 358) a 2007 Morgan Stanley report “That within 15 years they could control just over 9% of total global financial assets.”

Bottom Line – There’s a Financial war out there. Some may call it a competition. There are some major sharks that are circling debtor nations (us) – Shadow financials, hedge funds, Sovereign wealth funds. SHARKS BITE AND GO INTO FEEDING FRENZIES. The more in debt you are the jucier you look to hungry sharks

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 -0.51% up
NASDQ -0.08% up
S&P 500 -0,21% up
Russell 2000- +0.00% -

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

Technicals, Fundamentals & Analysis

See PositionsStrategy , and Overview for changes made over weekend.(No changes this weekend)

Last Week’s Fearless Forecast

“Everything technical (volume & McClellan) is showing that we are running out of rally room…Rally Ho, but it gets sold off at end of week.”  US Markets were down 0.4 to 1.5% for the week, so the Forecast, for the most part was accurate.

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Chili earthquake is going to impact copper prices – Chile world’s #1 producer of copper. Earthquake means copper prices going to rise.  In Boston all we’ve had is some rain, but up and down the East cost huge amounts of Snow will have a negative impact on the US economy.

Internationally the acronym to remember is PIIGS – Portugal, Ireland, Italy, Greece & Spain – These are the European countries, like the USA that have over leveraged debt problems.  The difference is these problems are peaking now & ours have been covered over by less transparency ant trillions of dollars. This comparative weakness will continue to make the dollar stronger & a stronger dollar usually means weaker stocks.

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This Week’s Fearless Forecast

The US markets are trying to rally, but economic fundamentals seem to be moving in a different directions.  Similar situation to last week. Markets looking to rally, but economics keep declining.  Call – Flat week. – Rally gets sold into at end of week.

Significant Indexes

  • McClellan Index rose slightly  to +31.71 We are somewhat oversold, but have a ways to go to +60 Oversold territory.

Positions

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

No change in major ETF positions.

ETF Positions

  • 10% of portfolio EWZ (Brazil)
  • 6%of portfolio FXI (China)
  • 10% of portfolio MOO (agriculture)
  • 3% of portfolio IMAX (3D)
  • 2.5% of portfolio TYH (3x what techs do) (Down from 7.5% last week)

Will be lightening up when/if positions reach oversold 0n McClellan Oscillator.

Also,  Set what’s called a stop/sell orders on at @ 3% above what it was bought for

  • recently bought (added to) EWZ
  • 1/2 of MOO, a longer term position.
  • The remainder of THY

Stocks

  • IMAX – doing fine – really hope this will be a long term hold – and there will be other dips to buy into on the way up.
  • Looking for entry point to buy PRLN & VPRT as well as some other stocks on YOUR watch list (scroll down on link)

Other stocks on YOUR watch list - the earliest I would nibble is when the McClellan Oscillator falls below 0 (zero)

Not adding to any major ETF positions until markets become oversold again.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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