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Imelda Marcos by joaobambu.

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Another Shoe Drops

Remember the wealthy wife of Philippines Dictator Ferdinand Marcos – Imelda?  Well she truly loved shoes.   The above is a photo of a very minor potion of Imelda’s collection.

Imelda is no longer with us, but her shoes are raining down on Wall Street in increasing numbers every day. It’s not just the other shoe that’s falling but  but a symphony of shoes that are hitting their marks each day and destroying what’s left of the non transparent American Financial system.

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Bernanke and the Shoes

Smoke was coming out of the Fed chairs ears as he angrily denounced AIG in front of a congressional committee. AIG is an Insurance company that was running an (unregulated) “hedge” fund according to Bernake . We gave these crooks another $30 billion because the collapse of the company (shares now worth $0.42) would devastate the world’s financial system. Yahoo news on Bernanke: Bail Out Bad Borrowers Too

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Imelda’s revenge

The shoes are not only clobbering their targets – other companies that ran similar “hedge” funds full of over leveraged toxic assets – but are also hurting the entire world. AIG has tanked. Citigroup is 27 cents away from becoming a stock counted in pennies. GE down over 95% from highs. Wells Fargo, Bank of America, and the other “usual suspects” stock and bond prices are disintegrating. XLF (the Financial market basket of good and bad financial companies) has fallen from 30 to under 7 within a year and many stock markets all over the world hit new lows yesterday.

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Senator Bernie Sanders and the Shoes

Vermonters love their independent (socialist) Senator. Here’s why – Sanders to Bernanke – Tell us what banks have sought bailout money. Bernanke – We have a new web site… Sanders again – tell us what banks. Bernanke NO. Sanders dropped a shoe on more than Bernake

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Why are Bernanke Obama and Geithner’s lips sealed?

First any bank that has taken bailout money is likely (like AIG and CitiGroup) to keep asking for more. Who knows how vast the “hedge” fund trading or toxic debt is?  It’s all hidden.  Therefore, the shoes keep falling and the markets keep melting down.  If the government & companies exposed the facts investors would realize the dreaded N word – Nationalization – would get used. These stocks would fall off a cliff and the markets would take a big hit. So we keep dying a death of a thousand cuts from falling shoes and the market slowly melts down. Which is worse?

Stop hiding the facts. Take the hit. Stop the shoes. Let’s start fixing the financial problem.

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AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Stocks

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Index Percentage % Volume
Dow -0.55% down
NASDQ -0.14% flat
S&P500 -0.64% down
Russell2000 -1.85% -

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Technicals & Fundamentals

We did NOT get the predicted oversold bounce yesterday. Instead markets consolidated in declining volume. Perhaps we’ll get some sort of over sold bounce today, but more and more its looking like the short term momentum is totally owned by the bears. 

The benchmark S&P 500 closed below 700 yesterday. These round numbers are support levels. So another support barrier fell. 

Reading the tea leaves – Until there is clarity in the financial sector (see above) stocks have little chance of sustaining a rally.

Major fundamental for the week is the monthly jobs report on Friday.

How will you know when there’s a chance for a sustainable rally? When there’s bad news and the market’s ignore it or even better – move higher on negative news.

 

Long Term Outlook BEARS RULE

See STRATEGY, POSITIONS, OVERVIEW  & ARCHIVES sections of blog for more

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

 

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