If it weren’t for Mr Ponzi we’d now be calling it Madoff schemes instead of Ponzi schemes. The mantra for decades has been – leave “free markets” to regulate themselves. What a colossal mistake. From  the Madoff fraud to the AIG scam we, our children, and our grandchildren are going to be paying for this mistake for a long long time.

  

Charles Ponzi

 

Mr Ponzi

Major news networks this AM (EST) are following Bernie Madoff on his way to court apparently for a guilty plea to 11 counts of fraud and money laundering. Huge media contingent & cable  outlets carrying this live. The Madoff case has absolutely destroyed the reputation of the SEC as well as the savings of thousands.

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BusinessWeek – Resource

This magazine/blog has always been a great source on business news. While any business magazine has an obvious slant, it does almost constantly give the other side.  Example: Bob Kuttner often writes for them. Their blog has come up with with a way to track and share business topics on the web. Today for example you can find 429 new articles on Obama’s stimulus plan or 106 on behavior targeting. Its on the top right of their home page.

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Market Manipulation

Jim Cramer, the popular CNBC (financial channel) host of Mad Money has openly admitted to market manipulation in a 2006 interview. In fact he brags about it. See video. If he did it then…

One major reason Investor’s 411 advises investments in Exchange Traded Funds is they invest in large market baskets of stocks. These market baskets, because of their size are difficult to manipulate. Hedge funds and other major players can easily manipulate individual stocks – the less liquid the stock the more easy it is to manipulate.

If you watch or use CNBC (the major financial network) as a source (I often have it on as background) please take what they say with a grain block of salt.

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The Rich Get Poorer.

Who lost the least money? Forbes has come out with its list of the worlds richest people. Gates and Buffett have switched positions and Mr. Softy’s founder is now #1. The complete list here

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Accounting Systems

A huge debate is raging on how to account for money – Mark to Market.  Those who want a “freer” system that allows for more flexibility think current values are unfair because people/investors are panicked. They want to change or eliminate the system. These folks believe if we suspend Mark to Market it will calm the markets. 

The other side says take away transparency of Mark to Market and the cheater’s will flourish again. You’d get “fantasy” accounting.  This would also protect the bad banks, but it would punish the good banks who played by the rules. Hearings in front of Congress today on Mark to Market.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Stocks

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Index Percentage % Volume
Dow +0.06% down
NASDQ +0.98% down
S&P500 +0.24% down
Russell2000 -0.39% -

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Technicals & Fundamentals

US and many world markets consolidated gains of Tuesday or traded flat. The NASDQ (often thought of as a proxy for tech) stocks did gain almost 1%. Volume  dropped. This is to be expected after a huge gain. The NASDQ continues to outperforming other major indexes.

On the upside the first major technical resistance level is S&P 741. Remember this was the big support level on the way down.  The SPX (see chart at the side of blog) is now at 721. So we have about 3% wiggle room before serious resistance is encountered.  If prices do not rise or have the momentum to test this level within the next few days, then we’re in trouble.

Short term – oversold indicators are pointing to a rally. 741 is the line in the sand.

For a longer term look at a prospective oversold bear market rally see yesterday’s Investors 411.

Bottom Line for Long term Investors - Best advise – this is a market you should be dating and not married to. (see Postions section of blog)

 

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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