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Planned Parenthood

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Susan G. Komen, a previously non political cancer organization, has stopped funding Planned Parenthood who gave mammograms to over 4,000,000, mostly low income,  Americans over the last 5 year.

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This has sparked a firestorm throughout the country.

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• Top Komen officials are resigning.

• Hundreds of thousands are directly protesting

• NYC’s Mayor Bloomberg has just given Planed Parenthood a $250,000 contribution

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What you can do to help

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My wife was one of the first 10,000 to sign onto

this petition

protesting SGK actions.

The petition now (8:00AM) has 314,127 signatures. (I’ve also been one of the thousands protesting directly on their facebook page)

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Join Us

If charity’s become political then there if little hope left for a divided America. SGC president said they cancelled PP because they were “under investigation” (by a Republican member of Congress)

• McCathyism was an ugly period in America when if you were simply investigated you were black listed.

• Penn Sate is under investigation by members of congress should they loose their SGC funding?

• Innocent until proven guilty used to mean something in America.

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It’s your world –

If you act like sheep you will

get fleeced.

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STOCKS

• Both the NASDQ (tech) and Russell 2000 (small caps) are outperforming the S&P 500. It’s been this way since the October lows.

• When techs and small cap lead for this long it’s usually a sign of a bull market

• From Seeking Alpha – 6:00 AM Overseas: Japan -0.5%. Hong Kong+0.1%. China +0.8%. India +1.0%. London+0.5%. Paris +0.5%. Frankfurt +0.4%.

• Mantra – “Low volume rallies are a characteristic of Central Banks and friends manipulating stocks/bonds. They have become quite good at this and these rallies have tended to last.”

• More and more it’s beginning to look like last year was the year of dividend stocks. This year higher growth stocks are starting to outperform.

• Beaten up sectors are rebounding.  Tech, small cap, and momentum stocks are leading the way.

• Check out the comment section of the blog. Paul has a lot of experience in the sectors that are leading the market. Many others offer credible concepts on long and short term investments in Investors411 comment section.

Investors411 Has Returned from Summer Hiatus

Economic Outlook /Stocks

Late last week the US GDP figures came in better than expected, a -1.0 %. The expected number was -1.5% . This number while not positive should be compared to the previous quarters -6.4 % and the loss in the quarter before that of about -5.7% .

Clearly back  in September it looked like the US and the world’s economy was headed over a cliff. That no longer is the case. “In short, the recovery act turned this quarter’s economic performance from disastrous to merely bad.” See data/story here

The economic stimulus that the Fed and the Obama administration delivered has turned the tide. The economics have improved dramatically. Since our government’s stimulus plan is back end loaded and only @ 25% has been allocated, the economic picture should stabilize or improve in the coming quarters.

Consensus outlook is for moderate growth next quarter/year that should turn positive.

China’s GDP has also rebounded. Their economic low was a +6.1% in the first 1/4 of 2009 and is now at a better than expected +7.9% in the latest quarter.  Remember their stimulus package was far greater than ours when measured against GDP ( from memory something like $585 billion on a GDP of 4 trillion vs. UA 780 billion on GDP of $13 trillion.) Businessweek story here

So the world’s two most important economies are rebounding.

Apologies to the European Union whose combined countries have a slightly larger GDP than the USA. On the whole they are on par with the US. There expected to have a loss in 2009 of -1.8 % and a relatively minor rebound in 2010 of +0.5% These figures/projections are obviously far more consistent with the USA than China.

Bottom Line – China is once again going to outperform the other major economies of the world. Those countries like South Korea, Singapore, India and Brazil (see Positions section of blog) will continue to outperform the USA. All these countries benefit from the mega trend of globalization . (Will fill in details in upcoming updates.)

Jobs/Jobs/Jobs

In the up coming year or two the employment picture should like the economy brighten because of the stimulus .We are now losing jobs at the rate of about @ 400,000 a month (compilation of May & June) vs. @ 700,000 (Jan & Feb.) The overall figure will grow. However, as more of the stimulus kicks in this figure should fall.  Most estimates have unemployment going up to 10% this year, however the rate of unemployment is dramatically declining. The figures for July come out  Aug. 7th.

Like the small recession in the beginning of the Bush administration it will take a long time for the jobs picture to improve . What happens is that companies lay off US workers and tighten their belts in a major recession.  When it comes time to hiring back workers they do it where they find the cheapest labor – abroad. This is one result of the mega trend globalization (See Overview section of blog)

The “Giant Sucking Sound” (Ross Perot’s term) is middle class and working jobs going abroad. However, for a year or two the stimulus will help. It’s NOT all roses and sunshine but –  American companies will do far better than American workers. Foreign countries will continue to outpreform the USA.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

The S&P 500 joined the NASDQ in significant multi day volume confirmation of its price move last week

Off had, I do not remember US markets being this over bought. Just from a pure technical point of view it looks like rally has run out of steam. But there are an army of investors still waiting to buy the dip.

Big news is jobless figures for July come out on Friday.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . 2975 is the major support level and the BDI closed at 3320 – down last two days. As long as we hang in above 2975 stocks should do well.

In a nut shell the BDI is

• short term – Neutral (perhaps bearish trend starting)
  
• mid term -  Bearish pattern
• long term - Bullish pattern

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$USD - The Dollar went down and tested its major support level all last week . The last remaining support level is the June lows at @78.4. . Breaking this support would be very bearish for the dollar and bullish for stocks. We broke that support on Friday and dollar now at 78.29. Bullish for stocks

Fearless Forecast

The FF did not get its “stabilization week” as stocks moved moderately higher. Technically conditions are still way overbought .

The dollar slipping (closing) below major support on Friday is bullish for stocks. Even though markets are overbought and oil prices rising to yearly highs (in large part because of dropping dollar) it looks like another rally week.

Buy the dips of trending sectors.

Positions

The whole Positions Section has been revised (Click on “Positions” at top of blog). Check it out

Buy the dips of recommended ETF’s (see Positions)

Adding to QLD , FXI and EWY (Korea) on dips.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 on Hiatus for the Week

Will Return Aug 3rd.

Overwhelmed with business deadlines and grandkids so just a short overview today.

Health Care

The single best argument I’ve heard for Public Heath Care is virtually all other industrialized democracies have a public heath care plan of some sort. If these plans are so inferior why have the voters NOT changed back to a private  plans? These plans may not be great but they provided statistically verifiable better results at a cheaper price.

Many folks in every country can tell you some horror stories about their heath care plan. Like the 58 year old nurse in front of the US Congress last week. She was denied coverage for a double mastectomy because she had a skin rash some months previously. Even though her dermatologist (MD) pleaded that it had nothing to do with her breast cancer she was denied coverage.

We enjoy Harvard Community Health Plan. A plan that is constantly rated "best" or one of the best in the nation. The problem is it keeps going up in price 5 to 10% a year. Thank God I’ll be able to qualify for Medicare (public health care) in a few years, because the premiums are going through the roof.

If Republican’s and those who oppose change cared why did they do nothing over the entire course of the Bush administration?

NYT outlined some of the benefits that changing health care offers here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 4 1/2 years of beating benchmark S&P 500

(see results for last 1/2 year – click  6/25 & scroll down)

• Brown = repeat statements
• Green = usually bullish statements
• Red = Usually bearish statements

Technicals and Fundamentals

The NASDQ is the only major index significant multi day volume confirmation of its price move.

Earnings season begins to wind down. While many companies are increasing profits by cost cutting, there are some major companies that are actually increasing revenue and profits.  Intel started this ball rolling.

Off had, I do not remember US markets being this over bought.

Besides earnings here is one Business site on various positive indicators.

Bernanke has a Town Hall meeting (First time ever for Fed Chair) Defended stimulus package and unemployment peaks at @10% early next year.  If government had not interviened there would have been another great depression.

Significant forecasting tools/Indexes for stock markets

BDI - The Baltic Dry Index measures the flow of goods (world trade) It looks like we could be forming another lower high and that would reinforce the mid term bearish pattern . The rate of decline flattened toward the end of the week. Bullish sign We have had a series of lower lows and lower highs since early June. We have a way to do before we establish a new low (see yesterday’s update).

In a nut shell the BDI is

• short term – Bullish pattern could be starting
  
• mid term -  Bearish pattern
• long term - Bullish pattern

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$USD - The Dollar went down and tested its major support level all last week . The last remaining support level is the June lows at @78.4. The dollar index closed at 78.75 . Breaking this support would be very bearish for the dollar and bullish for stocks.

Fearless Forecast

The FF struck out last week. As Investors411 saw the rally taking a breather in the second half of the week. We rallied into the weekend. Technically conditions are still way overbought . So some kind of stabilization is predicted again this week. We are in a rally and this rally is now in danger of going elliptical. Up too far too fast. This would mean a big crash and burn.

The dollar slipping (closing) below $78.4 would certainly move stocks higher. Dollar at 78.46 this AM in pre market trading.

Buy the dips of trending sectors.

Positions

The whole Positions Section has been revised (Click on "Positions" at top of blog). Check it out

Buy the dips of recommended ETF’s (see Positions)

Hopefully you were "stopped out" of the suggested FAS short position. (see Wednesday’s Update) If not tighten stops. Consider EWY (South Korea) on dip.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

WHAT’S UP? – Ballots over Bullets – Oprah, that’s right Oprah Winfrey – Healthcare vs. for profit illness care – Our Positions – The new Hedge is starting out with positive results – FXI, QLD, EWZ & IFN

Ballots Over Bullets

Tom Friedman has a Ballots Over Bullets editorial in today’s NYT. He echos what Investors411 has described as the results of Obama’s speech, and the relationship to the Lebanon elections. Like the economy, there are a few green shoots of hope in the Mid East. They may get crushed, but at least we’re not locked into the "you’re either with us or against us" mantra.

Oprah and HealthCare

Never thought you’d see Oprah Winfrey in Ivestors411. She is one hell of a business women. But Ophra also is setting a standard in health care. It may not be perfect, but what her show deals with is heath care and what we in the USA deal with is a for profit illness care .

Oprah promotes "wellness,  prevention, and alternative medicine" far more than our conservative, for profit medial establishment. Our mainstream medical establishment is addicted to drugs, surgery, and pills  like Cheney is addicted to bullets, hate and torture. There are alternatives that work.

Dr. Deepak Chopra , who I had the privilege of spending some time with decades ago, is now one of the loudest voices for change in the medical establishment. Take a look at his "Mainstream Medicine and the Oprah Factor"

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals

Remember – Forecasting what markets will do is all about how potential investors feel about the  fundamental aspects of stocks and the economy. Technicals (looking at chart patterns) gives us some idea of where the traffic signals are. It all about predicting attitude.

NASDQ is again separated from the pack.  The distinction may look small, but over time is has and hopefully will continue (see our "hedge" position) to outperform.

Volume was below average. No confirmation of a price move.

Reading The Tea Leaves

• Oil prices now over $70 a barrel - WTIC
• The BDI (measures world trade) has fallen 5 days in a row
• Interest rates of 30 year fixed mortgages have risen over 0.50% in last month.
• Chrysler’s bankruptcy deal and possible GM’s could get bogged down in supreme court. = Way more unemployment and foreclosures

There is fundamental long term trouble brewing just under the surface. The above factors is they continue in the same direction combined could crush a budding economic recovery.

What’s moving this market is a falling dollar. Russia did/said something this AM to cause the dollar to fall further – So stocks and oil prices should move higher this AM.

Position s – (See positions section of blog for more)

• The Hedge – Q LD went up +1.68% and SDS went down -0.54 %. This means our latest and second largest position made +1.24% yesterday.
• FXI – China -1,25% yesterday.  #1 position has dramatically clobbered the benchmark SPX this year. This ETF is falling in decreased volume and a new buying opportunity is/may arise.
• Looking to buy  into IFN (India) EWZ (Brazil) on dips.
• Looking to buy back into QLD (a separate position from "the Hedge")

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTIN G !

Obama in the Matrix – Everyone is taking shots at Barack/Neo, but…. Military budget gets announced to fearful Americans fighting the Evil Empire. The two, Two Cows – understanding AIG and Market to Market accounting with humor. They are back – after 101 years of trying – will they succeed?

photo from About.com: political humor

Obama in the Matrix

Obama is being totally dissed by the right that wants him to fail. Even lefties like Nobel Prize winners like Krugman  &  Stigletz as well as this blog are taking some shots at his administration. But his poll numbers remain high and USA Today headlines Obama’s trip to Europe as a “Success”

Military Budget

Today’s the day the Pentagon budget gets announced.

Lots of us hoped our paranoid country that spends what the entire rest of the world does on weapons would cut back just a wee bit this year. But alas our 3% of the population has to be armed and ready to fight the rest of the world. You thought only the NY Yankees were the Evil Empire, but to fearful Americans the rest of the world is still the Evil Empire. Well, Obama is giving the Pentagon less than they asked for, but more than last year. Another record budget story

The Two Cows

photo from Clusterstock

John Carney  has some easy to understand, humorous ways to comprehend, both the Mark to Market and AIG using two cows. You can spend hours reading different editorials, like me, and still have a zillion questions, or simply skim his two, two cow stories. 

101 Years

Finally – Spring is in the air and that means the professional game of baseball that started in 1870 will be filling dozens of stadiums with thousands of excited fans. The dreaded evil empire, the New York Yankees, will once again take on the forces of good – the beloved Boston Red Sox.

The major Major league baseball story is about the team that will field nine players as they have for the last 101 years without winning a world series – The Chicago Cubs.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Four Bad Bear Markets – Understanding long term bear markets is critical and the following two charts will give you a relative idea what a bear market looks like.  The G 20 – rhetoric and results.  Israel – right wing takes control and spurns Obama/Clinton peace process. Stimulus & Budget. Employment #’s. Why the current rally may continue – “Rotation” and volume.

Click on either chart to see bigger chart. Charts from dshort.com

Four Bad Bears

These charts graphically put in perspective where we are relative to 3 other major bear markets starting with the Dow from 1929 to 1932  The first chart is over 34 months and the second is over 10 years.  The second includes the often never mentioned 9 year long NASDQ bear market.

You can draw you own conclusions, but notice how far we’ve fallen and how close we are to the Dow 1929 to 1932 crash. Each bear market is different, and we are fundamentally moving a lot quicker than they did in 1929 to fix the problem.

G – 20

The rookie, Barak Obama, didn’t hit a home run but he certainly was a hit. He translated his world wide star power into results from refereeing a France/China verbal spat to getting a trillion for emerging markets. You can read the NYT editorial  the G 20 here More came out of G 20 than almost everyone expected. Obama message – “the world is in this together” – resounded.

This AM (EST) Obama is speaking to an packed audience in France and tying the failure of a mortgage in Florida to the failure of a bank in Iceland.

Israel

My closest Israeli friend absolutely hates the newly elected Netanyahu government. It’s like giving American neocons complete control of Israel. Netanyahu has already told the Obama  “Stop Iran or I Will.” 

Netanyahu picked an extremist as his foreign minister – a former Moldovan night club bouncer named Avigdor Lieberman, who like Iran’s Ahmadinejad has made some outrageous threat. He immediately  “spurned” the peace process started by Bush and supported by Obama/Clinton.

Stimulus & Budget

Although many Republican’s voted against Obama’s stimulus plan the last Republican (South Carolina) holdout governor caved in and will accept the stimulus for his state to keep teachers in the schools and cops on the street.

House and Senate have passed basically the Obama budget.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

The ongoing war over the “Shadow Banking” System –  the major battles – whose winning - the sides -. Is London Burning? – The G 20 meeting – winners and losers – The Critic. Economic tends for the future – more regulations, delevering, & degloblization.

Photo of riots in London over G 20 meeting from the Atlantic

Shadow Banks

Definition – Over a decade ago Shadow Banks were formed when the US congress began to strip regulations from the financial system. Huge “to big to fail” institutions (from AIG to GE) were created and allowed to hide their over leveraged assets. This created false wealth and 100′s of billions for those crooks who ran the scam. It brought the entire world to the precipice of economic meltdown.

The Battle – Shadow Institutions are winning (so far)

• Trillions of taxpayer dollars and printed money are being given prop up shadow banks
• Programs designed to have taxpayers bailout banks (See nobel prize winner Joe Stiglet’s in NYT editorial
• Accounting rules (Mark to Market) are being changed to allow less transparency
• almost nothing outside of political jaw boning has been done to break up  ”to big to fail” shadow institution

The Sides - These sometimes fluctuate  and politicians know how to hide their true colors, but basically a partial list looks like

• Defenders of shadow banks – The Bush administration, the Obama administration, Wall Street and the shadow institutions. 
• Opponents – unlikely and less powerful group- Most notable Paul Krugman, France Pres. Sarkozy, Alan Greenspan, Joe Stiglets, Lindsey Graham (R senator), some other major Republicans and Democrats & American taxpayer who is going to pay.

Is London Burning?

One photo says a thousand words (see above). No matter how right you think your position is – is it right to break into institutions, hold CEO’s hostage, cause the death of an innocent bystander, destroy property, attack your employer when the business folds, write letters to the families of workers for banks threatening their kids?

Both the media far left and far right are pouring oil on this fire. The lefties in London are hurting their own cause. See comments made by “The Critic” on right hand side of blog.

One big positive coming out of G 20 is greatly increased funding for IMF (International Money Fund). MIT’s  Simon Johnson has an editorial on this and credits Obama.

Long Term Trends

Future trends depend on if or how much major Shadow Institutions are able hide their toxic assets and keep their to big to fail  size.  The following trends (good or bad) seem to be gaining at least a foothold.

• The desire for more regulations to prevent bubbles.
• “Delevering” – Over leverage risk will get reduced as everyone saves more
• “Deglobalization” – Nationalization, protectionism, will grow as countries turn from greed to survival

Very interesting editorial on this by PIMCO (bond giant) Bill Gross and its negative long term future for stocks

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Government rejects GM/Chrysler bailout plan. The G 20 meets. Asking the wrong questions – What’s wrong with our prisons/justice system? The real question - What’s wrong with the USA? The “Quiet Coup’s”  ominous forecast referenced in Sunday’s blog deserves further consideration. One solution that prevented/delayed the downfall of the Roman Empire.

Rejecting Autos & G 20

(see  fundamental section below)

What’s Wrong with the USA?

Parade (the Sunday news magazine/supplement in many newspapers) headlined What’s Wrong with Our Prisons? Investors411 asked what’s wrong with our Justice System Friday?

Yes our justice system is a “national disgrace” (Sen. Jim Webb)   Our rate of imprisonment is “5 times the world’s average… Either we are the most evil people on the earth or we are doing something very wrong.”  (headline from front page of  Parade) The real question is what wrong or what’s happened to America’s culture? Webb has some good ideas, but the roots of this problem go well beyond the justice system. 

• Why are we so violent, 
• Why are we so fearful?
• Why are we so focused on me instead of we?  
• Why do we focus on retaliation instead of mediation?
• Why is mob mentality growing and individual accoutability vanishing?

I’m sure you could add to this list. 

The Quiet Coup

Here’s the conclusion of the MIT professor Simon Johnson’s editorial

What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

How a Roman General Beat the Terrorists.

Pompey in 67 BC beat the terrorist pirates who threatened to destroy Rome. Here’s how

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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.

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News

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Nationalization

It’s here. The concept of nationalization has come out of the closet and now even Bernanke and Greenspan are using the term.  Worries over nationalization have caused a meltdown in stocks, but it seems to be better choice than the systemic chaos of bankruptcies or the taxpayers continuing to to be the major shovel throwing money at the problem.

Now the big boys  Bernanke and Greenspan are  using the N word. At Investors411 (see archives) you watched this significant trend develop from a whisper to a market mover that will significantly change our governments response to the financial crisis.

Learning lessons from India

India has been terrorized by multiple terrorist attacks that have originated from inside Pakistan. Yet they have not gone to war with them unlike the Bush administration who went to war with a country that had nothing to do with WMD’s or 911. The significant Muslim population of India has rejected the Mumbai terrorists. For more see Tom Friedman’s editorial – No Way, No How, Not Here.

Helping Mortgage Holders

Finally a plan to keep the rate of foreclosures from growing. All he Paulson TARP plan did was shovel money at banks. Obama has announced a plan to help possibly 9 million threatened homeowners.  The ripple effect of not helping would bring down a lot more financial institutions and further devalue home across America. Many comments on this are like those on the stimulus plan – while significant it is not enough – NYT editorial

Israel Elections

The vast majority of elections analysts see the right wing gaining power in Israel. To most Israeli’s and Americans the war against Hamas had a far better outcome than the war against Hezbollah. Of course there are many worldwide angered by both wars. While the centrists  did barely win the most seats in Israel’s parliament the  divided right wing parties picked up a substantial majority. 

Bottom Line – The peace process has become a whole lot harder

Stanford, Another Madoff

Another this time smaller $8 billion dollar Ponzi scheme has come to light.  Seems investors thought nothing of  investing in 10% to 14% yielding CD’s controlled by the Stanford Group. Mr S is on the lamb.  

Bottom Line - Once again the understaffed, incompetent SEC is caught with its pants down. When all you had under Bush (really since Reagan) was cut cut cut government and don’t you dare dare dare regulate free markets – Stanford/Madoff and an over leveraged financial catastrophy is the result.

Stocks

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Short Term Outlook

Major US markets took a breather yesterday. Foreign markets have rebounded somewhat overnight. CNBC, the most popular financial channel (they are right wing cheer leaders corporations) has a decent morning compilation of how markets are setting up for the day.

Momentum is still with the bears.

Long Term Outlook = Bears Rule

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See STRATEGY POSITIONS & ARCHIVES sections of blog for more

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!