Investors 411 Blog

Whose Buying Democracy?

The Million Dollar

Super Pac Club

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At some point in time $1,000,000 or even the Adelson’s (now) S11,,000,000 million will seem like chump change to give to a Super Pack.

By then our democracy will be like Russia’s oligarchy or  the one Party state of China.

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The Oligarchs contributing to Super PAC’s

Romney’s $1,000,000 Super Pac Club

• Steven Lund - Formed a company just to contribute then company vanishes.

• Edward Corner – VP Bain – Had to be outed.

• Jeremy Blickenstaff – Lund’s Son in Law

• Julian Robertson – Hedge Fund Owner/Manager

• Paul Singer – Hedge Fund Owner/Manager

• Robert Mercer – Hedge Fund Owner/Manager

• John Paulson – Hedge Find Owner/Manager

Every one for these individuals, because they are associated with/runs a venture capitalist or hedge fund pay the same tax Romney did for all his years at Bain

15% or less – You suckers pay more.

How many Swiss and Caymen Island Bank account’s here?

Obama – $2,000,000 Super Pac Club

• Jeffery Katzenberg - Dreamworks

What’s missing ?

and More Important

(I’m just one person up against a deadline)

• Bundlers for Unions and Companies that amass millions

• The massive Pack of donors who give more than legal $2,500 to a campaign, but less than a $1,000,000

• The donors who give to both sides

• The oligarchs who are smart enough to wait till the last quarter to give so that their names won’t be made public till after the election.

The Bottom Line

Below

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STOCKS

• Repeat – Long term - As long as interest rates stay low, and there is liquidity without inflation – investment money seeking higher returns will be forced into stocks and bonds. This dynamic has not changed under Bernanke/Obama even though other significant sectors of the world have taken some big hits (Europe & Japan) or are slowly pulling back – China.

The POSITIONS page does not yet reflect the 2012 Outlook.

• The MO can be read like any chart (see  above link) This is the 6th time in 6 weeks the MO has approached +60. It failed the other 5 times. That’s one very very strong resistance level.

• 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.

• Combination Option Trades – Congratulations to two of you who made $ on an AMZN combination options trade.  Not a lot, but a 10 to 25% profit. NFLX , we all made out on this one last quarter, reported last night. The option prices were too high to risk this trade, but it sure looks like it may have worked again.

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Buying Democracy

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How money

Wins Campaigns and  Destroys Democracy

Part 2

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What if Sheldon Adelson (8th richest man in USA and pictured above) decides to give Newt Gingrich’s Super Pac more than the $10,000,000 he already has? After all $10 million is not even close to one day’s profits from his giant gambling empire.

What if Adelson gives $100,000 million?

What if a Saudi Prince through an American corporation he own/controls/influences  decides to give a $100,000 million?

What if George Soros (7th richest in the USA) decides to give Obama $100,000 million?

Just because Adelson’s chosen to be open about his contribution, doesn’t mean the others have to be open about their contribution.

Money sure helps win elections. (There are some other infuencing factors)

• Gingrich & Romney spend the same amount of  money in S. Carolina and Gingrich wins.

• Romney spends the 5 times what Gingrich does in Florida and Romney wins

Where is the Outrage in the media?

There is almost none.

Why?

Because both Democrats and Republicans are out getting all  wealthy oligarch Super Pac money they can.

Its all legal.

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Here’s a photo of one leader who has consolidated power in a supposed democracy with the help of his own wealthy oligarchy. Now, Even billionaires who opposed him are in Siberian jails.

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Russia’s Vladimire Putin with a former friend

Think this will never happen in the USA?

Did you ever think there would be a legal $10,000,000 campaign contribution to influence a presidential campaign by a Vegas casino owner in the USA and no one cares?

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STOCKS

• Fundaments- These are the drivers of stocks –  The earnings reports, the jobs number, GDP, money supply and a host of other significant factors.

• Fundaments are the drivers and the car that move along the road. One good or bad earning report can shatter any sign or light on the technical road.

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• Repeat from Friday – “The MO can be read like any chart (see  above link) – Three times in January the MO has tried to break out above the 55 to 60 range and failed. Yet is has stayed in a very tight range between 30 and 60. If this range/trend breaks  on the top side bulls win and on the bottom bears win. The fact that the trend is from + 30 to + 60 instead of minus is BULLISH

• DAX (Germany)  down 1.2%  at 9AM EST. Not good for US markets. Big European Meeting this week. But they are all big meetings. Just lie all 19 Republican debates – each is hyped and hyped

• Link to the market events of the week here and Seeing Alpha’s homepage

• Two more considerations for Option combinations. BIDU (Monday earnings) A short term trade.MCP as a possible long option term combination trade.

• Reading Tea Leaves – It seems the majority of market tea leaf readers I look at are predicting some kind of pull back this week – It would be healthy if markets had a minor consolidation. Earnings season is winding down so outside economic news will start to dominate.

• The Key to Watch for – Any signs of Central Banks manipulating stocks or bonds. Rumors of a QE #3 abound. (google – news QE 3)

Brutal, Just, Brutal

Gingrich Super Pac new 7 minute movie on

Romney and Medicare

Came out at 1:00AM EST

Click on word FRAUD above to see it

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What’s even worse for Romney is Gingrich , catches Romney in a “blatant lie” in the Tampa debate about 6 Minutes and 30 seconds into the film.

Gingrich “Did Bain have any work with the government such as Medicare and Medicaid.” Romney “We didn’t do any work with the government.”

Documentation for Film at

“MittsBloodMoney.com“

That’s Gingrich’s Super Pac title NOT mine

Be Afraid, be very afraid because Super Pac adds  by  members of a corrupt oligarchy and permitted by the 5 right wing Supreme Court Justices who gutted campaign finance reform by voting to allow this are buying our democracy.

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SOTU

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George “Been Forgotten” Bush went over the top with his “your either with us or against us” proclamation.  A line he later regretted.

Remember, those of us who opposed the Iraq war were hated as un American and not Patriotic. Emotions ran high because of the terrible 911 tragedy, but now some healing  has occurred over a war that was a tragic mistake.

The heart of Obama’s speech

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We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right.

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Why are Romney’s Poll numbers Dropping?

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Romney provides the contrast to Obama SOTU and makes Bush’s “you’re either with us or against us”  milquetoast.

The following 20 second video is a perfect example of raging extremism. The kind of shouted hatred that twists the minds of so many of our fellow Americans into blind fear mongered emotionalist.  Romney -

“I’m going to Stuff it Down Obama’s Throat”

Click on photo for 20 second video

As far as timing goes Obama caught a huge break that his SOTU address came directly after Romney released just his 2012 tax returns (13.9% tax rate) that have opened a massive amount of new questions. (future editorials)

More on SOTU here and NYT here

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STOCKS

• From Last week – “We are in a low volume rally” In Paul’s Corner he points out the decrease in volume over the last five days. There have been lots of technicians who are calling for a pull back here. I tend to see 1350 1370 as the target on the S&P 500 before a significant retreat. (S&P now at 1314)

• 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.

• DAX (Germany) down this AM 0.67% at 7:00 AM EST. Italian bond’s two week long yield fall puts it well out of the 7% danger zone. But yields rose yesterday and this AM to  +6.23%. The Spanish and Italian bond reversal shows some economic stability returning to two of Europe’s largest economies and is bullish

• NFLX reports earnings after the bell. Watch comments section for details on possible combination Option Trade.

• Our government is simply overwhelmed by corporate lobbyist and money. For more Robert Reich

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“The Most Brutal Campaign Video

Evah”

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• Italy stabilizing at 6.5% (good news) vs JMP’s disappointment balance each other. Every time the market has dropped over last couple weeks, buyers have appeared.

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Warren, Roosevelt and

Obama

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Osawatomie Kansas is where Republican President Teddy Roosevelt made his big speech on income inequality – A New Nationalism –  101 years ago. Elizabeth Warren has echoed those words in a 2 minute video - The Debt Crisis and Fair Taxation.

Yesterday at Osawatomie Obama finally joined the chorus.

You can see the “best speech of his presidency” video and text at The New Civil Rights Movement. NYT lead editorial HERE.  Huffingtpost HERE From the later some observations and quotes -

Obama presented himself as the one fighting for shared sacrifice and success against those who would gut government and let people fend for themselves. He did so knowing the nation is riven over the question of whether economic opportunity for all is evaporating -

“Throughout the country, it’s sparked protests and political movements, from the tea party to the people who’ve been occupying the streets of New York and other cities,” Obama said.

“This is the defining issue of our time,” he said in echoing President Theodore Roosevelt’s famous speech here in 1910.

“This is a make-​or-​break moment for the middle class and all those who are fighting to get into the middle class,” Obama said. “At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement.”

Obama drew a sharp contrast between his “New Nationalism” and Mitt Romney & Republicans who believe “business unfettered will easily bring back Jobs and prosperity.”(NYT quote)

Rick Scott

People in Florida have learned their lesson of what happens when you put a right wing, unfettered, free market, businessman in the Governors office. In just three short years his poll numbers have dropped to the lowest in Florida history 26%.

It took him long enough but

Obama is finally talking the talk

Can he walk the walk?

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STOCKS

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Strong correlation between Europe and US stock opening price

Photo of Lake in Iran

War In Iran?

Is the US already in an undeclared war in Iran?

• Latest – US drone downed in Iran

• Stuxnet/Conflicker worm computer virus attacks Iran nuclear facilities.

• Assassination (bombing) kills top Iranian nuclear scientists

• Other assassination attempts?

• Plot to kill Saudi ambassador in US linked to Iran

Investors411 has reported in the past that Obama is 10 times more likely to use drones in targeted assassinations than Bush.

This sure looks at least like a cold war. Will it get hot? Betting odds from Intrade on an overt US and/or Israel air strike on Iran by June 2012 = 30%

Payroll Tax Cut

Obama makes case for extending Payroll tax cuts for middle class Americans. Most Republicans oppose this. Romney, of course is flip flopping. Taxes would increase by @ $1000 for most middle class families. LINK to story

Presidential Poll Numbers

Most folks realize Newt Gingrich is up in the polls for Republican Presidential nomination. Voting starts in a month. In the first four voting states Romney is moving in the opposite direction. LINK to story. – Poll compilation.

Newt’s rise has been too meteoric, but this is also a significant sign that Romney may be in trouble.

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STOCKS

The Reality

At the end of the year more conservative fund managers (mutual, hedge 401k managers) have to INVEST their money or explain to INVESTORS why their $$$ are earning next to nothing in a money market account.

For the last four+ months worldwide equities have been in turmoil. These conservative fund mangers hate high risk often measured by the VIX (see chart) As you can see the VIX has basically been above 30 for 4 months and recently dropped below.

The below 3o is kind of an all clear signal, and these conservative investors are sitting on 4 months worth of money.

Therefore – There’s a strong possibility we’ll see Santa Clause.

Of course, some strong fundamental factor can  disable Santa’s sleigh.

Yesterday Standard and Poors (a major rating agency) did put most of Europe on “negative credit watch” for a downgrade. Not enough to stop Santa but  a series of events like this my put the sleigh out of commission.

Strong correlation between Europe and US stock opening price

Europe

• The Bears Case - Europe (the world’s largest economic block) has a huge fiscal crisis with no apparent solution.

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• Technically APPL’s chart is much better than AMZN. The later in free fall.

• Exit strategy – Exit 1/2 the trade with  5+% gain. Let the rest ride.

More in comments section or tomorrow’s blog.

A Photo Essay

Pepper Spray

84 Year Old OWS Protestor Dorli Rainey

From Seattle Pi

“Icon” Portland Oregon OWS Photo

Students at UC Berkley OWS from Aggie TV

You Tube – Short Video & Long Video

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Criminal Prosecutions of

Financial Institutions

Et Tu Barack Obama

The above inspired by:

• OWS “Banks got Bailed Out, We Got Sold Out” Chant
• A Deal That Wouldn’t Sting NYT Gretchen Morgenson
• How To Prevent A Housing Recovery Seeking Alpha’s Bruce Judson
• 6,000,000 foreclosures since 2007 and another 4,000,000 in the works MSNBC
• Why Isn’t Wall Street in Jail? Rolling Stone’s Matt Taibbi
• Some on the left who believe only right wing politicians are in bed with shadow “banksta’s”
• Mostly because from college students to 84 year olds – there are those willing to sacrifice and fight for what they believe in.

Who are the 99%

See more of the 99% at

http://wearethe99percent.tumblr.com/

Pass on this or your favorite photo

Tom Friedman’s editorial in the Sunday NYT has an excellent article on the crony, casino capitalism we are fighting against.

Some major points –

• An under reported Citigroup Fraud “that made GS “look like boy scouts” – No one gets arrested while thousand of Occupy Wall St. protestors do.

• A comparison to Taharir Square in Egypt’s quest for justice where the “game had been rigged by the Mubarak family and its crony capitalists.”

• “Capitalism and free markets are the best engines for generating growth and relieving poverty — provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade. If we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis.”

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Euro Zone Doubts

Lots of news outlets over the weekend cast doubts over last weeks  Euro Bailout. Here’s one from NPR’s Jim Zarroli .

But the best (easiest to understand)  is this two minute animated explanation featured in the Guardian.

Click on animation photo for link to video

The impact of these editorials on stocks covered below.

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Raising Cain

Huffington Post headline this AM is about “flavor of the month” (leader through October) Herman Cain having accusations of “sexual harassment” If there is any validity to these charges Cain is toast.

Candidate Rick Perry, last quarter in financially out raised Cain 6 to 1 and even beat Romney.  Money buys elections and flavors last a month. Perry, last week picked up endorsement of Mr Flat Tax -Steve Forbes. If Perry can stop putting his foot in his mouth he would be a very strong candidate.

Mitt Romney took a spank from mega conservative columnist George Will on Romney’s flip flops

Perhaps, Obama’s biggest weakness was how would he answer the 3AM phone call?  He did with Somali Pirate’s, Bin Laden, His #3, and Ka Daffy. Do we want an indecisive flip flopper answering that 3AM call?

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STOCKS

“Deja Vu, All Over Again”???

Yankee Star Yogi Berra

On July 21 st markets rallied on the news of a Euro Bailout Plan – Greek bond holders took a 21% cut , etc. The chart of the benchmark S&P 500 shows a significant rally in above average volume on the 21st. We held onto or confirmed those gains the next day just like last week and the second major Euro bailout plan.

After a weekend investors started to doubt the rescue plan and by Aug. 8th the S&P 500 was down almost 20%.   The question is – are the current doubts strong enough to have the same impact on the investment herd? (see above links and link below)

Click on photo for link

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Reading The Tea Leaves

• Our #1 technical forecasting tool, the McCellan Oscillator, is at +77.29 . 50DMA at 22.45. Overbought = Bearish.

• Our secondary indicator, the Put Call Ratio is at 1.00. Well below its 50DMA which is at 1.15 = Bullish/Neutral

• For more on MO & PCR see POSITION Section of blog (scroll down)

• China’s growth numbers has its critics, but again its GDP was over 9% again.

• Consumer sentiment is down, but consumers are spending more in USA.  Due to top 10% (income) on buying spree and the bottom 90% very worried.

Bottom Line – Too hard to make a definitive call on this situation because the manipulators (Central Banks) & shadow banks are hidden in opaque accounting.

However , if you use some inter market technical analysis, the kind John Murphy creates, you’ll see some clear hesitation across currency, bond and commodity markets. (What all this means in tomorrows Investors411)

Same long term outlook till/if we break down below 1225 on SPX.

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Long Term Outlook

3 to 6+ months

Investors411 upgraded its Outlook last Monday to CAUTIOUSLY BULLISH. Reasoning

• Technically, we broke out of this summers trading pattern. The resistance and now support level for benchmark S&P 500 is @ 1225.
• Fundamentally, the perception that European banks will survive (see Banksta at War) another over leveraged crisis
• A 2.5% GDP Growth in the third quarter is NOT a recession number.

CAUTIOUSLY BULLISH

Investors411 has 5 different valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.