Investors 411 Blog

What’s Up - Pakistan  - Are we making the same mistakes? ; Israel/Palastine - an ineviable war and a path not taken; Polls and Avaaza; Markets continue low volume & low volatility. Stocks held onto Monday’s gains; Volume and volatility continue to fall. Bulls with the football

Refugees (Photo LA Times)

Pakistan

Are we going to learn from the mistakes of the past? Right now the Pakistan government is fighting the Taliban in certain areas of Pakistan. This has created a refugee problem of  almost a million people. 

One report shows the same old counter productive results. Each day the Pakistan military announces the # of Taliban killed. Each day in the massive refugee camps full of people fleeing the violence, Taliban allies offer food and help to those whose lives have been shattered. Add to this often unmanned Ameirican planes blast the Taliban and there is significant civilian collateral damage.

There are some signs that things will be different. For now the Pakistani clerics are supporting the government denouncing the Taliban tactics. Also, Hillary Clinton has asked for $110 in humanitarian aid. Perhaps this time the focus will be more on winning over the hearts and minds of the people instead of focusing on body counts. Only time will tell.

Netanyahu  (Photo Google images)

Israel/Palestine

This is a minefield whenever its brought up.  So let’s take Obama’s Notre Dame advice and look for some common ground. A recently conducted poll of Palestinians and Israeli contained the following results.

• 70% of the Palestinians and 65% if the Israeli’s wanted Obama involved in the peace process.
• 59% of the Israeli’s think Obama is trustworthy  vs. 31% think Bibi Netanyahu (Israel’s PM) is trustworthy 

The Bottom Line here is the USA/Obama should get more involved in the peace process. If this situation is allowed to fester another war is inevitable, perhaps within a year.

 Avaaza (Voice) is a multi national group of 3 million members that is trying to get Obama more involved in the peace process. Check  out Avaaza.org. and their add.  Another way, if Avaaza is not your cup of tea, is obviously to directly contact Obama and let him know how you feel.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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Technicals & Fundamentals

Markets basically went nowhere and Volume remained light.

In one sense this is bullish – we held onto Monday’s big gains. However, volume has been weak and well below average for the last 4 trading sessions.  Since volume is the chief confirmation factor of a price move, we simply have no confirmation of the price move.

XLF - The ETF that tracks financials (mostly shadow banks ) moved lower yesterday -2.03 in light, but increased volume. The chart (see side of blog) shows light volume for the last 7 days. The XLF has entered a rangebound pattern between 11+ and 13+. Yesterday’s close was 12.04. The downside volume has been greater than the upside volume. This gives a little of the mojo to the bears.  A breakout from this range (@11+ to @13+) will determine the overall markets next move.

Market’s Major Mantra - Again – “If Shadow Banks go up – so will stocks. If Shadow banks go down so will stocks” 

WTIC - Oil prices closed at $60.10. Up +0.86%. Prices had established a range between $54 and $60. We are sitting directly at a major resistance level for oil.  

HIgher oil prices have two sides. Higher prices for oil usually means investors think the economic picture is getting better. Higher oil prices means everyone pays more for gasoline.

BDI - The Baltic Dry Index that measures world trade  broke through resistance last week and is at a new 6 month high. The BDI broke through a major resistance early last week and rose another +1.5% yesterday. Repeat - World trade is critical, because if protectionism/nationalism between countries grows over trade the recovery is doomed. Very Bullish indicator for world economics and stocks

Reading this weeks tea leaves - Our primary forecasting tool – Volume – is not clear, so let’s use our secondary indicators -  

Markets moved higher on good news (India) and the BDI give us a short term bullish bias.  Resistance level of 13.08 on XFL is the breakout area to watch. Any move above this is very positive for bulls. Another important breakout level is 930 on the benchmark S&P 500. Right now the bulls have the football.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING !

Pakistan the epicenter of terrorism – Wins one for Democracy.  Are stocks on a bull run or a dead cat bounce?; AIG – Follow the money.  Are We All Socialists Now? The financial channel ducks and covers. An uplifting  comment/story by Stewart E. – about hanging together in tough economic times.

Pakistan Wins One for Democracy

The lawyers and opposition leaders “Long March” to have the Supreme Court Chief who was ousted under the former dictator seems to have won a major victory. It was bloody, but the  government caved in as police/army refused to keep beating the demonstrators and Mr Chaundhry (former chief justice) was reinstated. For more see NYT or Times of India

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AIG – Follow The Money

We’ve shoveled $180 billion into AIG to keep he worlds entire financial system from going under. Yet we still can’t find out exactly where the money has gone. No one talked – For five months everyone’s lips have been wired shut. – the company, the Bush administration, the Obama administration  & the Fed. See NYT Saturday editorial

The icing on this toxic cake is the crooks at AIG are being given $165 million dollar bonuses (a “contractual obligation”) including the small division that traded credit default swaps and sunk the company. More from Financial Post

AIG caved yesterday to all the pressure and listed most of the companies who it owed $ to. Hint – the trading of toxic, over leveraged debt with these other mega crooks. Opps, my mistake they are called financial companies. Check out the list or crooks here 

They haven’t caved on the bonuses yet.

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CNBC Ducks and Covers 

After heavily promoting the Jon Stewart/Jim Cramer smackdown. Not a word could be found about it  on CNBC financial channels or blog. Further indication of just how badly Cramer did and how mad  common folks are at the”Fast Money” financial news network. Here’s the LINK to the original Stewart shot across the bow. 

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Are we All Socialist’s Now?

Over the last 4 decades the far right has hammered Americans with how poor our government does thing vs. the wonders unregulated capitalism.

The answer to them is take a look at the socialist systems of public eduction, police departments, fire departments post offices, and libraries. Do you really think AIG, GM Citigroup, Merrill Lynch and Lehman Brothers would have done a better job?

What would have happened if Social Security had been tied to the stock market?

We’re not socialists, but Americans are waking up to the fact that unregulated capitalism is a huge rip off, and government is the only institution strong enough to regulate it.

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Solutions

In the comments section (on right side of blog) you’ll find a comment and a story  submitted by Stewart E. who notes “we are all in this together” The story about Beth Israel hospital and how they are handling the recession. It’s author or a “A Head with a Heart.” is Boston Globe columnist Kevin Cullin

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AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING