Jon Stewart

Amerigasm

On Monday night we had the CNN/Tea Party sponsored Republican Debate. “A truly remarkable pairing, as a fringe often derided incopetent bunch of yahoos was granted legitimacy by pairing with the TEA Party.”

How totally incompetent was CNN.? How horribly low and devolved into spectacle has news become? Watch the Jon Stewart video Their debate rivaled The World Wrestling Federation in hype and spectacle.

Our mainstream news media as devolved into a very laughable parody.

Einstein

Relativity

Obama’s Job Program

This week many of you made some excellent comment on Obama’s job program.

• Content credible
• He proposed how to pay for it – again credible with more to come next week on cuts to entire budget.
• It’s political – Obama  intends to run on this.
• Republicans have no plan or ones that include cutting taxes on big business/wealthy, and no specifics on deficit reduction.

Relativity – We have a patient whose dying and Obama’s job plan does offer  the patient  a pint(s) of blood. But the problem is that the wound is open and bleeding.

We have a dysfunctional shadow gambling/financial system that need regulating and regulators. This shadow system is now impacting Europe. Major US companies continue to bleed US jobs overseas.  Until the wound is stitched and closed the prognosis – negative.

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Investors411 Technical Forecasting Tools.

• Investors411 uses the PCR to measure the path of least resistance for HFT dominated stock market. HFT’s love leverage and if there are more puts then calls, there is simply a supply glut on one side that forces a move to the other. See above.

The McClellan Oscillator

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Reading The Tea Leaves

Short Term Outlook

days, week+

• Our forecasting tool are  Bearish/Neutral (see above) - You rather enter oversold markets and exit overbought markets. Advantage to Bears.

• If the PCR was below 0.80, the Bulls would rule. (See Current Positions below for more)

• We do have a technical series of higher highs and higher lows build on major indexes.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

• Tea Leaves – Any @200 point Dow rally should bring the MO to or above +80.  Ideally we like a lower PCR. However, this (a potential +200 point Dow rally today) could be a risk on trade to nibble at - GO SHORT – Use a leveraged ETF like SDS or TZA or sell some long positions.

• Monday was a risk on to go long. It worked.

• If @+200 Dow points today – HTF will have pump this market higher and some technical levels will have fallen (higher highs). Institutions will get excited and buy, then HFT’s will dump it. CAUTION – This is contrarian advice. Most analysts will see  a +200 point move on the Dow as bullish. Longer term it technically is.

• Risk on = For those that can tolerate the risk you have a fair trading opportunity – GOING SHORT in this case -. It could be better, even much better, but the tea leaves put the odds in your favor

• If Investor411 goes short or buys GLD you will see it first in the comments section of the blog.

Positions

NLY - Annaly Capital Mgt. Ultra high dividend stock –a @14% dividend

GLD – (Long Gold ETF) Bought at 167.05 - Sold 1/2 for 8% gain. GLD closed at 174.40. Gold is contrarian to stocks and More willing to buy tan sell right now into a stock rally.

Disclaimer - I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

NEUTRAL*

*Investors411 has 5 different long term 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

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

“A National Disgrace “- The American Justice System. South Park – Bailout video. Update on Iraq. A Berlin wall separating 39 million Hispanics from 135 million Mexicans. Pat Buchanan solution to the drug problem. The rising Red River. Over bought stocks market’s short term outlook 

Lady Justice by Rodringo Duran

“A National Disgrace” US Justice System

Senator Jim Webb (D VA) words at the introduction of the 2009 National Criminal Justice Act. Webb - With 5% of the world’s population, our country now houses 25% of the world’s reported prisoners. That’s just his opening in a laundry list of problems

Of course you’re wondering if any of the criminals who run the Shadow Banking System and robbed Americans of trillions will ever see the inside of a prison.  We, by far, run the largest police state of any civilized democracy, but if you’re wealthy shadow banker?

South Park – Bailout

 A 30 second You Tube video

Iraq’s Civil war

American corporate media has ignored the fact that the Shia have almost wiped out the Sunni’s in a bloody civil war that is still simmering. Baghdad once a majority Sunni city has now less than 15% Sunni according to Juan Cole’s Informed Comment blog. The latest on the Iranian backed Shia’s that control a fearful and divided Iraq/Baghdad – AP story

Mexico

Far more relevant than Shia dominating Sunni’s in Iraq to the US will be the 39 million Hispanics in the USA we are trying to separate from the 135 million Mexican’s by a wall. We will have to turn into what communist East Germany was when they erected the Berlin Wall to make this work or find a different solution.

Hillary Clinton is leading a diplomatic effort to Mexico that will culminate with an Obama visit. ” Clinton – “The U.S. shares responsibility for its neighbor’s drug violence. Now we must be just as smart about our ‘help.’” More from LA Times on Clinton and the Mexico Message

Hillary, is winning kudos as Secretary of State,

Solution to the Drug problem

Conservative/Libiterian Pat Buchanan often offers a choice in solving the “weed” problem.

•  Do what chairman Mao did and kill all the dealers and users
• Legalize it like cigarettes & alcohol, then tax it.

Legalizing pot would take a whole lot of business away from the violent Mexican cartels that operate in 230 American communities and account the 1200% increase in drug offenders in the USA since 1980. (stat source Jim Webb, point of view – mine)

The Red River

Just turn on the weather channel. The Red River in Fargo/Moorhead is cresting above 40 ft. (new record) in 6 below zero temperatures this AM. Best wishes to several bloggers and a grandson & granddaughter who live a few hundred yards from this river.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

THE BIG TAKEOVER- “The global economic crisis isn’t about money, its about power. How Wall Street insiders are using the bailout to stage a revolution.” The growing tent cities across America – a slide show.  Also an overview or reading the tea leaves of the US economy and the stock market – a longer term view. 

(photo from Rolling Stone)

The Big Takeover

Matt Taibbi piece in the Rolling Stone is a must read for anyone who wants to understand why your lives will change dramatically over the next decade. 

First you have to check out the comments by Robert Sadinsky on the right hand side of the blog. In passionate colorful terms he offers in a much shorter vision/comments on Taibbi’s Big Takeover.

(NYT photo)

Tent Cities of California

As the unemployment rate keeps growing, tent cities are spring up around the country. The NYT has a slide show of this growing problem in hard hit California.  

Even supposedly healthy tech giant IBM is accelerating laying offs - another 5,000 people.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Below is your very own collection of photos of the men who have privatized the profits and socialized the risk.  The Masters of the Universe who have rescued the dishonest and  greedy banks, kept the financial system afloat,  and created an explosive rally on Wall Street by moving in the shadows and stripping away financial transparency. Of course that’s just how they helped create the financial meltdown in the first place.

The Masters of the Universe

(above photos – Tim Geithner, Larry Summers, Hank Paulson)

“To the Moon Alice”

was Ralph Kramdon’s (John Herbert “Jackie” Gleason Jr.) famous line.  That’s just where the stock market is now going. See technicals and fundamentals below.

Masters of the Universe

was , of course, was the term author Tom Wolfe used in to describe all  the greed, arrogance, and shadow deals that personified Wall Street in the 1980′s. Since Obama’s took office his boys (Summer’s & Geithner), like Paulson before them, have become the personification of Wolf’s term.

Nobel Prize winner Paul Krugman  in an editorial entitled “Zombie Financial Ideas” states “ Every plan we’ve heard from Treasury amounts to the same thing — an attempt to socialize the losses while privatizing the gains.”

Arianna Huffington In her editorial pleads with Obama to take the “steering wheel out  of Geithner’s hands.”  She chronicles the war within the Obama administration between Axelrod and Geithner/Summers over AIG, Wall Street bonuses and just who is going to pay to fix the worldwide financial problem. Right now the fixer sure looks like YOU (the taxpayer) your children and your chldren’s children. 

John Bogel (legendary founder of Vanguard) - This AM on CNBC – The solution gets the government back in the shadow banking business

The solution, brings the world’s financial system back from the brink and ignites a Wall Street rally lead by the financials that scammed the world.  Probably later rather than sooner ordinary folks are going to realize how big the bill will be. 

A whole lot more on this later and since we’re all in this together you can lead the conversation by  submitting YOUR editorial/comments at the bottom of the blog.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!