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Heroes

Part 2

Obama’s new CIA Director General

David Petraeus

Petraeus when asked – Who would be your person of the year? – answered Mohammed Brouazizi The Tunisian street vendor whose immolation sparked the Arab Spring. He also gave a nod to Steve Jobs.

What Petraeus has taught is the brute force, so beloved by the right wing and military industrial complex, doesn’t work. In Iraq progress was made when Petraeus endorsed sitting down and talking with former enemies and turning them against those who opposed US forces.

Winning the hearts and minds of an opposing side works far better than  brute force which created more terrorists.

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Jon HuntsmanJo

Jon Huntsman

John Huntsman, a true conservative, has taken some outstanding positions is his fight for the Republican nomination for President.

He believes in science – global warming (see below).

As former ambassador to China he understands foreign policy. Huntsman opposes Mitt Romney’s use of brute force and taking China in front of the world court on day 1 of your presidency. It’s  a horrible idea.  It would create a trade war that would lead to a massive recession or world wide depression.

But, by far his most outstanding attribute is Huntsman is the only candidate, including Obama, that has a clear and workable

plan to break up the too big to fail banks.

LINK to his plan

Obama’s plan leaves big shadow banks up to regulators under the weak Dodd/Frank legislation. Matt Taibbi and others have often pointed out regulators are corrupted by those they regulate as easily as congress is by lobbyist.

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Systemic Disaster

If a systemic plant wide catastrophe worries you in the slightest

DO NOT

Read this article

Continue to ignore the continuous stream of giant bursting bubbles of methane gas as they erupt into our atmosphere all across vast sections of the globe.

You can see them, smell them, die from inhaling methane gas

But do they really don’t exist?

Ignore  the science and reality that your children will have to face or read the article.

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STOCKS

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Jonas Salk’s Gift

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Yankee Bob (Conclusion from Monday’s Editorial)

It was easier in the 60′s. The End the war hippy dippy back to the earth  Counter culture became the dominant narrative.

The counterculture said to popular culture’ Hey, your institutions told me to love one another, how can you send me around the world to kill people I have no quarrel with? How can you send me to kill yellow or brown people in the name of freedom and liberty and then discriminate against people of color  at home ??? Counter culture simply held the mirror up to society’s face and cried

“Hypocrisy”.

We have to do that again! Society has to function for the greater good of many not just for the greed of a few. There is no doubt about the need for social change and social justice. There is no doubt that our political institutions are dominated by greedy corporate interests. Change will have to come from the ground up and not imposed from the top down.

We are many. The greedy are few. I hope. Can you imagine someone tomorrow announcing that they have a cure for HIV and AIDS and that they are making a gift of it to the world?? The  Talmud commands that we not shall stand idle our neighbors blood or suffering.

Our leaders like Obama are disappointing. Our Religious Institutions are too busy worrying about Gays and defending their pedophiles to be a force for social justice.

I think we have to organize from the ground up. Unions probably offer an effective vanguard for social justice. The Occupy Movement does too  in the sense that at least it is a demand for social justice.

Yankee Bob

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STOCKS

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Strong correlation between Europe and US stock opening price

• We have just started to enter moderately oversold territory (-30) We hit @-140 in early Aug & @-105 in late Nov.

• Therefore,  there is a ways to go ( -36 to -105 = 69 points) before  we get any kind of solid reversal area.

So not expecting any technical help in the short term. Any reversal is going to have to come from some major change in fundamentals.

Reagonomics/Democracy

Paul Craig Roberts is one of the founders of Reaganomics and on Max Keiser’s show (video) had the following to say about the global financial crisis.

The Money Quotes -

“The west prides itself that it is the standard for the world, that it is a democracy. But nowhere do you see democratic outcomes: not in Greece, not in Ireland, not in the UK, not here, the outcomes are always to punish the innocent and reward the guilty…

There is no democracy, there are oligarchies, some of these smaller European countries are not even run by their own governments, they are run by Wall Street…

Revolution is the only answer…

We are confronted with a curious situation. Throughout the west we think we have democracy, we hold ourselves up high, we demonize China, we talk about the mafia state of Russia, we talk about the Arabs and so on, but where is the democracy here?”

Just how far to the radical right this nation has turned when the founder of Reaganomics tells us China has more democracy than the USA and calls for revolution.

Your Comments

• Too Big To Fail lived up to its promise on HBO last night with  A little too much spinning of bankers and Paulson who caused the crisis as heroes. But the postscript was most alarming. Now interconnected shadow banks are even  bigger – only 10 banks have 77% of the capital in the USA. Of course there are no serious pieces of legislation to prevent what happened from happening again – the last minute intervention to prevent the meltdown of the world’s financial system

• Yankee Bob has another editorial (Link and scroll down) The money quote – “What Bush and his gangsters did is too important to ignore. And to ignore it is to allow the precedent to stand for future use.”

• Jim J has a link to a 60 Minutes Interview of Tom Drake (use above link to read other comments on this) Popeye money quote – One big reason 911 happened and Bush never got bin Laden is because of the corruption and mismanagement of the NSA. They had a $3 million dollar program that the whistleblowers [Drake} wanted, but decided to go with a $1.2 billion program sub contracted to private industry that didn't work and had to be cancelled in 2006.

KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose SIGNIFICANTLY  AGAIN on Monday +0.68%. The Dollar bulls  are back, and momentum could carry the dollar higher and stocks lower = Bearish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to -49.17 This is almost exactly April’s low although March’s low reached -90 US stocks moderately oversold = Bullish/Neutral (trying to show a lot more bullish and just a tad neutral.

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Paul’s Corner

Paul’s Corner

Buy and Hold, Dividends, Better Stocks?

As we all know these past few months have been tough to make money trading stocks, I don’t care who you are, it’s been tough. With the stomach wrenching moves of the market of late folks have been asking for “longer term better stocks” and “dividend stocks” thinking that is what is needed so your lunch doesn’t turn into a bad meal at Taco Bell.

Last fall when Your Stock List 3 was introduced, the stocks sat still for a few weeks and then at the start of September the market took off on a wonderful bull run and YSL 3 enjoyed the ride with a very good gain. As they say “a good time was had by all“.

Several of the stocks didn’t make the ride so a few were dropped and a few new member requested stocks were added and the new list was introduced about the same time the market peaked and immediately took a 7%  correction.

Since then due to market rotation, the run and decline of the oils, the collapse of silver etc, the market and YSL 4 has essentially been flat. So is YSL dead? Is the market dead? Of course not, most of the YSL 4 charts actually looked quite good until yesterday’s sell off and the market does what it always does, it baffles one and all and will continue to do so for years to come.

So what has changed in “Your Fathers Stock Market” so we can no longer buy and hold? Be an investor rather than a trader? Well as much as I like to joke about Jim Cramer and his lousy recommendations (Say silver a few weeks back) he had a very good video last week about what  the market is now and what has changed since your dad selected his latest pick with a pencil circling a stock symbol in his favorite news paper.

LINK

So do we complain the good old days of buy and hold or over, or do we get with the program and realize paying attention, has replace complacency?

YSL 4 chart reviews will be made as necessary and added to the comments section as the week goes on so check over there from time to time.

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Too Big To Fail

Tonight at 9:00PM Andrew Ross Sorkin’s account of the 2008 financial meltdown comes to life in an HBO Movie.(Trailer) Rave reviews, All Star cast, and what looks to be a chilling account of the arrogance of Wall Street and how close we came to a meltdown.

An economics lesson from hell as entertainment.

It’s a shame that more will see the movie adaptation than read the book, but that’s our culture. You know where I’ll be at 9:00 PM.

Europe on The Brink

Each day Europe inches closer to the brink of a fiscal meltdown. There are those in Europe and the USA (Republicans) who insist on “claiming that defaulting on U.S. [or European] debt would be no big deal “— This is truly frightening.

Nobel Prize winner Paul Krugman When Austerity Fails (NYT today) goes over that and other myths that obviously haven’t worked to solve Europe’s current problems

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KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

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Dividend Stocks

If stocks get toasted or flatten, stocks with a second stream of income – a dividend – usually suffer too. It’s the dividend that makes them outperform most other categories. Earlier we covered the ultra high dividend stocks (NYL & AGNC). Today two sectors of relatively high dividend plays.

Notes –

• DailyFinance.com has a history of payouts for dividend stocks for the past 5 years. (Click on Dividends near top of column on left)
• DUK – A Utility I forgot to mention Friday, has a 5.16% dividend.
• * Indicates or someone in my family owns this stock
• Buy the dip

Tobacco

• *MO – 5.48% dividend, Simply put – people across the world are addicted to tobacco. This stock is almost always on a top 10 list of dividend stocks. Marlboro etc.. For 5 years the dividend has been flat of higher.
• RAI – 5.40% Winston etc.. Another stock that has raised dividends for 5 straight years. Lawsuits – The double standard – Tobacco companies fill government coffers with tax dollars so litigation is often curtailed.
• PM - 3.65% Not as high a dividend, but the story is this international company was spun off from MO in anticipation of US litigation against tobacco companies. Again always flat or raising dividends over last 5 years

Telecom

• *T – 5.50% This whole group benefits from all the new tech toys and apps that use their services. 5 years of steady dividend growth. AT&T
• *VZ -5.23 Another stock with a 5 year dividend growth record. Verizon
• *WIN 7.22% Smaller than the two above giants. 4 3/4 years of the same dividend. Windstream

Do your own homework on these stocks. The above is an outline. Consider protection(see above) and be conscious of overall market conditions when investing.

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

• The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose SIGNIFICANTLY Friday  +0.74% yesterday. The Dollar bulls  are back, and momentum could carry the dollar higher and stocks lower = Bearish
• McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to -20.22. Just a tad move oversold, but lots of room to run on both sides. = Neutral

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Positions

• In light of the Long Term Outlook call Friday, I sold 1/2 of REMX (Rare earth metals ETF) at basically what it was bought for.  Still have a lot of confidence in this area.  But it will take a hit if the summer is down.
• Investors411 favorite long term  favorite IMAX probably had a good weekend.  The Pirates movie opened lower than others, but close to 1/2 the revenue was 3D and IMAX charges a premium. Still have faith in this stock because of its solid fundamental story – Lots more potential 3D hits on the way this summer. Shrek opens in 3D this weekend
• As stated on Friday YOUR Stock List will be negatively impacted by the change in long term outlook.

Disclosure - I have positions in IMAX & REMX and manage a fund that has a 5+ year position in GLD

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Lots of you think of GW Bush like this but…

George Bush The Hero

Troubled Asset Relief Program (TARP) Treasury Secretary under BUSH Hank Paulson and Fed Chair Ben Bernanke sold Congress on the $700 billion insurance plan to save shadow banks. Phase 2 was carried out under OBAMA & his Treasury Secretary  Geithner

From screamers - Tea Party Patriots on the Right to Rachel Madow on the left the TARP gets bashed. Even Democrats run & hide when the TARP is brought up.

Yes it was a bait and switch by Paulson, yes it kept the shadows in business, And yes some fat cat CEO’s got fatter because of it (lots of blame to retiring Senator  Dem. Chris Dodd on the last point).

The Bottom Line – Simply a second great depression was averted. Lehman collapsed and if the other dozen or so major investment firms had fallen along with AIG, GE, GM (also add any other worldwide companies that had over leveraged positions) it would have started the dominos of panic and we’d be seeing unemployment at way over double what it is today. Imagine a dozen firms all bigger than Lehman’s going belly up and the other mega banks failing throughout the world. Add media hype. Result Great Depression #2

Story on this from Politico’s Ben Smith – TARP A Success None Dare Mention

FYI on TARP – From Wikipedia “as of April 12, 2010, is down to $89 billion, which is 42% less than the taxpayers’ cost of the Savings and loan crisis of the late 1980s.”

Postscript – 33 Hero Democrats in May of 2010 voted to break up those too big to fail shadow banks. 61 Republican & Democrat caved into the shadow financial institutions and their lobbyist.

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KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for September - ”The Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer -”BB/HFT make up 80% of trades.”

Term for the Day – High Frequency Trades - From Investopedia – “High frequency trading is an automated trading platform used by large investment banks, hedge funds and institutional investors which utilizes powerful computers to transact a large number of orders at extremely high speeds. These high frequency trading platforms allow traders to execute millions of orders and scan multiple markets and exchanges in a matter of seconds, thus giving the institutions that use the platforms a huge advantage in the open market.”

US Markets – Ended up flat in what passes now for moderate/average volume. Much less than in the past because retail investors have been exiting stock and trading is dominated by HFT’s.

Brokerages, Mutual Funds & Platforms that cater to individual or small groups of investors/traders are seeing profits diminish as retail investors continue to leave stocks.

Holding onto gains is usually a bullish sign after a major rally day. But there was a divergence in the normal relationship between the dollar and stocks that have been moving in almost 100% different directions since July. The dollar took another big hit and stocks instead of moving higher were flat. (more below)

Gold like Silver last week broke out to new highs. Mea Culpa – Investors411 talked many times about buying GLD on dips but never did.

Significant Indexes

• The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar, fell ANOTHER HUGE -1.01% yesterday.  Dollar at 81.08 and has a another major support level at just below $80. For stocks =Bullish
• The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell a  -1.21% yesterday.  The BDI does not have the immediate impact that the MO or Dollar does. Two relatively minor down days in a row. Right now longer term chart pattern still = Bullish
• McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to +45.56 yesterday. Back to = NEUTRAL

Reading Tea Leaves

We may have missed at least a short term selling or shorting opportunity. We had the MO at +61 & the Dow climbed another +60 points in to the the AM. (just short of the +100 criteria) Investor411 has only one small long position in EWS, so I took no action in the 411 account.

The Baby Bull is still alive. But…

There has been a key divergence. The dollar is in meltdown vs. other currencies. From yesterday on the dollar  “one ugly bearish chart” This dollar meltdown should have been good news for stocks. Stocks should have rallied. But they stayed flat & the MO dropped 16 points. Sometimes it takes a day for stocks to react, but, for right now, overbought stocks went nowhere despite good news in a falling dollar.

This could signal at least a short term top.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

(I do manage 6 accounts that have other positions)

Current positions –  EWS (Singapore).

EEM (the major ETF for emerging markets) is overextended from 50 DMA. So are other breakout countries. It would be natural to see some sort of consolidation.

Along with the Baby Bull the upgrade to CAUTIOUSLY BULLISH is not yet firmly in place. We still could fall back to neutral.

Here’s the test – The MO falls to about zero or +20 and stocks rally from that point.

I’d be willing to invest/risk a bit more then. Yes its not -60 on the MO – a better entry point, but emerging markets & a falling dollar are pulling US equities along for the ride. A consolidation after a run is not to be feared. Also time to start looking at YOUR stock list

Long Term Outlook – CAUTIOUSLY BULLISH

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

Senator Ted Kaufman -” The Most Important Person You’ve Never Heard Of.” - ABC

Investors411 readers have heard this name many times.

Too Big To Fail

Moody’s, has come out with a report that Congress has NOT solved the Too Big To Fail Shadow Bank Problem. A team led by Moody’s (one of 3 major credit rating agencies in USA) big wig Robert Young concludes:

“[A] key issue that challenges the feasibility of the proposed legislation is that it would not fully eliminate the issue of interconnectedness, nor is it likely that resolution authority could fully eliminate the systemic implications of allowing a large and/or highly interconnected firm to default, especially with respect to large international groups, and it certainly would not eliminate the risk of contagion,”

Shahien Nasiripor writing in the Huffington Post point out some obvious and alarming statistics. The 4 major shadow banks alone are growing and now control $7.7+ trillion dollars of money. [$7,700,000,000,000] Relativity = Lehman Brothers who collapsed in 2008 controlled $400+ billion. Therefore, each of these major  banks is @ 5+ times large than Lehman’s.

Now think, of the people/ businesses who have their savings in each of these major over leveraged shadow banks. If one goes down, like Lehman panic will certainly spread to others. Bada Bing, Bada Bang, Bada BOOM!

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

Mantra – Volume has not worked as confirmation factor for many many moons. = Neutral

Lack of volume shows hedge funds and giant institutions with their high speed computers are the dominating the US stock markets. Most average investors have long since got out.

As predicted, (it was no surprise) yesterday markets held onto the significant gains of the day before. = Bullish

A major French bank got toasted this AM because of  derivatives. Emphasis on the word French = Bearish

All eyes on monthly jobs report - Its safe to say this number is massaged or manipulated to a degree by whatever administration is in power. Comparing the USA’s unemployment rate with other countries is like comparing apples and oranges because of the different ways each country compute/massages its unemployment number.

The Employment Report- 8:30 EST  - +431,000 jobs, Employment number down to -9.7%, Private sector jobs only +20,000. Most jobs created by census. = WEAK Report – Worse than expected.

Significant Indexes

• McClellan Oscillator rose to +9.43 [+60 or above = Overbought = sell. -60 or below = Oversold = buy]. StockCharts has a better version of the McClellan chart ($NYMO)LINK. -  This is first time the MO has turned green (entered positive territory) in over a month. Momentum is up, but bottom line – this is NEUTRAL territory -   How the MO works.
• US Dollar –  The dollar rose a significant +0.52% [Anything over +/- @0.50 is significant.] Mantra - right now The Dollar Rules is very important. Currency markets are now being directly manipulated by out Fed and other central banks. This manipulation is to keep the Euro from falling. Dollar  at $87.25 Chart shows at least 6 attempted breakouts above @87.5 have failed in last 2  1/2 weeks. = Bullish.

Reading the Tea Leaves - – Stocks are focused on the jobs report.  Since stocks have rallied into the into todays jobs report, it would be logical for the Central Banks to allow the dollar to rise to a new high with a decent jobs report. Momentum is up for the MO and this currently translate to a short term positive for stocks.

Since Obama administration (leaked?) and Wall Street have built into the recent rally a much better than expected jobs report expect the following.

• Worse than expected numbers – Stocks take big initial hit, but US employment is not really a major factor in shorter term US stock prices – Hedge funds and giant institutions are far more worries about the monsters mentioned yesterday.
• Better than expected numbers – Would have to be blowout numbers. Really good numbers already built into stock prices. A blowout number will send the dollar and stocks soaring. Sometime during the day major players will realize that a soaring dollar will hurt stocks (even central bank intervention can’t stop a massive run) and this will temper gains.
• Obviously, better than expected numbers is good for the long term economic well being of the USA.

Positions

The  Positions Section = latest buys and sells  - These are positions I actually own

Have NOT had a chance to update this/last weeks trade. You can find results in individual post over last two weeks

Consider ETF’s that short the markets.

Long Term Outlook = CAUTIOUSLY BEARISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING