As the year comes to a close here is our final link fest.
Dead Soul is a Debt Collector
India and China: Pushing Back
Save the Date
Viet Nam: Online Gamers Elude Crackdown
A True "Japan Inc" Could Be On The Way
The Last Roll of Kodachrome developed
Netflix: Time to Hit the Eject Button?
Ignore Expiration Dates
Floyd Abrams Whizzes on WikiLeaks
Justice Department Seeks Tougher Derivatives Rules
Friday, December 31, 2010
Wednesday, December 29, 2010
The Spirit of Christmas and the Markets
I was going to develop a post with pictures of Christmas in Singapore, but I wasn’t at home enough to take the pictures of Orchard Rd and get them up here. Anyway, suffice it to say that they go all out here for Christmas.
It’s odd. A non-Christian country. Christmas trees and lights so bright and sparkly-drippy-blinky that you’d think you were downtown NY at Macy’s, or on Beacon Hill at FAO Schwartz. Snow making machines at malls that make bubbles that look like snow. Every store has a decorated tree, with boxes wrapped and decorated to the nines underneath. What’s going on, how can all this spirit exist, you would ask, in a primarily non-Christian country?
To digress, There’s a dual-layer caste system here. The ultra-rich (doctors, professionals, managers, and expats on packages from their companies) living in private houses and condos, and the mostly-poor living in government-subsidized HDB flats, 3BR 600 sq ft apartments which are purchased with 10% down (now costing around 350,000 S$) with the Sing government supplying the rest of the capital as long as the borrower’s working. 3 generations living in one of these, the younger generation not getting married and having babies because they can’t afford a place of their own, so they’re living with parents and grandparents, until the family dies and they can inherit a place of their own. I’ve been told that this caste’s success is based on achieving the 5 C’s: Cash, Credit cards, Car, Condo, and Country Club membership.
All the Christmas “spirit” in evidence here doesn’t add up. My conclusion is that the merchants with their use of the glitz and glamour of the Christmas season decorations are convincing the lower-caste to purchase gifts and spend money during the Christmas season. I see advertisements everywhere for stuff where if you buy it, your [family girlfriend boyfriend child parent] will be happy, and how your life will be improved because of your purchases.
I see the merchants here not unlike the bankers creating and satisfying the markets for derivatives and other financial instruments. The bankers, the Madoffs, and even governments of nations are creating risk appetites or at least capitalizing on them and taking money from pension funds, private investors, and money market funds to satisfy the lust they’ve created for yields and growth.
I will never be a BAMAG. I won’t be able to create instruments to satisfy risk appetites. I will never be able to call tops or bottoms of these instruments. So I will try to ride the wave, and let the BAMAGs create the instruments and manage them, I’ll ride the trend until it changes direction, then I’ll short it as it returns.
Here are some trends I’m watching:
The Euro. Under pressure. Maybe even headed for a failure. Is it trending down now? And how to trade it?
European sovereign debt bonds. Under pressure. Maybe headed for default; delayed or cancelled payments. Not soon, maybe April.
China. Urban areas overdeveloped, rural areas with populations leaving in droves, but because of the property bubble, they have no place to live. Food prices up.
The VIX has nowhere to go but up. Short trend, maybe.
I’m worried about the US/Mexico border again. Maybe the drones can keep it under control, but maybe there’s a trading opportunity here.
Gold/Silver. They do the best when markets aren't advancing, when there's a threat of inflation, and when nations' monetary systems are in jeopardy. I don't see any of those happening in the short term, so maybe we'll see gold/silver pull back.
It’s odd. A non-Christian country. Christmas trees and lights so bright and sparkly-drippy-blinky that you’d think you were downtown NY at Macy’s, or on Beacon Hill at FAO Schwartz. Snow making machines at malls that make bubbles that look like snow. Every store has a decorated tree, with boxes wrapped and decorated to the nines underneath. What’s going on, how can all this spirit exist, you would ask, in a primarily non-Christian country?
To digress, There’s a dual-layer caste system here. The ultra-rich (doctors, professionals, managers, and expats on packages from their companies) living in private houses and condos, and the mostly-poor living in government-subsidized HDB flats, 3BR 600 sq ft apartments which are purchased with 10% down (now costing around 350,000 S$) with the Sing government supplying the rest of the capital as long as the borrower’s working. 3 generations living in one of these, the younger generation not getting married and having babies because they can’t afford a place of their own, so they’re living with parents and grandparents, until the family dies and they can inherit a place of their own. I’ve been told that this caste’s success is based on achieving the 5 C’s: Cash, Credit cards, Car, Condo, and Country Club membership.
All the Christmas “spirit” in evidence here doesn’t add up. My conclusion is that the merchants with their use of the glitz and glamour of the Christmas season decorations are convincing the lower-caste to purchase gifts and spend money during the Christmas season. I see advertisements everywhere for stuff where if you buy it, your [family girlfriend boyfriend child parent] will be happy, and how your life will be improved because of your purchases.
I see the merchants here not unlike the bankers creating and satisfying the markets for derivatives and other financial instruments. The bankers, the Madoffs, and even governments of nations are creating risk appetites or at least capitalizing on them and taking money from pension funds, private investors, and money market funds to satisfy the lust they’ve created for yields and growth.
I will never be a BAMAG. I won’t be able to create instruments to satisfy risk appetites. I will never be able to call tops or bottoms of these instruments. So I will try to ride the wave, and let the BAMAGs create the instruments and manage them, I’ll ride the trend until it changes direction, then I’ll short it as it returns.
Here are some trends I’m watching:
The Euro. Under pressure. Maybe even headed for a failure. Is it trending down now? And how to trade it?
European sovereign debt bonds. Under pressure. Maybe headed for default; delayed or cancelled payments. Not soon, maybe April.
China. Urban areas overdeveloped, rural areas with populations leaving in droves, but because of the property bubble, they have no place to live. Food prices up.
The VIX has nowhere to go but up. Short trend, maybe.
I’m worried about the US/Mexico border again. Maybe the drones can keep it under control, but maybe there’s a trading opportunity here.
Gold/Silver. They do the best when markets aren't advancing, when there's a threat of inflation, and when nations' monetary systems are in jeopardy. I don't see any of those happening in the short term, so maybe we'll see gold/silver pull back.
Tuesday, December 28, 2010
2011
Hello everybody.
Just a lesson that I learned from the market: do nothing when the market is trending is difficult.
The thought that we can do more and more not necessarily means more efficiency.
Past Thursday I thought to cover a little more my exposure buying Spy puts.Wery wery smart from my part.
Yesterday night I thought that China could affect the equity market with their decision.
I ended up selling at the second failed test to breaking support this morning.Ended flat just by pure luck. Yes, just a half percent movement on that news, so out again of puts and waiting for the period between dec 29 and Jan 9-12.And swearing to do nothing.
There are several situations that make me a little uneasy about a clean movement up in the very short term, but having not experienced any meaningful correction since September makes me not to try to hold my breath even the opposite is commonly assumed, (that if went up is going to correct in some similar proportion) and at that moment early March 2009 populates my brain.
So yes, do nothing is tough, overtrade could be the answer to calm ourselves down but if I do something like this I wouldn't have learned anything from the market in the past 4 months.
Checking between Dec 29 and Jan 9 (or a little more, the 12 th) with a keen eye.
The 6 and 7 could give a hint of future price action, will see.
I hold SPPI, EK and BSX and a few calls (as an insurance) from MBI, so no change at all.
Good luck.
Dan
Just a lesson that I learned from the market: do nothing when the market is trending is difficult.
The thought that we can do more and more not necessarily means more efficiency.
Past Thursday I thought to cover a little more my exposure buying Spy puts.Wery wery smart from my part.
Yesterday night I thought that China could affect the equity market with their decision.
I ended up selling at the second failed test to breaking support this morning.Ended flat just by pure luck. Yes, just a half percent movement on that news, so out again of puts and waiting for the period between dec 29 and Jan 9-12.And swearing to do nothing.
There are several situations that make me a little uneasy about a clean movement up in the very short term, but having not experienced any meaningful correction since September makes me not to try to hold my breath even the opposite is commonly assumed, (that if went up is going to correct in some similar proportion) and at that moment early March 2009 populates my brain.
So yes, do nothing is tough, overtrade could be the answer to calm ourselves down but if I do something like this I wouldn't have learned anything from the market in the past 4 months.
Checking between Dec 29 and Jan 9 (or a little more, the 12 th) with a keen eye.
The 6 and 7 could give a hint of future price action, will see.
I hold SPPI, EK and BSX and a few calls (as an insurance) from MBI, so no change at all.
Good luck.
Dan
Monday, December 27, 2010
Manny Mondays: 2011 Market Prediction Time
Morning all! Hard to believe, but it's that time of year again to have a little fun and make our market (and any other) predictions for 2011. I wonder if there's a way that we can dig up last year's predictions from the other site to see how each of us fared this year (I'm guessing not very well for MOST of us).
Here are mine:
DOW
Low - 10,235
High - 12,310
Year-end - 11,745
S&P
Low - 1,095
High - 1,358
Year-end - 1,289
Nasdaq
Low - 2,415
High - 2,928
Year-end - 2,795
My belief is that we're in a bit of a range-bound market for 2011 that will frustrate both bulls and bears alike (probable the latter more so) and that we'll see at least one major correction along the way, but still ending the year in the positive as the real economy continues to slowly improve, much to the dismay of those that are still waiting (and seemingly pining) for a "P3" style event or events that causes great upheaval around the world. I believe that in spite of all the global risks out there right now (and they are many, with any of one of them capable of wreaking havoc), we will continue to muddle through and "extend & pretend" a bit longer (while continuing to transfer private losses to the sovereign), likely making these problems even bigger and more painful down the road, mainly because it's human nature to put off (and shift) any pain for as long as possible. For me, this would be the most surprising thing to happen next year, as it seems to me that too many are either betting on outright collapse or a continued bull market bonanza), so I'm placing my "chips" on the least talked about possibility, the muddle through option, further pushing off these problems yet again until at least 2012. And what big event just so happens to be scheduled for 2012? Hint: it starts with "Presidential". For me, that's the year we're more likely to see it all come apart again.
So, what are your market predictions for 2011? Have any other predictions that you'd like to share with us here at AT? If so, please fire away and have some fun with this! Who knows? Some of them may even come to fruition. On another note, I hope that everyone has enjoyed the holidays and has a very Happy New Year!
Here are mine:
DOW
Low - 10,235
High - 12,310
Year-end - 11,745
S&P
Low - 1,095
High - 1,358
Year-end - 1,289
Nasdaq
Low - 2,415
High - 2,928
Year-end - 2,795
My belief is that we're in a bit of a range-bound market for 2011 that will frustrate both bulls and bears alike (probable the latter more so) and that we'll see at least one major correction along the way, but still ending the year in the positive as the real economy continues to slowly improve, much to the dismay of those that are still waiting (and seemingly pining) for a "P3" style event or events that causes great upheaval around the world. I believe that in spite of all the global risks out there right now (and they are many, with any of one of them capable of wreaking havoc), we will continue to muddle through and "extend & pretend" a bit longer (while continuing to transfer private losses to the sovereign), likely making these problems even bigger and more painful down the road, mainly because it's human nature to put off (and shift) any pain for as long as possible. For me, this would be the most surprising thing to happen next year, as it seems to me that too many are either betting on outright collapse or a continued bull market bonanza), so I'm placing my "chips" on the least talked about possibility, the muddle through option, further pushing off these problems yet again until at least 2012. And what big event just so happens to be scheduled for 2012? Hint: it starts with "Presidential". For me, that's the year we're more likely to see it all come apart again.
So, what are your market predictions for 2011? Have any other predictions that you'd like to share with us here at AT? If so, please fire away and have some fun with this! Who knows? Some of them may even come to fruition. On another note, I hope that everyone has enjoyed the holidays and has a very Happy New Year!
Friday, December 24, 2010
Weekend Open Thread - Holiday Edition
Have a great Holiday Weekend everyone!
America's Best Hot Chocolate
Today’s hot chocolate has come a long way from little packages with gritty marshmallows. From sipping chocolate flavored with secret Caribbean spices to house-roasted cocoa beans and celebrity truffle shops, America’s best hot chocolate has gone gourmet.
I can't wait to try Xoco, Rick Bayless' new restaurant where they serve hot chocolate with a Mexican influence.
Holiday Movie Trivia
A bitter sweet Christmas storey by Dick Cavett
Christmas with Lincoln
Traumatized Iraqi Christians exercise caution for Christmas
The Humbug Express
The Tannenbaum Chronicles
EReaders Under the Christmas Trees May help spur sales
Bethlehem bounces back in time for Christmas
Relative quiet in the Palestinian city has bolstered tourism and the local economy.
Television's Yule Log Now Blazes in 3D
Saturday Christmas Crossword
When Traditions Must Change
Thanks to everyone who has stuck around through thick and thin, and whom we now call friends and to those who wish to be friends. We could not have pulled this off with out you! Thanks for all of your kind words and support and hope we have another great year.
America's Best Hot Chocolate
Today’s hot chocolate has come a long way from little packages with gritty marshmallows. From sipping chocolate flavored with secret Caribbean spices to house-roasted cocoa beans and celebrity truffle shops, America’s best hot chocolate has gone gourmet.
I can't wait to try Xoco, Rick Bayless' new restaurant where they serve hot chocolate with a Mexican influence.
Holiday Movie Trivia
A bitter sweet Christmas storey by Dick Cavett
Christmas with Lincoln
Traumatized Iraqi Christians exercise caution for Christmas
The Humbug Express
The Tannenbaum Chronicles
EReaders Under the Christmas Trees May help spur sales
Bethlehem bounces back in time for Christmas
Relative quiet in the Palestinian city has bolstered tourism and the local economy.
Television's Yule Log Now Blazes in 3D
Saturday Christmas Crossword
When Traditions Must Change
Thanks to everyone who has stuck around through thick and thin, and whom we now call friends and to those who wish to be friends. We could not have pulled this off with out you! Thanks for all of your kind words and support and hope we have another great year.
Thursday, December 23, 2010
Thorsday Potpouri
Gold to $2000 by 2012
Oil Shoots for the Century Mark
In 2010 we watched the stock market and many commodities like silver, cotton and coffee explode in price, will 2011 be the year of commodities, and can inflation be far behind? All of these increases in commodity prices point to a continued global recovery despite the global debt problems.
“The current key drivers behind the rise in silver are similar to that for gold, including quantitative easing I, II, likely III and possibly IV, paper currency debasement, sovereign debt issues, concerns over future inflation and strong investment demand, particularly from emerging markets.”
Oil Shoots for the Century Mark
The daily changes haven’t been dramatic, but they add up and the trend is hard to miss. Since Nov. 22, crude prices have jumped 11%.
In 2010 we watched the stock market and many commodities like silver, cotton and coffee explode in price, will 2011 be the year of commodities, and can inflation be far behind? All of these increases in commodity prices point to a continued global recovery despite the global debt problems.
Wednesday, December 22, 2010
Reits Time may have Come Again
A market segment in which I have interest now is REITs. I think there is some opportunity here.
Have a look at the Chicago Fed’s report, “why aren’t banks lending more” at http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2010/cfldecember2010_281.pdf.
This article researches the roll of Commercial Real Estate and the depth of investment in CRE as it relates to a given bank’s lending. They found a direct correlation between banks with high exposure to CRE and slower rates of loans to other sectors of the economy.
Some REITs have contributed to the problem with delinquent payments. Some have not. Moody’s Delinquency Tracker (DQT) tracks loans issued since 1997, and the numbers of increased delinquencies are staggering. In 2009, there were 1800 delinquent loans with a balance of around 15 B$, but in 2010, there’s over 4000 with a balance in excess of 50B$. By property type, the hotel sector has the highest delinquency rate, and Multifamily came in second. Office space, which used to be the best, has shot up, but is still near the best of breed. For more details, you can see:
http://www.housingwire.com/2010/12/13/cmbs-delinquency-rate-rose-to-8-63-in-november-moodys
The sectors that have the least default percentages are 1) Industrial properties, 2) Office space, and 3) Hospitals. With the up-up-and-away market, and the continued profit gain by industries, I think we might consider investment in these REIT market segments.
In my REIT chart, here are candidates that fall into (mostly) the 3 segments with the least delinquencies:
CLI: Diversified in Office, Industrial, some retail, and a hotel
DLR: Technology (industrial) real estate
GOOD: Industrial and commercial properties
HCP: Healthcare
LRY: Diversified in Office and industrial properties
PSA Self-storage. I don’t know, maybe a kind of industrial property?
PSB: Multi-tenant flex, Industrial and Office space
SNH: Hospitals, senior nursing homes
VNO: Office, Industrial and Retail
VTR: Healthcare-related facilities.
I’m investigating SNH because it’s pulled back a lot and had a big 250Million buy on Dec 10’th. On the 60 minute chart, I will have to wait for a pullback hopefully above 20.43 to establish a start for a position. Right now, it looks like a lower low on the 15th and a lower high on the 17’th, not good points for a position start.
Have a look at the Chicago Fed’s report, “why aren’t banks lending more” at http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2010/cfldecember2010_281.pdf.
This article researches the roll of Commercial Real Estate and the depth of investment in CRE as it relates to a given bank’s lending. They found a direct correlation between banks with high exposure to CRE and slower rates of loans to other sectors of the economy.
Some REITs have contributed to the problem with delinquent payments. Some have not. Moody’s Delinquency Tracker (DQT) tracks loans issued since 1997, and the numbers of increased delinquencies are staggering. In 2009, there were 1800 delinquent loans with a balance of around 15 B$, but in 2010, there’s over 4000 with a balance in excess of 50B$. By property type, the hotel sector has the highest delinquency rate, and Multifamily came in second. Office space, which used to be the best, has shot up, but is still near the best of breed. For more details, you can see:
http://www.housingwire.com/2010/12/13/cmbs-delinquency-rate-rose-to-8-63-in-november-moodys
The sectors that have the least default percentages are 1) Industrial properties, 2) Office space, and 3) Hospitals. With the up-up-and-away market, and the continued profit gain by industries, I think we might consider investment in these REIT market segments.
In my REIT chart, here are candidates that fall into (mostly) the 3 segments with the least delinquencies:
CLI: Diversified in Office, Industrial, some retail, and a hotel
DLR: Technology (industrial) real estate
GOOD: Industrial and commercial properties
HCP: Healthcare
LRY: Diversified in Office and industrial properties
PSA Self-storage. I don’t know, maybe a kind of industrial property?
PSB: Multi-tenant flex, Industrial and Office space
SNH: Hospitals, senior nursing homes
VNO: Office, Industrial and Retail
VTR: Healthcare-related facilities.
I’m investigating SNH because it’s pulled back a lot and had a big 250Million buy on Dec 10’th. On the 60 minute chart, I will have to wait for a pullback hopefully above 20.43 to establish a start for a position. Right now, it looks like a lower low on the 15th and a lower high on the 17’th, not good points for a position start.
Tuesday, December 21, 2010
Waiting
Hello everybody,
Wait and see mode particularly between Dec 29 and Jan 8.
Trend keeps unchallenged and I'm aware that trading gets lighter for the festivities.I was expecting some kind of reversal for a few days starting Monday but look that the equity market got it's own plans to the upside.
My objective is trying to get the 4-7 movements where the trend changes during a calendar year, and is very challenging, not there yet.
So plainly put, sometimes I don't have nothing to say, just wait and see what happens.I don't want to mix what in my view are important dates astrologically speaking in a year, with what will be more of a personal opinion that last only a few days. I don't want to confound people with lots of opinions.
Since September the trend got very strong expecting a correction around nov 17 which ended up to be a continuation of the existing trend. Like I mentioned a few months ago the trend was up and is not clear to me right now if it's going to be a mild correction or we just keep in the same direction.That's why I want to see Dec 29-Jan 8 and how we get out of that time window and reassess or keep my original view longer.
Holding EK,MBI and past week I got into BSX again and SPPI.
ITMN the bad news is that I didn't get it this past week but the good one is that confidence in what I'm doing is growing steadily seeing the company pop more than 100% two days ago. I'm just getting closer and closer and hopefully is a matter of time.
Anyway we are toasted from an economic point of view, so instead of getting worried about the economy now is probably healthier to just enjoy with family and loved ones the end of a challenging year.
Merry Christmas and Happy New Year!
Dan
Wait and see mode particularly between Dec 29 and Jan 8.
Trend keeps unchallenged and I'm aware that trading gets lighter for the festivities.I was expecting some kind of reversal for a few days starting Monday but look that the equity market got it's own plans to the upside.
My objective is trying to get the 4-7 movements where the trend changes during a calendar year, and is very challenging, not there yet.
So plainly put, sometimes I don't have nothing to say, just wait and see what happens.I don't want to mix what in my view are important dates astrologically speaking in a year, with what will be more of a personal opinion that last only a few days. I don't want to confound people with lots of opinions.
Since September the trend got very strong expecting a correction around nov 17 which ended up to be a continuation of the existing trend. Like I mentioned a few months ago the trend was up and is not clear to me right now if it's going to be a mild correction or we just keep in the same direction.That's why I want to see Dec 29-Jan 8 and how we get out of that time window and reassess or keep my original view longer.
Holding EK,MBI and past week I got into BSX again and SPPI.
ITMN the bad news is that I didn't get it this past week but the good one is that confidence in what I'm doing is growing steadily seeing the company pop more than 100% two days ago. I'm just getting closer and closer and hopefully is a matter of time.
Anyway we are toasted from an economic point of view, so instead of getting worried about the economy now is probably healthier to just enjoy with family and loved ones the end of a challenging year.
Merry Christmas and Happy New Year!
Dan
Monday, December 20, 2010
Manny Mondays - Holiday Schedule Edition
Schedule for December 20th - Jan 3rd.
We have two of our posters on vacation and due to the usually quiet holiday weeks, we anticipate a lighter posting schedule and comments until after the 1st of the year.
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Early Christmas treat: 2010’s total lunar eclipse
This sounds like fun, Venus can also be seen in the early winter sky in the early mornings in the east.
We have two of our posters on vacation and due to the usually quiet holiday weeks, we anticipate a lighter posting schedule and comments until after the 1st of the year.
++++++++++++++++++++++++++++++++++++++++++++++++++++++
Early Christmas treat: 2010’s total lunar eclipse
LOS ANGELES (AP) — ‘Twill be nights before Christmas and high overhead, the moon will turn brown or maybe deep red. The Earth and the sun with celestial scripts will conspire to make a lunar eclipse.
Weather permitting, sky gazers in North and Central America and a tiny sliver of South America will boast the best seats to this year’s only total eclipse of the moon.
This sounds like fun, Venus can also be seen in the early winter sky in the early mornings in the east.
Saturday, December 18, 2010
December 18, 2010 Linkfest
Oil and Gas Exploration Innovations: Mostly Hot Air
OPEC: Quotas 'r' Us
EIA: Shale gas production in US to moderate prices to 2035
US documents: Chavez selling China inexpensive oil
China’s Push Into Wind Worries U.S. Industry
The Patriot app. Finally, American citizens can achieve the peasant mindset they have long desired.
"Killing The Messenger For Bad News"
Mike Vick wants to own a dog again. Fool me once, shame on you...
Zombie Karl Popper
OPEC: Quotas 'r' Us
EIA: Shale gas production in US to moderate prices to 2035
US documents: Chavez selling China inexpensive oil
China’s Push Into Wind Worries U.S. Industry
The Patriot app. Finally, American citizens can achieve the peasant mindset they have long desired.
"Killing The Messenger For Bad News"
Mike Vick wants to own a dog again. Fool me once, shame on you...
Zombie Karl Popper
Friday, December 17, 2010
Friday Potpouri
National Geographic has a "Photo of the Day" on their website.
Photo of the Day
Incredible photos and incredibly addictive!
Phone Wielding Shoppers Strike Fear Into Retailers
Photo of the DayIncredible photos and incredibly addictive!
Phone Wielding Shoppers Strike Fear Into Retailers
Tri Tang, a 25-year-old marketer, walked into a Best Buy Co. store in Sunnyvale, Calif., this past weekend and spotted the perfect gift for his girlfriend.
Last year, he might have just dropped the $184.85 Garmin global positioning system into his cart. This time, he took out his Android phone and typed the model number into an app that instantly compared the Best Buy price to those of other retailers. He found that he could get the same item on Amazon.com Inc.'s website for only $106.75, no shipping, no tax.
Mr. Tang bought the Garmin from Amazon right on the spot.
Is this the new "let your fingers doing the walking" bargain shopping model? No wonder retailers are scared. Of course the shopper could have done his online shopping before he went to Best Buy.
The Euro Crisis, Explained
For some nations, such as Britain, giving up the national currency was an identity crisis too far. Led by the right wing of the Conservative Party, opposition to joining the euro is visceral and deep seated in the U.K., and no British prime minister, Conservative or Labour, has even attempted to argue for membership in the single currency.
France and Germany were willing to cede their national currencies, but not their authority. Politicians like to control tax rates. They like to set budgets. So these functions were reserved for each government's politicians to oversee.
For its first decade the euro worked well. It quickly established itself as a reserve currency. It was instrumental in helping the entire European Union grow economically. Today the EU accounts for between 27 percent and 28 percent of world GDP — a larger share than either the U.S. or China.
Thursday, December 16, 2010
Land Seizures in China
Heard a piece on Chinese land grabs on the radio the other night and it peaked my interest so I did a little reading that I will share with you today.
Basically, local governments in the provinces are given some pretty steep growth guidelines. In large part this is achieved with the construction of large civic projects. In many cases, entire villages, some thousands of years old, are bulldozed to make way for condo complex, malls, and opera houses. Villagers and farmers are usually compensated, but in most cases, the amount of their compensation comes nowhere near close to the amount needed to buy a new home in China's fast inflating housing market.
Below are a few articles worth you time . . . if you have any of course!
LAND SEIZURES AND FARMERS IN CHINA
According to the Chinese Ministry of Land and Resources between 1998 and 2005 there were more 1 million cases of illegal seizures involving at least 815,447 acres. The real number of such seizures is believed to be several times high. Sometimes farmers are given only a few days notice before bulldozers arrive on the scene and tore down their houses and ripped up their cornfields and rice paddies and laid foundations for new factories.
Land is seized for roads, power plants, dams, factories, waster dumps, urban sprawl and housing projects for wealthy city dwellers who seek peace and quiet and an escape from pollution in the countryside. In some cases the first crews to show up are in dump trucks filled with sand that bury the cropland and plug irrigation canals so the land is unusable. The whole process smacks of the kind of disregard for peasantry that caused the Communist revolution in the 1930s and 40s.
Thousands riot against land seizure in Yunnan province
A total of 50 vehicles were destroyed, among them ten police cars, according to media reports, as a Yunnan protest against a government land grab turned violent. The violence first flared on Tuesday 2 November as villagers sought to stop officials and construction workers entering the disputed area where construction work on a new highway was about to start. Around 2,000 paramilitary and riot police were eventually sent to the area to re-establish control as numbers in the protest swelled to a reported 10,000.
Basically, local governments in the provinces are given some pretty steep growth guidelines. In large part this is achieved with the construction of large civic projects. In many cases, entire villages, some thousands of years old, are bulldozed to make way for condo complex, malls, and opera houses. Villagers and farmers are usually compensated, but in most cases, the amount of their compensation comes nowhere near close to the amount needed to buy a new home in China's fast inflating housing market.
Below are a few articles worth you time . . . if you have any of course!
LAND SEIZURES AND FARMERS IN CHINA
According to the Chinese Ministry of Land and Resources between 1998 and 2005 there were more 1 million cases of illegal seizures involving at least 815,447 acres. The real number of such seizures is believed to be several times high. Sometimes farmers are given only a few days notice before bulldozers arrive on the scene and tore down their houses and ripped up their cornfields and rice paddies and laid foundations for new factories.
Land is seized for roads, power plants, dams, factories, waster dumps, urban sprawl and housing projects for wealthy city dwellers who seek peace and quiet and an escape from pollution in the countryside. In some cases the first crews to show up are in dump trucks filled with sand that bury the cropland and plug irrigation canals so the land is unusable. The whole process smacks of the kind of disregard for peasantry that caused the Communist revolution in the 1930s and 40s.
Thousands riot against land seizure in Yunnan province
A total of 50 vehicles were destroyed, among them ten police cars, according to media reports, as a Yunnan protest against a government land grab turned violent. The violence first flared on Tuesday 2 November as villagers sought to stop officials and construction workers entering the disputed area where construction work on a new highway was about to start. Around 2,000 paramilitary and riot police were eventually sent to the area to re-establish control as numbers in the protest swelled to a reported 10,000.
Tuesday, December 14, 2010
Time to Short?
I’m so tempted to go short on this market. I say tempted.
Why? There’s lots of reasons:
1. It goes without saying the S&P chart is so oversold and has been on this oversold trend (with one minor pullback) since August.
2. So many topping patterns have been registered; I follow JRCC closely and it appears to have topped.
3. The CBOE Put/Call ratio hit an extreme low of .65. This has been a turnaround indicator in 2010. When this indicator fell below .7, multi-day declines (corrections) too place. April 12, 14. Jan 8. Nov 5. Now, Dec. 13.
4. There are strong rumors that Moody’s will downgrade US debt. Who would have thought, with 13 Trillion debt almost the same as our GDP. Not that I believe the CS Monitor, but there were other sources as well. See http://www.csmonitor.com/Business/2010/0316/Moody-s-hints-at-move-that-could-be-catastrophic-for-US-debt
5. Late-day selloffs indicate the big funds are doing distribution and that smaller investors don’t want long positions overnight.
6. S&P Futures and Nasdaq-100 have hit Tom Demark Combo and Sequential 13 sell signals.
7. Eurozone debt problems: Ireland’s promise to “save the banks” at the expense of facing sovereign debt default. They were bailed out, but who’s next? I’m feeling the Euro will be the currency under pressure in the near term, making the U$D stronger. Stronger dollar, weaker stock market.
8. US Mortgages are facing disaster, coming in early 2012.
9. Chinese inflation. China not letting their currency float and not moving to a consumption-based economy, they’re still an export-based economy.
10. Trending lower intraday tops in $SOX.X (SOX was one of our ETF leaders, remember?)
11. Wikileaks are coming on a Big Bank.
12. 1225 S&P is strong support.
13. Mutt's nervous about going long right now.
Why go long?
1. The fed is printing. Yesterday’s FOMC said that no changes are expected to QE2. Monday’s POMO was 7.8B$.
2. Economic indicators are improving. Retail’s up. Jobs are choppy (don’t we see a lot of chop before a turn-around?).
3. Higher treasury yields ahead. Pushes bond prices lower, and stocks higher.
4. Banks. Looks like Barry Ritholtz’s prediction on C hitting $5 will come true.
5. We’re in a season where stocks just don’t decline. They just don’t dare.
6. Volume will be light, giving folks with deep pockets the ability to move individual stocks.
7. "The trend! The trend!" (Said with a lispy French accent)
8. Everyone wants the market to go up. When you short, you're really in the minority, and everyone and everything is working against you.
I wish I knew which way the market will go. As we all know, stocks will as a rule follow the market. But I will begin to look for the weaker stocks, the ones that have consolidated or gone up the least, during the Nov-Dec rally.
You don’t short strength. Never short Apple, for example. But also you don’t short market strength. Let the market tell, and look for individual indicators that are weak. I’ve posted some strengths lately, some have done quite well. (Yes, I said Defense would do well but after putting together a chart and evaluating their performance, it was a premature call—defense is a trend follower). But now I’m thinking to look for stocks that are below-trend followers and identify them, for future shorting opportunities. Which I believe are coming soon.
Again, look to the tapes. Look for the S&P trend to reverse on the 3LB if you want to be really safe. Don’t try to call a top, or a bottom, but jump in on the trend once it’s established. And set your stops so you don’t lose capital!
I shorted X early, and lost my $100. I shorted JRCC early and haven’t hit my stop yet, so we’ll see. But I added to my NEM on the pullback, as well. I did good on that one, I caught just after the turn-around. Just being honest. I did not enter PAAS, I fell asleep.
What, Rock, no charts? Relax, I may put them in comments as I find weak opportunities. You'll get your chance, don't worry. I did not enter PAAS, I fell asleep. As I said, snooze, you lose.
Ok, Ok, I heard the jeers. Here’s my JRCC short chart. So there.
Why? There’s lots of reasons:
1. It goes without saying the S&P chart is so oversold and has been on this oversold trend (with one minor pullback) since August.
2. So many topping patterns have been registered; I follow JRCC closely and it appears to have topped.
3. The CBOE Put/Call ratio hit an extreme low of .65. This has been a turnaround indicator in 2010. When this indicator fell below .7, multi-day declines (corrections) too place. April 12, 14. Jan 8. Nov 5. Now, Dec. 13.
4. There are strong rumors that Moody’s will downgrade US debt. Who would have thought, with 13 Trillion debt almost the same as our GDP. Not that I believe the CS Monitor, but there were other sources as well. See http://www.csmonitor.com/Business/2010/0316/Moody-s-hints-at-move-that-could-be-catastrophic-for-US-debt
5. Late-day selloffs indicate the big funds are doing distribution and that smaller investors don’t want long positions overnight.
6. S&P Futures and Nasdaq-100 have hit Tom Demark Combo and Sequential 13 sell signals.
7. Eurozone debt problems: Ireland’s promise to “save the banks” at the expense of facing sovereign debt default. They were bailed out, but who’s next? I’m feeling the Euro will be the currency under pressure in the near term, making the U$D stronger. Stronger dollar, weaker stock market.
8. US Mortgages are facing disaster, coming in early 2012.
9. Chinese inflation. China not letting their currency float and not moving to a consumption-based economy, they’re still an export-based economy.
10. Trending lower intraday tops in $SOX.X (SOX was one of our ETF leaders, remember?)
11. Wikileaks are coming on a Big Bank.
12. 1225 S&P is strong support.
13. Mutt's nervous about going long right now.
Why go long?
1. The fed is printing. Yesterday’s FOMC said that no changes are expected to QE2. Monday’s POMO was 7.8B$.
2. Economic indicators are improving. Retail’s up. Jobs are choppy (don’t we see a lot of chop before a turn-around?).
3. Higher treasury yields ahead. Pushes bond prices lower, and stocks higher.
4. Banks. Looks like Barry Ritholtz’s prediction on C hitting $5 will come true.
5. We’re in a season where stocks just don’t decline. They just don’t dare.
6. Volume will be light, giving folks with deep pockets the ability to move individual stocks.
7. "The trend! The trend!" (Said with a lispy French accent)
8. Everyone wants the market to go up. When you short, you're really in the minority, and everyone and everything is working against you.
I wish I knew which way the market will go. As we all know, stocks will as a rule follow the market. But I will begin to look for the weaker stocks, the ones that have consolidated or gone up the least, during the Nov-Dec rally.
You don’t short strength. Never short Apple, for example. But also you don’t short market strength. Let the market tell, and look for individual indicators that are weak. I’ve posted some strengths lately, some have done quite well. (Yes, I said Defense would do well but after putting together a chart and evaluating their performance, it was a premature call—defense is a trend follower). But now I’m thinking to look for stocks that are below-trend followers and identify them, for future shorting opportunities. Which I believe are coming soon.
Again, look to the tapes. Look for the S&P trend to reverse on the 3LB if you want to be really safe. Don’t try to call a top, or a bottom, but jump in on the trend once it’s established. And set your stops so you don’t lose capital!
I shorted X early, and lost my $100. I shorted JRCC early and haven’t hit my stop yet, so we’ll see. But I added to my NEM on the pullback, as well. I did good on that one, I caught just after the turn-around. Just being honest. I did not enter PAAS, I fell asleep.
What, Rock, no charts? Relax, I may put them in comments as I find weak opportunities. You'll get your chance, don't worry. I did not enter PAAS, I fell asleep. As I said, snooze, you lose.
Ok, Ok, I heard the jeers. Here’s my JRCC short chart. So there.
Pendulum
In the Social Security Act of 1934 an impressive amount of people got a new contract with life, in the sense that meant that government sometimes represents or have at heart people's needs.
It started 60 years before with Otto Von Bismark in Germany where for some unusual reason started blossoming the wild idea that people deserve a compensation (covering pensions and unemployment) for a life of work after they are too old to work or at least their bodies slow down or if their jobs are gone.
Getting a new contract with life in the very sense that ideals of something better for people got inside the realm of the possible.
Yes, we are still too close to the dark middle ages where royalty derived from God himself the mandate to rule humans and appointed a whole group of people that just became the owners of the land and by that in no small measure of the population's destiny.
Similarly a kind of aristocracy of money got the leashes of the country here. But they blinked in 1929 when they were at the zenith of their power and miraculously they retrenched and a bloodless revolution occurred in the hands of one of their own, president FDR who sided with the little people.So what speaks not too bad about the robber barons (still controlling vast parts of the economy) is that mayybe out of a sense of embarrasment or even shame allowed the new president to create mechanisms and laws to prevent in the future similar situations
Something that we kissed goodbye several decades later in the Clinton presidency by the repeal of the Glass-Steagall Act (not separating wall street and main street money anymore so wall street could help itself more liberally so to speak) among other things.
That moment is a clear example of not letting a crisis go wasted.From Roosevelt point of view.
The untold suffering for years by huge amounts of the population rendered ineffective any kind of counteraction with a chance of success by the moneyed elite.
Just to set the record straight moneyed elite means a very small group of the wealthy to me, just the robber barons, if you get my meaning.
Those that don't have any conscience's objection at all to opress, enslave and discard fellow humans from the production stage in their companies in the name of progress and letting government to deal with that.And cry foul if they have to pay taxes in a mesure that allow the nation to take care of the infirm, something that is coming very soon by the way.
A Sam Waltonish approach where the encouragement is to have employees go to the hospital as a way to make more profit.
Of course had the workers owned a sizable amount of shares in the company would have been a "neutral" so to speak decision; increasing profits to shareholders and himself.
There lays the crux of the matter and the central question: What is fair? where is the line in the sand? because on the other hand we got organized labor when... ahem "get" for the people more than the fair share and companies go bust like the GM case of course their power is or was a lot less.
So in 1934 it was determined that a fair share was to provide some kind of net to people who without participating in the benefits got the short end of the stick.And things doesn't look too different today, do they?.
But the S.S. Act of 1934 planted the seeds of what is known as the great compression, roughly it was a wealth transfer (high taxes one of the most evident results) to the masses from the rich.Where the country succeeded in establishing broad new standards about what was a fair and decent deal revamping the American Dream. The sense of what is just.
And honestly I think that this is the course that we are going to embark again. Some catalyzer should be in place but I can not fathom it yet.
But the situation after a decade of stagnant income (the need to sometimes compensate with debt the lack of income in the form of flashy plastic cards) and unresponsive governments for the little people needs; looks like is going to snap up.
Having in the other plate of the scale lavish profits for a very few who gradually became more owners of everything than in the last 80 years, makes me wonder if this time will be different or same like before a pervasive sense of shame is going to make the robber barons retreat allowing to reset what is fair in the "social contract" again, because they are still very much alive, aren't they?.
Dan
Yeah, when the market is boring I become philosophical but this weekend I'm going to start checking in detail and see if something new arises. Still in ACAS, EK, MBI.
Good luck everybody.
It started 60 years before with Otto Von Bismark in Germany where for some unusual reason started blossoming the wild idea that people deserve a compensation (covering pensions and unemployment) for a life of work after they are too old to work or at least their bodies slow down or if their jobs are gone.
Getting a new contract with life in the very sense that ideals of something better for people got inside the realm of the possible.
Yes, we are still too close to the dark middle ages where royalty derived from God himself the mandate to rule humans and appointed a whole group of people that just became the owners of the land and by that in no small measure of the population's destiny.
Similarly a kind of aristocracy of money got the leashes of the country here. But they blinked in 1929 when they were at the zenith of their power and miraculously they retrenched and a bloodless revolution occurred in the hands of one of their own, president FDR who sided with the little people.So what speaks not too bad about the robber barons (still controlling vast parts of the economy) is that mayybe out of a sense of embarrasment or even shame allowed the new president to create mechanisms and laws to prevent in the future similar situations
Something that we kissed goodbye several decades later in the Clinton presidency by the repeal of the Glass-Steagall Act (not separating wall street and main street money anymore so wall street could help itself more liberally so to speak) among other things.
That moment is a clear example of not letting a crisis go wasted.From Roosevelt point of view.
The untold suffering for years by huge amounts of the population rendered ineffective any kind of counteraction with a chance of success by the moneyed elite.
Just to set the record straight moneyed elite means a very small group of the wealthy to me, just the robber barons, if you get my meaning.
Those that don't have any conscience's objection at all to opress, enslave and discard fellow humans from the production stage in their companies in the name of progress and letting government to deal with that.And cry foul if they have to pay taxes in a mesure that allow the nation to take care of the infirm, something that is coming very soon by the way.
A Sam Waltonish approach where the encouragement is to have employees go to the hospital as a way to make more profit.
Of course had the workers owned a sizable amount of shares in the company would have been a "neutral" so to speak decision; increasing profits to shareholders and himself.
There lays the crux of the matter and the central question: What is fair? where is the line in the sand? because on the other hand we got organized labor when... ahem "get" for the people more than the fair share and companies go bust like the GM case of course their power is or was a lot less.
So in 1934 it was determined that a fair share was to provide some kind of net to people who without participating in the benefits got the short end of the stick.And things doesn't look too different today, do they?.
But the S.S. Act of 1934 planted the seeds of what is known as the great compression, roughly it was a wealth transfer (high taxes one of the most evident results) to the masses from the rich.Where the country succeeded in establishing broad new standards about what was a fair and decent deal revamping the American Dream. The sense of what is just.
And honestly I think that this is the course that we are going to embark again. Some catalyzer should be in place but I can not fathom it yet.
But the situation after a decade of stagnant income (the need to sometimes compensate with debt the lack of income in the form of flashy plastic cards) and unresponsive governments for the little people needs; looks like is going to snap up.
Having in the other plate of the scale lavish profits for a very few who gradually became more owners of everything than in the last 80 years, makes me wonder if this time will be different or same like before a pervasive sense of shame is going to make the robber barons retreat allowing to reset what is fair in the "social contract" again, because they are still very much alive, aren't they?.
Dan
Yeah, when the market is boring I become philosophical but this weekend I'm going to start checking in detail and see if something new arises. Still in ACAS, EK, MBI.
Good luck everybody.
Monday, December 13, 2010
Manny Mondays: Merry "Bifurcated" Christmas
Morning from snowed in Minneapolis! So why does this market and economic recovery feel even less "real" to many people than the last one? Well, for starters, take a look at who's benefiting the most from this so-called "recovery". It's largely not the middle and lower classes, which make up most of the country's population. No wonder why many people are in such a surly mood right now, even in the face of a surging market and apparent economic "recovery", and in some cases, an even worse mood than the last "recovery" from '03 - '08 that left a lot of them behind then as well.
My premise has long been that we are in the midst of an extremely "bifurcated recovery" and economy where we find the "haves" doing very well again, and even better than ever in many cases, while those in the middle and below largely continue to struggle with stagnant (or no/low) wages. Well, it looks like others are starting to come around to this point of view as well. Welcome to the party, folks. In Sunday's Washington Post, Yian Mui describes how this very thing that I (and others) have theorized is playing out with a vengeance: Economic recovery leaving some behind this Christmas.
This holiday season, those two worlds have been thrown into stark relief: At Tiffany's, executives report that sales of their most expensive merchandise have grown by double digits. At Wal-Mart, executives point to shoppers flooding the stores at midnight every two weeks to buy baby formula the minute their unemployment checks hit their accounts. Neiman Marcus brought back $1.5 million fantasy gifts in its annual Christmas Wish Book. Family Dollar is making more room on its shelves for staples like groceries, the one category its customers reliably shop.
"When you start to line up all the pieces, you see a story that starts to emerge," said James Russo, vice president of global consumer insights for The Nielsen Co. "You kind of see this polarized Christmas."
It seems that things are just downright peachy again in the upper strata of our country's wealth continuum, as the wealthy, after a brief bout with what's known as a conscience, no longer feel guilty about flaunting their wealth in every way possible:
The divide is evident in retailers' sales. Sales at luxury stores open at least a year - a key measure of retail health - plunged by a monthly average of 9 percent last year, only to skyrocket 7 percent so far this year, according to industry analysis. Discount stores eked out a 0.5 percent gain a year ago and are up just 2.6 percent this year.
So putting this into context with the recent tax cut "compromise" reached by the Obama administration, how ludicrous (and immoral, if you ask me) do the arguments look now about extending tax cuts for the very people who seem to be doing better than ever?
My premise has long been that we are in the midst of an extremely "bifurcated recovery" and economy where we find the "haves" doing very well again, and even better than ever in many cases, while those in the middle and below largely continue to struggle with stagnant (or no/low) wages. Well, it looks like others are starting to come around to this point of view as well. Welcome to the party, folks. In Sunday's Washington Post, Yian Mui describes how this very thing that I (and others) have theorized is playing out with a vengeance: Economic recovery leaving some behind this Christmas.
This holiday season, those two worlds have been thrown into stark relief: At Tiffany's, executives report that sales of their most expensive merchandise have grown by double digits. At Wal-Mart, executives point to shoppers flooding the stores at midnight every two weeks to buy baby formula the minute their unemployment checks hit their accounts. Neiman Marcus brought back $1.5 million fantasy gifts in its annual Christmas Wish Book. Family Dollar is making more room on its shelves for staples like groceries, the one category its customers reliably shop.
"When you start to line up all the pieces, you see a story that starts to emerge," said James Russo, vice president of global consumer insights for The Nielsen Co. "You kind of see this polarized Christmas."
It seems that things are just downright peachy again in the upper strata of our country's wealth continuum, as the wealthy, after a brief bout with what's known as a conscience, no longer feel guilty about flaunting their wealth in every way possible:
The divide is evident in retailers' sales. Sales at luxury stores open at least a year - a key measure of retail health - plunged by a monthly average of 9 percent last year, only to skyrocket 7 percent so far this year, according to industry analysis. Discount stores eked out a 0.5 percent gain a year ago and are up just 2.6 percent this year.
So putting this into context with the recent tax cut "compromise" reached by the Obama administration, how ludicrous (and immoral, if you ask me) do the arguments look now about extending tax cuts for the very people who seem to be doing better than ever?
Saturday, December 11, 2010
December 10, 2010 Linkfest
A Desert Sunset for all you Snowbirds!
EIA: Short-Term Energy Outlook
Worrying about oil prices
Estimating the Breakeven Costs of Shale Gas
"Shocked to Find Gambling in This Establishment" Watch: Indian Property IPOs May Stall After Probe, Top Arranger Says
Mike Rowe celebrates dirty jobs
Apple's communication gap irks business buyers
Nobel No-Shows for Prize to Dissident Reveal Chinese Influence. Ugh.
Thursday, December 9, 2010
Thoughts on future directions
With the chop lately, Rock’s not been making much money. It seems we actually had the start of a trend reversal, but looks like it’s back to normal, up up and away.
I think we all realize in the short term, the government is trying its best to help Wall Street, and not Main Street. The basic reason for this is because Main street had to bail out Wall Street, and the Government doesn’t want that to happen again, so while we establish regulations to hopefully prevent banksters from going there, we need to keep the markets up. Then Main Street doesn’t have to bail out the banksters or the pension funds, and we will all be saved from creating a lot more debt.
We need to keep interest rates low. I watched the Bernank address congress where he said this spending can’t go on forever and we need to get some fiscal responsibility. In the mean time, the Bernank will keep interest rates low so the US debt doesn’t increase because we have to pay a lot of interest. How do we do that? Buy bonds, keep interest rates down. Definition of QE2.
Congress is likely to take years to decide how to cut spending. I may be dead by then, but I’ve seen a couple of green shoots: there’s talk of a transfer tax, and rich guys have said they could pay more taxes. But we need more than green shoots.
So let’s have a look around at the market. We must try to get ourselves ahead. Granted the job picture is weak, so structurally we don’t want investment in stocks that need lots of consumer spending or non-necessities. I suspect the jobs picture will be very bleak for years. There may be some shining stars in the best sectors, and there may be some real underperformers in the poorer sectors, so still you must be careful and do your homework. So structurally, where do we go?
1. Defense spending. As more saber-rattling happens in Korea, and Afghanistan, we will need to continue defense spending. I saw an article that some pentagon leader is worried about defense spending cuts, but it ain’t gonna happen. So research what companies are primarily here, and post em to our blog.
2. Oil and Gas—equipment and services, not reserves. People will drive, even with fewer jobs, they will drive.
3. Coals—we will use electricity (he says, as his coffee cup sits on the warmer, 4 monitors on, 3 computers on, and a future of electric cars needing charging)
4. High-end retail. The rich will continue to buy, and give their kids money to spend.
5. Ultra low-end retail. The poor will look for better ways to spend the tiny amount of cash they’ve got
6. Cash driven businesses. Like gambling and high-end resorts or high-end reits. Places where people can take their illegally gotten cash and dump or launder it. Like the Sands, especially if they are an overseas branch, like our new Sands here in Singapore.
7. Metals and mining: precious metals, especially ones that get used up. Not copper. Silver, platinum are good.
8. Cheap home entertainment. Nintendo, Sony, Note Phillips just bought Saeco, maybe we should short Starbucks
9. Baby stuff. More time at home, well, I also said cheap entertainment……I actually think a baby boom may lead us out of this non-depression we’re in. I have little hope of China or emerging markets in general leading us out because I’ve been there, and I’ve seen. Too many basic necessities are missing.
10. Semis. This is kind of like "basic materials" for our technological world, and I don't see that sector going away, or underperforming like the following.
Places to stay away from:
1. Middle retail. No jobs, no spending, no profits. These guys are relying on developing markets for their additional revenues, not looking at the US. With the emerging market’s impending inflation, I don’t think they’re in very good shape. Thank you, QE2.
2. Solar. My heart is there, but my pocketbook says fossil energy will be cheaper for tens of years.
3. Home schooling. I think a lot of people got a dose of reality when they realized there weren’t any jobs for accredited schools’ graduates.
4. Medical: instrumentation, drugs, the whole thing. First, it is unknown what new regulations will be coming, and with the hospitals losing money because of lawsuits, the services will drop. Get ready to travel outside the US if you need a major medical event.
5. Banks. They are insolvent. A new regulation could bury them, and could happen any day of the week. If you invest here, you are taking a substantial risk that would be lower almost anywhere else.
6. Emerging markets. They are facing huge inflation, especially as China moves the RMB. When your food is going up daily, you don’t spend on other things. Like India is now.
7. Currencies. Too volatile. Sovereign debt. Political fights over Euro. Trading wars. Just too much risk.
8. Techs. Too much interbreeding. And remember, you've seen major CEOs jump ship and try to enter politics. Somehow, this seems oxymoronic. Or just moronic.
9. Insurance. sorry, Dad. I just wouldn't put money into a piece of the Rock just now.
Now a couple of charts. Yeah, I know. You thought Rock wasn’t gonna have charts.
First, interesting charts are the number of companies that are above their 50 day and 200 day moving averages. These are 3LB charts, the ones I like to use to evaluate trends, courtesy of Stockcharts.com.
The trend looks up to me.
Second, (or third, if you’re counting) is the SPY. Sorry, Mutt, but it looks like the trend’s in favor of going long.
I think we all realize in the short term, the government is trying its best to help Wall Street, and not Main Street. The basic reason for this is because Main street had to bail out Wall Street, and the Government doesn’t want that to happen again, so while we establish regulations to hopefully prevent banksters from going there, we need to keep the markets up. Then Main Street doesn’t have to bail out the banksters or the pension funds, and we will all be saved from creating a lot more debt.
We need to keep interest rates low. I watched the Bernank address congress where he said this spending can’t go on forever and we need to get some fiscal responsibility. In the mean time, the Bernank will keep interest rates low so the US debt doesn’t increase because we have to pay a lot of interest. How do we do that? Buy bonds, keep interest rates down. Definition of QE2.
Congress is likely to take years to decide how to cut spending. I may be dead by then, but I’ve seen a couple of green shoots: there’s talk of a transfer tax, and rich guys have said they could pay more taxes. But we need more than green shoots.
So let’s have a look around at the market. We must try to get ourselves ahead. Granted the job picture is weak, so structurally we don’t want investment in stocks that need lots of consumer spending or non-necessities. I suspect the jobs picture will be very bleak for years. There may be some shining stars in the best sectors, and there may be some real underperformers in the poorer sectors, so still you must be careful and do your homework. So structurally, where do we go?
1. Defense spending. As more saber-rattling happens in Korea, and Afghanistan, we will need to continue defense spending. I saw an article that some pentagon leader is worried about defense spending cuts, but it ain’t gonna happen. So research what companies are primarily here, and post em to our blog.
2. Oil and Gas—equipment and services, not reserves. People will drive, even with fewer jobs, they will drive.
3. Coals—we will use electricity (he says, as his coffee cup sits on the warmer, 4 monitors on, 3 computers on, and a future of electric cars needing charging)
4. High-end retail. The rich will continue to buy, and give their kids money to spend.
5. Ultra low-end retail. The poor will look for better ways to spend the tiny amount of cash they’ve got
6. Cash driven businesses. Like gambling and high-end resorts or high-end reits. Places where people can take their illegally gotten cash and dump or launder it. Like the Sands, especially if they are an overseas branch, like our new Sands here in Singapore.
7. Metals and mining: precious metals, especially ones that get used up. Not copper. Silver, platinum are good.
8. Cheap home entertainment. Nintendo, Sony, Note Phillips just bought Saeco, maybe we should short Starbucks
9. Baby stuff. More time at home, well, I also said cheap entertainment……I actually think a baby boom may lead us out of this non-depression we’re in. I have little hope of China or emerging markets in general leading us out because I’ve been there, and I’ve seen. Too many basic necessities are missing.
10. Semis. This is kind of like "basic materials" for our technological world, and I don't see that sector going away, or underperforming like the following.
Places to stay away from:
1. Middle retail. No jobs, no spending, no profits. These guys are relying on developing markets for their additional revenues, not looking at the US. With the emerging market’s impending inflation, I don’t think they’re in very good shape. Thank you, QE2.
2. Solar. My heart is there, but my pocketbook says fossil energy will be cheaper for tens of years.
3. Home schooling. I think a lot of people got a dose of reality when they realized there weren’t any jobs for accredited schools’ graduates.
4. Medical: instrumentation, drugs, the whole thing. First, it is unknown what new regulations will be coming, and with the hospitals losing money because of lawsuits, the services will drop. Get ready to travel outside the US if you need a major medical event.
5. Banks. They are insolvent. A new regulation could bury them, and could happen any day of the week. If you invest here, you are taking a substantial risk that would be lower almost anywhere else.
6. Emerging markets. They are facing huge inflation, especially as China moves the RMB. When your food is going up daily, you don’t spend on other things. Like India is now.
7. Currencies. Too volatile. Sovereign debt. Political fights over Euro. Trading wars. Just too much risk.
8. Techs. Too much interbreeding. And remember, you've seen major CEOs jump ship and try to enter politics. Somehow, this seems oxymoronic. Or just moronic.
9. Insurance. sorry, Dad. I just wouldn't put money into a piece of the Rock just now.
Now a couple of charts. Yeah, I know. You thought Rock wasn’t gonna have charts.
First, interesting charts are the number of companies that are above their 50 day and 200 day moving averages. These are 3LB charts, the ones I like to use to evaluate trends, courtesy of Stockcharts.com.
The trend looks up to me.
Second, (or third, if you’re counting) is the SPY. Sorry, Mutt, but it looks like the trend’s in favor of going long.
A Contrast in Crisis Response
We recently received news that the Economy of Iceland had once again returned to growth. Remember that it was just two short years ago when the economy of Iceland was driven off a cliff by it's banking sector. Below are two recent articles I found interesting contrasting the different ways in which each country went about handling it's bank crisis.
IRELAND, ICELAND AND LETTING BANKS FAIL
What’s interesting about the two crises is the dramatic difference in the ways they were able to attack their problems. While both have implemented austerity measures there have been vast differences. In particular, Ireland, embroiled in the flawed single currency Euro has been unable to devalue their currency while at the same time being forced to succumb to the pressures of foreign bankers. In Iceland, they have benefited enormously from being able to devalue the Krona. Finance Minister Steingrimur Sigfusson recently said:
“(devaluing the Krona) significantly increased our export business and got us ahead of our competitors which, without a doubt, helped us through this difficulty and continues to drag us along and eventually out.”
In addition, Iceland did not force the public to accept the losses of private bankers.
Iceland’s Economy Grew in Third Quarter as Recovery Takes Hold
The $12 billion economy troughed in the second quarter, when output slumped an annual 7.5 percent led by a 16 percent drop in fixed investment. The government’s decision two years ago to let its lenders fail and protect taxpayers from the cost of a bank bailout may allow Iceland to recover faster than some euro members such as Ireland as exports pick up and households start spending again.
“The economy is expected to hit bottom in the next few months,” said Ingolfur Bender, an economist at Islandsbanki Research, in a note before the report was published. “The pre- conditions for growth have been re-established after a massive correction.”
Working poor, carers and the sick will 'take the hit'
MANY PEOPLE will be driven into poverty, and those already in poverty will see their situation deepen as a result of the Budget, the director of Social Justice Ireland said yesterday.
Fr Seán Healy said the claim by Minister for Finance Brian Lenihan that the Budget was progressive and had distributed the burden fairly “was patently untrue”. The Budget was “unjust, unfair and inequitable”.
The working poor, low-income families, carers, the sick, people with disabilities, children and the unemployed would “take the hit”. And senior bondholders, the corporate sector and those who benefit from tax breaks that had not been removed would “escape”.
These two examples should be fascinating to us all because they will be very clear and loud examples of what will and will not work in the long run. Stay tuned, things are about to get interesting!
What’s interesting about the two crises is the dramatic difference in the ways they were able to attack their problems. While both have implemented austerity measures there have been vast differences. In particular, Ireland, embroiled in the flawed single currency Euro has been unable to devalue their currency while at the same time being forced to succumb to the pressures of foreign bankers. In Iceland, they have benefited enormously from being able to devalue the Krona. Finance Minister Steingrimur Sigfusson recently said:
“(devaluing the Krona) significantly increased our export business and got us ahead of our competitors which, without a doubt, helped us through this difficulty and continues to drag us along and eventually out.”
In addition, Iceland did not force the public to accept the losses of private bankers.
The $12 billion economy troughed in the second quarter, when output slumped an annual 7.5 percent led by a 16 percent drop in fixed investment. The government’s decision two years ago to let its lenders fail and protect taxpayers from the cost of a bank bailout may allow Iceland to recover faster than some euro members such as Ireland as exports pick up and households start spending again.
“The economy is expected to hit bottom in the next few months,” said Ingolfur Bender, an economist at Islandsbanki Research, in a note before the report was published. “The pre- conditions for growth have been re-established after a massive correction.”
MANY PEOPLE will be driven into poverty, and those already in poverty will see their situation deepen as a result of the Budget, the director of Social Justice Ireland said yesterday.
Fr Seán Healy said the claim by Minister for Finance Brian Lenihan that the Budget was progressive and had distributed the burden fairly “was patently untrue”. The Budget was “unjust, unfair and inequitable”.
The working poor, low-income families, carers, the sick, people with disabilities, children and the unemployed would “take the hit”. And senior bondholders, the corporate sector and those who benefit from tax breaks that had not been removed would “escape”.
These two examples should be fascinating to us all because they will be very clear and loud examples of what will and will not work in the long run. Stay tuned, things are about to get interesting!
Wednesday, December 8, 2010
Wednesday Link Fest
The Ugliest Cars of 2010
(I vote for the green one, but the brown one was a close second)
Cat and Mouse Game Over the Euro
Iceland Emerges From Recession in 3Q
HSBC Overweight on Russia, Cautious on Other BRICS
(Turkey just isn't for Thanksgiving anymore)
The Irish Times: Severe Budget cutbacks will see drop in living standards
(Let them eat potatoes)
North Korea - South Korea Rules of Engagement
Real life "Jaws" terrorizes Egypt coast
(Thor, don't go in the water!)
Wanderlust: It's pronounced "fooking"
Allen Stanford Too Drugged in Prison for Trial, Lawyer Says in Bail Bid
(Insert your own insult here ______________ .)
Madoff Friend Agrees To A $625 million Forfeiture
The Rise of Holiday Me-tailers
(Best gift idea for 2010, M&M's emblazoned with your kid's photo)
Citi Looks Cheap as U.S. Exits Stake
US Education Rank Tumbles
Google’s Chrome OS: Ready to live your life on the Web?
Chicago-Declare Your Street Chair Free
(This is so "inside Chicago")
The Eight Most Annoying People You Will Meet On An Airplane
Mastercard, Swiss Bank and Lawyer hacked by Wikileaks supporters with DDOS attack
(21st century version of the Empire Strikes Back)
Tuesday, December 7, 2010
Let's party
Well imagine that we parked, get out of the cars and in to the long awaited party.
When we enter it looks evident the good times, ebullient people chatting and laughing everywhere, get our coats off while being greeted by the hosts though not much attention is being paid to what is said, we just want to get in and finally here we are.
Marvelling at the crystal chandellier from a bygone era is an unspoken tribute to the talent and craftmanship that populated the land around the 1920's, when it was made with the secondary objective to dazzle future generations.
Then it dawn on us when we mingle with all that beautiful and sophisticated people that they talk funny, yeah really really funny. We briefly look disconcerted but just laugh as a way to borrow time regaining our composure and "coolness".It's amazing how engaging the crowd is with all of us.
Their talking funny their utterances the meanings of what is said is lost to us, we don't get it.
Of course we laugh at least we didn't have to pay cover charge. Anyway we are fine comfortable and we even think that we are with the right crowd.
Of course we all shared the body language and that looks like enough to get cozy.We all understand body language so we indulge in checking body language and specially the bodies that come wrapped in flimsy dresses, but I digress.
At certain point after scanning the whole place for more "body language" one of us starts speaking with the objective to introduce ourselves.
And his words sound as unintelligible as with the rest of the crowd. Giddily we start speaking and with all of us the same happens, mesmerized by our own sounds not knowing how to decode it we just happily start conversing and laughing even though nobody can understand a fucking word.
This is what I call our rationality, human rationality.
We pretend that we understand what is being said manufacturing creating words that nobody can understand but us, and just partially because we are not sure if this is an accurate way to represent our inner feelings neither to ourselves nor to others. Not even want to go further and try to imagine what kind of concoctions other people use to create their own words.
In al that caos thank God we have for a fact something more primitive, shared and reliable: body language.
Now think about the foreclosure scandal and it's effect in the equity market, none.
The California budget crisis (this year and the previous one) nope.
Harrisburg, Pennsylvania crisis and Muni bonds in distress, nada.
The bond vigilantes dissatisfied with meager returns, nil.
The employment numbers past week, zero.
The ECRI numbers 3 months ago and the doble dip recession as a sure thing, nilch.
Ireland, Grece? Not either (will see when Spain comes)
Insiders selling at a record level (10, 12 weeks ago) Niet.
That's the drawdown of rationality and the way MSM presents it. At moments work in the way that logic tell us it should and some times don't, yeah...freaking comforting.
Now if we check "body language" what we can get.
Decoupling ridiculed 3 years ago is for real bringing India and China to the place that occupied as GDP world leaders (till the start of the industrial revolution) for centuries.
World GDP around the 2008 high record levels.
Companies cleaning their balance sheets in one of their best moments in the past five decades (and the debt is capital at its disposal for investment, trading, M&A, etc, so not too shabby for having debt if used to generate profits).
Politicians Dem. and Rep. realizing that if they leave 2 million people without unemployment benefits were going to be set ablaze in a short while and for nothing because like I mentioned couple months ago it just not going to happen that they let them die without food in an internment camp in some kind of class cleansing.
Intel as a representative sample made 8-10 times more money the past quarter than in 2008.Which by the numbers doesn't look fantastic but my point is not the amount of money earned instead that someone is buying their stuff. Economic activity.
The world is not in 2008 anymore as a fact.
Of course this doesn't mean at all that we can't go back to that time and even worse, but facts tell me that we are not in 2008.
Currency wars as theater because every nation is going to devalue keeping pace with the rest or slap taxes to foreign capital to neutralize the disparity (think Brazil).
The state (government) ready to absorb the entire house market relieving banksters that can in some way start cleaning their balance sheets.
Banks growing larger and larger, (not a good thing, just a fact) so they are probably planning to sell more and more financial products to the world to keep pace and as a way of feeding a growing base of people who got attracted to that line of business.Meaning everything needs to expand just to get a decent bonus.
So I'm not at ease with rational thinking in the equity markets because one day goes up and with the same information being presented the next day brings it down,
That's my reason for checking only body language, because it doesn't lie.
Dan
(About the markets I have to study this coming couple months before saying more than I did past Tuesday)
When we enter it looks evident the good times, ebullient people chatting and laughing everywhere, get our coats off while being greeted by the hosts though not much attention is being paid to what is said, we just want to get in and finally here we are.
Marvelling at the crystal chandellier from a bygone era is an unspoken tribute to the talent and craftmanship that populated the land around the 1920's, when it was made with the secondary objective to dazzle future generations.
Then it dawn on us when we mingle with all that beautiful and sophisticated people that they talk funny, yeah really really funny. We briefly look disconcerted but just laugh as a way to borrow time regaining our composure and "coolness".It's amazing how engaging the crowd is with all of us.
Their talking funny their utterances the meanings of what is said is lost to us, we don't get it.
Of course we laugh at least we didn't have to pay cover charge. Anyway we are fine comfortable and we even think that we are with the right crowd.
Of course we all shared the body language and that looks like enough to get cozy.We all understand body language so we indulge in checking body language and specially the bodies that come wrapped in flimsy dresses, but I digress.
At certain point after scanning the whole place for more "body language" one of us starts speaking with the objective to introduce ourselves.
And his words sound as unintelligible as with the rest of the crowd. Giddily we start speaking and with all of us the same happens, mesmerized by our own sounds not knowing how to decode it we just happily start conversing and laughing even though nobody can understand a fucking word.
This is what I call our rationality, human rationality.
We pretend that we understand what is being said manufacturing creating words that nobody can understand but us, and just partially because we are not sure if this is an accurate way to represent our inner feelings neither to ourselves nor to others. Not even want to go further and try to imagine what kind of concoctions other people use to create their own words.
In al that caos thank God we have for a fact something more primitive, shared and reliable: body language.
Now think about the foreclosure scandal and it's effect in the equity market, none.
The California budget crisis (this year and the previous one) nope.
Harrisburg, Pennsylvania crisis and Muni bonds in distress, nada.
The bond vigilantes dissatisfied with meager returns, nil.
The employment numbers past week, zero.
The ECRI numbers 3 months ago and the doble dip recession as a sure thing, nilch.
Ireland, Grece? Not either (will see when Spain comes)
Insiders selling at a record level (10, 12 weeks ago) Niet.
That's the drawdown of rationality and the way MSM presents it. At moments work in the way that logic tell us it should and some times don't, yeah...freaking comforting.
Now if we check "body language" what we can get.
Decoupling ridiculed 3 years ago is for real bringing India and China to the place that occupied as GDP world leaders (till the start of the industrial revolution) for centuries.
World GDP around the 2008 high record levels.
Companies cleaning their balance sheets in one of their best moments in the past five decades (and the debt is capital at its disposal for investment, trading, M&A, etc, so not too shabby for having debt if used to generate profits).
Politicians Dem. and Rep. realizing that if they leave 2 million people without unemployment benefits were going to be set ablaze in a short while and for nothing because like I mentioned couple months ago it just not going to happen that they let them die without food in an internment camp in some kind of class cleansing.
Intel as a representative sample made 8-10 times more money the past quarter than in 2008.Which by the numbers doesn't look fantastic but my point is not the amount of money earned instead that someone is buying their stuff. Economic activity.
The world is not in 2008 anymore as a fact.
Of course this doesn't mean at all that we can't go back to that time and even worse, but facts tell me that we are not in 2008.
Currency wars as theater because every nation is going to devalue keeping pace with the rest or slap taxes to foreign capital to neutralize the disparity (think Brazil).
The state (government) ready to absorb the entire house market relieving banksters that can in some way start cleaning their balance sheets.
Banks growing larger and larger, (not a good thing, just a fact) so they are probably planning to sell more and more financial products to the world to keep pace and as a way of feeding a growing base of people who got attracted to that line of business.Meaning everything needs to expand just to get a decent bonus.
So I'm not at ease with rational thinking in the equity markets because one day goes up and with the same information being presented the next day brings it down,
That's my reason for checking only body language, because it doesn't lie.
Dan
(About the markets I have to study this coming couple months before saying more than I did past Tuesday)
Monday, December 6, 2010
Manny Mondays: Has Our National Affliction Reached the White House?
Morning all! I know that most of us want to stay away from overt political commentary on this blog, but a NY Times Op-Ed caught my eye over the weekend because it touches on one of the seeming afflictions of the populace that has both mortified and stupefied yours truly, in addition to other posters and commenters at other blogs. What's this "national affliction", you ask? Answer: Stockholm Syndrome.
What is "Stockholm Syndrome", you ask? Here is a rough definition of it courtesy of Wikipedia:
In psychology, Stockholm syndrome is a term used to describe a paradoxical psychological phenomenon wherein hostages express adulation and have positive feelings towards their captors that appear irrational in light of the danger or risk endured by the victims, essentially mistaking a lack of abuse from their captors as an act of kindness.[1] [2] The FBI’s Hostage Barricade Database System shows that roughly 27% of victims show evidence of Stockholm syndrome.[3] The syndrome is named after the Norrmalmstorg robbery of Kreditbanken at Norrmalmstorg in Stockholm, in which the bank robbers held bank employees hostage from August 23 to August 28, 1973. In this case, the victims became emotionally attached to their captors, and even defended them after they were freed from their six-day ordeal. The term "Stockholm Syndrome" was coined by the criminologist and psychiatrist Nils Bejerot, who assisted the police during the robbery, and referred to the syndrome in a news broadcast.[4] It was originally defined by psychiatrist Frank Ochberg to aid the management of hostage situations.[5]
It's been my premise since this crisis started that much of the public continues to suffer from at least a mild form of this affliction, with many, instead of "connecting the dots" by doing some actual critical thinking, continually defending their "captors" or "masters", including the big Wall Street banks, banking system itself, and the Fed, as well as those political leaders who continue to make policy decisions that do actual great harm on most of its stakeholders, namely We the People, instead of benefiting us.
Well, according to Frank Rich in yesterday's Sunday NY Times, this affliction may have also reached the Executive Suite in the White House. Rich eviscerates the President for continually trying to placate the GOP, a body that has continually and openly stated that its main and only goal is to destroy his presidency and "make Obama a one-term president" no matter the short or long term harm inflicted on the country as a whole. Here are some key passages from the article:
This dynamic was acted out — yet again — in President Obama’s latest and perhaps most humiliating attempt to placate his Republican captors in Washington. No sooner did he invite the G.O.P.’s Congressional leaders to a post-election White House summit meeting than they countered his hospitality with a slap — postponing the date for two weeks because of “scheduling conflicts.” But they were kind enough to reschedule, and that was enough to get Obama to concentrate once more on his captors’ “good side.”
More here:
And so, as the big bipartisan event finally arrived last week, he handed them an unexpected gift, a freeze on federal salaries. Then he made a hostage video hailing the White House meeting as “a sincere effort on the part of everybody involved to actually commit to work together.” Hardly had this staged effusion of happy talk been disseminated than we learned of Mitch McConnell’s letter vowing to hold not just the president but the entire government hostage by blocking all legislation until the Bush-era tax cuts were extended for the top 2 percent of American households.
Rich goes on to make the very important point (I believe) that what the country yearns for (and thought it was getting in Obama) is real leadership, which means someone who can make the difficult decisions and make the case plainly and bluntly to the American people (speak the "hard truths"). In short, what people admire in a leader is continually knowing what they stand for, which might partially explain George Bush's ability to get elected, then re-elected, in addition to being able to get much of his agenda through Congress without even close to a filibuster-proof Congress.
Now I think that "W" was wrong on just about everything, but we always knew where he stood on the issues and who he was representing (he certainly didn't care about what I thought or the 50% of the country that didn't vote for him). Obama seems to lack any conviction of just about anything. Everything is up for negotiation right off the bat, even his most prized chips. It would be one thing if he were a shrewd negotiator but he gives up his most important negotiating chips right from the get-go, which is very disheartening to many people who voted for him in '08. In times of crisis, the country needs a leader with a capital "L" that can use the bully pulpit to stand up for his ideals and values (assuming he has any) and rouse "We the People" to follow. Obama seems to be more of conciliator and mediator and one who prefers to find the "good" in his adversaries and namely "get along" with the other side and find what he perceives to be "middle ground", even if his enemies ending up getting the lion's share of what they want, while the other side fights for scraps off the table. That might be OK if we weren't in a time of dire crisis where what's required, and what the people yearn for, is a real leader who LEADS by and with his values and convictions, even if many might disagree with them.
Here's more from Rich on how NJ governor Chris Christie is governing, no, LEADING, in contrast to Obama, and how even many of his adversaries seem to be falling into line:
Christie’s popularity among national right-wing activists and bloggers has been stoked by a viral YouTube video where he dresses down a constituent in a manner that recalls Ralph Kramden sending Alice “to the moon.” But the core of Christie’s appeal at home is that he explains passionately held views in concrete, plain-spoken detail. Voters know what he stands for and sometimes respect him for his forthrightness even when they reject the stands themselves. This extends to his signature issue — his fiscal and rhetorical blows against public education. He’s New Jersey’s most popular statewide politician despite the fact that a 59 percent majority in the state thinks public schools deserve more taxpayer money, not less.
G.O.P. propagandists notwithstanding, Christie’s appeal does not prove that New Jersey (and therefore the country) has “turned to the right.” It does prove that people want a leader with a strong voice, even if only to argue with it.
A lot can happen until the '12 election, but I fear for this reason among all the others at this point Obama will not only be a one-term president, but he may even see a primary challenge (which actually might not be a bad thing for the Dems and country long-term, as I think it's time to break the stranglehold the current two-party system has on the country).
Go read the whole article here, and if you have time, read many of the reader comments as well. They are MOST telling of the increasing despair that's out there, and gaining momentum about the President's lack of toughness, resolve and real leadership qualities.
All the President's Captors
What is "Stockholm Syndrome", you ask? Here is a rough definition of it courtesy of Wikipedia:
In psychology, Stockholm syndrome is a term used to describe a paradoxical psychological phenomenon wherein hostages express adulation and have positive feelings towards their captors that appear irrational in light of the danger or risk endured by the victims, essentially mistaking a lack of abuse from their captors as an act of kindness.[1] [2] The FBI’s Hostage Barricade Database System shows that roughly 27% of victims show evidence of Stockholm syndrome.[3] The syndrome is named after the Norrmalmstorg robbery of Kreditbanken at Norrmalmstorg in Stockholm, in which the bank robbers held bank employees hostage from August 23 to August 28, 1973. In this case, the victims became emotionally attached to their captors, and even defended them after they were freed from their six-day ordeal. The term "Stockholm Syndrome" was coined by the criminologist and psychiatrist Nils Bejerot, who assisted the police during the robbery, and referred to the syndrome in a news broadcast.[4] It was originally defined by psychiatrist Frank Ochberg to aid the management of hostage situations.[5]
It's been my premise since this crisis started that much of the public continues to suffer from at least a mild form of this affliction, with many, instead of "connecting the dots" by doing some actual critical thinking, continually defending their "captors" or "masters", including the big Wall Street banks, banking system itself, and the Fed, as well as those political leaders who continue to make policy decisions that do actual great harm on most of its stakeholders, namely We the People, instead of benefiting us.
Well, according to Frank Rich in yesterday's Sunday NY Times, this affliction may have also reached the Executive Suite in the White House. Rich eviscerates the President for continually trying to placate the GOP, a body that has continually and openly stated that its main and only goal is to destroy his presidency and "make Obama a one-term president" no matter the short or long term harm inflicted on the country as a whole. Here are some key passages from the article:
This dynamic was acted out — yet again — in President Obama’s latest and perhaps most humiliating attempt to placate his Republican captors in Washington. No sooner did he invite the G.O.P.’s Congressional leaders to a post-election White House summit meeting than they countered his hospitality with a slap — postponing the date for two weeks because of “scheduling conflicts.” But they were kind enough to reschedule, and that was enough to get Obama to concentrate once more on his captors’ “good side.”
More here:
And so, as the big bipartisan event finally arrived last week, he handed them an unexpected gift, a freeze on federal salaries. Then he made a hostage video hailing the White House meeting as “a sincere effort on the part of everybody involved to actually commit to work together.” Hardly had this staged effusion of happy talk been disseminated than we learned of Mitch McConnell’s letter vowing to hold not just the president but the entire government hostage by blocking all legislation until the Bush-era tax cuts were extended for the top 2 percent of American households.
Rich goes on to make the very important point (I believe) that what the country yearns for (and thought it was getting in Obama) is real leadership, which means someone who can make the difficult decisions and make the case plainly and bluntly to the American people (speak the "hard truths"). In short, what people admire in a leader is continually knowing what they stand for, which might partially explain George Bush's ability to get elected, then re-elected, in addition to being able to get much of his agenda through Congress without even close to a filibuster-proof Congress.
Now I think that "W" was wrong on just about everything, but we always knew where he stood on the issues and who he was representing (he certainly didn't care about what I thought or the 50% of the country that didn't vote for him). Obama seems to lack any conviction of just about anything. Everything is up for negotiation right off the bat, even his most prized chips. It would be one thing if he were a shrewd negotiator but he gives up his most important negotiating chips right from the get-go, which is very disheartening to many people who voted for him in '08. In times of crisis, the country needs a leader with a capital "L" that can use the bully pulpit to stand up for his ideals and values (assuming he has any) and rouse "We the People" to follow. Obama seems to be more of conciliator and mediator and one who prefers to find the "good" in his adversaries and namely "get along" with the other side and find what he perceives to be "middle ground", even if his enemies ending up getting the lion's share of what they want, while the other side fights for scraps off the table. That might be OK if we weren't in a time of dire crisis where what's required, and what the people yearn for, is a real leader who LEADS by and with his values and convictions, even if many might disagree with them.
Here's more from Rich on how NJ governor Chris Christie is governing, no, LEADING, in contrast to Obama, and how even many of his adversaries seem to be falling into line:
Christie’s popularity among national right-wing activists and bloggers has been stoked by a viral YouTube video where he dresses down a constituent in a manner that recalls Ralph Kramden sending Alice “to the moon.” But the core of Christie’s appeal at home is that he explains passionately held views in concrete, plain-spoken detail. Voters know what he stands for and sometimes respect him for his forthrightness even when they reject the stands themselves. This extends to his signature issue — his fiscal and rhetorical blows against public education. He’s New Jersey’s most popular statewide politician despite the fact that a 59 percent majority in the state thinks public schools deserve more taxpayer money, not less.
G.O.P. propagandists notwithstanding, Christie’s appeal does not prove that New Jersey (and therefore the country) has “turned to the right.” It does prove that people want a leader with a strong voice, even if only to argue with it.
A lot can happen until the '12 election, but I fear for this reason among all the others at this point Obama will not only be a one-term president, but he may even see a primary challenge (which actually might not be a bad thing for the Dems and country long-term, as I think it's time to break the stranglehold the current two-party system has on the country).
Go read the whole article here, and if you have time, read many of the reader comments as well. They are MOST telling of the increasing despair that's out there, and gaining momentum about the President's lack of toughness, resolve and real leadership qualities.
All the President's Captors
Saturday, December 4, 2010
Weekend Open Thread - Trading Rules Edition
Snow!We woke up to snow this morning, this is a free photo from freefoto.com (they request we link back to their site and attribute the photo to them) as I am too lazy to get a photo of my yard.
Friday, December 3, 2010
Friday Link Fest
Greece's Credit Rating May Be Cut by S&P on EU Rules
Asia Markets: China coal-price cap not much help for power firms
Pentagon official sees mounting budget pressures
Small-business owners cry foul over safe-toy law
Qantas takes legal action on A380
U.S. Retail Chains Report a Robust November
Amazon: WikiLeaks Violated Terms
Tax Breaks for Bailout Recipients Spark Debate
China passenger train hits 300 mph, breaks record
(Where's our high speed train? China completes 824 miles, Fresno just breaking ground 65 miles)
Unemployed and likely to stay that way
Asia Markets: China coal-price cap not much help for power firms
Pentagon official sees mounting budget pressures
Small-business owners cry foul over safe-toy law
Qantas takes legal action on A380
U.S. Retail Chains Report a Robust November
Amazon: WikiLeaks Violated Terms
Tax Breaks for Bailout Recipients Spark Debate
China passenger train hits 300 mph, breaks record
(Where's our high speed train? China completes 824 miles, Fresno just breaking ground 65 miles)
Unemployed and likely to stay that way
Thursday, December 2, 2010
Metals and Mining, Silver, and Gold
Gold. Gotta have it. Sooooooo presssssioussssss, my pressssioussssss.......
OK, that said, Gold is a good investment. So is silver. Here's why:
in 1973, a Mustang Mach 1 would cost you about 32oz. of gold. In 2010, a Mustang Mach 1 would cost you about 20oz. The value has improved 60% over those years.
Is that a good way of testing the value? Probably not, because materials and technology changes, making today's Mustang costs lower, but you get my drift. For an average "thing", Gold today has more value than Gold in 1973.
So buy, and keep gold. Besides, I hear it's good to eat....dentists used to stick it in your mouth.
Now, How about Silver? For that same Mustang, it would have cost you 1600oz. of silver in 1973, and today, it would cost you 945oz. Wow, almost a 70% value gain!
Who's the winner for long term investment? And why is that? The answer may be that silver gets used, and gold gets hoarded. Bottom line, if you want an investment that has improved over the years, it looks like Silver substantially outperforms gold.
so if you want to invest for your kids' future, buy them some silver now, and give it to them 35 years later. But I'm afraid ol' Rock can't wait that long. The actuarial tables are against it. And besides, this is a Anonymouse Traders blog, not an Anonymouse Investors.
So let's start with the sectors. How's the metals and mining sector performing? To find this out, we look at a daily chart of XME. For 43% of its value, XME consists of the following:
MEE SWC FCX HL WLT ATI CDE BTU PCX
Ok, that's not completely metals, but it does have some content.
Here's the XME chart:
Although there's a lot of information on this chart, please look at the "relstrength 20 day" portion. That chart plots the stock price in reference to the S&P500 price, with a smoothing over 20 days (1 month). That line shows how this stock performs as compared to the S&P. There's no oscillators, it's just raw price.
As you can see, the XME has marched with our rally, staying around the same as the S&P (the 0.00 line on the RelStrength 20 day chart), to a little positive, until the last couple of weeks where we've gone to a .09 higher than the S&P. You heard the pundits say "commodities are doing better than anything", but it looks like there may have been better choices than metals and mining for this time period.
Now let's look at the Gold Miners, GDX, which for 72% of its value it has
ABX AEM GG ASA KGC SLW NEM
and a couple others I don't have the tickers for. This is much more precious-weighted. Let's look at the chart:
It looks like it is in not too good shape. Why is that? Well, GDX is heavily weighted with NEM, and NEM has tanked since September/End, being substantially negative compared to the performance of the S&P. If you take out NEM, then GDX is running around .11 over the S&P. I'm sorry I can't do a chart of that for you, you'll just have to take my word.
So taking away NEM, it seems Gold miners have been doing better than the metals and mining sector.
I don't have a chart for the Silver miners' sector, because they kind of mine Silver with Gold, and I can't find an ETF that's silver mining only. But looking at PAAS CDE, and SLW, they are running over .15 better than the S&P. Well, it stands to reason, looking at our Mustang measurement.
Here's the chart for PAAS as an example:
Now, let's look at the metals themselves. the GLD chart:
It's barely tracking the S&P!! How about SLV chart?
Now we've got something. It's been running positive from the S&P since Aug 10, and hitting .15 better than S&P from time-to-time.
As a conclusion, we can see:
1. XME metals and mining is not the best place to be.
2. The miners are doing better than the metals
3. Silver is outperforming Gold by a substantial margin
4. The silver miners are outperforming the gold miners by several percents.
Where to invest?
Silver. The miners first, then the metal.
Except I like NEM, I always liked the underdog (I like you too, Mutt). I think it has a chance to catch up to the others. The only reason it's down is because of the guidance it gave in the last conference call. I read a transcript, and I think that's BS especially if we see GLD go up in price.
OK, that said, Gold is a good investment. So is silver. Here's why:
in 1973, a Mustang Mach 1 would cost you about 32oz. of gold. In 2010, a Mustang Mach 1 would cost you about 20oz. The value has improved 60% over those years.
Is that a good way of testing the value? Probably not, because materials and technology changes, making today's Mustang costs lower, but you get my drift. For an average "thing", Gold today has more value than Gold in 1973.
So buy, and keep gold. Besides, I hear it's good to eat....dentists used to stick it in your mouth.
Now, How about Silver? For that same Mustang, it would have cost you 1600oz. of silver in 1973, and today, it would cost you 945oz. Wow, almost a 70% value gain!
Who's the winner for long term investment? And why is that? The answer may be that silver gets used, and gold gets hoarded. Bottom line, if you want an investment that has improved over the years, it looks like Silver substantially outperforms gold.
so if you want to invest for your kids' future, buy them some silver now, and give it to them 35 years later. But I'm afraid ol' Rock can't wait that long. The actuarial tables are against it. And besides, this is a Anonymouse Traders blog, not an Anonymouse Investors.
So let's start with the sectors. How's the metals and mining sector performing? To find this out, we look at a daily chart of XME. For 43% of its value, XME consists of the following:
MEE SWC FCX HL WLT ATI CDE BTU PCX
Ok, that's not completely metals, but it does have some content.
Here's the XME chart:
Although there's a lot of information on this chart, please look at the "relstrength 20 day" portion. That chart plots the stock price in reference to the S&P500 price, with a smoothing over 20 days (1 month). That line shows how this stock performs as compared to the S&P. There's no oscillators, it's just raw price.
As you can see, the XME has marched with our rally, staying around the same as the S&P (the 0.00 line on the RelStrength 20 day chart), to a little positive, until the last couple of weeks where we've gone to a .09 higher than the S&P. You heard the pundits say "commodities are doing better than anything", but it looks like there may have been better choices than metals and mining for this time period.
Now let's look at the Gold Miners, GDX, which for 72% of its value it has
ABX AEM GG ASA KGC SLW NEM
and a couple others I don't have the tickers for. This is much more precious-weighted. Let's look at the chart:
It looks like it is in not too good shape. Why is that? Well, GDX is heavily weighted with NEM, and NEM has tanked since September/End, being substantially negative compared to the performance of the S&P. If you take out NEM, then GDX is running around .11 over the S&P. I'm sorry I can't do a chart of that for you, you'll just have to take my word.
So taking away NEM, it seems Gold miners have been doing better than the metals and mining sector.
I don't have a chart for the Silver miners' sector, because they kind of mine Silver with Gold, and I can't find an ETF that's silver mining only. But looking at PAAS CDE, and SLW, they are running over .15 better than the S&P. Well, it stands to reason, looking at our Mustang measurement.
Here's the chart for PAAS as an example:
Now, let's look at the metals themselves. the GLD chart:
It's barely tracking the S&P!! How about SLV chart?
Now we've got something. It's been running positive from the S&P since Aug 10, and hitting .15 better than S&P from time-to-time.
As a conclusion, we can see:
1. XME metals and mining is not the best place to be.
2. The miners are doing better than the metals
3. Silver is outperforming Gold by a substantial margin
4. The silver miners are outperforming the gold miners by several percents.
Where to invest?
Silver. The miners first, then the metal.
Except I like NEM, I always liked the underdog (I like you too, Mutt). I think it has a chance to catch up to the others. The only reason it's down is because of the guidance it gave in the last conference call. I read a transcript, and I think that's BS especially if we see GLD go up in price.
Wednesday, December 1, 2010
Spying For Profits
CNBC has a cutting edge slide show - Spying for Profits.
Spying For Profits - The Satellite Image Indicator
A New Leading Indicator
As part of a growing trend among hedge funds and Wall Street firms, Cold War-style satellite surveillance is being used to gather market-moving information.
The surveillance pictures are often provided by private-sector companies like DigitalGlobe in Colorado and GeoEye in Virginia, which build and launch satellites and take pictures for US government intelligence agency clients and private-sector satellite analysis firms.
Looking for an edge, institutional investors such as UBS have begun to use satellite imagery to gauge customer traffic and economic activity, observing everything from parking lots and oil refineries to shipping terminals.
The scope of this spying covers oil refineries, parking lots, shipping ports, and containers. Fascinating stuff.
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