by Zero Hedge - April 26th, 2009 5:02 pm
Courtesy of Cornelius at Zero Hedge
by Phil Davis - April 26th, 2009 4:22 pm
What a strange week.
Overall, it was a big, ugly "W": We began the week at about 8,100, fell to 7,800 Tuesday morning, rose to 8,050 on Wednesday (hump day), fell to 7,800 again on Thursday and then back to 8,100 on Friday. In summary – NOTHING HAPPENED! We have that gap to fill on Monday around 8,000 (last Monday’s gap down open) and, unlike this past week, next week is going to be chock-full of scary data points including Consumer Confidence and Case/Shiller Home Prices on Tuesday, GDP and the Fed on Wednesday, Jobless Claims and Personal Income and Spending along with the Chicago PMI on Thursday and Friday is still busy with Michigan Sentiment, Factory Orders, ISM and Auto Sales for April.
It’s going to be fun, fun, fun next week as another 25% of the S&P 500 are set to report and early on, we’ll be keeping our eyes on the following:
- Monday: BEAV, CHKP, GLW, ENR, HUM, LO, ONB, QCOM, SII, TZOO, VZ & WHR. Evening: AXS, BIDU, FNF, FADV, HLTF, HXL, MAS, MTH, OLN, RCII, SWN, TUES, UHS, WRE, WRI and XL
- Tuesday: AG, AMFI, AMED, AM, BDX, BMS, BMY, BCO, CRDN, CCE, CVH, ELNK, FMD, BEN, FDP, HCP, HL, KELYA, LAZ, LCAV, LVLT, MHP, NWPX, ODP, OXPS, ORB, PCAR, MALL, PCZ, PFE, SMG, SBNY, SPAR, STFC, TLAB, X, UA, VLO and WAT. Evening: ACE, BLDP, BWLD, CRI, ETFC, FIS, HTZ, MEE, NAL, PNRA, PRAA, RFMD, SUNH, JAVA and VFC.
So plenty to keep us busy but earnings last week were way better than expected overall and guidance was not too depressing so we’ll have to see what kind of follow-through we can now get on that and if there is any gas left in the market to finally punch through that 8,200 mark or if we are still doomed to correct back to 7,632 in the very least.
As I mentioned in last week’s wrap-up, we called it right by entering the weekend 55% bearish despite the fabulous stick save of Friday the 16th. In fact, I should have gone with my gut at 3:43 that day when I said to members: "DIA – 1/2 cover into the close it is then. I wanted to go more bearish but the levels won’t let me!" Thank goodness we stay bearish though because, as you can see from the chart above, there was no time to…
by ilene - April 26th, 2009 4:09 pm
Financial Innovation: The Round Trip
2010-11: Back to the Future Recession
The Fed at the Crossroads
How Did We Get It So Wrong?
The Trend Is Not Your Friend When It Ends
Orlando, Naples, Cleveland, and Grandkids
This week we look at the second half of my speech from a few weeks ago at my annual Strategic Investment Conference in La Jolla. If you have not read the first part, you can review it here. The first few paragraphs are a repeat from last week, to give us some context. Please note that this is somewhat edited from the original, and I have added a few ideas. You can also go there to sign up to get this letter sent to you free each week.
Okay, when you become a central banker, you are taken into a back room and they do a DNA change on you. You are henceforth and forever genetically incapable of allowing deflation on your watch. It becomes the first and foremost thought on your mind: deflation, we can’t have it.
MV=PQ. This is an important equation, right up there with E=MC². M (money or the supply of money) times V (velocity — which is how fast the money goes through the system — if you have seven kids it goes faster than if you have one) is equal to P (the price of money in terms of inflation or deflation) times Q (roughly standing for the Quantity of production, or GDP).
So what happens is, if we increase the supply of money and velocity stays the same, and if GDP does not grow, that means we’ll have inflation, because this equation always balances. But if you reduce velocity (which is happening today) and if you don’t increase the supply of money, you are going to see deflation. We are watching, for reasons we’ll get into in a minute, the velocity of money slow. People are getting nervous, they are not borrowing as much, either because they can’t or the animal spirits that Keynes talked about are not quite there.
by ilene - April 26th, 2009 2:05 pm
Here’s a couple more articles on the Swine flu situation. – Ilene
By Hans Nichols, Bloomberg
April 26 (Bloomberg) — Twenty people in the U.S. have confirmed cases of swine flu linked to the virus that has spread in Mexico, and the acting head of the Centers for Disease Control and Prevention said officials expect more severe infections to begin showing up.
Richard Besser, the CDC’s acting director, said the virus has been identified in New York, Texas, California, Kansas and Ohio. So far, the cases have been relatively mild and only one person has reported being hospitalized.
“It looks to be the same virus that is causing the situation in Mexico,” Besser said at a briefing at the White House. Scientists are trying to determine why the virus, normally transmitted among pigs, has been more severe in Mexico, where as many as 81 deaths have been linked to the infection…
White House press secretary Robert Gibbs said it was “far too early to determine” whether there will be an economic impact from the outbreak….
He said there is “no evidence whatsoever” of a connection to bioterrorism. Besser said all investigations so far point to a naturally occurring virus.
LONDON/ZURICH (Reuters) – Drugmakers said on Sunday they could supply millions of doses of medicine and were ready to work on a vaccine against a new type of swine flu that has killed up to 81 people in Mexico and infected around a dozen in the United States.
Roche Holding AG’s Tamiflu, known generically as oseltamivir, and GlaxoSmithKline Plc’s Relenza, or zanamivir, are both recommended drugs for seasonal flu and have been shown to work against viral samples of the new disease.
Tamiflu is expected to be in greatest demand should swine flu develop into a pandemic, as experts fear it may, since it is given as a tablet. Relenza must be inhaled…
The longer-term battle against any pandemic, however, depends
by Zero Hedge - April 26th, 2009 1:42 pm
Courtesy of Tyler at ZH
by ilene - April 26th, 2009 1:37 pm
JANET: EVENTS DO NOT WARRANT SCREENING OF INCOMING TRAVELERS…
‘NO EVIDENCE’ OF BIO-TERROR…
CDC RECOMMENDS PLANNING FOR SCHOOL CLOSURES…
Positive: NYC students…
WHO: Swine flu could mutate to ‘more dangerous’ strain…
White House to detail govt response
Flu fears prompt quarantine plans…
Mexico City residents staying at home…
WHO declares international concern…
CLOSE TO 1,200 SUSPECTED CASES…
Russia Suspends Imports of Meat From Mexico, Some U.S. States…
2 cases found in Kansas…
New swine flu likely widespread…
Asia on alert…
10 New Zealand students in scare…
Mideast First: Israeli man hospitalized on suspicions…
by ilene - April 26th, 2009 5:24 am
This is not good news for Insider Trading Buying strategies which tend to work best when the market has bottomed and insiders start buying significant positions in their companies. The key is to be patient… – Ilene
Courtesy of Jesse’s Café Américain
Do you need to buy a vowel?
Keep the possibility of a significant monetary inflation in mind, with no advance in real terms but a handsome nominal rally.
Yes, they are that desperate and reckless and short-sighted. That’s what they did in 2003 in creating the housing bubble to save Wall Street and the financial markets.
But the greater probability remains that this is an engineered short squeeze that will fail about this level and fall back to the bottom of the trend channel.
Insider Selling Jumps to Highest Level Since ‘07 as Stocks Gain
By Michael Tsang and Eric Martin
April 24 (Bloomberg) — Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.
… While the Standard & Poor’s 500 Index climbed 26 percent from a 12-year low on March 9, CEOs, directors and senior officers at U.S. companies sold $353 million of equities this month, or 8.3 times more than they bought, data compiled by Washington Service, a Bethesda, Maryland-based research firm, show. That’s a warning sign because insiders usually have more information about their companies’ prospects than anyone else, according to William Stone at PNC Financial Services Group Inc.
“They should know more than outsiders would, so you could take it as a signal that there is something wrong if they’re selling,” said Stone, chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. “Whether it’s a sustainable rebound is still in question. I’d prefer they were buying.”
Insiders from New York Stock Exchange-listed companies sold $8.32 worth of stock for every dollar bought in the first three weeks of April, according to Washington Service, which analyzes stock transactions of corporate insiders for more than 500 mostly institutional clients.
That’s the fastest rate of selling since October 2007, when U.S. stocks peaked and the 17-month bear market that wiped out more than half
by Zero Hedge - April 26th, 2009 12:24 am
Courtesy of Tyler at Zero Hedge
When a month ago I presented some of the projected dynamics of CMBS, a weakness of that analysis was that it did not address the issue in the context of the CRE market’s entirety. The fact is that Commercial Mortgage Backed Securities (or securitized conduit financings that gained a lot of favor during the credit bubble peak years for beginners) is at most 25% of the total commercial real estate market, with the bulk of exposure concentrated at banks (50%) and insurance companies’ (10%) balance sheets.
But regardless what the source of the original credit exposure, whether securitized or whole loans, the core of the problem is the decline in prices of the underlying properties, in many cases as much as 35-50%. When one considers that with time, the underlying financings became more and more debt prevalent (a good example of the CRE bubble market isthe late-2006 purchase of 666 Fifth Avenue by Jared Kushner from Tishman Speyer for $1.8 billion with no equity down), the largest threat to both the CRE market and the bank’s balance sheet is the refinancing contingency, as absent yet another major rent/real estate bubble, the value holes at the time of maturity would have to be plugged with equity from existing borrowers (which, despite what the "stress test" may allege, simply does not exist absent a wholesale banking system nationalization).
The refinancing problem thus boils down to two concurrent themes: The first is the altogether entire current shut down in debt capital markets for assets, which affects all refinancings equally (for the most immediate impact of this issue see General Growth Properties which was not able to obtain any refinancing clemency on the bulk of its properties). The government
by ilene - April 25th, 2009 10:50 pm
Everything you always wanted to know about trend days, right here. Thanks to Corey for gathering up all the links to articles he’s written on the subject. – Ilene
Courtesy of Corey at Afraid to Trade
With Trend Days becoming more prevalent in the market, I thought it would be beneficial for you if I compiled some of my best intraday analysis summary posts and educational posts on “Trend Days” into a single, featured post. Use this as a reference to brush-up on this powerful and profitable trading strategy.
Trend Day Examples with Lessons
Finally, check out Dr. Steenbarger’s educational post “Six Ways to Identify a Trend Day in the Stock Market.”
The bulk of some traders’ monthly profits come from successful execution on Trend Days – while other traders get plowed-over on these days by fighting a prevailing trend. Make sure you know as much about Trend Days as possible, do your research, and take advantage of recognizing these days when they develop – they can be very rewarding… or destructive.
by ilene - April 25th, 2009 5:24 pm
Commentary: Euphoria or the Obama Depression?
Courtesy of Timothy D. Naegele | Distributed by McClatchy-Tribune News Service
Former Federal Reserve Board Chairman Alan Greenspan’s "easy money" policies and laissez–faire attitude toward the regulation of banks and other financial institutions – a belief in self-regulation – gave rise to the housing "bubble" and our ensuing economic problems. When the bubble finally burst, a tsunami was released that has been rolling worldwide and hurting millions of people, with no end in sight to the enormous suffering.
Barack Obama is euphorically optimistic, but neither he nor the leaders of other countries can hold back an economic tsunami, just as mankind is helpless to stop the wrath of natural tsunamis in the oceans.
Obama supporter George Soros says: "There’s no sign that we are anywhere near a bottom." Obama’s business guru, Warren Buffett, believes the U.S. economy has "fallen off a cliff." Vernon L. Smith, Nobel Laureate in Economics, and Steven Gjerstad said recently: "The events of the past 10 years have an eerie similarity to the period leading up to the Great Depression." According to the Rasmussen Reports, most Americans – 53 percent, in fact – believe the United States is at least somewhat likely to enter a 1930s–like Depression within the next few years. If so, the repercussions are unfathomable.
Rupert Murdoch said: "We are in the midst of a phase of history in which nations will be redefined and their futures fundamentally altered. Many people will be under extreme pressure and many companies mortally wounded." Legendary former Federal Reserve Chairman Paul Volcker, who now oversees Obama’s economic recovery efforts, said recently: "I don’t remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world."
While Volcker was referring to the global economy, he could have been talking just as appropriately about Americans’ faith in the Obama administration during the months ahead.
The "New Deal II," or the most sweeping expansion of government in decades that is being put into place by Obama and the Democrats, will only prolong the "Great Depression II," not thwart its progress. Franklin D. Roosevelt’s…