I rely on a variety of resources, including newsletters, blogs, and the mainstream media, to try and figure out what the future holds.
One publication that has always been helpful in this regard is Barron’s, the investment weekly, which I’ve been reading for several decades. Among the features I enjoy are Alan Abelson’s Up and Down Wall Street column and the Q&As with experts who, in many cases at least, seem to have been selected because they actually know what they are talking about (unlike many of those who are regularly quoted or profiled elsewhere).
What I especially look forward to, however, are the "Roundtable" issues, which feature articles drawn from moderated discussions between a select group of old hands, many of whom I respect a great deal.
Luckily enough (for those who don’t subscribe, at least), the financial weekly seems to be running a promotion whereby some of the material from the January 10th issue, which includes the first installment of the Annual Roundtable discussion, is available for free to nonsubscribers (though I’m not sure how long that will last).
Anyway, here is an excerpt from the article, entitled "Hang on Tight!" which includes a welcome sampling of the always straight-shooting and thought-provoking insights of Marc Faber and Fred Hickey.
Our go-to group of investment experts sees tough times for the economy — but good fortune for stockpickers.
ONCE UPON A TIME, WE LIVED IN A WORLD where asset-price inflation begat leverage, which begat more asset inflation, in a virtuous circle known as the great bull market. We bought bad art, good wine and vacation homes (many), and stocks "on the dips," which made us rich. And geniuses, of course.
Then the big, bad wolves — greed and excess — came and popped our bubble, and the markets’, and all the pretty assets fell to earth. The fairy god-mother — bearing a strange name for a godmother, Uncle Sam — tried to clean up the mess with great gobs of money, but little success. The
Having earned been paid $115 million since 1999 for taking lunch and, on a busy day, pontificating, former Treasury secretary Bob Rubin capped his payoff for helping debauche Glass-Steagall, without which intervention Citi might still be a functional financial institution rather than a ward of state.
Not forgetting, of course:
Inside and outside the bank, Mr. Rubin is blamed by some for pushing Citigroup to rev up risk-taking as the housing and derivatives bubbles expanded — a move that has saddled Citigroup with tens of billions of dollars in write-downs and necessitated a sweeping government bailout of the financial giant…Citigroup’s share price is down 70% since he came on board.
In the next turn of the revolving door, NakedShorts has the over/under on Hank Paulson joining the board of JP Morgan Chase (or similar) at Sep. 2009. And is taking the under. (Related links after the jump).
Bailing on another Ponzi
The eponymousJ. Ezra Merkin resigned as chairman of GMAC LLC, slipping over the gunwales of the Cerberus-GM joint venture under cover of a “board restructuring” triggered by a TARP-funded bailout that, but for the fact that TARP has no rules other than whatever Hank & Neel say they are, seemed to have broken every rule in the book.
Mr Merkin stands at an intersection of two of the largest current business stories — the federal bailout of the auto companies and the Madoff financial scandal.
In addition to being chairman of GMAC, Mr Merkin is a hedge fund operator who invested more than $1.8 billion of his clients’ money with Mr Madoff. Mr. Merkin’s three private investment funds — Ascot, Ariel and Gabriel — are among the largest of the so-called feeder funds that placed investors’ money with Mr Madoff without their knowledge, according to the investors. Mr Merkin collected millions of dollars in management fees annually for his work.
Among all the allegedly professional money managers hit by the Madoff fraud, Merkin has been
Here’s another EW analysis, making it clear that EWers in general believe that the market is approaching a turn from a corrective move up (wave 4) to a final move down (wave 5) to complete an Elliott Wave cycle. Differences between analyses are in the details of current wave 4, with the consensus being that wave 4′s end will result in another significant leg down in the markets.
Three updated charts of the S&P 500 index as of Friday’s close. In descending order, the Weekly, the Daily and a 60 minute chart.
The chart above is our main compass, a Weekly S&P 500 chart that is in the midst of a five wave sequence down from the 2007 highs. There are three clearly designated completed waves and by implication, a Wave 4 that has been sliding and slinking its way sideways to up against the major downtrend. A previously drawn wedge is placed earmarking this 4th Wave with the hope of isolating either an extended Wave 4 by a break upwards out of the wedge, or a completed Wave 4 by a breakdown below the wedge. As is obvious, neither an up or down breakout has yet occurred. By zeroing in on a couple shorter time frames, maybe we can glean some clues as to which way prices are headed.
Above is a Daily chart with a broader view of the 4th Wave. I’ve drawn in a channel that encompasses all price action since the November 21, 2008 low. Superimposed on that price action is a simple ABC sequence culminating with a Wave 4 top as of the close on Tuesday, January 6, 2009. What isn’t clear on this chart is whether or not Friday’s decline broke the bottom of that upward rising channel. For some clarity, let’s look at the 60 minute chart below.
Whoa, Nellie (not an orthodox Elliott observation), this chart shows a break of that lower trend line clear as a bell.
The phrase means simply "very clear." A bell is used as a model of clarity because the sound of a bell
Citigroup signaled a breakup of its unwieldy financial supermarket model with a possible deal to sell a share of its prized retail brokerage business to Morgan Stanley, said several people with knowledge of the discussions, underscoring the enormous problems the bank continues to confront even after receiving taxpayer bailout funds.
The new chapter of wrenching change came as former Treasury Secretary Robert E. Rubin, who came under fire for his strong support of that model in an advisory role that helped fuel the bank’s troubles, said he would resign.
The developments highlight how badly Citigroup has been damaged by the global financial crisis. Deepening losses, declining confidence in its leadership and a desperate need to raise capital have forced the bank to rethink the strategy it has clung to for years.
“This is either a one-off or the first inkling of a dismantlement of the company, taking apart of what John Reed and Sandy Weill did,” a senior executive with ties to the company said, referring to the two leaders who forged the landmark deal to bind Citicorp and Travelers Group in 1998.
With pressure mounting on Vikram S. Pandit, Citigroup’s chief executive, the company’s executives say the decision to split off Smith Barney, the “crown jewel” brokerage business he said he loved a few months ago, suggests the bank’s troubles are so deep that he is looking to reshape the company in a former image of itself.
While a deal is not yet final, such a change would position Citigroup to look more like Citicorp — a global franchise with strengths in trading, corporate and investment banking, and international consumer banking — than the bloated and unwieldy company it has become.
It also could lead to yet another shift in power on Wall Street. A joint venture with Morgan Stanley would create the nation’s largest brokerage network of 20,000 advisers, edging out Merrill Lynch’s thundering herd of brokers that Bank of America snapped up in September. Citigroup and
Securities regulators have done a lot of stupid things over the past year, but the SEC’s temporary ban on short selling financial stocks was probably the biggest. SEC chairman Chris Cox called it the biggest mistake of his tenure and the unintended consequences to Hedgistan, combined with the downfall of Lehman Brothers, unleashed a 1-2 punch that decimated the gang that probably deserved a medal, as opposed to the enema they received.
My take is that Hank Paulson (after being goaded by brokerage CEOs) strong-armed Cox into the move; intimidation seems to be a big part of Paulson’s management style. Bernanke does not seems to stand up to him either and will finally crawl out from under his desk as Paulson leaves town in two weeks.
But one of the more asinine proposals regulators have been floating is to restrict communication between money managers. Dan Loeb of Third Point LLC is never one to back down from a scrap, and penned a response to regulators who were seeking to blame shorts for talking amongst themselves and driving down the stocks of brokers:
Such conversations permit us to test our hypotheses and refine our thinking and, as a result, we believe that participating in give-and-take with other managers is in the best interest of our investors. Our outside counsel has examined this matter thoroughly and assured us that our position is consistent with the securities laws and that we have not violated any law in connection with these communications.
Now an industry group is rallying behind Loeb and the BuySide. Great news, but what took so long?
The hedge fund industry is concerned that a proposed FINRA rule designed to prevent the intentional circulation of rumors for the purpose of manipulating the market will interfere with the beneficial free flow of investment ideas. In a letter to FINRA, the Managed Funds Association said that proposed Rule 2030 would impair the ability of money managers to receive and investigate the validity of market information and have a negative impact on the overall efficiency of the marketplace. The MFA urged FINRA…
ROBIN HIT THE BULLSEYE AGAIN THIS WEEK!! THE FOLLOWING IS THE NARRATIVE FROM LAST SATURDAY’S 1/3/2009 BLOG WHEN ANALYZING THE DOW AFTER IT HAD CLOSED THE WEEK AT 9035:
“My bet is that the index may flirt with higher levels but very briefly and then will retrace to test 8348.”
THE DOW CLOSED AT 8599 ON FRIDAY [...]
-The INDU closed Friday right on its’ lower trendline. The bearish move of this past week could begin to falter at this level, however, the index is more likely to continue its’ retracement to retest recent lows at 8348. We are moving in a 700 point range between 8348-9065. From a longer-term perspective, we have been making a [...]
In the beginning of our series on Risk Graphs, we talked about each of the individual trading instruments. Among those discussed was the short call. The short call is a marvelous tool when used in tandem with other instruments. However when used alone, it is known as a ‘Naked [...]
Any way that you measure it, we’re in for some rough sledding ahead. We are about to see the result of a disastrous 4th quarter 2008 in the upcoming earnings season. Already, we’ve gotten some ‘Same Store Sales’ figures on several retailers and they weren’t pretty. Jobs numbers indicate further job losses. We ended the [...]
Market Shadows Virtual Value Portfolio put most of our remaining cash reserves to work this morning in buying 38 ADRs (American Depository Receipts) of Toyota Motor Company (TM) the world’s largest seller of automobiles and trucks. We like and already own shares of Honda (HMC) as well.
The stock was down overnight due to negative action in the Japanese marketplace so we got a great entry price of just $106.57 per ADR today.
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The BCI at 169.3 is down from last week's upward revised level of 169.5. BCIg, the smoothed annualized growth of BCI, at 16.9 is down from last week's upward revised 17.5. This week's BCI shows no recessionary trends.
Figure 1 plots BCIp, BCI, BCIg and the S&P500 together with the thresholds (red lines) that need to be crossed to be able to call a recession.
Ukraine's Deputy Foreign Minister Danylo Lubkivsky exhorted to US State department officials, "let's not look for further time frames," demanding "all necessary pressure" be applied now. The red line has already been crossed and, as Bloomberg reports, Lubkivsky says he hopes U.S., EU don’t prioritize political concerns over moral ones and that the West will help with economic, diplomatic and military assistance.
As Bloomberg reports,
“Let’s not look for further time frames” and instead exert “all necessary pressure,” Ukrainian deputy foreign minister Danylo Lubkivsky tells State Dept officials, jo...
Initial jobless claims surged from 304k to 329k this week, the biggest weekly rise since mid-December. From exuberance at new cycle lows, we swing to the average of the last 8 months. This is the biggest miss to expectations in over 2 months. Continuing Claims dropped further to new cycle lows at 2.68 million (beating expectations) - its lowest since Dec 2007. So this is as good as it gets for continuing claims - America is back at its best!
Initial claims surges back up to its average of the last 8 months...
vGreat Lakes Dredge & Dock Corporation (NASDAQ: GLDD), the largest provider of dredging services in the United States and a major provider of environmental and remediation services, today announced that on April 23, 2014, it completed the sale of NASDI, LLC and Yankee Environmental Services, LLC, its two subsidiaries that comprise ...
Shares in Las Vegas Sands Corp. (Ticker: LVS) are up sharply today, gaining as much as 5.7% to touch $80.12 and the highest level since April 4th, mirroring gains in shares of resort casino operator Wynn Resorts Ltd. (Ticker: WYNN). The move in Wynn shares appears, at least in part, to follow a big increase in target price from analysts at CLSA who upped their target on the ‘buy’ rated stock to $350 from $250 a share. CLSA also has a ‘buy’ rating on Las Vegas Sands with a $100 price target according to a note from reporter, Janet Freund, on Bloomberg. Both companies are scheduled to report first-quarter earnings after the closing bell on Thursday.
Yesterday, the market continued its winning ways for the fifth consecutive day. The S&P 500 closed within 1% of its all-time high, and the DJI was even closer to its all-time high. Healthcare, Energy and Technology led the sectors while Financials, Telecom, and Utilities finished slightly in the red. All three sectors in the red are typically flight-to-safety stocks, so despite lower than average volume, the market appears poised to make new highs.
Mid-cap Growth led the style/caps last week, up 2.87%, and Small-cap Growth trailed, up 2.22%. This week will bring well over 100 S&P 500 stocks reporting their March quarter earn...
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[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.
And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference. Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014? The Biotech ETF beat the S&P by better than 3 points.
As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...
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