Morning Call [8:14am ET] The community portion of his website is nothing more than an afterthought. ...April Fool’s Joke via 24/7 Wall Street.
http://247wallst.com/2010/03/31/the-247-wall-st-twenty-best-financial-bl...
It seems like you cannot believe anything you read these days, nevertheless today, April 1. Look on the bright side community; if it was not for you, 24/7 may have missed me altogether, silent like one hand clapping. But your enthusiasm keeps me motivated and wanting to write stuff for you to consider and discuss. This is, after all, the CaraCommunity.com blog.
Thank you.
What’s relevant today in financial news is the storyline that economic data is showing worldwide growth. There are so many stories about this, in fact, I am beginning to feel that Koolie nipping at my heels, telling me it’s lambing time, off to the slaughterhouse.
http://en.wikipedia.org/wiki/Koolie
Actually there is an improvement to the global economic data, which is encouraging, but so did the economic data of China stun the world with its growth metrics all through the stock market crash of the Shanghai Stock Exchange for the year beginning 4Q2007, starting at 6000 and plummeting to a low close to 1700.
So, if you plan to invest in shares of companies, you need to focus on corporate metrics like balance sheet strength, operating margins, returns on shareholder equity, management guidance, and the like, plus of course the trend and momentum data of the equity prices, which tend to lead the corporate data.
http://management.about.com/cs/generalmanagement/g/metrics.htm
After all, share prices are, like real estate prices, a function of interest and money. The more money you have to invest, you know there will be people there trying to focus your interest. I think we all realize that what was a period of the greatest money printing the world has ever seen would turn into a massive demand for investment. The only issue has always been price inflation.
http://en.wikipedia.org/wiki/Inflation
There is no inflation. April Fools.
Community, just, for a moment, think about that Koolie before you join the herd.
Goldman Sachs is back in the news today, saying that Research In Motion (RIMM) has hit the wall, and should be sold.
http://www.marketwatch.com/story/research-in-motion-cut-to-sell-by-goldm...
Hit the Wall Street movers-and-shakers is probably more believable. Nice timing!
You can read the corporate earnings report that was just issued, and make up your own mind as to how the corporation is faring.
http://www.marketwatch.com/story/rim-earnings-jump-revenue-disappoints-2...
The last Buy/Sell signal for RIMM on my system for the Monthly data was a Buy Alert @ $54.77 on 29-Jan-2009.
The last signal for Weekly data was a Sell Alert @ $74.49 at 17-Mar-2010.
The last signal for Daily data was a Sell Alert @ $75.15 at 16-Mar-2010. There was another one at just under 72 in mid-February, so I have been leaning south for several weeks.
Interesting thing about RIMM is that on March 26, JP Morgan upgraded the stock from Neutral to Overweight, lifting the 12-month target price from $70 to $84. On Mar-19, Wunderlich initiated research coverage with a Buy rating and a target of $96. On March 8, BMO Capital Markets upgraded from Market Perform to Outperform with a target revision from $70 to $88. On March 1, Canaccord issued a Buy rating with a new $95 target, up from $90. On Feb 23, Stifel Nicolaus initiated coverage with a Buy rating and a $90 target price.
http://www.finviz.com/quote.ashx?t=rimm
So, as my system is throwing off Sell Alerts, Wall Street has been laying down Buy ratings and higher Target Prices. Now with a very good report, Goldman Sachs is telling clients to sell because they don’t like RIM’s future against the competition. Did that opinion change after the corporate news release, or is this another ‘best practice’ ploy by Goldman Sachs to ‘buy the rumor (from them of course) and sell the news’?
My point, of course, is that there are hundreds of stories out there, some of them April Fools jokes, but you need to do your own homework and make up your own mind.
As for me, I like the fundamental corporate metrics of Research In Motion a lot in fact, but, at $74, I don’t like the current share price. I’d be interested in buying this stock down at its January low of $60 or, possibly at the 4Q2009 low of about $55, which may happen if the broad market took a big hit in the quarter starting today.
Have a good day, but don’t believe everything you read. Today especially.
Btw, did you read my Brief on RIMM back on November 6, at $58.72? I recommended the stock.
I think RIM has done the right thing by going hard into consumer markets.
Sure, the Average Selling Price (ASP) and the margins are less, but the
company’s biggest need is to capture market share as quick as possible to
keep their first-mover advantage. With commodity type purchases (note,
these phones are replaced about once every 16-17 months), instant sales and
marketing success is the critical factor to ultimately winning the war... CTA intends to be a net buyer of RIMM, and we will continue to aggressively write short puts and buy long calls on the dips.After the broad market stabilizes, we intend to build long positions in the stock.http://caracommunity.com/sites/default/files/story/2009/11/09/07CTARIMbr...
CTA Trading Desk Post-Close Report
All is right in the world; equity and commodity markets bolted higher, apparently satisfied that sustained economic growth is here to stay. Oil prices surged to six-month highs (USO +2.26%), natural gas (UNG +6.22%) popped on a tighter inventory report, and precious metals (SLV +2.33%, GLD +1.19%) were in heavy demand as the US Dollar weakened (DXY -0.47%).
US markets opened on their highs aided by strength in the oil sector but began selling off into early afternoon, dragged down by persistent weakness in high tech bellwethers Research in Motion (RIMM -7.37%) and Amazon (AMZN -2.92%). Once the popular averages relinquished the entire +1% opening gap, under-invested money managers swooped in buying stocks during the final hour sending indexes moderately higher on the day (S&P +0.74%).
The S&P opened above the top of the near-term resistance zone (1180) but couldn’t build upon early gains ahead of the release of the US unemployment report on Friday. It seems strange that the government would choose to report this very important piece of economic data on Good Friday with equity markets closed. Expectations are for jobs growth of 250,000, which if met would be the highest numbers in many moons.
Bears were once again able to seize upon the intraday downside reversal and drive prices lower into the close. In other words, underlying demand is still trumping profit taking; until the supply of stocks for sale can overwhelm Johnny-come-lately buyers, the trend remains up. Next target is the 618 retracement up around S&P 1228.
The first sign of trouble will be a close under 1165, but the critical level is 1150. Prices will need to appreciably break and stay below this area for several sessions before the market is in a weak position.
Have a wonderful Easter holiday, Everyone.
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Comments
Cara 100 Ratings Changes
Good morning.
Only one, so far, and Bill already pointed it out:
RIMM - The stock gets reduced to Sell from Neutral at Goldman Sachs after yesterday’s earnings miss and amid increasing competition from Apple’s (AAPL) iPhone and Google’s (GOOG) Android operating system. The new target price is $65, down from $73.
Metals action
Gold and silver spiking up in last 10 min GOLD up $10 in a heart beat.
http://www.kitco.com/
Sell Alerts
Your right Bill ,26 sell alerts out of the Cara 100,and 4 in the Distribution Zone.
Another piece of "good news" coming...
... to facilitate buying:
Preview: March US Vehicle Sales numbers expected throughout the day from major auto makers
**consensus estimates y/y (adjusted):
- Ford (Noon ET): +39%e
- GM (13:45ET): +25%e
- Chrysler: -4%e (on 3/24 Chrysler said Mar sales would be -10% y/y)
- Toyota: +35%e (on 3/30 Toyota said Mar US sales would be up 35%+)
- Honda: +17%e
- Nissan: +43%e (on 3/31 Nissan said Mar US sales would be +35%)
**March 2010 had 26 selling days, one more than 2009, so adjusted sales figures will be about 4% lower than unadjusted figures.
**Industry sales pace is expected to be around 12M, which would the best month since Sept 2008.
Cara 100 Update
CSCO - estimates, target raised at UBS. Shares of CSCO now seen reaching $28. Estimates also increased, given positive industry demand trends. Neutral rating.
ICE - numbers upped at UBS. Shares of ICE now seen reaching $128. Estimates also boosted, because of strong futures volumes. Buy rating.
RIMM - numbers raised at UBS. Shares of RIMM now seen reaching $75. Estimates also increased, as the company is seeing better unit sales and gross margin. Neutral rating.
RIMM - estimate higher at Barclays. RIMM 2011 EPS estimate jumped to $5.30 from $5.08 on strong guidance. Maintain Overweight rating and $85 price target.
RIMM - PT Raised from $95 to $100 @ Credit Suisse. Outperform
TGT - numbers boosted at Government Sachs. Shares of TGT now seen reaching $53. Estimates also raised, because of improving credit trends. Neutral rating.
GS on RIMM
Hi Bill,
This is welcome and timely news from GS. I have been patiently waiting for some seasonal negative news that would allow me to take another successful round trip on what is a very tradeable stock ( RIM in my case ). Heavy promotion of the Curve by telecom carriers has allowed the inventory clean up of the lower margin models that have become dated. Since most mobile apps are for kids and not directed to the business user I am not surprised that Apple would be leading the numbers here. RIM has stayed focused on their core business market while expanding into Apple's space, so I see this as an advantage for RIM. RIM is also launching a major drive into open-source apps so the results will be evident in a year or so. In the meantime, along with the GS prop desk, I will be accumulating RIM if and when it returns to the mid 60's.
CS reiterates OUTPERFORM on Research In Motion (RIMM)
The CS report today is headlined: RIM's EPS momentum continues, Revising Estimates and Raising Target Price to $100 (from $95)
• Raising estimates, reiterate Outperform. We raise our FY11/FY12 EPS estimates by 5%/6% to $5.70/$6.35 (from $5.45/$6.00), given higher volumes. With continued strong consensus EPS momentum and robust earnings growth, we retain our Outperform rating (Credit Suisse focus list stock) and increase our TP to $100 (from $95), which represents 16x our FY12 EPS.
• Still confident with the volume outlook. While volumes were slightly weaker than expected in F4Q, we remain confident in our unit estimates of 51mn/62mn (+40%/+20% yoy) for FY11/FY12 given several factors. 1) We believe that recent volume weakness seems to have nearly all related to a one-time channel inventory reduction at a major carrier in the US (we suspect Verizon), something that is supported by robust sell through trends, robust sequential volume growth guidance for F1Q (May), and healthy net addition levels. 2) We remain confident in our view that the smartphone market will grow 35%/27% in 2010/11 to 230mn/293mn units globally, which should benefit RIM. 3) Last, we continue to believe that RIM's global smartphone share is sustainable at 20-21% as North American share loss over time will be offset by international share gains.
• ASP declines are factored, margin strength is reassuring. Despite our expectation for ASP declines of 6%/10% in FY10/11 to $310/$279, we remain confident in our OM estimates of 22.5%/22.9% in FY11/12. First near term, we note that key selling products are GM accretive (both the new Bold 9700 and the Curve 8520) and company guidance for ASP decline in 2HFY11 could prove conservative as ASPs stabilize. Second, we continue to believe that services will grow faster than hardware sales supporting a group GM of around 43% for the next two years.
• Valuation compelling. Trading on a P/E of 11.7x our FY12 EPS, we believe shares are inexpensive given a revenue/earnings CAGR of 21%/21% between FY10-FY12, sustainable margins and improving FCF conversion.
Iron Gold
This is where the action is now, iron ore and steel makers. I have a full position in VALE for disclosure purposes.
The big three iron ore miners, Vale BHP, and RTP control 70% of the world's iron ore supply. This percentage will probably be dropping as new ore resources come on line, i.e. Canada, etc. But the important item is that the big three have negotiated price increases on a quarterly basis of 90-95%! Outrageous? Probably! But when you have near a monopoly, it's pay or go somewhere else. And where are they going to go? Nowhere! Some steel producers have their own in house mines such as US Steel and MT. But the rest, especially in the Far East have to pay the price. You have probably noticed the daily increases in the price of CLF which mines in the Messabi range of the US. They had an old fashioned pricing system which included long dated contracts up to ten years with current prices only a part of the equation. That will change!
This morning, Vale is making new 52 week highs! Good for me! The next big move will be determined on how contracts with China get priced. A price 90-95% higher can not be ruled out. Is this a start of a bubble? Who knows but I will keep raising my stops to lock in these enormous profits!
Re: Cara 100 Ratings Changes
The question is why is Goldman Sachs so down on RIMM. Did the analyst time his report for when he believed Wall Street would be all thumbs up, rolling up the RIM to win? Maybe, like me, he just thinks the market price risk is a tad excessive and it would be a good time to separate his work from the crowd? I like that actually, if that's all it was. But, do we really think Apple has the apps that will drive the wireless business world and that RIM is only a terrific email vendor? As I see it, AAPL got overpriced at $200, and now it's $235. Should RIMM sell off, I'd be a buyer and pair that with a short on AAPL if the latter was slow to come down from the perch that Wall Street and the media has it. Yes, Apple is a great company -- a Cara 100 now -- but so too is RIM.
Re: Cara 100 Ratings Changes
Did GS loose their camaraderie from other HB&B? or there was none to begin with? CS even reiterated their outperform today.
This singleton sell recommendation is really sticking out from all the buy signs for such a heavily traded/well covered company.
ACMR
BOT at $3.05. This is a turnaround retail play. Volume is high today and it looks like it has bottomed.
Balance sheet is excellent: $46 Million in cash, no LT Debt, $160 Million in equity. Company is only worth $70 Million so it's trading at $24 Million ex-cash. They actually broke even last quarter after backing out one time items. Revenues have declined since 2006, although they haven't crashed. They generated $14 Million in FCF last quarter. This was a $30 stock in 2005.
Semi's hot
RBCN a Led stock moving to recent highs.
march 29,target raised to $30 at Canaccord Adams based on improving trends (19.88 ) : Canaccord Adams raises their RBCN tgt to $30 from $22. The firm notes that as MOCVD capacity issues are being resolved with large order increases, the availability of sapphire substrates is becoming tighter. This trend has forced pricing up 50% Y/Y and appears likely to accelerate over the coming quarters as roughly 33% of new worldwide LED capacity comes on line. The firm views these price increases and the mix shift from 2" to 4" substrates as favorable for incumbent suppliers such as Rubicon
RIMM / APPLE / PALM / SIRI
RIMM
Funny pre earning it was concern about margin the post earning it is about a (one time) revenue miss. Taking small positions and hope the stock goes down more for LT hold.
APPL - looking overheated but I expect this to keep going up - no position yet.
Terminal shorts:
Palm / Siri - looking to short as exited my puts to book some profits
If anyone has comments on how these look or why the LT thesis could be off please offer.
In memory of...
Thomas James Northcutt, Ft. Lauderdale Philanthropist, passed away unexpectedly at his home in Sea Ranch Lakes, FL, Sunday, March 28, 2010. Born June 29, 1923 in Cincinnati, OH, Tom graduated Riverside Military Academy, of Hollywood, FL, and Gainesville, GA, and attended Miami University in Oxford, OH. After flight training at Pensacola, he became a naval aviator flying Grumman F6F Hellcat fighters from the aircraft carrier Randolph during WWII. Shot down once, he flew with Crommelin's Thunderbirds and was awarded three Distinguished Flying Crosses and three Air Medals in addition to various campaign medals. Tom, a graduate of University of Georgia Law School, was a member of the Georgia Bar. Gravitating to real estate, he developed residences, shopping centers and office buildings in Atlanta and Miami. A track star in school, Tom's love of speed led him and his two sports cars to a division championship of the Sports Car Club of America. He was a founding member of Atlanta Country Club and Cherokee Town and Country Club and a former member of Adios Golf Club, Hillsboro. Tom moved to Ft. Lauderdale in 1977 where he met his wife at the Opera Ball in 1985. Tom was honored with the distinguished Impresario Award by the Opera Society of the Florida Grand Opera in 2001. He served on several Boards: the Opera Guild, Inc., the Ft. Lauderdale Council of the US Navy League, Freedoms Foundation, and the Broward Sherriff's Advisory Council. He was also a member of the Christ Lutheran Church where he served on the Council, the Royal Knights of Chivalry, the Coral Ridge Yacht Club, and a Virtuosi Supporter/Member of the Symphony of the Americas. He is survived by his loving wife KayeLynne; a daughter, Chris Northcutt of St. Simons Island, GA; four grandchildren, and one great-grandson. To honor Tom's memory, those who wish instead of flowers, may make a contribution to the Symphony of the Americas, 199 N. Ocean Blvd. # 200, Pompano Beach, Florida 33062; the Florida Grand Opera, 221 S.W. 3rd Avenue, Ft. Lauderdale, Florida 33312; or Christ Lutheran Church, 1955 E. Oakland Park Blvd., Fort Lauderdale, Florida 33306. Family will welcome friends for visitation, Monday, April 5, 2010 from 6 to 8pm at Kraeer-Fairchild Funeral Home and Cremation Center, 4061 N. Federal Highway, Ft. Lauderdale, FL. 33308. 954-565-5591. www.kraeerfairchild.com. Funeral Service will be held, Tuesday, April 6, 2010 at 11am at Christ Lutheran Church, 1955 E. Oakland Park Blvd., Ft. Lauderdale, FL 33306.
PM doing very good; SLV broke out from triangle!
So far low volume, so this is just a beginning IMHO. I'm thinking about target of 19-20 on SLV, 116-120 on GLD, and 50-52 on GDX? Regardless, I will let you guys know when PM sentiments are frothy (we are far from that).
Re: Iron Gold
These are good points. Additionally, we have peak iron comings in the next several years (as per the GS study). However, there may be severe corrections along the way as the world seems overbuilt for the moment?
Re: PM doing very good; SLV broke out from triangle!
Newcrest $8.5B bid for Lihir has ignited a fire under PM stocks. The bid was at a premium of 35% to current market price. Suggests to me that the mid-majors like Randgold, Iamgold, Red Back, etc are all in play and might have to make further acquisitions of their own to ward off similar takeover offers. I think this could mark an inflection point in GDX/GLD such that we now see the miners outpace the metal.
Re: PM doing very good; SLV broke out from triangle!
Of course I forgot to mention that Lihir has REJECTED the $8.5B US bid, saying they are undervalued.
Re: Cara 100 Ratings Changes
Apple may be the only company that can execute on design - taking core needs, designing for those needs, and then building the design. Almost every other technology company is driven by technology - engineering driven, incremental, feature addition.
Being design led means that you have the creative/intuitive power to attack new markets - think Ideo but with a technical wing to actually make the stuff they dream up.
I'm hearing iPad has 11+ hours battery life, which makes it a winner. The core needs it solves are taking media and making it more accessible - bridging tv/paper with internet. This product will go gangbusters with 11+ hours life.
I'm not saying the price won't come down. But I guarantee that if they want they can attack as-yet-unseen large markets with ease at this point. Can you name a company that can transform itself so quickly ever in history?
Impossible, because the ability to transform only happened with programming code the amorphous medium - in the bricks and mortar world it is not so possible.
TY pushing %4
I have been thinking about this for awhile and seek some feedback:
Assumptions: Rates over %4 on the ten year spell trouble no matter how you look at it.
Shorting bonds is looking a bit crowded, even though it makes SO much sense.
The US debt servicing requirements rise sharply (and likely rapidly) if rates get out of control much above where they are now. That would be bad....
The treasury auctions will be weak unless they can be made to look enticing. How does that happen? Either higher rates, or a situation in which lower rates look good. How does that happen?
Okay...
We've all been looking for a roll over of this market for quite a while now (don't get me started), but %4 rates are just the thing that might do it (as part of the overall HBB plan, of course).
What if: All the people shorting bonds are about to get creamed?
A take down of the market accomplishes many things here:
It will take the short bond traders money.
It will scare people into bonds, driving rates down.
That may make treasury auctions better subscribed. We stay funded a bit longer. Auctions coming up...
The fear, and the resultant rush to bonds will boost the dollar, which will help with those pesky energy prices, thus capping inflation worries (so there is less of a call for the FED to normalize rates, when they really need them low forever), and additionally putting pressure on precious metals (which the FED & HBB want manipulated downwards in any event). That won't stop PM, just make it more difficult for traders to stay with the PM trade in the short term.
Also, the longer rates can be kept down, the longer the banks are able to continue to recapitalize (at our expense) based on the spread.
COT charts of TY show the commercials getting longer these last few weeks, the large and small speculators less so. And the ES shows large speculators and commercials getting less bullish as small speculators increase their bullishness.
(Anyone here with COT expertise - I'd appreciate input, thanks.)
Further, and on a side note, I've been toying with exogenous shock theories. In other words, what out of the blue event (like a North Korean torpedoing of a South Korean warship - which didn't work on the market, apparently) would cause a rapid shift in the sentiment, because at the moment, complacency rules and nothing seems to scare the markets.
Something will soon.
comments appreciated and congrats again to Bill for being recognized as a "best blog" on wall street 24/7. But I guess we all knew that!
IRS arrests employer paying staff with gold & silver coins
The IRS lost the case! Kaimu will like this one:
http://www.youtube.com/watch?v=EDSs757MgdY&feature...
Re: TY pushing %4
aiki100....... +1 Good job!
RIMM on the ground
Talking to a 20 something knowledge worker on the elevator ride this AM, listening to his blackberry with Apple-type ear buds. Uses: mostly for email and what he likes best is the removeable memory. (If my memory serves me correctly. For the hopper.
Hopped on HNU.to yesterday for a quick 10% scalp this AM. A fluke out of desperation really. The inflation trade is on? I'm beginning to be swayed that it is via these two articles.
http://www.minyanville.com/businessmarkets/article...
http://www.minyanville.com/businessmarkets/article...
It might be a good time to buy a new car right now if it's in your plans for the near future.
Re: TY pushing %4
Not sure I agree that over 4% is doomsday. Why would that be? Why would an increase of 0.0014 in annual interest rates cause the economy to crater?
Re: TY pushing %4
Aiki,
I have very similar sentiments. This scenario is very possible, but what would be the early indicators of this taking place. How and when to take a position to capitalize on it is the trader's dilemma. The hysteria over the Greek crisis is probably a good clue. Who will be next to default. It might not be a country. it could be a state.
Bob
Re: RIMM on the ground
Westcoaster said, "It might be a good time to buy a new car right now if it's in your plans for the near future."
Gee, I bought my wife a new car Saturday for $1,454 below invoice and that is with taxes, license fee and doc fee included. It is a fantastic time to buy just deal hard with them. I passed on the Bentley which was going for $385,000. LOL
Scenerio #2: Gap up, slight fade, flatline. Forever!
About 20 out of the last 24 trading days have been a gap up, slight fade, and a flatline. Which causes a nice orderly rise in the markets with little opportunity to find an entry point. Of coarse the four dip days were the time to buy right. Buy on the dips no matter how small a pull back. Buy the dips is what this market is telling you. Buy the dips is what CNN is telling you. Just listen.
Bob
Re: RIMM on the ground
Hold it, hold it ! RIM is not about Blackberry phones. First, they are made here in Mexico. but....
It's about the 42 million subscriber base, and growing. In K-W home of RIM Park they look at RIM as a $60 stock.
Go back and re-read Bill C,s comment, "if it was $55 it would be a buy".
G-S is correct, as it shorts like crazy and picks uo $20mil
my Blackberry is 2 years old and time to replace it.
PS: non-Canadians: "roll up the RIM to win" is a Tim Hortons Coffee shop promotion
Re: Scenerio #2: Gap up, slight fade, flatline. Forever!
It does make day trade entry more difficult, but if you buy the day before and hold overnight the pop can be captured. I really do not understand peoples fear of overnight holding.
I cleared out four trades today and will mostly observe from here for a few days. It would not surprise me to have the SP grind out to around 1225-1235 before we pause/really roll over.
Edit: Allengg, will you just buy a new Blackberry or will you evaluate the option of purchasing an Iphone?
anyone investing in the smaller, land rich gas/oil
producers here in the US ( mmr, bexp, sd, etc... )?... have seen some pretty strong inside ( ceo ) buys in the past 2 months in some ...
smaller oils/baz22
been selling the puts on MMR and ME for months now, can still get 3% on cash secured MMR apr 15s today for next two weeks....reasonable entry point........thanks for the IMMR a few months ago.... have been sitting on it patiently selling calls..will probably loose it but it did not appear to be very risky IMHO...DYOD on MMR and ME
Failed wave 5 or one more shot up on phony jobs data?
Dumping tech could start the avalanche. Added EDZ.
Most overbought market in a decade.
Blackberry or iPhone ?
Well, lemme see: Blkbry has real keys or touch option. I can add or subtract music from my computer on Blkcby not so iPhone.
Blky hooks up to my computer (Ubuntu 9.10, hardware is recent) IPhone will not
Blky can be dropped, iPhone , ?
Telcel supports Blkby not iPhone
cost ?
Choice is easy , not using the GPS feature here, might in Canada
Allen
Question for Vadym
Re: setups you mentioned yesterday. Sounds like scenario 2 and should gap down on Monday. How risk management would work with this setup? Cover short if market goes up on monday? Thanks!
Re: Failed wave 5 or one more shot up on phony jobs data?
More like rotation into commodity stocks & energy, copper & oil have broken out to new highs, not to mention the PMs moving up nicely.
Is this just the big players letting the commodity bulls have some fun over the holidays, everything to be taken back sometime next week?
Let's see how far the metals & oil can get by Tuesday, to start with.
Re: Failed wave 5 or one more shot up on phony jobs data?
What's your target on EDZ?
Quite an amount of activity in our old friend, ' KRY '
today... thinking its reflecting an article out of Vez. yesterday...
Re: Question for Vadym
Jack,
please see my http://caracommunity.com/content/bill-cara%E2%80%9...
I would NOT be having open positions facing material event with a potential for a big price shock. To me it's gambling. I am not arrogant enough to think that I can foresee which way things turn; I follow things instead of trying to outguess them. I don't have a feeling that I am missing a trade if I am not positioned before the unknown event - trading is a process, not an event. New opportunities appear all the time, and I want to take those that:
- I can recognize as familiar situations in which I know the most likely development;
- present risk that I am comfortable with.
To illustrate how futile the guessing can be: The idea that market should gap down on Monday - why? We are selling off right now, which is not a scenario 2. It can be shorts lured in right now, to announce fantastic-looking numbers tomorrow, however fictional they are, and gap up big on Monday, trapping those shorts. Does it look like less likely scenario than gap down?
Sorry that I can't answer your question, it's simply not how I think.
Re: Quite an amount of activity in our old friend, ' KRY '
fwit... http://www.dailybusinessreview.com/news.html?news_...
Choppy Waters
When everyone knows the markets are managed and the Govt data is phony (well a few don't), WHY does the market gap into phony data. Are they all that stupid? Or has GS told everyone but me how the game is to be played.
~
Target for EDZ: I expect it to reverse along with a whole bunch of other shorts before long, and move well above the 200 day MA. In the short term, zero with my luck. Will add last bite if it goes into the 30's. Over the last few days the EM shorts and FXP have been slammed by an invisible hand, after paint a nice bottom. I got burned there figuring the manipulators would spend their $2-trillion mostly on US markets.
Re: RIMM on the ground
allengg,
You are right about blackberry obsolescence. Bought mine -- best model at the time -- at beginning of Oct 2008 and now the telco won't even service it. Told me it's out of warranty, buy a new one!
About the "Roll up the RIM to win", I think most people here know I write stuff via free association process. I just spent 4 weeks in Canada, left my Cdn bb behind, drank TH, think RIMM might pull back to a winning price, ...what can I say? It's like breathing, I just do it... No, that's Tiger, and I'm not running. Swooshing around in the ocean 15 minutes ago though.
http://www.brainstorming.co.uk/tutorials/definitio...
Re: Quite an amount of activity in our old friend, ' KRY '
baz22,
Do you think there is such a thing as "Blood Gold"
http://en.wikipedia.org/wiki/Blood_diamond
The Venezuelan govt issued a license to Crystallex to mine that deposit, and the shareholders put up their risk capital. If Chavez intends to steal it for himself and the Russians, why would he expect to raise capital the next time he goes to London? They'll call him a liar to his face.
Re: Quite an amount of activity in our old friend, ' KRY '
Exactly... I am willing to ( have ) try a ' few ' shares on that premise... that when the egg is thrown in his face, maybe ( very Huge Maybe ) Mr. C. will throw KRY a bone... the world, is indeed, becoming smaller, and Victor knows his time, and legacy, is running dry... Do you have any thoughts on how the Russian/Canadian business relations are ? I believe the comrades may be pulling Victor's strings at this point.... Thank you, baz.
Re: Question for Vadym
Thanks, it helps.
I lightened on my speculative SLV calls today
I'm still bullish on PM and have the core GLD, SLV, and GDX positions. However, there could be a few down days, especially with equity being overextended like it is today. Good luck to all and have nice holidays!
Re: anyone investing in the smaller, land rich gas/oil
Hi Baz - Along with TCK (thanks Bill) Bexp has been one of the stars of my lazy man's portfolio. This offsets my KRY bust, but nice to see a move on that too. Also picked up MMR on the strength of drilling results announced back around $10/share. They all have a good day now and then and proven management keeps these smaller ones on the right trend overall. Happy Trading All
What is Your if then Scenario. Positive Jobs Report is Negative
What is Your if then Scenario. Positive Jobs Report IS Negative for stocks. IMHO. Positive jobs, means higher interest which means no more free money. If there is a gain in jobs. Market will spike 1 hour to three days. I will be prepared to fade with a position in VXX and short financials and gold. Just one of many IF Then scenarios. I would like to hear what your IF THEN scenarios are for Monday.
Buying Bullion These Days
Anyone been buying bullion lately? (Gold or Silver) Seems like supply is scarce lately. All I can get for the last month or more has been a few 10 ounce bars. (Silver bars of course).
Re: TY pushing %4
If demand for bonds continues to be weak with foreign bond buyers continuing to shun UST's, I would agree the HBB may seek to lower the stock market and
improve bond demand, but what bonds would be of interest? I doubt bond buyers will be interested in anything but short term issues. If we have a sell off like in 2008 or 2009, would everything get sold or perhaps gold would hang in there as fear could rise and prompt some of cash going into gold as a safe haven play? Further erosion in confidence may drive more cash to gold as the ultimate safe haven. Problem is even if gold would triple in value, it is still to small an investment pool to accomodate all the dollars sloshing around the world. Essential commodities may then boom as a harbor for cash exiting the stock market.
There has been talk that the Fed is looking at pensions,401K's,Ira's and
making rule changes to force a portion of those funds into the longer end
of Treasury bonds, in order to hold down long rates.
Priced for Perfection?
Really? I hear this all over the place. People are saying the market has been bid up way to much...really? Is that really true?
Let's look at how far we have run:
YTD: up 5.6%
Since mid October: up 7.9%
Since January High: up 2.4%
I don't know, I just don't see how it's a parabolic move up.
Re: Blackberry or iPhone ?
AGG I'm a little confused, do you favor Blackberry? I"m not sure after Bill's comments. I never owned BBY, now have iPhone, but don't use much for email or browsing although will do in a pinch to read WIR's etc if away from computer) Just curious, what your comments meant.
Happy Easter all, enjoy the break.
Well, lemme see: Blkbry has real keys or touch option. (Advantage BBRY?)
I can add or subtract music from my computer on Blkcby not so iPhone. (Itunes on computer?)
Blky hooks up to my computer (Ubuntu 9.10, hardware is recent) IPhone will not. (Synchronize?)
Blky can be dropped, iPhone , ? (Iphone so far so good, been advised to get rubber frame)
Telcel supports Blkby not iPhone
cost ?
Choice is easy , not using the GPS feature here, might in Canada
Allen
Re: Buying Bullion These Days
I haven't bought any new physical since mid-2009 but just perused Apmex.com and most everything seems available - including 100 oz bars of silver at $0.69 over spot.
Re: Buying Bullion These Days
Apmex.com had plenty of silver coins/bars starting at $17 (as of last Friday). Almost no premium over spot. I thought it was very reasonable and got some, probably not enough. Silver is very bulky. I use it as a decoy for home burglars and have it laying around hoping to distract from more valuable stuff.
Edit, I went back and they are $19 now: http://www.apmex.com/Category/520/Silver_Rounds_Se...
Agnico-Eagle to Acquire Comaplex's Meliadine Gold Property
It's hunting season, acquire or be acquired....
http://tinyurl.com/yktprej
Re: Priced for Perfection?
If you look at QQQQ's or SPY's charts and specifically RSI, MACD, and FORCE, they look similar to the mid January formation. Sentiments are likewise extreme. There has to be some degree of correction or consolidation soon.
FD: I don't trade indices (hard money to make) but use the info to time PM markets.
Re: Priced for Perfection?
Jack - I'd argue that the move over the past 2 weeks has been the consolidation. it has basically traded sideways since March 17.
Re: Priced for Perfection?
Exactly - and this kind of consolidations at the high tends to resolve into breakout and sharp upward move more often than not.
Re: Priced for Perfection?/ No Such Numba, No Such Name
One observation regarding human nature that supports higher highs at these levels- there is no reason for investors to sell right now. With each new high in a stock like BIDU or AAPL, the incentive is to keep holding. No overhead resistance, no 'get me back to even' selling, no memories of old highs where it broke down.
The 11,000 target that Vad tossed out a few days ago will be hit next week (albeit without me on board). No doubt in my mind.
As for the term 'priced for perfection,' what exactly does it mean? Does anyone have a clue what 'perfection' means? Or the appropriate price to attach to it? Of course not. It's just a term, and the industry is full of terms that have been less than helpful the past year:
'overbought'
'put/call ratio signals a top'
'VIX at levels that have preceded sharp corrections in the past'
Yeah, well, all of those plus a few real buffalo chips might provide enough heat to make dinner. They haven't made bears any money.
Re: Priced for Perfection?/ No Such Numba, No Such Name
I agree...why we bother trying to short until we have a clearly defined reason to do so borders on insanity. I have done it on occassion in a couple of my accounts and haven't done much other than lose money on those trades.
I have one account that I have been (fortunately) long only in since March 2009. I've never tried to trade counter to what is obvious (rising market) and my returns in that account are absolutely astronomical. No options, no margin, just good ole fashion buying and selling stocks. And that's with an itchy sell trigger finger the whole way up. The trend is my friend in that account...and I have no problem with that industry term.
Re: IRS arrests employer paying staff with gold & silver coins
Sorry Loannetter this person, Kahre, is in prison; his story is about two thirds of the way down on this IRS page: http://tinyurl.com/ybl5v8q
Menock, trading for thirteen years, ten full time and seriously tired.
Re: Priced for Perfection?/ No Such Numba, No Such Name
2nd.
Price to perfection is just one part of the colorful trading vocabulary. You really cannot pick on one word without castigating the entire aggregate of trading lingo. In addition with earning season coming up we will hear this word constantly to explain why earnings will meet or slightly beat expectations and then suddenly the stock will sell off, counter to a laymans expectation. You can only use "sell the news" or "Price's went down due to profit taking" so much. Got to break it up with, "Well that stock was priced for perfection." I try to keep the current run up in perspective. My favorite web site to do that is The Onion. Here is an oldy but goody to keep grounded.
Stock Market 'Best Since 1928,' Say Investors:
NEW YORK—Wall Street insiders are hailing the current bull market as the best since 1928, The Wall Street Journal reported Tuesday. "The Dow is on an unstoppable rocket-ship ride into the outer stratosphere of fiscal health and prosperity," H&R Block broker Phillip Guyer said. "I see no reason why this upward trend shouldn't continue forever. To celebrate, I think I'll buy myself one of those newfangled horseless automobiles—on credit!"
CCC MAIDEN LANE LLC
ALOHA!!
Well, as I have reported for near a year now the three MAIDEN LANE LLCs have completely crashed in value and now the US FED has come clean on some of those assets. In some cases 80%+ of the assets held in the MAIDEN LANES are junk and in fact the financial reporting and management done by BlackRock(another US FED member bank)would only state that the ratings had sunk to BBB+ or less. As the article from Bloomberg points out that most of it is close to default with ratings of CCC and C, which is one step above total default.
Hey, its all owned by us Americans ... so while the US Treasury may tout that the US Taxpayers are going to make a killing on their CitiBank(C) stock(???) we US Taxpayers have taken a total bath on some $100BIL+ worth of worthless toxic debt packaged and sold by the likes of Bear Stearns, WaMu, CountryWide and AIG, which benefited banks like BAC,JPM and GS, who would have never realized any derivative gains as their counterparties would have been BK had the US FED and US Treasury not intervened. So while Bernanke and Geithner paid banks par and above for those assets, on our behalf, now we find those same assets are worthless and should be valued closer to "default".
Here is the article and you have to summarize that any other similar toxic debt derivatives of this nature now held by surviving banks like BAC and WFC are just as toxic or worse. What BlackRock needs to do is re-list those ratings at CCC or less not BBB+ or less, as they have been totally corrupt and misleading with their financial reporting and ratings. In fact any sane and moral "customer" would fire BlackRock for poor management and fraud, but how can you fire one of your own banks? As we have seen "nobody" ever gets fired from the US FED no matter how bad they perform. That's how monopolies work!
What was Bernanke's excuse for taking on such toxic assets on the behalf of the US Treasury and every American? It was an "emergency"!!! Its the "E WORD" yet again. Any student of failed monetary and banking policy in America will see the "E WORD" mentioned throughout history in all applications large and small. That was the exact same excuse FDR used to confiscate US citizens gold and enact the EMERGENCY BANKING ACT ... it was an "emergency". When isn't it an "emergency"?
We citizens have allowed the same two party political monopoly to align with the money monopoly to totally destroy our currency and impoverish our future generations in a never ending quagmire of debt and debt derivatives ... so much so that the US Dollar has been turned into just another debt derivative like MBS or CDO or any other "packaged debt".
Bloomberg article ...
LINK: http://www.bloomberg.com/apps/news?pid=20601087&si...
Thank you Bloomberg for forcing the US FED's hand and proving that once again intervention into the markets is yet again a total failure. Shock of shocks that one ... oh and thanks for proving me right in my Maiden Lane analysis!
GARBAGE IN ... GARBAGE OUT
Re: TY pushing 4%
I posted right before I left for a meeting, sorry for the delay in reply.
I did not mean to imply that 4% was a doomsday scenario, just that it is an area beyond which certain things may start to happen. The market thinks it can handle higher rates "as a sign of the improving economy", but I don't believe the economy can just yet.
Speaking to the .0014 you speak of, this is a question for Kaimu. .0014 (or more as rates go higher) multiplied by the funding needs of the US Government is a serious chunk of change, I would think. So...
Personal income is flat, yet personal expenditures are slightly up in economic reports this month. How does that happen? Either people dip into savings in order to spend or use credit. Higher rates will hurt users of credit.
Higher rates may further starve the already starved small businesses who can't get loans at these already low rates.
Higher rates may force more "sovereign" risk candidates into bankruptcy - think California, where you and I both live, that will have to raise money through GBO's at much higher rates at at time when it can barely service the debt it has now.
It makes the housing problem SO much worse in terms of either outright defaults based on higher refi remedies (or higher debt burdens in other areas), or the inability of new buyers to purchase with low rates. Ditto with car purchases, etc.
70% of GDP is consumption: if the economy is hung by higher rates, jobs have more trouble materializing. No jobs, no spending, unless it's government transfers (some of this has been the case), or financed through credit.
Please see attached chart of the ten year note rates (green line: TNX) essentially downtrending since1987, i.e, downtrending during the entire run of the greatest bull market in history (blue line:SPX). Yes, rates have been above (way above) 4% during much of this time, so a strong economy can manage it, but rates have been in a downtrend for decades, supporting the market's advance.
Dotcom blowup in 00 ended Sept 02 and started rising just after rates dipped below 4% again.
Rates have been below about 4.5% from July 02. The two peeks above 4.5% almost coincides with the double top in the SPX that fails in october 07, and we all know what's been happening since then.
This certainly doesn't mean the market can't go higher, in fact, were I HBB, I'd do it this way:
Have a temporary (but meaningful) pullback to suck in the bears, give those on the sidelines a chance to get back in, run it up to 1250 - 1300, distribute all the way up, then crash it to bring the rates down and strengthen the dollar in the face of the "crisis" (just to disabuse anyone about who's the real reserve currency in times of need).
This gives the FED a supportable reason to keep rates low, homeowners in their houses, banks more time to capitalize on the spread, treasury auctions more well subscribed, and the US debt in a "manageable" state for a bit longer. The stronger dollar keeps energy prices, thus inflation expectations low, and helps us all at the pump.
I have no idea how it plays out, but higher rates isn't going to help.
More feedback appreciated.
And happy easter/holidays to all!
Re: Priced for Perfection?/ No Such Numba, No Such Name
Priced to perfection is just one part of the colorful trading vocabulary.
True. However, not as colorful as the vocabulary used by bears who have been eating bovine chips for 12 months ;)
70% of the Economy is the Consumer Spending
Another saying I ignore. I can't tell you how many times I've heard that. I remember researching this last year and coming to the conclusion that a far smaller % of that is actually discretionary spending. A very large portion of this 70% is actual non-discretionary spending on things like food.
This is right up there with the insane idea that bearish people had back in August 09 when they said they were shorting the market because Septembers were typically bad months. I couldn't believe it when I heard people mentioning that as one of the reasons for going short. I mean, I've lost money on some bad trades but I've never shorted or purchased something because it historically did poorly/well in that period. That's just craziness.
Re: 70% of the Economy is the Consumer Spending
I would say 25% of the global economy revolves around illegal activity, of which 90% is inadvertently funded by (otherwise) well-meaning government interdiction programs.
Re: 70% of the Economy is the Consumer Spending
I agree there are many sayings worth ignoring, but I believe it's pretty standard fare that consumer consumption (discretionary and non-discretionary) is the preponderance of GDP in America. All those companies need customers that come from somewhere, no?
That isn't even the main thrust of the post however; it's that higher rates are not going to be good for an economy that has grown by debt creation for many years, that is currently in a debt de-leveraging purge, and has no new paradigm as of yet to replace credit/debt as the engine of the economy. The powers that be will (continue to) manage what they have to work with in order to create the most stable platform for the economy going forward.
Not feeling particularly bearish or bullish about this, just trying to work out some if-then, or what if scenarios that match our current macro situation.
Cheers
Re: 70% of the Economy is the Consumer Spending
2nd -I like your reply better - I'm going with yours instead!
You made me laugh!
Thanks -
decent interview ( don't know if it will paste )
kaimu would like the ' Public Enemy # 1 )... http://ow.ly/1tpRS
Re: IRS arrests employer paying staff with gold & silver coins
Menock,
So crime does not pay? Apparently not in combination with other crimes. Liked the music though!
Re: IRS arrests employer paying staff with gold & silver coins
ALOHA!!
It doesn't take a math genius or a Nobel Economics professor or even a staunch Republican to figure out that since the US FED has had control of our monetary policy for near 100 years our money buys less ... not more than it did in 1913. To allow a 100 year track record of failure to continue is just plain insanity, yet Obama in all his wisdom, like Bush, rehired Bernanke. Who owns who?
Oh yeah ... and who cares what employees want in payment for their services. Here where I am they will work for flowers. Its called barter ...
Re: Priced for Perfection?
I disagree. This was not consolidation as the sentiments did not go down. They oscillated at abnormally high levels. Good example of flat to rising consolidation was late april 09, the sentiments eased and then markets took of.
Don't get me wrong, I'm not shorting. But, based on sentiment situation, I sold my SLV calls today that have been vary profitable lately. I'm planning to reload shortly.
Re: 70% of the Economy is the Consumer Spending
ALOHA!!
According to the US Treasury, which it includes both on budget and off budget accounting, since 1970 the government spending has accounted for 31.7% of the GDP. That leaves "real" consumers with only 38.3% of GDP ... not as much as everyone touts! Kind of like when Nick Leeson disclosed that his biggest customer was Barings bank(himself Mr 88888). Why do you think I keep saying that without the government customer(contracts) the Fortune 500 in America would be the Fortune 5 ...
That is why I call the government's actions as PRICE FIXING. As we saw with MAIDEN LANE LLC the US Treasury will pay top dollar for anything no matter what garbage pile it came from. When you have a printing press "value" has no meaning and due diligence is for suckers.
Insult Upon Injury: Senior Scams
I heard the most horrific story this evening. A home owner (elder) came in to consult on options to avoid foreclosure. Apparently they took out a Home Equity Line of Credit to invest in an oil hedge fund. Scam of scams, the advice came from an 'investment teacher' who was instructing inmates in a prison how to make money online and advising their familes to invest in his own little game. In addition, this family was scammed by a now defunct brokerage into a Pay Option ARM (neg amortization loan) that has exploded beyond recognition. This family is now about $100K in the hole not to mention the sickening evidence of predatory loan practice. The companies involved are long gone bankrupts.
Our State Attorney General publishes a list of the top Senior Scams online. Worth sending to anyone you know who may be over trusting of strangers offering to 'help'. Here is the Investment Scams page. Note they have an entire menu of scam categories:
http://www.atg.wa.gov/SeniorFraud/InvestmentScams....
Re: Insult Upon Injury: Senior Scams
ALOHA!!
Is the US Treasury listed under "money scams"?
Re: 70% of the Economy is the Consumer Spending
Far be it for me to question any of your numbers kaimu - (you reign supreme in this area and I have very high respect for it) but where's the rest of it?
38.3 + 31.7 = 70, yes, so according to the treasury info you have, who produced the other 30%? Would that be the classic economics "investment" component? Just curious....
btw, I'll go with the price fixing schema - it fits so well...
TIA
Greek deal fell through
http://tinyurl.com/yzczgw6
At least they didn't get the bailout money and spend it on something else, like we did.
Re: 70% of the Economy is the Consumer Spending
ALOHA!!
aiki100- My numbers are what I get from various sources and the US Treasury is one source among many, but then I interpret those numbers trying to work some common sense in layman's terms. Quite frankly a lot of numbers issued by the US Treasury and the CBO don't add up or are vague and misleading and that has been one of the main criticisms coming from the GAO for decades and I am sure part of the reason why David Walker just gave up and called it quits. My positions on the USD and the US economy come from a deep distrust of everything this bloated government and its accomplice the US FED does, including basic economic calculations and the resulting "media data". They shift numbers and versions of data to benefit their own agendas, which is mainly to get re-elected or to blame others for their intervention failures. Quite often I believe the mainstream economists approach economic data which they themselves create with eyes wide shut. Which brings me to the accounting profession, which like Arthur Anderson did when they sold out to Enron, now accounting has sold out to government and banks.
The concept of "money" is not evil in itself since money is simply suppose to be a "store of value", a store of your accumulated wealth you have worked your entire life for. The evil part of that equation is when money is no longer a "store of value" and becomes corrupted by corrupt government and banking institutions with the complicity of economics and accounting professions. Measuring America's wealth with GDP is like an open source operating system as nothing is standardized from one decade to the next. Why switch from GNP to GDP? Why so many variables(deflators/inflators)? Economic data in America from any source is as "free-floating" as our currency.
GDP
Which way do you want to calculate GDP? There is more than one way.
Here is one:
GDP = private consumption + gross investment + government spending + (exports − imports)
I think there are two misleading terms here whereby "consumer spending" that is thrown out to the public, while in economics "general consumption" is both private consumption and public/government spending or can be condensed into what is called "final consumption expenditure"(FCE), which includes both since the private sector and public sector buy finished goods and services.
In this case numbers do not add up if you accept private consumption(consumer) as 70% of GDP. In FY 2009 total GDP was $14.003TRIL USD, which means 70% would be $9.8TRIL while the US Treasury reports spending at $4.6TRIL, which is 32.9% of GDP. So $9.8 + $4.6 = $14.4TRIL(exceeds total GDP) which only includes federal spending and not state or local government expenditures nor off balance amounts. Where do you take that when you still have to add in gross investment and net exports?
Here is two:
GDP = final consumption expenditure(FCE) + gross capital formation(GCF) + net exports
Here is three:
GDI = compensation of employees + gross operating surplus + gross mixed income + taxes less subsidies on production and imports
The third is based on "income" ...
It is mind boggling the amount of minions required to calculate these numbers, not to mention the accounting software employed on a daily basis. I used to work for the IRS and I can report that such complex systems were rife with errors of all sorts, especially when it came to inputs. The problem with the IRS and complex systems which big government uses to hide behind can be boiled down to one word "interpretation". As anyone who is religious can attest a thousand people can read the Bible and give you 1000 different interpretations. Anyone here ever seen how many volumes the IRS TAX CODE is? It makes the Bible look like an index card! Let me just say that "interpretation" was the leading cause for problems at the IRS when I worked there. It was always a battle between the taxpayer's interpretation and the IRS interpretation and as usual the IRS usually won the war! I am sure not much has changed since then.
Other government entities? Fill in the blanks from there ...
"It is only the passionate pro-socialist zeal of mathematical pseudo-economists that transforms a purely analytical tool of logical economics into an utopian image of the good and most desirable state of affairs."-Ludwig Von Mises, Theory and History, 1957.
UP TO $17.2TRIL
ALOHA!!
This is the most comprehensive and detailed up-to-date diagnosis of various bailouts and promises issued in America that I have seen. The current total comes to $17.214TRIL USD in "total potential support including implied guarantees" for US banks and corporations and private citizens. This info comes from Nomi Prins and her FaceBook. She is the author of a number of best selling books and was a former managing director at Goldman Sachs running the international analytics group at Bear Stearns, London.
Just scroll down through the "trillions" and then think of a good reason why anyone in DC should still be there on November 5th.
LINK: http://www.sitemason.com/files/foZeWA/bailouttally...
NOMI PRINS
Nomi Prins is a journalist and Senior Fellow at Demos. Her latest book is: It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street (Wiley, September, 2009). She is the author of Other People’s Money: The Corporate Mugging of America (The New Press, October 2004), a devastating exposé into corporate corruption, political collusion and Wall Street deception. Other People's Money was chosen as a Best Book of 2004 by The Economist, Barron's and The Library Journal. Her book Jacked: How "Conservatives" are Picking your Pocket (whether you voted for them or not) (Polipoint Press, Sept. 2006) catalogs her travels around the USA; talking to people about their economic lives.
Her thriller, THE TRAIL, came out in 2008, under her pseudonym, Natalia Prentice, a page-turning novel about intrigue, secrets, and money on Wall Street, in DC and offshore. It was selected to FORBES CEO BOOK CLUB in April, 2008.
Before becoming a journalist, Nomi worked on Wall Street as a managing director at Goldman Sachs, and running the international analytics group at Bear Stearns in London.
She has appeared on numerous TV; internationally on BBC World, BBC and Russian TV, and nationally on CNN, CNBC, MSNBC, ABC, CSPAN, Democracy Now, Fox and PBS. She has been featured on hundreds of radio shows globally including for CNNRadio, Marketplace, Air America, NPR, regional Pacifica stations, New Zealand, BBC, and Canadian Programming.
Her writing has appeared in The New York Times, Fortune, Newsday, Mother Jones, The Daily Beast, Newsweek, Slate.com, The Guardian UK, The Nation, The American Prospect, Alternet, LaVanguardia, and other publications.
She is based in Los Angeles.
LINK: http://www.nomiprins.com/
Thanks to Casey(Mr Tao) for the tip ...
Re: IRS arrests employer paying staff with gold & silver coins
Couldn't this have been simply , "...an honest mistake," as Obama said of Geithner's $32,000 "oversight" on HIS taxes?
We should see the imprisoning here as a warning should one of us neglect to buy his designated amount of health insurance.
Question: If you go to prison for failure to buy health insurance — will you get health care in the slammer?
Re: 70% of the Economy is the Consumer Spending
TOF, 2nd, aiki,
re: 70% consumer spending 25% illegal activity
A few days ago I came across this article on the topic of consumers and recovery possibilities.
------------------
Consumer spending accounts for 70% of gross domestic product, so we can't afford to have a good portion of consumers not spending.
"The economy can recover if high-end consumers are spending, but it can't flourish without the lower-income households participating," says Zandi. He calculates that the bottom 60% of shoppers by income account for 40% of spending.
http://tiny.cc/9yqfh
------------------
As for the "illegal activity" — Vad may be able to confirm this which our son told us after returning from a high school trip to the Soviet Union in 1984. He said dollars were good anywhere, but with the kids the currency was Levis, Elvis record albums or US news magazines like Newsweek and Time.
I am willing to believe we have at least 25% of our economy off the books and rapidly increasing as government becomes increasingly "in our faces".
When the President of the US openly ignores his campaign promises (Obama), when he tells us to "...shop or they will have won," (W) when we hear "... it depends on what is, IS," (Clinton) or "Read my lips, no new taxes," (Bush 41)it becomes far easier to feel OK skirting the law.
When $ billions in tax dollars are spent, "Off-Budget," what is a few bucks in unaccounted cash for services rendered?
Re: 70% of the Economy is the Consumer Spending
Thank you kaimu! I knew you would have the answer (in spades). Greatly appreciated!
Agoracom under investigation... again
When will people learn!
http://www.ctv.ca/generic/generated/static/busines...
Periodically, I get hit with waves of pretenders who try to push into this community, and I have to put my foot down. Thankfully, I think most of you by now can see the new people who arrive with an agenda, and you speak out. Thank you.
All of us make mistakes, but as long as they are honest mistakes we can learn from them. But if the mistakes continue to be due to somebody's agenda of deception and manipulation, and we repeat making them, we will never learn.
You deserve better.
Re: IRS arrests employer paying staff with gold & silver coins
Gyrm... you sure can (get healthcare in prison )... one of my friends is in accounting in my state's prison system... Need a knee replacement ? For $ 10, and at a major university medical facility, you got it... This is for Any inmate, serving time for any offense...
Unfortunately not a joke.
Hank Johnson Thinks Guam Is Going To 'Tip Over' (VIDEO)
Unfortunately, this is not an April Fools Day prank, just a member of Congress acting hilariously aloof. After debating the exact size of Guam for a full minute with a military commander before concluding that it is "a small island," U.S. Representative Hank Johnson reveals his fear: that more U.S. troops will cause Guam to "tip over" and sink into the ocean.
The best part of hearing Johnson say, "My fear is that the whole island will become so overly populated that it will tip over and capsize," is hearing the commander try to explain why it's probably -- no, definitely -- not going to happen.
[UPDATE: "I wasn't suggesting that the island of Guam would literally tip over," Johnson says via a spokesman. "I was using a metaphor to say that with the addition of 8,000 Marines and their dependents -- an additional 80,000 people during peak construction to the port on the tiny island with a population of 180,000 -- could be a tipping point which would adversely affect the island's fragile ecosystem and overburden its already overstressed infrastructure.
[UPDATE: "I wasn't suggesting that the island of Guam would literally tip over," Johnson says via a spokesman. "I was using a metaphor to say that with the addition of 8,000 Marines and their dependents -- an additional 80,000 people during peak construction to the port on the tiny island with a population of 180,000 -- could be a tipping point which would adversely affect the island's fragile ecosystem and overburden its already overstressed infrastructure.
"Having traveled to Guam last year, I saw firsthand how this beautiful -- but vulnerable island -- is already overburdened, and I was simply voicing my concerns that the addition of that many people could tip the delicate balance and do harm to Guam."]
No one is buying his denial today. I guess the "good news" is this proves in America, anyone can be elected to high office.
WATCH:
http://www.huffingtonpost.com/2010/04/01/hank-john...
The slippery slope
There will not be an effective Consumer Financial Protection Agency in the US or anywhere that matters; the much needed Volcker Rule ("Return of Glass-Steagall") will never happen; and, Humungous Bank & Broker will always operate in a pervasive self-regulated and protected environment where conflict-of-interest destroys the wealth of the people and cannot be managed by those who are empowered to protect the people.
That's the good part -- and only so because many of the leaders do have strong moral values, which acts as a partial check and balance on the others. The bad part is that society now figures that if corrupt leadership at the highest levels of the financial services industry and in government can commit fraud and not be prosecuted, so can the rest of the people. Many individuals, networks and organizations have sprung up from the grassroots that are using their considerable expertise and experience to also commit fraud, and the serious problem is that many of these have total and utter disrespect for society, figuring that if ever they are caught they can, unlike a big name bank or broker, simply change their name and move on.
Unfortunately, I don't see this getting better because politicians and securities regulators are bed partners. My viewpoint might change the day I see and hear an Eliot Spitzer type individual get appointed to head the SEC and make the statement he or she intends to prosecute the senior executive officers of Goldman Sachs and JP Morgan Chase for fraud, and live to pursue it. Until then, I believe we are on a slippery slope.
We got the emplyment # now what?
They look good but lower than market expected (162 vs 184k): http://biz.yahoo.com/c/e.html
To me it sounds like less than perfect. Hoverer bonds sold some today.
According to the $SPX:TLT chart, daily RSI(7) hit over 80 and it's easing now. Monday could open high and fault later (equities). I'm talking short term moves, because the above chart, but weekly, doesn't look as extreme as the july 07 or june 09 tops.
Re: The slippery slope
Bill,
I am sorry to say I totally agree. Too many Americans have too short a memory and are easily distract by trivia.
Grym
Re: We got the emplyment # now what?
The market should ultimately like this report. Fewer census hires (42k) than expected from what I gather so the number could have been higher. Private employment rose over 120k which was pretty good, better than expected. But not too hot to worry about rising rates just yet. Also, prior months were revised up to show that the general trend has been up. I think momentum could gather if we have a few months like this because companies with lots of cash will get antsy that the good talent is beginning to get hired.
Ultimately, I think we hit 1230 in the near term unless we have some big negative unknown factor come into the works.
Special Fed meeting Monday
An expedited closed meeting of the Board of Governors of the Federal Reserve has been scheduled for Monday to review the advance and discount rates to be charged by Federal Reserve Banks. http://tinyurl.com/ye323jt
Re: We got the emplyment # now what?
Shrug your shoulders. Slow methodical melt up until further notice.
Bob
Re: Special Fed meeting Monday
Are they planning to cool the markets some? We are approaching the invisible glass ceiling of 39 on $TNX.
Full Transcript Of The BLS' First Post-NFP Public Q&A
From Zero Hedge:
http://tinyurl.com/ybwyhgp
The Zero Hedge takeaway: "Key data points for March: change in NFP: 162K; of these - Census +48K; Weather ~+100K; Birth/Death +81: Net -67,000. Underemployment increased to 16.9%. In the meantime the dollar is surging, and the 10 Year is approaching 4.00%."
A look inside (that crazy) government machine of ours. (sigh)
Re: RIMM on the ground - will see some serious competition
RIMM will be seeing some serious competition from the Google Android mobile phone OS.
I think Google Android will gain significant market share from Apple and RIMM. It will be similar to Apples IPhone OS but now you can have multiple vendors create a devices and applications to take advantage of the Android OS. This will lead to the creation of many types of devices where there is only one form factor for the IPhone and a limited number of RIMM devices. The Achilles heel for Apple and RIMM is that they are the only device manufacture for their OS. Sure it allows them to keep quality in check but it does hurt device creativity. The Google Android OS will also be able to take advantage of the Google mapping technology. There will be some really cool software apps created in conjunction with the Google mapping.
I just read a summery of a 4000 person poll from ChangeWave investing and according to their subscribers they have been moving away from RIMM to the Apple IPhone and Android devices. 43% of this community used to own a Blackberry devices 6 months ago and now it is down to 38%.
Also...Microsoft is revamping their Mobile OS and will make a big push here in the near future.
The number of subscribers using smartphones is increasing so that is good for RIMM but they are loosing some market share to Apple and Android.
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
If I listened to Zero Hedge the past year and a half i would be broke.
Re: We got the emplyment # now what?
TOF, Bobbyo,
If you want to trade the markets' reaction to the number — OK.
But watch out if you are thinking longer term...
Most of us know CPI data are skewed — national debt is low balled and nearly all government data if not out right lies is spun like a tornado. The Fed is pumping and brokers are cheer leading. Who believes "the health care will save us money"?
In a couple of months the new grads will hit the streets looking for jobs. I expect those who can afford it will end up in summer school and go for advanced degrees. The other thing seldom mention is job quality. It just isn't there. In many areas people are scrambling for temp jobs or jobs far below their qualifications.
I don't expect many companies will rush to grab talent due to low demand for products and services and the crushing health care edict hitting their existing workforce load.
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
"If I listened to Zero Hedge the past year and a half i would be broke."
No question anyone who bought the indexes would have done well. The question is why did the markets rise?
What is fundamentally changed? Which of the following are improved?
City, state national Debt?
Unemployment 12 month picture?
Most people's benefit package?
401(k)s?
Mutual fund buying vs selling since last year?
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
How about: earnings, cash flow, industrial production?
Re: We got the emplyment # now what?
Personally, I'm waiting for the indexes to sell off 7-8%, then go long in the buy-and-hold half. I don't think we dip much below DJIA 10,000 for the remainder of 2010, and will certainly see 12,000+ at some point.
As always, that's JMO, which means it's just another opinion, and we have plenty of those.
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
Don't listen to anybody blindly - listen to everybody and use it to expand your POV. Nothing more nor less.
Re: 70% of the Economy is the Consumer Spending
"Measuring America's wealth with GDP is like an open source operating system as nothing is standardized from one decade to the next. Why switch from GNP to GDP? Why so many variables(deflators/inflators)? Economic data in America from any source is as "free-floating" as our currency."
The much bigger number including spending makes it MUCH BETTER to compare *DEBT* or *DEFICITS* against, me thinks.
It make it look not quite so bad as a percentage...
JUST YOU TRY AND REPAY IT, LOL
Re: We got the emplyment # now what?
According to shadowstats dot com the real CPI is running about 10% I read last week. I asked my wife what the increases were running on things, and sure enough, most things that you actually HAVE to spend on are up quite a bit, some way more like fuel and healthcare, some around 10% like taxes, food, tuition, some less, like clothes or ipods, but I rarely BUY clothes and NEVER will buy an Ipod.
Wages flat or down for those still left employed...
Sounds like STAGFLATION to me.
Re: We got the emplyment # now what?
Grym,
My perspective was just a short term trading perspective where I believe the much talked about employment data will have no effect on the market. Having inline results with expectations does that.9.7% Unemploymen is terrible. The worst in my life time. My long term MACRO outlook for the USA is probably not much different than yours. I don't see Goldilocks returning. The bears ate her. I see historically high interest rates, high taxes and inflation or stagflation. Our only hope is if the rest of the world is worst off than us. Hoping others to fail is probably not a great plan to bringing about prosperity.
Bob
Re: Special Fed meeting Monday
We that was an easy guess.
So the rumors that Gold would be crushed right after the jobs numbers were correct, then.
What a scam...
Re: We got the emplyment # now what?
I don't see Goldilocks returning. The bears ate her.
Well, not exactly. More like Goldilocks pulled off a slick move- trapped them in the basement while she's still running around the house. Unless things change fast, the bears will die of starvation, and at that point, the last one standing wins ;)
Re: Special Fed meeting Monday
Another increase in the spread…..getting closer to the pre-crisis level of 100 basis points…… and the perception of normalcy.
Day for thanks to all
With the long weekend I wanted to take a moment and remember back to when Bill had Pneumonia and I went through the registration process. I wanted to let him know I also was recovering from it and to take it easy then. It seems I had been a long time reader and few time contributor. Reading several times a day I can only say I am much better for this living community of like minded individuals who express their thinking here.
So, today I again wish to thank everyone as it takes two sides to flip a coin.
My FelCor Lodging Trust FCH and MGP Maguire Properties, Inc. which I shared a few week ago have both done well in place of XLE which stands below the mark I sold it as a few weeks ago to fund them. After some conversations here regarding a third I went with MVG.
Last posting we were discussing ways to gain access to flows of data streams. The antenna on the house is in its last days. I am from the era when colored text on the net was a big thing. I can remember in graduate school punching out lines of ticker tape to run through the mechanical reader to contact UCLA to play chess over a phone line with a receiver boot. That was the future as most of my interactions were by punch card.
Now, I find myself creating portals for the flow of information over the Internet. Last time it was on finding content to replace your TV subscriptions over the net. I was overwhelmed by the world wide response I got to my home page, After all we are all more alike than different in front of a computer screen.
So as my way of sharing back to the community I have redesigned by stock page. As I am an educator by trade there is no advertising as such. It contains my links to financial information I use each day. Having been a member here so long I hope the interface reflects the community spirit. If you have other links I need here I will find them as you post them.
http://cvip.fresno.com/~mag77/stocks/marke.htm
Again thanks to all and a great weekend however you choose to spend it.
P.S
Unbelievable, looking back in January I was standing on a beach on Paradise Island although it was in a coat. From California I have never seen clearer waters. I have been to Brazil, Hawaii, Florida. This place takes away your breath.
Thanks Bill.
Re: Day for thanks to all
Very cool. Thanks for sharing your site - we are blessed indeed to have this place together. Yet another thanks to Bill for making this community possible.
Re: We got the emplyment # now what?
LMAO. Mixing the metaphors. I meant the Bond bears not the bears shorting the equity bubble. I don't see the Goldilocks economy coming back long term as defined:
A Goldilocks economy is a not too hot or cold economy, sustaining moderate economic growth and a low inflation allowing for a market friendly monetary policy. That Goldilocks will be a tasty snack for the US deficit.
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
"No question anyone who bought the indexes would have done well. The question is why did the markets rise?
What is fundamentally changed? Which of the following are improved?"
Let's see: because all who wanted to sell sold, and there was nothing but pure buying left? Plus a whole lot of money injected in economy through various vehicles was sloshing around looking for work (something Bill warned about a few months prior March of 2009)? Plus there was not much alternative to stocks at the moment?
Most importantly, and absolutely necessary for anyone dealing with stock market to understand: there is NO direct and easy to understand connection between all the economic factors and stock market movements. NEVER was, NEVER will be, and this has nothing to do with today's conditions. It has everything to do with the very nature of the market that never rewards obvious. Obvious is obvious for everyone - how can everyone win? Who will everyone take the money from? That's why you need to understand what is obvious and watch for the market to start acting against it. That's when you have Price - Information Divergence that allows you to take position against obvious, thus against crowds, thus becoming Smart Money.
http://blog.realitytrader.com/2008/03/history-teac...
http://blog.realitytrader.com/2008/10/information-...
http://blog.realitytrader.com/2008/04/traders-job....
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
No, how about all that liquidity printed since the crash.
Edit: Ooops! I wrote this before seeing Vadym's post at the end.
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
Vad, What is your goal. If you educate everyone where will the dumb money come from?:)
Bob
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
If nothing changed since tulips mania time even though the story was retold countless times over the centuries, I wouldn't worry too much :)
Re: Tulip mania
http://tinyurl.com/yjy495x
Never heard of this guy before...but PLEASE check the date of the article....
Vad, you're the greatest!
Re: Tulip mania
I actually had in mind more traditional reference, http://en.wikipedia.org/wiki/Tulip_mania, but that's one funny spin
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
LOL!
A few small (population <30,000) cities in the Bay Area spend up to $2m installing red-light cameras, post warning signs up the wazoo, and for some reason, the investment provides a steady stream of income (and pays for itself in less than 5 years).
I wish I could come up with the trading equivalent of the red-light camera.
Tulip Mania
I hear you. VAD Since I have given up all fundamental analysis of companies I find I have a lot more time to surf the internet. This is really the only financial chat room that I have ever been too. Reading the posts at the other sites was a real eye opener. I could not believe the amount of risk and complete naivete that was out there.People believe commercials. People believe get rich schemes. People trust the untrustworthy. People trust the FOREX market for crying out loud. After feeling sorry for these pigeons. I became very confident as a trader. I wish I could just sit at the same table as these fools, but then I would feel bad. Wish people would come to this sight first.
Bob
Re: Tulip mania
aiki100- Yes, I see someone has already invented the red-light camera for traders.
Re: Tulip mania
I kinda liked it - made me laugh. Again.
Yes, the real. historical tulip mania is more pertinent to our current discussions, but this one was more fun
;)
Re: Tulip mania
Those leveraged ETF charts are unreal. The problem is, they're real. Real people bought them, watched them decay in real time, and now have real problems.
I've watched gamblers take real hits at the baccarat table. Not a pretty sight. I watch them walk off, sometimes pretending it doesn't matter. But they knew what they were doing. UNG/FAZ buyers? I'm not sure they really understood what they were getting into. The ones who bought and held? At baccarat one at least has a real shot at making it back. Bears down 90% on ultrashorts? They might do better cashing out the last 10%/flying to Vegas.
Re: Tulip mania
Let me add that in no way do I rule out UNG or FAZ suddenly blossoming into the best-performing ETFs of Q2. The market pulls amazing stunts every single day/month/quarter/year. In fact, for me to dis UNG/FAZ right now is unfair. Buying either one might result in hefty countertrend profits should it all reverse for a few weeks. Prior to resuming the current trend.
Point A to point B..
as distressed as the shipping industry has been, I very vividly remember the rail industry one year ago... one of my trading partners basically said I had lost my mind entering CSX ( as well as Massey )... although the overcapacity in new vessels ( all sizes ) is a near term quagmire, IF the global growth story is, indeed, intact and tangible, then a trader may not get many more chances such as those that could present themselves in the next little while. I have been in and out of the tankers, dry bulks, for several years. My father always said, find one thing you can do, and do it well. That is what I look for in the shippers. Now the issue is what price range will get the most bang for the buck, when the buyers arrive. We all know that fundamentals, which Really do matter when dealing with a commodity and its avability and excavation costs, also matter when the bottom line is the transportation costs from point A to B. As odd as it may seem, I have to use the solar companies rise, fall, and rise, as a template on what the percentage possibilities could be with the shippers. If one goes back to TSL, I could see the same reaction to NAT or FRO... or, STP could portend DSX, EGLE, EXM or even DRYS.. SOLF and JASO could be PRGN or some others. This may not make any sense ( and probably will get a few laughs ), but the point is, just as Vad said, if its obvious, well then, its Obvious. So, as the negative sentiment about the shippers continues, I will remind myself: stuff has to be moved, trade has to continue... this trading world is like a bowl of jello, and as sure as there will be sector rotation, there will be opportunities...
Re: The slippery slope
Deleted at this person's request
Re: Point A to point B..
I recall seeing something about using a chinese index (like shanghai, rather than SPX) for correlation to BDI index. I've looked at BDI vs. SPX before, but this made sense to me as an additional viewpoint because the Chinese are the ones, in large measure, moving stuff around. I understand also that OSG, because of solid balance sheet, may be in the best position to survive these times as well as to perhaps pick off some competitors. I could have the OSG part wrong...you seem better informed....what do you think?
GATA's Allegations at CFTC hearings
Not a peep out of the WSJ or other media re the recent hearings wonder why?
http://seekingalpha.com/article/196794-gold-silver...
Re: Point A to point B..
Hi aiki, OSG is certainly a solid company and probably has the one of the best potentials for a ' squeeze '. The only part that has me hesitant is the nice rise it has already had. That said, it certainly could compare with the actions in TSL.. I am not sure if LBO's will occur as readily in the shipping industry, due to the various ages of the ships on log, although partnerships ( mutual consolidation ) might seem a real possibility. As always, I try to stay away from the Quants ( before they drain the blood out ).. sometimes it is just not possible. I would be looking for a multi-month move(s), dependent on the beta...
Re: Tulip mania
Simply short both sides of leveraged ETF's and let the math work for you. Most are 'daily' ETF's so holding for the long term is suicide. It's like buying exchange traded notes or ETF's on commodities. The contango will eat any modest progress.
Ahh tulips. I remember a joint stock company formed in 17th century England during another mania. Their 'scheme' was to produce multibarreled muskets. As they described it, you could use round shot for European wars but the devastating 'their words' SQUARE shot only against Infidels! I guess that was the age of Gentlemen's wars.
To Vad's comment about markets. DA, it is MR. MARKET. He doesn't care a whit about the news of the day. It is simply a reflection of the current mood. Well to my mind, inflation is going to beat our brains out. During Weimar would you have held cash or Krupp Stahl, Bayer and a pig farm. STUFF has tradable and in some cases edible value. So called 'precious' metals may, I hope, be the next bubble asset. It's time. I have a friend who still has some of Bunker Hunt's $40 silver.
Everything has a price but for me, the only noble asset is land. I have leveraged much land and hope to expunge the debt with depreciated dollars in whatever form. Bubble gold?
26
ALOHA!!
Last Sunday Hilo Tribune newspaper jobs section had 26 job ads for a city of nearly 200,000. Hilo is the second largest city after Honolulu. Not much to go on as some 3900 students at University Of Hawaii Hilo(UHH) will be looking for jobs soon after graduation.
HILO DATA LINK: http://www.co.hawaii.hi.us/info/stats/jan10.pdf
The 162,000 jobs report have made zero difference in my community.
From the NFIB on the sentiment of small and medium sized business regarding the outlook for economic recovery ...
• Waiting for U.S. Recovery: The overwhelming majority (92 percent) say the U.S. economy has yet to improve. Six out of 10 (60 percent) feel the recovery is between 13-24 months away compared to 32 percent who expect the economy to noticeably improve within the next 12 months.
This from a group who accounts for more than 90% of US exports.
On Obama stimulus ...
• One year after passage of the $787 billion American Recovery and Reinvestment Act, more than three-quarters (78 percent) feel they have yet to benefit from this federal program, little changed from the fall survey. Only one in five (21 percent) say they have received any benefit while 2 percent have received a "significant" benefit.
Capital spending ...
• Little Interest in Loans: Nearly eight out of 10 (78 percent) probably or definitely will not take out a new loan or line of credit during the next six months compared to 19 percent who will -- consistent with last fall. Capital spending remains flat as 51 percent have no plans for investments compared to 43 percent a year ago.
Once again small business must recover first for "real jobs numbers" to improve. Government jobs should not even be counted since those jobs are "financed" by taking jobs away from taxpayers in other sectors or by debt. As I have shown it is US Treasury "debt" that makes up the US government payrolls now as tax revenues have plummeted. I could hire another employee here at the nursery if I could get an unsecured loan(based on faith and credit)paid with OPM to make payroll. Anybody here want to send me money so I can hire employees? That way the jobs numbers would improve and we'd get out of this economic crash faster, but you won't get paid back ... That is how all government jobs are paid for ... OPM!
Re: Agoracom under investigation... again
Bill said: "Periodically, I get hit with waves of pretenders who try to push into this community, and I have to put my foot down. Thankfully, I think most of you by now can see the new people who arrive with an agenda, and you speak out. Thank you."
Puts to shame that silly remark of 24/7 Wall Street doesn't it. The community portion of this website represents one of the few places where, if not bias and personal opinion are absent, at least blatant fraud and lies are actively blocked.
S&P Where do we sit?
1) Bull markets are born on pessimism,
2) grow on skepticism,
3) mature on optimism, and
4) die on euphoria
"Templeton"
Would it seem we are in phase 3 and still not close to 4 yet?
There are many of us here sitting on cash so are there better alternatives out there? Hard to sit 95% cash for so long but so what next?
How about putting x% to bonds, convertible bonds, REITs, gold, other?
Have a great Easter everyone.
HALF WAY
ALOHA!!
US Treasury report March 31, which is the end of Q2 for FY2010, half year ... half way!
FY2010
MED/MEDI/SS = $663.5BIL USD
DEFENSE VENDORS = $192.2BIL
INTEREST ON UST = $89.6BIL
UNEMPLOYMENT BEN = $83.1BIL
GSE INVESTMENT = $30.3BIL
HUD = $34.3BIL
MARKETABLE UST DEBT ISSUES = $3.85TRIL USD
NONMARKETABLE US DEBT ISSUES = $26TRIL USD
TOTAL GROSS TAX REVENUES = $1.004TRIL USD
TOTAL TAX REFUNDS = $295.6BIL USD
TOTAL NET TAX REVENUES = $708.5BIL USD
TOTAL WITHDRAWALS(OUTLAYS) = $5.5TRIL USD
TOTAL US PUBLIC DEBT = $12.72TRIL USD
Now let us go look at those same data points from FY 2009 and FY 1998 ...
FY2009
MED/MEDI/SS = $613.5BIL USD
DEFENSE VENDORS = $186.8BIL
INTEREST ON UST = $85.9BIL
UNEMPLOYMENT BEN = $44.3BIL
GSE INVESTMENT = $59.8BIL
HUD = $27.9BIL
MARKETABLE UST DEBT ISSUES = $4.47TRIL USD
NONMARKETABLE US DEBT ISSUES = $21.97TRIL USD
TOTAL GROSS TAX REVENUES = $1.035TRIL USD
TOTAL TAX REFUNDS = $259.5BIL USD
TOTAL NET TAX REVENUES = $775.8BIL USD
TOTAL WITHDRAWALS(OUTLAYS) = $5.95TRIL USD
TOTAL US PUBLIC DEBT = $11.06TRIL USD
FY1998
MED/MEDI/SS = $197.9BIL USD
DEFENSE VENDORS = $44.3BIL
INTEREST ON UST = $97.8BIL
UNEMPLOYMENT BEN = $10.5BIL
GSE INVESTMENT = $15.9BIL
HUD = $19.4BIL
MARKETABLE UST DEBT ISSUES = $1.06TRIL USD
NONMARKETABLE US DEBT ISSUES = $6.3TRIL USD
TOTAL GROSS TAX REVENUES = $713.6BIL USD
TOTAL TAX REFUNDS = $78.4BIL USD
TOTAL NET TAX REVENUES = $635.23BIL USD
TOTAL WITHDRAWALS(OUTLAYS) = $1.98TRIL USD
TOTAL US PUBLIC DEBT = $5.45TRIL USD
The US population in 1998 was 270 million and now it is 306 million an increase of around 13%. As you can see the US Treasury is spending way more than 13%, more like a 275%+ increase in TOTAL WITHDRAWALS(OUTLAYS) since 1998, which I might add during that 12 year time period from 1998 to 2010 the Republicans(conservatives) controlled most of US Treasury spending. However, as you can also see now Obama is outspending George Bush on almost every category, including DEFENSE VENDORS(military). Look here to see what DEFENSE spending means to traders long term ... LINK: http://tinyurl.com/yckyxcp
The destruction of the currency and the ravages of inflation is clearly present here in these data points. Clearly massive DEBT has taken over America from the top down. Maybe we should get rid of the top because they certainly have failed to lead by example, while Americans have certainly failed at the voting booth with the "voting lesser evil" strategy.
DATA POINTS
1-There has been a 430%+ increase in DEFENSE VENDOR spending since 1998.
2-There has been a 230%+ increase in the US PUBLIC DEBT since 1998.
3-There has been a 790% increase in UNEMPLOYMENT BENEFITS since 1998. That is staggering ... nearly 800% more in jobless benefits, yet 162,000 jobs is a victory.
4-There has been a 330%+ spending increase in MED/MEDI/SS since 1998.
5-There has been a tiny 11.5% increase in TOTAL NET TAX REVENUES since 1998.
6-There has been a 400%+ increase in TOTAL US DEBT ISSUES since 1998.
7-The WITHDRAWALS(OUTLAYS)/NET TAX REVENUE RATIO in 1998 was 3.12:1 in 2010 it is 7.76:1, more than double. More proof that raising taxes solves nothing.
8-HUD has increased spending by 175%+ yet we have record low income foreclosures.
9-There is more GSE INVESTMENT yet GSE is virtually insolvent. Not much of an "investment".
10-The interest on UST has gone down some or were rates higher in 1998? So who was the big benefactor of lower rates?
George Bush, the conservative, issued much more MARKETABLE DEBT than Obama has, but then Obama makes up for it under the NONMARKETABLE DEBT issues and in fact Obama has issued $3.41TRIL more debt than Bush did a year ago. If those foreigners don't want US DEBT then go to your internal creditors(trust funds)who are passive and have no say. Take little solace in the fact that Obama has created more debt conservatives, since Bush annihilated Clinton when it came to pumping up the debt machine.
Just look at how poorly NET TAX REVENUES has kept up with US DEBT ISSUES since 1998, DEBT ISSUES up 400%+ while NET TAX REVENUES only up 11.5%. That tells me taxation in America is a waste of time and a complete misallocation of capital. Simply put the US government needs to shrink on a massive scale in order to balance the "real" budget. Either BIG GOVERNMENT survives or we do, not much else matters. Just how many Americans are willing to go the "austerity" route like the EU and the IMF recommend for the Greeks?
The two party political monopoly fiscal track record is dismal at best ... Who won?
Re: Day for thanks to all
... and thank you xdroid for your market info page. I had basically the same thing ready to go in 2005, but that was another project that got half finished. What you did here is excellent.
And your recent link to Internet TV really opened my eyes. Amazing. Thank you for that one too.
Thanks too for the shout out re the clear waters of Paradise Island and Nassau. You should really see the clearer waters in the Family Islands of Exuma, Eleuthera, Abacos, Berries, Long, Cat, and on and on. The combination of (i) very shallow waters over tens of thousands of square miles (ii) low-lying islands that are basically coral heads and sand, (iii) a current that brings a stream of fresh ocean water from thousands of miles away, and (iv) relatively few people who live here, and especially on the outer islands, is a near perfect water environment. The visitors who get out to those islands, like kaimu who flew 1000 feet over them, are stunned at the beauty.
Re: We got the emplyment # now what?
"Our only hope is if the rest of the world is worst off than us. Hoping others to fail is probably not a great plan to bringing about prosperity."
Bobbyo,
I think this is so sad. I feel fortunate, looking back, to have been born when and where I was. Just missed the Great Depression and WW2, too young for Korea by a couple of years, discharged before Viet Nam, never turned down for any job I applied for, and able to work at my own business for over forty years after borrowing only $1,000 from my dad.
Reminds me of the song, "Those Were the Days, my friend. We thought they'd never end..."
Well, they have ended and unless we make drastic changes (not just a political slogan) our descendants will see a much less pleasant life. At the rate of deterioration we will see it too. We need some sort of revolution in our thinking, our government, our financial system — and we need it NOW!
Re: Full Transcript Of The BLS' First Post-NFP Public Q&A
LOL!
Barnum said it for all time, "There's a sucker born every minute."
Been there.
Did we change the rules along the way
April 2, 1792:
The creation of a U.S. mint is approved. $10, $5, and $2.50 coins will be made of gold, $1, half dollar, quarter, dime, and half-dime will be made of silver, and cent and half-cent will be copper. Defacement, embezzlement, or counterfeiting
Re: Tulip Mania
Vad, Bobbyo,
I should say this with any comments I make, but...
I am not primarily a short term trader. I'm a reformed B&H or more generally a swing trader with a lot of long swings :-)
Basically, I'm trying to stretch what I have for ten to twenty years for my wife and myself. So, contrary to nearly everyone here I've been heavily into various bond funds. Was mostly in GNMA (VFIIX) in lieu of m/mkt and now mostly in VWEHX for the yield, but willing to exit any time for cash.
Lately, with the lack of solid rules and an even less reliable econ/market road map then ever, I've been thinking a lot about a recent quote, "It depends on what is, IS!"
It's not that I see Slick Willie (Clinton, not Sutton) as a great sage, but as a Parser Supreme. The media, government, "watchdog" agents and nearly anyone with a "professional" opinion of the economy or markets has a hidden agenda and a spin.
What I think should reasonably happen, must happen, or want to happen is least likely to happen. By the same token what the spinmeisters expect to happen is far from assured to happen. Sorry, Ben — your plan is stupid and while your faith seems undented — you're making everything a whole lot worse.
I will continue to force myself to wait for significant, real changes in economic and/or market trends before making significant, real commitment of my funds. Even then I will not ever allow myself to become too comfortable.
Eventually I think we will get some bargain prices on substantial companies with good prospects, but it always takes longer than I expect to get there.
Today it is just too difficult to know what is, IS. What I hear and see happening to people I know and talk with daily is all very scary right now and far from what stories I see moving the stocks.
Birth-Death Model...Does Anybody Care?
http://www.ritholtz.com/blog/2010/02/bloomberg-on-...
Trouble For Gold ETF's
We will soon find out if panic hits the gold ETF's...
"Gold ETFs are traded just like shares of stock. You can buy and sell a gold ETF just as easily as shares of any company. And they trade on major stock exchanges including New York, London, and Sydney. However, some gold ETFs buy and hold the physical bullion, while others invest in futures contracts.
But when the gold ETFs came into the market, nobody anticipated a fraud will spoil the image of ETFs within 10 years of its existence. So, last week, when the Commodity Futures Trading Commission (CFTC) heard a case regarding manipulations in bullion market by gold cartels, the gold ETF scam hit the investors like a bolt from the blue. Now, the gold ETFs’ image is at stake. Soon, investors are set to question the credibility of the gold ETFs. The reason is the facts emerged during the CFTC hearing."
http://tinyurl.com/ye4w2hy
Re: Tulip Mania
"Eventually I think we will get some bargain prices on substantial companies with good prospects"
Grym,
here is the question that everyone who wants to buy at such prices needs to start pondering now, well in advance of that happening.
We had bargain prices a year ago, and it was far from easy to recognize the opportunity and utilize it. In fact, it was not easy to recognize even in retrospect for quite some time - most denied that it was bargain for many months after the moment passed, while prices continued to rise. So, the question is: how do you recognize such moment in the future?
Re: Tulip Mania
So, the question is: how do you recognize such moment in the future?
Which begs another timeless question- Who said trading was easy?
Re: Tulip Mania
I did not mean to imply that it's impossible. I actually had in mind a pragmatic approach of preparing for the event - building scenarios in advance, creating pre-canned responses, outlining criteria by which the opportunity should be identified.
Re: UP TO $17.2TRIL
YIKES. The chart on page 6 is very telling. Do you know where to research a particular bank's Stimulus fund balance sheet? As always your perspective is very illuminating. Thank you!
LIES AND GOODBYES
ALOHA!!
Paul Craig Roberts calls it quits ... Who is he?
Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press.
Good-Bye: Truth Has Fallen and Taken Liberty With It
There was a time when the pen was mightier than the sword. That was a time when people believed in truth and regarded truth as an independent power and not as an auxiliary for government, class, race, ideological, personal, or financial interest.
Today Americans are ruled by propaganda. Americans have little regard for truth, little access to it, and little ability to recognize it.
Truth is an unwelcome entity. It is disturbing. It is off limits. Those who speak it run the risk of being branded “anti-American,” “anti-semite” or “conspiracy theorist.”
Truth is an inconvenience for government and for the interest groups whose campaign contributions control government.
Truth is an inconvenience for prosecutors who want convictions, not the discovery of innocence or guilt.
Truth is inconvenient for ideologues.
He ends with this ...
The militarism of the U.S. and Israeli states, and Wall Street and corporate greed, will now run their course. As the pen is censored and its might extinguished, I am signing off.
LINK: http://www.globalresearch.ca/index.php?context=va&...
A former US Treasury Assistant Secretary and a WSJ editor calls it quits. What must the other sellouts who call themselves "leaders", "experts", "public servants", "ivory tower economics professors", "ivory tower accounting professors" be thinking? Where does their duty lie? With "truth" or with their "tenure" ... with truth or their "speaking circuit fees". "Bought and paid for" is truly a grand legacy for your children to live down.
Hummmm ... Well, yet another guy who believes that total collapse seems to be the only solution to America's Stockholm Syndrome with the two party monopoly.
Lets go back in time here and look at two of the all time "Masters" of the BIG LIE ...
"That is of course rather painful for those involved. One should not as a rule reveal one's secrets, since one does not know if and when one may need them again. The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous." --- Joseph Goebbels, "The Churchill Lie Factory"
"All this was inspired by the principle--which is quite true within itself--that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying." --- Adolf Hitler, Mein Kaumpf
Liberty is in bad need of "new blood" ...
Re: UP TO $17.2TRIL
ALOHA!!
loannetter-Each one of those entries has a "footnote" that takes you to data sources. The links are at the bottom of the pdf file and are several pages long.
Also Nomi Prins has a FaceBook so you could ask her directly.
Thanks ...
Re: Tulip Mania, what is, is, Vad's insight, and Bill's prices
Grym -
It doesn't matter what is IS. It is what is is, at any given moment.
The market does what the market wants to do, whether it arises from herd instinct, manipulation, phases of the moon (or solar flares), greed, fear or both at the same time, whatever. It just doesn't matter.
I kind of like trying to get my head around the macro picture because I find it interesting, and in the past many intermarket relationships have proven to be useful. But if i've learned nothing in the past few years (and I often think I HAVE learned nothing, when I look at mistakes that I make) it's that the market is often, if not totally, disconnected from economic reality and it's probably always been that way to one degree or another. But it doesn't matter.
Our sage friend Vad has put it better than anything I've ever seen in post #60176:
"there is NO direct and easy to understand connection between all the economic factors and stock market movements. NEVER was, NEVER will be, and this has nothing to do with today's conditions. It has everything to do with the very nature of the market that never rewards obvious. Obvious is obvious for everyone - how can everyone win? Who will everyone take the money from?"
Vad has provided to us one of the best, most clear insights of what the market is. It's why he never trades in front of the number. Why? Because economic/earnings numbers that "should clearly" produce a market moving result based on some certain positive or negative outcome often don't. The market doesn't care what it "should" do. It does what it does. He waits till the announcement comes out, then sees, as Bill says, "The reaction to the news, not the news itself." His If-Then scenarios leave him prepared to execute based on what the market decided was important, not what he thought was important.
How many times have we seen the market go up on bad news? Down on good news? Up on good news? What the heck!
Fundamentals and earnings are reasonable to consider and can be important to the market, but how many times have we seen a "good solid" company thrown under the bus? How about a zero revenue company pushed into the stratosphere? Is the market "wrong" in either of these actions? Not at all...
Economics are reasonable to consider and can be important, but the market doesn't necessarily care (although sometimes it does) about these either.
The market can do any thing at any time.
Bill says, "We trade prices." Prices are not macroenomics, prices are not balance sheets. If we have higher-highs, we are likely going up, lower lows, going down.
My "prediction" for the market? We go to 1230-1250 and turn. Or we don't.
We go straight up to dow 30,000 (remember that guy?). That would surprise everybody. Or we don't. Or....I have no idea what.
But if I can get myself out of my own way, the market will tell me what is, is. And if I'm lucky, maybe I can execute based on what it tells me. (Insert prayer to the trading gods here).
I have learned so much from this blog. Thanks to all and our host, Bill.
Re: Tulip Mania
Vad,
Well, a couple I bought I've already sold at a profit, but I still have CVX and Exc. I had bids in on MMM and JNJ missed both by a whisker (JNJ by less than a dollar). Serves me right for not watching closer. I'll probably keep them unless I hear something really drastically negative.
I was looking for either companies with "real stuff" like oil, energy — or with broad consumer product lines of low cost, every day things.
This time I WILL get JNJ and MMM ;-)
Edit: I also want a reasonable dividend ( doesn't need to be huge) with a long history. Any cut in dividend is a sign to pack up and move elsewhere.
MORE APRIL FOOLS
ALOHA!!
According to the US Treasury reports for March 31st and April 1st total US "marketable" debt issued was as follows ...
03/31
NOTES - $121.993BIL USD
04/01
BILLS(REG SERIES) - $90.425BIL USD
BILLS(CMB) - $42.001BIL USD
The total two day debt issues were $254.419BIL USD.
That bumped the US PUBLIC DEBT up by $80.31BIL USD and that was no APRIL FOOLS ... just FOOLS! Who gets to pay for that two day debt binge?
Re: Tulip Mania, what is, is, Vad's insight, and Bill's prices
aiki,
"It doesn't matter what is IS. It is what is is, at any given moment."
While that is certainly true, what I am referring to is the constant spinning (like Clinton was doing when he made that comment). The government, brokers, CNBC, etc. all tell us what is that is NOT at any given moment.
To me it does matter and I try to filter out the misinformation and search for as much reality as I can find.
As I see it the market all too often fickle and reacts to the spin.
Vad is a trader. Once again I must say I am seldom trading for the short term.
In the longer term economic factors do matter and will eventually determine the stock market's value and direction. I try to keep in mind the John Maynard Keynes saying, "The market can remain irrational longer than you can stay solvent."
Fundamental changes always take far longer than I think they should.
Can someone validate the Consumer Metrics Institute results?
Consumer Metrics Institute predicts a sizable contraction of GDP in second quarter 2010 based on dropping consumer activity.
http://www.consumerindexes.com/index.html
Not sure what to make from this as their index is dropping since 11/09. They maybe have a very leading indicator all right, but sounds like it's leading way too much.
Re: Tulip Mania, what is, is, Vad's insight, and Bill's prices
Vad is a trader. Once again I must say I am seldom trading for the short term.
Grym- I would argue that anyone with money in the market(s) is a trader. The distinction between 'investor' and 'trader' isn't useful to me. 'Investments' (in commodities, real estate, art) can turn sour/go south as quickly as prices of stocks and bonds. And as we all know by now, a 10-20 year 'investment' in the total stock market can be cut in half in no time.
Kaimu.....Feed a dog ' table ' scraps for half its life,
then take them away, and put out a bowl of ' dry ' food... See what happens. Humans are no different... The question is, will the ones that had the table scraps be content to eat ' dry ' food for the rest of their lives, or will the ones that have seen the others dine on the ' table ' food ( via the internet or TV ) now want that privilege themselves( RE: developing nations ), and will they be willing to drastically undercut wages and work longer to achieve that ? How much longer will the ' dream ' last ...?
Re: Tulip Mania, what is, is, Vad's insight, and Bill's prices
2nd,
Notice I called myself a "swing trader", but I agree titles are of little consequence. I do distinguish between purchases for technical reasons and those with a more likely longer term value.
For the longer term I want a fair yield, a product which people need, not simply want — like oil and elec., without built in obsolescence like tech and cars, low cost to consumers — like toothpaste.
I made the biggest gain ever in day-trading Krispey Kreme (KKD) based on momentum and the companies massive promotion skills. I was in at the IPO @ $20 and followed up, sometimes hourly, with stops for nearly one year (out @$41.75) with several splits.
My next biggest gain was Walgreens (WAG) which I held and added to for nine years as they began a massive expansion and market share growth program. I didn't sell until the dividend stalled due to,IMO, over-building. I did have stops on the whole time, but with a 10% slush gap.
For the past 15 years I have been ready to dump all at any time and have three times — in 2000 (30% loss regained with KKD), 2008 (broke even for the year) and 2009 (-5% net including cost of living expenses for my wife and myself).
In 41 years of stocks and bonds believe I have made every possible bad move. The key is to recognize it ASAP and try not to do it again. Experience is a tough teacher, but a good one. I see myself as sometimes trading and sometimes investing, but never again a Buy&Holder.
To each his own ;-)
Re: Can someone validate the Consumer Metrics Institute results?
Jack,
Not exactly what you asked for, but related.
From Mish yesterday:
158,000 Personal Bankruptcies In March, 75% of them Chapter 7
http://globaleconomicanalysis.blogspot.com
----------
Also, a personal observation:
Now that warmer weather has arrived in the Mid West, I'm back to biking outside and along with daffodils For Sale signs are popping up along my route.
There are a few new listings and many of those which I thought may have been sold are back. The biggest difference is the large number of those now "For Sale By Owner". A couple I recognize which had been listed with at least two brokers. Not sure if they've given up on the agents' abilities or hoping a lack of commission will make the sale.
Taking another look at John Lee
http://ibankcoin.com/chart_addict/2010/04/04/spy-w...
Take a look at his charts and his thoughts. Trying to make an effort with these if-then scenarios, JL's graphical outlook helps (no, not the bunny).
Joyous fete to everyone this weekend. Another public holiday here tomorrow.
Thought I'd provide a few
Thought I'd provide a few smiles before what promises to be turbulent week starts:
http://photography.realitytrader.com/2010/04/cutes...
Overseas markets closed Monday
FYI: Europe, Australia, Hong Kong, China and Taiwan all closed for Easter Monday. No Asian/DAX lead-in. Just a guess, but I suspect volatility to be muted tomorrow (even if it's large) in comparison to having all the players back on the floor Tuesday.
It also means that any news out of the fed meeting happens when most of the world can't immediately do anything about it.
$NYSI and $NASI charts show a clear top formation.
I studied these charts lately and they they paint a nice story. They do not guarantee how big dip is going to be, but there should be one. This agrees nice with the bearish divergence we are seeing in SPY and especially QQQQ and EEM in the last couple of weeks. IMHO, the chart mimic the situation from beginning of August 09 or January 10 (pay attention to RSI7 on daily charts).
FD: long GLD, GDX, and SLV but partially hedged by QQQQ and EEM puts.
Lower highs and lower lows
Bill mentioned that a few times. It is happening already, but masked by dollar fluctuations. SPY:FXE or SPY:GLD clearly show equities rolling over during the last several days. Dollar is strengthening today, time will tell whether that will send stocks lower tomorrow.
SandRidge buys Arena Res..
http://finance.yahoo.com/news/SandRidge-Energy-Inc...
Cara 100 Ratings Changes
Good morning.
AAPL - PT Raised from $253 to $295 @ Kaufman Bros. Buy
CCJ - Downgraded to Sell @ Canaccord Adams
JNPR - Upgraded to Outperform @ Wells Fargo
In case you missed this
In case you missed this... I'm sure Timmy meant no harm, just another "honest mistake" like his underpaying the IRS $30,000.
"On the subject of credit conditions, the Federal Reserve was forced last week to reveal the assets that it acquired during the Bear Stearns and AIG bailouts (the "Maiden Lane" portfolios - remember, the ones that Bernanke and Geithner assured Congress were made up of extremely high quality assets on which it would most likely turn a profit?) As Bloomberg reports, it turns out that the assets that can be valued are currently worth between 39-44 cents on the dollar. My concern is that this is something of a microcosm of the gap between reported and actual assets in the U.S. banking system as a whole."
John Hussman 4-5-10
http://hussmanfunds.com/weeklyMarketComment.html
PREVAILING WAGE AND THE RMB
ALOHA!!
I was just reading the MISH article regarding the US Treasury and US Congress labeling China a "currency manipulator". As if the US treasury and the US Congress are such bastions of virtue. As my nephews used to tell me ... "Choke me with your halo!"
I had to think how China's letting the RMB float would effect daily life here in America. I recall when I started my own export/import business in Australia when I was 17. One of the ideas I came up with was to have a friend of mine buy popular "albums"(vinyl record discs)like LED ZEP, ELTON JOHN, BEATLES, CS&N, CCR, etc. at "Licorice Pizza"(a popular discount record store in the 1970s)for $3USD and ship them to me in Perth, West Australia where I would turn around and sell them for $15AUD(a bargain since those same albums were selling for $18AUD). Back then an AUD was worth more than a USD so we made profit on the exchange rates and the cost of goods, in fact it was quite profitable to the point where my parents(I was living at home as a student then)told me to shut down the business because there were too many "hippies" at the house partying and we didn't want to get deported! HA!!
What would have happened though if suddenly the USD went up back then? It would have cut into my profit margin as I could not buy as many "albums" as before when the USD was lower. Would this not be the same issue that WAL-MART would be facing if the Chinese currency went up in value against he USD?
PREVAILING WAGE
Then I thought of the many more important internal issues we face here in America that have nothing to do with China's currency. One of those is the "cost of government". Tied to that is unions and the "prevailing wage" rates that cause Public Works projects to be so expensive. Mish mentioned how in Seattle that garbage truck driver get paid $100,000 yet the union wants more.
I went to the DAVIS BACON prevailing wage rate tables website. Here is the link.
LINK: http://www.gpo.gov/davisbacon/allstates.html
Then I went to my former county where I used to live before moving to Hawaii, which was Contra Costa County just outside San Francisco,CA. The following list is made up of union jobs that pay more than $50,000 per year with benefits and retirement. I also put in the highest hourly rate.
- Bricklayer $38+
- Boilermaker $40+
- Drivers(dump, cement trucks, etc) $28+
- Carpenter $36+
- Communication tech $34+
- Electrician Lineman $44+
- Electrician $45+
- Elevator mechanic $54+
- Glazier $41+
- Building Iron worker $33+
- Drywall installer $36+
- Drywall taper $41+
- Painters $34+
- Laborers $27+
- Sheetmetal workers $33+
- Sprinkler fitters $48+
- Roofers $30+
- Plumbers $48+
- Plasterer $33+
- Pile Driver $35+
- Operator Grader $34+
- Operator Crane $38+
- Traffic Control Flagger $27+
So there you have it ...
Probably 80% of these workers you see at construction jobs have no college degrees. They may have vocational degrees though or they at least have a GED, at least the IBEW(Electrical workers)did. A laborer, probably not.
The lowest wage paid for a guy just digging a ditch with a shovel or running cement or plaster with a wheelbarrow gets paid $27/hr, which is $55,080 per year. The guys that stand there with a flag or stop sign get $55,080 per year as well.
The highest paid an elevator mechanic gets $54/hr or $110,160 per year.
Everything else is between that ...
Various annual pay rates:
- Plumber $97,920
- Electrician $91,800
- Carpenter $73,440
- Roofer $61,200
- Painter $69,360
- Dump truck driver $57,120
So you can see one of the main reasons that California is broke. Never mind the union workers who work directly for the state, county or city, since all those roads and bridges and schools are all Public Works projects sometimes referred to as "Shovel ready".
When you drive by one of those construction sites or when you see guys working at the airport just remember the lowest paid guy there is making $55,080 per year plus benefits and probably barely got his GED.
I am not against blue collar but the idea of a fair wage for both white collar and blue collar has been totally lost in between political and monetary agendas. Somehow here in America it has become not what you know or your skill level but how big and powerful is your union or lobby.
In effect the RMB could go to par with a USD and the US internals of debt and political monetization will only get worse not better. Yet again those who caused the crisis are trying to blame everyone but themselves. Lets hope we can all see through their immorality and get rid of them in November.