Saturday, May 30, 2009


When is it GOOD for your countries currency to turn into ass wipe paper? Sure looks like the rally from the '08 abys is over as 80.00 might have gotten kiss goodbye (last red candle)

From a HO HUMM day on stock market friday...until miraculous last 15 minute I the only one finds that kind of aimless action turns into 100 pt gain suspicious?

DID all the $$trillions buy us a new bull mkt?



Why Contrarians Make Money And Trend Chasers Lose Money
Simon Maierhofer
On Friday April 17, 2009, 11:33 am EDT

Don't you hate being left out? Going against the grain is usually the unpopular direction to go. Nobody likes to be the oddball out. For the sake of popularity, humans tend to conform to the general trend eventually, especially if the trend continues to persist.

As it turns out, when it comes to investing, being the oddball is much more profitable. Oddballs in the investment community are considered contrarians and contrarian investors have been one of the few to actually book profits over the past year or so.

If you are willing to exchange some of your trend conforming popularity in return for profitability (don't worry, making money will once again increase your popularity score), this article is for you.

Trend chasing - a losing proposition

Most investors - novices and pros alike - rely on news and news- based forecasts to make their buy/sell decisions. News is always good at the top and bad at the bottom. Excessively bullish news will trick you into the market before it falls, excessively bad news will squeeze you out of the market before it bounces.

Here are a few examples to illustrate what I mean: Equity mutual fund cash reserves reached an all-time low of only 3.5% just before the market topped in October 2007. This means that 96.5% of mutual fund managed assets got to participate in the decline that followed.

Broad index funds such as the Dow Jones (NYSEArca: DIA - News), S&P 500 (NYSEArca: SPY - News) and Russell 1000 (NYSEArca: IWB - News) lost over 50% from top to bottom. Most actively managed mutual funds did even worse. Why? Because fund managers based their decisions on positive news.

In the fall of 2008, the Federal Pension Benefit Guaranty Corporation shifted most of its $65 billion in assets from bonds to stocks and real estate. This move came just before the bear's attack intensified.

In 2007, companies belonging to the S&P 500 index spent a record $590 billion repurchasing their own shares. On average, this buy-back decision resulted in a 50% loss. Index components like General Electric (NYSE: GE - News) and JP Morgan (NYSE: JPM - News) did much worse than the broader market.

General Properties (NYSE: GGP - News), one of the largest mall operators in the states, had to file for Chapter 11 bankruptcy protection due to its aggressive and overleveraged expansion at the height of the real estate boom.

Yes, as the example of General Properties and once highflying homebuilders (NYSEArca: XHB - News) shows, trend chasing is actually the root cause for the financial and economic meltdown. The fear of losing out on profits caused even the most prudent investors and business men to throw caution to the wind.

As Ben Stein commented in the New York Times, nearly all of us are part of creating the prevailing trend, which inevitably turns against its creators. Ben noted that 'almost all economic pundits and soothsayers - whether on television, in newspapers, or at brokerage firms - are asked to tell the future. Some of them are stunningly well paid for their efforts, even though they are wrong decade after decade. Yet, we cry out for someone to tell us the future, like children who want to hear the end of the story.'

If you are looking for a crystal ball of what the future holds - as long as it relates to equities and economics - resisting your urges and swimming against the current is your best bet.

Easier said than done

As so often, this is easier said than done. Certain people, perhaps even prior contrarians with a stellar reputation and brilliant mind, may abandon their out of the box views and conform to the general trend tempting you to do the same.

Crispin Odey, a London hedge-fund manager who gained fame and money by shorting U.K. banks, has switched teams and is now cheering for the bulls. After being short for most of 2008, Mr. Odey started to accumulate bank stocks again earlier in 2009. The SPDR KBW Bank ETF (NYSEArca: KBE - News) is the U.S. cousin to U.K. bank stocks.

On a larger scale, even Mr. Roubini, one of the few economists who predicted the real estate meltdown and Mr. Soros, the billionaire investor who came out of retirement to steer his Quantum fund to an 8% gain in 2008, believe that the worst is over. Albeit slow, they expect an economic recovery to begin over the next year or two.

Like sand on the beach

Look around and you'll see that economic forecasts are as abundant as sand on the beach, and they are worth just as much. It is tough to find a precious gem (an accurate forecast) amidst worthless sand.

To further illustrate the folly of news and news based forecasts, consider this: On March 9th, the day the market bottomed, the Wall Street Journal featured an article called 'Dow 5,000 - There's a Case For It.'

True, there might be a case for it eventually (more about that below), but as it turned out, the market decided that March 9th was not the time and place in history.

In fact, just a few days earlier, on March 2nd, the ETF Profit Strategy Newsletter sent out a Trend Change Alert recommending ETFs that benefit from a rising market. Such ETFs included traditional broad market index ETFs, dividend ETFs, sector ETFs like the Financial Select Sector SPDRs (NYSEArca: XLF - News) and leveraged ETFs such as the Ultra Dow Jones ProShares (NYSEArca: DDM - News) and Direxion Large Cap Bull (NYSEArca: BGU - News).

Back to the folly of a news-driven market; Wells Fargo's (NYSE: WFC - News) positive earnings report sent stocks soaring last week while Goldman Sachs' (NYSE: GS - News) earnings surprise this week was greeted with indifference. If news drives the market, why does the market react differently to essentially the same piece of news?

The profit prophet

The ETF Profit Strategy Newsletter has often referred to the inverse effect investor sentiment tends to have on the market's performance. On December 15th for example, it noted the following: 'Optimistic sentiment, which should be more visible above Dow 9,000, will give way to further declines. At this point, the best target for a temporary low is 6,700 for the Dow and 700 for the S&P 500. Extreme pessimistic sentiment may drive the indexes even towards Dow 6,000 and S&P 600.'

The beginning of January, right about when investors started to feel comfortable with the market's future prospects again, proved to be the time to load up on short ETFs such as the UltraShort Dow Jones ProShares (NYSEArca: DXD - News), UltraShort MidCap ProShares (NYSEArca: MZZ - News), Direxion Large Cap Bear (NYSEArca: BGZ - News) and many more.

Economists and market analysts often use projected growth and earnings numbers as foundation for their forecasts. We have found that using projected numbers does not deliver accurate results. 'Projected' implies the possibility and often probability of change. Who wants to hear after the fact, 'sorry, we had to adjust our forecast because things got worse than expected?'

The market's built-in indicators

Most people don't know this, but the stock market has several built in indicators visible to the naked eye. Just like a fever is the body's way to let you know something's wrong, the stock market's internal indicators are telling investors whether its current valuations are 'healthy or sick.'

While it does take some common sense to interpret the market's symptoms, you don't need to be a Doctor or rocket scientist to figure them out.

Dividend yields, P/E ratios and investor sentiment are the market's way of letting us know what's going on. An analysis of the above three indicators reveals that the stock market does not bottom until dividend yields, P/E ratios and investor sentiment reach certain levels, just like your body is telling you that you won't be fine until your temperature calibrates back to about 98.6 degrees.

An in-depth analysis of the above three indicators along with the Dow Jones measured in the only true currency, gold is available in the March issue of the ETF Profit Strategy Newsletter. The results show that contrarians will continue to be the ones raking in profits.


From: Pieter van Leeuwen []
Sent: Thursday, May 28, 2009 8:58 PM
To: Andreas Meyer; 'Elva Edwards'; Eric Swann; 'Joel McCorkel'; Ken Eng; 'Kenneth Jenness'; 'Marc Rosen (home)'; Marc Rosen; Matt Maciejewski; Steve Dossick; 'Tom Webb'
Subject: Hedgie on yesterday's bond mkt action

5-28 - Potential Consequences of 5.5% Mortgage Rates
Thursday, May 28th, 2009 | By Mr. Mortgage

Mortgage Rates - It Could be as Bad as You Can Imagine

With respect to yesterday’s in the mortgage market — yes, it is as bad as you can imagine. No call can be made on the near-term, however, until we see where this settles out over the next week of so. If rates do stay in the mid 5%’s, the mortgage and housing market will encounter a sizable stumble. The following is not speculation. This is what happens when rates surge up in a short period of time - I lived this nightmare many times.

Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day. Jumbo GSE money — $417k - $729,750 — has been blown out completely with some lender’s at 8%. I have seen it all in the mortgage world — well, I thought I had.

A good friend in the center of all of the mortgage capital markets turmoil said to me yesterday “feels like they [the Fed] have lost the battle…pretty obvious from the start but kind of scary to live through it … today felt like LTCM with respect to liquidity.”

The consequences of 5.5% rates are enormous. Because of capacity issues and the long time line to actually fund a loan in this market, very few borrowers ever got the 4.25% to 4.75% perceived to be the prevailing rate range for everyone.

A significant percentage of loan applications (refis particularly) in the pipeline are submitted to the lenders without a rate lock. This is because consumers are incented by much better pricing to lock for a short period of time…12-30 day rate locks carry the best rates by a long shot. But to get this short-term rate lock, the loan has to be complete enough to draw loan documents, which has been taking 45-75 days over the past several months depending upon the lender’s time line. Therefore, millions of refi applications presently in the pipeline, on which lenders already spent a considerably amount of time and money processing, will never fund.

Furthermore, many of these ‘applicants’ with loans in process were awaiting the magical 4.5% rate before they lock — a large percentage of these suddenly died yesterday. From the lows of a month ago to today, rates are up 20%. To make matters worse, after 90-days much of the paperwork (much taken at the date of application) within the file becomes stale-dated and has to be re-done with new dates — if rates don’t come down quickly many will have to be canceled out of the lender’s system.

To add insult to near-mortal injury, unless this spike in rates corrects quickly, a large percentage of unlocked purchases and refis will have to be denied because at the higher interest rate level, borrowers do not qualify any longer. For the final groin kicker, a 5.5% rate just does not benefit nearly as many people as a 4.5%-5% rate does. Millions already have 5.25% to 5.75% fixed rates left over from 2002-2006.

This is a perfect example of why the weekly Mortgage Applications Index is an unreliable indicator of future loan fundings and has been for a year and a half with the market so volatile. As a matter of fact you will see this index crumble over the next few weeks at the same disproportional rate as it increased over the past several months if rates don’t settle lower quickly.

With respect to banks, mortgage banks, servicers etc, under-hedging a potential sell-off with the Fed supposedly having everybody’s back was a common theme. Banks could lose their entire Q2 mortgage banking earnings and middle market mortgage banker may never recover or immediately have to close shop.

Lastly, consider sentiment — this is a real killer. This massive rate spike may have invalidated hundreds of billions spent to control the mortgage market literally overnight. This leaves the mortgage and housing market very vulnerable.

Mortgage loan officers around the country are having a very very bad day today explaining to their clients why their rate was not locked and how rates are going to come right back down. They are also taking calls from borrowers with locked loans to confirm that the loan is indeed locked, inquiring as to when it will be approved or fund, and to rush the process in order to fund the loan by end of the lock-in term. This creates a customer service log-jam that chews through lender capacity quickly making the loan process even longer. Loans with second mortgages that need to be subordinated, are in a world of their own. Essentially, everything becomes a rush. Subsequently, loan officers will not feel like getting too aggressive taking new loan applications at least for the next month unless this corrects quickly.

Press surrounding this event will be the talk of Main Street immediately and cast a serious doubt over the housing recovery story that has been the common theme for months. An overnight housing market sentiment killer wildcard is something that nobody was factoring in.

We have to see where all this settles over the next few days before making a near to mid-term call on the outright damage because at this point, Fed or Treasury shock and awe is almost certain — another common theme has been ‘if it doesn’t work throw much more money at it’.

Obviously they have been following this closely for the past few weeks, as conditions began to deteriorate, and have likely been waiting to see where the upper range was before shocking in order to get maximum benefit…that would be a humongous short squeeze in Bonds driving rates lower. The problem is…if they do shock her and it is sold into with the same fury that we have been seeing, there may not be an act two.

The bond and mortgage market got complacent with the ultimate in moral hazard’s — the Fed’s got my back. Complacency is a killer. Where we stand in two weeks in unknowable.

Re-leveraging Through Exotic Interest Only Financing

Those that must close a loan, who were not locked and who need a rate in the 4%’s will be forced into an Agency 3/1 or 5/1 fully amortized or interest only. Obviously, interest only affords the most leverage but is in part what got us here in the first place. Maybe that is the plan behind all of this — today’s rates for good borrowers are still in the high 4%’s.

Friday, May 29, 2009


FRI AM MARKET OUTLOOK "ZOMBIE NATION" CHART of one view of money base. you can see what has been done in the name of prop job or revival attempts.

The US $$ has PLUNGED below 80.00 again, and I think this time it doesn't bounce back and is one reason GOLD is SOARING back to near its alltime highs.

New Home sales from

New home sales for April didn't live up to expectations as they checked in at a seasonally adjusted annual rate of 352,000 units (consensus 360,000). April sales were up 0.3% from the March level, which was revised lower to 351,000 from 356,000, but were down 34% year-over-year.

On a regional basis, sales were flat month-to-month in the Northeast and Midwest, up 1.9% in the South, and down -3.8% in the West. The median sales price increased 3.7% from March to $209,700, yet that was still 14.9% below the median sales price in April 2008.
The inventory of unsold homes continued to get worked down as it stood at 297,000 units versus 310,000 units in March. Factoring for the current sales pace, that left the supply of unsold homes at 10.1 months versus 10.6 months in March.

The new home sales report for April fits in with the view that things are stabilizing. The three-month average for January-March was 347,000. Still, it is a sobering reminder that new home sales are a long, long way from being considered robust. To that point, they were running at an annual rate of 887,000 in April 2007.

*Stabilizing and getting better.....job losses and jobs created are 2 very different animals.

For NO apparent reason one of my salespeople had his credit card RATE go UP......above 22% apr.

GDP is adjusted todat at 8:30 go to Calendar...sub economic to get details if interested.

from this months contraryinvestor please follow link a super read.

"Maybe more than any other headline credit market indicator of the moment we believe Fed actions have distorted what used to be the prior “risk based” message of LIBOR. And that cuts right to the conceptual heart of government intervention. Just how the heck can the private sector assess risk and allocate capital correctly and efficiently when the Fed/Treasury/Administration is acting to help “misprice” assets and risk measures?

In our eyes, there will be no true recovery in the economy and capital markets until risk is being priced appropriately and all risks are known (the issue of transparency). Make no mistake about it, the decline in LIBOR is not a result of credit market healing and the lessening of risk perceptions. It’s a result of the Fed TAF. And so once again, how do they step away from this intervention?"

"The following chart comes to us directly from our wonderful friends at the Fed. Looking at the Fed balance sheet, they now own close to 15% of total US commercial paper outstanding. You can see that commercial paper outstanding in all categories continues to contract. This is not a picture of a recovering or vibrant credit market. Not by a long shot."

My friends, I am not on this blog to share things to perk you up, I mean if I SEE good things I will report them, it is NOT in my nature to always be so DOUR! What I am doing is telling it like it IS. And if not too late trying to protect you from disaster. Those with me since I began may appreciate this.

The FED is PROPPING up the market, we are a ZOMBIE NATION.


Thursday, May 28, 2009


NEW YORK ( -- Despite all the hand-wringing and attempts to contain the foreclosure plague, the problem still spread during the first three months of 2009, as the number of foreclosure actions started hit a record high, according to a quarterly report.

The National Delinquency Survey released Thursday by the Mortgage Bankers Association (MBA), reported the largest quarter-over-quarter increase in foreclosure starts since it began keeping records in 1972. Lenders initiated foreclosures on 1.37% of all first mortgages during the quarter, a 27% increase from the 1.08% rate during the last three months of 2008 and a 36% rise from the first quarter of 2008. All told, more than 616,000 mortgages were hit with foreclosure actions.

Delinquencies, the stage in which borrowers have fallen behind on payments but have not yet received foreclosure notices, also hit record highs, with the seasonally adjusted rate at 9.12% of all loans, up from 7.88% last quarter.

"Now the ball is in the Federal Reserve's court, as they could step up the pace of their bond buybacks in an effort to reverse some of this week's increase," the report said. (this is what I had been saying.....boy the FED can do it all)

Even as mortgage rates continue to rise, they still remain much lower than last year, when the average 30-year fixed mortgage rate was 6.20%, according to
Is a commercial real estate bust inevitable?
Bank lending has slowed, but securities issuance has fallen off a cliff.

The government hopes to restore lending via cheap financing. Skeptics say programs aimed at restarting the market haven't worked yet.

The government has responded with programs such as the Federal Reserve's Term Asset-Backed Loan Facility, which aims to spur asset-backed lending. But there are few signs that these efforts are succeeding in restoring the health of markets that collapsed in 2007 after years of breakneck growth.

Developers say they are confident the administration and Congress understand that they need more help.


Thusday Market Wrap

Well, well......isn't this interesting. Down one day, up the next, down up down up.....called a trading range...light volume.....end game sill ST in doubt.

My AM post showed what THIN premise the excitement was over, and the GM annoucement was no shocker. Well that didn't initially rally market, but if sellers aren't quite ready to step up, market can float higher, I didn't see super demand here either.

I AM seeing momentum divergences and my charts have me on a daily MACD sell signal. I still think this resolves in a downard break and after flushing Trillions at this shithole mess.....those that B......may be trying to keep this thing propped.....rigged maybe it long can it last...this flight from reality.

Do you realize that since the FED'S existance, in JUST ONE YEAR we have DOUBLED the MONEY supply that EVER 12 f%$@ months....what do you think of that?

The things you could give a hoot about are going DOWN in know the stupidass JOS A BANK style of marketing....I'm still waiting for 4 suits price of one...then Im there.....of ocurse I dont wear those neck stranglers that I got.

Can you PRINT your way to prosperity? "Market sighs of relief......FED BOND auction went well....fear of higher rates subsiding....let's rally" GIVE ME A BREAK.....they are buying their onw crappy paper....a loan is made. money is created, bond is issued, then they buy it back! haa

WHO WANTS this crappy paper? IF the reserve currency was let's say the RUPEE.....would you want to be holding this toilet paper KNOWING they just printed DOUBLE the amount in existance in hust 12 months? what should that make your RUPEE in your pocket worth? ABout as worth as a 90 yr old man who has run out of Viagra....

These bankers, the FED (NOT sanctioned by gov) getting fat......sucking us dry like a leech or tick.

It's time for AMericans to WAKE UP....DEMAND CHANGE. WE OWE $99 TRILLION promised out in entitlements etc.....NEVER be able to pay up ever.

OBAMA'S plan for green energy jobs may be just more hogwash


"This was big. Huge. Gigantic. The story has escalated for two weeks. But why? I think it's the economy. It's getting worse, despite assurances by politicians around the world that the recovery is near, the bottom is near, and the public should not panic. "

*WHO speaks for us, the average American that doesn't like what he or she is seeing or hearing? My friends, no one is. A $1.8 Trillion deficit doesn't even sound like a real number to most, and the avg person does NOT comprehend what is going on.

SO much has been destroyed by this last bubble and how do the people in charge try to fix it?
By DOUBLING THE MONEY SUPPLY.....inflating the problem away? havent we tried this already? look where it got us.

The economy is doubled over like it ate a carton of pure OLESTRA....there ain't enough toilet paper available to wipe its ass.



New home sales for April didn't live up to expectations as they checked in at a seasonally adjusted annual rate of 352,000 units (consensus 360,000). April sales were up 0.3% from the March level, which was revised lower to 351,000 from 356,000, but were down 34% year-over-year.

Initial jobless claims drop unexpectedly

Initial jobless claims drop, but continuing claims at record high; demand up for durable goods
WASHINGTON (AP) -- The tally of newly laid-off Americans requesting jobless benefits fell last week, the government said Thursday, a sign that companies are cutting fewer workers.

But the number of workers continuing to receive unemployment benefits rose to 6.78 million -- the largest total on records dating back to 1967 and the 17th straight record week. The figures for continuing claims lag behind initial claims by one week.

The Labor Department said the number of initial claims for unemployment insurance dropped to a seasonally adjusted 623,000, from a revised figure of 636,000 in the previous week. It was below analysts' estimates of 635,000

**WHEN you add back what they f’d up from last week it came in AS expected…HORRIBLE how can ANYTHING positive be taken from 600K PLUS losses??? How many jobs lost now in this R?

**In a separate report, the government said demand for big-ticket manufactured goods soared by the largest amount in 16 months in April, the second increase in the past three months. New orders have risen in two of the past three months, which may be signaling that the deep recession in manufacturing is bottoming out.

My friends WHAT is it they are buying? GUNS and AMMO?


AM POST AND BS DATA Come on , LOOK at the revised #'s NOT even close to what was reported....this is PURE BS! HOW do they get away with it? SO what use is todays RISE in Durables? useless!

STILL OVER 600K in job losses...OMG record for CONTINUING...this IS the news. probably worse than reported. COSTCO even falls short. WHI is left to buy these foreclosed homes? LONG RATES are shooting up...are these the green shoots? HAS FED LOST CONTROL of the curve?

One of my manufacturers is now requiring a 50% DEPOSIT with all large orders....squeeze til I pop


Wednesday, May 27, 2009


Note in DEC is when FED said they would "monitize" the debt . My DXD in money nicely,,,,staying course for now, may move stops up....mkt still being coy....


FDIC RUNNING DRY < Henry Blodget says "worst is over for US economy"

As the FDIC has had to step in to take over more and more insolvent banks, the fund has dwindled to dangerously low levels. At the same time, the number of problem banks continues to grow at a rapid pace.
At the end of the first quarter there were 305 'problem institutions' with a total of $220.0 billion in assets, up from 252 institutions and $159.4 billion in assets at the end of 2008. At the end of the quarter, the Deposit insurance fund was at just $13.0 billion, or 0.27% of insured deposits, a decline of 24.7% in the quarter alone.

Worst is OVER I only wish it true.

Or is it getting worse? Interest rates EXPLODED upwards today.....where is that safe haven?


Tuesday, May 12, 2009

Rise of the Zombies

From Pariah to Most Desired: Banks Raising Billions But Faith May Be Misplaced
Posted May 11, 2009 10:38am EDT by Aaron Task in Investing, Recession, Banking


Capital One, BB&T, KeyCorp. and US Bancorp on Monday joined the veritable conga line of banks raising capital and planning to repay TARP with the proceeds. The stock and debt offerings come in the wake of Friday's stress tests results and seem to secure the financial sector's two-month transformation from pariah to most desirable.

The fact banks, including JPMorgan, Wells Fargo and Goldman Sachs in addition to the aforementioned, are able to raise money from private sources is an unalloyed positive. Treasury Secretary Tim Geithner deserves major kudos for navigating the stress-test course with great success and aplomb, at least to date. Investors are understandably flocking to the financials because the market (not to mention the government) is sending a very strong message about their solvency and stability.

However, we can't help think investments made in many of these investments banks will come back to haunt the buyers - maybe not tomorrow, maybe not next week, but eventually - for the following key reasons:

How stressful were the stress tests? As discussed here (and elsewhere), the stress tests were not particularly stressful in terms of assumptions about the economy or compared with the past "nuclear winter" tests that Fannie and Freddie were said to have passed (before being declared insolvent.)

Everything is negotiable: The WSJ details how the banks pushed back against the government's initial capital requirements. Some back and forth is fine and just but how the government changed its original determination that Citigroup needed to raise $35 billion to a mere $5.5 billion is a head-scratcher that requires additional investigation (or the total suspension of disbelief.) Similarly, The FT reports the government is letting bank count future earnings against current capital needs, which would seem to be an invitation for some mark-to-market accounting magic in the coming quarters.

Rise of the Zombies: Amid all the hubbub about the stress tests, the bottom line is the banks are still saddled with tons of toxic debt, and nothing that's occurred so far changes that reality. So how is what we're doing materially different from what Japan did with its problem banks back in the 1990s? Meanwhile, the number and type of bad loans continue to rise and U.S. banks are, understandably, wary about lending money in the current economic environment.

Monday, May 11, 2009


Jury may be out, but it appears we will get more thanone day pullback in prices. Todays down volume was83% of total volume so that is considered substantial. How this develops should tell us a lot about what may lie ahead.

I think we will get through this, but smoothe sailing I don't think so from here. A lot of properties have just begun to be dealt with, renegotiating lonas with banks by cutting principal etc, well banks may be open to it.....but it could take years and years...and WHO qualifies? How will the people paying their mortgage living next door feel? They owe full amount.

ANd we need for someone other than the GOV to hire workers. The ONE TIME 70,000 GOV census takers are glad to be hired, and it kept the # below 600,000....if it aint there next report....those betting it goes even lower may be rudely awakened.


Sunday, May 10, 2009


There is no conscience in politics. Economic policies may be changed, reformed, and readjusted because they are ineffective, unproductive, and unpopular, but rarely ever because they are immoral. Debt may be a grievous bondage to an honorable man, but it may be a “national bond” which, in President Roosevelt’s words, “is owed not only by the nation but also to the nation.” Surely, politicians have a code of laws to observe and obey, but honesty in matters of debt and money is not one of them. "Inflation IS Theft" 2005 TOTAL DEBT UPDATED

Saturday, May 09, 2009



While much of the focus is on the stress tests and banks' efforts to raise cash, the real story is Geithner's Public-Private Investment Program (PPIP), says William Black, an Associate Professor of Economics and Law at the University of Missouri - Kansas City.

The PPIP is the "greatest boondoggle in the history of the world," says Black, a former bank regulator who was counsel to the Federal Home Loan Bank Board during the S&L crisis. As occurred during the S&L era, Black says the PPIP will allow banks to exchange "trash for cash" and turn "real losses into faulty gains."

If the goal of Tim Geithner and other regulators was "to rip off the American taxpayer for the benefit of the least-deserving wealthiest people you can imagine, well - mission accomplished," Black says.

If can't beat them join them?


IS US $$ HEADED FOR TEST OF 80.00? She looks broken

Higher yields, broken dollar, higher gold....foiling FED manipulation?


AMERICAN BANKER offering free trial. SOme important well done banking sector stories here.

Friday, May 08, 2009

SWENLIN ON WEDGE BAsically a call that, well nothing is 100% but likely we are close to resolution here, more than likely to downside.

Swenlin seems to think this will be brief and rally will then continue.....figure attack of 200 EMA at least.

One of the stronger bear mkt rallys Ive ever witnessed, but for now still IN a bear market. Nothing is for certain, but IF a NEW BULL MKT has commensed....there should be plenty of time to enjnoy the rise, though early on is the most dramatic. This would surprise me to some end, but some of my TA pointed to the possibility, I could never confirm it. And there are missing components that would make this one of a kind.



UNEMPLOYMENT ROSE TO 8.9% (from 8.5%)

Previous data was revised down addt'l 30,000 !

Todays number of 553,000 will be trumpeted as WONDERFUL, a SURPRISE....BETER THAN EXPECTED.......there are 75,000 GOV jobs in here some temp for "CENSUS".

Take out these temp census GOV jobs (is private sector improving?) and you get another horrible number of 628,000....add back the 30,000 that somehow SLIPPED by last report and you get 658,000.

I smell something me not impressed.....wages in delcine.....home values tanked, banks STIFF on lending......demand for credit plunged......but we're in recovery?



Currently AM 83.60
BDI at Resistance

Bank Stress tests that instead of market value for paper the BANK sets the value.....this is what was given to "regulators" to make their ASSumptions....thought you'd like to know.

Subprime (bad credit mortgage) loans have certainly been generating a lot of attention, and worry, among investors, economists and regulators, but those loans may be only part of the threat posed to the housing market by risky lending.

Some experts in the field are now concerned about the so-called Alt-A mortgage loan market, which has grown even faster than the market for subprime mortgage loans to borrowers with less than top credit.

Alt-A refers to people with better credit scores (A-credit) who borrow with little or no verification of income - so-called alternative documentation.
But some people in the industry call them “stated income” loans, or worse, “liar loans.” And these almost no-doc loans were an important part of the record real estate boom of 2004 and 2005 that has recently shown signs of turning into a bust.

Standard & Poor’s estimates that the Alt-A market has gone from less than $20 billion in home loans in the fourth quarter of 2003 to more than $100 billion in each of the last three quarters.
Overall, new Alt-A mortgage transactions totaled $386 billion in 2006, according S&P’s estimates - up a drastic 28 percent from 2005.

By comparison, bad credit home loans reached a whopping $640 billion in 2006, according to trade publication Inside Mortgage Finance.


Beware ALT -A

Could it be we've just entered the second half of the credit crisis?
Just as 2008 was the year of subprime woes, this one will go down as the year of Option ARM resets (or adjustable rate mortgage resets). With billions in Option ARMs resets in 2009 and 2010, this crisis is about to unleash a fury no one's prepared for.
It won't be as bad as subprime, of course. It'll be worse.

WHat is ocurring now my friends is an attempt to use the MEDIA, propaganda, lies and misrepresentation and cheerleaders to PROP up the paper assets STOCK MKT and careful out there.



Can't monetize the debt fast enoough?

Thursday, May 07, 2009


NEW YORK ( -- The chairman of the Federal Reserve Bank of New York resigned Thursday, days after coming under attack for his continuing involvement in a company regulated by the institution.

Stephen Friedman received a waiver to remain on the board of Goldman Sachs (GS, Fortune 500), the Wall Street firm that became a bank holding company amid September's financial frenzy, according to a report in the Wall Street Journal on Monday. He also holds a substantial amount of shares in the company and continued to buy more even after Goldman came under the Fed's supervision.

DAMN them all......who is looking out for the little guys?....I told you it doesn't matter what party, or who's in power....the rich get richer...the connected stay connected...WTF gave this idiot a "waiver"?

I'm telling you, THEY are stealing us blind, us the taxpayer has been lied to, cheated...and SOLD OUT to the banks, the same one who screwed us....still screwing us!



Auction of bonds ...well it didn't go so swell.....
"The auction is big news because now it's showing that maybe the Chinese don't want our bonds. If the cost of capital for the United States becomes more expensive, then the recession is going to take that much longer to get out of," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"Mortgage rates will go higher, which will make it less attractive to buy a home again. So, it's back where we started."
The U.S. government's plans to help finance its burgeoning budget deficit with more longer-term debt ran into trouble on Thursday with a dismal reception for its sale of 30-year long bonds.
The $14 billion auction met below-average demand from investors, who bid aggressively to force the government to pay a higher yield.
and so will FLOODING the planet with worthless paper.... BUT ex BEAR Jeremy Grantham thinks stocks can "go to the moon" into end of year......."stocks are more senitive to stimulus than economy".....maybe he's right......and then he goes on to tell enjoy it while it lasts, after that's over a decade of pain.....FWIW
and this PLAEEEZE..been leaking news out for days!!!!! who's in Grant's tomb a better kept secret.
The results of government stress tests on the ability of the 19 largest banks to weather a deep recession will be released at 5 p.m. and are expected to show about half of the banks need more capital.
CSCO reported last night, hyped as it was....stock was up in AH, the NAZ sank today, when CSCO can't move the NAZ..usually trouble for tech.
PAL (N American Paladium) has FINALLY woken up and has spurted higher from $1 base....
WASHINGTON (AP) -- Consumer borrowing plunged in March at the fastest pace in 18 years as Americans put away their credit cards and hoarded cash amid the worst recession in decades.
*But other reports were trying to make you believe consumers had risen from the that what you read into that?
The Commerce Department last week said that the personal savings rate edged up to 4.2 percent in March, marking the first time in a decade that the savings rate has been above 4 percent for three straight months.
Households have been spending less and saving more as they seek to replenish nest eggs in the face of massive job layoffs.
onsumer spending, which accounts for about 70 percent of total economic activity, fell 0.2 percent in March, ending an otherwise strong quarter. Consumer spending grew at an annualized rate of 2.2 percent in the first quarter, according to government data.
OH boy stress test results at 5PM...they already leaked most of the stuff....does it really matter what they say? it's the reaction in the markets.



WASHINGTON – President Barack Obama is citing a host of government programs for budget cuts, saying that "these savings, large and small, add up."

The president went before the cameras Thursday to discuss his proposal for roughly 120 budget cuts totaling $17 billion — a sum that would be only about one-half of 1 percent of the $3.4 trillion budget that Congress has approved for next year. (LOL!!!!)

He said he's entrusting budget director Peter Orszag to follow through with the cuts. But there already have been indications that he'll meet some resistance in Congress.

Obama acknowledged that "none of this will be easy." But he said he's determined to cut in half the projected budget deficit in half within four years.


WASHINGTON (AP) — In twin strokes, President Barack Obama is calling on Congress to award generous budget increases to domestic programs while proposing relatively modest cuts to wasteful or obsolete programs that just won't seem to die.

Obama's promised line-by-line scrub of the federal budget has produced a roster of 121 budget cuts totaling $17 billion — or about one-half of 1 percent of the $3.4 trillion budget Congress has approved for next year. The details were unveiled Thursday.

White House budget director Peter Orszag said the president's plan for program cuts is just a start and that a lot more needs to be done to dig the government out of its fiscal hole, especially curbing the growth of the Medicare and Medicaid health care programs for the elderly and the poor.

"But $17 billion a year is not chump change by anyone's accounting," he said. (REALLY?)
Those savings are far exceeded by a phone-book-sized volume detailing Obama's generous increases for domestic programs that will accompany the call for cuts.

And instead of devoting the savings to defray record deficits, the White House is funneling them back into other programs.

Friends do you see how we are so screwed?



The improving trend in initial claims supports the claim that the pace of layoffs is slowing. Unfortunately, the pace of hiring isn't picking up.

With employment considered a lagging indicator, though, the improving trend in initial claims is apt to take precedence for the market, which has embraced the idea that the economy has bottomed out.

Anyone else cheering this data? Can we claim the worst is over? Personally I would pray so....continuing claims continue their upward march.....we arent even close to 300,000 per month...then we cheer.

With pomp hype and cicumstance we could see the 200 EMA's in play....will "smart" money who made EASY money cash out or continue to ride this thing? Will that fabled "sideline" cash feel left out and rush into an overbought market?



*always click to enlarge charts
Relevant to my long previous post this is debt as % of GDP going back to last Depression.....look where we are in this cycle! Can a trip back to THE NORM be halted from these EXTREMES? "CREDIT CRUNCH ALIVE AND WELL!" This does NOT jive with mamoth rally IMHO

HEADED DOWN THE SLIPPERY SLOPE AND GOV ROPE-A-DOPE This IS an IMPORTANT READ, please take time to understand what you are looking at.
You can see the "long term averages" and you can SEE where we were at in 1980 the last setup for the GREATEST ECONOMIC BOOM IN HISTORY, the stat of the longest running BULL MKT in history.
Here is ANOTHER IMPORTANT READ.....if you want to understand it will take a huge effort to disect and sift thru the good, bad, ugly and pure BS.
"I think America's in this retail deep freeze," Beemer said. "I think we're going to see it go on for months and months and months."
Meanwhile, only 24.2% of consumers said they feel they have extra cash in their paychecks due to the U.S. government stimulus package, while 73.7 % said they did not.
The stimulus package includes a tax credit that will be paid to many workers in the form of less withholding tax taken out of paychecks, though at $400 annually for single workers, that amounts to only $7.69 a week.
The survey was conducted May 1 through May 3.
WHAT we have is MINIMAL GOV STIMULUS that is effecting the REAL ECONOMY and REAL PEOPLE....what we do got (great English huh?) is expanding GOV and EXPANDING BAILOUTS that DO NOT go directly into the REAL ECONOMY where the BLEEP it is needed!!!!
WHat happens when the GOV spending is increasing at an alarmingly high rate and the economy is SHRINKING by about as much? GOV tax reciepts are WAY we have a GOV and FED (boy look at their balance sheet now) that is trying to PRINT and TALK their way out of this mess.....the GOV is trying to create the economy....but what it is doing is STARVING it from being able to recover and it is sucking the available monies right away from those also needing it.
I have all my monies in a TREASURY MONEY MARKET (basic MM's are NOT INSURED) and I am basically getting NO INTEREST....NADA!
REAL economies grow from INVESTMENT and MANUFACTURING, and it takes the money from a world where the need for monies for DEBT are so dramatic.....the demand so immense; how can interest rates be sitting so low? (though off THE LOWS)
New paper is printed to buy the old paper......WTF is that? OBAMA has taken the BUSH spending batton and out it on steroids......the GOV is competing with the private sector for credit and winning.
WHY isn't our GOV living within its means as we have to? YOU got A coming in you dont spend B to the infinty power.
How do th ebanks out of thin air be declared SOLVENT when the huge amount of paper issued at price X is now in the shitter? SO allowing the honest BANKERS to tell us what that crappy paper is now worth and all of a sudden they show huge profits?
IS THAT SO? hasnt some of the major profit drivers of the banking system been destroyed? IS it off consumer loans? corporate loans? mergers and aquisitions? IPO's? then what?
What is happening now is ANOTHER attempt to REFLATE deflating assets....real estate, stock printing it to health.
WHat you can do is not buy into the myth and get OUT OF DEBT PAY IT DOWN....get LIQUID as possible.....try to ride this out.
If Banks arent loaning monies from savings of depositors what then?
My friends we need investment in the PRIVATE ECONOMY, NOT THE GOVERNMENT which is getting bigger, and invading our COnstitutional rights and lives by the minute.
The FED GOV has promised, guaranteed, bailed out equivalent to 89% of our total GDP!
Should we actually recover.....IMHO an INFLATION of extroadianry proportions awaits us.....but DEFLATION is the enemy now.
In 1930 the TOTAL CREDIT MARKET DEBT was 265% of GDP, we rose to 350% this time around......the object is to HEAL and RETURN to the we couldn't be farther away!
And like I said....just pulled this off
White House: Obama seeks hike in domestic spending- AP
In twin strokes, President Barack Obama is calling on Congress to award generous budget increases to domestic programs while proposing relatively modest cuts to wasteful or obsolete programs that just won't seem to die.
Give the money to the PEOPLE MAN....let US decide where to spend it!



= crock of pooo.

What are the value of the paper they hold if it isn't marked to market? WOULD they say ANYTHING negative which would cause a panic? pure BS! rally sustainable?


Wednesday, May 06, 2009



CSCO earnings off 24% after close...but beats street HAA. Same old game

Markets are still in bearish config, and it's approaching the 200 EMA (exponential moving avg)
which is normally good resistance for any rally.....sure it can pop over it.....but this rally is getting long IMHO come a long way.

STRESS TESTS (sure) and FRI employment numbers ......if you care to beleive them..



From April 21st on Bloomberg




Does not validate US STOCK RALLY IMHO. WHERE IS the pick up in raw material demand to make THINGS?



Tuesday, May 05, 2009


WASHINGTON – Federal Reserve Chairman Ben Bernanke told Congress Tuesday the economy should start growing again later this year, his most optimistic assessment of the country's financial health since the recession struck with force last year.
But Bernanke warned that even after a recovery gets under way, economic activity is likely to be subpar. That means businesses will stay cautious about hiring, driving up the nation's unemployment rate and causing "further sizable job losses" in the coming months, he told the Joint Economic Committee. **another 2 sided mouth conversation, friends,what does he see that we dont see? KNowing thathe didnt see THIS coming (EBOLI ECONOMY) and LIED months into it...."this wont leak into economy,,,its contained"
WHY believe this connected insider now? Here's your rally and recovery you paid for out of this air..



Oil lingers above $54 on economic recovery hopes (not on demand P/u but on HOPES)


UBS 'cautious' after $1.7 billion loss
Swiss bank says outlook for the firm is cloudy as global economy continues to worsen.

ZURICH (Reuters) -- UBS remained wary on its immediate outlook as it braced for the full impact of the recession after confirming it had posted a first quarter loss on yet more writedowns and client withdrawals.
Despite a strong rebound in stock markets in recent weeks, UBS (UBS) said the global economy has continued to deteriorate and its home market Switzerland will not be spared. The Swiss economy is set to contract by up to 3% this year.
"The markets continue to be unsettled, and we remain cautious on the immediate outlook for UBS," the world's largest wealth manager said in a statement.

Services data AM and Thursday will be?

Banks: The financial sector will remain in focus as investors await the release of the results of the U.S. government's so-called stress tests on banks, which are due out Thursday.
At least 10 of the 19 big banks under review -- including Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) -- may need to boost their capital, according to published reports.
Although, the number of reported banks that may need to boost their capital requirements has been fluctuating in the run up to the release of the results.

I will repeat, we are still in a BEAR MKT, and when the trend reasserts itself, MANY will be caught offguard and taken down with it.


Monday, May 04, 2009

SOME CHARTS$SPX&p=W&b=1&g=0&id=p94532429432
Notice during BULL CCi can stay overbought for a year....but during BEAR MKT past and this one notice what HAS happened when CCI weekly reached area its at now.....$SPX:$VIX&p=M&yr=10&mn=6&dy=0&id=p95359378420&a=147023883 this one measures fear/price....see my annotations. MACD wants to signal ,aybe its over at same time ratio has come right back to that channel underside....curious. dbl bottom at 16 was hint of ST bottoming.$INDU&p=D&yr=0&mn=6&dy=0&id=p78179678834&a=158245127
a move to 200 EMA not unusual. LAST ONE BEARISH RISING WEDGE?$INDU&p=D&yr=0&mn=3&dy=0&id=p29735166432&a=166742532 still intact...breaking up and over nullifies odd when you see price stop like that.$CYC:$CMR&p=W&yr=8&mn=6&dy=0&id=p74150163626&a=147023766 this sector (buillish?) has had monster move. D


Sunday, May 03, 2009


EVERY major end to THE BEAR and SEEDS of economic recovery in the past (I am aware of) has been with the ability to GOOSE,JUMP START AND GROW CREDIT it different this time?

The ability to do so has been SO impaired, what we have witnessed from 660 SPX has been short covering....I mean the little guy has been short cicuited or unemployed.

401K contributions and wall street bonuses have been decimated. Ability to draw value from your home near eliminated.

Tightening credit standards have excluded MANY from new money.

Credit cards are chock full.

Mark to mkt end has only put a vail over REAL MKT VALUE.

ALt A loans not in mix nor talked about in MEDIA. Commercial loan defaults JUST beginning their turn at ugly cycle putting MORE stress on banks.

Consumer sentiment may have risen with rally, but it IS coming from lowest point in history.

Stock Market has never proven it knows anything. The economy began to weaken in 1998 yet mkt highs were in 2000.

It is ALL about credit/debt expansion to what 350% of GDP total credit market debt (290% in 1930) in the past when this has POPPED it RETURNS US to MEDIAN trend.....what is current TOTAL CREDIT MKT DEBT? I think still over 300%.

If not THE bottom, what kind of bottom? DID THE SPX PE's OR DIV yields reach levels seen at prior MAJOR CYCLE BOTTOMS? NO

ALL BOTTOMS GET TESTED? usually....dont ya think this one will? 2nd MOUSE here if enterring with more gusto will be unltimate winner.

NO thinking was failed and masked by my own BIZ experience of despair....had I had only game face on.....SNDK at $5 HNI at $7 DOW and friends under $10 were NO BRAINER TRADES. UYG near $1 a no brainer. There is BIG talk of recovery...I ask you why then UYG under April highs, but supported by 50 EMA and do I see another wedge?

Friday, May 01, 2009


Notice how 911 rally after capturing 200 EMA was then stopped when approaching it from under right before it began steep decline into 2002 lows, we also had a VIX that fell to below 20!
*click to enlarge


Weekend Commentary

YOU SHOULD keep in mind that recovery rallies that occur during extended bear markets are often very impressive. If the rallies were just run of the mill they would not do their job. These rallies will last just long enough to lure in the most that think the worst is over and they let their guard down.

And when these rallies fizzle, and those that jumped back in deny their is trouble brewing in the air, that's when the PRIMARY BEAR TREND reasserts itself with a vengence.

Folks this is a nasty Bear MArket, values will most likely be driven down to never before seen values, with yields near 6%, and SPX 500 PE ratios in single digits......I am sorry to say I do not think we have gotten to the end, and I know the yields and PE's have not met their goals.

The avg person is not trading these markets, the avg person may be reading my blog along with some seasoned traders, but the avg person has been holding this whole time.

The feverish demand for stocks usually met at bear bottoms has been mostly absent here. I think the rally from MArch is most like the one after the 911 panic subsided. I mean WHAT could be worse than the terrorism and pain we felt after being attacked?

I dont remember, but I do know that rally ended and new LOWER prices came after in OCT 2002. And then again in 2003 we came close to the lows, TESTED and didnt look back.

IMHO at LEAST the lows get tested my the least.

Our problems are deep and wide. Long TERM int rates manipulated lower, even with threat the FED buys its own Bonds...have only risen since....10 yr back above 3.10 % which means mortgage rates will rise......not what was intended....but we KEEP BORROWING TRILLIONS.......there is no spending control iN GOV....

You ask yourself.....or ya it getting better....are the programs taking hold...fixing the problems?

This is the WORST economy in my 50 yr I wont presume to know how it ends, or improves....I can say I dont see it yet.....and its PRESERVATION MODE for me


ZERO HEDGE always a good read

Watch the wedge develop, catching shorts TOO short and way oversold market at MArch lows ignited this. End of mark to market and abuse of the data have fed this, as has the playa's and suspect that important stimulus money is not being loaned but gambled.