By Darrett
I can imagine a cartoonist drawing a man behind a podieum that is a characture of Obama with a name tag of OZ and then a characture of the Scarecrow, Lion, Tin Man, Dorothy and Toto, Lion is Ben Bernake, Scarecrow is Tim GuyNerd, Tin Man is the Bank Bailout Dorothy is Hilary and Toto is the Tax Payers.
Well I think you get the point on that, add whatever text you like LOL.
I’m here to say I was completely and utterly wrong about this rally and wrong about oil as well. That doesnt change I am still bearish, but even bears can make money and go for the ride. Except I didnt, I finally took a loss on part of my position with FAZ in two accounts. I had one clear some funds immediately and I rebought in FAS. I guess to edge out a good loss and hedge for a good solid gain if the rally is good for a couple more days. Just Depends on a lot of variables that need to come back in to reality.
Politics: Obama and crew still dont have a clue about prioritizing and understanding of trying to doing TOO much TOO fast. How in the heck can you talk about the previous administrations debt run up and talk about straddling our children with debt when you are planning to double what the previous administration did in debt. Hello Pot I would like to you to meet kettle. Anyone noticed he has backed off his “positive” market rhetoric? Did anyone also catch the Federal Treasury has changed the economic outlook for the country 3 times this year already, each time worse than the last. Meaning, all this “positive” outlook is bullshit and as far as I can tell people are buying it. LOL.
Economics: Ok, right now the entire world is looking to the US and China for leadership out of this economic crisis. The US is the big dog in all this and everyone is turning to the US whether like it or not. Hence the buying of US treasuries and Currencies and Equities. The Bigger Economies drive the emrgining market economies and the emergining market economies in turn drive the big market economies. So the emerging market economies have not felt the pinch, they will be the next to take pinch but they will, EVEN CHINA will feel it. While they might not go in to recession, their GDP growth will be greatly reduced. The world is going to shed jobs as well and that slows down things as well. This is not something thats just going to go away no matter how many times we click our heels.
Market: I’m still bearish, even traders looking around going… I dont know. Ofcourse they say it in such a way they can flip to either side and say I told you so. Kind of like Cramer does, every time the market rally he says good thats normal things are great, then he says cash out and take profits until the rally goes further…Does he honestly think everyone is dealing in millions of shares of these 10 to 50 dollar stocks? No. He’s a power broker like others and has his own agenda. Albeit I like his show on other basis but take his words with a grain of salt. However back to the market, all I can say, and hope, is that the bigger this gawd awful huge punk ass rally is the harder the fall from grace it will be. So buyer beware especially right now. Even if the market didnt do a big tank right now or soon, I would recommend sitting this rally out for any investor looking for great buys for a long hold, not right now, it will take atleast one more huge dive if not two big dives…
Oil: Ummmmmmm okay in normal world increasing supply + shrinking demand meant prices go downnnnnnn… Global demand is falling at a record pace (5 year low) oil supplies are bluging like a fat kid on Thanksgiving but oil is holding above 50, not to mention Russia and Brazil are increasing output too much of OPEC’s chagrin. However, oil is staying above 50? Anyone see a fault with this logic?
By Darrett
Lets just say WTF and throw Economics, Market and Politics in one big shit pile and talk about it. Lately everyone has had their hands in everything so might as well just have a rant and go with it this week.
OK 4 weeks ago everyone was touting the banks and financials being so awesome and amazing and they are having a profit! OMG! I said it back then they were full of shit and I am sure they would amend their statements later and this remarkable news wont be so remarkable. Anyone willing to take a further step and say as we get closer to 1Q earnings and 3Q write downs and losses its going to be worse than they led people on. If your stock was plummeting what would you do? I am sure you would clean up your books with as much sugar as possible so it wont look as bad. The problem is STILL there, there is not going to be any miracle recovery, we are going to have to take or licks and heal up. Ever been a kid or had a kid that REALLY wanted to do something or HAD to be somewhere in 5 minutes? Then mom tells them they have to clean their room before they go and what happens? They shove every piece of junk under the bed or in the closet or both! By all appearances it looks clean, but the junk and mess is still there until it builds up again, and then what, the bed and closet are full, you’re then forced to clean it. The point being its still bullshit even if you cover it in roses, its still stinky bullshit.
OIL, 53 dollars a barrel, REALLY? On who’s planet are you on and what powerful drugs do they have because I want some. Oil was around 40 dollars when the Opec meetings was coming up and people were expecting a cut, people saw spending and other economic news wasn’t so bad so oil supplies were expected to stay the same or fall a little, then it shot up to over 45 dollars a barrel, and then OPEC didn’t cut (GEE I WONDER WHY?) and supplies increased by a million barrels dollar fell 2 bucks on the news from OPEC but then rose sharply just after the news of supplies INCREASING, W T F ? Now oil supplies have increased an additional 3.3 million barrels (wonder if adjust numbers come in late as well and its actually more) and inside the US between all the storage and the strategic reserves we have over 1.3 BILLION barrels of oil. Our highest levels since 1993. Japan, the SECOND largest economy in the world, their demand dropped 14% !!!! 53 dollars a barrel, REALLY? COME ON! WHO YA FOOLIN? ??
Anyone else noticed A LOT of adjusted figures are continuously coming in, and about 95% of the “adjusted figures” are always worse than was reported. GM and Chrysler need MORE AID, after saying, no they wouldn’t. Anyone see the EU and Britain are on the brink of collapse and their recession is quite a bit nastier than they first reported? Hmmmmm what other smoke shall we find up our asses if we look hard enough. Oh so now BAC is going to boost everyones pay 70% to get around the Excise tax. Obama wants to TRIPLE the federal deficient after people bitch and moaned about GWB and his reckless spending. Holy shit, thats like a police officer arresting a man for blowing someones head off and then turn right around and blow of 3 Peoples head for no reason and go “WHAT? It needed to be done!!”
Unemployment is over 10% in 4 more states now, housing bottom doesn’t EVEN begin to happen till late Q3 of 2009 but the majority doesn’t bottom and recover until Q2 and Q3 of 2010, Ummm anyone starting to catch on the Banks Balances sheet are showing OK because they have not marked down the value of their foreclosed homes yet in anticipation of a generous mark to market rule they are waiting for so they can rape investors in the TARP program and get more money. Hence why the hell we need to let them freaking collapse, because not only are the banks screwing the tax payer, but they are screwing their customers too! Wow, can I whore out a financial too? Im sure I could be a great pimp!!!
TARP, What the hell is a Tarp? Sounds like a dad gum fish, and southerners love to deep fry fish for a better taste, but you know, the amount of shit thats probably going to be inside this tarp, I don’t think there is enough tools, time and money to gut and clean that fish well enough and get fried that would make it taste better.
I am still bearish and personally, I think its a huge trap to take as much money on one last big huge score for the short sellers before all the new rules come in play and make it less profitable, call me paranoid… but if you were a bunch of brutal bank robbers but lets say it was still technically legal but you knew new laws were about to come out to make it illegal, wouldn’t you as robbers want to make ONE LAST BIG FAT SCORE before you couldn’t do it anymore? Has to do with the current war and general references I been hearing described about the market, so thinking militarily, it makes sense as well.
Something to make you ponder on life and history.
A new voice of the country has seemingly come from out of no where to lead this country out of massive economic failure with the country feeling the pinch and rallying by this charismatic speaker who’s party controls all political houses without fear and with this control he vows to lead the country out of moral corruption, back in to economic power and back in the worlds eye and game as the dominant global power and influence that will not and shall not be contested and those who are the enemy of the people that are greedy and robbing the people of their wealth and hording it shall be punished. This voice shall mold a new country in their eyes and vision and increase their control over various sectors of the economy through close controls and regulations…
Now ask yourself this…. Were you thinking of Obama…….. or where you thinking of Hitler? NER NER NER NER, NER NER NER NER, NER NER NER NER *twilight zone* Just a thought, not saying its real or I am a conspiracy theorist… just an interesting correlation between history.
Had my son and time with my girl, so no picks for the pick group…
Now my hunch this week for a stock is a pick 3, might hit a pull back, but getting a good feeling about this stock. Do what you want with that, but it looks well and like it has lots more upside. ASH is the ticker symbol.. I am still long on gold stocks as well.
My thoughts on the market, damn it I am still bearish, this rally still has nothing support it IMHO, however, going on hunches and history,m I think the market will have 2 to 3 day decline at the very least, now if sentiment turns sour and worse news comes in than expected, I think we could see us diving back down. Shit according to me we shouldn’t have been here in the first place, see OIL LOL.
Lately, when I stick to MY rules of trading and I stick to my hunches, I am doing quite a bit better, I made some great trades last week, CTIC being the greatest. had I listened to others when i was 70% down I would have suffered a mass loss. Instead, when that bull was bucking like hell and tearing me around, I just griped harder on the rope and spurred that fat bitch a little harder and rode the pig out and it payed off well. Not only did I stay on the full 8 seconds on the ride, but scored some massive points too! Yes others did better, but I made my 20% gain and anything else past that was gravy.
Politics, Oh thats easy… OBAMA AND GEYNERD SHUT THE FUCK AND LET THEM ASSHOLES GO BANKRUPT!!! Oh yea don’t raise taxes, and maybe just maybe, its only a suggestion, maybe you could break up all your agenda initiatives several years, maybe stagger them just a little.
By Darrett
I do like to blog and it was one of my passions a few years ago but now I have a new passion and love and new friends so here I am going to write some things that been crossing my mind and this will be thoughts about the Economy, Politics, Stocks, Wall Street, etc…
AIG
Oh my lord, I think anyone thats anyone has now heard about the AIG bonuses and there is new word out they failed to disclose another 55 million which will surely set the anger phasers on obliterate. Am I angry and upset too? hell yea I am! At first I had my pitch fork, rope, hood and a torch and was going with the mob and said Tax them! I have then thought about it and I agree don’t tax them. However, this is what I propose which the federal Government can do.
SEIZE CONTROL OF THE COMPANY!!! We already own 80%, that’s nationalization, just say it, NA SHUN AHL AZE SHUN, and get it out of your system. its okay, say it a couple of times, not a dirty word.
Fire up all the government lawyers and launch a series of investigations that go so deep a proctologist would be proud and/or take all the executives to court for unfair bonus pay and declare bankruptcy and renegotiate the contracts. These are the automatic rules in place when a company receives federal financial aid to stem the anger.
ANY bonuses to be paid must come under the senate committee for review and approval as they meet the guidelines. Whatever is negotiated to be “fair” value for their bonus is the first thing that is established for executives. X being the amount of the bonus.
Now, the executive gets anywhere 10 to 20% of the bonus in cash to pay for bills, the other portion of their bonus is paid in common stock rated at par value of the companies highest stock value in the last 365 days. They have to stay with the company for three years after receiving stock bonus, if they leave before that, they lose those stock bonuses payouts. Finally, they can NOT sell, Donate, Trade, Give, Transfer the stock for 5 years after receiving it, even if they pass away. After 5 years the lien on the stock is taken off.
But Darrett this doesn’t provide incentive or true compensation? I disagree and think it does. If they think they are so smart and valuable let them go find another job at another company let that company higher them to run their company in to the dirt. There are thousands of fresh young explosive new talent I feel are sure looking for a job and looking to make a name for themselves and love a challenge. Now if AIG turns profitable and owes the government absolutely no debt and goes one complete year with no government intervention and profitable again, all restrictions on executive bonuses and stocks are lifted. Do I thnk this is tough and hard, ya damn right I do, but I think its fair..
You dont give your dog a nice meaty fresh raw T-bone steak for tearing your house up and taking a leak on your furniture and crapping on shoes do ya? Or do ya whup his behind and rub his nose in the poo and say BAD DOG !? Later on ya ya say awww c’mere boy… and pet him…
Finally, wonder when the outrage of 80 Bln dollars going to other financial institutions over seas is going to sink in? Especially when all this money was to be sued to free up assets to let them start “lending” money and free up the credit market, etc. Obama says its in their contract, they have to get it, but the Automakers have to tell the low man they HAVE to go back and renegotiate your contract. So rich execs that DIDN’T do their job get millions in bonuses, and the little guy, who did their job and paid their bills and taxes gets the shaft? WOW, the Democrats are REALLY for the little guy, way to go Presideee…. errrr Speaker Pelosi, you rock! Now my opinion is that the Gov’t should have never stepped in really and just let things go way the should have. yes it would have been painful and it would have sucked, but I think we would have rebounded our of recession/depression sooner rather than later now. However with that said, if I had a choice between GM and AIG, and throwing money at it to help out, GM hands down would win.
The Economy
The economy is baddddddd. I have been saying for two weeks this last rally was based on bad news and worse news, nothing to support nor sustain the rally and it boggled me. other than the fact everyone was drumming up the economy and the market. Which is rather baseless in my honest opinion considering unemployment is projected to be at least 10% the economy is projected to at least shrink by 2% and Obama which have been killing the Republicans over the Bush deficit but yet Obama wants to almost triple it by 2010 and thats just 6 months with the CBO with adjusted figures. I think eventually what I been drumming on will sink in to more and more Americans, some people just take longer than others. I think Ben Bernake pulled the trigger on the cash injection and inflationary tactic is a little early and premature and will actually be less effective that originally projected. I think Tim Geitner, well, lets just say i think hes good for my idea of wall street so I hope he lasts a while before he “resigns” and goes away. Now I am not trying to be a doom-sayer, I am trying to pragmatic and a realist, you know that dang cowboy logic and southern sensibility. LOL
There use to be a commercial that aired quite awhile back that showed a man pacing around saying over and over this line. “I do coke to work longer hours to make more money so I can do more coke.” and the man repeated it over and over. The point of endless vicious cycle that doesn’t stop till the person crashes or someone or something intervenes. Now, the ultimate point of that analogy is what I always call the snowball effect with an old southern adage “Shit rolls down hill.”
Too many people are focused on their local economy and to a lesser degree the national economy. What I been trying to get people to understand and follow is the fact there is a GLOBAL economy and the US can not set policy and direct the whole global economy. They can take action to maybe direct global economic policies but they hardly have ability to direct national economy the nation itself. There is Microeconomics, Macroeconomics and what I just refer to as Meganomics, which is apart of Macro Econ, but as the global economy evolves and grows and becomes more integrated it will need its own area of focus that will expand. LOL, they probably have a name for it already “coined” but I haven’t heard it. Ok now to my thoughts on economics and whats going on. I pull bits and pieces and try to read between the lines of the media and I watch CNN, FNN, CNBC, and Bloomberg, and local news, im a news whore LOL.
1. The news on the economy and unemployment are being told and based off best case scenario, is it possible thats where it goes? Absolutely, but chances are of it being worse I feel are greater than being on par.
2. Unemployment is going up and soon we are going to have millions of new graduates entering the work force. Ranging from high school grads to doctors and PHD’s which will add to the demand for jobs. Which means less people having money to spend and demand for services, retail, necessities all go down. Now we go to the folks that are coming up, were going to retire and even people that have already retired more than likely try and re-enter the workforce or stay in the work force. Why? Millions of people lost around 30% to 50% if their IRA’s, Investments, etc. Bills have to be paid. So expect further issues from this. Interestingly enough I head the avg valuation of peoples 401K’s on average is less than 3,000 dollars. NOT GOOD!
3. Obama is going to pretty much triple the deficit by 2010, with adjusted figures in another 6 months and without change to his budget is another thing I feel will grow and grow with time.
4. They are pretty much telling all banks do what you want, we will throw money at you like its going out of style. We “can’t” let you fail. However when you look at history, this is exactly why a free market capitalist society works the best. There is no such phrase as “Too Big To Fail.” Let them fail and declare bankruptcy and let the vultures pick the pieces of whats left over. However, looks like they are trying to play savior to everyone right now, which is a noble idea, but hardly practical. Which will make things worse. Throwing money at the problem haphazardly won’t help the problem.
5. Real Estate still hasn’t bottomed and the toxic relief plan by Geitner I have informed will not be available for private investors to buy. Which, the plan will probably blow up in his face like everything else. Most in this group know the track record of doing the right thing is not good. Seem like they are having the pitcher of a baseball team be the savior by having them hit a home run in game 7 of the world series, bottom of the ninth, two outs and no one available to pinch hit. Can it happen? LOL yes it can, but its highly unlikely.
6. America is primarily a services nation that other countries and investors use and invest in. Besides the scandal and crisis thats going on that reduces external income inflow due to lack of faith, most countries are not really liking the path Obama is doing so that reduces more inflow.
7. China (and formerly India) is a hot economy, there is now doubt about that, but China is an Exporter nation where 80% of there GDP is from Exports, the US is 1/3 of their export demand. What do you think happens to China when other nations recession reduces their import demand? India’s hot economy, has almost collapsed completely, it will probably in all likelihood be one of the first countries to recover from recession and explode in to a hot economy, but right now its DOA. The point being is China does not have unlimited income and when the economy shrinks (Recession as well?) their ability to help stimulate their own local economy and a larger degree global economy will become less and less. What happend to the last stimulus package they promised go? I haven’t heard a word about it again.
8. There is and will be further Global Recession. I believe the IMF said global economy will shrink by 1% (if not more) and that means lost jobs around the world which translates, well I think some might be getting the picture how things are intertwined these days. Which means global demand for EVERYTHING goes down, including oil.
9. Bernake just tried a tactic to help stimulate the economy as well by basically trying to artificially inflate the economy by printing more money. It is a sound viable tactic, but it has extreme dangers with improper timing that could mean Hyper-Inflation. I personally feel he did it too soon, when was the proper time, I am still formulating that one in my head. My initial thought to do it when oil has bottomed which probably means the market being down there too. There is also a danger of currency wars going on between the nations and protectionism.
10. We will still go through a deflationary process, nationally and globally, might be reduced now, and the bottom for the market might (and I stress might) have been raised from 500 to more like 600. We will see what happens with that. What that means is that valuation of stocks and even some commodities will still lose value and go down and that means oil especially as global demand slides further and further down.
11. Foreclosures are still climbing, people defaulting on credit cards and other miscellaneous debt is on the rise, households declaring bankruptcy is sky rocketing which begs a thought. Why is the little guy allowed to fail and go bankrupt and lose potentially everything but rich fat cats that screwed all this up allowed to keep their jobs, get bonuses and try and keep the company from going bankrupt? Seems AWFULLY skewed. Even the help financials given to help the “little guy” went to everyone and everything but to the place it was designed for.
12. With less people employed, that means less taxes and revenues for local, state and the national government. Which means the deficit rises more becomes there is less income from taxes. The wealthy are going to do what everything they can to preserve their capitol, tax shelters, less investing, less spending, etc, which is trickle effect because Obama and the Dems want to attack the rich and penalize them. So they want to raise taxes already, what happens when tax revenue doesn’t increase like they think? Raise taxes more? This will never happen, but the easy fix is to abolish the IRS and Tax code, institute a 12 to 15% national flat tax and then make an 8% sales tax, I am so sure that would snap the economy back in to shape so much faster. However, politics is run by greed and taxes are their hands on the throat of the uninformed public and how they get re-elected. Politicians salaries and budgets so based on a forumla thats based on the over all GDP and level of the job and the pay raises/decreases and budgets for their offices be raised/decreased based on GDP growth or recession. What ever the fair value is goes up or down with the economy. If the economy shrinks 2% so does their salary and budget.
13. He wants to attack wall street and tax them to hell and back too. Now what do you think foreign investors are going to do when they have places like Shanghai were they can trade tax free? Then there is word about how they want regulatory oversight on Exec pay and bonuses even if they don’t receive federal money or not.
14. Something else I thought of, less workers also means less people using public transportation, which inevitably and more than likely job cuts, cut back on routes, which mean less consumption of fuel, which also factors in to global demand for gas and oil.
More to come, taking a break.
Part 3 (Wall Street)
Disclaimer: I am not a professional or licensed trader, and any opinions thoughts about the market or stocks are just thoughts and opinions of the writer. Always consult your broker before investing.
Financials: The TARP program might cause a rally, its the unknown factor which I don’t know about. More scandals about, at least that is what they are calling the AIG bonuses right now on top of the Madoff and Stanford issues with it. This is going to cause storm of people looking over every place that received fed money with a microscope. Other things are already coming to the surface right now like AIG’s additional 55 million. Merrill Lynche’s 80 Bln dollar bonuses, then AIG sending money over seas to pay debt 100 pennies on the dollar with no negotiating and including but not limited to Goldman Sachs. I don’t think the excise tax is going to fly, but I do think there are going to be some serious legal wars coming and GS will be one of them. Thats why they returned their 10 Billion, they knew they were going to get 12.5 billion from AIG. Banks might be gun shy selling their toxic assets for federal money now, investors might shy about investing in them since real estate values still have yet to bottom, etc. However they might and that might keep them from plunging or making a rally. God knows I was on the wrong side of this last rally call when bad news kept coming out about deflation, more job losses, earnings estimates being worse than thought. If the financials don’t dive and go back to the new lows it should because of some gold star info came out. What else is going to surface now from all this drama?
Energy: I was on the wrong side of the Oil call even though when a cut was priced in didn’t happen and oil supplies increased over 2 million barrels it only slightly went down. Now I think this happened because this still happened during this unfounded bear rally even on bad news. I said OIL would go below 40 before it saw 50, I was wrong about that as Bernake printed more money to ignite inflation again which caused investors to flee to commodities and drove the prices up. Now Ia m still bearish on oil and I still think it will definitely go back down below 40 a barrel before the summer drive up, which I have no doubts it will go up. However, the 110 to 140 a barrel by end of the year, I just cant see as recession is still going to drag demand WAY down, and OPEC still needs the money for their lifestyles they propped themselves on so I doubt cuts will be coming, and maybe when they meet in May, I can see cut there, its a critical time frame. Everything seem to be intersecting in the May and mostly in the June time frame for my observations.
Stems: I see them starting to come in to play as the market tanks, IF it tanks, and this just a personal observation and it seems stems (and other speculative companies in the penny range) seem to thrive and do much better when the market is down, even better when it goes bad for the market. Obama also made a reference to Stem Cell Research in his Town Hall meetings. So keep an eye on stems and speculative stocks, including your own.
Commodities: Oil goes down, Gold I like, I think right now its got an amazing uptrend and when the rest of the world starts to try to hedge against inflation and the economy, I think Gold will be the biggest winner and eventually oil as well, but wait for oil to dip. The other commodities I am no real thought on other than maybe corn and wheat will go up because we need to feed the soup kitchens and nations that went back to being a third world nation?
Stock Observation: FAZ, most of us here now that this is an inverse Bear Stock and know when the market goes down it goes up. However, something I seem to look at the observation of things for a good solid play. FAZ is inverse, DERRRR, but if you compare it to the market and study closely, and I might be mistaken. But while the market is in the bottoming process and is going lower and lower with lower highs and lows as it descends. Now if you take look at FAZ, it IS doing the opposite, its having higher highers highs and lows even though it hit a new 52 week low recently which would have been an AMAZING buy in. I think when the market sinks it fully has the capability to run back up to that 113 mark if not break it. SRS might be a good longer term play that you want to bow out in June when it reaches its peak and the housing market bottoms. Might be a time to buy those TARP assets at that time after the market has bottomed IF we can buy them. I think a good buy in for FAZ is 30 bucks unless it goes back on a slow rise, then you will have to time a pull back. But for right now, the market might start green and then go in to a sell off and if that happens that means FAZ should pull back. I am expecting around the 32 to 33 range might go back to 30. Yet again let me re-iterate, I could be wrong again, but there is SO much damage out there and even more to come out I fear so thats a reason I am still Bearish, cept gold.
I like FAZ and Gold/Silver Stocks, there are MANY gold plays out there that are good but here are the ones I like and my thoughts for a buy in point.
AEM = $47 Range.
FCX = $32 Range
AUY = $7.50 Range.
EGO = $7 dollar Range.
UXG = $1.75 Range.
Oil Hedge is DXO = $2.00 Range.
I am still loking at silver but I like CDE, SLV and DBS (I think its DBS) still studying them. I think CDE is a diamond in the rough, if you can catch in the .60 range snag it up. Just recently it spiked up to .93 (a few days before it was at .58) and this is a real company, they been on CNBC and Bloomberg, herd them talk, I like it. Its a precious metal play. SLV and DBS are ETF’s Silver is being called the poor mans gold and in fact has actually been out performing gold. Look in to it.
I wanted to write about politics too, but I will save that for next week as well what I like for long term plays for solid companies. Oh and feel free to reply and maybe mention something I haven’t factored in my Equation.
