News Update

Obama sets primetime news conference 3/24, 8 p.m. - My Spin - I expect similar to Bush announcement "Mission Accomplished", Obama to announce "bottom is in".
Intercontinental Clears $7.15 Billion in Credit Swaps - My Spin - If the CDS market becomes traded on a regulated exchange, such as this one, this would be a major step to avoid future AIG debacles, as well as improve market stability significantly. CDS valuation is over 40 trillion, so this is a small start.
Prudential Insurance credit rating cut to baa2 from A2 - No spin
OpEd piece - The United States Of Ponzi - My Spin - More accurate than mass media spin
NAACP accuses Wells Fargo and HSBC of steering well-qualified blacks into subprime loans - My Spin - Accurate or not, this spin I suspect won't play off well with millions of Americans burned, and we now have a black president.
Mexico Applies Tariffs to U.S. Products After Truck Dispute - My Spin - such a small story, with such huge ramifications if Tariffs as a "solution" gains steam.
Honda’s Credit Rating Cut by Moody’s on Decline in Car Demand - My Spin - I'd bet on Honda over GM when this is over.
Citi Losing Economist to Treasury - My Spin - Hopefully his new employer fares better than his old one.
In a first, bankruptcy judge rules Calif. city can void union contracts - My Spin - If this ruling stands, you can expect many cities to follow. Government unions will be the next to get broken. Those decades of promised paradise benefits in retirement will be curtailed.
AIG Consumer Lender, Plane Unit Downgraded by Moody’s - No Spin
U.S. credit card defaults rise to 20 year-high - My Spin - Anyone taking bets we will see an all-time high before this is over?

US Government announces printing of cash will solve US problems

OK, my title is a bit of a paraphrase of what the Fed announced Wednesday. I'm glad I didn't sell my longs, and of course, hindsight being 20/20 wish I bought more. :)

So recap of today, the Fed announces two critical actions.
1) The Federal Reserve. a Branch of the US government, will buy 300 Billion of long term securities from the US Treasury, a branch of the US government. (This is the start, not the end of this policy)
2) The Federal Reserve, will purchase an extra 750 billion in "bad debt" from private institutions.

The news of this sent the markets soaring....and Gold, OIL, resources soaring!

So obviously if everything went up this is great news, right! Let me dive into item #1 a little more. After the Fed buys treasury department bonds, the treasury will then have the ability to mark the "Debt" sold the same as if it was sold to say...china. The Treasury can then print money, or do other financial actions with the "investment" it receives from the Federal Reserve.

Whats wrong with this? Let me go a little slower. Lets say I create two companies of which I own 100% of. If company A, buys debt of Company B, and Company B now has more "cash" to invest with, am I "more wealthy"? (for the conrads out there, its NO!)

ANY Announcement the "Skeptic" should ask, is the action that the government is taking "fixing" a root problem with business?
In the current situation it needs to be addressing
1) Transparency to regain trust of corporations (Honest accounting )
2) Enforcing laws to bankrupt companies that are in fact, bankrupt
3) Curb debt spending to strengthen the US balance sheet.

If it doesn't do one of the 3 items above, alarm bells should go off.
For a more in-depth analysis, read Mish's Post here.

OK, so what does this mean for investing, currency, and resources?

Well, in general, resources exploded today! This on anticipation that the USD will fall significantly, requiring more USD to buy resources. Also banks, and equities exploded today! in anticipation this "Free money" will raise market valuations.

Who knows where this ends, testing the 200 DMA yesterday I thought was slim, now I think its extremely possible in the months to come.

Bottom line is, steady with buying resources. Hold onto to lottery tickets, and enjoy the ride while it lasts. If you look into history "printing free money" has never brought prosperity to a country. It has brought high inflation, market collapses, and revolution. This kind of a rally is what I expected mid January, I was a tad bit early...again. Happy John kept the faith in the government doing the wrong thing, and the government didn't let us down.

If we rally into Friday close, you may want to consider lightening up for a possible Monday reversal.

I'm still not convinced gold is on a mega bull run, waiting to see gold go above 1100 and ounce. Long term however, this is the first step, in a series of steps, to ensure resources are winners, and all USA citizens are losers. Enjoy the ride.
Update Thursday 8 am: Both Gold and Oil on an incredible tear today, I may eat my hat on the gold comment just last night.

How Far does this bull run?

The bull is running, spilling blood on shorts. On Sunday I created a graph to show the possible upside. Today I refined it a little, with the greater picture shown. Since June of last year, the SPX has not broken upwards the 25, 50, and 200 day moving averages. The market has been in a freefall since.

The market is about to break upwards over the 25 moving day average, with possible throw over the 50 day. If this was to occur, the SPX should break the 50 around 900. The 200 day moving average to me is out of the question. If it does, it will route all pessimists, shorting the market.

So the upside (excluding the 200 day) is 6 to 16% up from here. The down is still about 35%. Moral of the story if you where caught long, and are a gambler, you can wait to see if the 50 day is broken upwards. But if we do, better get quickly protective and get out of your longs.
Between the 25 and 50 is by no means certain.

I think the 50 will get broken, if anything, to screw over the shorters/pessimists. The market likes to take the "easy money", and right now that's the market shorts.

If the 50 day moving average is broken, I may put some shorts (option puts) on companies. I'll re-assess at the time, but companies I want to short are: Deck (deckers), MA (MasterCard), buy SRS (double inverse short commercial), AMZN (No Rush), APPLE (no rush), TOL (toll brothers), Moody's (MCO). If I do, it will be a minor position compared to the LONG positions I have on RJA (food), USL (oil), GLD (gold), GDX (Gold miners), and various gold & silver miners.

For now its watch and see, and I'm not adding to my long positions. I do have OIH, USL, DXO, UCO, various gold miners, PFE, PPH, RJA, FEED, VMW, TBT, MU, EMC. Minor positions in FXI, FNI, and lottery tickets.

From WebSurfinMurf's Financial Blog

***CORRECTION**** There is a typo in the chart above, should read 3/17/09, NOT 5/17/09

And the next time you hear someone NO ONE saw this occurring? Watch this November 2006 video. Some of what he predicted is still yet to come.

Fed meeting Tuesday, announce Wednesday

On Monday I wrote about a series of serious steps recently discussed or being taken by the government in an attempt to "help" the financial quagmire. The FOMC is meeting Tuesday, with announcement 2:15pm Wednesday. This makes the next two days basically "who knows" what will happen. This Saturday is options expiration, which historically have had some major game playing by the market.

So Tuesday may be another move down, signaling the recent rally is breaking down. However the Fed makes its announcement 2:15pm Wednesday (click). I am not concerned about the down move unless SPX breaks below 666 with conviction. The Fed announcement could quickly reverse this trend.

So I refuse to buy anything, and I am glad on Monday that I sold 1/2 of many of my lottery tickets that had 50+% upswing in 4 days. (see my twitter account, info in link on right)

Once again, the market could collapse, yet again. Hopefully readers sold some of their positions Monday, from my Sunday post.


Listen to this 80 minute audio from Peter Schiff. If you do, you can stop reading my blog, he pretty much covers 100% the theme of almost all my posts.

Entertaining and Educational Peter Schiff Audio

VERY long for all parts, 10 minute increments, listen to part 1

Part 2, Part 3 (Great), Part 4, Part 5, Part 6, Part 7, Part 8

Political actions are solidifying a Great Depression 2

Today, several news items came out that in my opinion, are making matters worse. No one action turns a recession into a depression. A collective of bad decisions to avoid attacking the root problem and attempting to create a patchwork of changes, construct a loooong recession or depression.

News Items today that I find particularly troublesome.
Price controls being considered. - Absolutely insane. Does everyone have a memory that lasts only 5 years? The 70's price controls was a DISASTER. My God. I thought this was suppose to be a free country, where CAPITALISM determines price. Apparently Stalin and Castro where right, the government should set price, not private industry. Start kissing *ss with well connected people, because the concentration of political power will escalate. Lets just hope this is talk and it ends there.

Mexico threatens tariffs in trade dispute - Yet another absolutely insane....but I predicted... Trade barriers start to erect, which if continues, ensure a horrible economic spiral. The last Great Depression was created when countries escalated a protectionism war, crippling international trade. Seems like once again, no one studies history, so we must repeat it. I'm sure Mexico has some very valid issues with the US, but tariff wars will not help anyone. OBAMA BETTER address this ASAP, otherwise other countries will smell blood in the water, and create their own sticks to beat the US and each other up with.

FASB rule changes for companies to value their assets, vote occurring on April 2nd: It would allow banks and other companies that have had a difficult time valuing illiquid mortgage and other securities, the ability to use "significant judgment" when valuing the assets. Once again, instead of restoring faith that companies are properly valued, rules will be changed to allow companies to "decide" what their assets are worth?!?! There is no end to this disaster.

Obama: AIG can't justify 'outrage' of exec bonuses - Great. Obama may interfere with pre-existing contracts by the government intervening and nullifying legal documents? If such action is to be taken, to undermine the rule of law, how about start by ENFORCING laws, before tearing the rule of law apart? AIG would not be paying out these bonuses if the government enforced honest accounting! People don't get bonuses on bankruptcy! This just goes to show political grandstanding to appease the masses takes priority rather than meaningful change. What the politicians don't realize that eventually the masses will still be unhappy.

The Federal Reserve new powers that include authority to monitor and address broad risks across the economy - That is the answer, increase the powers of a financial dictator in the US government to "address" issues as he sees fit. There is no time for debate, or congress to actually vote on spending money. No time for the government to enforce honest accounting. What is needed is more seat-of-the-pants last-second world-will-collapse action. My god. More power without democracy. More quotes "government to have comprehensive authority over all financial products marketed to consumers, including the consistent enforcement of consumer-protection laws related to mortgages and credit cards" This is an all out assault on capitalism.

Wells Fargo calls US Government "Stress test" asinine - One thing he is honest and right about is: "“Is this America -- when you do what your government asks you to do and then retroactively you also have additional conditions?” Kovacevich said. “If we were not forced to take the TARP money, we would have been able to raise private capital at that time” and not needed to cut the dividend to preserve cash, he said. " What this man misses is that the government has a deep need to takeover for capitalism, because capitalism can't be trusted. It needs to be orchestrated with price controls, minor dictators, and government "estimates" on value. The rule of law is about to die. Long live the new kings.

There is a bunch of other bad news out tonight, but the items above, show me that I am correct in doom-gloom for a long, prolonged, deep recession/depression. Unfortunately, it will take economic disaster of high inflation or financial collapse of S&P to 500 to prove me right.

And if there is a terrorist attack, the grab for power may make Bush seem tame. Lets just hope I am wrong, and these actions will make the US capital markets more "Free".....how it can is beyond my comprehension.

A music video on buy & hold of stocks, enjoy (Tnx Swan)

Buy, hold, or sell US Equities

On March 5th, I posted buying some lottery tickets , that since then have paid off reasonably well. In the last 5 days, the US Stock market has advanced about 12% on the SP500 now at 757. As previously posted, a reasonable target is around 800+ range, and a high target is back to the level we saw Jan 2nd at about 930. However, the long term target for the market is 400-500 range.
Whats the point? The market has recovered 12% in 4 days, looking for additional 5% to 15% higher, with long term target if up to -45% more down.

If you where caught long during this collapse, the potential risk-to-reward to stay long is kinda like a game of chicken now. I never advocate buying 100% or selling 100% on any given day in your own positions. But to scale in and scale out is prudent, to reduce risk. Consider moving a percent of your holdings into something more secure than common equities, while looking at the downside risk to upside reward.

From WebSurfinMurf's Financial Blog

*NOTE* High inflation changes everything, if it occurs S&P500 could hit 1,5000, but inflation would be high.

I am still holding the lottery tickets, hoping to put stop-losses in if/when they pass 50% up mark. Also, the target down does not apply in general to resources, however, if/when the equities make new lows, I wouldn't be surprised to see resources also be affected downward.

Bottom line, NOTHING is easy, and everywhere I still see risk. I am still in somewhat looking positive, but getting concerned that the up side may be getting stretched thin soon.
What is also amazing is that any significant news from the US government to actually address trust, transparency, and the true issues behind the market, could change the entire outlook of the up and downside for the better.
None of this is destiny, but without proper action, my long term view of S&P down 35-45% from here holds.
NOTE: Please read the disclaimer found here. I have zero professional credentials on equity trading, and further, you should assume I am as incompetent as your own stock broker. :)

Saturday Video Post 3

For the majority of us, the market is up this week, and we need to keep the good mood going.

For those who can't get enough of paranoia, world kaos, New World Order, etc, a new YouTube 2 hour movie called "The Obama Deception" is the thing to watch! I plan on watching it this weekend myself. (Thanks for my paranoid reader Swan for the link, ready with his bag of gold, a gun, and a map on crossing into Canada)

The Daily Show has been shredding CNBC, one of the targets was Jim Kramer.
The comedy channel has the videos, but the site has been destroyed by the traffic of viewers.

Jon Stewart was no hold bars on the attack. But the best point is, wealth is created by work, not leverage, and that is EXACTLY why I think this recession is going to last a while.

It is a great watch, enjoy

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Lottery Ticket Results - 7 days later

One week ago, I posted time to buy lottery tickets. I am trying to hold my lottery ticket stocks until I get 50% returns, then put stop - losses for 50% of the shares to minimize my total costs. I reserve the right to panic out. :)

Lets take a look at the returns/losses 7 days later. Keep in mind, when I posted the lottery tickets, they where long term lottery tickets, just so happens the market turned this week.

All prices are the price on post day (after close) and next day price, to cover the range you might have bought at.
AA bought 6.25-5.25 Currently at 5.98. Change between -5% to +14%
F bought 1.87-1.81 Currently at 2.10 Change between +13% to +16%
GE bought 6.69-6.66 Currently at 9.57 Change between +43%
LVS bought 2.23-1.99 Currently at 1.77 Change between -21% to -11%
MGM bought 2.21-1.89 Currently at 3.17 Change between +43% to +67%
DRYS bought 3.90-3.54 Currently at 4.31 Change between +10% to +21%
C bought 1.13-1.02 Currently at 1.67 Change between +47% to +63%

So average returns are +18% to 30% in 7 days. Great start for "lottery tickets".
Not to mention, the "small miners" are mostly winners also. And of course, the ONLY lottery ticket I bought in large size was LVS, I'm damn good ;)
Of course in 7 more days the gains could easily be wiped out. But hey, these are lottery tickets, fun to see where this lands!

MONSTER Bear Market Rally

This bear market is pissed off, and is biting back hard!
I was "waiting" for a monster rally for weeks, I "finally" threw in the towel Feb 27th. My friend happy John never lost the faith.
So how high are we going? S&P500 a good guess is 800-825 range as a reasonable target. However the market could bite back much harder and keep going.

Expect a pullback, possibly tomorrow. But the Bear is loose, and gutting the short sellers. The short sellers will now panic and cover adding fuel to the fire. Of course, government news can kill the entire run if they do something stupid. Right now the government is talking about suspending mark to market accounting.

Has the fundamentals changed? Hello no! Is the world facing another great depression, heck yea! Is there an army of bad news, of course. Is spending TRILLIONS of dollars by giving it to reckless corporations going to have consequences, yes! But for now its time to follow the whipsaw of the market and ignore the financial fundamentals. Lets look at the S&P500 below. Target is S&P about 800-840 range. My 1st grade charting guide shows an extreme high is 900-950 range. Update: See "The Smart Money Tracker" for Gary's spin.

From WebSurfinMurf's Financial Blog

Right now the 752 may be upper resistance, hence why we may pullback tomorrow.

For those readers in the market for the next 10 years+, take notice, I don't think this is the bottom, just a "short term" bottom. Take a look at the chart below to put where the market is in perspective to the last 20 years. If you truly believe (I respectfully disagree) that this is 'the" bottom, load up on stocks, get in cheap. But I don't see the economy turning around for years, and therefore the market is destined to break the recent lows. This rally could last months and go even higher than I posted, just long enough to start convincing people the water is safe...it is not.

So hang on to some longs. I'll post on the "lottery ticket" performance, 7 days later.

From WebSurfinMurf's Financial Blog

Gold and Gold Miners buy now to buy later?

I blogged yesterday that I am trying to avoid buying Gold miners until they pullback and are "cheap" I also said "Gold and gold miners should get CRUSHED, as I previously blogged.".

I subscribe to a variety of pay-for-blogger analysis, and frankly, I don't do any analysis except try to take in everyone else's. Sure I look at charts, daily moving averages, etc. But that's about it.

Gary of the "Smart Money Tracker" has a pay service that is a must if your into looking at precious metals and miners. In today's pay service email, he makes a strong arguement to buy Gold miners now or around here, etc rather than wait for a cheap purchase that may not come. If you want more details, go pay for his service for his explanation.

For myself, I'm a bit torn. I know with all my passion that gold miners is the play for the next few years, and I want to get into miners full tilt at some point. But I recently took a pretty decent hit in the market, and I don't want to take a chance of another hit. So I am going to take my own advice and buy over time, up or down. The next decent down day I'll add, a little. And try to buy gold miners between Gold at 900 an ounce down to 600 an ounce. It may never get cheaper than here, but could go to 750. 600 an ounce I'm planning for as a worst-case scenario. This is better than trying to pick some sort of exact bottom.

If gold makes a run for the border and hit 1100 an ounce, I can "chase" later, although I would rather not. But I just can't take the chance that gold tanks and be overly invested.

I have blogged a bit on Gold, Oil, food, resources, and I do truly believe they are all long term winners. But its been a struggle for me to convert from shorting financial stocks and buying into what is basically a long term "doom" play.

UPDATE: "Happy John" in response to this blog entry said:
1 - when a good case can be made for an asset to move either higher or lower in the near-term, it's best just to stay out.
2 - Money missed is FAR better than money lost! Opportunity is endless, money is not.

I wish I had seen this video when I posted "Preparing for Anarchy", pretty funny stuff (thanks Swan)

The Colbert ReportMon - Thurs 11:30pm / 10:30c

Doom Bunker - Jack Jacobs and Stephen Moore

Colbert Report Full Episodes
Political Humor

Rap Battle
NASA Name Contest

Rocking Tuesday

The "big" news today is Citi turned a profit .... if you ignore the billions given to them by the government. I'll make a separate post for other News.

Tuesday is the market is off to the races, DOW 10K here we come! ;)
OK, one day of the markets riding high hardly marks a turn around. The markets could easily turn around and tank. But if the market continues to rise, the short sellers who have been king for 6+ weeks will start to run for the hills, and the markets could really fly high.
S&P500 above 752 with conviction is something I want to see, with possibly a pullback, retest, and continue move up.

Gold and gold miners should get CRUSHED, as I previously blogged. I am revising target even lower than before. No worry, resources are still the #1 play for the next few years. But I plan to be cheap buying back into the miners. I'm talking wal-mart cheap. I'm going to try to sit on my hands until gold crosses below 750 an ounce and re-evaluate. As previously blogged no one wants gold to rise, (including all governments) except fear buyers and miners. Another reason I fear gold will get crushed is every town now has 10 store signs saying "we buy gold". Once gold falls fast enough these mom/pop shops should get panicked, starting a buzz for gold lower. Also I am very concerned that gold could not make significant new highs as the market plunged from DOW 9K to 6.4K in 8 weeks! That should have generated enough panic to see gold at new highs, which we did not.

I am still a big buyer of gold miners, but looking for fire sales prices in the months to come. However, who knows, gold may never get low enough and I'll miss the run up. That's OK. I'll admit I'm wrong if gold gets above $1100 an ounce. I refuse to get burned.

What else is bullish, how about China's trade deficit with the USA has COLLAPSED. This makes the US look much stronger. In November, China trade surplus was 40 billion, last month 4.8 billion. This is an absolute disaster for China and a big push for the USA. But don't be fooled, this will end once inventories are consumed and the US must start re-importing from China.

I previously blogged about lottery tickets on Thursday, quick update on the stocks.
AA 6.24/6.12, F, 1.87/1.85, GE 6.69/8.87, LVS 2.23/1.66, MGM 2.21/2.87, DRYS 3.90/4.47, C 1.13/1.45

LVS is a big loser, I may hit out, but over all not too bad after first major up day. I'm holding all of them looking for 100% profit to sell 1/2 and let the rest ride.

As promised a GREAT video from The Daily show, making fun of CNBC well worth the watch!

Quick Market Thoughts

I have been looking for a market turn around, and frankly, it seems there will not be one. Ever.

OK, maybe not ever. I do find it a positive development that gold is pulling back. That may indicate fear is turning down. Oil has been staying reasonably strong, keeping USL and OIH at reasonable levels. But the stock market just can't get its footing to make any sort of a come back.

Cash is best, as always. But at some point, the sellers will have sold, and all that will be left are the 401K people who have watched their savings become a 201K, and are holding for the "30 year" haul. Once the sellers lighten up, between now and DOW 2K ;), the market should have a decent rally.

I still have hope, but trying to risk less.

Where is the Leadership for change?

I am starting to think Obama is as bad as Bush, for the single fact his administration doesn't seem to be "attacking" the problems in the financial industry. For example, Treasury Secretary Geitner ONCE AGAIN delayed announcing details on Treasury overhauling the USA financial system.

Meanwhile, the administration is cranking out freshly minted cash through massive spending. US Treasury yields are slowly starting to rise as the US creditors are looking for better return on their funding the largest deficit in the history of the world.

But what choice does the administration have? The US corporations are so large, so entrenched in every aspect of world finance, they are "too big to fail". Question this as a fact? Just ask AIG who told the U.S. that failure may cripple manks, money funds. But the truth is that government money going to US companies are being funneled to foreign banks to keep them afloat.

But don't worry, the government may be digging itself into a world class hole, and US financial companies, but US companies are ok...right? Even good companies are facing unbelievable expenses as the credit market get a new wave of skeptisism sending cost of credit soaring.

Solution? The US Government instead of changing the rules and regulations around CDS or other financial dealings, it is "stepping up" and becoming the lender for everything. GE is now offering 8 billion dollar debt sale, with the government "Backing" the debt. So "private" money will be used to fund GE rolling over it's debt, but yet once again the US Government is on the hook for the debt if anything goes wrong. NOT that anything can go wrong.

What is wrong with this action? These actions will drive up the cost of US debt, and therefore EVERYONE's taxes, and a cut US Government services. How does US Government backing GE private debt result in this? Well, not just GE, but each time this happens, "smart money" buys the corporate debt instead of federal bonds, which has a higher % yield than treasury debt. This is "smart" since the debt is backed by the US government.....JUST like a federal bond. (different mechanism, in general same principle). So the government is creating a situation where corporate debt drains the dollars buying US government debt, which in turn forces the US government to raise interest rates to compete.

So whats the point of my rant today? Trying to "pussyfoot" around the heart of the problem solves nothing. It gaurantees a long, drawn out recession/depression. There is NO free lunch with debt. Someone has to pay. And in America, it has been decided that the people who manage to keep a job will be paying a heck of alot more for that privilage in the future, with fewer government services once the US debt interest rates hits 20%. (eventually) And those job wages will not only get hit with higher taxes, but their salaries will fall.

There is another solution. Bankrupt companies that are bankrupt. Sell the "good" pieces of the bankrupted businesses to companies that run their business well. Have the losses be taken by those who risked capital. Insure the publics personal funds in banks, even if that has to be done through debt spending.

Once the losses are recognized, bad businesses burned, the market bottom would be in and a turn around in the economy inevitable. This is the right, but harder path, which takes strong leadership. I have full faith the world leaders will take the (wrong) near term easier path. If you agree be prepared for 10+ year recession/depression, and plan accordingly. The result will be debt so opressing, we won't recognise the US in a decade from now.

Very funny video from The Daily Show bashing CNBC

The Daily show had a great second video Monday night, hopefully I can publish it tomorrow.

Monday Morning Debacle?

Unfortunately, I didn't have time to do some in-depth writing tonight. Just some thoughts for today's post. Friday closed pretty strong to the upside. The various pay bloggers I listen to have varying viewpoints, which is expected with the market being so erratic.

I'm trying to not buy the gold miners at this level still, since I believe we could be close to a short-term bottom and the "fear" comes out of the market, sending gold plummeting. But I still HAVE gold miners, just not as big numbers in force.
My hope is the miners retrace down, GDX down to 25 or so, and I re-load the miners for my near-final play for the next year or so.

But who knows, maybe now is the best time to buy, the skys the limit! Hence why I still have some positions open.

I have some long plays, and I'm buying some other stuff long. Still like Oil long, food, and natural resources. This past weekend Obama lifted the stem cell ban, so some health care companies may get a small rally.

In general, trying to add positions (again) for my looooong over due rally, that I have been hoping for for over a month now, which means I could still be wrong.

Some news today:
World Bank offers dire forecast for world economy - My Spin - Now that the world bank says its bad, its gotta be close to a near term bottom.
Overvalued euro set to plunge 'within months' - My Spin - As the world collapses, the US may get a nice spike up, as the US looks "not as bad" as the world. After all, the USA lead the way down, and the rest of the world is just now playing catch0up.
More FHA-Backed Mortgages Go Bad Without a Single Payment - My Spin - And it will continue for year(s)

And I swiped from Mish's post the image below of the unemployment trajectory. My thought is its gotta have a counter movement before continuing to 15%.

Saturday Video Post Part Deux

Peter Schiff touches on what I already stated, that bonds (US and others) will be a bad place for your money in the future. Peter also likes commodities. Some of what Mr. Schiff suggests you should have access to world marketplace for investing, one I use is Interactive Brokers.


Former Presidential Candidate Ron Paul. Considering he was a distant but viable contender for the US Presidency, he can't be THAT crazy. And I believe he is the best congress person for having a firm grasp on US economic situation.



I said no more Jim Rogers.... I lied. This post discusses Oil, one of the resources I have been pushing.

Preparing for Anarchy

Yesterday's post I listed some "lottery tickets" for a market pop. Today I'll post what if, the world economy spirals out of control. (we haven't seen anything yet, this is an opening act)
What can you do? This is MAD-MAX territory. Before you start spreading rumors I lost it and have gone "off the reservation", I am NOT prepared for MadMax scenario. So I haven't transitioned to this as my reality, but I have thought about it.

• First off, if your considering Anarchy to be possible, you should NOT be invested in any stock, money markets, corporate bonds, etc. Money should be in federal treasuries or resources. Also have primary savings in two radically different companies. Like a local bank AND an international stock trading account, etc.
  
• Have significant physical cash on hand. Either is a security deposit box or "buried" someplace. If things spiral, banks are now allowed to run out of physical cash BUT remain solvent/open. This was changed with the bailout law in 08.
• Sell your home, rent. Be nimble for change.
• Stock up on food. Having 4-6 week food supply that you rotate not only gives some cushion, but actually saves you money by having bulk-buying of food. Alternately, you can buy big-quantity long term storage food by clicking here.
• Apply for a gun permit ASAP and buy a gun...or two. If it comes to the point where you "need" a gun, laws will be changed that you cannot have a gun.
• Consider buying commodities to store wealth for an economic reset or dollar crash. Short-term crash buying commodity stocks/etf's helps. Complete disaster collapse you need physical ownership of resources. Ideally you want valuables to barter with. There are places like goldmoney.com to own gold and have them store it in or out of the USA. Also can buy physical commodities gold coins, such as land, etc. Remember, in the last Great Depression, the US Government rummaged the safety deposit boxes and confiscated everyone's gold. So consider where is "safe" to hold resources.
  
• Consider having a secondary place to live, whether its a relative in a rural area, or moving out of the country. Unfortunately, who knows what country if any will fair better. But the USA is itching to re-invent itself, and probably for the worse. Alternately make sure passports are valid, but don't count on being able to leave.
  
• Consider putting your trading account in a place like Interactive Brokers. This will allow you to transfer wealth "on a dime" to any other investment, such as currency trading, futures, foreign stocks, foreign bonds, etc. If mad-max happens, it may be mute, the exchanges degrade, and/or the clearing houses or other institutions have issues

Yes, this post is a bit tongue in cheek, but it does have a serious side. Think of how LESS crazy some of the above sounds compared to just 6 months go. And consider how much LESS crazy it unfortunately may sound in 6 more months if the market plummets to DOW 2K.

GREAT Video below, thanks Happy John!

Time for Lottery Tickets?

Question, do you believe the USA and the world is heading for a Mad-Max scenario?
If yes, watch gold, oil, resources as they declines, and buy some personal firearms. If you answer no, read on!

Since you don't think this is the "end of the world as you know it". Lets take a look at what has happened since summer of 08.

The stock market has fallen about 50%, and it is reasonable to believe some companies are cheaper than they should be. After all, not ALL companies are destined for bankruptcy. And even if many are, there may be some optimism before their final demise.

So lets take a look at some companies worth considering buying. Just throw $1,000 each at these companies, set 1/2 the shares to sell at 100% higher, and let the rest ride into retirement or a panic attack. :)

Also consider that the stock market is EXTREMELY over sold well below 200 day moving average. The market tends to close this gap over time. Of course, mad max may be on our doorstep, but that's your call. If you have cash, and want to gamble, with better odds than Atlantic City, some of these lottery tickets may be just the thing.

First, SPX (stock market index) Chart.

Now Alcoa(FAVORITE), Ford, GE, LVS, MGM, DRYS and a riskier play, Citibank

So look around, find a company "on the cheap". Buy some and sell 50% at 2x the price, let the rest ride. If we do get a rally, some of these stocks can easily double. Example. Ford from $1.87 to 3.60 is not hard to imagine. If you buy four lottery tickets, even if one hits, it should cover the other "losses". Lots of ifs here! I am more of a Mad-Max mindset, but NOTHING moves in a straight line.

Could also buy "small gold miners" as previously blogged here:
NOTE: Please see my disclaimer. All trading decisions are your own.

In the News

Conseco's survival in question My Spin - I'll break my own rule and comment. I like Conseco, and hope they can get through this.
S&P cuts Hartford Financial Services to 'BBB'
GE Capital Default Swaps Climb to Record on Capital Concern - My Spin - How long until the US Government starts selling Credit Default Swaps?
Bernanke rips AIG - says nothing makes him angrier - My Spin - Apparently not angry enough to stop the flow of infinite cash.
S&P Downgrades Bank Of America Ratings
China moving to buy more oil, See example here - My Spin - USL is one of the possible good ways to get in on oil long-term.
Pressure to reveal major AIG counter parties grows - My Spin - Article said "Goldman Sachs, Merrill Lynch, UBS AG and Deutsche Bank AG " I'm guessing under Bush administration huge chunk went to Goldman Sachs. I have no facts but lets see how accurate I am as this unfolds.......
Toyota, Facing First Loss in 59 Years, Seeks Loans From Japan - My Spin - Japanese government BETTER demand the car workers get benfits cut! Damn inefficient laborers! If Japan "loans" money to Toyota, will America take the high road and bankrupt GM?!? (anyone else see the irony?)
Bernanke Says U.S. May Need to Expand Bank Rescue - My Spin - Bernanke said he had his fingers crossed when he indicated the last time he asked for money that was all he needed.
U.S. Jan. pending home sales down 7.7%, realtors say - My Spin - This is just plain ridiculous. There has to be a counter trend rally to collapsing home sales....then continue the collapse.

This interview with Jim Rogers is the most in-depth of all I have seen.
I'll try not to post any more of Jim rogers, as this interview should EXHAUST all of Jim Roger's views. Video 1 below, click here for two and three.

Where are Gold prices going

Tuesday it was nice to see the market didn't plunge another 300+ DOW points. It gives some hope that maybe the market isn't entering a cascading fall. I'll put on some light optimism if the DOW can close above 7,400, within reach of 7552, the old support level. Or S&P above 752.

So what is going on with gold? Well, frankly, I'm a little concerned over Gold. As I previously blogged, I sold much of my gold miner stake, waiting for a pullback. The market collapsed to new lows recently and Gold did NOT hit new highs. The USD did gain strength again. Gold not advancing indicates either the demand (fear) has weakened, the USD is finally taking a chunk out of Gold valuations, or there is market interference afoot.

So lets take a little closer look at gold. Who the heck needs gold? Jewelers and industrial use. In a recession both should be down. Who else? Speculators and "sky is falling" types. (myself excluded). Who doesn't want gold to appreciate rapidly?
Everyone BUT speculators and gold mining companies. Why?
For jewelers/industrial use cheaper resources = better profits.
For Governments, gold is somewhat the "other" currency. If people keep their money in cash, stocks, or bonds, people are participating in the world economy. Buying shiny rocks has significantly less upside to the economy.

Sound a bit deep end? Well, the International Monetary Fund once again threatened (shaky news source here) selling 400 Tonnes of gold from the third largest stash of gold in the world. But a quick Google search quickly finds out this is old-hat, back to May 2007 for the IMF.

Basically the IMF seems to behaving like the early days of Ben Bernanke. "Threatening" to lower interest rates, or buy the long end of the curve. Doing what they can to keep speculators from flying off the deep end and driving gold through the roof.

This statement in the article is concerning: "The existing Central Bank Gold Agreement, which limits gold sales by central banks to ensure the market is not flooded with bullion, is in its final year and is due to expire in September. "

It does help to realize that governments and monetary system have levers they can pull to try to limit golds rise. To me this indicates gold will need to build up enough pressure to eventually overcome any shenanigans going on by the big players. When it does, it should be similar to the stock market collapse, except in reverse. :)

So I'll be less quick to pile into gold positions, hoping for a pullback. If I am wrong, I'd rather miss the entry point and be late to the game, than get yet another smack down by the market on my P/L statement.

Crash VS Rally

Its pretty much a coin toss of a mega rally vs crash.
With that said, going long or going short is valid.

WARNING: IF we rally hard, gold should get crushed as fear subsides.
Governments do NOT want gold to accelerate, as that means people have given up on their currencies.
Safest is CASH. :)

Selloff Tuesday?

Monday has confirmed market collapsing. After Market hours, Obama has announced more money thrown at the banks with 'Bad Bank' Funding Plan Starts to Get Fleshed Out . We'll see if Tuesday can get some meaningful traction to reverse. I would be more convinced if the government announced MEANINGFUL changes, other than "throw cash" at companies.

This could get ugly quickly. If the market screams down, Gold, oil, and all resources are likely to sell off along with the market. However commodities will be the place to be post-crash, so if your in cash, be "cheap" and buy into resources when it looks cheap enough to you that its a gift.

Cash is best. I lightened up a bit today, and already I'm wishing I sold more. More countries enter into unrest, as the Ukraine has joined Iceland, Latvia. Two ceo's resigned Freddie Mac & BlackWater founder.

Europe has pledged to NOT bail out the eastern block. THAT isn't going to help things.
At the end here I have a rather depressing (no sharp objects around when watching) interview with Jim Rogers, where he states (I could not corroborate) that eastern block countries bought mortgages based on the yen! That is DEADLY. The Yen has rised in value compared to those countries, and I imagine it is crushing people with mortgages there.

In any event, below is S&P 500 graph. 400-450 is the taget, but 200 is not impossible.

From WebSurfinMurf's Financial Blog

Weekend News Round-up

UPDATE 2/3/9 @8:30 am - some "good" news from government statistics, personal spending up - My Spin - Lets see if this can help stem the tide of selling
USO called self-propelled pyramid - My Spin - I fell for USO, but as blogged, flipped all to USL. As I said, there is no way to buy oil in general as an investment. OIH closest to reality by buying oil companies. USO may not have good price action this week...
Bank of America discloses 44 Billion in losses - My Spin - I now trust all the toxic assets by BOA are properly assessed now.....don't you?
HSBC plans to halt personal loans, mortgages: report
HSBC shares suspended from trading in Hong Kong - My Spin - NO COMMENT
HSBC slashes 6,100 U.S. jobs, sets huge share sale - UPDATE 3/2/9 - 8:30 am
Banking in Australia, ANZ, CBA, Westpac Outlook Cut to Negative by Moody’s
UK rates may rise before upturn, says ex-BoE deputy - My Spin - USA will also get hit with borrowing spree cost of higher interest eventually
EU Rejects Eastern Europe Bailout
Boomers: 30% underwater - My Spin - OMG, this is worse than I thought, if this many boomers are basically bankrupt, those of us left with a job are going to get the taxed hard in years to come.
Ireland on the brink of collapse - My Spin - If Ireland and England goes, europe can't be far behind.....
Berkshire Profit Plunges 96% on Stock Market Bets
FDIC needs more money for bank failures - My Spin - FDIC should be the ONLY bailout the US government supports

Market Crash Monday?

Friday has finally created a situation where I think any hope I have had on a market rally has been killed. My friend "Happy John" still has the hope. I do not.

Most of my money is in gold/oil, but some is in long valued stocks, such as UWM.
Monday Morning, probably even pre-market, I'll decide what I'll do.
From a chartists perspective, there is nothing bullish anymore. All major indicies have fallen below support levels. Next up is DOW 6K-4K range. Not saying its a straight line. There is no way I'll short this, since the risk is too great for a very hard reversal.

And at any moment, some sort of "stick save" could be made to turn everything in the opposite direction. Funny, the last 2 years corruption has held the market up, causing me to lose money, since I was short. Now the lack of corruption to keep up the market is causing me to lose money. I guess the greater context of the story is Obama administration is worse liars than Bush.

The irony is thats GOOD for America, since the sooner we face the music, the sooner we can get back to rebuilding.

So I'll still see what we face next week, but its about time for me to just ignore all but gold miners/oil for any investment, no matter how "good" it looks.

Some graphs in review, current S&P 500/DJIA as of Friday and the long term view.

From WebSurfinMurf's Financial Blog

From WebSurfinMurf's Financial Blog

Bear Market Blog search box

I added to this blog on the right hand side, a Google search box tailored to the Bear Market blogs I tend to follow. I expect I'll continue to add to this search box as I find new blogs that are interesting.
Please check back to this post to see what I have setup to search.

Currently the search box links to:
Mish's Global Economic Trend Analysis
The Market Ticker
Sudden Debt
The Mises Institute
The Big Picture
The Smart Money Tracker
http://www.tickerforum.org/

Please post on this entry comments of blogs to add, and if this search box is useful.
Also I added google ads. I'm lucky if Google pays me 50 bucks in 2 years. I added it to "play" and learn Google's tools for websites. By day I'm a techie.

Week Blogging Roundup

My blogging roundup will be shorter than normal, highlighting the major points I read over the past week. All of them are must-reads.


Mish's Global Economic Trend Analysis Blog (all articles are worth a read)
Who bears the 3 Trillion Dollar Mistake - EXCELLENT insight on why the Fed is proceeding the way it is
Bernanke's Boiled Frog Plan To Recapitalize Banks - Insightful Critique of Fed plan for banks
14 year commercial real estate supply in China - A small insight of one of the many issues China faces....China is not positioned to turn the world around "tomorrow".

The Market Ticker
The Underlying Fraud In Banking & The Remedy - Long detailed rants, with great analysis of the sickness this nation faces...and in my opinion the US WON'T face until its the "easier" choice...say DOW 4K

The Smart Money Tracker
Gary blogged on his short thoughts on Gold Miners decouple from the market

Sudden Debt
The age of De Leverage begins
From AAA to ZERO

Many more great blogs can be found on the right of this blog, do your own reading. The internet has given us common folk a great gift of unprecedented access to information. If this was 20 years ago all of us would have had NO IDEA of the pending collapse of the market. With the internet many of those reading blogs knew the storm was coming. Continued reading I am hoping will help prepare us for what is still yet to come.

Well worthwhile speech from Karl of "The market ticker" at award ceremony for

"AIM's 2009 Reed Irvine Award for Grassroots Journalism".

Saturday Video Post

I have two items for Saturday. One is an interesting article on the currency Krone.

For your viewing pleasure, I have two videos. One from Jim Rogers youtube channel, from Marc Faber youtube channel. and finally video from Peter Schiff youtube channel.

Peter Schiff Video on Obama proposals (EXCELLENT)