Archive - Apr 2010 - Blog entry

VOLD (NYSE Up-Down Volume Differential) broke below 4/16 opex levels and then some today; registering the single most negative close (-1,621,467) since 3/02/09. A quick look at the S&P 500 E-mini, NYSE Tick, VOLD, VIX, ADD, UVOL & DVOL.

For those who have forgotten the implications of the highly leveraged and opaque financial holdings (the true value of which rests at the mercy of market sentiment) and can turn blind eye to the highly volatile nature of the trading revenues combined with a literal tsunami of regulatory pressure and potential litigious onslaught (all issues which we have repetitively brought up in the past as what appears to be the sole voice of contrarian reason), Goldman Sachs holds a strong investment proposition. However, if fundamental considerations such as the company’s solvency, true economic profit (not the accounting earnings you hear preached from your brokerage’s sell side marketing propaganda cum research reports) and the sustainability of income are to be considered, GS should NOT appear among the preferred lot.

David Crane, California Governor Arnold Schwarzenegger's adviser notes, this year's unfunded pension liability is next year's budget cut—or tax hike. This year $5.5 billion was diverted from other programs such as higher education and parks to cover the shortfall in California's retiree pension and health-care benefits. The Governor's office projects that, absent reform, this figure will balloon to over $15 billion in the next 10 years.

Demographics Auger Poorly for the Real Estate Market. Desperate homeowners counting on a "V" shaped recovery in residential real estate prices to bail them out better first take a close look at global demographic data, which tells us there will be no recovery at all. The Demographic Nightmare in Japan. The demographic paradise in Vietnam. (EEM), (VNM).

Now we know why BRK, CAT and the other big corporates came oozing out of the woodwork last year to defend the OTC derivatives market. JPMorgan (JPM), Goldman Sachs (GS) and the other OTC dealers let Warren Buffett's Berkshire Hathaway (BRK) and the other "AAA" corporates play at the roulette table w/o any chips. Isn't this the man who called OTC derivatives weapons of mass destruction?

Yes that's right. I expect 200+ billion Slugs to die over the next three years. It might cause interest rates to rise a bit (more). Another buyer bites the dust.

Last Friday was the first 90% Downside Day since February, sentiment gauges are as bullish as they’ve been since the “calm before the storm,”, the CBOE equity put/call ratio is at extremes last seen in August of 2000, stocks are the most overbought since the rally began in March 2009, we’ve gotten within spitting distance of “The Lehman Gap,” volatility is back to complacent levels, and by Jeffrey Saut’s count, last Thursday was session 34 in the “buying stampede” that began on February 26th (rarely do such skeins last more than 30 sessions).

Here's a list of companies whose share prices have shot up at the same time that their fundamental and macro outlooks have collapsed - at least in our opinion. I present some (retail) food for thought.

Society doesn’t self organize for the benefit of the many but rather society is organized for the benefit of the few as the most effective way to rape, rob and pillage the many. Who needs war when the process of abuse can be institutionalized and glorified?

The Abacus deal stunk. But there were other deals that were even worse. This train wreck for investors could have been avoided. Instead, everyone just closed their eyes.

Treasury announces plan to sell 1.5 billion Citigroup (C) shares "in an orderly fashion" ... [1] Treasury press release, [2] C weekly chart, [3] C 30-minute chart, [4] BKX weekly chart

Today is my birthday so I decided to post my last comment again because I think it is important you all read it carefully as it was not given proper consideration by ZH administrators. I apologize for this but we need to discuss these issues in detail and I would appreciate your feedback. Thank you.

Weekly technical profiles of Gamestop (GME), Waters (WAT), Liberty Media (LINTA), JetBlue (JBLU), Radioshack (RSH), Exelon (EXC), Monsanto (MON), H&R Block (HRB) & China North East Petroleum (NEP) with explicit trade setups

For those of you interested in economics, capitalism, and Austrian theory, and a lot of other things, I've created a new Reading List page on my blog, The Daily Capitalist.

Potential foreclosures may result in a 103 (9 years) month inventory of homes coming on the market.