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The US Equity Market Summed Up In One Stock Chart
The stock below is up 1200% year-to-date. The company in question is insolvent by any and all measures and has a "parent" under great pressure to take whatever gains it can get (as opposed to leave anything for shareholders). The company is exposed to the worst of the worst in the housing market. The smart money (as they are called) is piling in. The company is, of course, Fannie Mae (or Freddie Mac - same discussion). This chart, like none other, reflects the "investment" thesis in America today, as Grenwood's Walter Todd notes, “Either you’re going to make a lot of money or you’re going to lose everything you put into it."
However, as he adds, "I cannot fathom the government allowing someone to profit from these two entities given everything that’s happened, and the pain endured by the government and the taxpayer.”
The consensus in Washington among Democrats and Republicans is that Fannie Mae and Freddie Mac should be dismantled and shareholders wiped out. The Obama administration believes the two should be wound down, the Treasury Department said in a statement.
But why not gamble on the likelihood that against all odds, you can become instantly rich...
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Both stocks should be suspended as they are utterly bankrupt. However the thieves can make money on it so will trade it. Once they are all out, then it will collapse or get suspended with no hope of any returns for those left in. Or those whose pension managers have bought into it on their behalf.......
I'm waiting for Crammer to issue a buy-buy-buy on it before I go all in.
Would you settle for Bill Ackman's Pershing Square Capital Management, L.P.? They just bought 115,569,796 common shares, or 9.98% of outstanding.
http://www.sec.gov/Archives/edgar/data/310522/000119312513443212/d630953dsc13d.htm
Screw the equity "market."
The real money is in the capitol. Go there, start a company that does - literally - net-negative value added work, and sell your company for 90 million a few years later.
There's a gold rush in Washington D.C. with pick axes & equipment funded by the taxpayer. Stake your claims now.
Forget the stock "market." That's a total sucker's play compared to this.
http://www.stltoday.com/news/national/govt-and-politics/d-c-awash-in-con...
D.C. awash in contracts, lobbying wealth
Print
4 hours ago • By GREG JAFFE and JIM TANKERSLEY Washington Post
WASHINGTON • So much money to be had if you know where to look.
The avalanche of cash that made Washington rich in the last decade has transformed the culture of a once staid capital and created a new wave of well-heeled insiders.
The winners in the new Washington are not just the former senators, party consiglieri and four-star generals who have always profited from their connections. Now they are also the former bureaucrats, accountants and staff officers for whom unimagined riches are suddenly possible. They are the entrepreneurs attracted to the capital by its aura of prosperity and its super-educated workforce. They are the lawyers, lobbyists and executives who work for companies that barely had a presence in Washington before the boom.
During the past decade, the region added 21,000 households in the nation's top 1 percent. No other metro area came close.
Two forces triggered the boom.
The share of money the government spent on weapons and other hardware shrank as service contracts nearly tripled in value. At the peak in 2010, companies based in Rep. James Moran's congressional district in Northern Virginia reaped $43 billion in federal contracts — roughly as much as the state of Texas.
At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital.
The signs of the new Washington are everywhere — from the Tiffany store that Fairfax County (Va.) development officials boast is the most profitable in the country to the new Tesla dealership in Tysons Corner. Every morning on the Beltway, contractors, lobbyists and some of the country's highest-paid lawyers sit in the nation's worst traffic. Sports talk radio crackles with rants about the Redskins and the latest ads from Deltek, a firm that advises companies on "capture strategies" for winning government contracts. The radio signal doesn't extend much beyond the Washington commute. It doesn't have to. The ad barely makes sense to most Washingtonians, let alone those living outside the capital.
At Cafe Joe, a greasy spoon near the National Security Agency in suburban Maryland, software engineers with top-secret clearances merely have to look at the place mats under their fried eggs to find federal contractors trying to entice them away from their government jobs with six-figure salaries and stock options. The place-mat ads cost $250 a week. They are sold out through 2014.
The new money and jobs have raised Washington's stature in the global economy. Tens of thousands of the nation's best-educated workers flocked here, some for contracting jobs, some simply to be part of the newly energized business climate. The money and brainpower supercharged the region.
Now, with lawmakers struggling to shrink the nation's debt and contract dollars declining, Washington is revving its economic engine. If it can run on its own — if all this new wealth and brainpower can innovate and produce beyond government work — the region may be able to sustain its growth.
Venture capital is already flowing in, and the thriving local economy continues to draw the nation's best-trained workers. Essentially, Washington has been the beneficiary of a decade-long, taxpayer-funded stimulus package. "We could have been a dodo bird," said Mark Muro, policy director at the Brookings Institution's Metropolitan Policy Program. "Instead we are the center of the universe."
Washington has long been a place where power outshone money, where companies tried to be discreet about their influence, where defense contractors knew not to wear watches that outshone the admirals'. The new Washington has lost some of those old inhibitions and has begun to resemble other global financial centers. Power still animates the city, but so increasingly does the pursuit of wealth.
Ulysese Jefferson was the kind of everyman only Washington could produce. He'd spent 30 years traveling the world fixing computers for the State Department. In 2002, he had a tidy pension, a split-level home in Laurel, Md., and about $5,000 in the bank. He was 64, a widower, and looking for something to keep him busy.
"I knew there was pressure to reduce the size of the federal workforce," he said. "But someone still had to do the work. Obviously, they were going to turn to contractors."
And who better to turn to than Jefferson? He knew the work and stayed in touch with dozens of State Department retirees. His goal was to win some State Department IT contracts and build a business that he could leave to his sons, both of whom were pretty good with computers. "I was never trying to make a fortune," he said.
Nearly 10 years later, Jefferson sold his company to the contracting giant ManTech for $90 million.
Jefferson's feat was accomplished during the post-9/11 period, when taxpayer money poured into the Washington area at rates that dwarfed any other time in the capital's history.
By 2010, the government was spending $80 billion a year on contracts here, much of it driven by the wars in Iraq and Afghanistan. "The culture changed," said Brett Lambert, the Pentagon's former head of industrial base policy. "It was spend, spend, spend."
It's hard to say exactly how many of Washington's households in the top 1 percent draw their incomes from the broad business of serving, supplying or influencing the government. But an analysis of tax data by the Economic Policy Institute shows that the area's 1-percenters are most likely to be lawyers and executives, or those who work in management consulting or IT. Nearly 1 in 10 of those households is headed by a government worker.
Jefferson was a small player in the federal contracting scrum. Every morning he would scan his contractor badge and head for the State Department cafeteria. His sons, who often joined him, thought of their dad as the quintessential State Department man. He was a fastidious dresser, but never flashy. He wore reading glasses perched on the tip of his nose. Over coffee, he caught up with old colleagues, sharing stories of Africa, Afghanistan, Pakistan and China. These conversations were where he picked up his best leads.
Because Jefferson was part of a special program for minority-owned small businesses, he could receive small contracts without going through the months-long competitive bidding process. By 2005 his company, which he named Worldwide Information Network Systems (WINS), had picked up several million dollars in contracts and had a couple of dozen employees.
What happened to me and my company was built on my relationships," he said.
Most of his employees were State Department retirees who worked at government desks. Companies like Jefferson's are known around the Beltway as "body shops" or, more derisively, as "butts-in-seats" businesses. Jefferson paid his employees about 30 to 40 percent more than they had made in the State Department.
The contract workers were supposed to be cheaper over the long run because they could be laid off when they were no longer needed. Instead, they often became permanent fixtures. Each year, Jefferson added more contracts with the State Department. He picked up work with the Justice and Commerce departments. By 2008 his company had about 120 employees and annual revenue of about $30 million. Jefferson took his workers on annual Potomac River boat cruises and paid for a formal Christmas party in a hotel ballroom where he passed out $500 Tiffany and Gucci gift certificates as prizes.
Jefferson's big breakthrough came at the Pentagon's Defense Intelligence Agency. Unlike the cash-strapped State Department, the DIA was awash in war spending. Jefferson now had access to the insular world of military intelligence. He immediately moved his son Mark into DIA headquarters to oversee the company's work there. Then, following a well-worn Washington path, he lured away one of the agency's division managers, paying him $235,000 a year, a big raise over his government paycheck.
"Now there was someone from their family inside our company," Jefferson said.
Since his firm lacked experience bidding for billion-dollar contracts, he hired an executive with a DIA background away from Booz Allen Hamilton. He paid her $256,000 a year.
In 2010, his company won a slot on a $6.6 billion DIA "contract vehicle," one of the new insider currencies of Washington's boom years. The vehicle was essentially a hunting license. Only the 11 winning firms would be allowed to bid for DIA computer work over the life of the five-year contract. Ten of the winning firms were based in the Washington area. The sole non-local winner, SAIC, was in the process of relocating its headquarters from the West Coast to Northern Virginia.
Immediately after his win, Jefferson began fielding calls from suitors for his company. He didn't want to sell. But he did wonder how much it was worth. He and his sons, David and Mark, met at an Irish pub near Bowie, Md., to discuss the offers and the future.
"If I could ever build a $25 million company, that would be the most wonderful thing," he told his sons.
David guessed it was already worth $25 million to $30 million. Mark said $50 million.
"Dad and I thought he was out to lunch," David said.
The company's revenue doubled to about $70 million in the first year after the DIA win. Jefferson now had more than 200 employees, and one big worry. His company no longer qualified for the small-business minority preference program and would have to compete with the world's largest defense companies — Lockheed Martin, Northrop Grumman and Booz Allen — for work. Wealthy private-equity investors were in the mix now, too. They enticed former generals, admirals and Cabinet secretaries to join their companies' advisory boards. Some of these firms' boards packed more brass than the Joint Chiefs of Staff. How much star power would Jefferson need to compete?
"I would consider selling if I got an offer of $75 million," he told his sons. He reluctantly agreed to shop the business.
The sale to ManTech was finalized in late 2011. Jefferson's closest friends said he seemed more sad than elated.
How do you turn something like that down?" John Cabral, a friend and State Department employee, recalled telling him. "It is just too much money."
Jefferson set aside about $1.5 million for bonuses that he paid to two dozen of his top employees. He bought houses for his five children (only two worked full time with the company) and established trusts for his 12 grandchildren. He gave tens of thousands of dollars to his church.
This fall he made one more purchase: a 24-seat skybox at FedEx Field. On a fall Sunday, there he is, an ordinary Washingtonian, borne by a wave of government spending to one of the city's exclusive symbols of success.
The federal government wasn't the only one pouring buckets of new money into Washington in the 2000s. Big business did it, too.
At a time when promising investments were hard to find, corporate America learned that lobbying was one of the most surefire ways of bolstering its bottom line.
Consider Boston Scientific, a powerhouse in the medical manufacturing industry. It develops medical devices, including cutting-edge heart stents, tubes that keep blood flowing through clogged or weak arteries. It discovered all sorts of new ways to boost profit margins by shaping federal policy.
Back in 2000, the company spent a mere $260,000 lobbying Congress, federal records show. Its lobbyists mostly talked to lawmakers about health care: medical manufacturing issues, Medicare reimbursement rates, privacy of health records, and congressional oversight of the Food and Drug Administration.
By the end of the decade, the company had broadened its horizons dramatically. "Government relations" now accounted for $2.6 million — a tenfold increase. On one quarterly disclosure report from 2010, Boston Scientific listed 35 different pieces of legislation on which it was lobbying. They included proposals on patent reform, tax penalties for moving American jobs abroad, tax credits for research and development, rules for transporting lithium batteries, limits on workers' ability to form labor unions and federal regulation of certain types of financial derivatives.
Brenda Becker understood that those bills could all mean millions of dollars for the company.
Before Boston Scientific tapped her as senior vice president of its government relations division in 2007, Becker had spent a lifetime around government: daughter of a former Michigan legislator, she'd started lobbying in her home state after college and quickly moved to Washington, where she spent 20 years advocating for Blue Cross Blue Shield.
She briefly worked in the George W. Bush administration, but her heart was in government relations: "I can't imagine I would do anything else," she said. "When I came on board, the thought was, let's bring in someone who knows Washington, who understands Washington, who has a government affairs background . . . from a Boston Scientific standpoint, it's an understanding that government has a hand in everything we do."
One of Becker's first initiatives was to explain to company executives how much money lobbying was saving them. She built spreadsheets and presentations for her bosses, attaching dollar figures. That battery-transportation rule, for example? It would have forced Boston Scientific's sales staff to become certified in handling hazardous materials. By helping to kill it, her team saved the company between $50 million and $75 million, Becker said.
Government relations has become so important to the bottom line of a modern company, Becker said, that it should be a required course at business school. The numbers suggest she's right. Companies spent about $3.5 billion annually on lobbying at the end of the last decade, a nearly 90 percent increase from 1999 after adjusting for inflation, political scientist Lee Drutman notes in a forthcoming book, "The Business of America Is Lobbying."
Why the dramatic leap? Most big companies long shied away from lobbying outside a narrow band of issues. That started to change in the mid-1990s. Under a pro-business Congress, which invited their participation in policy debates, industry groups won big victories such as permanent normal trade relations with China and the deregulation of telecommunications, Drutman said. Corporate executives saw how those victories made them money, and they shed their inhibitions about playing in the world of government.
"A growing number of companies," Drutman said, "became fully convinced that having a large-scale Washington presence was a good strategic decision." Pages in the Washington lobbying directory have quadrupled since 1981, he said.
Legal services also boomed, fueled by the growing complexities of federal business regulations. The number of lawyers in the D.C. metro area increased by a third from 2000 to 2012, nearly twice as fast as the growth rate nationwide. And those lawyers have the highest mean salaries in the country, according to George Mason University's Center for Regional Analysis.
The more companies spend on influence, the lower their effective tax rates and the higher their stock returns compared with competitors', according to recent research. A company called Strategas has built an index to track the stock performance of the 50 companies that lobby the most; last year, that index outperformed the rest of the market by 30 percent...
http://www.stltoday.com/news/national/govt-and-politics/d-c-awash-in-con...
If I said "Nuke it from orbit", would I be taken away?
Hypothetically, I may or may not know someone who was potentially considering leaving a remarkably similar comment.
Accoding to my hubby, one can STFATH on a cost averaging basis and also make a bundle. As a matter of fact there is more to gain downside when the unraveling comes. $10k on long dated puts way out of the money, can fetch you 1,000% that will make you $10 cool million.
I gave him the green light. God bless
sure, why not - he's a value investor lol!
Ha ha, like the government cares about 'the taxpayer', ha ha ha, good one. As long as 'the taxpayer' doesn't catch on to any really egregious theft, anything obvious and undeniable enough, and easy enough to understand that ANYBODY can see it, then who fucking cares about 'the taxpayer'.
And the government doesn't endure any pain - individual members endure the occasional embarrassment and public humiliation, but they're all sociopaths so it doesn't really register for them anyway - just another little bump in the road to lie their way over.
Please, with more the 50% of the population now dependent on some form of government largesse (be it SNAP or a MIC contract), there is no "taxpayer".
hedge accordingly.
Um... there ARE taxpayers. Ask me how I know.
I keep trying to rearrange the letters of my name to spell "s_u_c_k_e_r"; can't get it yet, but I'm sure it's in there...
doubletap
If the USA can print it's own currency, why does it need a 'taxpayer' at all?
Unless it's really about slavery....
I don't know whether to laugh or cry.
Hey look, my equity portfolio is up, and silver is on sale again!
Have the puppets in D.C. figured out a budget and how to fund it yet? Gee I wonder what I should do?
/s
The whole damn country is insolvent.
Kind of like the USSA?
And they have their debt collecting servicer, who don't own the note, foreclose on all the houses they can !!!!!
Join the criminals and get rich.
Or - play by the rules, be honest, and get screwed.
Your choice.
Those getting hosed don't look happy at all, but they're a much better class of people. Mamma always said it was important who I hung around with.
I read somewhere this weekend that there are only 3,700 companies operating in the Wilshire 5,000, is that right?
More and more Fed dollars chasing fewer and fewer stocks. We're fucked.
No, there's more than 5000 now. About 6600-6700 if I recall correctly. They're the easist index to get included into. Only qualifications (that I'm aware of):
1. The companies are headquartered in the United States.
2. The stocks are actively traded on an American stock exchange.
3. The stocks have pricing information that is widely available to the public.
I just ordered my BTC $700 hat...
Gold itching to retest $1250. A sudden plunge to sub $1100 is a possibility now with a rebound back up to $1300 shortly thereafter. FNMA in reverse.
I don't think Gold is itching to retest $1250. Manipulating FED thieves want to force paper gold down whilst the East buy up as much physical as possible from these retards
+1
They have been jawboning for $1050 gold for a couple months now, to make it seem natural when they pull the next epic drive-by.
We'll see (probably this week) some sort of coordinated assault.
This really is WAR.
Well somebody is making it itch. Whether its JPM, the Fed, the Chinese or the Winkelvoss twins. Another big leg down to $1276 into the Euro close.
I sense no fear in the market. Shouldn't be long now.
Time to sell TBT and buy puts in TD.TO
It would look pretty bad if they were cratering.
But CNN said the stock market was a reminder how good the economy is - no, how good a year it was for Americans. That's the truth, right?
Truth is?
Here's another one, ICLD.
The stock was trading at 2.26 on 11/14 and came out with "great" earnings. The next day it was trading in a range of $4.50-9.80. Today it is trading $14.80 so that's a 3 day return of over 600%.
Last Thursday it traded 70,000 shares, on Friday 12million. Today it's traded 6.7 million shares so far. And the float on this is 3.86 million shares.
And if you check out the historical prices, you can see that this had a 1:4 split Aug 1, 2013 and a 1:125 split on Jan 14, 2013.
http://finance.yahoo.com/q/hp?s=ICLD+Historical+Prices
Unbelievable.
Yeah Cloud!
With 2 reverse splits in the last 12 months, one of which was a 1 for 125! Nice.
Someone's boiler room operation is making a killing on this one.
The idiocy continues...
Why not pile in. The Government won't permit them to collapse. It's all or nothing to keep the ship afloat, and that means they'll print/buy/shoreup the only remaining mortgage holder.
“Either you’re going to make a lot of money or you’re going to lose everything you put into it."
Which is why I bought the FNMFN pfd under $2 -- now $14. It was a long term high risk call option. The attention here focused on the FNM trade suggests the move is largely over.
Does it matter if these "investors" are betting with their own money or some retired school teacher's? It must be great to be able to use other people's assets to ramp any given stock so as to push your own portfolio and then make sure you are the first one out.
Perfect stock for THE GANG to use...a stock The Public and anyone in their right mind would never Buy. So The GANG can run it up, kinda like money laundering or a way to stuff those pockets full of CASH while looking "Legit" ... if The Public ever did move in across a certain Level, then The Gang would SHORT it to a dollar
Any other business run with that set of assets and business model would be in jail or enroute to chap 7. I can't belive they still issue debt. or buy mortages. With what for crying out loud! (retorical question, I know it's taxpayer $$$$)
Time for me to display my ignorance again, lemme try guessing:
1. It will keep going up until pension funds own the lot and then it will crash.
or
2. It will keep going up but one day hyperinflation will turn the paper gains into real losses.
Am I getting warm?