Good Bye and Thanks

I’ve decided to cease printing daily reviews of the stock market and economic events.  Thanks for reading.

Top of the Morn to Ya…

Happy St. Paddy’s Day!  Let’s hope for a little luck of the Irish to motivate our markets to better performance. 

Yesterday the markets gave back a triple digit gain as the close approached.  This is not a sign of strengthening of the markets.  It seems to indicate we are approaching an overbought period shortly after coming out of an over sold period.  What is unusual is the short time period entertained within each period.  Historically these are longer and not so aggressive.

AIG – just saying or hearing these 3 letters brings out pure unadulterated rage.  What a terrible example one company set’s misusing of government relief.  President Obama asked Treasury Secretary Geithner to intercede and block the payment of these bonuses.  This will be interesting drama to watch as it unfolds.  Funny how AIG hasn’t been required to consider restructuring their efforts.  The auto makers and airlines certainly did when required and look how much better the airlines are doing.  Can’t say so much for the automakers.

Bernanke said he now sees a bottom for banks, which means no more failures.  The markets have responded to this news.  Let’s see if the optimism remains.

I’m not a reader of tea leaves but I have a bad feeling for the markets in the days ahead.

The Genius of GM…

Last week was a great week for the markets.  The first up week we’ve witnessed this year.  Phone calls are flooding my office asking is this the time to get back in.  My reply, not yet.  Let’s wait this out a little longer.  Remember, core problems that created this mess we call our present economy haven’t been addressed.  Bernanke stated over the weekend that until the financial institutions are strengthened, then the recovery will not take place.

AIG is back in the news.  I’m certain that’s of no surprise to most readers.  Turns out AIG has used the taxpayer money provided to pay large bonuses to its key employees.  This is outrageous!  We are setting a precedent that rewards corporations for bad behavior.  The old response that the bonuses were needed to keep these key employees is stale.  These employees have failed to perform and need to be replaced.  Paying them any type of bonus, especially funded by taxpayer dollars is downright criminal.

GM is also in the news again.  Their solution to poor car sales is to develop a new muscle car; GM proudly unveiled the new Camero.  This seems like a great response to the problems associated with GM.  Role out a revamped 80’s muscle car known best for gulping gasoline and transporting drugged out teenagers around town at high rates of speed. (Ignore the obvious pun)  It’s no wonder this company is failing badly. 

Lending is still not occurring anywhere near the levels needed to see hope for recovery.

Today presents a positive opportunity for a strong open.  Be warned, this is not the time to jump back in blindly.  Doing so will lead to regret in the days ahead.  Watch.

March Madness is nearly here.  Three teams from upstate New York will represent the region proudly.  Go ‘Cuse. 

How We Got Here…

 

This video by Keith Olbermann does an excellent job of detailing how the financial crisis evolved into what we know it as today.

Bye Bye Bernie

Justice may begin to unfold for Bernie Madoff today.  Unfortunately, it seems little if any resolution to the thousands of investors who lost millions and millions of dollars under his watch. 

Watch for uncertainty in the market today.  News of possible reversal of mark to market accounting which partially led to the confusion in the markets is in the mix.  If any announcements come out, watch to see the market participate in the news with positive excitement.

Another huge takeover in the Pharmaceutical sector.  Roach plans to take over Genentech with a 47 billion dollar takeover.  Seems this sector continues to strengthen.

Investors should continue to be wary of jumping back into the markets.  While this week has shown promise and optimism, this economy is anything but healthy.

The Treasury continues to ponder the best means of injecting liquidity into the markets.  I appreciate that we are in uncharted waters, but for goodness sake, do something.

6500 may have been a  bottom for the market, at least for now.

Another Ray of Sunshine

What a great day we had yesterday.  If only we could have 50 more just like it.  Today will give more positive results to investors but not to the same advanced level as yesterday.  The rally yesterday seemed to stem from the discussion surrounding the Uptick rule on shorting stocks.  Barney Frank was in conversation with Mary Shapiro from FINRA about bringing this piece of regulation back into play.  What this does is remove the feeding frenzy surrounding companies whose price begins to falter.  The Uptick rule slows down the decline and hopefully gives companies a chance to regain their footing. 

Investors beware!  The good day yesterday and the positive one today do not reflect the actuality of our economy.  These were just plus days not indications the good times are ahead.  Remember, there still is much bad stuff out there that hasn’t been resolved. 

It was reported yesterday that hedge funds would begin laying off many people.  Look for thousands of jobs to be lost in the days ahead.  The days of wine and roses for hedge funds seem to be over for now.

Watch for BAC, GE, and GM.  Pay attention to how these companies handle the turmoil ahead.  As these companies strengthen so should our markets.  Following these may give a snapshot of the days before us.

On a personal note, my daughter was informed she received a full scholarship for college next year.  Hard work does pay off.  Good job my love.

Encouragement…

Can you believe it?  A day filled with optimism and hope for the markets.  The early indications mark a strong opening and possibly a continued rally throughout the day.  Today will be a great day to take partial losing positions off the table.  Don’t get all crazy and start buying blindly based on today’s enthusiasm.  Let a longer, detailed trend clearly develop before jumping in with both feet.

Bernanke’s speech today details plans to aggressively foster big banks.  Regulations will tighten and further destruction of banking entities should diminish.  He said the Fed will make sure banks have enough capital to actively function and not wither away.  With this news in mind look for banks to re-vitalize on this information.  Bernanke plans to address directly the institutions that are too big to fail and impose greater regulation on these entities.

A great quote I heard today that we should all keep in mind when looking at the efforts of this administration to solve the financial crisis they inherited.  “When you are up to your neck in alligators, it’s hard to remember your original job was to drain the pond.”

 

Monday Redux…

Today’s posting is late due to an extended stay in the repair shop for my car. Turns out the extended warranty that we purchased served only the purpose of making the car dealer more profit. Turns out the warranty covers nothing we were told. It’s hard to have too much sympathy for the car companies with stories like these. The Treasury announced today a new plan would be unveiled in a couple of weeks. Couple of weeks? Are you stinkin’ kiddin’ me? Give us something! Merger news…Merck declared the takeover of rival Schering Plough today. This mammoth enjoining should have moved the market in a favorable manner. No such luck. Further evidence of the malaise found in this current market. What we are watching unfold in a giant revealing of karma. Today’s markets are suffering from the uncontrolled exuberance found in the 80’s and 90’s. Talking heads are looking for the new resistance levels to come in around 6200. This means more freefall for stocks in the days ahead. Watch GM, GE, and BAC. AS these companies continue to decline in value the markets should mimic. If a sudden strengthening should occur look for the markets to rally around this. Until then plan on extended periods of wallowing.

Foul Friday…

 

Yesterday was a difficult day to watch unfold.  The losses started early and got progressively worse as the day developed.  Panic is a word people are trying to avoid using but the reality is, the prospect of hope diminishes each and every day in our markets. 

Watch the markets erode as the news of the jobs report are announced.

China announced they would hold off buying more debt in the US markets.  They are starting to see this as a bad investment for the future.  This doesn’t bode well in the immediate days.

The jobs report will come out today.  The report is expected to show numbers of unemployment at level equal to the late 1940’s.  Again, without jobs recovery just won’t happen.

The expected GDP for the 1^st quarter is predicted to be just as poor as the 4^th quarter. 

It’s reported that 11% of homeowners are in trouble with their mortgages.  What this number doesn’t show is, are these second homes or mortgages taken under false pretenses?  Those two factors do matter.

I came across this video this morning.  It is both incredibly revealing and excessively sad.

 

 

 

 

 

Thursday Thumping…

Yesterday was actually a fun day to witness.  Unfortunately, the brief rally was nothing more than a sucker’s rally.  These head fakes are historically known for teasing investors back into the markets only to have their investments smashed.  Today is not different.  The markets have taken a drastically lower tone and little promise of improvement awaits.

If corporate America keep its stats like a baseball player, out leaders of commerce would be sent down to the lower farm leagues.  But not in our system.  Instead of forcing these captains of industry to improve themselves, these players asked the pitcher to start throwing underhanded.

The only opportunity this markets presents are very short trading windows.  Do not buy a position with the hopes of holding it long term.  You may regret this decision.

Don’t look for anything to impressive going into the weekend.  Traders are tired and worn out and only want to get away from the constant dredging faced everyday.

As the next rally approaches, if you have any questionable positions it may be the time to jump ship.  This boats going down.