THE DOT - if this turns orange or red be alert

Tuesday, April 20, 2010

Brainstorming Tuesday - part 1

1. Sometimes its hard to listen to this propaganda chanel Bloomberg which obviously works for Wallstreet besides CNBC - someone should give them a briefing that journalists should have some dignity. I do not know how analysts who deserve to be paid can come up with such earnings estimates for Goldman and its not a surprise that Goldman could beat them easily. After all Lehman is gone and Bear Stearns is part of JP Morgan making those 2 the leaders with different bias and the FED produces a free ride to Goldman and the others as well ( but Goldman gets special treatment) who has a full bank lending advantage but does not deal with Mainstreet at all which gives them a head start of 100 BP over there Broker dealer status plus the artificially low FED rates adds another 100-150 BP. This alone as I laid out in former posts on a 1 tril. balance cheat gives you a yearly profit of 10 bil per 100 BP so rather 20 bil for most banks which they use to write off their loss bearing balance cheats. That is free money which Mainstreet have to pay for as they get close to nothing for their savings which is a negative interest rate as inflation is rather around 4%. Goldman has barely any write offs left and makes tons of free money in the yield curve sponsored by the FED - this again is a transfer of money ( robbery). Its not the trading floors with all the talent who make the money as they claim all the time. Plus Goldman has special leverage granted by the FED to take bigger risk free bets.

excerpt

Goldman Profit, Revenue Top Forecasts

Goldman Sachs blew past consensus forecasts on the top line and bottom line in the first quarter, bank said Tuesday.

Goldman Sachs

The company reported earnings per share of $5.59 in the period, compared with estimates of $4.01. Revenue was $12.78 billion, versus estimates of $11.07 billion by analysts polled by ThomsonReuters.

Goldman Sachs [GS 163.32 2.62 (+1.63%) ] profit was well ahead of the $3.39 per share reported in the first quarter of last year.


2. Alarming level at the RYDEX sentiment index - has reached crash level confirming top.

ate NAV Adjusted N/U Ratio
4/16/2010 1.174
4/15/2010 0.856
4/14/2010 0.845
4/13/2010 0.837
4/12/2010 0.926
4/9/2010 0.945
4/8/2010 0.937
4/7/2010 0.950
4/6/2010 0.914
4/5/2010 0.871

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