THE DOT - if this turns orange or red be alert

Wednesday, October 27, 2010

SPX update

As expected we tested the 200 week MA and turned south. The top is about to be finished within a week with the SPX being rather the underperformer. Over the weekend when Mars enters Sagitarius we might have a little spike testing that resistance once again as the NDX will push a bit higher but the triangle target was the 2125 area which we have reached and we are entering week 9 counts and NDX wil even make a 13 monthly and weekly count next week which is a very strong mark for a turn. My expectations was that the market would rally til elections but I expected a correction in betweeen which never really occured. Well that makes the market more vulnerable now as we have left all bearish sentiments behind and have entered bullish sentiment but not at exyteme level yet. as with elections we also get the QE2 announcement early Nov. we can expect a mini spike in the first week. Hence for now 1165-70 may stay as support in the first test followed by another test of the 1190-1200 level but right thereafter 2nd week Nov. a steeper correction should start to at least 1100-20.

Friday, October 22, 2010

part 2

1. When goldman advice is to jump on the bandwagon the end is near - though they do tell the truth bernie boy and his entourage from different banks and hedge funds are exactly playing that game - if someone like goldman asks you to join its getting dangerous.

Goldman Advises Clients To Front Run The Fed Via POMO

Tyler Durden's picture




After a few months of breaking down what the simplest trade in the world is, that would be frontrunning the Fed for the cheap seats, Zero Hedge is happy to advise our readers that finally Goldman Sachs itself has capitulated and is now indirectly telling its clients to frontrun Ben Bernanke via POMO. No complicated value investor nonsense, no pair trades, no cap structure arbitrage, no hedging, no levered beta plays. Buy ahead of POMO. Sell. Rinse. Repeat.

From a GS distribution to clients:

On the interplay between the FED and STOCKS: Since Sept 1 – when QE was becoming a mainstream focus – if you only owned S&P on days when the Fed conducted Open Market Operations (in US Treasuries), your cumulative return is over 11%. in addition, 6 of the 7 times when S&P rallied 1% or more, OMO was conducted that day. this compares to a YTD return of 5.8%. the point: you would have outperformed the market 2x by being long on just the 16 days when – this is the important part – you knew in advance that OMO was to be conducted. The market's performance on the 19 non-OMO days: +70bps.

And there you have it - the top in frontrunning the Federal Reserve is now in.

The most recent Fed POMO calendar is linked (there is one tomorrow). Frontrun away.

Oh, and Ben, your criminal organization will one day pay for making a complete manipulated travesty out of capital markets.

2. Well another observation from goldman but always be very careful when the devil gives you stock tips at the low they came up with another bearish scenario but this time I rather do agree. the above observation rather contradicts this one.

excerpt

Goldman Sachs: At 7% Above The 55-DMA, The Market Has Been More Overstretched Just Once In History, And Other Mispricings





John Noyce, Goldman's arguably best technician, in his weekly Charts that Matter, has released one (among many) interesting observation on just how overbought the market currently is, and more specifically just how desperate the velocity of the pick up in the stocks since August has been, in order for levered beta players such as hedge funds, as we predicted in the end of August, to make up as much of their year as possible before seeing redemptions (even so many will not survive into 2010 as the entire 2/20 model is now crumbling). Specifically, by looking at where the S&P is relative to its 55 DMA, Noyce notes that every time the market has gotten to above 5% its trailing average, it has always entered a period of consolidation (read at least modest selling). Furthermore, compared to the recent trend extreme of 7% above 55 DMA, the market moved meaningfully above one just one occasion in the past: in January 2009... just before the crash to the decade lows of 666 on the S&P occurred.

brainstorming friday

1. We are in the final stage of this bull campaign scam as we also have reached quite bullish sentiment but they will keep it up basically til election. As a matter of fact the next day of elections is the most likely day the FED will officially announce QE 2 and some morons may jump on it but that will reverse very quickly as sell the fact is the smart thing to do. The next big event after elections will be the tax situation as the top gear bracket having won the congress will push hard to get it extended as well but it will be a matter of civil unrest going forward after DC helped to rob America by banksters and other oligarchs.As Obama let that slip as well because that will end any chance of DEMS keeping a chance for the next elections but may be the demand by his puppet-masters. The technical picture is quite topish now but they still can bring it towards the 1220 level once again as they manufactured the golden crosses to cry buy after the death crosses showed up right at the low I rather think the golden ones might not do the tr ickthis time around as well other than to trick us. After this rally happened over 8 weeks with any correction we have pretty much seen the same manipulators run the same con like the rally from Feb10 to April with exactly the same magnitude.

2. Here some thoughts from urban survival expressing fully some points I made in earlier posts.

http://urbansurvival.com/week.htm


Carrier Counts

Over the past months, I've gotten several calls from my consigliore, who keeps a running tab on how many SEAL teams are deployed on subs, then the number of landing craft ships, and the number of carriers out. He then cranks in the number of KC-135's that are away on missions from his homesteads in his part of the Midwest, and then he sets the odds on whether Israel is about to pop Iran.

All of that sounds complicated (he is a lawyer, right?) so while I've been on the road I've been watching for stories that will give me good insight. Sure enough, the Debka site has an article this morning announcing that the "US deploys second carrier in Persian Gulf with 60 warplanes".

Related: The report that 12-people were killed at an Iranian arms warehouse and a report that China may be breaking UN sanctions on Iran.

So when this whole thing goes off in powder-keg fashion, maybe it won't just be Russia that's ticked and making demands; could toss in China, too. All of which would set up a find case for World War Three/Four, which in turn would explain Clif's data gap, and that in turn...

That Hijacked Tea Party

A month or two back I was deluged with hate-mail by people who have been led astray by the corporate-hijacked Tea Party who didn't appreciate my pointing out that corporate money was flowing like water into Tea Party candidates who were systematically being 'bought' and their positions co-opted by the rabid right.

Well, lookie here: Dylan Rattigan on MSNBC this week had one of the original founders of the Tea Party - Karl Denninger on - and he's now saying : "To the Tea Party: Go Screw Yourself."

The old Tea Party - the one folks like Denninger founded - was real. They 'got it' that corporations now own government...but something happened along the way. In came the corporate money, the message turned, and suddenly the core issues: foreclosure gate, audit the fed, and so forth disappeared into the corpmedia noise..

So write this down somewhere: If you think that the Tea Party wins in the upcoming election are going to change anything? Guess again.

Long Live the Checkbook Republic! He who pays the politicians, calls the tune!

Tuesday, October 19, 2010

brainstorming tuesday

1. the market turned for now as expected after reaching the NDX 2100 target. SPX made finally the 13 yesterday at the high and we are in for a 5-7percent retreat SPX will find good support in the 1115-20 area.
- euro has made an interim top as well and has a 1.3450 target short term before going up again towards the 1.44-5 resistance thereafter

2. things do not look good at all but market is driven purely by insane FED put strategy as hedgefunds had a great september riding along they are now caught in the act

Moody's Commercial Property Price Index Drops 3.3% In August, At Lowest Level Since 2002

3. DC and the whole country is so rotten that even Shakespeare might have a hard time putting it into his Denmark story

excerpt

Here...Buy a Vote

We continue to hold onto the notion that elections should be on eBay, since there at least we can see who the high bidders are. Or, alternatively, if OpenSecrets.Org had a real-time ticker, that would be dandy, too. But, absent all that, all we can do is point at the democorps who are talking up the idea of a one-time payment of $250 to Social Security recipients in the lame duck (or, I guess here, more properly lame-ass) session of congrease which comes along when the votes are in. Supposedly...

The simplicity of American politics is this (a handy reference for you):

  • People don't own corporations. Corporations own people.

  • Corporations also own government. Example: There are five financial lobbyists for each member of congrease.

  • Democorps and Republicorps get money from the same corporate interests.

  • The Tea Party is a grand idea, but check where the money comes from, yeah?

The reason there are so few jobs in America is it has been more profitable to have our shit made overseas in sweat shops and set up telecom operations to handle customer service from Mumbai.

If you can find a candidate for national office who can honestly wear the "100% corporate-free" badge, let me know. I'd like to send 'em a buck or two.

Monday, October 18, 2010

brainstorming monday

When you think this mortgage mess can not get any uglier it turns out that banksters are the lowest of all con artists in their ethical standards and can still put it into a higher gear. Actually one has to start with DC and put all in jail as they shamelessly cover them up and the bank CEOs need a full Guantanamo treat to get out the ugly truth of their financial terrorism. Homeland security is going after the wrong guys and Obama who they call not business friendly - which is one of their little pschco reverse propaganda scams - covers up this gangsters all along and even takes care that their bonus pools get more taxpayer injections so they can have another record party after they robbed the whole nation,world twice.
The fact the ANGELO MOZILO got away with a 67 mio fine by the SEC after being one of the core gangsters in this mortgage fraud. We can be confident that the SEC will use the money wisely and invest in faster broadband connections hence the directors can download their porn faster and be sooner back home. Martin Armstrong sits in prison because he refused to sell his computer system to the NSA for 10 years now about 5 of them without any trial. FULD, MOZILO, GREENSPAN,PAULSON just to name a few will never be in court or jail.

excerpt 1

Are ALL Mortgage Backed Securities a Scam?

George Washington's picture




Washington’s Blog

Pensions and other large investors may sue the banks which sold them mortgage backed securities (mbs)based upon fraudulent misrepresentation.l

Indeed, as William D. Cohen and Felix Salmon point out in must-read stories, the big banks hired a company called Clayton Holdings to sample the quality of mortgages being purchased.

Clayton found very high percentages of mortgages which did not meet minimal underwriting standards.

However, instead of disclosing to the investors purchasing mbs that many of the mortgages were bad - or even that there were samples and statistical analyzes performed by Clayton and the banks - the banks simply kept it to themselves, and used that inside information about poor mortgage quality to negotiate a discount of the price that the banks paid when purchasing the loan portfolios from the folks who originated the loans.

This is like buying a used car, but having a mechanic look it over first. Once the mechanic discovered a cracked engine block, the buyer negotiates the purchase price way down, but then turns around and sells the car for a higher price without ever disclosing that there was a cracked engine block or even that a mechanic had looked it over.

Indeed, its worse ... at least with the car, there is something physical to inspect. But because many of the underlying mortgage documents have gone missing, there is nothing for the mbs buyer to investigate even if he wanted to. For example, as I've previously noted, MERS - the holder of 60% of all U.S. residential mortgages (and many commercial mortgages) - is a shell company, and many mortgage documents were forged.

But a financial insider claims that the entire mbs sausage-making process is a scam (via David Kotok - chief investment officer of Cumberland Advisors - and investment adviser John Maudlin):

"The whole purpose of MBSs was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with correspondingly higher rates of return.

"Therefore, as everyone knows, the loans were 'bundled' into REMICs (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then "sliced & diced"...split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.

"This slicing and dicing created 'senior tranches,' where the loans would likely be paid in full, if the past history of mortgage loan statistics was to be believed. And it also created 'junior tranches,' where the loans might well default, again according to past history and statistics. (A whole range of tranches was created, of course, but for the purposes of this discussion we can ignore all those countless other variations.)

"These various tranches were sold to different investors, according to their risk appetite. That's why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds.

"But here's the key issue: When an MBS was first created, all the mortgages were pristine...none had defaulted yet, because they were all brand-new loans. Statistically, some would default and some others would be paid back in full...but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads...but what will the result be of, say, the 723rd toss? No one knows.

"Same with mortgages.

"So in fact, it wasn't that the riskier loans were in junior tranches and the safer ones were in senior tranches: rather, all the loans were in the REMIC, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder last.

"But who were the owners of the junior-tranche bond and the senior-tranche bonds? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn't be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.

"Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier tranche?

"Enter stage right the famed MERS...the Mortgage Electronic Registration System.

"MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two again ...I know, I know: like the chlamydia and the gonorrhea of the financial world...you cure 'em, but they just keep coming back).

"The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially where the digitized mortgage notes were sliced and diced and rearranged so as to create the mortgage-backed securities. Think of MERS as Dr. Frankenstein's operating table, where the beast got put together.

"However, legally...and this is the important part...MERS didn't hold any mortgage notes: the true owner of the mortgage notes should have been the REMICs.

"But the REMICs didn't own the notes either, because of a fluke of the ratings agencies: the REMICs had to be "bankruptcy remote," in order to get the precious ratings needed to peddle mortgage-backed Securities to institutional investors.

In other words, the author is saying that mbs buyers thought that they were buying specific tranches tied to real mortgages, but they were just getting a statistical cut of wispy, non-corporeal representations of information related to the entire universe of mortgages floating around in the digitized MERS ether.

So are all mortgage backed securities a scam?

Janet Tavakoli created the following chart in 2007 which might provide a hint:

https://mail.google.com/mail/?ui=2&ik=ac0145633e&view=att&th=12bb704862d9e298&attid=0.1&disp=inline&zw

See also this and this.


excerpt 2

Have You Looked at Angelo Mozilo's Facebook Page lately?

williambanzai7's picture




I don't mean to sound cynical (which I am), but has anyone in the mainstream media bothered to ask: why did the SEC decide to settle with Mozilo this week? After all, the fraudclosure scandal has turned into the mother of all subprime political heartburn episodes and the O Team must be desperate to show how it is Johnny on the spot. Election day is just two weeks away folks.

If you want my opinion, a $67.5 million settlement is really chump change when you consider all the hardship this guy can call his very own personal handy work. I don't want chump change, I want a trial!!

How can we restore confidence in our capital markets when the regulators are perpetuating the calculus of fraud (T-F=ME Where: T=The Full Take F=Settlement Fines ME=My End)?

And what important purpose prevented them from settling with Martha Stewart?

Just asking...

[Update: A reader correctly points out the piece de resistance, "most of Mr. Mozilo's financial obligations likely will be paid by Countrywide's current owner, Bank of America Corp., as part of indemnification agreements it has with former officers. Countrywide was sold to BofA as it was collapsing in 2008" (source WSJ)].

View: Full Screen Link

FB

Friday, October 15, 2010

brainstorming friday

1. Fraudclosure is not only a big mess but also has killed any chances of the Obama bankster puppets to keep the power in the congress. This event can not be blamed on the Bush admin. as it happened entirely on the watch of the current Obama admin who is hiding as one of the biggest thefts in American history keeps marching with the help of his stuff.
The banks who were bailed out - still are - by the people have found a new way to screw the people once again for 10s of billions and the congress had even quitely passed a law to make it easier which Obama vetoed last minute as they were caught in the act.

excerpt 1

Meet Danielle And Jim Plus 9 Part 2 - This Time Squatting On The Ratigan Show

Tyler Durden's picture




Today's media sensation (and future leaders of some symbolic resistance) - the Earls, who after falling behind on their $880,000 loan, inspired by recent events, decided to take matters into their own hands (and the hands of their 9 children) and broke back into their foreclosed house. The police in local Simi Valley, made famous previously by such cult deadbeat classics as the Big Lebowsky, were so stumped by this they had no idea what the hell is going on so they just watched... Which seems to also be the general response of most of America. Today, the Earls appeared on the Ratigan show to present their side of the story. Gotta love the lawyer who cuts to the chase when he says that the banks aren't really owed the $880K noted above, "they are owed zero." Next up: everyone in America who has debt (and that would mean about 300 million people) decides to follow this advice, and "realizes" they don't actually owe any money to the bank. Problem solved.

So without further ado:

Visit msnbc.com for breaking news, world news, and news about the economy

4.70588

2. Yesterdays price action was in the right direction but got disrupted by the Google earnings and some PPT and or insider buying at the close due to the pending Google results. We also missed the last links closure as the SPX missed to make the 13 count on the combo clock but made it on the sequential count. still we need one at or above close of 1178 SPX to be done. That will even happen today or with another sure mind blowing earnings event of Apple on the 18th as both companies are profiting from a new generation of mobile devices smartphones and tablets. In belows statistics the Ipad is not part of the numbers although it should be since it sells at a speed of 2 mio units per month or 6 mio per quarter which will make a big difference to the overall market share of Apple.

excerpt

Apple's share of U.S. PC market cracks the 10% barrier
Apple's share of the U.S. personal computer market grew more than 13% to reach a modern day high of 10.4% for the third quarter of 2010, leaving it just 17,000 units shy of becoming the nation's third largest PC vendor. [Updated with IDC data]

Gartner

Preliminary statistics released just minutes ago by market research firm Gartner have Apple selling what appears to be a quarterly record 1,831,664 Macs in the United States alone for the three-month period ending September. That's up sharply from the 1,611,000 units the company shipped domestically during the same period last year, which netted it a 9.3% share of the market.

Overall, Apple ranked fourth on the firm's list of top U.S. PC vendors, falling just 17,000 units shy of Acer, which saw shipments decline 21 percent to 1,848,511 units. Still, those sales were just enough to allow the maker of budget netbooks to cling to its third place ranking. Apple's iPad sales are not factored into Gartner's totals.

"Apple had another strong quarter," said Mikako Kitagawa, principal analyst at Gartner. "Increasing traffic to Apple, associated with the iPad release, as well as iMac and Mac Pro refreshes, contributed to the growth."

Mac marketshare
Preliminary U.S. PC Vendor Unit Shipment Estimates for 3Q10 (Thousands of Units) | Source: Gartner


Topping the list of US PC makers was HP, which saw sales rise 2% to nearly 4.5 million systems. HP is followed closely by Dell, whose sales slipped some 5.8 percent to 4.1 million units. Toshiba rounded out the top 5, boosting shipments by over 20% to 1.69 million units.

In the global market, HP remained in the top worldwide position but it experienced a slight decline in shipments in the quarter to 15.43 million units. Acer similarly saw slight declines in unit shipments but its 11.52 million shipments worldwide were enough to keep it ahead of third place Dell, which grew sales more than 9% to 10.81 million units.

Lenovo, Asus and Toshiba rounded out the top 6. Given that Apple is estimated to have shipped less than Toshiba's 4.695 million units worldwide, Gartner did not provide its standing in the list of top global PC vendors.

Mac marketshare
Preliminary Worldwide. PC Vendor Unit Shipment Estimates for 3Q10 (Thousands of Units) | Source: Gartner


Overall, Gartner said worldwide PC shipments surpassed 88.3 million units in the third quarter, a 7.6 percent increase from the third quarter of 2009. The results were below the firm's earlier market outlook, however, which had predicted third quarter PC shipments to grow 12.7 percent.

"The major growth inhibitor in the third quarter of 2010 was softness in consumer PC demand in the U.S. and Western Europe," said Kitagawa. "The third quarter historically is a strong consumer quarter, led by back-to-school sales. Consumer mobile PC demand, driven by low-priced notebooks, including mini-notebooks, slowed after very strong growth the past two years."

The analyst added that media tablet hype around devices such as the iPad also affected consumer notebook growth by delaying some PC purchases, especially in the U.S. consumer market.

"At this stage, hype around media tablets has led consumers and the channels to take a 'wait and see' approach to buying a new device," Kitagawa said.

In EMEA (Europe, the Middle East and Africa), PC shipments totaled 27.3 million units in the third quarter of 2010, an increase of 7.3 percent from the same period last year. Gartner said that the Western Europe PC market slowed as professional buyers and consumers held back on PC purchases, while emerging markets in Central and Eastern Europe -- as well as the Middle East and Africa -- experienced good growth.

In Asia/Pacific, PC shipments totaled 29.7 million units, a 10.5 percent increase from the third quarter of 2009. In the emerging markets, mobile PC demand in the consumer segment continued to grow unabated as mainstream notebooks continue to appeal to first-time PC buyers as well as those substituting notebooks for desktops. Meanwhile, shipments in China held steady at 62 percent of all PCs shipped in Asia/Pacific, growing 11.3 percent over the same quarter last year.

Latin American PC shipments totaled 8.2 million units, a 9.9 percent increase from the third quarter of 2009. Back-to-school PC sales in Latin America were reportedly sluggish, and this transpired into fewer home mobile PC shipments.

Over in Japan, PC shipments surpassed 3.6 million units, a 14.1 percent increase from the same period last year. Large deals in the enterprise and government sectors drove PC sales in the quarter, according to Gartner. In the consumer market, replacement demand for primary PCs, both desktop and large-size mobile PCs, has continued to grow since the beginning of 2010.

IDC

Meanwhile, rival market research firm IDC painted a slightly different picture of Apple's third quarter sales, estimating the company sold upwards of 2 million Macs domestically, boosting the company past Acer on growth of just over 24%.

Mac marketshare
Preliminary U.S. PC Vendor Unit Shipment Estimates for 3Q10 (Thousands of Units) | Source: IDC


"Apple's influence on the PC market continues to grow, particularly in the U.S., as the company's iPad has had some negative impact on the mininotebook market," said Bob O'Donnell, IDC vice president for Clients and Displays. "But, the halo effect of the device also helped propel Mac sales and moved the company into the number three position in the U.S. market."

Thursday, October 14, 2010

brainstorming thursday

1. Retail is doing the smart thing selling the phony rally - actually 80 bil. is too low let wallstreet have much more the next weeks - since the FED games may some day prove to be very expensive for taxpayers as they already steal your interest rates with the zero interest rates who only serve the banksters interests.


retail keeps quiting the stockmarket - outflow for 23rd week reaches 80 bil.

2. This foreclosure mess will be clearly the legacy of the Obama legislation and turn out to be very expensive as the GSEs and FDIC are part of this new fraud and stealing scheme and the outcome will be ugly as the lawyers will have the chance to steal whatever is left from now on.

excerpt

RealtyTrac Reports Q3 Foreclosures Hit All Time Record... Just In Time For The Plunge





Looks like someone may have had a little advance notice on October's foreclosure semi-moratorium festivities. According to RealtyTrac, September foreclosures marked a 5 month high of 347,420, jumping 3% from the previous month and 1% from September 2009, even as the 3rd quarters marked the highest foreclosure activity on record. For the first time in history, bank repossessions (REOs) surpassed 100K, hitting 102,134. Providing some much needed color on what is actually happening in the foreclosure market, James Saccio, CEO of RealtyTrac said: "Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months. We expect to see a dip in those bank repossessions — and possibly earlier stages of the foreclosure process — in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks." And plunge, foreclosure activity will: the 24 judicial foreclosure states most affected by the foreclosure documentation issue accounted for 40 percent of all foreclosure activity in the third quarter and 36 percent of bank repossessions, or REOs. And the worst part is precisely what Jim Cramer thought was going to represent a boost to home prices, confirming just how little the man understand basic market principles: "If the lenders can resolve the documentation issue quickly, then we would expect the temporary lull in foreclosure activity to be followed by a parallel spike in activity as many of the delayed foreclosures move forward in the foreclosure process. However, if the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overall housing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows — causing more uncertainty about home prices.” In other words: a complete housing market collapse.



Wednesday, October 13, 2010

NDX UPDATE

NDX has reached the May high level with a gap above the Bollinger today. the ultimate target deriving from this triangle pattern is around 2100-25 but ı still believe we will reach that with the next leg up as we should turn around from here within 24h. The SPX makes the 12 count today and should be able to make a 13 without any new highs. A correction of about 2 weeks maximum length should start but we also may have reached the same phase we had in the late rally from Feb to May as we traded in a 80 point range for 3 weeks back and forth after jumping above the Bolls around the top before we had the flash crash. If we do not make a severe correction now the consequences will be far worse with the real correction thereafter. since we entered the earnings season we can expect some volatility anyway as not all earnings might turn out to be glorifying for the bull camp.

brainstorming wednesday

1. That is about one of the rare moments in life when from an expected source comes truth your way. Cramer who was rather more a propaganda puppet says essentially true things about the disgusting attitude of the banksters.

excerpt

Banks Pay Themselves Bonuses, Deny Shareholders Dividends

Cramer is mad at the banks.

While "miserable" shareholders hang on to these "awful" equities, he said, bank employees are about to receive a record $144 billion in bonuses.

The financials are "by far the worst performing group" in the S&P 500 index, down 3.98 percent in the last year and 25 percent over the past three years. These assets pay almost no dividends to the shareholders, yet these financial institutions feel it's appropriate to pay out record bonuses.

Cramer said the shareholders, not the employees, deserve this money. The people "showering themselves with money" didn't do something so "monumental" as to justify these paydays.

"All these guys did was take the government money to stay in business, crush their own stocks, get rid of the dividend and now reward themselves with fortunes," Cramer said. "I say no bonuses until those dividends are returned to their old levels. Everything should be put back to the shareholders until they are back to even."

2. Markets will reach - the 12 count for the SPX , the missing link for a correction as it needs to complete the 13 count - today the temp high very likely. Vıx started around 18 which is dangerous ground going forward but at some point we still might see the 1200 level in november still before real crash levels are reached. The ISE MAs have reached good ground with 10 and 20 above 120 but crash levels we usually get around 140. Anyway we are anyway just looking for a 5-7 percent correction starting within 24h. The FED and DC are playing a very dangerous game by creating these bubbles since there is no substance.

Tuesday, October 12, 2010

Brainstorming Tuesday

1. Yesterday was strange one in some respects as volatility was sold down agressively and in emerging market terms has even reached just before crash levels - it is amazing though that the Bloomberg article claims the opposite that those levels signals no black swan which is as pathetic as it gets. Whenever such reluctance levels are reached the opposite is the case and we are back at July 2007 levels - rings a bell I guess.

excerpt 1

Options Show No Black Swan in Emerging-Market Stocks



The MSCI Emerging Markets Index’s historic volatility, a gauge of price swings during the past three months, fell to 12.1 last week, the lowest level since July 2007

excerpt 2

1M-3M Volatility Term Structure Plunges To Steepest In Years (VIX/VXV)

Tyler Durden's picture




The ratio between VIX (implied vol as determined by 1 month out SPX options) and VXV (3 month Implied Vol) has just dropped to the lowest it has been since the end of 2006. After hitting a post-Lehman high of just under 1.3, VIX/VXV has plunged to 0.7917, a steep drop of 0.07 in just one day, as near-term equity vol is being aggressively sold, even as forward implied vol remains resistant to day to day changes in the market. Whether or not this is predicated by the QE2 event occurring somewhere inbetween the 2 term points is unknown, and irrelevant, but traders certainly seem to be far more comfortable with 1 month volatility and are selling much more of it than its longer-dated cousin. However, as Chris Cole pointed out earlier, this could be a very dangerous underestimation of the possibility for an exponential jump in near-term vol, in a time when correlations are near all time highs.

Here is the chart of VIX/VXV:

2. NUKEs found in Japan deployed by N.-Korea is a news we never get to see on MSM but the implications are big to say the least.

excerpt

Six North Korean atomic bombs located in Japan, five have been seized by the police

The North Korean government smuggled six nuclear weapons into Japan to use as blackmail against the Japanese government, according to a senior Japanese public security police source. Five of the bombs have been seized by Japanese authorities but the sixth is located in the basement of the headquarters of the General Association of Korean Residents in Japan (Chosen Soren) and police have been warned it will be set off if they try to seize it. The discovery of the bombs by Japanese authorities confirms the original warning about the North Korean plot to attack with Japan that from a KGB agent who claimed to report directly to Russian Prime Minister Putin. The nuclear blackmail is linked to a failed Federal Reserve Board crime syndicate plot to start World War 3 on the Korean peninsula in a bid to stave off bankruptcy.

Monday, October 11, 2010

part 2

3. The inflation fraud has reached a level where its hard to deny as the official numbers are so far out of reality that everyone knows the emperor is naked but people have developed an attitude which will only benefit the wrong momenetum until we are all in WW3 very soon. Giving the tea-party right wing your vote is not the answer as it is an overall trend seems to indicate. Democracy does not end with the vote it rather starts with it - democracy also means to take full responsibility as the people in power are the people in theory but the system has been perverted as DC has become a self fullfilling entity who just needs to spend some money to get the vote it wants. Only that they have driven the system to a point of no return mess and the only way out is another world war. Hyperinflation is around the corner as predicted as a result of the banksters default and the FEDs bailout policy of printing money which has no worth - this is just the beginning and Obama is part of this fraud as his promise of transperancy was actually turned into the biggest government lies ever probably about the real economic state of affairs. not that McCain would have done any better but the reason why people gave obama their vote was his promise to do bettern than the disastrous Bush admin. but turned out to be even worse as he had the chance to make a fresh start instead hired all the Clinton people who produced this mess to begin with.

excerpt

Corn Crunch Means Costliest Beef in Quarter Century


By Whitney McFerron and Elizabeth Campbell

Oct. 11 (Bloomberg) -- Meat prices are poised to extend a 14 percent rally this year that drove U.S. retail costs to the highest levels since the 1980s as surging corn futures prevent livestock producers from expanding their herds.

The U.S. cattle herd in July was the smallest since 1973 and the number of breeding hogs last month was near the lowest ever, government data show. Corn futures jumped to a two-year high today and the price of the main feed ingredient is more than 70 percent above the 10-year average.

U.S. per-capita beef supplies next year will be the lowest since 1952 and pork the smallest since 1976, industry researcher CattleFax said. Hog futures will rise 14 percent by July and cattle may gain 3.6 percent by April, according to a Bloomberg survey of analysts. Wendy’s/Arby’s Group Inc., the maker of the 1,360-calorie Baconator Triple burger, and CKE Restaurants Inc., owner of the Hardee’s chain, have warned investors they are contending with higher commodity costs.

“If grain prices go up, then meat prices are going to have to move up,” said Mark Greenwood, a vice president at AgStar Financial Services Inc. in Mankato, Minnesota, who oversees $1 billion in loans and leases to the hog industry. Corn costs “tempered any enthusiasm there was on expansion,” he said.

Livestock prices failed to keep pace with third-quarter rallies of as much as 40 percent for corn and wheat, as too much rain and heat eroded U.S. yields and drought hurt crops in Russia and Europe. Cattle futures rose 11 percent in the period and hogs dropped 8.3 percent.

Corn soared the 45-cent maximum limit allowed by the Chicago Board of Trade today to $5.7325 a bushel, the highest price since September 2008, after the U.S. Department of Agriculture on Oct. 8 cut its harvest forecast for the second time in two months. The December corn futures contract was up 43.25 cents, or 8.2 percent, at $5.715 a bushel at 10:51 a.m. in London. Wheat, soybean, rice and oat futures also rose.

Cattle Feedlots

U.S. cattle feedlots that didn’t lock-in corn costs faced losses in the third quarter, said Ron Plain, an economist at the University of Missouri in Columbia. Feedlots made money in the first half after two years of unprofitable markets from surging feed costs and the global recession, he said.

“Normally, six months of profit will get you to the early stage of herd expansion,” Plain said. Costlier corn “slows expansion plans,” he said.

Farmers may earn $5.46 per hog in the first seven months of 2011, according to Steve Meyer, president of Paragon Economics in Des Moines, Iowa. That’s down from his July forecast of $19. Cattle feedlots lost about $17 a head last month, compared with profit of $42 in the first half of 2010, Plain said.

Price Forecasts

Hog futures will advance to 84 cents a pound on the Chicago Mercantile Exchange by July, up from 73.85 cents on Oct. 8, according to the average estimate of seven analysts surveyed by Bloomberg. The top estimates were 90 cents, which would be the highest level since 1996.

Cattle futures will rise to $1.024 a pound by April, from 98.875 cents on Oct. 8, according to the survey. Goldman Sachs Group Inc. last month predicted $1.05 as early as December, which would be the highest since September 2008.

4. Sentiment has risen substantially to the bullish side without reaching an extreme though but we are ready for an correction now starting today with a higher weekly opening.

excerpt

MONDAY, OCTOBER 11, 2010 Blank Image

INVESTOR SENTIMENT READINGS
High bullish readings in the Consensus stock index or in the Market Vane stock index usually are signs of Market tops; low ones, market bottoms.

Last Week2 Weeks Ago.3 Weeks Ago
Consensus Index

Consensus Bullish Sentiment56%63%58%
Source: Consensus Inc., P.O. Box 520526,Independence, Mo.
Historical data available at (800) 383-1441. editor@consensus-inc.com
AAII Index

Bullish49.0%42.5%45.0%

Bearish27.731.625.4

Neutral23.225.929.6
Source: American Association of Individual Investors,
625 N. Michigan Ave., Chicago, Ill. 60611 (312) 280-0170.
Market Vane

Bullish Consensus54%54%53%
Source: Market Vane, P.O. Box 90490,
Pasadena, CA 91109 (626) 395-7436.
FC Market Sentiment

Indicator54.5%55.9%55.5%
Source: First Coverage 260 Franklin St., Suite 900
Boston, MA 02110-3112 (617) 303-0180. info@firstcoverage.com
FC Market Sentiment is a proprietary indicator derived from actionable sell-side trade ideas sent by the sell-side to their buy-side clients over the First Coverage platform. Over 1,000 institutional sales people at more than 250 firms participate on the First Coverage platform and have contributed hundreds of thousands of ideas since inception. Each Idea is associated with a ticker or sector and is tagged bullish or bearish by the creator. This data is aggregated at the sector, industry and market level. The FC Market Sentiment score ranges from 0-100 (0=most bearish, 50=neutral, and 100=most bullish) and represents a completely objective, real-time view into what advice the sell-side is providing to their buy-side clients


Citigroup Panic/Euphoria Model
Market Sentiment

Brainstorming Monday - part 1

1. Ironically the foreclosure fraud is pushed on taypayers behalf by DC entities - hence no surprise the congress pushed quietly a criminal law which would have helped the process but Obama had to veto it since it became public - DC s involvement in all the bankster criminal enterprises has been obvious for quite some time now - we only dropped to a new level of insane corruption and the robbery of the people has taken up some speed.

excerpt

Assume there is a home that has a $250,000 mortgage and the loan is in default. Now assume that the owner of that mortgage wants to sell it. Assume further that the mortgage is bundled up with a bunch of other busted mortgages and sold at a deep discount from par. Say the price of the loan package is 40 cents on the dollar. Now finally assume that the property can be sold at an auction level price of $175,000.

If you add up all my assumptions you get a situation where the mortgage is purchased for $100k (250*.4) and the actual value of the assets securing the mortgage is worth $175k. That 75k for a “flip” is big money if there is a lot of them to be done. And as Realtytrac says it is a million or so a year.

If you’re reeling from all those “assume this” crap I was selling don’t be. What I describe is happening in very big numbers. Busted whole mortgage loans are being packaged and sold to investors to the tune of at least $10b a month. Some of the biggest players on Wall Street are in the game of arbing the sellers. Packages are regularly being put together and sold. Who are these sellers? A lot of the banks. The big ones have sold large amounts, the smaller banks have sold regional portfolios at distressed prices. But by far and away the biggest sellers that have created the “profit window” all reside in D.C. A big seller has been the FDIC. Fannie, Freddie and FHA have also been steady sellers.

I have no idea how much abuse there has been when secondary market purchasers of mortgages push through foreclosures and auction off homes to make a big profit. But the answer is it is not zero. What if only 10% of foreclosures were the result of some outfit or the other pushing to make some fast cash? What if they were doing it on the cheap. Say $10k a pop. Well that comes to a billion a year. And for that much money people will pull all matter of strings. They will buy lawyers and document processors who will gladly take the dough. When you have nine-figure money and a short time window of opportunity you press it as hard and fast as you can. That is how it works.

Two possible headlines we may see:

In an effort minimize losses Federal Agencies relied on improperly documented foreclosure procedures.
Thousands may be affected. FHFA to issue apology.
Or it could look like this:

Federal Agencies Sold Loans to Scheisters
Improper payments made to foreclosure agents. Billions of profits at stake. Hundreds of thousands lining up for class action suit.

2. Another sample of how rotten the system is but also how much they even do not care anymore about being bribed publically for anyone to see. Obama is a perfect president creation for them as his pattern is to attack them as an media event but in real terms he lets them get away even with perks as he did for Wallstreet.

excerpt

Feinberg Firm Paid More Than $2.5 Million by BP in 3 1/2 Months

Kenneth Feinberg and his law firm have been paid more than $2.5 million in 3 1/2 months to administer the $20 billion fund set up by BP Plc to compensate victims of its oil spill in the Gulf of Mexico.

The London-based oil company agreed to pay Feinberg Rozen LLP in Washington a fee of $850,000 a month from mid-June, when Feinberg agreed to run the claims facility, through Oct. 1, according to a report today on the compensation by former U.S. Attorney General Michael Mukasey.

Feinberg, 64, who ran the fund for victims of the 9/11 attacks and was special U.S. master for executive pay, was chosen by BP and President Barack Obama to compensate those affected by the largest U.S. oil spill. Feinberg Rozen retained Mukasey and his firm, Debevoise & Plimpton LLP, to evaluate the package. Mukasey said the payment was reasonable for demanding work under scrutiny by residents, public officials and BP.

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I am a professional independent trader