Monday, December 15, 2008

SPX outlook

Left hand the daily SPX and the expected downside bias is confirmed by todays price action coming from the financial selling pressure as Gıoldman and Morgan will be reporting this week and the 50 bil scam has some impact. Tomorrow's rate cut will be with a final decision for the car bailout sometime soon might trigger the upside again as we are in quadruple witching this week. The bias remains on the downside for a few days but as soon as the Seq 13 are in the yearend upside window dressing will be the dominating game for the last 2 weeks with plenty holidays. Therefore 815 SPX should be the floor for the remainişng year. Early next year we will test the lows of Nov. again and very likely make new ones as we wıll enter the earnings season of Q4 which should be very negative.

Another member of the 'Rothschild' boys

The impression I had when I listened to this so called grillings in the Senate hearings and the modest tone of Snator Schumer- was more like a charade, though some were serious about their allegations it seemed. As a matter of fact there were plenty warnings especially from competent places like the BIS (Bank for International Settlement) about the immense risks the banks leverage exposure had already 2 years ago. Its not only pathetic to turnaround now and just accuse the bankers - politicians screwed up as well from the Clinton Administration to the Bush administration. Money talks and Washington walks - the system is rotten on all ends

Excerpt NYT

A Champion of Wall Street Reaps Benefits

“We are not going to rest until we change the rules, change the laws and make sure New York remains No. 1 for decades on into the future.”

— Senator Charles E. Schumer, referring to financial regulations, Jan. 22, 2007

WASHINGTON — As the financial crisis jolted the nation in September, Senator Charles E. Schumer was consumed. He traded telephone calls with bankers, then became one of the first officials to promote a Wall Street bailout. He spent hours in closed-door briefings and a weekend helping Congressional leaders nail down details of the $700 billion rescue package.

The next day, Mr. Schumer appeared at a breakfast fund-raiser in Midtown Manhattan for Senate Democrats. Addressing Henry R. Kravis, the buyout billionaire, and about 20 other finance industry executives, he warned that a bailout would be a hard sell on Capitol Hill. Then he offered some reassurance: The businessmen could count on the Democrats to help steer the nation through the financial turmoil.

“We are not going to be a bunch of crazy, anti-business liberals,” one executive said, summarizing Mr. Schumer’s remarks. “We are going to be effective, moderate advocates for sound economic policies, good responsible stewards you can trust.”

The message clearly resonated. The next week, executives at firms represented at the breakfast sent in more than $135,000 in campaign donations.

Senator Schumer plays an unrivaled role in Washington as beneficiary, advocate and overseer of an industry that is his hometown’s most important business.

An exceptional fund raiser — a “jackhammer,” someone who knows him says, for whom “ ‘no’ is the first step to ‘yes,’ ” — Mr. Schumer led the Democratic Senatorial Campaign Committee for the last four years, raising a record $240 million while increasing donations from Wall Street by 50 percent. That money helped the Democrats gain power in Congress, elevated Mr. Schumer’s standing in his party and increased the industry’s clout in the capital.

But in building support, he has embraced the industry’s free-market, deregulatory agenda more than almost any other Democrat in Congress, even backing some measures now blamed for contributing to the financial crisis.

Other lawmakers took the lead on efforts like deregulating the complicated financial instruments called derivatives, which are widely seen as catalysts to the crisis.

But Mr. Schumer, a member of the Banking and Finance Committees, repeatedly took other steps to protect industry players from government oversight and tougher rules, a review of his record shows. Over the years, he has also helped save financial institutions billions of dollars in higher taxes or fees.

He succeeded in limiting efforts to regulate credit-rating agencies, for example, sponsored legislation that cut fees paid by Wall Street firms to finance government oversight, pushed to allow banks to have lower capital reserves and called for the revision of regulations to make corporations’ balance sheets more transparent.

“Since the financial meltdown, people have been asking, ‘Where was Congress? Why didn’t they see this coming? Why didn’t they provide better oversight?’ ” said Barbara Roper, director of investor protection for the Consumer Federation of America. “And the answer for some, including Senator Schumer, is that they were actually too busy pursuing a deregulatory agenda. Their focus was on how we have to lighten up regulation on Wall Street.”

In recent weeks, Mr. Schumer has worked closely with the Bush administration to try to mitigate the damage to New York’s financial institutions. And as members of Congress and President-elect Barack Obama have called for new regulations to prevent future upheavals, Mr. Schumer has endorsed the need for reforms while still trying to make them palatable for Wall Street.

Calling himself “an almost obsessive defender of New York jobs,” Mr. Schumer has often talked of the need to avoid excessive regulation of an industry that is increasingly threatened by global competition. At the same time, Mr. Schumer has cast himself as a populist who looks out for the middle class.

In an interview, Mr. Schumer said that until the recent market turmoil, he did not fully appreciate how much risk Wall Street had assumed and how much damage its practices could inflict on ordinary Americans. “It is a learning process, no question about it, an evolution,” he said, adding that he now believed that investors and homeowners must be better protected.

But he defended his record. “Wall Street and Main Street are tied together,” he said. “Often times, they are not in conflict. When they are in conflict, I tend to side with Main Street.”

While Mr. Schumer has taken some pro-consumer stances, his critics fault him for tilting too far toward Wall Street in balancing his responsibilities.

“He is serving the parochial interest of a very small group of financial people, bankers, investment bankers, fund managers, private equity firms, rather than serving the general public,” said John C. Bogle, the founder and former chairman of the Vanguard Group, the giant mutual fund house. “It has hurt the American investor first and the average American taxpayer.”

Sunday, December 14, 2008

The biggest scam in history from a single person gets some company

We have not heard anything about the real interesting part as he claims himself that the whole thing was above 50 bil. - wow what a number its so big that a single handed guy makes a 50 bil scam. Anyway he had only around 16 bil. at hand - I still do not understand what realy happened as he booked people basically a profit of 1% per month hence do people think they have 50 bil at his funds? They say they used some other people's money to pay other people but that does not make sense as a growing number of people must have lost money. Generating a considerable amount of people who must have been frustrated and complained - that's the part which does not make sense to me yet.

The real problem beside this unbelievable scam is that in 2 decades he was never regulated as there were also big conflicts of interest with his market making firm but even the regular business even since he must have generated substantial management fee's hence this will through a bad light on the IRS, SEC and many other authorities who should have looked into his business. In any case the Hedge Fund business will get a huge regulatory blow since this puts the final trigger on a deep upside down on the regulation of Hedge Funds.

Excerpt from WSJ

How Bernie Madoff Made Smart Folks Look Dumb

What do George Carlin and Bernard Madoff have in common?

The late comedian immortalized oxymorons, those absurd word pairs like "jumbo shrimp" and "military intelligence." Mr. Madoff just put the silliest of all financial oxymorons into the spotlight: "sophisticated investor."

The accounts managed by Bernard L. Madoff Investment Securities LLC reported gains of roughly 1% a month like clockwork, with nary a loss, for two decades. Why did that freakishly smooth return not set off alarms among current and prospective investors?

Lawyer Seen as Bold Enough to Cheat the Best Investors

By ALISON LEIGH COWAN, CHARLES V. BAGLI and WILLIAM K. RASHBAUM

Published: December 13, 2008

This article is by Alison Leigh Cowan, Charles V. Bagli and William K. Rashbaum.

Rob Loud/Getty Images

Marc S. Dreier, center, was joined by Michael Strahan and William Shatner at a charity auction in Manhattan in July 2007.

Times Topics: Marc S. Dreier

Marc S. Dreier knew the 45th-floor conference room of Solow Realty well. He had been in it many times as a trusted lawyer for the company’s founder.

So nothing seemed amiss when he showed up one afternoon in October and told a receptionist he had a meeting with her boss, people associated with Solow say.

Mr. Dreier was elegantly dressed, as always, the people said. He had three people with him. The receptionist ushered the group past her desk. They were sitting there, visible inside the glass-walled room, a few minutes later when the boss, Steven M. Cherniak, happened to walk by.

Mr. Cherniak would later tell people at the company how surprised he had been to see Mr. Dreier. He had not scheduled any meeting with him, and he had no idea what Mr. Dreier was up to.

But people there gave little thought to Mr. Dreier’s odd visit until November, when the company’s founder, Sheldon H. Solow, received a disturbing call. The caller wanted to let Mr. Solow know that Mr. Dreier had offered him the chance to buy promissory notes that had been issued by the company, people associated with the firm said.

They were fake notes, and shortly thereafter, lawyers for Solow Realty — different lawyers — were in touch with federal authorities, reporting their suspicions that Mr. Dreier might be engaged in financial fraud.

Since that opening tip, federal authorities have been tracking what they describe as a brazen swindle of some of New York’s savviest investors by one of New York’s more accomplished lawyers. Mr. Dreier has been charged with multiple frauds in the United States and a related crime in Canada, and is being held without bail in Manhattan.

In court last week, prosecutors said their count so far put the money missing at $380 million, most of it lost by hedge funds and other investors who had bought promissory notes that were flat-out fictions.

In recent days, Dreier L.L.P., the Park Avenue law firm that Mr. Dreier founded, has been plunged into chaos. At least $35 million in escrow that was to have been held by the firm seems to be missing, the authorities say, and nearly all of its 250 lawyers are now looking for work.

The amounts pale next to the $50 billion fraud that another high-profile New York figure, Bernard L. Madoff, was accused last week of orchestrating, but they have unnerved lawyers and their clients in the broader legal community.

As the Dreier firm’s lawyers rummage through the law firm’s books, which had been until recently Mr. Dreier’s exclusive preserve, they are finding that bills have not been paid in months. Their health insurance is in default and the firm will not be able to make its $2.6 million payroll on Monday, lawyers there say.

“No one is in charge,” Vincent F. Pitta, a lawyer at the firm, complained last week in an affidavit in support of a government request to freeze assets. “The news of Mr. Dreier’s arrest has had a neutron-bomb-like effect on Dreier L.L.P.”

Few have fallen as quickly as Mr. Dreier, a Yale graduate and Harvard-educated lawyer who had been a partner at some of New York’s better known firms before opening up a high-profile practice of his own in 1996 that now has offices in five cities.

“He promised lavish salaries and lavish compensation and he was attracting the best and the brightest,” said Gerald L. Shargel, Mr. Dreier’s lawyer. Mr. Shargel said Mr. Dreier is cooperating with the receiver now running the firm.

The expense of running such an operation does not provide a ready explanation for thefts of such magnitude. Even the cost of sustaining Mr. Dreier’s appetite for luxury does not provide an easy answer for what instilled the desperation that seems to have prompted schemes involved here, schemes that prosecutors said involved Mr. Dreier pretending to be other people.

Saturday, December 13, 2008

Market long term analysis (Astrology) -part 1

I start with the astrological part as it perfectly confirms what our common sense can observe right now and if your honest with yourself you get an idea where we are heading yourself anyway.

You have to get used to trust your own thouıghts since as you may have recognized the so called experts are even liars or do not understand what is going on as they have been trained to think only in limited scenario's and are even brainwashed. The talking heads in the media are hyping any daily news as that is there business but that might be confusing for a viewer since they switch back and forth like hysteric monkeys in a cage who are starving for the next banana.

In order to get the big picture it might be good to start from a point your least familiar with

Excerpt

http://www.mmacycles.com/articles/articles/the-cardinal-climax%3a-2008%112015/

The 2008-2015 Cardinal Ingress and T-Square Configuration

There are so many powerful geocosmic conditions unfolding in the next few years, that the challenge will be to figure out where to start, and how to prioritize so many critical issues that are due to arise.

The largest pattern that will unfold involves Saturn, Uranus, and Pluto, three of the four longest-term planetary cycles in their orbit around the Sun. Not only that, but these three planets are powerful, or “yang” in their nature. The other far-out planet – Neptune – is “yin,” and much softer by nature than the other three. Saturn, Uranus, and Pluto are strong and seem to “make things happen.” It is especially important now because these three planets will be moving from mutable signs to the action-oriented cardinal signs. This process unfolds from January 26, 2008, when Pluto first enters the cardinal sign of Capricorn, through March 17, 2015, when the final waxing square is completed between Uranus and Pluto, from the signs of Aries and Capricorn respectively. In between those dates, Saturn will enter the cardinal sign of Libra (October 29, 2009-October 5, 2012), and Uranus will enter the cardinal and war-like sign of Aries (May 28, 2010-March 6, 2019). Also, each of these planets will form a “hard” aspect to one another. Saturn will be in its 45-year opposition to Uranus five times between November 4, 2008 and July 26, 2010. Saturn will be in its 32-37 year waning square aspect to Pluto November 15, 2009 through August 21, 2010. And then the final segment of this powerful celestial set up ends with the seven passage series of Uranus in waxing square to Pluto, June 24, 2012 through March 17, 2015. This later signature may be the most important part of the whole pattern, for it doesn’t happen too often. The last occurrence was in 1876-77. In between, there was a waning square between these same two planets in 1932-1933. Both of these times coincided with economic depressions and severe stock market losses.

Astrology says we are at the brink of a major crisis ( what we saw so far is really just the beginning) within the next 5 years all what you saw as granted might disappear we are in the midst of major historic changes and in historic proportion decadency and greed and corruption combines with ignorance are the harbingers of a major change in the tide - that's what we have right now.

Friday, December 12, 2008

BKX outlook

Left hand the BKX daily chart and as the count of the SEQ shows as we have a 9 count today that sometime next week we might get a counter move briefly as we have the 13 below 40 rather close to 35. In weekly terms we are in week 5 so the window dressing might implicate selling underperformers to year end. The dangerous part is that things get still worse for banks with jobless rates rising the foreclosure or overall credit book quality is about to deteriorate still sharply going forward. The hiiden but most dangerous part though is the part we have the least knowledge about is who has to what degree which derivative contract obligations of those 600 trillion in derivatives out there. Where is not enough money on this planet to settle those at least in real terms.

ECB takes a stupid stance

ECB makes big mistakes by delaying any rate cuts since to curb inflation it does not make a difference if they are at 1 or 2% that's a ridiculous approach. Since only 2 scenarios are possible even an extended deflation like Japan had for 2 decades but rather more likely is a hyperinflation later in 2009 as the printing press will speed up working double 24/7 shifts. They need to deliver a steep curve for banks to recover and at the same time force them to lend at cheap rates to the industry and consumers if anything can be done its that approach of absolute easy money. Although in case of Germany the implosion of mortgage financing is in too low rates. Germans finance the purchase of houses by paying interest rates on a fixed basis for 20-30 years and its not easy to switch to lower rates once the agreements are made since the banks refinance their lending usually by same maturity borrowing. The crucial part though is that only interests are paid and the basic capital repayment is done through a life insurance as they have tax advantages. The problem is and was that the income of those insurance policies depends very much on capital markets performance. Lower interest rates mean that the assumed generation of interest on the paid in capital will not be achieved. Leaving huge gaps for the ones who own the houses to be paid back out of their pockets. Generally those deals are calculated to the edge and insurers had to guarantee levels of interests earned which were lowered over the last years. As baby boomer generation head for retirement big trouble is ahead. Especially with demographic problems in Germany as the population is over aged in 2020 more than 50% of the population will be over 60. Hence Germany is not facing a real estate bubble but a demand implosion which may have the same result at some point.

ECB Signals Reluctance to Cut Rates Much Further, May Pause

By Gabi Thesing

Dec. 12 (Bloomberg) -- European Central Bank policy makers signaled they’re reluctant to cut the benchmark interest rate much further after three reductions to 2.5 percent since October, and may not trim borrowing costs again next month.

“We have dealt with the economy to some extent because we took an extraordinary measure,” ECB council member Yves Mersch said in Luxembourg today. His colleague Axel Weber said last night he “would like to avoid” taking the rate below 2 percent. Both questioned whether the bank will have enough new information in January to act again on rates.

The ECB has lowered borrowing costs by an unprecedented 1.75 percentage points since the global financial crisis pushed the euro region into recession. European industrial production plunged the most in 15 years in October as orders weakened and the region’s biggest companies scaled back investment, the European Union statistics office in Luxembourg said today.

Investors are betting the deepening economic slump will force the ECB to slice another 50 basis points off the benchmark rate in January, Eonia forward contracts show.

“They will be forced to go to 1 percent or lower by June,” said Juergen Michels chief euro-area economist at Citigroup Inc in London. “The rhetoric at the moment is to justify their forecasts, which are too optimistic.”

All those trillions will not stop the Titanic (as some people might want it to happen) from sinking just slow down the process

The second stimulus package in Japan adds up the whole effort to 500 bil. Dollar, Europe agreed to a 'small' 260 bil Dollar package and China had committed 700 bil Dollar for the same purpose. America will be nothing short of 700 bil but be sure all of them will double those efforts over time. So that's throwing trillions of dollars in aid into the economies and that is on to of the tril. of aid given to financial firms after they screwed up big time. İts outrageous that the bonus payments which are still paid though reduced are sponsored by taxpayers money as a incapable to say the least Treasury Secretary spend half of the TARP money unwisely without making sure it goıt there it was needed to be. That should trigger an charge for misconduct and a full fledged investigation into the operations of the FED and Treasury as they worked on strange standards to bailout some and let go others without any sense I can make out of it other than to benefit small groups on costs of the taxpayers. The problem was and is that lawmakers allowed banks to expand unwisely their ways to generate faked profits since everybody who ever joined a class for economy and I suppose that must be true for Harvard MBA classes as well knows there is no one way profit stream. The weird thing is to make center figures of those 'deliberation' attempts to the people who oversee it as Greenspan was a lobbyist for banks to deliberate and was made chairman of the FED and to make after Rubin who influenced Clinton to go forward with that insane strategy now Paulson to finish the mission looks rather more like a master plan than just stupid greed. As much as the 9/11 event was needed to change/ diminish democratic rights in the sake of haunting the evil forces the collapse of the financial system will make it possible to change the control of money flows to a unseen scale as the powers are moved into the hands of a few as the Worldbank or IMF - that's a dream scenario for the 'Rothschild' or Bilderberger or what ever name that group of people might have. Its getting more and more obvious as some people have big smiles on their faces as all this happens. Republican congressman and now senators have shown in the TARP and now in the car industry bailout negotiations that they play a big charade and people allover the world have to suffer because they were not able or what I rather believe have an interest in destroying market faith. The irony is that they were in the driver seat for most of the 8 years of Bush administration and could have acted wisely and in foresight of obvious things to come. Basically that's true for almost all politicians around the world as they are the puppets 'deep pockets' pay to take care of there interests. Corruption and greed are at all time highs as people let there presidents screw around (Clinton) and get into insane debt but get out with 50 mil at the end. Corruption is done on a sophisticated and legal level nowadays. You just pay a person for 2 hours speaking some bulls.. 250000$ that were the daily rates of Greenspan and Clinton plus they got some advisor contracts which earned them a few mil more. That's pretty obvious as those who paid those rates were wall street firms or other big companies who had there benefits.

Excerpt CNBC

Japan Announces New Economic Stimulus Package

Japanese Prime Minister Taro Aso on Friday announced a new stimulus package to shore up his country's economy, with measures to spur employment, encourage lending and inject capital into financial markets.

"The global downturn is said to be a recession on a scale that comes once in a century," Aso said.

The new package includes 10 trillion yen ($111 billion) in tax breaks and public financing, and 13 trillion yen ($144 billion) to prop up financial markets, he said in a nationally televised news conference.

It comes after a 27 trillion yen stimulus package announced in October, which included expanded credits for small businesses and a cash payout to every household to spur spending.

Sons Turned In Madoff After He Allegedly Told Them His Investment-Advisory Business for the Wealthy Was 'Giant Ponzi Scheme'

Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday, a day after his sons turned him in for running what they said their father called "a giant Ponzi scheme."

Image from Madoff.com

Bernard Madoff

The Securities and Exchange Commission, in a civil complaint, said it was an ongoing $50 billion swindle, and asked a judge to seize the firm and its assets. "Our complaint alleges a stunning fraud that appears to be of epic proportions," said Andrew M. Calamari, associate director of enforcement in the SEC's New York office.

In a separate criminal complaint, Federal Bureau of Investigation agent Theodore Cacioppi said Mr. Madoff's investment advisory business had "deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars."

....

Both complaints say Mr. Madoff told his sons he believed losses from his fraud exceeded $50 billion. That figure couldn't be confirmed. But such a loss is plausible, had money been flowing in and out for years: At the beginning of 2008, according to the SEC filing, his operation had more than $17 billion under management.

Such a scheme would dwarf past Ponzi schemes. It would also be nearly five times larger than the accounting fraud that drove telecom company WorldCom into bankruptcy proceedings in 2002.

Excerpt from CNBC

Bernard Madoff Arrested Over Alleged $50 Billion Fraud

Bernard Madoff, a longtime fixture on Wall Street, was arrested and charged Thursday with allegedly running a $50 billion Ponzi scheme, U.S. authorities said.

The former chairman of the Nasdaq Stock Market who remains a member of Nasdaq OMX Group's nominating committee, is best known as the founder of Bernard L. Madoff Investment Securities, the closely-held market-making firm he founded in 1960.

Shelby, South Lead Resistance to Rescue

By NAFTALI BENDAVID

WASHINGTON -- Sen. Richard Shelby, a jut-jawed lawmaker embodying the hostility many in Congress feel toward the Big Three auto makers, has emerged as the face of the opposition during the debate over aiding the industry.

Mr. Shelby's objections are rooted in the interplay of long-held principle and home-state interest. The Democrat-turned-Republican has always been opposed to bailouts and big government. At the same time, his state of Alabama is home to manufacturing outposts of several foreign auto makers -- including Toyota Motor Corp., Honda Motor Co., Hyundai Motor Co. and Daimler AG's Mercedes-Benz -- that have competed successfully with U.S. auto companies.

[Shelby, South Lead Resistance to Rescue ]

Getty Images

Sen. Richard Shelby, left, speaks as Sen. David Vitter listens during a news conference on the auto bailout Dec. 10.

"It's a situation where the senator does not have to worry about cognitive dissonance," said David Lanoue, head of the political-science department at the University of Alabama. "Obviously this is one of those situations where you can follow your philosophy and the interests of your constituents at the same time."

The band of mostly Republican Southern senators who form the heart of the opposition -- it also includes Senate Minority Leader Mitch McConnell of Kentucky and Sen. Bob Corker of Tennessee -- share Mr. Shelby's principle and circumstances. Kentucky is home to a major Toyota factory. The corporate headquarters of Nissan Motor Co.'s North American operations are located in Tennessee, and Volkswagen AG recently announced plans for a $1 billion, 2,000-worker plant in Chattanooga, Tenn.

Foreign auto makers have favored the South in part because of its nonunion, low-wage tradition, and these senators argue that if the Big Three's labor relations more closely resembled those of the Southern plants, they wouldn't be in such trouble.

Mr. Shelby held a news conference Wednesday to call the $14 billion plan a "travesty." It was just a "down payment" on what would probably become billions more in taxpayer-funded aid, he predicted, and without major restructuring, the Big Three would fail anyway.

Thursday, December 11, 2008

NDX tech update - expected downturn starts

As expected the trendline and 50 day MA was the resistance and turning point as I write the NDX is diving into the gap from Mondays trade up. After 4 days of getting no inch higher the bulls capitulate for now as they absorbed a lot of bad news but it kept coming. Especially financials which are obviously not a crucial part of NDX are retreating sharply. The stupid behaviornmofm Reps being prudent suddenly when it comes to bailinmg out the car industry for 15 bil. are a negative after they had 8 years to see it coming - thats the most pathetic part for those morons who had a chance to regulate those problems also in the financial industry. We can expect a severe downturn now for the next week and the consecutive week. The final week of this year will be dominated by window dressing upside manipulations. we discuss the magnitude of the downturn tomorrow as I need to see the close to get a better idea.

EUR tech outlook

The EUR has reached the exact 38.2% retracement of the last downleg and very likely will retreat from here as the overall Dollar strength is not finished yet but that is correlated very much to the stockmarket moves as we can see clearly. Basically a test of the downtrendline cannot be ruled out as we have clearly broken above the 50 day MA which we also di during the consol,dation in July/Aug by the same magnitude. As the stockmarkets need to make another dive the Dıollar needs to complete its high which should start around this weekend.

behind-the-matrix

THE DOT - if this turns orange or red be alert