Friday, July 31, 2009
"If they can't administer a program like this, I'd be a little concerned about my health insurance."
So why then, would Wall Street sweat health care?
What's with Obama saying that he saved us from the next "Great Depression?"
Didn't we have 10,000 banks fail in 1933? 25% unemployment?
Today Obama said they would continue the "cash for clunkers" program. But didn't car production drop 90% in the Great Depression?
Maybe it's time to bring Vera Baker back to perk up the President, so he'll quit miming Bernanke about how they saved us from Great Depression II!
When Janet Brasher of Sanford Bernstein asked this question:
Can I ask about the Sands and the Peninsula? All the revenue components are down. Your EBITDAR margin is up an impressive 6 points in your EBITDAR is up 13%. How do you do that?
"Cooking the books. Just kidding, just kidding. Mike, you want to answer that."
As an aside, only SNDK gives a conference call as bad as LVS does, but that comes with the territory. I like it under 10 this morning.
As another aside, MGM reports August 4--Bloomberg had a nice piece on MGM:
July 31 (Bloomberg) -- MGM Mirage, with the smallest casino market share in Macau, said it’s overhauling operations and marketing at its venture in the city to boost the company’s revenue after an “underwhelming” start.
“Our Macau market share is half what it should be,” Jim Murren, chief executive officer and chairman, said in an interview yesterday in Las Vegas, where the company is based. “The other U.S.-based and other newer casinos have been more aggressive in marketing, more aggressive” in recruiting and junket relationships, he said.
The dozens of insurance companies that make up the American International Group show signs of considerable weakness even after their corporate parent got the biggest bailout in history, a review of state regulatory filings shows....
But state regulatory filings offer a different picture. They show that A.I.G.’s individual insurance companies have been doing an unusual volume of business with each other for many years — investing in each other’s stocks; borrowing from each other’s investment portfolios; and guaranteeing each other’s insurance policies, even when they have lacked the means to make good. Insurance examiners working for the states have occasionally flagged these activities, to little effect.
More ominously, many of A.I.G.’s insurance companies have reduced their own exposure by sending their risks to other companies, often under the same A.I.G. umbrella.
AIG, of course says otherwise. They, of course, said they were solvent, when they needed a $182 billion bail-out from the Government.
Remember Liddy who said that AIG had all these wonderful plans to pay back the Government?
What happened to that, and what happened to him?
Thursday, July 30, 2009
The first program that works and the Government decides to suspend it at midnight tonight? $1 billion that was supposed to be expanded by a factor of 4, and now, the government wants to shut it down already?
The story here:
WASHINGTON (AP) -- The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday.
The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Thursday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle...
A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.
"There's a significant backlog of 'cash for clunkers' deals that make us question how much funding is still available in the program," said Bailey Wood, a spokesman for the dealers association.
Even before the suspension, some in Congress were seeking more money for the auto sales stimulus. Rep. Candice Miller, R-Mich., wrote in a letter to House leaders on Wednesday requesting additional funding for the program.
"This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn," Miller said Thursday. "The federal government must come up with more money, immediately, to keep this program going."
From their morning research:
Concerns over economic growth and weak oil statistics led a commodity sell-off. We believe concerns over Chinese loan growth, a disappointing headline US durable goods report and weak US oil statistics led a sell-off across the commodity complex today, including a $4.29/bbl (6.4%) decline in WTI crude prices. In our July 27 Energy Weekly we underscored the downside risks to crude oil prices following the recent back-end led rally as technical and credit difficulties have limited the ability of some refiners to take advantage of better refinery economics and as long-dated prices have once again moved above levels consistent with industry economics. However, we believe that the drivers of today’s sell-off are less negative for market fundamentals than they first appear.
The upgrade of GE:
We are upgrading GE to Buy from Neutral and raising our 12-month target to $15 (22% upside potential) from $13 as comments reported after the close by US House Financial Services Chairman Barney Frank suggest broadening support for regulatory reform that would not mandate the separation of GE Capital. While numerous uncertainties remain, we are reducing our probability assumption for a costly GECS separation to 25% from 50% and this drives our higher target. Greater potential for a manageable regulatory outcome should prompt investors to focus on longer-term benefits of economic and credit stabilization to GE shares.
GS main 0730
LVS also reports. I've advertised snake eyes for the shorts in the casino stocks, and I think they'll continue to roll them.
After all isn't WYNN up 7 today?
The U's can go to L!
We have V!
Of course, before it was fashionable, I advertised 4% Q3 growth; a figure people found laughable, and the V shaped recovery.
The V in the stock market, predicts the V in the economy.
Not U, not L, but V.
Not what PIMCO states, with all their PHDs, or the Wall Street pimps, who are late to the party, even though the punch bowl isn't even yet spiked.
Didn't Bill Gross have this to say about hope?
Instead of love, though, we sell “hope,” but very few are able to seal the deal with performance anywhere close to compensating for the generous fees we command. Hope has a legitimate price, of course, even if its promises are never fulfilled.
Their version of hope is different that they hope referenced on this blog. But mine, made you money!
Monday, May 4, 2009
Looks like Mr. Market no longer believes the bears! Why should he? Are they a company of liars?
The above book was a fictionalized account about the Black Plague in 1348; a world then ruled by faith and fear.
Wasn't that the same on Wall Street? Instead of the the "Black Plaque" we had the "swine flu." And instead of faith in the future, the street was overcome with fear! Whose agenda was that? Wasn't that the agenda by those who profited from it?
The stress test? Swine Flu? Obama bashing Wall Street? $30 oil? 325 S&P? Downgrades of Cisco, Disney and WalMart by Goldman? Toxic assets? Great Depression II? Uber-bears? Perma bears? The protestations by the chief of the NYSE saying the rally wasn't real? The exhortations to sell by the pundits? Roubini's churlish bearishness? David Rosenberg's bearish screeds? Mike Mayo's Seven Deadly Sins? Henry Blodget's bearishness? George Soros' backache?
Did any of you get caught with this Company of "lies?"
Wasn't all that foolishness chronicled here? Is it any wonder, the bears will no longer read these screeds? As Narigorm said in the book, "I did tell him the truth," she said savagely. "I'll tell you yours, then you'll see."
But let me quote a couple passages from the book. Maybe the bears could say these apply to some of the bulls! Let's be equal opportunity bashers!
Compared to some, my trade might be considered respectable and it does no harm. You might say it even does good, for I sell hope and that's the most precious treasure of them all. Hope may be an illusion, but it's what keeps you from jumping in the river or swallowing hemlock. Hope is a beautiful lie and it requires talent to create it for others.
I am, after all a Camelot, a peddler, a hawker of hopes and crossed fingers, of piecrust promises and gilded stories. And believe me, there are plenty who will buy such things. I sell faith in a bottle: the water of the Jordan drawn from the very spot where the Dove descended, the bones of the innocents slaughtered in Bethlehem, and the shards of the lamps carried by the wise virgins. I offer skeins of Mary Magdalene's hair, redder than a young boy's blushes, and the white milk of the Virgin Mary in tiny ampoules no plumper than her nipples. I show them the blackened fingers of Saint Joseph, palm leaves from the Promised land, and hair from the very ass that bore our blessed Lord into Jerusalem.
The only question you need to consider, about the soothsayers on the street, was also in the book.
It's hard to tell with some of the fortune tellers if they believe in their own art or not!
And on Wall Street the bears believed that belief made things true!
But I digress. I know the bears won't click the clink, so I need to put it in front of their face again.
After all, who wants to be in the Company of Liars?
But let's look at what uber-bear, David Rosenberg had this to say this morning:
"The government has its hands in 40% of the economy and when public sector officials can influence how banks can value their assets, how mortgage servicers should be doing their business, who shall fail in the financial industry and who shall not; and when we have a central bank that is not just the lender but the market of last resort, even for RVs, and a government willing to run up its deficit to levels that would have made FDR blush, then perhaps we can end up seeing a recovery occur sooner than we had thought."
That was supposed to be difficult to recognize? Looks like stock buyers, already seen what only Rosie, and the rest of the bears are now seeing today!
And now Rosie has belatedly recognizes that the illusion of hope, was not in fact, an illusion, but reality. And if they got that version of hope wrong, maybe they need to relook at the version I advertised!
After all, the Government has just put Ginger in the drink to give it some spice, wait until they add the booze!
Now that the market is ramping, what is the case for the V shaped recovery?
It's right here, courtesy of Barclays!
The full FT article:
Never has a bull market climbed a steeper wall of worry. In spite of a proliferation of positive economic indicators, the consensus remains gloomy. Bullish economists are than hens’ teeth.
The average forecast for third-quarter US gross domestic product growth is a weak 0.8 per cent, which would be by far the slowest first quarter of any recovery on record. Since 1945, the average annualised real US growth rate in the first two quarters of recovery is 7 per cent. History provides abundant evidence that the deeper the recession, the stronger the bounce. Even the recovery from the Great Depression conformed to this rule, real US GDP grew 10.8 per cent in 1934 and 8.9 per cent in 1935.
Yet today’s consensus assumes this time things will be different. The persistence of such pessimism is striking given a strong Asian recovery is visible, with output, employment and demand all following V-shaped trajectories, and regional industrial production rapidly bouncing back above the previous peak. Yet this recovery is dismissed by western analysts, who appear unable or unwilling to believe the region is capable of endogenous growth. That 2009 will be the second year in a row in which the increase in Chinese domestic demand exceeds that of the US is a point roundly ignored.
The fate of the Chinese economy is supposedly in thrall to the US consumer, in spite of clear and persistent evidence to the contrary. The US economy, which provides a home to 17 per cent of China’s exports, is still seen as the arbiter of growth in Asia. This obstinate adherence to an outdated assessment of economic dependence is not the only gaping intellectual flaw.
The 9.5 per cent US unemployment rate is also viewed as an obstacle to recovery. This objection ignores the many contrary examples of high unemployment rates and subsequent recoveries, not least in the US. Thus in 1982, US unemployment hit 10.8 per cent, yet GDP soared at an average annual pace of 7.7 per cent over the next six quarters.
Similarly, few commentators consider the possibility that the large post-Lehman rise in US unemployment was a mistake on the part of panicky managements. Yet this is precisely what trends in labour productivity growth, not to mention common sense, tell us occurred. In the first half of 2008, labour productivity growth averaged 3.3 per cent, while the unemployment rate rose to 5.6 per cent. At that point, there was no evidence US companies were overstaffed. Thereafter, output collapsed, yet business productivity growth remained positive, registering an average yearly pace of over 2 per cent, as companies shed labour at a faster pace than they reduced output. Businesses, like markets, panicked after Lehman went under. Employment and output were both reduced far more than it turned out to be necessary, as businesses temporarily and understandably assumed a worst case scenario.
Just as global output is performing a V-shaped recovery, there is a big risk US employment will do the same, with monthly payrolls showing surprising growth by the end of 2009.
If unemployment is one half of the bearish consensus, de-leveraging is seen as the other main obstacle to recovery. Yet increases in private leverage never play a significant role in recoveries. Indeed, since 1950, US private sector borrowing ex-mortgages has declined an average 0.1 per cent of GDP in the first year of recovery, with non-financial business borrowing declining 0.6 per cent of GDP.
A regression of the household savings rate on the wealth-to-income ratio tells us the former has made the appropriate adjustment to declines in the latter. In fact, the rally in the stock market, the low level of interest rates and the stabilisation in house prices all tend to limit the risk of a further sizeable increase in the savings rate. So over the rest of this year, the standard cyclical timing of a US economic turning point tells us pessimistic expectations are likely to collide with the economic reality of a strong recovery. The net result is almost inevitable, in the shape of an inexorable continuation of the equity rally.
But the money is out there even for those bearish.
Press the keys.
Victory awaits at your fingertips!
That's either a double in a week, or a triple in two.
I just have two words to say about that move.
GE upgraded? By Goldman?
What was the story again?
Wasn't GE Capital's latest presentation roundly disparged by those who were so "smart?" Go to their website if you didn't read it.
And why was GE disparaged? Wasn't it because the metrics were under the Fed's "stress test" scenario?
Did trading on that make you any money?
Didn't I have a target of 18 on (GE) this number on my DOW year end piece? In fact, isn't the DOW target of 10,270 now looking light? And if that doesn't look light to you, than you aren't looking at the same market that I am at.
How about the banks, when they sold them off last week. At least here, didn't I say that it meant nothing? And that you had to buy that selloff? Did that make you money?
How about those that said they were now ready to roll-over and puke? Did that make you money?
You better get some rose colored glasses, instead of listening to Mr. Rosenberg!
How about the Durable Goods number?
What was that story again?
Wasn't that supposed to be bad?
Didn't Goldman say that it was "broadly positive?"
Didn't we sell of 70 points on that number yesterday? And aren't we now 130 points higher than when "they" sold it off?
So what was that story again?
How about PIMCO last night?
Wasn't their latest missive about the structural "new normal" and didn't we hear that the the market was on a "sugar high " yesterday?
Did that make you any money?
Listening to that?
How about bonds?
What was that story again?
5 year to 2.68 from 2.63, too much supply coming on the market--we'll never be able to absorb it.
Wasn't that the story again?
Indirect bids were less than 37%--Oh my!!!
Oh my--Stocks are higher!!!
What was that story again?
How about the 10 minute trade yesterday on HIG and FLS before earnings? Weren't these supposed to be pukish also? Come on, I pounded the table on HIG at 6.66, and then 11 and change last week. Isn't it now over 16?
What happened to that story? Book is now 33!
Oooo--but I'm supposed to be scared!!!
Oh make me gag, bears.
How about FLS? Didn't they raise guidance?
Even though we heard all their customers weren't going to buy?
What was that story again?
How about this.
We go to NEW HIGHS by next year.
Get ready for that story.
Because you'll hear about it, here, and often.
Because it's happening.
And we're just getting started!
The NYSE has largely kept its facility under wraps, even keeping the exact location a closely guarded secret. Executives recently made oblique references to the company's plans, describing them as "critical" to the NYSE's future. When they discuss second-quarter earnings, set for release before the opening bell Thursday, those plans are likely to be addressed in more detail.
HFT or knowing what tomorrow's stock prices will be today.
I'll stick to the latter!
Wednesday, July 29, 2009
A lawyer for Wall Street powerhouse Goldman Sachs was caught in a sting operation aimed at perverts who solicit young girls for sex, officials said Tuesday.
Todd Genger, 33, is accused of trying to lure an underage teen with explicit chat on the Internet and then traveling to Westchester to consummate the cyber-affair.
In reality, the "girl" Genger was chasing was an undercover investigator posing as a teen in the chat room, the Westchester County district attorney's office said.
At least she wasn't a "real" 15 year old. Otherwise we'd probably hear bad jokes that Goldman, for once, wasn't trying to screw the taxpayer, and that would of trivialized the issue.
“Some of the courses of action that have been proposed not only will fail to address the perceived harms but also will have unintended consequences that may be disruptive to liquidity and the markets generally,” said Casturo, who is responsible for risk management at Goldman Sachs’s commodity index business.
Casturo said increased participation in commodity markets by financial investors has helped liquidity and improved price discovery.
Or improved Goldman's profits?
When they sold BAC for the $4.6 billion loss, Temasek had this to say:
"We may choose to divest an investment, even at a loss, to optimise our risk or portfolio exposures, or if there are better opportunities elsewhere or later."
Temasek also dumped Barclays at a fire sale price, so at least they are consistent. Buy high, and sell huge when lower!
Now that they have lost $28 billion, they have come up with another gem.
“We are certainly not happy with the negative wealth added in March last year, as well as March this year.”
Tuesday, July 28, 2009
July 28 (Bloomberg) -- NYSE Euronext will begin to charge brokerages for transactions at the open and close of trading in the U.S., while also cutting fees for its largest clients.The New York Stock Exchange will charge a fee of at least 5 cents per 100 shares for trades executed during the opening and closing auctions starting next month.
It costs you not to be ripped off!
A Nasdaq spokeswoman said the exchange had no comment beyond a letter Greifeld sent to the SEC on Monday, in which he called for the elimination of "any order types or market structure policies that do not contribute to public price formation and market transparency."
Greifeld's letter listed "flash orders, internalized orders, enhanced liquidity providers, Block Talk orders, and dark pools," as order types that do not support price formation.
Nasdaq and rival BATS Exchange started on June 3 "flashing" buy and sell orders to exchange members, including big banks and hedge funds -- closely mirroring a service offered by alternative venue Direct Edge, which long offered the service to a smaller group of market participants, and was growing its market share at the exchanges' expense.And they flashed the orders "reluctantly."
A reluctant flasher?
Only after they've been caught!
I advertised the September 29 calls on UNH, at .55 less than a week ago, as a spec on the failure of Obama's plan. They are up 300% already.
You should get another pop in the morning, and play it, then, for free.
Check this out:
The al-Aqsa Martyrs' Brigades, a coalition of Palestinian militias in the West Bank, released a statement saying it was 'very upset' at how it is portrayed in the film.
The group is responsible for dozens of suicide bombings and shootings and has been designated as a terrorist organisation by the European Union and United States
'We reserve the right to respond in the way we find suitable against this man.'
At least they found the only redeeming feature of the movie.
Now? Only now the CFTC realized what everyone already knew? Now they can tell the world they really have their arms around the problem.
Maybe they should now regulate HGH in Hollywood!
The Commodity Futures Trading Commission plans to issue a report next month suggesting speculators played a significant role in driving wild swings in oil prices -- a reversal of an earlier CFTC position that augurs intensifying scrutiny on investors.
And shortsellers, now seem to have been recognized as a force in the market crash also. So now we see this:
US regulators will share more detailed information on short-selling activity with the public as they move to boost transparency of the trading that was blamed for fuelling market turmoil during the financial crisis.
The US Securities and Exchange Commission said on Monday that in the coming weeks, aggregate short-selling volumes in shares would be published on a daily basis while information about short-sale transactions in all publicly traded shares would be provided with a one-month delay.
Just leave the HFT boys alone!
Monday, July 27, 2009
Anyone notice how Nouriel Roubini is now grandstanding behind Bernanke? The call is simple. Just back in March, Roubini forecasted a depression; now we already have the start of the recovery. Roubini can't admit that he was wrong; therefore he has to get behind Bernanke, as the "genius" who saved us from the second Great Depression.
So what policies did Bernanke enact after March that changed the course of history? Could Mr. Roubini enlighten us on that? He, of course, won't and can't; because it's just another smokescreen.
But Bernanke can use that support. After all, that's the line he's telling the American public in Kansas City last week:
"The problem we have is that in a financial crisis, if you let the big firms collapse in a disorderly way, it will bring down the whole system," Bernanke said. "I was not going to be the Federal Reserve chairman who presided over the second Great Depression."
Using that tortured logic, I can say I "saved" the stock market. I said it would turn at 666. How ridiculous is that statement? It bottomed, because it was ready to bottom. And its as ridiculous as Bernanke saying he saved us from the next Great Depression. What Bernanke did do, was save the jobs of a few banker friends!
It's the same with our economy. But stock market at bottoms, turn like speedboats, while economies turn like ocean liners.
And now that the ocean liner is half way through the turn, its even recognizable by those bearish who predicted the next Great Depression.
But since a trillion or so was handed out to the banks, Bernanke has to make up a bigger story, because the public knows they were screwed, while the bankers were bailed. The first $700 billion from the taxpayer given to the Government was on only two sheets of paper. Try and get a mortgage modification by the same banks, and you'll need 200 pieces of paper. So Bernanke tries to paper over this discrepancy, as though he saved the world, when in fact, he only saved the jobs of his friends.
These bankers are so bad with their BS, that they are in competition with Bruno as far as making people want to take a shower!
But compare what happened to the bankers in power here in the States, with what happened to the oligarchs in Russia. Weren't we told that they would all fall from grace with the decline in commodities? And all their empires would unwind? And no-one would rollover their debt? Debt that was is excess of $430 billion?
What happened? Why are the oligarchs still in power?
Let's go back to LTCM in 1998. Wasn't that supposed to come about because of the price collapse in emerging markets? And when LTCM needed to get bailed out, who balked? Didn't Bear Stearns not ante up the $250 million the other bankers did? And didn't Lehman only put up $100 million? Was it just ironic that these two firms bit the dust? Were they any worse than the rest of Wall Street, or were they just not as connected?
Maybe you think I'm being too dramatic in attempting to make a point. You think so? How about when Merrill was staring into the abyss, and was going to go out of business, just like Lehman and Bear Stearns did. Didn't John Mack of Morgan Stanley say, "Maybe we should let Merrill go down too." What did Jamie Dimon then say to Johnnie Mack? Didn't he say this: "John, if we do that, how many hours before Fidelity would call you up and tell you it was no longer going to roll your paper?" And later, didn't Dimon, like Bernanke, also have that same problem of recollection about this conversation?
So what caused things to change? Wasn't it something much simpler? Make it unpalatable to profit from falling prices. Restrict short selling, change credit default swaps, and make the White House the bully pulpit. That way, you need to get long to profit. In fact, you had that story here, on March 4, right before the bottom, when the White House put themselves on the cross, and did a shakedown of the vocal bears.
Bernanke, the arsonist, became the fireman after he was tried by fire. But his bet, was the same the oligarchs made. They just needed to buy themselves some time.
The difference was, the oligarchs didn't have a pussy like Paulson getting down on his knees and begging money from Pelosi to get it done. And then, have a Fed chief, broadcasting to the world that he saved it from the next Great Depression.
The oligarchs just decided to play Russian roulette with the banks.
And the banks blinked, before the chamber was even loaded!
And they bought themselves time, because that's all they needed.
Goldman finds it compelling, and Barclays now sees a recovery in international markets.
I advertised this number just over a week ago at 28.92, and it traded to 33 and change in Thursday's afterhours after earnings.
Now that the stock pulled in two points, it's providing an entry point for the IB's to tout it.
You can see that in just about any stock. The weakness is used to buy.
So riddle me this then. If the IB's use weakness to individually buy and tout the names, how then, collectively, is this market supposed to come in?
On Wall Street, there are two interpretations of this business model: Either the firm is so brilliant at making near-riskless bets that it continually attracts more clients, who don’t mind being used for the golden database if it means more profits for them—or it’s a giant casino in which the house has gamed the system by knowing every hand at the table and using that information to enrich itself at the expense of others.
Well wasn't the most erudite of the bears David Rosenberg?
Remember this crystal ball story here?
Highly paid, and widely read can be wrong!
Tomorrow's Wall Street today, once again, is tucked away here, in the free corner of the Internet!
However doubts about the value of high-frequency firms have emerged at the London Stock Exchange, which this month abandoned similar rebates amid concern that it was alienating its biggest customers, the large banks that channel orders from so-called buy-side asset managers and pension funds.
Taiwan OEM's have recently placed new orders for Sony's PS3 components--that are double the growth rate of the 2nd quarter.
Goldman last week, increased their target on ERTS to $25 from $24 because of M&A premium. I'll go with them on that trade.
Apple is working with the four largest record labels to stimulate digital sales of albums by bundling a new interactive booklet, sleeve notes and other interactive features with music downloads, in a move it hopes will change buying trends on its online iTunes store.
The talks come as Apple is separately racing to offer a portable, full-featured, tablet-sized computer in time for the Christmas shopping season, in what the entertainment industry hopes will be a new revolution. The device could be launched alongside the new content deals, including those aimed at stimulating sales of CD-length music, according to people briefed on the project...
“It’s all about re-creating the heyday of the album when you would sit around with your friends looking at the artwork, while you listened to the music,” said one executive familiar with the plans.
Apple wants to make bigger purchases more compelling by creating a new type of interactive album material, including photos, lyric sheets and liner notes that allow users to click through to items that they find most interesting. Consumers would be able to play songs directly from the interactive book without clicking back into Apple’s iTunes software, executives said.Book publishers have been in talks with Apple and are optimistic about their services being offered with the new computer, which could provide an alternative to Amazon’s Kindle.
Sounds to me like AAPL is creating "Kindle lite."
Sunday, July 26, 2009
It is the gift that keeps on giving.
The government's guarantee since November on new debt issued by financial firms such as Citigroup Inc. and General Electric Co. will save those companies about $24 billion in borrowing costs during the next three years, according to an analysis by The Wall Street Journal.
In the second quarter alone, the eight largest issuers of corporate debt under the Federal Deposit Insurance Corp.'s Term Liquidity Guarantee Program cut their interest costs by about $2.2 billion, increasing their profits and delivering an extra jolt to the stock market's two-week rally.
Citigroup saved nearly $600 million in the latest quarter on the $44.6 billion in medium-term FDIC-backed debt it has issued, or about 14% of its overall profit of $4.28 billion. Goldman Sachs Group Inc., which posted record quarterly profit of $3.44 billion, is cutting financing costs by roughly $205.5 million every three months by selling corporate debt through the government-assistance program instead of on its own.
Looks like the shorts in these numbers rolled snake eyes!
Now I know I was in WYNN on April 2 (I said the shorts on the casinos were Wall Street's new cooler) at 27, out at 50 on May 5, and back in at 35 and change on May 26 before Obama decided to visit Vegas.
Thursday morning, I said it was time for traders to get back in the casinos that have the Macau IPOs. LVS was 10.25 and WYNN was 42 and change. So why another tout again instead of another "As advertised?"
Because I think this time, the market won't be able to contain the moves.
Last I checked, there was 70 million shares short in LVS, and 16 million shares short in WYNN.
Shorts think WYNN will stop at 50, and LVS will stop here. I don't buy that for a second. I retouting these names because I think WYNN goes to 66, and LVS goes to 17, on their "enterprise" value, which will be unlocked by the Macau IPO's and the market belatedly recognizing that Sand's Singapore casino will greatly help cash flow for LVS.
I also think MGM could spike to 12, as I believe negotiations with the NJ gaming regulators regarding Pansy Ho, could soon receive clarification. (I'm long the 7.5s, 9s, and longer dated 10 calls on this number. 12 is just a stepping stone on the way to 22.)
The catalyst this time?
What analyst is bullish? But what person doesn't know that China is on fire? And what person soon won't know about Macau's new culture secretary Fernando Chui, who wants to smooth relations with China?
First step is changing the Visa restrictions on Chinese heading to Macau. Currently its once every two months.
Chui's first statement was this:
“The Motherland not only provides us with powerful backing, but also continuously injects dynamism into our development. I’d like to take this opportunity to extend my gratitude to the Central Government for its care and support for Macau.”
And I'd like to take this opportunity for thanking him on the shorts burial!
Didn't Obama have 17 parking tickets courtesy of the same Cambridge police, that he garnered in college, that he only paid right before he started his Presidential campaign?
At least Washington works like the SEC.
If its a parking ticket, they'll move mountains to get to the bottom of it.
Now that the SEC has investigated, Al-Raya's CEO Hazem Khalid Al-Braikan was found dead.
Citigroup owned 10% of Al-Raya.
The SEC officials should do some digging at Citigroup and see what their positions in these numbers were.
Ex Citi bigwig, and ex Treasury Secretary, Robert Rubin, did many, many, many multiple times more damage to Citigroup than what these couple press releases from Kuwait did.
But no-one from the SEC deems it important enough to investigate Rubin's misstatements!
On May 5, after the market had a great move, Mark Hulbert said this.
Commentary: Yet more evidence we're in a bear-market rallyWhat I found reinforces the conclusion I reached last week: There is a good possibility that the market's rise since March 9 is a bear-market rally rather than the beginning of a new bull market.
At the same time, I was calling these bears Waldos.
Now Mr. Hulbert is warning us again:
That unfortunately means that the stock market's rally can no longer count on receiving much continuing support from the sentiment data. In other words, the editor of the average short-term market timing newsletter is no less optimistic today over Dow 9,000 than he or she was about the same market level in early January -- just before the stock market was about to go over a cliff. This is not what contrarians believe should occur at major market bottoms. The typical pattern is for there to be a lot more pessimism as the market recovers from such lows than during the initial descent into those levels.
I guess that's the difference between a journalist and myself. I say it like it is. These folks love to use the word "contrarian" when its just an euphemistic way of saying they are right and the markets are stupid.
But if they said that, who would buy it? Who wants to call the markets stupid? Oh wait. Didn't we have one of the most vocal bloggers alert us of that? (Karl should really be running for political office!) And say, "Do Not Be Stupid." And what was his "misplaced" advice on Aprl 11? That if we didn't listen to his bearishness, it would be to our own peril!
So now just call yourself a contrarian, and make bad calls, and then you can continue to write about them!
Even if the calls are--wait--I won't say stupid--I'll put on the hat of a journalist--and just say even if the calls are misplaced!
And while misplacing my modifiers--too your own peril!
Because stupid is only funnier on a shirt, than on your shorts!
For 10 days, Erin Andrews of ESPN, and her peephole video is one of the top searches on Google, despite the warning that hackers have downloaded the video with viruses.
Now we know why Brett Favre hasn't signed with the Vikings.
His publicity machine can't compete with that!
Saturday, July 25, 2009
What happened to Caterpillar after earnings? Two days before earnings it was 33. It's now 42. You had that action in six days. And we heard how they "missed" on the top line.
How about MMM? Wednesday before earnings, the stock was 64.67. After earnings Thursday the stock was 5 points higher! And they "missed" on the top line!
How about GOOG? They beat numbers last Thursday night, but they sold the stock down on expiration to 430, because "they" wanted you to think it was a miss. Where did the stock close yesterday? 446! How about its twin BIDU? Thursday it was 332. After earnings--358 at Friday's close!
How about ISRG? Remember when this was manipulated on April 16? After earnings? You had the story here, on this blog. After earnings, they knocked the stock down 10 to 109, only to see it close at 131 the next day. Three months later we get another earnings report from ISRG. Wednesday before earnings, the stock closed at 169. It closed Friday at 222, double the manipulated price that the bears printed only just three months ago!
How about JNPR? Weren't we told that it missed it's numbers after it reported? Didn't these hapless bears and shorts knock this number down in Thursday's after hours to 24. What happened? Didn't Goldman Sachs then upgrade JNPR Friday morning? And didn't this number then close at 26.86?
But we hear the stories and the excuses. It's just the HFT. The high frequency traders and the flash orders. Why else do you think I have the women flashing on this blog? Did you get anything from the women flashing? That's the same that these HFT's guys get. Sometimes the flash is worthwhile, but sometimes they just need to get the programs interested. Because buyers are under the market, thinking that they are so smart, when these buyers underneath the market are just dumb! They should be taking offers; instead, they think they are being prudent, and smug, in their own analysis of where prices should be, when they should be as giddy as the folks at the Heinz wedding!
Newsflash stock buyers! Prices should be much higher, and if the HFT traders need to smoke you out, to pay up, then so what. They at least know where stock prices are going, and those folks with their bids in the system don't.
These HFT traders are doing just what we did during the Internet stocks. But this time, they are doing it with real companies, with real assets, and real franchises, that have a real worth.
It's just that the typical stock buyer hasn't gotten a clue of where prices should be. They read the erudite bears, and they look at the unemployment numbers, and they see the foreclosures, but somehow they can't see past any of this.
March, 2009, is the equivalent of August of 1982. And now we are just approaching December of 1982, and it's July of 2009. Where did that market go? Where then, do you think this market is going?
So now you want to sit and bid for stocks?
So the supplemental liquidity providers then will take your money. Your liquidity, goes to supplement those with billions. But you let them. You should be just taking offers instead of bidding for stocks.
Spreads are so tight with these algorithms, that you don't need bid against the machines. You can pick your entry points, when the machines exaggerate the moves downward, or sell when they exaggerate the moves upward.
So pick their pocket, or otherwise let them pick yours!
Heck, one company that did report, that they have now taken down, is United Technologies (UTX 52.23). Long term buyers should be all over this number right here, when these programs are trying to smoke out the stock. This stock really isn't the kind I buy, but these mutual fund that keep getting their pocket picked, should take stock down here, now, and in size. Take it when they are giving it to you!
This HFT game is no different than anything else.
Remember when Goldman Sachs economist Jan Hatzius, was calling for the end of the world, and the next great depression? Right at the market low, and the months before? Notice how he doesn't show his face on television anymore? But to Goldman's credit, at least he was allowed to throw a sop at the market on April 22.
Is it any different here with the Supplemental Liquidity Provider's? Didn't Goldman just up their S&P target now to 1060? But that target is moving anyway. Heck we went up 7.3% the week before last, and 3.9% this week.
How about oil? Did we hear a peep from Goldman when it was $59? Now that it's $68, don't you think they are getting ready to get out of the closet again? After all, weren't we supposed to have an investigation of oil being rigged? What happened to that story? It was swept under the rug, just long enough, that now oil is ready for another Goldman pump!
Because the HFT scandal has now become main stream. The NY Times has that story.
It used to be "pump and dump."
Now it's just "pimp and pump!"
Without a peep!
Since July 10:
HERE'S A SNAPSHOT OF JULY'S ROMP, courtesy of Bespoke Investment Group: From their July 10 low, the 50 smallest stocks in the S&P 500 had rebounded 17.2% through Thursday, outgunning the 50 biggest stocks' 9.7% gain. The 50 most heavily shorted stocks have jumped 17.6%, versus just 8.8% for the 50 least-shorted names. Companies raking in foreign revenues outran domestic earners, a sign that traders are still uneasy about the dollar.
In Barron's Friday, noted shortseller and bookseller, Barry Rihltolz was quoted as saying:
"In this environment, capital preservation is paramount," Ritholtz concludes.
Up 17% in a couple weeks? How about capital restoration?
Maybe capital preservation is key for those short, but capital restoration is key for those long!
And the market is providing it, despite what the booksellers will tell you!
Friday, July 24, 2009
Did CNBC Jinx The Rally?
NASDAQ Win Streak Will Crash To A Halt (MSFT, AMZN)
What happened? That's a jinx? That's a crash? Not even .02 on the QQQQ's?
That's the difference between a journalist and a trader.
At least here, last night and this morning, I said the news meant nothing.
And the supposed sell-off and crash?
Except more accumulation and buying of stocks!
If you look at how annoying this stock traded, then you know, it got just about every person that wanted to sell out.
And when you get every person out that wanted to sell, you go higher.
Let's look at the dialogue we've heard just the last few days.
That the market "melt-up" is a black swan event.
Was sub-prime black swan? Was that contained? Didn't it hit Alt-A, Prime and then Commercial real estate?
How about the market crash that we just went through? Or the collapse of the financial institutions? Didn't the black swan get them also?
So now we are just going to dilly dally around here?
Who is smoking what?
We are going to rip the hearts out of the shorts. This market will make the doomsdayers irrelevant. And it will make the person, with the most outlandish, and reckless opinion, the one that wins.
Because when Armageddon happens, no one will be prepared. And to make all these Armageddon callers look completely foolish, no one will remember this crash. They will only remember the opportunity it gave, and the fortunes that were created, by those who were "brave" enough to buy. And that bravery is of the Wall Street type. Because it doesn't take courage, and it doesn't take bravery, and it doesn't take intestinal fortitude to buy here, but Wall Street needs to pretend it does, because most of the people are just overpaid scared sheep, that have figured out a way to misprice merchandise on an unfostering gullible public while they accumulate it--a principle Goldman Sachs completely understands. So they need to pretend that it took balls of steel to buy, so they can steal the money back that they already stole from the public!
So when you here that this rally was a black swan event, pay it no heed.
The pain hasn't even started for those short, and for those that are underinvested.
Because after all, isn't the pain, so far, just contained?
And the only way to blow the lid off is with higher prices.
And they will be much higher!
Botox and breasts making a comeback?
We knew that there was a downturn in "vanity" but the upswing in the market may even make DABA girls fashionable again.
Allergan reports numbers at the end of the month. AGN snatched breast maker Inamed, from Medicis Pharmaceutical who tried to buy them a few years back.
With the price that Ethicon (JNJ) paid for Mentor, we know that breast augmentation and aesthetics is still a good business.
The trade down in aesthetics has been MRX, which has been accumulated the past three months. They don't do breasts, even though they tried buying them, but they do help the face look nice.
They report earnings on August 4th.
The stock, at under 16 is cheap, and has takeover potential.
"Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.
“This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”
It was July 15, and Intel, the computer chip giant, had reporting robust earnings the night before. Some investors, smelling opportunity, set out to buy shares in the semiconductor company Broadcom. (Their activities were described by an investor at a major Wall Street firm who spoke on the condition of anonymity to protect his job.) The slower traders faced a quandary: If they sought to buy a large number of shares at once, they would tip their hand and risk driving up Broadcom’s price. So, as is often the case on Wall Street, they divided their orders into dozens of small batches, hoping to cover their tracks. One second after the market opened, shares of Broadcom started changing hands at $26.20.
The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.
In less than half a second, high-frequency traders gained a valuable insight: the hunger for Broadcom was growing. Their computers began buying up Broadcom shares and then reselling them to the slower investors at higher prices. The overall price of Broadcom began to rise.
Soon, thousands of orders began flooding the markets as high-frequency software went into high gear. Automatic programs began issuing and canceling tiny orders within milliseconds to determine how much the slower traders were willing to pay. The high-frequency computers quickly determined that some investors’ upper limit was $26.40. The price shot to $26.39, and high-frequency programs began offering to sell hundreds of thousands of shares.
The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders."
And now ZH, has a copy of the SEC letter on its website, purporting to look into Goldman's high frequency trading.
But why doesn't someone try and game the algorithms?
If someone really wants to own a stock, why don't they just take the offers? On most stocks, you have 50-100,000 shares available. Take it from HFT algorithms, instead of flashing them your orders, and letting them front run your price!
And if you really wanted to goose a stock that you were long, why couldn't you have 100 daytraders all in concert, put in bids, on some of the thin names and let the algorithm detect the "buying interest" and let them run it up amongst themselves. Then have one of the daytraders, put a bid a penny above his buddies, and let the algo's hit him, while the bid continually is refreshed. That will alert the algo traders that the buyer is "real" and that the bid is really another algo trader that really wants the stock.
It's time to game the gamers.
"Finding your rhythm as a rookie anchor in cable news, circa 2009, is in large part about learning to tap your inner outrage. On the night of Tuesday, June 30, Dennis Kneale found his. At the time, the 51-year-old business reporter was several weeks into a tryout, anchoring CNBC’s 8 p.m. hour. He stared at the camera in a TV studio in Englewood Cliffs, N.J., and lambasted the anonymous bloggers who were making fun of him on the Internet for, among other things, his recent and repeated claim that the recession was over. Mr. Kneale called the “digital dickweeds” cowardly and cynical.
“I say dickweed because apparently it is indeed a plant akin to pond scum,” said Mr. Kneale, “and name-calling seems to be the lingua franca of the blogosphere.”Afterward, Mr. Kneale’s producer told him that his outburst was poetry, the best thing he’d done on the show. The next night, Mr. Kneale returned to the subject. He called the blogosphere the “bitterest realm on earth,” and noted that he didn’t spend much time reading “the vitriol spewing out of these miscreants and these digital imbeciles,” but that, apparently, they were watching him. “Nanny-nanny boo-boo,” said Mr. Kneale."
Gawker has a different version:
If half the rumors about Dennis Kneale are true, the CNBC host has good reason to fear bloggers and curse them on air. So why is he telling people privately that he manufactured his feud with bloggers for buzz? After Kneale's repeated on-air outbursts against bloggers, in which he has called them "dickweeds" (see June 30 video above) and "digital imbeciles," Kneale told our source who spoke privately with him that the crusade was dreamed up with his producer, former Fox News man Jerry Burke. The idea was to draw attention and drum up buzz.
Supposedly, his rant was manufactured, as in made up, as in pretended outrage. The day before his rant, someone from CNBC went through 28 pages of my blog. Maybe it was manufactured? who cares. What isn't on CNBC? I was then invited to be on CNBC's show, and gave a response, but it never amounted to anything.
Anyway I suppose the blogosphere will talk about it for a bit, since Harry Crumb is demolishing them since DK is bullish! It will be akin to blaming the market upswing on HFT!
But the story has brought up another side of Dennis, that is rather entertaining. The Viagra induced groper! He's caught in a rabbit hole, just like the bears!
This Page 6 article has now been resurrected:
WHICH business-magazine editor, who keeps a jar of blue jellybeans on his desk labeled Viagra, was called on the carpet for feeling up an underling's wife? The co-workers and their spouses were in a taxi heading to Brooklyn after an office party. The underling later went to the groper's home to get an apology. The groper's boss told him that if it ever happened again, he'd be fired.
Danger is his middle name!
Of Colombia's 162 endangered birds, her favorite is the yellow haired parakeet. One time when she was in the jungle a bothrops atrox, (a pit viper) was in the nest of her favorite bird, so she had to remove the venomous snake. She used her net to delicately remove it, and toss the viper and protect the bird's nest and egg.
But no sooner had she removed the viper, that she was confronted by one of the more serious side; one of Colombia's gun toting guerrillas, who had amusingly been watching her.
They asked her what she was doing in the jungle; and she told them, and she gave the names of those in their territory that had given her permission to be allowed in their jungle. (Guerrillas have property rights, its just that most people don't bother trespassing on their land!)
They asked her, if she was afraid of the jungle. She said, "No, I'm not afraid of the jungle but I'm afraid of your guns." They laughed, and then looked at her, sized her up, and not having any female companionship, they told her to come with them. They then proceeded to give her a "tour" of the jungle, and did their best to be charming.
She saved the birds, got her stories, and made the guerrillas day, all the while being protected by machine guns.
Because she was saving a rare birds egg.
And that night, she restfully slept in a hammock, tied between two trees, by the edge of the water.
She was awoken early in the morning, by a crocodile, eating a fish dinner, underneath a hammock.
Compared to the guerrillas, it was restful!
What happened to the massive drop in the futiures that we were supposed to see after MSFT's miss and AMZN? Weren't we assurred that the market was then going to rollover and puke?
Two things on MSFT. They have a new operating system, Windows 7, and and they spent money putting out bing--So Windows client revenue was down 28%, and online services lost $732 million.
So sweat Mr. Softee all you want, and try and extrapolate it to the rest of the market, and sell stocks and go short because of it, and you'll be just wrong.
It means nothing, and you that have their hopes that this will mean something, will have your hopes displaced.
The only ones selling on MSFT on this news, were those short, trying to make the market appear to say something, and those re-allocating money from MSFT, into something that moves.
Because where are these same folks that sold last night this morning?
And the bulls are eating eggs for breakfast!
Thursday, July 23, 2009
So the futures are down on Amazon's miss, and we are supposed to be scared. So I guess I'll beat my chest like Tarzan, put out a silly picture, and advertise some calls made here in just the last ten days or so.
Just to show you that you can swim in the Amazon!
So weren't HIG and LNC touted just 7 trading days ago at 11.31 and 15.45? And didn't they close at 14.38 and 18.26, up 27% each?
Two 27% movers in, and the bears think people are going to stay away from the stock market?
How about BUCY last weekend at 28.92. It's at 33.25 in the after-hours and going higher. That's 15% in four days. URI is 11% higher also.
How about my cement plays VMC at 40.62 and EXP at 22.72 just 10 days ago? Didn't they close today at 46.77 and 28.54? That's 15% and 26%!
I touted options on Berkshire Hathaway two days ago. They are up 40% already.
How about my CAT options. You only had 500% on these numbers in three days!
You had the play on AAPL before earnings, and cash for the gold bugs--two 15% plays, and two 10% plays, in less than a week.
You had the play on Harmon twice! In the pre-market it was up 50% on the fake take-over story. And I touted it again at 21.33 when someone puked this number up!
You had the bottom in oil at 59, and ICE at 85 here.
And on Tuesday July 14, before the open, and before this market took off, before oil rallied, and before bonds sold off you had this:
And you had a "flash" piece on Meredith Whitney, and the inimitable Harry Crumb here and here!
And now Sitting Bull! Carnac!
Where did we hear that before?
Before we answer that, let's ask where we heard that today? Wasn't it from the bearish, but highly readable Zero Hedge?
Here's what ZH had to say today:
The curveball: Now VIX is directly correlating with stocks. Last time that made sense was, well, never, even though it happened just over a week ago. The Black Swan reverse migration is the market melt up this time around.
That's the definition of a black swan? According to "The Black Swan" author, Nassim Taleb, it is this:
First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact making it explainable and predictable.
- Extreme Impact
- Retrospective predictability
I guess we now have that here, on this blog. Because wasn't this not said?
Those that missed the bottom, or don't know why stocks are going up, come up with clever and sophisticated reasons to explain why the market is wrong. Just like a lie. The truth is never complicated. But no one on Wall Street seems to be able to say "I was wrong" or "I missed the bottom." Instead, we get stories like these.
From the same people, who missed the bottom, and have a self interest in stock prices coming down, because they missed it, or are short!
And if only one of these quants funds is up since Marth 9th, how much firepower then, is on the sidelines, who will soon be forced in?
And that my friends, is the black swan event that the bears are missing!
And of course the bears can't recognize it---because the bears are the market's next black swan!
It's good to see that this black swan, as advertised here now has its restrospective predictability!
It did have its rarity. I didn't see anyone else touting this market.
But it still hasn't had its extreme impact.
Because we are just getting started! After all, we're heading to new highs next year!
AMZN: Instead of the margin noise, let's look at their acquisition of Zappos. I don't have my Goldman research in front of me, but from this morning Goldman said that AMZN will be able to save $1 per order on shipping, the average ticket on Zappos is $130ish versus $25ish for AMZN, and that Zappos net will be about $20-30 million. That's the story on AMZN, not tonight's margins.
Cramer on his show told people to take some profits tonight and buy a sweater. But then he said tech was going higher. Anyone want to have it both ways?
Here's what Richard Russell of the Dow Theory had to say today:
But next question, did the bear market hit bottom on March 10, 2009? I am doubtful. First of all, valuations on March 9, 2009 did not come anywhere near the typical valuations seen at major primary bear market bottoms -- nor did price earnings ratios for the Dow or the S&P come close. At a true bear market low, the sentiment is beyond bearish, it is total revulsion. At the final bottom, people don't want to hear about Wall Street or stocks. They've been too badly battered, and the losses have been too upsetting and frightening.
Today, just four months after the "supposed March bottom," the public is turning bullish again. At the March 10 low, Lowry's Buying Power Index stood at 96. Four months later, on July 10, Buying Power had dropped to 82. Never in the 78 year history of Lowry's has Buying Power fallen to a new low following a perceived market bottom. In other words, Buying Power now is lower than it was at the March 9 "bottom."
Which means that this after-hours selloff is just profit taking by nervous folks.
And it means nothing.
I've outlined how Joe Weisenthal at Business Insider has been slamming the earnings reports. Today, with the DOW at 9,000, he comes up with a different tune:
Judged solely by market action, this has been a stellar earnings season so far.
What was that?
It's just another bearish Pied Piper!
To get hits, you need to get bullish!
SPX 965? Bears thinking we are exhausting ourselves? Maybe they should try 4,444.
You think that is ridiculous?
Maybe you should re-read what was written on March 12!!
Thursday, March 12, 2009
It's the bull market of the beast.
The low in the S&P was 666.
The low in 1982, on the DOW was 777 before it's 18 year run.
And when the market crashed in October of 1987, to the high in 2000, the S&P had moved 666%, and it took 3,141 trading days (pi).
So let's take the S&P low of 666.666 X 666.666% and we have a target of 4,444 in the S&P.
Since I was born at 4:44 AM, on this earth that spins around the sun at 66,666 miles an hour, I'll take those numbers.
But no one else will. The bulls flip to bears when the market stalls, just like a sober alcoholic goes back to his drink.
The bears can't go in the bull camp because their positions are contrary to it, and so is the news.
And like an alcoholic, who thinks a drink will make him feel better, they go back to their shorting ways, not realizing that the punch bowl for the bears has been taken away, and the market is on the road to recovery.
So I threw in some math, that only someone with "wet brain" would appreciate.
The market just got it's white chip.
It's not going into relapse yet!
The green chip comes in 90 days.
And that's when the bears will sober up!