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Tuesday, June 30, 2009

An open letter to Dennis Kneale at CNBC

Dear Dennis:

I received a comment from your producer Dave, asking me to participate on your show tonight, on my blog. I accepted, however it must of been too late, as I posted a response, and your producer had already left for the day, when I called. I normally write at night, or in the morning, and then I leave this blog alone, because unlike corporate America, I'm not tied to a Blackberry, and I refuse to have emails or posts sent to my phone. I check electronic mail, the same way I check postal mail.

When I get home.

Forgive me for that.

I saw you on your show tonight on CNBC, where supposedly these "bloggers" feared to be on your show. I, however, do not share that trait. Do you really think I fear easily?






In fact, you could say that this blog answers to a higher calling. But could you take a response from someone that says this? Or this? Or this? Even though it was 100% prescient?

Could you handle a person who had this response to the Madoff ponzi scheme?

Could you handle someone who has this take on Shakespeare? Or Superman? Or the Mona Lisa? Or this version of Wall Street truth? It's written, so that the nuances can't be detected, even with an earpiece, two teleprompters or five handlers. You need to know, to know what it means, and what it reads, is not what it says!

But on the market, I am crystal clear. Oil, bonds and stocks. Isn't that what CNBC viewers trade?

So I ask you:

Did anyone at CNBC say to sell every one of your bonds on January 1, at the exact top for a New Year's resolution? How clear was that?

Did anyone on CNBC tell you to buy oil, when your CNBC guest on 12/19/2008 said it would go to $17.85?

Or give you the play at the exact bottom in crude with the shortsale of double short crude ETF? It was only 155 points in just over two months!

Or cleary explain Goldman's oil position posturing?

I didn't see that on CNBC.

But you saw it here.

You had the bottom of the stock market at 666, the day it happened. You only had four 300% winners, and three 200% winners from that post alone.

I didn't see that on CNBC. But you saw it here.

And for emphasis, another 666 "Number of the Beast" post the next day after the market bottom. Even though it was 100% accurate, and 100% prescient, could you really handle the leprosy argument, or the evisceration of the bears sacred leaders?

That call would of made someone's year. I didn't see it on CNBC. But you saw it here.

And another on March 11. Heaven help you if you read it--I said "Lazarus come forth!"

Or this response to "wet brain" three days after the bottom in the market?

Has anyone on the history of CNBC ever had three week results that looked like this?

Or two 400% plays in three days?

Did anyone at CNBC call the second leg up on this market, after the first consolidation at S&P 830 on this market the day it happened? With a stool check?

Did we see anything remotely like that on CNBC? But you had it. Here.

Too many posts to read? Here's one--To the day. I'll make it easy.

Now I talk fast, and think quicker, so I blog so I'm not misunderstood. However, I still have that faulty genetic trait, that also befalls those that make the news, or report on it.

Publicity is good.

So I'm interested, to spar with you, even though we are more likely on the same page, despite the sh*t I gave you the other day.

And I commend you for doing a good job disposing of the blogger on your show tonight. I'd expect no less from Gator Nation.

But why don't you take on a real fight?

Comment me, Dave or Dennis, and I'll call you.

Or I'll call your television blogger bluff!

And if you don't, I'd still buy you a beer at the Swamp.

Because I've been in the real ones up in 'Nole country, and I prefer playing at home!

"I betcha"

Sarah Palin said she could beat Obama in a distance run:

"I betcha I'd have more endurance," she said. "If you ever talk to my old coaches they'd tell you, too. What I lacked in physical strength or skill I made up for in determination and endurance."

In hoops, she admits she couldn't beat him in one on one because, "He towers over me and I wouldn't be complaining about an unfair advantage there." "But maybe I'd do better playing H-O-R-S-E with him than one-on-one," she said.

Her self importance reminds me of some television journalists....

Some ZH commentary

Over on ZH

Tyler Durden
I have no animus toward Obama at all. I, however, loathe anyone who believes they can take advantage of the little guy with BS data and spin it on TV for hours just to get mom and pop to part with their $x cash and buy Citi stock. Also, if you have been reading this blog and others, I am sure you have noticed many other instances of data manipulation, and not by the CAR, that I have highlighted.

Marx Karl
Tyler,You're being disingenuous. You have loads of animus toward the Obama administration and you show it every single day. Sorry, but it's not convincing.

Tyler Durden
Actually i am not. I would as happily ridicule any republicans in a position of power... if only any were left. Alas aside from affairs with Argentitian hotties, republicans are strangely absent from the popular scene these days.

Argentitian? Doesn't that make Gov. Sanford's quote "the erotic beauty of you holding yourself (or two magnificent parts of yourself)" just jump out at you?

Maria Belen Chapur has now changed the meaning of Argentitian!

Univision will soon be calling!

Oil toppy, bonds sloppy, and confidence droppy

That sums up the market today.

Robbber gets smacked around by 72 year old ex boxer

















A burglar with a knife got pounded when his 72 year old victim punched him out.

Time for a new Facebook picture!

"Green shoots"

Everyone seems to be annoyed with the word "green shoots" and they'd be happier, if the term would be junked, like Obama did with the "global war of terror" terminology.

June 30 (Bloomberg) -- The current recession has created at least one growth industry: use of the phrase “green shoots.”

Since Federal Reserve Chairman Ben S. Bernanke first uttered the words almost four months ago to describe signs of a thaw in frozen credit markets, instances of the botanical metaphor in the press have climbed sevenfold. A Google search for “green shoots” returns 4.86 million hits.

“These may be the two most overused and annoying words of my investment career,” said John Mauldin, president of Millennium Wave Advisors LLC in Arlington, Texas. “Every possible sign of a recovery is anointed with the phrase.”

Jim O’Neill, the chief economist at Goldman Sachs Group Inc., said April 27 that the green shoots of global economic recovery are “turning into daffodils,” when he upgraded his forecast for 2010 world growth to 3.2 percent from 2.8 percent.

‘It’s Moss’

“Housing is still a drag on the economy,” David Coard, head of fixed-income trading in New York at Williams Capital Group, a brokerage for institutional investors, said May 26. “It may be green shoots, but they are growing slowly. It’s moss.”

Billionaire investor Warren Buffett joked June 24 that he had yet to see any green shoots, adding that his eyesight may be to blame.

“We’re not seeing them,” Buffett said on CNBC. “I had a cataract operation in my left eye about a month ago and I thought, maybe now I’ll be able to see some green shoots.”

..Nouriel Roubini, the New York University economist referred to as Dr. Doom for predicting the current crisis, enlisted the phrase to temper budding optimism about the economy.

“People talk a lot about these green shoots,” Roubini said June 22 in Paris. Yet looking at the economic data, he said, “I see more yellow weeds than green shoots.” Instead, he predicted the recession in the advanced economies would last another six to nine months.

..Accurate or not, Bernanke’s resurrection of the expression may have done some good this time around. Consumer and business confidence measures improved as it proliferated in the media, according to data compiled by Bloomberg.

..The term is “overused, not to mention overrated,” said David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates in Toronto. “It is more a comment on the human condition and the innate need for optimism” than an accurate description of the economy and markets, he said.

A substitute phrase may also be needed if the U.S. economy slows down again later this year, said Rosenberg, the former chief North American economist at Merrill Lynch & Co.

“We will not very likely see ‘brown manure’ as the catchy horticultural replacement to green shoots,” he said.

Monday, June 29, 2009

Did the Government prop up the Transformer box office?

Or was it just young boys?

$200 million? That supposedly wasn't supposed to happen!

It can't be! Weren't the reviews terrible? Didn't the critics complain about Megan Fox and her toilet habits? And didn't they just hate the movie?

How about Roger Ebert?

“Transformers: Revenge of the Fallen” is a horrible experience of unbearable length, briefly punctuated by three or four amusing moments… If you want to save yourself the ticket price, go into the kitchen, cue up a male choir singing the music of hell, and get a kid to start banging pots and pans together. Then close your eyes and use your imagination. The plot is incomprehensible.

How about Joe Morgenstern from the WSJ?

Michael Bay’s 150-minute celebration of attention deficit disorder is like a July 4th fireworks display that doesn’t end until July 8th and makes you swear off Roman candles for life.

How about the Hollywood Reporter?

With its intelligence at the level of the simple-minded, however, the film is not likely to attract moviegoers who seek something more than a screen filled with kaleidoscopes of colored metal.

How about USA Today?

Bigger, louder, longer and more metallic is definitely not better.

How about Rotten Tomatoes? A rating of only 20%?

$200 million dollars in five days!

Maybe JPM and Goldman Sachs were buying movie tickets at the Government's behest, to give us "green shoots!"



Transformers, was to the critics, as this bull market is to the shorts.

As Ms. "pinch a loaf" says, "I'm your worst nightmare!"

Mark Sanford the Appalachian Democrat?


Just in case you haven't acquainted yourself with South Carolina Republican Governor Mark Sanford's emails, here's a link in his lessons of love. But let me indulge myself and give just a few tidbits of just one of his email lessons:

He used flattery:

"..you have the ability to give magnificent gentle kisses, or that I love your tan lines or that I love the curve of your hips, the erotic beauty of you holding yourself (or two magnificent parts of yourself) in the faded glow of night's light"

He used power:

"The following weekend have been asked to spend it out in Aspen, Colorado with McCain-which has kicked up the whole VP talk allover again in the press back home.

He used poetry:

"Have you been told lately how warm your eyes are and how they softly glow with the special nature of your soul."

And he used himself--- the misunderstood Governor, who just desired unrequited love, but who would use his power to corrupt she who he pursued:

"The rarest of all commodities in the world is love. It is that thing that we all yearn for at some level--to be simply loved unconditionally for nothing more than who we are--not what we can get, give or become. There are but 50 governors in my country and outside the top spot, this is as high as you can go..."

Is it any wonder FOX had a (D) for Democrat at his news conference in the picture above?

But Mark doesn't need to worry.

John McCain's daughter, Meghan, forgives him over at the Daily Beast!

Maybe he can send her that story, in an envelope with a stamp!

Al's house


Al Emmons, 71, of Greenfield, WI had a house that needed to be demolished, but the contractor wanted $10,000 to do the job. So he gave everything away, and he had people standing 16 deep, "picking the place cleaner than a Thanksgiving Turkey."

Green shoots in recycling or green shoots in desperation? You make the call!

The story:

Greenfield — In these tough times, you don't just throw stuff out.

Even if that stuff is a house.

So, when Al Emmons, 71, needed to tear down an old two-story, four-bedroom place at the corner of W. 90th St. and Plainfield Ave., he decided to "recycle" it.

"The contractor wanted $10,000 to demolish the place," Emmons said. "I figured there must be a better way. Time to go green."

With the help of his son, Emmons posted pictures of the house on Craigslist, an online advertising service. He offered to let people come and take what they wanted.

You won't believe what happened next.

People lined up, sometimes 16 deep, picking the place cleaner than a Thanksgiving turkey.

They took shower curtains and piping, toilets and sinks, aluminum siding and truckloads of floorboards.

The City of Franklin claimed the rubble for fill on N. Cape Road.

Someone even dug up the onions in the backyard garden.

"One lady took the rose bush," Emmons said. "Someone else wanted that apple tree over there, but I think that's too big to move."

The house was built in 1937. Emmons bought it 18 months ago, hoping to fix it up. But the place was in such bad shape that he couldn't get an insurance company to cover it. Without insurance, a bank wouldn't offer financing.

"Tearing it down was the only option," Emmons said.

He sold $800 worth of windows but gave away everything else. There were five layers covering that old house: wood, fake brick, aluminum siding, stucco and Lannon stone. So there was plenty to take.

Shane Stewart, 30, of Menomonee Falls hauled away a big pile of two-by-fours that he plans to use to build his cabin in Tomahawk.

"It's saving me a lot of money," Stewart said.

Rick Kusisto, 53, of Greenfield filled five truckloads of wood siding that he plans to burn in his outdoor fire pit. He spent hours pulling nails out of the boards and selling buckets of them at the dump.

"My kids think I'm nuts," Kusisto said. "But you know what? We can't just throw everything away and watch all these landfills fill up. It's got to stop somewhere."

That was precisely what Emmons thinks.

If Dennis Kneale of CNBC was a weatherman...

We have good news! There's no longer any water on the bridge!



Cash for clunkers

I've been saying we will have 4% Q3 GDP, and now Barclays is on the record for 2.5% Q3, and 3.5% Q4. Their catalyst is the $1 billion from the clash for clunkers program, that they believe will be expanded four-fold.

My 4% Q3 GDP estimate, of course, will be according to "Government" figures--which means the growth will be overstated but, to show you how liars figure, here's the Barclay's report.
BarclaysCapitalcash4clunkers

The Sears stimulus plan

June 29 (Bloomberg) -- Sears Holdings Corp., the largest U.S. department-store chain, will let customers who lose their jobs suspend payments and keep appliances bought with store credit cards in an effort to bolster sales in the recession.

Customers who spend at least $399 on appliances and related merchandise between July 6 and Aug. 1 will have one-twelfth of the purchase price credited to their account for every month they are out of work, said Larry Costello, a company spokesman. Those who are jobless for more than a year will have the full debt forgiven, he said. The offer period may be extended, he said..

The retailer, based in Hoffman Estates, Illinois, is running the trial program to spur spending on refrigerators and washing machines as consumers hold off on bigger purchases amid declining home values and mounting job losses

Ron Insana's latest

Ron highlighted 11 things that happened last week that people may have overlooked.

Picture-perfect Federal Reserve statement
$104 billion of Treasury debt sold
Lower mortgage rates
ECB-$600 billion injection
Savings rate 7%
New world reserve currency chatter
Navy shadowing North Korean ships
Detaining of British embassy workers in Tehran
Lower oil prices
Bidding on Iraq oil projects
House climate bill

I'd add the over-reaction on the crushing of the Aerospace and related stocks, on the BA 787 news.

Another black book buried

This was an older story, but now it's finally getting some national press it became bigger as it became closer to sentencing, as Michelle's attorney, Marc Nurik of Ft. Lauderdale, had her black book, and those in it, didn't want their activities disclosed. So after making $8 million, she will be fined $30,000, with six month's home confinement, and 5 years probation.

She's also "cooperating" with the IRS.

And for those hoping that a black book will show up in Madoff's sentencing today, indicating where all the money went, don't hold your breath.

That black book has also already been buried, along with Michelle's.

After all, who needs a book deal, when you can book appointments like these?

How much did these woman get paid? They were paid, in the Jeffry Picower style!

Her stable of 70 women - said to include fashion models, Hollywood actresses, and Playboy centrefolds - were able to command up to £30,000 a night for sex.

According to the Daily Mail "she makes nineties Hollywood madam Heidi Fleiss look like Mary Poppins."

And the madam is a "stay at home" Mom of two.

Here's another funny quote from Marc, whose assistants would always make a grown man week in the knees, who "surmised" that the gentlemen were meeting them for sex.

'I'm not sure people would pay money to meet a porn star and talk about Stephen Hawking's newest book.'

She also had a house for incalls, that was in South FL where a lot of the drive by action occurred. If you missed a date with the ladies, at least you can own the house.

The "stay at home" Mom's house is for sale.

Zero Hedge moves offshore

You have to love this.

More importantly, we have moved our physical servers and domains offshore, partly to be independent and never be held hostage by any major provider, partly to avoid what has become widespread abuse of the Digital Millennium Copyright Act to silence whistleblowers and force the pre-emptive removal of content without due process of any kind.

"Marla Singer" can now be contacted here!

Hag 52
Trisenberg, Trisenberg LI-FL-9497
LI

The conspiracy theorists will just love this!

Maybe that file with all the dirt on the Lehman bankruptcy will now actually see the light of day!

Jackson's autopsy

Story here:

Jawboning--The next stimulus?

Talk it up! Christina Romer from the Obama admininstration warned against tightening monetary and fiscal policy, until a recovery was "well established" and that stimulus was “going to ramp up strongly through the summer and the fall”. She also said “We do not want to repeat the mistake Japan made in the 1990s, when the moment things started to improve they tightened policy.”

On the other hand, Obama senior advisor David Axlerod, said on the Sunday television circuit, that the administration would be open to more stimulus--“Let’s see in the fall where we are, but right now we believe what we have done is adequate to the task. If more is needed, we’ll have that discussion.”

The PPIP-The greatest program that never occurred

From the WSJ:

The government's plan to enable banks to dump troubled assets is facing troubles of its own.

Markets initially rallied when Treasury Secretary Timothy Geithner announced in March a two-pronged plan to offer favorable government financing to entice investors to buy bad loans and toxic securities from banks.

But that initiative -- called the Public-Private Investment Program, or PPIP -- has lost momentum. Big banks worried about having to sell at fire-sale prices while small banks feared they would be shut out. Potential buyers balked at the risk of doing business with the government, concerned that politicians might demonize them for making big profits.

Scott Romanoff, a Goldman Sachs Group Inc. managing director, has referred to the current effort, PPIP, as "the greatest program that never occurred," because it "created confidence in the markets so banks can raise equity capital."

Dump the Spandex!

In 1985, one of my workout partners, decided to try out for the Minnesota Vikings. He was about 6' 5" and 254, which was pretty big back then. In 1982, "Scar" played in the "scab" games of the strike shortened NFL season, for the Vikings and even got some checks when the Vikes went into the play-offs. So hopes springs eternal, and he was pounding the weights with me in late May of 85, getting ready for another tryout.

We did power cleans first and then we went to the bench press. We both did these sets--220X8, 264X8, 308X6, and then he put on 352 lbs, and he knocked off 6 reps. So as I prepared to go and bench, all of a sudden I felt this massive adrenaline rush, and I just knew that I would beat him. I knocked off 7 reps, and threw the weight back on the rack like it was a toy. He looked at me, surprised as heck, but the truth was, I was way more shocked than him! He then went to 374, and knocked off some reps, but I was already done!

Anyway, admist all this smack talking and commotion, the gym hottie, who had just recently gotten a gig modeling underwear for the Marshall Field's catalogue, came up to us, and asked what we were going to do tonight, because there was a party at this bar, that was just a couple blocks from my house. He declined, but I said I'd show.

So I was feeling pretty good walking out of the gym. I just had a great adrenaline rush lifting; and now I was going out to meet the underwear model.

So I put on my best vintage Hawaii shirt, some white drawstring pants, and walked the two blocks to the bar. And like most woman, she made you wait. So I ended up ordering a bottle of Miller Lite from the bar, and noticed this really pretty Latino girl, approving my taste in beer. She asked me why I was drinking Miller. I said, "Because they sponsored our tug of war team." (Back then, the war between "great taste" and "less filling" was the flag on the tug of war rope!) And I suppose, this was just the response you would never expect to hear, so she laughed, and we started talking.



Turns out she worked as an intern in the law department at Miller Brewing. (Owned of course by Phillip Morris) I found her really interesting, especially because she wanted to change the world by helping the under-privileged, the pro-bono work that she planned, and because she had this wonderful idealistic viewpoint on life. (Now she heads up commercial litigation at one of the majors. Seems pro-bona and the idealism ended after law school!)

But she was smart. My trader friend said, that if she didn't become a lawyer she could always work at Goldman Sachs. Back then, Goldman Sachs had a name that was revered!

Somehow we got to talk about the stock market, and she told me, that I should buy Apple. Her boss had just gotten this Mac, and now you can't even buy them.

Now it was getting real loud in the place, so I could hardly hear her, so I laughingly asked her what else she did besides get coffee---and she said, "Oh, we're real busy now, because we are going to buy another company. We're getting into food. We're going to buy General...."

And right then, the underwear model, made her appearance, in this 80's silvery spandex dress with appropriate cut-outs, and grabbed my arm, and asked me to dance. So she dragged me out to dance to Chaka Kahn's "I feel for you."

So I'm out dancing with Ms. Spandex, but I'm increasingly distracted. So I assessed the trade-- her in the cut out dress dancing to be seen, and then the scene at the bar, of her drinking the bottle of Miller Lite, and I said, to myself, "It's Miller time'" and I left Ms. Spandex to dance by herself.

And then, it was like a beer commercial. We walk out in the parking lot, and she has this really nice sports car, and she throws me the keys and says, "I really don't know my way around this city. Why don't you just drive? And you can keep my car, as long as you pick me up at work." I said to myself, "Nice call!"

The next day, I called the only computer store in town that had Apple, and I found out there was a shortage of parts, and that the only computer they had was the floor model, but they weren't selling it. A shortage of parts is different from a shortage from demand!

I wasn't going to buy Apple anyway. But I couldn't get the "general" out of my head. General Mills? or General Foods? If it was "Mills" it would make sense for her to say we are getting into food. If they were buying "Foods" why say that we are getting into "food?"

So I looked at the calls on General Foods, and the calls on General Mills, but the General Food options were more expensive. So instead of buying the General Food options at $1, I bought the General Mills options at .55.

Three weeks later, General Foods moved up $11 to 82 3/8 on rumours of a Phillip Morris bid. A spokesman for General Foods said there was nothing new to report, and there was no reason for the heavy activity in the stock. They didn't know, but the whole world did. I guess that's why we believe stock prices and not companies.

I picked her up that day of work, and asked her about General Foods. She said, "Did I tell you that? I can't remember!" Interns learn fast

A few months later, Philip Morris bid $120 for the rest of the company. But I never traded it again. I already had made the good trade!

I think the moral of the story is, (beside five good years with her) is sometimes the best trade, is also knowing when to walk away.

And if I missed the trade, so what. So did Goldman. They bought $49% of General Foods in 1929 for $12.5 million, and then sold it back to the company in 1932 for a loss.

For once Goldman didn't have the right inside information!

But it took a depression for it to happen!

Sunday, June 28, 2009

Saturday, June 27, 2009

Barron's latest


Alan Ableson on the latest market surge:

We've had a hunch for a while now that a quantum gob of the stimulus bucks, under whatever guise and through whatever channel, was finding its way into the stock market. Which would explain a lot of things. Like the size and speed of the surge since the dark days of early March. The more than passing strange upward bursts of prices toward the end of so many sessions. And the overall racy character of so much of the market. A miniature resurrection, in other words, of what Alan Greenspan called "irrational exuberance." We sure hope we're wrong.

On the other hand, Barron's suggested that the alternative asset class mix of the Ivy league endowments needed to be changed.

At Yale and Princeton, hedge funds, private-equity and real-estate funds, and commodity-related investments accounted for about 75% of endowment assets as of last June; the total for Harvard was around 55%, above the 35% allocation to alternatives favored by the typical nonprofit endowment.

And since their endowments have fallen significantly, it brings problems with their private equity committments.

In the near term, endowment chiefs may be wrestling with how to handle commitments to private-equity and real-estate funds. At Harvard, investment commitments totaled $11 billion on June 30, 2008; at Yale, $8.7 billion, and Princeton, $6.1 billion. These commitments are especially large relative to shrunken endowments. Harvard's endowment could end this month in the $25 billion range; Yale's is about $17 billion, and Princeton's, $11 billion, after investment declines, yearly contributions to university budgets and new gifts from alumni and others.

Which led to this conclusion:

The brutal market of the past year could mark the end of the alternative-investment boom they abetted, as managers of trend-setting university endowments, as well as their followers in the nonprofit world, move back toward the traditional stocks and bonds that once were staples of their investment portfolios.

Which leads to this:

Buy what the Government is buying!

Wall Street's roots


Trying to discover the northwest passage to China, captain Henry Hudson, landed in New York harbor instead, by the Mauritus River, which of course was renamed the Hudson. Hudson was the first person to put Manhattan on a map. Manhattan, comes from the word Manna-hata, which was the name the European settlers used from the Native American tribe, the Lenape, who lived their, which meant "the island of many hills."

That was a better etymology of the name than the word manahachtanienk which means "a place of general inebriation!"

New Amersterdam, a fortress city for the protection of new arrivals, was founded on Manhattan Island in 1625 by Wilem Verhulst of the Dutch West India Company. In 1626, the Island was bought from the Lenape for 60 guilders worth of goods, (or about $24 in those days) by Peter Minuit, who did the deal with the Canarsee tribe, who didn't own or have any rights to the island.

It was the first instance of a Wall Street misrepresentation. Broker a deal, and misrepresent what you are selling!

The Lenape thought they were getting a free lunch; to them land was like air, it couldn't be owned, so it was only being shared with the Europeans. But later on, they wanted the land back, so they wanted to back out of the trade. The settlers then built a wall to keep them out. That wall of course, later became the street we know today---Wall Street.

Times change, but people don't.

And Wall Street is still fighting to keeping the people out of "their" club, with their own version of the "velvet rope!"

But unlike Ms. Jackson, their case of introspection only occurs when their profits and inside deals are threatened.

After all, would Wall Street ever say this? "Just because you have money doesn't mean you're happy. It doesn't mean that all your problems go away."

Because it's only okay to hear "Beat It" on iTunes but not on Wall Street!

Madoff's wife gives up assets

Monday, Bernie Madoff gets sentenced, so his wife, cut a deal with prosecutors to give up $80 million of assets before the big day. She gets to keep $2.5 million, and SIPC won't have to fund her loss.

Ruth Madoff, the wife of one of the most reviled swindlers in history, has agreed to give up her potential claim to more than $80 million worth of assets, keeping just $2.5 million in cash in an agreement reached with federal prosecutors.

The settlement with the U.S. attorney's office in Manhattan was approved late Friday by U.S. District Court Judge Denny Chin, who is scheduled to sentence her husband, Bernard Madoff, on Monday in a final courtroom stand that will seal his legacy as one of the world's most successful thieves.

Friday, June 26, 2009

Marching to ZION!!!


Whoa!!!! Now that was action!!!!!

I'll take it!!!!

And what a set-up! Take a look at the 5 day chart!

This Monday, Bronte Capital, had a hatchet job on Zion Oil and Gas. The title was Creation Science, oil drilling, naked shorts and constitutionally protected stock fraud. Of course I commented on the piece and took the opposite side of the trade!! And threw in some talk of the flood of Noah, just to look "stupid" and naive!

Today was payback!!! And it's a bitch!

Anyone see Zion Oil & Gas (ZN 13.30 +5.96) after hitting 14 and change on the Russell rebalance?

14! From 7!

Now I'll take a day off.

After all, don't you rest on the seventh day?

Secular winners ---The "new" window dressing


Let's take a look at some events the last few days. The above chart is the mysterious buyer of the futures a couple nights back, covered by Denninger here, and ZH.

Karl said:

"That's last night.

Over 12,000 contracts traded in two five-minute periods, over 10,000 right up on the time of that spike.

There was no news of any sort related to the US markets on the wire last night. Zero. None. I and many others were wondering what the heck caused that.

This morning, the buying began in earnest at 8:30 Central, and then again at 10:00 Eastern - one hour in front of the "announcement" again on heavy volume.

Where is the SEC?"

The Fed, however, has a new press release Thursday. Anyone think someone had wind of that?

We know that Goldman has significantly ramped their principal business.

And we know that in Wednesday's research, Goldman advised us to buy the secular winners.

Goldman Research 6/25

Notice what Goldman has to say on page 2 of their research (page 5 scribd) under Americas: Energy: "Pullback provides an opportunity to add to secular winners."

And anyone that trades with Goldman, knows that is their latest buzzword. It's not "window dressing" it's just "secular winners!" Buy 'em!

After all, doesn't Goldman need to unload some paper?

And doesn't Goldman want our market higher, if you own all this paper?

And that's why it can't go down. Because the equity market needs the psychological boost, almost more than the economy does! After all did anyone really read Greenspan's article in the FT today? People thought his article was about inflation. Was it? I think not.

"Global stock markets have rallied so far and so fast this year that it is difficult to imagine they can proceed further at anywhere near their recent pace. But what if, after a correction, they proceeded inexorably higher? That would bolster global balance sheets with large amounts of new equity value and supply banks with the new capital that would allow them to step up lending. Higher share prices would also lead to increased household wealth and spending, and the rising market value of existing corporate assets (proxied by stock prices) relative to their replacement cost would spur new capital investment. Leverage would be materially reduced. A prolonged recovery in global equity prices would thus assist in the lifting of the deflationary forces that still hover over the global economy.

I recognise that I accord a much larger economic role to equity prices than is the conventional wisdom. From my perspective, they are not merely an important leading indicator of global business activity, but a major contributor to that activity, operating primarily through balance sheets.

Stock prices, to be sure, are affected by the usual economic gyrations. But, as I noted in March, a significant driver of stock prices is the innate human propensity to swing between euphoria and fear, which, while heavily influenced by economic events, has a life of its own."

And that's the justification, to rig the market, with the imprimatur of the former Chairman of the Federal Reserve.

Now as everyone knows, I'm out there with my bullishness.

But those on inside, are working to keep it that away.

Even if they need to manipulate the markets, and trade on information no one else has!

The Russell rebalance

Why trade today, when you can make all of your coin in the last five minutes of trading with the Russell re-balance?

Fortress and Michael jackson


Jackson's stake in the Sony/ATV Catalog of songs is now owned by Fortress (FIG 3.31). Bank of America had $270 million of debt owed to them by Jackson. BAC sold it to FIG at a discount. FIG loaned Jackson money on it.

So what is the compliation of songs worth, that has the rights of the Beatle's songs and Jackson's music? Much more today than yesterday.

The value previously has been estimated upwards of a billion dollars.

So today you get the Fortress pump.

Someone should of paid up for Jackson's jukebox!

Take your coffeee black

For sweet breath, don't have milk with your coffee--because coffee beans contain compounds that prevent bacteria releasing the gases behind halitosis, (bad breath) research shows.

Pinpointing the key chemicals could lead to coffee 'mints' or pastilles that stop bad breath at the source.

Adding black coffee to 'soups' of bacteria-filled saliva blocked the release of gases that cause breath to smell. In some cases, the amount of gas was cut by up to 90 per cent.

The researcher said: ' We expected that coffee would cause bad breath but there is something inside this magic brew that has the opposite effect.'

Thursday, June 25, 2009

Michael Jackson's 911 call screenshot

Bank of America counterparties

Why was the Fed so insistentent into jamming Merrill into BAC hands? Let's look at BAC's counterparties:

The documents also reveal the bank's top 25 counterparties -- a closely guarded list of banks providing critical funding to Bank of America.

Bank of New York was at the top of the list, with an exposure of $46.1 billion, followed by
$45.3 billion to State Street and
$41.6 billion to J.P. Morgan Chase.

The Fed was worried about what these counterparties might do if the situation worsened for the bank.

And once Merrill was in BAC hands, the Fed could backstop all the paper.

The counterparty risk goes away!

R.I.P.

Farrah Fawcett gets her angel wings, and Michael Jackson is dead. Two icons of the baby boomers gone.

I can't help but think, that this will make some people a little introspective.

After all, who didn't watch Charlie's Angels on Sunday night? Or went to sleep with a Farrah Fawcett poster? Or copied her hair?

"Thriller." 37 weeks at #1. "Beat It." "Bille Jean." Who didn't try and copy Jacko's moon walk? How many people watched their first 3D movie with Captain EO at Disney?




Today they've left this planet.

Tonight they rest.

Michael Jackson Dead


Michael suffered a cardiac arrest earlier this afternoon and paramedics were unable to revive him. We're told when paramedics arrived Jackson had no pulse and they never got a pulse back.

I was a bouncer in one of his concerts in the early '80's back before he was a freak. Back then, The Jackson 5 sure knew how to put on a good show.

They should of bid higher on his collectibles!

The bears R.I.P. with Michael Jackson.

They should of bid higher also.

Private yachts offer pirate-hunting cruises!


Check out this story!

Rich Russians with money to burn can sign up for pirate-hunting cruises on armed private yachts off the Somali coast, the website Ananova reports. Wealthy punters pay $6,620 a day to patrol the most dangerous waters in the world hoping to be attacked by raiders. When attacked, they retaliate with grenade launchers, machine guns and rocket launchers, says the Austrian business paper Wirtschaftsblatt. For an extra $9.45 a day they get an AK-47 machine gun, pictured, while 100 rounds of ammo cost $13.25. They are also protected by a squad of former special forces. The yachts travel from Djibouti in Somalia to Mombasa in Kenya. They deliberately cruise close to the coast at a speed of just five nautical miles in an attempt to attract the interest of pirates.

And here:

The yachts travel from Djibouti in Somalia to Mombasa in Kenya.

The ships deliberately cruise close to the coast at a speed of just five nautical miles in an attempt to attract the interest of pirates.

"They are worse than the pirates," said Russian yachtsman Vladimir Mironov. "At least the pirates have the decency to take hostages, these people are just paying to commit murder," he continued.

The next leg up!!

It's morning in America again!

R.I.P. for the 'dreaded" anglerfish!!!

R.I.P. bears/rollover!!!

Oh my, this is just "populist overeaction!"

In the words of Miley Cyrus, "Say, what?"

The "populist" don't want the bankers to be able to steal anymore?

"Say what?" (Come on, I have a seven year old!)



These lobbyist's arguments are as thin as the plotlines!

June 25 (Bloomberg) -- Wall Street’s largest trade group has started a campaign to counter the “populist” backlash against bankers, enlisting two former aides to Treasury Secretary Henry Paulson to spearhead the effort.

In memos of confidential meetings with top financial executives, the Securities Industry and Financial Markets Association said it began this month the “execution phase” of the operation, which pledges to “embrace change” and accountability. The plan targets policy makers and the media in New York, London, Washington and Brussels and calls for a “city-by-city, grass roots” approach.

Bernanke's grilling

What does anyone really think? That Bernanke will have a "Majestic" moment?

Will he be Luke, and not Peter? That's only a movie moment!

But does anyone think that the town folk will be waiting for him, when he comes in on the train from Washington?

He is now credited for saving the financial world from the mess his policies "fostered." Jacking up short term rates, when the whole world was financing LT with ST paper? He'll be the sop thrown to every homeowner, that lost their home, because Greenspan recomended ARM's while he and Ben were raising rates.

Because isn't there any culpability at the Fed?

Bernanke said the Fed acted with "the highest integrity?"

Isn't that just what the fired Inspector General said?

Today is the fall season for Bernanke, and springtime for Larry Summers!

Santelli: QE is like prohibition

"A novel idea, but it doesn't work."

Gerstner's new tax ideas

Did anyone see Lou's latest? Here it is:

“If you buy something -- a stock or a bond -- in the morning, and you sell in the afternoon, the tax probably ought to be 80 percent,” said Gerstner, also a former chairman of Carlyle Group, the world’s second-largest private equity firm.

“If you hold it for six months, maybe it ought to be 60 percent,” Gerstner told Bloomberg Television.

Selling an investment after five years should carry a zero rate “to try to get the incentives for investment to go back to being a true investor and not a trader,” he said...

“We do have a greed or an inefficiency that comes out of excessive focus on the short term”

Who managed earnings with massive stock buybacks at IBM, while piling on debt to do it, and benefiting from an egregious stock option package?

Wasn't that "bring back the booze" Gerstner?

Attributing IBM's rise to Gerstner, makes as much sense as attributing GE's rise to Jack Welch.

Why are these lionized business messiahs always found in bull markets?

Daytraders taxed at 80%?

Doesn't he know that's Goldman's business?

Nike trades down

Nike misses (future orders) and is trading at 50.55 in the pre-market, down 2 1/2 dollars, and down 7 points in the past week.

Nike's job cuts will help future earnings, and NKE can continue to squeeze suppliers.

When Fed-Ex "missed" the stock rebounded.

I think it's the same here, and that 50 is a decent entry point.

The Presidential "gifts"

We know Obama gave the Queen an iPod, but what did the dignitairies give the Bush Administration? Now we know, as the State Department has just released the latest gifts to those in the previous Administration.

Dick Cheney, got a photo album to put his duck hunting pictures in, worth about $295, some cognac ($58), and a box of pomegranates that must of been picked up from Whole Foods because the estimated value was $210. Dick's wife, Lynne, wasn't left out, as she got some preserved fruits and jellies worth about $120, and a pair of $300 Dr. Scholl high heeled clogs.

However, we do see, who the favorites were in the Bush Administration, and it was none other, than the leather high stepping boots wearer, Condi Rice.

No Dr. Scholl's for her!

Apparently, there must be some political pool of some sort across the globe, regarding the bush Secretary, as the largess thrown her way was rather substantial.

Condi got a diamond ring, and a locket with Qadhafi's photo worth $212,500. Saudi Royal Highness, King Abdullah bin Abd al-Aziz Al Saud upped Qadhafi as he sprung for a gold, diamond and sapphire set worth $230,145.00, and he also threw in a robe to wear with the jewelry and just her boots.

Nothing like a challenge to crack for the world's dignitaries!

Sarah Palin needs to learn a lesson from Condi.

More spike in the heels!

(Peeler, this is for you!)

Wednesday, June 24, 2009

Rep. Issa on the "cover-up"




Saint Bernanke?








Bernanke "is a man of great integrity" or so intoned Jim Cramer, and the idea that he would muscle Ken Lewis to buy Merrill Lynch is just--well---it's just worth a rant on CNBC. (So please don't click on the above email for a closer look!)

So Darrel Issa is just a kook.

So then, must be Alan Grayson, because he wants answers to these questions:

1. How was the deal negotiated by Citigroup, the Federal Reserve, and the Treasury? How does this loss-sharing arrangement benefit taxpayers?
2. What are current mark-to-market losses to the Federal Reserve in this loss-sharing arrangement?
3. What is the current cash flow from these assets? Are these asset performing?
4. Who should be held accountable for the reckless acquisition of a third of a trillion dollars in assets that ended up requiring a government guarantee? [emphasis mine]
5. Which vendors are pricing these assets, and are there conflicts of interest present in these vending arrangements?
6. Is the Federal Reserve guaranteeing assets generated from lender-induced mortgage fraud and predatory lending practices?

Remember Obama's speech on financial market transparency? All we got was a website that started with this:

The Department of the Treasury is committed to transparency and accountability in all of its programs and policies, including all programs established under the Emergency Economic Stabilization Act (EESA). Under the new Financial Stability Plan, Treasury will implement new enhanced measures to ensure greater transparency and accountability for all of its programs under the EESA. In addition to these actions, Treasury has developed a productive working relationship with TARP oversight bodies including the Government Accountability Office, the TARP Special Inspector General, the Congressional Oversight Panel, and the Financial Stability Oversight Board.

And this section on the contracts.

We also got a bill, H.R. 1207: Federal Reserve Transparency Act of 2009 stuck in committee. The bill, Ron Paul sponsored almost four months ago.

So now we get emails.

But the public understands them.

Even if they're not as salacious as former Governor Sanford of South Carolina, the supposed new torchbearer of the Republican parties. I guess the public understood those emails. (So much for the former chairman of the RGA----so far.)

I suppose I'll just sit back and read this article entitled "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again" in the latest Rolling Stones!

It claims that Government Sachs is a market manipulator!

Must be a left wing read! Who would think that?

The only last question is, "When are the boys in the Government going to shut http://zerohedge.blogspot.com/ down?"

Talk about hitting for the cycle!

Dodo to a dove?

Roubini: U.S. Economy "sort of stabilizing."

MGM rallies

The catalyst? The removal of the "going concern" from the auditor.

This wasn't known by the marketplace?

It just means that the shorts have been getting busy again, with their algorithms, hitting stocks that have busted their secondary price. In MGM's case it was 7.

Erin Burnett on CNBC said this morning that high end bags now have a larger waiting list, and in the UK, you have had an uptick in price for the high end homes.

"Green shoots" in the high end?

And it looks like the shoots are getting shoved in some shorts!

Because shoots need fertilizer to grow!

The world's "strongest" banks

The British magazine, The Banker, has come out with it's list of the world's strongest banks.

1) JP Morgan
2) Bank of America
3) Citigroup
4) Royal bank of Scotland
5) HSBC

The most profitable bank last year, ICBC of China, with earnings of $21.3 billion was ranked seventh.

Cashin' In!


Look at the latest Kiplinger's magazine, touting the recovery. "Cash in on the Recovery!" But does anyone want to hear it? The magazine is 75% off.

Now compare that to Art Cashin, on CNBC, one of the most respected traders with a pulse on the market. He is rather dour, and still sees downside.

No one is discounting what he says by 75%.

Which means, that this time, Art is probably on the wrong side of the trade.

OECD ups forecast

In March, 2010, estimates were for a 0.1 % contraction for the 30 industrialized members; now estimates are for 0.7 % growth.

Fed days

The WSJ has a story out, highlighting the volatility of the Fed days. The bulls always seem to find something they like, because the Fed normally gives them what they want to hear.

If there is one safe bet ahead of the Federal Reserve's policy decision Wednesday, it is that markets don't quite know what's coming.

Volatility has been the market response to every Fed policy decision since Dec. 16, when central bankers set their traditional policy tool, the federal-funds-rate target, at roughly zero and promised to keep it there "for some time."

But as the chart shows, the "volatility" for stocks is to the upside!

Tuesday, June 23, 2009

The latest on Megan Fox

The Daily Mail was criticizing Megan Fox, because two years ago she gave this quote. "Friends will tell me, "Megan, you totally pinched a loaf in my toilet and didn't flush."

The interpretation?

That's journalists saying that the latest "Transformer" sequel will have an immature/undeveloped/sophomoric plot lines.

We'll see how many times those words are used in the latest reviews!

But now she doesn't have to worry about flushing.

Last I heard, Joe the plumber has now volunteered to clean her toilet!

With Cindy McCain supervising, and Karl Rove twatting about it on Tweeter!

Jeffry Picower: The real con in the Madoff ponzi scheme


$5.1 billion was withdrawn by Picower, over and above what he invested with Madoff. Annual returns in some accounts were sometimes 100%, 500% and 950%.

Total money withdrawn was $6.7 billion!

Within a week of the scandal, the Picower foundation had "closed" and all the records shredded, along with I'm sure, the records of Decisions Incorporated, and the overseas trusts.

Picower has been a con artist for years. He was highlighted on this blog, right when the scandal broke, way back on December 20.

In 2002, Forbes had an article on Picower, titled "Unaccountable." This article needs to be re-read again.

Now, at least the Fed's want some money back, and they are on the right trail.

Year Withdrawals Sum
1995 3 $50,240,000
1996 84 $390,751,188
1997 68 $420,959,554
1998 59 $506,065,516
1999 57 $590,835,236
2000 61 $658,061,313
2001 64 $821,000,950
2002 52 $922,221,107
2003 52 $1,025,301,463
2004 44 $480,151,300
2005 40 $468,316,059
2006 37 $165,025,910
2007 35 $216,450,976
2008 14 $30,685,976
Total 670 $6,746,066,548

Where did Madoff's money go?

Now you know!

PC Guy on Obama

Last Chance Gulch at the 4th of July

Something to consider for those on the sidelines!

Thanks Goldman for the BIDU $$$

I'll book this trade--the stock dropped over 25 points since Goldman upgraded it in just over 3 days!

Labor conditions worsen in China

From the NY Times:

DONGGUAN, China — Liu Pan, a 17-year-old factory worker, was crushed to death last April when the machine he was operating malfunctioned.

Somehow Mr. Liu became stuck in the machine, his sister Liu Yan recalled during a tearful interview in a village near the factory.

“When we got his body, his whole head was crushed,” Ms. Liu said. “We couldn’t even see his eyes.”

Investigating the accident, inspectors found a series of labor and safety violations at the factory, Yiuwah Stationery, which supplies cards, gift boxes and other paper goods to Disney, the British supermarket chain Tesco and other companies.

While the accident at the Yiuwah factory was particularly tragic, working conditions elsewhere are worsening. A year and a half after a landmark labor law took effect in China, experts say conditions have actually deteriorated in southern China’s export-oriented factories, which produce many of America’s less expensive retail goods.

With China’s exports reeling and unemployment rising because of the global slowdown, there is growing evidence that factories are ignoring or evading the new law, and that the government is reluctant to enforce it.

Government critics say authorities fear that a crackdown on violators could lead to mass layoffs and even social unrest...

Because of the downturn, 20 million migrant workers have already lost their jobs, Beijing says. The government recently put rules in place restricting factories from making large-scale layoffs without giving the government notice...

Experts say cheating workers on wages, forcing them to log up to 200 hours of overtime a month and denying them health benefits is commonplace in China.

Many factories are violating not just the new contract labor law, but also a 1994 law, which covered a broader set of labor and wage practices, they said.

Monday, June 22, 2009

They were drinking in Bethpage....


Beer-sodden fans and rain combined for an ugly finish to a long day of golf yesterday, with Tiger Woods and other golfers subjected to drunken heckling as the action at Bethpage Black came to a close.

At 6:42 p.m., dozens of drunken spectators at Hole 10 taunted Woods as he prepared to start his third round in the rain.

"We're on Long Island, baby, where men are men!" one fan yelled. "Put that umbrella down!"

The taunts were mixed with cheers from the majority of the crowd.

Woods did not respond to the people who were heckling him but tried to quiet the crowd with a "sshh" hand gesture, putting his finger to his lips, as golfers prepared to tee off on the adjacent 12th tee.

"Suck it up, you've got your own video game!" someone shouted at Woods.

..and in Milwaukee where a man got a DWI on a golf cart


Richfield — After drinking at least 10 beers at a golf course on state Highway 167 and being left behind by the relatives who brought him there, a South Milwaukee man decided to drive himself the nearly 40 miles back to his home - in a golf cart.

He did not even take the time to throw the empty beer cans out of the cart before hitting the road in the commandeered cart, according to a Washington County Sheriff's Department incident report released Monday.

The man, 47, was arrested Saturday on suspicion of second-offense operating a vehicle while intoxicated after a sheriff's deputy stopped the golf cart the suspect was driving southbound on state Highway 175, the report says.

The man told Deputy Andrew Meier that he was driving back to South Milwaukee after a group of "uncles" abandoned him at Kettle Hills Golf Course on Highway 167...

The man told Meier that "he did not even realize he was driving the golf cart on the road until he saw the squad with lights behind him," the report says.

(At least he wasn't talking on the cell phone!)

The unemployment "exhaustion" rate


Obama came out today and said the Unemployment Rate could exceed 10% in the next couple of months. The table on the top of the page, is the % of unemployment with exhausted benefit claims--those who use up their benefits.

You can talk what you want about the table and statistical methodology, but you need to consider that its = (# losing their benefits/ # new unemployment claims). Obviously, the # of people losing (exhausting) their benefits > # of new filers, so this helps explain this in today's WSJ:

Welfare rolls, which were slow to rise and actually fell in many states early in the recession, now are climbing across the country for the first time since President Bill Clinton signed legislation pledging "to end welfare as we know it" more than a decade ago.

Twenty-three of the 30 largest states, which account for more than 88% of the nation's total population, see welfare caseloads above year-ago levels, according to a survey conducted by The Wall Street Journal and the National Conference of State Legislatures. As more people run out of unemployment compensation, many are turning to welfare as a stopgap.


This is part of the information that the market was trading on today.

It's not new news, but it puts in a statistical format the unemployment numbers that came out in the first week of June, that were erroneously heralded as good news.

And the President "confirmed" it, with his 10% prediction.

Still, unemployment is a lagging indicator, but the damage was done.