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*Lehman Moment* [a/k/a Extend & Pretend]

Originally posted by Doug Noland @ http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10543 on how *extend and pretend* are the new normal and why Greece could very well be the tip of yet another Lehman Moment.

 

Isn’t it incredible that the failure of one firm, Lehman Brothers, almost brought down the global financial system?  It is equally incredible that, less than three years later, a small country of 11 million has the world teetering on the edge of another systemic crisis.  Today’s circumstance is a sad testament both to the instability of the international Credit “system” and to the lessons left unlearned from the previous crisis.

For about 15 months now my analysis has attempted to draw parallels…

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Admin

Macro [Storm] Clouds

First Macro Cloud

As we all know, The bernanke's most cherished policy measure QE2 comes to a screeching halt at the end of this month. Assuming that the program ends as planned, the Fed will have bought about $600 billion of various Treasury securities since late 2010, in addition to whatever agency debt proceeds were “re-invested” into Treasurys. Once the cruthches are removed from the patient, will he stand on his own two feet? I should think not, afterall, his arms (unemployment) & his legs (Housing values) have not heeled at all. Ask SHJ what happens when crutches are removed prematurely;-)

"The Standard & Poor's 500, the US stock market's benchmark index, could fall roughly 10% from its current level, partly due to the…

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Finally EUR.USD sold off and heavy

Hi Traders, I was so frustrated with the eur/usd for a few days cause, all over market there were outside reversals and swings but nothing was happening with this cross. I was beginning to doubt my techincals , but i have learnt a great lesson (with profit, thank gods!) that when accumulation is taking a long time , the burst is explosive, so a great lesson for me to continue to have patience and wait for price traps,
I had lost before that 22% of my total equity, thanks god i regained it and made a small profit, ufffff.
From now on, i will be more patient and always follow my techincals, without my Opinion and with emotions out & ofcourse stops.

Just wanted to share with you all,

My things to continue learning, a permament student of the market, O_o

 

All the best 

Dimitri

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Skewed towards fundamental analysis, these words are not my own.  Feel free to guess, I'll buy a beer for the first person who guesses the author correctly.

 

 

In other words, I continue to think like an amateur as frequently as possible.

 

Stocks are most likely to be accepted as prudent at the moment they are not.

 

Six out of ten is all it takes to have an enviable record on Wall Street.

 

Only invest what you can afford to lose without that loss having any effect on your daily life in the foreseeable future.

 

Investing without research is like playing stud poker and never looking at the cards.

 

Although it's easy to forget sometimes, a share is not a lottery ticket.It's part ownership of a business.

 

When looking at the same sky, people in mature industries see clouds where people in immature industries see pie.

 

If you can't convince yourself “When I'm down 25%, I'm a…

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Gann Global Calls A Commodity Top

I FINALLY noticed that I was blogging in my profile area instead of here!

 

04/23//2011

 

I have not been here for a while!  I just cleared this note area because some of the notes and charts are getting old and moldy! 

GANN GLOBAL FINANCIAL video @ 60 year cycle (I "remember" 1951 [I turn 60 next Friday!?!])

Video 3: 50-to-1 Reward to Risk Opportunity; 60-Year Cycle Points to Aggressive Declines

http://www.gannglobal.com/webinar/2011/04/23-video-03.php

James Flanagan covers silver (this means you, Kos!) and other commodities.

Oh well!  I can catch the next 60-year cycle (or not).

:)

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Admin

The Scoop On Coal

With the nuclear disaster in Japan and nuclear projects worldwide now being put on a shelf, many have looked to Coal to gain favor going forward when it comes to power generation.  Therefore when I came across this interview, I thought it prudent to post the transcripts here for future reference.  They discuss not only the two types of coal and their uses, but excavation and transportation costs.  To view the original video click HERE.  Readers should note that there are conflicting reports on coal lately.  One stating China recently *turned away* coal shipments here with other promoters saying it was merely b/c they have been accepting Japan's imports while their ports are expected to be…

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So now you know the secret I have kept close to the vest for nearly two years, the "Greed Screen."  But why the hell do I call it that?  Well, it comes from my analysis of both the success (HSR) and the failure (TPI) of the two original investments culled from the screen.  Let's look at what they have in common.  They both were heavily owned by insiders and they both paid a dividend.  In effect insiders were getting additional income at a reduced tax rate by owning the shares of the company that they ran.  In the case of HSR, they hiked the dividend adding to an already juicy yield. 

 

The differences between the two range from obvious to subtle.  I won't discuss the obvious differences such as sector membership and geographical areas of operation.  The subtle part is the behavior of management. In the case of TPI, management scaled back on their stake while the business deteriorated.  They never bothered to pre-announce and warn shareholders of a major revenue fall…

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Admin

Crude Oil Spikes and Historic Recessions

"I've just completed a new research paper that surveys the history of the oil industry with a particular focus on the events associated with significant changes in the price of oil. Here I report the paper's summary of oil market disruptions and economic downturns since the Second World War. Every recession (with one exception) was preceded by an increase in oil prices, and every oil market disruption (with one exception) was followed by an economic recession."

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The table above itemizes the particular postwar events that are reviewed in detail in my paper. The paper also provides the following summary discussion:

The first column indicates months in which there were contemporary accounts of…

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Admin

When Will The Fed Raise Rates?

The following from CalculatedRisk with my notes added as an afterthought:

Short answer: it is very unlikely that the Fed will increase the Fed funds rate this year. There are a series of steps the Fed will most likely take before raising rates1: • First the Fed needs to complete the $600 billion “QE2” large-scale asset purchase program. This is currently scheduled to be completed at the end of June, however, to “promote a smooth transition in markets”, it is possible the Fed will decide to "gradually slow the pace" of the purchases like they did with QE1 (quoted text from QE1 related FOMC statements). If the program is extended and purchases tapered off (but the size remains at $600 billion), this will probably be announced at the conclusion of the two day FOMC meeting in late April and the program will probably then be completed in August. • Next the Fed will end the…

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It was spring of 2009 and I limped back to my brokerage accounts after several months of self-imposed isolation from the market and my accounts.  I hadn't even visited stockpickr since November of 2008.  My steadfast refusal to sell my holdings at what I perceived to be near the bottom of the market and the market not agreeing with me had left me confused and disoriented.  I had a grasp of what the market was doing until the elections and was even managing to beat the market.  At times I was even profitable.  It felt great to be up 10% on the year when the overall market was down twice that.  But that was short lived.  Eventually those gains evaporated.  At some point the rules changed and no one sent me the memo.  The selling was endless and without, in my eyes at the time, reason.  The Fed was continually cutting both the Funds rate and the Discount window rate.  TARP had been passed.  Surely with all this government intervention the financial system had been saved and if that…

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As many of you know, I believe strongly in investing for the long term. My investing philosophy hinges on the belief that the Equity Markets are inherently inefficient. I strive to take advantage of these inefficiencies. This belief often leads me into stocks with little or no analyst coverage. The market segments with the least analyst coverage are mid, small, and micro-cap stocks. Naturally, my portfolio is heavily weighted in these segments. This heavy weighting in the smaller companies can create problems. Smaller stocks are inherently volatile in price. Less liquidity means that sometimes even a small buy/sell order can move the price noticably. Furthermore, there are periods of time when certain market capitalizations are out of favor. Sometimes it's David, sometimes it's Goliath that is out of favor.

To make a long story short, due to my investing style I have very little large cap exposure in my portfolio. To take advantage of the swings in capitalization popularity,…

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Admin

To Buy The Dip Or No

“There is time to go long, time to go short and time to go fishing”  -Jesse Livermore

 

"What happens after a fast, high-volume 2-3-day sell off. There are three major scenarios:


     - a stock move sideways on a low volume as it finally find bidders. Some will interpret this price action as the forming of bear flag. Others will look at it as the forming of a new base, which is an important prerequisite for higher prices in the future as it is likely to attract fresh money. Both groups could be right and that dispute will be solved only by price – in which direction is the stock going to break out from its new range.…

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Admin

Stocks With Growth Potential

eMagin (EMAN #4), which over the past few months has bounced on and off our rankings, sells high-resolution OLED (organic light emitting diode) microdisplays for military, industrial, medical and consumer applications. Click here to read our November 22 profile.



Onyx Pharma (ONXX #16) is a biopharmaceutical company with a focus on cancer therapies. It currently has one product approved by the FDA and on the market: Nexavar. This drug, which was co-developed with Bayer Pharma, is currently approved for the treatment of liver cancer and advanced kidney cancer. Nexavar is currently approved in more than 95 countries for the treatment of advanced kidney cancer and in more than 90 countries for the treatment of liver cancer. Additionally, Nexavar is being investigated in several ongoing trials in a variety of other types of tumors.

Beyond…

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Admin

What's AIG Worth?

Hey technical analysis guys/gals, would love your comment or thoughts:

[Subscriber content from Barrons]

Wall Street derivative traders are wrestling today with how to value the new American International Group (ticker: AIG) warrants the insurer plans to issue later this month to its public shareholders.

Warrants are long-term call options. The value of the warrant is important to assessing the current value of AIG stock since shareholders will get just over 0.5 warrants for each share owned.

AIG stock has been strong lately, rising $1.40 to 61.85 today and up more than 40% since the start of December on hopes for the big insurer's revival and also thanks to the rising value of the AIG warrants.

AIG said today that it plans to issue 75 million of 10-year warrants with a strike price of $45 to its holders later this month, or 0.53 warrants, for each AIG share. When-issued warrant trading is expected to begin on Jan. 13 and the…

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Admin

Holiday Sales, S&P Dividend Yield and POMO

This from Alan Abelson @ Barrons  *Tis' The Season To Be Wary* [subsrciption only]

The deep freeze. No, no, we're not about to do a reprise on the credit collapse back in 2008-2009. Hey, this is the season to be jolly. The freeze we're talking about is neither financial nor metaphorical but climatic—the real thing, that dumped who knows how much snow on Northern Europe, grounding thousands of flights, making life miserable for any poor souls who had to get out and about, and further constraining the populace's shopping impulse, already chilled by the cold winds of economic austerity.

Do you need any greater evidence of how desperate folks are than the dispatch from Berlin that told of how two men dressed as Santa Claus strolled into a supermarket, whipped out a pistol and robbed the joint? Although the report of the incident is lamentably shy of details on motive, one can only…

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The search for the Holy Grail has always ended in disappointment, except, maybe, for the Knights Templar. But that's another discussion entirely. After this past Bear market, I began searching for a long term hedge, or alternative strategy that would dampen volatility or would at least lose less in a down market. Since I primarily invest and trade over long time frames, I wanted something I could hold a core position in for years if need be. My Holy Grail would have low correlation to the overall equity and bond markets. A diversification across less traditional investment vehicles, so to speak. I scoured the financial sites perusing mutual fund descriptions and performance data. I looked at long/short, market neutral, balanced, and alternative asset/strategy mutual funds. I finally settled on The Merger Fund and Pimco's Commodity Real Return Strategy Fund. Both are mutual funds. I've held them for nearly a year. Recently it was announced that the primary…

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Admin

Trading Based On Calendar Timing


Hat tip to Stockchartist for lumping these all together in one handy place. The link to his blog at the bottom of the post. While he does leave out Presidential and mid-term election year theories as well as a few others, these are the basics you'll hear about as you learn to navigate the market.

For years I thought the key to investment success was good stock picking; find the right stocks and you're going to see your portfolio grow. Doesn't "you-know-who" continually say there's always a "bull market somewhere" and all you need to do is find it?

Actually, I, along many others, stopped drinking that cool-aide in 2003 after seeing retirement and savings investments shrink by about 40%. That's when I embraced another belief system. One based on the belief that the key to outstanding…

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Admin

Monopoly Lessons by Goatmug

Just too much good research to let it disappear. Get a cup of coffee, take the phone off the receiver and snuggle up. Reprinted from one of my favs SlopeofHope

SEPTEMBER UPDATE

Overall, we are seeing divergent data coming through as usual, so we'll have to wait and see where we fall. In general, I tend to believe the longer term theme that I've laid out that our economic situation for consumers is slowly grinding to a halt while big business is taking full advantage of the globalization of the world economy and managing to keep busy. I think this is why some of this data remains stubbornly positive despite what the average guy is feeling here in the US. The fact that large multi-nationals are diverse enough to show gains abroad is great and is really beneficial to the US economy, if we didn't have that, I think we'd be in a much worse…

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