Dr. O

Five Reasons the Market Could Crash This Fall

Interesting article. Extreme bearishness sells around here. I agree that much of this rally has been short covering (certain stats back this) and that an "invisible hand" has been guiding the markets up.

No one I've read has commented on another of Greenspan's comments from his ABC appearance on Sunday. He specifically stated that the rebound in the stock market to the tune of 3 trillion dollars off the lows was in and of itself a positive economic development contributing to a positive wealth effect.

Bottom line: a 50% move off the bottom on declining volume in the face what looks like an "L" shaped recovery, not a "V," sets us up for a violent correction. I have been one "place order" keystroke away from buying out of the money index puts a couple of times, stopped only because I want to see the first high volume down day first.

Time to Get Conservative? 50 Ideas for a Summer Sell-Off

Nice article on hedging/collecting premium with selling calls. As you mentioned, this seems to work best in a sideways or declining market. A declining market serves up increased call premiums, hence the enhanced return relative to the index/stock. A sideways market allows you to collect premium and make money even while the underlying index/stock does nothing.

As a frequent trader, the first thing I wondered about were costs of commissions and how selling calls with each stock purchase might affect returns.

Wall Street Breakfast: Must-Know News

The dollar is weakening this morning, following strong stock sessions in Asia overnight. Looks like emerging markets, commodity stocks and markets (Brazil, Australia, Canada), should be strong today. Remember: weaker dollar, stronger stocks, stronger commodities.

Closing Update for Monday, July 20

Avoid the stagnant markets of the West, and embrace Asia:
BRIC + HAT = Brazil, Russia, India, China plus Hong Kong, Taiwan, and Australia.

Focusing just on China: CHATS = China, Hong Kong, Australia, Taiwan, and Singapore.

I'm holding a lot of my "cash" in currency shares of other countries. Buying gold and silver coins here and there.

Bottom line: China + her satellite economies, Brazil, a dash of India, and heavy metal. Looks like the US Dollar is finally about to take a dirt nap.

The Next Major Financial Crisis

>>From our vantage point, the nearly $1 trillion in outstanding U.S. credit-card debt could be the next major crisis to roil the economy<<

That's one of them.

Bank of America Punishes Customers Who Dare to Have a Balance

Mark, I've had a Capital One card for years, a huge line of credit (I didn't ask for it), and have paid off my balance monthly on time. I received a "change in terms" letter about 2 months ago, and was notified my interest rate on purchases was going up from 8% to 18%.

No credit glitches on my end to explain this. Included in the letter was an automated phone number to decline the new terms and cancel the card. I did.

Do you think living in Michigan has something to do with this?

Cramer's Stop Trading! This Is One of the Greatest Rallies in History (3/27/09)

>>Cramer's Stop Trading! This Is One of the Greatest Rallies in History (3/27/09)<<

In a volatile, down-trending, short-term over bought market, rallies need to be sold.

Credit Card Crunch: Creating a New Generation of Subprime

I use credit cards for everyday purchases because I only use checks to pay bills, only use a debit card to obtain cash. It's safer using a credit card, in terms of consumer protections available.

Never had a late payment. Can't remember the last time I carried a balance. Definitely a high-FICO score. Nonetheless, Capital One Financial sent me a notice that my monthly APR on ordinary purchases was going from 7.99% to 17.99% beginning mid-May.

I had to reread this a couple of times. I became concerned that something negative had happened to my credit rating, as one late payment can trigger all your credit providers to raise their rates. Nope. No problems from my end.

I could only conclude that Captial One didn't want someone who paid their balances off every month, and, had no late payments. They weren't making money off of me, I guess.

I canceled the card, a Visa. My default credit card now is an Amex Card. Citi still hasn't touched my Mastercard or its credit line, but I rarely use it.

Something is going on in credit card land.

Preview from Europe: The Horror Show's Alive and Well

It's usually not the news but the market's reaction to the news that counts. The market is a forward looking discounting mechanism.

Retail sales were better than expected and bank CEOs are talking about "profitability." Up another 3%.

Eight Reasons Bank of America Is Going to $20

It's sad I'm not surprised Seeking Alpha published rubbish like this article (Bank of America is going to $20 (from $3), whereas my synthetic article taking stock of the current financial storm was not published.

My track record? Went from mostly in cash to all in cash in June 2007. No debt. The market has been cut in half and I've lost almost nothing.

I am amazed how popular articles about this stock or that stock or this commodity or that remain as the prices for everything but precious metals have collapsed.

Delusion is not a path to prosperity.

Why Capping Pay Is Likely to Work

It sickens me that corporate executives have such obscenely mammoth pay packages; yet I am equally sickened by the Government regulating compensation in the private sector.

I am perhaps most sickened by how badly many financial companies have been mismanaged such that many of them are technically insolvent.