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HiddenLevers lets investors chart economic indicators against stocks, generate trading ideas based on economic parameters, and understand how big picture scenarios will impact their investments. The team is comprised of Wall Street trading floor veterans, economic experts, and successful Black... More
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  • Unemployment at 9.8% - blind bullishness continues

    Today’s unemployment report rose to 9.8% after three steady months at 9.6%.  Disappointing politicians hopes and contradicting other indicators showing some rays of economic sunshine, the jobs data show the cold hard truth – the hiring picture is abysmal.  Just 39k jobs were added in November. Analysts were expecting 150k new jobs. But employment fell across the board, in retail, manufacturing and government.

    This setback didn’t phase the markets today, as some strategists openly questioned the data and expect an upward revision.

    “Wall Street’s mild reaction to the jobs report could be an indication that people are not believing the report so much,” said Jeffrey Kleintop, chief market strategist at LPL Financial. “It doesn’t really change the view of the economy, which is muddling along,” Kleintop added.

    Cantor Fitzgerald’s Pado argues that the uptick in the unemployment rate is actually a positive signal in that it signals Americans who had given up on finding work were re-entering the labor pool in anticipation that the climate was improving. (Marketwatch)

    This kind of imbecility I just don’t get. If there is a positive jobs report, it has to be true. But if a jobs report is negative, then it must be incorrect, and it will surely be revised next month.  There is quite a chasm between the 39k actual number and the 150k jobs that were expected.  This kind of spin is just doing the American public a disservice. The situation is not abating, and if we are muddling, it is along the bottom.

    Unemployment increases to 9.8%, but spun positive -

    At HiddenLevers, you will get honest commentary about financial conditions and economics. We are here to expose economic truths, without any spin, and give you access to real economic data and analysis, which often is unavailable to even  the financial reporters writing such stories. Subscribe today for 30 days free.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 09 12:32 PM | Link | Comment!
  • Crude oil hits 25-month high. How do I play an oil spike?

    Crude oil hit a 2-year high today, touching $90.  As most of us have heard, Unemployment figures for November were much weaker than expected, at 9.8%. This hurt investor confidence in the recovery of the US economy, but not stocks. Why? The Fed is pumping injections daily through printed money into the markets. While we feel good that the market rallies, what is evident is they are accelerating the long term erosion of the dollar. And now, with J.P Morgan issuing a report on a $120 destination for oil in the next year, and all this uncertainty concerning the US economy, the potential for an oil spike scenario becomes clear.

    Scenario: Oil Spike -

    A number of industries such as Airlines would be devastated by such a scenario. But some stocks are poised to gain. Here are a few good large caps to play an uptrend in oil, and have at least a 5% dividend. Each stock has a high beta correlation to oil, which means it is married to oil prices. If J.P. Morgan is correct about $120 oil coming, then these should provide returns far superior to the major oil companies.

    If oil spikes, these stocks will rock, and pay out -

    Remember, not all oil companies are created equal. Some follow the oil trend, and some don’t. Use HiddenLevers Screener to find investments based on your view of where oil’s headed, or on dozens of other economic indicators. (subscription required)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 09 12:29 PM | Link | Comment!
  • Hark, the inflationary beast has awoken

    This weekend I saw so many signs of a potential US dollar apocalypse. My favorite caramelized nuts in Soho NYC have been raised by 50%. FedEx announced it would be raising prices after the holidays, largely because the dollar is losing value and oil is hovering at $90. The Fed made $9 trillion in loans to private corporates and foreign governments, a disclosure this week that let the world know how much printing we’ve been up to.

    But the biggest sign of a potential inflationary spiral coming was Ben Bernanke on 60 minutes.  He stood by the recent Quantitative Easing decision by the Fed, to begin a bond buying program to the tune of $600 billion. He talked about how stimulating the economy and keeping interest rates low would encourage consumers to spend more and therefore encourage businesses to create jobs.  He didn’t talk about how the Fed is waking the inflationary beast in the long term. He played down fears of inflation, aying he was “100% confident” in the Fed’s ability to control it. But just how is the Fed going to mop up all the money once it’s time to raise interest rates. They didn’t exactly act promptly in the mid 2000s, when the housing bubble grew under their noses, due to low interest rates and bogus mortgages.

    Scenario: High Inflation -

    Just remember – the last time Bernanke was on 60 minutes was in spring 2009, near the bottom of the crisis, to defend saving AIG but let Lehman go under, decisions made within 24 hours of each other.  If I was a large holder of US treasuries, i.e. the Chinese, I would be reconsidering any new purchases of US treasuries, and start getting out of US dollars, because the Fed obviously has no clue. Meanwhile, just take note of all the things you are starting to go up in price. Right now, the dollar’s gasping strength only comes from pathetic items like continuing housing deflation and Euro Zone falling apart.

    Inflation's been tame, but the beast is waking -

    What would an inflationary spiral look like? HiddenLevers details the macro-economic impact of this and over two dozen other big-picture scenarios, and can help you understand how your investments would be affected in such a scenario. (subscription required)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 09 12:25 PM | Link | Comment!
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