Richard Suttmeier - Seeking Alpha 'Richard Suttmeier' Tag RSS Syndication from SeekingAlpha.com SeekingAlpha.com http://seekingalpha.com/author/richard-suttmeier Bank Failures Get No Holiday http://seekingalpha.com/article/179192-bank-failures-get-no-holiday?source=feed 179192 I thought that the FDIC would suspend bank failures for the Holidays – I guessed wrong.

The FDIC closed seven banks on Friday with a total estimated cost of $1.8 billion to the Deposit Insurance Fund. The Deposit Insurance Fund is now in arrears by $18.6 billion.

]]> Mon, 21 Dec 2009 11:21:45 -0500 Richard Suttmeier I thought that the FDIC would suspend bank failures for the Holidays – I guessed wrong.

The FDIC closed seven banks on Friday with a total estimated cost of $1.8 billion to the Deposit Insurance Fund. The Deposit Insurance Fund is now in arrears by $18.6 billion.


Complete Story »]]> TLT GLD DUG DIA Richard Suttmeier Home for the Holidays: Fannie, Freddie Give Struggling Homeowners a Break http://seekingalpha.com/article/179020-home-for-the-holidays-fannie-freddie-give-struggling-homeowners-a-break?source=feed 179020 If you have a Fannie Mae (FNM) or Freddie Mac (FRE) backed home mortgage and face foreclosure or eviction, you can stay home for the holidays at least through January 3rd. If you have a Citigroup (C) mortgage and are in default, you will get a 30-day suspension from foreclosure and eviction. This affects around 4,000 struggling homeowners.
A year ago, while Obama’s $75 billion loan modification program was on the drawing board, most major lenders suspended foreclosures while the details were being hammered out. Since this program only helped about 4% of the estimated four to seven million expected qualified homeowners foreclosures picked up again after the grace period ended.
The unwinding of Conservatorship of Fannie and Freddie must begin in 2010 - Many say that GSE mortgages and debt are backed by the full faith and credit of the United States, but this is not an explicit guarantee. Here’s the statement still shown on the Fannie Mae website:

Fannie Mae debt securities, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality thereof other than Fannie Mae.

The unwinding the Conservatorship of Fannie Mae and Freddie Mac will be come a huge issue in the second half of 2010, as portfolios must be reduced by 10% by the end of the year.
More Problems for Commercial Real Estate - Sources say commercial real estate mortgage defaults have more than doubled in the third quarter year over year, and are projected to reach 19% by the first quarter of 2011. JP Morgan reported that property sales financed with commercial mortgage-backed securities plunged 95% from a record $237 billion in 2007, as the real estate bubble was beginning to pop. This lack of securitization is a factor in the decline in commercial real estate values, which are down 55% from their peak. This is a sharper decline than home values. In some major cities such as San Francisco, office rents are down 37% year over year in the third quarter. The vacancy rate is up 14% with 1.4 million square feet emptied in the first nine months of the year.
The daily charts for Gold, Crude Oil, the Dollar Index and the Euro
Gold was oversold and below the 50-day simple moving average at $1111.6 Friday morning. My quarterly pivot remains at $1135.
Crude oil is positive with the 21-day at $74.44. The weekly chart remains negative with lower highs for nine consecutive weeks now. The 200-week simple moving average is resistance at $75.74.
The euro is extremely oversold with the 200-day simple moving average as support at 1.4179. The weekly chart remains negative confirming the Thanksgiving bottom for the dollar.
The Weekly Chart for the Dow shows the failed test of the down trend that goes back to October 2007. Next week Ascending Wedge support is 10,211 with the down trend resistance at 10,475.
Disclosure: No Positions
]]> Sun, 20 Dec 2009 06:05:02 -0500 Richard Suttmeier If you have a Fannie Mae (FNM) or Freddie Mac (FRE) backed home mortgage and face foreclosure or eviction, you can stay home for the holidays at least through January 3rd. If you have a Citigroup (C) mortgage and are in default, you will get a 30-day suspension from foreclosure and eviction. This affects around 4,000 struggling homeowners.
A year ago, while Obama’s $75 billion loan modification program was on the drawing board, most major lenders suspended foreclosures while the details were being hammered out. Since this program only helped about 4% of the estimated four to seven million expected qualified homeowners foreclosures picked up again after the grace period ended.
The unwinding of Conservatorship of Fannie and Freddie must begin in 2010 - Many say that GSE mortgages and debt are backed by the full faith and credit of the United States, but this is not an explicit guarantee. Here’s the statement still shown on the Fannie Mae website:

Fannie Mae debt securities, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality thereof other than Fannie Mae.

The unwinding the Conservatorship of Fannie Mae and Freddie Mac will be come a huge issue in the second half of 2010, as portfolios must be reduced by 10% by the end of the year.
More Problems for Commercial Real Estate - Sources say commercial real estate mortgage defaults have more than doubled in the third quarter year over year, and are projected to reach 19% by the first quarter of 2011. JP Morgan reported that property sales financed with commercial mortgage-backed securities plunged 95% from a record $237 billion in 2007, as the real estate bubble was beginning to pop. This lack of securitization is a factor in the decline in commercial real estate values, which are down 55% from their peak. This is a sharper decline than home values. In some major cities such as San Francisco, office rents are down 37% year over year in the third quarter. The vacancy rate is up 14% with 1.4 million square feet emptied in the first nine months of the year.
The daily charts for Gold, Crude Oil, the Dollar Index and the Euro
Gold was oversold and below the 50-day simple moving average at $1111.6 Friday morning. My quarterly pivot remains at $1135.
Crude oil is positive with the 21-day at $74.44. The weekly chart remains negative with lower highs for nine consecutive weeks now. The 200-week simple moving average is resistance at $75.74.
The euro is extremely oversold with the 200-day simple moving average as support at 1.4179. The weekly chart remains negative confirming the Thanksgiving bottom for the dollar.
The Weekly Chart for the Dow shows the failed test of the down trend that goes back to October 2007. Next week Ascending Wedge support is 10,211 with the down trend resistance at 10,475.
Disclosure: No Positions

Complete Story »]]> FRE FNM KME IYR Richard Suttmeier The FOMC Status Quo Isn't Good Enough for Stocks http://seekingalpha.com/article/178653-the-fomc-status-quo-isn-t-good-enough-for-stocks?source=feed 178653 Fed Statement is Status Quo as expected

The FOMC suggests that economic activity is picking up as the deterioration of the labor market abates. The Fed says that the housing sector shows some signs of improvement, and household spending is expanding. But the Fed admits that this is in the context of a weak labor market, modest income growth, lower housing wealth and tight credit.

]]> Thu, 17 Dec 2009 08:46:10 -0500 Richard Suttmeier Fed Statement is Status Quo as expected

The FOMC suggests that economic activity is picking up as the deterioration of the labor market abates. The Fed says that the housing sector shows some signs of improvement, and household spending is expanding. But the Fed admits that this is in the context of a weak labor market, modest income growth, lower housing wealth and tight credit.


Complete Story »]]> GLD DUG DIA Richard Suttmeier FOMC Should Maintain Status Quo http://seekingalpha.com/article/178495-fomc-should-maintain-status-quo?source=feed 178495 It will be Status Quo for the FOMC. Credit Card delinquencies are on the rise. Declining demand for foreclosed properties will become a drag on the Housing Market. The daily charts for Gold, Crude Oil, the Euro and the Dow as we await the Breakout then Fake-out.

Look for the FOMC to Maintain Status Quo

]]> Wed, 16 Dec 2009 12:25:24 -0500 Richard Suttmeier It will be Status Quo for the FOMC. Credit Card delinquencies are on the rise. Declining demand for foreclosed properties will become a drag on the Housing Market. The daily charts for Gold, Crude Oil, the Euro and the Dow as we await the Breakout then Fake-out.

Look for the FOMC to Maintain Status Quo


Complete Story »]]> GLD DUG DIA Richard Suttmeier TARP Stays Until October 2010 http://seekingalpha.com/article/177582-tarp-stays-until-october-2010?source=feed 177582 The TARP has been extended by the Obama Administration to October 3, 2010.

Treasury Secretary Geithner tells Congress that the Treasury will keep TARP protection for another nine months, as “The Great Credit Crunch” has another rain delay of bad loans and mortgage defaults.

]]> Thu, 10 Dec 2009 11:10:30 -0500 Richard Suttmeier The TARP has been extended by the Obama Administration to October 3, 2010.

Treasury Secretary Geithner tells Congress that the Treasury will keep TARP protection for another nine months, as “The Great Credit Crunch” has another rain delay of bad loans and mortgage defaults.


Complete Story »]]> TLT GLD DUG DIA Richard Suttmeier Markets Snap, Crackle and Pop http://seekingalpha.com/article/177343-markets-snap-crackle-and-pop?source=feed 177343 The US Treasury auctions $21 billion 10-Year notes today, as the daily chart favors higher yields. Risk aversion should be strong enough to trump supply as long as the auction holds daily and weekly pivots at 3.415 and 3.446. If these supports hold the yield should return to its 200-day simple moving average at 3.322. Tomorrow Treasury sells $13 billion in 30-Year bonds.

Comex Gold traded as low as $1125 on Tuesday, but is back above my quarterly pivot at $1135 this morning. The parabolic bubble has popped, but gold can rebound to its daily and weekly pivots at $1158 and $1179. A weekly close below $1135 indicates risk to lower supports at $1107 to $1094.

]]> Wed, 09 Dec 2009 09:58:17 -0500 Richard Suttmeier The US Treasury auctions $21 billion 10-Year notes today, as the daily chart favors higher yields. Risk aversion should be strong enough to trump supply as long as the auction holds daily and weekly pivots at 3.415 and 3.446. If these supports hold the yield should return to its 200-day simple moving average at 3.322. Tomorrow Treasury sells $13 billion in 30-Year bonds.

Comex Gold traded as low as $1125 on Tuesday, but is back above my quarterly pivot at $1135 this morning. The parabolic bubble has popped, but gold can rebound to its daily and weekly pivots at $1158 and $1179. A weekly close below $1135 indicates risk to lower supports at $1107 to $1094.


Complete Story »]]> TLT GLD DUG DIA Richard Suttmeier Fuzzy Math for TARP and Conservatorships http://seekingalpha.com/article/177085-fuzzy-math-for-tarp-and-conservatorships?source=feed 177085 Fuzzy Math from the Bank Bailouts

Congress authorized the Treasury Department to spend $700 billion in TARP and another $400 billion for Fannie Mae (FNM) and Freddie Mac (FRE) in Conservatorship.

]]> Tue, 08 Dec 2009 07:52:51 -0500 Richard Suttmeier Fuzzy Math from the Bank Bailouts

Congress authorized the Treasury Department to spend $700 billion in TARP and another $400 billion for Fannie Mae (FNM) and Freddie Mac (FRE) in Conservatorship.


Complete Story »]]> FNM FRE TLT GLD DUG DIA Richard Suttmeier Expect a Breakout or a Key Reversal Today http://seekingalpha.com/article/176575-expect-a-breakout-or-a-key-reversal-today?source=feed 176575 The Dow remains positive but overbought on its weekly chart with resistance at 10,581, which is on the down trend that goes back to the October 2007 high. This week the Dow reached a new high for the move at 10,513.52 and last week’s low is 10,231.25.

Today’s the day when the Dow needs to breakout above 10,600 to signal an end to the multi-year bear market. If that does not occur and the close is below 10,231.25 we have a weekly key reversal. A top would be confirmed by two consecutive lower weekly closes. This would also keep the multi-year bear market in place going into 2010.

]]> Fri, 04 Dec 2009 07:35:30 -0500 Richard Suttmeier The Dow remains positive but overbought on its weekly chart with resistance at 10,581, which is on the down trend that goes back to the October 2007 high. This week the Dow reached a new high for the move at 10,513.52 and last week’s low is 10,231.25.

Today’s the day when the Dow needs to breakout above 10,600 to signal an end to the multi-year bear market. If that does not occur and the close is below 10,231.25 we have a weekly key reversal. A top would be confirmed by two consecutive lower weekly closes. This would also keep the multi-year bear market in place going into 2010.


Complete Story »]]> DIA SPY DUG Richard Suttmeier Beige Book Shows the Great Credit Crunch Continues http://seekingalpha.com/article/176365-beige-book-shows-the-great-credit-crunch-continues?source=feed 176365 Beige Book shows that “The Great Credit Crunch” is continuing

I consider the Beige Book as the Gossip Columns from the twelve Federal Reserve Districts. Let’s look at some of the anecdotes from comments presented.

]]> Thu, 03 Dec 2009 08:14:33 -0500 Richard Suttmeier Beige Book shows that “The Great Credit Crunch” is continuing

I consider the Beige Book as the Gossip Columns from the twelve Federal Reserve Districts. Let’s look at some of the anecdotes from comments presented.


Complete Story »]]> AMZN DIA GLD DUG Richard Suttmeier Multi-Year Bear Market Tests Key Resistance http://seekingalpha.com/article/176134-multi-year-bear-market-tests-key-resistance?source=feed 176134 The weekly chart for the S&P 500 is testing “Snake Eyes.”

If the S&P makes a clear move above 1111 it would be above the down trend that connects the highs going back to October 2007.

]]> Wed, 02 Dec 2009 07:50:26 -0500 Richard Suttmeier The weekly chart for the S&P 500 is testing “Snake Eyes.”

If the S&P makes a clear move above 1111 it would be above the down trend that connects the highs going back to October 2007.


Complete Story »]]> SPX DIA AAPL TLT GLD Richard Suttmeier The Carry Trade vs. Risk Aversion http://seekingalpha.com/article/175932-the-carry-trade-vs-risk-aversion?source=feed 175932 Today the “dollar carry trade” is back on as market strategists’ claim no contagion from Dubai.

]]> Tue, 01 Dec 2009 10:24:12 -0500 Richard Suttmeier Today the “dollar carry trade” is back on as market strategists’ claim no contagion from Dubai.


Complete Story »]]> TLT GLD DUG DIA Richard Suttmeier Financial Time Bombs: Still Ticking http://seekingalpha.com/article/175758-financial-time-bombs-still-ticking?source=feed 175758 The Dubai Debt Issue is Just One Financial Time Bomb
As I continue to dig deeper into the FDIC Quarterly Banking Profile there are many ticking time bombs as many loan categories continue to deteriorate and no one knows the risks embedded in the $206.4 trillion in Notional Amount of Derivative Contracts. This is a new high for this category and is up 16.5% year over year. How many more $60 to $80 billion Dubai Bombs are there, and which US banks are exposed?
On Thanksgiving, investors around the world sold riskier assets, as the dollar stabilized and equities sold off. The situation stabilized over the weekend as the United Arab Emirates central bank provides additional liquidity to banks and branches to the Dubai area.
The Dollar Carry Trade may still be alive, but losing members, as copper and crude oil lag. Most notably is the fact that crude oil has had a lower high in each of the last six weeks. Equities are weakening in a totem pole from the SOX as weakest at the bottom to the Dow as strongest at the top.
Now there is a report that finally agrees with my theme first presented in April 2006. The inspectors general of the US Treasury and Federal Reserve have criticized these banking regulators for being too slow to react to risky lending and should have been on top of the growing overexposures the commercial real estate loans. Bank examiners looked the other way instead of following their own regulation with regard to exposures to C&D and CRE loans The FDIC has seized 124 banks so far in 2009, the most since 1992 leaving the Deposit Insurance Fund with an $8.2 billion deficit at the end of the third quarter and an estimated $10.4 billion at the end of November.
Hotel Owners are falling behind on Commercial Real Estate Loans
Hotel operators are offering sweet deals to entice travelers, but occupancy rates are falling anyway. Sources say that Hotel Loans are falling into delinquency faster than any other type of commercial real estate debt. Exacerbating the problem is that new hotels started during the real estate boom are flooding the market. In October 8.7% of hotel loans are delinquent, up from 1.5% year over year.
More help to prevent foreclosures
The Obama administration appears ready to increase pressures on mortgage companies to do more to help homeowners prevent foreclosures to keep residents in their homes. The Mortgage Bankers Association says that 14% of homeowners with mortgages were either delinquent or in foreclosure at the end of September, a record level for the ninth straight quarter.
The Congressional Oversight Panel reported last month that foreclosures are threatening families who took out conventional, fixed-rate mortgages with down payments of 10% to 20% on homes that would have been within their means in a normal market. The Home Affordable Modification Program targeted the housing crisis as it was in the beginning, but now the problem has spread to prime mortgages as the unemployment rate rises.
Fannie Mae (FNM) with its growing loan problems and with its Conservatorship scheduled by law to begin to unwind in 2010 makes any new program tougher to administer. Fannie has responded by tightening lending standards requiring a 620 credit score or better with a 45% maximum of total debt to income.
My theme continues that “The Great Credit Crunch” continues and is intensifying!
Disclosure: I hold no positions in the stocks I cover.
]]> Mon, 30 Nov 2009 11:58:53 -0500 Richard Suttmeier The Dubai Debt Issue is Just One Financial Time Bomb
As I continue to dig deeper into the FDIC Quarterly Banking Profile there are many ticking time bombs as many loan categories continue to deteriorate and no one knows the risks embedded in the $206.4 trillion in Notional Amount of Derivative Contracts. This is a new high for this category and is up 16.5% year over year. How many more $60 to $80 billion Dubai Bombs are there, and which US banks are exposed?
On Thanksgiving, investors around the world sold riskier assets, as the dollar stabilized and equities sold off. The situation stabilized over the weekend as the United Arab Emirates central bank provides additional liquidity to banks and branches to the Dubai area.
The Dollar Carry Trade may still be alive, but losing members, as copper and crude oil lag. Most notably is the fact that crude oil has had a lower high in each of the last six weeks. Equities are weakening in a totem pole from the SOX as weakest at the bottom to the Dow as strongest at the top.
Now there is a report that finally agrees with my theme first presented in April 2006. The inspectors general of the US Treasury and Federal Reserve have criticized these banking regulators for being too slow to react to risky lending and should have been on top of the growing overexposures the commercial real estate loans. Bank examiners looked the other way instead of following their own regulation with regard to exposures to C&D and CRE loans The FDIC has seized 124 banks so far in 2009, the most since 1992 leaving the Deposit Insurance Fund with an $8.2 billion deficit at the end of the third quarter and an estimated $10.4 billion at the end of November.
Hotel Owners are falling behind on Commercial Real Estate Loans
Hotel operators are offering sweet deals to entice travelers, but occupancy rates are falling anyway. Sources say that Hotel Loans are falling into delinquency faster than any other type of commercial real estate debt. Exacerbating the problem is that new hotels started during the real estate boom are flooding the market. In October 8.7% of hotel loans are delinquent, up from 1.5% year over year.
More help to prevent foreclosures
The Obama administration appears ready to increase pressures on mortgage companies to do more to help homeowners prevent foreclosures to keep residents in their homes. The Mortgage Bankers Association says that 14% of homeowners with mortgages were either delinquent or in foreclosure at the end of September, a record level for the ninth straight quarter.
The Congressional Oversight Panel reported last month that foreclosures are threatening families who took out conventional, fixed-rate mortgages with down payments of 10% to 20% on homes that would have been within their means in a normal market. The Home Affordable Modification Program targeted the housing crisis as it was in the beginning, but now the problem has spread to prime mortgages as the unemployment rate rises.
Fannie Mae (FNM) with its growing loan problems and with its Conservatorship scheduled by law to begin to unwind in 2010 makes any new program tougher to administer. Fannie has responded by tightening lending standards requiring a 620 credit score or better with a 45% maximum of total debt to income.
My theme continues that “The Great Credit Crunch” continues and is intensifying!
Disclosure: I hold no positions in the stocks I cover.

Complete Story »]]> SPY DIA QQQQ FNM Richard Suttmeier The Markets React to Dubai's Debt Issues http://seekingalpha.com/article/175548-the-markets-react-to-dubai-s-debt-issues?source=feed 175548 Thanksgiving proved to be a turkey for global equity markets on debt problems at Dubai World. Mixed Messages from the US Capital Markets - US Treasury yields, Commodities, Currencies and the totem pole of major equity averages
US Treasury yields and commodities declined as the dollar stabilized and global equities markets took it on the chin as Dubai World asks creditors for a postponement of debt repayments on about $60 billion worth of debt until May 2010. This surprise led to fears of potential defaults around the global financial system, particularly in emerging markets. This could be the catalyst to end the Bear Market Rally that began back in March.
The yield on the 10-Year Treasury plummeted below its 200-day simple moving average at 3.30.
This yield had been above its 200-day since May 18th. Global uncertainty with regard to Dubai World debt led to a flight to quality into US Treasuries trumping increasing supply. Risk aversion pushed the yield on the 10-Year to 3.15 with the October 2nd low yield at 3.10. Charts courtesy of Thomson / Reuters
Comex gold reached a new all time high at $1195, as the Dollar Index slipped below uptrend support. This morning gold is between quarterly and weekly pivots at $1170 and $1135.
Comex copper reached a new high for the move at 318.50 then failed to hold my weekly pivot at 315.90. The 200-week simple moving average is support at 295.50. There are reports of global stockpiling.
Nymex crude oil has avoided the positives of the dollar carry trade with lower highs in each of the past six weeks after peaking at $82 on October 21st. Today crude oil traded as low as $72.39, and a close today below its 200-week simple moving average at $75.57 and its five-week modified moving average at $75.16 shifts the weekly chart profile to negative. This would mean that reduced demand resulting from “The Great Credit Crunch” has trumped the Dollar Carry Trade.
The Dollar Index tested $74.21, which is below the uptrend connecting the lows of April and July of 2008. This morning the dollar is back above the uptrend level at $74.55. With the dollar oversold, a weekly close above the five-week modified moving average at $76.09 is required to shift the weekly chart to positive.
The Euro traded to a new high for the year at 1.5143, but returned to my weekly pivot at 1.4972. A close today below the five-week modified moving average at 1.48 shifts the weekly chart to negative, and identifies a weekly key reversal.
The dollar versus Japanese yen broke below its December 20, 2008 low of 87.15 to as low as 84.92, which is above my quarterly support at 82.72.
The SOX is the low index on the totem pole being well below a double-top at 337, which was a failed test of my semiannual resistance on September 26th and October 17th. The SOX lead off the bottom with a low of 167.55 back on November 22, 2008. Other indices did not bottom until March. A close today below the five-week modified moving average at 311.29 keeps the weekly chart negative.
The Russell 2000 has a double top at 624 / 625 set on September 26th and October 24th. The Transports have failed several tests between annual resistances at 4037 and 4199 since Sept. 19th. The NASDAQ has stayed below its 200-week simple moving average at 2211, and now has a negative divergence in weekly MOJO. The S&P 500 needs to close Friday above 1115 to break the multi-year bear market down trend that goes back to October 2007. This trend drops to 1111 (snake eyes) next week. The March bottom was the devilish 666.
The Dow is at the top of the totem pole with overbought MOJO. Ascending Wedge resistance is 10,520 with down trend resistance back to October 2007 at 10,612. These trends converge next week around 10,600 give or take twenty points or so. My weekly pivot is 10,327 with last week’s close at 10,318.
Disclosure: I hold no positions in the stocks I cover.
]]> Fri, 27 Nov 2009 10:42:18 -0500 Richard Suttmeier Thanksgiving proved to be a turkey for global equity markets on debt problems at Dubai World. Mixed Messages from the US Capital Markets - US Treasury yields, Commodities, Currencies and the totem pole of major equity averages
US Treasury yields and commodities declined as the dollar stabilized and global equities markets took it on the chin as Dubai World asks creditors for a postponement of debt repayments on about $60 billion worth of debt until May 2010. This surprise led to fears of potential defaults around the global financial system, particularly in emerging markets. This could be the catalyst to end the Bear Market Rally that began back in March.
The yield on the 10-Year Treasury plummeted below its 200-day simple moving average at 3.30.
This yield had been above its 200-day since May 18th. Global uncertainty with regard to Dubai World debt led to a flight to quality into US Treasuries trumping increasing supply. Risk aversion pushed the yield on the 10-Year to 3.15 with the October 2nd low yield at 3.10. Charts courtesy of Thomson / Reuters
Comex gold reached a new all time high at $1195, as the Dollar Index slipped below uptrend support. This morning gold is between quarterly and weekly pivots at $1170 and $1135.
Comex copper reached a new high for the move at 318.50 then failed to hold my weekly pivot at 315.90. The 200-week simple moving average is support at 295.50. There are reports of global stockpiling.
Nymex crude oil has avoided the positives of the dollar carry trade with lower highs in each of the past six weeks after peaking at $82 on October 21st. Today crude oil traded as low as $72.39, and a close today below its 200-week simple moving average at $75.57 and its five-week modified moving average at $75.16 shifts the weekly chart profile to negative. This would mean that reduced demand resulting from “The Great Credit Crunch” has trumped the Dollar Carry Trade.
The Dollar Index tested $74.21, which is below the uptrend connecting the lows of April and July of 2008. This morning the dollar is back above the uptrend level at $74.55. With the dollar oversold, a weekly close above the five-week modified moving average at $76.09 is required to shift the weekly chart to positive.
The Euro traded to a new high for the year at 1.5143, but returned to my weekly pivot at 1.4972. A close today below the five-week modified moving average at 1.48 shifts the weekly chart to negative, and identifies a weekly key reversal.
The dollar versus Japanese yen broke below its December 20, 2008 low of 87.15 to as low as 84.92, which is above my quarterly support at 82.72.
The SOX is the low index on the totem pole being well below a double-top at 337, which was a failed test of my semiannual resistance on September 26th and October 17th. The SOX lead off the bottom with a low of 167.55 back on November 22, 2008. Other indices did not bottom until March. A close today below the five-week modified moving average at 311.29 keeps the weekly chart negative.
The Russell 2000 has a double top at 624 / 625 set on September 26th and October 24th. The Transports have failed several tests between annual resistances at 4037 and 4199 since Sept. 19th. The NASDAQ has stayed below its 200-week simple moving average at 2211, and now has a negative divergence in weekly MOJO. The S&P 500 needs to close Friday above 1115 to break the multi-year bear market down trend that goes back to October 2007. This trend drops to 1111 (snake eyes) next week. The March bottom was the devilish 666.
The Dow is at the top of the totem pole with overbought MOJO. Ascending Wedge resistance is 10,520 with down trend resistance back to October 2007 at 10,612. These trends converge next week around 10,600 give or take twenty points or so. My weekly pivot is 10,327 with last week’s close at 10,318.
Disclosure: I hold no positions in the stocks I cover.

Complete Story »]]> DIA SPY QQQQ Richard Suttmeier FDIC Data Reflects Continued Economic Slump http://seekingalpha.com/article/175312-fdic-data-reflects-continued-economic-slump?source=feed 175312 The Third Quarter FDIC Quarterly Banking Profile shows a deteriorating economy. Case-Shiller shows stability in home prices, but I project this to be just a pause.
The Number of Problem Banks increased dramatically in the third quarter to 552 from 416.
What’s significant in this is that 50 banks failed in the third quarter, up from 24 in the second quarter and 21 in the first quarter. An additional 29 banks have failed since the end of the third quarter. If you assume that the 50 seized banks were on the Problem List, the FDIC added 186 banks to the list in the third quarter.
Most bank failures and the 552 problem banks are overexposed to C&D and CRE loans, which I have been warning about since April 2006.
The Deposit Insurance Fund was in arrears by $8.2 billion at the end of the third quarter.
The FDIC notes that they have big enough cash cushion to make it to the end of the year when member banks must pony up $45 billion in pre-paid fees for 2010 through 2012. If you add the cost of the 29 failures so far in the fourth quarter the Deposit Insurance Fund is $10.4 billion in the hole.
The FDIC expects bank closures to cost the Deposit Insurance Fund $100 billion through 2013, but by June 2013 the fund must return to 1.15% of insured deposits. This will be difficult without help from tax payers through the $100 billion line of credit with the US Treasury. The FDIC has a $500 billion temporary line of credit with the US Treasury, but considers tapping that a last resort.
In my opinion, with almost 3,000 banks overexposed to C&D and CRE loans, several banks will not be able to pre-pay Deposit Insurance Fund fees, which will put them on the FDIC list of Problem banks.
Noncurrent loans continue to rise at a faster pace than Reserves for Losses.
Reserves for Losses increased $9.2 billion in the third quarter, while Noncurrent Loans increased $34.7 billion. Year-over-year reserves are up 40.8% while noncurrent loans are up 95.7%. This puts significant stress on the banking system and extends “The Great Credit Crunch”.
Year to Date Total Assets in the banking system are down $596 billion to $13.25 trillion.
Since the FDIC Quarterly Banking Profile is the Balance Sheet of the US economy, there is no way that the NABE forecast that GDP will return to $14.55 trillion by the end of 2010 can be achieved.
The FDIC Quarterly Banking Profile is the most important leading indicator for the US economy and the deterioration was worse in the third quarter than the second quarter, which warns that the Recession has not ended and will continue at least through 2010. No double dip until the first dip ends.
The Case / Shiller home price index showed that the 20-City Index fell 9.4% year over year, but with a modest bump of 0.3% for September versus August.
Fewer cities saw month-to-month improvements and prices are back to the levels of autumn 2003. Prices have room to renew a decline given the fact that home values are up 50% since the beginning of the new millennium.
Problems for home prices are the fact that one in four mortgages in the United States is now under water, and mortgage delinquencies continue to rise along with the unemployment rate.
Disclosure: I hold no positions in the stocks I cover.
]]> Wed, 25 Nov 2009 11:18:02 -0500 Richard Suttmeier The Third Quarter FDIC Quarterly Banking Profile shows a deteriorating economy. Case-Shiller shows stability in home prices, but I project this to be just a pause.
The Number of Problem Banks increased dramatically in the third quarter to 552 from 416.
What’s significant in this is that 50 banks failed in the third quarter, up from 24 in the second quarter and 21 in the first quarter. An additional 29 banks have failed since the end of the third quarter. If you assume that the 50 seized banks were on the Problem List, the FDIC added 186 banks to the list in the third quarter.
Most bank failures and the 552 problem banks are overexposed to C&D and CRE loans, which I have been warning about since April 2006.
The Deposit Insurance Fund was in arrears by $8.2 billion at the end of the third quarter.
The FDIC notes that they have big enough cash cushion to make it to the end of the year when member banks must pony up $45 billion in pre-paid fees for 2010 through 2012. If you add the cost of the 29 failures so far in the fourth quarter the Deposit Insurance Fund is $10.4 billion in the hole.
The FDIC expects bank closures to cost the Deposit Insurance Fund $100 billion through 2013, but by June 2013 the fund must return to 1.15% of insured deposits. This will be difficult without help from tax payers through the $100 billion line of credit with the US Treasury. The FDIC has a $500 billion temporary line of credit with the US Treasury, but considers tapping that a last resort.
In my opinion, with almost 3,000 banks overexposed to C&D and CRE loans, several banks will not be able to pre-pay Deposit Insurance Fund fees, which will put them on the FDIC list of Problem banks.
Noncurrent loans continue to rise at a faster pace than Reserves for Losses.
Reserves for Losses increased $9.2 billion in the third quarter, while Noncurrent Loans increased $34.7 billion. Year-over-year reserves are up 40.8% while noncurrent loans are up 95.7%. This puts significant stress on the banking system and extends “The Great Credit Crunch”.
Year to Date Total Assets in the banking system are down $596 billion to $13.25 trillion.
Since the FDIC Quarterly Banking Profile is the Balance Sheet of the US economy, there is no way that the NABE forecast that GDP will return to $14.55 trillion by the end of 2010 can be achieved.
The FDIC Quarterly Banking Profile is the most important leading indicator for the US economy and the deterioration was worse in the third quarter than the second quarter, which warns that the Recession has not ended and will continue at least through 2010. No double dip until the first dip ends.
The Case / Shiller home price index showed that the 20-City Index fell 9.4% year over year, but with a modest bump of 0.3% for September versus August.
Fewer cities saw month-to-month improvements and prices are back to the levels of autumn 2003. Prices have room to renew a decline given the fact that home values are up 50% since the beginning of the new millennium.
Problems for home prices are the fact that one in four mortgages in the United States is now under water, and mortgage delinquencies continue to rise along with the unemployment rate.
Disclosure: I hold no positions in the stocks I cover.

Complete Story »]]> Richard Suttmeier What Will the Q3 FDIC Quarterly Banking Profile Report? http://seekingalpha.com/article/175029-what-will-the-q3-fdic-quarterly-banking-profile-report?source=feed 175029 The Third Quarter FDIC’s Quarterly Banking Profile is released this morning at 10:00 AM

]]> Tue, 24 Nov 2009 08:12:15 -0500 Richard Suttmeier The Third Quarter FDIC’s Quarterly Banking Profile is released this morning at 10:00 AM


Complete Story »]]> PBCT FNM FRE Richard Suttmeier Dollar Bottom Has Not Been Confirmed http://seekingalpha.com/article/174836-dollar-bottom-has-not-been-confirmed?source=feed 174836 The US Treasury sells $118 billion in new 2-Year, 5-Year and 7-Year Notes this week.

On Monday $44 billion of 2-Year notes are auctioned with a weekly pivot at 0.74%. On Tuesday $42 billion of 5-Year notes are auctioned with a weekly pivot at 2.20%. On Wednesday $32 billion of 7-Year notes are auctioned with a weekly pivot at 2.93%.

]]> Mon, 23 Nov 2009 10:22:17 -0500 Richard Suttmeier The US Treasury sells $118 billion in new 2-Year, 5-Year and 7-Year Notes this week.

On Monday $44 billion of 2-Year notes are auctioned with a weekly pivot at 0.74%. On Tuesday $42 billion of 5-Year notes are auctioned with a weekly pivot at 2.20%. On Wednesday $32 billion of 7-Year notes are auctioned with a weekly pivot at 2.93%.


Complete Story »]]> TLT GLD DUG DOX DIA Richard Suttmeier The Recession Continues as Geithner Takes Heat http://seekingalpha.com/article/174619-the-recession-continues-as-geithner-takes-heat?source=feed 174619 Today's Four for Four:
  • Jobless Claims are still at Recessionary levels.
  • Geithner takes Congressional Heat.
  • The FDIC Quarterly Banking Profile will be released next Tuesday.
  • More Treasury supply before Turkey Day and the Daily stock charts
The economy is in Recession as long as jobless claims are above 350,000.
You remember how I tracked the 350,000 Threshold in mid-2008? We were already in Recession then.
Even Bernanke admits that the economy is still losing jobs, albeit at a slower pace, but not at a pace to raise the federal funds rate. He repeatedly says that rates will stay low for an extended period, which admits that unemployment will remain high for an extended period.
Greenspan says that several months of 100,000 job growth in non-farm payrolls must occur before the unemployment rate peaks.
Comments from Treasury Secretary Geithner
Our Treasury Secretary told the Joint Economic Committee that the US is recovering from the worst financial and economic crisis in generations. He indicated that after an extended and painful contraction GDP grew at an annualized rate of 3.5% in the third quarter. He expects this to be the beginning of a trend with growth in the fourth quarter and in 2010. I respectfully disagree.
I agree with Republican Congressman Kevin Brady, who wants Geithner to resign. As NY Fed President, Geithner ran the Federal Open Market Trading desk, which has the primary dealers as contra-party clients.
The NY Fed thus monitors the financials of the primary dealers on a daily basis. Here are some problems Geithner missed among the primary dealers: Countrywide, Bear Stearns, Lehman, Merrill Lynch, etc.
Tuesday’s release of the FDIC’s Q3 Quarterly Banking Profile will give me the reasons that I disagree with the Treasury Secretary.
Mortgage Delinquencies and Foreclosures on the Rise
Economic strength should be questioned as prime mortgages sink into foreclosure. Because of rising unemployment prime mortgage in foreclosure accounts for 33% of all new foreclosures in the third quarter, up from 21% in the third quarter of 2008.
The percentage of all mortgage holders either delinquent or in foreclosure reached a record high for the 9th consecutive quarter. The delinquency rate hit 9.64% in Q3 versus 9.24% in Q2 and 6.99% in Q3 2008. For FHA backed loans 18% are at least one payment late or in foreclosure.
Treasury to sell $118 billion in notes next week - The US Treasury will sell $44 billion in 2-year notes on Monday, $42 billion in 5-year notes on Tuesday and $32 billion in 7-year notes on Wednesday.

That’s today’s Four in Four. Have a great day.

Disclosure: I Hold No Positions in the Stocks I Cover.
]]> Fri, 20 Nov 2009 09:44:40 -0500 Richard Suttmeier Today's Four for Four:
  • Jobless Claims are still at Recessionary levels.
  • Geithner takes Congressional Heat.
  • The FDIC Quarterly Banking Profile will be released next Tuesday.
  • More Treasury supply before Turkey Day and the Daily stock charts
The economy is in Recession as long as jobless claims are above 350,000.
You remember how I tracked the 350,000 Threshold in mid-2008? We were already in Recession then.
Even Bernanke admits that the economy is still losing jobs, albeit at a slower pace, but not at a pace to raise the federal funds rate. He repeatedly says that rates will stay low for an extended period, which admits that unemployment will remain high for an extended period.
Greenspan says that several months of 100,000 job growth in non-farm payrolls must occur before the unemployment rate peaks.
Comments from Treasury Secretary Geithner
Our Treasury Secretary told the Joint Economic Committee that the US is recovering from the worst financial and economic crisis in generations. He indicated that after an extended and painful contraction GDP grew at an annualized rate of 3.5% in the third quarter. He expects this to be the beginning of a trend with growth in the fourth quarter and in 2010. I respectfully disagree.
I agree with Republican Congressman Kevin Brady, who wants Geithner to resign. As NY Fed President, Geithner ran the Federal Open Market Trading desk, which has the primary dealers as contra-party clients.
The NY Fed thus monitors the financials of the primary dealers on a daily basis. Here are some problems Geithner missed among the primary dealers: Countrywide, Bear Stearns, Lehman, Merrill Lynch, etc.
Tuesday’s release of the FDIC’s Q3 Quarterly Banking Profile will give me the reasons that I disagree with the Treasury Secretary.
Mortgage Delinquencies and Foreclosures on the Rise
Economic strength should be questioned as prime mortgages sink into foreclosure. Because of rising unemployment prime mortgage in foreclosure accounts for 33% of all new foreclosures in the third quarter, up from 21% in the third quarter of 2008.
The percentage of all mortgage holders either delinquent or in foreclosure reached a record high for the 9th consecutive quarter. The delinquency rate hit 9.64% in Q3 versus 9.24% in Q2 and 6.99% in Q3 2008. For FHA backed loans 18% are at least one payment late or in foreclosure.
Treasury to sell $118 billion in notes next week - The US Treasury will sell $44 billion in 2-year notes on Monday, $42 billion in 5-year notes on Tuesday and $32 billion in 7-year notes on Wednesday.

That’s today’s Four in Four. Have a great day.

Disclosure: I Hold No Positions in the Stocks I Cover.

Complete Story »]]> DIA QQQQ Richard Suttmeier The Great Credit Crunch Is Deepening http://seekingalpha.com/article/174267-the-great-credit-crunch-is-deepening?source=feed 174267 Bank Assessments to Cover “Too-Big-To-Fail

Within the proposed banking reform bill the House Financial Services Committee wants banks and funds to make payments in advance for companies deemed “too-big-to-fail”.

]]> Thu, 19 Nov 2009 07:50:51 -0500 Richard Suttmeier Bank Assessments to Cover “Too-Big-To-Fail

Within the proposed banking reform bill the House Financial Services Committee wants banks and funds to make payments in advance for companies deemed “too-big-to-fail”.


Complete Story »]]> DIA Richard Suttmeier The Carry Trade Has Created Asset Bubbles http://seekingalpha.com/article/174024-the-carry-trade-has-created-asset-bubbles?source=feed 174024 Fed’s Vice-Chair Donald Kohn sees no asset bubbles – I say, take off the rose colored glasses and get a Seeing Eye dog. Look at the charts for gold, copper and equities, and for the dollar index.

For the Dollar Index there is a potential Weekly Key Reversal. The dollar reached a new low for the move on Monday at 74.75. A close this week above last week’s high of 75.88 defines a weekly key reversal. A Weekly Key Reversal followed by two weeks of higher closes confirms a dollar bottom.

]]> Wed, 18 Nov 2009 09:19:48 -0500 Richard Suttmeier Fed’s Vice-Chair Donald Kohn sees no asset bubbles – I say, take off the rose colored glasses and get a Seeing Eye dog. Look at the charts for gold, copper and equities, and for the dollar index.

For the Dollar Index there is a potential Weekly Key Reversal. The dollar reached a new low for the move on Monday at 74.75. A close this week above last week’s high of 75.88 defines a weekly key reversal. A Weekly Key Reversal followed by two weeks of higher closes confirms a dollar bottom.


Complete Story »]]> DIA Richard Suttmeier Carry Trade Shifts into Parabolic Gear http://seekingalpha.com/article/173814-carry-trade-shifts-into-parabolic-gear?source=feed 173814 The President and Fed Chief both talk a strong dollar policy, but do not back that with action. In fact Bernanke says interest rates will stay low for an extended period, on recovery concerns.

Bernanke says that he expects moderate growth in 2010, yet no talk of an exit strategy on the policy of flooding the World with dollars. Then he says that unemployment and job creation will be an issue in 2010.

]]> Tue, 17 Nov 2009 10:48:02 -0500 Richard Suttmeier The President and Fed Chief both talk a strong dollar policy, but do not back that with action. In fact Bernanke says interest rates will stay low for an extended period, on recovery concerns.

Bernanke says that he expects moderate growth in 2010, yet no talk of an exit strategy on the policy of flooding the World with dollars. Then he says that unemployment and job creation will be an issue in 2010.


Complete Story »]]> TLT GLD DUG DIA UDN UUP Richard Suttmeier