drini

Google Nearing Two-Year Highs

Everyone is playing technical charts. GOOG is 200B Mkt Cap and with Forward PE of 40. Cramer, CBNC, BB, MW all are keeping this in the news so its popular. Just one product company. It is going up on weak volumes. The feds and the brokers are moving all the stocks in the index's to make it look that the economy is healing. There is net outflow in equities but equities are going up, the pattern is so obvious that it is manipulated, move the futures in thin volumes, move the stocks up in the first 30 mins and let the program trading keep them up buying and selling at the same price. Then in the last 15-20 Min again move the market up. All that needs to be done is move about 30-40 stock to move all the indexes up. Dow 30 and stick like GOOG, APPL and few large stocks. Also evey day or 2 one of the brokers come and upgrade few of these 30-40 stocks. Watch for a day when Program trading goes haywire sure lot of them are going lose big time.

Important to note that the whole financial system will collapse if people do not invest in stocks and bonds so feds keeping the lending rates very low so people put all the hard earned saving into risk debt and stocks. Here is why
(1) next year Treasury needs 3Trillion and may be more( deficits and roll over existing debt) and i think this does not include any thing required for health care, FDIC insurance or any bailouts.
(2) Bonds duration has gone down to 4.2 Years and lot of that has to be rolled over in the next 1-5year. I think the figures are staggering 12-15T. Be very careful this is mkt i s10 times large then the stock mkt. I do not believe all deals will get financed
(3) Housing and commercial real estate is not done, any improvement see is just because 30% are investors buying and 100% Mgts are backed by FNM and FRE. In March Govt support is removed then the Mtg rates will start going. Also next wave of re-sets starts in Jan 2010 and won'nt peak until 2012. 30% of Mtgs are under water and atleast 20% more are delinquent when this hits the market over the next year it will not be pretty.
(4) Jobs there will be no growth in jobs after the first 2 months next year. Off course Govt and White house are going to move lot of these to the newly created EUC (extented unemployment ) to make the unemployment figs look good(just a accounting trick). Also many Millions will loose the Unemployment benefits.
(5) Accounting rules allow the banks to show over inflated value for the MBS and other derivative products instead of the real Mkt value.
(6) Emerging Mkts growth, China is growing due to stimulus and money printing(directly related to US printing), they exports are down dramatically. India has a inflation problem but it has the largest underground economy where 70% of the transactions are done with cash, not debt so may do OK but not a growth of 8% or so. Europe no growth but Euro could take a hit.


This whole Mkt is utter rubbish and why would funds and sane people want to buy in this market. As the valuations of stocks are much higher than pre-crash levels give that there we no real growth in coming years. I cannot imagine that GOOG can grow at even 10% leave alone 40% in the next 3 years. There are clear indications that internet advertising revns are saturating(lower pricing) and all the penny'sGOOG was scraping of small bus. is also stalling. For speculative purpose buying calls is a better option than buying the stock itself.

No one in the media told you sell before the last crash why do you think they are to tell you sell now, Just turn of CNBC and Bloomberg they are pure commercial channels bought by wall street. Just do your own analysis. Cramer is a criminal just doing his job of pumping, he was asking people to buy all way down when the markets crashed but this guy is still on TV recommending people to buy when the Mkt valuations are at the peak.

China's Growth an Accounting 'Miracle'

China is flooding the market with credit, they are forced to do this, it is not bad because USA is doing the same(printing money). China has a lot of assets in USD (like treasury, agency debt etc), which are all depreciating assets adjusted to inflation. So if they do not increase the credit in they system the value of they curreny becomes stronger relative to USD which is pegged to USD, to keep the lid they would rather increase the money flow in China then buying USD related assets. Its is actually bad for the US and good for china if done corectly, but we in the usa need to watch for inflation because those imports are going to cost lot more.
I need to agee on the one point there is no transparency in the data in china, but in the USA we have a lot of data but it is all statistical(lies, damn lies and statistics). Also I agree on author that the GDP numbers in China is hard to belive because its a export oriented economy and thats fallen off the cliff.

Earnings Preview: Google

138Billion Mkt Cap and single product company, saty away from this other the search they have not proved in anything else. They are now bigger then IBM, CSCO and host other companies this makes it a gamble to buy google. good days are over or close to being over for this stock.

Meredith Whitney Ratings

The stock is already priced for good results so no point buying now unless you want to day trade. Also she started a new frim and is basically sucking it up with goldman as she knows she could get favors from GS on th elong run.

Rising Oil Prices: What We Have to Do ASAP

I think 2 factor impacting prices now are speculation and inflation fears. GS, JPM and MS are the main culprits on speculation. They hold substaintial physical oil apart from future contracts used as hedges against swap trades. So as more investor money flows into oil more hedging is required and therefore push's up the price. Now give that these firms are renting off shore tankers to store physical oil for 9 mothns forward, the market is over supplied with physical oil(See inventory level are 10% higer then last year plus nearly highest in couple of decades). Note the off shore storage does not show up in inventory levels. Also inventories not only in US but worldwide are pretty high and almost to full capacity.
Now the investors are purely driven by hype to diversify into commodities because huge inflation is down the road. Now this may be true but inflation is likely not going to happen for atleast couple of years, given the severity of the crisis and still the credit markets are suffering, they have improved because the feds are buying and very little private activity in the credit markets. Also follow the bond yields they are climbing steady which choke of any housing activity and likely result in future increase indefault rates. Very important to note the alt-A, option arms etc are going to re-set starting 2010 and this wave is 1.5times the sub-prime wave so if the rates are higher(abive 5%) look for a big fall in the markets across all investments(commodities, stocks, bonds etc)
Oil may likely be done for this summer but who knows, one thins i for sure if it goes higher expect the consumers to cut more spending and stocks to eventually fall. do not short oil here. buy Nat gas (UNG instead if you want to play spike in OIL)

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

The article is well written and very true. AIG and Fannie/Fredde are used as intermediaries to funnel money from the tax payers to the banks/broker houses. AIG bonus was like throwing a bone to a barking dog, the idea was to divert public outrage. I am shocked that the big media including PBS has not kept the public well informed on this. I hope they pick this up and replay it daily. Also hope somethrows this on U-tube and other propulat web sites to created awareness to the public. This has to stopped and no one has the will to stop it. This is the worlds biggest corruption by the feds and the treasury i have see.
GS and the brokers are spking the markets it is so obvious just looking at the gaps at start and end of day with low volumes. I hope the market falls quick so few people are trapped into this BS manipulation and let the real slow recovery being which will be more sustainable. People will then save and invest wisely and allocating capital to the right industries and real business rather. Keep your good work. I think when you short buying protection on th eup side will help atleast. I assume the author has done that so his short losses are limited.

Cramer's Mad Money - Mutual Fund Monday (5/4/09)

Cramer is full of shit, this guy should be removed from the media and has destoryed many lives. The market is not rallying on fundamentals but pure speculation. The volumes are low and seem to rally on short squeeze just before the end of day. Pure manipulation and program trading. Everyone is piling on to one side of the trade. This will likely end the same way when everyone tries to getout. Look at all crises from LTCM, credit bubble and tech bubble eveyone was executing the same stratergy with leverage and boom. To me it looks like the GS is big on this program trades. They gap up the indexes in pre mkt hours on very low volume and at the start, eveyone piles on throught out the day and then same crap at the end of the day. Also the main media is so maipluated, blogs are much better place to go.
Banks are still in such bad shape and the housing is not coming back for 3-5 years atleast, big wave of option amrs, NIJA alt-A loans coming due this year end much bigger then the sub-prime, not sure how long the banks can last. IThe securties these firms hold are lost value for good, also big trouble in the corp bond mkts, eastern euro, middle east, South America. Hope the feds and treasury are paying attention to these and make sure the banks do not leverage up.

As for the technology as cramer points out, I think they will get hit i cannot see why companies are going to buy new hardware and software eveyone is cutting bdgets. Same goes with the consumers(16M unemployed in the US but worldwide likely about 150million lost jobs and income). Cell phones are reached close to peak demand, same with PC's, games etc.

Big money flowing if actually check the voumes below normal vols, skew by few names like BAC, C the usuall program trading issues.

more can be said, but it better to stay out of this rally and not short the stocks either.

Fed Tries Its Own Version of 'Shock and Awe'

From the funds outflow by foreig'n investors and likely selling of agency debt by chinese looks like no other way but to buy them as US institutions & PE are not buying them. Either way the tax payer is screwed. First they bailout the Broker and bank with tax payers dollars, next they want to increase taxes. Now this. This is just insane. Ask people to save first before they spend this is the way to save the economy on the long. Why is Govt trying to get people to invest in risky assets by keeping the interest rates low. Investors took the risk so they should also take the pain. Going short the treasury soon.

The Fed's Bold Measures Are Worth the Risk of Future Problems

This very bad news. There are no buyers for treasury and the agency debt, so they have no choice but to buy them. The Chines and forigen buyers are not there and likely selling which is causing the feds to buy. This looks like a bail out for the chines selling agency debt
Stay away this does bode well for recovery.

The Crude Oil Price Disconnect

the article is right on the money, pure speculation and strange that the feds and the politicians have nothing to say to break this. I am sure they will come and blame everyone else after the bubble bust, just like housing and Stock market crash. Also there is lot of research on alternative fules and also research to grow in labs just like stem cells so this should be no issue in terms of exhasuting our resources. One other point is the media is scaring eveyone about this and geeting as many ionvestors as they can suck in so they big buys can dump them. One odd thing i have noticed is that daily there is some news about a supply problem but there is no news about people unable to get gas for real use. Also futures market should be investigated and send people to prison. We would nto need the rebate checks and sqandring of tax payers money if we only stop this mad speculation in basic food and oil.