Investing1

GE (GE) "strongly disagrees with the premise" it is selling off assets in a desparate attempt to raise cash. But looking at recent deals, and GE's effort to dump NBC Universal's $2B in debt by selling it into a JV at way below market value, Daniel Fisher can't help but wonder: What then?

Folks, I have been saying all along that as buffett gets senile he is making a ton of mistakes. Buying a unionized railroad for a 30% premium is a huge mistake. Tomorrow he is going to be crushed and he will have to raise equity rapidly to shore up his ratios that he needs to maintain with the insurance business.

Remember, he doubled down, and tomorrow he gets called for it.

And GE, I have been telling all the readers to my blog for the past year that GE is bankrupt. The government will end up taking them over too.

Folks, you have to pay attention. India did not buy all the gold on the planet 2 weeks ago for NO reason.

Credit markets have seized up again and it started with Vietnams devaluation. When a major economy like that... ( it is growing rapidly) devalues its currency you have to stand up and run as fast as you can for the exits.

India buying, vietnam devaluing, Abu Dabi in default. More shoes will fall and Buffett will get the squeeze.

All you have to do is read along for free at my blog myspace.com/investing1

Coal, Grain and Imports Make Burlington Northern Another Good Move By Buffett

What I do not understand is that you guys do not understand that Warren may have violated ethics with the BNI deal. Just this weekend Obama announced that he is banning mountain top mining to save the May Fly. Yet, here in Michigan we have BILLIONS of may flys every year and no coal.

Warrens deal to buy BNI sure looks like he had access to the EPA/obama admin announcement on the banning of mountain top mining in the eastern states.

If we are arresting hedge fund managers for information they learn in the hall ways of capitalism, are we not going to arrest Warren for trading on information gleaned from the hall ways of government???

His deal smacks of ethical concerns to me. Why pay a huge premium? Why do a deal rapidly? Why buy a union company when you are against that? Why leverage yourself when you are against that?? Why run the risk of ruining your credit rating to do the deal???

BNI has tripple track from the power river basin to the east. Did he know that Obama was going to eliminate Patriot Coal, Massey Energy and International coal this weekend with his announcement of banning mountain top coal minning???

What did he know and when did he know it???

Then, did Obama act ethically to crush Patriot, Massey and International. Is the president not supposed to be saving and creating jobs rather than crushing those industries that we need to create jobs??

You guys do not get it. Warren did not just pick this out of his hat. It violates many of the rules he preached in the past. B

How Apple's Market Share Will Propel Stock to $500, Part 1

Again, I have to wonder. Swine flu will close the malls and the stores that sell everything. I am seeing it already as swine flu heats up and the kill rate is currently running at 1 in 20 hospital admittances that is not a good ratio. I am sorry folks but things crash as the economy crashes on the swine flu reality. Kids will be dying off with the swine flu and they certainly will not be flocking to the apple store to breathe everyones exhaled air. Crash and burn. Sorry.

Then, after the dust settles, sure, it can go up to $500 as there is no other computer on the face of the planet as good as an apple. PERIOD. The planet is their market. Msoft had the planet and as soon as old billionaire got complacent, they crashed and burned as well.

Gap up exhaustion tops are all over in the market, all you have to do is look around. Then, trace back the chart a month or so and you will always find an improperly formed downward slopping w patter that has broken out into the exhaustion gap and those will all fail. They always do.

Look at options on MZZ, there are absolutely none being traded yet the small caps and the mid caps and every other long etf have broken down on the week. IBD double inverted in the top 200. We are correcting folks. My own business can not sell anything suddenly this past week. Swine flu will crush the remainder of the economy.

Look for apple and others to quickly announce stock splits to justify the gap up exhaustion. That will justify the concept of $500. They only get there on a stock split now and after the recovery post swine flu. Brian

Ebix, Inc.: Likely to Beat Expectations

I have to concur as well. Although I am showing that there will be a near term pull back with the shares so now is a great time to be ready to pull the trigger on some shares in that pull back range. $58.50 to $60 seems doable.

Why the U.S. Dollar Drop Might Be Significant

You guys are forgetting the current facts that the Chinese are manipulating the derivatives market. They have underwater derivatives that they have sold for less then they have into them yet they are simply not presenting the derivatives forsale at that lower or loss price. If the price is so low that there are no sellers, yet there is a heard of buyers at that low price, why are we not forcing the Chinese to sell what they agreed to sell.

If there is no delivery in the derivatives markets then there is no set price point which brings us back full circle to September of last year..... What is anything worth? What are derivatives of those anythings worth? ZERO.

Is a Crash Impending?

Just some thoughts. Each and every downturn in the stock market since 2007 had the same pattern that has NOW SET UP. Weakness in the small cap sector three or four days before a Wednesday. We have that... Last week the small cap sector rolled over and it continues to roll over. Double inversion of the IBD top 200. Tonight we have that. The number of stocks up in volume and up in price is less than the number of stcoks up in volume and down in price. Same holds true for the down in volume stocks...

Basically, the leaders are failing.

Data points to the short side better then those long. Extrapolated from IBD timesaver table and my proprietary spreadsheet data, there have been three DOWN DOWN DOWN signals in the ratio of the stocks up verses stocks down in the timesaver table of IBD since Aug 18. LAST SEPTEMBER had the same set up and no other sell offs had this extreme action... THREE IS HUGE.

In my spreadsheet and in my blog I noticed the nuances of the market correction Friday at noon. I immeditately went on my blog and gave my readers my blessing to buy short. The data squew in the spreadsheet is strongly short at this juncture. The mathematical model has never failed me.

We have price support with ETFs... Double and tripple that are up in price and reaching higher highs and higher lows for the past three days. (do your research)

We have a 10 year note that has dropped from 3.46 to 3.50 to 3.30 as smart money flees equities and heads to safety.

Watch what is actually going on, measure it mathematically and make some inferences from the data squew. It is really very simple to do. I am a retired truck driver and it was strange to me to have "advisors" telling people to buy now so I went back to college to finish my finance degree so I can tell people the truth, near term be fleaing the long side of the market. Take a small 20% short hedge and take all your profits out of the market. It will sell off near term. How much??? We have to break 973 to know. So far? 973.

Potential? 665.

Why? There is no liquidity in the system. California is issuing IOUs, Cities and towns and school boards are now out of funds. Bill Cosby is begging African Americans to stay in school. Cash for clunkers is over and the government is hoarding the cash rather than paying it out.

My coin business? Common coins are tough to sell at any price, uncommon coins sell instantly for whatever I want to sell them for.

The north american boarder crossing from my condo... STRONG truck traffic compared to this time last year. Uptick in freight volumes in the local truck load sector as car plants get up and running to build out the 200,000 cars that sold in the clunkers program. Look for near term GDP to move above 0 but then to colapse in the next quarter. The only stock anyone can buy right now? BWLD. Everyone will want a chicken wing and a beer in front of a tv screne no matter what the economy.

1 Month, 24 Bank Failures: Random Event or Wilting Economy?

I disagree that this quarter we are in right now will see the end of the recession. I concur that with the deflator we were -2.7. With the strong revision to -6.5 and a deflator at -2.7 that compares to a real, soon to be revised number ot -3.7

traders do not trade off of silly ness like a government report. In fact traders have not been trading in several months as there is no volume in the market right now and has not been volume in a long time.

Money has evaporated from all the systems in the US. Banks are failing because they do not have money. Businesses are failing because they have no access to money. The only people with money are the government and that is why they have increases spending by 11%. To get money into the system.

There has been billions and billions pulled from the economy on the month as people hoard the stuff. There has been a HUGE baby boomlett that will fix the social security crisis in 18 years as the huge number of kids born since 2007 will be turning 18 and entering the work force.

With national health care we will be able to kill off all the sick and infirm and that will lower total cost.

Things are starting to look great for this economy. As Plague, Swine Flu, and Malaria, and AIDS are sweeping around the globe killing millions of people that will right size the human population on earth and gas house emmisions will decrease over time.

Things are improving each and every day. It is something that gets better with time not worse. There will be a stock market correction and it MAY get started MONDAY.... The data points to the fact that IT MAY get started soon. But each time the data precipitates to weakness we see a new wave of cash hit the market and it corrects higher. If you want to stand in front of the wave of the fixative causues comming with TIME, then so be it. I just can not do that.

'Too Big to Fail' Cause of Current Community Bank Failures

I concur that the crisis is still here, I agree that the market is over bought, but the data stream to the short side is just not there yet, hence, the market can and probably will rise.

There is some internal weakness showing in the long ETFs I watch but.... That is not enough at this stage to put us into correction. With the strong support at S and P 870 that is the new bottom. Will we retest that again, probably. It will not happen until September or November though with the FASB m2m comming due.

The O man will soon be all over the TV telling us how mean the SEC is and how it has to be abolished. The "folks" that elected him will agree with him and the crisis will be averted with continued no m2m.

Yes, there are baricades in front of us but you are forgetting the concept that the democrats control the press and hence they control the public and they will figure out all kinds of ways to delay the enevitable.

We need not look into the US but we need to closely follow CHINA. loans over there are through the roof as they have reduced their loan standards and over 25% of the loans they have made have been invested into their stock market.

Nearly 50% of the top stocks leading this market higher are chines stocks that trade in the US. Indeed in IBD today 4 out of the top 6 stocks in the top 100 are chjina and SMALL CAP CHINA!

Small cap china is leading this stock market rally from here. Do you believe it? If you beleive that small caps are the first place that growth begins in a rally then this is perfect for that thesis. We need to keep an eye on transports and train utilization. If that increases, we are recovering and we may recover rapidly.

Yet, plague, swine flue and Malaria are starting to sweep the globe and kill folks in alarming numbers.

If you want press coverage of the true news cycle it is easy to get it. Turn off the news and turn the satelite to CANADA. Stop reading your local paper and punch in the globe and mail from Toronto. Get rid of any influence you have to the falsehood of the US press and subscribe to IBD. You will be fine.

More on Capital Ratios of U.S. Banks

Well, With the rebalancing of personal balance sheets and the billions that were pulled from the market in July, I would suggest that the consumer... Who is currently not spending a dime, is in the process of cleaning up their balance sheets. I have been. I have been able to cut my mortgage debt by 40K simply by selling at the tip of the market and just now rebuying into the market. My monthly end savings rate will increase from under $500 to over $1300 with the move back into the mortgage market from the rental market.

And I do not have a job currently!

My arguement is that no one is counting the process of people cleaning up their balance sheets. They are doing it in droves. The trade down market in the city I live in is selling for multiple offers right at asking.

As people clear their persoanl balance sheets they will be buying bonds for no risk and the solid rate of return. Specifically corporate bonds. We will move back to a time where savings and wealth creation and management will be the new focus and away from spending in excess just because we can. Hence, the economy will not recover but we will have stag flation unless the dollar drops farther and faster to make the US the country of preference for manufacturing again.

Yes, capitol ratios matter, but they really no longer matter as we are moving beyond that with the work that everyone isdoing with their balance sheets. I am sure you have too!

Dow 6,000, Part II

Everyone forgets to look at the fundamentals. The short side double weighted ETFs were trading at -2.90 divergence and -4.0 MACD at the peak of the market advance a few months back. Now, as we head into the summer sell off season the divergence and macd has narrowed with the divergence POSITIVE and the MACD less than -1.0 in many of the short double ETFs. That signifys huge strengthening in the internal shift to a down slope of the market to a retest.

Simple truth is that we have had strenght to support but each and every support is getting weaker and weaker. What concerns me is that the trading floors were all sent by the government over to trade the bond pits to lower interest rates significantly the past two weeks. When we get back from the hoilday will the trading floors be back in buying equities and futures to bump the market on such low volume?

Additionally, With the strong W pattern to many of the long double ETFs that I treack every night and their failure to break from that W pattern to sustainable growth is interesting to me. They drop 3 days and then rally 2. They drop 4 days and then rally 2. They drop 3 days and then rally 1. Look at the charts of the MVV, SSO, DDM, QID, BGU...

Additionally, Chinese stocks make up nearly 50% of the IBD top 20 this week. Yes, Chinese stocks that trade in the US are nearly 50% of the top stocks trading in the US. Infact, there are few US stocks trading up in this market to a grade they reach the top of IBD. Interesting...

Yet, China just crushed 4 of the top stocks this week when they stopped the practice of allowing the online gamers to offer virtual money to players that those players can then trade for real assets and services. That has crushed the prospects and low cost process of these massive online games. At the very least it will increase their back office opperating cost significantly. 3 of these top stocks are in the top 20 of the US stock market.

That, to me is striking. However, the rise in China can fuel the US to rally. Look no further back then 2007 when we had this same phenomeon. In the IBD top 200 there were tons of Chinese stocks breaking higher and that lifted the market to a point that it rallied heading into the October sell off when folks suddenly realized that the economy was bad.

Lastly, as mandates from the government have increased nearly 20% this year alone, the cost of doing business in the US has become nearly confiscatory. Indeed, today 2 new nuclear plants were taken off the drawing board since the costs to build them could not find financing. If any form of Cap and Trade passes that will be the death nail for US equities in the near term and will be awesome for attached countries like Canada as all Us based companies will flee the US for other jurisdictions. As Canada is cutting regulation and taxes on corporations they have a huge welcome mat out.

Cap and Trade is just a new Smoot Hawley. History is repeating itself.

VanceInfo: A Little-Discussed Chinese Stock with a Bright Future

VIT has now hit my buying requirement in IBD. I will be building a position. Slowly. I built a nice position in FUQI over the past month and that has offered some nice rewards. I have to concur that CHINA is the place for my money and I have a clearer vision after fleeing the Us and its socialist/marxist undertones for the safe shores of Canada with its liberal ore extraction ideals and decreasing corporate tax rates.

The Case for Allowing TARP Repayments

Danny boy. The problem with the tarp repayment is that the mortgage crisis is far larger than the government is telling you. Here on these pages author after author have taken their time to tell you that the sub prime mess is behind us. That only cost around 2 trillion. However, the good loan mess is not behind us. It is staring us in the fase. As we now are closing in on 10% unemployment for every 10th person unemployed that makes 1 home fall into forclosure. With the move from 8.9 to 9.4% unemployment, you can see the exposure to more down side losses.

When you look at the banks balance sheets, you have to keep in mind the shadow market or the off balance sheet market. It is all paper trading. All the contract and such that the banks agrees to in the shadow market. This is a huge market. Far larger then you would ever imagine. For years this market has been allowed to be off balance sheet. Now with the new FASB rules created under the Sarbaines -Oxley requirements the FASB board has told every financial institution that its off balance sheet itmes must be on balance sheet by November 15th. Unless there is a change authorized by congress to the Sarbaines Oxley rules the Fasb board rules stand. That is staring us in the face right now. As soon as FASB made this rule the President immediately demanded the disbandment of the SEC which the FASB opperates under.

Just as we were mad at the SEC for their errors in Tyco, Madoff and others, the SEC has started cleaning its house and cleaning up its act to offer TRANSPARENCY under the Sarbaines Oxley requirements and the one industry that did not have any transparency was the banking sector. As such, the FASB board has been making initiative o offer this transparency. Needless to say, transparency to the government shell game is the last thing they want at this point so the President demanded the immediate closure of the SEC. It is in essence government turning on itself.

So a few banks will repay TARP. The Tarp will be made available and forced on smaller institutions. Eventually all our banks will be under some form of tarp restrictions and the weaker banks will not be able to repay the blooming interest payments that they will have to make to the government. They will raise fees everyday including Sunday and they will lose their competitiveness. Then the government will also be able to dictate how much people make with the new PAY CZAR. If the banks do not take TARP then the President will be able to take his new 5,000 strong secret police force (KGB and SS combined) and force the CEOS to take TARP. Hence we are finding that Bof A had to take TARP.

You see where this is going. IF..... IF THE worst case senario the government did a few weeks back was so indepth, and they used 9% unemployment and the President is going to hire part timers in the next wave of hiring the government does, will part time jobs from teenagers stop the forclosure rate from rising? If less and less people are spending (have you been to a Home Depot or a mall lately?) and the Us saving rate goes up, as it has been then Corporate forclosures are in the next ring of things that need worked through. As more and more businesses are being legislated to death (there has been a 17% INCREASE in mandates so far this administration) they will fail and their loan will be called.

As we raise taxes on corporations (Obama is proposing this right now... narrowing the loop holes) more US businesses with forign headquarters on shore in the US will move those offices off shore to avoid the tax implications. With that move goes more jobs. Microsoft admits that it will have to offshore a ton of jobs. Every corporation with forign markets will have to look at the savings to justify the stay. Hence, more job losses.

As the interest rate ticks up on our horrendious spending... We have spent 1 TRILLION DOLLARS since Obama took office and the President is proposing a new 1 trillion dollar medical scheme to replace something that is not broken.... And he will do some of that by taxing you... That means that next year we will need to use the credit card for 2 trillion dollars of new spending...

As the Chinese have 768 BILLION of this debt... And the treasury market has dropped by about 6.2% this year the Chinese are sitting on about 47.6 BILLION IN LOSSES by funding our credit card debt... You see how this is a house of cards. The same type of house of cards that has caught up with ma and pa kettle in middle Amerika, that has forced them to lose their credit card, or their medical insurance or their job, or their home... You see it. It is happening all around you. That is the path the government institutions are on. Last time I checked Banks are government institutions. Hence they do not want to be transparent.

Indeed, a government group immediately published its finding on the health of the bansk in the Us and they pointed out that the unemployment rate in the government forcast of the worst case senario is ALREADY HIGHER than the government projected. AND, the AVERAGE DROP IN HOUSE PRICES ON A NATIONAL SCALE IS ALREADY HIGHER THAN THEY PROJECTED. It was all smoke in mirrors to try to get the consumer to spend since the Us economy is 70% of consumer spending/ I want it, where is my credit card at??

I hope that helps. The data points are all over the place. The banks only want to repay the tarp so that they are not controlled by the government in how they pay their people. Simple truth is that GS has made so much money in their trading opperations this year that their bonuses they will pay this year will be so huge and so focused on so few in our society that if they were controlled by the government at bonus time the outcry and back lash against them would be so massive that they would have to change their business model. To avoid that, they need to repay tarp before the bonus season. That is the real reason for the repayment.

Today's Yellow Shoot: The MBA Mortgage Report

We just bought a home this week. It is just 9.6% of our monthly NET income and we put 32.4% down and qualified for a loan at 3.25% on a fixed 25 year ammo on a 5 year term. Yet, they are restricting us from only being able to pay off our mortgage by 15% more per year!!!!

We decided to step in after selling at the top of the market 2 years ago. For some reason they are giving homes away here, 1 block from a new canal district, 6 doors down from a new $120 M medical center, 6 doors the other way from the Detroit River water front and its miles and miles of walking and biking paths. 22 blocks from the new $100M engineering university and 24 blocks from the new 800M boarder crossing which is just 4 miles as the crow flies from a different new 1.2B boarder crossing.

We decided it was time to stop renting our condo and live like the common folks again. To celebrate our poorness, we made reservations for a vacation to unwind in Hawaii for a few weeks.

Now all I have to do is find an out of work home rennovation specialist and designer to gut the place and make it what we want.

Whitney Tilson's Updated Housing Analysis

We just stepped in this week and bought a house here. We snagged it for $107K and it will need $35K of reno so will will be helping the local economy. In our area of 400K population there are over 5600 homes on the market and the only things that are seling are the homes under $100K. Last month there were 56 homes sold! Interest rates are just 3.25% for a 25 year ammo on a 5 year fixed. Payment with taxes will be less than a good (non bankrupt car payment) We too were at Lowes last weekend and they were deserted. The mall??? EMPTY. Yet resturants and retailers are some of the top sectors in IBD? WEIRD. I have my cash piled up just waiting for the market to flop to the short side but that will not happen for a few weeks yet. If you are a short thinker, there is NOTHING cheaper on the planet than the QID right now.

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

Awesome article! As a market directional shift modeler and a guy that believes in keeping things simple, your insight spot on. So far though, we only have the tech secor falling. All that is is money being pulled to "trade" the financials since there is so much easy money being made on the trade. I have written extensively about the headwinds gold faces at $1000 per ounce and concur that any brake out above that level will be exceedingly inflationairy. As a 42 year old retiree, I concur that things are frightening and the separation of powers act is being used for toilet paper with our new King.

That being said, We do have three past days of weird market action. Wednesday was mixed in the IBD top 200. The first mixed read in this rally. The lp double inverted or the loosers outpaced the winners on Thursday and Friday. The IBD top 100 index dropped for the week yet the market was up. The press is telling everyone that happy days are here again but when you run the internal data through my spreadsheet you see that in fact the past three days have been largely bearish. Yet the triple short BGZ is crushed on Friday to a new all time low.

I know so many people who are getting crushed by this action. They are short waiting for the end of the world. When infact the interanl data has been bullish for the 107% run in the BGU. With this meltdown of internal data, and it is significant, I have to concur with the concept of taking long profits at this point in the cycle and have been telling all my readers to do just that.

For my own personal holdings, I have been cash for a large part of this rally and have only been day trading the bgu for 2% gains. Now that the data feed has been so bad the past three days, this week I will be waiting to see... Prudence is the perfect solution at this point in the market. It has moved parobolic I concur, yet when that ends has yet to be seen.

Just as the MZZ was parobilic in Sept Oct and Nov moving from $60 to $134 I am reminded the MVV dropped less to just $25 and then as the parobolic nature turned the MVV continued its drop to $13.87 while the MZZ just treaded water and made strong 2% day trades. That, in my view is where wea re at now. We are just biding our time for the next move and I do not think we can healthily trade above 942 based on the concept that the winning stocks with strong balance sheets and strong fundamentals are starting to roll over.

Additionally, my buiness and the business of my clients who one businesses are reporting to me that Business has NEVER BEEN SO BAD. That further concretes me to being in your camp.

It infuriates me to no end that so many only listen to the 630 news rather than actually taking the time to understand money and markets. It realy can be very simple. In my study of markets Theater Theory and Game Theory are the two guiding princples backed up with data mining. Religious macro model data mining. 2 hours of it per night rather than the national news! twitter at: investing1