The Market Last Week and Ahead
First, Ben Bernanke raised the discount rate to the banks last week by 25 basis points, but that means nothing with rates as low as they are. Low rates are good news to help the Wallstreet banks survive. It’s no news to help the man and woman on main street survive and decrease the unemployment rate and raise GDP. The banks aren’t lending anyway, and the borrowers are not borrowing also. Those days are over for quite some time going forward. Earnings season is almost over. Even with some good earnings reports, the market still did poorly. Earnings estimates and the actual earnings reports are all laggards to the real market anyway. Unemployment is here to stay for awhile unless you can show me what the government is doing to decrease it, or anything that can help it, and with that, GDP and real estate prices, along with stock prices are still headed south in my opinion. Deflation is now the real situation, declining prices and values of everything, except maybe for food. Cash is king, and it’s a real good trade and investment in times like this, and or short stocks on the upticks now, and hold short long term. I would bet shorting stocks now than buying long at these dead cat bounce prices and current and forward economic conditions.
Global Major Economic Data Reports This Week
Monday: Bank of Japan Meeting Minutes
Tuesday: France Consumer Price Index, Germany IFO Report, UK Housing Loans, USA Case Shiller Home Price Index, USA Consumer Confidence, and Japan Trade Balance.
Wednesday: Reserve Bank of New Zealand 2-Year Inflation Expectation, German Gross Domestic Product, Private Consumption, and Consumer Confidence. USA New Home Sales.
Thursday: Australia Private Capital Expenditures. New Zealand Business Confidence. France Producer Prices. Switzerland & German Unemployment. Euro-Zone Consumer Confidence. USA Durable Goods Orders. New Zealand Trade Balance, Building Permits, Imports and Exports. Japan Consumer Price Index and Retail Trade.
Friday: UK Gross Domestic Product. Euro-Zone Consumer Price Index. UK Consumer Confidence Survey. Australia Private Sector Credit. Canada Current Account. USA Gross Domestic Product, and Personal Consumption.
My Stock Pick This Week
Is a short sell on Goldman Sachs, a major New York and global investment bank that’s been in the middle of the financial crisis since day one. Currently the markets are looking eerily like they did back after the 1929 crash, and subsequent rebound to current prices. Goldman Sachs loan portfolio growth as well as the other banks is slow to dead, and their earnings estimates and stock price are headed in the same direction in my opinion. During the Jan Feb sell off this year, I was seeing sell signals in many global banks, especially in the emerging markets. Possibly a tell tale sign that all is not well around the world right now with the global banks. With the Dubai and Greece debt situations, the big problems are not even begun to be over yet. The worst is yet to come I do believe. Sell and stay short on this very possible intermediate to long term downtrend that started beginning of January. You could actually be a big winner in this disaster if you get it right.
Sell Short Goldman Sachs – Ticker GS
Sell Entry: 166.50 to 154.49
Take Profit Areas: 148.57 to 145.51, 128.77 to 126.11, Hold Short Long Term
Goldman Sachs Company Profile
The Goldman Sachs Group, Inc., together with its subsidiaries, provides various investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory services, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs; and underwriting services, including equity underwriting and debt underwriting. The companys Trading and Principal Investments segment engages in market making in, trading of, and investing in commodities and commodity derivatives, including power generation and related activities; credit products, such as credit derivatives, investment-grade corporate securities, high-yield securities, bank and secured loans, municipal securities, emerging market and distressed debt, public and private equity securities, and real estate; currencies and currency derivatives; interest rate products consisting of interest rate derivatives and global government securities; money market instruments, including matched book positions; and mortgage-related securities and loan products. This segment also provides equity securities, derivative securities, futures, and options clearing services; market-making and specialist services in equity securities and options; and insurance services, as well as involves in principal investments activities. Its Asset Management and Securities Services segment offers various asset management services comprising investment advisory services, financial planning, and investment products; management of merchant banking funds; and securities services, such as prime brokerage, financing services, and securities lending. The company was founded in 1869 and is headquartered in New York, New York.
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Disclosure: No Positions. Going Short Based On Trade Plan Above