Saturday, May 9, 2009

Saturday update - news - 5:05 PM

Click on headlines for links: AT&T to buy Verizon Wireless assets for $2.35 billion - MarketWatch Toshiba Seeks to Raise $5 Billion - WSJ GMAC could get $7.5 bln from U.S. next week: report - Reuters Just for fun. California Counties Target Pot Growers Despite Rising Talk of Legalization - WSJ I followed that a little bit. The growers made an offer to help their state deficit.Couple of other links on this. Blog by Jane Wells through CNBC end of Janurary - (here) Link to the growers themselves - clever name - Let Us Pay Taxes I'd be curious to see the return on investment from these grants.

Saturday - Week in review - charts - sector maps - 11:50 AM

Last weeks Dow Jones Industrial Average Last weeks S&P 500 Last weeks Nasdaq Last weeks Bank Index (since they were the star this week) This weeks performers by sector Weekly Heatmap

Saturday, May 09, 2009 - Morning business headlines of interest - 10:40 AM

Click on headline for link: Banks Won Concessions on Tests - WSJ Under Restructuring, GM To Build More Cars Overseas - Washinton Post Obama pushes credit card crackdown - CNN Regulators Seize Bank in Washington State - WSJ Friedman Defends Buying of Goldman Sachs Stock - WSJ JPMorgan faces SEC lawsuit - FT On Wall Street: Beware of the sucker’s rally - FT This is from Thursday: Economic casualties pile into tent cities - USA Today

Friday, May 8, 2009

Late night Friday - did we miss any news? - 11:10 PM

Jumped on the net to see if any banks were victims of the FDIC carnivore tonight. It appears there were none. The under bet wins, this week. (correction - see below) What did catch my eye was the earnings report from our favorite Oracle. Seems Mr. Buffett didn't have a great quarter, or year for that matter. Berkshire report from Reuters: NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc posted its first quarterly loss since 2001, hurt by losses on derivative contracts, a big investment in the oil company ConocoPhillips, and the weakening economy. When Warren talks, people listen. He's the second or third richest guy in the world, why wouldn't we. When I read his report, I remembered what he said a few years ago. Frankly, I don't know what to think. March 4, 2003 from Warren: The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk. But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system. The point of the article, summed up by the BBC is this: The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy and most shares are still "too expensive", legendary investor Warren Buffett has warned. You can read the entire article here. That was 6 years ago. What changed Warren? Why didn't anyone listen, and why didn't you listen to yourself? This is the kind of stuff that makes me wonder about the entire machine we know as a market. Derivatives are a form of leverage. Sometimes too much leverage, and many times off the books. We still hear about them, but the name has changed. They are now called "toxic assets." The same toxic assets the so called "stess test" didn't address, or account for. More proof the stress tests are utter BS. These derivatives, many based on real estate, both residential and commercial, are still "financial weapons of mass destruction." Good thing these banks had such a good month. **** Update - April 9, 2009 FDIC Friday strikes again! You can read the report from the FDIC website here On Friday, May 8, 2009, Westsound Bank, Bremerton, WA was closed by the Washington Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed. Not sure when this was released. Number 33 for the year. You can see all of them here.

It's all about the banks - again - end of day close 4:15 PM

We made it through another week. Whew! Fast and furious is was. The final numbers for today: Dow - 8574.65 - +164.80 - 1.96% S&P - 929.21 - +21.82 - 2.40% Nasdaq - 1739.00 +22.76 - 1.33% Notables: The BKX ($BKX)Bank index was up 12.20% TODAY - 30% for the week. Symbol Price % Chg FITB 8.49 58.99 GS 139.59 4.38 JPM 38.94 10.5 LNC 18.24 14.72 WFC 28.18 13.81 TREE 11.34 3.09 USB 20.54 5.01 BAC 14.17 4.89 MS 28.2 3.91 STT 43.75 15.65 STI 20.77 12.15 GS 139.59 4.38 AIG 2.01 3.08 C 4.02 5.51 FIG 6.95 22.14 By sector: Best week for crude (up)in quite some time. Closed at $58.65 **** I'll have earning reports for Monday posted before the weekend is over and a calendar of events as well. I'm tired, and ready to drink a beer or two. But we have two more things to cover unless some breaking news happens. In case you haven't been paying attention, today is FDIC Friday. That's because the sneaky little ****** like to close banks on Friday night or Saturday when we are busy drinking beer. I will report as soon as I see them. Over/under is 3. Place your bets. **** NEWSFLASH (as I type this) Nouriel Roubini is on Closing Bell with Maria - Dear God the world is ending! I didn't think they would let Dr. Doom anywhere near the cheerleading channel. He has already stated the "stress test" was not stressful enough. No ****! Atta boy Nouriel. He said the next few months macro news will proven to be difficult for the market and the banks. Possible 1.6 billion to be needed yet. Really!!!! House prices to fall another 20 percent. Europe is weaker. I can't keep up, and maybe they will have a video that I can link to later. If I can find the video (here), or if you watch it, watch Roubini while the guy on the other side of the debate (a bull, bottom is in guy)tells Maria the housing mess is not what Roubini says. Priceless. My money will be on Roubini. Update 5:21 - Link to video above. ***** NEWS ALERT: Obama accepts resignation of official who authorized NYC flyover. ***** One last thing before I sign off for the day. The daily crock of **** CNBC cheerleading grade. Today = B- Kind of low maybe. They pumped this puppy all day, but let a few things slide through the cracks. They let Santelli speak one too many times and he told the truth, although it was quick, and he was a little tactful. They actually let Roubini on for the first time since I can't remember. That alone dropped them from an A to a B, Santelli for the B to B-. Not considered in the grade, but the guy who took over for Dylan during the Closing Bell said "It's all about the banks." Yep, sure is. I didn't take it the way he meant it, but he was right. He just didn't know how right he is. Disclaimer - I muted Kudlow and had lunch during the unbearable hour of 11 to 12. Happy Trading

More government handouts - GMAC - 3:40 PM

Haven't seen this cross the wire, but Reuters is reporting Geithner said GMAC (the financial arm of the soon to be bankrupt GM)will get more money. Maybe we knew this, I can't keep track of all the money they are handing out. Link to Reuters here **** Update 3:56 PM GM - the company that is going bankrupt - who spoke this week of diluting their share price 100-1 is still trading at $1.60. UP for the day. Incredible. Why would you not sell that stock if some morning you wake up and it's 18 cents?

Thank you Rick Santelli - Finally someone tells the truth - 3:20 PM

This is a chart of the dollar index ETF. It has been going down today, quite a bit by currency standards. I can't remember exactly, but I will paraphrase what Santelli said a few minutes ago. "Who would have thought a falling dollar, a not so good jobs report, that was revised upward over the last two months, would look so good. Thank you, finally someone on the cheerleaders channel told the damn truth. That may cause the CNBC cheerleading grade top move up a tad today. It doesn't look good, and this will not end well. **** Update 3:30 PM This little tidbit just crossed the screen. Google (GOOG Quote) estimates, target raised at Bernstein to $600. Estimates increased to reflect the potential for economic improvement by the end of the year. Outperform rating. GOOG is trading at 409.20 as we speak. That would roughly be a 50% increase. Not even considering they were trading at 300 in early March. Ok, whatever. Based on what? Just like all these other upgrades they are passing out like candy - based on what? Earnings? When did earnings matter?

The when did it start argument - Liesman and guest - CNBC - 1:15 PM

In one of the "Call of the Wild" segments that CNBC loves so much, Steve Liesman and a guest were arguing about when and who is responsible for the banking meltdown. The guest was blaming it on the government and TARP. It is clear in this picture, the meltdown started much earlier than that. How about July 07, and what about all those bad loans????? Don't let the facts get in the way of a good spin job.

How long can this last?????? 1:07 PM

Today's S&P at 1:00 Today's Bank Index - can you say parabolic? As I said, at this pace, we will be back to the October 07 tops by the end of August. No friken way, somethings got to give.

What's moving today? - 12:33 PM

Without looking my guess would be the financials. What think you? Yep, shocked, just shocked I tell ya! Plus, oil going up again. Just what we need, higher priced gas while we all lose our jobs and can't pay our bills. Good luck all.

So everything is fine? - 11:14 AM

See this? Look at it very carefully. As we speak, the talking head cheerleaders and their guest on CNBC are telling us how difficult the "stress tests" on the banks were, and how good the unemployment numbers are. Yada, yada, yada. This people is utter BS! See that chart, that will be the next tsunami of debt that will find it's way to the banks balance sheets. Oh, but the scam just gets better. How you ask? Commercial Real Estate, or as we will call it going forward CRE. It has been reported, which is part of the scam, the large 19 banks that were stress tested do not have large exposure to CRE. Credit cards maybe (See Captial One Finance - COF) for that (which is another story in and of itself). The smaller regional banks, some of which do have large exposure (FITB for one)to CRE, will see this problem develop as we move into summer. Some of the large CRE - REIT's have already issued shares to raise capital. Why? Because they are losing money. One of the largest, General Growth Properties has already put some properties into bankruptcy. Simon Property Group has already rolled out a stock offering, and will be doing another. See tickers GGP & SPG respectively. It's not just them, it's many in the CRE market. The information is there, read it, CNBC won't be telling you this anytime soon. Actually the perma bull Bob Pisoni told us a couple of weeks ago how there was heavy buying in REITs. He just didn't tell us why. Imagine that. I'm going to speculate here, which I don't like to do, but here's what I think will happen. The larger banks, now that their stock price is up, even talking about paying back the TARP money, will begin to acquire some of the smaller banks. Everyone knows (if you don't watch CNBC)the CRE problem is on the way. If the smaller regional banks that have exposure to CRE are gobbled up by the larger ones - nudge, nudge, wink, wink - the ones who have already received TARP money? The CRE problem is huge (some say it's already baked in)as well as the rest of the residential (still plenty of problems there as well)problems that await. The government has already said none of the 19 will be allowed to fail. There is no way the smaller banks can absorb the losses of these problems without government help. This is a backdoor way to bailout the CRE along with residential - through the banks that already have their hands in the governments pockets. Is Fifth Third up today 44 percent because they have a good balance sheet, or do people think they will be taken over. Pure speculation, I want to clarify that. Even without my speculation, the above chart speaks for itself.

Fannie Mae needs more money - 9:48 AM

I had to hunt for this after seeing a nano second blip on the CNBC cheerleader station. Seems Fannie Mae (FNM) needs another 19 BILLION dollars. Link to article. WASHINGTON -- Fannie Mae says it needs $19 billion in additional government aid after posting a loss of $23.2 billion in the first quarter as the taxpayer bill from the housing market bust mounts. The mortgage finance company, seized by federal regulators last September, posted a quarterly loss of $4.09 per share on Friday. That compares with a loss of $2.5 billion, or $2.57 a share, in the year-ago period. The results were driven by $20.9 billion in credit losses due to declining housing market conditions and $5.7 billion in writedowns of the value of its mortgage-backed securities. The request for federal aid is its second since the takeover. The company received about $15 billion earlier this year. **** Not to worry their stock is up, as is the market. Dow = 139.15 8549.00 S&P = 17.33 924.72 NAS = 28.85 1745.09 As of 9:55 AM. Nothing will stop this market. At this rate it will be at the November 2007 highs by the end of August. Buy stocks, any stock, they all go up. This is the biggest money making opportunity in a lifetime. Yea, I'm kidding. This is the biggest scam in our lifetimes. Update 10:01 Wholesale trade (March)down 1.6 vs 1.7 (February) Rally on! Update 10:10 Goldman's Blankfein - We're well capitalized expect to pay back TARP money soon. Per CNBC. That will run all day, while the Fannie news was up about 12 nanoseconds. This is a sucker game people, they are all(banks, government, media)suckering us into putting our hard earned 401k money back in the market because everything is just fine. Then, the rug will be pulled out from under us, and the robber barons put an addition on their house in the Hamptons. Criminals! This recession is far from over. FITB - Fifth Third Bank - needs to raise capital (which means they don't have enough money to weather all the commercial real estate problems yet to be faced)are up 43 percent - and three firms upgraded them today. You have to be ****ing me!

Looking at the job numbers - 8:37 AM

Let us take a look a little deeper into these numbers (we can't take them at face value). From the MarketWatch article April's loss of 539,000 jobs was the smallest decline since October's 380,000. Job losses in February and March were revised higher by 66,000. Job losses were widespread across industries in April. The only sectors adding jobs were health care and government, which was boosted by the hiring of temporary workers to prepare for the census next year. Private-sector employment fell by 611,000. According to a survey of hundreds of thousands of work sites, goods-producing industries shed 270,000 jobs, and the services industries cut 269,000. Of 271 industries, 28% were hiring in April, up from 20% in March. *** So, the numbers were better, but the only people hiring were health care and government. Plus, last months numbers were revised (as usual)so what they told us last month was BS, again. To reiterate: Employment in manufacturing fell by 149,000, while the average factory workweek rose by 0.2 hours, another encouraging sign, since the factory workweek is one of 10 major leading indicators. Employment in retail fell by 47,000. Financial services cut 40,000 jobs. Professional and business services cut 122,000 jobs, including 63,000 temporary workers, a discouraging sign. Health services added 17,000 jobs. Hospitality industries cut 44,000 jobs. Government added 72,000 jobs, mostly temporary census jobs. State and local governments added 6,000 jobs, despite widespread accounts of layoffs. Green shoots everywhere! I can't wait to hear Kudlow and CNBC spin this as good news all day. The market to 10,000! We have lost 5.7 MILLION jobs since December 2007.

Friday, April 8, 2009 - Today's market action - 7:30 AM

Good morning What do we have on tap today? As of 7:30 this morning: Futures DJIA INDEX 8,483.00 96.00 S&P 500 918.70 11.70 NASDAQ 100 1,404.75 10.25 The financials are screaming pre-market due to the results from the Stress tests. Crude - up $1.25 Nat Gas - up .098 8:30 AM Jobless Situation - Non farm payrolls. 10:00 AM Wholesale Trade I will update those numbers as they come out. CNBC is interviewing Ken Lewis of Bank of America as we speak. Softball questions so far. They did ask him and another guest why the bank stocks are going up when they all need to raise capital, some by diluting their shares. Because banks are better than everyone thought and the bottom is in. They asked Lewis how all the Stress test results were leaked. He didn't know. Imagine that! You can buy that crap, I'm not. I'll show you the math later when I have time. Update 8:05 McDonald's Corporation announced today that global comparable sales rose 6.9% in April, marking the 72nd consecutive monthly increase. Comparable sales increases by segment were as follows: * U.S. increased 6.1% * Europe increased 8.4% * Asia/Pacific, Middle East and Africa increased 6.5% Update 8:30 - Job Numbers Job - -539,000 Rate - 8.9$ Link to full report from Bureau of Labor Statistics Let's see what happens when we drill deeper into these numbers. CNBC of course spinning "less" job losses as a good thing. Quick look at futures since announcement: DJIA INDEX 8,490.00 103.00 S&P 500 919.30 12.30 NASDAQ 100 1,406.75 12.25 Update 8:50 - Links to job numbers reports MarketWatch Bloomberg WSJ

Thursday, May 7, 2009

Market musings April 7, 2009

The market was up overnight about 50 on the DOW. The job report at 8:30 would be the the critical data for traders today, but there were plenty of other news as well. 7:00 AM Bank of England Announcement - interest rate = no change 7:45 AM European Central Bank Announcement - interest rate = -25 bp to 1.00% 8:30 AM Highlights The rate of layoffs is definitely coming down but those out of work are staying out of work longer, the good and bad results of this week's jobless claims report. Initial claims fell a sizable 34,000 in the May 2 week to 601,000 for the lowest rate since late January (prior week revised slightly higher to 635,000). The drop pulled down the four-week average by 14,750 to 623,500 for the lowest level since mid-February. Now the bad news. Continuing claims rose for a 14th straight week, up 56,000 to a new record 6.351 million. The unemployment rate for insured workers rose another tenth to 4.8 percent. The rise in the insured unemployment rate is a reminder that the number of unemployed continues to rise. But the improvement in initial claims confirms that the rate of deterioration is moderating. There was no significant reaction to the report, at least initially. The Labor Department will post the monthly jobs report tomorrow at 8:30 a.m. ET. Link to summary at the NASDAQ here 8:30 AM - Productivity and costs Link to summary at the NASDAQ here Link to Bureau of Labor Statistics here 10:30 AM - Natural Gas report Natural gas in storage rose 95 billion cubic feet in the May 1 week to 1,918 bcf. 82 bcf last week. Full report from Energy Information Administration here Fair value of the indexes shrugged off the job numbers and opened up a moderate amount, only to see those gains slip away as the day wore on. On this day the financials did not lead the market higher, possibly due to the anxiety over the "Stress Test" release today after market close. The sell off accelerated when the the 1:00 PM 30yr bond offering didn't go off very well. Rueters link to bond auction Also contributing to the day was the 3:00 PM announcement of Consumer Credit. Highlights In the steepest contraction since early in World War II, consumer credit outstanding fell $11.1 billion in March following an $8.1 billion contraction in February ($7.4 billion first reported). The contraction for March was split evenly between revolving credit, at -$5.4 billion, and non-revolving, at -$5.7 billion. Consumers are retrenching, paying down their debts and putting their money into the bank in a very big way. It's been a very volatile day in the financial markets but stocks did fall when the report hit the tape. You can see the NASDAQ summary here Check today's closing numbers on the left. Today's action per sector: Today at 5:00 PM we finally got the long awaited Stress for the banks. The results are all over so I won't link them. Some need money, some don't, and the ones that do are doing it in various ways. What we have on tap tomorrow: Non-Farm payroll at 8:30. This might dictate the direction of the market. Earning reports: ABR Arbor Realty Trust Inc. Financial ACET Aceto Corp. Healthcare ARD Arena Resources Inc. Basic Materials BECN Beacon Roofing Supply Inc. Services BRK-A Berkshire Hathaway Inc. Financial BRNC Bronco Drilling Co. Inc. Basic Materials BRT BRT Realty Trust Financial BZH Beazer Homes USA Inc. Industrial Goods CCIX Coleman Cable, Inc. Industrial Goods CCOI Cogent Communications Group Inc. Technology CEP Constellation Energy Partners LLC Basic Materials CODI Compass Diversified Holdings Financial CPN Calpine Corp. Utilities CV Central Vermont Public Service Corp. Utilities DRQ Dril-Quip, Inc. Basic Materials EIX Edison International Utilities EP El Paso Corp. Basic Materials EPB El Paso Pipeline Partners, L.P. Utilities ERF Enerplus Resources Fund Basic Materials EVEP EV Energy Partners LP Basic Materials FHC Female Health Co. Consumer Goods GMET Geomet, Inc. Basic Materials GROW U.S. Global Investors, Inc. Financial GTN Gray Television Inc. Services HALO Halozyme Therapeutics, Inc. Healthcare HUN Huntsman Corp. Basic Materials ICOC ICO Inc. Basic Materials IT Gartner Inc. Services IX ORIX Corp. Financial JOUT Johnson Outdoors Inc. Consumer Goods KFS Kingsway Financial Services Inc. Financial LINTA Liberty Media Interactive Services LMIA LMI Aerospace Inc. Industrial Goods LRN K12, Inc. Services MAG Magnetek Inc. Industrial Goods MDC MDC Holdings Inc. Industrial Goods MEA Metalico Inc. Basic Materials MGS MetroGAS S.A. Utilities MIM MI Developments Inc. Financial MIR Mirant Corporation Utilities MRLN Marlin Business Services Corp. Services NANX Nanophase Technologies Corp. Basic Materials NGS Natural Gas Services Group Inc. Basic Materials NXG Northgate Minerals Corp. Basic Materials NXTM Nxstage Medical, Inc. Healthcare PBR Petroleo Brasileiro Basic Materials PCLN Inc. Technology PETD Petroleum Development Corp. Basic Materials PONE Protection One Inc. Services RDNT RadNet, Inc. Healthcare REP Repsol YPF SA Basic Materials RGCI Regent Communications Inc. Services SNI Scripps Networks Interactive, Inc. Services SRZ Sunrise Senior Living Inc. Healthcare SYMX Synthesis Energy Systems, Inc. Basic Materials TM Toyota Motor Corp. Consumer Goods UXG US Gold Corporation Basic Materials VNR Vanguard Natural Resources, LLC Basic Materials VNUS Vnus Medical Technologies Inc. Healthcare VTIV inVentiv Health, Inc. Services WIN Windstream Corporation Technology WR Westar Energy Inc. Utilities XTEX Crosstex Energy LP Basic Materials That pretty much gets us up to speed for today and the start of tomorrow. Nope, thought of one more thing. Stephen Friedman has resigned as chairman of the Board of Directors of the Federal Reserve Bank of New York, saying his role had been at the central bank has been maligned. The link is in the text. If you haven't followed that story, you should. I won't spell it out here, but the blogesphere has been on this much longer than the "real" media. What a crock of ****. ****** Speaking of a crock of ****. My daily CNBC cheerleading grade = B- As much as they have been pumping this rally, and telling us to buy, buy, buy, they said the words bearish, concerned, and overbought today. Shame on you CNBC - your slipping. I swear, If I hear "less worse than expected" one more time I'm going to barf. Happy trading.