Some news for investors

BobHelm wrote:This is not my area of expertise (by any stretch of the imagination ) however the following site was sent me today by someone I would trust - so, for better or worse, here it is...

http://moneywatch.bnet.com/

It never hurts to read, Bob. Thanks for the link.

1. Some improved earnings from Alcoa and a decline in claims for jobless benefits helped stocks edge higher throughout most of the day but some serious selling in the last hour erased most of the gains.

Dow ----- 8183.17 +4.76
Oil ----- 60.27 +0.13
Gold ----- 912.80 +3.30

2. Average rates for 30 year mortgages fell for the 2nd straight week but still remained above the record lows reached earlier in the year. The average rate for a 30 year fixed home loan was 5.20% this week, down from 5.32% a week earlier.

3. Stephen Levy, the director of the Center for the Continuing Stud of the California Economy says the budget crisis in his state is "embarrassing" but the perception that businesses and residents are fleeing the state is not supported by the facts. The state did suffer a small exodus of residents in 2004-2007 but that?s because housing prices 2.5 - 3 times above the national average gave homeowners an opportunity to cash out ? and discouraged others from coming to the state.

4. Most experts had predicted that it would take 35 months, but GM emerged from Chapter 11 on Monday just 36 days after it went in. Appeals are coming, but the bankruptcy court's decision will certainly stand. The company's case moved far more quickly than almost anyone imagined, thanks to the U.S. government's considerable powers of persuasion and $50 Billion in taxpayer money.

5. Stocks in the news today:
Alcoa ----- 9.23 -0.23
Ford ----- 5.63 +0.28
GE ----- 10.86 +0.15
Home Depot ----- 22.68 +0.02

i see homeland security is getting another 40 billion plus to waste, maybe they can spend 12 million more busting tommy chong type criminals for selling bongs, that made me feel more secure, wasted money and man hours.

including $800 million for bolstering security along the U.S. border with Mexico

money approved, now the debate how to spend it, 800 mill for mexican border........ok, what could you possible spend that on. that money hasn't already been wasted on already. 800 million, divided by 1500 miles of border.................hmm, more than 1/2 million per mile. how a bout a 3 meter wall, then a cheap cyclone fence, w/automated 50 caliber gun turrets, shooting anything in between, via video camera, save on employees and benefits.

do all the politicians have contracts with homeland security.

almost $400 million for cyber security, a 27 percent increase over fiscal 2009, and comes as several U.S. government websites were attacked in the past few days by hackers.

reading between the lines 101, via murdoch news/propaganda machine..........release a story saying gov't websites hacked, then award yourself............oops, private contractors, 400 million to fix the problem. 535 congressperson, divided by 400 million, yea, we can pass that.......535 congress persons, divided by 800 million, yea, we can pass that.

must be part of that trickle down theory, will any of it actually trickle down or be left over and be spent on something needed, that millions haven't already been thrown at. 50 years of spending and throwing money at the same things, and they still aren't secure..............hmm.

saw a political cartoon, when G. Bush 1 / dad, was finally done, and left a 15k plus debt per/to every american at the time. that sounded big, well that debt per person has now doubled to over 30 k, and if not mistaken, think income/buying (GDP) levels were just above that figure, per person recently. i'd say the county has a bit of a problem.

http://news.yahoo.com/s/nm/20090710/pl_nm/us_usa_budget_security_1

Another way to look for "indicators" in the market ... Fund Flows.

Why You Should Watch Fund Flows

I've heard this mentioned on telecasts before, and made a mental note of it, but this is the first article that I have casually run across that addresses it. The author also recaps an interview with someone who she regards as an expert, and he explained the recent downturn in the market.

One of my favorite stock market indicators is the flow of money into – or out of – mutual funds and exchange traded funds (ETFs). There is no question that the best source for this information is a firm called TrimTabs, founded nearly 20 years ago by Charles Biderman.

I’ve interviewed Charles dozens of times through the years, and I always find his analysis insightful. In fact, I spoke to him toward the end of June, just as the market was beginning another leg up.

He, however, was bearish, and he was exactly right. After hitting a recent high of 928 on June 29, the S&P 500 has fallen about 5% in just a couple of weeks.

He told me there were three signs that led him to believe the market would turn back down:

1. Individual investors were putting more money into mutual funds and ETFs than they had in a long time. His research indicates this is often a precursor to a pullback.

2. While individuals were pumping money in, corporate insiders were taking it out. Insiders were selling at about 27 times the rate that they were buying.

3. New offerings were flooding the market with additional shares, about $100 billion worth, which dilutes value.


I asked Charles what this meant for investors, and here is what he told me:

I would take my profits, if I’m a trader. And if I’m a long-term player, I would still lighten my equity exposure dramatically. And if I’m a real trader, I’d be short. I went short. We doubled up to fully short this week (the week of June 15).

I think this is the time to short the banks. I also think this is the time to short retail and consumer discretionary. And I’m also looking at selling my oil positions, which had been my safe hedge.

He also told me that cash was the next best option for those who are not comfortable shorting stocks, which a lot of investors are. His personal IRA money, he said, was going into the Vanguard high-grade corporate bond fund.

I’ve found fund flows to be a generally reliable indicator for the market, so we’ll check in with Charles frequently to stay on top of what they are telling him and what they portend for your investments.

The Vanguard high-grade corporate bond fund is a good one.

Oil is falling in price again. That is good, but the reason it's falling is the lack of demand due to more pressure from the recession.

Oil Set for Biggest Weekly Drop Since January on Demand Concern
** Please use the link to view the entire article. **

U.S. regulators said July 7 they may clamp down on oil and gas price speculators by limiting the holdings of energy futures traders, including index and exchange-traded funds.

“This news was like a bucket of cold water for the market,” Glaser said.

Oil may fall next week on speculation the global recession and payroll cuts will constrain demand and keep U.S. supplies ample, a Bloomberg News survey of analysts showed.

Nineteen of 41 analysts surveyed, or 46 percent, said futures will decline. Nine expect the market will be little changed and 13 forecast that oil prices will rise.

“With a poor economic outlook for the future, oil is going to be pressured to come down in price,” said Mike Sander, an investment adviser with Sander Capital in Seattle. “Just as exuberance pushed oil higher in the second quarter, pessimism could easily push oil lower in the third quarter.”

Oh well thats another price rise at the pumps using Thai logic I mean!!! "lack of demand put up the price" simple!!!!!

seymourbutts wrote:Oh well thats another price rise at the pumps using Thai logic I mean!!! "lack of demand put up the price" simple!!!!!

A couple of us shared that same logic today at the gym.

Those who could afford to return to the shop were charged higher and higher prices as the economy got worse and fewer people went. Then, those who could afford to return to the shop, stopped going. The shop is out of business. Closed.

Yes, it's sad to see that many people don't understand the "survival" part of owning a business and taking care of loyal customers.

1. Investors are betting that the strength in banks will flow to the rest of the economy. Financials had a great day as an influential banking analyst raised her rating on Goldman Sachs today. If you can believe it, the investment bank is expected to report a $2 Billion (with a 'B') profit tomorrow when they report 2nd quarter earnings. The New York Times is questioning how Goldman "could have rebounded so drastically only months after the nation's financial industry was shaken to its foundations."

Dow ----- 8331.68 +185.16
Oil ----- 59.73 -0.16
Gold ----- 919.33 +6.28

2. Another bank failed over the weekend. The Bank of Wyoming went to bank heaven Friday night. That's the 53rd failure of the year and didn't draw much attention except for this nasty statistic. The FDIC's war chest is now below $ 13 Billion . . . the lowest since 1993.

3. According to the Wall St Journal this morning, the Obama administration says it has been on a "learning curve" with the economic stimulus package but has now figured out how to spend some of the available billions more quickly.

4. The battle between Microsoft and Google is heating up. Google, which last week announced plans to launch its own PC operating system, has been pushing to bring its internet platform to PCs, while Microsoft is pushing its PC platform onto the internet.

5. Stocks in the news today:
Goldman Sachs ----- 149.44 +7.57
Microsoft ----- 23.23 +0.84
Google ----- 424.30 +9.90
Bk America ----- 12.99 +1.11
Sun Trust ----- 16.24 +1.04

1. Investors found some good news today in a report from Goldman Sachs whose 2nd quarter earnings easily surpassed analysts expectations thanks to some big trading and underwriting gains. Johnson & Johnson, a Dow stock, reported that their profit fell 3.5 % but that still topped analysts estimates.

Dow ----- 8359.18 +27.50
Oil ----- 59.50 -0.19
Gold ----- 925.28 +4.98

2. The new draft House Health Care bill runs more than 1,000 pages and is designed to fulfill Obama's call for legislation that will extend coverage to millions who lack it. Key elements of the legislation include federal subsidies for poorer individuals and families to help them afford coverage. Financing would come from a federal surtax on the upper income . . . up to 5.4% on the income of taxpayers making more than $ 1 million a year . . . as well as hundreds of billions of dollars in cuts in projected Medicare and Medicaid spending. Here comes rationing of health resources for the Medicare program recipients.

3. Recognize this number? $1,100,000,000,000.00 That's the record budget deficit the US govt has accrued since the fiscal year began last October. That's double 2008's all time high deficit of $454 billion and 2009 isn't over yet.

4. Stocks in the news today:
Microsoft ----- 23.09 -0.14
Google ----- 424.26 -0.08
GE ----- 11.67 +0.20

Another article on the Volatility Index (VIX)

VIX Futures Come in Like a Bear

1. Intel announced strong earnings and an upbeat forecast and that was all investors needed to dive right back into this market with a full head of steam. The chip maker?s results signal that computer sales are picking up faster than had been expected.

Dow ----- 8616.21 +256.72
Oil ----- 61.76 +2.24
Gold ----- 939.63 +13.93

2. Two of the biggest U.S. credit card companies, Capital One and Discover reported lower than expected defaults and delinquencie in June, sending their shares sharply higher today.

3. Longtime "gloom and doom" forecaster Gary Shilling said today that "By the 3rd or 4th quarter, the government will launch a second stimulus. Next year is an election year, and despite ballooning deficits, politicians won't sit idly by and watch themselves not get re-elected because the economy has failed to recover. The 2nd stimulus will finally trigger an economic recovery, but it won't happen until next year." In the meantime, Gary thinks the stock market will crash again, with the S&P dropping 35% to 600.

4. Stocks in the news today:
Capital One ----- 25.84 +2.73
Discover Card ----- 10.85 +0.63
Intel ----- 18.05 +1.22
Coca Cola ----- 50.53 +1.24
Kin Ross Gold ----- 19.68 +1.03
Exxon Mobil ----- 68.44 +2.22
Acacia Research -----7.67 +0.57

1. After a very lackluster morning, stocks advanced ahead of profit reports from Google and IBM that will be announced after the close. Most financial stocks took it on the chin though after small business lender CIT Group Inc announced that negotiations with federal regulators about a rescue had broken off. Investors are naturally worried the company will file for bankruptcy protection.

Dow ----- 8710.76 +94.55
Oil ----- 61.48 -0.06
Gold ----- 936.83 -2.73

2. House Democrats pushed ahead with legislation that would deliver on the President's promise to remake the health care system and cover some 50 million uninsured, despite concerns from their own party's moderate and conservative lawmakers that the $1.5 Trillion plan costs too much. A sobering warning came from Doug Elmendorf, the Budget Office Director that the legislation he has seen so far would raise costs, not lower them. He was asked if the current legislation would "bend the cost curve." He responded "the curve is being raised."

3. In an interview today, Texas Congressman Ron Paul vented his pessimism about the economy, largely because, in his view, the Obama Administration "continues to do the things that created the problem in the first place," Paul's main point continues to be that increased spending and higher deficits are not the solution to our problems but their cause.

4. Stocks in the news today:
IBM ----- 110.64 +3.42
Google ----- 442.60 +4.43
SanDisk ----- 17.67 +1.47
Visa ----- 64.41 +1.76
Prepaid Legal ----- 50.25 +1.11
O'Reilly Autom ----- 41.09 +0.21
TravelZoo ----- 12.92 +0.57
Acacia Rsrch ----- 8.01 +0.34
Raser Tech ----- 2.06 +0.09

Here is an interesting BLOG that give some insight to what U.S. private investors are choosing to do in response to the Obama/Democrat orchastrated economy.

http://www.bizzyblog.com/2009/07/13/thi ... ve-led-to/

One comment for example: Precisely the same situation will prevail with jobs. Hundreds of thousands of jobs will fail to materialize as small businessfolk hide under their desks and large businessfolk deploy capital abroad. I’ve asked several CEOs what their strategy is in the current political environment. Answer: Wait Obama out.

another comment: I have in the past created 4 different multimillion dollar businesses. The biggest employed over 80 people.

Today, I am a single member LLC, with no employees, and NONE planned. I have wiped from my dreams any and ALL business ideas that would require employee #1, much less employee #100. If it cannot be outsourced, or I can and want to do it myself, I will NOT go there.

Essentially, the cost of having employees has become repulsive to me as a freedom seeking being. I also have no idea what the tax situation will be for capital gains 5 years out, so I’d never start a capitalized business again with a sale as a planned exit. I won’t borrow money to fund a business, either. I won’t own business real estate nor lease an office. Why? Because the risk:reward ratios are trending dramatically negative.

I can travel for business nearly anywhere in the world with a bit of planning. I can work 8-20 hours a week and have plenty of money for simple pleasures… even paragliding in beautiful places. I used to really truly enjoy co-creating with employees a business we sold for lots of money and everyone benefited. Not my model anymore.

Anyone who thinks the Creative class doesn’t have options in how to Create a lifestyle that works around excessive taxation and punitive regulations is… well… not in the Creative class.

1. The board of CIT Group, one of the nation's largest lenders to small and midsize businesses, approved a deal with major bondholders to keep the company out of bankruptcy. The deal will not necessarily prevent a bankruptcy filing, but it will give the firm some breathing room while it attempts to refinance existing debt. CIT has a $1 Billion dollar payment due in August. The news gave investors something to cheer about and stocks were positive all day.

Dow ----- 8847.93 +103.99
Oil ----- 64.05 +0.49
Gold ----- 949.85 +12.35

2. For those of you who are keeping score, there were 4 more bank failures over the weekend, bringing the YTD total to 57. Here are the four latest casualties:
a) First Piedmont Bk of Winder, GA.
b) BankFirst of Sioux Falls SD
c) Vineyard Bank of Rancho Cucamonga CA
d) Temecula Valley Bk of Temecula CA

3. Refiners from Germany to Hawaii are weighing plans to shut or sell plants amid the biggest drop in oil demand in almost 3 decades. Within 5 years, about 25% of capacity in North America and 30% of Europe's will be idled. Royal Dutch is already looking to close 2 plants in Germany and one in Montreal. Chevron is taking a hard look at its plant in Hawaii.

4. Stocks in the news today:
CIT ----- 1.28 +0.58
KinRoss Gold ----- 20.48 +0.53
Yamana Gold ----- 9.82 +0.39
IBM ----- 116.30 +0.84
Microsoft ----- 24.53 +0.24