Archive

Research for online investors

Gotta Love Bob Hope

Legendary Investor Jim Rogers
It is great to watch a Capitalist.

WARNING:   The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions. It may contain errors and you should not make investment decisions based solely on what you believe you have read here. Do your own research, it is your money. If you lose it, it is your responsibility, not ours or your grandmothers! The editor may or may not have a position in any securities discussed. The editor may have held a position in a security earlier, or in the future.

New Human Rights  You may have heard that the U.S. State Department submitted a report to the U.N. Commission Human Rights Council last week.  This was the first time the U.S. had presented a report on the status of human rights.  The previous administration had refused to submit a report to this arm of the U.N. as it is used to criticize the state of Israel.  The Council includes representatives from Cuba, Russia, Saudi Arabia, Nigeria, Mexico and Russia...Read More about Human Rights

Resetting Social Security  The provision to reset Social Security was written into the law for people that may have started collecting benefits, but had to go back to work.  When they decided to retire again, they could reset their benefits and collect the higher benefits based on their current age.  All they had to do was pay back all the payments they had received...Read More about the Minimum Wage

Hello...I'd like to Sell a Bridge  Hewlett Packard (HPQ) must have fired all the brains in the company when Mark Hurd left as CEO under suspicion of sexual harassment of a contractor and expense padding. They topped Dell’s (DELL) bid for 3Par (PAR) of $27 per share this morning with a $30 bid. That makes an unprofitable company (PAR) now worth $2 billion. Does anyone have HPQ’s mergers and acquisitions department phone number? I have a bridge in the desert….Read More about the Clean Air Act

Jimmy's Excellent Adventure  N. Korea’s Dear Leader, Kim Jong-il, arrived in China overnight. The Dear Leader will not fly, and was reported to be accompanied by his son, Kim Jong-un on a presidential train. Authorities in China will not confirm the trip but police are guarding a hotel in Jilin, a city straight north of Korea in the Northeast corner of China...Read More about Kim Jong-il

Tulip Mania  One of the most well known and first recorded market bubbles was in Tulip Bulbs from 1736 thru 1737 in the Netherlands. People paid more than ten year’s wages for one tulip bulb, until the prices crashed. Since Tulips must be planted in the early fall and bloom in the spring, a futures market developed for...Read More about Bubbles

Bubblicious Treasuries  According to the Investment Company Institute (ICI), investors have withdrawn $33.12 billion from domestic stock mutual funds in the first seven months of 2010. The ICI further tells us the money is flowing…Read More about Musical Chairs

Corporate Responsibility  What is the primary purpose of a “for profit” corporation? Why do you buy stock in a company? Do you decide to own a piece of a company because they constantly increase profits and grow, or because they are ecologically friendly and sponsor philanthropic events in the city or state...Read More about Corporate Waste

Merger Mania  Mergers and Acquisitions make investors and trader’s hearts beat a little faster. There have been two big ones that have shook the market in the last two days. BHP Billiton (BHP) offered $39 billion or $130 per share for Potash Corp (POT) and Intel (INTC) bought McAfee (MFE) for $7.68 billion or $48 per share...Read More about Unsolicited Offers

Are You Smarter than a Fifth Grader?  Zogby International surveyed 4835 American adults on basic economic questions, and then asked the respondent’s political leanings. The results are not surprising to you, if a political discussion ever ended with puzzled looks after a moronic statement by a “feeler”...Read More and Take our Test

Is the Uptrend Over?  We have been warning our premium subscribers of our fear the market will experience a hard sell off in August or September, retesting the low of 1010 set on July 1. In our letter to Buy, Sell, Hold subscribers last night, we said we are not as convinced lately this must occur although we still believe it is possible...Read More with our Point & Finger Chart

Foreclosure Woes  The Associated Press reported yesterday that home mortgage payments that were 60-days late stood at 6.67% in the second quarter. This was up from 5.8% a year ago and well above the historical norm of 1.55 to 2.0%. Record delinquencies were reached in the fourth...Read More about Mortgage Foreclosures

TLT Bellwhether? The market is hesitating today. We are at a crossroads and must choose a direction. Will traders and investors push the market higher and enjoy the party, or get a scowl on their face and watch but not buy? Do we wait for confirmation of some bit of news that tells us the economy is improving?   While we wait, do we dabble in an oversold market trying to find...Read More about Fed Actions

Eurozone GDP Grows  They may have budget problems, but the eurozone is growing their GDP. Eurostat, the EU statistics agency, reports that the 16-member eurozone grew by 1% in the second quarter. Germany led as they reported a higher than expected growth rate of 2.2% in the second quarter. Germany was set to capitalize on the euro currency drop since they are Europe’s...Read More about Eurozone Economies

Fed Fumbles  For the last year, banks could borrow money from the Fed at 0.00% to 0.25% and buy 10-year treasuries receiving 3.5% to 4% interest. The Federal Open Market Committee (FOMC) sent a signal yesterday that the economy is weaker than previously thought. Rather than raise short term rates, they announced they would use up to $1.3 trillion from maturing mortgage backed securities (MBS) to buy treasuries.  Investors have taken the Fed's advice and are running scared from the market at open this morning.  The Fed's statement has raised fear about the U.S. economy...Read More about the FOMC statement.

Money Flows Part 2 Only the velocity of the money produces inflation.  Additional money sitting on bank balance sheets being used to buy treasuries does not produce inflation.  That is why two Fed governors want to raise the short term rate on loans to banks, to squeeze the interest rate spread, so they will make loans into the economy. The Fed takes back the money and reduces money supply (to control inflation) by not renewing or rolling over the short term loans to the banks...Read More about Fed Action

Money Flows Part 1 Like me, you no doubt have read reports that money has moved out of the stock market and money invested in the bond market has increased. If money on net is moving out of stocks, how can the major averages increase? If there are more sellers than buyers…then it seems that the law of supply and demand dictates that the prices must drop. What is your understanding?...Read More about Money Supply

Happy Face Romer Out  Romer was rumored to be at odds with Larry Summers. She was an odd choice for an administration that wanted to follow Keynesian principals of spending money by the government. She had written that a “tax increase of one percent of GDP lowers real GDP by roughly three percent.” Her research came to the conclusion there was "no support for the hypothesis that tax cuts restrain government spending; indeed ... tax cuts may increase spending.”...Read More about Fin Reg Politics

Oil Trade Time?  U.S. crude oil inventory was down 2.8 million barrels yesterday according to the Energy Information Agency (EIA). Gasoline stocks were up 800,000 barrels and distillate stocks (diesel) were up 2.2 million barrels. These numbers look like they nearly balance out leaving total U.S. inventories roughly the same as the previous week...Read More about factors in the Crude Oil Market

Unemployment Uptrend?    The market looks good today on a stronger than expected ADP Nonfarm Employment Report.ADP showed 42,000 jobs added last month.The market expected 25,000.Amazing to see so much made over so little.These numbers are for the United States, not one city!...Read More about our Growing Economy?

Car Sales Melt Up  Automakers reported July sales today, GM sales were up 5.4% over July last year. Ford reported a 3.1% sales increase and Chrysler’s sales were up 5%.   Foreign manufactures were up varying amounts except for Honda (down 2%) and Toyota fell 3.2%...Read More about Chinese Imports from U.S.

Print More Money!  The market is up this morning acting like we might push through resistance this week. We haven’t seen 1148 since 5/18. Retail investors and traders are ignoring any bad news and jumping on the band wagon. Smart money seems to be setting on the side, watching. Shorts are taking it in the...Read More about the FOMC.

Earnings Jump 91% = Sell Off?  Our favorite company reported earnings Thursday morning. Exxon’s (XOM) second quarter earnings jumped 91%. XOM is the world’s largest oil company not under state control. They reported $7.65 billion in profits, or $1.60 per share, almost double last year’s second quarter $0.81 per share. Revenue was up 24% to $92.48 billion...Read More about Exxon Mobil

Environmental Disaster?  Time Magazine has an article that will make the White House squirm as they continue to enforce the deep-water drilling ban. Time’s The BP Spill: Has the Damage Been Exaggerated? tells us the spill is the biggest ever but may not be that bad concerning the environment. Jacqueline Michel, a federal contractor and geochemist says the “Impacts have been much, much less.”..Read more about Oil Spill Impact

We Bring Bad Things To Life  I gave Steve my standard answer, “Buy Exxon, the best company in America.” Then I hurt his feelings, “Sell GE, worst company in America.” He was surprised and told me how he had bought it over a year ago at a low price and made a lot of money. He doesn’t understand the stock market, “I own a company and next month it is worth less or more, but they are still the same company and have not done anything different.”..Read More about GE, the Worst Company in America

Belgium Baloney  We are all familiar with the problems that the eurozone sovereign debt crisis caused in the spring for world stock markets. Where will the next problem develop? By now we know the PIIGS by heart; Portugal, Ireland, Italy, Greece and Spain. What if the next problem comes from left field, from a completely unexpected development...Read More about the next Credit Crisis 

(Un) Precious Metals   Gold is trading even with a bias down and silver is even with a bias trending up. Together precious metals are treading water. What does this mean? We think investors and traders are trying to assess the likelihood of deflation in the near term. This is opposed to the popular view for the last year that the U.S. would enter an inflationary period and blow the top off...Read More about Precious Metals Trends

Crony Capitalists/Politicians   From the "Can't we all just get along" department.   CNBC reported Wednesday that Lloyd Blankfein of Goldman Sachs (GS) and Jamie Dimon CEO of J.P. Morgan Chase (JPM) were not invited to the Financial Regulation signing ceremony. Executives from Citigroup (C), Bank of America (BAC), Barclays (BCS) and Morgan Stanley (MS) were all invited...Read More about Goldman Sachs

Deflation Knocking  Deflation is defined as a decrease in the general price level of goods and services. Paper currencies that are not backed by any store of value as a reference point (fiat money) can be inflated or deflated by monetary supply and economic decisions made by market participants...Read More about Deflation Causes

Financial Regulation, Law  President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Financial Regulation or Fin Reg) this morning. It took us two hours to find a copy of the bill online in its final form...Read More on Fin Reg

Coal, Cheap Clean & Plentiful I came across some interesting information this week about coal. In the last thirty years, the U.S. has tripled consumption of coal. More than 50% of our electricity is currently generated using coal. During the time that our use has increased, coal emissions have been reduced by 40%. Last year our consumption decreased by 10.7% because of the credit crisis...Read More about King Coal

Handwriting on the Wall  “Fin Reg” was passed last week and President Obama will sign the massive financial regulation bill this week. The head of the SEC, Mary Shapiro, will announce the agency’s intention to hire about 800 new bureaucrats tomorrow. She is scheduled to testify before congress...Read More about Market Optimism

Houston, We Have a Problem  BP has the gulf well capped for now. They are running an “integrity test” to see if the well can hold the pressure, estimated at 9,000 psi, and perhaps much more. This makes no sense. BP has a stack on the riser, why aren’t they letting the oil flow to the tankers waiting...Read More about the Gulf Oil Spill

Watch This Index  One index to check the world’s economic pulse is the Baltic Dry Index (BDI). The BDI tracks the cost of transportation for bulk commodities on ocean going vessels. The shipping cost of items such as coal, iron ore, copper and grains are calculated in the BDI. The heavier the demand for shipping these commodities, the higher the BDI goes. When demand for shipping is lower...Read More about BDI Index

Best Quarter Ever  Intel Corp. (INTC) reported after the market close yesterday.  INTC CEO Paul Otellini called it their "best quarter ever."  The company earned $2.9 billion, or $0.51 per share. Revenue rose 34% to 10.8 billion. Retail sales data this morning showed slower consumer spending...Read More about Market Mood

New Moratorium, Old Song?  Diamond Offshore Drilling (DO) was the first company to move a rig out of the Gulf of Mexico last Friday. Yesterday, they announced a second deepwater rig was moving to waters off the Republic of Congo due to the U.S. drilling moratorium. The rig was under contract to Murphy Oil through March 2012. The contract was renegotiated to a one year commitment for operations in the Gulf when Murphy can get permits...Read More about the new Deepwater Drilling Moratorium

All Eyes Watch for Earnings  The market is wandering what to do. Are we on the verge of a bull market taking us to new highs, or is the Bear going to plunge us to new lows? Low volume tips buyers hands; animal spirits have not been present for some time. Volume seems to dry up as stocks move higher...Read More about Earnings Season

Bank Secrecy, Asset Security  The U.S. government makes you report money held in overseas accounts. Last year Switzerland’s UBS bank paid a fine of $780 million dollars and disclosed the names of 4,450 U.S. citizens with...Read More about Asset Secrecy

Tax Tsunami    A Tsunami of tax hikes are around the corner, what can you do? In six months, the largest tax hikes in the history of the U.S. will take effect.  These tax hikes will hit your family and small businesses like a tsunami...Read More about Tax Hikes

Fog of War  Trying to buy into a market on such a steep decline as the last ten weeks is tough, as every new position seems to immediately go into the red. Traders look for a support level before opening new positions, then sell when their limit is hit. How many positions can you open, only to watch every one of them stop out? It causes a trader to lose confidence and his bearings due to the Fog of War!...Read More about Trading Stocks

Tip: Return of Your Money  After the market volatility of the last two months you may have some cash sitting on the sidelines. A safe place to park money looks better and better to many investors as evidenced by the recent dip below 4% on 10-year treasuries. Interest rates can only drop this low when fear helps investors remember the most important question is “Return of my money…then return on my money.”->Read More about Treasury Inflation Protected Securities (TIPS).

It Can't be that Bad  How bad can it be? This question allows humans to minimize the impact of bad news or actions. Except for the occasional pessimist, most of us try to ignore the negative and “accentuate the positive,” to borrow a phrase from an old song. The longer a bad situation goes on, the more we minimize it, thinking it will go away and not bother us again. This tendency is probably hard wired into our Rat Brain...Read more about How Bad the Oil Spill can be.

Sell in May and Go Away  Sell in May and go away sounds like good advice as we sit today. The market has been punishing investors for the last two months, and it doesn’t look like it is over. We crashed through the 1040 support line on the S&P 500 yesterday. This morning touched 1010 before bouncing...Read More about Death Cross

Sacred Cows and Rat Brains  Today we are going to shoot some sacred cows, so to speak. Popular herd mentality is the enemy of society, and most investors. We are all guilty at one time or another of accepting popular opinion as “truth” as opposed to being a bit of a contrarian. How many times have you served on a board and made a decision, only to later try to understand how such a stupid decision could have been made? We also are mindful of every investor’s “rat brain.” That little gray area we all carry, that causes us to act when confronted by danger...Read More about Popular Opinion

Tesla IPO  With the sour mood of the market today, why not write about something positive? Tesla Motors (TSLA) went public at $17.00 per share. TSLA raised approx. $202 million from the sale of 11.88 million shares. Elon Musk, the founder, and other insiders sold an additional 1.4 million shares. They (insiders) have also granted underwriters an option on an additional 1.995 million shares to cover overallotments...Read More about Tesla's Initial Public Offering

G-20 Hangover  The G20 summit in Toronto came to a close with no agreement on the financial tax we discussed in G-20 Summit Goals last Thursday. Press reports are covering the news as a tax on banks, but it was much more than that. The “big picture” goal was to tax every financial transaction down to, and including, individual investor's stock or bond purchases. Individual investors should give thanks to Canada, Australia, Japan and Brazil for standing in the way of this freight train. Where was the U.S.? Shoveling coal...Read More about Financial Regulation

Big Boys, Little Guys  What do we do when only the big boys are left? This question cuts to the unintended consequence of the current attitude in Washington. Whether health care, financial regulation or off-shore drilling, more regulation means less competition and higher prices for consumers...Read More about Compliance Cost

G-20 Summit Goals  The G-20 meeting starts Saturday in Toronto, Canada. The tug-of-war between the U.S. and Europe couldn’t be starker. Traditionalists would think the U.S. would be trying to pull Europe back from the brink of socialist spending plans, and Europe would be encouraging the U.S. to “prime the pump” with more government spending to goose the world economy. Traditionalists would be wrong, 100% wrong...Read More about the G-20 Agenda

Moratorium Manipulation  After a federal judge overturned the existing six month moratorium on deep water drilling, the administration announced an appeal. This was surprising in that they had not taken the time to read the judge’s opinion first.  U.S. Interior Secretary Ken Salazar is also preparing a new revised deep water drilling moratorium.  He will announce this "new" moratorium while appealing the previous six month moratorium...Read More about the Administration's Manipulating the Gulf Spill

Gulf Coast Workers 1, Obama 0  A New Orleans Federal Court blocked Obama’s six month moratorium of deep water drilling. This decision was made quickly so either party could appeal before the appeals court goes on summer recess. Reuters has a quick story on the appeal with some background information. The administration has said they will appeal the ruling, and the Interior Department announced they would not issue any new permits without lengthy review...Read More about General McChrystal

Be Careful What You Wish For  On Saturday, China announced they would let their currency the Renminbi Yuan appreciate against the dollar. This ends two-years of currency policy that kept the Yuan tied to the value of the dollar. The U.S. Congress called on the Treasury Department to label China a currency manipulator in March. To this we say, “Be careful what you...Read More about the United Reserve Currency.

“Deserves got nothing to do with it” according to Clint Eastwood in The Unforgiven. Gene Hackman had just exclaimed that he was building a house, and he didn’t deserve to be killed. The house was made available for a new owner, courtesy of Eastwood’s character, William Munny...Read More about the Real Estate Double Dip

White House Shake Down    I popped some popcorn to get ready for today’s appearance of BP CEO Tony Hayward before the House Oversight Subcommittee. Of course we were going to have to suffer the pontifications of many members that don’t know blow-out from flatulence, but that is beside the point...Read More about BP Blunders

Drill Baby Drill  is now repeated derisively, targeting those who believe a country should exploit our own natural resources as opposed to paying other countries to sell their natural resources.   We had a chance to watch the “Wizard of Washington” last night. I came away with that feeling I might be coming down with the stomach flu.  It was a similar feeling to when Jimmy Carter won the presidency.  I almost died of alcohol poisoning...Read More about BP Cutting Corners

Print Baby P rint is the call from politicians and central banks to supply the one unnatural resource we don’t need any more of. We have not written about monetizing the debt in some time. It hasn’t been on the front burner of late. We have other issues that have pushed it aside. Don’t believe it is gone. Just like an athlete that trains under the lights long hard hours for his moment in competition, bureaucrats are working overtime in darkened offices undermining the value of....Read More about Debt Monetization

A Billable Catastrophe  American greed and creative accounting are on full display in the gulf region. Commercial clam fishermen have been hit hard with lost fields. The toe bones connected to the foot bone, with hotels and restaurants claiming lost bookings and meals served...Read More about BP Liability

Jackboot Obama    Good news everybody, James Cameron and Kevin Costner have weighed in on the oil spill and may have the answer to stop the ecological damage along the coast...Read More about the Wizard of Odd

Turn out the Lights  My wife and I disagree about shutting off lights when we leave a room. Luckily we have been married for 23 years and have left this disagreement in the past. I foolishly thought I won the argument years ago with the simple question, “If it is cheaper to leave them on, why ever shut them off?”...Read More about the National Debt

A Break in the Clouds  Federal Reserve Chairman Ben Bernanke testified before the U.S. House Budget Committee this morning. He warned the committee of the importance of a budget plan that brought the deficit down.  He instilled confidence in the markets that the economy was recovering, as market rallied while...Read More about China & Europe

Should I Buy the Dips?  Is it time to “Buy on the Dips?” The question begs an answer, as many have done well over the last year buying on market pullbacks. But the answer may depend on your time frame. Are you a trader or an investor? How much tolerance for pain do you have? If you have practiced this technique for the last month and a half, you have been punished for your efforts...Read More about Market Channels

Does Oh! Bama Know What He is Doing?  President Obama’s administration touted the jobs report last week. Rule #1, don’t talk about what you don’t know. Surly, even those that like the current occupant of the White House realize he doesn’t know what he is doing. Or does he?...Read More about the Economic Slide

Euro: Panic or Premonition  With one of the oldest democracies in the world teetering on a cliff of massive debt, and Asia recovering from the global recession faster than anyone expected, the big global economic question of the day is: Do I short the Euro and go long on the Dollar, or short the Euro and go long...Read More about FOREX Trading

Four Star Bubble  In the hearing, Buffett defended the ratings agencies as participants in the “greatest bubble” he had ever seen. He also referred to the housing bubble as a “four-star bubble” and “the granddaddy of all bubbles.”...Read More about Warren Buffett

Back in The Saddle  The markets are all over the map today as investors and traders try to understand the information filtering in through sunburned eyes from the long weekend. It is time to get back in the saddle...Read More about Market Worries

Can You Spare A Yuan?  Honda has suspended production at two plants in China after 1,000 workers went on strike May 17. They want higher pay.  Honda has offered a $52 dollar monthly raise for full time workers...Read More about Chinese Manufacturing Pay

All Aboard!  I about spit out my coffee this morning when I saw the overseas markets, and our futures market numbers. This was not what I expected. Well expect no more, reality check. It took the Asian markets to tip their hand. What happened?...Read More about the Next Bull Run.

The Bunds Have It  Germany sold seven billion euro in five year bunds (bonds) Wednesday. They had a coverage ratio of 1.1 That is terrible, Germany had to retain 22% of the issue. If not for the Bundesbank, it would have been a failed auction. As the credit crisis in the eruozone built we discussed the problem for Germany. By rescuing Greece (and any other country that cannot control spending) they have to guarantee their debt. When Germany did this the interest rates for sovereign debt from Greece went down...Read More about Germany's Almost Failed Auction

Wall Street, We Have a Problem!   You can imagine Tom Hanks speaking those lines about the market for the last four weeks.If you fancy yourself a trader (or a traitor to some congressmen) you should be watching this...Read More about Market Anomoly

Extreme Moves  The market has been down for six days in a row. Thomas Paine said, “These are the times that try men’s souls” when speaking of greater calamities. We must keep the day-to-day mechanizations of the market in perspective. Watch your trailing stop losses. We have a couple of higher volatility stocks in our long-term portfolio that are in trouble...Read More about Actions To Take

Oils Slippery Slope  Crude oil, as represented by the USO etf, has been on a slide since hitting a high of $42.19 on April 6th. USO is trading at $32 and change today. This is a 23% decline in the last six weeks. What has happened in the oil patch to cause the decline? We have had increasing inventories, but is the build in inventory responsible for the price decline?...Read More about Crude Oil Price

Too Many Moving Parts We have a lot of moving parts coming together in a perfect storm to cause traders and investors great concern. If you are not watching the market closely we closed Tuesday at 1120 on the S&P. This is the level of resistance the market encountered in February when we were...Read More about the Market Correction

Nothing but Air    Crude oil is trading lower on a strong dollar and four weeks of building inventory. The U.S. dollar has been on a tear against the euro for the last two weeks.  The euro has been in a free fall against other currencies.  Which European government provides support for the value of the euro, or is it standing on Nothing but Air?

Flash Crash Victims  Last week’s big drop in the market on Thursday has now been named the “Flash Crash” since it happened so quickly and corrected.It sounds kind of like we all rebooted our computers at the same time.Did we all hit the Ctrl+Alt+Del keys?..Read More about Trailing Stops 

Is the Doctor In?  March 30, 2009 just three weeks after the low on the stock indices we recommended a great company to our Long-Term Portfolio subscribers. We still hold this company. We didn’t get it bought at the recommended price. The market kept moving higher and we don’t like chasing stocks. Eventually, we picked it up on a pullback. Today you have a chance to pick up this same company at a great price. I thought it was worth  repeating this recommendation for all of our subscribers.  Copper is known as Dr. Copper to many traders, as copper pricing can tell you a lot about how the economy is doing.  What do you think?  Is the Doctor In?..Read More about FCX

We Want Our Money!    The pain of austerity is spreading in the eruozone. Spain’s Prime Minister Zapatero announced they would slash civil service pay 5% this year and freeze it through 2011! The government also plans to cut 13,000 jobs, reduce pensions and cut infrastructure spending. The total cuts amount to...Read More about Shakedowns

Waking Up after the Binge  The markets opened today like a drunk waking up after a binge. The market had a buying binge Monday on the news of euros sloshing around Europe. Today, traders and investors realized the fix is only temporary, and long-term problems are still to be addressed...Read More about the Eurozone Bailout

Whack A Mole  The malinvestment continues, and grows larger.We now have entered the season of “Whack a Mole” intervention.Why do I call it Whack a Mole?Because fixing one problem creates another.The U.S. has spent trillions of dollars to cover up the mortgage loan bubble.What is the result?We owe trillions of dollars to our creditors.Every time government intervenes in the market, it creates another problem.What we don’t owe to China and Japan, we owe to the Federal Reserve because they just printed the money, this is called ‘quantitative easing.’  If the Fed doesn't call this money back, we get inflation...Read More about the Euro Bailout

A Rock and a Hard Place  Goldman Sachs (GS) is having a shareholder meeting this morning at their headquarters in New York. Goldman Sachs is in negotiations with the SEC to settle the fraud charges brought two weeks ago. While they vehemently deny any wrong doing, the company cannot afford the risk of fighting the case in court. They are between a rock and a hard place with...Read More about Why GS must Settle

Too Small To Fail    “We must save the world.” uttered the flummoxed bureaucrat.Thus began our descent into debtor prison.What would happen if the Eurozone countries told Greece the TRUTH.They have lied about their deficits; they have deceived the European finance ministers about their budgets for years.They have visited this economic disaster on themselves.And what would happen if France, Germany and the ECB said “You are going to have to work this out yourself.”...Read More about Spain Credit Issues

Thanks, Greece!    Thank goodness for the problems in Greece!Don’t accuse me of acting like Goldman Sachs and capitalizing on other people’s problems, but we needed something to slap some sense into the market.For the last two months new highs were the order of the day.News reports talked about money sitting on the sideline.Talking Heads on TV made us feel sorry for money managers chasing the market, because they felt pressure to get in on the rising market...Read More about our Trade of the Year

Spain's Pain  The Eurozone credit crisis has finally scared investors enough to bring down some of euphoria in the market.Greece had used deficit spending for years, and hid the true size of their debt.When it all came to a head, they could not continue the façade any longer.Investors in bonds were the first to see the danger in their sovereign debt.Investors either withdrew from the market for Greece treasury bonds, or lowered their bids to increase the rate of return.The Euro hit a year low exchange rate of $1.3023 in trading early this morning...Read more about Spain's Economy

Greek Lifeline  The IMF and EU governments agreed to extend a $145 billion dollar lifeline to Greece over the next three years. Greece has adopted a new round of austerity measures. Germany insisted that Greece take more action to tighten their budget and increase taxes as a condition for...Read More about Sovereign Debt

Gift that Keeps Giving  The oil spill in the Gulf of Mexico appears to be the “gift that keeps on giving.” The story just gets worse. Crude oil is hitting beaches and delicate marsh areas. BP has “bellied up to the bar” with statements of responsibility for all damages. I doubt their lawyers advised them to...Read More about the Gulf Oil Spill

Reconciling our Rat Brain  Every subscriber to MarketToday receives a copy of “Beware of Your Rat Brain.” This is a letter I wrote a couple of years ago after reading information about our brains and how we react to fear and danger...Read more about Trade discipline

Covered Calls, Best of Both Worlds  Selling covered calls is confusing to some, and when we don’t understand something, it is easy to discount the importance of the strategy. Much has been written that can confuse the reasons to use this strategy.   Let’s look at selling covered calls, and why it may fit your...Read More about Covered Calls

Mr. Blankfein goes to Washington  The main thrust of the day, and the question imbedded in most of the questions was; should Goldman Sachs, as an investment bank and market maker, act as a financial advisor and be aligned with their customer’s position. In other words, should GS ever sell a product that their trading desk does not own? Are they allowed to offset risk by shorting against...Read More about Bookies

Energy Demand and Price    If you think the economy is improving, think energy. What is happening in crude oil, why does it keep moving higher? Natural gas has fallen, and can’t get up. The bottom line is the U.S. is not the center of the world for pricing world commodities. We are still the largest user, but our use is a reflection of built out infrastructure, not growth...Read More about our Crude Oil Trade

Greek to Me  While you were sleeping, Greece asked for help from the Eurozone and International Monetary Fund (IMF). Thursday the spread between Greek bonds and German bunds reached 586 basis points...Read More about Greece Credit Problems

Spring Fever  The market today appears to have caught a cold. A bit of a sneeze. Will it develop into the flu? Probably not, as spring is such a wonderful time of year, full of promise that summer is around the corner. Nature shakes off the weariness of winter, and activity abounds...Read More about political contributions

Risk Management  If you trade stocks, you know how frustrating it can be. I read an article yesterday that the biggest challenge to traders is confidence. Not the kind of confidence that allows you to place a trade for thousands of dollars. Many of us can do that. The kind of confidence that can hurt you as a trader is if you cannot admit a mistake...Read More about Trader Challenges

Sucker at the Table I read one story about Goldman Sachs with the finishing line that “I made money, the firm made money; the client didn’t do so well. Two out of three ain't bad.” Another about GS was that their clients wouldn’t go anywhere, comparing them to gamblers that keep betting because they don’t believe they are the suckers at the table.  We  all know the old adage, if you sit down at a poker game and don't know who the sucker is, it is time to leave...Read More about Credit Default Swaps

Flying High  While checking headlines this morning for an idea to write about, I came across this headline, “The last time we had a rally of this magnitude was in 1930, at the beginning of the Great Depression. The stock market skyrocketed up 48%... Then plunged a disastrous 86%!”...Read More about the VIX Fear Gauge

SEC vs GS vs US  The Securities & Exchange Commission (SEC) brought civil charges against Goldman Sachs (GS) for fraud this morning. GS marketed a collateralized debt obligation (CDO) to ITB (German bank) and others. GS sold the CDO for a commission of approximately $15 million. Within six months the Mortgage Backed Securities (MBS) underlying the CDO started to show signs of stress, 83% of the loans had been downgraded and 17% were in default. Within nine months, 99% of the portfolio had been downgraded. Buyers experienced a one billion dollar loss, Paulson & Co. made a similar amount...Read more about Stop Limit Orders 

What is the Fed?  What is the Fed? What does the Federal Reserve System do? We throw around names for institutions and many may not know what they do, why they were created in the first place, and how they work. Occasionally, we have a new customer to our premium services that is overwhelmed by all of the jargon in the world of investing...Read More about the Federal Reserve 

Bernanke Looks Tired  Ben Bernanke, chairman of the Federal Reserve, appeared before the Joint Economic Committee of Congress this morning. He said the government must begin to make “difficult choices” concerning the deficits and debt. He warned “postponing them will only make them...Read More about Congressional Perks

Our Own Economic Needs    Chinese President told U.S. President Barack Obama that China would not be pushed by external pressure and would instead base any decision on the yuan on its own economic needs...Read More about Currency Exchange Rates.

Greece Credit Problems, Again   Greek credit problems are like your daughters high school boyfriend. You have to tolerate the insoluble situation, but you don’t have to be happy about it!  Eurozone nations agreed to provide up to $41 billion in the next year to prop up Greek debt. The IMF will provide almost $10 billion. Both will be at lower interest rates than the open market is...Read More about Sovereign Debt.

Shoes, Dill and Sweet Pickles  Yesterday’s hearings had a statement that stuck with me. One of the questioners to Citi executives compared the rush to securitize mortgages and not accept blame for the implosion, akin to selling a pair of shoes and when they fall apart blame the leather...Read More about the Shoes, Pickles and Loans

Prince and Rubin Dance Team  The Federal Crisis Inquiry Commission (FCIC) met again today, Chuck Prince, former Citi CEO, and Robert Rubin, former Treasury Secretary and Citi board member, testified...Read More about FCIC hearings

Greenspan Plays Kickball  Alan Greenspan, former Chairman of the Federal Reserve appeared before the Federal Crisis Inquiry Commission (FCIC). The FCIC is conducting hearings into the cause of the credit crisis in the fall of...Read More about the CFTC

Lies, Damn Lies, and Statistics  Friday the Bureau of Labor Statistics (BLS) announced 162,000 jobs were created in March. The administration was quick to point out that this was the largest increase in three years. I found some more information on the BLS methodology. 48,000 were temporary census workers...Read More about OSHA

FDIC Hiring an Army  Our daughter interviewed for a summer job with the FDIC, it seems they want to hire an army of ‘number crunchers’ to review problem bank's balance sheets. The FDIC rented office space in Jacksonville, Florida last year to accommodate 500 new employees. Last month, they rented seven floors in Chicago and have opened an office in Irvine, California...Read More about Bank Closures

My Worst Trade Ever!   Don’t you love to someone talk about how much they made on a trade?I will break the silence and tell you about my worst trade.We bought Medivation (MDVN) in the Buy, Sell, Hold portfolio...Read More about Why I Hate Pharmaceuticals

The Grand Bet  The U.S. deficit is increasing our national debt to levels that are unsustainable. The U.S. will not be able to sell all the debt required to fund the continuing operation of the government on its present course without interest rates dramatically rising...Read More about our Trade of The Year

Break out the Crystal Ball    Last year we called crude oil the ‘Trade of the Year’; we recapped the performance of the trade on 12/31/09 when we recorded a 79% gain on the year.What do we think will be the..Read More about our Trade of the Year

Jail the Negotiators  Four Rio Tinto (RTP) executives were sentenced earlier today by a Chinese court to 7 to 14 years for taking bribes and stealing commercial secrets. It appears the commercial secrets charge was from confidential strategy meetings of the China Iron and Steel Association (CISA). The CISA negotiated with the big three iron ore importers to China; RTP, BHP, and VALE...Read More about Doing Business in China

Fox in the Henhouse   Subscriber B.A. called last night and interrupted the NCAA basketball tournament on TV. B.A. is an old college buddy, and president of a community bank. “How did we get to this point?” he asked me. B.A. had obviously just finished his taxes and was incredulous at the taxes he owed, fishing for answers in a murky pond...Read More about the Socialists in Charge

Euro Train Wreck  Can the Euro survive divergent economies and governments?  The European Central Bank (ECB) announced today they would continue to accept collateral from Eurozone banks with reduced credit ratings past the previous deadline of December 2010. This move was to help Greece as their banks can access ECB short term loans with Greece bonds as collateral...Read More about the Greek Rescue

Death Cross Indicator  One of the indicators traders look for is when a stocks 50 day moving average crosses below the 200 day moving average.This is popularly called a “Death Cross.”I look at this as a “Kiss of Death” when I come across it.It is especially powerful when other indices and the general market is moving up, but one stock or etf is ‘breaking down.’..Read More about the China Bubble

Contrarian Trade Developing Last year the government borrowed 49 cents of every dollar they spent. A new entitlement for national health care has just been enacted on top of underfunded social security, medicare and medicaid mandates that will suck the lifeblood out of the economy. Over time it will become obvious, if it isn’t already, that tax revenues will not support the spending that is mandated...Read More about Gold and Oil

Doing Business in China  Four Rio Tinto (RTP) employees agreed to plead guilty to taking bribes in China today. A trial was to have begun today for the four on bribery and stealing commercial secrets.  The trial would be conducted in two parts, with the bribery charges to be considered in the...Read More about Rio Tinto Employees on Trial

Dr. Copper Says...  China’s Deputy Commerce Minister Zhong Shan is going to visit the U.S. the end of next week. He plans to meet with administration officials to discuss “Sino-U.S. trade balance and trade frictions.” This is in response to the request from 130 legislators asking the Treasury department to...Read More about FreePort McMoRan

Renminbi Yuan, Cheap?  There is growing pressure in the U.S. to push China to let their currency, the renminbi yuan or “yuan” float on the world currency market. U.S. politicians look at the Chinese export driven economy and are jealous.  Developed countries are jealous of China's mild pullback during the world economic crisis and quick recovery...Read More about Currency Manipulation

Is China Manipulating the Yuan?  Some of our smartest pols are taking a shot at China. It seems the Chinese are their latest target for scorn. 130 U.S. lawmakers urged the U.S. Treasury to label the Chinese as “currency manipulators.”  The implicit wrong is that through manipulation of the value of their currency, they gain an advantage in world trade. If the government keeps the value of the yuan cheaper than market forces would dictate, the country’s exports are cheaper against...Read More Currency Manipulation

All Eyes on the Fed    The Federal Open Market Committee (FOMC) is meeting today. This is the first one-day meeting since 2008. Their statement will be issued after we have already sent our letter to your mailbox. Investors and traders are waiting to parse the statement, looking for any indication of...Read More about Market Manipulation

Impetuous Children  The girls are home from college this week, and the house is full with activity, at least after eleven o’clock in the morning and until midnight. It seems my daughters have become nocturnal in college. Thinking about the good times and the difficult times raising kids caused a smile this morning. My mind wondered back to when they were little, tagging along behind mom...Read More about J.M. Keynes.

IMF or Chinese Gold?  Has China bought the IMF gold? On March 9th, Pravda carried the headline “IMF sells 191 tons of gold.” The gold market did not respond. This was the remainder of the ‘mother-lode’ of gold that needed to be removed from the marketplace and supply...Read More about China vs U.S.

Crude Oil & NG Inventories  Crude oil inventory increased 1.4 million barrels last week, according to the Energy Information Agency (EIA).Gasoline inventory dropped 1.9 million barrels, but inventories are 7.8% above last year’s levels.Distillate (diesel) inventories are down 2.2 million barrels, and for the first time closing in on year ago levels.No doubt traders have noticed this and believe the market may be reaching a balance in supply and demand...Read More about Natural Gas and Crude Oil

Iceland Says NO! O ver the weekend, Icelanders voted 93% against reimbursing the British and Netherlands governments $5.3 billion dollars. This was money paid to Icesave account holders of Iceland’s Landsbanki bank which collapsed in the 2008 credit crunch in Britain and Holland....Read More about Iceland Banks

Mexican Oil Production  Mexico’s oil production is falling so fast they will soon be oil importers. The New York Times has found the story we have brought to your attention, starting over a year ago. The problem for Mexico is politics. They kicked out foreign oil companies in 1938, claiming oil profits for the state.  Oil income supplies 40% of the revenue to run the government. What do they do when...Read More about Pemex Oil

We Have Seen the Enemy  We have seen our enemy, he is us! Greek Prime Minister George Papandreou packed his bags and is traveling the world looking for someone to prop up his country’s creaky financials...Read More about the Credit Food Chain

Reconciliation Mechanics   Health care reform appears dead to your editor. There are two ways for supporters of Health Care Reform to accomplish their goal. The House could pass the Senate version as is, which would then go to the President and become law. The House will not pass the Senate bill because it has language in it that members do not agree with. The popular alternative...Read More about Health Care Reconciliation

Greek Bond Sale  Greece was able to sell $6.8 billion today in a government bond auction.  They had a coverage ratio of over 3, and...Read More about the Greek Deficit

Bond Auction Basics F  riday we wrote about Bond Vigilantes, and feedback suggested our subscribers would like to know more about how Treasury Auctions work.   The Treasury issues a press release with the amount of debt to be issued and how much debt is coming due that the Federal Reserve owns. Participants see this as a tip of the Fed’s hand, showing how much money they...Read More about Treasury Auctions

All that Glitters  We watch the precious metals market for clues on larger issues. Stronger dollar, Greek deficit, China lending restrictions, there are a lot of moving parts to the market. Trader’s sentiment in all these issues, eventually are reflected in the price of precious metals...Read More on Gold and Silver

Buffet's Annual Letter  Berkshire Hathaway released their Annual Report on Saturday morning on the internet. Our long-term subscribers have owned class B shares in Berkshire Hathaway since last February, when we bought them for a split adjusted $54.00 per share. We are up 44% on this...Read More about Berkshire Hathaway

Bond Vigilantes  Galtstock concentrates on equities for investors, paying attention to the debt of the companies we invest in. We also comment often on the debt problems of the U.S. and other countries such as Greece, this is called...Read More about Bond Yields

Health Care Summit  If you have been at work today, you missed the health care summit. Lucky you. I was glued to the tube, changing channels if the commentators wanted to interrupt and give me ‘their take’ on the discussion. I don’t need them to tell me what my opinions are of the give and take...Read More about Obamacare

Gold, or Bonds?  Big news this morning as Ben Bernanke, Federal Reserve Chairman, testified before the House Financial Services Committee. Smooth talking Ben told us lower interest rates would be held for an extended period. This was manna to the markets as traders bid equities higher on a cheap dollar. News crept onto the trading floor that the Treasury’s auction of $42 billion dollars in five-year bonds did not go as well as expected...Read More about Bond Vigilantes

Health Care Safety Net  As a former County Commissioner, I had the responsibility to oversee and fund the county health department.  This health care facility provides basic services to citizens who cannot afford (or choose not to pay for) access to private health care. County health departments exist throughout the nation.  Free or reduced price, health care is already being provided depending...Read More about Health Care

Natural Gas Burn  Trading natural gas is like playing with matches, you can get burned. We have traded natural gas in the SwingTrader service for the last year. It can move so fast, and erratically, it is easy to get caught in a losing position. The underlying truth to trading any commodity is that it cannot go to zero...Read More about Natural Gas

Discount Rate Jitters  The Fed increased the bank ‘discount rate’ to 0.75% after the market closed Thursday. This caught traders by surprise, although many Fed watchers said it should not have. Stocks took a dive in the aftermarket. Precious metals and commodities took the hardest hit. Any increase in interest rates would strengthen the dollar, which makes these products comparatively...Read More about Fed Policy

Pair Trade Example  One of the most popular pair trades is to profit off a market disparity as a market returns to normal. We wrote about “Pair Trades” earlier this year, you can read Intro. to Pair Trades in Investor Resources...read more about Pair Trade Dangers

Toyota's Woes  Toyota’s woes continue to mount. They have now recalled 8.5 million vehicles worldwide. That is almost as many cars as sold in the U.S. last year! What is happening, how long will it go on, and how...Read More about Toyota's Problems

Greek Tragedy  The Greek budget/credit problems have been averted for now. European Union leaders pledged to help Greece “if needed to safeguard the financial stability of the Euro as a whole.” There were no specifics on what form assistance would take to remedy the Greek Tragedy...Read More about Greece's Credit Crisis

Orderly Chaos  Why do we spend so much time, trying to predict what cannot be known?Watching a quarter flip five times with the same result, how many of us will bet the farm on the next flip?We all innately know the result is incalculable, but feel sure the outcome must break the streak.  We must bring order to chaos..Read More on Market Unknowns 

Greek Contagion  Greece will be rescued from their credit crisis by other members of the European Union, Reuters reports.Greece’s deficit is running at 12.7% of GDP this year.Greece needs to borrow over $75 billion to cover their deficit and refund loans coming due.Their total debt will reach $420 billion, or 120% of GDP this year.   Who will rescue the U.S. when we succumb to the contagion...Read More about Public Debt

China, Raising the Ante  China is raising the ante on anyone that dares to disagree with their great leap forward. According to China Daily, four Rio Tinto employees have been charged with bribery...Read More about China Diplomacy

Cap & Trade, Dead?  Cap and Trade legislation seemed almost a certainty last June when the House passed the American Clean Energy and Security Act of 2009 The bill would establish a cap and trade plan to reduce greenhouse gas emissions 17% by 2020.

Sovereign Debt Blues  Sovereign debt by small European countries can wreck havoc on the Euro, but to the world economy may not be as big as it seems.It is a problem because the European Union does not have a way to deal with member states that cannot control their finances.  But, it must be...Read More about World Credit Problems

Market Taken to the Woodshed  The market has been taken to the woodshed by traders and investors are looking around for some good news to rally the market.   This week saw a failed auction in Portugal which brought the European Union country’s credit problems into consciousness, again...Read More on Expected Lows

Researching Companies  How do you research companies to decide to invest in them? This question was posed by subscriber R.G. a couple of weeks ago in our mailbag. New investors face a monumental task, separating the wheat from the chaff. Buying as an investment as opposed to...Read More about Picking Stocks

Gasoline Too Cheap?  The major oil company’s quarterly reports have been disappointing. We expected gross sales to be down and profits to be squeezed, after all we are dealing in $70 dollar oil not $120 dollar crude oil. A big component of Exxon and Chevron’s profits are their refineries. Refining margins have been tough because the ‘crack spread’ has been so thin...Read More on Pair Trading Gas vs Oil

“We have tried spending money   we are spending more than we have ever spent before and it does not work. I say after eight years of this administration, we have just as much unemployment as when we started….and an enormous debt to boot.” ,,,Read More about Budget Mistakes

New Budget, Death Spiral    The White House sent its 2011 budget proposal to Capitol Hill this morning; it weighs in at $3.83 trillion dollars, the largest ever.Luckily, we are only going to borrow $1.27 trillion of that amount, or 33%.That is down from borrowing $1.56 trillion in this fiscal year.Whew, that was a close one!We are making headway…The President’s Budget raises total government expenditures to over 26% of GDP, the highest rate since the depths of WWII.  This puts the U.S. budget into a death spiral, more spending, more taxes, and....Read More about Taxes, Productivity and GDP

Pair Trade Basics    You may have heard someone speak of a “pair trade” and not known what people are talking about.Let’s look at some ideas for a pair trade, to understand the value of this technique...Learn More about Pair Trades

All Hat, No Cattle  We came off great market action yesterday. The market traded down to minus 90 on the Dow only to rally back and close up 61 on the day. This was a classic reversal, and all the more impressive as the low of the day was solid support at 1083 on the S&P 500  This morning we found the hat, but no cattle...Read More about Energy Inventories

Fireworks in Wahington  Treasury Secretary Tim Geithner appeared before the House Oversight Committee this morning to explain the rescue of AIG and Goldman Sachs (GS) receipt of funds...Read More about AIG

Correction Ahead  Trading stocks can make a person humble.The market has had a great run in the last nine months.We took some nice gains.Sometimes, you feel like you can see the future, and when the market moves as you expect the verification is a heady rush.It is not hard to predict the market, just...Read More about Correction Possible 

Put Optiion Basics  What does it mean to buy a “Put”? A “Put” is an option contract that gives you the right to sell the underlying stock at a predetermined price on a certain date. The writer (seller) of the ‘put’ is obligated to purchase the underlying stock at the strike price. Put contracts are the opposite of ‘Call’...Read More about Put Options

Something Good Happens    While we were not looking, something good happened. Yesterday, Senator Lisa Murkowski, R-Alaska, introduced a resolution to strip the EPA of power to regulate greenhouse gases. Predictably, this has the world improvers up in arms. Murkowski has 37 co-sponsors of the measure. She is a few votes short of gaining passage, but hopefully will gain the required...Read More about the EPA

Who You Gonna Call?   The Dow dropped 130 points shortly after open this morning, and continued down. The President spoke concerning financial regulations on the nation’s biggest banks. The market moved 20 points lower as he spoke, at one point minus 229 on the Dow...Read More about the Plunge Protection Team.

Turmoil in Town  The market sold the news today. A big advance yesterday was lead by health care stocks in anticipation that the health care bill would be in trouble if Scott Brown won the Senate election in Massachusetts to replace Ted Kennedy. The election is over, and now the political landscape is blurry.  There is turmoil in Washington and Wall Street...Read More about the Day After Massachusetts 

Populism, For the People?    There is a game making a resurgence in Washington, called ‘populism.’  Do we understand where it can lead us? Everyone likes sporting events, to cheer for our favorite team and snarl at the opponent.  In life, is an enemy necessary? For us to feel successful, does someone else have to fail? Is life a zero sum game?  If we fail, is it anyone’s fault other than our own?...Read more about Populism

A Dirty Job  The news is full of items that beg to be commented on. It is a dirty job, but somebody’s got to do it. I have clenched my teeth this week as we discussed investing ideas. The world spins and the government (and others) seem bent on knocking a wobble into people’s lives...Read More about Investment Plans

Call Option Basics    What does it mean to “buy a call”? Call options are the right to control a stock at a certain price for a predetermined amount of time. Call options are quoted in price per share, but one option contract is for 100 shares of the underlying stock. The price of one contract is 100 times the...Read More about Call Options

Federal Reserve Game  The Federal Reserve reported profits of $52.1 billion in 2009 They will turn over $46.1 billion to the U.S. Treasury. When Wall Street was losing their shirt, the Fed was raking in the profits. On the surface, there is some outrage that the Fed was making money during the credit crisis...Read More about Federal Reserve Profits

Short Sale Basics  Our SwingTrader subscribers enter trades to make small incremental gains on the market, whatever the trend may be.Sometimes this involves “shorting” a stock.What does “selling short” mean and how do...Read More about Selling Short

Bolivars for Bread  Hugo Chavez, President of Venezuela devalued the Bolivar Friday night during a popular baseball game. Citizens rushed to stores Saturday to spend their money before it became worth less...Read More about Devaluing Currencies

Competition in Currency  Article 1, Section 8 of the Constitution gives power to the federal government to “coin Money, regulate the Value thereof, and of foreign Coin.”Article 1, Section 10 forbids states from “make anything but gold and silver Coin a Tender in payment of Debts.”...Read More about Real Money 

The Confidence Game  Investing and trading in the stock market requires confidence.We gain confidence with every trade we make.  We lose confidence when a trade does not go the way we expect.If we plan every trade, we may be disappointed that a particular trade didn’t work out the way we thought.  It may not be about money!  It is always about confidence...Read more about Trader's Confidence

Ford Sales Increase Ford reported a 33% December sales increase year-over-year.General Motors and Chrysler were both down.Ford (F) stock hit a 52-week high over $11 and closed just shy of the mark with a 6.6% gain for the day.Only three auto makers sold more cars in the U.S. in 2009 than in 2008...Read more about Google Nexus

Annual Letter to Subscribers  We have survived a tumultuous year. We saw a sell-off that shook confidence in all investors. The economy seems to be recovering as we get news almost weekly of slowing initial unemployment claims, increased capital goods orders, and a bottoming of the real estate market...Read Our Expectations for 2010

Trade of the Year    We have called crude oil the ‘trade of the year’ in 2009With crude oil up 72%, it was a pretty good call.What will our ‘trade of the year’ be in 2010?We are narrowing the list and will reveal our trade of the year for 2010 sometime in the month of January.Let’s look at crude oil on this, the ...Read More about Crude Oil Inventories

Who Determines Interest Rates?   The Fed announced they would end the purchase of Treasuries in the fourth quarter of 2009 and stop purchasing MBS in spring of 2010This means that market forces would start to work again, which cannot be good news for world improvers...Read More about Treasury's Interest Rate Play

Are You Going To Believe Me, Or Your Lyin' Eyes?   In the last week we have witnessed the Senate approve a bill to extend and control health care, under the guise of controlling costs. It was done on a party line vote on Christmas Eve. After the vote, the Senate also approved raising the debt limit...Read More about the Creation of the Federal Reserve

Survive to Fight Another Day  One of the attitudes we must develop to trade, or invest in the stock market is to be a “survivor.”We are not talking about a TV show.  The attitude is one of watching the market dispassionately, making trades and investments with a well thought out plan...Read More about Survival Investing

Where are the Banks?    Oil and precious metals are staging a rally, with natural gas dipping. Apple is hitting an all time high, leading the tech sector up. The strange thing about this rally is the banks. I always check Goldman Sachs for a peak at buyer sentiment...Read More about the Current Rally

Climate Change Honesty  I spent the morning reading Scientific American, looking for a balanced article on climate change.I didn’t find one.I am reminded of my sixth grade science project that sought to prove the thesis, “low-voltage electricity causes plants to grow faster.”I inserted needles in plant stems and applied low-voltage to the plants 12 hours per day...Read more about Climate Research

New Years Resolution If you are new to managing your investments, slow down. One of the recurring challenges is to convince new investors to sit on their hands. It is so attractive to over trade. We see the market going up, and want to be on-board. We see red on our screen and want to sell to protect the profit we...Read More about Discipline

N. Korea Weapons Seized  North Korea was caught with their hand in the cookie jar last week.Authorities seized a cargo plane full of weapons in Thailand.The final destination and buyers of the weapons are not known.The crew told authorities the plane was supposed to stop in Bangkok...Read More about the Fallout from Copenhagen

Re-Balance Your Portfolio    We have one week left in 2009It is time to re-balance your portfolio.This is simply reviewing your stocks and the amount of equity each represents in your portfolio.We suggest each position should represent approximately 5% of your totallong-term  funds...Read How to Re-Balance Your Long-Term Investments

The Confab in Copenhagen  is winding down; Maobama is arriving tomorrow to save the day.Secretary of State, Hillary Clinton opened the checkbook this morning with,"The United States is prepared to work with other countries toward a goal of jointly mobilizing $100 billion a year by 2020 to address the climate change needs of developing countries."...Read More about Climate Change

Iran Fires One Across the Bow  Iran launched a Senjii 2 missile a few hours ago.It has a range of 1250 miles, enough to reach Israel, and U.S. bases in the gulf.  It is a good thing that Iran is only pursuing a peaceful nuclear program to generate power.Some think the power they are interested in will not benefit...Read More about the FOMC Release

Boss; De Plane, De Plane  Monitoring the news shows today provided a little excitement as Boeing had their first test flight of the 787 Dreamliner. Perhaps it is something in me from being a farm kid, growing up in a time when seeing a jet in the sky was an amazing site. Watching the plane take off, without any problems, set off a touch of excitement and swell of pride...Read More about the Boeing 787 Dreamliner 

EIA Predicts Lower Oil Imports What really caught my attention was “reduced oil…imports.” The EIA predicates this statement on a big wish, “U.S. crude oil production increases from 5 million barrels per day in 2008 to over 6 million barrels per day in 2027 and remains at just over 6 million barrels per....Read More about Future Oil Use

Coming Nat-as-trophe  Natural gas is back, with snow and cold blowing across the country and positive economic news points to increased usage in the future.  We predict a ‘Nat-as-trophe’...Read More on our take for Natural Gas

Unintended Consequences When you squeeze a balloon on one end, the other end bulges out. When you borrow all the money the bank has, they get worried about your ability to repay it, and want to charge more. When you regulate mining, you get less mining and the cost of the natural resource increases. When you have 10 girlfriends, your wife will eventually find out...Read More about No Good Deed Goes Unpunished

KMP Pumps Profit Why do we like it?  As a partnership they have to pay out 90% of their income to maintain their tax status.  Some of the dividend income is tax sheltered by depreciation, and none of it is double-taxed...Read Our take on Kinder Morgan Energy

Emission Troubles  Yesterday we wrote about the ramifications of the Copenhagen Confab and the EPA declaring green house gases a human health hazard.  The Senate probably would not be able to pass any kind of ‘cap and trade’ treaty that the President would present, since it will most certainly involve reversing any chance of growth for our economy and involve paying other countries...Read More about U.S. Emissions

Emergency in Copenhagen    The protesters are out for blood. “The clock has ticked down to zero. After two years of negotiation, the time has come to deliver”, according to the U.N climate chief Yvo de Boer. Oops, it seems some of the radicals are now in charge of the agenda...Read More about the Climate Change Agenda

Lock in Your Price for Gasoline  “If you plan to drive 20,000 miles next year and your car gets 17 miles to the gallon, you will use 1177 gallons of gas.Today the price of gas is about $1.70.1.70X 1177 = $2001.Today you can buy $2000 worth of one of these ETF’s and drive next year for the same net price.You might want to buy a few years worth!”...Read More about the future price of Crude Oil

Why Do You Invest?  My wife keeps telling me to buy stock in TJ Maxx (TJX), as she shops in their stores, and believes they run a good operation. I have looked but not touched, as they do not fit our investment profile. We have Walmart (WMT) in the retail sector, currently up 9% and they pay a better dividend...Read More about Discipline

Checked Your Crack Spread Lately?  Profitability in refining is measured by the “crack spread.” This refers to the chemical process to ‘crack’ the large crude oil molecule to smaller refined product’s molecules. Crack Spread is the difference in the cost of crude oil and the price at which the derived refined products...Read More about U.S. Refining

The Stock You Should Own  Subscribers to Galt’s Long-Term Portfolio have owned Berkshire Hathaway since last February.It was one of our first purchases to rebuild our portfolio after the carnage last fall and winter....Read More about BRK

Trading Batteries  We didn’t realize it at the time, but batteries were our ‘currency’, they had value. They couldn’t be replaced by anything else. They were rare. New batteries cost ten cents, MORE THAN A CANDY BAR. Mom wouldn’t just go buy a battery because we wanted a new one...Read More about the Federal Reserve

Third Down, and 15 to Go!  As overseas markets fell, so did the dollar. Investors were moving to ‘safe’ currencies, which did not include the dollar. In times of fear, investors pull out of equities and get liquid. The dollar has been the ultimate ‘safe haven’ for the last 100 years; this is part of the cache...Read More about the Dollar Demise

FHA, Broke by Spring  FHA guaranteed loans are bundled as mortgage backed securities, like the Fed is buying, and sold through Ginnie Mae. Bob Toll says, “It’s a train wreck and the flag will go up in the next couple of months. Bail us out. Give us more money.”...Read More about the FHA Train Wreck 

Guys Behind the Curtain    The Global Warming world improvers started using the term 'Climate Change', as there was some disagreement whether or not the climate was actually warmer. Some data showed the hottest year was 1998, and climate had actually cooled since then...Read More about the Leaks that Sank Global Warming

Incoming! Debt Wave  The government’s economists have been telling us, “Consumers have lived beyond their means!”We borrowed too much money for homes, too much for toys, too much for widgets from China...Read More about Refinancing the National Debt

Cheap Electricity My friends point was made on an expansive basis. He empatically told me, “Every country that has created an economic boom, an industrial revolution, did it with cheap energy. Cheap and plentiful energy is the one common denominator in every business expansion, and China has cheap energy.”...Read More about China Energy

Ethanol Waste  Two years ago, investors couldn’t get enough of ethanol stocks.Congress passed legislation in 2005, mandating 7.5 billion gallons of ethanol use by 2012Ethanol was seen as a replacement for MTBE in motor fuels, with the side benefit of replacing imported crude oil..Read More about Ethanol Production

Where Are the Jobs? The White House claims the $787 billion economic stimulus program has created or ‘saved’ at least 640,000 jobs. This included 30 jobs saved in Arizona’s 15^th congressional district, a district...Read More about A New Stimulus Bill

Cryin' In Their Beer  The Chinese are publicly questioning the cheap dollar and concern for the U.S. budget deficits. This is all talk aimed at the Europeans. It does not upset the Chinese. They tie their currency, the Yuan, to the U.S. dollar. As the dollar becomes cheaper, their exports gain...Read More about U.S. China Relations

FHA Issues CDS    American International Group (AIG) received $70 billion dollars in TARP funds to cover the Credit Default Swaps (CDS) they issued to banks. These CDS were sold as ‘insurance’ that the loans the banks held would not default.  Since the CDS were not technically ‘insurance’ AIG did not put aside reserves in case the covered assets turned sour...Learn More about Government CDS

Walking The Walk  The rally returns today as the dollar tanks. Our present ‘leaders’ in Washington will have to learn the difference between action and a good speech. What do you expect? Professional politicians have never taken action on anything except polls and fund raising. It is the difference in...Read More about the Falling Dollar

Dental Dreams  Dental care is relatively inexpensive, I pay cash and dentists don’t have to give away their services if someone shows up at their door at one in the morning declaring an emergency.    Which leads me to think about our veterinarian, Bill is a great guy that is probably a better doctor than most doctors...Read More about Free Markets

Inflation Explained  Subscriber T.M writes, “I don't understand HOW they inflate the dollar?  How does that occur?  Through the cost of the...Read our explaination

Unemployment Blues the more comprehensive ‘U-6’ number is 17.5% unemployed. Some economists believe the actual number may be as high as 22%, unprecedented since the Great Depression...Read More about the Jobless Recession

What is in Your Wallet?  From August 1999 to September 2009, your dollar has depreciated by 35%! The Consumer Price Index (CPI) has increased from 166 to 224 during the last ten years. Is it any wonder investors and traders are looking for hard assets that will increase in value as dollars shrink in value?  Call it the incredibly shrinking dollar...Read More about our Currency Woes

Too Many Refunds Next week the U.S. Treasury is auctioning $81 billion in notes and bonds. $42.5 billion will be new money, and $38.5 will be to refund maturing securities. Refinancing maturing...Read More about the Treasury Snowball

Crude Oil, Lower?  Crude oil inventory reports came out yesterday from the Energy Information Administration (EIA). Is the trend towards higher prices supported by the numbers?...Read More about our thoughts on Crude Oil

Gold's Time Cometh Mr. Jones is bullish on gold. Referring to gold, “It is just an asset that, like everything else in life, has its time and place. And now is that time.” --Read More about Paul Tudor Jones

The Great Dance Continues  One of the great things about writing the MarketToday newsletter is the ability to view the market as an observer.To spend the day reading other’s views and watching the ‘great dance’ that...Read More about Value Stocks

Carry Trade Over? From the beginning of the financial crisis, the U.S. government’s concerted effort has been to throw more money at the problem. The bureaucrats  answer is to pump liquidity into the banks, and...Read More about the CIT Bankruptcy

80 Year Anniversary--BOO   Were you aware that this Wednesday and Thursday marked the 80th anniversary of the 1929 Market Crash?  How does the current stock market rally (ending?) compare to the 1929-1932...Read More about Today's Market 

Swine Flu, Ban Pork?  China announced this morning that it would resume pork imports from the U.S. The ban was imposed last spring because of the ‘swine flu’. Amazing. Don’t tell them about ‘petroleum jelly’...Read More about Exxon Results

Why not Regulate General Electric?   Kenneth Feinberg, White House & Treasury Pay Czar, appeared before the House Oversight Committee this morning. Why doesn’t he regulate pay at General...Read More about the Pay Czar 

Looking in the Wrong Place  China, Russia, France, and Japan are all working to dethrone the U.S. dollar as the ‘world’s reserve currency’.We have covered this as a news story over the last nine months...Read More about the future for Precious Metals

On the Sideline?  Are you sitting on the sideline? Many investors pulled money at the worst time and now sit on the side...Read More about Re-Entering the Market

Is The Market Out of Gas Amazon beat earnings and Microsoft gave an encouraging forecast, but the market is down this morning...Read More about the S&P 500

Shocked there is Gambling The “Administration is Shocked by GM and Chrysler” mismanagement.  My first thought when reading this headline was that they were starting to act more and more like government bureaucrats.

Hin Sing, Hang Sung   After trading and investing full time for four years, I feel like a novice. It seems that when I zig the market zags. My hen sing is out of wack with the hang sung...Read More about getting out of a Trading Rut

Apple of the Markets Eye  Apple Inc. (AAPL) knocked the socks off analysts last night. AAPL sold 7.4 million iphones in the...Read More about AAPL Earnings 

Market Maxims  It is easy to be caught up in the frenzy, almost everything we buy keeps going higher. Maybe we need to buy more… But, doesn’t it have to end sometime? We were shorting the market back in May...Read More for a quote from Jim Rogers

Market in a Foul Mood  It is options expiration day, and the market seems to be in a foul mood. GE and BAC came out with earnings that stunk up the trading floor. IBM disappointed with lowered contracts and forecast. Bad Earnings, options expiration, and Friday, a toxic mix...Read More about Immigration Enforcement

Put Your Right Foot In  The market is playing ‘put your right foot in, put your right foot out.’ Where do we go from here? Investors don’t know whether to buy more or sell into this rally. When you look at trading channels...Read More about the Market Advance

DOW 10,000  The DOW hit 10,000 this afternoon to cheers on the floor. It did not last long as sell orders kicked in, then the market rallied back. The DOW first closed above 10,000...Read More about Where do We Go Now

Snowe Dressed for the Prom  Olympia Snowe (r-Maine) announced she would vote the Senate health care bill out of the Senate Finance Committee at 1 p.m. Health Care stocks took a hit. If you can imagine Ms. Snow in a prom dress, you know how she feels. She has forgotten how the girl is treated...Read More on GS Downgrade

Citi sells Phibro for Peanuts Phibro has been one of Citi’s most profitable divisions, accounting for 10% of the company’s profits in 2007, but profits are not as important as not offending the political class...Read future statistics on Precious Metals

More Stimulus, Less Growth!  Will there be another stimulus? The White House says, “No.”  They are grappling with an economy that is not recovering after all their “focusing like a laser beam” on stimulus plan...Read More about Economic Harm by Government 

Prepare Your Portfolio  What do we need to do to protect our nest egg? Luckily, we have been positioning all of our portfolios for future inflation. In the long-term portfolio, we have looked for companies with significant foreign operations. These companies produce profits just on currency exchange...Read More about Portfolio Action You can Take

Trading Rules Success leads to bending the rules and losing money, or not attaining the goals you have set out for yourself.When we are “on our game”, we follow our rules, such as stop losses, and maintain...Read More about Dollar Troubles

Dollar Demise, Will we Answer?  The big news today was that Russia, China, Japan, and France were in discussions with Saudi Arabia to price oil in a basket of currencies and gold. The UK Independent has the story...Read More about our Currency

Smartest Guys on Wall Street  Goldman Sachs (GS) proved again, they are the smartest guys on Wall Street. GS loaned CIT Group Inc. (CIT) $3 billion in June 2008 on a 20-year loan. This was before the credit markets...Read More on Earnings Season

Fisker Fingers Fed  Fisker Automotive received a $529 million ‘loan’ from the Dept. of Energy last week. One of Fisker's largest investors is a venture capital firm. The V.C. firm, Kleiner Perkins Caufield & Byers (KPCB)..Read More about Political Corruption

Health Care, Up Close  I am sitting in a hospital waiting room watching the market punish the bulls.Brother-in-law Bob is under the knife...Read More about Michael Moore

A Dictatorship Soon  Novelist Gore Vidal says the U.S. will “Have a dictatorship soon” in an article in the Times Online.  He supported Hillary Clinton but switched to Oh! Bama and now regrets it.I do not agree with the man, or admire...Read More on

FDIC, Creative Financing  The FDIC is meeting today to decide how to raise money to cover expected bank closures and demands on the insurance fund. They have developed a new twist to raise money...Read More about the Chamber of Commerce 

New Week Headed Higher  The market has opened off to the races this morning.Last week gave us the feel of teetering on the brink of a cliff.The surprise was bad news Friday morning on durable goods and new home sales.The market seemed to struggle and ignore it by only 5 points for the day...Read More about our Market Outlook

Volcker Speaks Up  Paul Volcker, the president’s Economic Advisor, testified before the House financial services committee yesterday. Mr. Volcker led the Fed in the 1980’s and lends experience to the administration’s inner circle. It appears he does not agree with some of the positions...Read More about Paul Vocker

Angry Dog at Your Throat “Sometimes, when you pass an angry dog on the street, you are advised to ignore it and it will go away. This is not such great advice, however, if it lunges for your throat.”...Read More about our Nation's Predicament

Short Oil, Buy a Gun Crude oil stocks built 2.8 million barrels over last week. Gasoline inventories grew 5.4 million barrels, and distillates (diesel) increased 3 million barrels. These numbers are bearish for oil prices...Read More on how to Profit on Oil

China Buys U.S. When you are the largest owner, you are committed. I am reminded of the old joke about the bank becoming your partner when you cannot pay him back. Being the largest does not mean you have to...Read More about China's Treasury Buys

Gangster Government As you recall the government forced Chrysler and GM to shrink their dealer network in the bailout/bankruptcy.   Dealers complained that they did not cost the companies any money; they bought the cars...Read More about Consolidating Power

FDIC Going For Broke The FDIC had closed three more banks over the weekend. They have been closing banks every week.   How much money are they burning through, and how much do they have left....Read More about Bank Closings

Age of Responsibility  Senator Max Baucus (D- MT) released his health care bill yesterday. Everyone seems upset. The bill does not include tort reform or interstate competition. It throws more unfunded mandates on states for Medicaid patients, and “health insurance co-ops” that tap money from the...Read More about Health Care

Cuomo vs Bank of America   The New York Attorney General, Andrew Cuomo has filed paperwork to depose directors of Bank of America (BAC) concerning the acquisition of Merrill Lynch....Read More about the Bank of America Merrill Lynch Merger 

Bebi Goes to Moscow  We like the U.S. Crude Oil ETF (USO) in the SwingTrader. Today, I have resourced a few articles on the Middle East that may help us understand if USO is a must-have for protection from anticipated...Read More about the Middle East 

Trade Spat  The Administration slapped tariffs on imported tires from China on Friday.This was under a provision in the agreement from the time China joined the World Trade Organization.The U.S. is allowed to place tariffs on goods to slow China imports so domestic industries can adjust...Read about the Escalating Trade War with China.

Fooling Some of the People  “You can fool some of the people all the time, and all of the people some of the time, but you can not fool all of the people all of the time.” That famous quote from Abraham Lincoln comes to mind this morning. The present political situation in Washington stretches the imagination...Read More about Fooling People

China Buys U.S., U.S. Guarantees 95%  The Chinese Investment Corp. (CIC) is working with BlackRock and other funds to buy U.S. Real Estate. That is great; let them spend their money to buy expensive real estate. We all....Read More about the TARP Bill

Jobs on the Job  Apple held a product event today in San Francisco as investors and traders held their breath. Steve Jobs showed up to wow them. Eric Schmidt, CEO of Google, sat in the third row with other Apple...Read More about Apple's Product Show

Precious Metals Bubble? Gold and silver, along with zinc, copper and other commodities catapulted higher last week. This is a strange play, because interest rates are not bouncing higher, which reflexively happens when the..Read More about GLD & SLV

Sec Inept, What's New Bernie Madoff while he ran his ponzi scheme for over sixteen years right under their noses.We have reported before about the letters written to the SEC that spelled out the empirical...Read More about government boondoggles.

Gold and Silver Spike Higher  Gold and silver continued their climb. Is this the spike that takes gold to $2000? Probably not, we closed our SwingTrader position in the Proshares  Ultra Silver ETF (AGQ) yesterday when it dipped below our stop.We exited for a nice gain, but it has..Read More about Precious Metals and Natural Gas

Win the Lottery  What does it take to win the lottery? So much money that you get to pay the cost of the U.S. government for a few hours. If you are a pharmaceutical company, you could invite doctors to a retreat, pay for golf and massages. If you are unlucky enough to be Pfizer (PFE)...Read More about Government Destruction

Are You Scared Yet  We enter the month of September like a bride. We are excited and all dressed for the occasion, but have a knot in our stomach because of the unknown nature of our future...Read More about Is the Market going Down?

Cheap Food, Government Subsidies  The U.S. lost a case before the World Trade Organization (W.T.O.).The subject is subsidies to domestic cotton growers.Our government has consistently subsidized farmers to keep the cheap food coming for American consumers...Read More about how legislators Buy Votes. 

The Smartest Guy I Know, At What He Knows ...my brother the farmer, I commented that he is “one of the smartest guys I know, at what he knows.” I repeat it again today, because after writing it, I paused and thought how much absolute truth there was in that statement....Read More about Investing in the Stock Market

Buyers to the Rescue   Initial jobles claims and GDP numbers came out premarket. Unemployment was more than expected but less than last weeks. The GDP shrank 1% in the second quarter, which was better than expected. There was no discernable impact on the market as we drifted lower...Read more about Buying Pressure 

Federal Reserve Secrecy  The Federal Court in Manhattan has ruled against the Federal Reserve in a freedom of information request. Bloomberg News sought the names of banks that received emergency loans from the Federal Reserve beginning last year in the midst of the financial panic...Read More about the Federal Reserve

Deficit Spending Balloons  The White House leaked that Ben Bernanke would be re-appointed as Chairman of the Federal Reserve. This covered up the news that the deficits are exploding. How can Oh! Bama pass all his big government programs, when the country is broke? Maybe he can’t!...Read More about the Federal Deficit

Ignoring Bad News   The market wants to go higher as we have been up five out of the last six weeks. There is talk now that September will deliver the bad news with a market fall. I don’t know...Read More about the Market Today 

Natural Gas  Natural gas has been in the news for the last few months, as supply has outstripped demand. Natural gas is now under $3 mcf. This is a multi-year low. Jimmy Carter declared over 30-years ago, “The U.S. is running...Read More about Natural Gas 

Silver and Oil  Eight million barrels of imported oil didn’t show up in port last week.  Oil, gasoline and distillates inventory in total dropped 11.2 million barrels! The market caught the fever from the commodity trading pits, and we were off to...Read More about Silver 

Crude Oil Soars  The crude oil trade came back with a vengeance today. I have called oil the "trade of the year" but had become bearish the last three weeks. We had broken the trend of declining inventories, the rally was running out of buyers and the general market looked lower. I surmised that some of the “oil on ships”...Read More about Crude Oil

Dead Cat Bounce?  The market is quite today as we look for direction. Is it a dead cat bounce? The volume is light and there does not...Read More about the Stock Market.

Dorm Move In, Market Falls  Moving your freshman daughter into a dorm, while a thousand other parents are doing the same thing, is akin to trying to get out of a trade when the market is falling! The stairways are crowded and the elevators do not move!

Where are We Going?  Any pullback that does occur should be very mild, support is: 989—50% Fibonacci-- 970---10 day moving average-- 943---50 day moving average

Crude Oil, Higher?   The real surprise today was the reaction to the Energy Information Agency (EIA) report.Crude inventories continue to build.Crude Oil stocks increased 2.5 million barrels, gasoline decreased one million barrels, and distillates increased 800,000 barrels...Read More about our take on the Oil Market 

Fed Meeting Report  The Fed is meeting and will issue a report tomorrow afternoon. The market does not expect any change in current actions. The $300 billion purchase of treasury bonds is scheduled to end in September. So far, they have bought $253 billion with printed money...Read More about Quantitative Easing

SLV, COMEX & EGG I wanted to understand if shares of SLV could be used to close out a futures contract in substitution for physical metal.   This question was central to my concern for the integrity of SLV, raised in an article published...Read More about SLV

COMEX Rules for SLV  “Your article on SLV contains the statement that shares of SLV can be used to settle COMEX silver contracts. That is absolutely not true.”...Read My Answer to this, and today's take on the Market

Santa Bama ... went to Wakarusa, Indiana today. The grab bag of gifts was full of goodies for the kids. We all needed a pep talk, and no one does it better than the tele-prompter in chief. Navistar picked up $39 million in...Read More about Flash Orders

EBay & HFT  EBay bought Skype in 2005 for $2.6 billion. Now the founders of Skype have sued EBay to terminate the use of the licensed technology that makes it work. This comes when EBay is planning to spin off Skype next year...Read More about HFT

Cash for Clunkers This is a great example why the government is not capable of running the health care system. The clunker program offers up to $4500 for your low gas mileage, less than 25-year old car...Read More about Government Boondoggles

Caution, Copper Cache The 76% rally in copper has occurred because of China buying to build inventories. They have pulled back from the market in the last thirty days as they may have stockpiled more than they need until the...Read More about FCX

Swimming in Crude The market acted that way today.After the crude oil inventory report came out this morning, you could have shot a gun and not killed an oil buyer in the pits.Crude dropped more in one day than it has since April...Read More about Crude Oil

Health Care, A Plan My focus is how to provide health care to uninsured citizens. If this is a national priority, let’s not destroy the health care system that stands between us, and the grim reaper in the process...Read More about Health Care 

Different This Time?  One of the scariest phrases an investor can hear is “It is different this time.” It always signals a detachment from reality. We have all heard the discussion about this being a “jobless recovery.”...Read More about Wealth Guilt

Explain This Rally! Earnings expectations are so low that most companies are beating the estimates. Excitement has infected even the most bearish investor. Some of the upward pressure is no doubt the result of short sellers having to cover positions. This is like rocket fuel to a rally. In two weeks...Read about this weeks Oil Report

China Miracle Continues  In the midst of one of the most severe economic downturns of the past century, China's economy managed to grow by 7.9% in 2009. For some perspective, today's chart focuses on Chinese stocks and presents

Cost, Benefit and Government Dealing with the government in anything we do can cost more than it is worth.  Who among us would get a replacement drivers license when we moved until we absolutely had to? Dealing with government is like getting a tooth pulled, a relief once it is over...Read more about Govenment Health Care

California Leavin' A study last year found that 5,000 of California’s top 25,000 taxpayers left the state. Their combined tax payments were an estimated $8 billion per year. This is exactly what the founding fathers envisioned, if one state has stupid laws, the citizens are free to vote with their feet...Read More about the California Budget Resolution 

Fixed Income Basics One standard repeated often is your age should determine the percentage of bonds in your portfolio. If you are 25 years old, 25% of your portfolio should consist of fixed assets (bonds), if you are 55 years old..Read More about Bonds  

Crude Oil, Bull or Bear? This week saw crude oil dip in price then turn higher today. Why? There were general concerns about the economic recovery, the market was trading lower and the dollar was up relative to other...Read More about Crude Oil

CIT Twists in the Wind The administration has rejected any bailout or guarantee of debt issuance through the FDIC. As I covered Monday, CIT was asking for the same FDIC backstop for its debt that GE receives...Read More about CIT and Bankruptcy

Are CDS Poison?  Maxine Waters D-CA has introduced a bill in the House to ban Credit Default Swaps (CDS). Ms. Waters is a nut job, but she is right on this, we do not need the ability to bet on a company’s ability to...Read More about Credit Default Swaps

Science or Intellectual Fraud?  Oh! Bama said, “"...the truth is that promoting science isn’t just about providing resources—it’s about protecting free and open inquiry. It’s about ensuring that facts and evidence are never twisted or obscured by politics or ideology...Read More about Lies, Statistics, and Climate Change

Jobless, Because of Minimum Wage  Minimum wage laws are frequently debated in the context of a “living wage”, but most minimum wage employees live at home with their parents. This more likely should be called a ‘training wage’ when young people take their first job, and gain skills to advance in the...Read More about Unemployment

Bonds, IOU's, Going Busted  The U.S. Treasury auctioned $73 billion in bonds this week and interest rates were down on the short term, but up on the 30-year bonds. The softness in the stock market likely...Read More about the IMF Economic Projections

Google takes on Mr. Softie Google announced in a blog posting yesterday that they would introduce a new operating system...Read More about Chrome and Windows 7

Climate War, Private War Yesterday at Oxford, Al Gore accused governments of “exploiting ignorance about the dangers of climate warming.” He went on to compare the “threat from climate change was as urgent as that from Hitler.” Wow, how do you engage a raving lunatic?...Read More about Global Warming and Health Care>>

What Causes Foreclosures?  We all marveled at the creative financing that was done. Only in America could you find a zero down, adjustable, interest only low documentation loan. It takes a special kind of marketing department to dream up these kinds of financial instruments...Read More about the Housing Crisis

Market Dips, Closes Higher If it were this easy, the bull market would carry us to green pastures. It is not this easy, earnings season starts this week, oil and other commodities appear soft, out of concern that the...Read More about Market Action

Walmart, Did they Drop the Soap?  Walmart made headlines today when it appeared they succumbed to the desire to curry favor with the government. Walmart now backs a push for an employer mandate for health insurance. The story is more complicated than capitulation on Walmart’s part...Read More about Walmart Health Care

Silver and Oil, Shiny and Rare Silver is a precious metal, but much more.  It is in almost every electronic piece of equipment produced in the world.  Oil is in almost everything produced in the world, period...Read More about the Iraq Oil Concessions 

Unsustainable Debt  The choice facing policymakers is not whether to address rising deficits and debt but when and how to do so. Debt is projected to soon grow to unsustainable levels...Read More about our Mounting National Debt

Randall goes to Wall Street  I have helped a few people get started with online investing.  Randall, a retired businessman had never handled his own investments. He was scared, but excited to take control of his...Read More about Online Investing

Decapitation thru Cap & Trade  The house is working on “cap and trade”, ready to ram it through by the end of the week. The proponents have written a bill that does not have many teeth in it, until after the CBO cost scoring expires. CBO estimates a low cost in 2020, the costs escalate after that date....Read More on Evaporating Wealth

California Mess, Crude Supply  California’s budget troubles are not going away. Moody’s Investor Services warned the Golden State faces a “multi-notch” downgrade to its credit rating if the legislature does not produce...Read More about the Crude Supply

Profit in Treasuries, Iran & N. Korea  It looks more and more like the Treasury is trying to avoid selling 20 and 30-year bonds. Are they afraid of what the market will tell them? We will get some 10’s and 30’ on July 8-9. The prospect of a failed auction in U.S. debt should cause sleepless nights...Read More about Treasuries & China

Dip, Drop, Plunge  The sell off that was widely expected, appeared today. I am reminded of an old politically incorrect joke about the commonality of a Texas thunderstorm and rape, once you realize it is..Read More about Today's Market.

Health Care, Who Needs It? Many well meaning people seem willing to accept a little socialism, if it means helping a wide swath of the citizenry obtain a basic human right. Socialist politicians recognize a wedge issue to grant a new entitlement to a segment of the population, thereby cementing...Read More about National Health Care

Regulation or Strangulation?  The Oh! Bama administration has proposed an overhaul of the regulatory structure for financial services. It appears to be an expansion of the Fed’s power over the economy...Read More about Increased Regulation

Has Oil Peaked?  If you have followed crude oil and traded the USO, DBO or DXO during the last few weeks, you have had a great run. You probably are wondering how to play this train for another great ride. Get ready. Do not look at the overhang of refined products as a block to higher prices. Look at them as a lever to push crude higher as they work off. Just like a teeter totter on the playground, when the refined end goes down, the crude price goes up!...Read More about Crude Oil

Oil Bubbling Out of The Ground  On June 29, Iraq will open bids to develop and operate six oil fields and two natural gas fields. In 1972, foreign companies were kicked out of Iraq. Some of these fields are some of the easiest in the world to develop. In Iraq, the oil still bubbles to the surface....Read More about Iraq Oil Concessions 

Inflation, I Don't See No Inflation  Art Laffer, author of the Laffer Curve, observes that the Fed has increased the monetary base by almost $1 trillion since September 2008.  This increase in the monetary base is the largest increase in fifty years, BYA FACTOR OF TEN...Read More about the last 60 years of Inflation

More Quantitative Easing?  The Fed has spent over half of the $300 billion they committed to print buying Treasury bonds.This program was to end in August, but Bernanke has floated the idea of extending the plan with additional ‘quantitative easing’ of as much as $1 trillion...Read More about the Expanding Fed Balance Sheet

Interest Rates & Dollar Drop   The Treasury auction sold $11 billion of 30-year bonds at 4.72%    Oddly, the dollar sold off...Read More about today's Stock Market

Brother, Can You Spare a Dime?  The handouts never end, or at least the line of companies that argue they should get to suck on the teat. Auto supplier companies to GM and Chrysler met with the Treasury Auto Task Force today, asking for $8 to $10 billion...Read More about Bailout Nation

Gold & Silver, a Rigged Market?  We all know governments loan their gold to market makers. This allows them to make a small return premium on the loan. Otherwise, gold and silver make now return. What if they are loaning their gold and silver...Read about Gold & Silver Manipulation 

SCOTUS vs POTUS  The elephant in the room today was what the Supreme Court would do. Would they block the sale of Chrysler? The key legal issues were the use of TARP funds outside of bank rescue and moving secured...Read More about Chrysler

Unemployment Climbs to 9.4%  The Labor Dept. unemployment report showed the economy lost 345,000 jobs in May. This was much less than expected as monthly job losses have been in the half million range since...Read More about the MarketToday

Zimbabwe, Here We Come!  You can buy Zimbabwe money on EBay as a collector item. I found a nice collection of 10, 20, 50, & 100 Trillion notes for sale, for only $14.95 If you don’t believe it can happen...Read More about our Future

Treasury Bond Blues  It is time to issue my monthly warning about Treasuries. I have sounded the clarion to sell Treasuries since January. If you own Treasury bonds, they are becoming worth less...Read More about Treasury Bonds

ETF Flexibility  ETFs have taken over many investors’ portfolios because when you invest in an ETF you do not have exposure to one company’s peccadilloes. Your portfolio will not be slaughtered by an accounting fraud, or oil...Read More about ETF Flexibility

ETF Basics  Exchange Traded Funds (ETF’s) are relatively new, having been introduced in the mid 1990’s. The first widely accepted ETF was SPY, which tracks the S&P 500. SPY owns every stock in the index. As a small investor, you...Read More ETF Basics

Ultra ETF Tracking Error look ULTRA ETFs. Most of these seek to ‘double’ the daily movement of the underlying security or sector. The important word in this description is ‘daily’ not ‘double’...Read More about Ultra ETF's

Why is Oil Going Up?  Crude oil continues its march to $70 per barrel, and beyond. Seventy dollars is not going to destroy demand. The Energy Information Agency (EIA) released their forecast for energy usage through 2030 yesterday. The headline tells the story for our future, “World Energy Use Projected to Grow 44 Percent Between 2006 and 2030.”....Read More about Oil Goin Higher 

Gold & Interest Rates Climb  In 2006, gold accounted for just 0.2% of the world’s investable wealth. By the end of 2008, gold represented 0.6% of world wealth. Going back to 1968, gold represented about 4.75%...Read More about Gold & Interest Rates

What is Market Reality?  What a difference three days can make, the world has changed. North Korea inserted themselves in investors’s portfolio over the weekend. What happens to oil, gold, base metals and other...Read More About Market Perception

Carbon Dioxide Emissions Plummet U.S. Energy-Related Carbon Dioxide Emissions Declined by 2.8 Percent in 2008  U.S. carbon dioxide emissions from fossil fuels decreased by 2.8 percent in 2008....Read More about Carbon Emissions

Oil, Lower Inventories=Higher Prices Crude oil stocks have drifted lower for the last two weeks, shoving prices higher. While inventory is 48% above last year, it is 2.1% less than last week. Crude oil imports dropped...Read More about Crude Oil Inventories

Ford Gambles on Electric Cars  Ford is the only surviving domestic auto producer that has not taken government bailouts. They evidently have not cleaned out all their stupidity...Read More about Ford

Position Sizing  Position sizing is of utmost importance to every investor or trader. Position sizing is one of our “Four Legs of Wealth”. It is one of the cornerstones of the Galt Long-Term Portfolio...Read More about Position Sizing

TARP, Take It...or Take It This memo lays out the threats used for the meetings. “If capital infusion is not appealing, you should be aware your regulator will require it in any circumstance.”..Read More about TARP

Deficits and Taxes Going UP  The U.S. Trade Deficit increased in March for the first time in eight months, according to the Commerce Department. The deficit was recorded at $27.6 billion, just wait until crude starts..Read More about Deficits 

Bondholders Secure-less  The Chrysler bondholders gave up the fight this weekend and agreed to take what they could get out of the bankruptcy court.  J.P. Morgan’s Vice-Chairman, James B. Lee Jr. told Rattner that Chrysler would have to pay its lenders all of the $6.9 billion that was owed...Read More about Chrysler and Bankruptcy>>

Ford's Survival Plan Ford is the only major U.S. car company that is not technically or legally bankrupt. What does that mean, and how did they...Read More about Ford>> 

Oil, Rising Inventory & Higher Prices  Crude Oil just keeps notching gains, up 3% today, anticipating an improving economy. Supply and Demand is not the driver, as the following two charts illustrate...Read More>>

Bonds Lose Luster  The Treasury Bond Auction today did not attract enough buyers.Interest rates shot up on long-term bonds at noon trapping bondholders.The explanation may not be as simple as you think...Read More>> 

Stress Tests Fuel Bank Rally  The “stress tests” are all over the news today. Bank of America (BAC) went public with the news that they have to raise $34.8 billion in the next six months. The results are scheduled...Read More>> 

Fed Focused on Inflation? Bernanke said the Fed was “focused like a laser beam” on contracting the money supply and controlling inflation when the economy starts to recover. Ha! Ha!...Read More>>

SDR's Signal the End of the Dollar  The International Monetary Fund is going to issue bonds, in SDR’s. This is the beginning of the end of the U.S. dollar as the world’s Reserve Currency. We are such suckers...Read More>> 

Oil Supplies Continue to Grow  EIA reports that crude oil inventories continued to build. This week rather than show the two charts I have shared previously I have condensed the data...Read More>> 

Chrysler Bankrupt! Chrysler filed for bankruptcy in New York at noon. OH! Bama is upset with the holdouts that chose to maximize their investor’s returns, rather than get crammed down by the administration...Read More>> 

Trailing Stop Losses If you are like many investors, why do you have a stock in your account that is down 70%?Let us resolve in 2009 to limit losses...Read More>> 

National Car Companies  The UAW looks to get 55% of Chrysler, and representation on the board, according to a report in Bloomberg. Fiat would get 20% with incentives to go to 35%, and the government keeps 10% for footing the bill. It does not look like there is too much left...Read More>>

Chinese Gold, U.S. Debt they have been buying gold over the last five years, almost doubling their reserves.  China now ranks fifth in the world of nations that report their reserves...Read More>> 

Bear Rally, Intact The rally of the last six weeks has taken on a life of its own. It is like the monster from the black lagoon, eating everything in front of it, especially my trading account balance. The SP500 is at 866...Read More>>

B of A, Shut Up and Buy It!  Ken Lewis, CEO of Bank of America, is pushing back on the Treasury and Fed forcing his bank to buy Merrill Lynch. He claims he was told not to disclose any information about the losses at Merrill Lynch...Read More>> 

Natural Gas, Ready to Explode? Natural gas is a national resource that burns clean, which should make all but the most radical environmentalist happy. You may want to look at opening a position in natural gas, you can use UNG, the natural gas ETF...Read More>> 

Gethner Testifies, Banks Rally As in the in the last six weeks, financials led the way higher. They were down pre-market and the first two hours then reversed to lead the market higher. It was the lack of news as opposed to any bad news that let the market regain its footing.  Turbo Tim did not stick his foot in his mouth...Read More>> 

Earnings Season Hangover  BAC announced before open this morning. They reported $0.44 earnings for the first quarter, compared to expectations of $0.04  They are down over 20%! ...Read More>> 

General Growth REIT in Peace  Last month consumer prices fell by 0.1% in the U.S., leaving them down 0.4% compared to the previous year. This deflation was primarily fueled by plummeting costs of energy and lower costs for food commodities. This was the first time U.S. inflation...Read More>>  

Hyperinflation Worries  Hyperinflation, it just kind of rolls off your tongue. The doom and gloomers make it sound like the world is going to end tomorrow. The government has printed over $1 trillion dollars in the last six months, but the CPI went down last month....Read More>> 

Are You a Right Wing Radical? The Homeland Security office has sent a report to states warning them about “right wing radicals”. They believe these groups may “reject federal authority in favor of state or local authority…..may oppose immigration.” Sign me up....Read More>> 

Tea Parties Tomorrow  Remember to file your taxes tomorrow, check out this web site or google “tea party” to see if there is a gathering in your area...Read More>> 

All Clear, All is Well, Maybe  I  read an article about the wild swings in the market last week, and the suspicion that there ‘might’ have been some manipulation going on. Ha, ha. Pre-market futures volume exploded on Wednesday and again on Thursday when Wells Fargo pre-announced they made almost $3 billion in the first quarter. Pre-market volume on SP500 futures contracts was up 400%...Read More>> 

Wells Fargo Makes Billions  The bear market rally got a shot from Wells Fargo; they forecast earnings of $3 billion for the first quarter before the market opened this morning. They were just so proud they could not wait until they...Read More>> 

Builders Combine, Still Going Broke News that Pulte Homes and Centex would merge to form the nation’s largest homebuilder created some excitement. Together these two lost over $1 billion in the fourth quarter of 2008. They hope that by combining they will be able to survive the current...Read More>> 

Alcoa, More Losses Ahead  The market is drifting down. It seems enthusiasm may have overplayed the reality of the economy. Buying begets buying, everyone seemed afraid of missing out. Now selling begets selling...Read More>> 

Bankrupt Advantage  When an airline goes bankrupt, it gains an advantage on its competitors. They walk away from debts, renegotiate labor contracts, and eliminate business commitments. Their competitors do not have these...Read More>> 

Public-Private Ponzi  The profits the banks bragged about on January and February may not have been as virgin as we were led to believe. I read an ‘insiders’ account of what kind of shenanigans were going on at AIG, it is shocking that there is gambling going on...Read More>> 

Let Them All Vote! ...move to grant a seat in the House of Representatives to Washington, D.C. residents. It is exciting to see our government walk a legal tightrope, this falls right in line with diluting voting requirements nationwide....Read More>> 

G-20 Excitement A mass of anarchists rallied behind a sign that said, “Capitalism isn’t working”. I looked for OH! Bama, but he overslept. He later met with the Queen. I wonder, was she impressed with the iPod...Read More>> 

Crude Oil Blues Oil prices are headed higher, whether because of dollar weakness, world economic recovery, or OPEC production cuts; the handwriting....Read More>> 

Gold Statistics Gold production from mines in 2008 was 2400 metric tons. Gold production has been declining in the last few years...Read More>>

Rally Holds  The markets lost ground today, but it wasn’t a rout. Support of 815 held on the SP500. Next week will be interesting. The rally looks intact, but there are a lot of moving parts...Read More>>

Stagflation?  What will Bernanke do if inflation takes off and he cannot take away the punch bowl? What if nobody shows up at treasury auctions, entrepreneurs do not borrow money, and businesses do not....Read More>> 

Way To Hell, that is how the E.U. President described the U.S. Stimulus. I must confess, sometimes it seems I am too strident in criticizing OH! Bama, but he...Read More>>

Bonds Headed Lower It seems that $300 billion does not buy much anymore! After a $300 billion commitment, interest rates are headed higher...Read More>>

Treasury's New Plan  Do you own treasuries?Have you sold them yet?You have been handed a gift, they are worth more than face value, right now.This will not last.The Fed committed to buy $300 billion in long-term treasuries over the next six months.What will happen when that money is....Read More>> 

Iranian Opening, Our New Ally? OH! Bama wants to open a dialogue with Iran. Good Luck. At first, I recoiled from this idea, but on reflection, I wish him luck. One of the beauties of elections...Read More>>

Pickens Plan, Immigration As a candidate, Oh! Bama was critical of the U.S. having “No energy policy”. Today we have “No energy policy”. The administration has withdrawn federal land auctions for drilling...Read More>>

Exxon Makes Giant Discovery may remember when PBR discovered the Tupi oil field off the coast of Brazil last year. It was hailed as the Western Hemisphere’s largest discovery in 30 years.  News is coming out that Exxon and Hess oil, with PBR as a minority partner have made a giant discovery in deep water...Read More>> 

Currencies, Inflation, Profits! Reuters reported that foreigners were net sellers of U.S. Securities in January. I wonder who will buy our treasuries, when foreigners pull away from the market...Read More>>

Options Expiring, Market Jumping  The SP500 was up over 770 and then fell back to close at 753, just a little lower than we started this morning. This is not a big deal; it just reminds us that the bear market is not over. The chance of bad news this week, plus options expiration, makes traders nervous....Read More>>

China Worried Chinese Premier Wen Jiabao expressed concern about the safety of U.S. securities after China’s Legislative session closed. Wen said, “We have made huge loans to the United States...Read More>>

Three Days in A Row!  We grabbed our third day up today. This may turn out to be something, if buyers come back into the market. Everyone wants to be part of a bull market. I hope that it will not end before the new buyers show up...Read More>> 

Where Did the Money Go?  Congress wants the Fed to release where the bailout money that has gone to AIG has migrated. After $162 billion, they would like to know where it went! It seems certain that much of this money was...Read More>> 

Citi Makes Money  Citi bank leaked a memo from Chairman Vikram Pandit that the bank turned a profit in January AND February! This plus Bernanke on television at the Council of Foreign Relations...Read More>>

New Week, Same Bear The Dow is currently down 53% since peaking in October 2007.  We are in the middle of the second worst correction on record...Read More>> 

Bottom, UP  We MAY have seen the bottom today. A classic ‘bottom’ is when you have a selloff setting new lows, and the market reverses mid-day to close higher. It happened so late in the trading day that it may sneak past many, but the buying was furious in the last thirty minutes...Read More>> 

Politics & Profits While the market burns, the administration has a health summit to make happy talk on how to nationalize the nation’s medical care, and Barney Frank spews more venom about banks...Read More>>

China Primes the Pump Before market opening this morning, it was reported China may double their $585 billion economic stimulus plan. This created a positive bias to the market opening...Read More>>

Another Financial Crisis This is a problem of regional balance of payments caused by localized currency fluctuations.  For the past ten years, the Eastern European countries have been trying to join the European Union...Read More>>

Play the Limbo If you bought anything today, you are down now. My computer alerts were going off so fast it sounded like the soundtrack from “Close Encounters of the Third Kind”...Read More>>

Tarp Recipient Insights I had the chance to talk with a friend last night. He is President of a bank that has taken TARP funds. I should tell you, it was an interesting conversation. They bought some securitized mortgages...Read More>>

Where is the Rally? Why do we all like to join in on a party? First thing in the morning, coffee and CNBC then FOX. This sets the tone for the day. I woke this morning to European markets are up, and I felt invigorated, ready to take on the world...Read More>>

Chanellor Oh! Bama  The Chancellor addressed the nation last night. The parallels are eerie. In elementary school, Hitler was never referred to as a socialists.  Did you know that Hitler sent Vladimir Linen to Russia in 1917 to ferment a revolution?  Australia beware you may want to bar Hillary a visa!..Read More>>

Happy Talk We need some ‘happy talk’, I wish OH! Bama would read one of Ronald Reagan’s old addresses.  It would be inspiring to hear him tell us government was not the answer, that we lived in the greatest country on earth, that the U.S. is like a shining city on the hill...>Read More>

ETF's For Safety You may be struggling with taking control of their investments rather than owning mutual funds. Probably the safest way to start investing on your own is with Exchange Traded Funds (ETF)...Read More>> 

Nationalization, Whoa! Today Chris Dodd (Chairman of the Senate Banking Committee) got into the act, telling CNBC that ‘nationalization is a real possibility”.  A loose cannon would cause less damage.  Dodd caused a run on a bank last fall, after a briefing from Treasury...Read More>>

Yawn, Oil is Up I expected the market action to run higher then turn over, to dive for the depths of despair. This would set up capitulation, which is what the market needs for buyers to be convinced a bottom is in and it is ‘safe’ to buy. Bottoms do not feel this safe. The screaming in despair cannot...Read More>>

New, New, New Plan The oil market was down again today, waiting for consumption to increase with the world recovery that is inevitable.  Why is it that simple supply and demand is ok as long as no one is making any money???Read More>>

Mission Control    The market opened under pressure this morning from sell offs overseas markets. Concerns about the GM, Chrysler, financials, and the stimulus plan drove the market down through support. This is not a happy day....Read More>>

Losers, Winners, and Stops I am always torn on whether to add to a losing or winning position.   The easy decision is to add to a loser, this verifies our ego that we made the right decision in the first place.   We say to ourselves..Read More>>

Terrorists Invited executive order allowing Palestinian refugees to immigrate to the U.S. PALESTINIAN, as in Hamas and Hezbollah, that is exactly what we need, we pay for terrorists to come to America...Read More>>

Obamanomics The $800 billion expected price tag would bring the total government commitment to over $9.7 trillion dollars to solving the financial crisis. That is enough money to pay off 90% of every home mortgage..Read More>>

TARP Rhymes with CARP   Geithner had his much anticipated press conference at 11 a.m. and financials tanked within minutes. He spoke in generalities rather than specifics. Unexpectedly...Read More>> 

Which Way Now?    Thursday and Friday were led by financials and tech.  Where do we sit today? The range of opinions varies from both extremes. Dow Theory tells us that productivity must be...Read More>> 

Rally Ho When the market ignores bad news…  With the rally today, I feel like looking around the corner. Where is the bogyman?...Read More>>

OH! Bama the Rally-Killer! OH! Bama is doing his best to ‘talk down’ the market to put additional pressure on congress to pass his stimulus package.  Insiders are referring to the President as the “rally-killer”. Today the bill is pegged at over $925,000,000,000.00 and growing...Read More>> 

President Caps Pay We now have the government telling banks that executive salaries are capped at $500,000. When you take money from the government, the wolf is in the door....Read More>> 

Beating Out a Bottom There is fear of a fall, while we wait for the next pronouncement from Capitol Hill. Earnings and expectations for the future are depressing prices as the market tries to understand the economic...Read More>>  

Ground Hog Day Until there is a clear way for the large financial institutions to regain momentum and be assured of a survival other than a weekly trip to the government for more bailouts, traders are caught...Read More>> 

GDP Better Than Expected Gross Domestic Product slid 3.8% in December. This was less than the market anticipated, but the market sank....Read More>> 

Gold to Oil There is a theory of the historical relationship between the price of oil and the price of gold.  It is an interesting theory...Read More>> 

Mini Rally, Oil & Gold Slump Then oil rallied! It made absolutely no sense. Later, the Open Market Committee of the Federal Reserve released their statement on monetary policy, and oil...Read More>> 

Treasuries Down, Oil Up, Unrest Abroad U.S. Treasury largest purchasers over the last fifteen months were Arab oil countries.  They purchased $245 billion worth. The next  largest buyer was China, who alone bought $233 billion worth...Read More>> 

Budget Deficit Up Up and Away  The U.S. budget deficit for 2009 is now projected at $1.1 trillion, more than 8% of GDP! Since our countries founding, only during WW I and WW II did we run a higher annual budget deficit. If OH! BAMA’s ‘stimulus’....Read More>> 

ETF's and REIT's Cushing is full, and tankers are being leased to store it for future delivery. Unless there is a terrorist action, or other event that scares the market, the trend is still down...Read More>> 

Super Contango You may have heard the term ‘Contango’, it is a normal condition describing the relationship between spot prices and future delivery prices. The oil market is in now in ‘Super Contango’....Read More>> 

Is the Market Seductive? It turns out that our brains are hardwired to get us into investing trouble; humans are pattern-seeking animals. Psychologists...Read More>> 

Inaugeration Day, Good Luck The market sold off throughout the session today. It started down, paused during the swearing in ceremony, and then accelerated like kids on a wagon rolling down..Read More>> 

Tarp Funds for Everyone The Treasury will get $3 billion in preferred stock, but backstops $97.5 billion in bad loans! Who negotiates for the Treasury? I think Paulson must have sent someone from the mailroom...Read More>> 

Buyers Market, Stocks on Sale I recommended a buy on GE for the long-term portfolio. We were able to fill it at or below the suggested price today. I encourage you to look at this company for your holdings. I believe it will be a great long term holding. It is selling for less than at any time in the last ten years, pays a great dividend and is situated to profit in different sectors as the economy recover...Read More>> 

$1.70 Gas for Next Year Today you can buy $2000 worth of one of these ETF’s and drive next year for the same net price. You might want to buy a few years...Read More>> 

Citi & Crude Oil Citi is trying to sell Smith Barney to raise money. Robert Rubin left just in time to distance himself from the blowup. The new brokerage could be a real mouthful, “Solomon Smith Barney Morgan Stanley"....Read More>> 

TBT ETF, Inflation and Gold This trade will gain as interest rates rise.My premise is that interest rates will have to rise as the government begins to borrow more and more.The government has two options; borrow or...Read More>> 

Lost Friends and Markets We had a saying in the construction business, “If you want a friend, get a dog.” It was an admission of the ruthlessness of the competition. You bid on jobs..Read More>> 

Market Down, Unemployment Up The market giveth the market taketh away! I was excited yesterday as we were approaching the highs set on Election Day. Today we backed up more....Read More>> 

Global Warming & OH! BAMA! "2008 was cooler than the previous year, confounding dire predictions of melting ice caps and extreme weather patterns.” “2008 was the year man-made global warming was disproved...Read More>> 

ENER1 a Jolt This small company makes lithium-ion batteries for hybrid electric vehicles. This is a speculative play that I would normally stay away from...Read More>> 

Swing Trades, Oil Stupidity A great month for our swing trades, oil goes higher but will fall later...Read More>>

Peak Oil Peak Oil does not predict or mean that we will run out of oil, but that production will peak, flatten and then decline on existing wells. Read More>> 

Oil & Treasuries, Every Bubble Bursts!  so they hold back and hold back and finally the dam breaks, the bubble bursts, the market tumbles. If we are in the right place, we make a lot of money...Read More>> 

GM, Ford and Chrysler Merry Christmas GM and Chrysler are broken. Unless the government forces the unions to give up their gold plated employment and retirement...Read More>> 

Contrarians Beware I cannot predict when oil will begin its ascent to $150 a barrel and higher. I just know that it will. I believe the price will depend not on the world economy, but the perception...Read More>> 

Trailing Stops and Peak Oil We only need to check the closing price daily. This is to adjust the stop loss price up if we have set a new high, and to check if the price has fallen below ourtrailing stop. Remember, thetrailing stop is based...Read More>> 

Trailing Stops For Bigger Gains The question remains, why do you have a stock in your account that is down 70%? Let us resolve in 2009 to limit losses. At this..Read More>> 

Evaluate & Rebalance your Portfolio A perfect example of a changing business model is the Canadian Oil sands. Public information told us the cost of production was over $50 a barrel. Oil was going up every day and predictions of worldwide shortages we....Read More>> 

Quantitative Easing=Inflation So what is “Quantitative Easing” of credit markets?  Simply put “Print more money”. This euphuism describes what the FED will do since it cannot cut interest rates...Read More>> 

World Improvers and the Road to Serfdom  “Planning unites almost all of the single-minded idealists, all the men and women who have devoted themselves to a single task.  The hopes they place in planning, however, are the result not of a comprehensive view of society but rather of a verylimited view...Read More>> 

GM, a Financial Institution?  The Secretary is authorized to establish the Troubled Asset Relief Program (or `TARP') to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution...READ MORE>> 

Beware of your Rat Brain  This technical term is part of our psyche going back to Neanderthal...More>> 

$100 billion out of thin air
Question:  Will these operations be reserve neutral?
Answer:  No, these operations will be financed through the creation of additional bank...Read More>> 

Treasury at 0.01% interest! Gosh ma, if we put enough in, we can buy a toaster! The Santa Claus rally....Read More>> 

TIP'S for you! Every recession has been followed by inflation. It is a direct result of the “priming of the pump” that goes on to try change the natural occurrences of boom and bust....Read More>> 

300% ETF's I think the market is getting ready to have a dramatic rally that could go as high as 10,000 or 10,500 on the DOW. I am an amateur chartist...Read More>> 

Three wise men drove their electric hybrid camels over the hill and across the Potomac in the spirit of Christmas. They traveled night and day to ask....Read More>>. 

Hedgies and Mutuals withdrawals estimated at $19.5 billion for the weekending November 19. That is a lot of dough.....Read More>> 

The roller coaster ride that never ends. The market is acting like a schizophrenic teenager. When you decided to invest in the stock market, did you know that buy and hold was a lie....Read More>> 

Who can we blame. who can we attack?
Competing parties with elections approaching in India paint a bleak picture for cool heads to prevail....Read More>> 

10 year Treasuries @ 3.1%
News from the capital is good, but gives us a warning. Treasury prices plunged on Monday....Read More>> 

Troubled Banks, Gulfstreams & 600 Billion
The FDIC says its list of problem banks shot up to 171 during the third quarter. There were 117 banks....... 

OH! Bama! Bonds
“The Evil of the U.S. Dollar”, argues that the Middle East should not take dollars for oil. 

Please God, let there be one more oil boom!
Ipromise not to piss off all the money this time”. If this quote captures how you feel, you are not alone. 

When your in a hole, stop digging! 
“If you find yourself in a hole, quit digging!” The best thing we can do in this market is stop. For short term investors just sell on rallies when you get to any gain. For long term investors sit tight. Some of the smartest guys I know 

Click on the month for achives of our newsletters.

We hope you enjoy reading them..we enjoyed writing them!

Sign up for daily delivery to your email Here

Leave us your comments at feedback@galtstock.com

March 2009 Newsletters

Feb. 2009 Newsletters

Jan. 2009 Newsletters

Dec. 2008 Newsletters

Nov. 2008 Newsletters

Oct. 2008 Newsletters

Sept. 2008 Newsletters 

Home