Santa Bama
Research for Online Investors

by John Dalt

8/05/09

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 development funds for hybrid vehicle powerplants.  A few more billion will go to Michigan and Indiana.

What good would it do to curb earmarks in congress, when the President hands out political grease?  It looks like the $800 billion stimulus plan is a bottomless pit that Oh! Bama can use to buy political favors.

Last Thursday, you became the largest shareholder in Citibank (C).  The federal government exchanged $25 billion in TARP funds for common stock, the remaining $20 billion will remain in preferred stock paying 8% interest.  We now own 34% of Citibank.

Corporate insiders are selling stock at a 4 to 1 ratio.  They are selling four shares for every share they buy.  Insiders are a good indication of sentiment in the corporate suite.  They know the landscape for their company and work with the challenges they face every day.  They must not like what they see…

My concern on High Frequency Trading (HFT) is on the radar of the Securities Exchange Commission (SEC).  The SEC announced yesterday that they would push to eliminate “flash orders.”  This is the most egregious abuse of the system.  It is akin to front running the market.  Flash orders are an abuse of market information.  HFT place orders with high-speed computers in front of other orders that have already been placed, but the rest of the market is not aware of yet.  Flash orders are exactly what my concerns were in Monday’s article.  The New York Times had an article on the SEC.

The U.S. Treasury sold $205 billion in bonds last week, compared to $450 Billion in all of 2007!  Buy TBT on any dip, interest rates will spike once the Fed quits buying treasuries with printed money.  TBT is up 4% today.  We have traded TBT in the SwingTrader a few times in and made money EVERY time.  If you would like these kinds of tips every week, you can subscribe for less than two dollars per day.  You will make the annual subscriber fee on one trade!

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.

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