Tuesday, August 31, 2010

The Poor Have No Chance of Joining the Rich, the Game is Rigged


"Financiers - like bank robbers - do not create wealth. They merely distribute it. While the mob may idolize holdup men in good times, in the bad times it lynches them. What they will do to the new money men when their blood is up, we wait eagerly to find out." - Mobs, Messiahs and Markets.

As our economy hurtles towards its meeting with destiny, the political class seeks to assign blame on their enemies for this Greater Depression. The Republicans would like you to believe that Bill Clinton, Robert Rubin, Chris Dodd, and Barney Frank and their Community Reinvest Act caused the collapse of our financial system. Democrats want you to believe that George Bush and his band of unregulated free market capitalists created a financial disaster of epic proportions. The truth is that America has been captured by a financial class that makes no distinction between parties. These barbarians have sucked the life out of a once productive nation by raping and pillaging with impunity while enriching only them. They live in 20,000 square foot $10 million mansions in Greenwich, CT and in $3 million dollar penthouses on Central Park West.

These are the robber barons that represent the Age of Mammon. The greed, avarice, gluttony and acute materialism of these American traitors has not been seen in this country since the 1920's. The hedge fund managers and Wall Street bank executives that occupy the mansions and penthouses evidently don't find much time to read the bible in their downtime from raping and pillaging the wealth of the middle class. There are cocktail parties and $5,000 a plate political "fundraisers" to attend. You can't be cheap when buying off your protection in Washington DC. (more)

Using this one method I turned a $14,000 trade into a $75,000 profit in just 8 months.


Bear Bet: China Crash Now Simply Unavoidable

Three numbers should suffice to give Chinese economic policymakers a sleepless night: 65.4 million, $28.7 billion and $2.45 trillion.

In order, they are the estimate by a government researcher of how many apartments stand vacant in China, many of them bought as speculative investments; the country's trade surplus in July; and the international reserves the central bank has accumulated by buying dollars to hold down the yuan.

Together, they encapsulate the distortions of an economy that favors investment by suppressing the cost of capital and other inputs at the expense of consumers, whose spending power is held down by low wages and low deposit rates.

Unable to sell at home all that it produces, China exports the rest.

This template has powered 30 years of headlong growth that is catapulting China past Japan to become the world's largest economy after the United States. (more)

Using this one method I turned a $14,000 trade into a $75,000 profit in just 8 months.

Here Are The Biggest Fund Losers From The Retail Stock Market Boycott


It is no surprise that Charles Schwab is trading at 52 week lows: as long highlighted, for retail brokers to make money, someone has to trade. And since Schwab can't charge the computers, the banks, and the Fed for transactions (especially the latter which seems to enjoy dark venues more than anything), the future is sure not bright for the E-Trade's (potentially the only investment in Citadel's portfolio, which is for the second year in a row below its high water mark, making money this year) and the Schwabs. Yet due to their relatively lean cost structure, retail brokers at least do not have to worry much about redemptions and capital under management. Which is most certainly not true for the mutual funds out there, many of which are also public, and will soon be whacked doubly more so as a result of plunging asset holdings, and tumbling transactions. So instead of shorting Schwab, here are the mutual funds, classified courtesy of Moody's, which have the most to lose from the ongoing $50 billion+ YTD withdrawal by investors from domestic stock funds (hint: Waddell & Reed, and Janus). (more)

Stock Assault 2.0 - Artificial Intelligence Stock Market Software

BNN: Top Picks

Rick Stuchberry, portfolio manager, Macquarie Private Wealth, shares his top picks.

click here for video

Safe investments with reasonable returns

Severe stock market corrections like the Dow’s 23 per cent plunge in 1987 and the mysterious derivative trade that led to a 600-point drop in the Dow on May 6 this year have helped drive small investors out of the market.

Canadians, growing increasingly weary over market volatility, entered 2010 sitting on a mountain of cash – about $1 trillion to be exact, mostly in bank accounts and GICs. And over the course of the year they’ve pumped another $100 billion into bank accounts.

On the surface it might look like a sensible thing to do. After all, you can’t lose money if it’s squirreled away under a mattress or in a bank account.

Or can you?

Because all this money is largely stowed away in savings accounts and GICs, all you can earn on a short-term savings account is about 0.25 per cent and on five-year deposits about 4 per cent. (more)

Using this one method I turned a $14,000 trade into a $75,000 profit in just 8 months.

Dividend Watch List

Watch List Summary
The best performing stock from the previous list was Harleysville (HGIC) which rose 4% The worst performing stock was Medtronic (MDT) which fell 14%.

Topping the list this week is Johnson & Johnson (JNJ). Based on IQTrends (http://www.iqtrends.com/), JNJ is undervalued at or near 3.5% yield. The current yield is 3.7%. Trailing P/E of 12 is 25% below its average 5 years P/E of 16. We suggest readers adding JNJ to your investment watch list.

Second on the list is Intel (INTC). After cutting their sales and margin forecast down on Friday, stock rose 1%. Could the negative news be priced in? Only time will tell. Intel is trading at 11x trailing earnings. Compared that to its 5 years average of 21x, it could be a bargain. Analyst will have a weekend full of downward revision so we expect little more pressure next week. But given the stock is yielding 3.4% compared to the 5 years average yield of 2.3%, the risk/reward is more attractive now. Both JNJ and INTC have payout ratio below 50%. (more)

Obama could kill fossil fuels overnight with a nuclear dash for thorium

by Ambrose Evans Pritchard,

We could then stop arguing about wind mills, deepwater drilling, IPCC hockey sticks, or strategic reliance on the Kremlin. History will move on fast.

Muddling on with the status quo is not a grown-up policy. The International Energy Agency says the world must invest $26 trillion (£16.7 trillion) over the next 20 years to avert an energy shock. The scramble for scarce fuel is already leading to friction between China, India, and the West.

There is no certain bet in nuclear physics but work by Nobel laureate Carlo Rubbia at CERN (European Organization for Nuclear Research) on the use of thorium as a cheap, clean and safe alternative to uranium in reactors may be the magic bullet we have all been hoping for, though we have barely begun to crack the potential of solar power.

Dr Rubbia says a tonne of the silvery metal – named after the Norse god of thunder, who also gave us Thor’s day or Thursday - produces as much energy as 200 tonnes of uranium, or 3,500,000 tonnes of coal. A mere fistful would light London for a week. (more)

Money Today - September 2010

Money Today is a comprehensive, easy-to-read personal finance magazine that steers clear of the jargon thats common to money-related issues. The content is both topical and timeless. Most important, it is utilitarian, offering readers clear tips on managing their money--be it investing in mutual funds, buying stocks or a house or car. It even offers help when negotiating a new salary or setting up your own business. In short, Money Today takes the guesswork out of investing and helps you maximize your returns.

read more here

A Way for Traders to Profit from Failing Banks

As the economy continues to slide, regional banks are failing at an alarming rate. So far, in 2010, 109 banks have failed. This brings the total number of bank failures since 2007 to 277.

As a result, many regional banks provide excellent shorting opportunities. California-based East West Bancorp (NYSE: EWBC) is one such candidate.

The holding company for East West Bank, EWBC offers a full range of personal and business banking deposit and loan services. Although the company has thus far managed to maintain profitability, this picture may be about to change.

EWBC appears technically vulnerable. The stock is in an intermediate-term downtrend and falling. It is currently testing an important resistance zone between $14.10 and $15.00. (more)

When Will Silver Prices Explode?

Jason Hommel,

Many analysts and investors try to guess when silver prices will explode. They make these guesses based on the charts, or even by the fundamentals like I do. I pointed out the fundamental supply and demand numbers in my last article, "1% of 1%".

The Tiny Silver Market attracts 1% of 1%, or $1 out of every $10,000 in the US Banking system, each year.

By the time 1% of paper money tries to buy silver in one year, there will be 100 times as much investor buying of silver as today, which will be about $180 billion trying to buy only 750 million ounces of annual world production, which implies a silver price of about $240/oz., or perhaps higher.

1% of 1% August 23rd, 2010 (The Silver Market is tiny, tiny, tiny!)

That article led Al Korelin and Steve Carr to call me up for a 13-minute radio interview on the Korelin Economics Report. See here:


Please listen to that radio segment; it's very powerful information.

The silver fundamentals are so great, and the silver market is so small, that at any time, the silver price can double, up from about $18-19/oz. now, to about $40/oz. (more)

Using this one method I turned a $14,000 trade into a $75,000 profit in just 8 months.