Jack "Tin Man" Welch...the Lex Luther of American finance? ROTFLMAO!
capitalstool.com
Mark’s Market Commentary – September 26, 2002
Every one at some point in their career gets The Memo.
This is a piece of correspondence which comes from the top, and nobody dares to question it. It almost has a magical “aura” about it. You just do what the memo says.
Today, The Memo went out to the Gang of 22, instructing them to “support” some key Dow stocks, like UTX, C, JPM, IBM, and GE. Massive bids were put under this group, in a desperate attempt to push the Dow back above “The Number”.
They huffed and they puffed. JPM and IBM couldn’t be moved. So the Gang piled on UTX, one of the heavier weighted stocks, and finally got it moving. Other stocks like IP and CAT got caught up in the backdraft, and the shorts panicked out of those also.
Another person who got The Memo was Paul O’Neill, who immediately issued rosy “recovery” projections for the rest of the year.
Other old props were dragged out, the most notorious being Jeffrey “Regis Philbin” Immelt of GE, who for the 8th time this year, promised 17% growth. Of course, he learned how to “hide” future earnings by stashing special reserves somewhere on the balance sheet, so he could bring these standposts out if necessary to “support” the next quarter’s earnings target. Thanks to his extensive tuition under Jack “Tin Man” Welch.
Capitalstool’s Color Commentator was on the scene, and he had this to report about the Tin Man:
“This is the first installment in the Liars' Almanac. Liar CSFirstBullShit is reporting that Liar GE may be fudging numbers after all. So given the choice of two liars, which one do you pick? Since market has already discounted the lie by GeneralEgregious then you have to sell it now that it has been marked up. This means you must go with the habitual and sociopathic tendencies of the ever reliable CSFB. When dealing with two enemies one must ally oneself with the one who is for the moment the stronger of the two. Not that it’s any big surprise that General Egregious is tweaking its numbers again. It’s all in the timing. Criminal stock forensics a must in every trader’s vocabulary of tools.”
“GE the company formerly run by the Lex Luther of the Markets, Jack Welch, is a gaming operation, heavy into all the scams run thru the 90s. In that sense it is a great American company since it adopted all the tricks of the Casino as the game morphed into banking, derivatives, loan sharking, margin explosion and outright fraud, malfeasance and grotesque earnings projection. Just look at Welch. Just look at him. Would you buy a used Pontiac from that guy on the open lot without 3 mechanics and at least a one year warranty? Note the name. What does it mean? What does it mean to Welch on a customer?”
“There is a whole school that believes the surname often defines the user's karma, not always but the affinity is there. Most importantly this is the definitive era of the 'Emperor Wearing No Clothes'. Those who are championed as Kings are really just the opposite, they are thieves and peddlers. Invert the media picture constantly and the truth is found. Turn the little Christmas glass ball upside down and shake it, therein is the real story, the ball explodes in your hand; the smiling Santa in the reindeer scene turns into a screeching, decapitated devil spilling blood and gut out over the snowy, snow.”
So after all that work, we went up and down and up and down, but still could not close at “The Number” on the Dow.
Missed it by 3 points.
And poor GE opened up strong, but collapsed at the end of the day, along with IBM.
In the meantime, several Nasdaq stocks which are typically thown in the back of the El Camino and mounted for a quick session during one of these meltups were not so lucky.
The Color Commentator had the following to say:
“It surely looks like these prom queens all got date raped today. They were hoping for at least a weekend over, maybe a trip to Catalina, instead they all got groped and then rolled out of the passenger side of the speeding Jag; torn nylons, broken heels, twisted brassiere straps. The usual predictable abuses. Time to call Yellow Cab.”
“Looks like dumpage rather than accumulation in last years favorite whore, QLGC. Now no one wants to be seen with it, no one wants to bring a dockside hooker to the prom that has shared its bed with millions of drunken sailors. Ruthless crack addled Market.”
It is simply amazing how much “dead wood” is out there on Wall Street. These pyramid companies masquerading as investment banking firms still have hordes of analysts working in bullpens adjacent to the boiler rooms pumping out recommendations on blown up stocks in lousy sectors. And they still have the nerve to assign “overweight” ratings to these dogs:
From CBS MarketWatch:
Morgan sees miss for Polycom in Q3 (PLCM) by Michael Baron
"Polycom (PLCM) is down 39 cents, or 4.8 percent, to $7.75 after Morgan Stanley said that it believes the Pleasanton, Calif., communications equipment will fall short of its guidance in the third quarter. The firm said that recent channel and industry checks have identified "significant market deterioration," and it lowered its estimates to earnings of 8 cents a share on revenue of $112 million from earnings of 14 cents a share on revenue of $125 million. Analysts polled by Thomson First Call are currently looking for a profit of 13 cents a share in the period on average. Morgan sees fair value of the stock at around $10, but it believes there is downside risk to one times net cash, or around $5. The firm left its "overweight" rating on the stock intact."
And you still have a high number of no-name money management firms who claim to have marauding herds of analysts roaming around performing “channel checks” to see if they can dig up some useless statistic that can be bent just enough to label the company “intriguing” with a “compelling valuation”.
Over 2 ½ years into a bear market, and we still have this excess baggage milling around eating up management fees? I find it incredible!
When are these people going to get fired?
When are we going to see some fund closures or failures?
How long does the bear market have to continue before we see a dramatic contraction in the number of supporters?
When are people going to wake up, start selling, and cause some real redemptions? Redemptions which cannot be handled by your mutual fund tapping Bank of America’s Prime Brokerage Credit Line at 0% interest and no payments until “the bear market is over?”
Can the worst case really be unfolding?
Has Wall Street done such an expert public relations job, it has managed to forestall the panic stage of the bear market for 29 months?
What happens when all these hopers who cling to every bit of positive news decide to get out at the same time?
Is it possible that there will be an orderly exit?
Can the greatest mania really unwind without some sort of a panic?
Can Greenspan and the Gang of 22 really pull off a “soft landing” for the stock market?
How much longer can the hopers continue to “believe”?
How much higher can trading velocity and speculative intensity be pushed, so late in a bear market?
I really don’t think earnings, war, scandals, or technicals have any bearing on this market. None of these factors has successfully shaken the public’s confidence in stocks. The bear market has been propped up and sustained solely on the raw power of extraordinary liquidity and the greatest public relations jam job in history.
Right now there is some concern, but no fear in the market. No liquidity has left the market, which enables the hedge fund short sellers to easily push the market up when they get squeezed.
One day, the short squeezes will be inconsequential to the flood of selling when the sheep finally get a clue and decide to hit the fire escape at the same time.
There will be no meaningful “bottom” to this bear market UNTIL THERE IS A DRAMATIC SHIFT IN SENTIMENT AND LIQUIDITY.
What to Expect Next
The rally is quickly running into exhaustion. Another mania spike on the NYSE TICK around +1100 this morning, and then the jackhammer +1000 TICKs in the afternoon (so many I couldn’t count). So it appears that the dippers and the short coverers are in the usual hysterical panic mode.
We could have a failure tomorrow. Or we could make a run to the 50-day average. So far, the volume isn’t drying up yet, so we may have a few more days to go.
As usual, I was wrong about the gold stocks. I will continue to hold at least one gold and one silver stock, just in case this major “accident” over at JP Morgan materializes when nobody expects it.
Will add some more shorts if we go up on lighter volume. But if volume starts accelerating, we’ll have to cover some positions.
Position Summary:
Doubled quarter position on KBH to half.
Doubled quarter position on BBBY to half.
We are 77% short, 3% long, 20% cash.
Half Short:
XLNX at $22
CLS at $25
QCOM at $30
DELL at $28
TOL at $27
MMM at $128
COCO at $37.
T at $13
NCEN at $30
PG at $91
CDWC at $46
LEN at $56
COH at $28
IDPH at $42
AMAT at $13
BBBY at $36
KBH at $49
Quarter Short:
FRE at $68
EXPE at $78
MCHP at $33
SBUX at $24
EBAY at $60
NYT at $51
WHR at $78
AMGN at $44
CCR at $49
NVLS at $52
SYMC at $42.
INTC at $31
MBI at $54
PNRA at $34
JPM at $35
YHOO at $19
MXIM at $39
THC at $47
QLGC at $39
Half Long:
BGO at $1.31
HL at $4.10 |
