re: ["we hit $8400 Dow...does that mean some nasty geopolitical
event is now on deck to validate the "short 8400" call?"]
There are many potential "events" out there, but those would
just be gravy. My thoughts don't have anything to do with
any geopolitical events.
I think the US and global economic fundamentals are still
terrible, and will get worse relatively soon.
I wrote a while back when the DOW was approaching it's lows
that the market needed two things... a change in mark to
market, and the re-institution of the uptick rule, or at
least the spotlight being shined on naked shorting.
We got it and the resulting short squeeze.
Missing months, massaged and manipulated bank earnings,
postponed stress test results and less than catastrophic
housing numbers - are not what sustainable rallies are
made of imho.
A sustainable rally will be about one thing and one thing only...
- JOBS.
Jobs - Jobs - Jobs.
While the market generally turns up before employment does,
there is nothing on the horizon (beside manipulating/revising
the numbers) that's going to improve the jobs picture anytime
soon.
US GDP is 2/3rds consumer spending.
The US consumer has no cash, and no savings.
Banks are not lending and 50% of all existing outstanding
consumer credit just got cut off.
People are still scared $hitless about losing their jobs, and
the banks are gouging them with junk fees, higher rates, and
higher payments. Taxes are going up - and much higher than
anyone would believe. Shopping malls are empty and ghost
strip malls are popping up left and right in middle America.
America is rebuilding it's non-existent savings cushion,
it's not buying new cars, appliances, furniture, or homes.
And if things get worse, it has nothing to fall back on...
seattletimes.nwsource.com
“A MetLife study released last week found that 50 percent of
Americans said they have only a one-month cushion — roughly
two paychecks — or less before they would be unable to fully
meet their financial obligations if they were to lose their
jobs. More disturbing is that 28 percent said they could not
make ends meet for longer than two weeks without their jobs.”
50 percent said they have only a one-month cushion or less
before they would be unable to fully meet their financial obligations.
28 percent said they could not make ends meet for longer
than two weeks.
29 percent of people earning $100,000+/year said they’d
struggle to pay bills after a month.
86 percent have cut back spending.
Banks aren't lending, and the shadow banking system no longer
exists. Credit has been cut off and the US consumer has no
savings. Where is sustainable spending going to come from?
China's imports are not enough to buoy the world economy.
Europe may be worse off than the US. Japan is a basket case,
and we are about to see Chrysler and probably GM go into
bankruptcy... and both will shut down production for the bulk
of the summer.
This will create a substantial negative ripple effect
in the U.S. economy.
Playing off Chrysler, or GM bankruptcies as non-events
because the bankruptcies will be "surgical," is like
telling someone not to worry because their surgery is minor.
Minor surgery is when someone else is going under the knife,
major surgery is when you are going under the knife.
When has anything to do with these bailouts and interventions
gone the way they said it would, or been better than expected?
Remember when they told us total bank losses would be $100
billion? That was about $2.6 trillion dollars ago.
The IMF just revised it's numbers for bank losses up from $2.4
to now $4+ Trillion dollars. Housing and ISM numbers are
horrible, but just a little less horrible.
....so let's rally!
Credit card losses are going to continue to rise.
I see no significant recovery in housing prices.
Commercial Real Estate is going to be a huge negative
and is only just now beginning to unravel.
And there's another huge blip of adjustable mortgages that
are going to reset, and a ton of foreclosures that were
held in forbearance that are soon to come to market.
And I agree with David Rosenberg, the market is hardly cheap...
"Earnings forecasts are still being trimmed steadily for the
balance of the year. In fact, forward P/E multiple of 15x
operating, and 30x on reported EPS are not that compelling."
And I'll add another HUGE shoe that's going to drop like
a lead balloon in 2010 - collapsing city and state budgets.
Tax revenues are cratering. Cities and States got Fed bailouts
and tapped reserves this year. I've talked to a couple of
well placed people locally, and they are already telling their
city & county employees... "we can not guarantee you that you'll
have a job in 2010. You're fine through year end... but, make
plans for 'the worst' next year, because there will be
substantial cut backs and layoffs."
State & Local governments are among the largest employers
in many communities. I believe one of the biggest stories
in 2010 is going to be the catastrophic budget and job cuts
for state and local workers.
People are getting tired of government employees getting
cost of living, or automatic 4% annual pay raises with
generous pensions and gold-plated benefit packages.
Try passing another $800 billion dollar stimulus next
year to bail out state and local governments that are
raising taxes and nickel and dimeing the citizenry already.
It's broadly talked about that they're trying to to push
this move to DOW 9000 and then keep the floor at 8k.
In my opinion, it's been too blatant. There have been many
good pieces written on it - Zerohedge.com had a good piece
on Goldman's rather obvious PPT role.
I think everyone has their eyes on DOW 9000 and will be
inching towards the exit door soon.
I've traded in & out of DIA (short) over the last couple of
weeks, and did scale in today as we reached (breached) the
January 8405 high.
If I get stopped out - I get stopped out.
DOW 9000 is a big round number and isn't too far away. If
I don't catch a turn here, I'll try again at 9K.
As a trader, if you have a firm conviction on the fundamentals,
and also have strong confirmation technically in the charts -
you have to make the trade.
This isn't about making "a call" - it's about making a
trade. To me, trades are mechanical and calls are emotional.
This one was pretty mechanical.
I believe there's a helluva lot more downside risk than upside
to this market. One reason, is because I know the degree of
manipulation that was involved in propping up this market.
And talking talking about manipulation...
I didn't see much comment about the one thing that stood out
most blatantly about Goldman's recent earnings results.
It was their 1% tax rate.
The evil empire paid a 1% tax rate because the bulk of their
earnings came from "offshore."
Now remember, the G-20 just closed all the banking havens
so YOU can't take YOUR money offshore.
And what Tax Rate did you pay -- I'd bet it's a helluva lot
higher than 1 %?
Goldman lowered their tax rate from 34% to 1%, while getting
$10 billion in TARP taxpayer money, plus government guarantees,
and another $14 billion out the backdoor of the black hole
known as AIG.
Yes, America -- we got punked.
Bend over, grab your ankles, and say...
"Thank You Hank - may I have another?"
Goldman not only lined their pockets with $24 billion dollars
of our money, they got Hank Paulson & cronies to eliminate
40% of their competition too!
bloomberg.com
By Christine Harper
Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc., which got
$10 billion in cash and debt guarantees from the U.S. government
in October [and another $14 billion from AIG]...
The company’s effective income tax rate dropped to
1 percent from 34.1 percent, New York-based Goldman Sachs
said today in a statement. The firm reported a $2.3 billion
profit for the year after paying $10.9 billion in employee
compensation and benefits.
Goldman Sachs, which today reported its first quarterly loss
since going public in 1999, lowered its rate with more tax
credits as a percentage of earnings and because of “changes in
geographic earnings mix,” the company said.
The rate decline looks “a little extreme,” said Robert
Willens, president and chief executive officer of tax and
accounting advisory firm Robert Willens LLC.
“I was definitely taken aback,” Willens said. “Clearly they
have taken steps to ensure that a lot of their income is
earned in lower-tax jurisdictions.”
U.S. Representative Lloyd Doggett, a Texas Democrat who serves
on the tax-writing House Ways and Means Committee, said steps
by Goldman Sachs and other banks shifting income to countries
with lower taxes is cause for concern.
Doggett said...
“With the right hand out begging for bailout money, the
left is hiding it offshore.”
-------------------------------------------------------------
Offshore!
...Whodathunkit?!?!
1% taxes for Goldman and a tax cheat for every Cabinet position.
Taxes & losses are for you -- bailout billions, all profits
and fat bonuses are for them.
What about that deal don't you understand debt slave?
And if you open your mouth... that's soon to be a hate crime.
And if you protest at a Tea Party... then you're a racist who's
angry that a Black Man is in the White House.
And if you open your mouth AND protest ... then you're
obviously a modern militia member and a terrorist, and
you're gonna get slapped with the Patriot Act and maybe
sent to Poland for a little water boarding vacation.
So just shut up, hand over your guns (and put a tarp over
that bible & picture of Jesus while you're at it), pay
your new carbon taxes and be thankful that we don't turn
your useless eater/carbon emitting ass into soylent green
while we're at it.
Any questions?
SOTB |
