alevin's account talk

[alevin]

I've been reading about how recessions end (or is it markets recover?) when nobody is willing to buy stocks anymore. Period. I've been sceptical that the market emotional cycle really ever got to that point, but I'm starting to become a believer after reading this tonight....from one of my favorite sites: http://www.decisionpoint.com/TAC/NEWMAN.html

For kicks, we did a Google search for "most heavily shorted stocks" and amongst the results found a list of ten stocks from 2003 (http://tinyurl.com/dl3huf). Several of the group are now extinct but the ones still extant are typically so incredibly over owned even today that we can only wonder how anyone can trust the stock market. Take Cheesecake Factory (CAKE) and Molex Corp. (MOLX) for instance, each of which have at least 60% more stock owned by large block owners than the companies have issued. These are not small fly-by-night companies; CAKE has sales of $1.6 billion and MOLX has sales of $3.2 billion.

But we went another step further and then searched for “highest percentage of float short” and came up with equally disturbing results, pulling in a Bespoke Research study from September 28, 2008. We only checked ten of the 25 listed stocks, enough to further fortify our determination that the markets are broken. For each, large block owners alone accounted for well over 100% of the total of authorized share issuance.The companies included Web MD (WBMD), Sears Holding (SHLD), Cree Inc. (CREE) and Mylan Labs (MYL). Five companies had large block owners of more than DOUBLE the authorized shares issued. The five included Lennar (LEN), Martin Marietta (MLM), Big Lots Ohio (BIG), Chipotle Mexican Grill (CMG) and Panera Bread (PNRA). All have revenues well in excess of $1 billion. The worst offense to shareholders was PNRA, which has 29.5 million shares outstanding but somehow has large block owners of 69.5 million shares.

We do not make this stuff up. The short sale mechanics of the U.S. stock market are horribly broken. Investors are well advised not to trust anything they hear and only half of what they see.Most unfortunately, the agency responsible for keeping track of stock ownership is fighting to do away with paper certificates, the only way one can currently certify ownership without any doubt as to legitimacy. Given the statistics we have presented in past months, a brokerage account entry proves nothing. Blue Nile (NILE) has 14.5 million shares authorized to trade, yet 38.2 million shares reside in brokerage accounts.


Transfer Agent Lori Livingston was so alarmed about the DTCC’s moves towards paperless “ownership” that she wrote the SEC to question their operations, pleading that “it has become more and more difficult to determine who owns the shares, who is trading them and if the trading is proper.” You can read her letter at http://tinyurl.com/dbtlsh. The DTC has termed the move to paperless ownership “dematerialization.” For all intents and purposes, this is a perfect description of what is to come and amply defines a sad future for investors.

My apologies in advance if the colors make things harder to read, but it was already hard to read without the colors. There would be lynchings if people knew who to lynch. O-M-G!!!!!!! :blink: and I was just starting to enjoy buying single stocks too.

 

[Pschiffdicpal]

The despicable bastards, we should all ask for hardship withdraws and bankrupt TSP HELL with the taxes

 

[alevin]

Actually Schiffpal, I'm thinking of loaning TSP$ to myself before interest rates skyrocket-enough to pay for critical major home maintenance needed before the end of 2010.

On a totally other note-wow, tonight I did something I never did before-went door to door, rounding up write-in candidates for 4 vacant local rural fire district positions. elections are tomorrow, opened my ballot tonight and discovered none of the 4 people who have served as district reps for 30 years or more-were on the ballot! Nobody filed! 4-years with no tax district representation for contracts with the city fire department? 4-years with no legal point of contact for the CPA who handles the fire district taxes and contract negotiations? Yeeeow!

Problem was that I couldn't remember the names of the senior citizens who were always on the ballot all these years-they live somewhere down the road from me, never actually met them, talked to a couple of them on the phone a couple years ago only. Anyway, I did the walk and talk with neighbors my age and a couple older ones, got 2 others to consent to put their names as write-ins on the ballot alongside mine, and got several other nearby neighbors to say they'd write our names in on the ballot too, so we'd have a legally functioning fire district at least.

Small towns, even so, neighbors don't all know each other, even in a local neighborhood. Church members stick to fellow church members, old-timers talk to oldtimers, people do limited talking over the fence with immediate neighbors-sometimes. So tonight, I talked to a number of people in the neighborhood I knew of secondhand before, but now am acquainted with firsthand slightly. there must be some good come out of it for our neighborhood, I'm not in the running for personal jollies so I hope it makes a dif for the neighborhood. Talk about kicking into high gear tonight when I discovered the crisis in front of us all. Didn't even come home til 830 or so and quit yacking up the nearby neighbors about the need to vote and vote for the slate of write-in candidates, their nearby neighbors, to keep our fire protection situation semifunctional legally.

No idea whether a handful of write-in votes is sufficient to take care of the ballot deficiency or not, but at least we're making the effort given the limited amount of time to address the situation. Geez, Wednesday should tell the tale on our fire district saga-its been evolving and not in a positive way for the past several years already, we're such a small weird tax base situation.

 

[XL-entLady]

Gold star, Allie, I'm so proud of you! So many people do nothing about their political situation except to b***h after the elections are all over. But you spent precious time to try to proactively correct a bad situation beforehand in a positive way.

{standing up and clapping hands} Brava! Brava!

Lady

 

[alevin]

While I love rose-tinted glasses when I'm sightseeing, I prefer true color and natural lighting when it comes to my finances.

This chart is helping me manage my expectations for my TSP performance between now and the time I retire-not how I wish it would be, but how it may really be, unless I can market time it better, and manage my outside accounts even better.
http://dshort.com/charts/total-return-bear-comparisons.html?total-bear-comps-2000-1929-extended
http://dshort.com/articles/2009/total-return-comparisons-03.html

In real (inflation-adjusted) terms, the S&P Composite needed 29.25 years to regain the 1929 pre-crash high. However, with dividends reinvested, the inflation-adjusted total return was an impressive 385.9% when the index price finally broke even in November 1958.
... Given the much lower dividend yield over the past two decades, the prospects [going forward today] are far less encouraging.
This new chart shows both the index price (excluding dividends) and total return (with dividends). Just as the first wave of the Boomer generation hit mid-career, dividend yields went into freefall [around 1980-in other words, the growth from reinvested dividends now vs. then is going to be very different chart pattern-more similar to growth w/o reinvested dividends unless something changes]. See A Short History of Stock Dividends.

 

[Steadygain]

While I love rose-tinted glasses when I'm sightseeing, I prefer true color and natural lighting when it comes to my finances.

You're very smart !


Well my beautiful angel - Emily got home from college yesterday and is heading down to Harlan, KY for the summer to work with SWAP. Serving With Appalachian People - is what SWAP stands for. Sarah - 'my girl' - oldest - worked there for years while she was in college. They have groups that come in for a week at a time throughout the summer that repair and rebuild houses throughout that area. Sarah had worked in the Kitchen - and Emily will now be doing the same thing.

It's nice because she goes to the sights to deliver snacks on a daily basis and gets to see everything that's being accomplished.

Sarah is now in South Korea - and anxious to get home for a few weeks late in 7/09 - early 8/09 before she returns another year.

Both of them are simply amazing and seriously I could go on and on about how wonderful they are.

Then I've got 'my precious girl' Carrie at home. When Sarah got the title 'My Girl' after she was born - I had to make sure the others didn't feel any lesser so 'my angel' and 'my precious'.

Well Carrie is heading to New Salem on Sunday - an exact replica of Lincoln's Time with the cabins, stores, and everything. Because she's been through the whole program several times before now when she returns (even for a day or two) she becomes an 'Interpretur' for all the visitors go through.

It's been really quiet around here today - eerie - kind of strange...

Well have a great weekend my little kabootel

You should get the gitfiddle out and play for the disabled vet

Steady

 

[alevin]

Emily got home from college yesterday and is heading down to Harlan, KY for the summer to work with SWAP. Serving With Appalachian People - is what SWAP stands for. Sarah - 'my girl' - oldest - had worked in the Kitchen - and Emily will now be doing the same thing.


Sarah is now in South Korea - and anxious to get home for a few weeks late in 7/09 - early 8/09 before she returns another year.

Both of them are simply amazing and seriously I could go on and on about how wonderful they are.

Then I've got 'my precious girl' Carrie at home.

Well Carrie is heading to New Salem on Sunday - an exact replica of Lincoln's Time with the cabins, stores, and everything. Because she's been through the whole program several times before now when she returns (even for a day or two) she becomes an 'Interpretur' for all the visitors go through.

Don't know how many others here been to New Salem, but it was a family visit for me in my teens visiting the grandparents one year. New Salem just aint that far from where I spent every summer on family vacations. Pretty cool, and Carries got a cool job. My grandma (still alive) was born in a 2-room log cabin, it was sold at some point, the next owners eventually donated it to the State or County for a little roadside interpretive park just north of where she still lives. My uncle and I visited it several years ago and told the tourguide my grandma was born in that cabin the tourguide was allowing us to look at.



Well have a great weekend my little kabootel Rick, you do have a way with words :cheesy:

You should get the gitfiddle out and play for the disabled vet. My gitfiddle days are waiting for me to get some surgery done on a couple finger tendons, later this summer I hope. work too busy right now with computer writing, for me to take down time for post-surgery healing. BUT! I delivered a beautiful Quilts for Valor to my disabled Nam vet friend first thing this morning. The quilting group delivered it to my door last evening. My other neighbor and I gave it to him together.

The other neighbor's son spent 1.5 years away from his family on active duty in Iraq and AFGhanistan, had to bring 2 bodies home from Afghanistan a few years ago to their home town here, from when helicopter went down all hands (I normally call them ships in everyday job around here-but for clarity you folks who don't work around them...).

Steady

Have a terrific 3-dayer, big bro.

 

[alevin]

Some new things to think about. Haven't read any of this guys material before. Found him today.

UK Rating Action - The research grp put out a cmmt last week post the S&P shift on the UK. The key takeaways from my side:

A) The UK WILL have a multi-yr austerity government soon, the only question is when. We WILL see higher taxes, far less public spending, higher unemployment etc. The UK has no more fiscal room left, so from here on in its ALL abt the politics and policy is ALL abt whether thru BoE QE we have much more appetite to further debase GBP.

And B) I really suspect the UK action is also a case of S&P using the UK as a guinea pig (in terms of assessing mrkt reaction) ahead of something they may do on the US, in say 3 to 6 mths time. The US has a tad more room than the UK fiscally, but ultimately the issues (austerity vs currency debasement) are the same.

.....
4 - The risk here is that we are creating/storing up huge tail risks in the form of significant FX gap risks (esp. re the USD/GBP), and/or significant Rates gap risks (esp. re USTs and Gilts). Since early 2007 the Credit mrkt has been the driver/lead indicator for markets. As the policy response has been to load up all the risks & debt onto public sector, going forward THE LEAD DRIVERS WILL BE FX & RATES MARKETS, in terms of levels, direction and volatility, and NOT the Credit or indeed Equity markets. IN OTHER WORDS, just focusing on what S&P and/or the Crossover index is doing is NOT going to be enough.

5 - So, if I look at all of this together, all I can see ahead are higher VOLS in both markets and the real economies of the world, a higher risk free rate, higher hurdle rates to investment, and more selectivity around capital allocation and investment.....this means Risk Premia MUST be higher....in this context do NOT focus on Q4 08 comps - this is utterly bogus. DO the comps with 04/05/06/07 - hey presto, you get a much uglier picture for where we are at and where we are going. Higher risk premia means LOWER PEs.....combined with profit outlook which is basically flat on 08 for 09 and 2010 at least, this means STOCKS ARE TOO HIGH. [Confirms what I already know from other articles I've posted previously]

Turning naturally to markets at this juncture:

1 - The min-May turn I talked abt earlier this mth is happening. I expect it to last another fortnight or so, looking for stocks to be another 5 to 10% lower (S&P down at 800/780), ....

3 - For H2 09, I am BEARISH equities (looking for a 30/40% sell-off from coming June/July 'highs') --> S&P target - 950 in July, 550 in the back-end of 09. Credit will RELATIVELY outperform equity, but if stks are off 30/40% in H2 09, Credit on an absolute basis WILL be wider and, as the risk of a seizure in dealer 'bids'/market liquidity dry-up is likely going to be very high, we could see some outsized spread gaps, driven more by 'technicals' rather than fundamentals (a partial unwind of the biggest concensus trade of the moment - thatIG corp. bonds are the best 'long' around). Within Credit I see HY suffering far more than IG in H2 09, as HY will suffer from weaker technicals AND weaker fundamentals, but as I say, gaps moves wider in IG are entirely possible. I am looking for S10 XO up at 1500 (adding back Bassell) and S11 XO up at 1250. I am looking for IG12 in the US well above 200. IG, incl. big bank senior will outperform HY, HY will see new wides, IG will maybe revisit the wides on the corp side but overall we may not see new wides.

Into July I expect to see govvie yields back up at current highs, perhaps even higher, esp in the US/UK - 10yr USTs up at 3.75??? Overall, I stick with the theme that the ECB will be the most independent and least likely to debase, with the US at the other end. .......overall I look for a much weaker USD. On a multi-yr basis, Gold an CRUDE remain key back-book 'longs'.


Bob Janjuah
Chief Markets Strategist
RBS Global Banking & Markets

http://tickerforum.org/cgi-ticker/akcs-www?post=94929

 

[alevin]

Hmm.

While America was “inventing” Twitter so Americans could waste more time on useless bull___, China built three nuclear power plants and two refineries.

http://www.financialsense.com/editorials/quinn/2009/0526.html

 

[Steadygain]

Oh Alevie,
I could write a book on this and have reflected on this very thing over and over throughout the years.

WWII - was the great war - it stood for something so fundamentally different from all the wars that followed. It actually had a worthwhile cause and signified 'Honor, Dignity, Respect' - and there was probably nothing that would have more strongly had Americans (and I use that word only because it's the common expression) pull together and 'Do the Right Thing'.

This is why the Savings rose so high - it stemmed from a 'true inner character' and the determination to show American Strength.

Then there was Vietnam - which was probably the worse disaster on essentially every level that could possibly be measured.

Then there was the Gulf War....

Then there was 9/11 - with insider information showing that the VP and P were desperately wanting to wage war against Iraq. They looked for any excuse possible and finally made it happen.

The people reflect who and what our country has become and perhaps the most solid measure is how they live their lives - and that would hugely reflect how they spend their money and what kind of savings they have.

Do I sound Anti- American? I AM NOT !!

I can't imagine a heart that more aches for our country and our people - but I do not blame the President for every negative reflection our country represents - nor do I blame the Government and use them as the scapegoat for how the general population live their lives and the way they regard one another.

Anyway - you're one of the very best ladies I've ever met and I have the deepest respect imaginable for who you are.

 

[Birchtree]

I blame the idiots of both JFK and LBJ for Vietnam. That was a Democrat war and full of loopholes to avoid going to war. For example if you could get yourself married you were exempted and if you could afford to go to college you were exempted. If you were fortunate enough to be a poor black or poor white you were forced to serve your country. That's why we now have a voluntary military. Like the "Boss" says: I went down to see my VA man.....

 

[alevin]

Morning Steady! My last post was not so much a commentary on the gov or on any particular war in the past 100 years, it really had more to do the savings people had to deal with crash and production shortages that came later as result of crash and pre-crash events. The seeds of WWII were planted in WW1 and the 20's "Flapper/Good Times Roll" era. WWII came about as result of international economic crises that Hitler and Japan played off of.

We went into crash this time with negative savings, are doing the post-haste catchup now, but may not be fast enough since we may be facing serious shortages and rationing coming up in next few years for reasons similar to 29Crash prelude, whether or not we end up in aNOTHER war shortly (on top of the current military engagements).

Birch, I remember anti-war songs on the highschool bus in 70-72 as late jr. high/early high schooler, I didn't want the juniors and seniors I admired and looked up to, to get drafted. didn't want my guy buddy classmates to get drafted either-it was coming in a couple years, but then Nixon changed that before it happened. Knew little of how the war got started or why or what was really going on-just knew people were dying at home and overseas, and people were protesting. Kent State was appalling-hit home hard to someone approaching college age. Watergate consumed the nightly news and front page of Washington Post and Star-News during the time I began becoming politically of age and aware-I got disgusted with all the ranting and raving and tuned out for many many years after on the subject. I defended Nixon as a high school jr. in 73 for finally getting us out, that's how politically aware I was (or wasn't) at the time. The kids from wealthy families that bought their way out-I didn't know any.

 

[Steadygain]

I'm sorry Alevie :embarrest:

That graph struck some of my deepest nerves - and brought out way more than you could ever imagine.

Birch,
I couldn't agree with you more - and that's equally true with Nixon.

It's a lot harder to hide things now a days; but I really don't want to get into this - will only make me fume and lose whatever ground I've managed to gain over the years. Anyway - sorry man - I probably shouldn't have said anything but that chart really stuck deep.

Well the charts are looking solid for now - so who knows maybe this is consolidation and things are looking up.

 

[alevin]

Just keepin' my thread active. Lady went to the tall pines this weekend, I went to the high desert. One of my favorite places in the whole world. Short mini-vacation, but all I can spare from work crunch right now. Anyway-some observations...My destination location was in one of the most depressed counties in the US, Mich and CA notwithstanding. a place I used to work and still have friends. 20% official unemployment right now. RV Manufacturing jobs lost with downturn, no surprise. What scared me more was travelling rural, seeing ranch after ranch with for sale signs. Real ranches, not ranchettes. Food is gonna get even more expensive, folks. Remember FarmAid in the 80s? I do. Working ranches went broke back then too, bought up by movie stars. I knew one that went that route. Now the movie stars are going broke too, thanks to Madoff and friends. Who's gonna buy the ranches this time? Market and economy-not in sync, which will recover first? Seriously. We''re still under the 13x34 weekly EMA cross I'm waiting for.

 

[alevin]

This is what I've been watching, among other things...Ichimoku's are really really cool, takes some studytime to get comfortable with them tho. Japanese traders think the trailing green trend line the most important. I'm watching that AND watching candles bump up against the bottom side of cloud. Cloud height indicates range of resistance. Daily Ichi is in danger zone between red and blue lines, hasn't dropped below the red line yet, in daily chart uptrend still. Weekly first, daily second.
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&b=5&g=0&id=p75763624188

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p63763606539

Notice green trailing line in daily chart dropping back below candle line-baaad juju-unless you're short or flat.

 

[alevin]

More anecdotal evidence that food producers are getting hit hard. I and several friends began participating in a Community-Supported Agriculture program this year, committing to and purchasing 4 months worth of vegetables ahead of the growing season-direct from small local organic farming couple in the next town over. (this in addition to starting my own sizeable garden effort this year-still turning sod on part of it, first seeds planted by this weekend I expect.)
Anyway, got an email from the farmers today-they noted that elsewhere, the CSA movement participants are required to pitch in and contribute labor as well as cash, which was news to me. Our local couple are NOT requiring that from us, but they put out a plea for help today. They had hired some workers to keep up with weed control but can no longer afford to keep the workers, so they are asking for volunteer weed control time from those of us who are benefitting from their hard work at doing the organic production model we want them to produce. I have relayed the info to my partners in consumption ( I went in on the program with several friends-we split the produce each week among ourselves by negotiation-we get whatever veggies are ready to pick and available each week for delivery).

Anyway, the small farmers are really struggling. Local food suppliers. Reduce chemical costs-increase labor costs. Provide in-kind labor or see food prices increase to either afford paid labor, or see producers go out of business. Just another personal observation what's going on in the ag arena my part of the world.

 

[alevin]

Spent a wonderful weekend away from the markets-very-small town USA annual celebration, church service, potluck, fireworks, egg toss, parade, sack races, small town singing competition in a 19th century theatre, you name it, we did it. So now I'm back and cogitating as per usual. don't think I haven't noticed Birch finally passed me-barely, but lo and behold, I'm back in the top 100 again too after the last several days.

A lttle something here for folks willing to join me cogitatin' on. I do believe there'll be another shot at getting in on the low side of the market-coming up not long from now.:worried:

There’s at least a school of thought saying that the stock market won’t let people get-in close to the preceding lows again; so it can’t go down there. Nonsense. Stocks still remain overpriced generally; and that case of course omits the key idea we’ve shared lately; that (over time) nobody is considering that (seasonal rallies or not) there is no particular evidence that (based on valuations) the March low is ‘the low’. I think that’s where technical analysis has to be constrained a bit by a focus on reality; or you may have the market anticipating the recovery that doesn’t really occur. That would be just the inverse of the market anticipating a number of recessions that didn’t occur; why of course can’t it be the inverse? That may not become the case; but such risk exists.

http://www.decisionpoint.com/TAC/INGER.html

 

[Steadygain]

Spent a wonderful weekend away from the markets-very-small town USA annual celebration, church service, potluck, fireworks, egg toss, parade, sack races, small town singing competition in a 19th century theatre, you name it, we did it.

Many would probably think 'too boring for me'

Where are the slot machines... and whatever else people have come to think of as wonderful and exciting. The booze and all ....

It sounds like the most perfect weekend you could find anywhere. The small towns have such a super quality Spirit and Atmosphere. No meal beats a Potluck - especially following church. All of it sounds GREAT !!! For me there are few things - that compare to that good ole USA wholesome quality.

So now I'm back and cogitating as per usual. don't think I haven't noticed Birch finally passed me-barely, but lo and behold, I'm back in the top 100 again too after the last several days.

He passed me too :nuts: Was 8 something % when I got back

A lttle something here for folks willing to join me cogitatin' on. I do believe there'll be another shot at getting in on the low side of the market-coming up not long from now.:worried:


http://www.decisionpoint.com/TAC/INGER.html

I hate to think about it - as it put my stomach in knots last evening. There is so much going on - and that has been going on even when the Markets began to rise and pretty much throughout. The Financial Stuff is something I can handle and I think by and large we can deal with more job losses, foreclosures, and all that stuff.

My fear is way more Israel and Iran. I understand (at least partly) why so many others have ill feelings toward the USA - but the ill feelings towards Israel is probably even greater. Once again we will witness a first hand account of long term setbacks and huge problems if Israel attacks Iran. So the 'Classic Quick Term Fix' will likely result in pretty much a Global Collapse. I personally can not imagine any event doing more to crush the Markets but this is the only time I'm not looking forward to buying at New Lows. I probably go too much on my feelings and am somewhat of a worrry wart but the bigger part of me has a bit of fear regarding the Present State of World Affairs and its influence on the Global Markets.

Well back to the weekend - the best we can do is 'get away from everything' and find something better.

 

[alevin]

I hate to think about it - There is so much going on - and that has been going on even when the Markets began to rise and pretty much throughout.

My fear is way more Israel and Iran. we will witness a first hand account of long term setbacks and huge problems if Israel attacks Iran. I personally can not imagine any event doing more to crush the Markets but this is the only time I'm not looking forward to buying at New Lows.
Well back to the weekend - the best we can do is 'get away from everything' and find something better.

Steady, I enjoy your visits. Leading with your heart the way you do. I too am deeply concerned. I remember where I was and who I was with, the moment Gulf I was announced to me and my colleagues. Iran is as you say, an ancient country with a rich history, as is the land of Israel, and there has been a long history of warfare dating to before Christ. If it comes it will be the latest episode, only now it would be a global impact, not just a regional impact.

I too have known Iranians here in this country who were afraid/reluctant to speak much about the internal condition of their country, and that was over 30 years ago. One was an ex-pat Baha'ii who couldn't go home again (25 years ago). Another was a Kurd (25 years ago), another was a plain and simple non-Kurdish Persian (I think), probably Shiite, I never learned that much detail about him, didn't even know there were Shiites and Sunnis in those days (30 years ago). It's a very complex nation.

And yes, some would say I had a really boring weekend-what made it so rich was the relationships and bonds that connect me to old friends, a widow and her daughter who have seen much adversity in their lives and come through seemingly insurmountable difficulties as shining stars. The daughter is in transition, just graduated high school and headed to a small private college away from home in the fall, full scholarship-had to deliver her graduation present. The 7-year old foster daughter they've been caring for over the past several months-learning her history and helping her with boundaries, basic life skills like tying her shoes, how to iron her Princess dress for the parade, making sure she knows not to leave a plastic utensil in the skillet while the eggs are cooking. Things like that make a weekend memorable and very well spent-and lets the outside world go away for bit.

 

[Steadygain]

Thank you !! so much.

Your friendship is priceless and irreplaceable ...

Your message is full of understanding and encouragement and gave the strength and peace I needed.

Take care my friend,
Steady