Monthly Archives: June 2010

Tropical Storm Alex to BP’s Rescue

Posted by Investing Freak on June 22, 2010
General / 10 Comments

I Want my life back! I am not the only one as plenty of fishes, birds, and people also want their life back that  BP plc (ADR) has taken away. Not to Worry because BP feels sorry, so sorry that it is donating oil spill revenue to charity (the National Fish and Wildlife Foundation). BP said it would provide $5 million to the group immediately, Based on a current futures price of $77.83 a barrel, the collected oil is worth about $1.2 million. BP hopes to cap the well by August.

With the CEO now out of the picture time to get back to work and stop this drilling insanity. Hmm maybe not thanks to a federal judge who has overturned the Obama administration’s 6-month moratorium on new deepwater offshore drilling projects. What’s the reason for overturning the decision?
The Interior Department said it needed time to study the risks of deepwater drilling but U.S. District Judge Martin Feldman said in his ruling the Interior Department assumed that because one rig failed, all companies and rigs doing deepwater drilling pose an imminent danger.

Come on there has to be more to this story and thankfully there is. Like many judges presiding in the Gulf region, Feldman owns lots of energy stocks, including Transocean, Halliburton, and two of BP’s largest U.S. private shareholders — BlackRock (7.1%) and JP Morgan Chase (28.3%). Here’s a list of Feldman’s income in 2008.  How can he stop drilling when his heart is fully soaked in oil? He can’t because Industry ties among federal judges are so widespread that they are beginning to endanger the courts’ ability to conduct routine business.

More great news!  We don’t need to head to Italy to see the amazing Leaning Tower of Pisa because BP pipe is tilting more.
The Deepwater Horizon riser package that sits on the seabed a mile below the ocean surface weighs over 450 tons, including the 48-foot-tall failed blowout preventer. National Incident Commander Thad Allen announced that the riser package is tilting “10 or 12 degrees off perpendicular (On June 10 it was only tilting by about 2 or 3 degrees). Engineers and geologists fear the stack atop the well could tip over if the well integrity further degrades, leading to the “unlikely, but not implausible” scenario of “oil gushing through the sea floor.”

Hey you say, its unlikely and worst case scenario and BP will get things rolling before something worse happens. What else coulg go wrong? everything is already factored for the worse.
Oh wait! More Great news just arrived! Tropical Storm Alex comes to the rescue (or not) of BP.  The ECMWF model is the most aggressive in developing this system, taking it into the Gulf of Mexico as a hurricane next week. The NOGAPS model keeps the storm weak and farther south, predicting that 93L will bring heavy rains to northern Honduras as a tropical disturbance or tropical depression on Friday and Saturday. But either way this will be fun to watch.

Here is the graph of Invest93 (Tropical Storm Alex)


Check out some previous BP Posts
:
BP Cares about the small people June 17
BP now stands for Bad Publicity June 14

Thats all Folks,
-K

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First Day of Summer

Posted by Investing Freak on June 21, 2010
General / 8 Comments

Its June 21st and officially first day of summer. With that being said a summer vacation is in the works which might result in some inactivity on here.
But until then I will not stop improving and updating the blog. Last week I managed to get the blog running from 7 second load page to less than 2 which is 3x faster.

Next up was the much neglected Current Picks page that wasn’t updated since May 15th. That is now checked off the list and also an improvement in the look of the current picks page was done. Here is a before and after shot.

Next up on that page is to have a visual chart for at least the main indices but don’t expect it anytime soon.

Getting away from general information and into market talk. It seems like 6-10-2010 was a turning date for the majority of the symbols that my system tracks. The S&P is up 31 points (nearly 3%) since then. One thing i noticed is that 1139 is strong resistance if it the market gets that high.

Seeing this i decided to have some fun by plugging in BP stock into the system and i’ll let the chart speak for itself. Keep in mind BP rig exploded April 20th.

The Futures are up 13 points (1%). Only scheduled news is for Bennies counterpart Trichet to speak at 12:30pm.  Unscheduled news? well the US navy moving around in the Red Sea and the Israeli crafting a new “do not bring into Gaza” list.

Update: Oh and what’s this? Far offshore, crews drill into Gulf to stop oil (AP) Relief well? Ay Dios Mio!! The only little people left after this will be BP shareholders and pension funds. They dont know how much oil is underneath there… oh wait one relief well might not be enough because the aim has to be precise so lets drill about 50 and deplete the oil ASAP and when the bottom of the gulf becomes an empty cavity without the oil and collapses on itself it’ll look like a humongous version of  the Guatemalan Sinkhole and lets not mention the Mega Earthquake a crashing of the seafloor would create but wait lets add some tsunami for a topping 🙂 . I realize i’m being a bit unrealistic as this takes time but lets put it this way,I might still be alive when it happens and it will not be pretty.

Make Money!!

-K

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Capital Gains Tax Rates to increase in 2011

Posted by Investing Freak on June 18, 2010
General / 6 Comments

President Obama has publicly said that he will let the Bush-era capital gains tax cuts expire on schedule this year, so it’s important to know how they will affect your investments.
If you’re in the 10-15% tax bracket long term cap gains will go from 0% to 10% so if you have investments that you’ve held long term you might think of selling this year to avoid paying 10% to IRS  unless you are making a loss in which case you can hold and pray forever. For more detailed brackets visit Bargaineering

I always felt that the speed at which the TARP money was getting repaid was extreme for such a crisis. Major players paid big bucks back in order to possibly restore confidence in their institutions and the economy (of course so they could use more money to pay their CEO’s bonuses as well which was forbidden under TARP).  The latest headline didn’t shock me one bit.

After a string of profitable paybacks from Goldman Sachs, JPMorgan and 59 others, the list of deadbeats is growing. In May, 91 banks missed their dividend payments to taxpayers. Two big banks already look like serious zombies. Pacific Capital Bancorp , with $7.4 billion of assets, and Anchor Bancorp Wisconsin with $4.5 billion, have each missed five dividend payments and appear incapable of surviving without taxpayer cash.

This is so awesome and so unworthy of mentioning (since we know news always gets factored in before its published) but since my Celtics lost I had to create a new blog post.

Make money tomorrow and be careful if you’re messing with options as its options ex day.

-K

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BP Cares about the small people

Posted by Investing Freak on June 17, 2010
Market Analysis / 18 Comments

As you might have figured out by now, BP plc (ADR) Chairman and the CEO met with President Obama ONLY two months after the oil spill disaster.
Of course as I mentioned in the previous post BP now stands for Bad Publicity so nothing was unexpected on my end when the Chairman said: “I hear comments sometimes that large oil companies are greedy companies or don’t care, but that is not the case with BP. We care about the small people.”   Bad publicity this time will cause BP to buy google ads for keywords such as petite, small, midgets, oompa loompa.  They needed a leprechaun to give them some lucky charms but now they insulted the small guy.

Did you hear that? BP cares about you so much that if you are in the Gulf of Mexico and for the next century your fishing or tourism business is doomed.. BP has put together $20 billion dollar fund for your damage It is truly truly truly sorry. Oh and If you weren’t affected by BP but are part of US pension funds – including Calpers, the Teacher Retirement System of Texas and Ohio Public Employees Retirement System then BP is truly truly truly sorry for you as well because the 12% dividend yield that you saw a few days ago will be reduced to 0% so they can spread that wealth to the victims.  You can enjoy your -50% gain in BP stock now.

But wait I forgot to mention one benefit of this disaster. BP has hired cleanup workers to clean things up and this good news for the people of the Gulf.  Hey you just got promoted from fisherman to fish rescuer, Congrats!!  Just sign here on the dotted line ………..   and just make sure to not get sea sick from the delicious fumes because your complaints and health information will never be part of BP’s record.

BP attempted to deny and conceal links of its oil spill to illnesses, after initial reports of oil cleanup workers who were getting sick due to extended exposure to oil and dispersants. Fishermen have complained of “severe headaches, dizziness, nausea and difficulty breathing” after working to clean up the spill, and one said BP did not provide protective equipment. But BP CEO Tony Hayward brushed off illness concerns, suggesting “food poisoning” might have been the culprit.

Although Louisiana state records indicate that at least 74 oil spill workers have complained of becoming sick after exposure to pollutants, BP’s own official recordkeeping notes just two such incidents.

You all should feel sorry for BP Because it will take anywhere from 100 days to 365 days for BP to make back the $20 billion in profit while the victims sit at home and receive checks.
Ok fine that’s less than a year’s worth of profits… But this is just a fund for economic damage, and won’t protect it against all sorts of other legal costs. According to NYT legal costs and criminal fees could hit at least $63 billion.   WHOOPS!    Hey NYSE:BP stock… you will be missed when you hit $19 but on the bright side! You’ll be a teenager again full of energy (pun intended) !

And now for a mini change of subject.  Senate has now accepted an expanded Fed audit. The House proposal allows repeated future audits of discount window and open market transactions, whereas the Senate proposal had only allowed a one-time audit. Of course this is just a grain of salt and even when it’s passed it might be years before we see any audits.

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BP now stands for Bad Publicity

Posted by Investing Freak on June 14, 2010
General / 46 Comments

After creating one of the biggest disasters in US history with the Gulf Oil Spill, British Petroleum (BP) has tried to buy ads on Google to get their message through, however, they have not just stopped at buying ads for Google search and have been promoting their message on YouTube too.

BP plc (ADR) has concluded that its “top-kill” attempt to seal its broken well in the Gulf of Mexico may have failed due to a malfunctioning disk inside the well about 1,000 feet below the ocean floor. If the casing is compromised the well is that much more difficult to shut down, including the risk that the relief wells may not be enough. If the relief wells do not result in stopping the flow, the next and drastic step is to implode the well on top of itself, which carries other risks as well. The real doomsday scenario here… is if that casing gives up, and it does come through the other strings of pipe. Remember, it is concentric pipe that holds this well together. If it comes into the formation, basically, you‘ve got uncontrolled [oil] flow to the sea floor. And that is the doomsday scenario. –Naked Capitalism

The U.S. Coast Guard gave BP Plc 48 hours to find more capacity to contain its leaking oil well in the Gulf of Mexico after scientists and researchers doubled their estimates of the spill’s size.Based on government estimates, the drillship isn’t capturing as much of the spill as BP predicted earlier this month. In a June 4 interview with CBS, Suttles said the system would be capable of capturing as much as 90 percent of the flow.

If BP does not comply with this order, and cannot give a satisfactory reason why, this will put them further on the back foot in their meeting with Obama next week. Readers are correctly cynical as to whether the Administration will live up to its tough words, but the groundwork is being laid, which would make failure to follow through even harder to defend.

Separately, BP said its board will meet June 14 to discuss whether to cut or defer its second-quarter dividend payment following the spill. This is causing BP’s Major British Shareholders to Ditch The Company While American Ones Are Staying. Major UK institutions including Legal & General, M&G, Scottish Widows, Threadneedle and Axa have all trimmed their holdings since the Deepwater Horizon rig sank. US pension funds – including Calpers, the Teacher Retirement System of Texas and Ohio Public Employees Retirement System – have held their stakes in the company despite the dramatic fall in the share price.

If you think BP is a good buy right now check out this article: The Ultimate Contrarian Bet: BP

Lets see what today has in store for BP and the rest of the market.

Happy Trading

Update 1pm : – Senate Majority Leader Harry Reid (D, Nev.) and members of the Democratic caucus on Monday asked BP Plc (BP) to set aside $20 billion in a special account to be used to pay for economic damages and clean-up costs of an ongoing oil spill in the Gulf Coast.

Update 3:30pm: To demonstrate that it’s responsibly taking care of the oil spill and listening to public complaints, BP has touted the fact that it has set up call centers to handle the response. However, one of the operators at the BP Call Center in West Houston has revealed that she and the other 100 employees are just PR props; BP isn’t actually doing anything with the thousands of calls it receives: ““We’re a diversion to stop them from really getting to the corporate office, to the big people,” said Janice. … Because the operators believe the calls never get past them, some don’t even bother taking notes.”

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World Cup Friday

Posted by Investing Freak on June 11, 2010
General / 36 Comments

If you notice lower volume during the next 30 days you can bet that the World Cup is affecting traders (or maybe just me) with matches at 7AM 9:30AM and 2PM every day. I guess this would mean that soccer fans would come back for the last 30 minutes of trading during the “Adult Swim” hour.

The Data is out and during Q1 household debt contracted 2.2% annually while State and local government debt expanded at 4.25% annually. The financial sector “shed” ~$1.3 trillion in debt (on an annualized basis) in Q1. Is anyone surprised the federal government added almost that same amount? –EconomPic

From 8:30 to 10 am some exciting news come out such as the retail sales data and consumer sentiment. You can check up on them at the Economic Calendar.
Retail Sales Fall, But Not As Bad As Reported Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain.  Subtracting those outliers we still have a decline, which shows weakness. Just not as weak as early reports would indicate.

The BP Oil Disaster has become large enough at the moment to cover Albania which now makes Albania the New Frontier for Oil Investors.

Keep in touch using the comment box and even make your pick for the World Cup Champion to be crowned July 11th.
I hope you like the new speed of the website thanks to our seamless move to a new host.

Make some money and think before you hold into the weekend.

-K

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1077 Proves to be $SPX resistance again.

Posted by Investing Freak on June 09, 2010
Market Analysis / 27 Comments

Going into the open today 1077 was on the radar as a heavy resistance. It will now try to become a death cross of two averages i use that can be seen as the blue and red lines in the Special Investing Freak $SPX chart.

As for what happened today I decided it is best to sum it up using this image and text. (Click To Enlarge)

I bought Puts early on then called top of 1077 in a comment at around 10:50 with the top on the market coming at around 11:30 where I decided it was time to make true to my preaching and sell my calls. Sold puts at end of day and am flat for the next day opening so i can sleep well 😉

Keep checking the comments for latest news and talk and feel free to participate (dont be shy)

-K

Let’s just say

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Debt Reducing Tuesday

Posted by Investing Freak on June 08, 2010
Market Analysis / 13 Comments

Bennie Balloon Bernankie has something to say about the koolaid.
“My best guess is that we’ll have a continued recovery, but it won’t feel terrific. Even though technically we’ll be in recovery and the economy will be growing, unemployment will still be high for a while and that means that a lot of people will be under financial stress,” he said. Via CalculatedRisk

But there is GREAT NEWS…You can use your credit card to Help Reduce National Debt. Via The Mess That Greenspan Made
Its ok that everyone is financially strained you are still welcomed to help especially if you have a credit card with 13 trillion dollar limit. 😉

There are two ways for you to make a contribution to reduce the debt:

  • You can make a contribution online either by credit card, checking or savings account atPay.gov
  • You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it’s a Gift to reduce the Debt Held by the Public.

And as mentioned yesterday the G20 Meeting relied more on taking the koolaid away and tightening the belts of the countries.
Here’s what Germany decided to do:
Germany will cut child payments, pare government payrolls and boost taxes on energy firms with nuclear power plants in an effort to save 81.6 billion euros ($97.6 billion) between 2011 and 2014 in a package approved by Chancellor Angela Merkel’s Cabinet on Monday. -Marketwatch
and how it would look if the United States did something very similar. (Click the option to View as One Page for easy reading)
Of course all these news were already priced in today and greenshoots galore tomorrow.
Make money!!

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Its another Manic Monday

Posted by Investing Freak on June 06, 2010
Market Analysis / 9 Comments

Without going into many links I will summarize what I read. BP can’t stop leak still, Hungary is the next Greece and this time it might not be bailed out since the G20 meeting was all talk about Fiscal Policy (bailouts) are not sustainable and austerity measures are the way to go. to top it all Iran is not willing to take the next Gaza aid ship to its destination by providing naval escort (Read: Israel can’t attack without starting a war)

Here is an Update of the InvestingFreak Special SPX chart the Red Line (250MA is broken for now so lets see if it holds broken and turns into resistance. to the downside i see 1040 and to the upside a retest of 1104 at least is possible although not all this action might come monday. (Click Image to Enlarge)

So there you have it. Fun week ahead but lets all make money whichever way it goes.
Also visitors are always welcomed and encourage to comment and participate in daily market discussions, your posts wont be deleted or censored unless they contain inappropriate content and links.

S&P futures are down 9 points since the open.  On top of the page in the “Economic Calendar” tab you have easy access to the daily calendar happenings and live commodity futures.

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