BP Cares about the small people
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.
1077 Proves to be $SPX resistance again.
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
Debt Reducing Tuesday
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!!
Its another Manic Monday
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.
Germany Tries to save the day AGAIN -2008 Part 2 Begins-
So today Germany's Merkel decided to pull a good trick over the nekkid shorts.
There is much surprise that the German government has declared a ban on naked short selling, including CDS, as of midnight tonight, with no prior notice or the niceties demanded by the banks when government chooses to act. This action seems to have perturbed some and confused many.
Germany is claiming that this move will stop the Speculators
The ban will also apply to naked short selling in shares of 10 banks and insurers that will last until March 31, 2011, German financial regulator BaFin said today in an e-mailed statement. The step was needed because of “exceptional volatility” in euro-area bonds, the regulator said.
HMMM Where oh Where Have I heard this story before... Oh Yeahh.. September 20, 2008 German regulator bans short-selling in financial stocks
Germany on Saturday halted short-selling in financial shares, when investors borrow company stock to sell it, following the example of Britain and the United States. The ban affects 11 shares including those of AAreal Bank, Allianz, AMB Generali, Commerzbank, Deutsche Bank, Deutsche Boerse, Deutsche Postbank, Hannover Re, Hypo Real Estate, MLP and Munich Re. BaFin, said short sales were banned with immediate effect until the end of the year, underscoring that they could lead to huge losses in the current global financial turmoil.
Roll Back to May 18, 2010....
Allianz SE, Deutsche Bank AG, Commerzbank AG, Deutsche Boerse AG, Deutsche Postbank AG, Muenchener Rueckversicherungs AG, Hannover Rueckversicherungs AG, Generali Deutschland Holding AG, MLP AG and Aareal Bank AG are covered by the short-selling ban. “Massive” short-selling was leading to excessive price movements which “could endanger the stability of the entire financial system,” BaFin said in the statement.
I wonder what happened last time they tried protecting the banks? Well I will examine it below but what's that I hear you say? This Time is Different? It sure is!!
During the last Crisis we had Lehman go bankrupt and Bear Stearns collapse. Two years later we don't have any financial institutions going down. We Have Countries that are crumbling and their "shareholders" (taxpayers and citizens) revolting. Greece is Bear Stearns because of the trillion dollar bailout and Portugal might as well become Lehman because unless Europe is willing to print a trillion for every country they bail (which I know they can if they want) and euro dropping to parity and beyond with the dollar.... someone will have to hold the bankruptcy stick.
Anyways Lets look at how the last short selling ban affected the financial institutions they tried to protect.
I'm using Dow Jones Germany Index for a Benchmark as to compare returns.
| Company | Sept to Dec 2008 | May 2010 – March 2011 |
| Dow Jones Germany Index (USD) DEDOWD | -23% | TO |
| Allianz SE AVL | -30% | BE |
| Aareal Bank AG ARL | -64% | FILLED |
| Commerzbank AG CBK | -61% | OUT |
| Deutsche Bank AG DBK | -50% | ON |
| Deutsche Boerse AG DB1 | -15% | APRIL |
| Deutsche Postbank AG DPB | -65% | 2011 |
| Hannover Rueckversicherung AG HNR1 | -18% | WHEN |
| MLP AG MLP | -26% | BAN |
| Muenchener Rueckversicherungs-Ges. AG MUV2 | +7% | ENDS |
Oh myyyyyy Germany Saved the day as speculators were on the sidelines watching and missing out on 18 to 65% gains (its what you do when you short and if you're not familiar just Google "selling stocks short")
The Previous ban was 3 months and the protected stocks crashed an average of 46%. The New Ban will be around 11 months and will crash how much? It will crash aplenty so I will not make an exact percentage call on this one. But I will be doing one thing this time around though. I'm putting German Financials on a Bank Watch List that I will check back on April 1st 2011.
Make plenty of money these next few weeks even if my blogging is sporiadic at best. (Offline life always comes first)
-K
Market Correction: Special Edition Results [Animated Charts]
If you've been following my blog recently you might have noticed my April 28, 2010 "Special Edition: Here comes the red ink, correction begins."
On April 27th The SPX stood at 1183 and it swung as low as 1065 during the past 7 trading days to ultimately close at 1110.
As I wrote on the 28th
I finally had time to check on the market a big grin came to my face. A lot went on today and news blamed Greece and Portugal downgrades for the sharp drop. Nobody ever talks about the technical analysis because it is beyond the mind of Joe the Plumber.
The first chart was the EUR/USD which broke an ascending triangle on the daily back in December. Below is an animation of Apr 27 and May 7 to show the move. If you have trouble viewing the animated image please leave me a comment because it's the first time I'm using animated content. (CLICK TO VIEW ANIMATION)
Next we'll move onto the $TED Spread which jumped nearly 100 percent since the 28th. (Click to View Animation)
Lastly I will leave you off with the Investing Freak Special SPX chart animation. Boy was this a move, the red line is the 250 day moving average in case you are wondering. (Click to View Animation)
Where do I see us heading from here? We still haven't broken some key supports such as the 1088 trendline and the 1060 250Day moving average. So if we drop another 50 point we will still be good to go for a bounce. If more crazy days are upon us? I will check with BID ( Sotheby's ) to see if it's gone below 22 to initiate heavy short positions.
Thats just me and as always these are my opinions and even though they work for me I cant guarantee them working for you.
Have a good weekend and be on the lookout for the latest Current Picks signal changes coming up this weekend.
-K
Market Survives Heart Attack
There is no need for me to summarize today's DOW -1000 move so I will move ahead to the point of the day.
Quick Update to the post on April 28 Special Edition: Here comes the red ink, correction begins.
I want to talk about my leading market indicator ( Sotheby's BID)
As Quoted from April 28's article.
Now lets take a look domestically at BID - Sotherby's which as I mentioned on March 14th's post is Part of my indicators arsenal. A move below 32 (20% drop from 39) would tell me to wipe the dust off my ammunition and a move under 22 (40+% drop) would just signal that Chaos is back and since this is a Leading indicator to me it would highly influence my positions.
What BID did today is move below 32 for most of the day so my ammunition is now dust free and waiting for the under 22 move if it comes.
Go to the link above to check the older chart (or click here) but here is the one updated today that shows you how BID bounced right on the trend-lines I had drawn a while back. Since it bounced at 28 that to me signals that there is still a chance for survival from this heart attack.
Here's the chart and I will stop here for the day. Tomorrow there should be a textbook green day with more red on the way for next week. (Click to Enlarge)
-K
Special Edition: Here comes the red ink, correction begins.
It was a busy day today and when I finally had time to check on the market a big grin came to my face. A lot went on today and news blamed Greece and Portugal downgrades for the sharp drop. Nobody ever talks about the technical analysis because it is beyond the mind of Joe the Plumber.
Let's start off with the Eur/Usd which I have closely followed since December when it broke a long term trendline. I hadn't looked back at it since and I was shocked. Here is the first in a series of Special charts.
Next on the list is $TED which stands for the Treasury - EuroDollar Spread. You can read more about what Ted is on this November post if you are not familiar with it.
WHile the spread of 0.2 is still fairly low and below the average of 0.5 the fact that it is increasing and the moving averages are making their first crossup since before the October 2008 crisis strikes me as interesting especially given the current economic situation.
While on the subject of Europe lets check out the Greek Index $GRDOW which I wrote about on April 11 and that turned out to be the opposite of what I expected. From a low of 124.17 on March of 2009 the Greek index went through the roof at 267.40 and as of close today it stands at 138.11. Go Greece!!!
Now lets take a look domestically at BID - Sotherby's which as I mentioned on March 14th's post is Part of my indicators arsenal. BID fell from 37.75 to 34.93 today which broke a short term trendline but also another big move would put it below the 32 mark that is the next strong support. Since the March 2009 lows of 5.85 BID is up 666% to as high as 39! That's nearly 47% a month. A move below 32 (20% drop from 39) would tell me to wipe the dust off my ammunition and a move under 22 (40+% drop) would just signal that Chaos is back and since this is a Leading indicator to me it would highly influence my positions.
Lastly I will leave you off with the Investing Freak Special SPX chart that I last posted on April 14th. We hit a top, retreated a bit below the blue moving average then made a higher high at 1219 but this time it was different as the retreat didn't land on solid ground and we fell through.
Class Dismissed.
-K
The Investingfreak Special SPX chart re-visited
Back on March 28th I posted an InvestingFreak original chart of the S&P500. Blue line is 10SMA and It has held for a few months now but as the market heads higher it faces a few resistance points, is 1216 the absolute top (I have preached that number offline for a while now) and a good correction of 100 points upon us? Remember that at this point all positive earnings might be faced with a "sell the news" attitude.
I don't have time for the nightly recaps but I will leave you with an updated chart that you will like. (Click To Enlarge)
Have a good night and make some money!
-K
Are Greek stocks ready for a comeback?
With all the recent bailout talks for Greece it might seem like a good time to short Greek assets right? No!
The risk rewards at this point have been cut in half. I will display a chart below of the Dow Jones Greece Stock Index $GRDOW.
Here is a 3 year chart with no comments. (Click to Enlarge)
Here is the 1.5Year chart showing a different story.
You see... Greece did hit bottom at the same time as the entire market did as well back in March of 2009 BUT Greece topped out in October of 2009 and started its next leg down.
From March-October 2009 the index rose from 124.17 to 267.40!
Thats 143.23 point gain or 115% Gain in 8 months... and here we are complaining that our market has gone up 75% and is overdue for a correction.
Now as we can see from the chart below Greece then took a turn from 267.40 to 150.84 in February of 2010 (and it might be making a lower low coming up if the bailout saga isn't fully discounted yet) the 116.56 point drop from the October 2009 peak to the temporary February 2010 bottom is a 43.5% correction!
Back to my original question... now do you see why I said no to shorting the Greeks? 44% Correction has already occurred and even if there is another 150 points to the downside (another 50% or so) the risk reward is no longer there. I might be looking to buy up some Greek Gyros or Banks soon to play. One such play is National Bank of Greece (NBG)
Here is the chart for NBG to compare to the entire index. Also Notice the Recent Volume (Click to Enlarge)
Thats all for tonight folks. Have a good night and a good trading day tomorrow.
-K