Archive for the ‘Markets’ Category

“Surrounded by Warning Signs!”

Could the stock market still feel the pain of a double dip?

The market had a huge scare last week which left Wall Street reeling!

Traders, analysts, and everyone on Wall Street are worried that this might not just be a glitch. They’re calling it a “flash crash” but it could be one of the many warning signs that the market is just two converging economic crises from a meteoric fall to a new bottom?

The new bottom—a more realistic bottom given all the band aids that have been applied to this economy—could be the second leg of the double dip. There is compelling evidence, largely ignored, that the March low of 6,547 could be tested again.

Despite the rising markets there has been a pall over the trading floors for sometime. And rightly so. The signs are there and they are many.

But does that indicate a double dip?

Last Thursday, David Hefty, CEO of Cornerstone Wealth Management appeared on Squawk On the Street and identified several of the huge warning signs that threaten the global markets.

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Posted in Economy, Markets, Wall Street | 1 Comment »

“One Fat Finger From Disaster!”

Living in a scary over-leveraged, under-capitalized global economy!

As everyone is well aware, on Thursday afternoon, panic struck like a lightning bolt on the trading floors of the stock markets.

Twenty minutes of feverish chaos exposed the vulnerability of the markets. World markets have embraced a model that teeters on tremendous risk. So much so that it has abandoned its purpose; its reason for existence. This leaves them vulnerable to the terrifying moves that occurred globally on Thursday.

Like the Big Banks, the markets have become giant casinos putting everyone’s money and financial stability at risk. That couldn’t have been more apparent than the meteoric fall near the end of the trading day on Thursday.

Some blame a ‘fat finger,’—a trader hitting a ‘b’ for billion instead of a ‘m’ for million—for triggering the events that sent markets spiraling to investment hell. But that wasn’t the only problem the market encountered in that brief, illuminating moment in time.

Human error could conceivably be at the center of Thursday’s sell-off, but technology could prove to be the market’s nemesis rather than its friend. Orders set in motion by high speed, market gaming, computers sent the market tumbling at a record pace as each triggered event triggered another round of events. The two, individually or together, may be the nexus for the eventual destruction of global markets. For whatever reason stocks went on that wild ride, it created a lot of excitement on the trading floors.

So what do investors do after such a frightening occurrence?

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“False Positives”

The markets are still bullish almost 8 months after the March 9th bottom. The Dow closed above 10,000 on October 14th and the bulls have been fighting to stay above it since then. But it has been trending below the ten thousand mark for the last 24 or so days.

The hopes were that earnings for the quarter being reported would be decent. This would give the bulls the ammunition to push the Dow and S&P still higher, well above the 10,000 mark.

So, where is the market going?

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“The Shipping Blues”

U.S. Markets continue to flirt with 10,000 and 1,100, shrugging off the fundamentals.

Trader’s are looking to the future; to a global improvement that will justify the unrealistic rises in the indexes. But what happens if the future doesn’t exist? A vaporous dream of hope that disappears leaving everyone empty?

Third quarter earnings are a pivotal indicator and the hopes for a holiday season, better than last year, is almost palpable on the floor of the exchanges.

Many of my articles have been cynical of the perceived recovery, the health of banks, and the rise in the stock markets. Rather than cynicism I like to view it as realism. A common sense look at what is really happening.

With many indicators moving at hyper-speed it is increasingly difficult to keep up with all of the complex elements of the economy and what affect each will have on consumers, businesses, investors, policy, and the markets. Today we’re faced with rapidly changing information. As a result I spend too much time reading, digging, watching, analyzing, evaluating, and writing.

But everything I need to know for The Shipping Blues is found on the deep blue ocean, the hard steel rails, and endless ribbons of asphalt and cement stretching across terra firma.

The best indicator of the future economy is conceivably shipping. And right now many shipping companies have “The Shipping Blues.”

What are The Shipping Blues? Read the rest of this entry »

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“Challenging Cooperman”

Last October the widely respected founder and Chairman of Omega Advisors, Mr. Leon Cooperman, saw signs of a bottom in the markets. The Dow was around 9,200 that day and the S&P was just below 1,000 points.

After reading his comments and based on my own informal research I sent Mr. Cooperman a letter and a copy of my book, “Final Audit.” I issued Mr. Cooperman a challenge, a friendly one, stating that the market would continue to tumble and that we would be lucky if it bottomed near 7,000 on the Dow and 740 on the S&P.

We know what happened in March!

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“Shades of Enron and WorldCom”

Eight short years ago the Markets were shocked by the December bankruptcy filing of Enron, one of the largest corporations in the country. It was the biggest bankruptcy in history. Just six months later WorldCom filed bankruptcy becoming the new largest recorded bankruptcy.

These two failures shook the markets sending stocks into a tailspin. Enron became the poster child for corporate corruption and executive greed leading the way to a series of corporate scandals including Adelphia, Tyco, ImClone, and Global Crossing. The perfect setting for Murder!

The corruption and greed became the backdrop for “Final Audit,” an exciting novel about executives from bankrupt corporations dying. As I wrote this ‘mystriguing’ first novel my research took me beyond the immediate scandals to the avarice, arrogance, and abhorrent behavior prevalent in Corporate America.

Many were responsible for the collapses of Enron and WorldCom. But the important issue would be what they learned from the failures and what they would do to prevent this happening in the future.

So what did we learn? And how did we apply those lessons? Read the rest of this entry »

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Posted in Bankruptcy, Economy, Markets, Predictions, Uncategorized, Wall Street | Comments Off

“The Real Crime at AIG” (reposted)

One year after the fall of Lehman Brothers, questions are still being asked about the decision. The day after Lehman was left to fail the Treasury chose to bailout insurance giant AIG. More was going on at AIG than we were told and the questions posed today may address a certain level of criminality that should be investigated.

On March 24th I sent an Op-Ed piece to the New York Times regarding the potentially criminal transfer of monies from the taxpayers to AIG counterparties through TARP allocations. Below is the text of the Op-Ed. The original article, “The Real Crime at AIG,”  is posted on It’s Worth an Opinion.

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“The ‘Real’ Crime at AIG”

Is the outrage over the bonuses given out to executives at American International Group (AIG) masking the ‘real’ scandal at the world’s largest insurance corporation?

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Posted in Banking, Economy, Markets, Too Big to Bail, Wall Street | 6 Comments »

“The Dow at 6,000” (reposted)

Last September, when the Dow was at 9,200 I told several people that we’d be lucky if the Dow managed to stay above 7,000. Now, I predict we’re faced with a Dow at 6,000 or less, maybe even this month. Submitted as an Op-Ed to the Wall Street Journal, April 2, 2009.

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Originally posted – April 2, 2009

It’s been one bumpy ride for Wall Street since the beginning of 2008. It’s been volatile and unpredictable; a bit like Mr. Toad’s Wild Ride, the chaotic and exciting children’s ride at Disneyland. I would have used the E Ticket analogy, but many of the traders would not have understood the classic reference to the level of volatility.

Traders, brokerages, pundits, and analysts vacillate from grave concern to irrational exuberance in the same day, and sometimes in the span of a single hour. It becomes increasingly difficult to predict the direction of the market when the market itself is so capricious.

Some say the volatility is caused by a lack of clear direction from the government. They decry the intervention of the government in private enterprise, protesting that it is leading to socialization. But in the words of the now infamous former Senator, Phil Gramm, they’re a bunch of “Whiners.” Read the rest of this entry »

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