Tuesday, March 31, 2009

POTC's Wednesday - Friday Market Psychology; Forward-Thinkers Will Not be Fooled This Week

Wednesday, April Fools Day brings us no earnings before or after market. Construction Spending for February at 10ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/const.htm Prior reading was a negative (3.3%), consensus now calls for an improvement of negative (1.6% - 2.0%). Briefing.com gives this report a letter "D" in terms of market moving significance, so even with that forecast improvement, we do not see any effect on the markets. The Institute for Supply Management Index (ISM) for March at 10ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/napm.htm Here's an economic report that judges the sentiment of the managers of 18 manufacturing sectors. The poll asks for a thumbs up or down on the current state of business. Since it doesn't take size of firms into account, it lacks some credibility, yet it is given a letter grade of "A-" for market moving impact. With so many stimulus greenbacks about to be thrown around, we anticipate a sudden shock in positive sentiment soon. The positive sentiment will be scattered, yet it could lift other sectors in sympathy, so to speak. The change in sentiment will be a false signal as far as we're concerned because it will be triggered by inorganic type growth. Bigger governments have a tendency to smooth and sway sentiment and even employment figures as they throw money around, so be careful. We envision this ISM to begin reflecting a tiny bit of that positive sentiment, and then it'll continue for several quarters. The $64,000 question is whether the market will be fooled on this April 1st into buying a $10+ Trillion bigger government mentality or not: not us. Here's how we see it without getting too preachy: IF the ISM comes in above its 6 month average of 38.4 or higher, the market will explode up. IF the ISM posts below 35, the market will implode lower. Anything in between will only bring on contagious yawns. Don't get fooled today though! POTC predicts Thursday will bring the bear market rally back, so we recommend buying Wednesday afternoon IF the Dow dips 150+ points and either selling into Thursday's morning - midday rally, or swinging short Thursday afternoon, as we see Friday offering up a yet another reversal down.
Thursday, April 2nd brings us Initial Claims for Unemployment for week ending 3/28 at 8:30ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/claims.htm POTC believes this report will give a false signal that things are improving. As pessimistic as we are, the market will probably rally hard Thursday. Prior weekly unemployed rang in at 651K, now the consensus is 645K - 653K. Although we will not position short ahead of this report, we will cheer IF the market rallies, and here's why. Friday's mother of all economic hammers brings us the fatter butter, the monthly employment percentage. And IF they rally this bear market higher Thursday because weekly statistics have improved by a few thousand, that will offer forward-thinkers/contrarians a fantastic opportunity to buy puts. We do not see the market closing on its highs, so prepare to execute short positions into the late morning/early afternoon buying frenzy, because smart hedge fund money will be selling into the bell. Before market earnings from Monsanto Company (MON), Q2 '09, revenue/sales estimates at $4.14B, last year same quarter revenue was $3.78B. Earnings per share estimates at $2.07, last year same quarter eps was $1.79. The shares have rallied in this angry bear growl of late and closed above their 200 day moving line of $82. You decide how to execute or not execute trade set-ups here; we're punting. After market earnings from: Global Payments Inc (GPN), Q3 '09, revenue estimates of $377M, last year same quarter revenue was $311M, a very nice improvement in any environment. Perhaps the credit card and casino processing businesses have not died? This is a very tough one to call. Earnings per share estimate is for $.42, last year was $.44, and here's where the truth is revealed. Rising sales due to GPN's account wins/scale, yet shrinking net profit margins. IF we had to toss the bones here, we'd be shorting or buying puts ahead of the report: GPN should revisit the sub $30 level before $40 in our opinion. Research in Motion (RIMM), Q4 '09, revenue estimate is for $3.4B, last year same quarter was $1.88B... very nice. Bottom line is pegged at $.84, compared to last year of $.72, and that we feel will be beat. POTC is biased toward RIMM. We believe the shares have been unfairly valued due to the Apple (AAPL) iPhone pricing model and carrier relationship advantages. Although Apple is arguably a top three technology company in the world, RIMM is not far behind. POTC does not believe RIMM will offer a doom & gloom business scenario, just the contrary. We sense RIMM has won a great deal of teen business in recent months and there's always a chance of a paradigm shift type business partnership/development. POTC, like the current change President, likes RIMM, GOOG, and AAPL, we recommend buying these Generals on any weakness.
Friday, April 3rd brings us the Unemployment rate for March: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/employ.htm This is referred to as the release that wields the heaviest hammer to market direction. The employment rate is arguably the best economic indicator we have in addition to Gross Domestic Product (GDP) to gauge future growth or contraction. Even though it's backward looking, the percentage affects business, consumer, and government psychology. We sure hope it affects this budget that's pending that's built to destroy the principles of capitalism. Capitalism was NOT built on the shoulders of bigger government, but a let me live free and give me the ability to spend my own capital philosophy. Prior unemployment for February was 8.1%, now consensus is for 8.5%. Will anyone be fooled into believing things are improving when Obama is dipping his sticky fingers into just about every sector? What does free market mean to him anyway? Is it possible ignorant fools continue to bid this market higher, of course, bear markets have a way of gutting geniuses and idiots alike. Yet we will definitely be shocked IF the market rallies higher on what looks like a very high estimate of 8.5%. POTC predicts the market implodes 500+ Dow IF the rate comes in 8.4% or higher. IF it comes in below 8.3%, then they'll rally the bear higher. The Institute for Supply Management Services Index (ISM) for March comes at 10ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/napmserv.htm Prior was 41.6, consensus now is 42 - 43. The trend will only be exacerbated by this number, as it's current reading is at such depths. Smart traders got long late Wednesday and reaped the Thursday rally. Smarter traders swung short mid to late afternoon Thursday and stayed short through the weekend. IF this little weekend piece helped you change something for the better, please share our subscriber email with anyone you feel would appreciate it: Psychologyofthecall@gmail.com. The Psychology of the Call team wishes all forward-thinkers a happy & healthy April. As the saying goes, "Spring has Sprung and Love is in the Air, It's Everywhere": http://www.youtube.com/watch?v=hvTwFl6OIAk&feature=channel

Regulation and Stimulus are 4 Letter Words For Fiscal Conservatives; G20 Looks to Offer Us a Beautiful White Elephant Solution

LONDON (AFP)--World leaders including U.S. President Barack Obama will gather in London on Wednesday for final talks on the eve of a G20 summit dogged by divisions on how to tackle the economic crisis. Obama arrived here late Tuesday on his first major foreign visit since taking office, and will hold talks with many of the leaders of the Group of 20 developed and developing nations ahead of Thursday's official summit. But the differences between the leaders on how to tackle the global crisis were laid bare in a newspaper interview Wednesday with Japanese Prime Minister Taro Aso, who rejected German claims that fiscal stimulus was not the solution. While the United States and others favor stimulus to boost economic growth, European countries led by France and Germany are skeptical about spending more than they have, and insist tighter global financial regulation is the priority. "Because of the experience of the past 15 years, we know what is necessary, while countries like the U.S. and European countries may be facing this sort of situation for the first time," Aso told the Financial Times newspaper. "I think there are countries that understand the importance of fiscal mobilization and there are some other countries that do not - which is why, I believe, Germany has come up with their views." France had already raised the stakes by saying President Nicolas Sarkozy would walk out of the summit if leaders refuse to address his calls for stronger regulation to prevent such a crisis in the future. German Finance Minister Peer Steinbrueck played down the likelihood, however, saying Berlin and Paris were expected to get their way. "There is a high probability that we will succeed in implementing better regulation and better supervision and make further achievements in overwhelming this financial turmoil," he told the BBC late Tuesday. The White House has rejected reports of any rift with European nations, and Obama has said any talk of regulation versus stimulus was a "phony debate". The president will hold talks Wednesday with U.K. Prime Minister Gordon Brown, the summit host, followed by discussions with Sarkozy and German Chancellor Angela Merkel. Obama will also hold his eagerly anticipated first encounters with Russian President Dmitry Medvedev and China's President Hu Jintao. The G20 leaders' presence in London has sparked a massive security operation across the capital, where a series of pro-environmental, anti-war and anti-globalization protests are planned over the next two days. On Wednesday, several demonstrations are planned to converge on the Bank of England, a march is planned on the U.S. embassy calling for foreign troops out of Afghanistan and Iraq, and pro-Tibet activists are also staging a rally. Brown has laid out five tests for success at the summit, including boosting the resources of the International Monetary Fund and World Bank to help them increase lending to countries struggling with the global economic downturn. He also hopes to agree on proposals to clean up the banking system - including agreeing on global rules for bankers' pay - to do "whatever is necessary" to stimulate growth, and to resist protectionism and boost trade. But European Commission chief Jose Manuel Barroso has tried to play down expectations, saying the talks would not yield a "miracle solution" to the crisis and another summit may be needed later in the year. The scale of the crisis facing the G20 leaders is severe. The World Bank on Tuesday forecast a contraction of 1.7% in the global economy this year, the first such outcome since World War II. The 30-nation Organization for Economic Cooperation and Development meanwhile predicted its member state economies would shrink 4.3% this year, warning the world economy was "in the midst of its deepest and most synchronized recession in our lifetimes." Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=l7owLFDn%2BkJrDg3iJlhMLA%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 31, 2009 22:26 ET (02:26 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 10 26 PM EDT 03-31-09

Obama is Crossing the Public-Private Sector Line; POTC is Against Govt Involvement in ANY Free Market Sector; Capitalism's Rays Musn't be Bent

U.S. President Barack Obama believes a prepackaged bankruptcy is the best way for General Motors Corp. (GM) to restructure, Bloomberg News reported, citing unnamed people familiar with the matter. He also is prepared to let Chrysler LLC go bankrupt and be sold in pieces if it can't form an alliance with Fiat SpA (F.MI), Bloomberg said Tuesday on its Web site, citing members of Congress briefed on the subject and two other unnamed people familiar with the administration's deliberations. Bloomberg quoted GM spokeswoman Renee Rashid-Merem as saying in an e-mail: "Our focus is on accelerating the speed of our operational restructuring and reducing liabilities and debt on the balance sheet," and "GM will take whatever steps are necessary to successfully restructure our company." Chrysler spokesman Todd Goyer didn't immediately comment, Bloomberg said. Full story: http://www.bloomberg.com/apps/news?pid=20601087&sid=aUFsRbmQyiJU&refer=home Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=l7owLFDn%2BkJrDg3iJlhMLA%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 31, 2009 21:10 ET (01:10 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 09 10 PM EDT 03-31-09

Goldman's Mathematical Modeling Failures Cut their TARP Strings; Iwanowski & Carhart Offer Retirement Excuse; De Santis Off to Greener Pastures...

DOW JONES NEWSWIRES The co-heads of Goldman Sachs Group Inc.'s (GS) quantitative investment management group and of its Global Alpha hedge fund have retired, Bloomberg News reported Tuesday on its Web site. Mark Carhart and Raymond Iwanowski left the firm Tuesday, the company confirmed. In addition, senior portfolio manager Giorgio De Santis also has left the firm. Full story at www.bloomberg.com/apps/news?pid=20601087&sid=am0ec1vXu_9A&refer=home -Dow Jones Newswires; 201 938-5500 Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=l7owLFDn%2BkJrDg3iJlhMLA%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 31, 2009 13:02 ET (17:02 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 01 02 PM EDT 03-31-09

Monday, March 30, 2009

Tuesday's Lil Early Dance Will Not End on a High Note; Yet Our Short-Term Sentiment Changes Late Wednesday; Update Tuesday Night

Tuesday, March 31st brings Consumer Confidence at 10ET for March: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/conf.htm Prior confidence was an historically most dismal 25, now consensus calls for an improvement of 27-28. The psychology of this consumer confidence dance is bound to improve as we dig ourselves out of the snowy months, yet the policies being legislated cannot go over well with
most sane capitalists. Will the market react after this number? We don't think so since the S&P/Case Schiller Home Price Index for January that came before it at 9ET carries more the painful weight. Prior was minus (18.55%), consensus now calls for minus (18.5%). These kind of numbers are beyond depressing. The wealth destruction in the capital markets have moved into the residential real estate arena, and since equilibrium has not yet been reached, we cannot be optimistic the market will cheer even slight improvements for more than a few minutes. Chicago Purchasing Managers Index for March at 9:45ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/chi.htm Prior reading was 34.2, now consensus estimates are 34.7 - 36. This is a leading indicator and an important barometer of future business activity in the Chicago region. There are some traders who will establish positions into this report, and very few after the report unless it falls far from its mean estimate. For the market to go meaningfully higher, the Chicago PMI would have to break above its 6 month average of 38.4, and meaningfully lower if it broke below the previous 34.2, as most expect minor seasonal improvements from very cold February to less cold March. (Perhaps they'll blame the result on global warming, regardless if it comes in hot or cold)
Before Market Earnings from: Lennar Corp. (LEN), Q1 '09, average revenue estimate is $530M, year ago same quarter was $1.06B, that is a b for Billion. Bottom line or earnings per share are estimated to come in at minus (.$71), year ago same quarter was minus ($.56). Jim Cramer mentioned he likes the homebuilders on his Friday Mad Money program. Whether you like, hate, or are indifferent to Cramer, as forward-thinkers we will continue to offer opinions from talking heads who are in the spotlight. We do not recommend going long any homebuilders, only waiting for them to possibly dead cat bounce, then we'd think of shorting the false run-ups. The policies of this administration are working to crucify risk takers, so we anticipate any reflex bounces from sector to sector to be short lived. Jim Cramer disagreed with us on his Monday show, saying bears are wrong and Obama is no Hoover. Our answer is simple, while in the grips of a bear choke down, do not give the all clear signal. Comparing 1929 to 2009 is irresponsible Jim Cramer, the scope of today's global destruction of wealth has never before been felt before, not even in 1929. After market earnings from: Apollo Group Inc. (APOL), Q2 '09, average revenue estimate is $865M, year ago same quarter was $694M. Average earnings per share estimate is $.65, year ago same quarter was $.41. Even though the education sector seems like an Obama favorite, the fundamentals are growing nicely, and the shares are above their 200 day moving average. We recommend taking an intelligent, forward-thinking trading approach and ignoring the earnings and initial move up or down. Patience, patience, patience, not gambling. A lot of money is wasted by gambling ahead of earnings, and we confess to being guilty of that stinkin' thinkin' behavior in the recent past. Although there will be instances where we recommend going long or short ahead of earnings, they will be rare. We'd much rather our forward-thinkers ignore the initial moves up or down and then take advantage of the fear and greed in the over-reaction. We feel that is a more intelligent behavior than merely throwing the dice, like Jim Cramer does so often. Cramer is not a bad man, yet like the rest of us humans, he has his deficiencies and is not to be looked up to as an expert in this treacherous political environment.. That's precisely the reason we feel the Psychological Financial Fusion (PFF) ratio will be widely accepted a 21st century ratio. The political/policy analysis of the PFF ratio is what average investors were missing in either studying the arts in the charts or the fundamentals/accounting. Not too many investors/traders have the time to follow policies that are coming down the pipe, POTC does. PFF ratio of the S&P will be revealed in a special email and posting on Tuesday, April 7th. The PFF ratio's goal wil be to find that perfect recipe of technical, fundamental, and political/policy analysis, sprinkled with an intelligent dose of behavioral psychology. It will combine the lagging indicators of technicals & fundamentals with the all important leading indicator of game changing policies/legislation/bills ahead. The PFF ratio will be issued for S&P 500 index from month to month based on those three components. POTC believes it will be effective and accepted as a forward-looking indicator due to its forward-thinking/anticipating political component.
IF you think this piece was useful, or IF you believe the PFF ratio may be something to monitor, especially its change effect/percentage due to future DC policies, please help us spread the blog address. If you are not a subscriber, please send an email to: Psychologyofthecall@gmail.com and we'll add you to the growing list of fiscally conservative thinkers who are anxious to better understand what hurdles lay ahead~

Sunday, March 29, 2009

Is the U.S. Govt Suddenly Making Free Market Decisions; Will We Allow Ourselves to Lose Control of our Capitalistic Society and Core Principles?

With bigger government weight over GM's Wagoner, his one free market eye was too stressed to go on. A sad day in American capitalism, a happy day for this scary change cabinet. Although still developing, many feel Wagoner was pushed out by Obama, and IF that is the case, the next CEO will be a mere global warming puppet.
POTC is not protecting Wagoner here at all, yet we are standing up for core free market principles. Rewarding success and punishing failure should be done by market forces, not government officials.
These donkeys must be remembered as total asses and ousted quickly. POTC predicts Obama will be powerless by the midterm 2011 elections:
We are confident the people of the United States will rise up to protect their core principles/values. Big government was and never will be the solution. It's beyond shameful what we are witnessing. Leaders from the Czech republic are quoted as saying Obama's policies are leading us to hell, supposedly German leaders feel the same way. How ironic the Europeans are standing up and telling us to wake up. Is it possible they know the system of change Obama is implementing, of course they do...
The people who bashed President Bush and for his war efforts after 9/11 are now facing a 11X
bigger budget deficit within one decade: http://www.nbcsandiego.com/news/us_world/10-Trillion-Dollar-Man.html , not to forget an escalation of the war Obama and many of his donkeycrats claimed we had lost and would end! Maybe some truth there, yet Obama's campaign promises of ending the war(s) have been broken. Does anyone think that sports announcer Olbermann would ever address the truth, not us, yet there are morons who tune in to that cable channel. Please Americans, speak out and stand up before some dress code and curfew is enforced!
We are more than hopeful sanity will kick every donkey and elephant that voted for bigger government and the out of control spending out of their DC zoo by 2011.
With one eye smiling and the other one crying, we look-forward to that November 2nd, 2011 date with hope of change; change that will throw a lasso around this big spender and control freak currently residing at 1600 Pennsylvania Avenue.

Friday, March 27, 2009

Friday's Economic and Earnings Data

Friday, March 27th at 8:30ET brings Personal Income & Spending for February: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/income..htm
Prior income figure came in at 0.4%, now estimate is calling for a gloomy 0.5% swing down to minus (0.1%). Personal spending prior figure was 0.6%, and now estimates are for 0.3%, so down 50% month to month. These figures to us seem too pessimistic, although we do not recommend placing large bets/trades going into any Friday, ever. Seasoned traders usually raise cash into weekends, so even good news Fridays have what's called a lag effect.
At 9:55ET the Revised Michigan Consumer Sentiment is slated for release: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/mich.htm
Although we do not believe this will have a meaningful change on market direction, it probably will work to exacerbate the trend. After correctly predicting today's rally (see below) we predict a sell-off ahead of the weekend.
[In relation to Thursday's release of Gross Domestic Product we stated: "Prior reading was a scary minus (6.2%), consensus now is for minus (6.6%). IF that consensus is beat, so (6.5%) or less, then the market will rally. IF that (6.6%) is hit on the head or above (6.7%), the market will be in trouble. POTC believes the number will post bullish and long portfolios will be rewarded today." The posted number was (6.2%)]
There are no meaningful earnings before or after market this Friday.

Thursday, March 26, 2009

Obama's Example of Control Over Free Markets

WASHINGTON (Dow Jones)--Previewing his looming decision on the U.S. auto industry, U.S. President Barack Obama suggested struggling car makers will receive more federal aid, but added that the money will be contingent on the sector making "some pretty drastic changes." "We will provide them with some help," Obama said at an interactive town hall meeting in the White House. "I know that it is not popular to provide help to auto workers or to auto companies, but my job is to measure the costs of allowing these auto companies just to collapse versus us figuring out can they come up with a viable plan." Obama's auto-sector task force has been evaluating General Motors Corp. (GM) and Chrysler LLC to determine whether the firms merit another injection of government cash. The companies have requested $22 billion, including $9 billion for the second quarter. Obama said the administration would provide extensive details on its stance on the auto makers in the next few days. Allowing the firms to slide into bankruptcy could cost thousands of jobs across the industrial sector, not just at GM and Chrysler, but at hundreds of dealerships, suppliers and related companies. At the same time, the White House is under pressure not to bail out companies that critics say are a victim of their own mismanagement. Obama said all parties - shareholders, workers, creditors, suppliers, and dealers - would have to make concessions because the industry's current model, which he said relies on low gas prices, is unsustainable. "If they're not willing to make the changes and the restructurings that are necessary, then.. I'm not willing to have taxpayers' money chase after bad money," Obama said. "And so a lot of it's going to depend on their willingness to make some pretty drastic changes. And some of those are still going to be painful, because I think you're not going to see a situation where the U.S. auto makers are gaining the kind of share that they had back in the 1950s." Though he didn't detail a specific remedy for the sector, Obama made clear that he wants it to survive. "We need to preserve a U.S. auto industry," Obama said. "I think that's important. I think it's important not just symbolically, it's important because the auto industry is a huge employer, not just the people who work for GM or Ford or Chrysler, but all the suppliers, all the ripple effects that are created as a consequence of our auto industry." Thursday's event, moderated by Vice President Joe Biden's top economic adviser, Jared Bernstein, was billed as the first-ever interactive town-hall meeting by a president. The White House collected more than 104,000 questions from nearly 93,000 people this week. Over 3.6 million votes were cast for which questions should be lobbed at Obama. The president took questions submitted in writing, as well as via video, and from the live audience, which the White House said was made up of around 100 people, including teachers, nurses and business owners. The event was streamed live over the White House website. The top questions - on education, homeownership, outsourcing and health care - gave Obama a chance to tout the initiatives his administration has implemented through the $787 billion economic stimulus package or is pushing in its budget blueprint. Obama said Americans should be "patient and persistent" about the ailing labor market, warning that unemployment is likely to worsen in the months ahead. "I don't think we've lost all the jobs we're going to lose in this recession," he said, adding that the job market is likely to endure a "difficult time" over the next several months, and possibly into next year. The U.S. has lost 4.4 million jobs since the recession started in December 2007, with almost half of those losses coming in the last three months alone. For Obama, the town hall meeting is the latest in an aggressive public outreach campaign on his $3.6 trillion budget proposal and the steps the administration is taking to address the economic crisis. White House spokesman Robert Gibbs said Obama would use the forum to provide another "update" to the American people. "It's a way for the President to do what he enjoys doing out on the road, but saves on gas," Gibbs said Wednesday. -By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Ia%2B9%2FwQde7iSgF%2FbgehNXw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 26, 2009 13:36 ET (17:36 GMT)

Wednesday, March 25, 2009

S/P Above 820 is a Definite Sell; this Politically Noisy Bear Rally Will not Last; Please Keep Your Eyes & Ears Wide Open

Thursday, March 26th at 8:30ET brings Initial Claims for Unemployment for week ending 3/21: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/claims.htm Prior number was 646K, now consensus is for 650K. Just like the existing and new home sales charts, the unemployment chart looks horrible. We reiterate about the problems with calling a bottom or turn in any spiraling market. Yet as traders we know that markets do not go straight down or straight up, so as these numbers are expected to come out bad, smart money usually buys ahead of these weekly reports. At such depths we only expect anomalies to occur to the upside, and that would exacerbate a bear market rally for Thursday. Gross Domestic Product (GDP) data for Q4 comes at 8:30ET as well: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/gdp.htm Prior reading was a scary minus (6.2%), consensus now is for minus (6.6%). IF that consensus is beat, so (6.5%) or less, then the market will rally. IF that (6.6%) is hit on the head or above (6.7%), the market will be in trouble. POTC believes the number will post bullish and long portfolios will be rewarded today. Okay; how can we not remind you of the coincidence again of the low S&P print of 666 just weeks ago, and now a GDP number that's forecast to be minus 6.6%? So many 6's must have the conspiracy theorists blogging about the end time being near. Not us, yet we love to point out anything related to numbers and sprinkle in some comic relief; this is NOT an easy exercise, especially considering how dire the global macro environment is! Please read on... Before market earnings from Gamestop Corp. (GME), Q4 '09, revenues are estimated to come in at $3.45B, and that would be a substantial beat over last year's same quarter of $2.87B. EPS is expected to come in at $1.36, and last year's same quarter was $1.14. Perhaps the same beat Buffalo Wild Wings shocked the Street with is in store for Gamestop. Even though we are very concerned with pooled investments related to commercial real estate assets, there are exceptions in retailers, and POTC believes GME is one. Family Dollar (FDO) and Buffalo Wild Wings (BWLD) are the other two. And if Sonic Corp. (SONC) goes through a management shake up, we would consider going long as well. Our target price on GME is much higher from where it's currently trading. Best Buy Inc. (BBY), Q4 '09, revenue estimates at $14.82B, up nicely year over year. As difficult it is to believe that many of these retailers are experiencing rising sales, we must point out that it's NOT as rosey a picture at BBY compared to GME. BBY's eps are supposed to come in at $1.39, and last year that figure was a fatter $1.71! With the fact Circuit City bankrupted, BBY could be an interesting buy if their revenues come in above $15B, so for aggressive traders who enjoy the shopping experience at Best Buy and feel revenues will surpass $15B, we recommend buying ahead of this report as well. We remind everyone of the phenomenon that it is truly a "market of stocks", not merely a "stock market". So as pessimistic as we are in our belief the S&P will eventually retest the old lows of 666, we do realize the opportunities in individual stocks from week to week nonetheless.IF you enjoyed any of the above analysis, please spread our blog email address to family and friends: Psychologyofthecall@gmail.com. Our team puts in roughly 18 hours of research per day in order to give a more scientific look to 21st century investment finance. And just how strange the free markets have become since the nearly overnight extinction of all five U.S. investment banks in 2008! The Psychology of the Call team.

Wednesday's Econ & Earnings Data; All Electrical Currents will be Focused on Paychex Inc. (PAYX); Earnings & Outlook Released After Mkt Close

Wednesday, March 25th at 8:30ET brings Durable Goods Orders for February:
http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/durord.htm Prior reading was minus (5.2%), now consensus calls for minus (2.0%). For many quarters durable goods orders held up well, but lately that has changed. Last quarter's strength in the U.S. dollar probably hurt sales of U.S. goods, yet the recent dollar weakness could see traders looking forward after this report and buy the dip. POTC does not see a favorable open Wednesday, so traders looking for a market/S&P trend take note. We are also bearish Wednesday due to our belief GS shares will sell-off and drag mud through most of the financial sector. 10ET brings the New Home Sales data: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/newhom.htm Prior new home sales were 309K, now the economists are calling for 300K. Not much positive can be said here either, except for the fact we feel that number could be beat due to weather related/cyclical reasons alone. Please open the link provided and understand detailed commentary on this falling knife of new home sales would be pointless. The only intelligence we can provide is this: whenever an asset is in such free-fall, it is irresponsible to ever use the word "bottom". Because forward-thinkers know, bottoms never do 180's, and IF they do, they usually retest at least once before eventually going sideways. Sideways movement is when smarter long-term type money begins to build positions. So we urge you to respect the fact shattered psychology takes longer to cure than fundamental capital damage. POTC believes consumers and investors will only begin to heal after the talking heads stop debating whether the market has bottomed. Please trust us here, the market has NOT bottomed, and that S&P 666 mark will be tested fairly soon. Before market earnings from Petrochina Ltd.. (PTR), Q4 '08, revenue estimates of $44.45B, no eps estimates as only 1 analyst offers coverage. With crude crawling back from the low $30/barrel to the $50/barrel level, PTR does look tempting. Although as forward-thinking traders, we understand everyone is aware of that fact, so perhaps we would only establish part of a long position in PTR if it were to sell-off 5%+ after earnings. After all, the entire world is in such bad economic and psychological shape, China's human rights issues related to slave labor have been given a pass. Therefore if you are optimistic of an eventual recovery by 2011, the Exxon Mobile of China must be monitored closely. POTC considers PTR a general, and generals are good leading indicators of the market. In the U.S., POTC considers CME, GOOG, and XOM as generals. After market earnings from Citi Trends Inc. (CTRN) Q4 '09, revenues pegged at $146.6M and a fat $.53 in eps. Since we're so bearish on commercial real estate, it's difficult to make an argument to buy a retailer, yet you must do extra due diligence and you may find some are decent buys and will survive. What has us semi-excited about CTRN is the estimates for revenues look to be up year over year (y/y) in this quarterly report. IF we had to guess, CTRN will probably pop higher after the report, yet it could be short lived. A VERY important report comes from Paychex Inc. (PAYX), Q3 '09, revenues estimated at $536.9M, and that would be up y/y from $532.17M, and $.36 of eps, which is slightly below last year's $.39. PAYX is a VERY important earnings report that will be highlighted on Dylan Ratigan's Fast Money as well as the Kudlow Report. Paychex provides payroll, human resource, as well as employee benefit programs, thus it is regarded as a leading indicator of employment. And employment, or lack there of is the single most important element to monitor as related to economic growth and or contraction. If PAYX's revenues do come in above $537M, we believe the market will blip higher Thursday. Yet the opposite is true if PAYX's revenues come in light (under $525M). We recommend more aggressive traders position long late Wednesday, as we feel PAYX will offer a rosier outlook than most today believe.
Thursday's weekly unemployment report should come in tamer simply based on cyclical reasons. Lastly, the massive spending bills will have a short-term effect that smooths the employment number, and bear markets have a way of rallying on any hopeful news. We call for a retest of S&P 823 on Thursday, after Tuesday's and Wednesday's sell-offs.
IF any of the above analysis helped you even a little bit, please spread our blog email address to family and friends: Psychologyofthecall@gmail.com. Our team puts in approximately 18 hours a day to bring a more scientific approach to investment finance.

Tuesday, March 24, 2009

Tuesday's Fade to Black Reality

The Psychology of the Call team is sticking our necks out in predicting the S/P has topped out yesterday at 823. We believe smart money is taking profits here, and aggressive money is shorting/buying puts as this bear rally fades... Although strength in the broad market this Tuesday is impressive considering Monday's monstrous move, the resiliency is softly rooted in lower volume, fewer sellers, and growing hope in an effective bank plan. Although both involve positive technical and fundamental elements, we remind of the huge foundational crack the economy may fall into IF the bank plan were to fail or its success post dated a 9.5%+ unemployment rate. Two variables forward-thinkers must consider before jumping long into any asset class today. Goldman Sachs argues a 9.5% or > unemployment rate would cause great tension in commercial real estate (CRE) and all connected assets. With most ears and eyes on the Bernanke - Geithner's AIG testimony, it's evident that these two men are well meaning. Yet we feel they have very little influence on righting the rusting Ship of Unemployment. The employment problem along with falling residential and CRE
prices remains extremely troubling for making a bullish case for stocks. We would like nothing more than to witness toxic bank assets brokered to buyers and then experience some sort of expansion of credit/loans, leading to more jobs and a needed turn in real estate. Wow, do you think all those events will occur by year end, not us. We look to 2011 for a meaningful economic turn and late 2010 for a fundamental stock market bull run. Until then, it'll remain a treacherous trader's market. Only until employment turns coupled with favorable real estate sales do we feel a new bull market grow horns. Even IF bad bank assets find buyers, the sentiment of most consumers push toward downsizing/getting smaller. Whether fewer family cars or smaller homes, we feel it's only the first inning of consumer downsizing. Most talking heads say deleveraging is over, but we feel they are only referring to corporations. We view the consumer as walking around with a blackened eye for the past several years, and it may not heal even after the banks are cleaned up. Yet the Dow rose 500 points Monday due to talk that one piece of a gigantic puzzle may fit. Banks are flushed with more cash today than ever in history, yet not writing loans due to the uncertainty of the upper-limit unemployment and year it will occur. Most economists say end of 2009, we disagree. Considering the tremendous net worth deterioration of most Americans, spending behaviors going forward may shift down to a lower gear. We know the rosey statements from government officials have vested interests in their outlooks, and herein lies the future economic conundrum. IF the Obama economic team's peak unemployment estimates of 8.1% are wrong (Peter Orszag), and we're at that percentage today, then their enormous spending bills will be viewed as irresponsible. A problem 10X greater than today's may be ahead of us on this fade to black bear market path.
The Psychology of the Call team reminds forward-thinkers of the power gained from positioning your account in cash at the end of the trading day, but especially after Monday's huge bear bounce. We wish you a profitable trend setting Tuesday.

Monday, March 23, 2009

Porn Abandoning Office Space in New York is Clear Sign of the Times; POTC likes SRS April $80 Call Options

NEW YORK (AFP) -- Focusing on boardroom, not bedroom needs, famed men's magazine Playboy is pulling out of its New York offices, a spokeswoman said Monday. "We are closing our New York offices to integrate our online and printed publishing," Martha Lindeman told AFP. She said that about 100 jobs were affected and that although some employees would transfer to offices in Chicago, or be given other options, the "majority" would leave the company. Only a "small editorial and sales presence" will remain in New York, where the racy magazine has leased 5th Avenue premises since the early 1990s. The move will take place May 1. Playboy Enterprises (PLA) explained in an earlier statement that it intends to "streamline operations across the company, which will include the elimination of additional positions and reduction of other expenses." New York is not the only place where Playboy founder Hugh Hefner is feeling blue. The Los Angeles Times reported this month that Hefner is selling his family home in California for nearly $28 million. Hefner's Playboy Mansion appears safe for now: the 83-year-old continues to live there with three models. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=opwgYsaCMSZ0RM8N0TznMw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 23, 2009 15:40 ET (19:40 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 03 40 PM EDT 03-23-09

Sunday, March 22, 2009

Psychology of the Upcoming Week's Earnings & Economic Data

The entire Psychology of the Call (POTC) team is excited and happy to bring back the weekend piece we call Psychology of the Upcoming Week's Earnings & Economic Data. We thank the loyal readers who found it useful enough to request that we bring it back to life. Here we go...
Monday, March 23rd at 10ET brings Existing Home Sales for February: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/exist.htm
Prior amount sold was 4.49M units and now the consensus forecast is 4.45M. Home sales continue to plague the capital markets. No other bubble has ever had such devastating effects as this ongoing U.S. housing asset and credit crisis. Falling long-term interest rates as the Treasury buys bonds should help sales, yet we do not believe this positive fundamental change of cheaper money (lower interest rates) will impact behavior this year. The pendulum of psychology will not swing quickly. Even as more favorable raw data starts coming in, be alert to the smoothing effects caused by foreclosures, otherwise known as distressed sales. POTC does not see a meaningful turn in existing home sales until the employment numbers recover, and that may not happen until mid 2011 by our guesstimates. Before market earnings from Tiffany & Co. (TIF), Q4 '09, revenue and earnings per share (eps) estimates are $838M and $.80. Walgreen Company (WAG), Q2 '09, revenue and earnings per share estimates are $16.42B and $.66.
After market earnings from Focus Media Ltd. (FMCN), Q4 '08, $193M in revenues and $.38 in eps (bottom line). Sonic Corp. (SONC), Q2 '09, $170.2M in revenues and $.09 eps expected.
For several reasons, POTC believes shares of SONC should be... ---------------------------
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Saturday, March 21, 2009

Trade Update

Congratulations to readers who acted on our March 7th recommendation regarding CRA. The shares closed up 25% Friday and are up more than 50% since our mention. With respect for the 11 Commandments we advise to take profits on half the position and hold the other half. CRA is in a space that could enjoy more favorable momentum as President Obama's administration is very open-minded regarding stem cell research.

Friday, March 20, 2009

Glimmer of Hope for the Political Element of the PFF ratio; Spending May be Stymied

WASHINGTON (Dow Jones)--The Congressional Budget office Friday substantially downgraded its forecast for the federal government's fiscal position, spelling gloomy news for President Barack Obama as he tries to win support for his $3.55 trillion budget request for fiscal year 2010. The non-partisan congressional number cruncher said that it now expects the federal government's budget deficit to hit $1.8 trillion in the current fiscal year, which ends in September, down from $1.2 trillion it estimated two months ago. Looking ahead to fiscal year 2010, the CBO said the federal government budget deficit will double to $1.4 trillion from the $700 billion it forecast in January. As for the president's budget request, the CBO said it would add $4.8 trillion to the baseline deficit forecast over the next decade. With Republicans and even some Democrats in Congress already questioning Obama's ambitious spending plans, the CBO revision could make the president's job of selling the budget to lawmakers that much more difficult. Congress is set to begin working in earnest next week on its budget resolution where it sets its top line spending figure that allows individual appropriation committees to start working on detailed spending plans. According to a senior administration official, the bleaker numbers from the CBO won't lead to a scaling back of the president's ambitions. The official said the administration was confident that Congress would adopt a budget resolution that closely followed the model set out by Obama's request. The centerpiece of the president's budget is universal health care for all, a plan that the administration said would initially cost a down payment of $634 billion over the next decade. Critics have suggested this figure could double over the longer term. One positive note to come out of the CBO revised forecast is that it expects the recession to end by the autumn due to the impact of the economic stimulus plan and the aggressive efforts by the Treasury and the Federal Reserve to stabilize the financial markets. It said U.S. gross domestic product would drop by 1.5% in fiscal year 2009, before bouncing back sharply by 4.1% in each of 2010 and 2011. The unemployment rate, which has been escalating sharply over the last year, will peak at 9.4% in late 2009 or early next year, the CBO said. It will remain above 7% through 2011. The rate is currently at 8.1%. -By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=HXabjEsEuAEnxPI6dc%2BULw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 20, 2009 14:28 ET (18:28 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 28 PM EDT 03-20-09

BACK BY POPULAR DEMAND: The Psychology of the Upcoming Week's Earnings & Economic Data; Late Saturday Night

Thursday, March 19, 2009

Our Greatest President Looks on with a Saddened Eye; Latest Monetary Policies Troubling

NEW YORK (Dow Jones)--The dollar got beaten down Thursday by continued worries that the Federal Reserve's announced bond-buying spree could spark troublesome U.S. inflation and weaken the U.S. currency's value. The euro, which was under $1.30 less than a week ago, rose to a 10-week high of $1.3739 during the New York session Thursday, while the dollar fell against the yen to a nearly one-month trough of Y93.55. Those moves helped send the dollar index, which measures the U.S. currency against a basket of currencies, down about 4% from where it was Wednesday afternoon when the Fed announced its latest non-conventional easing program, designed to kick-start the economy. The plan calls for pumping up to $1.15 trillion into the system so as to lower borrowing costs. The injections would occur through the purchase of $300 billion in long-term Treasury bonds during the next six months, and other measures. "It's been a one-way street in the foreign-exchange market since the Fed announced the buying of U.S. Treasurys," said Vassili Serebriakov, currency strategist at Wells Fargo Bank. "The U.S. dollar is under considerable pressure across the board." Thursday afternoon in New York, the euro was at $1.3678 from $1.3480 late Wednesday, and the dollar was at Y94.41 from Y96.21, according to EBS. The euro was at Y129.14 from Y129.70. The U.K. pound was at $1.4518 from $1.4288. The dollar was at CHF1.1228 from CHF1.1432 Wednesday. But while the dollar got hammered by its main rivals Thursday, it staged a modest comeback against some less-frequently traded currencies, such as the Mexican peso. The dollar had fallen to a 10-week low under MXN14 after the Fed announcement Wednesday, but on Thursday it rebounded to MXN14.24. Analysts said investors are concerned that continued problems with the U.S. economy would likely spell even more trouble for emerging markets, and their currencies. While the near-term course for the dollar appears grim due to the Fed announcement, Wells Fargo's Serebriakov said, the longer-term outlook might not be quite so bad if other central banks mimic the Fed's liquidity moves. "Other central banks are also likely to move further on the non-conventional easing path, while the dollar could benefit if the Fed's actions bring forward the day of the eventual recovery," he said. On Friday, currency traders are likely to keep an eye on a few pieces of U.S. economic data, including the latest reading on fourth-quarter economic growth, and a University of Michigan/Reuters consumer-sentiment survey for February. -By Dan Molinski, Dow Jones Newswires; 201-938-2245; dan.molinski@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=9wJyqpDVRkP1dIKEQFegyw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 19, 2009 15:55 ET (19:55 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 03 55 PM EDT 03-19-09

Wednesday, March 18, 2009

Treasury Secretary Timothy Geithner = No Change

Is Treasury Secretary Timothy Geithner able to offer the true change mechanic the banking system and American consumer so desperately desires? POTC feels Geithner would be more successful and trustworthy IF he admitted policy mistakes under the elephant regime he was a part of. Perhaps he should take a more independent (I) path instead of becoming lost in the herd mentality stinkin'-thinkin' animalistic type behavior. It's clear the scare tactics of printing money which began on the ousted elephants' watch are being exacerbated by the change donkeys; this cannot be effective in building positive consumer and bank lending sentiment dear Mr. Geithner. POTC sees acceleration of the same old same old, NOT the promised change. Real change would be stopping the problems that got us into this sink hole in the first place, not throwing good money after bad dear sir Mr. Treasury Timothy Geithner. Spending trillions of virgin greenbacks in such a short time is asinine, and AIG is but one example you have failed us. POTC would much rather put the so-called systematic risk failure scenario to the test at this point, instead of accepting the inevitable fade to black, dark death by dollars fate. Perhaps the so-called systematic risks are merely scare tactics in order for the two party animal system to maintain control? Anyone who voted for Obama or McCain and takes the time to reread Senator Ron Paul's politics has to feel disturbed. Here's why we feel the way we do about Treasury Secretary Timothy Geithner, you decide where the change lies: http://news.yahoo.com/s/ap/20090318/ap_on_go_ca_st_pe/whither_geithner_analysis

Stiffer German Bank Capital Requirements/Regulations Will Soon Darken the Growth Outlook; Deutsche Bank in the Crosshairs

FRANKFURT (Dow Jones)--Germany's finance ministry has drafted a bill that would give regulators more power to supervise banks and insurance firms, a ministry spokeswoman said Wednesday. If passed, the new law would boost regulators' rights to obtain company-specific information and set stiffer capital requirements, and would also allow them to intervene in a timely fashion on risks of rapidly deteriorating balance sheets, according to a document seen by Dow Jones Newswires. "It's all about regulators' right to intervene," said Jeanette Schwamberger, a spokeswoman at the finance ministry. "That's what the coalition committee has agreed on," she said. According to the document, which forms the basis of the draft bill, financial watchdog BaFin could force banks to raise their capital ratios, or the capital they hold against risky assets. Despite some improvements following the launch of the government's EUR500 billion SoFFin financial markets stabilization fund, the capitalization of German banks has often been behind that of their U.K. and U.S. peers. The German cabinet is expected to approve the draft bill March 25, and legislation could be implemented before the parliament's summer break, the spokeswoman said. -By Nina Koeppen and Andreas Kissler, Dow Jones Newswires; +49 69 2972 5509; nina.koeppen@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=YP4aEomnnr3fVmx9HToUdQ%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 18, 2009 10:07 ET (14:07 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 10 07 AM EDT 03-18-09

Tuesday, March 17, 2009

Ah-Chu! Although we are all for a clean environment Mr. Chu, we are staunchly opposed to Cap & Trade Rule

WASHINGTON (Dow Jones)--A day after one of China's top climate envoys warned of a trade war if developed countries imposed tariffs on carbon-intensive imports, U.S. Energy Secretary Steven Chu advocated adjusting trade duties as a "weapon" to protect U.S. manufacturing. Chu, speaking before a House of Representatives science panel, said establishing a carbon tariff would help "level the playing field" if other countries haven't imposed greenhouse gas reduction mandates similar to the one U.S. President Barack Obama plans to implement over the next couple of years. It is the first time Obama's administration has made public its view on the issue. "If other countries don't impose a cost on carbon, then we will be at a disadvantage...[and] we would look at considering perhaps duties that would offset that cost," Chu said. A preponderance of U.S. federal lawmakers who are crafting climate legislation say they won't sign greenhouse gas legislation into law unless it has a time-table for countries such as China and India to establish binding reductions and a tariff to protect U.S. business. Those measures were fundamental in getting labor union support last year for a Senate proposal that ultimately failed. Li Gao, a senior Chinese negotiator from the National Development and Reform Commission, told Dow Jones Newswires Monday that such a tariff would be a "disaster," would prompt a trade war and wasn't legal under World Trade Organization agreements. His boss, Xie Zhenhua, a vice chairman of the NRDC and China's top climate envoy, Monday met with his counterpart, Department of State's Todd Stern. The delegation will also be meeting with Obama's climate czar, Chu and other senior administration officials. "It does not abide by the rule of [World trade Organization] and secondly, it's not fair," Li said, adding that his delegation would relate China's concerns to U.S. officials. Domestic industries, such as energy-intensive paper, cement, fertilizer, steel and glass manufacturers, are worried the increased cost burdens imposed by climate change laws will put them at a severe competitive disadvantage to their international peers whoaren't bound by similar requirements. The issue has become controversial in international negotiations as European Union officials are considering a similar tariff, but many developing nations caution that trade restrictions run the risk of retaliatory action. In the U.S., although there's disagreement about the schedule for phasing in a carbon tariff - with proposals ranging from 2012 to 2020 - the policy has strong support from industry. Some of the country's largest and strongest unions, including the AFL-CIO and the International Brotherhood of Electrical Workers, support what is for them a competition-protection clause. Officials from American Electric Power Co. Inc. (AEP), which helped to write the language in the Senate climate proposals, have said the tariff requirement would only apply as a measure of last resort, and the U.S. would make good-faith efforts in the meantime to encourage other countries to cut greenhouse gases. But China is instead seeking to require importers of carbon-intensive goods to bear the emission costs, concerned that targets such as those proposed by the U.S. would cripple the nation's growth as an industrializing nation, arguing for a more lenient approach as it develops. Although with 1.32 billion people and developing demand forcing the country to build a new coal-fired plant every week, China points to the fact that its carbon dioxide emissions per capita is around 20% that of the U.S. In his 2010 budget, Obama late last month targeted a reduction of 14% of greenhouse gas emissions from 2005 levels by 2020 and 83% below 2005 levels by 2050. The U.S. does agree with China that an international agreement should be based on a principle of "common but differentiated responsibilities" that allows a less stringent and longer-term flexibility for developing countries. Obama's officials also agree that developed countries need to help finance the technology transfer for low carbon energy and efficiency measures. -By Ian Talley, Dow Jones Newswires; 202-862-9285; ian.talley@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=u8iDMvqaGGE59ulN8%2FBABQ%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 17, 2009 15:29 ET (19:29 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 03 29 PM EDT 03-17-09

Monday, March 16, 2009

Bernanke Reminds of the Unemployment Reality; Equity Market Retreats from Intraday Highs

U.S. retail shares traded lower Monday, moving in the opposite direction from rising broader markets after U.S. Federal Reserve Chairman Ben Bernanke said the 8.1% unemployment rate will rise. The S&P Retail Index (RLX) fell 1.5% to 258.89 in late afternoon trading. Bernanke said in a rare televised interview that while the U.S. recession will come to an end "probably this year," he warned the unemployment rate will rise. The jobless rate, at its highest in over a quarter century, has been one of the key factors hurting consumer demand and sentiment. In other economic news that signaled weakness in the economy, industrial production fell for the fourth straight month with the decline worse than expected by economists surveyed by MarketWatch. Meanwhile, U.S. home builders remained discouraged about their business in March, according to a monthly survey by industry trade group the National Association of Home Builders. Wal-Mart Stores Inc. (WMT) shares fell 0.2% to $49.10. Wal-Mart, a Dow Jones Industrial Average member and the world's largest retailer, plans to convert two of its Neighborhood Market stores to supermarkets specifically targeting the Hispanic population. Shares of Sears Holdings Corp. (SHLD), owner of Kmart and its namesake department store chain, declined 3.5% to $38.53. Sears said late Friday it's unifying its multichannel services under ShopYourWay, which includes services and features such as Web to store pick-ups and comparison shopping of the top eight appliance brands. -Andria Cheng; 415-439-6400; AskNewswires@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=StXlfP8AHGRffk1%2FkrsLOA%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 16, 2009 15:38 ET (19:38 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 03 38 PM EDT 03-16-09

Friday, March 13, 2009

After U.S.A just legislated over $1.2 Trillion in spending, Summers urges other nations to dilute their currencies; backs EFCA too!

Even though the market is performing a technical head fake today, we'd be remiss not to remind of the eery Friday the 13th news. POTC doesn't mind a little govt spending in times of great crisis, yet we believe the recent amounts reveal more weakness than strength. And when met with anti-growth fiscal/tax policies, perhaps Larry needs to revisit his Econ 101 studies before asking world leaders, who have already chosen to walk down more socialistic paths, to grow their govt even more? We see this development as the first step in a process of rising doubt about the mammoth growth in governemnt & greenbacks under Obama. 60% of respondents in our poll felt Obama is failing capitalism, the free market system that did more good than ANY other model ever. Thank you for participating in our poll. Also, please notice Summers back EFCA towards the end of piece. WASHINGTON (Dow Jones)--Lawrence Summers, a top adviser to U.S. President Barack Obama, said Friday that countries accounting for a "very substantial majority of the world economy" probably have room for fiscal stimulus. "As a general matter, I think there is, looking around the world, significant scope for fiscal expansion," the director of the White House National Economic Council said in answering questions after a speech at the Brookings Institution. Summers declined to name the countries, but Treasury Secretary Timothy Geithner is expected to urge his counterparts at the Group of 20 meeting this weekend to increase their efforts to spur demand. That push has been met with resistance, especially among European governments that have signaled they don't plan to come up with more stimulus measures. In his speech, Summers said the administration will be pushing the G20 to adopt pro-growth measures in addition to fixing the regulatory system. "Priorities will include spurring demand around the world and assuring the adequacy of funding for emerging markets," he said. The former Treasury secretary downplayed concerns about the increase in the U.S. debt load to finance its policies to restore growth and financial stability. When asked about comments by Chinese Premier Wen Jiabao about the outlook for U.S. government debt, Summers said Obama's budget proposal shows a commitment to returning to a "sustainable" fiscal policy once the economic expansion starts. But he said it's necessary to "prime the pump" to get out of the "vicious cycle." While acknowledging that there is a danger if deficits continue to rise after the crisis, Summers argued that the current policy is ultimately more fiscally responsible than austerity measures. With the current market sentiment, he said, the central variable is restoring confidence and generating a sustainable recovery. "If we were to put that at risk in the name of some generalized concern about austerity, I think we would be doing the wrong thing by the economy, and ironically, we would even be doing the wrong thing by markets," he said. Summers touted what he called "the boldest economic program to promote recovery and expansion in two generations." While expressing confidence that the administration's three-pronged plan to boost growth, revive financial markets and help homeowners will work, he acknowledged that the timing of a turnaround is unclear. "No one can know just when its positive effects will be fully felt. No one can predict when this crisis will be resolved," he said. "But in resolution, I am confident there is enormous opportunity for both Americans and for the United States of America." He pointed to improved consumer spending and narrowing credit spreads as signs that the policies are already bearing fruit. The economy is suffering from a "rarer kind of recession" caused by the "spontaneous correction of financial excesses," said Summers, warning that the crisis won't be solved quickly. But he also said the correction presents an opportunity to restore the economy to its potential, noting that, adjusted for inflation, the Dow Jones Industrial Average has fallen to a level last seen in 1966. "For policy makers, it suggests the magnitude of the gains from restoring sustained economic growth," he said, saying the market could be regarded as "the sale of the century." Answering a question after the speech, Summers said it's a good time to invest for businesses with sound long-term strategies "because in a real sense, there are a very large number of things that are on sale today," citing a lower cost of construction as one example. But he said that other engines of growth are needed to ensure long-term growth in the absence of the asset bubbles of the past, requiring efforts to boost exports and invest in health care, energy and education. Summers also signaled support for passing a bill that would make it easier for unions to organize - the Employee Free Choice Act that was introduced in the Senate this week. When asked whether a union-organizing bill is a good idea during a recession, Summers said a sound economic expansion requires that benefits are broadly shared, and a healthy trade union movement is part of that. Arguing that labor laws have tilted against unions for many years, he said "an attempt to redress that balance seems to me something that is appropriate at such a time." Summers also defended Geithner, saying he has handled the crisis in a "difficult and courageous way" by creating a plan that recognizes the complexity of the problem. Taking a swipe at the Bush Administration, he said the easy route would be to issue plans that have the "illusion of specificity and sense of certainty about what the future would bring." He said the wisdom of Geithner's approach will be clear once the bank stress tests are completed and the measures to restart credit markets start producing results. On overhauling the global financial system, Summers said the U.S. "must lead a leveling up of regulatory standards, not as has happened all too often in the recent past, trying to win a race to the bottom." Geithner plans to lay out more detailed regulatory proposals in coming weeks, but Summers mentioned some broad principles, including that "no substantially interconnected institution or market on which the system depends should be free from rigorous public scrutiny." In addition, capital and liquidity requirements should focus on protecting the system during crises, improper risk-taking should be discouraged, and regulatory agencies shouldn't compete, he said. -By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=ng1w6r1HE0kclAhDCqibiA%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 13, 2009 14:46 ET (18:46 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 46 PM EDT 03-13-09

Thursday, March 12, 2009

Mark to market change after S/P lost 50%+ of value? You too lost your chance to be invited to Rick Santelli's Tea Party in early '08!

WASHINGTON (Dow Jones)--In a surprising reversal, House Financial Services Subcommittee Chairman Paul Kanjorski, D-Pa., said Thursday that Congress will have no choice but to intervene if regulators and the U.S. accounting standards board don't act soon to improve mark-to-market accounting rules. He made his remarks at the start of a hearing Thursday on the controversial accounting rule, which has forced banks to write down billions of dollars worth of assets on their books because of the deteriorating market conditions. Mark-to-market rules requires them to list their assets at current market value. "Previously, I have taken the position that the Congress should not interfere through legislation in the area of establishing specific accounting rules. It seemed best that such technical work be left to the regulators, standard setters and financial experts," Kanjorski said. "We can, however, no longer deny the reality of the pro-cyclical nature of mark-to-market accounting," he added. "It has produced numerous unintended consequences, and it has exacerbated the ongoing crisis. If the regulators and standard setters do not act now to improve the standards, then the Congress will have no other option than to act itself." Kanjorski was careful to say that a Congressional intervention shouldn't imply support for an all-out suspension of mark-to-market rules, as many banks and some lawmakers have called for in the past. The lawmaker said he isn't in favor of doing away with the standard because it would "revert to the very kind of subjectivity and sleight-of-hand that made mark-to-market necessary in the first place." "The standard does provide transparency for investors, but its strict application in the current environment is, in too many instances, distorting rather than clarifying, the picture," he said. His comments came ahead of testimony in which representatives from the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Financial Accounting Standards Board are expected to say they oppose suspending the rule. Following a study the SEC submitted to Congress late last year, FASB has said it is working to provide additional guidance on the issue and hopes to present its findings by the end of the second quarter of the year. Critics of the rule and its application, including the American Bankers Association and the U.S. Chamber of Commerce, have called on FASB to pick up the pace on providing guidance, saying the matter is urgent. Those concerned about mark-to-market accounting have also said the rule has hurt the ability of banks to maintain regulatory capital requirements. On Thursday, Kanjorski urged the OCC to liberalize regulatory capital requirements and grant "reasonable forbearance in the current economic environment." One idea he said is worth consideration would be to separate an asset's losses due to credit risk from its losses due to liquidity risk when applying mark-to-market accounting rules. -By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=F9bOn6dSKEDD%2Fhvv3LCENQ%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 12, 2009 10:22 ET (14:22 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 10 22 AM EDT 03-12-09

Wednesday, March 11, 2009

JPM's Sparkling Capitalist Dimon using word "PROFIT"; a War of Words Against President Obama Perhaps? Profit is a Good Thing dear sir Mr. President

JPMorgan Chase & Co. (JPM) Chief Executive Jamie Dimon said the bank was profitable in January and February, CNBC's Dennis Kneale reported Wednesday after speaking with Dimon over the phone. Dimon's statement follows a similar one made by Citigroup (C) CEO Vikram Pandit, who sparked a rally Tuesday by saying his company also turned a profit in the first two months of the year. Web site: http://www.cnbc.com/ (END) Dow Jones Newswires March 11, 2009 14:47 ET (18:47 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 47 PM EDT 03-11-09

President Obama's Dangerous Control Agenda, Tying Up the Free Market System Due to Bad Al Gore Science

WASHINGTON (Dow Jones)--Democratic leaders - including U.S. President Barack Obama's top budget official - are considering a procedural tactic that could give them the power to ram a controversial climate change and energy bill through Congress. The administration and Democrats such as Senate Majority Leader Harry Reid, D-Nev., hope to avoid obstruction by the Republicans and centrist Democrats who fear the potential economic impact of legislation to ax greenhouse gas emissions. The tactic is being discussed because of the dramatic impact of the bill: collection of "climate revenues" from a proposed cap-and-trade system could represent a major source of future revenue for the federal government. Democratic leaders are considering a process in the Senate known as "budget reconciliation," meant to fine-tune the government's expenditures and revenues later in the year, which needs only 51 votes compared to the standard 60 needed for contentious legislation. Some leaders see the alternative as an option of last-resort. Yet even having this option under consideration is raising the ire of many lawmakers and reveals how serious Obama is about passing a bill that axes greenhouse gas emissions. "Reconciliation is not the first place we would go, but we're at the beginning of the discussion and aren't going to take anything off the table at this point," Office of Management and Budget Director Peter Orszag told Dow Jones Newswires Tuesday after a budget hearing in the Capitol. An aide with a senior Democrat said lawmakers are considering the option simply because "we want to get it passed, that's our strategy." Obama will face more than a handful of Democrats who've already voiced objections to the president's stringent climate change proposal. In Obama's fiscal year 2010 budget outlined earlier this month, the administration said it expected to start collecting "climate revenues" from a cap-and-trade system in 2012. Based on a very conservative price estimate of $20 a ton, Obama hopes to glean at least $646 billion by 2020 from the program, which would represent a significant future source of revenue for the federal government. Those revenues would be raised by a 100% auction of carbon credits - the right to emit greenhouse gases - but only around $15 billion a year would go towards funding low-carbon energy technologies, according to the Obama plan. A raft of senators from Rust Belt and coal-producing states last year said they couldn't support a climate proposal introduced onto the chamber floor, a bill less stringent than the president's proposal. They warned such a bill needed "great care" in crafting due to potential impacts on the economy, energy prices and industry competition. Those same senators, including Debbie Stabenow, D-Mich., Sen. Ben Nelson, D-Neb., and Byron Dorgan, D-N.D., have again joined forces this year and are drafting a set of principles they say should guide climate bill legislation. The Environment and Public Works Committee chairman, Sen. Barbara Boxer, D-Calif., said slipping the climate bill into the budget reconciliation process may be the easiest route. The procedure also could be used for other controversial energy provisions that could mandate renewable energy production and give greater federal authority to site electricity transmission. Surveying the legislative landscape, the administration is using a multi-pronged approach to cutting greenhouse gases. The president has also directed the Environmental Protection Agency to draft new regulations for greenhouse gas emissions through the existing Clean Air Act. Forcibly creating new climate laws, either through the Clean Air Act or budget reconciliation, is highly controversial. When Obama's predecessor George W. Bush used the budget reconciliation process to push through his tax cuts in 2001, some Democrats were outraged, accusing the administration of by-passing the Democratic process. Leaders in Obama's own party are warning about the tactic. Sen. Max Baucus, a Democrat from coal-state Montana and the chairman of the Finance Committee, said "it's not a good idea," and the partisan nature of such a strategy would cause the administration trouble. "It's possible 51 votes could be found, but at what cost?" he said on the sidelines of party lunches. "There's lots of ways to throw sand into the Senate's gears.. even with reconciliation, there are ways to slow things down," he cautioned. Sen. Nelson said he was opposed to reconciliation, "because I don't think it's the appropriate way to deal with climate change. That needs to go through the regular order." Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, said Congress needed more debate on climate change before passing legislation. Bingaman, who has supported a less onerous climate bill, suggested using reconciliation for climate change or including energy provisions would hinder passage. "It gets difficult to pass the bigger and more complex any legislation gets," he told reporters. Republicans are more blunt. "It's a horrible idea, would be seen as a vast power grab and would be wildly unpopular," said Sen. John Cornyn, R-Texas, a member of the Senate GOP's leadership team. One way the administration could build support would be to give emission credits to some sectors such as utilities most exposed to a cap-and-trade program. "This is going to be extraordinarily difficult to accomplish," said Senate Budget Committee Chairman Kent Conrad. D-N.D., at a panel hearing Tuesday. It is "unlikely the bill will pass if it doesn't have money set aside for industries that will be especially hard hit." -By Ian Talley, Dow Jones Newswires; (202) 862 9285; ian.talley@dowjones.com; (END) Dow Jones Newswires March 11, 2009 12:19 ET (16:19 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 19 PM EDT 03-11-09

Regulation Drumbeat Gets Louder, Dodd Has No Quick Fix as Uncertainty Grows

WASHINGTON (DOW JONES) -- Senate Banking Committee Chairman Chris Dodd, D-Conn., said Wednesday he supports the idea of a federal systemic risk regulator. "You need a systemic risk regulator," Dodd said, taking questions from reporters after a speech at the U.S. Chamber of Commerce. "The question is who is going to perform that function?" The Federal Reserve already has many responsibilities and creating a new entity to act as a systemic risk regulator would be a daunting task, Dodd said. By Meena Thiruvengadam, Dow Jones Newswires; 202-329-0693; meena.thiruvengadam@dowjones.com (END) Dow Jones Newswires March 11, 2009 11:47 ET (15:47 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 11 47 AM EDT 03-11-09

Tuesday, March 10, 2009

Hey Mr. Frank, don't you think it's too little too late for uptick rule even today? And you say one more month? You definitely Blew Off Psych 101:

U.S. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, told reporters Tuesday he expects the "uptick rule" - used to require investors to wait until a company's stock rises before it could be sold short - to be restored within about one month, Reuters reported. Frank also said the current standard of mark-to-market accounting - intended to value assets at the price they could fetch at present - must be improved and made more flexible. Reuters also reported Tuesday that the Securities and Exchange Commission is not planning to suspend the mark-to-market rule, citing a person familiar with the matter. http://www.reuters.com/ -Dow Jones Newswires; 201-938-5500 (END) Dow Jones Newswires March 10, 2009 12:29 ET (16:29 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 29 PM EDT 03-10-09

Monday, March 9, 2009

Thomas Jefferson's Legacy Remembered

POTC received this super email from a very forward-looking couple, and we felt it must be archived/posted forever:
President John F. Kennedy had this to say about Thomas Jefferson in 1962, when welcoming 49 Nobel Prize winners: "I think this is the most extraordinary collection of talent and of human knowledge that has ever been gathered together at the White House - with the possible exception of when Thomas Jefferson dined alone." The quotes below prove his point:
"My reading of history convinces me that most bad government results from too much government." "When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe." "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." "It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world." "I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." "No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government." "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
In light of the present financial crisis, it's interesting to read what Thomas Jefferson said in 1802. The Psychology of the Call team thanks Joanna & Jim for this brilliant reminder of the reason for elected officials; are you listening dear sir Mr. President Obama?

Grim Reality of Donkey Politics is Calling, Will You Stand Up & Fight for Capitalism?

WASHINGTON (Dow Jones)--House and Senate Democrats are set to introduce a controversial bill Tuesday that is shaping up to launch a major battle between labor and business groups this year. The Employee Free Choice Act, which Democrats say will make it easier for workers to organize into a union, will be introduced jointly by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., on Tuesday, said a spokeswoman for Miller. The bill is just as fiercely opposed by business groups such as the U.S. Chamber of Commerce as it is defended by labor organizations. It would compel business owners to recognize unions once more than 50% of workers agree to form one. Currently, owners have the right to demand a secret ballot election is held before a union is recognized. The legislation would also require owners and unions to submit to binding arbitration if, 120 days after a union is formed, the two sides can't agree on an initial contract. A third part of the bill would strengthen penalties against employers seen to be trying to intimidate workers who are trying to organize a union. Labor unions have long advocated for Congress to act to bring forward the legislation, but Republicans have opposed the measure and refused to do so. Now, with the Democrats in control of both chambers of Congress and the White House, labor groups believe this is an ideal time to try to pass the legislation. The Chamber plans to mobilize a substantial grass-roots movement to aggressively lobby lawmakers against the bill. It is flying around 180 of its members to Washington D.C. Tuesday to meet with lawmakers on the subject. Similarly, labor groups are getting set to substantially ramp up their lobbying efforts in favor of the proposal. The Senate Health Committee is scheduled to have a hearing into the bill Tuesday morning, after which Harkin and Miller are slated to hold a press conference formally introducing the legislation. Harkin is a senior Democratic member of the Senate health panel, while Miller is the chairman of the House Education and Labor Committee, which will lead the charge on the measure in the House. -By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=uhZWDuT8N%2Fh45Ys7RP60FQ%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires March 09, 2009 16:30 ET (20:30 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 04 30 PM EDT 03-09-09