Thursday, September 30, 2010

FOMC Voting Member Sandra Pianalto Offers a Positive Spin on Economy, then Mentions the 'Unchartered Waters Cliche' and Admits Unconventional Tools Have Unknown Costs ...

NEW YORK (Dow Jones)--While there are signs the U.S. is starting to recover from the deepest downturn since the Great Depression, the Federal Reserve has options if the economy ends up needing more help to heal, Cleveland Federal Reserve President Sandra Pianalto said Thursday.
Pianalto pointed to hopeful signs for consumers and businesses. Consumers are saving more, helping to improve their financial situations, and businesses' aggregate profits have returned to levels that are more in line with what is typically seen following recessions, she said. The private sector is also adding jobs and the U.S. has positive GDP growth. The economy is growing and she expects it will continue to do so in 2011.
"There are some signs that the economy is beginning to mend," she said.
However, the current pace of growth is not fast enough to make much progress in lowering the stubbornly high unemployment rate, Pianalto said. Inflation is also too low, Pianalto said, and she expects it to remain near its current low level through next year, lower than the roughly 2% rate that she sees as consistent over the long run with the Fed's objectives.
Pianalto was delivering prepared remarks as part of a discussion hosted by the Women's Economic Roundtable in New York. She is a voting member of the interest rate setting Federal Open Market Committee this year.
Her comments come amid continued talk in financial markets about if and when the Fed could kick off another so-called quantitative easing program to help the economy by buying Treasury securities. The Fed began buying Treasurys again last month on a small scale, using proceeds from its maturing mortgage bonds. Given recent soft data though, most market participants are convinced the Fed will have to relaunch a formal, larger-scale bond buying effort before the end of the year.
In her prepared remarks, the central banker said that monetary policy is highly accommodative and that if further accommodation is needed, the Fed has options available to it, but policymakers must tread carefully.
"We are in unchartered waters," Pianalto said. "History does not provide a complete guide for the unconventional policy tools we are using, which is why it is important that we continue to examine the costs and benefits of these tools."
If additional accommodation is needed, Pianalto said, she wants to ensure that the framework the Fed employs is an effective one.
-By Deborah Lynn Blumberg, Dow Jones Newswires; 212-416-2206;
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
September 30, 2010 18:16 ET (22:16 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.- - 06 16 PM EDT 09-30-10

Tuesday, September 28, 2010

The House Vote Every Trader Must Know About; Potentially Negative Implications for Stocks & Bonds are Ahead, Caution ..

WASHINGTON (Dow Jones)--U.S. House lawmakers from both parties are expected on Wednesday to support legislation targeting China's currency policy, a move that could influence the tenor of sensitive discussions between Beijing and Washington.

The House of Representatives is scheduled to vote on a measure that targets imports from China and other countries with currencies that are perceived to be undervalued. Both Democrats and Republicans are likely to endorse the measure, producing a Washington rarity: a bipartisan vote on a substantive policy issue just weeks before key midterm elections.

The anticipated support for the legislation is the manifestation of years of frustration on Capitol Hill over Beijing's currency policy, which has been estimated by economists to keep the yuan between 20% and 40% undervalued. Mixed with the slow U.S. economic recovery, nearly 10% unemployment and the November elections, currency has become a popular target for lawmakers.

"By deliberately keeping the value of its currency low, China is able to sell its goods in the United States at an artificially low price, which helps put American manufacturers out of business," House Majority Leader Steny Hoyer (D., Md.) said in a statement Tuesday.

The Obama administration has declined to comment on specific legislative proposals, including the measure the House will vote on, and administration officials said it was unclear if they would weigh in ahead of Wednesday's vote.

House passage of legislation targeting China's currency policy could influence ongoing negotiations between Beijing and Washington on a range of economic and trade matters. Treasury Secretary Timothy Geithner, appearing on Capitol Hill earlier this month, said it is "very important" for China to hear from lawmakers on the yuan and other issues.

"It's important for them to understand that this is a serious issue for the American people, and we're serious about it," Geithner said before the House Ways and Means Committee.

Still, administration officials are wary of lawmakers being too aggressive with any legislative action and disrupting the delicate negotiations between the two economic powers.

Whether the House proposal will receive a vote in the Senate is also an open question. Sen. Charles Schumer (D., N.Y.), a frequent critic of China's currency policy, said in a statement Tuesday that he would push legislation dealing with undervalued currencies after the November elections.

"China is merely pretending to take significant steps on its currency. This suckers' game is never going to stop unless we call their bluff," Schumer said.

-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273;
(MORE TO FOLLOW) Dow Jones Newswires
September 28, 2010 17:26 ET (21:26 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.- - 05 26 PM EDT 09-28-10

Deutsche Bank (DB) Prints 52-Week Low; Caution to ALL Jim Cramer Bulls ...

POTC views the fact Germany's DB collapsed to 52-week low today and major U.S. banks like GS, JPM, and BAC have not participated in this S&P rally from 1,040 - 1,150 as a short-term negative; in the least.

The fact financials have not participated is something to take note of, hence we mentioned Jim Cramer, who continues to think Barack Obama and Bernanke are market friendly?

We vehemently disagree the latest policies are anything but long-term market friendly, as there will be a huge amount of political debris to tackle ahead; regardless of who wins the November mids.

Our team understands the latest rally has been driven by an "in the clouds" type of tech-phoria.

Do we buy it here, no way. Do we think cloud computing will be a profitrable long-term trend? Only with the right stocks ....

Pictured to the right are Deutsche Bank's Twin Towers in Frankfurt Germany. A sad day for all DB employees as shares slide to new 52-week lows.

Wonder whether Jim Cramer will mention this huge development? After all, DB has been a stock he has been recommending.

Sunday, September 26, 2010

Secret Billionaire Meeting; Notes Revealed ...

For 25 years, legendary Wall Street strategist Byron Wien, now with The Blackstone Group, has held summer meetings with high net worth individuals to get their outlook on the global economy and investing. This year’s group, totaling fifty individuals and including more than 10 billionaires, was decidedly pessimistic on the U.S. economy, investment opportunities and the Obama administration. Click for entire story.

Friday, September 24, 2010

Calling Out Rick Santelli and Larry Kudlow; Capitalistic Paradox and Ruse is Upon 'US' ..

It is blatantly obvious the Obama Administration's plan is to destroy free-market capitalism by using the phony stock market move to solidify midterm democratic control.

We argue Obama needs one-term to wreck the private sector economy from perhaps no return, as two more socialist agenda lie in the wings. We sure hope we're not the only ones catching the the whiff of this plastic midterm election S&P pump higher. Please read on ...

POTC is 90% convinced the last several equity -out of nowhere/pivot type moves- S&P 1,040 level - 1,105, and today's S&P 1,124 - 1,149 have been orchestrated by the FOMC or Treasury buying S&P futures contracts with either stimulus money or paradoxically with billions in TARP payback funds from the big "bad" banks of GS, JPM, BAC, etc etc ..

Treasonous activity if it helps even 1 democrat win in the November midterms, Capitalist Pig Bob says Yes. And if it aids the democrats to retain control of both houses, will you just stand by?

A U.S. veteran and POTC subscriber suggested pitchforks and a revolution could ignite if news breaks about the FOMC propping up the S&P ahead of the pivotal midterm elections, you?

Since the Obama Administration is facing 10% unemployment and a stagnant housing market going into the November midterms, the only possibility they have literally lies in "It's the stock market, Stupid".  After all, we know nearly 70% of Americans' wealth is tied to the S&P/equity market.

Synthetically propping up stock prices by using S&P futures could make the American masses happy and cause them to cast their votes for another fiscal liberal instead of a fiscal conservative.

Do you not see why we believe these are treasonous policies by the FOMC and under the watchful eye of the Obama Administration to maintain control/power?

Cap & Trade and Employee Free Choice Act (EFCA) could be months away as the S&P fools most who are unsophisticated in realizing the government is manipulating S&P futures to their political advantage. This is definitely not "for the people or by the people".

It's likely Obama and his players use this plastic stock market move, from U.S. tax payer money nonetheless, to stump for votes in the days and weeks ahead, caution.

POTC is saddened that neither Rick Santelli and or Larry Kudlow have not exposed this dangerous paradigm for the future of "free-market capitalism" as we knew it.

Thank You, we ask you to pass this piece on to as many news agencies, friends and family as possible.

The Psychology of the Call team with special thanks to Steve B.

Friday, September 17, 2010

Obama's Plan to Level Wall Street is Crystal Clear Through Watchdog Warren's Guise ..

Here's a copy and paste job from wiki from our political correspondent Capitalist Pig Bob. POTC has verified most of these facts to be true:
"Communist" Michael Moore interviews Elizabeth Warren, the head of the US Congressional Oversight Committee, the government agency serving as a watchdog for Congress' wrong-doing and investigating Congressional "oversights" (mistakes). He asks her, "Where's our money?", referring to the $700 billion bailout money which Congress gave to the big banks and Wall Street investment companies. There is a dramatic pause and Warren replies, "I don't know." Advised by Warren to contact Paulson's office for answer, Moore's call is promptly disconnected upon recognition of his identity. He then goes to Wall Street demanding to "get the money back for the American people", but is denied entry into every office building of the major banks.

I/Capitalist Pig Bob do not believe in a bailout nation, ever. Much prefer to see Darwinian free-market forces at work regardless of the short and medium-term pain. Equilibrium is better found through winners and losers, troughs and peaks, bubbles and busts, 'butt' not through bailout. The irony now is the donkeys under Obama have a strong fundamental argument to over-regulate lower Manhattan's Wall Street. A conundrum to the nth degree is upon us with Watchdog Warren. And I must admit she is a helluva public speaker and dangerously eloquent woman. Must I tell you again Wall Street is in a lose-lose situation? Visit me on Facebook, we'll take this discussion to a higher level.

Wall Street Journal explanation of why a life-long public sector Harvard law professor, whose specilaties are contract law, bankruptcy, and commercial law, will be bad for Wall Street.

WASHINGTON (Dow Jones)--President Barack Obama on Friday tapped Harvard law professor and consumer advocate Elizabeth Warren as a special adviser to help create a framework for a new government watchdog with wide powers over the financial industry.
Obama, speaking in the White House Rose Garden, said Warren will oversee all aspects of the agency, from hiring to enforcement, and will have direct access to the president and Treasury Secretary Timothy Geithner. Obama said she would also assist him in finding a director for the bureau.
Obama said a recent report from the Census Bureau shows how important it is to protect the middle class. The report shows that from 2001 to 2009, median income dropped almost 5%.
He said banks, credit-card companies and mortgage lenders took advantage of the middle class by deceiving them into buying assets they couldn't afford. He also called on Congress to pass legislation that would extend tax cuts for the middle class.
It's unclear why Warren wasn't nominated to be the agency's director, though it may be because some lawmakers expressed doubt about whether she would pass the confirmation process. Obama didn't answer that question during his brief remarks.
Warren is credited with helping to come up with the idea of the bureau to ensure consumers get clear, accurate information from mortgage lenders, banks and other financial institutions.
Obama said the bureau "will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history."
He said, "Now getting this agency off the ground will be an enormously important task. A task that can't wait." Obama said a staff of people at the Treasury Department has already begun work on getting the agency started.
In a post on the official White House blog, Warren said Friday morning that she and Obama understand the "importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American."
She added, "The new consumer bureau is based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal."
Her appointment has brought praise from several lawmakers. House Financial Services Committee Chairman Barney Frank (D., Mass.) said in a statement: "I offer my congratulations to Elizabeth Warren, both for the work that she did to create the agency and for the fact that she will now have the opportunity to make it function as it was intended."
Warren's formal position will be assistant to the president and special adviser to the secretary of the Treasury on the Consumer Financial Protection Bureau.
-By Jared A. Favole, Dow Jones Newswires; 202.862.9256;
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
September 17, 2010 14:16 ET (18:16 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.- - 02 16 PM EDT 09-17-10

Thursday, September 16, 2010

RIMM Trade Alert No Longer Available ...

If interested in receiving our next Psychological Financial Fusion (PFF ratio) option Trade Alert, you may purchase it via Paypal in the right margin.

Please scroll down to our Focus List for Q3, there will be four more opportunities.

Regards from the Psychology of the Call team.

Monday, September 13, 2010

Obesity Drugs Thinning as ARNA Collapses ...

All subscribers received an option trade strategy on these obesity drug stocks: Arena Pharmaceuticals (ARNA), Vivus Inc. (VVUS), and Orexigen Therapeutics (OREX).

VVUS has a date with the FDA on September 28th and OREX December 7th.  

Monday, September 6, 2010

Q3 PFF ratio Option Trade Alerts Kicking Off Sept. 16th at 11 ET with Research in Motion ..

Q3's earnings reports for fiscal '10 are upon us. Here's POTC's FOCUS LIST: AAPL, AMZN, BIDU, CME, FSLR, GOOG, GS, NFLX, and RIMM.

Though Q2's 5 for 5 record cannot be bested, we remain extremely dedicated after your e-mails of praise and referrals to friends. We are grateful. 

RIMM will be the first Q3 Trade Alert on Thursday, September 16th at 11ET. You should  prepare to read through the report and act by market close. You'll have 5 hours until earnings release to take action.   

Not yet a subscriber, please sign-up through Paypal in the right margin.

PFF ratio Trade Alerts require seceral 12+ hour days of studying financial statements, rewinding conference calls over and over while taking physical notes, interpretting key news developments, technicals, politics, and underlying psychology of share price with a forward-looking and oft contrarian perspective. Our goal is to send non-biased, intensely-researched, educational, and most importantly, profitable trade suggestions.

POTC remains rooted in the principles of Darwinian free-market principles: NO bailouts and NO stimuli.

We are excited by the November 2nd mid-term elections. Our team believes a combination of smaller government (less spending) and lower taxes for ALL is the smartest solution to a brighter socioeconomic future.

The U.S. will toil in mediocrity if the only push is Anti-Wall Street and pull for more Unionization.

Beware of the Employee Free Choice Act (EFCA) and a bloated Department of Energy with Cap and Trade Act if the democrats retain majority. And in our opinion, there is a 60% that will happen unfortunately.

If you subscribe to a quarterly or yearly membership by September 16th, you'll receive the 11 Commandments of aggressive trading and our outlook on the S&P through the November midterm elections.

We envisage shrewd political planning and forces influencing stock prices in the weeks ahead. In our professional blogging opinion (ipbo), these forces will be evident to all on Friday, October 8th.

The bloated government Obama has installed ensures longer-term suffering for the private sector. Our Capitalist Pig Bob whole heartedly despises this Administration's economic team as well as the FOMC's insistence on a zero interest rate policy. Pig Bob doesn't believe enough attention has been paid to Obama's ex-economic advisor's insistence, in a New York Times piece, that ALL Bush tax cuts should be extended.

POTC has consistently blogged that it's not the price of money (interest rates) that are extending the recessions in housing and employment, but the frightened consumer followingthe unprecedented stock market and real estate bubbles of 2000.

The creation of an uneven global playing field in terms of manufacturing costs and the pegging of the Chinese Yuan to the U$D is another huge and ongoing problem. How China unwinds this peg and avoids inflation will be a case study for investment finance professors for decades.

Other factors like the fall of communism and imported Eastern European hunger for wealth in the 1980s - 2000 caused further economic dislocations, but especially in mortgage/credit. An extremely cheap Eastern European work force associated with the US residential real estate caused this foundational asset class to crack under these combination of stresses and pressures.

The Eastern European -post communism- hunger for wealth caused many functioning 1,800 - 3,000 sq ft houses to be bull dozed, and 5,000+ sq ft dinosaurs were erected. A conundrum that continues to plague most of the largest state suburbs of New York, New Jersey, Illinois, Georgia, California, Nevada, Florida, and Arizona.

The U.S. is facing a combination of extremely complicated socioeconomic issues in the months and years ahead. Residential real estate is just one internal micro facet, yet the manufacturing labor cost disparity with China is a full-blown macro crisis.

The average Chinese manufacturing wage is somewhere around $2.00/hour compared to the US's $16.00/hour. Hence the 800% difference with the Yuan/U$D pegged currencies is reason for tremendous geopolitical and socioeconomic concern. Something has to give, and the real estate and credit recessionary months ahead will be more difficult, in our opinion, than the previous couple years.

Subscribers to this blog have the choice of enjoying one-on-one trading advice and assistance via e-mail. Our team psychology is geared towards very aggressive trading, yet every subscriber receives our 11 Commandments that cover key investment wisdoms in traditional as well as individual retirement accounts (IRAs). The Commandments are not monolithic, as Jim Cramer's, and are updated at least once a quarter with "lessons learned".
Subscribers hail from:
United States, India, China, United Kingdom, Australia, New Zealand, Hong Kong, Pakistan, South Korea, Russia, Poland, Italy, Germany, France, Spain, Brazil, PhilippinesCanada, Japan, Chile, Argentina, and Mexico.

POTC is humbled by your trust. Our team is different than the talking herds on CNBC and Bloomberg, yet often times more effective in pinning individual stock option as well as market direction right.