Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
WAL-MART STORES INC. (WMT) The company is looking to enter the personal computer market with its own brand of PCs, said Christopher Whalen, an analyst with Ramberg Whalen & Co. That would not be good news for Hewlett-Packard, the largest supplier of PCs to mass-channel retailers such as Wal-Mart.
Happy Veterens Day, Vets! Thanks for serving. With the bond market closed we will probably see light volume with out the bond market being able to influence direction. Also, with lite volume it could be a good day for the bulls to move the market in their direction to make up some ground lost from last week.
Joe
China- This article in today's Atlanta paper talks of some changes taking place. I wonder if investing in China today would be like investing in the US market in 1982 with a long term hold in mind. Any ideas on how to play "China"?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Changes in China open doors to entrepreneurs
State-run firms to lose breaks, top officials say
John Pomfret - Washington Post
Monday, November 11, 2002
Beijing --- China is committed to leveling the playing field between private entrepreneurs and their competitors in the state-run sector, two leading Chinese economic officials said Sunday.
Their announcement is another sign that the Chinese Communist Party is trying to remake itself into the party of business in China.
The officials also said that China had begun experimenting with letting farmers amass larger parcels of land in another controversial pro-business reform destined to bring back memories of landlords and landless sharecroppers before China's revolution in 1949.
They also said private businesses will be granted equal access to bank credit and could even be allowed to issue bonds to raise capital. Areas closed to private businesses, they pledged, would be opened to private capital soon.
In another move that will further shrink the state-owned sector, foreign businesses, they said, have been granted approval to buy pieces of the state-owned companies listed on China's two stock exchanges. About 65 percent of the shares in those firms are not traded. Foreign firms will now have the right to buy the untraded portions of those state-owned firms, the pair said.
The officials, Zeng Peiyan, the head of the State Development Planning Commission, and Li Rongrong, chief of the State Economic and Trade Commission, made these remarks at a news conference during the 16th Congress of the Chinese Communist Party. The congress, generally held every five years, is Chinese communism's most solemn rite, during which party bosses are appointed to lead the country.
China's state-run media gave little hint during the weekend of what was going on in the congress, a secretive gala that has drawn more than 2,000 delegates from across China.
But Zeng and Li gave the distinct impression that the highest levels of China's government are preparing for the day when the economy will be dominated by private firms. Indeed, one of the main themes of the party congress has been the announcement that the party will now welcome entrepreneurs into its ranks. Private firms currently account for about one-third of China's gross domestic product.
Zeng said China's economy would grow by 8 percent this year, up from 7.3 percent last year, and the gross domestic product would hit $1.2 trillion. Total trade this year should reach $600 billion, while foreign investment in China surpasses $50 billion, he said.
Private firms now play an increasingly important role in keeping the Communist Party in power. The private sector is employing more people, faster than any other sector in the Chinese economy. Without such employment opportunities, Chinese officials acknowledge, the party's hold on power would be tenuous.
Zeng said the party was under ''comparatively major pressure'' when it came to employment. In the past few years, he said, lumbering state-owned enterprises have laid off 24 million to 25 million workers. Each year, 10 million new workers enter the work force.
Private firms have complained that their access to bank loans is restricted because many banks have no credit mechanism or are controlled by local governments that favor state-owned firms. Li said this type of ''policy'' lending will stop.
''The playing field will be leveled,'' Zeng said.
Li said the party supported the growth of private business. In 1989, he said, China had 90,000 private firms. Today, it has 2.03 million.
Private firms are banned from doing business in a variety of areas, but Li and Zeng said those barriers would soon fall. Already, Zeng said, in eastern China, private road-repair companies, banks and trash-collection firms, all of which in theory must be state-owned, operate openly.
ABK - Possible short candidate. I saw two mentions of ABK this weekend. First one is from OptionInvestor.com. the second is an excerpt from Doug Noland's essay at Prudent Bear. Followed it with a chart. JS
>>Ambac Financial Group, Inc. $57.53 (-3.44 last week)
Company Summary:
Ambac Financial Group is a holding company that, through its
subsidiaries provides financial guarantee products and other
financial services to clients in both the public and private
sectors around the world. The company provides financial
guarantees for municipal and structured finance obligations
through its principal operating subsidiary, Ambac Assurance
Corporation. Through its financial services subsidiaries, the
company provides financial and investment products, including
investment agreements, interest rate swaps, funding conduits,
investment advisory and cash management services to its
financial guarantee clients, which include municipalities and
their authorities, school districts, healthcare organizations
and asset-backed issuers.
Why We Like It:
It's a well-known market reality that any meaningful advance
for equities requires the participation of the Financial stocks.
Well, in the wake of the Fed's surprise 50-basis point interest
rate cut, Financial stocks have not been behaving very well, with
both the Banking index (BKX.X) and the Brokerage index (XBD.X)
closing in the red the past 2 days. After rocketing off the
early October lows near $50, shares of ABK have been running into
stiff resistance near the $65 level. The first bout of selling
after failing to penetrate resistance knocked the stock back to
its 200-dma near the $61 level. It looked like ABK might
actually consolidate before moving higher, but it wasn't to be,
as the bears pressured the stock below first the 20-dma ($61.56)
and then the 200-dma ($60.93). And then it got ugly. On
Wednesday, CSFB downgraded the stock to Neutral on a valuation
basis, motivating sellers to shave another 4% off the stock's
price by week's end. This week's decline put the PnF chart on a
fresh Sell signal, with a current vertical count of $50. If
achieved, that would be a retracement of all the stock's gains
since the October low. ABK came to rest right on the 50-dma on
Friday, and that might generate a bit of an oversold bounce next
week. If so, then we can look for the rebound to fail near the
$60 level, which is just below the 200-dma. Momentum traders
will want to wait for the stock to fall under $57 (just below
Friday's intraday low) before entering the play. Initial stops
are set at $61.<<<
>>>This week fellow Credit insurer Ambac reported that it owns $175 million of National Century Financial Enterprises (NCFE) notes (NPF XII and NPF VI conduits). This is a troubling revelation. We would hope that a company with $525 billion of “Net Financial Guarantees in Force” would be diligent and conservative in its investment approach. But, as is too often the case when it comes to the U.S. financial sector, we hope for too much. With “Capital and Surplus” and its “Contingency Reserve” combining for $3.6 billion, there is scarcely little room for error (Ambac has expanded its insurance “guarantees” by $49 billion y-t-d - a 14% rate). Yet somehow there was one gaping hole in Ambac’s Credit “analysis.” And if they were incapable of identifying conspicuous shortcomings and Credit issues related to NCFE, how much confidence are we to have in the Credit analysis used to establish one-half trillion dollars of Credit insurance exposure?
On the other hand, perhaps it had nothing to do with Credit analysis, being instead simply a case of CSFirstBoston (NCFE’s investment banker) needing to unload some NCFE paper and looking for a “favor.” We hope Ambac management would not purchase such bonds in hopes of garnering more (structured finance) insurance business or a “buy” rating on its stock (CSFB downgraded Ambac’s stock Wednesday). Sometimes - when we’re in one of those moods – we recall the Milken junk bond cartel fiasco and contemplate the “possibilities” for similar shenanigans on a much grander scale in the asset-backed securities marketplace. Too much “money” sloshing around; enterprising rating agencies, bankers, brokers, and accountants; too many securities without legitimate market prices; and scant transparency… Somehow, the ABS market remains off the radar screen when it comes to discussing conflicts of interest between commercial and investment banking. <<,
http://stockcharts.com/def/servlet/SC.web?c=abk,uu[l,a]daclyyay[dc][pc20!c50!f][vc60][iLb14!La12,26,....
China- Looking for some investment ideas for China. Any ETF that cover that country? Also, here is a letter written to Richard Russell that was forwarded to me on this subject. I guess RR had it in his newsletter. JS
Dear Richard --
to back up what you've been surmising...a patient of mine just returned from
china where he spent a few weeks and is being paid as a consultant. (he was
one of the people who figured out how to bond metallic oxides to other
materials like astronaut face plates)...he went with some trepidation as he
has been in Thailand and Korea ,etc.....well he came back astounded...he was
in a mid-sized town on the coast, no big city metropolis, his hotel was all
marble and beautiful ...$43/day and from his 12th story room he counted 19
hi-rise cranes building other structures...nice paved roads and no cars. the
plant he was at had thousands of workers imported from farm areas 2000 mi
away, they had uniforms and lived in co. supplied very nice dorms..they wok
9 hour days 5 days a week with 1/2 hour lunch and do not talk to fellow
workers..in other words a giant beehive filled with worker bees -- they are
paid $10/week and encouraged to work on weekends, most do. The factory
parking lot had four parking spaces for cars and 2000 bicycles
.They want his help in building a new factory, and he said he would need to
get together with some engineers to discuss it ..the next day they had 60
engineers in one room and started laying out the needs...he said they
accomplished in 2 days what would take 6 mos. here. Also the Chinese will
not buy Chinese tools and there are no import taxes on tools from
elsewhere...why? because they take apart imported tools and copy them, and
they are excellent copies.He said they copy everything from music c.ds. to
DVDs (they don't have tape they skipped that phase of development and went
right to c.d's.
He said it was the most amazing thing he has ever witnessed to use his words
"we don't have a chance". On a tour of one work area in the plant with 45
workers all trimming plastic flash from an extruding machine one employee
looked up at another of his fellow drones and then went back to work..the
supervisor leading the tour dropped everything and berated the man grabbed
his I.D. badge and dismissed him on the spot.
Growth rate 19% year, and this is not a major metropolitan area. It looks
like Mao's cultural revolution in reverse, instead of moving every one to
the farms they are moving everyone back from the farms and there so excited
to have jobs they work 7 days a week. He said there was a school below his
room and the students ran to get to school, and the children all seem to be
learning english..he said it was actually kind of scary.
regards norm
PS -- tell you children to learn Chinese!
Public Heel- You were asking how the Fed moves the market. Here is a good essay on how they do it.
The Fed's Open Market Operations- Daily Tides in the Financial Sea
By Jonathan Levinson
From the New York Fed's website:
"Seeing the Federal Reserve Bank of New York, visitors' first
impressions are of the building's formidable architecture. Stored
inside the vaults of this imposing structure is hundreds of
billions of dollars of gold and securities. But what is most
significant about the Bank is its broad policy responsibilities
and the effects of its operations on the nation's economy."
It would be more accurate to say "on the world's economy," as the
Fed is arguably the single most influential presence in the
financial world. There is a debate as to who owns and controls
the Fed, whether it is the US Congress or the world's largest
banks. For traders, particularly small or non-institutional
traders such as ourselves, it's an irrelevant issue, as the Fed
acts as a primary force in the financial markets. The Federal
Reserve's primary role for us small traders is as the controller
of liquidity in financial markets across most timeframes. Prior
to Chairman Greenspan's tenure, the Fed's focus was domestic
monetary conditions, but it has since become a commonplace that
the Federal Reserve concerns itself with global financial
liquidity and stability, acting in all markets just as the US
asserts its will in the world political arena.
In order to understand the importance of the Fed, one must
consider the impact of liquidity on financial markets. My
favorite analogy is of the markets as a liquidity meter- they
rise or fall depending on the availability or scarcity of money.
The Fed seeks to achieve financial stability by controlling the
availability of money in different markets. Like sailor holding
a course by making continuous corrections at the helm, the Fed is
continuously using subtle and not-so-subtle mechanisms to manage
liquidity as it sees fit. We have all seen the short-term impact
of interest rate hikes and cuts, which I would characterize as an
example of not-so-subtle liquidity management. By raising rates,
the Fed increases the cost of money to banks, thus restricting
liquidity and, theoretically, deflating financial markets. More
subtle, however, is its ongoing Open Market Operations (OMO),
which are done on a daily basis. During the past months, I have
been following the Fed's OMOs, and have found this to be an
indispensable tool in predicting short term market bias. The
Fed's Open Market Operations will be the focus of this
discussion.
Before looking under the hood of the Fed's OMO procedures, an
example from our favorite book, Reminiscences of a Stock Operator
by the legendary Jesse Livermore, published under the pen name
Edwin Lefèvre in 1923. Livermore tells the story of the crash of
October 1907 during which lenders had run out of cash.
Reports from the money crowd early indicated that borrowers would
have to pay whatever the lenders saw fit to ask. There wouldn't
be enough to go around. That day the money crowd was much larger
than usual. When delivery time came that afternoon there must
have been a hundred brokers around the Money Post, each hoping to
borrow the money that his firm urgently needed. Without money
they must sell what stocks they were carrying on margin - sell at
any price they could get in a market where buyers were as scarce
as money - and just then there was not a dollar in sight.
Livermore was, of course, short the entire market.
The president of the Stock Exchange, Mr. R. H. Thomas, so I heard
later in the day, knowing that every house in the Street was
headed for disaster, went out in search of succor. He called on
James Stillman, president of the National City Bank, the richest
bank in the United States. Its boast was that it never loaned
money at a higher rate than 6 per cent. Stillman heard what the
president of the New York Stock Exchange had to say. Then he
said, "Mr. Thomas, we'll have to go and see Mr. Morgan about
this."
The two men, hoping to stave off the most disastrous panic in our
financial history, went together to the office of J. P. Morgan &
Co. and saw Mr. Morgan. Mr. Thomas laid the case before him. The
moment he got through speaking Mr. Morgan said, "Go back to the
Exchange and tell them that there will be money forthem."
"Where?"
"At the banks!"
So strong was the faith of all men in Mr. Morgan in those
critical times that Thomas didn't wait for further details but
rushed back to the floor of the Exchange to announce the reprieve
to his death-sentenced fellow members. Then, before half past two
in the afternoon, J. P. Morgan sent John T. Atterbury, of Van
Emburgh & Atterbury, who was known to have close relations with
J. P. Morgan & Co., into the money crowd. My friend said that the
old broker walked quickly to the Money Post. He raised his hand
like an exhorter at a revival meeting. The crowd, that at first
had been calmed down somewhat by President Thomas' announcement,
was beginning to fear that the relief plans had miscarried and
the worst was still to come. But when they looked at Mr.
Atterbury's face and saw him raise his hand they promptly
petrified themselves. In the dead silence that followed, Mr.
Atterbury said, "I am authorized to lend ten million dollars.
Take it easy ! There will be enough for everybody!" Then he
began. Instead of giving to each borrower the name of the lender
he simply jotted down the name of the borrower and the amount of
the loan and told the borrower, "You will be told where your
money is." He meant the name of the bank from which the borrower
would get the money later. I heard a day or two later that Mr.
Morgan simply sent word to the frightened bankers of New York
that they must provide the money the Stock Exchange needed.
"But we haven't got any. We're loaned up to the hilt," the banks
protested.
"You've got your reserves," snapped J. P.
"But we're already below the legal limit," they howled.
"Use them! That's what reserves are for!" And the banks obeyed
and invaded the reserves to the extent of about twenty million
dollars. It saved the stock market. The bank panic didn't come
until the following week. He was a man, J. P. Morgan was. They
don't come much bigger.
Livermore's story is one, which we've seen repeated several times
this year, except that the entire has become automated through
the Federal Reserve System. Sometimes these operations rescue
the market, but they are now used as more subtle preemptive
measures as well.
Back to the Fed's Open Market Operations.
The staff of the New York Fed's Trading Desk continuously
monitors global financial conditions and the state of banking
reserves each day. After extensive deliberation beginning early
each morning and a conference call with all of the regional feds,
it determines whether or not it will add to, drain from, or leave
unchanged the level of banking reserves. This is carried out on
a daily basis. A plan of action is established for the day, and
the Fed executes it by moving huge amounts of money through its
network of 22 primary dealers, which are banks and securities
brokerages that deal in US government securities. To give you an
idea of the money flows being executed, these 22 dealers averaged
$375B per day in trading volume of US government securities in
March, 2002, according to the New York Fed website.
The most frequent transactions are called "repurchase agreements"
or repos (RP) for short, which are described as short term
transactions whereby the Fed purchases securities from the
dealers, who agree to repurchase them from the Fed by a specified
date at the specified price. When the repos mature, the added
reserves are automatically drained. The Fed pays for the
securities and takes delivery thereof simultaneously. When they
mature, often the next day as we've seen in the Market Monitor
(known as "overnight repos"), the securities are returned and the
funds reimbursed by the dealers to the Fed.
The reverse of a repo is called a matched sale-purchase
transactions (MSP's), whereby securities are sold to the dealers
for cash, and then repurchased from the dealers upon maturity.
Both Repos (RP's) and matched sale-purchase transactions (MSP's)
are temporary open market operations. Sometimes the Fed will
sell securities to or purchase securities from the dealers
outright, which affects the dealers' reserves on a permanent
basis.
If you're all still awake, or haven't yet dashed off to apply for
jobs with the Fed, here's the kicker. The effect of these OMO's
on the 22 dealers' reserves has a direct influence on the level
of liquidity in the markets, just as we saw in Livermore's 1907
example. When the dealers have excess reserves, they are free to
play with those funds until such time as the funds must be
returned. This liquidity finds its way into the markets,
purchasing securities. On days when reserves are drained, the
liquidity finds its way out of the market. During the past
months, there has been a tendency to see market strength on days
when large repos of 5-10B have been announced. When these repos
expire, if they are not replaced with new repos, we often see
market weakness. This year, because we are in the grip of a bear
market, the tendency has been to see repos. I have only seen one
instance of an MSP this year, although I've only been following
the Fed for the past few months.
The trouble for traders is in knowing which markets will be
affected by each Open Market Operation, and within each market,
which securities. Repo money can go into equities or fixed income
securities, currencies, or whatever else the dealers wish on that
day. I have read arguments to the effect that companies such as
MSFT are prime targets for Fed money because they are listed on
multiple indices, and so buying or selling in MSFT gives the
Fed's dealers the greatest bang for their buck. Remember that
the Fed's goal is to encourage the stability of financial
markets. When these markets are in jeopardy, smart traders watch
for the Fed's morning announcement and consider which markets
need it most. When the SPX broke 775 this month, an overnight
repo of $4.5B was announced, which is at the upper end of
modestly sized for repos this year, and equities bounced off
their lows, which then triggered a selloff in the extremely toppy
bond market, more money flowed into equities, and the rest we
know well. During the summer, I watched large orders that would
show up like a battalion at critical support levels on QQQ –
30,000 to 50,000 share bids that would line up 5 deep all at
once, and the subsequent matches would protect the support level
that had been in jeopardy. So what? We'd also see more such
bids that would line up just below key resistance levels after an
extended runup and the orders would power the index above them.
I'd always thought that the goal of traders seeking a profit is
to buy low and sell high, though perhaps buying high to sell a
little higher works as well. In any event, none of us would
think of using our own money to put on bullish positions just
below key resistance levels after significant runups. This is
the action of participants manipulating the markets using OPM
(other people's money) in the interest of protecting those
markets from what are deemed to be critical breakdowns.
Tracking the Fed's Open Market Operations gives the trader a
window on how much money will be available to the markets that
day relative to past days. Experience will permit you to assess
the impact of different sums- is a $1B drain substantial? Might
the markets tank or just drift? Generally, all that one can know
is how the Fed's daily activity will bias the markets, and so it
is far from a magic indicator. Many traders I know and respect
will not put on bearish positions on a day in which the Fed has
announced a repo for more than a few billion dollars. Follow us
in the Market Monitor each day and start to get a feel for the
impact of the Fed's Open Market Operations. Like most other
indicators, it will eventually help to fill in your overall
market picture in its own particular way.
I have been posting the Fed's daily Open Market Operations in the
Market Monitor and will continue to do so. To follow along
yourself, bookmark the following link:
http://app.ny.frb.org/dmm/mkt.cfm
>>It is obviously the opposite. Had I made such an asinine analysis I would have been kicked out of my poli sci phd program<<
Please explain.
Joe
Lane- China- Using my comparison of governments as one big corporation (China) or a group of smaller ones (US)might be visioned by using Home Depot and the independent hardware store. This is a comparison that I am very much aware because I opened my hardware store the same year that HD opened their's, both in Atlanta. Over the years HD has taken most if not all of the new growth in the industry. Over the years I, the independent hardware store, have had to adjust my business by being on the defensive and looking for niche products and services that are not HD's main stays. HD's strength has been their single mandate from the founders. The independents weaknesses has been the inconsistencies that they bring to the market by not a having a single vision of what they want to be.
That's where I see that China has an advantage going ahead. It really doesn't take that single genious to make it work. The US did all the gound work, all China needs to do is copy our strengths and try to control our weaknesses.
With the exception of different forms of government, China could probably be compared to where we may have been in our growth cycle at the turn of the last century. If you think about it we did not access all of our rights back then. Only after our "rights" were liberalized did we get Social security, organized labor and tort abuse, etc. China has the advantage to see our past shortcomings, the consequences, and the ability to shorten the learning curve while ramping their growth.
Looking ahead I see the US become more of a socialist state and China more embracing capitalism. The US moving more towards socialism due to our aging and more diverse population. Diverse in that immigration is increasing. Problem is that immigration stats show recent immigrants are less educated and poorer than immigrants of past generations. This will even put more burden on our social safety net.
I truly believe that China is a country to watch very closely. I also think that there should be some very good investment options tied to their future growth.
Joe
11/10/02 [DT] DEUTSCHE TELEKOM TO CUT CAP SPEND BY $3 BN:UK BUSINESS
Here's an excerpt from Doug Nolands essay this weekend.
http://www.prudentbear.com/creditbubblebulletin.asp
>>> But the issue is not the level of bank capital, but the quality of system debt, distorted asset prices, and a maladjusted economy. Yes, the Fed could have printed money and replaced the banking system’s lost capital in the early Thirties. Yet the $5 billion would have quickly proved irrelevant and impotent in sustaining inflated asset prices, tens of billions of non-productive debt created during the manic stages of the boom, and the insatiable Credit appetite of a maladjusted economy. Yes, a recapitalized banking system could have fed the Bubble awhile longer, but there was no changing the harsh reality that it was a Bubble. No amount of “money” was going to right the system, only extend the wrong.
To return this discussion to the nuance of contemporary finance, when things begin to turn sour, why can’t the Fed simply journal some Fed funds/liquidity over to the likes of Ambac, MBIA, Fannie and Freddie? After all, as long as there is “capital” underpinning the trillions of dollars of securities they have guaranteed, these securities will remain “top rated” and, with Fed assurances, liquid. There will be no liquidity crisis, debt deflation or economic collapse. And, as is the case today, it really doesn’t take much “capital” to support unfathomable amounts of rated debt (as long as confidence holds).
Well, I would argue that the critical issue today is not the imminent losses to be suffered by our behemoth Credit insurers. The issue is, as it would have been had the banks been recapitalized in the early Thirties, that to sustain the boom requires unrelenting Credit creation. As we are witnessing, there is no turning off the Credit insurance engine; there is no possibility of a respite for the GSEs. The day the Credit insurers back away from writing new policies is the day they the are crushed by systemic Credit problems. Yes, the Fed could wire them a few billion, but they have today no alternative than to insure new debt in the tens of billions From Here On Out. The Fed could wire a few billion to Fannie and Freddie, but the issue is that the GSEs will have no alternative than to purchase and guarantee new mortgages to the tune of hundreds of billions annually From Here On Out.
As I wrote last week, the issue is not the little “billions” that the Fed can easily “print” but the Trillions that the U.S. financial sector must create From Here On Out. The Credit system has Bubble binge consumption (with $500 billion current account deficits) to sustain. The Credit system has inflated (in many cases, especially California, grossly inflated) real estate prices to keep levitated. The Credit system has unfathomable quantities of non-productive debt whose value rests on the continued issuance of massive quantities of non-productive debt. The Credit system has a wildly maladjusted monetary/service sector economy - that is an absolute Credit sponge - to maintain.
If, like the early Nineties, we were suffering merely from a credit crunch, Fed “reliquefication” could reinvigorate the Credit system. But today, additional vigor only feeds the out of control financial sphere and further distorts the structure of the real economy. Neither Credit crunch nor deflation is the issue today. The issue is that we have no alternative than to deal with faltering Credit, speculative, and Economic Bubbles of historic proportions. The issue is a massive Credit Bubble that has likely reached the point of being inoperable in reverse. There came a point when Nick Leeson’s losing trade spiraled completely out of control, and the marketplace figured out as much. We think we may be approaching a similar crossroads for the Fed’s trade – “The Great Experiment” - gone terribly awry. And to think the inflationists are giddy to continue betting as if the stakes were only an unlimited number of green chips.<<<
>>> go to the users profile -- copy the URL, you'll notice at the end of the address "user=(number)" then remove that users' number from your filter list.<<<
Worked great. Thanks for all the replies.
Joe
Can someone tell me how to un-filter someone? I think I see how you do it if you have a user number but where do you get that?
Thanks, Joe
Bamboo, >>>Sell or buy back (as the case may be) enough Monday to satisfy the daytrading margin call.<<
Bamboo you are right. The post above will not work on a daytrading margin account. As a pattern daytrader you must be careful not to carry over too many positions to the next day. If you do it greatly lowers your daytrading ability for the next day.
The only way I know to resolve it is to open another account. I did this when the law first took effect. I now have two daytrading accounts.(actually three) Since sometimes if I tend to think a trend will continue I hold overnight causing me those problems for the next day. If I get the call I just move money into another account until the restrictions are lifted and just carry position or swing trades in the affected account.
Joe
jdaasoc- >>Computers are being sold in India while cutbacks occured in US.<<
Per capital income in India is $460. There is a good argument that most of the IT expenditures in India are for an infrastructure to take over American jobs. Here is a link to an article that addresses this subject quite well. The article points out that only 1.8 mil pc were sold in India in 2001. Very much worth the read. An excerpt below.
http://timesofindia.indiatimes.com/cms.dll/xml/comp/articleshow?art_id=21202541
>>There are a number of areas that need attention, but the most pressing should be to address the continual neglect of the domestic software industry. The figures seem to bear that out as well. In 2000-2001, India’s total software production (including IT enabled services) was $8.4 billion. Out of this, exports accounted for $6.2 billion and domestic market for a mere $2.2 billion. A year later, while the total reached an estimated $10.2 billion, exports touched $7.6 billion, and the domestic industry sputtered to $2.6 billion.
Contrast this with China, the country we don’t often but should choose to compare our software skills with. China’s total software production in 2001 was $9.6 billion, of which, exports accounted for a mere $0.7 billion. Several would term this as a no-contest, because they tend to weigh success in software with exports performance alone. If that were the case, then yes, India is clearly ahead. But such an attitude is fraught with danger. No country can really be a leader in any field unless it has a strong and resilient industry supporting it domestically.<<<
An IT spending rebound in 18 months? Could be. However they have been predicting a rebound for the last two tears. Maybe there won't be one. What do we need one for. It spending surged when everyone needed to impliment it. Now it's mostly a replacement market. I own a little hardware store. Even the little guy like me has done as much IT spending as I can stand.
Something to keep in mind about the US - demographics. Everyday a few more people drop out of the work force as they retire and become unproductive. Up until about 2000-2001 we were adding productive folks to our population. This will weigh heavily on the average business being able to increase IT expenditures as they try to meet last year's budjects on decreasing sales.
I would be interested in your argument and support of an IT rebound being a reality within 18 months.
Joe
>>> It was some shocking realization that corporate PC buyers may wake up soon and AG rate cut may have kicked it off.<<<
I don't think you will see that cycle that you are talking about. Through the 90's the PC business was driven by new purchases where there were none. Once the pipeline fills then we deal with mostly the replacement market which is a much smaller market. That is what is being sold now. You imply that PC sales are non-existent now. The numbers are still strong. The growth element is the only thing missing and I don't see anything changing that soon. Computers at some point won't have any higher of a growth rate than something like TV's. I can see computers having a much longer life span than 3.5 years. There's nothing Greenspan or low interest rates can do to change that.
Joe
WSJ: IBM To Cut Costs By $2.5 Billion Next Year
>>Unlike you, I actually believe our political structure is our greatest advantage in competing with China, with the exception of one economic scenario which I'll note in a moment. <<<
Lane, Thanks for the reply. Vision China as one big corporation. Now vision the US as a bunch of small companies with different and competing goals in mind. Which one has the better chance of reaching a common goal?
The problem with the US going forward is an aging population, and a more diverse population that has the "right" to vote themselves the largess of the "haves". Our current political situation works well when things are going well like they have for the last 100 years. The problem is that our government finds it almost impossible to address unpopular problems in fear that if they do, they will be out of office on the next election. The challenges placed in front of us by our demographics will be cause for some pain ahead.
Unfortuantely Americans don't appreciate the responsibilities that come along with our freedoms. Our "culture" is under attack. Who do I sue over that?
Joe
EP- Yep, ugly report. That one sure surprised me. Time to take some profits it looks like. Too bad those profits were so much more Wednesday.
Joe
Mir- What's my take? I think RRI and CPN are better. I own all three that I have from really cheap prices. MIR came out today and in their 10Q says that if everything goes wrong they'll have to file bankruptcy. I have serious doubts that will happen. Looks like the market got spooked by that. RRI basically said the samething a while back. If you got money coming due and no one will loan to you no matter how good your credit is or how much earnings you have, you have to file bankruptcy just to protect the assets. these banks are not going to force MIR into BK with the assets they have.
Anyway, I trimmed some MIR today and added to CPN and RRI. I think MIR will straighten this all out at earnings which I think come on the 18th. I think I will wait till then to add.
Joe
MIR- Power and natural gas concern Mirant (NYSE: MIR) is seeing some volatile activity today after reporting that income between January 1999 and June 2002 was overstated to the tune of $41 million. MIR officials asserted that there was no accounting fraud to speak of and have submitted a new first-quarter filing to the SEC. The stock started off on the positive side of the fence this morning but is now trading nearly seven percent in the red. The equity is currently perched beneath its 20-week moving average, which it has not traded above since April 2002. Before that, it was May 2001 that the equity closed above both its 10-week and 20-week trendlines. There has been some bearish speculation on MIR of late, as its short-interest ratio totals more than seven times. This essentially means that, should the stock embark on a continued uptrend, it would take these speculators more than seven days to cover their shorted positions.
AEIS, PLAB and MKSI - Semi's that look like attractive shorts IMO from a fundamental viewpoint.
Joe
PCAR->> Fitch cuts Cummins' credit rating (CUM) By Tomi Kilgore
Fitch Ratings has lowered the long-term credit rating of engine maker Cummins (CUM) to "BB-" from "BB+," citing "persistently weak" end markets and concerns over competition, increasing pension obligations and profitability. Fitch said industry demand is likely to suffer a "sharp drop-off" in the fourth quarter, following a sharp increase in the third quarter which reflected buying ahead of new emission standards. The stock is slipping 62 cents to $25.62.<<<
Lane- thanks for the Yahoo utility link. Joe
Gizmo, Thanks for the high yield ETF ideas. eom
>>DEC NATGAS UP 13.1C AT $3.99 AFTER $4.03 HIGH<<
Watch natural gas. Any fav picks in this area? EP has a nice tie in to NG and the power producers.
Joe
Yankee, Thanks for the PCAR reply. I agree, PCAR is a very good company. I also think they are due for a pullback. I would like to get 10%-15%. A position trade for me.
Joe
>>>That leaves us to question, who the heck will hold US up if we fail to be the World's booming ecomony? <<<
Bingo! From here on out the demographics get steadily worse. Here's a prediction for you. By 2020 China will be the next top super power. Our demographics (and our political structure) put us at a hudge disadvantage to compete towards the end of this decade.
Back in January 2000 I bought some 30 year treasuries paying 6.5%. I posted it to the board I contributed to and got flamed for it. I then challenged anyone that that 6.5% bond would out perform any large cap tech (CSCO, INTC, SUNW, etc.) stock currently trading for the next 30 years if bought at the same time. A dollar in the bond is currently worth about $1.20 I would guess compared to let's say, CSCO, which that dollar is worth now about 25 cents. wonder if it will ever catch up to my tortoise bond? <VBG>
Joe
Please, someone explain to me why the utilities (the big dividend paying ones are getting hit today. UTY is down almost 3%. Seems to me that they would be an attractive alternative to the lower yields coming from bonds. Also, I would think that the lower interest rates would help these folks that normally caring heavy debt. ????
TIA,
Joe
MIR- Cleared for lift off!
Joe
PCAR- I think this one is vulnerable to fall. Manufactures big trucks like Peterbilt. Many trucks were bought before the new engine regs took effect.
http://stockcharts.com/def/servlet/SC.web?c=PCAR,uu[l,a]daclyyay[db][pc20!c50][vc60][iLb14!La12,26,9...
Very pricey for it's growth rate. Some may want to wait for it to fall below it's 20ema to enter a short. I'm already in.
Joe
RRI's day in the sun. Up 19%. eom
MIR- Halted. eom
Something that should help the bears. I don't think the analyst will let many of these issues run to the sky without downgrading due to valuation concerns. With all the scrutiny that is being placed on them I don't think they dare let one of the stocks they cover get back to mania lebvels. An example is today QLGC. Downgraded today to neutral with a price target of $36 - much below the current bid. that would have never happened 2-3 years ago.
Joe
FROM OI:>>Little did we know what the Greenspan clan was planning - a 50
basis point cut that was the result of a unanimous 12-0 vote of
the FOMC. Sounds pretty bullish for the markets, huh? Not so
fast. The FOMC statement that accompanied the reduction stated
that, "incoming economic data have tended to confirm that greater
uncertainty, in part attributable to heightened geopolitical
risks, is currently inhibiting spending, production, and
employment." The committee basically telegraphed serious concern
about what they called a "soft spot" in our economy. They blamed
heightened geopolitical risks (read: Iraq), which certainly have
had some effect on companies reluctant to do business in that
part of the globe, as well as concerns over fuel costs. However,
the rough employment picture seems more based on a lack of
business spending in the economy, which has also led to
contraction in the manufacturing sector. Now that the bullets
are out of the gun, it will be interesting to see how the fed
deals with future economic weakness. While it is possible to
lower rates further than the current 1.25%, there is not much
room to move before money essentially becomes free, when taking
into account the inflation rate. The fed addressed that concern
by stating, "Inflation and inflation expectations remain well
contained." The committee also said it believed that the risks
are balanced for now, in regard to long-term goals of price
stability and economic growth. This indicates they are not
planning any more changes in the near term.<<<
Mlsoft, I think the Fed has about accomplished what it wanted to for this go around. IMO the FEd knows longer term that valuations are too high and must come down. Their main goal is to avoid a crash scenario. If you read back over some of their white sheets they tend to show a real fear of a "crash" and spend much time discussing how to avoid one. I think their main goal now is to control the rate of descent. Sure they would love to see a sustained recovery but I think a bunch of us know that it's not going to happen anytime soon. I think they know that but they also can't let the market go straight down. The PPT must time their involvment to get the greatest impact with the resources available to them. I think they will back off for a week or two here and maybe pick the efforts back up near Thanksgiving as they take advantage of the giddishness of the holiday season. New lows after the first of the year 2003 IMO.
I'm also very short tech here so I would just love my scenario to play out. I'm also very long some utility stocks. Here's to a big down day tomorrow. Half point cut - what were they thinking!
Joe
Gottfried, I agree that this year is bad but I don't see the catalyst for the jump next year. Looking at the chart that you provided and the shipments for 1995-97, I'm not so sure if shipments are not going to head back down. Actually looking at the graph, this year looks somewhat normal historically taking out the "mania" period. I base much on my opinion that I see lower and slower consumer purchases next year.
With the SIA calling for 19.8% growth next year but a 8-10% compounded growth rate in the future, is it only me or does anyone else think that these folks speak with a forked tongue? Think we need to be careful that the semi-industry is not factoring in that same recovery that they saw last year. I the market prices this new projected growth rate is anyone's guess. In my opinion, I think that most of these semi's will be cheaper next year than they are now. That said, I will trade what I see.
Joe
The more I think about the Semi-conductor industry cutting their projected growth rate, the more impact I think it may have on the semi's. For years the analyst have been pumping the semi's based on 20%+ growth rates. Now the industry is looking at 8 - 10% growth rates. That's not going to sell well for issues that are selling for the high PE's based on anticipated higher and above average industry growth.
Here's a prediction. I don't think next year's growth rate will meet the 19.8% projection. This year's grwoth rate is projected at 1.8%. Sure it may be easy to grow from those numbers but I also think capacity will be even less next year.
Looking out ahead I'll make another prediction that on boards like this in 3 years we will be discussing health sector stocks as the new growth industry and the better traders will know the health sceince stocks as well as most of us follow and trade tech today.
Just a thought. Joe
#2 sounds like it may be VASO.
Joe
Gottfried, (Semi-conductors) The article implies a downturn again in 2005. If they are looking for 19.8% in 2003 and 21.7% growth in 2004, with and estimated 8-10% compounded growth rate in the future, 2005 and beyond sales must suck. Here's a excerpt.
>>>"The group also culled its global revenue forecasts again this year. Global chip sales are now expected to grow 1.8 percent this year, 19.8 percent in 2003 and 21.7 percent in 2004 compared with mid-year forecasts for growth of 3.1 percent, 23.2 percent and 20.9 percent, respectively.
Despite the reduction in growth rates, Sanders said business conditions are moving in the right direction. "The long-awaited recovery is underway, unfortunately it doesn't feel much like a recovery."<<<
EP- earnings out Friday. Has beaten last 4 quarters. Selling for about half of book with 10% dividend. Gets linked more to the power producers but it's main interest is Nat gas. A break out over 10 moves it above past strong support and it's 50ema.
http://stockcharts.com/def/servlet/SC.web?c=EP,uu[l,a]daclyyay[dc][pc20!c50][vc60][iLb14!La12,26,9]&...
Currently have a position but this one could be subject to a bad headline with the CA mess. Looking to add on a pullback or once the CA situation looks clearer. Not a bad hold for long term in my opinion if looking for income a some good future price appreciation.
Just an idea.
Joe