I + O Goodbye

Ideas + Outlook, in one form or another, existed for over two years. The idea was to share Outlooks, Opinions, Ideas, Information, Resources, etc. about the Financial Markets and the world of Investments.
We, the participants, are mostly from the Financial Services Industry (Brokers, Advisors, Money managers, Analysts, etc.) and have been in the “business” for average 25+ years. (Some, a lot longer.) We’ve experienced recessions, “crashes”, “bubbles”, etc. We tend to be optimists, try to be realists and look for opportunity.
This time it is different. See …
http://cftc.gov http://www.sec.gov/litigation/litreleases.shtml http://www.nyse.com http://sec.gov
http://www.whitehouseforsale.org
http://www.opensecrets.org

The rules, regulations and controls that were put in place, starting in 1932, to protect the public and investor have been removed, revoked or simply ignored at the directions and control of Financial Institutions (Banks, Wall Street, Insurance Cos. Funds, etc.) who “own” Congress and both Democratic and Republican Administrations.
It was hoped that this would be reversed. Instead, Obama’s selections to head the SEC, CFTC, Treasury, etc. have a history of doing all the “bad things” and being controlled by “Goldman Sachs, Etc.” They are making things worse.

Ticking Time Bombs:
There is suspicion that shares “supposedly” held for clients (Brokers, Mutual Funds, ETFs, etc.) in omnibus “street name” accounts do not exist. (Ala Madoff)
Fixed Annuities are supposedly in “safe” income producing investments that are available on demand. Instead they may be giant Ponzi Schemes. The possibly of escalating demand for redemption is real. Any “bailout” would be many times the trillions of our current mess.
“Program trading”, exchange listed “derivatives”, uncontrolled “shorting”, etc. have turned our Financial Markets into giant “casinos”.
There is growing fear of a US dollar collapse.
The “average investor” (Us too.) is frightened, confused and has lost faith in the “markets” and government.
And more and more …..

Bottom line: We don't trust government or the markets. We believe both are thoroughly corrupt. We decided to no longer post Ideas and Outlook.

(We will contribute to http://seekingalpha.com and other idea/info/outlook sources.)

20 FEB '09 HELP!

Outlook: We were promised “Change”. We got change. The outlook (hard to believe) is getting progressively worse. If the Plans are supposed to enrich the Banks, Wall Street, Politicians, Unions, Lobbyists and other “insiders”, they are working. If the Plans are supposed to help the American People and our Economy, they are a disaster.
The Insane Asylum is being run by the inmates.
The Foxes are guarding the Chicken Coop.
The recently signed Stimulus” plan is estimated to cost at least 2-3 times the stated $787 billion. Obama, Geithner, etc, announced that this is just phase 1 with a lot more to come.

So … The Banks, Lobbyists, Wall Street, etc. write the “Stimulus” plans. They and the politicians are getting rich beyond belief. The Banks, Financial Institutions and other recipients announced further job cuts and closings. Next in line are auto makers, manufacturers (Industrial), Health Care and Retailers.

Mortgage Plan: According to Obama, the cost for Phase I is $75 billion. Simple math shows the continuing costs will be in excess of $240 billion.
(Also thrown in is an additional $2 billion per year for “community” organization fees. That is in addition to $4 billion already granted in TARP I. Who or what are these “community organizations” and “community organizers”?)
Homeowners who are current and make in mortgage payments on time, get no benefit.
Homeowners benefit if they stop making mortgage payments or default. ????
This is an invitation to stop making mortgage payments.
Obama’s Mortgage Plan will also provide subsidies and payments for people who don’t meet “guidelines” to qualify for mortgage loans. ??? Isn’t this what helped start this mess?

Bottom line: The “Stimulus” plans and government actions do not help. They suck money from the economy and make things worse. The Mortgage Plan will generate huge fees for the banks and mortgage companies, briefly inflate prices and eventually cause additional foreclosures.

Interest rates: The only way the geniuses in Washington can make rates lower than zero is by paying the banks and people to borrow money. Expect rates to stay low for the near future. (3-6+ months.) When the realization hits that the U.S. has no possibility of ever repaying or keeping current with the amounts we are borrowing, rates will go up.
Jim Grant (The Interest Rate Observer) predicts that current fiscal policy has made the US dollar worthless. He comments that the US Government is using the same cure as Zimbabwe and we can expect a monetary collapse. His advice is get out of the US Dollar and buy hard assets. The flood of money into Swiss banks won’t stop.
Wednesday, February 18, 2009: Bernanke announced the Fed decided to set “inflation targets”. The reasoning is that if the US dollar begins to fall sharply, people will stop saving and rush to spend all their dollars while there is still some value. Geithner concurred.
Does this make any sense?

Sites:
Watch where your money goes. http://www.recovery.gov/
From the population people: http://www.census.gov/population
National debt: http://www.brillig.com/

Ideas:
Soros and Grant and others believe the US dollar is becoming worthless and they don’t trust the US markets.
They are buying hard assets outside the US. PBR, SLV, GLD, RIO, BHP, etc.
Utilities: Seemed like a good idea. Get a good dividend with upside/growth potential.
Changed outlook: GXP and CEG just cut their dividends. ED, TE and a lot of others report dramatic increase in late and no payments.
Utilities require CAUTION and review for dividend cut.
Things do not look good. Will they get better or worse?

From: http://briefing.com/Investor/Index.htm
It's Not All Bad News
Last Update: 19-Feb-09 08:50 ET
From what we can tell, there aren't any plans to announce any new stimulus plans today. Incidentally (or should we say coincidentally?), the futures market is pointing to a modestly higher open for the market.

According to S&P (Capital IQ) the Market Cap of GM on February 19, 2009 was $1.26 billion.
We, the American Taxpayers, Mr. Bernanke, Geithner, Obama and the dear folk in Congress is going to give GM $25 billion. That is 20 times what the entire company is selling for on the NYSE.

A good idea is not very useful in a collapsing market.

........ HELP! (We need Hari Seldon) ........

Ideas + Outlook week 1 FEB 2009

Economic Outlook: Lousy and getting worse. Parts of the U.S. economy are "shutting down".

Nouriel Roubini: The U.S. will lose over 6 million jobs with unemployment reaching at least 9 percent. The U.S. economy will contract in 2009 and expand 1 percent at most in 2010. Economic growth in China will slow to less than 5 percent.

He reiterated his statements that the biggest U.S. banks are insolvent, and that losses could reach $3.6 trillion, far exceeding his original estimates.

Obama-First 2 weeks:
Secretary of Treasury (Geithner) was NY Fed Governor before and during collapse of our financial system. He did and does whatever the banks and Wall Street tell him to do. He also neglected to pay income taxes he owed for several years. His background and sponsors are the usual (Goldman Sachs, Robert Rubin, Clinton, Banks, Wall Street, etc.) New heads of SEC and CFTC have the same background. They all take orders from Goldman Sachs, Wall Street, etc.

New Deputy Director of the Defense Department is an active lobbyist for Raytheon, a defense contractor. Obama’s promises about lobbyists, conflicts of interest, honesty, "earmarks", etc. were made before the election.

Obama and team are screaming that the country will go kaput if Congress does not vote to give him all the money he wants with no restrictions. He announced the money will “save” the economy and create jobs. These are promises.
No one knows where most of the money given away (somewhere between $350-900 billion) has gone. We do know some was used for billions of bonuses, lobbyists and payoffs. Obama is asking for an additional $1.6 to $3+ trillion (including TARP, “bailouts”, “special grants” and deficit).

His proposed "plan" has a few vague details, but does include "earmarks", lots of "pork" and over 4 billion for "community organizations".

Question: Is there any reason to believe the markets will go sharply higher in the next month? If not ...

Ideas: Good ideas, none. FDIC money market pays very little, but it is safe. Stop loss orders. Dividends, dividends, dividends....

Utilities, natural gas pipeline MLPs and some discounted preferreds and convertibles are OK.

http://seekingalpha.com/article/116156-energy-infrastructure-mlps-among-the-very-best-high-dividend-stocks

From SA:

http://2008stockmarketupdate.info/Wachovia Securities Outlook http://www.wachovia.com/corp_inst/page/0,,13_54_1067,00.html
Wachovia Securities Outlook http://www.wachovia.com/corp_inst/page/0,,13_54_1067,00.html
More bad news.
Political historian Kevin Phillips wrote a brilliant Harper's article "Numbers Racket" warning us that "the economy is worse than we know." Politicians use "deceptive statistics" to further their political ends. Don’t believe a word they (government) say.
http://www.harpers.org/archive/2008/05/0082023

Ideas +Outlook 10 JAN 2009 Not good.

Outlook: The outlook is getting worse.

The initial $750-900 billion “bailout” allocated seems to have “disappeared”. The various Federal Agencies and Congress cannot find large amounts of the money and the Sec. Treasury, Fed and Administration refuse to give information.
This is similar to the bundles of one million dollars given away in Iraq by Paul Bremmer and other Bush designees in Iraq.
No question, this is the biggest theft and fraud in history. And it is just starting.
Obama, new Congress and Administration, promise more to come.
The 2009 deficit is projected to be above 1.2 trillion dollars. (Republicans estimate over 1.8 trillion.) The “stimulus package” is estimated to be over 1.3 trillion and possibility of substantially more than 2 trillion. That is a lot of trillions!

Interest rates: They (Government) will continue to print and give away money. (The stated purpose is to flood the economy with money and push down rates to stimulate the economy.) This will stop as the dollar is becomes worthless and/or inflation starts to rise.
Bottom line: … interest rates will remain low near term. When Treasury Auctions begin to fail, states flood the market with borrowing and the US dollar begins to drop, rates will rise.

Stock Markets:
Earnings look down, unemployment up, defaults increasing, consumer spending falling and world markets collapsing. What do you think?

From NYTimes: Unhappy news and thoughts. Go to ….. http://www.nytimes.com/2009/01/04/opinion/04lewiseinhorn.html

Idea: Income is good.
ETFs: (EMB), (HYG), (AGG), (PFF) and
Market Vector Nuclear Energy ETF (NLR).
Site: Remember Quant for income info. http://www.quantumonline.com/login.cfm

Ticking time bombs:
Mortgages: Most homes bought after 2006 are “underwater”. (Worth less than the outstanding mortgage.) The media and “financial advisors” are advising people to walk away or stop paying. The increasing belief is that the Government will “bailout” home owners or lenders will reduce the balance and rates.
Credit card debt: Default rates are rapidly increasing due to soaring unemployment, increasing balances and rates. A lot of people and the media expect a consumer “bailout”. (Stop paying?)
Consumers, homeowners, Financial Advisors, small business owners, etc. expect a change in bankruptcy laws from the new Congress.
Bottom line: Potential for massive consumers defaults and backlash is high. Not good!

Ticking time bomb: The current head of the SEC, Cox, admits massive failure. Those in Congress responsible for oversight have failed and made matters worse. Obama’s nominees for SEC and CTFC are part of the problem and with Congress’ help will probably be worse.
Bottom line: Investor confidence and financial markets are at great risk. Market collapse?

Ideas: As the dollar loses value; Hard assets outside U.S. RIO, BHP, TOT, REP, PBR, etc.
Ideas: GLD, SLV, etc. Hedge against $$$ decline.

How many dollars can the US Treasury print? Is there a limit?
China has stopped buying U.S. debt. China holds over US$1 trillion of such paper, and as interest rates collapse, there is less and less incentive for them to buy American.
(From James West) Reduced demand for U.S. debt will hamper plans to keep printing money. One limiting factor that still seems to be respected in terms of how much paper can be printed, is the idea that there must be counterparty to every issuance of T-Bills. Theoretically, less demand for T-Bills will force a rise in interest rates to attract investors. But that does not appear forthcoming, which will make the U.S. dollar weak relative to other currencies – especially gold and silver.

Idea: How low can REITs go? Some offer 6-12% returns. Foreign REITs will probably rebound earlier. Pick your own. For ETFs, Closed-End has a good screen. http://closed-endfunds.com

Good news: The world may not come to an end. And Groundhog Day is coming.