Today I came across the interview Aaron Task had with Bernie Schaeffer yesterday on his Yahoo Finance show, techticker. In the accompanying article he also writes, it included a point about gold that I found interesting. This point also reminded me of a post I wrote not too long ago.
In Task's article he mentions that when gold pulled back on Friday, it "tumbled more than $60, or 5%". When Task mentioned 5% it reminded me of a prognostication I made before Thanksgiving (November 24, 2009). In that prognostication I stated that I expect the gold ETF (GLD) to "only pull back as much as 7%". Now the point Task made is true, but it only takes into account intraday trading. When I made my statement I was not talking about intraday trading. So how much did the ETF really fall?
On December 2, 2009, two days before yesterday's pull back, GLD closed at a high of $119.18. As of yesterday's close, GLD is at $113.75. That means that it tumbled a total of $5.43, or 4.6%. This is still more than half of what I prognosticated. On top of that, it happened within the two week time frame I stated also. Not bad in my opinion. The question now is what will the next trading day bring? Will it a) continue to slide, b) oscillate sideways, or c) bounce?
The answer? I don't know. My opinion is that statistically it should continue to slide for at least one more day. Especially lately as it has been over-priced for an extremely long period of time, and the price has been increasing way too steeply. Usually such things are indicators that the drop will also be dramatic, as it has already shown in one day. However, humans are irrational and the sales pitch of a metals commodity broker is quite convincing. It is very likely that it will oscillate sideways for a while or just bounce. Maybe it will create a double top before coming down again. I just don't know.
What I do know is that the candlestick created on this down day has a long lower shadow. This usually means that bulls saw the drop as a good thing and rushed in to grab a great deal. From here the equity value travels sideways or bounces. The length of the shadow in comparison to the body is an indicator of direction. Generally, the longer the shadow, the more likely there will be a bounce. Since this one has a long shadow shorter than the body of the candlestick, it will probably travel sideways for a few days. That is my opinion, you can take it or leave it.
Disclaimer: See bottom of page. http://investorsopinion.blogspot.com/
=== References ===
Don't Fear the Fed: Stocks, Gold Still a Buy, Bernie Schaeffer Says
Tuesday, November 24, 2009 - Investors Opinion: Portfolio Update
Showing posts with label Aaron Task. Show all posts
Showing posts with label Aaron Task. Show all posts
Saturday, December 5, 2009
Monday, March 2, 2009
Nationalization Revisited.
The financial sector continues to give the market a heart attack as AIG reports huge losses and the their bailout is renegotiated.
Asia is the first to react to the bad news:
Nikkei => 7,280.15, -288.27, -3.81%
Hang Seng => 12,317.46, -494.11, -3.86%
Straits Times => 1,533.40, -61.47, -3.85%
Europe didn't react any better:
FTSE => 3,625.83, -204.26, -5.33%
DAX => 3,710.07, -133.67, -3.48%
CAC => 2,581.46, -121.02, -4.48%
And the US finished the day:
Dow => 6,763.29, -299.64, -4.24%
Nasdaq => 1,322.85, -54.99, -3.99%
S&P => 700.82, -34.27, -4.66%
As for me:
AMD => 2.01, -0.17
F => 1.88, -0.12
NG => 2.54, -0.32
AMD DG => 0.09, -0.01
HRP JZ => 1.50, unchanged
NLH JZ =>1.55, unchanged
Today I listened to a Yahoo! Finance techticker interview by hosts Aaron Task and Henry Bloget, and their guest Nouriel Roubini of NYU's Stern School. In the interview they got Roubini's reaction to Bill Gross' comments that "nationalization is a bad idea." I believe Roubini made a few interesting points about how the "nationalization" of the banks isn't the same as the Swedish model that Gross is referring to. If you haven't watched the video, please do(2). This video is a continuation of the interview where Roubini encourages full nationalization as better(1).
Roubini comments in a way that indicates that the situation is no longer "if" the banks will be nationalized, but how and how much. He uses the words "partial" or "full" and illustrates that with Citigroup who is now 36% owned by the government. To him, anything over a third is effectively partially nationalized, and that is the status of Citigroup right now.
I personally don't agree with the idea of fully nationalizing the banks since it will wipe out the shareholders, of which I am not. However, Roubini does make a point at the end of the first video that could very well be true. He comments that at this point fully nationalizing Citigroup and Bank of America would barely have an effect on the market because their stock has already been beaten down so much. Nationalizing the "big banks" would only have about a 50 point effect on the Dow and the significant moves in the market are a result of systemic fear because of the financial sector.
Unfortunately, I see that as a continuing inevitability. News reports will still come out about how the government is disassembling these "to big to fail" banks and those reports will affect the stock value of other companies since these big banks are still the account providers for existing companies.
My opinion on what the government should do is very simple, yet not at all pretty. If the banks want to clean up their balance sheets, they should have to follow these 4 steps.
First, accept a moratorium on all incomplete foreclosures. This will provide time for the owners to get their act together for the last step.
Second, the banks will have to accept the government's offer to buy the bad assets from them at market value or for the foreclosure principle balance, whichever is least. This is fare because the Bank wants more but the government wants to pay less, neither will be happy.
Third, the government should then send the list of assets to the county court house for which the properties reside so that they can be auctioned off, starting at the value the government bought it from the banks for. The resulting amount should then be funneled into the counties budget to pay for education and infrastructure.
Forth, the banks should be forced to allow for every property owner the opportunity to refinance even if they are not in default yet.
Like I said, it is simple, not pretty.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Asia is the first to react to the bad news:
Nikkei => 7,280.15, -288.27, -3.81%
Hang Seng => 12,317.46, -494.11, -3.86%
Straits Times => 1,533.40, -61.47, -3.85%
Europe didn't react any better:
FTSE => 3,625.83, -204.26, -5.33%
DAX => 3,710.07, -133.67, -3.48%
CAC => 2,581.46, -121.02, -4.48%
And the US finished the day:
Dow => 6,763.29, -299.64, -4.24%
Nasdaq => 1,322.85, -54.99, -3.99%
S&P => 700.82, -34.27, -4.66%
As for me:
AMD => 2.01, -0.17
F => 1.88, -0.12
NG => 2.54, -0.32
AMD DG => 0.09, -0.01
HRP JZ => 1.50, unchanged
NLH JZ =>1.55, unchanged
Today I listened to a Yahoo! Finance techticker interview by hosts Aaron Task and Henry Bloget, and their guest Nouriel Roubini of NYU's Stern School. In the interview they got Roubini's reaction to Bill Gross' comments that "nationalization is a bad idea." I believe Roubini made a few interesting points about how the "nationalization" of the banks isn't the same as the Swedish model that Gross is referring to. If you haven't watched the video, please do(2). This video is a continuation of the interview where Roubini encourages full nationalization as better(1).
Roubini comments in a way that indicates that the situation is no longer "if" the banks will be nationalized, but how and how much. He uses the words "partial" or "full" and illustrates that with Citigroup who is now 36% owned by the government. To him, anything over a third is effectively partially nationalized, and that is the status of Citigroup right now.
I personally don't agree with the idea of fully nationalizing the banks since it will wipe out the shareholders, of which I am not. However, Roubini does make a point at the end of the first video that could very well be true. He comments that at this point fully nationalizing Citigroup and Bank of America would barely have an effect on the market because their stock has already been beaten down so much. Nationalizing the "big banks" would only have about a 50 point effect on the Dow and the significant moves in the market are a result of systemic fear because of the financial sector.
Unfortunately, I see that as a continuing inevitability. News reports will still come out about how the government is disassembling these "to big to fail" banks and those reports will affect the stock value of other companies since these big banks are still the account providers for existing companies.
My opinion on what the government should do is very simple, yet not at all pretty. If the banks want to clean up their balance sheets, they should have to follow these 4 steps.
First, accept a moratorium on all incomplete foreclosures. This will provide time for the owners to get their act together for the last step.
Second, the banks will have to accept the government's offer to buy the bad assets from them at market value or for the foreclosure principle balance, whichever is least. This is fare because the Bank wants more but the government wants to pay less, neither will be happy.
Third, the government should then send the list of assets to the county court house for which the properties reside so that they can be auctioned off, starting at the value the government bought it from the banks for. The resulting amount should then be funneled into the counties budget to pay for education and infrastructure.
Forth, the banks should be forced to allow for every property owner the opportunity to refinance even if they are not in default yet.
Like I said, it is simple, not pretty.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Wednesday, February 25, 2009
How do you figure that?
The following link is a video article on Yahoo! Finance where Aaron Task interviews Jon Najarian, President of OptionMonster.com.
Four Simple Steps to Resolve the Financial Crisis and Boost the Stock Market
In the above video article, Jon Najarian outlines three of his steps he thinks will boost the Stock Market and Aaron Task adds a forth one to the list. My opinion? A complete joke, except for maybe one.
1) Cut taxes by 10% across the board for corporations and individuals alike?
Ha! This is a good one! With such a budget deficit, how in the world is government suppose to function? Print more money? Devalue the US currency even more? And how exactly does that encourage other countries to buy our debt? It doesn't.
Cutting taxes is not the answer as so many want to preach. I understand that we want to get people to spend more, but that isn't the reason why they are holding on to the money they do have. It is the lack of job security.
How about this? Rewrite the tax rules. Supply scale able tax deductions for companies that higher US citizens and resident aliens. And add a temporary tax to anyone that imports any new people or outsources any new jobs out of the country, retroactive to January 1, 2009. Notice the concession there, I am not without compromise or compassion to grandfathering in people.
2) Raise the FDIC insurance limit to $1 million per account?
This is another joke. Jon mentions that the average American had his money spread across several accounts and with the financial situation pulled their money out. What numbers is he looking at. The average American barely has a $10,000 in their checking account much less $100,000 in any one account. The only ones that have remotely near that much in there account is the upper-middle class and the upper class. These account for less than a 25% of America.
The average American doesn't understand what FDIC insurance is or even trust it. That is why so many people lined up at banks to pull their money out and stuff it into there mattresses. Raising the FDIC insurance limit would only encourage a small amount of people to put their money back in banks if any at all.
3) Suspend mark-to-market accounting?
Good try! This seems like a good thing for the bank but it is a lousy thing for the tax payer. The banks screwed up. They should have to accept the debt they incurred. But a compromise can be reached. The bad bank idea isn't really that bad of an idea. It just needs a very rigid foundation.
My opinion is that the US government, after federally mandating a temporary moratorium on all foreclosures in process, should buy all of the bad real estate assets that the banks have at market value or the remaining principle value, whichever is least. And then supply a tax deduction to the banks for accepting their losses.
Then assign the government in which the real estate asset resides to auction it off. The capital from the auction then becomes assigned to the education and infrastructure budgets. See how cash can flow?
After all that is done, any remaining home mortgages on primary homes must be allowed to be refinanced at a fixed rate for the remaining principle regardless of the payment status of the borrower. Why not let up to date borrowers better their terms? And if the mortgage is backwards, any back ended interest is a loss to the bank. Another lump the banks should have to accept. But again, another tax deduction to the banks for accepting the loss.
Secondary homes? Well who needs one should be able to afford it. If you have one and can't afford it, you lose. Banks, put them on the auction block regularly until they are sold. Hire a rehabilitation professional to get them in selling condition. Nothing extravagant, just clean and presentable.
As far as regulations go, make it mandatory that the mortgage applicant be screened against the payment to be expected on the first month of the 6th year to determine if they can afford the mortgage instrument. That should prevent 5-1 ARMs from being sold to the majority of incapable borrowers. That mandatory tax records for the past two years.
If, after all this, some individuals still can not afford to stay in their homes, they probably shouldn't have been in them anyway. Those then also get seized by the US government for market value and distributed to the local government to auction off and the funds funneled into the education and infrastructure budgets.
4) Reinstate the uptick rule?
Now, since I don't short stocks or commodities directly, I didn't have a clue what this was. So I looked it up. Thank you Wikipedia. The uptick rule is a rule that pretty much states that a short trade has to be made at the next 'tick' higher than the last executed long sale or at market value if the last long sale was higher than it's previous long sale. At least that is how I understand it.
Well, Aaron Task came up with this one and he might have something here. If you think about it, without the uptick rule, shorters can do trades without restriction. And since the market can have unlimited gains but only a finite loss, resistance against profiting on loss is actually a good thing. It would help slow but definitely not stop the market decline. The financial sector needs to stabilize, people with a job need to feel secure, those that are looking for a job need to find one, and those with businesses need to be able to hire more from within the country. The only way to accomplish all of this is to uproot the problem in the financial sector, and provide the needed incentives to get credit and cash flowing correctly.
So, in conclusion, Jon Najarian is either a confused individual or someone with his own agenda. Considering he is president of OptionMonster.com, I lean towards the latter. But...
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Four Simple Steps to Resolve the Financial Crisis and Boost the Stock Market
In the above video article, Jon Najarian outlines three of his steps he thinks will boost the Stock Market and Aaron Task adds a forth one to the list. My opinion? A complete joke, except for maybe one.
1) Cut taxes by 10% across the board for corporations and individuals alike?
Ha! This is a good one! With such a budget deficit, how in the world is government suppose to function? Print more money? Devalue the US currency even more? And how exactly does that encourage other countries to buy our debt? It doesn't.
Cutting taxes is not the answer as so many want to preach. I understand that we want to get people to spend more, but that isn't the reason why they are holding on to the money they do have. It is the lack of job security.
How about this? Rewrite the tax rules. Supply scale able tax deductions for companies that higher US citizens and resident aliens. And add a temporary tax to anyone that imports any new people or outsources any new jobs out of the country, retroactive to January 1, 2009. Notice the concession there, I am not without compromise or compassion to grandfathering in people.
2) Raise the FDIC insurance limit to $1 million per account?
This is another joke. Jon mentions that the average American had his money spread across several accounts and with the financial situation pulled their money out. What numbers is he looking at. The average American barely has a $10,000 in their checking account much less $100,000 in any one account. The only ones that have remotely near that much in there account is the upper-middle class and the upper class. These account for less than a 25% of America.
The average American doesn't understand what FDIC insurance is or even trust it. That is why so many people lined up at banks to pull their money out and stuff it into there mattresses. Raising the FDIC insurance limit would only encourage a small amount of people to put their money back in banks if any at all.
3) Suspend mark-to-market accounting?
Good try! This seems like a good thing for the bank but it is a lousy thing for the tax payer. The banks screwed up. They should have to accept the debt they incurred. But a compromise can be reached. The bad bank idea isn't really that bad of an idea. It just needs a very rigid foundation.
My opinion is that the US government, after federally mandating a temporary moratorium on all foreclosures in process, should buy all of the bad real estate assets that the banks have at market value or the remaining principle value, whichever is least. And then supply a tax deduction to the banks for accepting their losses.
Then assign the government in which the real estate asset resides to auction it off. The capital from the auction then becomes assigned to the education and infrastructure budgets. See how cash can flow?
After all that is done, any remaining home mortgages on primary homes must be allowed to be refinanced at a fixed rate for the remaining principle regardless of the payment status of the borrower. Why not let up to date borrowers better their terms? And if the mortgage is backwards, any back ended interest is a loss to the bank. Another lump the banks should have to accept. But again, another tax deduction to the banks for accepting the loss.
Secondary homes? Well who needs one should be able to afford it. If you have one and can't afford it, you lose. Banks, put them on the auction block regularly until they are sold. Hire a rehabilitation professional to get them in selling condition. Nothing extravagant, just clean and presentable.
As far as regulations go, make it mandatory that the mortgage applicant be screened against the payment to be expected on the first month of the 6th year to determine if they can afford the mortgage instrument. That should prevent 5-1 ARMs from being sold to the majority of incapable borrowers. That mandatory tax records for the past two years.
If, after all this, some individuals still can not afford to stay in their homes, they probably shouldn't have been in them anyway. Those then also get seized by the US government for market value and distributed to the local government to auction off and the funds funneled into the education and infrastructure budgets.
4) Reinstate the uptick rule?
Now, since I don't short stocks or commodities directly, I didn't have a clue what this was. So I looked it up. Thank you Wikipedia. The uptick rule is a rule that pretty much states that a short trade has to be made at the next 'tick' higher than the last executed long sale or at market value if the last long sale was higher than it's previous long sale. At least that is how I understand it.
Well, Aaron Task came up with this one and he might have something here. If you think about it, without the uptick rule, shorters can do trades without restriction. And since the market can have unlimited gains but only a finite loss, resistance against profiting on loss is actually a good thing. It would help slow but definitely not stop the market decline. The financial sector needs to stabilize, people with a job need to feel secure, those that are looking for a job need to find one, and those with businesses need to be able to hire more from within the country. The only way to accomplish all of this is to uproot the problem in the financial sector, and provide the needed incentives to get credit and cash flowing correctly.
So, in conclusion, Jon Najarian is either a confused individual or someone with his own agenda. Considering he is president of OptionMonster.com, I lean towards the latter. But...
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
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