I am turning comment moderation back on. I am getting just silly comments that are obviously of the spam variety.
I only intend to check comments once a day so if you comment it may not display until end of day.
Thanks for understanding
Support levels. Moving averages. Breakouts.
That strange language is being spoken more forcefully on Wall Street these days. It is the language of technical trading, which is helping to drive recent wild gyrations in stock prices.
Within hours, stock prices have been leaping and falling in 300 and 400 point bursts.
Technical traders all but ignore fundamentals, such as corporate profits or expected growth rates. Instead they rely on stock-chart analyses that signal when to buy or sell the entire U.S. stock market.
In the absence of clear signs about the economy's direction, more of Wall Street is turning to technical trading. When the charts say "sell," a herd of sellers emerges, magnifying declines. If prices fall far enough, another wave of technical selling is triggered and the decline is intensified. At some point, a threshold is reached where the charts say "buy," and stock prices get whipped higher.
"You have to have some idea of earnings and multiples for fundamental analysis," said James Masserio, the head of equity derivative trading at Credit Suisse. "But now there is essentially no clarity on future earnings for the next 6 to 12 months."
When traders can't forecast the future, they turn to what has happened in the past. "Technical analysis at its heart is just a graphical representation of human emotion and psychology," said Richard Ross, a global technical strategist at Auerbach Grayson, a New York-based broker. He says that price charts show that markets -- and investors -- follow reliable patterns.
A generation ago, volatility was measured in days. Now huge moves up, and then down, can happen in a matter of minutes. The moves are so fast these days because computers programmed to analyze charts are executing trades without any human intervention.
Democrats doubt Barack Obama's reelection chances
Excerpt:
Gary Pearce, a Democratic strategist in North Carolina, a swing state Mr Obama is likely to struggle to retain in 2012, said: "Democrats are worried. He looks weak, he doesn't say anything that grabs you, and people are looking for some kind of magic."
"The notion everyone is talking about is 'is he Jimmy Carter or will he be a one-term president'
Comment: $ 800 per month with no bathroom. HT: Salon
'Give money, I gun' bank robber gets 10 years in prison
Excerpt:
A grammatically challenged ex-con is looking at 10 years in prison for robbing a Fridley bank of less than $2,000.
Joe Nathan Michael, 48, of Fridley, was sentenced Tuesday in federal court after pleading guilty to holding up the TCF bank at Cub Foods on May 20, 2010.
According to the plea agreement:
Michael gave the teller a note that read "Give money, I gun," leaving her confused about what he wanted. He told her to give him all the money and not to push any buttons.
She handed over $1,991, recorded bait bills and a concealed electronic tracking device. Michael put the money in his jacket and fled on foot.
Police, provided with a description, saw Michael standing at a nearby bus stop and apprehended him.
Michael's criminal history includes convictions in Minneapolis for felony robbery and felony domestic assault and gross misdemeanors for domestic assault and assault
30,000 college students kicked out of food aid program in Michigan
Excerpt:
Michigan has removed about 30,000 college students from its food stamp program — close to double the initial estimate — saving about $75 million a year, says Human Services Director Maura Corrigan.
Federal rules don't allow most college students to collect food stamps, but Michigan had created its own rules that made nearly all students eligible, said Brian Rooney, Corrigan's deputy director. As a result, the number of Michigan college students on this form of welfare made the state a national leader. For example, Michigan had 10 times the number of students on food stamps as either Illinois or California, Rooney said.
Cutting off the students is part of what Corrigan says is an effort to change the culture of the state's welfare department and slash tens of millions of dollars of waste, fraud and abuse.
"Maybe (students) could go get a part-time job — that's what I did," said Corrigan, a former justice of the Michigan Supreme Court who attended Detroit's Marygrove College and University of Detroit Mercy School of Law.
"We want to encourage people to be self-sufficient, not to be dependent on the government," she said in an interview with The Detroit News.
We'll begin with the 2008 results adjusted for the post-Census reapportionment. I think we can all agree that this is a baseline -- the chances that Obama will win more electoral votes than he did three years ago is zero. Then we'll begin with what I think are fairly obvious adjustments -- we'll give the Republicans back the electoral vote they lost in Nebraska along with Indiana, North Carolina, and Virginia -- traditionally Republican states that he carried last time through a special magic the like of which we are not likely to see again.
Let's work from this base of 219 electoral votes and assume that the following states are potential battlegrounds in 2012: Washington, Oregon, Nevada, Colorado, New Mexico, Minnesota, Iowa, Wisconsin, Michigan, Ohio, Pennsylvania, New Hampshire, and Florida. We'll throw in Maine and New Jersey as stretch states as well. This gives the Republican nominee an almost absurd number of paths to the White House:
Perhaps the most obvious one, in that it resembles the 2000 and 2004 battlefields most heavily, is that a Republican could win by taking just Florida, Ohio, and Nevada from that list of states.
Or, even, they could tie it -- and win in a Republican-controlled House -- by taking Ohio, Michigan, and Wisconsin from the rust belt and Nevada in the West.
Alternatively, they could win without taking a single rust-belt state by winning in Nevada, New Mexico, Colorado, Florida, and New Hampshire.
Another odd-looking way of doing it would be to take Pennsylvania, Ohio, Nevada, and Oregon.
More simply, working from this base, Obama has to take 2/3 of the electoral votes in battleground states -- a tall order even for ordinary times.
FLASHBACK: Obama: My Presidency Will Be ‘A One-Term Proposition’ If Economy Doesn't Turn In 3 Years
Excerpt:
“Look, I'm at the start of my administration. One nice thing about the situation I find myself in is that I will be held accountable. You know, I've got four years,” Obama told The Today Show’s Matt Lauer on February 1, 2009.
The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Standard & Poor’s announced Friday night that it has downgraded the sterling U.S. credit rating for the first time.
The move came even though the Treasury Department said that it had found a math error in the firm’s calculations of deficit projections, according to a person familiar with the matter.
S&P decided to lower the AAA rating, held by the United States for 70 years, to AA+ after a bipartisan debt deal signed into law this week failed to assuage concerns about the nation’s growing spending.
Analysts have said a downgrade could increase the cost of borrowing for the U.S. government and lead to tens of billions of dollars in more interest costs per year. That could translate into higher borrowing for consumers and businesses, too.
A downgrade would also have a cascading series of effects on states and localities that rely on federal funding, including in the Washington metro area, potentially raising the cost of borrowing for schools and parks.
Urging the 14 million Americans without jobs not to get their hopes up, officials from the Department of Labor cautiously announced Tuesday that they had heard about a possible employment opportunity at the Lindale Mall in Cedar Rapids, IA. "Now, this could be something, or it could be absolutely nothing, but we think they're looking for someone to restock the jewelry kiosk Monday, Wednesday, and Friday evenings, with the chance to add Sunday mornings further down the line," said Labor Secretary Hilda Solis ...
But there are also several very important differences between this market crash and the ones a few years ago:
That means the government's ability to do anything about this market crash is severely limited. Yes, we'll almost certainly have a "QE3." And maybe that will prop things up a bit. But it won't fix the fundamental problems clogging the economy, just as QE1 and QE2 didn't permanently fix anything. (The only thing that will fix our economy is debt-reduction, discipline, and time.)
- The Fed has fired most of its bullets (interest rates are already at zero)
- Our budget deficit is already out of control, and Congress has had it with "stimulus"
- The public has had it with bailouts
To get a good sense of how hamstrung the government is, you need only look as far back as last week, when Congress was so paralyzed that it almost put the country into default rather than raise the debt ceiling. And you also need only note that, when the 2000 crash began, the US federal budget was running a surplus, and when the 2007 crash began, the deficit was only $200 billion. Now, the deficit's about $1.4 trillion.Comment: Image source. The problem:
While there are various opinions about what qualifies as a bear market, one widely used definition is a price decline of 20% or more over at least a two-month period. By that measure, we're not yet there, but getting uncomfortably close.
What's been influencing the move in stocks as of late? The market has been flooded with a wave of bad economic news (weak GDP, weak manufacturing, weak consumer spending, weak job market, etc.) and instability from Europe's ongoing sovereign debt crisis. The U.S. government's own struggle with too much debt is also worrisome.
Another strategy is to focus on dividends—getting paid to wait for the market to recover. The downdraft has caused a lot of robust yields, especially when compared with the 2.44% yield on 10-year Treasurys.
Pfizer, which trades at 8 times forward earnings, is paying a 4.5% dividend yield. Merck, also trading at 8 times forward earnings, boasts a 4.7% dividend yield. Verizon, trading at 15 times forward earnings, is yielding 5.5% and AT&T, trading at 12 times forward earnings, is yielding 5.9%.
Few companies in corporate America have as complicated a history as Kraft Foods, the owner of Oreo cookies, Ritz crackers and Oscar Mayer lunch meats. Today, Kraft announced plans to split up, marking yet another shimmy in its background as a mélange of corporations, including Philip Morris, General Foods and RJR Nabisco.
It was late Wednesday afternoon, July 13, in the Cabinet Room in the White House. Budget negotiations between Democrats and Republicans had been going on for months. The president, the vice president and congressional leaders on both sides were meeting again. Late in the meeting, House Majority Leader Eric Cantor asked the president a question. As Mr. Cantor told it this week, he was thinking about how the White House and the Republicans were still far apart on the size of budget cuts. He felt the president and his party were hung up on an insistence on raising taxes. Mr. Cantor asked Mr. Obama if he would drop his stand that the debt ceiling should be raised without dollar-for-dollar cuts. At that point, said Mr. Cantor, the president "turned to me and said, 'Eric, don't call my bluff.' He said, 'I'm going to take this to the American people.'" Then he got up and left.
The president was confident he could go over the heads of the opposition and win the day with his powers of persuasion. On July 25 he made his move, with a prime-time national address.
Boy, did it not work.
It was a speech with a calm surface but a rough undertow. "The wealthiest Americans" and "biggest corporations" should "give up some of their breaks." The "burden" must be "fairly shared." The problem is Republicans, who are "insisting" on an approach that "doesn't ask the wealthiest Americans or the biggest corporations to contribute anything at all." These Republicans ask nothing of "those at the top of the income scale." Their stand would "threaten working families" and enrich the "corporate jet owner," the "oil companies" and "hedge fund managers." But don't worry, "the 98% of Americans who make under $250,000 would see no tax increases at all." "Millionaires and billionaires" must "share in the sacrifice." Otherwise the government may not be able to send out Social Security checks.
It was, obviously, an attempt at class warfare. But class warfare is inherently manipulative, and people often sense manipulation and lean away from it. Americans at this point—they've been through the 20th century—don't like attempts to divide them. It turns things sour.
U.S. stocks plunged in the biggest selloff since the financial crisis, driving the Dow Jones Industrial Average down more than 500 points, as investors appeared to lose faith in the ability of the world's policy makers to revive the global economy and stave off a rolling debt crisis in Europe.
The debt deal and Obama's 2012 problem
Excerpts:
By affirming liberalism’s lodestar — the principle that government’s grasp on national resources must constantly increase — Obama made himself a spectator in a Washington more conservative than it was during the Reagan presidency. By accepting, as he had no choice but to do, Congress’s resolution of the crisis, Obama annoyed liberals. They indict him for apostasy from their one-word catechism, “More!” But egged on by them, he talked himself into a corner. Having said that failure to raise the ceiling would mean apocalypse, he could hardly say failure to raise revenue would be worse.
...
Regarding the political process: There are limits to what can be accomplished by those controlling only half of Congress, but the Tea Party has demonstrated that the limits are elastic under the pressure of disciplined and durable passion. As Tom Brokaw said in Washington on “Meet the Press” last Sunday, the debt-ceiling drama ended as it did because the Tea Party got angry, got organized and got here.
...
Obama’s presidency may last 17 or 65 more months, but it has been irreversibly neutered by two historic blunders made at its outset. It defined itself by health-care reform most Americans did not desire, rather than by economic recovery. And it allowed, even encouraged, self-indulgent liberal majorities in Congress to create a stimulus that confirmed conservatism’s portrayal of liberalism as an undisciplined agglomeration of parochial appetites. This sterile stimulus discredited stimulus as a policy.
...
America may be one-third of the way through a lost decade — or worse, toward a lost national identity. So, Republicans have their 2012 theme: “Is this the best we can do?”
