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The Stock Room page 83
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(Continued from page 82) hearing that last Thursday we came very close to a total collapse. I said it would happen a year ago if we didn’t stop all the negativity and shorts, so why we are still letting these Me’ers get away with their complicity in this collapse is beyond me. Now some are calling for the CEO’s of these financials institutions that need this bailout to give their bloated salary packages back. Rep. Barney Frank says no ‘golden parachutes’. Good, they should! However, I still don’t understand why NO ONE has called for any of those Me’ers who shorted us into this mess to give back at least part of their outrageous profits. NO ONE, except for me that is!!! 4. Pass a Wind-Fall Capital Gains Tax of 65% on ALL short sales retroactive to 01/01/08. The argument that they did this for a ‘greater good’ and served as market ‘oversight’ is unadulterated bullcrap. They caused this mess, so they should be called upon to help pay for it, too!_______________________________________ apppro’s take for 09/22/2008 @7:30 pm EST: I want to thank several of you whom have emailed me saying that the previous blog (article) was the best that I have ever written. Well, I’d like to say thanks, but I can’t because, I DIDN’T WRITE IT! It was written by a new blogger: ‘seeker’. His website is linked. I’m not sure whether I should feel honored or stupid. The later is probably the way to go. So, did you like how our Government was able to come up with a concrete plan to fix the financials, stop the short sellers, and generally restore confidence to the markets? Not! I’m telling you that it’s now way too late for that. All the longs with any money left are sitting on the sidelines. It’s still just too easy to short things into oblivion, so why should anyone bother now trying to ‘invest’ in our Nation when it’s easier and more profitable just to destroy it. We need to implement the Golden Rules immediately, with special attention and urgency to #4, to help pay for all of this. 1. Reinstating the Up-tick rule 2. Cracking down on naked shorting 3. Instituting some rules on what should be said on National TV 4. Pass a Wind-Fall Capital Gains Tax of 65% on ALL short sales retroactive to 01/01/08. And as far as seeker’s article goes, yeah it was very well written, but a little too 60’s California for me. And if the love of my life doesn’t stop laughing her ass off about this, there’s going to be hell to pay! _______________________________________ seeker’s take for 09/22/2008 @5:30 pm EST: seeker’s website: PointofLife.com
‘The Long and the Short of it’ How can the world financial system allow a trillion dollars to be written-down or written off within the last few months? How can oil jump from less than $12 to $147 over the past few years and then fall down to $91 in a couple of weeks? What kind of manipulation is this? To a lay person, it sounds like an economic war. Let's take a scientific approach to answer the question. There is a cause and effect for every action on earth and in the universe. Einstein's discovered; E=MC²; which relates to everything as energy. Energy can take many forms and guises but nothing is ever lost. It can turn gasses into mass and visa-versa. We humans were born out of stardust which, billions of years ago, swirled around the cosmos like Dancing Dervishes. The energy that created the sun, then earth, is still forming and reforming everything in the material world. Einstein also declared everything is relative in a space time zone and all is unified. However, that is disputed by other scientists who came up with a chaos theory where everything is random and things happen by chance. In every walk of life you are always going to get opposite view points no matter how sound and effective the argument for or against. In fact, a distinguished debater can argue the case for both sides of a dispute and articulate each case in parallel terminology that will make sense to opposing parties. For instance, take the price of gold and how it is traded on the commodity markets and how it obtains its changing values. Gold is a metal and every ounce that has been mined over thousands of years and is still around. The quantities keep increasing as the gold nuggets are dug out of the ground every day. It has an industrial use and a jewelry use. If these two components were the only way to value gold its price would be more stable and lower. However, it is also perceived to be a hedge against inflation and also a supposedly safe haven in a world of economic and political chaos. Both these two components depend on how well the intellectual propaganda machine operates its rhetoric on events played out on the world stage. With the help of the media and hi-tech, information is fed to the public at warp speed. The trades are performed on mercantile exchanges. The contracts are margined so a small percentage of the monthly contract price is required to trade each contract of 100 ounces. The value can increase and decrease at a fast pace due to all types of leveraged derivatives and electronically traded funds known as ETFs. On the other side of the value of gold it does not yield any monetary interest. Also, there is a charge when dealing on exchanges and if delivery is taken large quantities will be stored in a bank for security. When demand for the yellow metal drops it becomes a depreciating asset that is a liability because money has to be paid out to store it. Over the past 30 years the price has swung from $250 -- $1000. Today, the price is around $850 an ounce because of the financial market turmoil. Since most people who trade commodities lose money it is a speculation only for people who enjoy gambling in a casino. When fear evaporates the price may fall twice as fast as it went up. Oil and food commodities are different as they have an end use. Nevertheless, outrageous prices have been allowed to spiral out of control by a lack of regulation by people in power who believe in the myth of keeping alive a free market. When prices can be controlled by perceptions, ideas, thoughts and suggestions, then my friends, we are dwelling in the PITS of humanity and the markets are not free. They are held captive by topsy-turvy reason and logic that many self-interest experts can explain as factual. Supply and demand is paramount but figures can and do become distorted, thus supplying propaganda and fallacies with room to air. Without getting too bogged down with the complexities of financial markets as they are a 62 trillion dollar market. They are extremely complex these days and contain collateralized mortgage notes that are turning out to be of little value. These also depend on credit swaps, which is the rate banks lend each other money. The lower the ratings of a financial institution the higher interest it has to pay to stay in business. When credit rating agencies such as S&P and Moody's, downgrade them at a crucial and vulnerable time, they prematurely go into bankruptcy or taken over by the government as is the case in AIG, brought about mainly by the negative forces of short sellers. If that were not enough, hedge funds that are unregulated have sprung up and they can short stocks at will. If they work in conjunction with each other, which is deemed to be illegal, they can bring down sound financial institutions in a matter of days if the company is having temporary liquidity problems. Even if everything is legitimate in the short selling, once it reaches a certain level mutual funds and the public become fearful and they sell the stocks they own. The web of greed and fear becomes ever increasingly wound up in unregulated markets that resemble a Wild West shoot out, otherwise known as free market capitalism. The reverse is being projected when commodities or stocks reach overvalued levels. Both long and shorts are governed by erroneous thought process when extreme values are extended beyond normal expectations. This is what is going on in a nutshell but of course it is much more intricate as the devil ego/intellect is in the details. · Understand, very few values are what they seem to be in a financial world controlled by minds that cannot distinguish truth from opinions. · Therefore, truth cannot be found in intellectual opinions that are slanted in intellectual reason and logic on the left or right, the high or the low, the long or the short. · Truth cannot be manipulated but intellectual perceptions can. · Truth cannot be stretched but intellectual fabrications can. · Truth cannot be exploited but intellectual propaganda can. Truth cannot deceive but intellectual deceptions can.
Truth is the intelligent energy that created and evolved the universe. It is inherent in every human being, filtering in and out of every cell and particle. It is unified energy that flows throughout the cosmos. The only place in the construction of a human being, where unified energy is distorted into chaotic random energy, is in the conscious department of the brain. The distortion of unity is transposed into random acts of destruction and negativity by the creation of an illusionary ego/intellect/personality, that believes in its own power base, outside the realms of intelligent energy; E=MC²; The symbol for human destructive anti-matter should be D²M= NE…Darkness squared with mass = negative energy. Unfortunately, I do not have the ability to work it out with mathematic equations. As Einstein stated, E=MC²; everything is relative to a time space mode. On the one hand there is unified energy which is fueled by the speed of light. It creates harmony and grace. In human terms, it conveys compassion and kindness. It allows brilliant minds to discover and invent all kinds of material goodies for the benefit and well-being of all humanity...All is good when the human intellect serves its intelligent energy in philanthropic manners. However, when the human being uses negative energy; D²M= NE, to the detriment of everyone else, it divides itself off into the anti-matter of differing belief systems, that cause the effect of chaos and mayhem. Since wisdom is in short supply and demand for, more than enough, is prominent in society throughout all its divisible outlets, disorder and turmoil will continue on a not so merry path for everyone who subscribes to their own personal belief system, beyond the realms of intelligent truthful energy. In economic terms, prices will be driven higher and lower than truthful fundamentals dictate, which is not much fun, but is extremely mental. In the immortal words of Robert Frost ... “Forgive, O Lord, my little jokes on Thee And I'll forgive Thy great big one on me” _______________________________________ apppro’s take for 09/21/2008 @5:30 pm EST: Well, that blogation didn’t last long. Oh well, you can’t always get what you want. Anyway, I was going to go on a blogation until I could come up with a good blog about the how the ratings’ agencies played a major role in all of this. I was also going to insert the Warren Buffett conspiracy. I just read over this blog on SeekingAlpha and I was extremely impressed by the ‘Comments’ at the end in response to: Ambac Collapse: Anticlimax of the Week And I couldn’t have said it any better. _______________________________________ apppro’s take for 09/21/2008 @9:30 am EST: One of my friends said to me yesterday, “You’ve been really busy this week on the blog, haven’t you!” All I could do was smile and shrug my shoulders. Another friend had once said to me, “Why should I read your blog, I don’t buy stocks!” Both of these comments are more closely tied then either of them could imagine. As far as being busy, yeah I guess so, but that was out of sheer fear and frustration. We did get very, very close to financial oblivion on Thursday. Very close! Now don’t scream and bout, but today I’m going on a slight blogation, and won’t return until I have something written on the ‘ratings agencies’. You can all lay back now and let your sphincter muscle relax. Until I do return, you should reread my 07/26/08 blog, paying special attention to this part: << Now what do we do about all those well-meaning (bs) enablers? You just can’t keep pouring a drunk the Scotch, throwing him the keys to the car, and then screaming at that person when they smash the car into a brick wall. Enablers are just as guilty as the drunk himself. That’s exactly what the ratings agencies did to the monolines and banks. Moody’s, Fitch, and S&P kept saying: “Here’s another CDO. Insure it! Buy it! We love it! Its rated triple AAA, so go man go!” Now those same dickheads have kept downgrading the CDO’s, monolines, banks, etc., because of the crap they said just 10 months ago was the best think since Cheez Whiz. Jerks, and we’re all paying for it with bailouts and a tanking stock market. >> As far as my friend who doesn’t trade or own stocks, guess what: You NOW own parts of Beare Sterns, AIG, Fannie Mae, Freddie Mac, Lehman Brothers, and soon WAMU. Or should I say, “You now own parts of nothing”. You are also now the proud owner of every overdue loan and every foreclosed home that people shouldn’t have been allowed to buy in the 1st place. Hey you got screwed, but didn’t have any of the original pleasure or thrill that normally goes along with getting it up the rear. “Live long and prosper.” But as Spoke went on further to say, “I shall do neither. I have killed my Captain, and my friend.” _______________________________________ SHORT SELLING, DEATH SPIRAL CONVERTIBLES, AND THE PROFITABILITY OF STOCK MANIPULATION By John D. Finnerty Professor of Finance, Fordham University _______________________________________ apppro’s take for 09/20/2008 @9:30 am EST: During these historic times, let us all look back and remember the true causes behind these bailouts and financial destruction. Over a year ago I warned everyone that unless the shorts weren’t stopped and that all the illogical negativity wasn’t changed, things would end badly for everyone and everything. Well, can’t get much worse then this! In the future, you all will be hearing over and over again that it was the greedy Wall St. ‘Fat Cats’ that caused all of this. Many will say we shouldn’t bail out these ultra rich CEO’s and their corrupt companies. Got to say that those so-called ‘Fat Cats’ will never get hurt by any of this; at least not like how you and I will. Their accounts are so huge that any losses they will have will just make them reconsider buying that 6th home, or maybe just lowering its’ decorating costs. What should be remembered is who really did all this to us (besides ourselves), and realize that this has been the greatest transfer of wealth - EVER! That wealth has been transferred from many greedy CEO’s, bankers, hundred of thousands Common Stock holders, 401K plans, YOU, ME, etc. >>> OVER to a very small group of Generation Me’ers. And don’t kid yourself otherwise, Ackman and his select group of cronies are laughing all the way to the (their) bank(s)! How they destroyed the ‘Confidence’ factor will go down as the biggest crime of all. They had taken all those mortgage CDO’s and convinced everyone that they were worthless. Not just worth less, but WORTHLESS! Don’t get me wrong, I’m not a lover of all those complicated financial instruments, and you may remember my “I’m Not Smarter Then a Fifth Grader” blog. Hey, many of these mortgage bankers got what they deserved, and many housing speculators also got what they deserved; but that did NOT mean that 90% of ALL mortgages are in default and worth $0.00. That’s what Ackman was able to convince everyone was reality and all in the name to cover his short positions on the monoline insurers: MBIA & Ambac. Once he got what he wanted in November ‘07, the snowball became an avalanche and the shorting of our society just took over. It became far too fashionable to destroy, and the press (CNBC mainly) just loved the ratings. What the SEC did in July ’07 by eliminating long-standing short sale rules, just enabled the shorts and hastened the inevitable. So what was the root cause of this? It all comes back to the narcissistic greed of the Generation Me’ers and their need to be right above all else. They just had to prove the ‘Fat Cats’ wrong and the Me’ers were not going to allow the FC’s to get away with “…not letting them play in the other reindeer games.” Now the Government is involved and we all need to pray that a group of moronic politicians can get the solutions right. Who am I kidding! They can’t figure out who should take a !%?! first or even how to wipe their asses afterwards! We expect them to solve the greatest financial crisis and loss of wealth - ever! lol _______________________________________ apppro’s take for 09/19/2008 @7:30 am EST: FINALLY! Your Government finally got off its’ ass and has banned the shorts from destroying our Nation and society as a whole. SEC issues temporary ban on short sales: Financial News - Yahoo! Finance About friggen’ time! However, with me there is always a however, they only banned it for a short period of time and not like the Brits did until January ’09. “This Order shall be effective immediately and shall terminate at 11:59 p.m. EDT on October 2, 2008, unless further extended by the Commission.” I guess something is better then nothing. However, I do NOT like this BAILOUT THINGY! I’m not sure how you feel about it, BUT I have NO desire to own someone else’s home, bad loan, or mortgage. If I wanted that crappy house I would have bought it myself! Nor do I want to leave this as a debt for my children. This so-called bad debt is only bad because the shorts want it to be bad. DO WHAT THE BRITS DID AND STOP THE SHORTS ONCE AND FOR ALL!!!! That will save the system and all that “bad debt” will eventually go back to proper levels and all by itself. _______________________________________ apppro’s take for 09/18/2008 @5:30 pm EST: Well, at least the Brits have some brains and guts: UK Slaps Ban on Short-Selling Financial Stocks - General * Europe * News * Story - CNBC.com Maybe we’re finally getting the message also: The War Against Short-Selling Commences - Markets * US * News * Story - CNBC.com And up till now I really hated both of our candidates for Prez, but now I think McCain is getting close: McCain says he would fire SEC Chairman Cox - Yahoo! News _______________________________________ apppro’s take for 09/17/2008 @5:30 pm EST: On days like this you have a couple of choices: * You can sit home watching the stock market making yourself suicidal, or * You can go to your job, good or not, leave to go see your doctor and have a fight with the office manager at your doctor’s office over paying the deductible before the doctor even sees you. I chose the later. What did happen was that this market further tanked, because – well you know my thoughts on that. I do see that several skeptics are now seeing the ‘Ackmanization’ of our markets, and they are loudly calling for SEC action on short sellers. But no matter what the SEC does about this, well now it’s TOO LITTLE..TOO LATE! Don’t get me wrong, I pray they do something...anything; but it sounds like what they are planning, some more oversight on naked shorting, won’t do squat. What we need NOW is my 4th Golden Rule, and WE NEED IT IMMEDIATELY! Make those yuckers pay for all their damage and financial pain. #4 Pass a Wind-Fall Capital Gains Tax of 65% on ALL short sales retroactive to 01/01/08. Never happen! We’re all idiots and we’re going to get what we deserve. I would like everyone to please look at this video with the CIO of S&P, the ratings agency that helped screw this all up. You may remember my blog about how these guys have not only been complicit in the recent debacle, but in many respects have fed right into the hands of the shorts and actually caused the landslide. Briefly & ultra simply, from my past blog I said that these agencies would warn on issuing a downgrade because of certain factors, one of which was that the stock price was getting too low. Ridiculous reason, but that’s their parameters. This ‘warning’ therefore caused the shorties to further gangshort the stock making the stock price..well go lower. Therefore, the rating agency would downgrade the stock, and so on..and so on..and so on! Asswipes, every single and last one of them. _______________________________________ apppro’s take for 09/17/2008 @8:30 am EST: I am now coining the term being ‘Ackmaned’. This denotes the technique of narcissistic, ‘Generation Me’, short sellers: by which they water-board thru rumor mongering a company and at the same time gang-short an otherwise stable stock, with the ultimate results of driving the company into financial oblivion. They just did it to AIG and they are now trying to do it to GE. (Continued on page 84) |
