Wow KGB much?

This comes directly from the whitehouse.gov website

There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care. These rumors often travel just below the surface via chain emails or through casual conversation. Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov.

Umm... so basically what they are saying is to narc on your comrade.... errr friends, neighbors, etc. about spreading views contrary to the White House's agenda?

This just in... Brad Woodhouse of the DNC released the following statement (Redstate)

Die Republikaner und ihre verbündeten Gruppen - verzweifelt nach zwei aufeinander folgenden Wahlen zu verlieren und alle wichtigen politischen Kampf auf dem Capitol Hill - Anstiftung sind wütend Monster von einer kleinen Zahl von wütenden rechten Extremisten von K Street Lobbyisten zu stören nachdenklich Diskussionen über die Zukunft der Gesundheitsversorgung in Amerika, die sich in Congressional Bezirke im ganzen Land. Allerdings, wie wir gesehen, auf der McCain-Palin Kundgebungen im vergangenen Jahr, wo Menschenmassen waren Ködern mit Schreie der “sozialistischen”, “kommunistisch”, und wo die birthers Bewegung geboren wurde - das Monster von Extremisten sind nicht interessiert an einer Diskussion über nachdenklich die Fragen - aber wie einige republikanische Führer gesagt haben - sie sind interessiert in “Bruch” den Präsidenten und die Zerstörung seiner Präsidentschaft. Diese Mobs sind bussed von finanziell gut ausgestattete, hoch organisierten Gruppen von republikanischen Genossenschaften und finanziert durch die besonderen Interessen, die verzweifelt versucht, um die Agenda für den Wandel der Präsident gewählt wurde, um in Washington.Trotz der Überschrift grabbing Charakter dieser böse Monster und ihre Störungen von Veranstaltungen, sie sind nicht widerspiegeln, wenn das amerikanische Volk auf die Fragen - oder die Hunderte von Tausenden von nachdenklichen Diskussionen rund um Küche Tabellen-, Wasser-Kühler und in den Häusern. Die rechte Extremisten “Dinge wie die Nutzung der Teufel Hörner auf die Bilder von unseren gewählten Vertretern, hängen die Mitglieder des Kongresses in Bildnis, atemlos Befragung der Präsident der Bürgerschaft und der Verwendung von Nazi-und SS-Symbole wie die nur zeigt, wie außerhalb des Mainstream der Republikanischen Partei und ihre Verbündeten sind. Diese Art von Wut und Zwietracht nicht dienen Republikaner auch im Jahr 2008 - und es ist verpflichtet, nach hinten wieder.

Have a good day Comrades.

Pre-Open Update 8/5/09

The mad rush at the close to push the market higher was ultimately proven false as overnight buyers attempted to gap above yesterdays close only to be rejected (I believe the ADP # caused the rejection). This AM is currently hovering at Mondays globex high and my TA indicates that once again we have an outstanding globex low at 999 that should be tested. Breaking under yesterdays afternoon lows indicates we are going back down to test 992 (Tuesday morning's low) and 988.50(Monday morning's low) which still remain outstanding for a retest.

Still short term bullish. The only real outcome that might indicate that sellers are indeed back in force would be an opening surge to test the 106.50 area by a point or 2 and a complete rejection back down and a close under 992.00.

More Cash for Clunkers Data Points

Courtesy of Bloomberg via Drudge:

Four of Top ‘Clunkers’ Model Purchases Are Foreign

Aug. 4 (Bloomberg) -- Four of the top five models sold so far under the U.S. “cash for clunkers” program, aimed at boosting the auto industry, are made by foreign automakers, according to Transportation Department data.

Ford Motor Co.’s Focus was the top seller, followed by Toyota Motor Corp.’s Corolla, Honda Motor Co.’s Civic and Toyota’s Prius and Camry, data from the department showed today.

So this bill was passed to try and help the American car companies that took the bailout money. And the top 5 sellers are Ford (who didn't take any bailout money) Toyota, and Honda. Any buy American provisions were nixed from the bill due to WTO obligations and foreign complaints:

Initial clunkers legislation sponsored by Representative Betty Sutton, an Ohio Democrat, would have barred discounts for new vehicles manufactured overseas and offered higher payments for cars and trucks produced in the U.S. than for those made in Canada and Mexico. The “Buy American” provision was dropped from the final legislation because of opposition from foreign automakers and free-trade advocates who said it would conflict with U.S. obligations to the World Trade Organization.

“The share of cars sold to date under this program is actually larger than the traditional market share” for the U.S. automakers, White House Press Secretary Robert Gibbs told reporters today. Providing tax incentives only for U.S. companies “would have caused some legal and trade problems,” he said.

Again.. explain to me why we think anything planned by the government in a hurry will be effective?

Forget the Headline! The Important info is at the end of the article

The AP comes out with a story that gets picked up by Drudge Report and the headline is as follows:
Guard troops may be needed in troubled Ala. county

BIRMINGHAM, Ala. – The sheriff in Alabama's most populous county may call for the National Guard to help maintain order, a spokesman said Tuesday, after a judge cleared the way for cuts in the sheriff's budget and hopes dimmed for a quick end to a budget crisis.

In my opinion, this is the most important part of the article sort of a canary in the coalmine so to speak for all of you out there still holding desperately onto your precious yield from your Municipal securities.

The budget crisis comes as the county seeks to avoid filing what would be the largest municipal bankruptcy ever over some $3.9 billion in sewer bonds it can no longer afford to repay. As with the tax problem, elected leaders can't agree on a solution.

The sewer system is still operating normally, but the county has closed four satellite courthouses because of the loss of the revenue from the occupational tax. Residents are standing in line for hours at the main courthouse to do routine business like renewing car tags.

Mark my words, $3.9 billion will not be the largest municipal bankruptcy for long. I'm sure we'll see much larger this year or early next.

High end real estate part 2

I love how he says now this one has dropped into the eights....

Midday Update

Not even bothering to touch yesterdays lows, the market powered higher just proving how entrenched these momentum players are. Just another example of unsustainable buying continuing without paying attention to technicals. At some point we will be back down to the origin of this rally (S&P 880). Keep in mind people that bear market rallies are fierce. John Maynard Keynes once said:

The market can remain irrational far longer than you can remain solvent.

Play your positions wisely. I'd keep tight stops on all my longs.

Quick Look at Housing... Not looking good for the high end

With all the focus on the mid to low end real estate starting to see signs of improvement, I'd like to take a quick look at the high end and see if that is coming around. Starting at the super high end:

LUXE APTS. NOW $LASH PADS: PENTHOUSE PRICE TAKES A $20M HIT

The Donald is slashing the price of his signature penthouse by 20 million to $31 million from $51 Million.

This article in the NYT (Which requires you to pay... stupid) talks about the woes of the higher end of the housing market. This is the one graph I'd like you to focus on because it is why the residential housing market isn't done with its problems.

One Sales agent summed up the situation:

"Sellers are struggling to realize that we're back to 2001-02 prices."

While subprime mortgages sparked the first round of housing problems two years ago, now "troubles are lurking further up the food chain," says Joshua Shapiro, chief U.S. economist at MFR Inc. White-collar job losses have accelerated while more adjustable-rate loans to prime borrowers are resetting to higher payments. "You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top," he says.

To be sure, the affluent housing market is substantially smaller than the mass market. Sales of existing homes priced over $750,000 accounted for 2.3% of all sales in the first quarter of this year, compared to 4.4% of the housing market in 2007, according to the National Association of Realtors.

Still, the distress in high-end market has implications for consumer spending: the top 10% of U.S. households in terms of income accounted for 23% of consumer spending in 2007, according to government statistics. As those households watch their home equity evaporate, they are more reluctant to spend on housing upgrades or other items.

Inventory of expensive homes is rising. Overall, the inventory of unsold homes in June was enough to last 9.4 months at the current selling pace, down from 11 months a year ago, according to the NAR. But the supply of unsold homes priced above $750,000 swelled to around 17 months in June, up from a 14.5-month backlog one year ago. A recent forecast by analysts at J.P. Morgan Chase & Co. said it would take until at least 2012 for the expensive-home market to recover and that peak-to-trough declines could surpass 60%, compared to 40% for the rest of the market.

Defaults are rising, too. Among prime mortgages, jumbo mortgages are now leading delinquencies and defaults and are the fastest-rising category for defaults of all types of mortgages. The rate of 60-day delinquencies on prime-jumbo mortgages jumped to 7.4% in May, from 4.5% in November, according to First American CoreLogic. By comparison, 60-day delinquencies on prime-conforming loans reached 4.9% in May, from 3.6% in November.

A recent survey by the NAR found nearly three-quarters of real-estate agents said buyers were purchasing smaller houses due to tighter credit requirements. "We're in a 'trade-down' environment for the first time since the 1930s," says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.

This housing market went parabolic for more than half a decade... we're going to need at least that much time before things settle down and get back to normal. Stop kidding yourself into thinking a hugely illiquid asset will correct itself as quickly as the stock market.

Tax Revenues: Biggest Single Year Decline since Great Depression

I would love to have someone put this up against the increase in government spending

Picture and Article from AP

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

Pre-Open Update 8/4/09

My suspicions about yesterdays gap up rally were confirmed when the balance of the day was spent rallying at inappropriate timed intervals. The failure to close above the afternoons highs (also the daily high) confirmed that this was not very durable buying.

Overnight I was proved correct as the market sold off pretty much the entire globex session and is now forming a symmetrical triangle at yesterdays open. (the first break of any triangle is usually false) I will caution that patterns such as these do not have as much predictability during the pre-open session.

For me to think that sellers are starting to take control from these momentum buyers we need some sort of break of yesterdays low (988.75)

Yesterdays low also holds some sort of importance to me in that my TA indicates that it requires some sort of retest. How this retest occurs and the result following the retest will provide me with some great clarity as to whether or not buyers or sellers are in control of this market.

I will update you with my thoughts once yesterdays low is tested.

Dollar Stock Market correlation = -1.0000000

"So long as the dollar weakness does not create inflation, which is a major concern around the globe for everyone who watches the exchange rate, then I think it’s a market phenomenon, which aside from those who travel the world, has no real fundamental economic consequences."

Alan Greenspan, November 18, 2007

Bail out Banks, Universal Healthcare at the expense of....

OUR STATE PARKS
Time writes a pretty sobering article about the lengths to which our state parks are being put at risk by our government's fiscal irresponsibility. California (who in my opinion is the leading indicator for our entire country) is the first to close down less popular portions of our state forests and parks

Among some hikers in the San Francisco Bay Area, the quad-straining trail to the summit of 4,344-ft. Mount St. Helena near Calistoga, Calif., is known as "the stairway to heaven" for its panoramic views of the Napa and Sonoma valleys. These views, however, soon may be off-limits to visitors — the latest victim of the Golden State's staggering budget crisis. The trail sits within Robert Louis Stevenson State Park, one of up to 100 state parks in California that might be closed by Labor Day to help close a budget gap of $26 billion. While the Department of Parks and Recreation isn't releasing a list of potential sites on the chopping block, the stairway-to-heaven park likely is at risk because it has some of the lowest attendance figures in Northern California.
.......
"The situation is still very serious," says Ruth Coleman, the state's director of parks. "We're charged with protecting these natural treasures and making them available to the public, but for the first time ever, we simply don't know how we're going to do that without closing some parks for good."

The solution is to stop spending like crazy trying to solve immensely complex problems that have no real business being run by the government and focus on the aspects that do well under the government umbrella, like our state parks.

Just makes me angry....

Pre-Open Update update

FYI

• Q's are not above Thursdays high


• Dow is leading rally by remaining above Thursdays high


• S&P's are currently testing Thursdays high

What does this mean you ask? If the Q's, which can be perceived as the speculative interest in the market (Q's are the Mini NASDAQ ie. the 100 largest NASDAQ companies)are the laggards and the DOW which is the 30 largest companies and usually the most risk averse is the leader of this rally this A.M. Then consider me suspicious.