Money Talk

Any idea? Well I have some....here it goes.....'concise trading' blogger states going forward financials and energy are going to be looking very bad with their numbers. I can't agree more. There are others that are not going to be pretty either. Reasons aplenty....unaudited intentional leaks about increased earnings from citi can't be trusted......AIG behemoth is still rolling at the cliff thats about a mile below the first one it came off. Employment numbers won't improve until jobs can be profitably created.... housing sector?...better left unsaid....and so goes on the list. But there is money to be made yet....one would be in looking at puts on options and the other would be shorting the real weak ones in the weak sectors. Cherry picking is key and not every cherry picked would be a cherry!!

Solar stocks are soaring particularly STP is up about 50% in just the morning session. This sector was beat up pretty bad and STP came down to $7 from its high of $80 during the last 15 months. STP announced a flat past quarter and that was the only news I saw....but....its up ! The movement is volume based and that's significant I feel perhaps indicating entry of some big money funds.

Wall Street was full of smiles today with a near 500 point, 7.5% rally! Most of the rally was because of Treasury Secretary Tim Geithner's release of "bad bank" details. Some was due to the 5% increase in existing home sales .... but 50% of the homes sold were short sale or foreclosed homes. And some was due to short covering of stocks. Paul Krugman, 2008 Nobel Prize winner in Economics thinks Geithner's plan is a recipe that can fail as it emulates the same path paved by his predecessor Henry Paulson. But when quizzed more he admitted that his thinking may prove wrong if the spending increases as a product of credit flow. Some of my bank related stocks of Indian companies rallied as high as 18%. They are however down by 50% from a year ago.

Have you heard of this name? Well you are right if you thought its a horticulture seed producing company. What's great about this unknown company. If you had to pick out what are the industries that are losing steam in the current economy, its a no-brainer. But Burpee is experiencing an unprecedented demand for horticultural plant seeds (particularly vegetables and fruits) in all of its 20+ years of operations. Amazing! Its having the biggest growth and profit ever .... especially in the current "economic near depression".

Infosys co-founder Nandan Nilenkani..... I might have got that name spelt wrong but I am not mistaken when I heard him being complimented as the Bill Gates of India in an interview with Tom Ashbrook of "On Point" today in NPR. I don't have anything against Mr.Nilenkani but bigwigs like him have become successfully rich because of the lower economics of doing business in India. That leaves me with this question. Have they become the new generation of capitalists with the only goal of making hay when the sun shines. Everyone knows that these business magnets have wads of cash but its unfortunate that wealth resides with the elite few while there is a massive disproportionality in wealth distribution among other strata of society. If the finer details of their wealth compared to the rest of the masses in India are publicised, there would be a warcry on the streets. The rich people in India are far too rich while the middleclass have got stuck in the rut and their numbers tho

Wow .... wow....wow.....I wish I was right atleast 50% on my predictions. But wasn't I on the ball when I shared my thought a little over a week ago about the possibility that we are heading to a 4.5% rate for 30 year mortgage. I am feeling vindicated. But keep your eyes open, this rate is on the decline and is going to last atleast through this year. Will I be right again? 50/50!!!

Do you know what signs to look for in the economy to re-enter into stocks again? I read recently in SmartMoney magazine that the top 2 things would be 1) to see the numbers from the Conference Board's Consumer Sentiment Index if its showing an increasing trend and 2) the weekly and monthly retail-chain sales.

Is 4.5% interest rate on a 30 year mortgage possible? That's what some experts like the Dean of Columbia Business School, Glenn Hubbard has suggested that the US government should temporarily peg at, to alleviate the foreclosure crisis in the US. I am not sure why this is very difficult especially given the government intervention at multiple levels to prop up the housing and the economy. Some critics have cited such a move would bypass the market economics of supply and demand. But correct me "If everything in capitalism was based on supply and demand then there would have been absolutely no need to bail out failing banks and mortgage companies in the first place". Did I miss something?

While US stocks rallied yesterday and may see similar moves for a brief amount of time there are indications that such volatility would remain till another scramble to the bottom and then moving up again. News such as US job loss were lower this week - 639000 vs 670000 the previous week as reported by US Labor Department today would be a small shot in the arm.

I know of a blogger who is very smart in making trades whether it be stocks or options. He is remarkably accurate in many of his Wall Street predictions. He predicts some very dire economic scenarios which are worth taking a look. Check his blog and what he published today under the title "Guesses" at: http://concisetrading.blogspot.com/