On Naked Short Selling

It would seem that now, naked shorting has effected the over all confidence of the markets to the point that those in control are out of control. As well the no uptick rule has really screwed things up.

I know you think I’m paranoid with “nutty” conspiracy theories, but if you think most things occur by chance then I have no sympathy for your stupidity and those that take advantage of it.

Only now will the SEC and Cox address the naked short selling issue while the average guys 401K has been raped by such practices for years.

Do not think they are coming to your rescue, but merely to clamp down on lost control.

On a positive note this would help stabilize the markets going forward. At this point I’m taking this as rhetoric and a chance at scaring the shorts controlling this market.

GLT

by GW

— Sun Tzu, The Art of War

This goes out to Paulson, Bernanke, Cox, and our CIC

The market has shown a very nice comeback from the lows due to oil selling off and either nibbling or short covering in the financials.

Did you hear the senator from KY….At least he has some real understanding of the Federal Reserve and their role for screwing up America in regards to monetary policy. Will people listen?

Let the close determine your actions here. A bounce in the market is just that.

I will take a stab at EME. I will also add to SNHY and SY.

I’m selling all oil and gas stocks since there is talk of a bill that might pass within a week or two regarding the trimming and monitoring of oil and commodities trades.

Also look at the refiners bouncing big time today. Suggesting perhaps oil is down for the count for a quarter or two. With the grace of a higher power hopefully oil will be down for a long time. We do not need frozen seniors this winter season.

http://energycommerce.house.gov/Press_110/110nr292.shtml

As a last ditch effort, now everyone wants to bust rumor monger’s and speculators. Investigate the banks, Federal Reserve and the Mortgage companies rather than the individuals who implement their policies.

GLT

by GW

Today, we have Bernanke and president Bush speaking. The markets will certainly be looking for reassuring comments to help stabilize the markets today.

It is human nature to hope for the best. Loose lips do sink ships, but it is clear that the passengers of the ship can see the water rising up the sides of the hull.

Do not take any steak in Bernanke and president Bush’s words unless they state they will ignore the credit crisis and begin to raise interest rates to combat the “subsiding” inflation Bernanke talks about. Message to Ben you need glasses and to cut out your silver tongue.

It seems that the futures are bouncing back from the lows of the overnight session. We need to see the S&P hold 1214-1218 area, otherwise we are looking at 1170-1189 area.

PPI came in higher on the headline, but was relatively stable at its core. Looking further into the numbers it would seem that discretionary items are taking a hit suggesting that the stimulus checks are not really helping at all. Autos lead the way in discretionary items continuing there downtrend which is a key tell for the economy in general.

The dollar broke 72.98 on its index and the next break should be 71.34. Below this is 70.96 which is the crucial line in the sand. Keep your eye on the dollar for it for tells your fate as a long investor in the market.

Also a good guide for finding bottom is to see tangible book value on the banking index. As an example C’s tangible book value is around $10 -$12. Thanks to Meredith Whitney we have this price in [[C]] as a indicator for rock bottom.

GLT

by GW

Chart continued down here or below.

It is real simple folks. When BSC was bailed out we had a huge rally of many percentage points. When the Fed stepped up to the plate and granted rate cuts to the street we had a huge rally of 400 points.

The FNM and FRE news should be of greater value than the BSC bailout or any inflationary rate cut. Sadly it is not worth more than the gum under you shoe as smart traders and longs are selling into today’s rally. Forget about today the rally hardly lasted an hour.

The FED, PPT, Congress, and your treasury secretary can not stop a run away freight train. I still believe FNM and FRE are a smokescreen for something much larger.

I believe this since there is still no mention of IMB’s failure, but more so since they both have $25 billion plus in capital above the 1.5% threshold. According to analysts they would have to loose $40 billion plus to be in a position to have to raise money according to their covenants. 

Maybe it is C, MER, or LEH….Perhaps it is senior citizens being found frost bitten because they will not be able to pay their heating bills. God forbid that notion. Be careful, cash and time are still your best friends.

GLT

by GW

As you have probably heard IndyMac BankCorp Inc. [[IMB]] has taken a dirt nap indefinitely with the Federal regulators taking over their assets. They will open on Monday, but depositors have already yanked $1.3 billion from their accounts. 

From what I understand, they were involved primarily with ALT~A loans which generally carries higher credit scores and incomes then that of the sub prime lot. This is the beginning of the next housing blowup saga.

I also find it odd, although I did leave for a bit to go fishing, that there was no real alert or news surrounding this failure on Friday during market hours. I’m almost certain I did not miss much, so I would call the worries over FNM and FRE mis-direction away from IMB.

Furthermore while the bank was closed all day Friday and regulators seized control during market hours, the earliest news story I could find was 6:37 pm on Friday July 11th.

As far as I’m concerned if you bought stock on Friday and the market does a black swan dive Monday the 14th, the public has a good argument against being duped on notification of this activity. Especially if you speculated on Friday in IMB. This was not proper disclosure on a publicly traded company.

http://www.marketwatch.com/news/story/federal-regulators-take-control-indymac/story.aspx?guid=%7BE83FB78F%2D2D0B%2D4FD0%2D8A59%2D70F7C6524B3F%7D&siteid=yhoof

More importantly, this is the beginning of a long list of companies that will follow IMB to the grave. A analyst on Bloomberg stated the the FDIC Board told him that we could expect a couple of hundred or more banks to fail over the next two years.

I implore you to discover how small a bank you might be doing business with and consider transferring your accounts over to a large multinational bank in your local area. Even though your accounts are FDIC insured; if your bank goes under you can not know how long it will take to get your insured worthless greenbacks into your possession again.

Also keep a slush fund in your home. Invest in a fire proof safe if you do not already have one. Just in case there is a run on your bank you will not have to join the frenzy of knuckle heads trying to get their money out of their accounts.

Competitors to IMB for short ideas are: BAC, WFC, USB, WM, TCB, VLY, FBC, CMA, HBAN, PACW, CVBF, FTBK, PCBC, DSL, UB, NCC, FITB, KEY, and C. Some of these banks, as you know, have been hurt already so caution is necessary if your going to place individual shorts on these banks. I am not recommending you go short here, but there is probably opportunity abound.

by GW