After the market dutifully closed yesterday extremely close to my expectations, emails like these started showing up:
“George, Are you kidding me? The DOW finished at 11,167.32 today. That’s only a .11 miss from your prediction. I only get to check out your site occasionally, but holy cow man, I’m on for everyday now. What’s next? I can’t wait to see tomorrow’s prediction.”
And…
“You wrote:
We could speculate all morning on how this Big LaBounsky will soar, since anything from 11,167 to 11,244 would be fine with me, but I sense the top may be in…though time will tell and this is not trading advice, o’course.”
And the DOW ends today at: 11,167.32 !
Within 11/100ths … Damn fine work! (fess up, now… Zeus was in on this one, wasn’t he?
) )”
Purely luck, I tell you! Zeus The Cat slept through it all. OK, off by 11-100th’s of a point is close…I’ll grant you that… but blind luck.
On the other hand, if it looks like the market will close today anywhere from 11,235 to 11,250, I will be the guy buying another small block (30 contracts or so) worth of puts on a certain big-name financial stock with long expirations (Jan ’11). Over time then, I might be able to roll some of them forward, depending on how the stock trade over the next 7-months, or so.
Now, all we would need would be some gasoline to throw on the rally to give the perfect weekly finish…and what might that be? Aha! Here you go…
GDP Highlights
Newest peak at GDP is out:
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.2 percent in the first quarter of 2010, (that is, from the fourth quarter to the first quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 5.6 percent.
The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The “second” estimate for the first quarter, based on more complete data, will be released on May 27, 2010.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by decreases in state and local government spending and in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter primarily reflected decelerations in private inventory investment and in exports, a downturn in residential fixed investment, and a larger decrease in state and local government spending that were partly offset by an acceleration in PCE and a deceleration in imports.
Motor vehicle output added 0.52 percentage point to the first-quarter change in real GDP after adding 0.45 percentage point to the fourth-quarter change. Final sales of computers added 0.19 percentage point to the first-quarter change in real GDP after adding 0.01 percentage point to the fourth- quarter change.
Even before the story was released, stock futures were floating upward.
If the market is up 76.68 points today. it would be a second lucky guess in a row. Not likely and no, this is NOT trading advice…we have already exceeded that 11,244 number intraday, so a rollover to a lower close is also possible…it’s just that a weekly close of 11,241-11,244 would be oh so cool chart-wise.
SWAT Teams?
Several (more or less inept) MainStreamMedia have been headlining about how SWAT Teams are being sent to the Gulf to deal with the oil slick.
Of course, anyone with 13¢ worth of brains would have done a quick Google search and figured out the term was being used euphemistically.
But, oh no! Alarmist, polarizing, over-the-top, fear-mongering types immediately jumped on the idea that there must be some kind of terrorism involved. Gee: Couldn’t be a pocket of ultra-high pressure oil and gas at extreme depth blowing off could it? Naw….
Fine example of how to take a careless euphemism can blow up into conspiracy, though. Cute.
Big Brother & Your Checkbook
“Bailout bill would require banks to track and report personal checking accounts to Feds…“ And you thought this week’s article “Goodbye to Money” was kidding about the take-down of person-to-person money. There go garage sales, huh? Clear attack on the underground economy is there ever was one.
Nossir, I stand by the report “Goodbye to Money” from yesterday’s column: Der Uber Plan is to make every penny transit government traceable computers because that’s how control happens. No one seems to get this, yet it’s the elephant in the news these days. All this left-right crap is disinfo or stupidity – or all of the above – you figure that out….
Crush the economy this fall and tah-dah! 1WG (one world government) speaking of which…
Hints from the PTB
Here’s the real deal: “Trichet calls for corrupt BIS to Boss Global Government in CFR Speech”.
And you wonder why linguistics keep pointing toward more rebellion/revolution kinda of headlines yet to come? And a summer of hell, too?
The BIS is as qualified to run global government as I am to do brain surgery with a chainsaw. Equally messy outcomes should be anticipated, in either event.
With Friends Like This…
Word out of the UK that “Tony Blair denies Gordon Brown has ‘failed’ is about as fine a back-handed endorsement as I’ve ever seen.
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How much gold was it that Brown sold at $265? Wonder if his masters will pump enough dough into his campaign to buy another round? We see on May 6th, yeah?
China’s Kids
Turns out that dozens injured and four dead in a school knife attack in China the other day is part of a string of such things going on there.
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A little time on your hands? Correlate HAARP beam headings and operations to the events listed in China, maybe? I don’t know how that kind of thinking works…but as long as you’re at it, toss in satellites overhead in conjunction with HAARP. Course, you can’t get within a zillion miles of those ephemerides…but still….
Constitutional Question
Trust you read (or saw) the CBS story about how “Cities Threaten to Boycott Arizona…”
Let me ask you this: Is it constitutional for cities to go off and become political entities as it relates to other states? City voters probably never thought they were voting on such wide-ranging authority.
Seems to me it oversteps legal boundaries city authority to act in a pejorative manner outside its geographic boundaries. Scaled up, Texas could declare war on North Korea, right?
Certainly, voters in such towns never envisioned that relations with Arizona would be a distinguishing feature in the local city elections…So slapstick government? Or just more runaway government government in play?
Gambling Lesson, Anyone?
A reader in Canada has a good question:
“Hi George,
What is your opinion in regards to keeping a variable rate mortgage based on conditions of the worlds economy.
Here in Canada the Banks are predicting a rise in the prime of only around .50% for the 2010 but looking at the economical situation in Greece, today I saw an article where they talk about how it is affecting us and could get worse.
I been wondering, how high could rates go, I try to look in the past (30s) and there seem to be a year where rates were at around 14%. I have a mortgage that is variable and I’m been advised by every banker I ask to remain in Variable.
An article can be useful to help us decide whether to fix the rate now or face the coming storm in a Variable rate…”
This is where the (nominally) Federal Reserve FOMC statements are probably as good a guess as anything when it comes to where rates are going:
I am NOT a fan of variable rates. My preferred approach is to get a fixed rate and then IF rates decline enough, refi at the lower rate to a new fixed rate. However, rates have to drop enough that the savings offered by the lower rate refi can pay off the cost of the refi in a year or so.
A person, seems to me, would want to lock in rates every time they go down a good bit, so that you ‘win’ no matter what happens:
- If rates go down more, simply refi again if the change is sufficient to justify the hassle factor and cost.
- If rates go up, you will be effectively paying back the note with cheaper dollars and they can’t screw with it.
Variable rates seem like a good thing, under this condition, or that, but a world-changing event, however improbable might leave you out in the cold. For example, say you have a 6% variable and rates pop to 8% and concurrent with that, lending requirements for fixed notes become much tighter. You might find yourself locked into a higher rate by any number of Life’s dirty dealings. Say, you happen to be unemployed at the moment that the variable rate is going up…in that case, you might not qualify. Or, if home values have dropped, you may not qualify and you’re then stuck in every sense (including the bend over sense) of the word.
I’m sure that there’s a financial planner out there who will disagree with my ultra-conservation (common sense) approach to such things. But, it’s like walking into a casino, near as I can figure. The Casino will always let you have access to more money, as long as you can get it because the more they let you tap, the more they eventually win.
Banks and casinos operate along the same lines. The spins are just a little slower in one than the other. But trust me, in the end, both are more interested in winning (for) the House than being grand humanitarian least-cost providers of credit. They’re not in business for fun. They want every dime they can get.
The main difference? Banks get bailouts. Casinos don’t…at least so far.
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I have a mental bit-bucket which is labeled “Untrustworthy”. Variable rate anythings go there along with anything Gordo Brown does, phrases like “We’re here to help”, “It’s for your own good…”…and you got the picture?
