Traders,
The market gave up the gains from Wednesday (a rally based on optimistic euphoria – that the government was going to save the day) – reality came back that it was about printing more money and not necessarily going to create job creation – but rather band-aid the problem (for now). We are we going from here…
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EFCA ???
This nation is built on Democracy – we are a Republic. We elect individuals to represent us! However, to have a Democracy we must feel safe from intimidation – a freedom to make a choice without repercussions. In order to do that we vote via SECRET ballet. We elected Obama, our Congress, etc – all with Secret ballet. In fact when you ask people – many times they don’t want to tell you WHO they voted for, because they don’t want to suffer any social repercussions. Jimmy Carter travels around the world – and preaches that Democracy can only be insured if the people are free and safe to vote by secret ballet (devoid of threats).
So what is EFCA (Employee Free Choice Act) – is anything BUT free. Not allowing employees to vote by secret ballet – coupled with the threat of the government to enter a business and dictate pay, insurance, etc. This is not about UNIONS – if employees want to vote FOR or AGAINST a union they should be free to do so – but they should be able to do it in Secret !
I can put it any better than Bernie Marcus this morning on CNBC, watch it: http://www.cnbc.com/id/15840232?video=1017738004
Different views (you decide):
http://www.heritage.org/Research/labor/wm1768.cfm
http://www.aflcio.org/joinaunion/voiceatwork/efca/ (how the Union sees it) – of course they are FOR IT!
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GDP – not that bad?
The futures got a solid jolt to the upside as soon as the GDP reported that the U.S. economy
shrank 3.8% in the 4th quarter – while the most since 1982 – it was less than forecast (median forecast was for 5.5%). That got the futures to rally for sure – maybe it’s not that bad. But it looks like it is going to continue – at least for the 1st quarter of 2009. It was the first back-to-back contractions since 1991 (-.5% in the 3rd quarter, -3.8% in the 4th quarter) and we look to three-peat in the 1st quarter as well – possibly into the 2nd and 3rd.
However – many are pointing to 2008’s net GDP growth of 1.3% - and saying that we are not that bad off. Sure when you add in a massive stimulus check that was issued earlier in the year that created a massive shopping spree and the crack in the dollar that temporarily reduced the expansion of the trade deficit. These folks tend to ignore AIG, Freddie, Fannie, Bear, Lehman, etc…. I have even heard one call it an isolated incident – yeah isolated to the entire banking and lending sector (that affects every man, woman and child). Now it’s round two of Stimulus packages ($850 billion) – couple that with the $1 trillion dollar “Bad Bank” to buy assets, the second $350 billion in the Tarp, and already the massive debt of the Fed – well we should be fine – (please note that was sarcasm).
But when we look at the unadjusted GDP – it shrank 4.1% (the most since 1958) – please remember these are government numbers and the model frequently changes over the year (read my essay - for more details on government data: http://marketpreview.blogspot.com/2008/01/governments-modest-proposal.html
Clearly companies are still laying off people – job growth is negative and consumer spending (credit) is shrinking fast. I expect contraction in 1st quarter – but we could be sucked into believing that the economy is expanding by the 2nd or 3rd quarter (just like mid-last year) – once that stimulus check makes its way through the system. I call it “fake” – because we are spending borrowed money from the government – any premium it adds to the GDP is FAKE in my book – and it may look good today – but what happens when that stimulus runs out (just like the one last year) – bang – the harder we fall.
___________________________________________
AMZN – cheaper, faster, better !
While the brick-n-mortar suffer – Amazon looked to do well (as best it could) in the contracting consumer spending. Yeah – even I participated in Amazon’s holiday sales. A friend said to me – Amazon is the way that MEN like to shop for holiday gifts. Point, Click, Select Gift Wrap, Write Note, Address, Pay = DONE. None of that wandering around the mall and finding a parking space and the horror of picking out and wrapping gifts. Ask my Dad – he likes plastic or paper bags as gift wrapping (just kidding).
That being said – the world’s largest online retailer numbers topped estimates – which has sent the stock in the pre-market up 15%. It even out-paced Ebay (surprise). Net income rose 8.7% (52 cents a share). It looks like Amazon also stole business from many of the Mall Type Stores = racking in its biggest holiday season ever.
The market gave up the gains from Wednesday (a rally based on optimistic euphoria – that the government was going to save the day) – reality came back that it was about printing more money and not necessarily going to create job creation – but rather band-aid the problem (for now). We are we going from here…
________________________________________
EFCA ???
This nation is built on Democracy – we are a Republic. We elect individuals to represent us! However, to have a Democracy we must feel safe from intimidation – a freedom to make a choice without repercussions. In order to do that we vote via SECRET ballet. We elected Obama, our Congress, etc – all with Secret ballet. In fact when you ask people – many times they don’t want to tell you WHO they voted for, because they don’t want to suffer any social repercussions. Jimmy Carter travels around the world – and preaches that Democracy can only be insured if the people are free and safe to vote by secret ballet (devoid of threats).
So what is EFCA (Employee Free Choice Act) – is anything BUT free. Not allowing employees to vote by secret ballet – coupled with the threat of the government to enter a business and dictate pay, insurance, etc. This is not about UNIONS – if employees want to vote FOR or AGAINST a union they should be free to do so – but they should be able to do it in Secret !
I can put it any better than Bernie Marcus this morning on CNBC, watch it: http://www.cnbc.com/id/15840232?video=1017738004
Different views (you decide):
http://www.heritage.org/Research/labor/wm1768.cfm
http://www.aflcio.org/joinaunion/voiceatwork/efca/ (how the Union sees it) – of course they are FOR IT!
________________________________________
GDP – not that bad?
The futures got a solid jolt to the upside as soon as the GDP reported that the U.S. economy
shrank 3.8% in the 4th quarter – while the most since 1982 – it was less than forecast (median forecast was for 5.5%). That got the futures to rally for sure – maybe it’s not that bad. But it looks like it is going to continue – at least for the 1st quarter of 2009. It was the first back-to-back contractions since 1991 (-.5% in the 3rd quarter, -3.8% in the 4th quarter) and we look to three-peat in the 1st quarter as well – possibly into the 2nd and 3rd.However – many are pointing to 2008’s net GDP growth of 1.3% - and saying that we are not that bad off. Sure when you add in a massive stimulus check that was issued earlier in the year that created a massive shopping spree and the crack in the dollar that temporarily reduced the expansion of the trade deficit. These folks tend to ignore AIG, Freddie, Fannie, Bear, Lehman, etc…. I have even heard one call it an isolated incident – yeah isolated to the entire banking and lending sector (that affects every man, woman and child). Now it’s round two of Stimulus packages ($850 billion) – couple that with the $1 trillion dollar “Bad Bank” to buy assets, the second $350 billion in the Tarp, and already the massive debt of the Fed – well we should be fine – (please note that was sarcasm).
But when we look at the unadjusted GDP – it shrank 4.1% (the most since 1958) – please remember these are government numbers and the model frequently changes over the year (read my essay - for more details on government data: http://marketpreview.blogspot.com/2008/01/governments-modest-proposal.html
Clearly companies are still laying off people – job growth is negative and consumer spending (credit) is shrinking fast. I expect contraction in 1st quarter – but we could be sucked into believing that the economy is expanding by the 2nd or 3rd quarter (just like mid-last year) – once that stimulus check makes its way through the system. I call it “fake” – because we are spending borrowed money from the government – any premium it adds to the GDP is FAKE in my book – and it may look good today – but what happens when that stimulus runs out (just like the one last year) – bang – the harder we fall.
___________________________________________
AMZN – cheaper, faster, better !
While the brick-n-mortar suffer – Amazon looked to do well (as best it could) in the contracting consumer spending. Yeah – even I participated in Amazon’s holiday sales. A friend said to me – Amazon is the way that MEN like to shop for holiday gifts. Point, Click, Select Gift Wrap, Write Note, Address, Pay = DONE. None of that wandering around the mall and finding a parking space and the horror of picking out and wrapping gifts. Ask my Dad – he likes plastic or paper bags as gift wrapping (just kidding).
That being said – the world’s largest online retailer numbers topped estimates – which has sent the stock in the pre-market up 15%. It even out-paced Ebay (surprise). Net income rose 8.7% (52 cents a share). It looks like Amazon also stole business from many of the Mall Type Stores = racking in its biggest holiday season ever.
There is a recession story here as well. Amazon, unlike it’s store-front competitors – does not have to pay for retail space, cashiers, store front marketing, etc. That cuts down on the over-head. Additionally – state taxes – what state taxes? Cheap shipping costs and gift wrapping services also add into the ease. Thus saving money for the consumer and in this day and age – it is about saving money.
Could Amazon (like Wal-mart) be a recession stock? It would seem they have some edge over their competitors. Sales will surely contract in the non-holiday season as consumers have less to spend – but they are taking a serious look at buying power – Amazon gives them buying power.
Side note: Looking to save money on computers (and electronics) – great shipping, great reviews. I order most of my stuff from Newegg. Check it out www.newegg.com – too bad they are not public, but I would guess (with their growth) they would be a takeover target by someone that wanted to get into the AMZN business.
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Futures Pre-market
The futures were off – waiting for the GDP news – the shocker was it came in fairly higher than expected and along with Amazon news – it “seems” the market/economy isn’t that bad. Please note that it’s government data and one company – so this could be nothing more than a knee-jerk reaction. We look to have a flat to slightly higher opening.
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Support / Resistance
We started coming back off those resistance areas (bands).
INDU 8000 / 8250 (It looked like 8250 couldn’t hold and it now is a resistance again. As I said the other day – if you don’t know treat it as a pivot point – get flat with deltas. If you did – you didn’t get hurt.)
NDX 1100-1150 / 1200-1250 (We are at the bottom of the resistance band – 1200 looks like the support for the upper band. AMZN will help boost the index higher.)
SPX 800 (850) 900 (That 850 has some serious staying power – and is a pivot point)
RUT 400 (450) 500 (Just like the SPX)
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Conclusion
We can debate all day (and neither of us would be right) if we focus on moral justification (what we THINK or Believe should be right). I tend to avoid those debates. However – socialism comes about when we SEE things that we would all agree is NOT right and we wish to change them (Help the poor, Welfare, Social Security, etc.) – people confuse a cold heart with those that believe in Constitutional Freedoms.
The Declaration is this nation’s document to justify our decision to declare independence. The Declaration was addressed to ALL MEN of this earth (that is why it is such an important document) – it begins “We hold these TRUTHS to be self-evident” – these are traditional natural laws – which holds that there is a higher law of right and wrong. These moral truth’s are: “all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness.” (note: it is Pursuit, not Entitled). We are BORN with those rights – we do NOT get them from the Government. Our government was created to SECURE those rights – and only use their powers in just ways to secure them. The Constitution was drafted upon the principals of the Declaration.
The Constitution starts, “We the People…” – All power comes from the PEOPLE, not the government. Remember this is a Republic we ELECT them to represent the PEOPLE, not to RULE the People. Lately – our government is testing Article I, section 8 (General Welfare Clause) as an excuse for taxes, bailouts, and taking from some to give to others. The purpose of that section is permitting the spending only for enumerated ends and RESTRICTS such spending on the general welfare – NOT the welfare of PARTICULAR parties.
These are (for me anyway) concerning times.
I suggest (if you haven’t) take the time to read and know the two documents that have given us the Freedoms which we cherish today.
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