Month: October 2009

Be Afraid…..Be very, Very, VERY, AFRAID!

First off….Let’s get this right on and off the table. I could care less what political class, side, lover, hater, race, gender or ________ ( you fill in the blank.) you’re on. This post and discussion is for what IS, not what it is not, or what one might hope it to be, or not to be, Period!
We were just made aware that we now have in the United States of AMERICA a person who is…
1. Not in an ELECTED POSITION.
2. Does NOT…Repeat..Does NOT have accountability to Congress.
3. By his OWN WORDS..Stated that..The President of the UNITED STATES whom appointed him has NO..Repeat NO awareness or Influence on his Decisions.
4. And this persons decision is both BINDING, and FINAL by the Law. (and if you think it isn’t just ignore him right?)
5. We were also told that his decisions apply only to 7 companies…That’s correct now however not the complete picture. Less than 24 hours later, you have the Federal Reserve Chairman Ben Bernake release a speech where he believes it should apply to 25 companies. Tax Payer Money should no longer be the trigger….It should be whomever they believe is a RISK to the Financial System. Rep.Barney Frank (D) Massachusetts stated, (I’m para-phrasing) We should look at ALL companies we feel needs this act.
So what company is next?
Yours?…..Mine?…any new Start Up?…How about if we apply this type of logic to that fancy college tuition you’re paying for? Where’s your child going to find the job their studying for? Oh that’s right, If you accept or apply for any college loans, they can ONLY be made through the Government. That’s a new law that takes effect next year. So if the same rational applies for the Government in using it for their decision-making process. If they need people to run these companies because it’s in the good of the Tax Payer, and is needed in the eyes of the Government, what’s to say that in order for YOUR child to finish their degree, or receive one, they’ll have to do some Government Service working at one of these companies, hospitals,_______(again, YOU fill in the blank!)
Gives a whole new meaning to government intervention doesn’t it?

© 2009 Mark St.Cyr   All Rights Reserved

Dow 10,000…Great!….Now impress me Without the Training Wheels.

This post also appears in Forbes.com…………CEOnetwork (R)

The Dow Jones Industrial Average hit a level that every pundit and analyst on TV wanted to scream for months now…DOW breaks 10,000! All are saying it’s a “milestone” it’s this…it’s that…….It’s Hog Wash in my book. That’s a pretty big statement so I’ll elaborate without getting too technical.

First off, let’s remember…..Television Financial Show ratings go DOWN when the market goes down. That’s not an assumption…that’s a fact. Viewership decreases as people feel worse about the market or are losing money..They just don’t tune in to hear how much money they lost.That’s why you see commentators on Financial Networks putting such a positive spin on everything, and anything. CNBC as this year is down in viewership over 20% to 23% this year. ( I can’t remember the exact # but it is close to what I stated…You can research it yourself to make sure.) Television is like a bakery if you think about it…You always have to have fresh bread in the window…No matter how Bad sales are. So it’s no surprise that the spin would be as if the market was on the “Bull Run” of a life time as it is being portrayed. It’s NOT!

In 1999 when the DOW first broke 10,000..It was a great, and historic event, but it was also done without training wheels. The only reason the market is at these levels currently is from the Trillions….Yes…Trillions of dollars allocated by the Federal Reserve to keep Banks, and other institutions from completely collapsing. Analysts are falling over each other showing how “Earnings” are beating expectations. If anyone cares to notice…..It’s not really beating …It’s just Not as Bad as expected?……..Huh? Or another way to say it might be…We were expecting Famine…but it’s only another year of Drought….OK I feel much better now.

Just a few other caveats to ponder as this “Bull Rally” continues….( I believe it to be on its last leg myself.)so I’ll list a few.

Did anyone on TV as this market kept going higher state that another “historic event happened just month and a half ago…..Goldman Sachs on 1 trading day accounted for…..34% of the TOTAL NYSE trading volume. (Welcome to your new Wall St. the old one doesn’t exist.)..and it’s your Tax dollars….Not Bad for government work I guess.

Did anyone on TV state as this market was going higher that over 44% of 1 trading days total volume was allocated to just 2 stocks? Those would be the governments Fannie and Freddie Mac….Who by the way, were about to be de-listed that week…If their market share didn’t increase by that week’s end. Wow… Good thing they were on sale Ay? That surely was historic..from so many angles.

Are you an older CEO..or a newly appointed CEO….either way…How’s that Climate Bill…and Health Care Bill that’s passed and about to be voted on and become LAW soon making you feel?….Don’t worry…..everyone said either bill would never see the light of day……Oops….Those commentators got it wrong again. Well it’s not like they have to deal with the implications….Right?

One last thing that you wont hear on TV…All this so called “Bull Run” we’re on…Well the total volume on just one of the exchanges…the CME…that’s the place you see on TV most of the time with the Futures Pits were Traders make the markets….So far Volume for the futures is less than 1/2 of what it was just a year ago. So much for everyone jumping back in.

I heard Steve Forbes say it clearly when asked on one of those Financial Shows..( I’m paraphrasing but not by much.)…. Until the Fed gets out…The markets are broken.

I agree.

Mark

P.S.

Just a correction…I made a mistake…the 44% also had 2 other stocks……Citi..and AIG…I just wanted to make sure when I was pointing out the government involvement…I wouldn’t be accused of doing government quality reporting.

If you want to “Lead”…You had better be ready when “Everyone else Can’t…or Wont!”

I was speaking to a group yesterday on a subject when I was asked…”How can you be so sure?”……My response was….”I’m not, but that doesn’t mean I shouldn’t do what I feel is prudent.”

Leading is about making hard calls, hard decisions. You’re NOT going to be right all the time ( Read that line once more for emphasis.) but that’s not the point. You have to LEAD if that’s the position your in. Whether you chose to be there….Or not. If you want to be the leader, then do so…..Period!

I made a very tough call on August 22, 2009 ” ( see Aug. posting “On the Record”)…many said to me I might be putting my reputation on the line if wrong. That’s irrelevant in my book. I’m not a martyr, nor aspiring for that position, but since my call on the 22nd…Everyone, and I mean everyone I talked with was almost giddy in trying to demonstrate how I just didn’t get it, how I’m not just as tuned in as they were, and on and on.

So I just thought it fitting since the stock market has now retraced all the great gains everyone was touting, and saying I wasn’t getting it,and the so called “experts” had almost guaranteed the worst was over. I say to them….”How’s all your data treating you today?”

Mark