Monday, May 30, 2011

Investors Lose Confidence; Market Makers Take Action

Equity stock market rebounds after three consecutive weeks of decline. Many investors finally lose confidence in the market and trim down the portfolio although the percentage is small. But this has a negative wealth effect and increases the risk of a collapse if investors decide to trim down stock holding more aggressively. The demand for treasuries and bonds soars as households, mutual and hedge funds are flooded with capital. Part of it would be diverted to replace the buying from Federal Reserve on Treasuries when the program ends in June.

Institutional and individual investors remain calm amid light selling to protect profit. Day traders are speculating on market makers manipulation. Short term speculative trading is very risky. Investors are not willing to buy on dip for fear of further drop. Buying and selling by day traders balances each other. Market makers have been betting on a downtrend market in the last few weeks. But they do not oversell for fear of a sudden sharp rebound.

It appears that a storm may be coming soon due to irrational flow of capital. The action of individual investors and hedge funds will have influential effect on the market when they allocate the large amount of capital on hand for investment.

Get Ready for a New Home Construction Boom! Really
Still, don't expect builders to start laying plans for new developments that will come on line in 2020, just as the housing market will be tight by historical standards. That's not how we roll in this country. I've read a lot and written some about the history of bubbles in the U.S. And whether it's a telegraph line or a railroad, a fiber-optic cable or a development in Las Vegas, we tend to jump into bubble baths when they're at their frothiest.

Foreclosures for sale: Big supply, low prices
There's a three-year inventory of homes in foreclosure for sale, and that's devastating home prices.

What's more, the homes are selling at steep discounts, especially so-called REOs, bank-owned homes that have been taken in foreclosure procedures.

Also weighing on market prices are "short sales," homes where the selling price is less than what is owed by the borrowers. These sales sold at an average 9% discount.

Pensions Leap Back to Hedge Funds
Public pension plans are lifting hedge-fund investment, seeking to boost long-term returns despite losses suffered in some funds in the financial crisis.

The bullishness comes despite a moment in the financial crisis when the fund found itself adding cash to hedge funds it was invested in that were wobbling.

"We see hedge funds as having a smaller, though still significant and important role in the asset mix," spokesman Robert Gentzel said.

Why safe corporate bonds aren't so smart anymore
Companies deemed good for the money are raising trillions selling bonds to investors who can't seem to get enough of them. It looks like a great deal for both parties -- until you consider the details.

These bonds continue to attract money partly because many mutual funds that focus on bonds feel they must invest in them no matter what the price. No one can guess when bonds could tumble but if a fund sells them and they don't drop right away, it's sure to lose investors to rival funds that didn't sell and are still collecting interest and posting higher returns -- for now.

"You have to dance until the music stops," says FPA's Atteberry, echoing a now infamous line from former Citigroup CEO Chuck Prince as to why he was making risky bets in the run-up to the financial crisis. "But if you look around the room, there's 20 people and one exit door. Not everyone is getting out."

David Wright of Sierra Core Retirement Fund is just as critical of the almost willful ignorance of risk by investors. But he's buying. He says bears are ignoring the appeal of investment grade bonds as refuges of safety in the troubled times he sees ahead. Wright says investors are courting danger in myriad other assets such as stocks, which he thinks could fall as much as 35 percent over the next nine months.

"There'll be a shift from complacency to anxiety to fear," Wright says. "And they'll gradually move into these safe haven assets."

Or so they're called.

Monday, May 23, 2011

美婦兜售月球岩石被捕 美國國寶 開價千萬港元


NASA調查人員部署數月,派出一名臥底與兜售月球岩石的女子在洛杉磯東南埃爾西諾湖(Lake Elsinore)一家餐廳會面。雙方談妥價錢後,女子取出岩石,警方馬上現身將其拘捕,暫未知她如何取得該批岩石,亦未知她為何會被NASA注意。



曾任NASA調查員的亞里桑那大學講師古塞恩茲(Joseph Gutheinz)稱,這批岩石將在NASA的約翰遜太空中心(Johnson Space Centre)特別實驗室進行測試,例如檢查是否含有阿姆阿爾柯爾礦(Armalcolite),那是參與「阿波羅11」號登月任務的成員阿姆斯特朗(Neil Armstrong)、奧爾德林(Buzz Aldrin)及科林斯(Michael Collins)首次在月球發現的礦物。




Sunday, May 15, 2011

SAMMI 台灣 LIVE 音樂會 '99 ♫ Video (External Hosting Site)

The following videos are same content of "SAMMI 台灣 LIVE 音樂會 '99 ♫ Video" posted some time ago in this blog. Previous posting uses local Blogger storage for video content, i.e. YouTube. The following videos are hosted in an external site with the same video source files uploaded. The external site provides a slightly better image quality than the YouTube service.

SAMMI 台灣 LIVE 音樂會 '99 ♫ Video Part 1

SAMMI 台灣 LIVE 音樂會 '99 ♫ Video Part 2

SAMMI 台灣 LIVE 音樂會 '99 ♫ Video Part 3

SAMMI 台灣 LIVE 音樂會 '99 ♫ Video Part 4

SAMMI 台灣 LIVE 音樂會 '99 ♫ Video Part 5

Patient Investors Weighting On Portfolio Holding Despite Market Makers Selling

Market participants are gradually losing confidence as capital remains chasing other assets and staying away from equity stocks. Seeing that investors do not have purchase desire, market makers manipulate to move down the market. Institutional investors trim down the portfolio on fear of further decline. Most of individual investors follow the herd to slightly decrease portfolio holding to take off some profit which is being eroded in the declining market. Some individual investors take the risk to strengthen the portfolio for possible short term profit. Hedge funds are preparing for the coming storm in the bond market.

Market makers and day traders contribute to the majority of the daily trading volume. Market is highly manipulative. Patient investors may see short term loss in a fluctuating market. Market makers manipulate down the market on investors worry of a stagnant economy in which the majority of household do not see improvement in personal wealth due to suppressed wage, depressed home price, and a low return of money market.

It has been mentioned in late 2010 that the "economic" (wealth?) recovery is gathering speed, especially for the rich who recover the majority of wealth since the beginning of financial meltdown. At the present moment, most of the rich should have fully recovered the wealth if not surpassing the peak. However an undesirable consequence of the recovery is concentration of wealth. The wealth gap now is wider than at the economic peak in 2007 before the financial meltdown. It has been a combined effort of wealth creation and transfer of wealth. The rich are at a much better edge than the average household.

Post-Recession, the Rich Are Different
Bentleys and Hermes bags are selling again. Yet the wealthiest Americans are emerging from the financial downturn as different consumers than they were.

Though many of these people might seem unscathed by the financial crisis -- they didn't lose their homes, jobs or retirement savings -- they were deeply affected by what took place around them.

What's showing up in the latest research is a broad-based caution -- a sudden aversion to salespeople, a tepid response to ads focused on brand images, and a new interest in price-shopping.

Items the rich do value at full price are one-of-a-kind clothes and accessories and experiences that create fond memories.

Rich spend, others scrimp, retail reports show
The rich are back to pre-recession splurging: Saks Fifth Avenue and Nordstrom customers are treating themselves to luxury items like $5,000 Hermes handbags and $700 Jimmy Choo shoes, and they're paying full price.

The wealthy were the first to start spending again after the recession. Middle-class Americans' spending started picking up late last year.

"While the U.S. economy is showing some signs of improvement, we expect the recovery will continue to be slow and uneven, particularly for more moderate-income households," Gregg Steinhafel, Target's chairman, president and CEO, said on a conference call with analysts Wednesday.

The divide is prompting retailers to alter their strategies: Luxury stores like Saks Fifth Avenue, which had added more items, from shirts to suits, at lower prices after the financial meltdown in late 2008, are again rebalancing their assortments. Now, it's back to the $300-plus dress shirts.

World's Billionaires 2011
This 25th year of tracking global wealth was one to remember. The 2011 Billionaires List breaks two records: total number of listees (1,210) and combined wealth ($4.5 trillion).

While nearly all emerging markets showed solid gains, wealth creation is moving at an especially breakneck speed in Asia-Pacific.

The Yes-Yes Stock Market
The doubling of the stock market has almost precisely tracked the path of large-company earnings. In 2009's first quarter, when the Standard & Poor's 500 bottomed below 700, earnings of S&P companies were $12.83 per share. In the current quarter, the consensus forecast is $24.69. It's hard to get closer to an exact doubling of Corporate America's bottom line.

It would seem that cheapness isn't the reason to buy stocks at this stage of a bull market, yet stocks aren't so blatantly expensive that valuation argues for bailing out. The economic data will need to re-establish momentum for the market, but re-leveraging and merger-and-acquisition activity will remain supportive.

Effect of QE2's End May Be Greatly Exaggerated
The economy's acceleration was well under way when Fed Chairman floated the idea of QE2 in late August, he points out. Moreover, no serious economist doubts the dictum that monetary policy works with long and variable lags. Indeed, gross-domestic product growth slowed to a 1.8% annual rate in the first quarter, from 3.1% in the fourth quarter of 2010.

The most important impact may have been psychological; because the market participants thought QE2 was affecting prices, they did. And so the dollar fell in response to the Fed's securities purchases, mainly because that's what traders, expected, he concludes.

There is no argument that QE2 has had limited impact on economic growth so far, which no serious economist would assert was the case given the lagged impact of monetary policy. Moreover, data show no response in the money supply from QE2 as the Fed's Treasury purchases merely have expanded excess reserves in the banking system, as David Levy points out.

QE2 has had negligible effect on the economy, at least so far. Any improvement in employment was the result of what happened months before the Fed started buying securities.

Friday, May 13, 2011





聯合國環境規劃署(UN Environment Programme,UNEP)專家諮詢小組表示,油、銅、黃金等部分重要礦物,便宜、品質佳的來源即將告罄,亦即需要耗費更大量的燃料和水來生產。


Monday, May 9, 2011

Market Makers vs Small Investors

Equity stock market continues to retreat in this week. Last week's sharp decline in commodities price reduces the interest of some investors who plan to buy stocks after the pullback but to postpone until further drop to make it more attractive. Hedge funds seem to have finished with commodities liquidation and the price of the latter has stabilized. With fewer buyers, market makers can easily drag down equity stocks without heavy selling. On the other hand, investors do not follow with panic selling and continue to hold on with existing portfolio. Speculating day traders are finding opportunities in this highly manipulative market.

From observation of hedge funds strategy in the past few months, it appears to be accumulating when the market is calm and then a quick sale for profit taking. This has already happened on equity stocks early in the year and then commodities recently. The next guess would be the bond market. As investors are hungry for return but avoiding equity stocks, the demand for junk bonds increases recently. When Federal Reserve bond buying program ends in June, the impact on bond market can be exploited by hedge funds as well as market makers to manipulate the market for profit. A logical thinking would be a drop in the market. However, market participants have learned not to sell in a panic, as seen in the equity stocks and commodities market pullback. Therefore market may react with a pullback but not a collapse. Although Federal Reserve "Quantitative Easing" program comes to an end, it is likely to maintain the balance sheet and not to withdraw capital from financial market in order to revive economic activities. Looking forward, as the worry of Federal Reserve balance sheet cutback is cleared, investors will restructure the portfolio, in favor of assets purchase rather than money market.

Current market may be highly manipulative, dominated by market makers and day traders. But the downside risk is limited because at the present moment, there is no symptom of panic selling. Market makers are not overloaded with assets. Even a portfolio liquidation sale can be absorbed in a matter of days under current thin trading volume. Investors are holding with blue-chip stocks for their growth potential and dividend. Penny stocks are at higher risk when market retreats despite more attractive valuation. Investors are generally avoiding stocks. If stocks are to be considered, the safety of blue-chip stocks comes first. Pure shorting strategy are too risky for market participants because money on the sideline may trigger a short covering rally. Hedge funds used crude oil as hedging in equity stock selling early in the year and the recent commodities liquidation did not involve shorting. The coming bond strategy is to be seen.

In anticipation of above market participants strategy, the speculative investment portfolio will maintain an overall long position with day trading on short term price swing. Because of potential spike in market volatility, the leverage ratio is restricted so as not to overstretch under unfavorable market swing.

Why junk bond rally should be cheered -- and feared
Here's a markets riddle for you: What has jumped in value more than its biggest fans expected and withstood worries like slowing U.S. growth, European debt woes and even the specter of the U.S. losing its top credit rating?

No, it's not the stock market.

Stumped? It's junk bonds, a sort of IOU from risky companies thought most likely to not pay back their debt.

The Fed's policy of setting benchmark interest rates at zero and buying government securities has frustrated investors who are getting miserly interest payments on those and other conservative assets. That led many to rush into risky investments. To some extent, that's exactly what the Fed wanted. The hoped-for result is that money will flow more freely to companies and that investors will feel richer -- and that both will spend more. Bernanke's efforts were mostly designed to push investors into stocks after many pulled money out of stocks during the financial crisis. They've fled into all sorts of assets including tradable bank loans, heating oil futures, carbon-emission credits and, yes, junk bonds.

The big appeal of junk now is that safer assets are so unappealing.

So far, investors have decided to put off worrying about the risks of junk.

Count Cipolloni, the money manager who praises junk's impact on the economy, among the skeptics, too. "People are more desperate for yield than they are fearful of losing principal," he says, adding that he has been selling junk recently after buying it during the credit crisis. "They're overlooking the risk."

AP IMPACT: CEO pay exceeds pre-recession level
In the boardroom, it's as if the Great Recession never happened. CEOs at the nation's largest companies were paid better last year than they were in 2007, when the economy was booming, the stock market set a record high and unemployment was roughly half what it is today.

Executives were showered with more pay of all types -- salaries, bonuses, stock, options and perks. The biggest gains came in cash bonuses: Two-thirds of executives got a bigger one than they had in 2009, some more than three times as big.

Their decisions will be watched closely by shareholders. Government rules passed last year require almost every public company to give investors a vote at least once every three years on what it pays its executives. The votes aren't binding, but they can draw unwanted attention to a CEO's pay.

"Shareholders don't have any tools at the moment to force companies to make changes in pay, but there are plenty of companies making changes because they don't want the attention of a negative vote," Borges says.

America’s Middle Class Crisis: The Sobering Facts
"I worry that we're becoming a barbell society - a lot of money wealth and power at the top, increasing hollowness at the center, which I think provides the stability and the heart and soul of the society... and then too many people in fear of falling down."

Consumer borrowing turns around
Consumers are slowly starting to borrow again and banks are more willing to extend them credit, according to a report from the New York Federal Reserve.

And consumers and banks continued to cut back on credit cards, as about 195 million credit accounts were closed during the 12 months that ended March 31, while just 166 million accounts were opened over the same period.

Special report: What really triggered oil's greatest rout
Never before had crude oil plummeted so deeply during the course of a day. At one point, prices were off by nearly $13 a barrel, dipping below $110 a barrel for the first time since March.

Oil just doesn't fall by 10 percent in the course of a normal day, though. In commodities markets, oil is king, and its daily contract turnover, typically around $200 billion, is usually able to absorb even large inflows or outflows of investment.

During Thursday's crash, such selling locked in profits that high-flying commodities traders have been accumulating for months. Some of Thursday's rout appears to have been more a product of the wisdom of crowd computing than of widespread human panic.

"Funds were likely to take profits before June when the direct (Fed) bond purchases stop. All were eyeballing each other to see who would take profits first," said a London-based oil trader.

By the afternoon New York time, some of the world's biggest money managers thought they smelled blood. Several banks and funds seemed to be selling oil in an orderly fashion, even if the price drop was extraordinary. But could a hedge fund be struggling for survival?

"Since prices have been advancing well beyond any reasonable measure of value, Thursday's declines felt more like orderly corrections than chaotic panics. There was no sense that anyone was ready to jump from the window," said oil analyst Peter Beutel of Cameron Hanover in Connecticut.

As the Market Teeters, One CIO Sees Opportunity
With 90 percent of the S&P 500 having reported by the end of last week, earnings growth is coming in over 18 percent, well ahead of the 13 percent-plus that analysts had been expecting. While the recent slump in the tape suggests a classic "sell the news" investor response, Ghriskey says "stocks eventually follow earnings," which bodes well for equities in the longer term.

Commodity Rally Is Not Over, Strategist Says
With so much attention being focused on the sudden cooling of the formerly-hot commodities markets, it seemed like the perfect place to start.

Goldman’s O’Neill Says Investors Should Brave Fears
Jim O’Neill, chairman of Goldman Sachs Asset Management, said investors should shed their pessimism and stop hoarding cash amid prospects for a global stock rally that could start in China.

The view that “the West is in trouble” is wrong when nations including Germany, Sweden, Australia and Canada are performing strongly, O’Neill said in an interview with Bloomberg Television in Hong Kong, recorded yesterday and broadcast today.

In the aftermath of the 2008 financial crisis, investors are overly concerned at the possibility of so-called black swan events, said O’Neill, using a term sometimes used to describe unlikely occurrences with severe consequences.

“Every little problem that crops up somewhere in the world is not going to create another black swan,” he said, adding that “there’s far too much conservatism,” in terms of investors holding cash.

Friday, May 6, 2011

Commodities Collapse

Equity stock and commodities market fluctuates violently in this week. It is observed and mentioned in earlier posts that hedge funds have been buying in the commodities market in the last few months starting with crude oil as hedging against equity stocks selling. Hedge fund commodities trading activities increased in the last week. And in the start of this week, commodities price, especially crude oil, collapsed suddenly. It is perceived that hedge funds play an important role in the sudden drop of commodities price. With relatively low trading volume in the market and large pool of capital on the sideline, hedge funds seek niche to manipulate the market for profit.

The outlook of the economy, more precisely improving living standard, is optimistic due primarily to advance in technology and science. The financial market and asset price will reflect improvement in the society. This may not be the perception of the majority of the population who may only see stabilization, not improvement in their own living standard, in comparison to the significant jump in wealth of the wealthy elite. As a result, many individual investors feel that the economic growth does not match with the appreciation in equity stock market. Although there is no shortage of fund, individual investors are patient to wait for the market to fall back. Hedge funds are exploiting this perception to create turbulence in the market, equity stocks earlier in the year and commodities recently.

Because of capital liquidity, wealth effect, and corporate earnings, it is likely that equity stock market as well as asset price will recover to uptrend and heading for record high. In the week, although the sudden decline in commodity price is large, there is no panic selling from the mass of investors. There is speculation from day traders and some opportunistic investors take the risk to increase positions. If the market decline further, there will be more buying support from more investors as the price become more attractive. At the present moment, there is no symptom that investors are worrying about the impact of collapse in stock price because of diversified investment and improved personal income. Equity stock market remains a favorite for speculative or growth investment. Commodities is more speculative because of hedge fund manipulation. Other assets, including real estate, see increasing demand from households who are seeking outlet for their wealth.

Investors Ignore Risks in Pursuit of Growth in China
Shares for popular Chinese technology companies like Baidu, the Internet search engine, and Youku, the online video site, have risen triple-digit percentages since their initial public offerings, whetting investors’ appetites for such offerings.

In perhaps the most extreme example of how in fashion the sector is, Facebook, the biggest social network company in the world, has a market value of about $70 billion, based on a share sale currently being contemplated, making it worth more than companies like Boeing.

Needed: A Chart to Lure Bulls
A couple of years ago, as the markets were trying to shake out the cobwebs of the recession and financial crisis, there was a chart in wide circulation that kept a lot of folks out of stocks.

Right now, the market skeptics are leaning on the relative lack of trading volume on rallies and the laggardly action in big financial stocks.

Yet with money free, mid- and small-cap stocks clicking to all-time highs, the takeover and releveraging game gathering steam and investor sentiment refusing to stay excessively ebullient, the downside risk doesn't seem either excessive or imminent.

Stay Calm When the Market’s Chaotic: Gabelli’s Barbara Marcin
If you're feeling like a bull in a market that's suddenly shifted direction (yet again) toward the bears, don't panic.

The market has had three down days, but Barbara Marcin, manager of the Gabelli Blue Chip Value Fund, has some advice for the regular investor. This icon of under-reaction keeps a cool head first and then refers to a list of proven fundamentals.

"Don't fight the Fed," is chief among her admonishments, but she also says there's currently an absence of viable alternatives to stocks. Until rates return to more normalized levels (4%-5%) she argues that total return plays offering both growth and income will win, "especially [those companies] with exposure to global and emerging markets."

Fortune 500 Shows It’s a Great Time to Be a Big Corporation
And judging by the numbers, companies are doing just fine. The nation may be struggling to recover from the Great Recession of 2008-2009, but the corporate sector, which got off its back before the consumer sector, is flat out running. And by and large, this climate is giving corporate bosses exactly what they want.

All in all, while there's plenty to worry about -- inflation, Japan, Europe, deficits -- this is a pretty good time to be a corporation. As recent data from the Commerce Department shows Corporate profits in 2010 came in at $1.625 trillion, up 29 percent from 2009. Fortune 500 CEOs are justifiably proud of the way they've helmed their companies through the storms and are compensating themselves accordingly.

Corporations Rush to Hedge U.S. Dollar
A dollar rally seems wildly implausible in an environment of unprecedented stimulus programs. Of course, the reversal of well-established trends always seems unlikely. If past is prelude, and it generally is, ramping demand for dollar hedging suggests a bottom in the dollar may be at hand. The end of sharp moves always comes when no one expects it. Even if dollar impact is largely not a factor in stock prices, the dollar drop is behind, or at least correlated with, moves higher in gold, crude, silver and nearly any other asset you could buy overseas. Whether we like it or not, most Americans' portfolios are heavily impacted by the dollar.

Is The Market Rigged? Survey Says … ‘Yes!’
Meanwhile, more evidence the stock market is not a level playing field: 47% of respondents in a survey of 400 investors from across the world found one-on-one meetings with companies regularly lead to price sensitive information being divulged, according to the Rotterdam School of Management.

Surveys like this, along with the Rajaratnam trial, the saga over David Sokol's Lubrizoil trades and a overwhelming sense the market is stacked against them helps explain why mom & pop haven't piled back into stocks even after a more-than 2-year bull market.

In Ritholtz's experience what separates the successful professionals from the average individual investor is an information edge, in terms of research and analysis, not privileged information. Most of the rumors whispered around trading floors simply don't hold water, he says. "The best of the fund managers -- they're doing their own channel checks," i.e. legitimate research on industry trends from which they make informed bets about the fate of related companies.

Glencore IPO Shows Unregulated Traders Beating Goldman Sachs
For Goldman Sachs Group Inc. and Morgan Stanley, two of Wall Street’s biggest commodities-trading firms, the year’s largest initial public offering represents a nightmare come true: the rise of unregulated rivals.

“Glencore is unregulated and competes in many of the same businesses,” said William D. Cohan, author of “Money and Power: How Goldman Sachs Came to Rule the World” and a contributing editor to Bloomberg. “It’s based in Switzerland and can do a lot of things that Goldman can’t do anymore.”

Glencore, like rivals such as Hong Kong-based Noble Group Ltd. and Amsterdam-based Trafigura Beheer BV, can take bigger trading risks in the commodities markets, helping to make them more profitable and more appealing as employers for top traders.

Precious Metals Recap: Soros and Margin Hikes Reloaded
Last September, billionaire George Soros made claims that gold was the “ultimate bubble”. In February, Reuters reported that George Soros’ hedge fund actually owned $663 million of SPDR Gold Fund at the end of the year. Today, George Soros made headlines again. The Wall Street Journal reported that Soros Fund Management sold much of its gold and silver investments because there is a less chance of deflation. However, not all billionaire fund managers agree. John Paulson from hedge fund giant Paulson & Co. still holds most of his personal wealth in gold denominated funds managed by Paulson & Co.

Is Soros Right to Get Out of Gold?
Major players, including George Soros, are reportedly pulling back from gold and silver has recorded yet another collapse.

The currency is at two and a half year lows. The Mexican government bought $4 billion worth of bullion between January and March as it looks to reduce its dollar reserves.

Oil prices drop below $100
Oil prices plunged more than 8% Thursday as weak economic data and a strengthening dollar drove crude to its biggest one-day drop since April 2009.

Adding to the selling pressure was a strengthening U.S. dollar. The greenback gained 1.5% against the euro after the European Central Bank president Jean-Claude Trichet left Europe's interest rates alone and said they weren't likely to change in the near term, despite inflationary pressures.

That sent the dollar soaring and a stronger dollar tends to drive down crude prices because oil and other commodities are priced in the U.S. currency.