Hourly EWT

This is my count right now from the recent rally from mid Feburary....

Has the market finally stalled?

• The S&P 500 is beginning to run into a sheer wall of resistance.
• If you've banked some profits on the way up but are still reluctant to sell your long holdings I would suggest buying some put protection at this point in the game.
• I'm not saying the market is going to tank back into oblivion, but it truly is time for a pause in the rally.

S&P 500 Index

Is the all mighty China poised for a substantial pullback?

• I believe China's days could be numbered. It's just a matter of time before their enourmous property bubble pops. The market knows this and I think it's about to get a head start on the way down.

Shanghai Stock Exchange

Goldman Sachs charged with fraud!

SEC charged the company and one of its vice presidents with defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages.

The SEC said Goldman Sachs (GS) structured and marketed a synthetic collateralized debt obligation, or CDO, that hinged on the performance of subprime residential mortgage-backed securities. According to the SEC, Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.

So what GS was doing was selling a package of subprime residential mortgage backed securities to its customers knowing that they were overpriced and in a bubble while at the same time they were in a short position profiting at their client's expense.

So about the fine. GS was fined 1 billion dollars which sounds like a lot of money but when you look into the fine it's a slap on the wrist. The clients lost 30, 40, 50 percent of their assets because of this fraud that GS profited on. What percent of GS's assets was this 1 billion dollar fine? 0.09% of their 2007 assets. When you were losing 50.00% of you assets because GS lied to you they were losing 0.09% of their assets. This is around 1.1% of their 2007 revenue and 8.6% of their net income. So Goldman Sachs lost most people's life savings when they knew they were toxic investments and they get fined around a month of 2007's income (31.5 days)sounds reallllly fair to me.

How is money created?

George Soros: "50% Chance The Eurozone Disintegrates"

Things are not looking great for the Eurozone. Debt is knocking on the back door and it's not leaving till it gets in.

From Clusterstock:

“It is 50-50 whether the eurozone breaks up. The damage that break up would cause is so great, that I think that as people realise it, they will pull back from the brink,” Soros told the Financial Times in an interview. “But we are at the brink now...a solution has to be found in a matter of days.”

Greece is on the brink and I dare to say that the recent bailout won't be enough to save the mother of western civilization. The bailout rate is now rumored as being 6%. Greece simply can't afford this. Up next....Spain, Ireland, Italy, Latvia, Britain....

Euro Update

Sad day to be an American....

As a student to Austrian economic theory this is one of the worst days of my life (second only to the passing of PATRIOT act). I don't have anything else to say, if you want our argument against health care read this post:



http://absolute-investments.blogspot.com/2009/11/rebuttal-to-mr-anonymous-previous.html

“One of the consequences of such notions as "entitlements" is that people who have contributed nothing to society feel that society owes them something, apparently just for being nice enough to grace us with their presence.” - Thomas Sowell

“Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” -Frederic Bastiat, French Economist (1801-1850)

“I don’t make jokes… I just watch the government and report the facts.” -Will Rogers

“If you think health care is expensive now, wait until you see what it costs when it’s free!” -P.J. O’Rourke

“Suppose you were an idiot. And suppose you were a member of Congress….But then I repeat myself.” -Mark Twain

“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” -Winston Churchill

“The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.” -Winston Churchill

“Socialism is workable only in heaven where it isn't needed, and in hell where they've got it” - Cecil Palmer

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it” -Thomas Sowell

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” - Winston Churchill

“Socialism: nothing more than the theory that the slave is always more virtuous than his master” - Henry Louis Mencken

“Socialism values equality more than liberty.” - Dennis Prager