Dow Futures below 7000

DOW futures are below 7000 in the overnight session. I am sure we will have a good trading session later today , opps it is 1:30 am , WHY am I not in bed :)


MARKETJEDI

Trade Call: Short HBC

News out sunday night of pull out of US market. Funny this stock has been trying poorly the last couple of days and it is obvious folks knew of the news before hand.
SHORT HBC at open. This one looks dead


Another crazy weekend call.


MARKETJEDI

Bill Gross declares death of equities

Bill Gross, the $747 billion bond man, declares the death of equities

Peter Cohan
Feb 26th 2009 at 10:00AM

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Filed under: Economy, People, Investing

Stocks are dead for the rest of your life. That's the gist of my exclusive interview with the head of PIMCO Total Return -- the biggest bond fund you've never heard of. But you should know PIMCO because its chief, Bill Gross, is one of the world's most powerful bond investors.

Last September it looked like he was "helping" the U.S. government by advising it to put Fannie Mae and Freddie Mac into conservatorship. While this wiped out stockholders, Gross's Fannie/Freddie bonds were boosted by the U.S.'s decision. In addition to running a $747 billion asset management firm, Gross's PIMCO advises the U.S. on its $251 billion commercial paper program and its $500 billion fund to buy mortgage-backed securities. Gross shared his economic outlook with me yesterday in an exclusive interview -- and he's not optimistic.

I've never met Gross so it came as a complete shock when I received an e-mail from him yesterday morning. I was quoted in the latest issue of Fortune suggesting that he might be too powerful for the U.S.'s good. How so? Because he's such a big buyer of government debt -- which it's selling in huge quantities to finance various bailouts -- that he could use his leverage to threaten to walk away unless the U.S. sells to PIMCO at a favorable price.

On Monday I gave a TV interview in which I suggested that the U.S. might consider avoiding this potential problem by giving PIMCO's advisory contracts to another firm that does not have the potential conflict between buying U.S. debt and advising the government.

Gross saw the interview and e-mailed me. I replied by telling him that I had some questions about PIMCO and his views on economic prospects. I found his answers informative and insightful and he agreed to let me post on his economic outlook which is very grim for those who believe that stocks outperform bonds. In Gross's view, the current economic contraction is killing the animal spirits that drive risk taking and that's contributing to the death of equity capitalism as we've come to know it.

As Gross told me, "things will never be the same. Risk taking has been destroyed and any animal spirits must come from Washington. Global growth rates -- low, low, low -- asset classes will be readjusted for that outlook. That is -- stocks will be more of a subordinated income vehicle as opposed to a 'stocks for the long run' growth vehicle."

This argument is great for bond fund managers such as Gross since it would tend to drive people out of stocks and into bonds. But his point about stocks as a subordinated income vehicle is interesting. If I understand him correctly, he views stocks as the bottom of the liquidation hierarchy -- meaning that if a firm files for bankruptcy, all the other stakeholders -- such as bondholders, lenders, and preferred stock holders -- get their money before the common shareholders see a dime.

This is why so many common shareholders are getting wiped out. And in Gross's view, growth prospects are so dim that there is no point in owning stocks since common stock investors will not benefit when there's no economic growth. Moreover, they'll be last in line for any dividends that might be available.

Meanwhile, Gross has an interesting analysis of how we got into this mess. He attributes it to too much borrowing, weak regulation and greed. He also thinks that the U.S. is going to have to come up with as much as $5 trillion to fill the capital hole in the banking system.

As Gross said, "The cause of the current situation was too much leverage leading to over consumption which was facilitated by lax regulation and good ol' fashioned greed. Human nature will never change but our institutions will. Not sure policymakers understand what needs to be done -- there still is a $4 trillion to $5 trillion capital hole that needs to be filled but politics may inhibit necessary action. Bernanke and Co. get it though and have more freedom and flexibility -- they are independent -- for now."

These are sobering thoughts from one of America's most powerful financial minds. My hunch is that over the medium- to long-run, we'll revive capitalism through venture-backed technology innovation. But I am not sure how soon that will happen. Meanwhile, what do you think of Gross's comments? Do they make you want to sell stocks?

Email Sent

Special email sent to those who I have emails for. I will have a part 2 email this week after we make new lows. These first couple days of March will be very significant and March as whole.

We will see soon enough


MARKETJEDI

Weekend: Market thoughts

Hey gang I will be writing an extensive email this weekend about the markets and how to tell your friends and family how to survive what I think is coming. Awesome day for me personally while the market is crushed.
If you are not on my special email list please send me an email by tomorrow night so you can receive the thoughts by email.
Marketjedi@gmail.com

How you like the open plays FAZ long, SPG short, WFC short and PALM short.
Got some more coming !!!


MARKETJEDI- Only winners

DOW 6000s???

GDP is down 6.2% and they said we weren't going into a recession. Folks here come much much lower prices in the market dont be crazy buy and hold is all over, all over.

Citibank essentially being nationalized this morning, who next? BAC.

We been saying all of this over a year ago right on this blog.

Market Notes

Today was terrible day for the bulls. They gap us up and thought they would get some more upside and bam the sold us off. I for one was totally blindsided by the move as technically it looked bullish but they just could not end the selling of the bears. Man today was surely one of those days for the books, it was that crazy.
Next week is March and I think March will be one of those special months. I thing we hit a low much lower than the November lows in March and scare out many, I know I sound like a broken record but that's what I see.
The banks were the best performers on my list today, how crazy is that but they are thinking the administration is goign to pull something magical out of the hat. Let me tell you there is NO PLAN, if there was one we would have heard of it already. I am still short STT and WFC in the banking sectors and staying that way. The fact is the banking industry on a whole is making ZERO profits and it will be like that for a long time so why buy those stocks.

Lets rock

MARKETJEDI