Monday, October 24, 2011

Netflix Implodes After Reporting Horrific Guidance; Notes It Repuchased Stock At $218 Avg Cost Basis

One hopes that the European surprise on Wednesday will be more successful than this...

Gold's true value is above $11,000 per ounce, Turk tells King World News

JPM Cuts First Solar Price Target To $50

Just when the world's most pummeled stock of the past year thought it may see a brief short covering rally, here comes JPMorgan: "We are establishing our Dec-2012 price target and lowering it to $50 for FSLR due to what we believe has been significant erosion in investor confidence on the longer term growth story for the solar PV sector and the company. This has resulted in significant compression of the P/S multiple for FSLR from a recent range of 4.0x to 6.0x to a 1.4x level as of late. Historically, FSLR traded at a significant premium to other Solar PV stocks. This premium continues, but to a lesser extent. We believe that investors as a group no longer view the Solar PV market as a growth sector and that the stock multiple compression for FSLR is evidence of the increasing level of pessimism the Street has towards the sector outlook." And with that the Icarus Lazarus moment for the solars is postponed indefinitely.

It Gets More Unbelievable Everyday

Dave in Denver at The Golden Truth - 1 hour ago
Obama is going to make a direct attempt to transfer more of this country's dwindling wealth from those who can still pay their bills to those who can't. It looks like he's going to be able to implement an initiative to use taxpayer money to help very underwater homeowners refinance their mortgages without any Congressional authorization. You know, it gets to a point at which you have to pull the plug on bad investments destined to get worse. Housing is one of those "investments." I'm still trying to figure out why the originators of those mortgages, a lot of them private banks, ar... more » 

Random Thoughts From David Rosenberg

Instead of tackling any specific and highly volatile high frequency macroeconomic data points today (which will most likely be diametrically inverted in the next update iteration), today David Rosenberg focuses on sundry items and flights of fancy that are worth noting, such as that "the S&P 500 has recorded 62 consecutive days in which it has swung by 1% or more in intraday trading. The Dow has also closed 1% higher or lower 38 times since the beginning of August (compared with just 25 in the first seven months of the year)." Additionally, Rosie shares some views on the Paradox of thrift, i.e., that "spending on appliances, jewellery, watches, air travel, recreation vehicles, cameras, gambling is actually lower today than in 2005", on credit unions whose customers don't want to borrow money, " "Too few of its 95,000 members, most of whom live or work in five counties in the San Francisco Bay Area, want to borrow money. And too many are making extra payments on mortgages and car loans — or paying off personal loans ... Provident's loan portfolio has shrunk by 25% since the end of 2008, including a 5% drop in the first nine months of this year" but most notably concludes with the observation that while the 2008 "Great Financial Crisis" was quite memorably, "I wonder whether we'll say 2008 wasn't the real crisis — it was a warm-up, but the real crisis was the sovereign debt crisis in Europe....It is clear that the situation in Greece has deteriorated markedly and that the scope for any further fiscal restraint without triggering some sort of revolution is small. The only way toward fiscal sustainability — to get the sovereign debt/GDP ratio down to 110% by 2020 — is for investors to grant the country a jubilee of sorts and accept a 60% write-down." Naturally, France will throw up over any proposal that sees a 60% haircut Greek haircut, not so much due to Greek losses per se, but due to imminent losses when Portugal, Ireland, Italy and lastly Spain (to which four countries France has exponentially more exposure) decide to do the same as Greece and start underreporting data, striking daily, and overall just shut down their economies.

The Evolution And Recycling Of The Debt Crisis

Clearly all "bad" ideas are good again. Enron perfected the Special Purpose Vehicle (SPV) and was a master of off balance sheet guarantees. Guarantees with their own equity as collateral in many cases. SIV's are SPV's with leverage. The kind of "asset" that got Citi in huge trouble and almost took down the bank. SIV's had a special place in CDO hell, but I guess you can't keep a good idea down. Detachable insurance. So the EFSF would sell insurance that would come with a new issue bond but could be detached and sold separately? If that doesn't sound a lot like the evil enemy "CDS" than I don't know what does. The biggest detractors of CDS always seem to say it is like buying fire insurance on your neighbor's house. U never agreed with that analogy but this is definitely like buying fire insurance on a house that doesn't cover you in event of fire. The details will be interesting but they had better do as much with cash up front as possible because and ability to require cash in times of stress creates the contagion death spiral they are allegedly trying to prevent. Clearly everyone "gets it" now. What "it" is and how much damage "getting it" will cause remains to be seen.


Guest Post: Silver: Ready to Pop or Drop?


Silver and to a lesser extent Gold are poised to move. You can make a case for either direction. Today’s action was very constructive for commodities in general. But Gold and Silver were the weak performers. The charts show bear-flags, but stochs are in the process of reversing. Fact is, we can see what we want based on our own bias. What we are much more confident in is that in the next week, the Precious Metals will have a move of their own.  If you are in the camp that Europe must print money to solve its problems, despite the evidence that Germany is getting its way for now then put on your buying shoes. Ditto if you see Helicopter Ben cranking out more greenbacks in response to a Euro debasing or political pressures from our Keynesian overlords. If you believe that we are on a deflationary spiral, and that there simply isn’t enough money to buy anything at current inflated prices, and there will be no QE3 and that Europe will have enough (levered) money to solve their Grecian woes then get ready to sell Mortimer. Just remember that straddles don’t care which way the market goes.

Total U.S. state debt, including pension liabilities, could surpass $4 trillion, with California owing the most and Vermont owing the least, according to an analysis released.

TSA Releases VIPR Venom on Tennessee Highways PDF Print E-mail
If you thought the “Transportation Security Administration” would limit itself to conducting unconstitutional searches at airports, think again.  The agency intends to assert jurisdiction over our nation’s highways, waterways, and railroads as well.  TSA launched a new campaign of random checkpoints on Tennessee highways last week, complete with a sinister military-style acronym--VIP(E)R—as a name for the program.
As with TSA’s random searches at airports, these roadside searches are not based on any actual suspicion of criminal activity or any factual evidence of wrongdoing whatsoever by those detained.  They are, in effect, completely random.  So first we are told by the U.S. Supreme Court that American citizens have no 4thamendment protections at border crossings, even when standing on U.S. soil.  Now TSA takes the next logical step and simply detains and searches U.S. citizens at wholly internal checkpoints. 
The slippery slope is here.  When does it end?  How many more infringements on our liberties, our property, and our basic human rights to travel freely will it take before people become fed up enough to demand respect from their government?  When will we demand that the government heed obvious constitutional limitations, and stop treating ordinary Americans as criminal suspects in the absence of probable cause?
The real tragedy occurs when Americans incrementally become accustomed to this treatment on the roads just as they have become accustomed to it in the airports. We already accept arriving at the airport 2 or more hours before a flight to get through security; will we soon have to build in an extra 2 or 3 hours into our road trips to allow for checkpoint traffic? 
Worse, some people are lulled into a false sense of security and are actually grateful for this added police presence!  Should we really hail the expansion of the police state as an enhancement to safety?  I submit that an attitude of acquiescence to TSA authority is thoroughly dangerous, un-American, and insulting to earlier freedom-loving generations who built this country.
I am certain people will complain about this, once they have to sit in stopped traffic for a few extra hours to allow for random searches of cars.  However, I am also certain it merely will take another "foiled" plot to silence many people into gladly accepting more government mismanagement of safety. 
Vigilant, observant, law-abiding, gun-owning citizens defend themselves and stop crimes every day before police can respond.  That is the source of real security in America:  the 2nd Amendment right to defend oneself.  The answer is for people to be empowered to protect themselves.  Yet how many weapons might these checkpoints confiscate?  Even when individual go through all the legal hoops of licensing and permits, the chances of harassment or outright confiscation of weapons and detention of citizens when those weapons are found at a TSA checkpoint is extremely high. 
Disarming the highways and filling them full of jack-booted thugs demanding to see our papers is no way to make them safer.  Instead, it is a great way to expand government surveillance powers and tighten the noose around our liberties.


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