Daily Investment Interpretations

November 1, 2011

2011-11-1: (Tuesday Night): U. S. stock market indices dwindled further today after yesterday afternoon's surprise announcement by Greek Premier George Papandreou that he would call for a referendum basically on whether or not Greeks want to stay in the European Union:  Greece still swaying stocks,   Vote is "Basically Dead" - Greek Party OfficialThe NASDAQ Composite plunged  77.45 points (-2.89%) lower to close at 2,606.96. The Dow plummetted  297.05 points (-2-48%) to 11.657.96; the S&P 500 sagged 35.02 points (-2.79%) to settle at 1,218.29. Oil slipped again to 91.71 gold rose slightly to 1,721. The VIX jumped another 4.81 points to 34.77.
    Ashbaugh: U.S. markets fall to support levels
    As Michael Ashbaugh says, U. S. market indices have fallen to their support levels. The S&P 500 closed slightly below its support level of 1,220, meaning that if they fall further tomorrow, we may see a collapse to much lower levels.
     Mark Hulbert discusses Demographics and the stock market. This is about the impact that retiring Baby Boomers will have on the U. S. stock market. But he concludes that this is far enough off that it probably doesn't warrant much attention compared to the immediate future.
    David Weidner admonishes: Occupy Wall Street: Get real or go home. This article presents five suggested goals that the Occupy Wall Street" protestors could adopt that would constitute something besides a moan-and-groan lament on the ills of modern times.
    Irwin Kellner warns Itís a bad time for a bad mood. Dr. Kellner is referring to poor consumer sentiment numbers as we approach the all-important holiday shopping season. 
    Thomas Kee observes that The easy money has been made
    Arends: Six things no one mentions about MF  Less than a week ago, a few days before MF Global filed for bankruptcy, Jon Corzine, the president of MF Global, bragged at length about how well the company was doing and how bright its future looked. Marketwatch' columnist Brett Arends explains how rotten a deal this was, and how most of us have been scammed by MF Global. Most mutual funds, including, e. g., The Fidelity Group and TIAA-CREF, had sizable investments in MF Global. So it's not just Wall Street but Main Street that's taking the hit. He goes on to say,
    "These days more and more power lies in the hands of a smaller and smaller elite. Many people react by taking refuge in conspiracy theories. They assume the elite knows whatís really going on.
    "The more frightening view is the exact opposite: That the people steering the ship havenít got a clue.
    "Look at Jon Corzine, the chairman and CEO of MF Global. He has remarkable credentials. Heís the former head of Goldman Sachs, a former Senator, a former governor. And MF Global was his baby. He took over there last year, on a mission to build it into a global financial firm.
    "Yet it turns out the companyís blow-up took him by completely surprise. How much? Consider this: Corzine actually bought about $450,000 worth of MF Global stock with his own money over the summer. Some of it as recently as August."

    Mr. Arends also observes that the average MF Global employee, including secretaries and other support staff (3,000 in all), was paid about $184,000 last year.
    On that same page (I'm unable to link to it) is a video entitled "Is shareholder Capitalism working?" This video, by David Weidner, gives as an example Nabors Industries, Inc. Nabors CEO, Eugene Isenberg, has just been awarded $100,000,000 by his Board of Directors to move up from CEO to Chairman of the Board. This is after receiving $200,000,000 from the company two years ago. And this doesn't include his other emoluments, or the pay received by other top executives at Nabors Industries, Inc. This is from a company that earns about $300,000,000 in profits a year. And Mr. Weidner mentions that this is typical of medium-sized corporations. The CEO has the Board of Directors in his pocket. These management teams are there to plunder the corporations, taking the money they earn away from the shareholders. Mr. Weidner observes that large investors like The Fidelity Group could correct the situation, but Nabors Industries is too small to warrant the effort. After all, Fidelity isn't investing its own money. Fidelity is investing our money and becoming filthy rich in the process.
    Strong cross currents at play in November  
    State of the Markets contributions for today include:  
    Technical Talk: Not Exactly As Expected, But....       
    What The Greece Referendum Really Means   
    UK GDP Remains Weak But Comes In Above Expectations 
    UK Manufacturing PMI Dives Below 50; Indicates Contraction 
    Papandreou's Party Majority Shrinks in Greek Parliament 
    ISM Manufacturing Index Pulled Back in October But Still In Expansion Mode  
    Market futures are neutral tonight.