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Roubini says bottom of U.S. recession not here yet:

Nouriel Roubini * Still more yellow weeds than green shoots as the global economy has not bottomed out yet:

SEOUL, May 27 - Economist Nouriel Roubini on Wednesday said the end of the global recession is likely to occur at the end of the year rather than the middle, and that U.S. growth will remain below potential afterwards.

"We are not yet at the bottom of the U.S. and the global recession," said Roubini. "The contraction is still occurring and the recession is going to be over more toward the end of the year rather than in the middle of the year."

"There is still too much optimism that a recovery is just around the corner," said Roubini, a professor at New York University's Stern School of Business and chairman of RGE Monitor, an independent economic research firm.

Roubini, who is widely credited for predicting the current economic turmoil, was speaking at the Seoul Digital Forum.

"A more sober analysis suggests we're closer to the bottom; there is light at the end of the tunnel, but it's going to take a while longer, and the recovery is going to be weaker than otherwise expected."

Once the recession ends, "U.S. economic growth is going to be below potential for at least two years," he said, amid multiple imbalances in the housing sector and the financial system, and the rise of public debt.

Roubini said the outlook for Asia was more positive than for Europe, Japan and the United States, thanks to stronger fundamentals.

"The latest economic indicators from Korea ... suggest there is the beginning of an economic recovery, and growth might be already positive in the second quarter."

The downside risk, Roubini said, was if advanced countries did not recover fast enough and if China's rate of growth started to slow again.

Roubini predicted China would post a 6 percent growth rate this year, a "hard landing" considering it grew by 10 percent for a decade.

A robust recovery in Korean, China and other countries in the region would depend upon relying less on external demand and export-led growth and relying more on domestic growth, he said.

http://www.rgemonitor.com/blog/roubini/256890/still_more_yellow_weeds_than_green_shoots_as_the_global_economy_has_not_bottomed_out_yet

S&P 500 Trend and Reversal Prospects:

S&P 500 Trend and Reversal Prospects:

* By Richard Shaw - May 23rd, 2009

Here is the 200-day primary trend line of the S&P 500 showing its prolonged and continued downward movement (bear market condition) along with the position of four secondary trend lines that must move above the primary trend line before the primary trend changes slope from negative to positive.

Those staging into risk positions in the US stock market would be well served to monitor these key visual clues about the eventual transition from the current bear to a future bull when deciding how much and when to commit cash for an intended ultimate position size:

(1) the slope of the primary trend line

(2) the location of the secondary trend lines (whether above or below the primary trend line)

(3) the direction of movement of the secondary trend lines

(4) the relative position of the secondary trend lines above or below each other.



Similar visual analysis of price behavior of other asset categories should be equally helpful.

http://www.safehaven.com/article-13428.htm

Nationally, Home Prices Began 2009 with Record Declines:

Nationally, Home Prices Began 2009 with Record Declines
PR Newswire, The McGraw-Hill Companies, Inc.
On Tuesday May 26, 2009, 11:09 am EDT


According to the S&P/Case-Shiller Home Price Indices

NEW YORK, May 26 /PRNewswire/ -- Data through March 2009, released today by Standard & Poor's for its S&P/Case-Shiller(1) Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index continues to set record declines, a trend that began in late 2007 and prevailed throughout 2008.

"Declines in residential real estate continued at a steady pace into March," says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines. Seventeen metro areas recorded a monthly decline in March, with Minneapolis, Detroit and New York posting record monthly declines. On a positive note, nine of MSAs are reporting a relative improvement in year-over-year returns and nine of the 20 metro areas saw an improvement in their monthly returns compared to February. Furthermore, this is the second month since October 2007 where the 10- and 20-City Composites did not post a record annual decline. Based on the March data, however, we see no evidence that that a recovery in home prices has begun."

Minneapolis had a record monthly decline of 6.1% in March. This represents the largest monthly decline of any metro area in the history of the indices. For March, Detroit and New York also reported their largest monthly declines, returning -4.9% and -2.5%, respectively. The performances of these two MSAs represent the extremes of the national boom/bust scenario. The New York index is still up 73.4% from January 2000, though down 19.7% from its June 2006 peak. The Detroit index is 29.0% lower than in January 2000. Detroit home prices are back to their mid-1995 levels.

In terms of annual declines, the three worst performing MSAs continue to be the same three from the Sunbelt, each reporting negative returns in excess of 30%. Phoenix was down 36.0%, Las Vegas declined 31.2% and San Francisco fell 30.1%. Denver, Dallas and Boston continue to fare the best in terms of annual declines down 5.5%, 5.6% and 8.0%, respectively.

Looking at the data from peak-thru-March 2009, Dallas has suffered the least, down 11.1% from its peak in June 2007; while Phoenix is down 53.0% from its peak in June of 2006. All of the 20 metro areas are in double digit declines from their peaks, with ten of the MSAs posting declines of greater than 30% and two of those -- Phoenix and Las Vegas -- in excess of 50%.

The table below summarizes the results for March 2009. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data. More than 21 years of history for these data series is available, and can be accessed in full by going to www.homeprice.standardandpoors.com.

(1) Case-Shiller and Case-Shiller Indexes are registered trademarks of Fiserv, Inc.

2009 Q1 2009 Q1/2008 Q4 2008 Q4/2008 Q3 1-Year
Level Change (%) Change (%) Change (%)

U.S. National
Index 128.81 -7.5% -7.4% -19.1%


March/ February/
March 2009 February January 1-Year
Metropolitan Area Level Change (%) Change (%) Change (%)

Atlanta 104.89 -1.7% -2.5% -15.7%
Boston 145.83 -2.0% -1.3% -8.0%
Charlotte 119.30 0.3% -1.6% -9.3%
Chicago 122.34 -3.1% -3.4% -18.6%
Cleveland 96.86 -0.9% -5.0% -9.0%
Dallas 112.38 0.0% -0.3% -5.6%
Denver 120.35 0.1% -1.7% -5.5%
Detroit 70.98 -4.9% -3.8% -25.7%
Las Vegas 116.44 -3.8% -3.6% -31.2%
Los Angeles 160.88 -1.4% -2.0% -22.3%
Miami 148.87 -3.5% -3.0% -28.7%
Minneapolis 109.12 -6.1% -3.2% -23.3%
New York 173.35 -2.5% -1.7% -11.8%
Phoenix 106.83 -4.5% -4.5% -36.0%
Portland 147.68 -2.1% -1.9% -15.3%
San Diego 144.56 -1.5% -1.0% -22.0%
San Francisco 117.77 -2.2% -3.3% -30.1%
Seattle 149.03 -2.0% -1.5% -16.4%
Tampa 141.37 -2.7% -2.7% -22.4%
Washington 166.01 -1.2% -2.3% -18.4%
Composite-10 151.41 -2.1% -2.1% -18.6%
Composite-20 139.99 -2.2% -2.2% -18.7%

Source: Standard & Poor's and Fiserv
Data through March 2009


The S&P/Case-Shiller Home Price Indices are published on the last Tuesday of each month at 9:00 am ET. They are constructed to accurately track the price path of typical single-family homes located in each metropolitan area provided. Each index combines matched price pairs for thousands of individual houses from the available universe of arms-length sales data. The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly. The S&P/Case-Shiller Composite of 10 Home Price Index is a value-weighted average of the 10 original metro area indices. The S&P/Case-Shiller Composite of 20 Home Price Index is a value-weighted average of the 20 metro area indices. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.

These indices are generated and published under agreements between Standard & Poor's and Fiserv, Inc. The S&P/Case-Shiller Home Price Indices are produced by Fiserv, Inc. In addition to the S&P/Case-Shiller Home Price Indices, Fiserv also offers home price index sets covering thousands of zip codes, counties, metro areas, and state markets. The indices, published by Standard & Poor's, represent just a small subset of the broader data available through Fiserv.

About Standard & Poor's Index Services

Standard & Poor's Index Services, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Its family of indices includes the S&P 500, an index with $1.5 trillion invested and $4.85 trillion benchmarked, and the S&P Global 1200, a composite index comprised of seven regional and country headline indices. For more information, please visit www.standardandpoors.com/indices.

About Standard & Poor's

Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP - News), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com

http://finance.yahoo.com/news/Nationally-Home-Prices-Began-prnews-15346186.html?.v=1

The Worst Case Scenario (Someone Has to Say It)

Since the economy began sliding downhill in late 2007, mainstream economic and market experts have consistently erred on the sunny side.

As late as June 2008, mainstream consensus held that the U.S. was heading for a “soft landing” and would avoid recession. Several months later, the slump was acknowledged to have started in January 2008, but we were supposed to see renewed growth by mid-2009, with unemployment peaking in the eight-to-nine percent range. A quick “shovel-ready” stimulus bag was supposed to set us back on the road to prosperity.

In January, recovery projections were pushed forward to late 2009. Today, the consensus is for a mid-2010 recovery, with unemployment peaking at just over 10 percent. Clearly, the mainstream has struggled to catch up to reality for well over one year. What are the chances that they finally have it right this time?

Moreover, the mainstream continues to see what is going on as a plain-vanilla recession that will be quelled with some on-the-fly monetary and fiscal tinkering. Washington, we are told, will pull us out of this slump—as soon as the masses can be enticed back to the shopping malls. Then things will return to how they were before. But what if the experts and politicians are wrong not only on their ever-changing recovery timeline, but also on the nature—nay, the very existence—of a recovery?

America’s reigning political-economic ideology has demonstrably failed. Given that its government is obviously fumbling along without a clue, its foreign and domestic credit is tapped out, and its 300 million people are discovering that their hopes for continuous material improvement will never be met, could the U.S. be headed the way of the USSR?

Instead of a recovery as the mainstream envisions it, what if America permanently bankrupts, impoverishes, and marginalizes itself? What if its cherished institutions fail across the board? For example, what happens when the police realize that their under-funded pension plans cannot support a decent retirement? Will they stay honest, or will they opt to survive by any means necessary? These are questions that the mainstream does not even begin to contemplate.

In the interests of providing you with an alternate vision—something outside the mainstream—below are ten predictions for America through the year 2012. This is not boilerplate doom-saying. Rather, I am laying out in highly specific terms what will happen over the next three-odd years. Others have thrown around the term “Depression”, but I am going to tell you precisely what it means for you, your investments, and your community.

When these predictions come true, I expect to be rewarded with a seven-figure consulting gig, a book contract, or a high-level position in whatever administration succeeds the doomed Obama team—that is, if anyone succeeds it at all.

Prediction one. The twenty-five-year equities bubble pops in 2009. U.S. and foreign equities markets will stop treading water and realign with economic reality. Stock prices will cease to reflect the “greater fool” mentality and will return to being a function of dividend yields, which have long been miserable. The S&P 500 will sink below 500. In a bid to stem the panic, the government will enforce periodic “stock market holidays”, and will vastly expand the scope of its short-selling prohibitions—eventually banning short-selling altogether.

Prediction two. With public pension systems and tens of millions of 401k holders virtually wiped out—and with the Baby Boomers retiring en masse—there will be tremendous pressure on the government to get into the stock market in order to bid up prices.

Therefore, sometime in 2010, the Federal Reserve will create and loan out hundreds of billions of fresh dollars to the usual well-connected suspects, instructing them to buy up stocks on the public’s behalf. This scheme will have a fancy but meaningless name—something like the “Taxpayer Assurance Equities Facility”. It will have no effect other than to serve as buyer of last resort for capitulating smart-money types who want to get out of stocks entirely.

Prediction three. Millions of new retirees—including white-collar people with high expectations for a Golden Retirement—will be left virtually penniless. Thousands will starve or freeze to death in their own homes. Hundreds of thousands will find themselves evicted and homeless, or will have to move in with their less-than-enthusiastic children. Already strained by the rising tide of the working-age unemployed, state and local welfare services will be overwhelmed, and by 2012 will have largely collapsed and ceased to function in many parts of the country.

Prediction four. “Quantitative easing” will fail to restart previous patterns of lending and consumption. As the government sends out additional “rebate” checks and takes ever-more drastic measures to force banks to lend, hyperinflation could take hold. However, comprehensive debt relief via a devaluation of the dollar is even more likely. This would entail the government issuing one “new” dollar for some greater number of “old” dollars—thus reducing both debts and savings simultaneously. This would make for a clean slate a la Fight Club.

As there are many more debtors than savers in the U.S., the vast majority would support devaluation. The Chinese and other foreign holders of our bonds would be screaming mad, but unable to do anything. Every country that has not found a way out of dollar-denominated reserve assets by 2012 will see its reserves eliminated.

Prediction five. The government will stop pretending that it can finance continuous multi-trillion-dollar deficits on the private market. By late 2010, the sole buyers of new U.S. Treasury and agency bonds will be the Federal Reserve and a few derelict financial institutions under government control. This may or may not lead to hyperinflation. (See prediction four).

Prediction six. As the need for financial industry paper-pushers declines and people have less money to spend on lawyers and Starbucks (SBUX), unemployment will rise until the private sector has eliminated all of its excess capacity and superfluous or socially needless jobs. The government’s narrow unemployment figure (U3) will rise into the high teens by late 2010. The government’s broader unemployment figure (U6) will cease to be reported when it reaches 25 percent—it will simply be too embarrassing. Ultimately, one in three work-eligible Americans will be unemployed, underemployed, or never-employed (e.g. college grads permanently unable to find suitable work).

Prediction seven. With their pension dreams squashed, and their salaries frozen or cut, police and other local government workers will turn to wholesale corruption in order to survive. America’s ideal of honest, courteous, and impartial cops, teachers, and small-time local functionaries will have come to an end.

Prediction eight. Commercial overcapacity will strike with a vengeance. By 2012, thousands of enclosed malls, strip malls, unfinished residential developments, motels, truck stops, distribution centers, middle-of-nowhere resorts and casinos, and small-city airports across America will turn into dilapidated, unwanted, and dangerous ghost towns. With no economic incentive for their maintenance or repair, they will crumble into overgrown, plywood-and-sheet-rock ruins.

Prediction nine. By the end of 2010, tens of millions of households will have fallen behind on their mortgages or stopped paying altogether. Many banks will be unable to process the massive volume of foreclosure paperwork, much less actually seize and resell the homes.

Devaluation (as mentioned in prediction four) could ease the situation for those mortgage holders still afloat, but it would also eliminate any incentive for most banks to stay in the mortgage business. In any case, the housing market in many parts of the country will lock up completely—nothing bought or sold.

With virtually no loans being made, even the government will finally acknowledge that most banks are fundamentally insolvent. A general bank run will only be averted through a roughly one trillion-dollar recapitalization of the FDIC, courtesy of new money from the Federal Reserve.

Prediction ten. As an economy is never independent of the society within which it functions, the next few paragraphs will focus on social and political factors. These factors will have as much of an impact on market and consumer confidence as any developments in the financial sector.

Whether rightly or not, President Obama, having come to power at the dawn of this crisis, will be blamed for it by over 50 percent of the population. He will be a one-term president. In response to his perceived socialization of America, there will be a swarm of secessionist and extremist activity, much of it violent. Militias and armed sects will be more prominent than in the early 1990s. Stand-off dramas, violent score-settlings, and going-out-with-a-bang attacks by laid-off workers and bankrupted investors—already a national plague—will become an everyday occurrence.

For both economic and social reasons, millions of immigrants and guest workers will return to their home countries, taking their assets and skills with them. The flow of skilled immigrants will slow to a trickle. Birth rates will plummet as families struggle with uncertainty and reduced (or no) income.

Property crime will explode as citizens bitter over their own shattered dreams attempt to comfort themselves by taking what is not theirs. Mutinies and desertions will proliferate in an increasingly demoralized, over-stretched military, especially when states can no longer provide the educational and other benefits promised to their National Guard troops.

There will be widespread tax collection issues, and a huge backlash against Federal and state bureaucrats who demand three-percent annual pay raises while private sector wages remain frozen or worse. In short, the “Tea Parties” of tomorrow will likely not be so restrained.

Finally, between now and 2012, we are likely to see another earth-shaking national embarrassment on the scale of the 9/11 attacks or Hurricane Katrina and its aftermath. This will demonstrate conclusively to all Americans that their government, even under a savior-figure like Obama, cannot, in fact, save them.

By 2012, there will be a general feeling that the nation is in immediate danger of blowing up or coming apart at the seams. This fear will be justified, given that the U.S. has always been held together by the promise of a continuously rising material standard of living—the famous “pursuit of happiness”—rather than any ethnic or religious ties. If that goes, so could everything else. We were lucky in the 1930s—we may not be so lucky again.

http://seekingalpha.com/article/134820-the-worst-case-scenario-someone-has-to-say-it?source=hp_mostpopular

Big Banks gain $56b accretable yield:

Big Banks gain $56b accretable yield:

JPMorgan Chase stands to reap a $29 billion windfall, thanks to an accounting rule that lets the second-biggest U.S. bank transform bad loans it purchased from Washington Mutual into income.

Wells Fargo, Bank of America and PNC Financial Services Group are also poised to benefit from taking over home lenders Wachovia, Countrywide Financial and National City, regulatory filings show.

The deals provide a combined $56 billion in so-called accretable yield, the difference between the value of the loans on the banks' balance sheets and the cash flow they're expected to produce.

more...
http://seattletimes.nwsource.com/html/businesstechnology/2009261767_bankaccounting26.html

Cashing in on Unclaimed Property:

Cashing in on Unclaimed Property

* By David Bogoslaw - May 26, 2009, 12:01AM EST


For households struggling to pay bills, billions of dollars of unclaimed money sitting in government coffers could be a welcome windfall

Tough times compel people to rein in spending, cancel pricey subscription services like premium cable, mail in product rebate receipts, and collect food coupons. But the aggregate savings from those activities could end up looking like pocket change compared to billions of dollars in unclaimed property being held in state controllers' and the U.S. Treasury's coffers.

The Bureau of Public Debt, part of the U.S. Treasury Dept., says more than $16.6 billion worth of unredeemed U.S. savings bonds have matured and are no longer earning interest. The bureau has established a Web site, www.treasuryhunt.gov, for people to search for a missing bond by the original owner's Social Security number.
Claiming Treasury Bonds

Most people don't realize that even if the original holder of a bond has died, their heirs can still redeem it. Heirs can download a series of documents from www.treasurydirect.gov that enable them to state their relationship to the original owner and send in a copy of legal documentation, like a will or estate agreement, that proves it. Anyone who knowingly provides false information on these forms could potentially be brought up on perjury charges, according to the Treasury Dept.

In addition, at the end of 2008, there was more than $32 billion in unclaimed money sitting in state treasury coffers across the country, according to Shane Osborn, treasurer of Nebraska and president of the National Association of Unclaimed Property Admimistrators (NAUPA), a nonprofit organization affiliated with the National Association of State Treasurers. Unclaimed property accrues from a wide range of sources, including final paychecks that employees never collected, abandoned bank accounts, stock and bond certificates put away in safe deposit boxes or hidden under floor boards in homes, consumer product rebate checks, and utility deposits. Some of the money will never find its match, such as unused gift certificates at retailers which aren't required to keep records of who bought them.
Series E Bonds

There are more than 42 million individual Series E bonds bought between 1941 and 1978 that have fully matured and comprise the vast majority of the bonds that can be redeemed from the Treasury Dept. The E bonds were issued in denominations of $25 to $10,000 at 75% of face value and can be redeemed for between four and 12 times face value, says Stephen Meyerhardt, public affairs officer in the Bureau of Public Debt. The highest multiples apply to those bonds that locked in peak interest rates for 10 years if they entered an automatic 10-year extension period when those higher rates were in effect, such as between November 1981 and October 1982, he says.

The average estimated redemption value on the E bonds is around $400, says Meyerhardt. He estimates that perhaps 5% are redeemable for more than $500. "People who had larger securities were more apt to keep track of them and turn them in than those with very small amounts," he says.

Some savings bonds will never be redeemed, such as a portion of those bought during World War II "that were deliberately destroyed during bond rallies" in patriotic support of the government war effort, he says. Some heirs choose to hold onto bonds in their relatives' names because they're the only keepsake left. Other bonds just get lost along the way, and the heirs don't have enough information to even consider making a claim, he adds.

Only E bonds issued in 1974 or later can be searched at treasuryhunt.gov, since most issues before 1974 didn't require owners' Social Security numbers. The Bureau can still search its records for them but would need a letter from a claimant to start the process, says Meyerhardt.

The Treasury is holding another $62.8 million worth of matured H bonds, issued from 1952 through 1979. Also known as current-income bonds, they paid interest semi-annually prior to maturity and can be redeemed only at face value since there's virtually no outstanding interest left to be paid on them.
Efforts to Find Claimants

Osborn at NAUPA sees a greater urgency to try to return this money to its rightful owners at a time when the government is so committed to other fiscal methods to stimulate economic recovery. "Sixteen billion dollars—that would be a very legitimate economic stimulus to get this moving," he says. "You think of everything with the economic crisis going on, what $500 can do for an individual. It helps them make that car payment for that month or an electricity payment. And for some people it will be much more than $500."

As for the billions being held in state treasuries, some states are more active than others in trying to spread awareness of these funds. Using genealogical research to locate owners' heirs, in 2008 the Nebraska Treasurer's Office was able to return one of its biggest claims, for $440,000, to a bunch of grand-nieces and grand-nephews of the original owner, says Osborn. "We're aggressive in giving this money back and we need to be," he says.

The New York State Comptroller's Office is holding $9.9 billion in unclaimed funds as of May 21. Of $569 million received between April 2007 and March 2008, the Comptroller has processed $218 million in claims. Although about 60% of all claims are for less than $100, the largest personal account was for $4 million in stock, which was paid out before the market tanked last year, says Lawrence Schantz, director of unclaimed funds for the Comptroller's Office.

The Comptroller's Office lobbies media organizations such as NBC and Telemundo, the Spanish-language U.S. television network, to run stories to raise awareness of unclaimed funds. In a two-part series that Dateline aired in April, the program's anchor, Tiki Barber, turned out to be among those with unclaimed funds waiting for them in New York State's coffers. Several accounts in Bernie Madoff's name, or the names of his company, Bernard L. Madoff Investment Securities, his wife, or other close relatives are also on the Comptroller's list and have been restricted so they can't be paid, says Vanessa Lockel, a spokeswoman for the Comptroller's office.

Some states with unclaimed property with unknown owners do little more than run annual ads in local newspapers listing the names of new accounts that have been reported by companies, broker-dealers, and banks in the past year.

Delaware, which runs ads in two local newspapers yearly, has returned $109 million of a total of $3.24 billion, or just 3.4%, of the property it has received since 1993, says Patrick Carter, director of Delaware's Division of Revenue. One reason the payouts have been so few is that Delaware is deluged with unknown owner property since 60% to 65% of the Fortune 1000 companies in the U.S. are incorporated in Delaware. State laws require that companies and banks transfer funds for owners with unknown addresses to the state where the company was incorporated at the end of the five-year dormancy period after an account becomes inactive. Delaware doesn't pay interest on property while the state is holding it for owners, even for interest-bearing accounts, says Carter.

The California State Controller's Office had roughly 8.7 million owner accounts worth a total of $5.4 billion at the end of June 2008 and paid out 328,920 claims worth $286.5 million in fiscal year 2007-2008 (ended June 30, 2008). Until August 2007, the Controller was prohibited by law from sending notification to more than 20% of owners alerting them to money the state was holding for them. Now the state notifies 100% of the owners, and even informs them of money being held for them by companies before it's transferred to the state, says Holly Jordan, a spokeswoman for California's Controller's office.

Companies are getting smarter about unclaimed money, too. Many are establishing separate gift certificate companies in states such as Virginia, Ohio, and Arkansas that don't require unclaimed gift certificates to be transferred to the state where the parent company is incorporated. "So companies get to keep the difference," says Carter in Delaware. "The amount of gift certificates we receive has dropped dramatically."

Michael Schilken, an estate and trust attorney at Husch Blackwell Sanders in Omaha, is petitioning the Nebraska probate court to have two estate cases reopened to administer property not included in the initial probate but now being held by the state. In 19 years of legal practice, he's never represented this kind of case. This tells him that people have become much better informed about financial matters, and the state of the economy may be one impetus for that.

While it's always worthwhile for people claiming money listed in their own names to go after it, heirs of deceased owners need to consider the amount they're trying to recover, says Schilken. Since in most cases they'll need to hire a lawyer to represent them and petition to have the owner's probate case reopened, he believes it's only worth it for accounts with around $10,000 or more in them.

In years past, most people's conception of unclaimed property was a $20 rebate check that was never cashed that they assumed disappeared or was pocketed by the state. "I think the understanding of unclaimed property in the last five years has improved a lot," in part due to Web sites such as www.missingmoney.com that allow people to search for money by name, Schilken says. "People are paying more attention to their own finances and are just more curious and searching for financial information and this is just another piece of it."

http://www.businessweek.com/investor/content/may2009/pi20090522_643187.htm

The S&P 500 Earnings and Price to Earnings Ratios are Very Bearish:

Clive_Maund * If You are Long the Broad US Stockmarket - Prepare to Get Buried

* May 25, 2009

Fundamentally the rally in the broad stockmarket from early in March is viewed as being the result of a combination of media hype, wishful thinking and short covering, but there may be more to it than that - it would appear that a sizeable proportion of the TARP (Troubled Asset Relief Program) funds not thus far deployed have been used to drive up the stockmarkets in order to create a positive environment for the banks to issue secondary shares and thus raise equity. While this is perfectly understandable, it also means that once the banks have finished selling this stock to the public, or the market is simply exhausted by being soaked in this way, it is likely to go into reverse in a big way.

Technically, the rally in the broad stockmarket looks to be over and there are several important reasons to conclude that this is the case. On the 1-year chart for the S&P500 index we can see that despite the impressive gains, all the market has managed to do is rally from an extremely oversold position to approach its falling 200-day moving average, and so there is no reason thus far to consider that it is anything other than a typical bearmarket rally, albeit a big one. The rally stalled out a couple of weeks ago in the important zone of resistance shown and the index has since been retreating beneath the 200-day moving average, and late last week it started to break down from the uptrend in force from mid-March, a bearish development.


On the 6-month chart we can examine recent action in more detail. On this chart we can see that the breakdown from the uptrend occurred on Thursday, although thus far the break is not big enough to be conclusive, so we could yet see a short-term rally back towards the 920 area, especially as the fast stochastic (not shown) has dropped back to provide the leeway for such a move. However, the trendline break still has bearish implications that are definitely amplified by the growing preponderance of downside volume over the past couple of weeks, as shown by the red volume bars at the bottom of the chart, which has led to the first significant drop in the On-balance Volume line since the uptrend started, another negative sign. In addition a bearish "shooting star" candlestick appeared on Wednesday, when the market attempted to the challenge the early May highs and failed, dropping back to close near the day's low. A top area appears to be forming between the rising 50-day and falling 200-day moving averages, which are rapidly converging. This top area is bounded by the resistance shown and a support level which has become evident in the 880 area, breakdown below which would likely trigger a steep decline.


The abnormal and surreal nature of the recent rally is made starkly clear by the small charts below, prepared by www.chartoftheday.com. Both of these charts go way back to the 1930's and the first of them shows the extraordinary collapse in earnings of the S&P500 companies. The second of them shows that the resulting overall P/E ratio has risen into the stratosphere. These charts are most interesting as they demonstrate that earnings no longer matter to investors - all it takes to make the market go up these days is hope, TV commentators talking the market up - and a big dollop of TARP money. This is what is commonly known as a disconnect from reality. One thing is for sure - you don't want to be around when the market suddenly realizes that Barack Obama is not going to be able to wave a magic wand and make everything right, even with the benefit of creating trillions of dollars out of thin air to bid everything up. All this manufactured money had better create a recovery soon or the market is likely to implode. However, recovery is unlikely for, as we know, the banks are jealously hoarding their government granted largesse, and even if they made the funds available to the wider world, companies and individuals are so lamed by debt and fearful that they are in no mood to borrow, no matter how low the interest rate. So let's put 2 and 2 together - the stockmarket rallies hugely to discount recovery, but the recovery never materialises. Well, what a shame - it's an awful long way down from here.



Some market observers have been making comments in the recent past to the effect that leveraged ETFs are a scam designed to sluice money from retail investors into the pockets of professionals. While we would concur with this it shouldn't really be surprising, as to the extent that they are a scam they are simply following the rich tradition of many Wall St financial instruments, and compared to sub-prime mortgages, for example, they are a "mom and pop" operation as many European banks and financial institutions still smarting from immense losses will attest. This is not to say that you can't make good money out of them at times - in the same way that an experienced gambler may enter a casino in Las Vegas with a fair chance of coming out richer, but knowing that whatever his fortunes, the house will always win. Right now there are some bear ETFs which have been driven down almost to zero by the big market rally that look set to do really well if the market heads south soon as expected, even taking into account the eroding time value of option elements comprising them and the suspected tendency of the management of these funds to use them as ATMs.

On www.clivemaund.com we will be looking very soon at the associated effect on the dollar and the Treasury market of a reversal in the broad market and also at the likely impact of all this on prices of Precious Metals and oil and on resource stocks. We called the big rally in copper back in February before it began, and called the big rally in oil almost at its inception, and then more recently for copper to enter a trading range and oil to continue higher, which is what happened, and finally called the latest rally in gold and silver, although they were expected to perform better than they have on the recent dollar weakness. A big issue that we will address soon is whether gold and silver can break out shortly to new highs or whether they will get caught up in another downwave of deleveraging.

http://www.safehaven.com/article-13414.htm

Financial Crisis Inquiry Commission:

Financial Crisis Inquiry Commission:

By Barry Ritholtz -
May 24th, 2009, 8:45AM

This is weird: On Wednesday, May 20, (Recall Why TARP Funds Were Necessary) I wrote the following:

“Lastly, I would like to see a bi-partisan, Blue Ribbon panel put together analyzing why this occurred. Put an Elizabeth Warren or a Paul Volcker in charge, and give them 6 months to create a comprehension assessment of what went wrong, along with recommendations on how to fix it.”

That night, I read in the NYT The Caucus:

“President Obama on Wednesday signed legislation aimed at curbing financial fraud in the mortgage and other industries, including a provision that created an independent panel to investigate the root causes of the nation’s economic downturn.“ http://tinyurl.com/oqa2ec

That was obviously in the works for a long time . . . but the coincidental timing was sure funny.

Now, let us see who gets put on this panel, and who chairs it.

Commission Legislation:

SEC. 5. FINANCIAL CRISIS INQUIRY COMMISSION.
(a) Establishment Of Commission.—There is established in the legislative branch the Financial Crisis Inquiry Commission (in this section referred to as the “Commission”) to examine the causes, domestic and global, of the current financial and economic crisis in the United States.

(b) Composition Of The Commission.—

(1) MEMBERS.—The Commission shall be composed of 10 members, of whom—

(A) 3 members shall be appointed by the majority leader of the Senate, in consultation with relevant Committees;

(B) 3 members shall be appointed by the Speaker of the House of Representatives, in consultation with relevant Committees;

(C) 2 members shall be appointed by the minority leader of the Senate, in consultation with relevant Committees; and

(D) 2 members shall be appointed by the minority leader of the House of Representatives, in consultation with relevant Committees.

(2) QUALIFICATIONS; LIMITATION.—

(A) IN GENERAL.—It is the sense of the Congress that individuals appointed to the Commission should be prominent United States citizens with national recognition and significant depth of experience in such fields as banking, regulation of markets, taxation, finance, economics, consumer protection, and housing.

(B) LIMITATION.—No person who is a member of Congress or an officer or employee of the Federal Government or any State or local government may serve as a member of the Commission.

(3) CHAIRPERSON; VICE CHAIRPERSON.—

(A) IN GENERAL.—Subject to the requirements of subparagraph (B), the Chairperson of the Commission shall be selected jointly by the Majority Leader of the Senate and the Speaker of the House of Representatives, and the Vice Chairperson shall be selected jointly by the Minority Leader of the Senate and the Minority Leader of the House of Representatives.

(B) POLITICAL PARTY AFFILIATION.—The Chairperson and Vice Chairperson of the Commission may not be from the same political party.

Source:
SEC. 5. FINANCIAL CRISIS INQUIRY COMMISSION
http://thomas.loc.gov/home/gpoxmlc111/s386_eah.xml

http://www.ritholtz.com/blog/2009/05/financial-crisis-inquiry-commission/#more-27357

Letter to head of IRS:

Letter to head of IRS:

From the Dean of the Massachusetts School of Law.....

Friday, May 22, 2009

Letter to Douglas Shulman

May 22, 2009
Via Telecopier and Federal Express

The Honorable Douglas Shulman
Commissioner, Internal Revenue Service
1111 Constitution Avenue, N.W.
Department of Treasury
Washington, DC 20224

Dear Commissioner Shulman:

I do not know whether you are aware that in July of 2004, in the midst of Harry Markopolos’ revelations to the SEC that Bernard Madoff was operating a Ponzi scheme, the Internal Revenue Service placed its imprimatur on Madoff by approving his company as a non-bank custodian for IRAs. I am writing to request that you inquire into, inform me, and make public how this happened.

As you may know, when it enacted the Employment Retirement Income Security Act of 1974, Congress was deeply concerned over the safety of citizens’ retirement savings. It wished to insure that those who “participate in [retirement] plans actually receive benefits.” To insure that Americans’ retirement monies were safeguarded, Congress put the IRS in charge of insuring that fiduciary standards were met by custodians of retirement plans, IRAs and similar monies. Congress felt the IRS had previously done well in overseeing fiduciary standards, and this experience would aid it in future. To assist the IRS in doing this job in future, Congress authorized appropriations of 70 million dollars per year.

Congress further provided that the IRS could authorize non banks to be the custodian of IRAs and similar accounts if the non bank provided “substantial evidence” that “the way in which he will administer” accounts will be “within accepted rules of fiduciary conduct with respect to the handling of other people’s money.”

To carry out Congress’ intent, the IRS has regulations requiring that, to be an approved non-bank custodian of IRAs, a company has to have a separate trust department; the assets of different accounts cannot be commingled; continuity of the company has to be insured by diversified ownership under which no one individual can own more than fifty percent of its shares; the company has to keep customers’ assets in a vault; and the company’s fiduciary records have to be kept separate from other records. The IRS also ruled that, in order to carry out its function of safeguarding the owners of IRAs, pension funds and similar monies, it has a right to inspect the books and records of any company that wishes to become or already is an approved non-bank custodian.

Despite Congress’ intent that it safeguard retirement monies, and despite its own regulations, in 2004 the IRS approved Madoff as a non-bank custodian of IRAs even though he was fraudulently stealing retirement monies from IRAs and even though he was in violation of the IRS’ own regulations. Among the violations of the IRS’ regulations were these: Madoff had no separate trust department. One man, Bernard Madoff, owned 90 to 100 percent of the company rather than less than fifty percent.

(The Trustee, Irving Picard, has said in a complaint that Bernard Madoff’s company was “wholly owned” by him.) There was no vault -- and an inspection would have shown there also were no securities to put in a vault. All the customers’ assets were commingled since Madoff stole them all for his own use instead of keeping securities in separate accounts.

And had the IRS done its job, it also would have learned that, for at least fifteen years or so, Madoff had previously operated as a non-approved non-bank custodian for tens or scores of IRAs and as a non-approved non-bank subcustodian for hundreds of others. These discoveries would have necessarily caused the IRS to uncover and blow the whistle on Madoff’s fraudulent conduct instead of approving him as a non-bank custodian of IRAs in 2004.

The question which arises, of course, is how did this occur. How did the IRS come to approve Madoff in 2004? Did it conduct no investigation, but simply rubber stamp his application to be a non-bank custodian? Were there bribes or other criminal conduct involved? Was the IRS influenced somehow or other by the SEC. It seems inconceivable that the IRS could have approved Madoff. Yet it did. How did this happen?

As said, I request that you conduct an investigation of this, let me know the answer(s), and make the answer(s) public. It is no trifling matter when the Internal Revenue Service seems to have abetted the largest fraud in history by approving Madoff to be a non-bank custodian of retirement monies. It is no trifling matter when the IRS did this in violation of the intent of Congress and its own regulations. Those who lost money, the Congress, and the entire country have a right to be told the answer(s) to the question of how did this awful thing happen.

Sincerely yours,
Lawrence R. Velvel

http://velvelonnationalaffairs.blogspot.com/2009/05/letter-to-douglas-shulman.html

The Darkest Balance Sheet in Financial History:

The Darkest Balance Sheet in Financial History:
MyBudget360.com
May 21, 2009

The U.S. Treasury and the Federal Reserve have arguably two of the least transparent balance sheets known to humankind. This wouldn’t be such a big issue if the amount of money funneled into these organizations was small. That is not the case.

The Federal Reserve since October of 2008 has held on its balance sheet over $2 trillion in reserve bank credit and also, Federal Reserve Holdings of U.S. Treasuries. This of course is the biggest bait in switch in history because in exchange for U.S. Treasuries, banks can offload practically any collateral (i.e., mortgages, auto loans, credit card loans, etc). The U.S. Treasury and Federal Reserve are creating the biggest put option in the history of the world and the American taxpayer stands to lose big.

Let us take a look at the Fed’s balance sheet:



The Fed doubled its balance sheet in the matter of a few weeks. It went from approximately $900 billion to $1.8 trillion in lightning speed. And with this speed, the public unfortunately did not know what they were exactly buying into. It is important to take a look at the Federal Reserve balance sheet broken down by category:



Now I’ve highlighted a few of the areas that have seen explosive growth over the past few months. Many are not aware that the Fed already has $367 billion in mortgage-backed securities on its books. That is an enormous amount. Also, the Term auction credit which was designed to be short-term is staying absurdly high at $455 billion. We have “other loans” of $102 billion. We need more clarity beyond this. The public isn’t shown exactly how these securities look. There is a big difference between a 30-year fixed MBS and an Alt-A packet that contains questionable mortgages. These are things we do not know but are fully backing up with the full faith of the American taxpayer. The Commercial Paper Funding Facility backstopped a large portion of the money market accounts when they broke the buck last year. These are not assured either but here we are with $242 billion sitting on the balance sheet. What is the quality here?

The Maiden Lane facility, is the holding company that was created when the Fed brokered the JP Morgan and Bear Stearns deal. The Fed expects to lose $2 to $6 billion on this deal. The other Maiden Lane holding companies are setup to bailout uber financial failure AIG. Do these sound like quality assets to you?

There are petitions and now, a realistic push to open up the books at the Federal Reserve. After all, if we are being asked to bail these institutions out we have a right to know what kind of collateral we are receiving. It is not typical for the Fed to be taking on so much onto their balance sheet. But they are. The bet they are taking is that this thing will blow over and Recovery 2nd half 2.0 is going to take hold. Yet that put option is being squarely put on the shoulders of the American people. We are already going to lose money but the question is how much? Take a look at Fannie Mae and Freddie Mac. They went into conservatorship last year and we were initially told it would cost upwards of $25 billion in the worst case scenario. Recent estimates now put it at $177 billion.

The Fed balance sheet has exploded:



This is where things get fascinating. What is really in those other assets category? That is the question many now in Congress are trying to get at. But the Federal Reserve has the darkest balance sheet of any organization in the world. They tell the public enough and convolute things enough where people are snowed over. How can we not demand to know what is in that $2.1+ trillion balance sheet? They only have that because the public has allowed it. They give categories names such as Maiden Lane which sounds much better than garbage can holders for Bear Stearns and AIG.

And recovery 2.0 is not assured. The unemployment claims remain at record highs and as we have stated, with nearly 25,000,000 Americans unemployed or underemployed things are not going to turn quickly. For example, Californians just voted down propositions that would increase taxes to fund state programs. The vote was rather astounding. So now, the biggest state in the nation is gearing up for major cuts. This will push up unemployment. GM is next up on the chopping block and that will produce more job losses in the summer. Ultimately there has to be a convergence between main street and what is occurring in the stock market. The recent rally has benefitted financial companies the most but the public is still largely left to see very little benefit even though we are now approaching the 2nd year anniversary of this crisis.

The U.S. Treasury and Federal Reserve are pushing things and the public is demonstrating a fatigue. They do what they think they know best and that is banking and they are protecting their own. Let us put this in perspective. California with the propositions was looking to increase revenues and taxes by $6 to $10 billion. A total uproar. The Fed just lists on one of its line items “other assets” and it is up to $100+ billion? Do people really not see what is going on? We need to follow the money and the U.S. Treasury and Federal Reserve have it all.

http://www.mybudget360.com/us-treasury-and-federal-reserve-federal-reserve-holding-over-2-trillion-in-the-darkest-balance-sheet-in-financial-history/

Housing's Big Picture Isn't Pretty:

Housing's Big Picture Isn't Pretty:
By Peter Schiff

Euro Pacific Capital, Inc.
Friday, 22 May 2009

While economists and real estate investors "celebrate" the slight deceleration in the pace of home price declines in the recent data, a quick look at home price trajectories over the past 100 and 50 years reveals little to cheer about and much to be feared.

More significant than small month-to-month changes is the flow of home price patterns over decades. In his book Irrational Exuberance, Robert Shiller determined that in the 100 years between 1900 and 2000, home prices in the U.S. increased by an average of about 3.4% per year. These figures have not been adjusted for inflation. If they had, home prices would have outpaced inflation by only the slimmest of margins.

This 100-year period includes the Great Depression, when home prices sank significantly, and it also involves decades in which our current home mortgage infrastructure simply did not exist. The second half of the century, with its baby boom, heightened inflation, suburban expansion and institutionalized mortgage apparatus, was much kinder to home prices. Even so, in the 50 boom years between 1950 and 2000, home prices increased an average of 4.4% per year. Even this pace barely beat inflation.

By all accounts, the home price boom that began in late 1997 (when the high of the previous 1989 peak was finally eclipsed) and topped out in June 2006 was extraordinary. The Case-Shiller 10-City Index, an amalgam of the home price trends in 10 of the largest U.S. cities, gained on average 19.4% per year during that time. The movements had very little to do with market fundamentals and everything to do with distortive government policies, a national mania for real estate wealth and a torrent of temporarily easy credit.

If we assume that the bubble was artificial, we can instead imagine that home prices should have followed the more typical path during that time. When you do these extrapolations, a very sobering picture emerges.

Continued below....

http://www.thestreet.com/story/10503387/2/schiff-housings-big-picture-isnt-pretty.html

Ladies and Gentlemen: the US Is Insolvent:

Ladies and Gentlemen: the US Is Insolvent:

Posted by Jesse at 7:39 PM
23 May 2009

"We are out of money." Barack Obama May 23, 2009

Obama openly says what anyone with common sense has known for quite some time: the US is broke, and will not be able to honor its financial and fiduciary obligations.

The question remains how the US restructures that debt and how big a haircut the debt holders will take.

20%? 30%? More like upwards of 50% at least in real terms.

And who are these debt holders?

Anyone who hold Treasury debt obligations and financial assets, from the Long Bond to the US Dollar, and assets guaranteed by the Federal Reserve and the Treasury.

Technically the debt will be serviced and the interest paid according to the terms of the agreements, with devalued US dollars.

The process will continue until the debt is restructured and the dollar is replaced with a new dollar. This may take some years.

But we are now in the endgame.

The Incontrovertible Truth About Debt, Deleveraging, Devaluation and Recovery:
http://tinyurl.com/ocanla

Why the US Has Gone Broke - Chalmers Johnson:
http://tinyurl.com/pdhzyq

Marc Faber Sees Bankruptcy for the US:
http://tinyurl.com/qxw9lc

In 2009 the US Will Be Forced to Selectively Default and Devalue Its Debt:
http://tinyurl.com/6bq6ue

A Credit Bubble of Historic Proportion:
http://tinyurl.com/qtdyal

Shhhhhh.... Here is a Secret Worth Remembering:
http://tinyurl.com/3p2e5k

Didn't you just know they would spill it over a long holiday weekend?

Don't be too concerned, there will be more spin and denials after this trial balloon has been floated, and life will go on.

"Oh, that's not what Obama meant. He means we have a problem but there are the means and the time to address and repair it before it becomes too great."

People have an enormous capacity for delusion bordering on selective amnesia. Go back and read the posts on this blog starting in September 2008. Then reflect on what has been said recently on Wall Street and you will see what we mean.

We are now in the endgame of an historic credit bubble that will result in a currency crisis of epic proportions.

*****************************************************************

DrudgeReport
'WE'RE OUT OF MONEY'
Sat May 23 2009 10:32:18 ET

In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.

So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.

So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything"...
http://www.drudgereport.com/flashocs.htm

Posted by Jesse at 7:39 PM

http://jessescrossroadscafe.blogspot.com/2009/05/obama-we-are-out-of-money.html

Welcome! to Stock-Market-Lessons.com

www.stock-market-lessons.com

Learning how to trade the Stock Market is without a doubt the best thing that's ever happened to me. Not only in terms of making a good living at it (and allowing me to work at home), but also in the way it keeps me tuned into what's going on in the world.

I'm fifty-three years old and I'm not worried about getting Alzheimer's, because trading the Market is the best brain stimulation exercise regimen I've found yet. This is not easy money. It takes a lot of hard work and many hours a day to study what you need to know in order to be successful.

Over the last fifteen years I've taught myself how to read charts using Technical Analysis, and I've found that charts can actually let you know what's about to happen next.

Charts can give very clear Buy and Sell Signals. But even a master chart technician must know what's going on in the world every day by staying on top of the most recent news. That's why I watch the Stock Market news channel CNBC eight hours a day, five days a week. You must also have a solid understanding of the Fundamental Analysis of each company you trade.

To prove to you the kind of money you can make Day Trading, here are a few examples of real Day Trades I have done recently. I put $21,000. to work when I bought 2000 shares of TSO and made $280. in just three minutes!



Here is another example of a ten minute Day Trade that made $300.00



Here is another example of a seventeen minute Day Trade that made $300.00

Here is another example of an eight minute Day Trade that also made $280.00



This Day Trade took thirty five minutes and made $150.00



You don't need a lot of money to begin trading using my strategy. I can show you how to select good stocks that are less expensive, and that way you can buy a lot more shares and still benefit from smaller moves in share price.

In order to be a successful trader of the Stock Market, you must do all of these things:

1) Keep up with the latest news on the financial markets around the world. That includes know when each report on the Economic Calendar comes out, and which one carry more weight in their ability to move the Market.

2) Know exactly what is going on with the stocks you trade by knowing the Fundamental Analysis of each company you follow.

3) Learn to read and understand charts of each company you trade using Technical Analysis. One thing I've learned is Charts Don't Lie. They don't have emotions. Learn what the chart is telling you, and don't let your emotions get in the way of taking the appropriate action the chart is telling you to take.

When I first started trading, I didn't know anything about the Technical Analysis of Stock Market charts. I had spent a few years watching the live streaming charts that came with my Scottrade account that didn't have any Technical Indicators on them. I was getting pretty good at guessing what would happen next just by observing the patterns I saw develop day after day.

My wife had been trading the Market for many years before I met her, and she told me I needed to learn how to read Chart Patterns.

I found a few websites that offered lessons on the subject, and this one became one of my favorites: www.stockcharts.com

From this website, I learned all about Chart Patterns and all of the Technical Indicators I now use on my charts.

Only after I understood Technical Indicators did I begin to understand why a Chart Pattern would fail to yield the expected result at times. It was because the Technical Indicators said that the Price Per Share (PPS) had moved all it could, and it had met a resistance level.

Once I combined Chart Patterns and Technical Analysis into the reading of a chart I began to have much more consistent success in my trading abilities. It has taken many years of study to get to this point. I started by learning one Technical Indicator at a time until I knew it worked well, and then I would move onto the next one.

Let me give you a little hint here. After learning all about Chart Patterns, one of the first Technical Indicators you should learn is Bollinger Bands. It was the very last one I learned, and it is without a doubt one of the most important ones that I know of. I could have saved myself a lot of pain and suffering, not to mention avoid quite a few trades that didn't go well if I had known all about Bollinger Bands in the beginning of my trading career.

Here are a few examples of the different types of charts I use for doing Technical Analysis. I use different styles of charts because they each have a slightly different look and feel to them, even though the information they give is usually very similar.

There are just a few Technical Indicators necessary for my Day Trading strategy to work. The Commodity Channel Index (CCI) gives very clear and accurate Buy and Sell Signals, and I use Stochastics (STO) to confirm them. Bollinger Bands are also very important in my strategy, and Volume is too. The last two Indicators I use are the 5 Simple Moving Average (5-SMA) and the 15 Simple Moving Average (15-SMA) which also give good Buy or Sell Signals.

The chart of TSO below shows how I setup my charts for Day Trading. I also use three extra Technical Indicators known as the Money Indicators. They basically show if there are more Buyers or Sellers. The dark green one at the top is Chaikin Money Flow (CMF), the yellow line is On Balance Volume (OBV), and the light blue one is the Accumulation/Distribution (A/D) line.

In order for my strategy to work, you don't really need to learn these three additional Technical Indicators. It works fine without them, but if you want to learn how to use them that's okay too. That is an advanced lesson I teach after you have mastered the CCI, Stochastics, Bollinger Bands, and the two Moving Averages.



Here is what the charts from stockcharts.com look like. I use this type of chart after the Market has closed for the day. I primarily use this charting service for daily and weekly charts.



This is a chart from my Fidelity Active Trader Pro trading platform. These are the kinds of charts that I use while the Market is open because their information is streaming in real-time. With these charts, I can get one-minute, five-minute, fifteen-minute, thirty-minute, hourly, daily, weekly, and monthly charts. This is how I set up my charts when I Swing Trade. I use many more Technical Indicators when analyzing longer term charts like the hourly, daily, and weekly charts for Swing Trading.



Here is a screenshot of my four monitor trading platform. I combine elements of the Scottrader and the Fidelity Active Trader Pro platforms.



If you are interested in taking lessons on these subjects, I offer private one-on-one mentoring sessions custom designed for each student according to what subjects interest them. If you have any questions about the lessons I offer, don't hesitate to email me at:

info@stock-market-lessons.com

Day Trading is my favorite style of trading. It is a very exiting and lucrative way to trade. If you watch the Video Charts of my Day Trades, you will see exactly how it's done and you will feel the excitement of watching me make hundreds of dollars in less than fifteen minutes.

I also am very proficient at Swing Trading. Most of my Swing Trades only last a few days at most. Each one makes me at least a thousand dollars or more because I always buy at least one thousand shares, and when the PPS goes up one dollar, I've made one thousand dollars.

If the trade doesn't go well, the most important rule in trading the Stock Market is to KEEP YOUR LOSSES TO AN ABSOLUTE MINIMUM! The way I trade is that I know exactly at what price I will exit the trade if it isn't going well. I enter my trades as close to the exit point as possible. My favorite entry is at the second low of a double-bottom chart pattern. That way, if the Price Per Share breaks below the first low, I'm out without a doubt.

The most important rule to trading the Stock Market is CAPITAL PRESERVATION, because without money to trade with, you won't be able to LIVE TO TRADE ANOTHER DAY...

Happy Trading!
Tom