The Kirk Report

Bear Market Blues Posted: 16 Oct 2008 10:20 AM CDT Philly report creams stocks Factory funk! Our economy according to the latest Beige Book All this talk about recession is depressing Shoppers to constrain holiday spending Tough times in Las Vegas Buckle up - we haven't reached bottom yet! The collective view is that the recession will be mild by historic standards Survey shows more money managers believe global economy is in recession 5 interesting observations Buffett's best friend predicts 9% unemployment "I'm as sick of writing about financial problems as you are reading about them. But, as your mother probably said, just sit still and take the medicine. It's good for you." - John Crudele US hedge funds suffer heavy withdrawals Investors flee mutual funds for cash Panics and bubbles have a lot in common Everyone is scouring through old chart patterns for trading tells "If we see a breach on the S&P 500 of 912.75—Monday's low—that would be extremely disappointing. We'll start moving back into cash at that point." - Jerry Slusiewicz Aw, do we have to test the lows? "Friday was certainly a great opportunity, but you'll get other opportunities. I'd rather be a little late to make sure a trend is good." - Mr. Thomas Nyheim Bulls, Bears, Donkeys & Elephants Republicans, Democrats, and Stock Returns Democrats plan stimulus package Government efforts to heal the credit markets are having unintended consequences Questions are arising about what will happen to all of that troubled mortgage-backed debt SEC eases ruling to lift banks AIG lobbies to relax oversight rules FDIC's Bair criticizes government's rescue plan Dimon on the government's bailout moves Wall Street is a small world. Take a look at Paulson's network Financial firms want to suspend or change the rules concerning asset markdowns. S&P Ratings tells why that's a bad idea Paulson lacks leverage to compel banks to put new cash to work Companies are turning to hedge funds to raise cash Pimco tapped to manage Fed's CPFF Wall Street skid prompts calls for interest-rate swap guarantee How the bailout auction should work The Feds' next step after saving the banks Funny, but true - how the government is trying to restore confidence to the system Why Main Street should care about Wall Street Another $9.5 billion down the drain! And $13 billion more! Maybe Uncle Sam will "rescue" Citadel 10 people who predicted the financial meltdown SmartMoney's Power 30 Attention all gurus - if you ever make a forecast always be gloomy and vague "Investors are realizing that the economy is going down, and it may take some time to turn it around. The stock market trends clearly Bearish, it seems too early to initiate Bullish bets. Sometimes the best offense is a strong defense. Focus on capital preservation." - Robert W. Colby According to David Penn, swing traders should sit this out After last week, the bloggers turned very bullish! Corporate insiders are still bullish However, why are companies now taking a pass on buybacks? "Based on the outstanding float and yesterday's closing prices, that $700 billion could buy outright a total of 222 of the smallest firms in the S&P. Or, they could afford to buy a 10% stake in every single company in the index. Now that'd light a fire under the markets." - Jason Goepfert Mortgage rates spike - biggest jump since 1987! There's no quick fix for housing prices "Until home prices stabilize we expect higher losses in the home equity portfolio. If prices continue to fall, more of these loans will become worth almost as much as the underlying houses. That may increase the chances that homeowners will walk away from their properties and stop re-paying their loans." - CFO Howard Atkins, Wells Fargo Home prices seem far from bottom Peter Schiff tells Americans to stop paying their mortgage "If you played by the sensible financial rules all your life, saved money, invested most of it in mutual funds now find that the government has taxed you over a trillion dollars to bailout institutions of immense former wealth, whose top employees have prospered outrageously. Now you may end of giving more of it to neighbors who bought houses they couldn't afford and mortgage companies that were contemptibly greedy. You can also expect to be bailing out some lost cause state and local government or quasi-governmental agencies. Finally, after the markets have been successively devastated by each new round of bailouts your residual portfolio will be subject to the ravages of a bout of inflation that makes the 70s look tame. There will then be no bailout for you." - Jeff Norma Coldwell tries 10-day housing sale Very interesting - historical sector weights of the S&P 500 The impact of the financial crisis on some of the most basic industries Are new sector leaders emerging? The hunt for green October Liquidity troubles & volatility bedevil currency markets European stocks fall on economy concern Switzerland to the rescue! Is China the dumb money or the smart money? Pakistan turns to China's deep reserves Brics to the rescue? Oil falls below $75 a barrel Healthcare investors fret over the election Can infrastructure projects ease the recession? "In my mind, any company involved with the production of the SR-71 Blackbird spy plane should carry a permanent buy rating." - Sam Patel Pop Quiz! Can you name any of the top five best performing stocks in the S&P 500 over the past three months? Screening for hedge fund liquidations Marty Whitman's value stocks Stock bargains the pros like now StockScouter's top investment ideas TheStreet.com's top 5 all-around picks Nothing but a sea of red on the scoreboard of gurus How to find conservative & prudent banks "Figure out what you are good at, stick to it and eliminate/minimize the other bets in your portfolio." - Cam Hui Thoughts about breaking trading slumps The Stock Bandit shares 4 trading goals How is an investor to know how long earnings growth can last? An easy way to gauge this is by calculating the company's sustainable growth rate Basic truths about portfolio management Kevin Matras on covered call writing Three things you need to know about options expiration Does the weather affect stock market volatility? How to track stocks in Google Spreadsheets Backtesting isn't just about evaluation a trading system Want to keeping track of money flow? Here's the TrimTabs press release RSS feed "Limiting losses in tough times is perhaps the single most important requirement for achieving long-term capital growth." - William Nygren An new ETF with an infrastructure twist 5 questions for Ted Aronson For investors, the short-term horizon has gotten longer A decent question - Why are the biggest 2010 target-date funds down an average 22% this year, with just a few months to go before their investors theoretically retire? Mutual funds that defy market meltdown Quicken Online is finally free Smart financial moves for a down economy 78 ways for small business to save money in this economy Don't forget to donate your old computer hardware to those who can use it Very interesting! Glassbooth connects you to the 2008 presidential candidate that represents your beliefs the best Gordon Gekko is coming back! "Do not pray for easy lives. Pray to be stronger men." - John F. Kennedy

Hope The Lows Will Hold Posted: 16 Oct 2008 07:59 AM CDT Good morning. Investors are hoping that last week's lows are going to hold and premarket futures are pointing to a positive open. A large batch of earnings reports (see MER, C, & NOK, UNH, BAX, UTX, EBAY), a better than expected CPI reading and falling jobless claims have set the positive tone in addition to rumors that we're going to see more global rate cuts and more interventions sooner rather than later. The credit markets are showing further signs of improvement and oil prices remain under heavy pressure and are set to test the low $70s in today's trade. Premarket gainers: DFR, BTU, CNTF, SIGM, CCK, UAUA, SPWRA, STLD, CAL, NOK, CS, UBS, PCX, LVS, CHTR, ACI, MEE, IFX, UBS, UNH, AU, ABK, PCX, IPI, CAR, BLK, GPS, & TRN. Premarket losers: CEGE, CIT, AIG, EBAY, HOG, PUK, BCS, HLX, TTM, VSH, TLM, RRI, ACGY, GSS, & FLEX. Much like yesterday, we have a number of economic reports due out including Treasury International Capital (9:AM), Industrial Production (9:15AM), Philadelphia Fed Survey (10:35AM), EIA Petroleum Status Report (10:35AM), and the Housing Market Index (1:PM). Fed members Gary Stern and Eric Rosengren will also be giving speeches. Beyond today's data and Fedspeak, rumors of more hedge fund failures and forced liquidations are going to make the rounds and frankly many believe were the source of yesterday's nasty sell off. So, on one hand you have a great deal of hope that the lows we set last week will hold while at the same time you have forced liquidations and continued volatility that will scare even the most battle-hardened trader. I personally would like to see the market break last week's lows and clear out all hope and trap the bottom callers which were out in full force last week so we can set up for another rally once those people throw in the towel, but what I want and what the market will do is probably an entirely different thing. The best we can do is to simply listen to the market itself, put our expectations and hopes aside, preserve capital and stay focused amid some very challenging conditions. I know that's easier said than done, but that's the only game plan that will work for this market. Go make it a great day!

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