The Kirk Report

Ebb & Flow Posted: 13 Oct 2008 11:33 AM CDT Stocks soar on rescue plans The Fed and others flood financial markets with dollars European leaders agree to bank rescue plan Who has faith in the regulators? U.S. bailout is vulnerable to widescale conflicts of interest "The U.S. will lose its status as the superpower of the global financial system." - Peer Steinbruck Has the United States defaulted on its debt? Unearthing the overall credit profile of the U.S. equity market "By refusing to allow market forces to work their cure, our economy will inevitably die from the disease. Our economy will now face death by hyperinflation, which will cause a complete loss of confidence in the dollar and result in prices and interest rates skyrocketing out of sight." - Peter Schiff The world may be heading for its worst recession in a quarter of a century - if it's lucky! What comes after the Great Unwinding? What to watch for in the Recession Some suggestions as to how to fix this mess George Soros offers his thoughts on how to capitalise the banks and save finance Jim Rogers speaks with Bloomberg TV Central Banks should go long! How this bear compares A long-term look at the Dow "The last three major downturns all bottomed in the second week of October -- the tech crash of 2002, 1998's decline and the 1990 downturn that came after Iraq invaded Kuweit." - Douglas Porter The market's silver linings Finding a few bright spots in the gloom Got cash? This could end up being one of history's quintessential buying opportunities! Jeffrey Saut's weekly perspective offers food for thought "The fact is, there are a lot of tremendous bargains out there." - Ken Heebner Veteran advisers think this will pass...eventually The Cuckoo's Nest Get Real or Go Home! What might be the level of the S&P 500 that represents businessman's risk for 2009? "By all means, trade the bounces and wring out every penny of profit you can. But please remember my Main Street friends and don't be fooled by the revitalized bottom-callers. In the real world, "V"-bottom recoveries after market crashes are like Santa Claus and the Easter Bunny. They're true only the minds of children, and whoever's left in the Wall Street cheerleading crowd." - Alan Farley This time HAS been different Extremely oversold across the board Another month, another rogue trader to blame Easy come, as easy goes at Harbinger Capital The rise of the machines! Further loan to AIG shows Fed miscalculated risks Traders' worst fears realised at Lehmans auction Defense industry worries about cutbacks Gulf countries unveil measures to back banks China backs U.S. Bailouts Will Asian financial centers overtake Wall Street? Insider buying? Executives get hit with margin calls Sovereign-wealth funds hoard cash as markets plunge Small businesses get squeezed in credit crunch First into recession, California shows possible future for U.S. Mortgage crisis has turned homeownership upside down With mortgage money harder to get, sellers provide financing Tighter credit card limits add to woes Americans' charge-it culture is getting an overdue reality check. But will the new discipline stick? Wall Street gives up on bull market excess, except in just one area Tech companies feel bite as corporations slash spending Commodities crash! Commodity traders turn to exchanges to curb counterparty risk Here's some good news - the average price of gas in U.S. plunges A nice commodity snapshot Buffett's most unique investment The 10 top female fund managers on earth Follow the money! Private equity's loan danger It's a bull market for many small community banks Despite the turmoil, insurance companies appear to be safe GM & Ford rally on reports of industry merger talks Time for the Templeton Trade? This week's earnings preview Companies that are ready for rainy days Barron's highlights six tech stocks flush with cash Stocks rich people own TickerSense provides some big volume movers "The market is a losing game, meaning that all trades are placed with the attitude that they will be right, but with the knowledge that they are wrong until proven otherwise.  Trades need to prove themselves within a time stop as well as a price stop to be held and considered 'right.'" - Lucas Gap opens and their tendency to pull back Are you overfeeding on information? True - the less control a person feels, the more likely they are to see patterns or make connections that don't exist John Bogle on surviving the bear market A personal bailout plan? Most new car buyers just want a fair deal. This website can help you know what others have paid Paul Krugman wins Nobel Economics Prize "Reflect on your present blessings, of which every man has many; not on your past misfortunes, of which all men have some." - Charles Dickens

Columbus Day Posted: 13 Oct 2008 08:15 AM CDT Good morning. Markets are in rally mode following new efforts by governments around the world to ease the credit crisis. Along with loan guarantees between banks through 2009 and the measure to allow governments to buy stock in distressed financial companies in exchange for unlimited amounts of cash is being viewed as a much needed lifeline for the credit markets. Over the weekend, the FDIC seized two more small banks. In addition, Morgan Stanley and Mitsubishi UFJ have reach a new agreement. In other news, the FASB approved fair-value guidance and a Goldman Sachs analyst, David Kostin, is pounding the table and calling for a year-end rally. Premarket futures indicate a +3% to +5% gap open. Premarket gainers: MS, NCC, ABK, SFI, AIG, UBS, GNW, TMA, GM, F, IBN, AA, GOLD, APWR, ESLR, MTL, CHDX, SPWRA, RMBS, SOLF, UAUA, MT, LDK, BAC, WB, SOV, C, GS, LVS, ABT, MGM, HERO, MICC, STLD, FITB, ACAS, & SOHU. Premarket losers: NWY, RBS, NGPC, MIR, CMS, DYN, TSN, EXPE, PHG, GLNG, & VCLK. Today is Columbus Day and there's nothing on the economic calendar although we do have a number of earnings reports due out both today and the rest of the week as earnings season really picks up speed. At this point, it would actually be nice to see more pessimism and distrust of any bounce, rather than a surge of sudden optimism and bottom calling but if you are currently long the market to any extent after last week, you probably won't care no matter what. Needless to say, a bounce is only the first step to recovery. Ultimately, we need the market to enter a period of healing backed by a significant improvement in the credit markets in order to form a meaningful bottom that has the potential to last longer than just a few trading days. We're certainly oversold enough to see a double-digit percentage bounce this week, but like usual let's take it one day at a time and let the market itself prove that last week's selling was overdone.

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