Courtesy of Chris Fernandez of Peakstocks
Today is a day to give thanks. I know it’s a little early for Thanksgiving, but I’m talking about being thankful to Uncle Sam and the U.S. government for the bountiful opportunity they have given us to make huge loads of money in a relatively short amount of time. I’m talking about shorting U.S. debt via 2 specific, but very risky vehicles:
Ultrashort Lehman 20+Year Treasury Proshares (NYSE: TBT)
Direxion Daily 30 Year Treasury Bear 3X Shares (NYSE: TMV)
Since the collapse of the yield curve late last year when people were panicked in the market such that they were willing to take NEGATIVE returns on their money via U.S. Treasuries to ensure some type of safety, things are starting to normalize now, and in fact swing the other way.
This has given us one of the biggest opportunities in the last 50 years to take advantage of a punch drunk bumbling and stumbling government spending itself into possible oblivion.
A little harsh you say?
Perhaps, and I’m not one to judge, but I am certain of one thing: As Warren Buffett recently stated, the bubble in U.S. Treasuries is one of the largest of all time, even bigger than the housing bubble that we just witnessed collapse.
In fact, Buffett highlighted the sale in late 2008 by Berkshire Hathaway of a Treasury bill for a negative yield.
Buffett wrote in Berkshire’s annual letter in February that when “the financial history of this decade is written…the Treasury-bond bubble of late 2008″ may rank up there with the housing bubble of the early to middle part of the decade.
What The Heck Are You Talking About?
For those that are uninitiated, I’ll break it down in simple terms:
The U.S. government is printing money.
They are doing this to help stave off an apparent collapse in the banking sector, add liquidity to the market, AND prop up the U.S. economy with various stimulus packages.
How do you come up with money that you don’t have?
You borrow.
So how does the U.S. government borrow?
They issue Treasuries dated in different maturities ranging from 1-30 years.
Who buys this debt?
All sorts of folks from around the world, but mostly our neighbors to the East, China, Japan, and other countries.
What terms does the government have to offer them to take on ever increasing amounts of our debt?
Well, not too long ago, those terms were rather modest, and were akin to basically borrowing money for free, with yields going down below 3% for the 30 year notes in late 2008, and far lower yields for shorter maturities, it was a no brainer to take on more debt when being able to pay it back at such favorable terms.
That however, is now changing with Treasuries declining about 20% from those highs, and the yield now over 4% and climbing fast.
What happens when lenders, or buyers, don’t want any more debt?
We have to increase the payout they get for taking on more debt, thus lowering Treasury prices, and increasing the yield, since they work inverse of each other. Full Article
Strong Uptrend
ANGIOTECH PHARMACEUTICALS (NASDAQ ANPI)
Smart Scan Chart Analysis confirms that a strong uptrend is in place and that the market remains positive longer term. Strong Uptrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.
Get A Full FREE Trend Analysis for ANPI Here Sent To Your In-Box
May 27th Angiotech Pharmaceuticals announces FDA approval of next-generation TAXUS(R) Liberte(R) Atom(TM) Stent system Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI, TSX: ANP) today announced that its corporate partner, Boston Scientific Corporation (NYSE: BSX – News) has received approval from the U.S. Food and Drug Administration (FDA) to market its TAXUS® Liberte® Atom(TM) Paclitaxel-Eluting Coronary Stent System, a highly deliverable, next-generation drug-eluting stent (DES) specifically designed for treating small coronary vessels. It was approved for use in vessels as small as 2.25 mm in diameter and joins the TAXUS® Express® Atom(TM) Stent as the only drug-eluting stents approved for small vessel use in the U.S. The Company plans to begin a full U.S. launch of TAXUS Liberte Atom next month.
Trend Analysis is a daily email analysis tool that gives me insight into exactly what my portfolio is doing. This link takes you to get your first symbol analyzed and from there you can easily add more symbols to get a daily update, which I find very helpful. There are only a few quality sites out there that provide FREE high quality trading tools.
(CNNMoney.com) — Stocks gave back early gains Thursday after the government reported a smaller-than-expected rise in new home sales.
The Dow Jones industrial average (INDU) was down 37 points, or 0.5%, about 30 minuets into the session. The S&P 500 (SPX) lost 4 points, or 0.5%. The Nasdaq composite (COMP) slumped 0.9%, giving back 15 points.
Stocks sold off near the close of the previous session as bond yields and mortgage rates spiked, raising concerns that higher borrowing costs could stifle an economic recovery.
Economy: New home sales in April rose 0.3% at a seasonally adjusted annual rate of 352,000 from a revised rate of 351,000 the month before, according to government figures.
But the increase was smaller than expected, and the previous month’s figures were revised sharply lower. Economists surveyed by Briefing.com had expected a sales rate of 360,000. March sales were originally reported at a rate of 356,000.
Earlier, a report on weekly jobless claims showed a larger-than-expected decline, while the monthly report for durable goods orders showed a higher-than-expected increase.
Initial jobless claims fell to 623,00 in the week ended May 23, a decline of 13,000 from the revised figure for the prior week.
Claims were expected to have declined to 628,000, according to a consensus of economist opinion from Briefing.com.
Orders for durable goods jumped 1.9% in April, a larger increase than expected. Orders were expected to have risen 0.5% in April, according to the Briefing.com consensus, compared to a revised decline of 2.1% the prior month.
Bonds: The yield on the benchmark 10-year Treasury note slipped to 3.64% after surging to a 6-month high of 3.71% Wednesday. Bond prices and yields move in opposite directions.
Mortgage rates, which are pegged to Treasury yields,jumped in the most recent week. The average 30-year fixed mortgage rate rose to 5.45% in the week ended Wednesday from 5.24% last week.
Companies: Auto parts supplier Visteon (VSTN, Fortune 500) filed for bankruptcy protection for its U.S. operations. The company, which is a major supplier to Ford (F, Fortune 500), has been hit hard by the sharp decline in demand for cars.
Media powerhouse Time Warner (TWX, Fortune 500) announced that it would separate itself from online service company AOL. Time Warner said that AOL would be spun into a separate publicly traded company.
After the closing bell, personal computer maker Dell (DELL, Fortune 500) is expected to report first-quarter earnings of 23 cents per share, down from 38 cents per share a year ago.
GM (GM, Fortune 500) shares rose after the troubled automaker said major bondholders have accepted a revised deal to swap debt for equity. However, the deal does not mean that the company will avoid filing for bankruptcy, which could happen at the end of this week if certain other restructuring efforts fail.
Other markets: Stocks in Japan finished the session slightly higher. Markets in Hong Kong and China were closed for a holiday. European shares tumbled in midday trading.
In currency trading, the dollar rose versus the euro, but slipped against the yen and the British pound.
NYMEX crude oil for July delivery prices rose 55 cents a barrel to $64.01.
COMEX gold for August delivery rose $6.40 an ounce to $961.60.
Exec. VP, CFO & Asst. Sec’y of GameStop Corp. (GME) David W Carlson buys 25,000 shares of GME on 05/27/2009 at an average price of $22.48 a share.
GameStop Corp. is the world’s largest video game and entertainment software retailer. The company operates 4816 retail stores across the United States and in fifteen countries worldwide. The company also operates two e-commerce sites GameStop.com and EBgames.com and publishes Game Informer? magazine a leading multi-platform video game publication. GameStop Corp. sells new and used video game software hardware and accessories for next generation video game systems from Sony Nintendo and Microsoft. In addition the company sells PC entertainment software related accessories and other merchandise. GameStop Corp. has a market cap of $3.62 billion; its shares were traded at around $22.01 with a P/E ratio of 8.9 and P/S ratio of 0.4. GameStop Corp. had an annual average earning growth of 11.2% over the past 5 years.
(MARKET WIRE)–May 28, 2009 — DryShips Inc. (NasdaqGS:DRYS – News) (the “Company” or “Dryships”), a global provider of marine transportation services for drybulk cargoes and off-shore contract drilling oil services, announced today that it has reached agreement on waiver terms with Deutsche Bank AG, lender and Mandated Lead Arranger on $1.125 billion facility. This facility covers drillships hull numbers 1865 and 1866 currently under construction at Samsung Heavy Industries. This agreement is subject to customary documentation provisions.
George Economou, Chairman and Chief Executive Officer, commented: “We are pleased to have reached this agreement on a very important credit facility for DryShips. We are delivering the waivers as promised and we hope to conclude discussions with the rest of the lenders in the near future.”
About DryShips Inc.
DryShips Inc., based in Greece, is an owner and operator of drybulk carriers that operate worldwide. As of the day of this release, DryShips owns a fleet of 43 drybulk carriers comprising 7 Capesize, 29 Panamax, 2 Supramax and 5 newbuilding Drybulk vessels with a combined deadweight tonnage of over 3.4 million tons, 4 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips Inc.’s common stock is listed on the NASDAQ Global Market where trades under the symbol “DRYS.” Visit our website at www.dryships.com
Jon C. Ogg of 24/7Wallst
In most years, shareholder meetings are not full of much change. This year has been very different in that manner, and SIRIUS XM Radio Inc. (NASDAQ: SIRI) just sealed its share fate on the share count and on a split as it voted to increase the authorized share count and then making an adjustment that would allow for a pending reverse stock split.
Shareholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of common stock from 8,000,000,000 to 9,000,000,000 shares. The group also approved an amendment to SIRIUS’s certificate of incorporation to permit the Board of Directors to do a reverse stock split of its common stock and reduce the number of authorized shares of its common stock. The shareholders approved the long-term incentive plan and shot down a proposal that would put executive pay packages up for a vote. Continue reading
EMC Corp announces acquisition of Configuresoft; not expected to have a material impact to revenue or EPS for the full 2009 fiscal year (EMC) 12.22 +0.20 : Co announces that it has signed a definitive agreement to acquire privately-held Configuresoft, a provider of server configuration, change and compliance management software. The transaction is expected to close in June, subject to customary closing conditions and is not expected to have a material impact to revenue or EPS for the full 2009 fiscal year.
FREE Trend analysis for EMC Here
Trend Analysis is a daily email analysis tool that gives me insight into exactly what my portfolio is doing. This link takes you to get your first symbol analyzed and from there you can easily add more symbols to get a daily update, which I find very helpful. There are only a few quality sites out there that provide FREE high quality trading tools.
$1.25 trillion of quantitive easing hasn’t been enough to keep mortgage rates down. Will the government double down again?
Bloomberg: Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after yesterday for the first time exceeding where they stood before the Federal Reserve announced it would expand purchases to drive down loan rates.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.3 percent as of 10:25 a.m. in New York, the highest since March 10 and up from 3.94 percent on May 20, data compiled by Bloomberg show.
The Fed, seeking to use lower home-loans rates to stem the housing slump and bolster consumers, said March 18 it would increase its planned purchases of so-called agency mortgage bonds by $750 billion, to as much as $1.25 trillion, and start buying government notes. Rising mortgage-bond yields, driven higher in part by climbing Treasury rates, means the Fed now “faces a challenge to its ability to sustain low mortgage rates,” according to Jeffrey Rosenberg at Bank of America Corp.
Here’s a chart of Treasuries from a week or so ago. Now it appears mortgage rates will follow.
From Business Week:
Southwestern Energy (SWN)……………….3,662%
Celgene (CELG)…………………………………..2,607%
XTO Energy (XTO)……………………………….2,088%
Stericycle (SRCL)………………………………..1,503%
Gilead Sciences (GILD)………………………..1,491%
Denbury Resources (DNR)……………………1,271%
FLIR Systems (FLIR)……………………………1,190%
Ventas (VTR)……………………………………….1,127%
Range Resources (RRC)……………………….1,124%
Lab Corp of America (LH)…………………….1,107%
Quest Diagnostics (DGX)………………………..835%
Chesapeake Energy (CHK)……………………..813%
C.H. Robinson (CHRW)……………………………692%
Varian Medical Systems (VAR)………………..677%
Occidental Petroleum (OXY)…………………..634%
EOG Resources (EOG)……………………………599%
Express Scripts (ESRX)…………………………..595%
EQT Corp (EQT)…………………………………….540%
Apache Corp (APA)………………………………..486%
CONSOL Energy (CNX)………………………….486%
(Note: BW restricted the list to S&P 500 members with betas less than 1.)
