A Tough Start

Futures are down substantially as Europe leads the way down. U.K. GDP shrunk by 1.5% and the FTSE dropped below 4000 for the first time since December. Capital One reported to a big loss last night but announced that they will maintain their dividend, how fiscally responsible of them.

Pfizer is in talks to buy Wyeth for $60 billion, Harley Davidson's earnings were down 54% and Schlumberger reported a 17% short fall and will layoff 4000 and warned of a big slowdown for 2009. Sony led Asia down with the report of their first annual loss in 14 years. There is more bad news this morning, but I am running out of ink.

When will the companies that took TARP funds eliminate their dividends? This is getting silly. GE just reported as I write, and the stock is flat, the early comment is that they too will keep their dividend in place.

The weekend is finally upon us and I don't see any kind of rally today, although anything is possible. The market is still playing possum with the 8000 level. When it breaks, I anticipate a big move down. Good luck today and I will see you on twitter.

earnings for the morning

general electric in the morning, gold is higher than the s&p, and gm is half the market cap it was in 1929, now that's freakish.

keep your chins up

What Will the Market Do When We Run Out Of Buffetts?

The Oracle does not play on the no pass line and he is all in with a stake in GE. I guess GS and GE is really not a bad start and I'm sure Berkshire shareholders will be rewarded at some point down the road. Just not right away. And I love how the Sage of Omaha is using his juice with CNBC to throw out the possibility of getting government terms to play in the sub prime sand box. Will this be a thank you from the Feds for his help with GS and GE? Good for him if it is. Stay tuned.

But seriously, what will we do when we run out of captains of industry like Buffett? Sure he is setting the table, but there is no one on deck, unless the government just rolls over and allows private equity and the Bill Grosses of the world to play the game. I say why not? Their all chomping at the bid to do it, let them do it. Mucho dinero has been raised in the last month by new and existing hedge funds to rummage through the carnage to find value. They are calling themselves "opportunity funds." Well,if they say so. I have two buddies at two different funds up in Greenwich that are doing exactly that. I say let the guys that helped cause the problem, solve the problem. There is a ton of money out there even though the media will make us think we will be on line at a soup kitchen tomorrow. We are getting past the fear stage, now it's time for the greed stage. It's all part of the natural fear and greed dynamic on Wall St. Ain't it a kick?

I'll check in later.

GE The Terminal EPS Sandbagger

If Steve Jobs was a sand bagger like GE, Apple stock would be $700 on continuous upside surprises. GE has always gotten away with it, but not this time.It's easy to beat when you sandbag earnings, really.Which makes the case that the economy is really bad. If GE was the "tell" which I agree that it was, then beware of other companies that fall short in the coming weeks. The stage was set today as the market unmercifully sold the stock down. Where are these blue bloods on CNBC that tell you to buy these kinds of stocks because of the dividend. Well, I do like the yield today better than I did yesterday. If you are Intel or IBM and you fall short next week expect the worse. The market told you today what its tolerance is. If I was a GE analyst I would feel deceived here.
Technically we broke some levels today by violating 20 and 50 day moving averages. It's days like today that certainly encourage investors to wait before they jump in and buy. I guess the positive today, was that volume was once again light. My personal feel here is that we will be in a range and maybe even go much lower until earnings for the second quarter are over. If we do go much lower here I don't think it will be because of the financial or credit markets. I think that story for the most part has been told. Maybe a few more hiccups but nothing major. I think we go lower this time because of lousy earnings and the fact that we are in a recession. The question will start to become, how bad is the recession? I'm still waiting for credit cards and auto loans to rear its ugly head at one point over the next several months. As negative as I may sound I am still closet bullish because the Fed will do whatever it has to do to save the world, but right in here I think it will be tough to say the least. Real tough.
I had a phenomenal week being short BLK and GRMN which have been closed and I am still open short MOO and AA. I posted about MOO before and the farmer stocks hung in real tough today. Have a great evening.

GE

Everyone was looking at GE as the "tell" for the economy and they disappointed. They fell short on the health care side, and you guessed it, the financial front. We will see if the punish the market because of it. If they don't, that in itself would be bullish, but I'm not so sure.