DrStockPick.com Stock Report!

Thursday August 6, 2009

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Continental Airlines (NYSE: CAL) today announced new service from its Guam hub and Honolulu to Nadi, Fiji beginning Dec. 18, 2009. The flights will also offer convenient connections from the U.S. mainland, Japan and Continental’s Micronesian network to Nadi.

Shalov Stone Bonner & Rocco LLP announces that a class action lawsuit has been filed on behalf of purchasers of International Game Technology (NYSE: IGT) common stock during the period from November 1, 2007 to October 30, 2008, inclusive (the “Class Period”). The lawsuit is pending in the United States District Court for the District of Nevada against IGT and certain of its officers and directors.

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Ten years ago in his book The Return of Depression Economics, Paul Krugman* warned of the problems that would lead to the current crisis. Last year the professor and trenchant columnist was awarded the Nobel Prize for Economics. In the interview below with Daniel Huber, Credit Suisse’s Head of Publications, he talks of the reasons for the crisis, the lessons to be learned, and life as a winner of the Nobel Prize.

Daniel Huber: There are very few winners emerging from this crisis, but you seem to be one of them, because foreseeing this crisis a decade ago probably won you the Nobel Prize for Economics. Paul Krugman: Well, I think I’m enough of a humanitarian to wish things hadn’t turned out this way.

Would you consider yourself a pessimist or a realist? In my view, it seems they’re the same thing right now. But over the course of

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June 25 (Bloomberg) – “Barack Obama may be the worst thing that ever happened to tax-exempt bonds …. “

We certainly agree and see more trouble for tax-exemption down the road.

Obama Chief of Staff, Emanuel said, “A crisis is a terrible thing to waste.”, and the administration is taking that advice by sponsoring and subsidizing the issuance of fully taxable municipal bonds — “Build America Bonds” (the camel’s nose under the tent).

Presidents since Franklin D. Roosevelt have tried to tax the interest payments from municipal bonds without success, but the debt crisis has provided Obama with a way.

Build America Bonds (we prefer “Obama Bonds”) pay 35% of the interest cost for fully taxable muni bonds.

Presumably the subsidy also improves the credit quality of the bonds by having a portion of the interest come from the US Treasury.

Example Bonds YTM Rate Comparison:

We based our credit quality argument on logic suggesting the

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But for the many reasons we’ve described in these reckonings, we doubt that we’ve seen the last of this bear market.

“Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation,” said Ben Bernanke in response to a question posed by a Member of Congress. Then, he added…

“The Federal Reserve will not monetize the debt.”

That last sentence has a ring to it. It reminds us of Richard Nixon’s “I am not a crook.” Surely, it is destined to make its way into the history books, alongside Bill Clinton’s “I did not have sex with that woman” and the builder of the Titanic’s “even God himself couldn’t sink this ship.”

Monetizing the debt is precisely what the Fed will do. But it will not do so precisely. Instead, it will act clumsily… reluctantly… incompetently… accidentally… and finally, catastrophically.

That’s our prediction, here at the Daily

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TODAY: Diplomat accuses US of overplaying threat from Iran; what did Putin tell Bill Clinton?; Russia-Belarus tensions flare on loan; Amnesty slams human rights standards; reclaiming Soviet-confiscated art Russia will not object to a new UN Security Council resolution over North Korea but will continue to oppose sanctions.  According to the Guardian, senior diplomat Alexander Sternik has criticized the US for grossly exaggerating the nuclear threat posed by nations such as Iran.  The Moscow Times reports that at a private meeting in January, Prime Minister Putin offered assurances to ex-US President Bill Clinton that Medvedev is not his puppet and that the Kremlin and Washington would be able to come to an agreement on missile defense.  Poland is apparently pushing the US to ...

That the president of the United States of America is now creating the business plan for an automobile company is surely a sign of something big.

Yesterday was a holiday in the US. Little news from that quarter.

But while Americans were enjoying their backyard barbecues, the rest of the world turned.

“Obama plans ‘leaner’ car industry,” says the BBC.

While most readers will focus on the last three words of that sentence, we direct your attention to the first two. The subject is the important part… not the predicate.

That the car industry may or may not get ‘leaner’ is of little interest to us. It will do what it needs to do. But that the president of the United States of America is now creating the business plan for an automobile company is surely a sign of something big. The world has already turned… perhaps more than we realize.

It was only a few

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By Michael McKee and Matthew Benjamin

April 17 (Bloomberg) — The Obama administration’s bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said.

“All the ingredients they have so far are weak, and there are several missing ingredients,” Stiglitz said in an interview yesterday. The people who designed the plans are “either in the pocket of the banks or they’re incompetent.”

The Troubled Asset Relief Program, or TARP, isn’t large enough to recapitalize the banking system, and the administration hasn’t been direct in addressing that shortfall, he said. Stiglitz said there are conflicts of interest at the White House because some of Obama’s advisers have close ties to Wall Street.

“We don’t have enough money, they don’t want to go back to Congress, and they don’t want to do it in an open way and

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This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide.

The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation.

By Robert Prechter, CMT

Now that the downward portion of the credit cycle is firmly in force, further inflation is impossible. But there is one entity left that can try to stave off deflation: the federal government.

The ultimate source of all the bad credit in the U.S. financial system is Congress. Congress created the Federal Reserve System and many privileged lending corporations: Fannie …

Let me start by saying that this is not a partisan post, it is about the economy, about your money, and about your livelihood.

The recently passed “stimulus” package, an $800 billion dollar billd that has been marketed as the ambulance for our economy. But is it?

Some Disturbing Facts

I received an article today from Larry Levin from SecretsOfTraders.com with some disturbing facts about the significance of the economic downturn. In the letter were some astounding figures about the American public:

Over $697 billion lost in real estate decline
Over $900 billion lost in the stocks
Over $650 billion lost in mutual funds

Over 2 TRILLION dollars were lost… In 2008 alone! The American public, from the top of the upper class to the bottom of the working class have taken a beating. Americans either don’t have any money or don’t have the confidence in the economy to spend money on anything but the essentials.

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Time magazine has again demonstrated its irrelevance in the Internet age with a fatuous feature called “25 People to Blame for the Financial Crisis.”

The failure here is two-fold: One, the editors’ choices of who’s to blame, and two, the reader poll ranking those choices.

Let’s start with who’s on the little list — or more to the point, who’s not.  Time did an OK job of unearthing lesser-known names who definitely bear some culpability in the disaster — such as AIG’s Joe Cassano, who did much to unleash the nightmare of credit-default swaps.

But how can anyone take this list seriously when it doesn’t include Ben Bernanke?  Yes, Greenspan (who did make the list) laid the foundation, but Bernanke built on it with abandon.  Perhaps it’s because the intelligentsia regards him a genuine scholar on monetary matters — you know, historian of the Great Depression and all that.  A far more

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