The Weekly Report

By: Mick P | Sun, Jul 13, 2008
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Welcome to the Weekly Report. Normally at An Occasional Letter From The Collection Agency we try to focus attention on the macro-economic near term effects using the Weekly Report, allowing the Occasional Letter to look further into the future by about 18-24 months. We have reached a stage now where it is becoming difficult to keep the various strands of my convoluted thoughts distinct and clear for the readers so, in keeping with one or two other writers it is time for a re-cap.

My first public post on a financial site was 21 months ago so the timing is right. Unfortunately for the readers of my eco-babble I cannot do a 6 month resume, so here it is, a 21 month review of my work. We start off with a quick update to last week and a quirky question and then into the meat of the review.

Last week I opened by saying even I was worried about my own bearishness, using my own thoughts to make me think about possible supports (highlighting LTCM levels as possibly the area to watch for banks and financials). I am still watching this level. If support doesn't hold we are on our way down to the 9300 area on the Dow, eventually.

I have very little to sell, my little website was set up using the Austrian School of Economics as a guideline, it ticks along at a minimal cost to members because I didn't incur any debt or debt servicing costs to set it up. The capital I use is from savings and is repaid by the small subscription I charge, it even makes a small profit which when saved over a period of time may allow me expand the facility. If all my subscribers left tomorrow I could close the site down and walk away without having incurred any loss and move on to something new.

Now apply that line of thought to every single company in the S&P500. Can you find a single company that would be able to follow the same path? If you can, let me know because it would be nice to find a well run, properly capitalised Large Cap to put on the "long" watch-list. Remember, no debt. That includes bond issuance. If you wanted to be really at the cutting edge of investment in the new era of capitalism that will rise from the ashes of this Monetarist/Keynesian credit/debt orientated fiasco, check out the Funds in your portfolio, any leverage being used? The expression that "cash is king" is going to become the"new" catchphrase in the near future.

It is here that I have to do a recap of my previous remarks and comments about the economy. Unlike many bloggers and writers who are looking at the next Quarter or the second half of '08 and recounting what they said in March, my view has to go back much further than that to see if what I wrote about last year or earlier is coming to fruition. It is the only way I can help readers understand how my poor befuddled brain works. Now I cannot re-create each article here but what I can do is give you a link and a couple of key words or a phrase with the date of the article.

Is this an ego trip, a boost to my already self enhanced view of my abilities? Not really, it's just a way of showing you my timespan, how my thought processes work, you will find the odd wrong call too. So here we go:

A First Sighting originally written in November 2006:

Gone in Sixty Seconds originally written in June 2007:

The Second Sighting originally written in September 2007:

What Do Paulson, Bernanke and Greenspan Have in Common? Originally written in October 2007:

Is Ben Bernanke Getting Undeserved Criticism? Originally written in November 2007:

The Event Horizon For Credit originally written in November 2007:

You are probably realising that this weekends events are not a surprise to me. As you can see my eco-babble ratcheted up as my first blog came into existence, prior to the blog I published my thoughts on financial bulletin boards, I moved on as the spammers began to disrupt any possible conversation and a core demand grew for my thoughts. Now I know you want more, especially as it is free, so refresh that beverage and we will move forward into 2008. First though was my long term warning about the state of the Stock market, given to readers as a Christmas present in December 2007:

Edwin Coppock, Fed Fund Rates and The Dow

A simple lesson that many refused to listen to is about Fed Funds Rates and stocks, simply put: in this era of credit driven expansion falling rate environments are not a good time to buy stocks and this years events keep that rule intact. On the 4th of January 2008 I issued a warning to subscribers to adjust their strategies as I thought the Fed would cut rates between FOMC meetings.

Are you thinking I may not be specific enough? Well I don't like to mention specific calls on individual shares, that's not really what I am about but this one had reached an important level:

Citigroup - Opportunity or Death Rattle? Originally published in January 2008:

Now Citi was already in a well established downtrend but I wanted readers to note that the low on Citi in January was different that in the previous decade. As we have seen Citi has indeed hit the 1998 low. Whilst the mainstream financial media and some bloggers were saying it was a buying opportunity my Technical Analysis was saying something very different. Fundamental Analysis is not ignored either as we take a look at this:

Automobile Wreckage. It Isn't just Ford and GM

What really worries me is the manipulation of Joe Public when it comes to investment and, more importantly, the truth about the scale of the impending collapse of the current form of capitalism. The next article was this:

AIG Get Caught By The Auditors originally written in February 2008:

We go on; I know you are getting the point but this NOT an exercise in boasting about my calls on the markets, economy and impaired businesses. This is to remind you that things are truly different this time, to jog your memory, that just because changes are made it doesn't make the problem go away.

By now I was producing the Weekly Report and this particular issue got a huge number of hits: The Weekly Report 25 February 2008:

Did you know that this weekend all customer "on-line" and phone access to IndyMac has been suspended, with normal service due to re-start on Monday?

This from CNN Money:

With the timing of the IndyMac announcement and the restrictions imposed, what chance does a customer have of protecting their assets? Of all the remarks I have ever made, the one quoted from the 25th February is the most important for individual investors and savers. At the time I wrote it a reader left a comment that my bearish pronouncements might ignite a "theatre fire" type rush for the exits. My longer term readers may well have smiled at this, they know I look far enough ahead to issue warnings before the show starts.

On the 3rd March in the Weekly Report I wrote this:

Nuff said. We are now at the point in the present that my projections saw coming. I didn't see everything that was going to happen and a couple of calls are still waiting to happen but I don't think I did too badly.

But what of the future you say? Get another coffee and we will look forward to what I think maybe in store for us all.

To read the rest of this special Weekly Report click here to visit my free blog.

This will be the last full article that will be freely available for some months.

 


 

Mick P

Author: Mick P

Mick P (Collection Agency)
About Collection Agency

An Occasional Letter From The Collection Agency in association with Live Charts UK.

For some years now I have written an ongoing letter, using macro-economics, to try and peer into the economic future 6 to 18 months ahead. The letter was posted on a financial bulletin board to allow others discuss its topic.The letter contains no recommendations to buy or sell, indeed I leave that to all the other letters out there and to the readers own judgement. The letter is designed to make us all think about what may be coming, what macro trends are occurring and how that will affect future trends and how those trends will filter down to everyday life and help spot weak or strong areas to focus on for trading or investing.

To contact Michael or discuss the letters topic E Mail mickp@livecharts.co.uk.

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