Friday, June 18, 2010

"Wall Street Finest : It´s Always A Good Time To Buy, Buy, Buy....." BP Edition.....

Even as i have to admit that the "BP SPILL DRAMA" is a very complicated to judge it is nevertheless a perfect fit to my earlier post Wall Street Finest.... Of Course It´s A Good Time To Buy, Buy, Buy..... and a nice confirmation for what i´ve said in the past ....
"There maybe are legitimate reasons to buy stocks, but a favourable opinion from "Wall Street Finest" should definitely not play any role in your screening process .... Except you use them as a "contrary indicator".... ;-) "
Selbst wenn ich zugeben muß das der BP GAU schwer einzuschätzen ist, passt es wie die Faust aufs Auge zu Wall Street Finest.... Of Course It´s A Good Time To Buy, Buy, Buy..... und ist nebenbei die Bestätigung zu dem was ich bereits seit langem zum Thema "Experten" zu sagen habe....
"Grundsätzlich mag es ja durchaus gute Gründe die für Aktien sprechen geben, man sollte aber sicherstellen das die Einschätzungen der "Experten" beim Auswahlprozess keinerlei Rolle spielen....Es sei denn man nutzt sie als Kontraindikator.... ;-)"

Special Report: Amid the Gulf crisis, Wall St touted BP stock Reuters

As early word of BP's Deepwater Horizon blowout began spreading, investors panicked. After closing above $60 before the April 20 disaster, the energy giant's shares plunged almost 20 percent in New York, to below $50, in just two weeks.

It is not hard to understand why. Even then, the out-of-control oil spill in the midst of rich fishing grounds and nearby resort beaches raised the specter of horrific damages and untold potential liabilities.

Yet, nearly to a person, the dozens of securities analysts who followed the British oil giant were unfazed. As BP shares continued to drop, most were screaming the same message: buy, baby, buy.

Credit Suisse, which had a "buy" rating on the stock at the time, did not even mention the accident in an April 28 report. The firm upgraded earnings estimates after BP reported strong quarterly results the day before.

A day later, with BP's shares then down 11 percent, Citigroup's Mark Fletcher weighed in. He argued that the decline was "disproportionate to the likely costs to the company, even assuming damages can be claimed." In the same report, he estimated BP's total share of the cleanup at just $450 million -- today, conservative guesses put the figure at $10 billion to $20 billion.

Around that time, Morgan Stanley was among the chorus citing the strong rebound of Exxon (XOM.N) shares after the 1989 Valdez tanker spill in Prince William Sound, Alaska, as a reason to be bullish. "We think the sell-off presents an attractive buying opportunity for investors with medium-term investment horizons," the firm wrote.

All told, 27 of 34 analysts tracked by Thomson Reuters rated the stock "buy" or "outperform" as recently as May 11. The other seven rated the shares "hold." There was not a single rating of "sell" or "underperform" among those tracked.

And then there was the exuberant television host Jim Cramer, who insisted that Bear Stearns was fine just days before the company's stock crashed. On May 10, he told viewers of his "Mad Money" (Cramer: "The Dividend Is Safe, Way Overdone On The Downside" / Stock just under $ 50 & Cramer:Gulf Spill Won’t Break BP / Stock above $ 50 ) show on CNBC that he was purchasing shares of BP for his charitable trust at just under $50. "If you get any good news at all, you're at the bottom," he said. "I'd like to buy it.

BP has at least managed to outperform his May 10th "Housing Shortage Top Pick" SPF... I doubt that he is still refering to his Housing Shortgage Play Version 1.0 July 2008 and has meanwhile switched to version 2.0 or 3.0....To be continued.....UPDATE: Watch his comments after the entire group has tumbled close to 30% & his top pick SPF worst.... To call him a revisionist is an understatement.... Couldn´t resist.....

Immerhin hat BP es geschafft besser als sein anderer Favorit SPF abzuschneiden....Nach seinen letzten Kommentaren im Angesicht einen 30% Crashes im Homebuildingsektor sowie einer Halbierung seines Favoriten SPF muß man schon sagen das der CHUZPAH mehr als treffend ist....

If he did, he didn't make out so well. As estimates of the spill grew -- and grew and grew -- and efforts to cap it failed, BP's stock sunk ever lower. It didn't hit bottom for another month, the New York-traded ADRs touching $29 in midday trading on June 9, down 52 percent from just before the Deepwater Horizon disaster. That's approaching $100 billion in shareholder wealth that has been destroyed.


Others say the failure of even one analyst at a major firm to grasp the potential risks and advise clients to dump the stock reflects the profession's overall group-think tendencies. "For sell-side analysts, the incentive is to remain toward the center of the pack. If they are going to be wrong, they have got to be in good company," said Michael MacPhee, at investment manager Baillie Gifford.

As the shares headed toward almost half their pre-disaster level, most analysts issued more cautious notes, with Goldman, Natixis, S&P equity research and Charles Stanley, cutting their ratings to neutral or hold from buy.

By June 16, BP was rated a buy by 16 analysts, outperform by eight, a hold by another 8 with only one sell, according to data on Reuters Knowledge. That was the date, of course, when BP agreed to fund a $20 billion escrow account and suspend its dividends for the year.

With the price around half what it was before the spill, analysts might have a stronger argument that BP was a buy in mid-June, though that will be of little comfort to anybody who followed the advice to buy a month ago.

H/T Reformed Broker


The split over BP between U.K. and U.S. investors extends to analysts. The U.K. stock has 26 “buy” recommendations, while 12 analysts recommend holding the stock and two say to sell. In contrast, almost as many U.S. analysts advise against purchasing the stock as buying it. The ADRs have seven “buy” recommendations, five “holds” and one “sell.”

And when a guy like Chanos is shorting Exxon widely viewed as the goldstandart in the industry you have to wonder even more....

Wenn ein Typ wie Chanos momentan aber selbst den am meist angesehenen Titel im Sektor Exxon shortet ist das zumindest mehr als eine Randnotitz wert.....

Watch the percentage of sell ratings for S&P 500 companies flatlining even in the deepest recession since 1930........

Man beachte die rote Linie der Verkaufsempfehlungen für die 500 Unternehmen im S&P die selbst während der tiefsten Rezession seit 1930 "stabil" geblieben ist......

BP Oil Spill: Brief History of The Incredible Rising Cost Estimate WSJ Marketbeat

BofA Merrill, April 28 — “To put it in context, the Valdez clean-up cost reportedly reached [around] U.S. $3 billion and we expect the cost to BP to be lower at this point.”

BofA Merrill, April 30 — “If we assume the clean-up takes 6 months and include relief wells costs, total costs would be in the U.S. $2 billion range (U.S. $100 million per well + 180 days at $10 million/day). Even assuming additional civil damages similar to Exxon Valdez of US$2.5 [billion] awarded against [Exxon Mobil] in 2009, BP’s net costs for Macondo would approach [$3 billion] – just over half [first quarter 2010] earnings. While the market may not be willing to assume such a scenario, given ongoing uncertainty, it, nevertheless, underscores that the hit on BP’s shares looks overdone.”

BofA Merrill, May 28 — “The US Geological Survey (USGS) has independently estimated that the flow rate at Macondo is in the 12-19kb/d range. Whilst this is clearly larger than the previous [5,000 barrels a day range] estimate, it is inline with the flowrates of typical wells in the area as we had indicated (see BP: Making tangible progress 21-May). We note that this new information makes no difference to our worst case liability estimate of U.S. $10 [billion] – based on the recently proposed liability limit.”

BofA Merrill, June 10 — “Given the uncertainties presented by the spill (our base case cost est. is $28 [billion] but the worst case scenario cannot be adequately quantified.”

To be continued.....Check out the link for more stunning quotes.... Let´s all hope we won´t see an updated "Hurricane Edition".....

Fortsetzung folgt.......Mehr von den "Experten" gibt es hier.... Daumen drücken das wir um eine ähnliche Auflistung im Zusammenhang mit der "Hurricane Saison" herumkommen.....

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Monday, June 14, 2010

"Enron-Esque Accounting" Still Rampant......

"Austerity" New York Style........For more on this topic you should read Payback Time : State Debt Woes Grow Too Big to Camouflage & Seven State Pension Plans Out of Money by 2020 or just visit the Madoff, Ponzi links on Wikipedia..... ;-)

In Sachen Buchführung sehen im Vergleich mit den Amis selbst die Griechen alt aus....Mehr zum Thema entweder Payback Time : State Debt Woes Grow Too Big to Camouflage & Seven State Pension Plans Out of Money by 2020 oder direkt unter Wikipedia nach Madoff oder Ponzi suchen.... ;-)

State Plan Makes Fund Both Borrower and Lender NYT
ALBANY — Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

As word of the plan spread, some denounced it as a shell game and a blatant effort by state leaders to avoid making difficult decisions, like cutting government spending or reducing pension benefits.

Under the plan, the state and municipalities would borrow the money to reduce their pension contributions for the next three years, in exchange for higher payments over the following decade. They would begin repaying what they borrowed, with interest, in 2013.
No wonder the "In Fiat Money We Do Not Trust Camp" is getting more popular, but when considering the following headline Households Bust $1 Trillion Muni Mark it should be clear that the term "crowded" could be used for other asset classes than GOLD....;-) Thanks to the World Cup posting will be very light during the next few weeks.....

Bei solch absurden Geschichten muß man sich nicht wundern wenn das "In Fiat Money We Do Not Trust Camp" merklich an Popularität gewinnt....Und wenn man sich die nachfolgende Zahl Households Bust $1 Trillion Muni Mark ansieht sollte sich auch die angestiegende Beliebtheit von GOLD relativieren....Da momentan auch bei mir das WM Fieber grassiert wird in Sachen Blog die nächsten Wochen eher wenig passieren...


61% Underfunded Illinois Teachers Pension Fund Goes For Broke, Becomes Next AIG-In-Waiting By Selling Billions In CDS ZH

“If you were to have faxed me this balance sheet and asked me to guess who it belonged to, I would have guessed, Citadel, Magnetar or even a proprietary trading desk at a bank.” So begins a story by Alexandra Harris of the Medill Journalism school at Northwestern, which, however, does not focus on some exotic product-specialized hedge fund, or some discount window (taxpayer capital) backed prop desk (hedge fund) at a TBTF bank, but instead at the 61% underfunded, $33.7 billion Illinois Teachers Retirement System (TRS), which just happened to lose $4.4 billion in 2009 (a year when, courtesy of America's conversion from capitalism to socialism, the market rose 60%), and 5% in2008.

Yet underperformance can be explained. What can not, is that the TRS has now become a shadow AIG. As Harris notes "TRS is largely on the risky side of the contracts, selling and writing OTC derivatives, including credit default swaps, insurance-like contracts that guarantee payment in the event of a default, that were blamed in part for the 2008 collapse of Lehman Bros. and bailout of insurance giant American International Group Inc., or AIG."

Suddenly NY pension plan isn´t looking as bad....... ;-)

Plötzlich sieht selbst die NY Pensionskasse ganz passabel aus..... ;-)

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Friday, June 04, 2010

17 Minutes Bob Janjuah......

Quite refreshing compared to the usual "Buy, Buy, Buy...." spin ( UPDATE: After todays market action worth a second look) that is flooding the wires these days..... Excellent takes on banks, debt, inflation/deflation, GOLD, the upcoming jobs report, the real economy etc.....You can read his note "Uber Bear Early Warning Alert" they are refering to here & his even more bearish update "Prepare for flash crash II and $10 trillion of QE"here.....This guy makes even me look like a bull.... ;-)

In diesem Interview werden alle relevanten Themen ( Banken, Inflation/Deflation, Arbeitsmarkt, reale Wirtschaft, GOLD, Verschuldung ... ) ziemlich schonungslos und meiner Meinung nach sehr treffend abgehandelt....Vergleicht diese Ansichten mit der "Buy, Buy, Buy....Mentalität" ( UPDATE: Ist speziell nach dem heutigem Handelstag einen "zweiten Blick" wert ) die ansonsten tagtäglich von Wall Street Finest gepredigt wird.... Wer möchte kann den "Uber Bear Early Warning Alert" auf dem im Interview Bezug genommen wird hier nachlesen oder sein noch negativeres Update "Prepare for flash crash II and $10 trillion of QE" hier zu Gemüte führen...... Im Vergleich dazu höre selbst ich mich bullish an.....

Here are some earlier highlights

Hier ein paar Zitate aus der letzten Zeit....

September 2009 FT Alphaville

I think balance sheets and sustainability - govt, central bank ANDprivate sector, MATTER

If they no longer matter, I will be WRONG, and I will have to accept that the policy of ‘Print/Borrow/Spend on Rubbish we don’t Need’ is a limitless phenomena, without consequences, which means there should never be a bear marketever again….

January 2010 FT Alphaville

Well I clearly underestimated the ability & willingness of the Public Sector, notably in the UK, US, parts of periph Europe and Japan, to take huge risks with their sovereign balance sheets, AND IMPORTANTLY, I over-estimated the ability & willingness of the Financial Sector/Market to see things for what they are (Another Debt Fuelled Bubble/Ponzi).

April 2010 ZH

We are trapped in some horrendous Keynesian/monetarist nightmare, where policymakers, aided/abetted/advised by their buddies in the media, in the lobbyist cabal and in financial system, have YET AGAIN decided to go down the route which merely delays the problem/pushes it down the road, but which virtually guarantees that when the NEXT bubble collapses (I assume it will be the Global Government Debt/Bond Bubble and/or the Global Fiat Money/Paper Money/FX Bubble), there is NO pleasant way back.

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Tuesday, June 01, 2010

Tony Dwyer Is Not Alone..........Of Course It Is Still A Good Time To Buy, Buy, Buy.....

What a "surprise"......Keep the following stats in mind when the daily spin "stocks are cheap on forward pe´s" is hitting the MSM... If you want to hear the "rationale" for a 2000 S&P target in 2013 visit Tony Dwyer & his "brilliant playbook" UPDATE: A guy named Altucher is almost as good It's Not a 'V', It's Even Better, Look for New Highs by 2012 .... There maybe are legitimate reasons to buy stocks, but a favourable opinion from "Wall Street Finest" should definitely not play any role among your screening process .... Except you use them as a "contrary indicator".... ;-)

Welch "Überraschung"......Behaltet die nachfolgenden Daten im Hinterkopf wenn es wie tagtäglich in den Medien und auch der Fachpresse gebehtsmühlenartig wieder heißt "das Aktien auf Bewertung der 2011er Gewinne günstig sind"..... Ein eindrucksvolles "Schauspiel" in dieser Disziplin bietet Tony Dwyer mitsamt seinem "brillianten Playbook" für sein 2000 S&P Ziel im Jahr 2013 UPDATE: Dieser Typ ist mindestens ebenbürtig It's Not a 'V', It's Even Better, Look for New Highs by 2012..... Grundsätzlich mag es ja durchaus gute Gründe die für Aktien sprechen geben, man sollte aber sicherstellen das die Einschätzungen der "Experten" beim Auswahlprozess keinerlei Rolle spielen....Es sei denn man nutzt sie als Kontraindikator.... ;-)

Bloomberg surveys sell-side Wall Street strategists on a weekly basis for their year-end S&P 500 price targets. At the start of 2010, the average year-end S&P 500 price target was 1,225, which would have been a gain of just about 10%. As markets moved higher in the first quarter, strategists upped their year-end targets, and the current average target stands at 1,268. (In the table below, green shaded price targets are ones that have been increased so far this year. No strategists have lowered their targets since the start of the year.) A target of 1,268 translates into a gain of 13.68% for the year and 16.48% from current S&P 500 levels.

There are no strategists with year-end targets that are lower than the index's current levels.
Analysts Projecting 27% Gain in S&P 500 Defy El-Erian Bloomberg

Combined price estimates from more than 2,000 forecasters tracked by Bloomberg show the S&P 500 will rise 27 percent in the next year, the fastest projected rate since February 2009, data compiled by Bloomberg show.

The rally above 1,350 will be led by industries most tied to the economy, according to analysts who boosted individual share projections by an average of 0.9 percent in May, the 14th straight monthly increase.

Should analysts’ forecasts for a 27 percent gain in the S&P 500 come true, the gauge would climb to 1,360 by next May, the highest level since June 2008.

The real story here are not the S&P 500 targets from the "strategist" but that they have managed to increase the target since the beginning of the year.... Despite events like the Flash Crash ( "Cancel All Orders, Cancel All Orders....." ), "minor headwinds" when it comes to Sovereign Debt,China , for US companies an unfavourable strong $ , impact from the "Oil Spill" on drillers & still insolvent Banks it´s fair to say that ROSE COLORED GLASSES are still a must have item among way too many among "Wall Street Finest"... ;-)

Die eigentliche Botschaft sind nicht die angegebenen Kursziele, sondern vielmehr die Tatsache das diese trotz einiger unschöner Ereignisse die vermehrt seit Jahresbeginn aufgetaucht sind wie dem sog. Flash Crash ( "Cancel All Orders, Cancel All Orders....." ), "minimalen" Problemen wenn es um Sovereign Debt,China den für US Firmen ungünstigen "starken $" , seit dem BP GAU die Probleme der Ölförderer & die immer noch bemerkenswert schwachen Banken geht, munter fleissig angehoben worden sind..... Denke es ist keine Übertreibung zu sagen das eine ROSAROTE BRILLE unter etlichen von "Wall Street Finest" noch immer zur "Standartausrüstung" gehört.... ;-)

I´ll let "Mr. Anti Spin" David Rosenberg du some further "bashing"..... Do yourself a favour & subscribe to his free DAILY REALITY CHECK... SUPERB!

Überlasse es "Mr. Anti Spin" David Rosenberg noch mehr Wasser in den Wein zu gießen....Empfehle allen sich frei Haus die tägliche Dosis Rosenberg zu genehmigen....

"It’s also fascinating to read the “Ahead of the Tape” column in the WSJ today and to read about the fabulous earnings performance of U.S. companies — a revival built on a weak U.S. dollar, accelerating global growth, fiscal stimulus and a steep yield curve.

Meanwhile, the consensus has just now gone ahead and projected peak earnings for 2011 just as each of these main crutches are reversing course."


McKinsey: Equity Analysts Are Still Too Bullish via Barry

Moreover, analysts have been persistently overoptimistic for the past 25 years, with estimates ranging from 10 to 12 percent a year, compared with actual earnings growth of 6 percent.

Over this time frame, actual earnings growth surpassed forecasts in only two instances, both during the earnings recovery following a recession. On average, analysts’ forecasts have been almost 100 percent too high.”

This chart completes the not so glory picture when is comes to the credibility & reputation from "Wall Street Finest".... If you have the "guts" to read the "rationale" behind Goldmans bullsih call you should read Goldman: "We Raised S&P 500 EPS Estimates Despite Worst May Performance In Almost 50 Years"

Dieser Chart paßt hervorragend ins Bild unm das das wenig glorreiche Bild abrunden....Für alle die die Nerven haben und wissen möchten auf welchen "Modellen" die Schätzungen von Goldman basieren Goldman sollte Goldman: "We Raised S&P 500 EPS Estimates Despite Worst May Performance In Almost 50 Years" lesen....


Profit-Margin Outlook for U.S. Is ‘Extremely Bad’: Chart of Day Bloomberg

Best Stocks Liked Least by Analysts Missing U.S. Gain Bloomberg

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