Rydex 2x S&P 500

… direction, performance-wise, it doesn't tell you anything about the magnitude of those moves. For example, Rydex 2X S & P 500 RSU , an exchange-traded fund, aims to double the S&P 500's return (or loss) on any given day: On days when …

Pg 5: Abelson ’s thesis is that SEC newbies looking for “bare sterns” and “naked shorts” accidently ventured into porno sites. Jay and David Levy spread the blame around for the financial meltdown and also note that the financials are in the vanguard of this awesome rally. Alan Newman notes that there is $7.50 in long/bullish fund assets vs. only $1 in short/bear fund assets. Stephanie Pomboy thinks that we have learned nothing from the near-death experience: credit issuances are up and quite heavy in junk credits, and now beginning in mortgage securitization too; US stock market cap is 148% of GDP; 80% of the profit recovery is from financials whose sector profits are approaching their 2007 record. Pg 11: Last week saw the recent pattern of sharp and shallow pullbacks. Only 3% of stocks are overbought now (vs. 50 a week ago). New quarterly letter from Jeremy Grantham warns of another bubble in stocks and risky assets due to easy Fed policies and then a collapse that the Fed would be powerless to prevent. Laszlo Birinyi provides counterpoints on his subscription site.   Pg 16-17: Financial reform bill moves to a floor debate. NY Post reported that Goldman Sachs ( GS ) may settle with SEC; WSJ reported that a preliminary probe has been started by the Manhattan US Attorney’s Office. 2009 was worst in 60 years for Treasury tax receipts . Davis Cameron may win UK elections (Th). Jobs report +200,000? (Fri). Jeff Hirsch says that “ Sell in May and go away ” may work this year; 60-yr record for $10,000 invested during every Nov-May (Oct-April?) had $529,000 gain, while that during every Jun-Oct (May-Sept?) had loss of $474.   Closed : China (Mon), Russia (Mon), Japan (Mon-Wed).   Pg 18-29: In a follow up to drop-double-dip story (March 22), GDP growth of +3.2% for Q1 came below expectations, but it may be revised upwards. It may become a “Great Recovery” following the “Great Recession”.   Take profits in Citigroup ( C ) to buy JP Morgan ( JPM ).   DELL is down but there is still risk in its transformation strategy.   Cover Story – Liftoff at J&J ( JNJ ) due to earnings growth and possible multiple expansion.   BP and RIG are now priced for disaster and it may be overdone; the actual losses will be nowhere close to the $30 billion loss in their combined market value; collateral damage was to CAM and HAL . Exxon Valdez spill cost Exxon about $4 billion.   Could Goldman Sachs ( GS ) disappear overnight like Drexel Burnham Lambert in 1990? A criminal probe by the US Attorney’s Office in Manhattan has been started following the fraud charges by SEC. It may take years to sort this out.   New NASA budget has many incentives for private sector and BA, ORB and LMT may benefit.   After picking up some of Lehman’s business, Nomura ( NMR ) is expanding its US presence with a strategy of narrow-but-deep, with mixed results so far. It is already a big player in Europe.   Alaska Air ( ALK ) is hot and getting hotter. Alaskan traffic is only 20% of its vacation business. The stock is illiquid.   Pg 30-31: Deep pockets of HP ( HPQ ) will boost Palm’s ( PALM ) platform, but this acquisition is not good news for anybody else. There is a big consolidation coming.   Prospects for the new AOL are not good and it may be eventually picked up by YHOO or MSFT.   Binky Chadha of Deutsche Bank ( www.db.com ) has identified a list of cash-rich large-caps (see free at www.barrons.com ) that are likely to boost dividends . Harry Domash has a subscription site www.dividenddetective.com . Dividend oriented ETFs are SDY, DVY .   Pg 32-33: Arthur Calavritinos of the eclectic high yield fund JHHBX has concentrated positions that include companies undergoing restructuring. It is often at top (now) or bottom (in 2008) of the charts. To him junk debts are not tradable bonds but equities with coupons that require patience, and he often signs insider restrictions to participate in workouts. He is concerned about the record levels of junk issuances now and the narrowing spreads.   TVMAX, TVAAX and TVDAX are three funds that invest within DJ- RBP Indexes and are relatively well protected against earning misses. Morningstar thinks that average ERs have gone down as the market has rallied. Nuveen had a successful IPO of its closed-end Build America Bond Fund ( NBB ). Rydex /SGI is closing 12 of its 14 leveraged and inverse ETFs due to lack of scale; only RSU and RSW will remain.   Pg 35: The large gap between condominium pre-foreclosure filings and completed foreclosures is due to an overwhelmed court system, federal pressure for loan workouts and lenders’ willingness to allow for short sale. But one factor is also the lenders’ reluctance to pickup overdue condo-association fees . Total foreclosures hit a record in March but this condo pool of future foreclosures is like the calm before the storm. Condo prices have yet to bottom. Moreover, since 2006, 5 million credit histories have been trashed due to delinquencies and foreclosures, reducing the future pool of potential buyers.   Pg 36: Brazilian water utility SBS has room to run up yet; 5.2% yield, est P/E 5.4.   Pg 37: Mohamed El-Erian of PIMCO is interviewed. PIMCO has low or no PIIGS debt and is watching the developments from sidelines. The events in Europe are deflationary. In the US, the strong cyclical tailwinds will meet the structural headwinds later this year; there is potential for disinflation followed by inflation. A good entry point for TIPS may come soon. The emerging economies will remain strong.   Pg 40: Michele Paige advocated the use of bankruptcy laws to solve the financial mess.     Pg 47: Editorial on the pitfalls of relying too much on mathematics in soft sciences such as economics and portfolio analysis and theory.