Geldpress

According to Durangobill’s website, the odds of hitting the mega millions jackpot (all 5 balls, plus mega ball) are 1 in 175,711,536.  The grand prize of the Mega Millions jackpot drawing tonight will be $333 million, with an after tax payout of approximately $210 million, according to this site.  On top of that, there are numerous other potential prizes that a $1 ticket holder is entitled to, ranging in value from $2 to $250,000.  Even with the IRS taking roughly one third of the jackpot, the number of combinations in the final jackpot (175 million) is about 16-17% less than the after tax total payout of $210 million.  And that does not take into consideration any of the additional non mega jackpot award amounts.  With positive expectations like that, it may be time to skip that $8 lunch today and buy 8 mega millions tickets instead.  Good Luck!

The Brix condos in Seattle’s Capital Hill were completed sometime in 2008, but with very dismal sales.  Despite the low sales they were content on keeping the prices abnormally high (even for a strong market, which this is not).  Earlier this summer, they sent out an e-mail blast announcing price cuts of as much as 20% below original prices.  It was a good start, but still not enough to spur sales, and now it looks like they have had enough.  This morning’s e-mail blast announced the new auction style pricing, with the auction set for September 27th at 1pm.  Here is a sample of their price sheet.

For a comparison of another recent Seattle condo auction, check out these results of the Queen Anne high school condo auction.

Just about 5 years ago, Time Magazine did a cover story on the booming town of Las Vegas, which was in the midst of non stoppable economic growth.  Here is an excerpt from that article:

The city’s casinos, hotels, restaurants, shops and clubs took in a record $32.8 billion in 2003. Vegas is the fastest-growing major U.S. city; 7,000 people move to Clark County each month, bulging the population to 1.6 million and overstretching the police, fire fighters, hospitals and schools. The unemployment rate is more than a third below the national average, and there’s more construction than in any other city in the U.S. It’s the country’s top tourist and convention spot, with Vegas taking in more money from conventions ($6.5 billion) than gambling ($6.1 billion).

Fast forward to 2009, and times have changed quite dramatically to the city.  Time Magazine just did another cover story on Las Vegas, with some very notable differences.

This has been the first major recession Vegas has experienced since it became a real city. After two decades as one of the fastest-growing metropolises in the U.S., Las Vegas has seen its population growth flatten. It’s got the highest foreclosure rate of any major metro area, and the unemployment rate jumped from 3.8% to 12.3% in just three years. Even if you have a job, it’s not a good time to have your wage be dependent on lavish tips. The No. 1 convention city has also had a wave of cancellations from the AIG effect — companies don’t want the bad publicity of being seen in Sin City. Just as Las Vegas was the epicenter of the extravagant consumption of the past 20 years, now it’s the deepest crater of the recession over the last year.

Also notable are the incredible vacation deals available in Vegas today:

The hotels, led by Wynn Resorts boss Steve Wynn, slashed room prices to increase occupancy rates to 82% from a low of 72%. On the right day in July, you could book the type of 750-sq.-ft. room that was $500 a year ago at the Wynn for $109 and get a $50 gift certificate.

As for real estate in Las Vegas, the spiraling down of property values continues, and its making room for a new breed of real estate agents.  Brooke Boemio is showcased in the article, and she specializes in helping home “owners” abandon their overvalued homes and swapping it with a new purchase of a distressed or foreclosed home.

Boemio specializes in short selling, in a particularly Vegas way. Basically, she finds clients who owe more on their house than the house is worth (and that’s about 60% of homeowners in Las Vegas) and sells them a new house similar to the one they’ve been living in at half the price they paid for their old house. Then she tells them to stop paying the mortgage on their old place until the bank becomes so fed up that it’s willing to let the owner sell the house at a huge loss rather than dragging everyone through foreclosure. Since that takes about nine months, many of the owners even rent out their old house in the interim, pocketing a profit.

My how times have changed for Vegas.  The old adage rings true in Vegas – what goes up must come down!

The San Francisco Money show started today with a handful of keynote speakers, including Steve Forbes, who delivered the final speech.   If his republican bias was not apparent beforehand, it was pretty clear during his presentation, entitled “Battling the Anti-Capitalist Administration and Washington Politicians–Can They Be Stopped“.

Forbes delivered some compelling arguments on what makes sense for healthcare reform, such as removing restrictions that prevent consumers from buying health insurance across state lines.  He seemed to oppose most of the reforms being pushed by the Obama administration, and cited the example of Britain denying dialysis treatments to the elderly purely due to costs.  Here is a google books link that briefly mentions this, but it’s not entirely clear if these treatment denial policies are still in effect today.

On the topic of government size, Forbes supports small government, lower taxes, and a free market system.  He was of the opinion that the only reward for failure in this country occur in government and not in private industry.  This, we know is completely false, especially in light of the multi trillions in recent government bailouts of private enterprise financial institutions.  Sorry Forbes, nice try.  Almost immediately after this pro-private enterprise anti-government intervention remark, he seemed to give his approval of the bailouts by stressing what a mistake it was to let Lehman Brothers fail.  He also seemed disappointed that the government had not yet stepped in to buy worthless consumer credit card debt from private enterprises.  Despite the obvious misgivings and contradictions in his beliefs, it was a pretty entertaining speech.

American Insurance Group is in the headlines again for not honoring the very insurance policies they sold.  AIG’s collapse largely stemmed from their “business” of selling trillions of dollars in credit default swaps – with no capability or reserves to honor the insurance they sold.  Here they go again, with a bit of a twist.  Apparently some homeowner policies were sold with extra benefits of fraud protection, and some Madoff victims are making claims against AIG.  Check out this story that just hit the wires at Marketwatch:

the flailing insurer [AIG] is being sued by two California residents who said their homeowner insurance-fraud protection entitled them to coverage on losses from Madoff’s Ponzi scheme.

The federal lawsuit was filed in Manhattan federal court by Robert and Harlene Horowitz, who said they lost $8.5 million in the Madoff scandal. They filed a class-action suit on behalf of all policy-holders who lost money to Madoff for unspecified damages.

According to the court filing, the Horowitzes alleged that AIG, through its units AIU Holdings and American International Insurance of California, refused to honor AIG Fraud SafeGuard coverage, even though the coverage insures against losses resulting “directly from fraud, embezzlement, or forgery.”

Also check out:

• Who Are These Alleged Madoff “Victims”?

Fibonacci retracement levels are a popular and sometimes wildly successful trading method.  It can be thought of as either a technical trading tool, or even a psycological trading tool.

Leonardo Fibonacci was born in Pisa Italy in the 12th century.  His father Guglielmo was a trading post director near Algiers.  Leonardo often travelled there to help his father and became fascinated with numbers and trading.  At the age of 32 he published Liber Abaci, or Book of Calculation.   One problem discussed in the book was the hypothetical population growth of rabbits, which was based on a sequence of numbers called the Fibonacci numbers.  In the sequence, each number is the sum of the preceding two – 0, 1, 1, 2, 3,  5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, and so on.  And the ratio of any number to its subsequent number approaches the golden ratio, or .618.  That golden ratio is very popular in nature, and is also sometimes effective in predicting retracement levels in the stock market.

Creating Fibonacci retracement lines is very easy to do from within Optionsxpress.  First, select Flexcharts from the Quote menu.  Next enter the desired symbol or index, select the timeframe and line type, and use the select tool to choose Fibonacci retracement, as shown below.

Fibonacci retracement lines are drawn from two extreme points within a clear past trend.  They can be drawn on a minute by minute day trading chart or a larger weekly, monthly or yearly chart.  The example below is from a 6 month daily chart of Walmart, and the Fibonacci lines are drawn using the peak and low from the large downward trend during April.  Once the Fibonacci retracement select tool is chosen, just point and click twice on the chart – once for each extreme point within the desired trend.  The example is shown below.

Exactly how well do these retracement zones work?  That you will have to decide for yourself, but do it with your own money and at your own risk! I would also recommend reading a bit more on the subject before diving in with real money.

For a more in depth explanation of Fibonacci trading, I highly recommend the following book:

Fibonacci Trading: How to Master the Time and Price Advantage by Carolyn Boroden

According to this Marketwatch article, the price to rent an apartment is under downward pressure, and consumers may be able to get their rent prices reduced just by asking.  Mike Haskins, a Raleigh area renter, was profiled in the story.  He took advantage of his local market circumstances – new rental units which had just been built in combination with a low capacity in his own building – to negotiate a rent decrease.

It took some pushing — and a threat to take his business elsewhere — but before long, Haskins made a deal. When he renewed his lease, his rent was $100 lower…

In response to vacancies, 68% of landlords said they were lowering rents and 68% also said they were giving one or more months of rent free; 38% said they were reducing deposits; and 18% were offering upgrades or allowing more leniency for breaking leases or changing status, according to the Rent.com survey. Fifteen percent are offering storage or parking at reduced rates, and 8% are relaxing pet policies.

The Seattle rental market is also facing downward pressure on rents, according to this Seattle area blogger, who recently negotiated an offer from his landlord from an increase of 3.5% into a decrease of 5%.

Do you have any rental reduction stories to share?  Post them here in the comments.

Here is the latest snapshot from the prophet.net free industry group rankings, showing which industries are drawing in the most money.  The market has been on fire for the last several months, all while delivering fatal sucker punches to those who remain short.

Is this continued rally a sign of real economic growth and recovery, or just another suckers rally and head fake before the next leg down?

Answer:  It doesn’t really matter.  The strategy of the Geldpress trading team remains the same.  Continue to ride the wave up, but remain cautious, and keep the position hedges on – covered calls, married puts or collars.

Also see:

• Covered Calls – Scottrade, Tradeking, Fidelity
• Time for cover – the covered call
• Married Puts, Collars, And Hybrid Hedging
• Option Collar Length – Front Month Or Leaps