Charting Stocks

A humanitarian aid ship which set sail for the Gaza strip has been seized by occupying Israeli forces today. The Israeli military abducted 21 human rights workers from 11 countries  including former U.S. Congresswoman Cynthia McKinney and Noble laureate Mairead Maguire. The passengers and crew, though traveling in international waters, were forcibly dragged toward Israel.

Members of the crew are being detained. Israeli Foreign Ministry spokesman Yigal Palmor said Israel was planning to free the crew and passengers. “Nobody wants to keep them here,” he said. “They will be released as soon as they are checked.”

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In its busiest weekend in decades, the FDIC closed 5 more banks bringing the number of total bank failures to 45 for the year. This weekend exceeded the previous record when 4 banks failed on a single weekend in February.   Two of the seized banks were located in California, two more in Georgia and one in Minnesota. The FDIC was able to find buyers for 4 of the 5 failed bank deposits.

Community Bank of West Georgia failed in the true sense of the word. The FDIC did not find a suitable bank to assume their deposits. The FDIC will mail checks directly to depositors for an amount within the FDIC insurance coverage limit. It is estimated that the bank had $1.1 million of uninsured deposits.

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Ecuador’s President Rafael Correa has vowed to sue the Wall Street Journal for linking his government to the Colombian FARC rebels.  “We will sue this newspaper because we are sick of their lies,” Correa told reporters on Thursday after addressing the UN General Assembly’s Conference on the world financial crisis, Reuters reported.

“We demand the Wall Street Journal provide proof,” he said, dismissing the journal’s accusations that he is affiliated with the Revolutionary Armed Forces of Colombia (FARC).

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Was Michael Jackson’s fatal cardiac arrest the result of psychiatric drugs?

In a May 2009 study, which was largely ignored by the mainstream US media,  Jussi Honkola, MD,at the University of Oulu, Finland concluded that people who suffered fatal cardiac arrest were more likely to have taken antidepressants and other psychiatric drugs than those who survived.

“Our study shows that medications may negatively impact a person’s chance of surviving an acute coronary event such as a heart attack,” Dr. Honkola warns. “With more people taking medications such as painkillers and antidepressants, the public needs to understand the potential risks and serious consequences.”

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There are several unconfirmed reports that pop star Michael Jackson died today. The website TMZ.com was the first to break the story. They claim that the King of Pop suffered cardiac arrest at his Hollywood Hills home. [Confirmed: Michael Jackson dead at 50]

Jackson was reportedly rushed to Ronald Reagan UCLA Medical Center this afternoon by Los Angeles Fire Department paramedics. Fire Capt. Steve Ruda said paramedics responded to a call at Jackson’s home at 12:26 p.m. He was not breathing when they arrived. The paramedics performed cardiopulmonary resuscitation and took him to the hospital where, TMZ reports, Jackson was pronounced dead.

Michael is survived by three children: Michael Joseph Jackson, Jr., Paris Michael Katherine Jackson and Prince “Blanket” Michael Jackson II.

Citigroup has suspended mortgage applications at a unit which produced nearly $58 billion (half of the their mortgage business)  after the bank discovered that  income verifications and property appraisals were ‘missing.’ Other missing information includes employment verifications, phone numbers, credit reports and rent verification.

In a letter to clients, Citigroup stated that the division has stopped accepting new loans on June 23rd and will resume operations on July 6th. The bank has not disclosed how many documents went missing.

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The UK government has frozen $1.6 billion of Iran’s assets. British officials made the announcement on Thursday and claim that the money was frozen under international sanctions imposed over Tehran’s nuclear program. You know, the nuclear program which Iran has every legal right to pursue under the Nuclear Non-Proliferation Treaty.

UK’s economic secretary to the Treasury Ian Pearson said in a written statement to parliament “The total assets frozen in the UK under the EU (European Union) and UN sanctions against Iran are approximately 976,110,000 pounds.” Pearson did not elaborate.

The EU has frozen assets of Iran’s biggest bank, Bank Melli.

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After nearly 5 years of  depression, the housing market will likely bottom in 2010. Many of the major home builder stocks have finally broken above 4 year downtrends, while others are showing clear signs of a bottom (pinch me).

Why do we care about stocks? It’s important to understand one of the most fundamental principles of finance - the stock market is one of the the best leading economic indicators. Stocks lead the economy.  Remember stocks began to crash in 2000 and late 2007, while the economic recessions began in 2001 and 2008. In housing, the home building stocks peaked in late 2005, yet housing prices topped in the middle of 2006 (Case-Shiller home price data).

KB Homes (NYSE: KBH chart below) has been in steady decline in late 2005. The 4-year downtrend line was finally broken in April. Many of the stocks in this group show similar patterns. A bottom in the home builder stocks should translate into a housing price bottom within 6-12 months.

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Last week, we mentioned that technical indicators began to turn negative. Technical damage continued today as the Dow Jones Industrial Average, Dow Jones Transportation Average, and  S&P 500 closed below their pivotal 50 and 200 day moving averages (first time since March), with all 3 averages registering an RSI sell signal.  NASDAQ bucks the trend and remains above both critical levels.

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This is a map of the middle east which plots countries that have a US military presence. You still think Iranians want our “Help?”