The Most and the Least Shorted

In the following lists you can find from Seeking Alpha an overview with the most and least shorted stocks in the S&P 500 index, based on the short ratio.

Top 10 Most Shorted

Fastenal Co. (FAST): 12.87
Cerner Corp. (CERN): 12.43
Waste Management, Inc. (WM): 12.43
CMS Energy Corp. (CMS): 11.43
Integrys Energy Group, Inc. (TEG): 10.55
Roper Industries Inc. (ROP): 10.31
Mylan, Inc. (MYL): 10.13
Total System Services, Inc. (TSS): 10.13
Moody's Corp. (MCO): 9.98
Cincinnati Financial Corp. (CINF): 9.47

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Top Ten Least Shorted

Apple Inc. (AAPL): 0.43
McAfee, Inc. (MFE): 0.46
The Goldman Sachs Group, Inc. (GS): 0.65
Cisco Systems, Inc. (CSCO): 0.68
SanDisk Corp. (SNDK): 0.69
Pactiv Corp. (PTV): 0.75
MetLife, Inc. (MET): 0.75
Hasbro Inc. (HAS): 0.81
Bank of America Corporation (BAC): 0.82
PerkinElmer Inc. (PKI): 0.82

* Short Ratio: A sentiment indicator that is derived by dividing the short interest by the average daily volume for a stock. This indicator is used by both fundamental and technical traders to identify the prevailing sentiment the market has for a specific stock.

Intel Corp. agreed to buy McAfee Inc. for $7.68 billion, its largest acquisition.McAfee investors will receive $48 a share in cash and that is 60 percent more than McAfee’s closing price yesterday. Click here to read the article from Bloomberg.

W

One of the basic questions today is whether Western governments should spent more in order to avoid a second recession or to hold down in order to restore the confidence among investors. Albert Edwards from Societe Generale says that this debate is a waste of time. Click here to read the full article from Prison Planet for the second recession that Edwards forecasts.  

Below you can find some key points from the article:

Albert Edwards reverts to his favorite economic concept, the “Ice Age” in his latest commentary piece, presenting another piece in the puzzle of similarities between the Japanese experience and that which the US is currently going through.  

Edwards focuses on the disconnect between bonds and stocks, and synthesizes it as follows: “investors are finally accepting that what is going on in the West is indeed very similar to Japan a decade ago. For years my attempts to draw this parallel have been met with hoots of derision  but finally the penny is dropping.” The primary disconnect in asset classes as the Ice Age unravels, for those familiar with Edwards work, is the increasing shift away from stocks and into bonds, probably best summarized by the chart below comparing global bond and equity yields – note the increasing decoupling. This is prefaced as follows: “The reaction of bond markets is wholly appropriate given it seems we are heading into outright deflation. The increasing divergence of bond and equity market yields that has been a key plank of the Ice Age will continue (see chart below). Equities will look increasingly cheap relative to expensive bonds.”

If the market is allowed to find its natural place without endless Fed manipulation (and not necessarily of stocks: the outright open intervention of USTs, MBS, and monetary aggregates is sufficient), the plunge lower will be severe, dramatic and instantaneous. Which explains why on Tuesday everyone anticipates a new message of monetary loosening, regardless of the form it ultimately takes.

Re my last...

General Motors Co. filed for an initial public offering that may be the second-largest American I.P.O in history. The aim of the offering is cutting the government’s stake to less than 50 percent. 

Click here to read the article from Bloomberg.

Laffer curve

Laffer curve, the idea, popularized by economist Arthur Laffer and writer Jude Wanninski in the 1970s and '80s, is nothing more than a representation of the relationship between government revenue raised by taxation and all possible rates of taxation. In this curve the increasing tax rates beyond a certain point will become counterproductive for raising further tax revenue. 

Click here to read an article from Dylan Matthew with tax experts giving their opinion for where the Laffer curve bends in U.S or in other words which is the revenue maximizing rate.

...and something for the nuclear non-proliferation

Krugman on Ryan and Ryan on Krugman

Click here to read the comments of Paul Krugman on the "Ryan Plan" for solving the fiscal problem in the U.S. and here for the response of the Republican congressman Paul Ryan of Wisconsin...

Book Proposal

The Cartoon Introduction to Economics: Volume One: Microeconomics
by Grady Klein and Yoram Bauman

For more information please click here

Goldman Sachs vs. Morgan Stanley

Where the American economy is headed? Click here to read the two different roads...