The Market Direction…

With stock market investors diverting so much attention to Greece’s potential default on sovereign debt, I decided to share a rather timely commentary analysis from one of Hillbent’s affiliated partners, Stratfor.com.

I think a more substantive geopolitical analysis of Germany’s underlying motivations to support or withdraw from a bailout of Greece may benefit readers more than the myriad emotionally triggered sound bites touted by financial media pundits dependent upon viewer ratings.

Enjoy…

By Marko Papic and Peter Zeihan

The situation in Europe is dire.

After years of profligate spending, Greece is becoming overwhelmed. Barring some sort of large-scale bailout program, a Greek debt default at this point is highly likely. At this moment, European Central Bank liquidity efforts are probably the only thing holding back such a default. But these are a stopgap measure that can hold only until more important economies manage to find their feet. And Europe’s problems extend beyond Greece. Fundamentals are so poor across the board that any number of eurozone states quickly could follow Greece down.

And so the rest of the eurozone is watching and waiting nervously while casting occasional glances in the direction of Berlin in hopes the eurozone’s leader and economy-in-chief will do something to make it all go away. To truly understand the depth of the crisis the Europeans face, one must first understand Germany, the only country that can solve it.

Germany’s Trap

The heart of Germany’s problem is that it is insecure and indefensible given its location in the middle of the North European Plain. No natural barriers separate Germany from the neighbors to its east and west, no mountains, deserts, oceans. Germany thus lacks strategic depth. The North European Plain is the Continent’s highway for commerce and conquest. Germany’s position in the center of the plain gives it plenty of commercial opportunities but also forces it to participate vigorously in conflict as both an instigator and victim.

Germany’s exposure and vulnerability thus make it an extremely active power. It is always under the gun, and so its policies reflect a certain desperate hyperactivity. In times of peace, Germany is competing with everyone economically, while in times of war it is fighting everyone. Its only hope for survival lies in brutal efficiencies, which it achieves in industry and warfare.

Pre-1945, Germany’s national goals were simple: Use diplomacy and economic heft to prevent multifront wars, and when those wars seem unavoidable, initiate them at a time and place of Berlin’s choosing.

“Success” for Germany proved hard to come by, because challenges to Germany’s security do not “simply” end with the conquest of both France and Poland. An overstretched Germany must then occupy countries with populations in excess of its own while searching for a way to deal with Russia on land and the United Kingdom on the sea. A secure position has always proved impossible, and no matter how efficient, Germany always has fallen ultimately.

During the early Cold War years, Germany’s neighbors tried a new approach. In part, the European Union and NATO are attempts by Germany’s neighbors to grant Germany security on the theory that if everyone in the immediate neighborhood is part of the same club, Germany won’t need a Wehrmacht.

There are catches, of course — most notably that even a demilitarized Germany still is Germany. Even after its disastrous defeats in the first half of the 20th century, Germany remains Europe’s largest state in terms of population and economic size; the frantic mindset that drove the Germans so hard before 1948 didn’t simply disappear. Instead of German energies being split between growth and defense, a demilitarized Germany could — indeed, it had to — focus all its power on economic development. The result was modern Germany — one of the richest, most technologically and industrially advanced states in human history.

Germany and Modern Europe

That gives Germany an entirely different sort of power from the kind it enjoyed via a potent Wehrmacht, and this was not a power that went unnoticed or unused.

France under Charles de Gaulle realized it could not play at the Great Power table with the United States and Soviet Union. Even without the damage from the war and occupation, France simply lacked the population, economy and geographic placement to compete. But a divided Germany offered France an opportunity. Much of the economic dynamism of France’s rival remained, but under postwar arrangements, Germany essentially saw itself stripped of any opinion on matters of foreign policy. So de Gaulle’s plan was a simple one: use German economic strength as sort of a booster seat to enhance France’s global stature.

This arrangement lasted for the next 60 years. The Germans paid for EU social stability throughout the Cold War, providing the bulk of payments into the EU system and never once being a net beneficiary of EU largesse. When the Cold War ended, Germany shouldered the entire cost of German reunification while maintaining its payments to the European Union. When the time came for the monetary union to form, the deutschemark formed the euro’s bedrock. Many a deutschmark was spent defending the weaker European currencies during the early days of European exchange-rate mechanisms in the early 1990s. Berlin was repaid for its efforts by many soon-to-be eurozone states that purposely enacted policies devaluing their currencies on the eve of admission so as to lock in a competitive advantage vis-à-vis Germany.

But Germany is no longer a passive observer with an open checkbook.

In 2003, the 10-year process of post-Cold War German reunification was completed, and in 2005 Angela Merkel became the first postwar German leader to run a Germany free from the burden of its past sins. Another election in 2009 ended an awkward left-right coalition, and now Germany has a foreign policy neither shackled by internal compromise nor imposed by Germany’s European “partners.”

The Current Crisis

Simply put, Europe faces a financial meltdown.

The crisis is rooted in Europe’s greatest success: the Maastricht Treaty and the monetary union the treaty spawned epitomized by the euro. Everyone participating in the euro won by merging their currencies. Germany received full, direct and currency-risk-free access to the markets of all its euro partners. In the years since, Germany’s brutal efficiency has permitted its exports to increase steadily both as a share of total European consumption and as a share of European exports to the wider world. Conversely, the eurozone’s smaller and/or poorer members gained access to Germany’s low interest rates and high credit rating.

And the last bit is what spawned the current problem.

Most investors assumed that all eurozone economies had the blessing — and if need be, the pocketbook — of the Bundesrepublik. It isn’t difficult to see why. Germany had written large checks for Europe repeatedly in recent memory, including directly intervening in currency markets to prop up its neighbors’ currencies before the euro’s adoption ended the need to coordinate exchange rates. Moreover, an economic union without Germany at its core would have been a pointless exercise.

Investors took a look at the government bonds of Club Med states (a colloquialism for the four European states with a history of relatively spendthrift policies, namely, Portugal, Spain, Italy and Greece), and decided that they liked what they saw so long as those bonds enjoyed the implicit guarantees of the euro. The term in vogue with investors to discuss European states under stress is PIIGS, short for Portugal, Italy, Ireland, Greece and Spain. While Ireland does have a high budget deficit this year, STRATFOR prefers the term Club Med, as we do not see Ireland as part of the problem group. Unlike the other four states, Ireland repeatedly has demonstrated an ability to tame spending, rationalize its budget and grow its economy without financial skullduggery. In fact, the spread between Irish and German bonds narrowed in the early 1980s before Maastricht was even a gleam in the collective European eye, unlike Club Med, whose spreads did not narrow until Maastricht’s negotiation and ratification.

Even though Europe’s troubled economies never actually obeyed Maastricht’s fiscal rules — Athens was even found out to have falsified statistics to qualify for euro membership — the price to these states of borrowing kept dropping. In fact, one could well argue that the reason Club Med never got its fiscal politics in order was precisely because issuing debt under the euro became cheaper. By 2002 the borrowing costs for Club Med had dropped to within a whisker of those of rock-solid Germany. Years of unmitigated credit binging followed.

The 2008-2009 global recession tightened credit and made investors much more sensitive to national macroeconomic indicators, first in emerging markets of Europe and then in the eurozone. Some investors decided actually to read the EU treaty, where they learned that there is in fact no German bailout at the end of the rainbow, and that Article 104 of the Maastricht Treaty (and Article 21 of the Statute establishing the European Central Bank) actually forbids one explicitly. They further discovered that Greece now boasts a budget deficit and national debt that compares unfavorably with other defaulted states of the past such as Argentina.

Investors now are (belatedly) applying due diligence to investment decisions, and the spread on European bonds — the difference between what German borrowers have to pay versus other borrowers — is widening for the first time since Maastricht’s ratification and doing so with a lethal rapidity. Meanwhile, the European Commission is working to reassure investors that panic is unwarranted, but Athens’ efforts to rein in spending do not inspire confidence. Strikes and other forms of political instability already are providing ample evidence that what weak austerity plans are in place may not be implemented, making additional credit downgrades a foregone conclusion.

(click here to enlarge image)

Germany’s Choice

As the EU’s largest economy and main architect of the European Central Bank, Germany is where the proverbial buck stops. Germany has a choice to make.

The first option, letting the chips fall where they may, must be tempting to Berlin. After being treated as Europe’s slush fund for 60 years, the Germans must be itching simply to let Greece and others fail. Should the markets truly believe that Germany is not going to ride to the rescue, the spread on Greek debt would expand massively. Remember that despite all the problems in recent weeks, Greek debt currently trades at a spread that is only one-eighth the gap of what it was pre-Maastricht — meaning there is a lot of room for things to get worse. With Greece now facing a budget deficit of at least 9.1 percent in 2010 — and given Greek proclivity to fudge statistics the real figure is probably much worse — any sharp increase in debt servicing costs could push Athens over the brink.

From the perspective of German finances, letting Greece fail would be the financially prudent thing to do. The shock of a Greek default undoubtedly would motivate other European states to get their acts together, budget for steeper borrowing costs and ultimately take their futures into their own hands. But Greece would not be the only default. The rest of Club Med is not all that far behind Greece, and budget deficits have exploded across the European Union. Macroeconomic indicators for France and especially Belgium are in only marginally better shape than those of Spain and Italy.

At this point, one could very well say that by some measures the United States is not far behind the eurozone. The difference is the insatiable global appetite for the U.S. dollar, which despite all the conspiracy theories and conventional wisdom of recent years actually increased during the 2008-2009 global recession. Taken with the dollar’s status as the world’s reserve currency and the fact that the United States controls its own monetary policy, Washington has much more room to maneuver than Europe.

Berlin could at this point very well ask why it should care if Greece and Portugal go under. Greece accounts for just 2.6 percent of eurozone gross domestic product. Furthermore, the crisis is not of Berlin’s making. These states all have been coasting on German largesse for years, if not decades, and isn’t it high time that they were forced to sink or swim?

The problem with that logic is that this crisis also is about the future of Europe and Germany’s place in it. Germany knows that the geopolitical writing is on the wall: As powerful as it is, as an individual country (or even partnered with France), Germany does not approach the power of the United States or China and even that of Brazil or Russia further down the line. Berlin feels its relevance on the world stage slipping, something encapsulated by U.S. President Barack Obama’s recent refusal to meet for the traditional EU-U.S. summit. And it feels its economic weight burdened by the incoherence of the eurozone’s political unity and deepening demographic problems.

The only way for Germany to matter is if Europe as a whole matters. If Germany does the economically prudent (and emotionally satisfying) thing and lets Greece fail, it could force some of the rest of the eurozone to shape up and maybe even make the eurozone better off economically in the long run. But this would come at a cost: It would scuttle the euro as a global currency and the European Union as a global player.

Every state to date that has defaulted on its debt and eventually recovered has done so because it controlled its own monetary policy. These states could engage in various (often unorthodox) methods of stimulating their own recovery. Popular methods include, but are hardly limited to, currency devaluations in an attempt to boost exports and printing currency either to pay off debt or fund spending directly. But Greece and the others in the eurozone surrendered their monetary policy to the European Central Bank when they adopted the euro. Unless these states somehow can change decades of bad behavior in a day, the only way out of economic destitution would be for them to leave the eurozone. In essence, letting Greece fail risks hiving off EU states from the euro. Even if the euro — not to mention the EU — survived the shock and humiliation of monetary partition, the concept of a powerful Europe with a political center would vanish. This is especially so given that the strength of the European Union thus far has been measured by the successes of its rehabilitations — most notably of Portugal, Italy, Greece and Spain in the 1980s — where economic-basket case dictatorships and pseudo-democracies transitioned into modern economies.

And this leaves option two: Berlin bails out Athens.

There is no doubt Germany could afford such a bailout, as the Greek economy is only one-tenth of the size of the Germany’s. But the days of no-strings-attached financial assistance from Germany are over. If Germany is going to do this, there will no longer be anything “implied” or “assumed” about German control of the European Central Bank and the eurozone. The control will become reality, and that control will have consequences. For all intents and purposes, Germany will run the fiscal policies of peripheral member states that have proved they are not up to the task of doing so on their own. To accept anything less intrusive would end with Germany becoming responsible for bailing out everyone. After all, who wouldn’t want a condition-free bailout paid for by Germany? And since a euro-wide bailout is beyond Germany’s means, this scenario would end with Germany leading the EU hat-in-hand to the International Monetary Fund for an American/Chinese-funded assistance package. It is possible that the Germans could be gentle and risk such abject humiliation, but it is not likely.

Taking a firmer tack would allow Germany to achieve via the pocketbook what it couldn’t achieve by the sword. But this policy has its own costs. The eurozone as a whole needs to borrow around 2.2 trillion euros in 2010, with Greece needing 53 billion euros simply to make it through the year. Not far behind Greece is Italy, which needs 393 billion euros, Belgium with needs of 89 billion euros and France with needs of yet another 454 billion euros. As such, the premium on Germany is to act — if it is going to act — fast. It needs to get Greece and most likely Portugal wrapped up before crisis of confidence spreads to the really serious countries, where even mighty German’s resources would be overwhelmed.

That is the cost of making Europe “work.” It is also the cost to Germany of leadership that doesn’t come at the end of a gun. So if Germany wants its leadership to mean something outside of Western Europe, it will be forced to pay for that leadership — deeply, repeatedly and very, very soon. But unlike in years past, this time Berlin will want to hold the reins.

(Editor’s Note: STRATFOR is the world leader in global intelligence. Its team of experts collects and analyzes intelligence from every part of the world — offering unparalleled insights through their exclusively published analyses and forecasts. Whether it be on political, economic or military developments, STRATFOR not only provides its members with a better understanding of current issues and events, but invaluable assessments of what lies ahead. Renowned author and futurologist George Friedman founded STRATFOR in 1996. Most recently, he authored the international bestseller, The Next 100 Years. Dr. Friedman is supported by a team of professionals with widespread experience, many of whom are internationally recognized in their own right. Although its headquarters are in Austin, Texas, STRATFOR’s staff is widely distributed throughout the world.)

*Note that Hillbent.com does not officially endorse the commentaries of any contributors and its sole purpose of providing such content is for the convenience of our readers and to further assist their research efforts.

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Here’s an interesting commentary from highly respected economist, Robert Shiller (professor at Yale University).

He speaks to us from Davos and shares a short opinion on the future of large banks in the U.S. and the regulatory environment in which they operate.

The video interview with Bloomberg’s Betty Liu is @ 3 minutes long. Enjoy…

Professor Shiller on Major Changes for Big Banks

(Courtesy of YouTube)

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

With recent BLS unemployment figures ranging from U3 @ 10.2% to U6 @ 17.5% (aka alternative measures of labor underutilization), it is no wonder that foreclosures have been climbing at an alarming rate in the face of America’s "statistical" economic recovery. Stimulus funds are either spent or pending deployment, so there is probably little outside of employer based tax incentives (perish the thought!) or "legitimate" economic recovery (reminds me of waiting for Godot) upon which the Obama Administration can depend for job growth.

Meanwhile, many individual household balance sheets continue to bleed red while the Fed Reserve has done plenty to help shore up the balance sheets of banks and other "too big to fail" institutions that represent a systemic risk to our financial system. Is saving the little guy (i.e. individual taxpayer and/or currently unemployed) just "too small to matter" in calculating the systemic risks to our nation’s financial system, community social fabric, and family infrastructure?

If you are a corporate socialist rat bastard who accepted taxpayer money and/or transferred the risks of illiquid assets to taxpayers just to save your own ass when the fit hit the shan, then engaged in the redeployment of literally free government loans to support your gambling habit and high bonuses, and now find yourself hypocritcally espousing the virtues of free-market capitalism to argue against such loan modifications, then the answer is probably yes.

The bottom line is that positive cash flow determines who survives and being gainfully employed (vs. passive income) is the primary source for most Americans. Therefore, it should come as no surprise that the Obama Administration intends to target TARP recipients who have been either reluctant or inefficient when it comes to extending loan modifications for eligible borrowers. Below is an excerpt from Bloomberg’s coverage of this story:

The U.S. Treasury Department will begin taking action against lenders that aren’t doing enough to ease mortgage payments for troubled homeowners as part of the Obama administration’s campaign to curb foreclosures.

Lenders face “consequences” that may include sanctions and monetary penalties if they fail to perform under the Home Affordable Modification Program, the Treasury said. The $75 billion program requires banks that took federal aid to help homeowners at “imminent risk” of default by lengthening repayment terms, lowering interest rates and making other changes to the mortgages to avert foreclosure.

It is not like the president has much choice. Have you reviewed Gallup’s most recent job approval stats on him lately? 51% approve and 41% disapprove. Given the economic outlook in another Gallup Poll survey, this should be expected. Only 37% see things getting better while 57% believe they will get worse.

Let us return to the banks. Their lack of participation is understandable. Modifying loan terms to reduce mortgage payments would require a reduction in principal balances due or extending the repayment period. Either choice negatively impacts earnings going forward. The first would translate into more write downs for banks while the latter would unfairly disadvantage individual borrowers (whose tax dollars, incidentally, have been used to bail out their mortgage creditors who still wish to collect full boat on residential real estate assets worth at least 40% to 50% less).

Oh well, if this Friday’s employment situation report is worse than expected, I would anticipate more urgency being directed towards the implementation of penalties for non-compliant lenders who fail or refuse to modify loans and ultimately the bottom line for their borrowers/benefactors. Bank of America (BAC) is reputed to be worst among TARP recipients and holds almost 25% of the 4 million loans set for modification. Morgan Stanley (MS), Citigroup (C), and JP Morgan Chase (JPM) are noted as the best of the program’s participants.

There is no neat way to end this story which is just one big mess in and of itself. Therefore, I have no further comments.

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

It was reported in Mumbai that India may be ready to buy the remaining portion of IMF gold that is up for sale and bring the tally of its recent gold purchases up to 401 tons. If so, India’s purchase of gold at historically high levels speaks volumes about its perception of the Fed’s credibility to support the dollar.

In this current environment, emerging market central banks find themselves swimming in dollars and other fiat currencies to maintain their reserves.  Unlike some developed nations which have higher percentages of their reserves backed by gold, this is not the case for these fast growing countries and nor is it necessarily as convenient for them to do so.

The expansion of the monetary supply base easily outstrips the amount of new gold that is being mined on an annual basis. Mathematically, there is simply not enough of the shiny yellow stuff to go around for everyone if everyone simultaneously decides to add to their central bank reserves.

News events like this make me wonder how other countries such as Russia or China will react. Actually, we already know how China is responding. It is simply purchasing the gold that is being mined within the borders of its country.

As a side note, for all the criticism about U.S. monetary policy, it has the largest percentage as well as proportionate percentage of its reserves in gold.As far as I am concerned about the U.S.: we may be dumb, but ain’t stupid.

Here’s an excerpt from the story on India’s gold purchases which can be linked to at Commodity Online for the complete article:

 

India is still bullish on gold. This was evident when reports said India’s Reserve bank is still in talks with the International Monetary Fund (IMF) to buy another 200 tonne gold which the international body is ready to dispose of to fund its projects.

Earlier in November India had bought 200 tonnes of gold from the IMF for over $6.7 billion after which the global bullion market witnessed a bull run which lifted the yellow metal prices above $1150 per ounce.

The fresh attempt by the Indian central bank has added to the soaring prices of gold and the metal set a new record on Tuesday.
 
At the time of the purchase of the first lot of 200 tonnes, RBI had said it was part of its foreign exchange reserves management operations.

According to IMF, it has no fixed timetable for completing the sale.

RBI is on a spree to enrich its reserves and it wishes to change it to gold rather than dollar. That was evident when India first bought the 200 tonne gold. In just three weeks after it bought the gold, India benefited by $800 million on the investment of $6.7 billion it made in buying 200 tonnes from IMF.

Related securities: GLD, PTM, and SLV

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Democratic Rep. Defazio is calling for the resignations of Messrs. Geithner and Summers. There are clearly some disturbing things about the way the bailout was handled and the fact that much of it has been shrouded in secrecy is only making matters worse.

By the way, I strongly recommend reading the following review by Cumberland Advisors’ Robert Eisenbaus, In Fed We Trust, as it will also help connect the dots in this brief blog post. Should your blood begin to boil while reading it, take a few deep breaths or a yoga break. Here’s the Defazio video (hat tip to Yves Smith @ Naked Capitalism):

Meanwhile, attacking from the right or independent flank is Ron Paul, who is calling for reformation and more transparency from the Federal Reserve. Label me naive or whatever else suits your fancy, but I happen to believe that the American people are entitled to know how and for what purpose(s) their money was spent. Let’s face it. It is our money. Ironically and hypocritically, banks, who themselves engage in the activities of lending, require specific disclosures regarding the use of funds when lending capital, but I guess these standards do not apply to bailout loans.

Realistically, there is probably insufficient support from either side of the ailse to force an audit of the Federal Reserve. However, a simultaneous full court press demanding accountability from the Fed while insisting upon an early changing of the guard with Geithner and Summers might be just enough leverage to effect some form of change. The Fed is a sacred cow, but to appease the mob, it is plausible that Geithner and/or Summers could be asked to fall on their swords for Ceasar. Oh well, politics and money do make strange bedfellows and they will forever remain inseparable. 

P.S. May the ghost of Tom Joad embolden and empower Messrs. Paul and  Defazio to carry on their fight for truth and justice in America on behalf of its people…

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.