Make everything sound horrible and hope (against hope) that it will be better than horrible. I used to prepare my parents for the worst when it was report card time. That way they were not so mad when things weren't all bad. However, when the straight Fs come in, it doesn't matter. Here that Dimon, it doesn't matter.
Housing is having a dead cat bounce on the lower end, the credit crunch is in the 7th inning stretch but the malaise is finally sinking into the general economy. A lot of people are gonna go away for summer vacation and return to someplace else.
Dude sounds ungrateful to me. Taxpayers backing his BS portfolio which will make him millions. He could at least lie and paint a rosey picture as does Bush, Paulson ans Bernake
Asset Management expected to post losses through 09?! Their acquisition of Highbridge (the quant HF shop) has been held out as a model of success, but this looks like it has been/will be anything but. Even if their traditional strategies (huge in EAFE equities, cash, fixed income) were doing poorly, it's hard to see how you could forecast a loss in those areas without making a big market call, especially over such a long time period.
Delayed contraction. The longer the Fed and the Federal budget wranglers continue to use one shot and dubious bookkeeping schemes; the longer and more severe the recession. I never understood the fear of the economic cycle. Must be my Catholic upbringing. Why is there pain, why is there hell? Because without them we would have basis for proper actions. [Tanta may appreciate;] A world with no evil is left bereft of free will. An economy without stumbles cannot achieve greater heights.
Of course the recession is just starting. Every effort has been exausted to end load any possible trigger event. Every possible manipulation of the data has been modeled to obfuscate comparisons to past periods.
Then for all the brutal honesty Dimon decides enough and goes back to being a First Class Steward on the Titanic by claiming the capital markets crisis is 75% done. The great unwinding has only evaporated ~$2T of the necessary $7-$9T in the housing market alone. Dimon must think that economies turn on a dime. His statements seem to assume that seeing the next icebergs means avoiding them.
I believe that the President has decreed that there shall be no recession.
Perhaps you folks didn't get the memo.
Nothing to see here....please resume your favorite television program.
The Dow fell over 400 points from its recent high in the previous 6 trading days. A short covering rally isn't unusual.
It seems highly superficial to me. I've seen no real evidence of deleveraging. All the leveraged commodity, emerging market, and tech plays are holding up just fine.
This hasn't been a downward movement with any real conviction.
And why should there be any conviction when it's basically written into our constitution that the slightest blip on Wall Street will be relentlessly blasted with taxpayer funds until it reverses and turns into a new bubble.
I'm thinking of buying a false bottom suitcase for when I go to Chiapas, Mx I know I can hide an illegal alien and write down part of my trip.. It seems like it might fit under FASB rule number ?
Dennis Kneale is proof that lobotomies, totally removing the skeptical lobe, are 100% successful in creating perfect zombies. He should be "acting" in leave it to beaver remakes instead of bubblevision.
May 12 (Bloomberg) JPMorgan Chase & Co plans to eliminate about 1 million square feet of New York office space as it takes over Bear Stearns Co, CEO Jamie Dimon said.
The company will move its entire investment banking operation into the Bear Stearns headquarters building at 383 Madison Ave., Dimon said today at a conference in New York.
JPMorgan is taking on about 4.1 million square feet of Bear Stearns space, he said.
Russian stocks offer "exceptional value" and the benchmark RTS stock index may surge 20% over the next 12 months, with the catalysts for a rally likely to come from soaring oil prices as well as a decision to cut oil taxes, Goldman Sachs analysts said Monday.
OT: look at this footnote (page 20) i just found in indymac's presentation relating to their loss estimates:
2) Figure [severity estimate] appears lower than normal due to the fact that many borrowers have obtained 2nd mortgages/HELOCS that have depleted their equity and so they are walking away from 75-90% LTV 1st mortgages and the loss severity is smaller for the 1st lien holder than normal.
"Dimon said. He warned investors that while he still believes the deal was a good decision, "we are bearing an awful lot of risk" by taking on Bear Stearns' assets."
It seems highly superficial to me. I've seen no real evidence of deleveraging. All the leveraged commodity, emerging market, and tech plays are holding up just fine.
You haven't seen any evidence of deleveraging until it all starts to fall apart. FIve times in the last 15 months, it's started to fall apart: in February 07, August, November and January 08 and March. Each time, the powers that be blasted in liquidity to prop it all up for awhile longer.
Do you see a pattern here? The first time, 6 months elapsed between liquidity panics. Then 3. Then 2.
The Fed is running out of ammo. The public is running out of patience with the Fed and bailouts. And the negative feedback from the earliest liquidity-injections is starting to hit the dollar, commodity prices, the social welfare system, etc.
The U.S. is heading straight into a wave of semi-socialized government that will be a terrible environment for big business and big finance. There will be more draconian investigation and regulation of the financial world over the next few years than ever before.
Never again will so much leverage be allowed to contaminate the markets or the economy that rank-and-file people depend on. Very few people seem capable of seeing this trend happening.
ac, how does short covering explain that 2:30 mystery pop that happens so frequently?
Looks like a PPT from this view.
Well I assume that the pop is just some big player blasting a large chunk of borrowed change in to the futures markets.
The point is this kind of trick probably wouldn't work over and over if you didn't all these shorts to trigger panic buying with.
Remember you don't need some mysterious PPT to explain this stuff.
You have this massive leveraging industry that needs an expanding capital base of inflated assets to survive. Going short doesn't get you that. It's not a viable means for keeping a vast leveraged ponzi scheme afloat.
This isn't the early 90s where proprietary trading desks were making bets on legitimate market inefficiencies.
The investment fund industry we have today is largely a ponzi finance scheme.
Their existence cannot continue without rising asset prices to borrow against.
They will do anything and everything to keep asset prices rising.
Federal Reserve rate cuts and government bailouts minimizes the risk and makes the system predictable to the point where they can do this for much longer periods of time (and thus more destructively).
In the end though like any ponzi scheme it's going to make us much poorer than we otherwise would be.
It's basically legalized, government supported mass robbery.
short covering, in it's classical sense doesn't happen in the way the indexes are constantly popping out new highs. When shorts cover there is a flurry however it dies down and usually retraces some of it's gains.
This is not short covering at all. Too bad most people have no idea at all...so that's why it's always offered up as the reason.
and as already mentioned......always at around 2:30pm eh.??
The U.S. is heading straight into a wave of semi-socialized government that will be a terrible environment for big business and big finance. There will be more draconian investigation and regulation of the financial world over the next few years than ever before.
If China plays their cards right they can completely turn the tables and absorb all our industries as they flee regulation and government intervention that swings from one unhealthy extreme to the opposite due to popular bubble induced backlash.
For that reason it's better to have it sooner rather than later (for us anyhow).
More interesting to me than the comments (which certainly don't seem surprising) is the image of "the wire". I've never really known what exectly the format or appearance of newswire headlines was. It seems strangely atiquated, like they're still using terminals from 1982. I know this it supposed to be fast, unedited news but is there a reason it can't be displayed in 256 colors on with 1024x768 resolution?
Well as far as large international companies go, there is all that Arabian and Chinese money that surely is looking for some place to go other than depreciating US Treasuries. The 100 largest world companies seem like a likely place for both nations to park more of their money. Hence my slight suspicion that larger international companies will always be in demand, and consequently their stock will not drop in a bad recession as much as it did before these pots of money were around.
You haven't seen any evidence of deleveraging until it all starts to fall apart. FIve times in the last 15 months, it's started to fall apart: in February 07, August, November and January 08 and March. Each time, the powers that be blasted in liquidity to prop it all up for awhile longer.
Do you see a pattern here?
Each time leads to worse excesses and more confidence in those running investment scams.
Locally all the real estate investing infomercials have been replaced with stock gambling infomercials.
We can't deal with the pain of confronting our mistakes so instead we heap more mistakes on top of old mistakes to dull the pain making the final outcome worse.
I can't make heads or tails of that footnote, can you? Not that it really matters, it's just one more little cloud in his regularly scheduled obfusacatory shitstorm.
If China plays their cards right they can completely turn the tables and absorb all our industries as they flee regulation and government intervention that swings from one unhealthy extreme to the opposite due to popular bubble induced backlash.
As soon as the Olympics are over, you will see relationships between the U.S. and China turn immediately and permanently more hostile. The Chinese government is in increasingly desperate straits to hang onto power while trickling down so little prosperity to so many millions of people, with devasting permanent negative effects on their environment and cultural traditions.
They will have to go back to militarism, communism and oppression to get over the next hump. To hell with Wal-Mart.
More interesting to me than the comments (which certainly don't seem surprising) is the image of "the wire".
There are a lot of integration issues involved with financial newswires. They come off different platforms and go onto different platforms, with various repackagers and intermediaries in between. To avoid ompatibility problems, they stick to monochome text for the most part.
By the way, a few years ago, financial news wires were one of the highest profit margin products in the world. Now, financial websites and blogs are starting to eat into their biz.
Never again will so much leverage be allowed to contaminate the markets or the economy that rank-and-file people depend on.
Oh I think just like the 1920s once this episode passes out of living memory it will simply be replicated again by a population that thinks they're so superior to their forebears that they're incapable of repeating the same mistakes.
Unless technology fundamentally alters human nature by that time.
JP Morgan recommends Rusia and oil stocks (-> will underperform big time)
CEO predicts a "severe" recession (-> no recession whatsoever)
"China will absorp overregulated US business" (-> US will in fact emerge even stronger as the world's leading economy and prospects for China look bleak). Actually, isn't this week's issue of Newsweek titled something like the "The post-US World", decrying the end of American world leadership? From that perspective, the US must be stronger than ever.
ac is right on. rich also seems to know what he's talking about. thanks to both of you for your comments. Too bad we don't currently, and won't in the cumming years, have a leader in the white house who can look at the big picture like you guys.
The Chinese government is in increasingly desperate straits to hang onto power while trickling down so little prosperity to so many millions of people, with devasting permanent negative effects on their environment and cultural traditions.
It should frighten people that the last time wealth really began pooling into fewer and fewer hands the way it is now it basically took a Great Depression and a great war to undo it.
It's amazing how short-term prosperity deludes people into thinking historical lessons don't apply to them.
And yet it's the oldest story in the book. It's the oldest and most consistently unlearned lesson of them all.
I think we've only seen the first wave of falling house prices. In areas with rampant flipping and extreme upward price movement (like CA and FL (and Las Vegas), there was less resistance to fairly-rapid price drops.
The second wave of price drops is in progress--the weaker hands in the game, poor and lower middle earners who overstretched to buy in and are now BK and homeless.
But a massive third wave awaits. Like our realtor friend who bought a house last year for his daughter in college, and now refuses to sell it at a loss, so she can't move even though she needs to.
Homeowners/landlords like these are not yet in dire financial straits and can afford (they think) to hold out. Their prices stay very sticky.
As the recession bites, however, most of them will eventually go under, and capitulate--which usually will mean bankruptcy.
This is the kind of financial and economic leadership we have in this country right now:
Reflecting the economic slowdown, total receipts are up 3% this year to $1.55 trillion, with individual income taxes rising 6% and corporate income taxes falling 15%. Withheld individual income taxes increased 6%, while non-withheld individual income taxes rose 7%...
Outlays through the first six months are up 7.4% to $1.7 trillion. Military spending has risen 10% after adjusting for calendar differences. Social Security benefits rose 5.5%. Spending on Medicare increased 2%.
It doesn't give much detail of its proposed solution, but it does start the discussion rolling. Here's the first Paragraph:
Quote:
It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance your home with a mortgage that has the same one-in-five chance of putting your family out on the streetand the mortgage wont even carry a disclosure of that fact. Similarly, its impossible for the seller to change the price on a toaster once you have purchased it. But long after the credit-card slip has been signed, your credit-card company can triple the price of the credit you used to finance your purchase, even if you meet all the credit terms. Why are consumers safe when they purchase tangible products with cash, but left at the mercy of their creditors when they sign up for routine financial products like mortgages and credit cards?
Close Quote
People who read this blog for its information about housing and housing finance should find the article interesting.
It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance your home with a mortgage that has the same one-in-five chance of putting your family out on the streetand the mortgage wont even carry a disclosure of that fact. Similarly, its impossible for the seller to change the price on a toaster once you have purchased it.
How about having a regulation against Federal Reserve chairmen that repeatedly devalue your savings so Wall Street can keep scamming the middle class out of all their wealth?
short covering, in it's classical sense doesn't happen in the way the indexes are constantly popping out new highs. When shorts cover there is a flurry however it dies down and usually retraces some of it's gains.
This is not short covering at all. Too bad most people have no idea at all...so that's why it's always offered up as the reason.
and as already mentioned......always at around 2:30pm eh.??
BTW I think it's intentional pumping (by private industry, not some government organization). But the heavy short interest makes it much more effective.
It's a bit like intentionally firing off a shotgun near a heard of cagey cattle.
After the momentum gets going for a while we seem to get more "maintenance pumps" whenever the action starts to slow down.
I suspect it's a combination of using the large leverage available in the futures market in combination with the arbitraging operations as a gearing mechanism into actual stocks.
Again, this is just how I would imagine doing it if I had the means.
It's a bit like intentionally firing off a shotgun near a heard of cagey cattle.
the difference is that the cagey cattle will eventually become accustomed to the shotgun.
OTOH, shorts in this market become less stable and more prone to panicking as each shot is fired. eventually the mere presence of the shotgun will cause them to scatter.
remember when the DOW would jump 20 points every time Charlie Gasparino came on to CNBC after the 3 times he mentioned "MBIA" the market rallied?
as usual you are spot on. The maintenance pumps are getting to be sooooo obvious. The problem is that the banks only know "up".......
as far as the reasons...they are 100% crap. Our country needs to put any event down to some singular thing and the last round of MBIA pumps proves it.
How much did MBIA have in loss today??
If this continues in this way the depression is going to look like a walk in the park.....
BTW despite the dollar weakening today it rallied against the Yen.
Stocks go up, yen goes down & vice versa. Carry trade still alive and well, until Japan is forced to raise interest rates due to rocketing inflation/ food shortages there. When than happens look out below for stocks.
AC and Rich- Bravo on the comments. I would add that the margin calls come out about 2pm. Others have speculated that margin covering has pumped the market on some up days. On others we seem to plunge around 2:30
"
But a massive third wave awaits. Like our realtor friend who bought a house last year for his daughter in college, and now refuses to sell it at a loss, so she can't move even though she needs to."
There's a lot of just that sort of thing in my town: a university town on the central California coast. A lot of well-off SoCal kids go to school here, and over the past 7-8 years or so many of their parents have bought them houses here "as investments." Developers have even advertised condos in the student newspaper.
I know this it supposed to be fast, unedited news but is there a reason it can't be displayed in 256 colors on with 1024x768 resolution?
A WVGA screen is 800x480. The future will be small, portable and low power (see Nokia N800 series and the ASUS EEE PC... and my SVGA Thinkpad 240 circa 1999
I love it when someone talks their book. Let me translate this for everyone:
"The liquidity crisis is over" = I am going to be okay as the FED has my back.
"The recession is just starting" = You guys are screwed but I am great as the FED has my back.
As far as my trading, I am trading against my common sense kinda like George from the Seinfield series. Seems to be working as I am up when I really should not be. As far as the 2:30PM pops, I don't question them but profit from them. Cheers.
1st, sounds bullish to me.
Make everything sound horrible and hope (against hope) that it will be better than horrible. I used to prepare my parents for the worst when it was report card time. That way they were not so mad when things weren't all bad. However, when the straight Fs come in, it doesn't matter. Here that Dimon, it doesn't matter.
It's important to get this kind of news out so that the impact can be priced in. Thus inoculated, stocks have nowhere to go but up!
Does this mean i'm not getting a flat screen TV with my pony?
This would explain the 90 point Dow rally today (when coupled with the FDX warning).
What does Jamie Dimon know?
Wright Model B knows all< /bizarro>
Housing is having a dead cat bounce on the lower end, the credit crunch is in the 7th inning stretch but the malaise is finally sinking into the general economy. A lot of people are gonna go away for summer vacation and return to someplace else.
fuck Jamie Dimon....
Sorry had to say it...
Ciao
MS
Dude sounds ungrateful to me. Taxpayers backing his BS portfolio which will make him millions. He could at least lie and paint a rosey picture as does Bush, Paulson ans Bernake
Asset Management expected to post losses through 09?! Their acquisition of Highbridge (the quant HF shop) has been held out as a model of success, but this looks like it has been/will be anything but. Even if their traditional strategies (huge in EAFE equities, cash, fixed income) were doing poorly, it's hard to see how you could forecast a loss in those areas without making a big market call, especially over such a long time period.
CR, out of curiosity what wire did you get this off? I checked Reuters and Bloomburg and found no mention of any of this. Thanks, Eddie
The Dow fell over 400 points from its recent high in the previous 6 trading days. A short covering rally isn't unusual.
Delayed contraction. The longer the Fed and the Federal budget wranglers continue to use one shot and dubious bookkeeping schemes; the longer and more severe the recession. I never understood the fear of the economic cycle. Must be my Catholic upbringing. Why is there pain, why is there hell? Because without them we would have basis for proper actions. [Tanta may appreciate;] A world with no evil is left bereft of free will. An economy without stumbles cannot achieve greater heights.
Of course the recession is just starting. Every effort has been exausted to end load any possible trigger event. Every possible manipulation of the data has been modeled to obfuscate comparisons to past periods.
Then for all the brutal honesty Dimon decides enough and goes back to being a First Class Steward on the Titanic by claiming the capital markets crisis is 75% done. The great unwinding has only evaporated ~$2T of the necessary $7-$9T in the housing market alone. Dimon must think that economies turn on a dime. His statements seem to assume that seeing the next icebergs means avoiding them.
Fast Eddie, my friend Brian sent me the image. I believe it's a Bloomberg wire service called ...
Best Wishes.
I wanna see more quotes form Ben Stein on the Bloomberg.
"Contained" to the subscription Bloomberg feed?
BTW couldn't an 82 style recession cause a secondary crisis in the capital markets?
I believe that the President has decreed that there shall be no recession.
Perhaps you folks didn't get the memo.
Nothing to see here....please resume your favorite television program.
We have a president?
The Dow fell over 400 points from its recent high in the previous 6 trading days. A short covering rally isn't unusual.
It seems highly superficial to me. I've seen no real evidence of deleveraging. All the leveraged commodity, emerging market, and tech plays are holding up just fine.
This hasn't been a downward movement with any real conviction.
And why should there be any conviction when it's basically written into our constitution that the slightest blip on Wall Street will be relentlessly blasted with taxpayer funds until it reverses and turns into a new bubble.
I'm thinking of buying a false bottom suitcase for when I go to Chiapas, Mx I know I can hide an illegal alien and write down part of my trip.. It seems like it might fit under FASB rule number ?
CR -
I like everything about your format changes except that you have replaced your trademark "Best to All" signoff with "Best Wishes".
Is that because of Jas?
Dennis Kneale is proof that lobotomies, totally removing the skeptical lobe, are 100% successful in creating perfect zombies. He should be "acting" in leave it to beaver remakes instead of bubblevision.
Dimon has a purty mouth.
"You were a little tough on the beaver last night, Ward."
"Only because you like it that way, June."
I bet Dennis Kneale was picked on all his life.
After seeing the Dimon statements, Dow 14K is just a few weeks away.
sorry for the language above....
the remaining "25%" takes us,ironically, to what major event?
And since Mr Dimon is on the FRB is this the first utterance of the dreaded "r" word from an "official" source??
This is just the side show......what is really happening???
Love to know as most here would too.
Ciao
MS
wow markets popped to 130+ alls clear..
Most importantly:
May 12 (Bloomberg) JPMorgan Chase & Co plans to eliminate about 1 million square feet of New York office space as it takes over Bear Stearns Co, CEO Jamie Dimon said.
The company will move its entire investment banking operation into the Bear Stearns headquarters building at 383 Madison Ave., Dimon said today at a conference in New York.
JPMorgan is taking on about 4.1 million square feet of Bear Stearns space, he said.
Goldman Sachs offers hot money roadmap to new bubbles:
Goldman Sachs sees 'exceptional value' in Russia
Russian stocks offer "exceptional value" and the benchmark RTS stock index may surge 20% over the next 12 months, with the catalysts for a rally likely to come from soaring oil prices as well as a decision to cut oil taxes, Goldman Sachs analysts said Monday.
ac, how does short covering explain that 2:30 mystery pop that happens so frequently?
Looks like a PPT from this view.
Someone get Dimon a Wright B Model for crying out loud!
Dennis Kneale claims he was a senior editor at Forbes, and I thought Forbes was a reliable magazine.
OT: look at this footnote (page 20) i just found in indymac's presentation relating to their loss estimates:
2) Figure [severity estimate] appears lower than normal due to the fact that many borrowers have obtained 2nd mortgages/HELOCS that have depleted their equity and so they are walking away from 75-90% LTV 1st mortgages and the loss severity is smaller for the 1st lien holder than normal.
http://media.corporate-ir.net/media_files/irol/11/118924/2008-Q1-Earnings/NDE1Q08EarningsPresentation.pdf
"Dimon said. He warned investors that while he still believes the deal was a good decision, "we are bearing an awful lot of risk" by taking on Bear Stearns' assets."
Tranlation - "More backstop please, Ben."
Shameless.
A recession? Definitely bullish.
You haven't seen any evidence of deleveraging until it all starts to fall apart. FIve times in the last 15 months, it's started to fall apart: in February 07, August, November and January 08 and March. Each time, the powers that be blasted in liquidity to prop it all up for awhile longer.
Do you see a pattern here? The first time, 6 months elapsed between liquidity panics. Then 3. Then 2.
The Fed is running out of ammo. The public is running out of patience with the Fed and bailouts. And the negative feedback from the earliest liquidity-injections is starting to hit the dollar, commodity prices, the social welfare system, etc.
The U.S. is heading straight into a wave of semi-socialized government that will be a terrible environment for big business and big finance. There will be more draconian investigation and regulation of the financial world over the next few years than ever before.
Never again will so much leverage be allowed to contaminate the markets or the economy that rank-and-file people depend on. Very few people seem capable of seeing this trend happening.
I thought the worst of the Sub prime mess was behind us....I guess not
ac, how does short covering explain that 2:30 mystery pop that happens so frequently?
Looks like a PPT from this view.
Well I assume that the pop is just some big player blasting a large chunk of borrowed change in to the futures markets.
The point is this kind of trick probably wouldn't work over and over if you didn't all these shorts to trigger panic buying with.
Remember you don't need some mysterious PPT to explain this stuff.
You have this massive leveraging industry that needs an expanding capital base of inflated assets to survive. Going short doesn't get you that. It's not a viable means for keeping a vast leveraged ponzi scheme afloat.
This isn't the early 90s where proprietary trading desks were making bets on legitimate market inefficiencies.
The investment fund industry we have today is largely a ponzi finance scheme.
Their existence cannot continue without rising asset prices to borrow against.
They will do anything and everything to keep asset prices rising.
Federal Reserve rate cuts and government bailouts minimizes the risk and makes the system predictable to the point where they can do this for much longer periods of time (and thus more destructively).
In the end though like any ponzi scheme it's going to make us much poorer than we otherwise would be.
It's basically legalized, government supported mass robbery.
short covering, in it's classical sense doesn't happen in the way the indexes are constantly popping out new highs. When shorts cover there is a flurry however it dies down and usually retraces some of it's gains.
This is not short covering at all. Too bad most people have no idea at all...so that's why it's always offered up as the reason.
and as already mentioned......always at around 2:30pm eh.??
Ciao
MS
The U.S. is heading straight into a wave of semi-socialized government that will be a terrible environment for big business and big finance. There will be more draconian investigation and regulation of the financial world over the next few years than ever before.
If China plays their cards right they can completely turn the tables and absorb all our industries as they flee regulation and government intervention that swings from one unhealthy extreme to the opposite due to popular bubble induced backlash.
For that reason it's better to have it sooner rather than later (for us anyhow).
regulation without enforcement is the sole reason we are in this mess now. Adding more regulation is worthless unless you enforce it.
Not being done now means it will never be done......but it sounds like the right thing to do so.......
circle meet jerk..
Ciao
MS
More interesting to me than the comments (which certainly don't seem surprising) is the image of "the wire". I've never really known what exectly the format or appearance of newswire headlines was. It seems strangely atiquated, like they're still using terminals from 1982. I know this it supposed to be fast, unedited news but is there a reason it can't be displayed in 256 colors on with 1024x768 resolution?
Well as far as large international companies go, there is all that Arabian and Chinese money that surely is looking for some place to go other than depreciating US Treasuries. The 100 largest world companies seem like a likely place for both nations to park more of their money. Hence my slight suspicion that larger international companies will always be in demand, and consequently their stock will not drop in a bad recession as much as it did before these pots of money were around.
Anonymous writes:
fuck Jamie Dimon....
Absolutely!!!
You haven't seen any evidence of deleveraging until it all starts to fall apart. FIve times in the last 15 months, it's started to fall apart: in February 07, August, November and January 08 and March. Each time, the powers that be blasted in liquidity to prop it all up for awhile longer.
Do you see a pattern here?
Each time leads to worse excesses and more confidence in those running investment scams.
Locally all the real estate investing infomercials have been replaced with stock gambling infomercials.
We can't deal with the pain of confronting our mistakes so instead we heap more mistakes on top of old mistakes to dull the pain making the final outcome worse.
bacon -
I can't make heads or tails of that footnote, can you? Not that it really matters, it's just one more little cloud in his regularly scheduled obfusacatory shitstorm.
As soon as the Olympics are over, you will see relationships between the U.S. and China turn immediately and permanently more hostile. The Chinese government is in increasingly desperate straits to hang onto power while trickling down so little prosperity to so many millions of people, with devasting permanent negative effects on their environment and cultural traditions.
They will have to go back to militarism, communism and oppression to get over the next hump. To hell with Wal-Mart.
Financials are being bought in heavy volume blocks today..Somethings up..
There are a lot of integration issues involved with financial newswires. They come off different platforms and go onto different platforms, with various repackagers and intermediaries in between. To avoid ompatibility problems, they stick to monochome text for the most part.
By the way, a few years ago, financial news wires were one of the highest profit margin products in the world. Now, financial websites and blogs are starting to eat into their biz.
Never again will so much leverage be allowed to contaminate the markets or the economy that rank-and-file people depend on.
Oh I think just like the 1920s once this episode passes out of living memory it will simply be replicated again by a population that thinks they're so superior to their forebears that they're incapable of repeating the same mistakes.
Unless technology fundamentally alters human nature by that time.
Many contrarian plays in these posts:
JP Morgan recommends Rusia and oil stocks (-> will underperform big time)
CEO predicts a "severe" recession (-> no recession whatsoever)
"China will absorp overregulated US business" (-> US will in fact emerge even stronger as the world's leading economy and prospects for China look bleak). Actually, isn't this week's issue of Newsweek titled something like the "The post-US World", decrying the end of American world leadership? From that perspective, the US must be stronger than ever.
O-Joe
ac is right on. rich also seems to know what he's talking about. thanks to both of you for your comments. Too bad we don't currently, and won't in the cumming years, have a leader in the white house who can look at the big picture like you guys.
The Chinese government is in increasingly desperate straits to hang onto power while trickling down so little prosperity to so many millions of people, with devasting permanent negative effects on their environment and cultural traditions.
It should frighten people that the last time wealth really began pooling into fewer and fewer hands the way it is now it basically took a Great Depression and a great war to undo it.
It's amazing how short-term prosperity deludes people into thinking historical lessons don't apply to them.
And yet it's the oldest story in the book. It's the oldest and most consistently unlearned lesson of them all.
I think we've only seen the first wave of falling house prices. In areas with rampant flipping and extreme upward price movement (like CA and FL (and Las Vegas), there was less resistance to fairly-rapid price drops.
The second wave of price drops is in progress--the weaker hands in the game, poor and lower middle earners who overstretched to buy in and are now BK and homeless.
But a massive third wave awaits. Like our realtor friend who bought a house last year for his daughter in college, and now refuses to sell it at a loss, so she can't move even though she needs to.
Homeowners/landlords like these are not yet in dire financial straits and can afford (they think) to hold out. Their prices stay very sticky.
As the recession bites, however, most of them will eventually go under, and capitulate--which usually will mean bankruptcy.
That third wave is gonna be a killer.
This is the kind of financial and economic leadership we have in this country right now:
Reflecting the economic slowdown, total receipts are up 3% this year to $1.55 trillion, with individual income taxes rising 6% and corporate income taxes falling 15%. Withheld individual income taxes increased 6%, while non-withheld individual income taxes rose 7%...
Outlays through the first six months are up 7.4% to $1.7 trillion. Military spending has risen 10% after adjusting for calendar differences. Social Security benefits rose 5.5%. Spending on Medicare increased 2%.
Federal spending rising twice as fast as taxes
But not drowning ourselves in public debt and spending money we don't have is called "Hoover Economics".
Better to have a 3rd world economy than the type of economy we had last century it seems.
Those last 50 years were absolute poverty and despair after all.
"Just some headlines from CEO Jamie Dimon on the wire for now."
were those headlines just faked-up?
There's an interesting article in the current Harvard Magazine Forum titled Making Credit Safer -- The case for regulation. Here's a link: Making Credit Safer | Harvard Magazine May-Jun 2008
It doesn't give much detail of its proposed solution, but it does start the discussion rolling. Here's the first Paragraph:
Quote:
It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance your home with a mortgage that has the same one-in-five chance of putting your family out on the streetand the mortgage wont even carry a disclosure of that fact. Similarly, its impossible for the seller to change the price on a toaster once you have purchased it. But long after the credit-card slip has been signed, your credit-card company can triple the price of the credit you used to finance your purchase, even if you meet all the credit terms. Why are consumers safe when they purchase tangible products with cash, but left at the mercy of their creditors when they sign up for routine financial products like mortgages and credit cards?
Close Quote
People who read this blog for its information about housing and housing finance should find the article interesting.
The headlines were real. You can get them by typing "JPM Equity CN" into bloomberg. It's basically just company news for JPM.
TED spread is back below 1%
http://www.bloomberg.com/apps/quote?ticker=.TEDSP%3AIND
Looks like the crunch is over.
Now back to your regularly scheduled housing bubble.
It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance your home with a mortgage that has the same one-in-five chance of putting your family out on the streetand the mortgage wont even carry a disclosure of that fact. Similarly, its impossible for the seller to change the price on a toaster once you have purchased it.
How about having a regulation against Federal Reserve chairmen that repeatedly devalue your savings so Wall Street can keep scamming the middle class out of all their wealth?
That would be the best regulation of them all.
Say that it is not so, sonny.
BTW: AIG is starting to look like it should be looking.
I guess the smoke and mirrors expire 48 hours after earnings are released.
Good to know. Happy trading.
If the credit crunch were over, would JPM still get the loan guarantees?
short covering, in it's classical sense doesn't happen in the way the indexes are constantly popping out new highs. When shorts cover there is a flurry however it dies down and usually retraces some of it's gains.
This is not short covering at all. Too bad most people have no idea at all...so that's why it's always offered up as the reason.
and as already mentioned......always at around 2:30pm eh.??
BTW I think it's intentional pumping (by private industry, not some government organization). But the heavy short interest makes it much more effective.
It's a bit like intentionally firing off a shotgun near a heard of cagey cattle.
After the momentum gets going for a while we seem to get more "maintenance pumps" whenever the action starts to slow down.
I suspect it's a combination of using the large leverage available in the futures market in combination with the arbitraging operations as a gearing mechanism into actual stocks.
Again, this is just how I would imagine doing it if I had the means.
BTW despite the dollar weakening today it rallied against the Yen.
Hoocoodanode?
It's a bit like intentionally firing off a shotgun near a heard of cagey cattle.
That's a great analogy and similar to how I see it.
The market forces that are in control have the guns. The shorts are being scared off.
What do you get when the market has no more self-correcting mechanism?
This market simply cannot go down.
It truly is "different this time"
It's a bit like intentionally firing off a shotgun near a heard of cagey cattle.
the difference is that the cagey cattle will eventually become accustomed to the shotgun.
OTOH, shorts in this market become less stable and more prone to panicking as each shot is fired. eventually the mere presence of the shotgun will cause them to scatter.
remember when the DOW would jump 20 points every time Charlie Gasparino came on to CNBC after the 3 times he mentioned "MBIA" the market rallied?
ac-
as usual you are spot on. The maintenance pumps are getting to be sooooo obvious. The problem is that the banks only know "up".......
as far as the reasons...they are 100% crap. Our country needs to put any event down to some singular thing and the last round of MBIA pumps proves it.
How much did MBIA have in loss today??
If this continues in this way the depression is going to look like a walk in the park.....
Ciao
MS
BTW despite the dollar weakening today it rallied against the Yen.
Stocks go up, yen goes down & vice versa. Carry trade still alive and well, until Japan is forced to raise interest rates due to rocketing inflation/ food shortages there. When than happens look out below for stocks.
i mean what does it mean if a stock that sells for 8usd has a loss per share 13usd? is the company bankrupt or not?
AC and Rich- Bravo on the comments. I would add that the margin calls come out about 2pm. Others have speculated that margin covering has pumped the market on some up days. On others we seem to plunge around 2:30
unirealist writes:
"
But a massive third wave awaits. Like our realtor friend who bought a house last year for his daughter in college, and now refuses to sell it at a loss, so she can't move even though she needs to."
There's a lot of just that sort of thing in my town: a university town on the central California coast. A lot of well-off SoCal kids go to school here, and over the past 7-8 years or so many of their parents have bought them houses here "as investments." Developers have even advertised condos in the student newspaper.
And yes, prices here are pretty sticky.
I know this it supposed to be fast, unedited news but is there a reason it can't be displayed in 256 colors on with 1024x768 resolution?
A WVGA screen is 800x480. The future will be small, portable and low power (see Nokia N800 series and the ASUS EEE PC... and my SVGA Thinkpad 240 circa 1999
So which LBO shop/nation is Dimon going to be selling to?
EBGuy,
that is the best quote ever. "The future will be small".
I love it when someone talks their book. Let me translate this for everyone:
"The liquidity crisis is over" = I am going to be okay as the FED has my back.
"The recession is just starting" = You guys are screwed but I am great as the FED has my back.
As far as my trading, I am trading against my common sense kinda like George from the Seinfield series. Seems to be working as I am up when I really should not be. As far as the 2:30PM pops, I don't question them but profit from them. Cheers.
Bankers are still dancing but its all slow dances tonight.