Curious what "Total credit extended by the New York Fed is lower than originally anticipated as a result of an extensive review of the portfolio." will mean for the deal.
I am not an Elliott Wave theorist. I don't use it in my TA.
That being said, this current decline from the May 19th highs is the "second wave" down, similar to the one in 2001 that sent the SPX plummeting into the post 9-11 lows. I project around SPX 1070, DOW 9500 before an intermediate bottom.
Mike - The inferior good for buttered popcorn? Back in the day, poor people used to eat laundry starch as a snack food. I can remember growing up in a small southern town and seeing kids eating out of starch boxes. Total empty calories. But dirt cheap.
Notice how the USD/YEN declining still pushes equities lower, whereas its rise doesn't have as much a boosting effect?
I remember earlier in June when USD/YEN was 108.something you suggesting buying calls on FXY (which goes up as USD/YEN goes down). Well it's at 106.60 as I type. I think USD/YEN will reach 100, then 95, then 90...
Sadly it seems like people are catching on to our money making scheme
So with a moribund market ahead, some investors are changing their strategy: instead of trying to find individual stocks or sectors that might rise in a down market, they're taking advantage of the broader market's trend downwards.
That means shorting the market, or betting on stocks continuing to decline.
"The reality is things go up and things go down, and if we're going to be efficient in making money in the market consistently, we have to take advantage of both," says Ron Ianieri, head of Options University. "There is a time to be short and being short something that is dropping is just as profitable as being long something that is up."
Someone mentioned mud bugs? Actually the USDA back in the 1920's came up with that idea as a way of increasing the protein content of southern folks diets.
I'd call today a full Kunstlerday - stocks & dollars collapsing, commodities going crazy, unemployment rising, happy motoring suburban sprawlland in panic.
You can still buy a coupla pounds of uncooked popcorn for a buck or 2 & nuke it to a washerload. just use more corn or less time than they recommend, or you get fire.
I feel your pain. I cashed out of half my shorts prior to the fed day yesterday. It hurts, but the S&P, unlike some objects, is not appearing larger in my rearview.
Of course, these won't be complete without some sort of emergency speech from Pres. Bushit tomorrow, saying "we're just having a rough time, but the economy is robust"...
uuuhhh.
warp 10 writes: How sure are you about your targets?
I'm sure of one thing: we won't get there in a straight line unless we crash - and I'm not forecasting a crash. So expect back and forth movement within a down channel until we clearly capitulate at some important support level. We might get an intermediate bottom at SPX 1170, for example. We'll just have to see.
PA is a wierd metal. I lived in Moscow in 2000 when it went to $1,000 oz. Tried to get info on Norilsk but it was/is a closed city. State secrets are taken very seriously there. Tried to short it back then but no one would lend it. I luv Ford!
Notice how the USD/YEN declining still pushes equities lower, whereas its rise doesn't have as much a boosting effect?
I remember earlier in June when USD/YEN was 108.something you suggesting buying calls on FXY (which goes up as USD/YEN goes down). Well it's at 106.60 as I type. I think USD/YEN will reach 100, then 95, then 90...
I think more money is moving out of stocks and into commodities and maybe just into cash.
It could be that more and more the Yen is just offsetting selling in stocks, but at some point I think the Yen will again become an effective tool for generating another short rally.
Just a guess.
BTW I'm not suggesting anybody should buy anything. Again I think most people will still manage to lose money even if they guess correctly where markets are going to move for a while.
Not familiar with the area; it was just a guess. Maybe it's an absentee owner. But with HO expecting to touch $5/gallon this winter, the seller doesn't plan on needing it. The only individual that will can buy it would be a shady distributor with the truck; but after reading some of the more bizarre gas/diesel thefts by distributors, nothing would surprise me.
Not attributing any market timing to you; I think it's a serious matter that the USD/YEN decline can still tear stocks apart, while a rise is more muted.
This could have dire portents if the USD/YEN returns to its March lows, or even it's low of 80 a decade back.
Not attributing any market timing to you; I think it's a serious matter that the USD/YEN decline can still tear stocks apart, while a rise is more muted.
That's what makes me think this commodity mess is such a nightmare.
It's almost a worst case scenario for US consumers - falling house prices, falling stocks, rising oil and food prices.
Again, from history this outcome shouldn't be that unexpected as a consequence of cutting rates while we still have this massive speculative ponzi-finance industry in place.
The 10-yr will face a bit of stickiness as it tries to push the yield through 4.025%, but if stocks continue to fall apart, it'll get through like butter. The market is taking the day's improves housing report in stride as it looks ahead to higher mortgage and tighter credit throwing a wrench into any sustainable housing recovery.
10:17 am - Pressing Higher : The continuous 10-yr futures contract pushed to fresh weekly highs taking out stops just above 113 on its way to test some offers residing near 113.14. Resistance above sits at 113-25 should the push through 113 hold. Support sits at 113-04 and below at 112-20.
El mítico PPT debe usar pesos mexicanos para apoyar Wallstreet
There's IMHO a 2% chance that Pd will prove to be the cornerstone component in that cold-fusion hooey (Pd sucks up hydrogen like crazy and some experimenters are saying they're getting above-unity heat out of it).
12th Percentile writes:
Wasn't the yen at 98 the last time the market was this low
Actually the dow is lower, the Nas is higher and the S&P is higher by smidgen. I actually like the Yen here because it was kept artificially low for years by traders. Japan is more concerned about the yen v. Asian currencies as that is where its export growth is. The Jap'nse gov't will tolerate a stronger yen going foward and won't intervene.
ac writes: It's almost a worst case scenario for US consumers - falling house prices, falling stocks, rising oil and food prices.... You might as well have calls on TLT.
Don't you think what you describe reflects a net deflationary environment? That would explain it.
If nominal GDP can't get above say 3% over the next 3-5 years, then a long bond yielding north of 4% is a good investment, even as oil, food, metals rise.
Shazzam-Beat me to it..3rd or 4th wave in set. In hawaiian waters it is suicide to take off on 1rst..Popping up after a wipeout and seeing a cple set waves about to crush your head is humbling to say the least...
As a shark fearing amateur east coast surfer I can say that my experience is that the third wave is the one.
completely OT: I surfed the north shore of Oahu once. I'm lucky the first wave didn't kill me. I will never do that again. The wave literally ripped my shorts in half (sort of the opposite of today).
My wife bought a Russian Ballerina palladium coin a while back because she was a ballet dancer as a young girl and thought it was pretty. Paid about $100. Was watching the ticker one morning and said "hey honey, palladium is up over $1000/oz"
Next day we were at the precious metals/coin dealer in Denver and cashed out at about $1050. One of the best trades of my life and she bought dinner that night.
Don't you think what you describe reflects a net deflationary environment? That would explain it.
If nominal GDP can't get above say 3% over the next 3-5 years, then a long bond yielding north of 4% is a good investment, even as oil, food, metals rise.
I've been here arguing the deflation case since 2006.
That said, the more I read the more I become convinced that there's merit to the argument that deflation may ultimately lead to hyperinflation (though I think that's unlikely). That's why I beat the "money printing" and "trash dollar" drums these days rather than the deflation drum as I have in the past -- I think that would be the worst possible outcome.
But when house prices, office building prices, car prices, stock prices, bond prices, etc. are all falling I have a hard time calling that inflation.
It appears to me that the current inflation is "artificial" in that it's being driven by leverage via the hedge funds.
People used rising house prices in 2003 to argue that we were headed for an inflationary crack-up boom, not a deflationary bust.
Now look at house prices.
But in 2008 the exact same argument is being made because commodity prices are rising.
Isn't it possible that they might collapse just like house prices? (I'm not suggesting that's necessarily going to happen tomorrow though).
Two points:
1)We're due for some short-term (a)consolidation, or (b)retracement.
2)Today's closing low on the DOW (a mere 30 stocks) is extremely significant for a technical analyst whose opinion I respect. To him, it means in May we've already hit a high point in the DOW for the next 4 years at least.
Can't believe I bailed on SKF before the Fed and now this. I got a lot of upside in, but somehow got it stuck in my craw that there couldnt be any more. And today, another 7%. Sigh...
I dont see another entry point now for a while. Too scared about the giveback.
But I'll hold my SRS thank you. Patience young Jedi...
I think the threesome Bernanke, Paulson & Warsh should all climb out of the nap they have shared and focus less on sexual perversions and shit down the mkt in Japan before anyone gets wind that a lot of shit is going down, and I'm not just talking about Warsh -- there needs to be a merger between WM, LEH, JPM, GS and probably USB and BAC and then just to make sure this cockroach is dead, add in WFC and then, shut down wallstreet for about a month so that Treasury can print print a few extra trillion Dollars and then in a show of friendship, Treasury could print a few quadrillion Yen and then act as a currency hedge fund to sell Pesos.
That reminds me, has anyone seen the price of spam today? Up almost 90%!
regarding mock turtle gloating about gold...two said
Reversal? I don't see a reversal. I see a dear caught in the headlights.
Interesting Times | 06.26.08 - 3:38 pm |
In this environment, standing pat seems to be the same as cutting rates -- at least as far as the dollar is concerned
Bob Dobbs | Homepage | 06.26.08 - 3:44 pm | # #
mock turtle acknowleges..
hey, i'm smart enough to know, i damn well could be full of it, and you guys may be correct...
i'm not proud, and i'm thinking about what you said...
my premise is simple...oil is the new reserve currency not dollars...and gold is easier to put in my pocket than a barrell
btw i don't believe gold will rise as high nor as fast as oil
ac, you need to toss home purchases out of any macro economic analysis.
The money people were paying for homes this decade was based on loan program availability, interest rate flux, the speculative premium (making the home purchase a form of investment and not consumption) etc.
The US is still a big chunk of global GDP but we've seen our day in the sun and other regional economies are going to start pulling more of the train.
Absent US wage inflation, price moves in one sector will be offset in others.
Corporate profits were quite healthy for the middle part of this decade -- the boom -- so that's also an area that will see stress.
What is probably going to happen now is more FED monetizing and bailouts in their numerous fashions and definitely look out for more stimulus a.k.a handouts to be forthcoming.
SKF!!!! bought at 100 and sold just under 140, dammit!! I figured that the Fed announcement had to be good news for banks so I could get right back in. Even watched it then drop to 130ish, but didn't buy because of the Fed announcement coming up.
Oh Well, Im in SRS under 100, its up. You never know the timing, but these things are gonna swing a lot, so I know I'll get back in again and cash out again.
Geoff, I sold half my SKF today after riding it from 100 or so in April. Concerned about a financial snap-back on bailout rumors. I'll either plow more back into SRS anticipating the inevitable HB / REIT failures or buy some CRE puts.
The Dow continues to hold above major support in the Daily Chart, which currently sits in the 11,635 to 11,735 zone. Again, a big break or bounce from this level could spark the next major directional trend.
This is a financial storm and Katrina is moving back into The Gulf, and this is not a time to go stock up on cases of beer for a hurricane party -- get the fuck out of the market ASAP!
Thursday, August 25, 2005
At 6:30 PM EDT (2230 UTC), Katrina made its first landfall in Florida as a Category 1 hurricane near Hallandale Beach, Florida on the Miami-Dade/Broward county line. After landfall, instead of travelling west as originally forecasted, Katrina jogged hard left (south/south east) almost parallel to the coastline in densely-populated metropolitan Miami, Florida. As many as six people were killed, including three people killed by falling trees and two boaters that attempted to ride out the storm in their crafts.[3] Other sources, including BBC, put the Florida death toll at nine lives.
Next stage: Friday, August 26, 2005
At 1:00 AM EDT, maximum sustained winds had decreased to 70 mph and Katrina was again downgraded to a tropical storm.
Saturday, August 27, 2005
By 5:00 AM EDT, Hurricane Katrina reached Category 5 intensity.
Andy, im almost exactly in your boat, except a lower SRS basis.
Jason, I hear ya. I sold ALL of my SKF though yesterday near the intraday high. Thought I was being all smart. Ya. I just get kind of risk averse holding that stuff for too long once Im well into the money. The first few times I was trading that I made a ton and gave it all back almost. Pissed me off. I figured, here we go again if I hold. But the pessimism really seems to be holding now, and the big difference between now and then is that Big Ben seems to be out of ammo. No surprise announcements on a bailout, no rate cuts. Nothing is working.
And there is still a ton of denial on how bad CRE will get, so I'll hold that through the ups and downs. Im still pissed I didnt sell at 140 on that too, and am now only slighly positive, but it will get back there. Give it two months.
I'll either plow more back into SRS anticipating the inevitable HB / REIT failures or buy some CRE puts
last I checked SRS had no exposure to home builders aside from some of the REIT's owning land (my favorite is the one who owns rezi land in Atlanta). If you are banking on it going up when the HB go out of biz, you are making a mistake.
Of course many REITs will perish and SRS will be a fine investment. But if you want to profit from the HB demise, SRS isn't the way.
I remember when cap rates were double digits. Good old days.
Russell 2000 seems where bulls are holding strongest..Any ideas Why?
I've notice this wacky end of day action in the Russell 2000 several times in the past few weeks where it suddenly starts to outperform the S&P 500 for no apparent reason. At 2:30pm it's underperforming the SPX at 4:00pm it's substantially outperforming. I don't know if it's pumping or short covering or what.
Folks be careful even with shorts! When the market sells off they sell everything to raise cash, even shorts! Be sure to have your finger on the sell button!
I may have left something on the table w/ SKF, but if so oh well. I think the financials have led the market down nicely so far, with real estate ready to take the baton. All the taking heads are saying tech is OK based on the decent numbers from RIM and ORCL but I'm at a tech conference right now, and all the nametags I see say things like Wachovia, WAMU, Chase, Boeing ... the tech sector customer base is currently planning 09 budgets, and I'm sure they're being hacked to the bone. '09 will hurt for tech. Staples (the category, not the office supply co) will probably be OK.
Is being a broker or investment banker a sign of being masculine?
Research on beer commercials by Strate (Postman, Nystrom, Strate, And Weingartner 1987; Strate 1989, 1990) and by Wenner (1991) show some results relevant to studies of masculinity. In beer commercials, the ideas of masculinity (especially risk-taking) are presented and encouraged. The commercials often focus on situations where a man is overcoming an obstacle in a group. The men will either be working hard or playing hard. For instance the commercial will show men who do physical labor such as construction workers, or farm work, or men who are cowboys. Beer commercials that involve playing hard have a central theme of mastery (over nature or over each other), risk, and adventure. For instance, the men will be outdoors fishing, camping, playing sports, or hanging out in bars. There is usually an element of danger as well as a focus on movement and speed. Masculinity - Wikipedia, the free encyclopedia
You never see stock brokers in beer ads, or jumping out of windows; is that because people have changed, or are the windows unable to open?
Bernanke announces an emergency rate hike before the market opens tomorrow to stabilize the dollar, oil, and the markets -- wouldn't that be an ironic move!
Russell 2000 seems where bulls are holding strongest..Any ideas Why?
My bet is that the rates held constant. From what I've said and seen - made money in small-caps when Fed dropped rates years ago - smalls are inverse to rates. Increasing rates are problematic for smaller firms.
That would be ironic, but won't happen. The next big move by the Fed will be the announcement of yet another shotgun wedding - perhaps JPM and WAMU or some other bizarre mix that will produce only mutated offspring. Im thinking wiht the way things are heading, the desperation must be getting pretty heavy at some of these laggards and the news on the loan delinquency front didnt do anything to help valuations in the off balance sheet crapola. Id be surprised if we make it a week the way things are going. And remember, it's only Thursday. Im thinking a major smackdown in the Asian markets tonight, and that wont help.
Is Goldliocks dead yet? Quite a mauling she took today.
CNBC drinking game: take a sip anytime they say stocks are cheap, or it's a good time to buy for the long term investor. It seems to be the only analysis they are capable of on days like today.
The 15-nation euro bought $1.5760 in late New York trading, up from $1.5667 Wednesday. The British pound rose to $1.9877 from $1.9727, while the dollar fell to 106.66 Japanese yen from 107.93 yen.
This will help support higher oil and feed inflation; thanks Bush for destroying America! Hope your children and any offspring that flop out from your retarded gene pool are treated like shit as a result of your historical stupidity -- which killed countless people and destroyed vast amounts of wealth; you have out done Nero! Praise be to Bush and his family!
To show how over-valued U.S. small-caps are (even after today's plunge) I did an analysis.
The market cap of the Russell 2000 Index is around $1.5 trillion. The trailing 12 month P/E ratio of the index is 76.50, according to WSJ.
So the index has produced about $20 billion of earnings over the last four quarters.
You could buy the R2000 Index.
Or, for less than one-third the market cap, you could buy Exxon Mobil (market cap $423). Exxon has produced $37 billion of earnings over the last four quarters and has a TTM P/E of 11.39.
Or, for less than one sixth the market cap, you could buy Microsoft (market cap $264 billion) and get $16 billion of earnings at a TTM P/E of 16.47.
How many of the R2000 components are in as good of shape to weather this environment and keep growing as Exxon Mobil or MSFT?
I think everybody underestimates how many small-caps went into this crunch way over-leveraged and now are sucking wind to get enough cash to stay afloat. The banks are cutting them off left and right. Their costs are soaring and they have little or no pricing power with their customers.
My original target for R2000 was 550. Now that credit has got so tight and earnings are so weak, it's dropped into the 400s.
I think The Fed will find new ways to use the stupidity and corruption of Dodd to distort this systemic collapse into a new bastardized era of bailouts that will soak up every last cent that the American Middle class has (left); meanwhile, many of these right wing Mccain supporting retards will fail to connect reality to the loss of ownership in The Bush/Mccain Ownership Society....
June 26 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.
[snip]
The Dow has slumped 9.4 percent this month, its worst June since an 18 percent tumble in 1930 during the Great Depression. All 30 companies have posted losses in the month as oil surged, the unemployment rate jumped to the highest since 2004 and concern grew that global financial firms will add to $400 billion of subprime-related writedowns.
The Dow's retreat today erased all the gains since mid-March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.
Did something just happen to IndyMac Bank? My Oct 2.5 Put options just went to zero on TD ameritrade. Not sure if the problem is their system, or did they suddenly go belly up?
yogurt writes: You cannot net consumer prices against asset prices. Everybody has to buy consumables, but nobody has to buy assets.
But I was arguing that oil, food, metals prices rising could be justified along with a rise in long bond prices (drop in yields) if the asset destruction in house and stock prices decimated consumer spending enough to knock down GDP to something sub-3%.
Yeah, I went RWM but was a bit confused by some of the stats. Recalled your note about several weeks ago re P/E being approx 75-76; but stats that I found on web - granted the R2000 site - showed P/E TTM (exc neg earnings) was about 18.
Still bought RWM given that I agree that they're going to get shellacked, but why the discrepancy on P/E?
Hey Anonymous, your drinking game is hilarious,but you would be dead from alcohol poisioning by the close. However, we are here to serve your alcoholic needs.
Does anyone remember when one of the network magazine shows or morning shows ran an experiment with Dennis Kneale? It was set up to see if he could last a week without a Blackberry and maybe his cell phone, I can't remember. The guy was literally crying after a couple of days without it/them. Good times
Deus Irae
by Mozart of course, when upthread they started talking about music that popped in my head and started playing.
One of the first CDs I ever owned twenty years ago is a great rendition of Mozart's Requiem. Christopher Hogwood conducting the Academy of Ancient Music Chorus & Orchestra, and Westminster Cathedral Boys Choir. Recorded in 1983 and released in 1984 by Editions de L'Oiseau-Lyre. Performance of the Maunder completion.
Dies iræ! dies illa
Solvet sæclum in favilla
Teste David cum Sibylla!
Quantus tremor est futurus,
quando judex est venturus,
cuncta stricte discussurus!
Re: I think the technical term would be "Big Ben has shot his wad."
I believe in the porn industry, this is called "the money shot", thus one might be able to suggest that Ben failed to produce "the money shot" and thus this scene will need to be shot over with new actors. I would thus suggest that since Ben was able to produce, the next scene will involve a tag-team with Trichet and perhaps the hot and sexy new super model Zhou Xiaochuan?
Honestly, Ive had so many stupid debates about GDP. A good valuation tool would be something that approximated the standard of living of the country's citizens. And right now, on that measure, we're getting the crapp knocked out of us to the extent that any "progress" that might have been made in the last 5 years is now gone, and after this mess is said and done, we'll be lucky if we are back to the quality of life we enjoyed in 1995. (On average of course, because the fat cats are now living like it's 2020, instead of 2008.)
You are on to something there, I caught a talking head in passing who had an updated misery index - included house prices (I think) but more than unemployment and inflation - upshot was that it was higher now than the same index back to through the 70's...anyone catch that, the analyst and the index?
I missed it, but if you think about things in real terms, it's worse than a recession. Were just getting started and home prices are back to 2004, we've essentially got stock prices back to about 2005, and household budgets don't buy anything like they used to, not to mention that even in nominal dollars, they are still barely above 2000 levels. I mean, the pooch is getting screwed left and right. Think about people's retirement prospects now compared to what they thought they'd be doing.
I swear, just wait until the 2007 survey of consumer finances comes out. Sadly, it's going to miss a lot of this carnage, but you'll see where we are headed. The 2010 version will make readers cry.
People are starting to wonder whether the Fed has the guts to raise rates in the first place,'' said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York.The dollar could test $1.60 in the next month.''
Risk aversion is at elevated levels, and that's benefiting the yen,'' said Samarjit Shankar, director of global strategy for the foreign-exchange group in Boston at Bank of New York Mellon, the world's largest custodial bank, with about $23 trillion in assets under administration.There's a lot of investor concern about the Fed's direction and the path of policy makers going forward.''
while we're all dispensing trading nollege, here's one i haven't seen here.
note that while crude bounced $5 to $140, oil stocks sold off again today, with index price following participation lower.
looks to me like distribution. the boom from 2003 was in housing, banking and commodities. as speculative capital was tossed out of housing since late 2005, it migrated to the other two. since 2007 it has been tossed out of banking, making commodities the only narrative still working. i think tightening credit is pulling the plug on speculative leverage and people are slowly starting to wake up to the fact that there is in fact a lot of storage going on.
I held this quote for over 5 months now, knowing perfectly well there'd be a chance to use it:
=======================
This week all the bad news gets out there, next week we'll rebound. This really is the peak of anxiety and bearishness from which we turn around and never look back again. A moment to behold for all the bears.
"=======================
This week all the bad news gets out there, next week we'll rebound. This really is the peak of anxiety and bearishness from which we turn around and never look back again. A moment to behold for all the bears.
O-Joe's just a troll, but at least not a mean-spirited one. The last time I saw him post, he said he'd be holding off on a home purchase until next year.
zackattack writes:
I held this quote for over 5 months now, knowing perfectly well there'd be a chance to use it:
=======================
This week all the bad news gets out there, next week we'll rebound. This really is the peak of anxiety and bearishness from which we turn around and never look back again. A moment to behold for all the bears.
let me say that the PPT, and all their benefactors are well aware that tomorrow is big.
sentiment amongst the mass of investors and consumers is clearly very negative. the big boys and girls in the financial world know they have got to stop the hemorrhaging fast before the patient bleeds out.
i don't have a way to figure out what's gonna happen tomorrow. but i will say this.
if we get a 100 point plus down day on the dow tomorrow, then i guess that there will be a massive rush to the exits by the remaining small individual private investors ....PDCF and insitutional investors be damned
"...About that time, I received a phone call from the Lord of the Dark Matter, who began the conversation: "It's about to blow!" He then repeated himself.
He went on to say that behind the scenes, many parts of the credit/mortgage market were "offered only." He said it had nothing to do with month-end or quarter-end. Instead, he believed it had to do with the enormous amount of inventory that would be looking for a home in the next quarter. He believed that the equity market was "miles behind what was occurring in the mortgage-backed/credit markets." Though he noted that he'd said it before, he repeated: "It's never been this bad." That, combined with what I've seen on the equity screens, caused me to believe that today could be quite ugly..."
The part about "offered only" and many parts of the credit/mortgage market looking for a home next quarter sounds VERY ominous to me.
agreed - the money quote there is not the healine, its:
The Dow's retreat today erased all the gains since mid-March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.
I understand your reservation. But after weighing the pro's and con's about defending another break at this level. I think it would go down again and am betting on it to do so.
"CNBC drinking game: take a sip anytime they say stocks are cheap, or it's a good time to buy for the long term investor."
No kidding, talk about a masses calming mantra, they should turn these guys loose on Iraq.
I don't think anything short of a mutual fund melt down will shake the confidence of these people (i.e., 40-50 y.o 401K users). God should receive such blind faith.
Who can blame them I suppose, they hung on after the tech bust and were rewarded for their patience.
peaty: "Yeah, last time when there was panic like that, you bought in 1930. Sounds like a winning portfolio for the next 3 years.""
Hey, I'm with you. Can't find the graph right now, but I think in January - March of 1930, volume increased substantially, as the Dow paused its drop. As it turned out of course, the Dow continued its downward trajectory, bankrupting the 'knifecatchers' like..., well, fill in the blank. O-Joe, my idiot neighbor who bought a new Mcmansion 8 months ago, etc.
Me, I still can't believe that boomers only have 113k on average in equity... my god, what a slaughter this is going to be.
Not today, Dow was barely down 358 .. but soon.
Can you clarify this: "PPT team has NOT given up, they are wile and have looooong tentacles."
Anonymous | 06.26.08 - 5:03 pm | #
mock turtle responds
sure
Big Ben is famous for his post graduate thesis regarding remedial responses to severe economic contractions...as in the great depression.
much of what he said, has been said or practiced by others. for example, thw the stock market crashed in 87 fed chairman greenspan, ny fed prez gerald Corrigan, and chair of the NYSE, J Phalen, worked day and night to inject money , ie promises everywhere and anywhere they would be accepted and used to reflate the system in order to avert a depression.
several books have been written on the subject, but in the spirit of brevety and in order to be responsive to your quiery in short order let me refer you to a teaser article of 10 years ago...get you started
suffice it to say that the 500 richest families in america, the people who really "OWN" this country, are very bright, and not about to take a collapse lying down.
THEY KNOW PEOPLE...when they call Paulson on the phone they get thru.
the PPT is a loosely affiliated collection of very smart technocrats who work for the owners, and who will do everything they feel is ethically possible whether entirely legal or not, to save the system.
i have met some of these people. i don't hate them,i dont fear them, i don't vilify them and i don't envy them. nor do i put them on a pedistal.
i know them for what they are, very rich exceedingly powerful, and not to be trifled with. often they do great philanthropic deeds. be careful not to get in their way.
suggested reading
"who really runs america", Michael Patrick Allen.
"...About that time, I received a phone call from the Lord of the Dark Matter, who began the conversation: "It's about to blow!" He then repeated himself.
He went on to say that behind the scenes, many parts of the credit/mortgage market were "offered only." He said it had nothing to do with month-end or quarter-end. Instead, he believed it had to do with the enormous amount of inventory that would be looking for a home in the next quarter. He believed that the equity market was "miles behind what was occurring in the mortgage-backed/credit markets." Though he noted that he'd said it before, he repeated: "It's never been this bad.""
If Fleck's LOTDM is right - the Fed will close the 'window' and open up the 'loading dock'... believe me.
look, as dirty harry said, "a man's got to know his limitations"
i not too shabby when it comes to current events and history...
but as an investor and a business person...i got a lot to learn from this crowd here at CR.
the system is so complex and the players that may or may not take the field, are so awesome, that i hesitate to say what stocks will do tomorrow.
fundamentally i think the downward pressure is horrendous.
but the power of the central bankers and 1000 largest stock holders in america can, for a time, move mountains.
we will see how long they can lean against the wind and the tide.
the fundamental and natural forces of debt, trade imbalance, war, energy and the destruction of US share of REAL industrial production can not be denied.
whether tomorrow is a carnage or whatever...i think it could be, but i have no way of knowing
alex writes:
Did we have Black Friday today or is it coming tomorrow.
alex | 06.26.08 - 5:27 pm | #
Not even close - like last time we had a small BLIP, shorts get all jiggy over it. This was almost 3% on the Dow...Pull up a 5 year trend - I'll be shocked if the Dow doesn't go below 10K... I wouldn't be surprised if it went below 8K... and did so within the next year or two.
Headline: markets are cyclical.
For a down day to classify as a 'Black Friday' - we'd need to see the Dow drop something like 2000 pts in one or a couple days. If the credit markets really seize up - so tight even Ben & a jug of that shit you drink before a colonoscopy couldn't unplug it - then it could happen. But I wouldn't bet on it.
Oh - and if the majority of your income comes from a job - I wouldn't hope for it either.
June 26 (Bloomberg) -- Federal Reserve officials are reviewing regulations that limit investment firms' stakes in banks in an effort to channel more capital into the U.S. banking system.
The central bank ``is taking a look at these rules with an eye toward whether there are any provisions that can be modernized,'' Mark Tenhundfeld, senior vice president of regulatory policy at the American Bankers Association in Washington, said in an interview.
Fed Chairman Ben S. Bernanke, Treasury Secretary Henry Paulson and other officials have urged banks to raise capital, helping offset the impact of writedowns and credit losses. Treasury officials have urged consideration of easing limits on private equity firms' purchases of bank shares.
Earlier today, the Illinois senator, 46, held a summit with research and business leaders including General Motors Corp. Chief Executive Office Richard Wagoner and U.S. Steel Corp. CEO John Surma. He told the panel that he will be an advocate for a permanent research and development tax credit, lower energy and health-care costs, more educational opportunities and investments in infrastructure.
`Building Blocks'
An overhaul of energy policy, the health system and schools will be ``the building blocks'' of long-term U.S. competitiveness, Obama said in the interview.
And tax cuts too? Hmmmmm. I don't think he needs to clear that with Gary, Ben or any of us... does he know Zhou?
Nope. Article doesn't have much in the way of particulars, so I don't have much to say about it . . . except a permanent tax cut on the lowest portion of income would be just fine with me . . . as long as all the Bush tax cuts for the rich were not only repealed, but then brought back up to pre-Reagan levels.
I would increase gas taxes and put the money to transit, and I'd also jack up the royalty/lease payments on all Federal oil/gas resources.
And I'd aggressively pursue tax cheats and put them in Federal pounding-in-the-ass prison . . . along with 90% of the Bush administration.
Re: The Dow's retreat today erased all the gains since mid-March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.
That is true! Imagine all the work that Warsh, Ben, Paulson went the last 4 months and then this....damn, imagine if they woulda just let Bear fail, as it should have, and then NOT have devalued the dolar by further rate cuts and then NOT have opened The Treasury for securities hedge funds, and then NOT talked about possible regulation theory.....gee, if these guys would have jumped into a firepit 6 months ago and vanished from The Earth, a lot of this drama would never have happened and the dollar would be worth more, oil would be cheaper and Warsh wouln't have Paulson in bed with him every night -- trying to get prego.
"And I'd aggressively pursue tax cheats and put them in Federal pounding-in-the-ass prison . . . along with 90% of the Bush administration."
Or do what neither Dems nor Republicans will do, and crack down on American companies that avoid corporate taxes by declaring "corporate headquarters" to be a Bahamas lockbox. Seagate Technologies, I think Black & Decker, and many other names.
It could be - but the other wild card are the SWFs - the lower the dollar goes the better the values look - to them. Combination of falling nominal stock prices AND falling dollar at some point gets their attention. Where that point is I wouldn't guess but it is down there somewhere...
Of course since we are in dollars it doesn't look that smurfy to us - ever. Not until the dollar rebounds.
This is more of that rebalancing thing - we can sell them goods, or we can sell them our remaining assets - but if we keep running a huge CAD we'll be selling them SOMETHING and at weaker dollars.
How do you value a company like WM against a ten year bond yield at this point? Every possible model in the world is broken for valuation and the only solution is to de-value everything and start over from scratch, as in DOW 8K
At the very top of this comment string "Mike in Long Island" asks: What's the inferior good for buttered popcorn?
I'm concerned that the answer will ultimately turn out to be collecting un-eaten corn kernels from under the bird feeders of the "better off." Collecting the little nuggets until a useable amount is realized, then popping them (sans butter of course--we're talking inferior goods here), then sneaking your baggied bounty into the movie theatre through an emergency exit door a sympathetic friend left propped open.
I think I read something similar to that happening on a regular basis in the 1930's. Or, maybe it was just from an old "Walton's" T.V. episode....
There will be no movie houses open, because it will cost too much to have a building sitting idle and waiting for a few people to pop in for an old movie. The movie house is like the bakery, butcher shop, candle maker, buggywhip maker, etc. In this Depression entertainment will only be found here, in a virtual form -- if you can afford a connection.
Schumer: concerned over IndyMac stability
Schumer presses regulators for action to avoid disaster from IndyMac; stock plunges
June 26, 2008: 05:53 PM EST
NEW YORK (Associated Press) - The possible collapse of big mortgage lender IndyMac Bancorp Inc. poses significant financial risks to its borrowers and depositors, and regulators may not be ready to intervene to protect them, Sen. Charles Schumer, D-N.Y., said Thursday.
A wave of IndyMac depositors withdrawing their funds could leave IndyMac "in a disastrous financial situation," Schumer said.
Schumer, who sits on the Senate Banking Committee, voiced concern in letters to the heads of the Federal Deposit Insurance Corp. and the Office of Thrift Supervision, an agency of the Treasury Department.
Shares of Pasadena, Calif.-based IndyMac, which already have tumbled nearly 95 percent over the past year, dropped 28 cents, or 26 percent, to 79 cents in trading Thursday. They recovered a cent in after-hours trading.
Gutted by losses from writedowns on mortgage-backed securities, the company warned last month that it wouldn't return to profitability this year unless the slide in U.S. housing prices slowed. IndyMac posted a loss of $184.2 million, or $2.27 a share, for the first quarter, compared with a profit of $52.4 million, or 70 cents a share, a year earlier.
"I am writing to you out of concern for the safety-and-soundness risks posed by IndyMac," Schumer told FDIC Chairman Sheila Bair and John Reich, director of the thrift agency, in the letters. "The regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."
He asked what steps the two agencies are taking.
Schumer asked, for example, whether the FDIC has considered ordering IndyMac to reduce its reliance on brokered deposits, sold by securities firms to customers outside of a bank's local area, which can carry higher interest rates but also can be riskier than traditional deposit accounts because they may not fall within the federal insurance limit. Brokered deposits make up more than 37 percent of IndyMac's total deposits, according to Schumer's letter.
OTS spokesman William Ruberry declined to comment, other than to say that the agency is reviewing Schumer's concerns. FDIC spokesman Andrew Gray had no immediate comment.
Michael DiVirgilio, a spokesman for IndyMac, said the company was reviewing Schumer's letters and had no immediate comment.
I've never been too big on Tech analysis, but for those that are pull up a really long term chart on the S&P 500, say 35 years. March 2000 and Sept 2007 form the mother of all double tops, if you think there is anything to chart patterns its enough to make ya crap in your pants. Could put the S&P 500 at 500 or so. Don't think the fundimentals justify it...unless oil really did peak in 2005.
OK, I'll call a buyer's vacuum and DJIA down 1200 to 10,253 for an hour cooling-off period.
Rule 80B for 2Q '08: Level 1 Circuit Breaker = DJIA down > 1200 pts.:
Before 2:00 pm = 1 hour halt
Between 2-2:30 = 30 min halt
After 2:30 = Let 'er Rip
"This is more of that rebalancing thing - we can sell them goods, or we can sell them our remaining assets - but if we keep running a huge CAD we'll be selling them SOMETHING and at weaker dollars."
A German company bought a small private water utility in my area and immediate jacked up the price of water as high as they could. Much screaming, many lawsuits, sympathetic courts, and the Germans are beginning to beat a retreat. Oh, they're getting $$, but not the little empire that they'd hoped for.
Moral: they'd better watch out what assets they buy, and how they exploit them. Nationalism lives, for better or worse.
When gas is over $5.00 in a month and heading higher, most vacation plans will be canceled and people will prepare homes for winter heating increases and cost of living costs going parabolic. The days of fun vacations and easy debt are over and the tsunami of fun on wallstreet will evaporate within weeks. Get the fuck out of the market and protect cash. Do not be in debt!
Still bought RWM given that I agree that they're going to get shellacked, but why the discrepancy on P/E?
Okay, so the real number (based on reported TTM earnings and all 2,000 Russell small caps) is a P/E of 70+.
The P/E quoted by Russell, S&P and some others based on ex-neg. earnings and forward P/Es is 18-25.
What does that tell you?
It tell me: 1) a lot of small-cap stocks have turned neg in earnings. I'm estimating about one-third; and 2) the forward earnings estimated have become total fiction.
Go here and take a look (warning Excel file download):
This is S&P's earnings (actual and estimated) for the their 600 SmallCap index. They are showing smallcap earnings down -6.7% in 2007 but increasing 9.8% in 2008 and 29.7% in 2009.
Really? On what basis? They also show SmallCap earnings dropping like a stone in Q4 07 and Q1 08, but miraculously recovering in every quarter after.
That's how they get to the 18-25 forward PE (ex neg.). I'm thinking they figure out a P/E number that will keep investors glued to stocks and then work backwards to the forward earnings that will produce the target P/E. Of course, they're also relying on bottoms-up calls by analysts, who follow optimistic guidance made by 2,000 scared-stiff company mgt. teams.
In some ways, it's become a bigger racket than what was going on with tech stocks in 1999-00.
I think the forward earnings environment for small-caps may be worse today than it has been in 20-30 years.
Oh - and if the majority of your income comes from a job - I wouldn't hope for it either.
dryfly | 06.26.08 - 5:42 pm
No kidding. Guess what interest rates were during the depression? 2%
Today I am walking to my building and stop to grab a smoke before going in. Two maintenance/engineer guys are talking. They are always out front smoking at the time I find my way back to the building.
These are 2 men, white, late 40's or early 50's. One is telling the other "Man, I hope I can find a job. At least something at the same pay. I am to freakin old to go back doing the sh@# I used to do."
That is what is rolling towards us. It is all over for a lot of people. They know the panzers have have crossed the border but they can't believe they aren't going to get stopped before they roll into the village. If they do make it, well, whats the worse that could happen?
Life will go on.
Moral: they'd better watch out what assets they buy, and how they exploit them. Nationalism lives, for better or worse.
Bob Dobbs | Homepage | 06.26.08 - 6:22 pm | #
Oh I agree - just like in places like Columbia or Paraguay - nationalism lives. They'd rather have no water at all than see somebody else make money off of 'their water'.
We'll go through some of that too - until we get sick of having no water.
Oh and why no water? Because we have a declining wealth base to tax against - so no maintenance, no capital improvements... and eventually no water.
We could invest in building & maintaining it all ourselves - but then we'd have to jack up the rates to ourselves... looking at the deficits in Cali I don't see that as likely.
Glad I don't live in a desert. Of course it isn't winter yet where I live... we have our own issues here.
Gold also up sharply. Oh, and first.
"I can clearly not choose the cup in front of you."
Where to run, where to hide?
move rates up or down.
Be in stocks or bonds?
clearly, not the cup in front of me either.
Like in the movie, turns out both cups were poisoned.
I think it is an appropriate metaphor
NY Fed has a new press release re: New York Fed Completes Financing Arrangement Related to JPMorgan Chases Acquisition of Bear Stearns
New York Fed Completes Financing Arrangement Related to JPMorgan Chase’s Acquisition of Bear Stearns - Federal Reserve Bank of New York
Curious what "Total credit extended by the New York Fed is lower than originally anticipated as a result of an extensive review of the portfolio." will mean for the deal.
Glod at $916/oz, up $31.
And buttered popcorn up $2.50 a bag - what are half the folks on here going to do? What's the inferior good for buttered popcorn?
and with the fed making it clear interest rate drops are over...gold rises more than 25 dollars
so much for those who thought gold would die on an interest rate reversal
I am not an Elliott Wave theorist. I don't use it in my TA.
That being said, this current decline from the May 19th highs is the "second wave" down, similar to the one in 2001 that sent the SPX plummeting into the post 9-11 lows. I project around SPX 1070, DOW 9500 before an intermediate bottom.
Yes.
more rate cuts Benny!
but then palladium gets spanked while silver and platinum rise with gold
fundamentals in south african platinum production???
May be on the way to the 200 year trend..........
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Repost from prev thread........
Woops here is the link....
http://www.safehaven.com/images/kasun/10602_b.png
Mike - The inferior good for buttered popcorn? Back in the day, poor people used to eat laundry starch as a snack food. I can remember growing up in a small southern town and seeing kids eating out of starch boxes. Total empty calories. But dirt cheap.
Goldilocks aka the wicked witch of the east had a house drop on her. I can hear the munchkins singing!
Mock, I didn't know you were a fellow PA lover. It's a perdy metal.
Where do you guys go for your oil prices? I use oil-price.net, but I don't know if it's real time or not.
So if there is an institution twisting in the wind to cause the TED spread to go up, which would it be?
Wachovia, WaMu, Lehman?????
Or is it just end-of-the-quarter hoarding for balance sheet purposes, as some have suggested?
What's the inferior good for buttered popcorn?
Baked husks.
And when they was no crawdads, we ate sand.........
Buy S&P now or be left behind forever!
Y'know, under the right circumstances, I could get to like this here shorting thing.
So when to get in on the down side of commodities?
what's up with this?
craigslist | Page Not Found
they are trying to sell the heating oil out of their underground tank.
ac,
Notice how the USD/YEN declining still pushes equities lower, whereas its rise doesn't have as much a boosting effect?
I remember earlier in June when USD/YEN was 108.something you suggesting buying calls on FXY (which goes up as USD/YEN goes down). Well it's at 106.60 as I type. I think USD/YEN will reach 100, then 95, then 90...
Anonymouse
I have a target of 10900 on the dow and 1210 on the S&P. I'll probably get out then. How sure are you about your targets?
The commodity bubble keeps rolling on despite the Federal Reserves aggressive interest rate pause.
Of course if congress really does start printing money to "fix" the economy, this could be the one bubble that ultimately gets legitimized in the end.
I also have fxy calls. Whats your target on the Yen to dollar?
If you're going to foreclose, then there's no point leaving $1100 in the ground.
So when to get in on the down side of commodities?
Just ask Billy Ray Valentine or Louis Winthorpe III.
Oil hits $140, Dow Off 300"
CR, you say that as if the two were related.
you ate sand?!
Sadly it seems like people are catching on to our money making scheme
What's the inferior good for buttered popcorn?
Second hand unpopped corn kernels?
Cashed in my shorts last week thinking melt-up this week........
Now I am lost, what to do?
Ross
yes, i like canadian palladium maples
and palladium in general
she's not just pretty she's smart
holds hydrogen like a sponge and can filter h2 too! (catalytic sub for plat
THE AMAZING METAL SPONGE: Simulations of Palladium-Hydride
Just end of the quarter window smashing.
Someone mentioned mud bugs? Actually the USDA back in the 1920's came up with that idea as a way of increasing the protein content of southern folks diets.
I'd call today a full Kunstlerday - stocks & dollars collapsing, commodities going crazy, unemployment rising, happy motoring suburban sprawlland in panic.
You can still buy a coupla pounds of uncooked popcorn for a buck or 2 & nuke it to a washerload. just use more corn or less time than they recommend, or you get fire.
I feel your pain. I cashed out of half my shorts prior to the fed day yesterday. It hurts, but the S&P, unlike some objects, is not appearing larger in my rearview.
Canadian watching with popcorn wrote:
Cashed in my shorts last week thinking melt-up this week......
mock answers
if you are still wearing your pants, you're ok
I guess nobody here remembers the movie "Raising Arizona".
Argento, is that common? I can't imagine how you would get it home.
that's one of the tonier areas around here.
Here comes Dow 11,500. Thought we'd get one more rally (there's still half an hour left.)
Probably too late to buy some DXD.
Cashed in my shorts last week thinking melt-up this week........
Now I am lost, what to do?
Continuez de manger votre popcorn!
one person does. I thought the proper response was the one from the movie "you ate sand?!"
CR posits, "Is this the 4th wave of the credit crisis?"
mock turtle humbly responds...
if it is, then we only have 3 more waves to go
(as a teenage surfer wannabe ...long ago...i was told the biggest wave was the seventh wave)
Cashed in my shorts last week thinking melt-up this week........
Now I am lost, what to do?
Dude wait until after July 4th. Any good news in banks should be out by then. Declare your independence.
Of course, these won't be complete without some sort of emergency speech from Pres. Bushit tomorrow, saying "we're just having a rough time, but the economy is robust"...
uuuhhh.
I cashed out of SDS at 66.21
I'll probably regret it, but I just remember not selling at 72 back in March and waiting and waiting for it to come back up...
I hope that Ben has his Depends on today.
What's the use of us taxpayers lending the schmucks money if they are not going to prop up asset prices for us?
warp 10 writes: How sure are you about your targets?
I'm sure of one thing: we won't get there in a straight line unless we crash - and I'm not forecasting a crash. So expect back and forth movement within a down channel until we clearly capitulate at some important support level. We might get an intermediate bottom at SPX 1170, for example. We'll just have to see.
@ Mock,
PA is a wierd metal. I lived in Moscow in 2000 when it went to $1,000 oz. Tried to get info on Norilsk but it was/is a closed city. State secrets are taken very seriously there. Tried to short it back then but no one would lend it. I luv Ford!
Anonymouse Agree about that Seesaw action for a little while. No crash either still too much money floating around.
ac,
Notice how the USD/YEN declining still pushes equities lower, whereas its rise doesn't have as much a boosting effect?
I remember earlier in June when USD/YEN was 108.something you suggesting buying calls on FXY (which goes up as USD/YEN goes down). Well it's at 106.60 as I type. I think USD/YEN will reach 100, then 95, then 90...
I think more money is moving out of stocks and into commodities and maybe just into cash.
It could be that more and more the Yen is just offsetting selling in stocks, but at some point I think the Yen will again become an effective tool for generating another short rally.
Just a guess.
BTW I'm not suggesting anybody should buy anything. Again I think most people will still manage to lose money even if they guess correctly where markets are going to move for a while.
Make your own decisions.
What about the Dodo bird?
melidere:
Not familiar with the area; it was just a guess. Maybe it's an absentee owner. But with HO expecting to touch $5/gallon this winter, the seller doesn't plan on needing it. The only individual that will can buy it would be a shady distributor with the truck; but after reading some of the more bizarre gas/diesel thefts by distributors, nothing would surprise me.
12th Percentile:
You are, of course, correct.
ac,
Not attributing any market timing to you; I think it's a serious matter that the USD/YEN decline can still tear stocks apart, while a rise is more muted.
This could have dire portents if the USD/YEN returns to its March lows, or even it's low of 80 a decade back.
So when to get in on the down side of commodities?
FWIW if you're looking at doing this and don't want to get killed you might consider buying puts on precious metal ETFs or commodity related stocks.
There are lots of horror stories about people who tried to short commodities outright in the 70s.
Conjure's Credit Collapse Clock keeps on ticking.
Ross wrotes:
@ Mock,
PA is a wierd metal. I lived in Moscow in 2000 when it went to $1,000 oz....
yeah, the Russsians seem to have a thing for Palladium
before the Canadian Pd Maple the oly currency minted palladium coins i could find were Russian Ballerinas
as a teenage surfer wannabe ...long ago...i was told the biggest wave was the seventh wave)
that was the veterans pulling your leash, keepin you out of the lineup for the 3rd wave....LOL
it did'nt work , did it!
so much for those who thought gold would die on an interest rate reversal
mock turtle | 06.26.08 - 3:08 pm | #
Reversal? I don't see a reversal. I see a dear caught in the headlights.
Hmm.. Wonder if gold will hit that 930 by tomorrow.
Wasn't the yen at 98 the last time the market was this low?
Not attributing any market timing to you; I think it's a serious matter that the USD/YEN decline can still tear stocks apart, while a rise is more muted.
That's what makes me think this commodity mess is such a nightmare.
It's almost a worst case scenario for US consumers - falling house prices, falling stocks, rising oil and food prices.
Again, from history this outcome shouldn't be that unexpected as a consequence of cutting rates while we still have this massive speculative ponzi-finance industry in place.
rupert,
INO.com Current Futures Trading Price Board - Intraday Prices, Charts, and Quotes for Futures and Commodities Markets
The 10-yr will face a bit of stickiness as it tries to push the yield through 4.025%, but if stocks continue to fall apart, it'll get through like butter. The market is taking the day's improves housing report in stride as it looks ahead to higher mortgage and tighter credit throwing a wrench into any sustainable housing recovery.
10:17 am - Pressing Higher : The continuous 10-yr futures contract pushed to fresh weekly highs taking out stops just above 113 on its way to test some offers residing near 113.14. Resistance above sits at 113-25 should the push through 113 hold. Support sits at 113-04 and below at 112-20.
12th Percentile writes:
Wasn't the yen at 98 the last time the market was this low?
USD/YEN hit an intraday, pre-market low of 96.something, but yeah. It's got a long way down, and so does this market.
All rallies (and there will be rallies) should be sold. No bottom in sight.
I also have fxy calls. Whats your target on the Yen to dollar?
You might as well have calls on TLT. Check out this madness:
FXY vs. TLT
Russsians seem to have a thing for Palladium
There's IMHO a 2% chance that Pd will prove to be the cornerstone component in that cold-fusion hooey (Pd sucks up hydrogen like crazy and some experimenters are saying they're getting above-unity heat out of it).
12th Percentile writes:
Wasn't the yen at 98 the last time the market was this low
Actually the dow is lower, the Nas is higher and the S&P is higher by smidgen. I actually like the Yen here because it was kept artificially low for years by traders. Japan is more concerned about the yen v. Asian currencies as that is where its export growth is. The Jap'nse gov't will tolerate a stronger yen going foward and won't intervene.
Russsians seem to have a thing for Palladium
I understand that they control almost all the reserves and control the price on the market. I like of the Plat group metals better.
"so much for those who thought gold would die on an interest rate reversal"
In this environment, standing pat seems to be the same as cutting rates -- at least as far as the dollar is concerned
ac writes: It's almost a worst case scenario for US consumers - falling house prices, falling stocks, rising oil and food prices.... You might as well have calls on TLT.
Don't you think what you describe reflects a net deflationary environment? That would explain it.
If nominal GDP can't get above say 3% over the next 3-5 years, then a long bond yielding north of 4% is a good investment, even as oil, food, metals rise.
Shazzam-Beat me to it..3rd or 4th wave in set. In hawaiian waters it is suicide to take off on 1rst..Popping up after a wipeout and seeing a cple set waves about to crush your head is humbling to say the least...
cd writes
Love the surfing analogy. Are you Hawaiian?
地球ではないについては、円となり、気に留めるこの時点で、 n225がクラッシュしたときに！トラ、トラ、トラ！
day's improved housing report
m-o-m gains in housing sales are no "improvement"
y-o-y is the important statistic
地球ではないについては、円となり、気に留めるこの時点で、 n225がクラッシュしたときに！トラ、トラ、トラ！
YEEEEEEHAAAAAAAAAAAwwwww! WTH? CR we're going worldwide!
As a shark fearing amateur east coast surfer I can say that my experience is that the third wave is the one.
completely OT: I surfed the north shore of Oahu once. I'm lucky the first wave didn't kill me. I will never do that again. The wave literally ripped my shorts in half (sort of the opposite of today).
Somehow i don't think the FED will raise this year. They may talk the talk but as far as walking..
at the age of 14 i learned that on back doors and sunset. i also learned that haole's wait for the locals to get best positioning
Google got a new CFO. That gotta cure this bad karma in the market.
(re 7th wave) that was the veterans pulling your leash, keepin you out of the lineup for the 3rd wave....LOL
it did'nt work , did it!
shazzammm | 06.26.08 - 3:36 pm |
it did work...but
while they were catching the 1st thru 6th waves...i was making time with the surfer girls
Google translated some:
EarthではdownいにKawasakiいては, yenとdownり, Qiにstay Commonsるこのde factoで, n225がTalkラッシュしたときに!トラ,トラ,トラ!
Re: 地球ではないについては、円となり、気に留めるこの時点で、 n225がクラッシュしたときに！トラ、トラ、トラ！
YEEEEEEHAAAAAAAAAAAwwwww! WTH? CR we're going worldwide!
Earth is not about the yen and take notice at this point, n225 when crashes! Tora, Tora, Tora!
The last few posts make more sense than the FOMC statement!
It would appear that The Bernanke Put isn't working.
Wow the dow took quite a drop in the 2 minutes it took to do a comment scroll.
I take it "Tora, tora, tora" is bearish, no?
My wife bought a Russian Ballerina palladium coin a while back because she was a ballet dancer as a young girl and thought it was pretty. Paid about $100. Was watching the ticker one morning and said "hey honey, palladium is up over $1000/oz"
Next day we were at the precious metals/coin dealer in Denver and cashed out at about $1050. One of the best trades of my life and she bought dinner that night.
mp - the option has expired.
Don't you think what you describe reflects a net deflationary environment? That would explain it.
If nominal GDP can't get above say 3% over the next 3-5 years, then a long bond yielding north of 4% is a good investment, even as oil, food, metals rise.
I've been here arguing the deflation case since 2006.
That said, the more I read the more I become convinced that there's merit to the argument that deflation may ultimately lead to hyperinflation (though I think that's unlikely). That's why I beat the "money printing" and "trash dollar" drums these days rather than the deflation drum as I have in the past -- I think that would be the worst possible outcome.
But when house prices, office building prices, car prices, stock prices, bond prices, etc. are all falling I have a hard time calling that inflation.
It appears to me that the current inflation is "artificial" in that it's being driven by leverage via the hedge funds.
People used rising house prices in 2003 to argue that we were headed for an inflationary crack-up boom, not a deflationary bust.
Now look at house prices.
But in 2008 the exact same argument is being made because commodity prices are rising.
Isn't it possible that they might collapse just like house prices? (I'm not suggesting that's necessarily going to happen tomorrow though).
mp writes:
It would appear that The Bernanke Put isn't working.
Not yet mp. Please report to the nearest soccer stadium. Your belongings will meet you there...
Can anyone find the bottom? It's murky down here and I can't see a thing.
Okay, I'm not contradicting my forecasts here.
Two points:
1)We're due for some short-term (a)consolidation, or (b)retracement.
2)Today's closing low on the DOW (a mere 30 stocks) is extremely significant for a technical analyst whose opinion I respect. To him, it means in May we've already hit a high point in the DOW for the next 4 years at least.
"It would appear that The Bernanke Put isn't working."
They got to keep the sucker at the poker game to keep playing some how. More candy!
How is it the PPT theorists never show up when the DOW drops after 3 PM?
You ate sand?
We ate sand.
Can't believe I bailed on SKF before the Fed and now this. I got a lot of upside in, but somehow got it stuck in my craw that there couldnt be any more. And today, another 7%. Sigh...
I dont see another entry point now for a while. Too scared about the giveback.
But I'll hold my SRS thank you. Patience young Jedi...
herewego writes:
How is it the PPT theorists never show up when the DOW drops after 3 PM?
Everyone's sleepy after lunch.
And buttered popcorn up $2.50 a bag...
leave off the butter. this downturn will make us all healthier. less food, less fat, less...you name it.
What kind of music are they playing on CNBC right now?
They should have more variety in their music than that damn marching song, don't you think?
There wasnt any music during the Baattan death march, but if there were, it would be appropriate.
I think the threesome Bernanke, Paulson & Warsh should all climb out of the nap they have shared and focus less on sexual perversions and shit down the mkt in Japan before anyone gets wind that a lot of shit is going down, and I'm not just talking about Warsh -- there needs to be a merger between WM, LEH, JPM, GS and probably USB and BAC and then just to make sure this cockroach is dead, add in WFC and then, shut down wallstreet for about a month so that Treasury can print print a few extra trillion Dollars and then in a show of friendship, Treasury could print a few quadrillion Yen and then act as a currency hedge fund to sell Pesos.
That reminds me, has anyone seen the price of spam today? Up almost 90%!
Warp-Southern Californian, now surfing sharkier waters up here in N.Calif..Dealing with Fed sharks is worse..
Shazamm- Always let the localz go first, plenty waves in N.Shore..Re: 3-4th wave..
Learned the hard way on Big Lani day ..
For sale:Book "Dow 36,000" very cheap!
regarding mock turtle gloating about gold...two said
Reversal? I don't see a reversal. I see a dear caught in the headlights.
Interesting Times | 06.26.08 - 3:38 pm |
In this environment, standing pat seems to be the same as cutting rates -- at least as far as the dollar is concerned
Bob Dobbs | Homepage | 06.26.08 - 3:44 pm | # #
mock turtle acknowleges..
hey, i'm smart enough to know, i damn well could be full of it, and you guys may be correct...
i'm not proud, and i'm thinking about what you said...
my premise is simple...oil is the new reserve currency not dollars...and gold is easier to put in my pocket than a barrell
btw i don't believe gold will rise as high nor as fast as oil
they should be playing the tune 'edmund fitzgerald' as backup music
What kind of music are they playing on CNBC right now?
Wagner's Funeral March would be very appropriate, I would think.
ac, you need to toss home purchases out of any macro economic analysis.
The money people were paying for homes this decade was based on loan program availability, interest rate flux, the speculative premium (making the home purchase a form of investment and not consumption) etc.
The US is still a big chunk of global GDP but we've seen our day in the sun and other regional economies are going to start pulling more of the train.
Absent US wage inflation, price moves in one sector will be offset in others.
Corporate profits were quite healthy for the middle part of this decade -- the boom -- so that's also an area that will see stress.
Japan is the model in my mind.
I expect another entry point for SRS. I'd like to buy in the 80's but will take low 90's.
there is no fear about the commercial market yet. Institutional money will prop up IYR for a while. They are running out of places to put it.
Where is my Federal stimulus check and refund from amended 2006 return when I need it?
For sale:Book "Dow 36,000" very cheap!
Love that book. It should be in a museum with that sock puppet.
From the Twilight of the Gods, I forgot to mention.
mock turtle writes:
btw i don't believe gold will rise as high nor as fast as oil
I don't see too much of a correlation of the two, it helps but is not a prime driver.
I think the dollar strength will determine the direction of gold.
tdameritrade shows the 5% daily stock move in beautiful bright, bright green. Hadn't seen that before.
Troy
agreed about beyond unity and cold fusion
but diagree about the 2%...maybe 33 and 1/3rd %
US NAVY seems to be taking the quetion seriously
US Navy Cold Fusion Report
What a mess... Thanks Be
13-week T-Bill now 40+ bps below Fed Funds
I imagine the futures options adjusted hard today to predict no rate increase in the near future.
The T-bill rate suggests we might even see an emergency cut.
Q: What kind of music are they playing on CNBC right now?
A: It's beginning to look a lot like Christmas?
Russell 2000 seems where bulls are holding strongest..Any ideas Why?
What is probably going to happen now is more FED monetizing and bailouts in their numerous fashions and definitely look out for more stimulus a.k.a handouts to be forthcoming.
Calls for tommorrow?
There must be some nice sell side pressure, because the market continues to hold down/move lower despite push ups from futures purchases.
Good day to be short SSO.
cd,
WAG - lowest volume stocks are easiest to prop?
Dont get up!
herewego writes:
Calls for tommorrow?
I'll be the contrarian, it'll go down sommore before they call it a bottom.
or maybe hit snooze all morning long....
BB-Winner Winner Chicken Dinner!
Kudos..
hmm visitor count climbing over 400...
Watch for more selling Friday as investors worry about holding stocks over the weekend!
That was fun Daddy! can we do it again? HAAaaaaaaaaaaaaaaaaaaaaaaaaaa
I hope that you are right, rc.
Remember,you only have thru Monday to take advantage of GM's car/truck offer!
Dollar, Oil, Dow, Dodd....
Okay--what's the new currency? Oil? So, if Oil $$, price goes up, then Dow goes down?
Just threw Dodd in for novelty.
herewego writes:
Calls for tomorrow?
Flat to up slightly. The volume wasn't high enough to make it a definitive move. broke major support at 1298 so I don't see a lot of upside either.
SKF!!!! bought at 100 and sold just under 140, dammit!! I figured that the Fed announcement had to be good news for banks so I could get right back in. Even watched it then drop to 130ish, but didn't buy because of the Fed announcement coming up.
Oh Well, Im in SRS under 100, its up. You never know the timing, but these things are gonna swing a lot, so I know I'll get back in again and cash out again.
cd writes:
BB-Winner Winner Chicken Dinner!
Kudos..
Thanks. and I don't think you did too badly too
Warp 10
sadly i am part Hawaiian...in spirit alone.
my grandfathers, both sides were born on islands...in the mediterranean...
The market knows something. There must be some news.
If not, 200+ rally tomorrow.
DOW 11,456.35\t-355.48\t-3.01%
Theme music for CNBC:
YouTube - Marche Slave Op. 31
Mortgage rates were up to over 6% on the 30 year this morning.
Geoff, I sold half my SKF today after riding it from 100 or so in April. Concerned about a financial snap-back on bailout rumors. I'll either plow more back into SRS anticipating the inevitable HB / REIT failures or buy some CRE puts.
Best of luck to all on the dark side...
C'mon everyone, the second half recovery starts Tuesday. This is just the bear's last, dying gasp. [/sarcasm]
Brother,Can You Spare A Dime? writes:
Remember,you only have thru Monday to take advantage of GM's car/truck offer!
Wait till Nov. They'll be giving them away!
trading stats:
If you're listening, I am waiting for you to remind me of your call for the S&P tomorrow
Hang loose mock t
The Dow continues to hold above major support in the Daily Chart, which currently sits in the 11,635 to 11,735 zone. Again, a big break or bounce from this level could spark the next major directional trend.
SignalWatch LIVE!
That was yesterday's suggestion and this is reality: \tDow closes @ 11,457.08\t
IMHO, we will see a Fibonacci Tsunami well below 10,500
Good day for bears!
BB wrote, "I think the dollar strength will determine the direction of gold.
BB | 06.26.08 - 4:02 pm | #
i guess you are at least half right...
my only caveat is..watch major gold moves relative to top 10 currencies...
on most days major up or down moves involve more than one or two biggies.
DOW\t11,453.42\t-358.41\t-3.03%
Eagle Sized Balls (award for most thought provoking handle of the day).
Simple man, simple bets: we have everything, plus margin, short SSO.
Portfolio up 7% today.
I can send McPain a check now, so that he can appoint more gun-slinging judges.
Doggone it. I got one of those hard skin kernal things caught between my gum and my tooth and I can not get it out. Pass the popcorn to someone else.
This is a financial storm and Katrina is moving back into The Gulf, and this is not a time to go stock up on cases of beer for a hurricane party -- get the fuck out of the market ASAP!
At 6:30 PM EDT (2230 UTC), Katrina made its first landfall in Florida as a Category 1 hurricane near Hallandale Beach, Florida on the Miami-Dade/Broward county line. After landfall, instead of travelling west as originally forecasted, Katrina jogged hard left (south/south east) almost parallel to the coastline in densely-populated metropolitan Miami, Florida. As many as six people were killed, including three people killed by falling trees and two boaters that attempted to ride out the storm in their crafts.[3] Other sources, including BBC, put the Florida death toll at nine lives.
Timeline of Hurricane Katrina - Wikipedia, the free encyclopedia
At 1:00 AM EDT, maximum sustained winds had decreased to 70 mph and Katrina was again downgraded to a tropical storm.
By 5:00 AM EDT, Hurricane Katrina reached Category 5 intensity.
And truth shall set you free and make you very very rich.
CNBC talking head:
Cash is a way to hedge against inflation because it allows you to buy the beat up stocks.
I am speechless.
Dennis Neale just said if you haven't sold, you haven't lost. Fool.
this is the one that paid the best for me...i had massive conviction, and played it like as such.
it'd be nice if i had'nt covered so long long ago.
TradingStats writes:
been waiting for 1427, patiently....
all in 7x short...
TradingStats | 05.16.08 - 10:05 am |
1270... ;-0)
who knows on dow... with two bk candidates c,gm
Interesting Times writes:
And truth shall set you free and make you very very rich.
Way to go. Interesting times we are in indeed.
"Cash is a way to hedge against inflation because it allows you to buy the beat up stocks."
Like WM, I suppose.
Andy, im almost exactly in your boat, except a lower SRS basis.
Jason, I hear ya. I sold ALL of my SKF though yesterday near the intraday high. Thought I was being all smart. Ya. I just get kind of risk averse holding that stuff for too long once Im well into the money. The first few times I was trading that I made a ton and gave it all back almost. Pissed me off. I figured, here we go again if I hold. But the pessimism really seems to be holding now, and the big difference between now and then is that Big Ben seems to be out of ammo. No surprise announcements on a bailout, no rate cuts. Nothing is working.
And there is still a ton of denial on how bad CRE will get, so I'll hold that through the ups and downs. Im still pissed I didnt sell at 140 on that too, and am now only slighly positive, but it will get back there. Give it two months.
Dennis Kneale must have glossies of someone at CNBC...
IndyMac [IMB] shares down to $0.80 today (-$0.28, or 25.9%).
Wamu [WM] shares down to $5.03 today (-$0.51, or 9.39%).
Speechless indeed.
There's no such thing as a TRIPLE BOTTOM!
Dow down 14% YOY.
ac @ 335:
Thanks. Hadn't considered that.
Mock Turtle:
Grats on your gold. I do hope there is follow on buying in the asian markets tomorrow.
I'll either plow more back into SRS anticipating the inevitable HB / REIT failures or buy some CRE puts
last I checked SRS had no exposure to home builders aside from some of the REIT's owning land (my favorite is the one who owns rezi land in Atlanta). If you are banking on it going up when the HB go out of biz, you are making a mistake.
Of course many REITs will perish and SRS will be a fine investment. But if you want to profit from the HB demise, SRS isn't the way.
I remember when cap rates were double digits. Good old days.
I remember in college (2000) seeing the market plummet on the tech bust. I thought "whatever."
The next year I graduated and couldn't find a job to save my life.
The class of '09 will be jobless AND burdened with student loan payments.
Forecast for 2009: pain.
Da phones ringin off the 'ook. Kant get a werd in edgewise. CR, tell Benny to get back to work....
Russell 2000 seems where bulls are holding strongest..Any ideas Why?
I've notice this wacky end of day action in the Russell 2000 several times in the past few weeks where it suddenly starts to outperform the S&P 500 for no apparent reason. At 2:30pm it's underperforming the SPX at 4:00pm it's substantially outperforming. I don't know if it's pumping or short covering or what.
RUT vs. SPX
Folks be careful even with shorts! When the market sells off they sell everything to raise cash, even shorts! Be sure to have your finger on the sell button!
I may have left something on the table w/ SKF, but if so oh well. I think the financials have led the market down nicely so far, with real estate ready to take the baton. All the taking heads are saying tech is OK based on the decent numbers from RIM and ORCL but I'm at a tech conference right now, and all the nametags I see say things like Wachovia, WAMU, Chase, Boeing ... the tech sector customer base is currently planning 09 budgets, and I'm sure they're being hacked to the bone. '09 will hurt for tech. Staples (the category, not the office supply co) will probably be OK.
-Jasno
Is being a broker or investment banker a sign of being masculine?
Research on beer commercials by Strate (Postman, Nystrom, Strate, And Weingartner 1987; Strate 1989, 1990) and by Wenner (1991) show some results relevant to studies of masculinity. In beer commercials, the ideas of masculinity (especially risk-taking) are presented and encouraged. The commercials often focus on situations where a man is overcoming an obstacle in a group. The men will either be working hard or playing hard. For instance the commercial will show men who do physical labor such as construction workers, or farm work, or men who are cowboys. Beer commercials that involve playing hard have a central theme of mastery (over nature or over each other), risk, and adventure. For instance, the men will be outdoors fishing, camping, playing sports, or hanging out in bars. There is usually an element of danger as well as a focus on movement and speed. Masculinity - Wikipedia, the free encyclopedia
You never see stock brokers in beer ads, or jumping out of windows; is that because people have changed, or are the windows unable to open?
so at the close of the NYMEX today, we got gold up over 30 dollars on yesterday's close.
i'm still thinking about deer caught in the headlights, and that no change in fed rate-isn't a hike...
hummm
my next thought is, how much control does the fed have over interest rates and the dollar anymore?
the secular gold trend will reverse some day...i guess it is not someday yet, cause the dollar is toast, and..
WE HAVE NO STINKING ENERGY POLICY IN OUR COUNTRY... THANKS GEORGE AND DICK VERY MUCH.
(george and dick are crying all the way to the bank...the one in paraguay that is.)
There is a deeper wave than this
Rising in the land
There is a deeper wave than this
Nothing will withstand
-S
Popped popcorn that's been sitting in big bags in the backroom at Costco for the last few months.
"WE HAVE NO STINKING ENERGY POLICY IN OUR COUNTRY... THANKS GEORGE AND DICK VERY MUCH."
We need to take a lesson from the Franch ---- BUILD NUCLEAR POWER PLANTS!
PPT, we hardly knew you...
"and the big difference between now and then is that Big Ben seems to be out of ammo."
I think the technical term would be "Big Ben has shot his wad."
Bernanke announces an emergency rate hike before the market opens tomorrow to stabilize the dollar, oil, and the markets -- wouldn't that be an ironic move!
Russell 2000 seems where bulls are holding strongest..Any ideas Why?
My bet is that the rates held constant. From what I've said and seen - made money in small-caps when Fed dropped rates years ago - smalls are inverse to rates. Increasing rates are problematic for smaller firms.
Could also be that they like the word
"Russell".
That would be ironic, but won't happen. The next big move by the Fed will be the announcement of yet another shotgun wedding - perhaps JPM and WAMU or some other bizarre mix that will produce only mutated offspring. Im thinking wiht the way things are heading, the desperation must be getting pretty heavy at some of these laggards and the news on the loan delinquency front didnt do anything to help valuations in the off balance sheet crapola. Id be surprised if we make it a week the way things are going. And remember, it's only Thursday. Im thinking a major smackdown in the Asian markets tonight, and that wont help.
"Cash is a way to hedge against inflation because it allows you to buy the beat up stocks."
uh..hmmm like getting rescued off of the titanic by the luisitania
.......fools......
Dennis Kneale is a moron.
Is Goldliocks dead yet? Quite a mauling she took today.
CNBC drinking game: take a sip anytime they say stocks are cheap, or it's a good time to buy for the long term investor. It seems to be the only analysis they are capable of on days like today.
The 15-nation euro bought $1.5760 in late New York trading, up from $1.5667 Wednesday. The British pound rose to $1.9877 from $1.9727, while the dollar fell to 106.66 Japanese yen from 107.93 yen.
This will help support higher oil and feed inflation; thanks Bush for destroying America! Hope your children and any offspring that flop out from your retarded gene pool are treated like shit as a result of your historical stupidity -- which killed countless people and destroyed vast amounts of wealth; you have out done Nero! Praise be to Bush and his family!
I'd sell my SKF, but what to buy with the proceeds?
To show how over-valued U.S. small-caps are (even after today's plunge) I did an analysis.
The market cap of the Russell 2000 Index is around $1.5 trillion. The trailing 12 month P/E ratio of the index is 76.50, according to WSJ.
So the index has produced about $20 billion of earnings over the last four quarters.
You could buy the R2000 Index.
Or, for less than one-third the market cap, you could buy Exxon Mobil (market cap $423). Exxon has produced $37 billion of earnings over the last four quarters and has a TTM P/E of 11.39.
Or, for less than one sixth the market cap, you could buy Microsoft (market cap $264 billion) and get $16 billion of earnings at a TTM P/E of 16.47.
How many of the R2000 components are in as good of shape to weather this environment and keep growing as Exxon Mobil or MSFT?
I think everybody underestimates how many small-caps went into this crunch way over-leveraged and now are sucking wind to get enough cash to stay afloat. The banks are cutting them off left and right. Their costs are soaring and they have little or no pricing power with their customers.
My original target for R2000 was 550. Now that credit has got so tight and earnings are so weak, it's dropped into the 400s.
Go RWM and TWM!
Is Dennis Kneale, Larry Kudlow's son?
Check out the food inflation year-on-year:
Food Prices
awgee writes:
Is Dennis Kneale, Larry Kudlow's son?
LOL.
Hedge fund speculation, easier to leverage and manipulate than S&P of Nas, program trading and just plain ol' yen carry habit.
Basically, R2000 and Nasd are in the same speculative/leverage boat and track pretty close together.
But there will come a time when R2000 drops by twice as much as S&P.
I think the technical term would be "Big Ben has shot his wad."
Benny Wad?
Re: "mutated offspring"
I think The Fed will find new ways to use the stupidity and corruption of Dodd to distort this systemic collapse into a new bastardized era of bailouts that will soak up every last cent that the American Middle class has (left); meanwhile, many of these right wing Mccain supporting retards will fail to connect reality to the loss of ownership in The Bush/Mccain Ownership Society....
Someone get Bloomberg a Wright Model B, stat!
U.S. Stocks Tumble, Sending Dow to Worst June Since Depression
By Michael Patterson
June 26 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.
[snip]
The Dow has slumped 9.4 percent this month, its worst June since an 18 percent tumble in 1930 during the Great Depression. All 30 companies have posted losses in the month as oil surged, the unemployment rate jumped to the highest since 2004 and concern grew that global financial firms will add to $400 billion of subprime-related writedowns.
The Dow's retreat today erased all the gains since mid-March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.
[snip]
"Worst June Since Depression"
Nice headline!
Sebastian come out, come out, wherever you are!!
crispy&cole writes:
"Worst June Since Depression"
Whenever there is panic like that, time to buy.
Don't you think what you describe reflects a net deflationary environment?
You cannot net consumer prices against asset prices. Everybody has to buy consumables, but nobody has to buy assets.
BB - that is what realtors said last year, didnt work out too well for homedebtors...
Did something just happen to IndyMac Bank? My Oct 2.5 Put options just went to zero on TD ameritrade. Not sure if the problem is their system, or did they suddenly go belly up?
crispy&cole writes:
BB - that is what realtors said last year, didnt work out too well for homedebtors...
Wouldn't do it on one headline, need more.
yogurt writes: You cannot net consumer prices against asset prices. Everybody has to buy consumables, but nobody has to buy assets.
But I was arguing that oil, food, metals prices rising could be justified along with a rise in long bond prices (drop in yields) if the asset destruction in house and stock prices decimated consumer spending enough to knock down GDP to something sub-3%.
Rich:
Yeah, I went RWM but was a bit confused by some of the stats. Recalled your note about several weeks ago re P/E being approx 75-76; but stats that I found on web - granted the R2000 site - showed P/E TTM (exc neg earnings) was about 18.
Still bought RWM given that I agree that they're going to get shellacked, but why the discrepancy on P/E?
Hey Anonymous, your drinking game is hilarious,but you would be dead from alcohol poisioning by the close. However, we are here to serve your alcoholic needs.
IMB = DONE!
uh..hmmm like getting rescued off of the titanic by the luisitania
Almost... more like getting rescued off the Titanic by the Hindenburg.
-Jaso
OT
Does anyone remember when one of the network magazine shows or morning shows ran an experiment with Dennis Kneale? It was set up to see if he could last a week without a Blackberry and maybe his cell phone, I can't remember. The guy was literally crying after a couple of days without it/them. Good times
Deus Irae
by Mozart of course, when upthread they started talking about music that popped in my head and started playing.
One of the first CDs I ever owned twenty years ago is a great rendition of Mozart's Requiem. Christopher Hogwood conducting the Academy of Ancient Music Chorus & Orchestra, and Westminster Cathedral Boys Choir. Recorded in 1983 and released in 1984 by Editions de L'Oiseau-Lyre. Performance of the Maunder completion.
Dies iræ! dies illa
Solvet sæclum in favilla
Teste David cum Sibylla!
Quantus tremor est futurus,
quando judex est venturus,
cuncta stricte discussurus!
Stagflation, baby, get used to it.
Some day this war's gonna end...
Re: I think the technical term would be "Big Ben has shot his wad."
I believe in the porn industry, this is called "the money shot", thus one might be able to suggest that Ben failed to produce "the money shot" and thus this scene will need to be shot over with new actors. I would thus suggest that since Ben was able to produce, the next scene will involve a tag-team with Trichet and perhaps the hot and sexy new super model Zhou Xiaochuan?
Ok. Tomorrow i expect the carnage to continue.
Honestly, Ive had so many stupid debates about GDP. A good valuation tool would be something that approximated the standard of living of the country's citizens. And right now, on that measure, we're getting the crapp knocked out of us to the extent that any "progress" that might have been made in the last 5 years is now gone, and after this mess is said and done, we'll be lucky if we are back to the quality of life we enjoyed in 1995. (On average of course, because the fat cats are now living like it's 2020, instead of 2008.)
Sebastian is busy saying "It's not an official recession, it's not an official recession, it's not an official recession" over and over.
"schauenfreude"...it's what's for dinner.
"Sebastian is busy saying "It's not an official recession, it's not an official recession, it's not an official recession" over and over."
and it won't be until Crawford TX has an ex- President residing there.
Geoff,
You are on to something there, I caught a talking head in passing who had an updated misery index - included house prices (I think) but more than unemployment and inflation - upshot was that it was higher now than the same index back to through the 70's...anyone catch that, the analyst and the index?
Geoff,
One acronym:
NDP (not GDP)!
CR traffic indicator is pretty high, and the gloating shorts index is off the charts. I reduced my exposure looking for a small relief rally tomorrow.
"Hey Anonymous, your drinking game is hilarious,but you would be dead from alcohol poisioning by the close."
He wouldn't even make it to power lunch.
I missed it, but if you think about things in real terms, it's worse than a recession. Were just getting started and home prices are back to 2004, we've essentially got stock prices back to about 2005, and household budgets don't buy anything like they used to, not to mention that even in nominal dollars, they are still barely above 2000 levels. I mean, the pooch is getting screwed left and right. Think about people's retirement prospects now compared to what they thought they'd be doing.
I swear, just wait until the 2007 survey of consumer finances comes out. Sadly, it's going to miss a lot of this carnage, but you'll see where we are headed. The 2010 version will make readers cry.
herewego writes:
How is it the PPT theorists never show up when the DOW drops after 3 PM?
herewego | 06.26.08 - 3:55 pm | #
i am a pround member of the "belief in the PPT" club.
i was arguing it's existence on these pages a year ago, with "Banker" ( a very respectable person with whom i had one disagreement)
face it, the team took the field today,
(the plunge protection team that is)
they just couldn't put points on the board...
(the big board that is)
or any other board...
Ben needs to reload. but make no mistake about it, the PPT team has NOT given up, they are wile and have looooong tentacles.
Yen, Swiss Franc Rise as Stock Slump Reduces High-Yield Demand
Yen May Extend Gain After Stock Slump Reduces High-Yield Demand - Bloomberg.com
`Starting to Wonder'
People are starting to wonder whether the Fed has the guts to raise rates in the first place,'' said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York.The dollar could test $1.60 in the next month.''
Risk aversion is at elevated levels, and that's benefiting the yen,'' said Samarjit Shankar, director of global strategy for the foreign-exchange group in Boston at Bank of New York Mellon, the world's largest custodial bank, with about $23 trillion in assets under administration.There's a lot of investor concern about the Fed's direction and the path of policy makers going forward.''
while we're all dispensing trading nollege, here's one i haven't seen here.
note that while crude bounced $5 to $140, oil stocks sold off again today, with index price following participation lower.
looks to me like distribution. the boom from 2003 was in housing, banking and commodities. as speculative capital was tossed out of housing since late 2005, it migrated to the other two. since 2007 it has been tossed out of banking, making commodities the only narrative still working. i think tightening credit is pulling the plug on speculative leverage and people are slowly starting to wake up to the fact that there is in fact a lot of storage going on.
I held this quote for over 5 months now, knowing perfectly well there'd be a chance to use it:
=======================
This week all the bad news gets out there, next week we'll rebound. This really is the peak of anxiety and bearishness from which we turn around and never look back again. A moment to behold for all the bears.
O-Joe
Optimistic Joe | 01.15.08 - 12:34 pm | #
Re: hey are wile and have looooong tentacles.
I thing you meant testicles? Also see: Undescended Testicles
Well spank my naked ass!
Mock,
Can you clarify this: "PPT team has NOT given up, they are wile and have looooong tentacles."
Hey, Cause Beef- what's inyour freezer?
To replace the COF campaign.
Buy a freezer, stock up, and you will be enjoying your steaks while everyone else is substituting with soy product.
Stagflation.
Pure and simple, the price of everything that can be sold to someone outside of the USA goes up. The price of everything that can't goes down.
Kinda feels, I dunno, Argentinian?
I have a page on my wall from 2002- Argentine economy contracts 14.9% in first half of 2002, 15 straight quarters of decline in output.
Ponder that with terror in your heart, and resolve to go out and spend!
Someday this war's gonna end...
zackattack, thanks. I very much enjoyed that O-Joe quote.
Funny how he roams these threads like a troll spirit, whether he's here or not. Same with Seb, of course.
"=======================
This week all the bad news gets out there, next week we'll rebound. This really is the peak of anxiety and bearishness from which we turn around and never look back again. A moment to behold for all the bears.
O-Joe
Optimistic Joe | 01.15.08 - 12:34 pm | #
======================="
O-Joe's just a troll, but at least not a mean-spirited one. The last time I saw him post, he said he'd be holding off on a home purchase until next year.
zackattack writes:
I held this quote for over 5 months now, knowing perfectly well there'd be a chance to use it:
=======================
This week all the bad news gets out there, next week we'll rebound. This really is the peak of anxiety and bearishness from which we turn around and never look back again. A moment to behold for all the bears.
O-Joe
Optimistic Joe | 01.15.08 - 12:34 pm | #
zackattack | 06.26.08 - 4:59 pm | #
Thanks. I intent to use that this weekend.
BB wrote:
Ok. Tomorrow i expect the carnage to continue.
you are a braver soul than i.
let me say that the PPT, and all their benefactors are well aware that tomorrow is big.
sentiment amongst the mass of investors and consumers is clearly very negative. the big boys and girls in the financial world know they have got to stop the hemorrhaging fast before the patient bleeds out.
i don't have a way to figure out what's gonna happen tomorrow. but i will say this.
if we get a 100 point plus down day on the dow tomorrow, then i guess that there will be a massive rush to the exits by the remaining small individual private investors ....PDCF and insitutional investors be damned
crispy&cole writes: "Worst June Since Depression"
BB writes: Whenever there is panic like that, time to buy.
me: Yeah, last time when there was panic like that, you bought in 1930. Sounds like a winning portfolio for the next 3 years.
http://upload.wikimedia.org/wikipedia/commons/0/0a/Dowtrends19302008.jpg
crispy&cole writes:
IMB = DONE!
Anyone got a link? or is this premature?
TIA.
From Bill Fleckenstein about mid-day today:
"...About that time, I received a phone call from the Lord of the Dark Matter, who began the conversation: "It's about to blow!" He then repeated himself.
He went on to say that behind the scenes, many parts of the credit/mortgage market were "offered only." He said it had nothing to do with month-end or quarter-end. Instead, he believed it had to do with the enormous amount of inventory that would be looking for a home in the next quarter. He believed that the equity market was "miles behind what was occurring in the mortgage-backed/credit markets." Though he noted that he'd said it before, he repeated: "It's never been this bad." That, combined with what I've seen on the equity screens, caused me to believe that today could be quite ugly..."
The part about "offered only" and many parts of the credit/mortgage market looking for a home next quarter sounds VERY ominous to me.
peatey,
agreed - the money quote there is not the healine, its:
The Dow's retreat today erased all the gains since mid-March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.
Mock Turtle:
I understand your reservation. But after weighing the pro's and con's about defending another break at this level. I think it would go down again and am betting on it to do so.
m-t-, I agree with your read of the PPT, that (1) it is real and (2) its efforts to prop things up are not over.
I have no idea what will happen tomorrow. But, I'm short for the long-haul.
Portfolio was up 8%, not 7%. Leverage is good on the way up.
"CNBC drinking game: take a sip anytime they say stocks are cheap, or it's a good time to buy for the long term investor."
No kidding, talk about a masses calming mantra, they should turn these guys loose on Iraq.
I don't think anything short of a mutual fund melt down will shake the confidence of these people (i.e., 40-50 y.o 401K users). God should receive such blind faith.
Who can blame them I suppose, they hung on after the tech bust and were rewarded for their patience.
peaty: "Yeah, last time when there was panic like that, you bought in 1930. Sounds like a winning portfolio for the next 3 years.""
Hey, I'm with you. Can't find the graph right now, but I think in January - March of 1930, volume increased substantially, as the Dow paused its drop. As it turned out of course, the Dow continued its downward trajectory, bankrupting the 'knifecatchers' like..., well, fill in the blank. O-Joe, my idiot neighbor who bought a new Mcmansion 8 months ago, etc.
Me, I still can't believe that boomers only have 113k on average in equity... my god, what a slaughter this is going to be.
Not today, Dow was barely down 358 .. but soon.
Kinda feels, I dunno, Argentinian?
Best line of the day & fully captures the situation.
Did we have Black Friday today or is it coming tomorrow.
Anonymous writes:
Mock,
Can you clarify this: "PPT team has NOT given up, they are wile and have looooong tentacles."
Anonymous | 06.26.08 - 5:03 pm | #
mock turtle responds
sure
Big Ben is famous for his post graduate thesis regarding remedial responses to severe economic contractions...as in the great depression.
much of what he said, has been said or practiced by others. for example, thw the stock market crashed in 87 fed chairman greenspan, ny fed prez gerald Corrigan, and chair of the NYSE, J Phalen, worked day and night to inject money , ie promises everywhere and anywhere they would be accepted and used to reflate the system in order to avert a depression.
several books have been written on the subject, but in the spirit of brevety and in order to be responsive to your quiery in short order let me refer you to a teaser article of 10 years ago...get you started
washingtonpost.com: Plunge Protection Team
suffice it to say that the 500 richest families in america, the people who really "OWN" this country, are very bright, and not about to take a collapse lying down.
THEY KNOW PEOPLE...when they call Paulson on the phone they get thru.
the PPT is a loosely affiliated collection of very smart technocrats who work for the owners, and who will do everything they feel is ethically possible whether entirely legal or not, to save the system.
i have met some of these people. i don't hate them,i dont fear them, i don't vilify them and i don't envy them. nor do i put them on a pedistal.
i know them for what they are, very rich exceedingly powerful, and not to be trifled with. often they do great philanthropic deeds. be careful not to get in their way.
suggested reading
"who really runs america", Michael Patrick Allen.
Seriously, what happened to my IMB OCT 2.5 Puts? Why are they showing up as a 100% loss? That can't be right....
They should be a 500% gain, at a minimum
IndyMAC closed at 80 cents a share today .yes that is .80, less than dollar..yikes!
interesting to see if these folks fold tomorrow...and the fall out...
When CR had ask a week or so ago what next and I submitted IndyMAC
had about two weeks.
The reasoning, a loan officer I know whom was at IndyMAC emailed me to
let me know he had jumped ship.
He is a one man leading indicator. IndyMAC would be RE investment
outfit number 3 that has gone under for him.
I am short jg.
"...About that time, I received a phone call from the Lord of the Dark Matter, who began the conversation: "It's about to blow!" He then repeated himself.
He went on to say that behind the scenes, many parts of the credit/mortgage market were "offered only." He said it had nothing to do with month-end or quarter-end. Instead, he believed it had to do with the enormous amount of inventory that would be looking for a home in the next quarter. He believed that the equity market was "miles behind what was occurring in the mortgage-backed/credit markets." Though he noted that he'd said it before, he repeated: "It's never been this bad.""
If Fleck's LOTDM is right - the Fed will close the 'window' and open up the 'loading dock'... believe me.
Let the beatings continue.
[i] Let the beatings continue.[/i]
...until morale improves!
jg and BB
my sentiment is with you both.
look, as dirty harry said, "a man's got to know his limitations"
i not too shabby when it comes to current events and history...
but as an investor and a business person...i got a lot to learn from this crowd here at CR.
the system is so complex and the players that may or may not take the field, are so awesome, that i hesitate to say what stocks will do tomorrow.
fundamentally i think the downward pressure is horrendous.
but the power of the central bankers and 1000 largest stock holders in america can, for a time, move mountains.
we will see how long they can lean against the wind and the tide.
the fundamental and natural forces of debt, trade imbalance, war, energy and the destruction of US share of REAL industrial production can not be denied.
whether tomorrow is a carnage or whatever...i think it could be, but i have no way of knowing
alex writes:
Did we have Black Friday today or is it coming tomorrow.
alex | 06.26.08 - 5:27 pm | #
Not even close - like last time we had a small BLIP, shorts get all jiggy over it. This was almost 3% on the Dow...Pull up a 5 year trend - I'll be shocked if the Dow doesn't go below 10K... I wouldn't be surprised if it went below 8K... and did so within the next year or two.
Headline: markets are cyclical.
For a down day to classify as a 'Black Friday' - we'd need to see the Dow drop something like 2000 pts in one or a couple days. If the credit markets really seize up - so tight even Ben & a jug of that shit you drink before a colonoscopy couldn't unplug it - then it could happen. But I wouldn't bet on it.
Oh - and if the majority of your income comes from a job - I wouldn't hope for it either.
O- is proposing permanent tax cuts:
Obama Says Spurring Growth Would Let Fed Focus on Inflation - Bloomberg.com
Gary, did he clear that with you and Krugman?
The only shorts O-joe loaded up on were his brown ones.
jg, give it a rest and move on from your Obama obsession or STFU.
Amen Alec
Re: IndyMAC closed at 80 cents a share today
With inflation of 10% a year, these guys may just be in trouble?
I wouldn't be surprised if it went below 8K... and did so within the next year or two.
Accelerating IRA/401k withdrawal
Recession
Zero savings rate
Might be sooner
hmmmmmmmmm...
Fed Reviews Rules for Investing in Banks, Seeking More Capital
By Craig Torres
June 26 (Bloomberg) -- Federal Reserve officials are reviewing regulations that limit investment firms' stakes in banks in an effort to channel more capital into the U.S. banking system.
The central bank ``is taking a look at these rules with an eye toward whether there are any provisions that can be modernized,'' Mark Tenhundfeld, senior vice president of regulatory policy at the American Bankers Association in Washington, said in an interview.
Fed Chairman Ben S. Bernanke, Treasury Secretary Henry Paulson and other officials have urged banks to raise capital, helping offset the impact of writedowns and credit losses. Treasury officials have urged consideration of easing limits on private equity firms' purchases of bank shares.
[snip]
From jg's link...
Earlier today, the Illinois senator, 46, held a summit with research and business leaders including General Motors Corp. Chief Executive Office Richard Wagoner and U.S. Steel Corp. CEO John Surma. He told the panel that he will be an advocate for a permanent research and development tax credit, lower energy and health-care costs, more educational opportunities and investments in infrastructure.
`Building Blocks'
An overhaul of energy policy, the health system and schools will be ``the building blocks'' of long-term U.S. competitiveness, Obama said in the interview.
And tax cuts too? Hmmmmm. I don't think he needs to clear that with Gary, Ben or any of us... does he know Zhou?
alec, energycon
hey
i'm a dem and probable Obama voter.
when people just rip and rant, im with ya
but jg stated a view and provided a link to a news article...he and i disagree 50%.
can i suggest we ought to read his article and see if he's got a point?
then we will come back at him if he deserves it...or say he's right!!!
I think Zhou will be at one his future fundraising events, d-.
I hope that O- does not go for the 'Iced Tea' defense, later.
Nope. Article doesn't have much in the way of particulars, so I don't have much to say about it . . . except a permanent tax cut on the lowest portion of income would be just fine with me . . . as long as all the Bush tax cuts for the rich were not only repealed, but then brought back up to pre-Reagan levels.
I would increase gas taxes and put the money to transit, and I'd also jack up the royalty/lease payments on all Federal oil/gas resources.
And I'd aggressively pursue tax cheats and put them in Federal pounding-in-the-ass prison . . . along with 90% of the Bush administration.
Re: The Dow's retreat today erased all the gains since mid-March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.
>energyecon | 06.26.08 - 5:50 pm |
"The central bank ``is taking a look at these rules with an eye toward whether there are any provisions that can be modernized,''"
Modernized Heh...things always get interesting when rules need to be modernized
"And I'd aggressively pursue tax cheats and put them in Federal pounding-in-the-ass prison . . . along with 90% of the Bush administration."
Or do what neither Dems nor Republicans will do, and crack down on American companies that avoid corporate taxes by declaring "corporate headquarters" to be a Bahamas lockbox. Seagate Technologies, I think Black & Decker, and many other names.
Might be sooner
Argento | 06.26.08 - 5:50 pm | #
It could be - but the other wild card are the SWFs - the lower the dollar goes the better the values look - to them. Combination of falling nominal stock prices AND falling dollar at some point gets their attention. Where that point is I wouldn't guess but it is down there somewhere...
Of course since we are in dollars it doesn't look that smurfy to us - ever. Not until the dollar rebounds.
This is more of that rebalancing thing - we can sell them goods, or we can sell them our remaining assets - but if we keep running a huge CAD we'll be selling them SOMETHING and at weaker dollars.
Bush economic Chief Larry Lindsay promised lower gas prices as an excuse for Iraq invasion.
What happened?
I'm with you Bob Dobbs.
Something that makes me very, very happy: lots more fellow travelers on here than there were 2 years ago.
barely, you're going to owe $50 to the tip jar in a few short months.
Off to a meeting. Best to all (except jg and the insufferable "joe klein of CR" ipodius)
What happened?
Incredulous | 06.26.08 - 5:59 pm | #
They were... wrong?
Every share bought of the Dow Jones Industrial Average since October 2006 is in a losing position. Every last one of them.
Looks to be an interesting collection of articles - though Wharton is pushing the 'its the subprime' meme.
Knowledge at Wharton: Inside the Subprime Crisis
A share of WaMu now will buy either a gallon of gas, loaf of bread, pound of burger or a video rental (see Paulson & Warsh do DC).
How do you value a company like WM against a ten year bond yield at this point? Every possible model in the world is broken for valuation and the only solution is to de-value everything and start over from scratch, as in DOW 8K
"Accelerating IRA/401k withdrawal"
Better get it now before the Dems raise penalties for withdrawl and tax rates on incomes over $100,000.
incredulous, here is what happened...
"Mr Rumsfeld is in Europe to try to gain backing for possible military action against Iraq.
"It could last six days, six weeks. I doubt six months," he said, speaking at the American air base at Aviano, in northern Italy.
BBC NEWS | Middle East | Rumsfeld foresees swift Iraq war
here's how they f'ed it up
a lesson to all
they purged their "team" of any and all who argued, raised objection, or urged caution.
a smart leader encourages debate in decision making.
but after all even their supreme fearless maximum leader announced "i don't argue with myself"
and now we remember how we got into this mess...leaders who are cocky and cock sure of themselves...all the way over the waterfall.
A-mouse,
Your WAG on tomorrow's market?
At the very top of this comment string "Mike in Long Island" asks: What's the inferior good for buttered popcorn?
I'm concerned that the answer will ultimately turn out to be collecting un-eaten corn kernels from under the bird feeders of the "better off." Collecting the little nuggets until a useable amount is realized, then popping them (sans butter of course--we're talking inferior goods here), then sneaking your baggied bounty into the movie theatre through an emergency exit door a sympathetic friend left propped open.
I think I read something similar to that happening on a regular basis in the 1930's. Or, maybe it was just from an old "Walton's" T.V. episode....
Oh come on, and for pity sake WPA,
There will be no movie houses open, because it will cost too much to have a building sitting idle and waiting for a few people to pop in for an old movie. The movie house is like the bakery, butcher shop, candle maker, buggywhip maker, etc. In this Depression entertainment will only be found here, in a virtual form -- if you can afford a connection.
Schumer: concerned over IndyMac stability
Schumer: concerned over IndyMac stability
Schumer presses regulators for action to avoid disaster from IndyMac; stock plunges
June 26, 2008: 05:53 PM EST
NEW YORK (Associated Press) - The possible collapse of big mortgage lender IndyMac Bancorp Inc. poses significant financial risks to its borrowers and depositors, and regulators may not be ready to intervene to protect them, Sen. Charles Schumer, D-N.Y., said Thursday.
A wave of IndyMac depositors withdrawing their funds could leave IndyMac "in a disastrous financial situation," Schumer said.
Schumer, who sits on the Senate Banking Committee, voiced concern in letters to the heads of the Federal Deposit Insurance Corp. and the Office of Thrift Supervision, an agency of the Treasury Department.
Shares of Pasadena, Calif.-based IndyMac, which already have tumbled nearly 95 percent over the past year, dropped 28 cents, or 26 percent, to 79 cents in trading Thursday. They recovered a cent in after-hours trading.
Gutted by losses from writedowns on mortgage-backed securities, the company warned last month that it wouldn't return to profitability this year unless the slide in U.S. housing prices slowed. IndyMac posted a loss of $184.2 million, or $2.27 a share, for the first quarter, compared with a profit of $52.4 million, or 70 cents a share, a year earlier.
"I am writing to you out of concern for the safety-and-soundness risks posed by IndyMac," Schumer told FDIC Chairman Sheila Bair and John Reich, director of the thrift agency, in the letters. "The regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur."
He asked what steps the two agencies are taking.
Schumer asked, for example, whether the FDIC has considered ordering IndyMac to reduce its reliance on brokered deposits, sold by securities firms to customers outside of a bank's local area, which can carry higher interest rates but also can be riskier than traditional deposit accounts because they may not fall within the federal insurance limit. Brokered deposits make up more than 37 percent of IndyMac's total deposits, according to Schumer's letter.
OTS spokesman William Ruberry declined to comment, other than to say that the agency is reviewing Schumer's concerns. FDIC spokesman Andrew Gray had no immediate comment.
Michael DiVirgilio, a spokesman for IndyMac, said the company was reviewing Schumer's letters and had no immediate comment.
over at Roubini's blog is a list of the countries, along with US who are headed for a hard landing.
all the usual suspects
but interestingly absent from the hard landing list are:
drum roll please:
germany france and the BRIC economies.
is Roubini now arguing against his no- decoupling theory?
I've never been too big on Tech analysis, but for those that are pull up a really long term chart on the S&P 500, say 35 years. March 2000 and Sept 2007 form the mother of all double tops, if you think there is anything to chart patterns its enough to make ya crap in your pants. Could put the S&P 500 at 500 or so. Don't think the fundimentals justify it...unless oil really did peak in 2005.
Herewego, BB, Eagle:
OK, I'll call a buyer's vacuum and DJIA down 1200 to 10,253 for an hour cooling-off period.
Rule 80B for 2Q '08: Level 1 Circuit Breaker = DJIA down > 1200 pts.:
Before 2:00 pm = 1 hour halt
Between 2-2:30 = 30 min halt
After 2:30 = Let 'er Rip
NYSE, New York Stock Exchange > About Us > News & Events > Media Resources > Media Resources
Re: "the company was reviewing Schumer's letters and had no immediate comment."
C'mon, Sen. Chucky; please start a bank run/panic!
Dryfly writes:
"This is more of that rebalancing thing - we can sell them goods, or we can sell them our remaining assets - but if we keep running a huge CAD we'll be selling them SOMETHING and at weaker dollars."
A German company bought a small private water utility in my area and immediate jacked up the price of water as high as they could. Much screaming, many lawsuits, sympathetic courts, and the Germans are beginning to beat a retreat. Oh, they're getting $$, but not the little empire that they'd hoped for.
Moral: they'd better watch out what assets they buy, and how they exploit them. Nationalism lives, for better or worse.
Yeah, when a Senator is going to bat for you, you know you're in trouble.
peAkcredit writes:
OK, I'll call a buyer's vacuum and DJIA down 1200 to 10,253 for an hour cooling-off period.
Heh.We'll see if there's capitulation or not tomorrow.
I think markets are heading lower, and will get a better idea after the asian markets and europe open later.
Cheers,
Re: "crap in your pants."
When gas is over $5.00 in a month and heading higher, most vacation plans will be canceled and people will prepare homes for winter heating increases and cost of living costs going parabolic. The days of fun vacations and easy debt are over and the tsunami of fun on wallstreet will evaporate within weeks. Get the fuck out of the market and protect cash. Do not be in debt!
PS, I just got 4 offers for credit cards today!
Okay, so the real number (based on reported TTM earnings and all 2,000 Russell small caps) is a P/E of 70+.
The P/E quoted by Russell, S&P and some others based on ex-neg. earnings and forward P/Es is 18-25.
What does that tell you?
It tell me: 1) a lot of small-cap stocks have turned neg in earnings. I'm estimating about one-third; and 2) the forward earnings estimated have become total fiction.
Go here and take a look (warning Excel file download):
http://www2.standardandpoors.com/spf/xls/index/iee600_gics.xls
This is S&P's earnings (actual and estimated) for the their 600 SmallCap index. They are showing smallcap earnings down -6.7% in 2007 but increasing 9.8% in 2008 and 29.7% in 2009.
Really? On what basis? They also show SmallCap earnings dropping like a stone in Q4 07 and Q1 08, but miraculously recovering in every quarter after.
That's how they get to the 18-25 forward PE (ex neg.). I'm thinking they figure out a P/E number that will keep investors glued to stocks and then work backwards to the forward earnings that will produce the target P/E. Of course, they're also relying on bottoms-up calls by analysts, who follow optimistic guidance made by 2,000 scared-stiff company mgt. teams.
In some ways, it's become a bigger racket than what was going on with tech stocks in 1999-00.
I think the forward earnings environment for small-caps may be worse today than it has been in 20-30 years.
I vote we rename the USA the benevolent country of Parador.
It would be good to be the dictator.
Ahhh, I probably would have to play the part played by Raul Julia!
Lol, more like Jonathon Winters;-}
This would go down much better with some poooonaaasss.
Buy stock in booze producers.
The only winners will help us drown our sorrows.
Someday this war's gonna end...
France generates all its electric power with nuclear energy.
Hint. Hint.
Some thing wicked this way comes. I smell it.
But what?
BofA backs out of Countrfried deal, because the Bank bail out bill they wrote with UBS doesn't happen.
Then in August, Wachovia, WaMu and LEH implode.
More ammo and food.
Cheers,
ew thread...jump aboard.
Gary, you are going to put a real dent in well-heeled folks' optimism with those proposed actions of yours:
Spectrem Affluent Investor
Things were looking up in May. Why rain on the parade?
Oh - and if the majority of your income comes from a job - I wouldn't hope for it either.
dryfly | 06.26.08 - 5:42 pm
No kidding. Guess what interest rates were during the depression? 2%
Today I am walking to my building and stop to grab a smoke before going in. Two maintenance/engineer guys are talking. They are always out front smoking at the time I find my way back to the building.
These are 2 men, white, late 40's or early 50's. One is telling the other "Man, I hope I can find a job. At least something at the same pay. I am to freakin old to go back doing the sh@# I used to do."
That is what is rolling towards us. It is all over for a lot of people. They know the panzers have have crossed the border but they can't believe they aren't going to get stopped before they roll into the village. If they do make it, well, whats the worse that could happen?
Life will go on.
Moral: they'd better watch out what assets they buy, and how they exploit them. Nationalism lives, for better or worse.
Bob Dobbs | Homepage | 06.26.08 - 6:22 pm | #
Oh I agree - just like in places like Columbia or Paraguay - nationalism lives. They'd rather have no water at all than see somebody else make money off of 'their water'.
We'll go through some of that too - until we get sick of having no water.
Oh and why no water? Because we have a declining wealth base to tax against - so no maintenance, no capital improvements... and eventually no water.
We could invest in building & maintaining it all ourselves - but then we'd have to jack up the rates to ourselves... looking at the deficits in Cali I don't see that as likely.
Glad I don't live in a desert. Of course it isn't winter yet where I live... we have our own issues here.
Allen M:
But doesn't someone else have first dibs? His currency is the caramba.
Who's that again?
Rich:
Thanks for the read.
You've managed to put numbers to my fears.
Guess what I'm buying tonight?