NY Times Correction on Morgan Stanley Comment
Submitted by
CalculatedRisk on Thu, 09/18/2008 - 9:08am (262 comments)
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Someone got a call from the lawyers...
Um, don't people go to jail for things like this?
Is the NY Times shorting the market too?
and the gray lady has resorted to the manipulation of markets. excellent.
In law, defamation (also called calumny, libel, slander, and vilification) is the communication of a statement that makes a false claim, expressly stated or implied to be factual, that may give an individual, business, product, group, government or nation a negative image.
hmmmmmm....
I'm betting he said it.
That'll teach people to be honest about the situation at Morgan Stanley. Up next, an apology for the suggestion by the paper that WaMu might be sold.
Hey, they are known for making crap up. What's new???
MS should sue NYT within an inch of its life if they don't get a satisfac tory outcome. This kind of 'reporting' doesn't deserve the protection of free speech, and a more honest retraction (actually, preventing this from happening should be routine) would acknowledge the great harm done by what the law calls careless disregard for consequences.
People sure are touchy these days.
So when they go under in 2 weeks, what will he say then?
Oh that was something unrelated to the Times story.
/snark
Shocking. The NY Times gets a tory wrong. Oh well, back to smearing Sarah Palin's baby and carrying Obama's water.
It's hard for me to understand how a direct quote could have been put into someone's mouth based on comments from two unidentified sources. This is not exactly standard industry practice. Not what they taught us in J-School.
I think this translates as :
hand wave
"I didn't say we weren't going to survive, and these aren't the droids you're looking for"
Figured.
Puzzle for the reader:
See if you can determine the target FF rate by looking at table of actual overnight rates
.
Blame Gretchen... it's what I'd do.
You've got to be kidding me.
"nm"????
Mamasan Sheila better get her own whores in line before she starts slapping down bloggers.
Yes I'm sure CIC is interested in buying MS and no one seems to care that it's the exact same thing....however when one doesn't like the story then things get terse.
Works both ways scumbags.
Sue the NY times??? Methinks they have a little more to deal with at this point then a suit against a "rumor"
Ciao
MS
ot to change the subject or anything....but does anyone have any info on what level three assets GE might have? I'm interested in seeing if they could get into trouble.
Headline from Marketwatch: "Putnam closes Putnam Prime Money Market Fund"
This was just posted at nakedcapitalism:
Call me suspicious, call me a dumb blogger, call me when you get a chance, but ... what are the odds of all these mergers and failures and restructured on-the-fly deals occurring all within a few weeks of one another - and then the curious nature of new rules, new regulations morphing out of nowhere -- without FTC reviews, challenges by Congress or fully disclosed DD, with SEC filings????
FYI, remember these odds:
To understand how lucrative that loophole was, just look at the compensation of William McGuire, CEO of UnitedHealth Group Inc., an insurance company in Minnetonka, Minn. Earlier this year, the company revealed that McGuire had accrued more than US$1.6 billion in unrealized stock-option gains. Much of those gains came as a result of an agreement with the company that allowed McGuire to choose the dates on which his stock-option grants came into effect. Not surprisingly, McGuire chose dates around times when the company's stock hit its lowest point of the year. The odds of choosing those dates at random are about 200 million to one, according to an analysis published earlier this year by The Wall Street Journal. To put that in perspective, the odds of correctly picking all six numbers in the Lotto 6/49 are about 14 million to one, while the odds of being struck by lightning are about 700,000 to one.
Again from Marketwatch:
12:19 p.m.
Putnam Prime Money Market Fund net asset value $1 a share
12:18 p.m.
Putnam's decision due to marketwide liquidity issues
12:17 p.m.
Putnam closes Putnam Prime Money Market Fund
WTF! Whether Mack said it or not, I think it's the only truthful statement about an IB in years.
I dunno, it was reported as hearsay as in "according to two people briefed on the talks" so I think that while NYT wished they had gotten the quote directly, they didn't and had to cover their legal asses. But I suspect it's probably one of those true statements, or a close enough paraphrase, that Mack wishes he'd been more cautious about. Luckily he had the slender thread of not having the reporter actually present when he said it, so he's muddying the waters and denying all due to lack of tape recorded evidence.
Remember, these are not fine, upstanding folks we are dealing with at MS - they are the epitome of self interested manipulators. The cream of the crop
I'm forgetting who predicted an hour surge in the market today... the trend looks to be down after a bit of a rise.
Got Popcorn?
Neil
MS is going to be bought by Wachovia. Wachovia said they need a dowery. MS said "No Problem" and called the Chinese. Chinese answered the phone, but were sleepy, and said call back. Panic set in and the remark was made.
To put that in perspective, the odds of correctly picking all six numbers in the Lotto 6/49 are about 14 million to one, while the odds of being struck by lightning are about 700,000 to one.
Anonymous | 09.18.08 - 12:27 pm | #
UHC employees, customers & stockholders were the ones who got hit by lightening...
Headline from Marketwatch: "Putnam closes Putnam Prime Money Market Fund"
More like: (sub)Prime Money Market.
Goldman options: Options - WSJ.com - for Goldman Sachs Group Inc.
what a disgrace
All I can say is will the last one please turn off the lights? Holy Mother of Pearl .. $180,000,000,000 dollars. MORE than yesterdays $70,000,000,000 wich is more than the day before $85,000,000,000 and last weeks $200,000,000,000.
"The US Federal Reserve announced a 180-billion-dollar cash line to fight the racing fires of global financial crisis Thursday, as leading central banks said they would join in.
The Federal Reserve said it was expanding its temporary arrangements for banks to obtain dollars by 180 billion "to provide dollar funding for both term and overnight liquidity operations by other central banks."
The move was to fight "continued elevated pressures in US dollar short-term funding markets," the Federal Reserve said.
The Fed's statement concerned "reciprocal arrangements", which several central banks had authorised to run up to January 30, 2009, or for another four and a half months'
not to change the subject or anything....but does anyone have any info on what level three assets GE might have? I'm interested in seeing if they could get into trouble
I believe there was a chart on The Big Picture about two weeks ago showing who had the most Level 3. If I recall correctly, GE and GS were in the top 3.
As to what it consists of, I have no idea.
The Fed will have 'spent' a trillion dollars by the end of the week. They're basically just printing money. We are so doomed.
The president cited those steps, along with the takeover of American International Group Inc. by the U.S. this week, the rescue of mortgage giants Fannie Mae and Freddie Mac and steps taken yesterday by the Securities and Exchange Commission to strengthen investor protections.
``These actions are necessary and they're important, and the markets are adjusting to them,'' the president, who canceled plans to travel outside Washington today, said.
More Meetings
It was Bush's first public comment on the financial turmoil since a 160-word statement on Sept. 15. The president planned to meet with economic advisers later today, spokeswoman Dana Perino said, including Treasury Secretary Henry Paulson.
SKF trying to push thru 150
Here is that Level 3 post.
The Big Picture
This was just posted at nakedcapitalism:
Hmmmmm, am I getting skerewed here?
In level 3 no one hears you scream.....
Ciao
MS
I believe Mack really said, "I need a larger member or I'm not going to get naked."
The NYT never gets its quotes right.
The NY Times did not get the quote right.
The actual quote was: "We need a merger partner or we're going to fake it. Call Charlie Gasparino."
This is SERIOUS.
"NEW YORK (MarketWatch) -- A run on a money market fund managed by Putnam Investments, a subsidiary of Great West Lifeco Inc. (GWLI.F:great west lifeco inc com
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GWLI.F 30.25, +0.77, +2.6%) has forced the company to liquidate the institutional fund. Putnam said that "significant redemption pressure" on Wednesday forced it to close the $15 billion Putnam Prime Money Market Fund (PPMXX:PPMXX
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PPMXX, , ) . "Constraints on liquidity in money market instruments created the risk that in order to process redemptions, the fund would realize losses in selling its portfolio securities," said Putnam in a statement. "The Trustees determined to close the fund to ensure equitable treatment of all fund shareholders." The statement did not say when shareholders will receive their money, nor did it say whether the payouts would maintain the fund's $1 a share net asset value.'
Can we panic yet?
Money market funds battered
Some losing money, others rush to add cash
Money market funds battered - The Boston Globe
Several money market funds are losing money as the $3.5 trillion sector that long had been considered as safe as cash is buffeted by the turmoil on Wall Street.
Comrade Beach (aka Mr.) writes:
Headline from Marketwatch: "Putnam closes Putnam Prime Money Market Fund"
I don't see that at marketwatch.com. Link??
i think electric does a lot of aircraft engine leases and such nowadays...dunno if those would be level 3 but there aren't a lot of ppl going around buying engines nowadays, jsut the service plans...
I say j6pack makes his run on the banks come Monday morning.
They had a good quote, double-sourced, but the fact that they did not call Mack to confirm or deny in their rush to publish makes me think they were doing someone a sweet favor. (Because once Mack heard about what the NYT was about to publish, you know he would have commented!)
I hope Ben White and Eric Dash think their sources are worth it... because they sure look like cheap dates now. (Michael de la Madrid and Vikas Bajaj are about the only NYT business reporters who bring any extra cred to the table at this point for me... sad, really.)
The only thing you can say about today's intervention is that the overnight rate is now better,'' said Jan Misch, a money-market trader in Stuttgart at Landesbank Baden- Wuerttemberg, Germany's biggest state-owned bank.There's still a complete lack of confidence in the market though. There is enough cash out there, it's just not being lent out because people have lost faith in each other.''
The world's biggest financial institutions posted almost $520 billion in subprime-related losses and writedowns since the start of last year. Eleven U.S. banks collapsed since January. Corporate bond sales in the U.S. and Europe slumped 42 percent from a year ago, according to data compiled by Bloomberg.
`Hoard Cash'
The demand for liquidity has soared and has pushed banks to hoard cash,'' said Eoin O'Callaghan, a London-based economist for BNP Paribas SA.Market-based liquidity has dried up.''
Yields on three-month U.S. Treasury bills tumbled 135 basis points this week as investors sought the relative safety of government debt. The bill rate was at 12 basis points today, near the lowest level since World War II.
The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, widened 8 basis points to 310 basis points. That's higher than the 300 basis-point spread reached Oct. 20, 1987, when stocks collapsed around the world on what became known as Black Monday.
The U.S. commercial paper market fell $52.1 billion to $1.76 trillion for the week ended Sept. 17, the Federal Reserve said today in Washington. Overnight commercial paper yields have jumped 1.38 percentage points this week to 3.46 percent, according to data compiled by Bloomberg.
OIS Spread
The difference between the Libor for three-month dollar loans and the overnight indexed swap rate, the Libor-OIS spread that measures the availability of funds in the market, widened 17 basis points to 149 basis points today, the most since at least December 2001, adding to yesterday's 31 basis-point increase. The spread averaged 8 basis points in the 12 months to July 31, 2007, before the credit squeeze started.
No one is really expecting these spreads to come in,'' said Moyeen Islam, a London-based fixed-income strategist for Barclays Capital and a former U.K. Treasury economist.There's no let-up in the pressures in what we've been seeing.''
Money-Market Rate Slides After Central Bank Action (Update3) - Bloomberg.com
VIX eyeballing 40
Way OT, but Seattle Times reports this morning that WaMu has lost over $5 billion in deposits since June 30.
Business & Technology | WaMu scrambles to stay alive; it may be trying to find buyer | Seattle Times Newspaper
Relevant section: Last week, in an effort to calm fearful investors, WaMu said retail deposits stood at $143 billion at the end of August. But Peters noted that on June 30, WaMu's retail deposits were $148.25 billion.
Their list of potential buyers adds Banco Santander and BNP Paribas to those already named over the past few days.
Look at over-all volume. Very low compared to Tuesday and Thursday.
Wait until volume goes up. crash crash crash.
wtf just happened to GS?
Q: Our workers
A:http://www.marketwatch.com/news/story/putnam-liquidates-money-market-fund/story.aspx?guid=%7BECF1151B%2D38BF%2D43BD%2D8F58%2D9ECF274F4493%7D&dist=msr_2
NEW YORK (MarketWatch) -- A run on a money market fund managed by Putnam Investments, a subsidiary of Great West Lifeco Inc. (GWLI.F:great west lifeco inc com has forced the company to liquidate the institutional fund. Putnam said that "significant redemption pressure" on Wednesday forced it to close the $15 billion Putnam Prime Money Market Fund PPMXX
"Constraints on liquidity in money market instruments created the risk that in order to process redemptions, the fund would realize losses in selling its portfolio securities," said Putnam in a statement. "The Trustees determined to close the fund to ensure equitable treatment of all fund shareholders." The statement did not say when shareholders will receive their money, nor did it say whether the payouts would maintain the fund's $1 a share net asset value
GS 86
MS -27% GS -20%
Our company runs its 401k through Putnam. What does this mean???
I say j6pack makes his run on the banks come Monday morning.
Is this a recommendation?
I say j6pack makes his run on the banks come Monday morning.
blackhat
Maybe the weekend. Most WAMU branches out here are open on Sat and a few on Sunday. He get's his direct deposit into WAMU on Friday and "makes other arrangements" over the weekend.
Is it possible we see 9000 before Monday?
GS - we need a partner or we are screwed....Next NY Times headline
Re: Putnam. I see no news on that, and maybe that post should be pulled?
https://www.putnam.com/individual/
Damn, this is serious-- good thing the CNBC "all-stars" are on the case.
merciless,
No.
Just a feeling.
Down goes Frazier, Down goes Frazier
Man, should I be glad I switched over from the Vanguard Prime to the Vanguard Treasury MM yesterday?
Putnam: Putnam liquidates money market fund - MarketWatch
Comrade Kristina writes:
Is it possible we see 9000 before Monday?
Not likely. But definitely within the realm of possibility, which is scary as hell.
"We have lost control," said Hale, quoting Bernanke. "We cannot stabilize the dollar. We cannot control commodity prices."
Economist recounts talk with Fed chairman - Chicago Tribune
merciless,
No.
Just a feeling.
Ok. If BAC goes under, I am screwed (along with everybody else, of course).
MS -30%
geoff-
my guess is that existing credit lines are being pulled from them. Or they just swallowed something REALLY bitter, like their pride.
Ciao
MS
Link to Marketwatch article on Putnam:
http://www.marketwatch.com/news/story/putnam-liquidates-money-market-fund/story.aspx?guid={ECF1151B-38BF-43BD-8F58-9ECF274F4493}&dist=msr_1
Putnam liquidates money market fund
By Sam Mamudi
Last update: 12:30 p.m. EDT Sept. 18, 2008
Comments: 1
NEW YORK (MarketWatch) -- A run on a money market fund managed by Putnam Investments, a subsidiary of Great West Lifeco Inc. (GWLI.F:
great west lifeco inc com
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GWLI.F 30.25, +0.77, +2.6%) has forced the company to liquidate the institutional fund. Putnam said that "significant redemption pressure" on Wednesday forced it to close the $15 billion Putnam Prime Money Market Fund (PPMXX:
PPMXX
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PPMXX, , ) . "Constraints on liquidity in money market instruments created the risk that in order to process redemptions, the fund would realize losses in selling its portfolio securities," said Putnam in a statement. "The Trustees determined to close the fund to ensure equitable treatment of all fund shareholders." The statement did not say when shareholders will receive their money, nor did it say whether the payouts would maintain the fund's $1 a share net asset value.
The NYTimes is held to a higher standard and shouldn't have used quotes in the story. When it screws up, it makes news, when FOX screws up, they smirk and do it again.
22 shares of MS = 1oz. of cannabis
Wow.
Putnam MM news just hit Bloomberg. Katie bar the door.
CIO of Vanguard on now. Says not seeing massive redemptions in their MM funds.
Cannabis as the new world reserve currency?
I just saw a report on Bloomberg that says China may take a 49% stake in MS?
Why? I can't picture that happening, seems like posturing to me.
Ha. I would SO love it if the NY Times got sucked out with the rip tide along with the rest of them.
Kill them all, let God sort it out.
Just make sure it's Indica after this - the minister will help you choose. Im sure you will all be wiggy enough after this episode, so a downer might be in order.
JimPortlandOR writes:
Cannabis as the new world reserve currency?
No, it has a history of going up in smoke.
Currently Minister of Cannabis...
Is that an offer?
Dow down over 100 now.
The Putnam news has everyone scared shitless...WOW!
Stoner Wealth Funds might be the answer. The break rooms would have to be remodeled though.
The PPT must have broke for lunch..
Goldman at $92/SHARE.
It's hard to raise new capital if you are trading below book. And that book value is very suspect.
Hopefully we can bury that "smartest guys" on wall street crap forever.
This is historic. 1929 only worse.
Thank goodness for the printing press.
Ben to the engine room: start the reserve pumps, and set them to 110%
MS -32%
If you listen closely, you can hear the nearly soundless increase in money movement. Swish, swish, swish.
CSC-
You pay too much.....
Ciao
MS
In economics, hyperinflation is inflation that is "out of control," a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates.
The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services.
Wikipedia
we will all remember where we were today. I got that feeling.
I've said this before.
IMHO, we'll have hit an intermediate bottom when the regular posters here are profoundly scared.
Anyone there yet?
Q: Our workers
A:http://www.marketwatch.com/news/story/putnam- liquidates-money-market-fund/story.aspx?guid=% 7BECF1151B%2D38BF%2D43BD%2D8F58%2D9ECF274F4493%7D& dist=msr_2
NEW YORK (MarketWatch) -- A run on a money market fund managed by Putnam Investments, a subsidiary of Great West Lifeco Inc. (GWLI.F:great west lifeco inc com has forced the company to liquidate the institutional fund. Putnam said that "significant redemption pressure" on Wednesday forced it to close the $15 billion Putnam Prime Money Market Fund PPMXX
That link says "story not found."
Here again are the NYSE circuit breaker rules:
http://www.nyse.com/press/circuit_breakers.html
I work by the 50-story tower that used to serve as WaMu headquarters until a couple years ago when WaMu built its own 50-story tower a block away. Still tons of WaMuvers in the building, and a big branch right in the lobby.
Branch staff had been cut back dramatically over the last year compared to its boom days a couple years ago. Lots of empty desks on the branch floor.
This morning there are three times as many staff-y looking folks in the branch - not wearing the branch staffer regalia, clustered in the back office, manning the scattered desks around the branch, huddled whispering together in the corner. The longtime head teller, well, he appears to have been crying at some point this morning, but maybe it is allergies.
this is bad:
"BNY Mellon Institutional Cash Fund Hit by Lehman Debt Losses
By Christopher Condon
Sept. 18 (Bloomberg) -- An institutional fund run by Bank of New York Mellon Corp. designed to work like a money-market account fell to less than $1 a share after losses on debt issued by bankrupt Lehman Brothers Holdings Inc.
The $22 billion BNY Institutional Cash Reserves fell to $0.991 a share on Sept. 16, according to an e-mail sent by a bank representative to one client. BNY Mellon has ``isolated the Lehman assets in the fund into a separate structure,'' Ivan Royle, a spokesman for the New York-based company, said today in an e-mailed statement."
the third one,
OK here is the story on Putnam at Marketwatch:
Putnam liquidates money market fund - MarketWatch
we will all remember where we were today
Some us will be in denial
ot even close.....beach
this has more to go. As fast as it was pushed up last year on cheap money it will fall harder from no money.
Spreads blowing out now
Ciao
MS
So, 3 money-market fund closures and counting? ... Fallout of this? Final straw before bank runs?
MS is tanking...
Down more than 30% to 14.77...
So is GS
Putnam not the only one: BNY just broke $1 on a money market-esque fund (likely used for their institutional custody clients). Apologies if this was posted on the last thread, couldn't keep up with the comments!
BNY Mellon Cash Fund Hit by Losses From Lehman Debt (Update1) - Bloomberg.com
Drove by 4 WaMu branches on my errands. No lines or anything, but WaMu has so many frick'n outlets, there could be a bank run and you'd never know.
At what point do people close their 401k's, take the early-withdraw penalty and stash the cash under the mattress?
The longtime head teller, well, he appears to have been crying at some point this morning, but maybe it is allergies.
tomasyalba
Well we do have that coverrsion layer going.LOL
where is link on putnum??
"So, 3 money-market fund closures and counting? ... Fallout of this? Final straw before bank runs?"
most of the asset management professionals are freaking out.... -
MS now down 41%
In the past, the VIX has been known to hit 45+...
MS -41%
Dow down 135. Diving.
Crap ....its down to 11.9...
Down 3 bucks in one minute....
State Street down almost 40%.
MS: Who says that's the bid?
I get the feeling banks are not going to fail in an orderly S&L fashion. More like the sucking sound of an atomic blast-wave reversing and pulling everything back into the glowing mushroom cloud.
Dow down 148
we're headed toward another -400 kind of day it seems. How many of these in one week can people stomach before they've had enough losses and start yanking, cuz, uz, that's when we really head into the dumper.
Bank runs before the weekend?
Got ammo?
PPT helicopers warming up....
$300B in international financial aid and still no rally?
I'm betting he said it.
so am I, though NYT should have been a LOT more careful about this kind of quote before publishing it.
The Timess two sources have since clarified their comments, saying that because they were not present during the discussions, they could not confirm that Mr. Mack had in fact made the statement.
that's really not much of a denial. I wasn't awake when the sun rose this morning, so how can I say that it did in fact happen?
anya writes:
In the past, the VIX has been known to hit 45+...
$VIX was something like 185 in the 1987 crash.
Why oh why does the RUT hang on so tenaciously?
What does the Wright B model...someone, anyone...
armageddon writes:
Outta Control this market...
were gonna go lock limit
crispy&cole writes:
PPT helicopers warming up....
yah, but who remembered to fill them up lastnight?
"$300B in international financial aid and still no rally?"
At least it brought Hong Kong back from the brink.
Regarding MS, if no deal is done by tomorrow before the weekend, next week will be more blood in the street. Next up will be GS. Destroying piece by piece up the greed chain. Paulson gambled and lost. How do you restore confidence now? It's gone! Fear is rampant as indicated by widening spread over the whole week. Capital injection has relieved nothing. Capitulation is upon us. Only then there will be nothing left to fear. The question now is how soon will "Wall Street" be converted into a historical museum holding artifacts of a once mighty USA.
wright b in terminal tail spin.
"it's not the fall, but the landing..."
central bank infusions are being taken into the banks and put into storage: liquidity is getting worse, not better.
update
3 mo T bill 9 bps yield.
Comrade Baron Von Helmut III writes:
Bank runs before the weekend?
I would concur. The sheeple are getting panicked.
I love Bloomberg. Headline is 'Dow down 950 points this week.'
Got Popcorn?
Neil
Too bad it's too early or me predictions may yet come true.
Derivatives are the destructive threat to the entire global system. I've just started researching and attempting to understand the implications.
Have derivatives became an all consuming beast? Why can't these positions be allowed to end without continuing to take new positions?
Isn't it likely all these positions have cascaded into overwhelming default and the entire system has defaulted and no one will admit it?
The smart monet is already out of the market, when the less smart money pulls out we'll have a crash, when the dumb money starts pulling out we'll have a long slow decline.
Look at that SRS go.
You knock SRS, you're a loser!
I say j6pack makes his run on the banks come Monday morning.
blackhat | 09.18.08 - 12:41 pm | #
Mine's already in the underground back yard.
jo6pac
I thought the IBs were eventually all going to be gone, but I thought Roubini's prediction of them all being gone within 90 days was a little extreme. Now it looks like they may not last til' the end of this month.
Wow...Sep 08 will definitely go down in history as the month that shaped/changed the financial landscape....
And...we still have more than 10 days to go this month....
i can see russia from my house
GLD etf now near $90. - heading for March high around $99.
Check GOLD, it's going parabolic.
bank holiday would only exacerbate fear. Can rich farrell on CNBC be suid for consitently money losing advice. quadruple Top when that guy is hired as an investment strategist.
What do y'all think folks should do with their 401k's?
Gone fishing. writes:
Derivatives are the destructive threat to the entire global system. I've just started researching and attempting to understand the implications.
Buffet has called them weapons of mass financial destruction for a reason...
My... Christmas shopping could be a bit subdued...
Got Popcorn?
Neil
I am trying to be apolitical but this is , well funny
"
McCain says would fire SEC chairman
Reuters - 26 minutes ago"
By my rough estimation...I'll verify later... the DJIA has now gone below where it was at the start of the first AND second Bush terms.
Mentalic writes:
Wow...Sep 08 will definitely go down in history as the month that shaped/changed the financial landscape....
FIXED:
Wow...Sep 08 will definitely go down in history as the month that shaped/changed the world as we know it...
Oh, my. Not even a dead-cat bounce?
A lot of reasons working together including lack or big financials, leverage, hedge funds, fallen angels absorbed into the index, etc.
It's not where it's at. It's where the R2000 will end up at bottom.
Below 500, vs. 780 now.
In a world where people wonder if money market funds and CDs are safe, stocks of undercapitalized, unprofitable small U.S. companies are not safe.
My... Christmas shopping could be a bit subdued...
Got Popcorn?
Neil
Homemade gifts come from the heart.
A silver lining: Watching CNBC this week, it's easy to figure out who has their head screwed on right and who has no clue. Obviously, Kudlow is a barking moron, and the brunette with the evil smile is there because she's stacked.
Erin seems to have a grip, and her co-host Mark has a habit of being honest (he's the Andy Rooney of CNBC). David Faber is really good. Gasparino always looks like he's getting a hummer under the desk while he talks....
"My... Christmas shopping could be a bit subdued..."
With all the money we don't have being thrown around what's another $200 billion for one more stimulus check? One last hurrah?
At what point does Bernie's liquidity at any cost strategy b/c a tacit admission that US policymakers would prefer a Treasury default in the future over US equities hammered today? The world's watching these morons every move.
"Erin seems to have a grip"
she is a fucking idiot!
PPT on the case?
To be heard Monday:
"I've got to get my freaking money out of the bank before it goes down. How many Kroger-anns can I get for $600? "
PPT works well.
1:07 p.m.
U.K. FSA: Short selling ban in place until January 16, 2009
1:07 p.m.
U.K. FSA: Won't allow increase of short positions
1:06 p.m.
U.K. FSA: Won't allow new short positions
HAHAHAHHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAh
crispy&cole writes:
What does the Wright B model...someone, anyone...
There's so much commenting going on recently that I imagine anyone's forecasts will get brushed aside.
However, I wanted to mention even last night that I expect today to form a doji ("indecision") candle. That is, the market closes approx. where it opened with two "wicks" or "tails" pushing up into the high and down into the low - of roughly equal size.
So we got the upper wick this morning. I suspect we're near the completion of the lower wick.
Now - as for tomrrow? Blow through today's lows and close at the lows. A solid weekly down candle with highest volume on record will have formed, breaking longterm support, and heading for 1080 on SPX, 9500 on INDU.
DJ now green: the helicoptered PPT has arrived.
And no amount of money will heal this.
"There is enough cash out there, it's just not being lent out because people have lost faith in each other.''"
I think that Michael Lewis is correct - we need some public executions.
Senator Bunning said this morning that Paulson is turning us into France a la 20 years ago.
Did France still use the Guillotine 20 years ago?
Liberte, Egalite, Fraternite!
Dow + in seconds! Wow!
Dow in the green now!
DrChaos writes:
I am trying to be apolitical but this is , well funny
"
McCain says would fire SEC chairman
Reuters - 26 minutes ago"
Uhm yeah, he could put Sarah in charge for the interim, I heard she can see bank from her house.
By my rough estimation...I'll verify later... the DJIA has now gone below where it was at the start of the first AND second Bush terms.
1/19/01 (last day of Clinton's administration): DJIA closed at 10,587
Historical Quotes: Charting Tools for Looking Up a Security's Exact Closing Price - BigCharts
Thats Ballgame Folks:
I agree...
At what point do people close their 401k's, take the early-withdraw penalty and stash the cash under the mattress?
If you haven't done that already it's too late.
Sorry crisy&cole, I quoted the wrong comment. I meant to respond to the "PPT helicopters warming up."
See - I can't even keep track of the comments.
UK FSA ban: I'm a polite guy. But, what the FUCK?
Angry Saver writes:
WTF! Whether Mack said it or not, I think it's the only truthful statement about an IB in years.
No doubt. My reaction was to think there was actually hope for them if they were taking the reality train that many stations down the l ine. If only it were true that transparency was finally chic.
That same magic spike appeared on Tuesday an hour after the Fed announcement.
This stuff is so funny you could never have made it up. Here's Mack (the knife?) on MS's condition:
Mack, 63, addressed employees this morning in a crowded meeting in New York, saying the firm's earnings and balance sheet were sound, according to people who attended or watched the firm- wide video broadcast. He said Morgan Stanley was in stronger shape than Lehman or Bear Stearns Co., which was forced to sell itself to JPMorgan Chase & Cos. earlier this year.
We're (a bit) healthier than two dead guys.
aww, the PPT's helicopter may just have crash landed.
Dow back down 50
I would not be surprised if the SEC follows the FSA. This is serious folks.
Thats Ballgame Folks writes:
What do y'all think folks should do with their 401k's?
Make a choice:
Will the 401k's value over time be greater than the value if you liquidate given the Fed, State, and 10% penalties (assume you realize only 50%)?
If believe that given a 50% hit to your 401k it and the financial institution managing it will still be around and you will Dollar cost average your way out of the hole and then some...keep it. But, if DCA during the great depression, then you probably died before you realized getting back to where you started.
So, make a choice. Are you better with half now, or do you gamble the other way and chance that while the market may go down a little more, you can ride it out.
As has been observed, $300 billion just doesn't buy what it used to...
Comrade Midwest Product:
And today's low was 10461. It might still go lower today...
Hello. Bueller.
This is not the PPT. This is driven the news about the UK FSA's short selling ban.
How long before SEC does something similar?
They can go ask the folks in the Shanghai market how that no shorting rule props things up...
link on british short ban
CORRECT: Britain bans short-selling of financial stocks - MarketWatch
That sudden pop in the stock markets in the face of runs on money markets sure looked like market manipulation.
She's ready roll over big time.
energyecon writes:
As has been observed, $300 billion just doesn't buy what it used to...
A lot of truth in that.
Reserve Primary Fund Class 12 (RPFXX) at Fidelity lost 5% last night 95 cents as of this morning.
Saving the money markets...
Central Banks Offer Extra Funds to Calm Money Markets (Update7) - Bloomberg.com
seems like lose-lose scenario for 401k, unless you believe there's a happy day in the future when we'll be back to 14,000 and the world will be grand.
Blackhat:
That's assuming that you're still in.
I'm however, pondering PIMCO total return fund. Can Gross make it up in the next 10 - 15 years?
Goldman Sachs sr not zero coupon bonds are going for near 10% yield. Maturity as early as January 2009.
I'm trying to think of reasons for not buying these bonds. Anyone help me?
However, I wanted to mention even last night that I expect today to form a doji ("indecision") candle. That is, the market closes approx. where it opened with two "wicks" or "tails" pushing up into the high and down into the low - of roughly equal size.
So we got the upper wick this morning. I suspect we're near the completion of the lower wick.
Now - as for tomrrow? Blow through today's lows and close at the lows. A solid weekly down candle with highest volume on record will have formed, breaking longterm support, and heading for 1080 on SPX, 9500 on INDU.
Huh? You stumble into the wrong blog?
They can go ask the folks in the Shanghai market how that no shorting rule props things up...
Right! Good for a pop, but then you look stupid when the crash continues anyway.
Of course, by then it's someone else's problem...
crispy&cole said: "What does the Wright B model...someone, anyone..."
Even in 1987 there was no recession.
S.
Comrade Milkman writes:
Saving the money markets...
Bloomberg.com refer=home
my god, it's like it's Monopoly money
They can go ask the folks in the Shanghai market how that no shorting rule props things up...
Again this short selling ban just demonstrates how the government is going to keep doing things that have been shown not to work in an effort to make things "better".
energyecon writes:
They can go ask the folks in the Shanghai market how that no shorting rule props things up...
energyecon | Homepage | 09.18.08 - 1:19 pm | #
In a really bad bear market the only demand is 'short demand'... its the only thing close to a real circuit breaker there is. Do we have to re-learn all the lessons of the past?
So what happens with DXD, QID, SRS and other short index funds if there is a short selling ban?
I hate to see all this happen, and it will cost me alot of money in my profession, but there is always some schaudenfreude in seeing your worldview confirmed.
This is not about short selling...its about deleveraging. The Great Unwind continues
Brewster's Trillions
There's no ban on short selling. Naked short selling is already illegal; and it occurs systematically all the time as a matter of course for brokers/hedge funds. The regulators are just finally imposing a fine on the already banned practice.
Sebastian - will you admit you BLEW it big time on your market calls? Capitulation from you yet?
Been lurking here for a while and have a question.
A few months ago, my Mom inherited a small (not small for her) portfolio consisting of mostly muni bond funds (Nuveen, Putnam, Blackrock, Dreyfus and AB) and some stocks. I convinced her to pull out of the stocks, but she wants to holds the muni funds. Yes or No.
I think the great unwind is about to begin, the ample matron has been clearing her throat up til now...
I'm trying to think of reasons for not buying these bonds. Anyone help me?
Here's some reasons: Lehman, Bear Stearns, Merrill, AIG, FNM, FRE, Northern Rock, Subprime, 30x leverage, money markets failing.
What do option writers do if you can't short?
blue light special now on skf for the next 2 minutes.
Anybody remember Bernard Baruch--he shorted all the time--and was a patriot.
The ban is in the UK until Jan 16. 2009 -- according to the Marketwatch story.
Can the SEC institute such a ban here quickly?
I think ac was talking about the short selling ban just invoked in the UK?
RE: short selling bans
Buy put, sell call.
aka synthetic short - Google it
The heat is on for Cox to do the same. Out of the blue, of all the incompetence in charge, McCain this morning singled out Cox and called for his head. McCain's people got a sniff of this new from Britain.
Can the SEC institute such a ban here quickly?
I doubt they're going to want to after they see the result.
I guess it varies, but I didn't think you could close your 401k unless you left the company.
Anybody remember Bernard Baruch
When asked what was the key to his success, Baruch replied: "I always sold too soon."
ANOTHER $100,000,000,000?????
Welcome to ZIMBABWE. These guys have NO clue. You cannot hyperinflate your way out of debt!
"Sept. 18 (Bloomberg) -- The U.S. Treasury said it will sell an additional $100 billion in short-term debt to aid the Federal Reserve's balance sheet, amid the biggest extension of central- bank credit to financial companies since the Great Depression."
I think ac was talking about the short selling ban just invoked in the UK?
Yeah... sorry I should have been more clear.
If you have at least 30 years to go until retirement, why would you liquidate your 401k now?
crispy&cole said: "Sebastian - will you admit you BLEW it big time on your market calls? Capitulation from you yet?"
I'll tell you what. Set up a joint news-conference with CR and me. He'll admit he blew it big-time on his recession call, I'll admit that the stock market is correcting a lot more than I thought it would. Considering the actual facts (no recession and a -25% SP500 correction) that would certainly be fair, wouldn't it?
Sebastia
So what happens with DXD, QID, SRS and other short index funds if there is a short selling ban?
I've always assumed these were just crossover funds that gave stock traders indirect access to the futures markets by some swap/arbitrage operation.
I don't know though. Anybody have more information?
Exactly how much money has the Fed "infused" into the market this week? I've lost track and would like a number...
Baron Von Helmut, do you have a link to that?
Add another one to "Broke Buck Mountain."
Sept. 18 (Bloomberg) -- An institutional fund run by Bank of New York Mellon Corp. designed to work like a money-market account fell to less than $1 a share after losses on debt issued by bankrupt Lehman Brothers Holdings Inc.
The $22 billion BNY Institutional Cash Reserves fell to $0.991 a share on Sept. 16, according to an e-mail sent by a bank representative to one client. BNY Mellon has ``isolated the Lehman assets in the fund into a separate structure,'' Ivan Royle, a spokesman for the New York-based company, said today in an e-mailed statement.
the brits go all stupid and srs drops from 100 to 90 in a few minutes. You just got to love it. So we'll sit on the sidelines for a bit longer, then when the SEC announces it's own stupidity, after the first sell off, we go all in. And THEN wacha gonna do, huh? Morons.
REBear writes:
What do option writers do if you can't short?
The market maker exclusion is now gone too, which could inhibit BUYING.
If you want to buy 10,000 shares of "X" and your market maker doesn't have it, he would typically sell it to you (selling short) and then track down the stock. Now he has to track down the stock first, while you stare at your unfilled or (more likely) canceled buy order.
Dumbass move by the SEC if I am understanding this correctly.
McCain would fire Cox. Cox enjoys Bush's full support. Both from today.
According to FT.com:
FSA to ban short-selling of financial stocks
By Peter Thal Larsen, Banking Editor
Published: September 18 2008 17:44 | Last updated: September 18 2008 18:09
Short-selling of financial stocks is to be banned in the United Kingdom from midnight on Thursday night under rules drawn up by the Financial Services Authority.
The ban, which has been approved by the watchdogs board of directors, will prevent investors from creating or adding to short positions in all publicly quoted financial companies. The ban will remain in force until January 19, 2009, when the FSA plans to publish a comprehensive review of short-selling rules.
Back in the halcyon days of last February, dramatic Fed actions could have a positive effect for weeks or even months.
Now each action they take seems to have an effective lifetime of hours, if you measure by the time between such interventions.
I don't like what I am going to like what happens when that lifetime goes to zero.
Mel, here ya go:
U.S. to Sell $100 Billion in Bills to Fund Fed Moves (Update2) - Bloomberg.com
Sebastian,
I am sorry but are you really that obtuse? Or is it just an act man?
I have to know.
OMG Sebastian is Wesbury! AHHHHHHH!!!!!
Interesting poll on main page of linkedin.com:
Any more bailouts? Small sample size... but it's hitting mainstream
Sign In | LinkedIn
ANOTHER $100,000,000,000?????
The government is bailing out speculators and foolish investors.
What a disgrace.
I think the real Sebastian is probably hanging from a shower rod somewhere.
So, Sebastian needs cover to admit he was dead wrong. Typical.
By the way, State Street is getting spanked on credit and counter-party risk concerns. Custodial bank, sorta like money fund, is not supposed to expose clients to all that much risk. Putnam has closed a fund (NAV=$1, not less) and ratings agencies are looking at downgrades of a number of Lehman money funds rated AAA till now.
Yesterday diminution of the universe of safe assets continues today. So we shed risk where we can to make up for it.
Sebastian is right.
Unfortunately, the "no recession" call is unpopular, but it's not a popularity contest.
His call is correct.
He's been right for years.
Don't be a hater.
The fed's balance sheet is a toxic waste dump now.
Way to go wall street. Enjoy the bonuses. Greed is good.
Freakin Judas sob's.
ew comment up.
100B more?
Somewhere.. Mugabe is smiling.
Short selling was banned in the US in 1931. Market liquidity dried up and the ban was repealed in two days.
ultras dropping like stones
If the fed & treasury keep increasing their balance sheet, pretty soon Goldman's book is going to be above water again.
What a sham.
@Short selling was banned in the US in 1931. Market liquidity dried up and the ban was repealed in two days.
Has no one read The Great Crash? WTF?
HunkeringDown,
I lived in Orange County when it went bankrupt--a municipality. My experience only. I don't hold munis.
Gone fishing. writes:
Derivatives are the destructive threat to the entire global system. I've just started researching and attempting to understand the implications.
http://www.minyanville.com/articles/Fed-banks-debt-liquidity/index/a/15121
Probably the funniest comment I've heard on this yet was some yahoo saying this was necessary to prevent a "Shanghai style crash".
He's apparently unaware that short selling isn't allowed in Shanghai.
Sarah's Fun Facts.......Eskimos are lazy and have loose morals but they are real good at sports and Tap Dancing!
Market Update Set Alert
ADVERTISEMENT
1:30 pm : After falling to a session low, stocks spiked upward to make their way back to the neutral line. The advance was led by the financial sector, which swung from a 6.2% loss to a 0.3% gain.
Financials were helped by word that the Financial Services Authority, the United Kingdom's independent financial regulator, has issued a temporary ban on short selling financial companies. Dow Jones reported the FSA will not allow the creation or increase of net short positions in publicly quoted financial companies from the 2300 GMT. The provisions will last until January 16. DJ30 +4.73 NASDAQ +0.02 SP500 -1.51 NASDAQ Adv/Vol/Dec 1513/1.93 bln/1296 NYSE Adv/Vol/Dec 1229/1.09 bln/1920
Can someone tell me whether I should be concerned about a Morgan Stanley Money Market Fund account?
It is separate from the Morgan Stanley Bank, and I believe it's covered under SIPC. I'm more worried about the risk of it paying less than 1.00 N.A.V.
Pelosi hiddling on the floor is the very picture of confidence -- no wonder they want to adjourn.
stocks to rocket, market saved, get in before your priced out. LOL!
k harris said: "So, Sebastian needs cover to admit he was dead wrong. Typical."
What "cover" do I need? I'll admit that the stock market has corrected a lot more than I thought it would.
But I'm not the one with a high-profile blog who has
declared "Mission Accomplished" and put a "probable recession" ribbon on every posted chart in blatant disregard of the fact that real GDP is still clearly showing growth.
CR is the one who needs cover for his Karl Rove-ian treatment of the facts.
Sebastia
That's only partly true. I AM a great tap dancer,but I suck whale blubber big time at sports.
ScaredShitless writes:
Can someone tell me whether I should be concerned about a Morgan Stanley Money Market Fund account?
It is separate from the Morgan Stanley Bank, and I believe it's covered under SIPC. I'm more worried about the risk of it paying less than 1.00 N.A.V.
IMHO, if it holds anything other thatn 100% Treasuries, yes. Go ask the investors in Putnam or BONY if they feel safe today.
Nuff said?
(Uh, Sebastian, please don't call CR Karl Rove.
CR's not the one insulting you.)
I call jump the shark on Seb - CR is very evenhanded, non-partisan and just the facts - nothing to prove and no axe to grind.
Funny how the internet creates a breed of "expert" who expects some kind of authority/respect while wading further out with the receding tide. By contrast, CR has his reports visibly anchored to the shore for easy corroboration.
A Tutorial for Sebastian:
This will be kept simple because, well, it needs to be given its audience.
April, May, June, July, August, Sept, Oct, November =
8 months
December,
January, February, .....December
January, February, March, April, May, June, 1/2 July =
19 1/2 months
Why 8 months counted?
It is time from start of recession in March 2001 until recession declared by NBER Business Cycle Dating Committee on Nov 26 2001
Why 19 1/2 months counted?
It is time from Nov 2001 end of recession until recession declared over by NBER Business Cycle Dating Committee on July 17, 2003.
Why exactly are you giving CR grief for using "Probable Recession" on graphs starting the end of 07/start of 08?
Do you know anything, anything at all about data revisions issues at business cycle turning points, about the often lengthy lags in formal designiation of a turning point?
Seb, could you once, just once, add something of value to the board?
I very much want to read thoughtful/analytic folks who presently are not as pessimistic as myself. I might learn something.
You sir, have been nothing but noise.
Oops, make designiation
designation
Sorry
Response to the questionable comment from Mr. Mack and I quote; "No Comment".
Sebastian,
Are you based in Raleigh or Charlotte?
Sebastian, you're certainly correct that using the accepted definition of a recession, we currently aren't in one.
However, you should also accept that any definition of a recession that does not incorporate the current unemployment figures has a utility approaching epsilon.
There's Recession and then there's recession. It doesn't have to be capitalized by the NBER in order to be occurring.
Quite frankly, it's just not the sort of thing Mack would say. Mack is a bastard of immense proportions whose pride for MS is such that he'd never admit the end was near. Even bloodied, he'd be more like that Monty Python character - the soldier with his arms and legs cut off saying "it's just a flesh wound... come back you coward!"