Credit Crisis Indicators: More Progress
Submitted by
CalculatedRisk on Fri, 10/17/2008 - 9:03am (615 comments)
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First!
Happy days are here again, apparently.
Although I share a growing sense of optimism that our economic system might last a few months longer, at least.
Yay super reboom time!
Months ago, would anyone have thought we'd actually be happy to see TED at 3.59%?
Dear CR, Is AIG financing your hiking?
first?
folks are stepping up to the buffett buffet. yum.
Great!! Let's go buy another 52" flat screen, a Hummer, a 3rd vacation home, and a boob job for the mistress!
Oh, btw, can you find me a job?
/sarcasm
I'm hiking in Zion this morning, and I'll be back by lunch.
Was wondering when you'd be back.
The crisis is over, disaster has apparently been averted. Markets will be quiet IMO until large cities, states and emerging market countries begin to tank. I don't know if there is enough money to solve that one.
Ichan has his yacht for sale - is that an idication that things are getting better or worse for him?
30yr fixed vs. 10yr Treasuries is still pretty bad.
Well, glad to hear it.
But the central banks are assuming that this is a one-round bout. There may be other rounds to win after this one -- more capital injections and liquidity required.
I've felt the U.S. economy was like a patient in intensive care kept deceptively lively by shots of cocaine (low interest rates). Now the entire world's on coke, and they need the shot right in the heart muscle to keep going.
Also Mervyn's is now done...more CRE pain.
Happy days are here again, apparently.
Unless you live in Iceland, or you house is underwater, or your got your layoff notice, or your hedge fund is having an asset fire sale, or you are voting for McCain, or .....?
Happy days are here definitely if you are too big to fail and Uncle Sam has a chubbie to share with you.
I hiked Zion on Christmas Day about 29 years ago. It was unseasonably warm and the park was virtually empty. It's nice to have a national park as your private estate, even for one day.
"crispy&cole writes:
Also Mervyn's is now done...more CRE pain."
Well, damn. RIP. That's going to leave a big empty spot out at our local mall.
I'm still waiting for Circuit City to go BK. Don't know what's keeping them alive.
CR re: Zion
Good memories from an '05 visit. Truly magnificent.
the Spotted Dog was good when we were there, especially compared to what else was available.
Desert Pearl - which, again in '05, was absolutely a perfect place to stay.
Bufett should buy CC.
Funny how Realty Trash didn't issue a press release about foreclosure filings this month. They must have gone down substantially.
This bears repeating:
There are also stories floating around that JPMorgan received a call from their new partner (US) and was told to crush deposit rates. The trader who I spoke with for this post said they drove down (I think it was one month rates but not positive) from 5 percent to 3 3/4 percent.
As long as you are doing this daily, how about a one sentence summary or something so we know what you think about how to balance these better/slightly better/slightly worse/ etc.? Could even be flagged as non-scientific impression.
Perfect. CCs going down, and I don't need any more electronics (thanks to Costco)
Translation: savers and responsible Americans lose. A lot.
Max got it:
Sacramento Real Estate Statistics: Missing Link
Lots of swamping indexes with buys. Time to break out the S&P 500 1000pt mug?
CC is an "anchor" store for a lot of strip development. CC goes down means folks do not (or cannot) want to buy cheap electronics anymore to distract them from reality.
Perhaps someone should open 'Reality R US' in place and sell generic food stuffs you can stash in the basement.
Or better yet. Maybe E-Bay should just buy CC as they will be flooded with all the crap CC used to sell.
...I'm in the South campground in Zion, #64....like to buy you a drink at the Bit and Spur tonite....just to say thanks.
In 1998, the s&p fell 20% in a month, Thailand (in 97), Indonesia, Malaysia and Russia all basically defaulted, credit spreads blew out to record levels, and it looked like the banking system was going to spiral into the abyss until the Fed organized a bailout. Sound kind of familiar? This was much bigger, the fallout will last a lot longer, but in terms of intensity of the crisis, the worst may have passed. I'm feeling a lot better today than I was a week or even a year ago.
So if the credit crunch does more or less resolve, we just have a bad recession to contend with, rather than uncharted territory?
Please say yes. I know how to deal with recessions.
These numbers will continue to be favorable to spenders, consumers, borrowers, and any other entity that is hell bent on acting irresponsibly.
Until we hit the point where it is absolutely too big to bail, the status quo will continue on indefinitely.
My guess is that too big to bail is probably a national debt of over $20T and annual budget deficits in excess of a $1T over many years.
OT- Chinese economy hits hard times:
Economic Slowdown Hits Chinese Industry Hard : NPR
Geez, we still face a severe recession/depression. the trouble in financial industry was just a side show.
Good for you! Angel's Landing is a good hike. It's still surprising that you can be in such a remote and beautiful place and still post on the blog. The times we live in! (That's probably the same thing they said when Model T's started showing up.)
Hey! If you're hiking Zion you need to stop checking the internets. Do that hike up the Virgin River--absolutely awe-inspiring (just make sure there are no cloudbursts in the area first, please). Unplug from the matrix for a few days. It'll still be there when you get back.
Interesting Times writes:
Tomorrow: Huge Rally - Book it.
Interesting Times | 10.16.08 - 4:22 pm | #
A broken clock is right twice a day!
19,618 Homes Offered For Sale on Countrywide Financial's Website
Countrywide Foreclosures (REO) Blog
Now, that's progress.
Circuit City and Best Buy. Where to begin? CC has a broken business model. Walking dead. Best Buy has a a broken financial model. Walking contagion.
Okay, now think about every mall with one or heaven forfend both. Collateral damage.
I tihnk it would be great to see 30 year mortgage rates. If the public can not get credit easier, then it is bad times ahead which means more losses for the banks.
"This one's tricky. You have to use imaginary numbers, like eleventeen ..."
-Calvin
I mean like whew, TED spread is below 4.
Nostrovia,
I think the real story is not that these indicators are improving but how slowly they are improving. Essentially all interbank deposits are now guaranteed by the National governments. I think the more telling indicator is the a2/p2 CP rate. Until that starts improving I don't think that one say anything about markets.
Buffet is a swell guy but he is doing a disservice now. According to his rationale, when the Nasdaq collapsed 40% to 3000 in Y2K that would have been a good time to buy. Or Nikkei 21,000 (47% drop in one year) in 1990?
I got out of stocks in Summer 2006. I warned everyone in our office and emailed links to this blog and the HBB. No one listened. Heck, they had a good time in summer 2007 with DOW 14,000. Now they are crying.
Angel Landing
Virgin River
Zions Park
Kolob Canyon
Is it a hike, or a pilgrimage?
Does this mean housing has corrected and individual and business debt levels have disappeared?
No.
Damn...still going down. Can't borrow more if you can't make your monthly payments already.
This economy might hold together until Christmas. When the numbers come...
Buh Bye!
Nostrovia,
If the current interventions "fix" the problem, we're looking at Japan 1990 - a recession that never really ends. We've had minimal action since Lehman to actually write off bad debts, so they're still hanging around to drag us down. I'm not ruling out a proper Swedish-style cleanup, but I don't see any pressure for it. TPTB continue to insist a 25% writedown on WAMU's bubblezone HELOCs is reasonable. Serious denial.
Turbo - good luck with that feeling better. Just an anecdotal story- Vermont Yankee owned by Entergy is required to contribute to a "decommissioning fund". It had $400 million in it at the start of September now has $325. There will be calls very shortly for Entergy to add additional funds to the decommissioning fund. Repeat that for other plants that they own and they may not have the money. Now think about all the private and public pension funds that were underfunded before this melt down and figure what condition they are going to be in. I would submit that there are a number of companies and state and local governments that essentially insolvent. If they are not already there they will be shortly where the inflows into the funds exceeds the benefits.
re: the Kudlow interview of Paulson, who cares if the banks pay down their higher-interest debt or buy back higher yielding preferred? The counterparty then has the cash to redeploy or deposit. The money is injected, and the bank has a lower cost of capital. Mission accomplished.
AIG needs more:
AIG May Tap U.S. Commercial Paper Program for Cash (Update4) - Bloomberg.com
Turbo,
It is great to hear from you.
I wish I could share your optimism.
Yal writes:
AIG needs more:
Another big party planned?
Did anyone catch the WaMooo expose on ABC news? LMFAO! It looked like a Cult meeting with all the dancing and cheering, let by the former CEO
I'm not ruling out a proper Swedish-style cleanup, but I don't see any pressure for it. TPTB continue to insist a 25% writedown on WAMU's bubblezone HELOCs is reasonable. Serious denial.
A Swedish style clean-up would mean loses for equity and possibly bond holders. The wealthy in America won't let that happen to their faux wealth. It's much more profitable to be bailed out by all of society.
What a sham.
I see a Japan style slump but with higher inflation down the road.
SD Misfit,
Buffet is just talking his book...
He is well aware if this paddle procedure does not revive the patient,
we are all headed to the financial morgue.
P.S. In reference to your post on a previous thread, yes, "it is written", and there are some interesting times ahead.
Am I the only one who thinks that Buffett is also scared, and he is just protecting his counter-parties - Goldman Sachs and GE?
Turbo writes:
In 1998, the s&p fell 20% in a month, Thailand (in 97), Indonesia, Malaysia and Russia all basically defaulted, credit spreads blew out to record levels, and it looked like the banking system was going to spiral into the abyss until the Fed organized a bailout. Sound kind of familiar? This was much bigger, the fallout will last a lot longer, but in terms of intensity of the crisis, the worst may have passed. I'm feeling a lot better today than I was a week or even a year ago.
I think we've finished swallowing the broken glass and now we're in the digestion phase. However, I don't look forward to the next porcelain throne visit.
Oops, a little early today...... 2pm jam.
PPT's clocks are off
Eric --
PPT's clocks are off
Still using the old Daylight Saving Time rules.
Global stocks are about 40% lower today than they were a year ago, and real home prices about 20% lower. I didn't say we've hit bottom, just that we're much closer to removing the excesses from the system, which I believe is a good thing. I think the US recession will be backdated to Dec.07, and it will last until about May 09 - 18 months, which is quite a long recession by any standard. I don't expect much of a recovery for at least a year after that. Other than thinking the end of the world as we know it will be narrowly averted, I'm not much of an optimist
Fears of Lehman's CDS derivatives haunt markets
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3211647/Fears-of-Lehmans-CDS-derivatives-haunt-markets.html
Who here is thinking that the USD will fall dramatically after the elections?
CR:
Congrads on your hike. It was my favorite in all the national parks in Utah.
"Although I share a growing sense of optimism that our economic system might last a few months longer, at least."
DER MEISTER! Rammstein more optimistm songs! Diese scheisse!
The LIBOR Illusion: Just Wondering
Many economists today (these days) are pointing to the LIBOR as being a prime indicator vis-a-vis the current credit market freeze. LIBOR is high, and therefore credit is frozen. OK, I am simplifying the arguments grandly, but here is my point:
Let's say LIBOR comes down precipitously, as does the TED spread. These indicators would seem to point to an environment that is more conducive to risk-taking, and maybe would lubricate the credit market. I would posit, however, that risk aversion, per se, is no longer the primary variable/motivator effecting the credit/load marketplace.
What this crisis has accomplished---more so than any previous crisis---is to bring into the light many of the fatal flaws that exist in the system of Fractional Reserve Banking. And these flaws have been underlined particularly by the current Credit Default Swap debacle. Let me expand a bit.
As we all know, our system of banking is one in which MONEY IS DEBT. There are no longer minimum capital reserves that a bank must have on hand, as was the case, for instance, when a bank needed a 1:10 ratio of reserves to debt in its coffers. Unlimited fiscal growth, therefore, has, for decades, been predicated on the growth of debt (money) and on the ultimate servicing of said debt---which would then logically create more serviceable debt, and so on ad infinitum.
But over the past, oh, 5-7 years we'll say, banks and bankers and folks in the financial industry have, without any regulatory oversight, created and exploited a market of default "insurance" (called 'swaps', so that they appeared to fall outside of regulatory control) that has led to an exponential growth in the world's overall debt. 50+ Trillion $$$ in worthless, unbacked, "assets" that financiers have used to become part of the mega-wealthy while leaving the planet in a huge economic morass.
You see, since these Default Swaps are unregulated, unregistered, secretive, hidden transactions, no one really seems to know how much debt is out there, or who owes whom what, or when they themselves are all of a sudden gonna find out that their exposure in this market is way beyond their means to pay off their obligations. So all of banks and financial institutions are holding their collective breath, waiting to see what happens as these swaps hit the light of day.
Now, add to this another variable. EVERYONE with half of a brain understands that Henry Paulson is a liar and a cheat. Everyone knows that he is an old Goldman Sachs guy who has a lot of self-interest when it comes to protecting this system and making sure all of the fraud that has taken place doesn't become front page news. And no one knows this more than do other folks in the financial industry. Now don't get me wrong: they may not all totally agree with how Paulson is "handling this crisis", but they are silent and quiescent because they are terrified at what could happen if the truth really came out.
OK, one final variable. Have you been listening to people like Nickie Sarkozy over in France? The European leaders are pretty pissed off at the U.S. for allowing this situation to evolve, and there's a lot of sentiment out there that points to a little global game of "kill the carrier" once things settle down a bit. No, I don't mean WWIII (literally), but I DO mean that the world is not going to let the United States Congress, banking industry and FED create monetary policy that is not subject to global oversight. Now, to this point, George Bush and his cronies have made it pretty clear that they think the United States is not beholden to the will of the
International Court in The Hague---what will happen when an international monetary and financial regulatory body is created and the U.S. says it doesn't recognize the authority of that body? You think the world is gonna shrug its shoulder and say---"OK".
So, 4 variables in totum:
So back to the point of this post. As economists and would-be pundits wait for the LIBOR and TED spread to come in, and wait in turn for the concomitant loosening of the credit squeeze, one has to wonder why ANY bank or other financial institution would feel sanguine about lending anything to anyone!??!? The basic realities of a broken system, a dishonest and out-of-touch leadership, and a realization that the world is changing in ways that we could never have imagined (both economically and politically), and one has to wonder why---unless Paulson and Bush show up with guns and demand the banks lend out the $$$--why in the hell would any of these institutions loan these "monies" that they could, instead, simply sit on and use to feel a little better about riding out the storm.
Just wondering.
Sarkozy is standing beside Harper and preaching now on the hazards of not taking financial reponsibility.
Ironic, in that Canada has announced today that it has adopted mark-to-myth accounting.
"Fears of Lehman's CDS derivatives haunt markets"
Well if they're going to haunt things, they picked the right time of year.
Nostrovia,
Anglo-Saxons just SUCK...
Rob Dawg sez:
"Circuit City and Best Buy. Where to begin? CC has a broken business model. Walking dead. Best Buy has a a broken financial model. Walking contagion.
Okay, now think about every mall with one or heaven forfend both. Collateral damage."
We've got a big strip mall anchored by a Beset Buy and a Home Depot and a Safeway superstore. The Safeway will hang in there forever, but as for the rest...
Though I still think Beset Buy will oulive CC, even though I know you think BB's foul store color/design scheme deserves to die first.
ES GEHT EIN NUMBER EINS!
DU DU ANGLOSAXLONGS! DU LOST LOST LOST!
The TED spread is not a useful indicator of ... well anything, anymore.
Interfluidity :: Crocodile tears and the LIBOR-OIS spread
Crocodile tears and the LIBOR-OIS spread
OK. So, stock markets are, like, tanking.
But the new conventional wisdom has it that stock markets aren't really where the action is. To gauge how the crisis is unfolding, we are told, we should pay attention to credit indicators, particularly indicators that compare the cost of interbank lending to the cost of "risk-free" government borrowing, such as the TED spread.
Felix Salmon has done a nice job of pointing out the flaw in these indicators: Banks don't actually have to borrow at the elevated interbank rates, as long as central banks are willing to lend directly at much lower rates. So, it's unclear whether interbank borrowing rates like LIBOR are meaningful as measures of interbank counterparty risk. As Felix notes:
Libor is an indicative rate: it's the rate at which banks would lend to each other, if they were lending. If they stop lending, they still need to report some interest rate to the Libor committee. But it might well bear very little relation to banks' cost of funds in the real world, where the interbank markets are becoming increasingly dried-up and unhelpful.
What is very clear is that LIBOR serves as the basis of many thousands of private sector contracts, and that the banking system as a whole is a net receiver of LIBOR-indexed funds. To the degree that LIBOR does not reflect banks effective cost of funds, an elevated rate can be viewed as a hidden tax of the nonfinacial sector by banks. Rather than reflecting the banking system's pain, a high LIBOR might indicate banks' ability to leverage their collective insolvency to charge higher rates on nonfinacial firms without complaint.
The oddest duck in the credit indicator menagerie is the LIBOR-OIS spread. That's a measure of the difference between what banks claim they have to pay to borrow from one another and what the market actually expects they would pay, if they adopted a strategy of borrowing overnight from, err, one another in the Federal Funds market. Both legs of the LIBOR-OIS spread represent unsecured interbank lending, so it's not obvious how this measure captures counterparty risk. It does, to a degree, because counterparties of a bank rolling overnight loans can choose not to renew the credit, should bad news strike, while a bank that extended a term loan at 1-month or 3-month LIBOR can do nothing but watch the fall. In a sense, LIBOR-OIS can be viewed as the price of an option to call a loan, to the degree that LIBOR accurately reflects the cost of interbank term financing.
But since US banks can borrow from the Fed's discount window at the Federal Funds rate + 25 basis points, while adjustable rate loans from banks are often indexed to LIBOR, a simpler way to think of the LIBOR-OIS spread is as a measure of the difference between the cost to banks of central bank money and rate they charge on private loans. Put this way, it is hard to understand why banks are upset that this indicator is elevated.
If this seems overly cynical, it's worth considering what happened to a LIBOR predecessor, the Prime Rate during the last US banking crisis.
Steve Randy Waldman Saturday October 11, 2008 at 10:53pm
Hilipatihippa writes:
"Although I share a growing sense of optimism that our economic system might last a few months longer, at least."
DER MEISTER! Rammstein more optimistm songs! Diese scheisse!
I'm sorry, I don't speak Jive.
"Does anyone here speak jive?"
I like Best Buy. Buy my laptops there. Also buy the I break it you fix/replace it plan. Haven't bought a new laptop there in years. After ~18 months I make sure it's broken and not fixable. Then I get a store credit for a new one. Just buy new insurance plan for $300...I buy pricey laptops.
Nostrovia,
Who here is thinking that the USD will fall dramatically after the elections?
Anonymous | 10.17.08 - 2:13 pm | #
I do.
This is truly good news and as such will be my last post. I'm headed out to get a boob job, hair plugs and an addadicktome.
""Does anyone here speak jive?"
noobgoldberg | 10.17.08 - 2:20 pm |"
Hmmm. You never like..do it? Well, maybe it can be contained....
Comrade Misean is Dope - the margins on hardware are 6-8% but margins on the spiffy new software for your new box are 30-40%
just say'
Volker the Viking writes:
This is truly good news and as such will be my last post. I'm headed out to get a boob job, hair plugs and an addadicktome.
Out of curiosity, why would you want two? Or was there some sort of unfortunate smelting accident that you haven't told us about?
Hope you made some cash through this mess Yal. This market is insane.
oobgoldberg,
"DER MEISTER! Rammstein more optimistm songs! Diese scheisse!
I'm sorry, I don't speak Jive.
"Does anyone here speak jive?""
A bit. He's saying essentially that Ramstein, a German death metal bad has more optimistic songs than our economy does. This is shit.
I think. Don't quote me.
Nostrovia,
"removing the excesses from the system"
Turbo,
We have not even removed the excesses from the financial system - let alone from the economy as a whole.
How many people are still working in the marketing of residential homes ?
How many homes are still empty ?
How many people have jobds, real jobs - that are based on HELOC generated consumer economy ?
I can go on. We are not even close.
--
We should be out of recession soon with all this Progress, right CR? Hell, we might have an incredible rally over the next 3-6 months in anticipation of the economy coming out of recession.
Jas
"Comrade Misean is Dope - the margins on hardware are 6-8% but margins on the spiffy new software for your new box are 30-40%
just say'n
Anonymous | 10.17.08 - 2:24 pm |"
I'm just sayin' I don't pay $1800 for a new laptop every 818 months. I pay $300.
just sayin'
Nostrovia,
A bit. He's saying essentially that Ramstein, a German death metal bad has more optimistic songs than our economy does. This is shit.
I think. Don't quote me.
The sad thing is that I used to listen to that band a number of years ago. I had no idea that's how you spelled scheisse--I just knew how to say it.
Thanks Misean. And what ever happened to your blog?
Linens and Things liquidating, to close by Jan 1. 17,500 jobs lost since last year.
Yahoo! 404 - Page Not Found
Good chance for doomers to stock up on can openers.
Enjoy the hike. Would love to see a photo on the blog.
Pete
I'm just sayin' I don't pay $1800 for a new laptop every 818 months. I pay $300.
Conjure, is that you ?
The Dow is about to misbehave, this thing is not over yet
2/3 of the way to bottom Yal, 1/3 to go is my guess. Then welcome to the wonderful world of stagflation when the impact of the massive central bank balance sheet expansion hits - the one asset class I won't touch with a barge pole right now are bonds.
"The Dow is about to misbehave, this thing is not over yet"
About to? What has it been doing for the past few weeks?
I do.
Interesting Times
Be running for the hills then. It don't look good this balance of trade.
Out of curiosity, why would you want two? Or was there some sort of unfortunate smelting accident that you haven't told us about?
noobgoldberg
Why two? Well, why not!?
And I have also just decided to get my eyes lifted, my tummy tucked and my butt lifted. I always wanted a bedonkadonk.
Start the music! I'll be leading the parade down Main Street!
the one asset class I won't touch with a barge pole right now are bonds.
Turbo | 10.17.08 - 2:30 pm | #
Bonds == Bombs
IT,
LOL 18.
noobgoldberg,
Been doing server and system upgrades. After I get off work on Saturday, I just don't feel like working on the server.
Nostrovia,
Yes I have been thinking about inflation....especially since I am like 95% cash....
not sure yet what to do.
btw, about ecesses that have not started to work through the system but will suffer greatly here is one industry:
Wedding Statistics for the Media & the Wedding Professional
True kenobi, but it's been on its best behavior today so far. I think a lot of people will sell before the weekend
What's a good movie to see?
Sweet, Mervyn's bites the dust.
That makes five companies that I have worked for that have gone bankrupt. Payless Cashways, Microage, Global Crossing, Incacom and Mervyn's.
If you count Countrywide, six.
I am contagion.
3pm breakout... which way is it going to go?
Cap'n Fish (Paper Pusher): Are you self employed?
it's the wall street witching hour
I was actually thinking the same thing. Wasn't sure about the time scale of the misbehavior prognosis. FWIW, my take is that little Mr. Market is already fussing about his dirty diaper (started right before 2) and is starting to warm up for a full fledged tantrum into the weekend.
Yal.
The wedding industry needs to die. Or at least get pruned back. 5 figures as a bare, bare minimum is insane.
The payments often last longer than the marriage.
I am contagion.
Captain Fish (Paper Pusher) | 10.17.08 - 2:33 pm | #
You're a leading indicator. Wow.
Dope Brontide writes:
3pm breakout... which way is it going to go?
To quote Mel Brooks from 'High Anxiety': Up and down, and up and down, and side, side, side.
I am contagion.
Can you get a job in congress?
FYI: The blog "across the curve"
[hat tip]
seems to be pretty good for keeping tack of how the debt markets are doing. He is seeing progress as well.
This whole financial ponzi pyramid has been built on a foundation of ever deregulated bullshit and increasing debt.
To hide how really bad things are, they are now rejigging again the accounting books on a multi-national level. The Deus-Ex-Fed debt infusions add to the pile of sheize. This morality play can only end when we get back to a base of honesty with controlled money creation.
Hedge Fund Manager: Goodbye ... And Think Pot - CNBC
wait till the IRS gets this guy.
Anonymous writes:
What's a good movie to see?
Haven't heard of anything worth seeing now before coming to DVD.
Waiting for the new Bond on November 14th.
@Turbo: "Global stocks are about 40% lower today... we're much closer to removing the excesses from the system..."
There's a good chance we'll rally ~20% from here (to S&P 1150), lose ~40% from there (S&P 670), rally 20% (800), and then lose another 40% (480). Then we'll be about halfway (in time) to the sort of 90% peak-to-trough fall (S&P 150) that characterized the Great Depression and the Japanese slump.
The market charts are starting to look like Zion national park - we'll be hiking in the valleys with lots of very high peaks all around...
Volker,
No. I'm looking into it.
I hope the Red Oak Merger Corporation ring fence that BAC set up around CFC holds. Supposedly I was a true BAC employee for a week or so. God help us if I bring them down as well.
Waiting for the new Bond on November 14th.
Catch "W" I heard it's a frat boy flick.
@dan: The European leaders are pretty pissed off at the U.S. for allowing this situation to evolve, and there's a lot of sentiment out there that points to a little global game of "kill the carrier".
Was it the european led competitive sovereign guarantees that forced HP to abandon his bad asset purchase, and is that guarantee plan a prelude to some further anti-US action (that just happens to have escaped expert and msm attention?).
Turbo
nominal bonds - bad
TIPS - not so bad (especially if you don't have to pay for health care like me)
Captain Fish (Paper Pusher) writes:
Volker,
No. I'm looking into it.
Letus know if and when you do.I'll short you
TIPS - not so bad (especially if you don't have to pay for health care like me)
monta's ankle | 10.17.08 - 2:42 pm | #
It is assumed you actually believe in CPI to like TIPS
my oh my, this going to be the opex that got away...?
Well.. the PPT DOES need a plunge to protect us from at 3pm... so here it is!
Catch "W" I heard it's a frat boy flick.
Anonymous | 10.17.08 - 2:39 pm | #
Already saw harold & kumar, which had a W parody (very funny, W smoking a fattee and telling his Sr. to effeoff).
So....
Krugman and Roubini and CR and Paulson and Bush are pretty much on the same team, yes? SAVE THE SYSTEM. SAVE THE SYSTEM!!
You ever hear the old expression, "...only a fool fights on a burning ship..."
You're all lost in space..or more appropriately, lost on Earth. Let's just get right down to it:
In order to save the system we need MORE debt (because DEBT is MONEY), more growth, more resources, more spending, more jobs, more food, more automobiles...and yet our world is, right in front of our very eyes!!!...crumbling BECAUSE of our addiction to growth.
Man you guys are TOTALLY diluted and outright nuts.
Saving the System---the mantra being mumbled worldwide---means dooming us to a dreadful, impoverished and all-too-certain demise.
I say, throw out the system and being anew!!
From Bloomberg Community Banks Wait
Does anyone know how much lending these thousands of community banks do collectively relative to "Big 9"? Is it all just pushing on string regardless of size?
Bloomberg was saying that today would be witness to some major fireworks due to a huge amount of options expiring today....still waitin' for it!
CR,
You will have to explain how posted from Zion! Wondrous times we live in if you can blog from Zion!
Are you within range of McCain's two wireless towers or something?
@Misean "Just buy new insurance plan for $300...I buy pricey laptops."
Interesting use of the Moral Hazard implicit in the insurance plans. Just don't try the same thing with houses; they investigate that sort of thing in those markets!
Saving the System---the mantra being mumbled worldwide---means dooming us to a dreadful, impoverished and all-too-certain demise.
I say, throw out the system and being anew!!
Daisies and puppy dogs and rainbows for everyone. If only we just redesigned the system it would be perfect!
Oh, you want to know which redesigned system would be better? Well, it would...uh...be more sustainable...and less poverty...and...uh... Well, you guys are smart, you figure it out. Just make it better.
citizen energyecon writes:
my oh my, this going to be the opex that got away...?
I didn't get my homemade S&P 1000 mug out for nothing today. They wouldn't like me when I'm grumpy _
Give the boys and girls until 4pm and then your fat lady can sing.
re: Op. exp. Even this colossal weeklong rally leaves maybe 80% of this month's open interest out of the money. As Eric pointed out before, that money is only moving around inside the market and there doesn't appear to be a bias where a majority of market-makers would benefit.
Sometimes you just gotta don the rally cap and give 'er (look closely, you can see a beer funnel out on the trading floor)
mykillk
I'd say 'wait for it', but now that the times(?) made the not in the know masses aware of the 3 pm monte, it's harder for the shills to sneak up on the marks.
I'm watching and eating popcorn.
"Dive. Dive. Dive"
Admiral Nelson commanded Capt. Crane
Everybody concedes volatility--why would you hold a position over the weekend if you were a short term trader? I always expect a Friday crash and am usually disappointed.
PeakVT,
Thanks for the link to the Linens BK. I feel for the employees but there is a real need for consolidation in the retail sector here in the US. The article suggested there were willing buyers, but would only proceed if they could finance the purchase. If you thought it was a viable business, why not go 100% equity/cash purchase.
I hiked Angel's Landing this morning - awesome.
Awesome indeed. I did that hike - I was staying at the campground and did it in the morning light right after I woke up & caffeinated - very nice way to start the day. Pretty crowded if I recall but isn't it right near the lodge? I was too cheap to stay in the lodge... my people camp (met some real characters on that trip - half of my campground neighbors were Europeans bumming across the American West - what a wild bunch).
that 80% is a fictitious number, but most option activity was earlier in the month/at higher levels
let's cross are fingers for adequate margin requirements and little naked option selling
re: Linens N things
A supplier was on CBC News last night talking about how they were no longer going to order anything. I didn't realize the BK was today's news even.
Bed Bath and Beyond is doing remarkably well without digging into details.
Checkout action in T-Bonds beyond 3 months. This economy is going no where but down.
Buying stocks on the cheap is great, except if you are expecting them to actually be valued against output rather than speculation.
I forgot whom said Buffett was covering his backside on counter-party risk. Agreed. He is buying his way out of downgrades to the bags he holds.
But if he is buying there (GS GE)it means he is not buying elsewhere.
@ noobgoldberg
YES! Puppydogs!!!
Fractional Reserve Banking and continued reliance upon growth IS completely unsustainable...just a matter of time...which could be now once the CDS's really hit the fan.
ormalizing to the deviatio
I hope Buffett warns us before switching to treasuries again.
CR-
Angels Landing is one of the coolest hikes I have ever done.
Keep up the good work.
I'll be back later, just wanted to warn everyone to strap on their seat belt for the upcoming moonshot.
The buyers were very organized today, you're in for a treat of a finish from the best in the world
turbo-
The new Sebastain.
We haven't even had the layoffs yet and turbo is already talking hunky-dory.
FWIW, 8 percent u-3 in 2010 is very, very optimistic.
And DOWN the stretch they come....
The 3 pm race is on - haloscan timestamp not withstanding
DEBT is MONEY
Where exactly do I go trade my debt for money?
Eric,
I'll take that bet.
Let's take S&P 500, opened at 943. It's at 966 right now.
What kind of level you want to bet on? We can use a 20pt spread where the outcome is a wash
Uncle Ar writes:
CR-
Angels Landing is one of the coolest hikes I have ever done.
Cool is indeed a good way to describe refigirator canyon in autum.....
Evil,
I want in. I'll say flat from here to the close, with a bunch of chop getting there.
Anyone? I'll say 970 on up if someone takes 950 on down (S&P500)
Bipolar Bloomberg:
U.S. Stocks Climb, S&P 500 Heads for Best Week Since 1982 as Buffett Buys
Consumer Confidence in U.S. Falls Most on Record; Housing Starts Decline
.
Turbo writes:
the worst may have passed. I'm feeling a lot better today than I was a week or even a year ago.
Alt-A, Option ARMs, credit card bomb, auto loan bomb, CRE MBS, and CDS to tie everything to everything else and magnify the effects.
A recession in the real economy to complete the vicious cycle.
And both presidential candidates totally ignorant, especially the one who's ahead.
I continue to be pessimistic.
I'm buying gold and ammo.
Speed,
Low consumer confidence and a high VIX mean by law this is the bottom, I bet you don't even know what a T/A inverted hammer is
EHP, sorry, I'm not betting on down when I say that.... it's just a joke on horseracing calls from TV...
You know, final stage of the Kentucky Derby.... "AND DOWN THE STRETCH THEY COME".
EvilHenryPaulson,
I bet you can't find your ass with both hands.
Eric,
come on, it's a harmless bet. I'll take 980 on up even and give you 975 on down
.... you know you want to ....
I'm buying gold and ammo.
bobn
What about likkr (if only to sterilize any wounds).
Qunincy K - Given that I used to beat up on Sebastian at every opportunity for his utterly wrong-headed economic analysis, that may be just about the stupidest comment anyone has ever made to me on this site, barring Sebastian himself.
Speed,
I bet you couldn't pour piss out of a boot with directions on the bottom before you could catch some sarcasm
come on, it's a harmless bet. I'll take 980 on up even and give you 975 on down
Heh......
"first taste is free".
You kids play nice or we'll turn this blog right around!
Evil,
lmao
There is waaay too much testosterone pumping here. See you guys later.
.
JoGa writes:
bobn
What about likkr (if only to sterilize any wounds).
Liquor and guns are a bad mix, at least for me. Luckily, I quit liquor long before getting into guns.
I'm buying gold and ammo.
bobn | Homepage | 10.17.08 - 3:12 pm | #
Gold bars? Gold coins? What caliber ammo?
@ Berylmarkham writes:
There is waaay too much testosterone pumping here. See you guys later.
I thought I heard your oven timer go off
This is getting worse: Latino workers hit hard as financial crisis slams construction industry. By Hiram Soto. UNION-TRIBUNE STAFF WRITER. October 17, 2008
"We're not making it," said Terríquez, 43, an immigrant who already had to borrow money to pay the $1,400 rent of the apartment he shares with his wife and five children. I can't sleep. My head hurts from the stress. I don't know how we're going to make it next month."
"A lot of us are unemployed and desperate, and (the employers) know that," said José Mendoza.
"According to the Pew Hispanic Center, in 2006 two out of every three new construction jobs went to Latinos, most of them immigrants. Six years ago, Ricardo Rodríguez left his $9-per-hour job at a restaurant to make $20 per hour installing floors for a contractor. Now you can find Rodríguez unemployed, standing outside a San Diego Home Depot with dozens of other idled construction workers. Last month he took in just $240. "If it's only about making enough to eat, we can do that in Mexico," Rodríguez said.
Yup.
It does seem like a lot of post-hedge-fund guys made their way here.
Makes it a bit interesting.
As of December 31, the company was one of the largest purchasers of home furnishings in the United States, employed some 17,500 people and had a vendor base of about 1,000 suppliers, according to court documents. At that time, the company was operating 589 stores in 47 states and seven Canadian provinces.
Ripple effects coming.
1,000 suppliers lose a big chunk of sales and get stuck in the creditor line.
589 stores means a lot of landlords get left with an empty bag.
.
Takamiyama writes:
Gold bars? Gold coins? What caliber ammo?
Still working on the gold, but definitely not bars
- it will be some kept at home, not some silly piece of paper that says somebody somewhere has my glod.
Ammo is 7.62 x 39mm and 9mm. Someting in .308WIN would be good, too.
...had to borrow money to pay the $1,400 rent of the apartment he shares with his wife and five children... "If it's only about making enough to eat, we can do that in Mexico"
Five. Fucking. Children.
Don't come to me asking to pay for them. Go back to Mexico.
Why is Terríquez living in an apartment with his wife and 5 children? Doesn't he know that since he made $20/hour means he could be living in an $900,000 mansion?
Anyone contemplating FDIC Friday yet?
FCAL is off 27% today... but still trading over $5.
CRBC just posted a surprise loss, is off 17% and trading around $3.
MBHI is off 19% and trading below $3.
Not that the FDIC uses stock prices to decide who's getting taken under...
Looks like no wants wants to hold'em over the weekend.
Is Maria crying yet?
20 minutes until launch
Where she stops... nobody knows!
It seems that Mr. Market need to invest in better pharmaceuticals. His Viagra/Cialis doesn't seem to last more than two days at a shot. Someone fire up a black helicopter and get him another does, stat!
Probably put the whammy on myself with that post.
DOW 10,000 here we come . . . . TODAY!
my my my...
Oops, SP500 just fell off a cliff.
Ripple effects coming.
There's some bagholders somewhere, also. Apollo Management did a LBO of LnT in 2006, and that is one reason it went down.
So, has 3pm monte become 3:40 pm monte?
LOL Eric. Never take Maria's name in vain.
Anybody see this yet:
4 degrees of Henry Paulson - MSN Money
kevin bacon like inbreeding except with paulso
If I drove over a road like this market, I would need new shocks, frame, and support columns every hour or so....
Not to mention the occasional spikes requiring new tires.
3:24 down 52.
I think we see a down 400 day at the close.
One of the funniest CNBC moments ever....
This had to be back before 1998 (because I remember I was in my older office at the time).
We're watching CNBC (as we were wont to do, being traders and all). They're taking callin questions live......
Guy gets on the phone, and gets this out before they manage to mute it:
"ooooo.... Maria...... auausghghgg".
(just like the Homer Simpson Mmm...Donuts noise).
Friggin hilarious.
London Banker
"Those who would prudently save will be punished with negative real interest rates and asset deflation. Those who would prudently invest in productive industry will be starved of scarce capital and forced into liquidation. Those who would prudently labour for a decent wage will be slowly robbed by inflation and kept docile by the threat of unemployment.
There can be no more iniquitous alliance than to have the politicians at the service of the bankers, unless perhaps it is to have the military at the service of the bankers too. The US seems to have committed itself to this worst of all possible combinations, with Congressmen threatened by the imposition of martial law if they failed to acquiesce to the Paulson Plan. Thankfully the British and EU militaries are too small and ineffective to be leveraged into a similar threat to global or domestic peace and security"
Yahoo! 404 - Page Not Found
Russia not yet ready to lend to Iceland
REYKJAVIK/MOSCOW (Reuters) Russia is not yet convinced it should make a loan to Iceland to help dig it out of a financial crisis, a Russian source said on Friday.
But as the island ran down more of its meager foreign reserves, Iceland said it hoped its biggest bank, Kaupthing, would next week be able to re-open its Luxembourg branch to pay back Belgian and Luxembourg depositors.
Told ya I whammied myself.....
BIG MONEY... BIG MONEY... NO WHAMMIES...
(awwwwwwwwww.....)
Given that those who say Turbo is wrong are buying Gold and ammo - I may switch to his side . reason:
If so many people think this is the end of the world - this must be the bottom.
But I doubt too many people are at that point.
That graphic is freaking hilarious.
And when I'm done chuckling I'm going print it out and tape it to the wall for darts practice.
Though I still think Beset Buy will oulive CC, even though I know you think BB's foul store color/design scheme deserves to die first.
Bob Dobbs
Just to be clear. Best Buy does "deserve" to die first but CC will be first. Strangely BB will survive a bit longer because of its insane time payment revenue model for profitability. While neither is a pure play CC will be a victim of the CRE/retail implosion whilst BB will die from bad credit bets.
Come to papa market, come to papa
I will share my secrets on how to decipher the stock market movements using the "bible code" at my next seminar.
Still working on the gold, but definitely not bars
- it will be some kept at home, not some silly piece of paper that says somebody somewhere has my glod.
Ammo is 7.62 x 39mm and 9mm. Someting in .308WIN would be good, too.
bobn | Homepage | 10.17.08 - 3:23 pm | #
A few 10 oz bars could be easily carried or hidden
7.62x39!? AK's away my boys, AK's awaaaaaay! No .22? Think it'd be useful for trading purposes.
Have your reloading press ready?
"If I drove over a road like this market, I would need new shocks, frame, and support columns every hour or so...."
I feel like the air traffic controller guy in Airplane: "He's all over the place...900 feet up to 1300 feet. What an asshole."
Wow, the 1st half of the TARP could have bought all of Iceland at $1,000,000 a head...
Anyone want to make a new bet against me with the market going down 24 min to go?
EHP: No one cares.
what's the bet?
re: Iceland
They should have kept to the model of other small banking-heavy countries like Switzerland, Nauru, the Carribean, etc ... Stick to low cost, high fee money laundering, tax evasion, and other simple honest work
.... but no, they had to go for leverage
hello?
Ponies, it's ALWAYS ponies.
OK... I can't stand it, I gotta turn on the CNBC info-tainment.
Down goes Frazier!
I think EHP is bored. No truly interesting discussion.
Visitor traffic is down 77% (1143 peak last week to 261 now).
Why is Terríquez living in an apartment with his wife and 5 children?
He's a passionate reader of patrick.net : It's still much cheaper to rent than to own the same thing.
Sorry guys, I am bored and treating this like a chat room. I'll shut it up now
CRVIX is indicating complacency. I'm going long CRVIX.
Isn't this a chat room?
Visitor traffic is down 77% (1143 peak last week to 261 now).
JoGa | 10.17.08 - 3:44 pm | #
It's hard to read CR when you're living in a tent city.
further debunking the conventional wisdom
options expiration always leads to huge moves
does huge = .1%
Just wanted to say I am so glad that Rich is back..your posts much missed.
Nimrod from JP MOrgan on CNBC now.... buy equities, because when they drop, there's always a "policy response".
options expiration always leads to huge moves
does huge = .1%
monta's ankle | 10.17.08 - 3:46 pm | #
You missed the party at 2pm.
one of the funniest sscenes ive seen on cnbc this babe is ripping the jpm strategist. Calling bs to the stocks are cheap meme. Shes like yeah they have cash cause they are drawing credit lines. She is like oh I forgot when stocks get cheap there is a policy response oh yeah buy buy buy. worth watching the clip.
The bobbleheads blamed today's movements on options expiry an hour or so ago. "Lots of volatility" = we're not going to bother to make shit up.
It seems that CR is enjoying walking through events that have occurred in the geologic scale, rather that sprinting through the nanoseconds in the market, for a while, at least.
CR: Good to see that you are enjoying yourself. Zion is stunning, especially during the cool, crisp weather that you are probably experiencing today. I have fond memories of going there back in the 1970s with my parents.
further debunking the conventional wisdom
And the guys that backed up the truck at the stroke of three already had to speak to Mr. Margin.
Mr. Margin. I totally hate that guy.
Nimrod from JP MOrgan on CNBC now.... buy equities, because when they drop, there's always a "policy response".
The options lady before him says he's drinking the koolaid. HAHAHAHA. She'll not get called back to CNBC.
EHP:
How is Switzerland doing in this environment, anyway? Are they potentially Icelandic?
She'll not get called back to CNBC.
Yeah, she's ripping him a new one.
Someone called it on a previous thread - OPEC to cut production(Bloomberg)
Circuit city, sucks and has sucked for a long time. I love best buy. I own 3 computers, 8 monitors and stereos etc from there.
They are going to hurt, but they might be able to survive, at least, as well of the rest of us.
At least they actually do something versus wells farto fudging their books, getting handouts and are paramount in ruining our country for a very very long time....
Market week ending, not with a bang, but just a quiet up-less-than-a-percent whimper Friday?
It's quite funny that after so much raging turmoil, it would come as a shock to have a day that ends "normally", with less than a 1% (or even 2%) move over the prior day's closing price...
Was the "we are all subprime, we are all xxx" invented on this blog by Tanta? Heard it on NPR this morning.
Same NPR newsroundup guy kept using the word depression.
I'm waiting for my closing to get here. .
Waiting. . .waiting. . .waiting. . .
It's quite funny that after so much raging turmoil, it would come as a shock to have a day that ends "normally", with less than a 1% (or even 2%) move over the prior day's closing price...
That's what you get in a 'regulated' market.
Wisdom Seeker writes:
Market week ending, not with a bang, but just a quiet up-less-than-a-percent whimper Friday?
It's quite funny that after so much raging turmoil, it would come as a shock to have a day that ends "normally", with less than a 1% (or even 2%) move over the prior day's closing price...
I think everyone's just tired. Which means Monday should be interested (especially if an unofficial plan of action is disemminated over the weekend).
Lawyerliz: "We are all Keynesians now" - Richard Nixo
I think that guy from JPM is vertically challenged. He is a monumental midget.
There is no way this market fisnihes down. The healdine already is set buffet says buy stocks rally. Count on it. last minute
Circuit city, sucks and has sucked for a long time. I love best buy. I own 3 computers, 8 monitors and stereos etc from there.
Not to much excess there not much at all.
Turbo, for what it's worth,I'm with you. There's a terrible shortage of hope these days; we must take a breathe every now and then.
FRED
All day MSNBC posted headline stocks up in seesaw trading;
In the past 45 minutes they dropped the up for some reason.
What's a good movie to see?
W (opens today)
As if you haven't seen him enough in 8 years.
Don't come to me asking to pay for them. Go back to Mexico.
Builder Bob | 10.17.08 - 3:23 pm
Builder Bob, your industry is largely responsible for the problem. How about taking them in as guests at your house while they get back on their feet?
Just to be clear, I didn't say the bottom is in, or that there isn't several more months of recession to come. What I am saying is that things in the banking system are calming down quite a bit compared to the hysteria of the past few weeks, and I don't think a depression is in the cards. My view is pretty much in line with CR's.
@burnside - Yes, Switzerland is starting to look a bit Icelandic. They haven't gone volcanic yet, but the huge UBS tarp-ing is gonna hurt. Fortunately they have tighter Euro links and presumably won't have to worry about Gordon Brown flaming them since he's already been there and done that.
especially if an unofficial plan of action is disemminated over the weekend
I think you meant YET ANOTHER plan of action.
DJI from yesterdays low to high today moved 1100 pts. During the depression when it trades 50 pts. either side of 5000 I'll miss days like these.
I think you meant YET ANOTHER plan of action.
Eric | 10.17.08 - 3:56 pm | #
Yup. Bailout 5.0
Love Diane Garnick, wish CNBC would hire as a host but they can't afford her.
Yup. Bailout 5.0
I heard it's the best one yet. All the latest features.
Calling Margin, party of five. Your tables ready.
Quite the wedgie on the intraday and daily charts.
But the weekly chart is still screaming for more bounce.
Oil might... I repeat... might... have hit a bottom.
What a sad day.
What will the after hours news article be saying:
"Stocks drop on fears that credit market is easing?"
Spoos augering in here.
Good thing Buffet doesn't mind averaging down.
re: Garnick, yeah I thought she was solid. Had to roll my eyes when the guy in the middle (jpm?) tried to spin the interview away. As for cash heavy corporates, where true that backs what Garnick was saying -- returns will be inverse of a normal distrubtion, those with cash on hand will get free market size as the credit-dependent ones choke
re: market. Figures that I was wrong, they basically spent the entire week dancing above and below today's closing levels. Good thing I wasn't close to putting money on it
anyone thinking about buying USO here? As a long term hold?
"Stocks give up earlier gains on broader economic fears" or something like that.
Headline is "Market takes Buffett buying as contrary indicator"
They're playing that groovy collapso music again on the close.
As if you haven't seen him enough in 8 years
DemocraticUnderground, the original Bush haters, had a thread on a sneak preview screening. Although everyone hates Bush so much that they think they want to see "W", the general concensus was that it wasa good but it sucked spending even more time watching Bush.
I predict it does poorly at the box office.
"What I am saying is that things in the banking system are calming down quite a bit compared to the hysteria of the past few weeks, and I don't think a depression is in the cards."
Brave words before the weekend.
anyone thinking about buying USO here? As a long term hold?
Pissed Off In California | 10.17.08 - 4:02 pm | #
I bought energy trusts last week (a few times). I was going to sell them on Monday's bounce. Against my better judgement, I kept them. They were up again today.
Up about 10% on what should be a short-term play. The 30% divi is nice.
looks like I got out of some of my short positions a bit too early (not holding over the weekend, who knows when they unveil the "STOCKS CAN ONLY GO UP - TARP III" plan). Oh well.
@PO'd in Calif - Oil sold to you, pal.
Look at a 20 year chart. Lots of room on the downside. There will be plenty of producers desperate for any income whatsoever in the next year or so. Marginal producers and production-squanderers are going to be in real pain.
Chavez's time is running out.
Well, 3pm PPT: no show.
OPEX super jam: no show.
YEAH!
I don't think the market closed down enough for intervention over the weekend. More calm before the dive.
turbo-
Alt A resets have yet to begun into a declining and credit-challenged market.
Janszen is calling for a 5k DOW bottom. The guy has been pretty much spot on since 1999.
He has recently come of record stating taht one should hold some physical as opposed to all paper(GLD,SLV) impying that a complete systemic breakdown(hyperinflation) cannot be ruled out.
As for me, I just came back to the U.S. and am going to buy six months worth of non-perishable foods and be ready to trade in my fiat for any and all assets.
If this all goes to sh_t, there wont be a toilet for one to purchase. The PTB aready have another currency to roll out if need be.
I haven't seen any OPEC announcement yet other than they were in meeting.
1mn bpd cut = something, but if that is off the projects Saudi Arabia wanted to have pumping in Oct then it would be a net increase of 2mn bpd without considering other output declines.
2mn bpd cut = should be enough to stop oil decline within a couple of months
You have to keep in mind anything they say is like them talking through their hat. Their figures are not audited because they never want the market to know what they are specifically capable of
LawyerLiz: A closing?!
Wow - you go girl!
Paulson gets to go bird watching this weekend.
This market is combustible. Day trading is too long to hold.
New meme: Hour trading!
OPEX super jam: no show.
Eric | 10.17.08 - 4:06 pm | #
Someone out there is very rich.
It's time to buy long OTM puts for January.
This is very very ominous.
spoos clinging to green here, trying to hold on until 4:15pm.
What happened to my rally?!?!
Eric writes:
Well, 3pm PPT: no show.
OPEX super jam: no show.
Eric | 10.17.08 - 4:06 pm | #
Or maybe it did show, but was overpowered by those that don't want to hold through the weekend.
Wisdom Seeker,
Thanks for the info. I figured $50/b on the downside. I'm never great at catching tops or bottoms so I'm willing to hold long term.
My thinking is that Opec will try to cut and that will be counter-balanced by Iran/Venezuela/Russia etc. refusing to cut.
One or more of these countries is going down in flames with the high inflation and falling revenues so I think some sort of conflict is in the cards.
I'm predicating my buy on global depression being off the table.
ok, now we must watch the bank bk report!
"What happened to my rally?!?!"
The ponies shat upon it.
Should I stay or should I go?
mmm the sweet smell of fresh pony manure in the afternoon.
and pre-formed meatball sandwiches for dinner....
"OPEX super jam: no show.
Eric | 10.17.08 - 4:06 pm | #
Or maybe it did show, but was overpowered by those that don't want to hold through the weekend."
Is that like a Zen rally? If a rally happens in a forest with no-one to hear it, did a rally really happen?
Here is another indicator. CFC foreclosures.
Countrywide Foreclosures (REO) Blog
Federal Reserve H.8 release comes out in 10 minutes.
Total bank credit stats, $B, last 4 weeks:
Sept. 10 9,421.1
Sept 17 9,553.0
Sept 24 9,580.1
October 1 9,864.4
Note the $300B jump from Sept 24 to October 1.
I'm not an expert (still learning), but I think this should show a nice surge for the Oct 8 data due out today, with the Fed and Treasury pumping up the system...
Anyone willing to take an over/under guess?
Hurry, hurry! Step right up! Get a front row seat to the OPEC meeting next week!
"Welcome to BFF. Our host is hiking in the wilderness today but that's okay seeing as the banks about to be closed are even more lost."
"I'm sorry but all the good tables are currently full with CR readers who got here early."
"Would you like to sit at the bar in hopes of a decent seat opening up or would you rather sit in the back?"
"No, sir. No we don't accept credit cards. There's a card table set up out back in the alley with three card monty who might allow you to participate on credit. We here in the safety of The Bankerdome Grille call that table the Market. "
@PO'd in CA: "My thinking is that Opec will try to cut and that will be counter-balanced by Iran/Venezuela/Russia etc. refusing to cut."
That's a short-term analysis, unless your definition of long-term is shorter than mine?
I think the only question you have to ask is whether any of the major OPEC heads actually trusts the others to keep a deal in which he promises to pump less and thus earn less.
Supply will fall, but it won't be driven by a political process, it will be driven by marginal producers who can't afford to pump and sell at a loss.
But as the island ran down more of its meager foreign reserves, Iceland said it hoped its biggest bank, Kaupthing, would next week be able to re-open its Luxembourg branch to pay back Belgian and Luxembourg depositors.
Iceland has nice ponies...
I say find a neighborhood, most defaulted, near good agricultural land, buy the whole shabang for 2 cents on the dollar. Bring in all the destitute and downtrodden, distribute allotments with housing, demand sharecropping and shepherded animals for annual tribute payments.
Walla, revert to feudalism, housing problem stemmed, unemployment kept in check, people fed and sheltered. And they can call you Lord, and My Grace. Excellency!
So I bet on Monday we get to find out whether those LEH CDS settlements are really as insignificant as we've been told (only $6B).
I call BS. Gonna be ugly next week.
Interesting. The gradient for the CFC foreclosures is actually accelerating now.
Damn. Nation.
Just for fun, I checked out the monthly increase in the Federal Debt. We're now rising at $400+ billion per month but even before the banking blowout it was about $100 billion per month.
Hurry, hurry! Step right up! Get a front row seat to the OPEC meeting next week!
Anonymous | 10.17.08 - 4:14 pm | #
Camels, mysterious fortune tellers, Ali Baba and the Forty Thieves!
Walla, revert to feudalism, housing problem stemmed, unemployment kept in check, people fed and sheltered. And they can call you Lord, and My Grace. Excellency!
Johnny Lee | 10.17.08 - 4:18 pm | #
Good until the Union steps in.
McCain and Palin are putting the last nails in the coffin, every time they open their mouths and talk about something other than the economy. Which is always.
I'm not trying to stir up politics.
I'm saying...the market hasn't yet priced in a big Obama win with massive Dem majorities in both houses.
It's a Wall St. nightmare. Low cap gains rate gone in 120 days. Excess profits tax, extra taxes on rich, reinstalled estate tax, and total rewrite of financial reg book.
Very negative for markets and soon to be priced in. Go long at your peril. Have a nice weekend.
Iceland has sheep, impoverished hungry sheep who have been shorn. I bought two sweaters from them.
I was pleased to flip to CNBC and see Diane on. She's often on Bloomberg, and she is always worth listening to.
Wisdom Seeker,
Thanks for the analysis! Like I said I'm pretty awful at picking bottoms and this is something I'm willing to hold long term.
I do think that the next stage in another 1-2 years is inflation so I'm trying to get prepared investment wise.
Seems like from what you're saying there's still a ways to go before getting back into oil.
Thanks
Rich,
Too bad, we's been dun tired of bein stol from
rich writes:
McCain and Palin are...
I'm not trying to stir up politics.
Yes, you are and this is not the right place.
Very negative for markets and soon to be priced in. Go long at your peril. Have a nice weekend.
rich
Yes.
PO'd in CA:
I'm still mulling over Yves Smith's comments on inflation risks.
She expects, as many do here, that we'll be able to moderate deflationary effects somewhat but that, once the bottom is in, it's going to be very difficult to mop up liquidity rapidly enough to prevent an inflationary spike.
Anyone?
Mmmm-mmmm, good.
Oven Roasted Dawg for Valentine's Day.
How much of the federal budget is driven by capital gains tax? I'm trying to imagine what happens when it goes to zero.
Or maybe it did show, but was overpowered by those that don't want to hold through the weekend.
Each time OPEX or 3pm was mentioned... I always said: "if it doesn't happen, they'll blame externalities".
Ding!
I don't think rich is trying to stir up politics.
I remember making paper trades in 1992 in a college futures & options course, and I made gains betting that the market hadn't priced in a Clinton presidency and all the supposedly "bad" things that would happen to Mr. Market with a Democrat in charge.
Rich is right about the capital gains tax. I'm not sure I see the connection to the estate tax.
and now for something, completely different :
- Bloomberg.com
Mervyns to close remaining 149 stores.
@rich:
The market will develop very bad BO, see some level 1/1200 point triggers, and the good news is there are buyers at the fall '02 dot.com bottom at DJI 7200.
"She expects, as many do here, that we'll be able to moderate deflationary effects somewhat but that, once the bottom is in, it's going to be very difficult to mop up liquidity rapidly enough to prevent an inflationary spike."
I really don't see any way in hell that they pull of EXACTLY the right amount of liquidity in EXACTLY the right places to prevent both inflation and deflation.
Other than an outright currency collapse via capital fleeing overnight from the US I think we should see indicators ahead of time of when the switch from deflation to inflation happens.
Atleast thats my theory right now. I'm just trying to formulate an investment strategy now.
Also with most of the shadow banking system getting blown out of the water I wonder whether there will be enough credit going forward in hedge funds etc.. to create such massive speculative bubbles in the near term.
I predict it does poorly at the box office.
Broward Horne | Homepage | 10.17.08 - 4:04 pm | #
I'd rather get a root canal than pay to see that movie... and I hate Bush as much as anyone anywhere.
Whoever thought this was a good time for that release was smokin' some good stuff. Where is 'Move On' when we REALLY need them.
Mervyns to close remaining 149 stores.
Proletariat Geoff | 10.17.08 - 4:30 pm | #
You mean they didn't already? Whocoodanode?
Eric,
re: OPEX, even if it were a big factor the majority of those positions were long lost
I do think there is a lot of truth in terms of opening and closing volume spikes but that is due to structural factors like Europe day end coincides with America's open, trades programmed outside of market hours, settling of margins and other things that are uncorrelated over time.
However during crises all correlations go to 1 which is where I think of lot of PPT supporters are coming from. I view these big intraday swings as a healthy sign that there is some freedom of choice in the market and not a continuous unwind.
... we're in for a long winter
My take on W is the same as my reactions when United 93 and the Nick Cage WTC movies came out: the trauma being dramatized is still far too fresh for me to want to see a Hollywood treatment of it.