It certainly looks to me like you DO NOT want to be on that list. Which makes me wonder why I want to be on it. Is it too late to change my mind? Can I haz free lunch?
FT Alphaville summaries; Chancellor Darling on Sky News says these are extraordinary times:
There are three legs to what were doing:
- First - we are extending the SLS at the Bank of England, allowing £200bn available.
- Second - helping banks recapitalise. Britains biggest banks have agreed to increase capital by £25bn. There is a further £25bn should they want it.
- Third - we have agreed to guarantee interbank lending.
Darling stresses that this is in the taxpayers interest. There is upside for them through the use of fixed interest payments as well as dividends.
The Chancellor was extremely irritated about the announcement on Sunday night, adding that discussions only concluded a few hours ago.
The British government has thrown everything at the banking sector belt, braces, £50bn of equity, a super SLuSh fund and crucially a guarantee of interbank lending. Like em or loath em, the Tripartite Authorities have moved to close the funding gap.
And the net has been cast much wider than expected - nine major banks and building societies.
Early indications from the market suggests a 25 per cent hike in bank share prices when trading gets underway at 8am BST.
But dont expect the FTSE 100 overall to rally: the Nikkei 225 closed 9.4 per cent lower in Japan after Tuesdays late plunge on Wall Street. Futures prices point to an early 180 point fall in London.
After a series of ineffectual leaks, it looks like they went all i
All politics aside, this is the type of action needed to restore the financial system (note I didn't say financial corporations, the financial system is what enabled the Dutch to overtake the Portugese in colonization), it is also the same thing that brought Britain from obscurity to world superpower
monta's ankle,
Defended well enough at a time when they might have to issue £250bn of debt? That rate has to go up enough to make it sell and they are not the only vendor with the US selling $850bn just down the block
Big, but not quite the "Swedish Model". With the uptake voluntary there's still opportunity for an egoistic management team to hold out and then blow up later at a higher taxpayer cost. But all the big players are already in, so that's good.
This is the credit collapse of bank and investment companies leveraged from 10:1 to 40:1, and no amounts of national reserves, taxpayer anticipation revenues, or national deposit guarantees can hold back the tide.
Upcoming debt moratorium rescue plan acronyms may derive from phrases such as the Debt Obligation Administration.
this move, concerted, all in, with truly massive firepower, is how you fight this type of contagion.
if the US had announced TARP, along with its latest commercial paper foray, and a recapitalization plan, along with guaranteed intrbank lending, all at once, then maybe this credit and equity wipeout would have been blunted earlier
of course, i hate the thought of all this government intervention
but if your going to do it, go hard, its the only chance you have
The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company. The Government expects the take-up of the guarantee to be of the order of 250 bln stg, and will keep this under review alongside ongoing monitoring of capital positions and lending volumes.
They are choosing not to issue national debt, but a government backed corporation to provide the £250bn -- why would they do that? Is there a functional reason or is it just a political matter?
Anoddamoose,
True they are some very aggressively structured big banks. But in the end it is the citizens that must provide the £250bn, crucial in the case of Iceland for example
ot vague at all as to current equity holders - they ride in the very back of the bus.
of course, the bus was on the verge of losing all of its wheels, so at least they are still going somewhere (whether they want to go where they are headed is another question).
If there is so much upside for the effing taxpayer, why don't we eliminate the IRS and the British equivalent, all personal income taxes, and just fund the government through nationalization of banks and other businesses? Hmmmm?
Sorry Ben, we've too long bred for beauty and sex appeal rather than brains. And boy was it fun.
PeakVT,
The difference between the US and the UK might be that Gordon Brown will do everything possible to calm the situation so he can get re-elected as the cool controlled leader they know.
Whereas in the US Paulson is the guy who wants to get out ASAP and let the next guy deal with it
Now what will zie Germans do? They have the same problems but on bigger leverage
Italy -- going to default
France -- will try to make it look like they are leaders amongst the chaos while the have the EU presidency, too late to organize much of a inter-country bailout
Eastern Europe -- apparently no one cares about eastern europe
i must admit, i thought the UK shock and awe would have an upward effect on the equities markets (banks i knew would take it on the chin, after all, this is forced dilution)
this will help the credit situation, but, the ECB/EMU needs to unify and act in a similar manner - which i see as very very unlikely
yogi,
I like HSBC. They've just been waiting until they could buy out some of their competitors. They were the most honest bank when it came to writing down mortgages, and they were among the first
Re: "Subject to further discussion with eligible institutions, the proposal envisages the issue of senior unsecured debt instruments of varying terms of up to 36 months, in any of sterling, US dollars or Euros"
I see no mention of CDS derivatives and the long-term impacts of the $60 Trillion cancer. Total Global GDP is $54 Trillion!
I can't believe there won't be (haven't already been?) fundamental unintended consequences from banks and businesses realizing their bread is buttered by bureaucrats rather than customers.
For example, who will be easier to cheat and steal from?
The 30-share index BSE Sensex touched an all time low of 10,940.85 in early trading. All segments suffered huge losses. This is the benchmarks lowest since early August 2006.
Consumer Durables, which suffered the most, fell over 13% because of heavy selling in key stocks in that space
It looks pretty likely that this is going to be declared a recession, Lacker said. So far this has been a mild slowdown, but some of the things I was apprehensive about earlier in the year are weakening, Lacker said, citing business investment, nonresidential construction and consumer spending.
I'm thinking, the people at home that play stock market gurus are about 5 years ahead of the people in charge of this game!
kicked myself for getting cold and selling gold + silver two weeks ago, but kept yen, ditched francs and ended up in lots of US cash - that strategy is good for at least another 15 minutes !!!!!
Good times.....( I'm scared)
Chris Hossian of ODL Securities, says: "Whilst the first move is not always the right move, the initial reaction of the market to the rescue package has been lukewarm. Prior to the open we were looking at a 190 point move to the downside, but we are currently lower by circa 100.
Thinking and trading sounds like a damn fine life. That may be the best distillation I've ever heard. I've been casting about for a while, wondering what I wanted to do when I grew up. Definitely going to give that some thought.
25% Mish, 25% Weiss, 25% comments on CR, BP, and Mish and a few others, 25% toss a coin
Note, Im less worried about my USD Im trying to maximise NZD in case i have to go back - im a developer in phoenix USA so theres a high chance!
YTD: Down 10k US (500k portfolio). Up 200k NZD (purely exchange rate luck due to yen carry trade dismembering, that was my main bet). I have been relatively low risk trades as well, not leveraged. I can see how leverage in forex or even inverse ETFs which i played with can kill.
All this makes property development feel like playing with LEGO !
Speaking form the UK as a financial economist, this seems to be an excellent package and combined with an interest cut later, the best we can expect. they have addressed all the threats specific to the UK financial sector.
The holistic approach with clever checks and balances needs to be copied in principle by other smaller countries who are still in reaction mode..
Has that ever happened before?
s_puttnick | 10.08.08 - 4:23 am | #
I'm beyond asking that question. First of all I'm young enough that I hardly ever know without looking it up. Second of all assuming there would never be a 20% subprime foreclosure rate because it had never happened before is what got us into this mess
As someone said before, I don't even do a double-take for anything less than a 10% decline
This month I have vowed to devote all my energy to effecting grassroots political change in the House, somehow. I guess I'll look for close races where the opponent is against the bailout and incumbent voted for it. I still have faith in the system. Just started Walter Karp's "Politics of War".(Recommended on this blog) The situation he describes in 1890 is fascinating: people became disillusioned with both entrenched parties, who had an interest in keeping distribution of wealth conflicts from surfacing. So they jumped into the Spanish-American War.
After reading "Trillion Dollar Meltdown" and "Empire of Debt", trading has been absurdly lucrative, but bittersweet.
s_puttnick, Well with Mercury in retrograde and the constellation of Scorpio coming into the celestial window I would say we are near to a bear mark rally.
There is a minor confluence of factors to allow this, because there has to be at least one rally of some thing before year end, just the nature of people working on commissions. I think shorts coming back in will bring options volume up to close some spreads and slow the market velocity. Plus so much fresh money (thanks governments of the world) will allow some kind of bubble to inflate while the in-progress decline will stand on the sidelines. Heck some people probably even think housing has, or is close to, the bottom.
That will encourage everyone who still doesn't understand the system to "buy while things are cheap". I think after the new year and year-end lending crunch, we'll see the selling continue in strength as people are forced to question projected earnings.
EH: oh yeah had 100k in Yuan via everbank. made about 5k in 5 mths then read black swan book "Foolish Randomness" or something like that. Got scared that chinese could do the impossible and devalue, did nothing then russia stopped trading and lots of govs starting changing rules and chinese started talking about rate cuts. Bailed straight away - that may prove to be the best decision i have ever made.
All of Europe is being crushed. ALL. CRUSHED. Big bad Mr. Stock Market is nothing - NOTHING! - compared to a banking system gone wrong. NOTHING! /cramer
And now I am really go to bed.
PS - Brown slashing TARP left and right. Hilarious.
This is 100% social now, the stock markets are meaningless for everyone. This will be interesting, because as disruptive as this seems to be, I think the average Joe was not "directly" in the market. As we all know, there has been a huge divide among classes that has resulted in rich and poor with a war on the middle class, thus, this social event will impact the wealthy class and burn up excess play money. A recession will be the tight belt caused by rich people spending a lot less, while the average Joe just hopes to keep a job at wal-mart. If capital can be kept in the markets, business will hold together and not crash and this may end up being a new type of isolated economic event that will impact just a narrow group of people that had too much loot.
Gordon Brown -- "These problems started in the United States of America."
Putting the special in "special relationship"...
Anonymous | 10.08.08 - 4:33 am
Who cares what some TV chef has to say about it?
To be fair America was the primary beneficiary and breeding ground for the housing boom. Securitization tricks US investment banks learned in the 80s. With that precondition, it diffused throughout the world and delayed what would have been a 2003 recession. If people are upset that their own country's stocks are losing money, well that's because they were benefitting from the same things they are upset about.
If they had nothing ventured, nothing would be lost.
But this is just the opening act for the US switching from a net borrower to a net saver.
Anon I hope so, and that was my impression of the robber barons of the last century. The next "Rescue" will be a huge transfer to the bottom 95%, either through taxes or outright New New Deal printing.
S&P 500 crossing 1000 won't be done in real-time. Set to open below that mark
I think the VIX or VXN could hit 60 today. Now not only is there a massive amount of intervention, it is asymmetrical intervention AND we are in earnings season.
I'm just suggesting a minor diversionary bubble. Something like, but much smaller than, the short financial:long commodities trade that bought every trader's baby a new pair of shoes earlier this year.
As far as modern crashes, you have to go back to the Arab oil embargo to see this type of decline, but ... this is different, oui?
Anonymous | 10.08.08 - 4:42 am | #
all i remember is the odd-even day system for buying gas and the long lines at the gas station.
I was in NYC for the market crashes in '87, post 9/11. Real estate prices fell, but the city services and the overall standard of living gradually improved. This one looks worse, but for every bankrupt REIT there are overjoyed tenants who can suddenly afford rent. We'll find some way to employ people I hope.
I wonder if that would be economically possible to go to 6000, what would that mean?
Anonymous | 10.08.08 - 4:50 am |
Yes it is possible. More or less, we will have to adjust to an America which does not grow its total debt to GDP from 150% in 1980 to 350% in 2008. Without that easy money, companies like GE just don't work.
So just exponentially extrapolate from there. We will also see a comeback for companies who issue worthwhile dividends because that boosts their share price/lowers their borrowing cost compared to banks. I may be a bit over the top considering we have global computer networks to facilitate securitization and trading of debt/equity, but not by much.
Has anyone noticed this yet? The Mexican peso has suddenly dramatically weakened against the dollar. Graph this going back to 1993 and the spike in 2008 is similar to the 1994-1995 crisis.
The Gold story is real. I anticipate that the dollar will trade down to .52 in short order. The disconnect between paper "manipulated" futures and the physical market is severe.
A collapse of Comex is very likely now. Moreover, a collapse of the Euro is already foreseen by the EU.
Buy any physical bullion you can find. Gold is trading north of $100 over spot and Silver is above $8 over spot.
Recessions are a natural occurrence of our socio economic system, however if put off long enough may cause a depression which is not altogether any good.
MW writes:
The Gold story is real. I anticipate that the dollar will trade down to .52 in short order. The disconnect between paper "manipulated" futures and the physical market is severe.
Why .52 or are you quoting Jim Sinclair blindly here?
The speed of the market crash globally is the main thing, the week to week losses are connected to a social disruption that connects to a lack of confidence and this goes back to Paulson and Bernanke fucking around with Bear Stearns, who should have failed, and the market should have not been supported by government fraud -- now they have no way to rebuild stability! Bear might have caused a Trillion problem, but this mess and global lack of confidence will cost 20 times that!
I see more of a supercycle where people forgot how irrational speculation can get in seemingly boon times. But we're still nowhere close to reaping the full dividends of the digital revolution, and sun and wind power will eat a ton of inflation.
I've been on all day talking zero coupon bonds and the need to push cash into long term securities that are linked to real assets like mortgages that are not in synthetic pools. Wall street is dead IMHO and so is the traditional housing mkt. This is systemic and global and there will no recovery until the financial system is re-invented, which means stopping derivatives, shutting down wall street and going back yo old fashioned local economies that use common sense. The main problem with all the bailouts is to supercharge bankers and bail out fraud and unless I'm fucking wrong, people are voting with mutual funds and telling wall street to fuck off and die!
EvilHenryPaulson writes:
MW
I don't even know what the return of the investment on this one coin
This larger coin form the Canadian Mint satisfies the large investor, they want bars or larger units to be placed in private vaults, they can afford to move several million into bullion at once. I suspect the coin will sell out at its first minting.
This is very serious, there already talk of two new gold backed currencies to replace the USD as the reserve currency.
US Banks
BAC: Pre-Market: 21.01 -2.76 (-11.61%) - Oct 8, 4:18AM EDT
Pre-Market: 14.69 -0.46 (-3.04%) - Oct 8, 4:16AM EDT
Pre-Market: 30.00 -0.60 (-1.96%) - Oct 8, 4:17AM EDT
Pre-Market: 5.01 -0.24 (-4.57%) - Oct 8, 4:16AM EDT
JPM: After Hours: 39.41 +0.09 (0.23%) - Oct 7, 7:56PM EDT
USB After Hours: 31.38 -0.42 (-1.32%) - Oct 7, 7:48PM EDT
BBT After Hours: 34.01 +0.12 (0.35%) - Oct 7, 7:43PM EDT
the moral of the story is people won't bother trading you in the pre-market if you haven't screwed things up recently. Anything above the -3% Dow/Nas/S&P will be a victory today.
re: Dow, Boeing hasn't even been hit for the fact its workers are out on strike and it's looking bad because Boeing won't cede ground on outsourcing/contracting
Tried to put money INTO two BofA atms tonight and they were 'down' with instructions to drive to another BofA atm which was 'down' with instructions to drive to another...etc.
The surge in the dollar is nothing more than worldwide housekeeping. The BIS said to the US bring your toxic waste home, we don't want it exploding in the EU.
Well it can't happen fast enough, debt are being settled in USD which fives the appearance of a demand for dollars. IT I snot a demand, but the necessary effect of settling dollar denominated debt .
After the great delvering is complete, the dollar will do a swan dive off a cliff. Below .60 is possible in a few weeks.
the guest writes:
"Tried to put money INTO two BofA atms tonight and they were 'down' with instructions to drive to another BofA atm which was 'down' with instructions to drive to another...etc."
Sure you were trying to make a deposit! Hookers or coke?
Just a fast glance, but T/A is breaking down global and every market is headed for 15 to 20 year lows all at the same time in a matter of less than a year, so go smoke that in your pipe. Every model is broken and global confidence destroyed!
EvilHenryPaulson writes:
The UK rescue is exactly what should be done in my opinion. Let's everyone move forward ASAP, and let them pay you back later.
`Demand destruction is prevalent in developed countries with consumption falling at about 3 to 4 percent,'' said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. ``The credit crunch is forcing traders to de-leverage their positions as they have no access to credit.'
More FT copy+paste Its going all the way through 4,000 at this rate.
There is one riser in the FTSE 100. HBOS. Up 16 per cent, but trade is volatile.
The rest of the banking sector is being hammered:
Barclays down 17%
RBS down 12%
Lloyds down 11%
And in the rest of the world:
DAX down 8%
CAC-40 down 4.75%
FTSE Eurofirst down 7.44%
Russia has again suspended all trading. In Indonesia its worse: shares suspended indefinitely
OhBoy, screw the markets for a minute. Fix the system and all else will follow. Try and fix the market, and both the system + market will screw you twice as hard in the end
New research from TowerGroup finds that two proposed accounting amendments, coupled with severe downward pressure from the ongoing credit crisis, would significantly alter the ways banks and other lenders account for off-balance-sheet assets. The changes could affect trillions of dollars in consumer loans and potentially cut off sources of consumer borrowing at a time of shrinking liquidity.
Proposed rules from the Financial Accounting Standards Board (FASB) governing asset securitizations FAS 140 and FIN 46(R) could have a significant and negative impact on credit markets an impact that could potentially cost banks over $60 billion (USD) in annual earnings, according to TowerGroup research.
Securitization of assets is an essential capital funding source for banks. In fact, the Federal Deposit Insurance Corporation (FDIC) has reported that US credit card issuers rely on asset-backed securities (ABS) financing to provide more than 50 percent of their capital needs. The proposed changes, if implemented, could severely curtail the practice of packaging assets as securities and selling them as securities, freeing up capital and smoothing further investment.
If the proposed amendments go into effect, these securities could be placed back onto lenders books and thus require significant increases in loan loss reserves in turn requiring billions in capital. While the proposed FASB amendments are intended to restore investor confidence in the mortgage market, TowerGroup believes the rules will have an unintended consequence of negatively impacting credit card profitability. This will, in turn, adversely impact consumers in two ways: reducing the amount of available credit; and increasing the cost of credit to consumers. TowerGroup expects the reduction in the availability of credit will have a material and negative impact on the US economy, already teetering on the edge of recession.
OhBoy, screw the markets for a minute. Fix the system and all else will follow. Try and fix the market, and both the system + market will screw you twice as hard in the end
This is true, but we're not making public policy.
Besides the system is probably a little more complex to fix without all agreeing on the same collective rules, europe can't even cooperate on what they want to do collectively.
UK in one direction, spain off to the sunset, france will never allow a national bank to fail,.. etc.
Brown and Darling have put together a very decent plan ...
I would have only two qualms ...
That it is not a mandatory re-capitalization thereby leaving the door open for another bank failure.
That it doesn't call for the auditing of all banks to cleanse the system of insolvent institutions so that interbank lending may return to normal levels.
This Plan is leagues ahead of the Bush Plan. Indeed Brown laid the blame for the entire debacle at Bush's feet.
The British Plan including the improvements I've outlined would be a start for our banking system. What has been happening is that Paulson has been playing favorites while stalling costing we tax payers hundreds of billions if not trillions in taxes and economic activity. Paulson should be arrested, tried and hung.
Fear Mongering writes:
"TowerGroup believes the rules will have an unintended consequence of negatively impacting credit card profitability. This will, in turn, adversely impact consumers in two ways: reducing the amount of available credit; and increasing the cost of credit to consumers."
Hmmm,sounds like a good idea, no? Nothing like 30 credit card offers a week in the mail to turn any saving conscious individual into a living beyond his means fool.
@wtf
The global fiat system dies from hyperinflation...this is worse than the deflationista Crash. All debt would be wiped out from hyperinflation. This would not be good for debt holders but they won't get their money in a Depression either. So if this was planned or allowed to Crash, would hyper-inflation be wildcard or the Endgame planned. If it was planned. We know this was allowed.
Either way this goes or something down the middle, a lot of debt won't get repaid.
Wow, things are busy on here. I had to step away for one minute.
re: Gold, There is a group who are short oil and long gold out there. Don't know who yet, and I can only speculate on their reasoning but the correlation is too high to be coincidental
As we mentioned yesterday, the large triangle pattern in the Weekly Chart forecasts a target of 8,400. We are now a mere 1,000 points from that target after reaching new lows today. This target may very well be hit some time soon. At this point, every rally should be sold until we begin to see a bottom form. Continued overall selling pressure is likely to occur below 10,400, but near-term strength could be seen back toward 9,800.
HSBC has cash on hand and were honest when they wrote their stuff down accurately and early. That kind of reputation is worth more than they would need to raise even if April 2009 spreads are still high (heck they could make use of a little £200bn made available today)
Sorry yogi, I hadn't even looked at HSBC's ticker.
I do think that either I, or the market misunderstand the bank. They have fewer loans than deposits so they can take advantage of record yields. They seem to have handled the problem better than other British banks. They are expected to acquire some other bank(s) before this is all over
I thought being able to decline government capital would have not taken their stock down like it has its peers
Oil is very inelastic, that is the correlation between demand and price are almost constant.
With the destruction of demand price tumbles. Should demand increase the price will skyrocket.
It takes years to develop supply and their is no easy substitution for oil. Once supply is monetized recoup of investment demands going to market and staying in the market.
http://boombustblog.com/
This blogger has done extensive analysis of hsbc, and has been very prescient. Ignore the spelling, his number crunching is superb.
Agree on the hyperinflation scenario being bad but wondering the likelihood.
The author definitely likes dramatics...
"While the talk in most circles has been about little more then deflation in recent days, if the credit market contagion goes airborne and infects the currency markets, then the outcome could rapidly reach an inflection point in which it could pivot on a dime, and morph into an inflationary nightmare virtually overnight."
The idea of the US following the UK is starting to be taken seriously (let's hope). An article in today's NYT suggests similar idea and says TARP is authorized to do so if you read legislation.
Merely stating that the price movements are fund based. It can and will overshoot.
When demand is up, the price can still be low if the unwinding has not been completed, what you'll have is shortages though. The price is cheap but there is no oil.
Besides i see demand destruction for oil a myth, it is in high demand only that the prices fluctuate wildly in these times of deleveraging and reorganizing.
Besides i see demand destruction for oil a myth, it is in high demand only that the prices fluctuate wildly in these times of deleveraging and reorganizing.
OhBoy
~~~~~~~~~
During the Asian financial crisis (1997 'flu'), it went from 900 to 1630 overnight, and was back down below 1400 within a couple months for year end 1997.
USD is also JUMPED against a few western countries, incl. EUR, CAD, AUD (Dollar Index), while it dropped against Swiss Franc, Japanese Yen, and British Pound (I guess the markets do like the bailout). Some of those leaps are pulling back now, but this is getting out of hand
How does currency intervention play out?
citizen (of the world )yogi | 10.08.08 - 6:08 am |
Ask Iceland I suppose.
also, re: boombustblog/reggie. Is he really worth reading, or were you exaggerating your returns?
I just ask about the specific HSBC call. Seems like picking the one bank that hasn't declined as much to short is a lazy methodology, and earnings declines ignores gained market share/power (the other big 5 British banks are burdened with ~30% of their equity paying a usurious dividend). Meanwhile I've been saying RBS was on a path straight for insolvency since early September. I assume he only advises a handful of positions at a time, so why not target RBS? Is this recommendation indicative of his track record (is he just like the analyst who picked a random tech stock long in 1999?)
The gap down in the futures marks the end of this decline period. Exhaustion gap - exactly what I wanted and I'll be buying it with both hands.
Persecuted Comrade Anonymouse | Homepage | 10.08.08 - 6:10 am |
Care to instruct me on the terminology?
He did a lot of analysis on GGP, a mall REIT, which has gone from 40 to 4. He called Bear Stearns, which was how I found the blog. He called Lehman. He called Morgan Stanley the "riskiest bank on the Street", which has been borne out. He called Bank of America, Wells Fargo (the only real holdout), Goldman, American Express, and other banks, mainly with a thorough examination of their loan portfolios, a prediction of the rise in borrowing costs, and general macroeconomic deterioration. I read on his blog first that it was an insolvency, not a liquidity crisis, and that the main cause was securitization, not subprime lending. On HSBC, I can't remember the details now, but his record has been so good I don't mind. Don't be fooled by the amateurish style.
The Global Clusterfuck continues. Since the taxpayers are going to own their debt pretty soon, we should just net out global currency imbalances and wipe the slate clean.
Gotta run to another 12 hour shift of fun and adventure kids. Sorry I haven't posted more from MS&T08. I'll be back tonight to see if the UK dropping a nuke on Godzilla did much.
Persecuted Comrade Anonymouse writes:
The gap down in the futures marks the end of this decline period. Exhaustion gap - exactly what I wanted and I'll be buying it with both hands."
... indeed looks OK scenario unfolding according to hypothesis yesterday, futes did reach the 200% Fib. extension 960 SPX
(futes did a small 50% final extension after 12am ending with cute little triangle suggesting retrace from the low 960s SPX up to above 1000 soon)
if so we will open about flat
retest 960 during the day?
yeah aussie tanked .. crazy. from $1 to 65 cents in the space of a few months?
but don't worry, it (australia) is still here and everyone still seems quite relaxed. Local shopping mall (biggest in australia) was packed with consumers. Took out 5k from the bank they didn't blink.
Just want to let you know my buddy Bernanke is cutting rates 50 bp in an unscheduled rate cut as I predicted 3 weeks ago. They are joined, as predicted, by other central banks (Canada, England, ECB, others I guess)
I called the blad guy (Steve Leismann?) on CNBC and ordered him to report it. That was a few minutes ago, futures should start heading up
well yeah, you're right the fall was fast but it turned down longer than 3 weeks ago.
but I think it is hot money. If things get worse australian banking system will be one of the last standing.. and if not, money will rush back in..
anyway who needs to holiday in the USA? too many people with guns and a bad attitude right about now.
Markets run on superstition. There is no rational reason a coordinated rate cut should be more effective. It's what Krugman calls "the slap in the face" theory, just an attempt to wake up the market. Problem is, the market is comatose.
I'm not sure, but I think when the SEC extended the short sale ban to no later than last night, that this would be the day of the rate cut. In any event, it pays to read the federal reserve data and not the FF futures which lagged the effective overnight rate the whole way dow
Some easing of global monetary conditions is therefore warranted. Accordingly, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank are today announcing reductions in policy interest rates. The Bank of Japan expresses its strong support of these policy actions.
(Japan wishes us all luck with our lost decade.)
Dow futures spiked 500 points. Still up 250 from before the announcement.
How will this additional fund get to juice up the economy when the intermediary conduits decide to keep the money themselves. Nationalize the insolvent banks, recapitalize the solvent ones, ..., only then rate cuts will have their meaningful impacts. A temporary suspension of the capitalistic financial system is in order to save the global economies from falling into a depression.
Bring on the negative interest rates already. Your gonna need to PAY me to borrow Bennie. It's only fair after all - the Fed has been collecting interest on funny money created out of thin air since 1913. 'Bout time they gave something back to the people!
o rally being sustained. OIS crashed .. libor still fixing high.. spread blowing.. money mkts aren't easing..
Nothing stops borrowers from hoarding cash
There is no REAL policy response or socialistic ploy left..
you bought assets, you buy paper, you lower rates... WHAT ELSE?
Positives: Lowers cost of lending by 25% in most of the world, steepens the yield curve momentarily which is good for financial system
Negatives: You keep rates this low for long and it flatlines the whole yield curve which is counterproductive to growth because no one wants to lend in that environment. The commerical paper buying will be absolutely crucial to avoid cannibalizing short term lending
I think a bank holiday is more likely, but I think if THAT happened then we'd also have to stop the equities market too. Imagine the panic a bank holiday would create!
Good morning!
iceland!
That's a lot of money for such a little country.
ok, so this the uk version of shock and awe
question. is it better to be on the list. or off the list?
Uh. How can I get on the list? And why won't CR let me sleep? Grrrrrrrr....
Permanent Interest Bearing Shares
they should have asked buffett. bet he could have made sure these would yield a snappy 10%
It certainly looks to me like you DO NOT want to be on that list. Which makes me wonder why I want to be on it. Is it too late to change my mind? Can I haz free lunch?
So far the Euro zone likes it...US futures went from down 220 to down 120...Armageddon will have to wait another day...
hmm, by the end of the year
is that soon enough to call off the wolves?
and is this the final sign that the central banks truly believe a rate cut is a mistake (ad i actually believe they might be right)
we are getting closer and closer to outright bank nationalizatio
I wonder why HSBC didn't wait for Hank's free money?
That's equivalent to about $350B recap and $1500B liquidity in the US.
Crazy.
FT Alphaville summaries;
Chancellor Darling on Sky News says these are extraordinary times:
There are three legs to what were doing:
- First - we are extending the SLS at the Bank of England, allowing £200bn available.
- Second - helping banks recapitalise. Britains biggest banks have agreed to increase capital by £25bn. There is a further £25bn should they want it.
- Third - we have agreed to guarantee interbank lending.
Darling stresses that this is in the taxpayers interest. There is upside for them through the use of fixed interest payments as well as dividends.
The Chancellor was extremely irritated about the announcement on Sunday night, adding that discussions only concluded a few hours ago.
The British government has thrown everything at the banking sector belt, braces, £50bn of equity, a super SLuSh fund and crucially a guarantee of interbank lending. Like em or loath em, the Tripartite Authorities have moved to close the funding gap.
And the net has been cast much wider than expected - nine major banks and building societies.
Early indications from the market suggests a 25 per cent hike in bank share prices when trading gets underway at 8am BST.
But dont expect the FTSE 100 overall to rally: the Nikkei 225 closed 9.4 per cent lower in Japan after Tuesdays late plunge on Wall Street. Futures prices point to an early 180 point fall in London.
After a series of ineffectual leaks, it looks like they went all i
So now their banks are esentially nationalized...are the executives and managers now on a government pay scale?
Short selling reinstated tomorrow. Does this favor a further downturn or a major rally?
wow guaranteed interbank lending
that migth actually make a difference (either to the banking in the UK or to the pound sterling)
You don't want to be on that list.
1) You want to be on the CPFF
2) Fund massive $100M golden parachute
3) ... profit
(and then BK)
I'm glad I finally figured out what step 2 was. The dot-commies never did ;^)
that is almost all in
200 bp rate cut would have been all in
but i actually think this is as far as they can (or should) go
if this does not work, nothing will. ever.
PeakVT,
After converting pounds to dollars, and adjusting for population (GB=60mn, USA=330mn)
I get that is equivalent to a $2.4tn bailout in America.
I think the Brits might have done it. They're taking the medicine and looking to get healthy ASAP
As for the sovereign credit rating, let's just hope they can issue the debt before they get downgraded
i don't think they will get downgraded
the pound is well defended, even with a step as bold as this
and don't forget, the sheer force of this display may, and i stress may, keep them from needing to empty the chamber
besides, hanky is going to come in and magically turn their tier 3 garbage into tier 1 gold.
uk is moving like it means business.
no wonder they can't be bothered with iceland.
All politics aside, this is the type of action needed to restore the financial system (note I didn't say financial corporations, the financial system is what enabled the Dutch to overtake the Portugese in colonization), it is also the same thing that brought Britain from obscurity to world superpower
Holy macaroni, Nikkei down 9.4%!
Nice Post.
monta's ankle,
Defended well enough at a time when they might have to issue £250bn of debt? That rate has to go up enough to make it sell and they are not the only vendor with the US selling $850bn just down the block
Big, but not quite the "Swedish Model". With the uptake voluntary there's still opportunity for an egoistic management team to hold out and then blow up later at a higher taxpayer cost. But all the big players are already in, so that's good.
Obligatory model jokes to follow.
This is the credit collapse of bank and investment companies leveraged from 10:1 to 40:1, and no amounts of national reserves, taxpayer anticipation revenues, or national deposit guarantees can hold back the tide.
Upcoming debt moratorium rescue plan acronyms may derive from phrases such as the Debt Obligation Administration.
Population is probably not the best adjuster. Those are BIG banks.
this move, concerted, all in, with truly massive firepower, is how you fight this type of contagion.
if the US had announced TARP, along with its latest commercial paper foray, and a recapitalization plan, along with guaranteed intrbank lending, all at once, then maybe this credit and equity wipeout would have been blunted earlier
of course, i hate the thought of all this government intervention
but if your going to do it, go hard, its the only chance you have
and of course the flipside is, if it does not work
uh oh
no more bullets
The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company. The Government expects the take-up of the guarantee to be of the order of 250 bln stg, and will keep this under review alongside ongoing monitoring of capital positions and lending volumes.
They are choosing not to issue national debt, but a government backed corporation to provide the £250bn -- why would they do that? Is there a functional reason or is it just a political matter?
Vague as to effect on current equity holders.
After a fed-sponsored, worldwide, 60 year credit binge, it's not clear what the chances of recovery are.
they won't have to issue the 200bn pounds for the short term liquidity
it will be a loan after all
just don't look at the loan collateral. it might look just a little bit beat up around the edges. or dodgy as the brits might say.
Anoddamoose,
True they are some very aggressively structured big banks. But in the end it is the citizens that must provide the £250bn, crucial in the case of Iceland for example
ot vague at all as to current equity holders - they ride in the very back of the bus.
of course, the bus was on the verge of losing all of its wheels, so at least they are still going somewhere (whether they want to go where they are headed is another question).
If there is so much upside for the effing taxpayer, why don't we eliminate the IRS and the British equivalent, all personal income taxes, and just fund the government through nationalization of banks and other businesses? Hmmmm?
Sorry Ben, we've too long bred for beauty and sex appeal rather than brains. And boy was it fun.
EHP - US is only about 305M. Doesn't change the general scale - BIG. Makes Hank and Bennie look like wusses.
sex appeal correlates to brains, but it's subtle.
very big. makes hank and ben look like they were just pulling numbers out of thin air...
Europe looking rather red, including FTSE (15-20 min delayed at Yahoo!)
Major World Indices - Yahoo! Finance
Vague as to effect on current equity holders.
citizen (of the world )yogi | 10.08.08 - 3:27 am |
I have JUST the thing!
Read it yesterday, Effects of a £19-33bn recapitilzation of Barclays, RBS, Llloyds+HBOS.
Expect some dilutions of 27 - 38% if you assume those three needed £50bn (they reportedly declared new losses monday)
Well, that bounce lasted long.
FTSE off 2%+
God I hate being a buy-and-hold sucker.
Cheers,
prat
I thought Paris Hilton stunned everyone a couple of months ago with an enlightened financial outlook?
PeakVT,
The difference between the US and the UK might be that Gordon Brown will do everything possible to calm the situation so he can get re-elected as the cool controlled leader they know.
Whereas in the US Paulson is the guy who wants to get out ASAP and let the next guy deal with it
poor japan
they jump off the highest cliff yet and the news cycle moves them to page D7, along with a nice story about a florist who only uses organic flowers
Isn't it great what a bunch of deadbeat, overleveraged American homeowners can do to the global economy?
Thanks once more EHP. I'm sitting on a bunch of HSBC puts, courtesy of Reggie Middleton at boombustblog.com
Now what will zie Germans do? They have the same problems but on bigger leverage
Italy -- going to default
France -- will try to make it look like they are leaders amongst the chaos while the have the EU presidency, too late to organize much of a inter-country bailout
Eastern Europe -- apparently no one cares about eastern europe
Spain -- been very quiet
citizen (of the world )yogi writes:
sex appeal correlates to brains, but it's subtle.
Yogi, wonderful rejoinder. What time zone are you in? Just getting up or just about to turn in?
Sorry Ben...
i must admit, i thought the UK shock and awe would have an upward effect on the equities markets (banks i knew would take it on the chin, after all, this is forced dilution)
this will help the credit situation, but, the ECB/EMU needs to unify and act in a similar manner - which i see as very very unlikely
yogi,
I like HSBC. They've just been waiting until they could buy out some of their competitors. They were the most honest bank when it came to writing down mortgages, and they were among the first
well there goes my barclays dividend
it was fun while it lasted
held them for a long time, glad i cleared out 90% of my position last year at this time!
of course my loss on the remaining ten percent will wipe out whatever i made i'm quite sure...
Hey, is that a Howitzer in your trousers???
is it just me or are you numb to downside moves of less than 10% now
this 3-5% downside stuf in Europe can't get through to my brain anymore
besides, this is a slow geometric decent towards zero at this rate. still lots of time to suffer.
Re: "Subject to further discussion with eligible institutions, the proposal envisages the issue of senior unsecured debt instruments of varying terms of up to 36 months, in any of sterling, US dollars or Euros"
EHP - Sounds right on Brown, charitable on Paulson.
Looks like the capitulation/deleveraging has rotated to Europe.
Even CNBC Euro is pushing the TARP-makes-money line. Oh, well.
I'm out. Enjoy the ticker porn!
Re: Isn't it great what a bunch of deadbeat, overleveraged American homeowners can do to the global economy?
Yah, we have really made zee world a better place, for you, for me,..
YouTube - Put A Little Love In Your Heart (Unicef 1979) (ABBA+others)
ROTFLMAO!
Night owl in the city that never sleeps.
Quit my day job 'cause Bear Stearns got me thinking, and trading.
CalculatedRisk / CR,
You can update the mainpage post to include that RBS execs are being turfed as a part of the bailout deal
I can't believe there won't be (haven't already been?) fundamental unintended consequences from banks and businesses realizing their bread is buttered by bureaucrats rather than customers.
For example, who will be easier to cheat and steal from?
Sorry Ben, maybe next time we'll keep it.
RBOS, Lloyds very happy
Barclays very sad
what am i missing?
Bloody hell:
The 30-share index BSE Sensex touched an all time low of 10,940.85 in early trading. All segments suffered huge losses. This is the benchmarks lowest since early August 2006.
Consumer Durables, which suffered the most, fell over 13% because of heavy selling in key stocks in that space
bueller?
HM Government has 54 billion pounds ($95 billion) of debt to refinance by April, triple the amount of the year-ago period.
I'm not the only one questioning the long term cost of a debt-surge
must get sleep
thanks all
i'll look tomorrow to see why HBOS and Lloyds like the bailout (UK styleeee)
Barclays hates it
my guess is the first two were likely insolvent without it, Barclays diluted with it
good night
don't know this market as well as i should i guess
what I keep messing up
That figure was for the big6 UK banks.
Lacker caught like deer in headlights?
It looks pretty likely that this is going to be declared a recession, Lacker said. So far this has been a mild slowdown, but some of the things I was apprehensive about earlier in the year are weakening, Lacker said, citing business investment, nonresidential construction and consumer spending.
U.K. FTSE 100 index down 7.5% at 4,258.95
i do not want to stay up all night!!
kicked myself for getting cold and selling gold + silver two weeks ago, but kept yen, ditched francs and ended up in lots of US cash - that strategy is good for at least another 15 minutes !!!!!
Good times.....( I'm scared)
Chris Hossian of ODL Securities, says: "Whilst the first move is not always the right move, the initial reaction of the market to the rescue package has been lukewarm. Prior to the open we were looking at a 190 point move to the downside, but we are currently lower by circa 100.
fromNZliveinUS,
What kind of information influences your Forex decisions, and what kind of success have you had?
"lukewarm"
lol!
Check out these charts:
Jesse's Café Américain
Thinking and trading sounds like a damn fine life. That may be the best distillation I've ever heard. I've been casting about for a while, wondering what I wanted to do when I grew up. Definitely going to give that some thought.
Sorry Ben...
As for the bailout in the UK... looks like they are going to make it happen.
YouTube - RBS - Heimlich Maneuver
simple
Note, Im less worried about my USD Im trying to maximise NZD in case i have to go back - im a developer in phoenix USA so theres a high chance!
All this makes property development feel like playing with LEGO !
Sorry for jumping in, this may already have been said:
Bloomberg has DOW futures down 370.
Has that ever happened before?
EVP: all cash prior to Jan this year, so i haven;t chosen a statistical starting point to make numbers look better or worse.
Speaking form the UK as a financial economist, this seems to be an excellent package and combined with an interest cut later, the best we can expect. they have addressed all the threats specific to the UK financial sector.
The holistic approach with clever checks and balances needs to be copied in principle by other smaller countries who are still in reaction mode..
Has that ever happened before?
Yes when some rogue trader caused a 65B loss. The feds cut before the market opened.
s_puttnick -
neg500 before big fed rate cut when euro trader went mad a few months ago
Has that ever happened before?
s_puttnick | 10.08.08 - 4:23 am | #
I'm beyond asking that question. First of all I'm young enough that I hardly ever know without looking it up. Second of all assuming there would never be a 20% subprime foreclosure rate because it had never happened before is what got us into this mess
As someone said before, I don't even do a double-take for anything less than a 10% decline
I remember that story, but didn't know what futures were at that time. It's been a crash course.
Wonder if a rate cut would even do anything at this point...
EvilHenryPaulson,
I keep thinking that same thing when I hear people say there should be a big rally soon because "that always happens after big declines".
Sure. Sure it does.
Costco sales and earnings are only up 10% YoY and analysts are grumpy about it
Costco has the best ready marinated, heat up 20min NZ lamb shanks !! Tastes like homemade over 3hr slow cooking on stovetop back home
Gordon Brown is Bernanke.
Let's see what happens.
This month I have vowed to devote all my energy to effecting grassroots political change in the House, somehow. I guess I'll look for close races where the opponent is against the bailout and incumbent voted for it. I still have faith in the system. Just started Walter Karp's "Politics of War".(Recommended on this blog) The situation he describes in 1890 is fascinating: people became disillusioned with both entrenched parties, who had an interest in keeping distribution of wealth conflicts from surfacing. So they jumped into the Spanish-American War.
After reading "Trillion Dollar Meltdown" and "Empire of Debt", trading has been absurdly lucrative, but bittersweet.
Gordon Brown -- "These problems started in the United States of America."
Putting the special in "special relationship"...
s_puttnick, Well with Mercury in retrograde and the constellation of Scorpio coming into the celestial window I would say we are near to a bear mark rally.
There is a minor confluence of factors to allow this, because there has to be at least one rally of some thing before year end, just the nature of people working on commissions. I think shorts coming back in will bring options volume up to close some spreads and slow the market velocity. Plus so much fresh money (thanks governments of the world) will allow some kind of bubble to inflate while the in-progress decline will stand on the sidelines. Heck some people probably even think housing has, or is close to, the bottom.
That will encourage everyone who still doesn't understand the system to "buy while things are cheap". I think after the new year and year-end lending crunch, we'll see the selling continue in strength as people are forced to question projected earnings.
EH: oh yeah had 100k in Yuan via everbank. made about 5k in 5 mths then read black swan book "Foolish Randomness" or something like that. Got scared that chinese could do the impossible and devalue, did nothing then russia stopped trading and lots of govs starting changing rules and chinese started talking about rate cuts. Bailed straight away - that may prove to be the best decision i have ever made.
Anonymous writes:
Gordon Brown -- "These problems started in the United States of America."
Putting the special in "special relationship"...
Sign of a good politician.
They can't put curbs in on futures or pre-market, can they?
UK: Taking legal action to recover deposits from ICELAND
This is nuts!
Well Russia sure welcomes this short sightedness.
citizen (of the world )yogi writes:
They can't put curbs in on futures or pre-market, can they?
They can do anything they want and even intervention or fix rates if things get real bad.
All of Europe is being crushed. ALL. CRUSHED. Big bad Mr. Stock Market is nothing - NOTHING! - compared to a banking system gone wrong. NOTHING! /cramer
And now I am really go to bed.
PS - Brown slashing TARP left and right. Hilarious.
This is 100% social now, the stock markets are meaningless for everyone. This will be interesting, because as disruptive as this seems to be, I think the average Joe was not "directly" in the market. As we all know, there has been a huge divide among classes that has resulted in rich and poor with a war on the middle class, thus, this social event will impact the wealthy class and burn up excess play money. A recession will be the tight belt caused by rich people spending a lot less, while the average Joe just hopes to keep a job at wal-mart. If capital can be kept in the markets, business will hold together and not crash and this may end up being a new type of isolated economic event that will impact just a narrow group of people that had too much loot.
Gordon Brown -- "These problems started in the United States of America."
Putting the special in "special relationship"...
Anonymous | 10.08.08 - 4:33 am
Who cares what some TV chef has to say about it?
To be fair America was the primary beneficiary and breeding ground for the housing boom. Securitization tricks US investment banks learned in the 80s. With that precondition, it diffused throughout the world and delayed what would have been a 2003 recession. If people are upset that their own country's stocks are losing money, well that's because they were benefitting from the same things they are upset about.
If they had nothing ventured, nothing would be lost.
But this is just the opening act for the US switching from a net borrower to a net saver.
P.S.
I was just kidding about the PM's name
I suppose, but I meant under the current rules.
As far as modern crashes, you have to go back to the Arab oil embargo to see this type of decline, but ... this is different, oui?
citizen (of the world )yogi writes:
I suppose, but I meant under the current rules.
I guess you are right then. Speaking of which, when is the short selling ban rule scheduled to be lifted?
Anon I hope so, and that was my impression of the robber barons of the last century. The next "Rescue" will be a huge transfer to the bottom 95%, either through taxes or outright New New Deal printing.
EvilHenryPaulson,
Re: New Bubble
Where is money going to go to create a new bubble? I'm going to be thinking about that for the next couple of days.
Retail performance will boggle the mind on the negative side in the next three months.
Can't wait to see what the must-have toy will be this year.
Paris down 8%
S&P 500 crossing 1000 won't be done in real-time. Set to open below that mark
I think the VIX or VXN could hit 60 today. Now not only is there a massive amount of intervention, it is asymmetrical intervention AND we are in earnings season.
Re: New Bubble
GOLD!
s_puttnick ,
I'm just suggesting a minor diversionary bubble. Something like, but much smaller than, the short financial:long commodities trade that bought every trader's baby a new pair of shoes earlier this year.
As far as modern crashes, you have to go back to the Arab oil embargo to see this type of decline, but ... this is different, oui?
Anonymous | 10.08.08 - 4:42 am | #
all i remember is the odd-even day system for buying gas and the long lines at the gas station.
The Great Swallowing expands to europe now, as one by one their nations fall.
Oh When shall the Great Swallower be appeased? The minions tremble and fear..
I had always been looking at Dow 8500, but wow, wow, T/A is out the window -- like wow, are we going to 6K?
I wonder if that would be economically possible to go to 6000, what would that mean?
Paris down 8%
Anonymous | 10.08.08 - 4:45 am | #
The Panzers of Peril see the Eiffel Tower on the Western Horizon ... Will Paris surrender willingly?
Anonymous writes:
I wonder if that would be economically possible to go to 6000, what would that mean?
Means there is tremendous upside.
If so much is social now, how does lowering interest rates attract capital? Some how I am missing a few steps.
Sorry Ben...
Fuld Punch writes:
Paris down 8%
Anonymous | 10.08.08 - 4:45 am | #
The Panzers of Peril see the Eiffel Tower on the Western Horizon ... Will Paris surrender willingly?
You know what they say about a world war.
It isn't one till France surrenders.
screw france, terroists.
Dow 6000K implies not banks going under, but countries running out of cash!
"mururoa"
"rainbow warrior"
google it.
I was in NYC for the market crashes in '87, post 9/11. Real estate prices fell, but the city services and the overall standard of living gradually improved. This one looks worse, but for every bankrupt REIT there are overjoyed tenants who can suddenly afford rent. We'll find some way to employ people I hope.
BROWN says : We are taking radical action across the system.
Sounds like shock and awe to me.
Follow the money, see who benefits ultimately.
I wonder if that would be economically possible to go to 6000, what would that mean?
Anonymous | 10.08.08 - 4:50 am |
Yes it is possible. More or less, we will have to adjust to an America which does not grow its total debt to GDP from 150% in 1980 to 350% in 2008. Without that easy money, companies like GE just don't work.
So just exponentially extrapolate from there. We will also see a comeback for companies who issue worthwhile dividends because that boosts their share price/lowers their borrowing cost compared to banks. I may be a bit over the top considering we have global computer networks to facilitate securitization and trading of debt/equity, but not by much.
Can't wait to see what the must-have toy will be this year.
Piggy banks?
You want it, you save for it.
Sorry Ben...
Has anyone noticed this yet? The Mexican peso has suddenly dramatically weakened against the dollar. Graph this going back to 1993 and the spike in 2008 is similar to the 1994-1995 crisis.
Mexican Pesos to one U.S. Dollar
The Gold story is real. I anticipate that the dollar will trade down to .52 in short order. The disconnect between paper "manipulated" futures and the physical market is severe.
A collapse of Comex is very likely now. Moreover, a collapse of the Euro is already foreseen by the EU.
Buy any physical bullion you can find. Gold is trading north of $100 over spot and Silver is above $8 over spot.
This is very serious folks.
citizen (of the world )yogi :
Recessions are a natural occurrence of our socio economic system, however if put off long enough may cause a depression which is not altogether any good.
MW writes:
The Gold story is real. I anticipate that the dollar will trade down to .52 in short order. The disconnect between paper "manipulated" futures and the physical market is severe.
Why .52 or are you quoting Jim Sinclair blindly here?
A stopped clock is always right 2 times a day.
when all is said and done, who does a perp walk?
Dick Fuld
George Bush
Kerry Killenger
Dick Cheney
Stan(Tan Man)Mozillo
Any other ideas?
The speed of the market crash globally is the main thing, the week to week losses are connected to a social disruption that connects to a lack of confidence and this goes back to Paulson and Bernanke fucking around with Bear Stearns, who should have failed, and the market should have not been supported by government fraud -- now they have no way to rebuild stability! Bear might have caused a Trillion problem, but this mess and global lack of confidence will cost 20 times that!
I see more of a supercycle where people forgot how irrational speculation can get in seemingly boon times. But we're still nowhere close to reaping the full dividends of the digital revolution, and sun and wind power will eat a ton of inflation.
MW
I don't even know what the return of the investment on this one coin
US futures down 3%... tomorrow's going to be another massive bloodbath it looks.
Ready for theories?
keep it clea
Anonymous writes:
US futures down 3%... tomorrow's going to be another massive bloodbath it looks.
It is down off it's lows, and may even be positive if some rate cuts are announced.
Reday for theories!
How many rule changes will there be before lunch?
Sorry Ben...
If US markets tank, looking at currency interventions next.
China thinking of cutting rates now too.
I've been on all day talking zero coupon bonds and the need to push cash into long term securities that are linked to real assets like mortgages that are not in synthetic pools. Wall street is dead IMHO and so is the traditional housing mkt. This is systemic and global and there will no recovery until the financial system is re-invented, which means stopping derivatives, shutting down wall street and going back yo old fashioned local economies that use common sense. The main problem with all the bailouts is to supercharge bankers and bail out fraud and unless I'm fucking wrong, people are voting with mutual funds and telling wall street to fuck off and die!
The Crash was __________.
a. Planned
b. Black Swans
c. Bad Luck
d. Ineptitude
e. All Of The Above
EvilHenryPaulson writes:
MW
I don't even know what the return of the investment on this one coin
This larger coin form the Canadian Mint satisfies the large investor, they want bars or larger units to be placed in private vaults, they can afford to move several million into bullion at once. I suspect the coin will sell out at its first minting.
This is very serious, there already talk of two new gold backed currencies to replace the USD as the reserve currency.
This may happen in months not years.
MW
These people see the bottom at 7200.
currency exchange rules (i.e. not allowing you to take USD out of the country) and my brokerage failing are the black swans i am most worried about
US Banks
BAC: Pre-Market: 21.01 -2.76 (-11.61%) - Oct 8, 4:18AM EDT
Pre-Market: 14.69 -0.46 (-3.04%) - Oct 8, 4:16AM EDT
Pre-Market: 30.00 -0.60 (-1.96%) - Oct 8, 4:17AM EDT
Pre-Market: 5.01 -0.24 (-4.57%) - Oct 8, 4:16AM EDT
JPM: After Hours: 39.41 +0.09 (0.23%) - Oct 7, 7:56PM EDT
USB After Hours: 31.38 -0.42 (-1.32%) - Oct 7, 7:48PM EDT
BBT After Hours: 34.01 +0.12 (0.35%) - Oct 7, 7:43PM EDT
the moral of the story is people won't bother trading you in the pre-market if you haven't screwed things up recently. Anything above the -3% Dow/Nas/S&P will be a victory today.
re: Dow, Boeing hasn't even been hit for the fact its workers are out on strike and it's looking bad because Boeing won't cede ground on outsourcing/contracting
NZD has just gone timewarp. goodnight.
Tried to put money INTO two BofA atms tonight and they were 'down' with instructions to drive to another BofA atm which was 'down' with instructions to drive to another...etc.
Am thinking US markets will be better than most people expect.
Don't expect a crash.
The surge in the dollar is nothing more than worldwide housekeeping. The BIS said to the US bring your toxic waste home, we don't want it exploding in the EU.
Well it can't happen fast enough, debt are being settled in USD which fives the appearance of a demand for dollars. IT I snot a demand, but the necessary effect of settling dollar denominated debt .
After the great delvering is complete, the dollar will do a swan dive off a cliff. Below .60 is possible in a few weeks.
the guest writes:
"Tried to put money INTO two BofA atms tonight and they were 'down' with instructions to drive to another BofA atm which was 'down' with instructions to drive to another...etc."
Sure you were trying to make a deposit! Hookers or coke?
Overdrafted for gambling...
Gambling on housing.
We will be saying TGIF or WTFF?
The UK rescue is exactly what should be done in my opinion. Let's everyone move forward ASAP, and let them pay you back later.
However, it will not be taken seriously in the US. Why? The headline "Darling Unveils Bank Rescue", that's so cute ^_^
Just a fast glance, but T/A is breaking down global and every market is headed for 15 to 20 year lows all at the same time in a matter of less than a year, so go smoke that in your pipe. Every model is broken and global confidence destroyed!
Anonymous, It is my experience those who rely on T/A never understand the reasons behind the behaviour they seek to measure
EvilHenryPaulson writes:
The UK rescue is exactly what should be done in my opinion. Let's everyone move forward ASAP, and let them pay you back later.
Well, the markets are reacting positively to it.
FT Alphaville on the ball:
Capital injection would be at a 50 per cent discount to the share price, implying government ownership of 46 per cent at Barclays, 56 per cent in Lloyds/HBOS and 62 per cent in RBS, according to JPM. with charts from JPM, CR this is material worthy of a follow up blog post.
Also in the news, HSBC is politely declining any money from the UK Treasury (I told you they had their act together)
Most people misunderstand the price of crude.
It is way too cheap and can only go higher, recession or no.
The invisible hand demands less paper, more value.
`Demand destruction is prevalent in developed countries with consumption falling at about 3 to 4 percent,'' said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. ``The credit crunch is forcing traders to de-leverage their positions as they have no access to credit.'
News Flash from Bloomberg:
'Credit concerns are increasing'.
More FT copy+paste
Its going all the way through 4,000 at this rate.
There is one riser in the FTSE 100. HBOS. Up 16 per cent, but trade is volatile.
The rest of the banking sector is being hammered:
Barclays down 17%
RBS down 12%
Lloyds down 11%
And in the rest of the world:
DAX down 8%
CAC-40 down 4.75%
FTSE Eurofirst down 7.44%
Russia has again suspended all trading. In Indonesia its worse: shares suspended indefinitely
OhBoy, screw the markets for a minute. Fix the system and all else will follow. Try and fix the market, and both the system + market will screw you twice as hard in the end
For all you still up...
Does scare the sh*t out of anyone besides me?
Market Observation - Tim W. Wood 12.04.2009
Any thoughts?
-wtf
``The credit crunch is forcing traders to de-leverage their positions as they have no access to credit.''
This seems logical, and when the hedgies have stopped deleveraging, am looking for commodities to rise up to some fundamental valuation.
If all this liquidity doesn't produce something useful fast, which it can't, it must be spent on oil and food, no?
yogi, you still here? I hope you removed that HSBC put like I have suggested as recently as a few hours ago
Go to gold now.................
Can't trade it (NYSE) for a fe more hours. I have December at 75, and my screen shown 75.03
New research from TowerGroup finds that two proposed accounting amendments, coupled with severe downward pressure from the ongoing credit crisis, would significantly alter the ways banks and other lenders account for off-balance-sheet assets. The changes could affect trillions of dollars in consumer loans and potentially cut off sources of consumer borrowing at a time of shrinking liquidity.
Proposed rules from the Financial Accounting Standards Board (FASB) governing asset securitizations FAS 140 and FIN 46(R) could have a significant and negative impact on credit markets an impact that could potentially cost banks over $60 billion (USD) in annual earnings, according to TowerGroup research.
Securitization of assets is an essential capital funding source for banks. In fact, the Federal Deposit Insurance Corporation (FDIC) has reported that US credit card issuers rely on asset-backed securities (ABS) financing to provide more than 50 percent of their capital needs. The proposed changes, if implemented, could severely curtail the practice of packaging assets as securities and selling them as securities, freeing up capital and smoothing further investment.
If the proposed amendments go into effect, these securities could be placed back onto lenders books and thus require significant increases in loan loss reserves in turn requiring billions in capital. While the proposed FASB amendments are intended to restore investor confidence in the mortgage market, TowerGroup believes the rules will have an unintended consequence of negatively impacting credit card profitability. This will, in turn, adversely impact consumers in two ways: reducing the amount of available credit; and increasing the cost of credit to consumers. TowerGroup expects the reduction in the availability of credit will have a material and negative impact on the US economy, already teetering on the edge of recession.
adr
OhBoy, screw the markets for a minute. Fix the system and all else will follow. Try and fix the market, and both the system + market will screw you twice as hard in the end
This is true, but we're not making public policy.
Besides the system is probably a little more complex to fix without all agreeing on the same collective rules, europe can't even cooperate on what they want to do collectively.
UK in one direction, spain off to the sunset, france will never allow a national bank to fail,.. etc.
Short sales reinstated tomorrow. This going to favor a big drop or a big rally?
I think more people now understand shorting only affects liquidity, and positive or negative rumors are bs.
So why are US futures not down more?
mykillk writes:
Short sales reinstated tomorrow. This going to favor a big drop or a big rally?
My guess is both.
Brown and Darling have put together a very decent plan ...
I would have only two qualms ...
This Plan is leagues ahead of the Bush Plan. Indeed Brown laid the blame for the entire debacle at Bush's feet.
The British Plan including the improvements I've outlined would be a start for our banking system. What has been happening is that Paulson has been playing favorites while stalling costing we tax payers hundreds of billions if not trillions in taxes and economic activity. Paulson should be arrested, tried and hung.
Zombie Beach writes:
So why are US futures not down more?
Well because things are not as bad as it seems?
Fear Mongering writes:
"TowerGroup believes the rules will have an unintended consequence of negatively impacting credit card profitability. This will, in turn, adversely impact consumers in two ways: reducing the amount of available credit; and increasing the cost of credit to consumers."
Hmmm,sounds like a good idea, no? Nothing like 30 credit card offers a week in the mail to turn any saving conscious individual into a living beyond his means fool.
@wtf
The global fiat system dies from hyperinflation...this is worse than the deflationista Crash. All debt would be wiped out from hyperinflation. This would not be good for debt holders but they won't get their money in a Depression either. So if this was planned or allowed to Crash, would hyper-inflation be wildcard or the Endgame planned. If it was planned. We know this was allowed.
Either way this goes or something down the middle, a lot of debt won't get repaid.
So why are US futures not down more?
A 100 basis-point cut being priced in?
Hsbc now at 74. Why is news good? I read they have April debt problem.
Wow, things are busy on here. I had to step away for one minute.
re: Gold, There is a group who are short oil and long gold out there. Don't know who yet, and I can only speculate on their reasoning but the correlation is too high to be coincidental
This Plan is leagues ahead of the Bush Plan. Indeed Brown laid the blame for the entire debacle at Bush's feet.
Agree with the first, the second leaves much to be desired, if UK banks had not participated as much as it did, it would not be in this pain now.
There are some countries with little exposure to this contrary to all the global moniker it has received.
I keep hearing slowdown will destroy demand for oil, but I don't buy it.
So why are US futures not down more?
could be several reasons ...
oversold , rate cut expectations, a decent British Plan ...
or they may just be setting the shorts up for a big PPT inspired rally.
As we mentioned yesterday, the large triangle pattern in the Weekly Chart forecasts a target of 8,400. We are now a mere 1,000 points from that target after reaching new lows today. This target may very well be hit some time soon. At this point, every rally should be sold until we begin to see a bottom form. Continued overall selling pressure is likely to occur below 10,400, but near-term strength could be seen back toward 9,800.
yogi,
HSBC has cash on hand and were honest when they wrote their stuff down accurately and early. That kind of reputation is worth more than they would need to raise even if April 2009 spreads are still high (heck they could make use of a little £200bn made available today)
I warned you HSBC was a champ
citizen (of the world )yogi writes:
I keep hearing slowdown will destroy demand for oil, but I don't buy it.
I agree with you 100%, as for price destruction am thinking this will be as low as it gets or about there as well.
Barclays, RBS in Debt Double Whammy as Rates Increase (Update4) - Bloomberg.com
I warned you HSBC was a champ
Down about 5% if am not mistaken. No one is spared.
Sorry yogi, I hadn't even looked at HSBC's ticker.
I do think that either I, or the market misunderstand the bank. They have fewer loans than deposits so they can take advantage of record yields. They seem to have handled the problem better than other British banks. They are expected to acquire some other bank(s) before this is all over
I thought being able to decline government capital would have not taken their stock down like it has its peers
we are getting closer and closer to outright bank nationalization
How can you tell the difference?
Is HSBC single? She sounds hot!
Still if you look at the past year, HSBC is down 8.3%. The other big British banks are down 60%
Maybe the market is disappointed that HSBC won't be getting anything directly out of the UK bailout
OhBoy
What you need to understand is elasticity ...
Oil is very inelastic, that is the correlation between demand and price are almost constant.
With the destruction of demand price tumbles. Should demand increase the price will skyrocket.
It takes years to develop supply and their is no easy substitution for oil. Once supply is monetized recoup of investment demands going to market and staying in the market.
http://boombustblog.com/
This blogger has done extensive analysis of hsbc, and has been very prescient. Ignore the spelling, his number crunching is superb.
@the guest
Agree on the hyperinflation scenario being bad but wondering the likelihood.
The author definitely likes dramatics...
"While the talk in most circles has been about little more then deflation in recent days, if the credit market contagion goes airborne and infects the currency markets, then the outcome could rapidly reach an inflection point in which it could pivot on a dime, and morph into an inflationary nightmare virtually overnight."
-wtf
EvilHenryPaulson
and HSBC shares won't be diluted like the other banks.
We're saying demand destruction will not keep pace with dollar printing.
We're saying demand destruction will not keep pace with dollar printing.
citizen (of the world )yogi
huh?
EvilHank
The idea of the US following the UK is starting to be taken seriously (let's hope). An article in today's NYT suggests similar idea and says TARP is authorized to do so if you read legislation.
Breakingviews | Tarp
mmckinl writes:
OhBoy
What you need to understand is elasticity ...
Merely stating that the price movements are fund based. It can and will overshoot.
When demand is up, the price can still be low if the unwinding has not been completed, what you'll have is shortages though. The price is cheap but there is no oil.
Besides i see demand destruction for oil a myth, it is in high demand only that the prices fluctuate wildly in these times of deleveraging and reorganizing.
citizen (of the world )yogi :
Reggie is the undiscovered Meredith Whitney.
We will inflate out of as much of 10 trillion debt as we can, which can only send oil flying.
Reggie has made me a millionaire in 6 months. No kidding.
citizen (of the world )yogi writes:
We will inflate out of as much of 10 trillion debt as we can, which can only send oil flying.
That looks like a plausible scenario too. Judging by Ben's background no one can disprove this offhand.
The price is cheap but there is no oil.
Besides i see demand destruction for oil a myth, it is in high demand only that the prices fluctuate wildly in these times of deleveraging and reorganizing.
OhBoy
~~~~~~~~~
huh ?
Ben will be forced politically. He has no real power.
huh ?
Look east and tell me there has been massive demand destruction for oil.
China's dollars will buy whatever they need, and a lot of what they want.
Check out the South Korean Won to the US Dollar.
It is absolutely out of control. At 1390 KRW/USD.
During the Asian financial crisis (1997 'flu'), it went from 900 to 1630 overnight, and was back down below 1400 within a couple months for year end 1997.
USD is also JUMPED against a few western countries, incl. EUR, CAD, AUD (Dollar Index
), while it dropped against Swiss Franc, Japanese Yen, and British Pound (I guess the markets do like the bailout). Some of those leaps are pulling back now, but this is getting out of hand
Jimmy Carter gets the last laugh.
citizen (of the world )yogi writes:
China's dollars will buy whatever they need, and a lot of what they want.
Hence inflation makes sense, to decrease in value what is actually owed.
Of course, and this time finally getting off oil will make much more sense to Americans, even if means high speed trains.
Some of those leaps are pulling back now, but this is getting out of hand
I expect to see currency interventions and curbs to be enforced soon.
In these conditions, no business can survive much less plan for the future.
OhBoy,
That is with South Korea publicly declaring it was going to intervene. It has been selling some of its reserves, of which they had plenty at one time
How does currency intervention play out?
That is with South Korea publicly declaring it was going to intervene. It has been selling some of its reserves, of which they had plenty at one time
They may have to peg or it'll be 97 there all over again.
The gap down in the futures marks the end of this decline period. Exhaustion gap - exactly what I wanted and I'll be buying it with both hands.
Exhaustion gap - exactly what I wanted and I'll be buying it with both hands.
I think you might be right but holy shit, mousie; I respect you a lot but I sure hope you're just planning to resell to the greater fool.
How does currency intervention play out?
citizen (of the world )yogi | 10.08.08 - 6:08 am |
Ask Iceland I suppose.
also, re: boombustblog/reggie. Is he really worth reading, or were you exaggerating your returns?
I just ask about the specific HSBC call. Seems like picking the one bank that hasn't declined as much to short is a lazy methodology, and earnings declines ignores gained market share/power (the other big 5 British banks are burdened with ~30% of their equity paying a usurious dividend). Meanwhile I've been saying RBS was on a path straight for insolvency since early September. I assume he only advises a handful of positions at a time, so why not target RBS? Is this recommendation indicative of his track record (is he just like the analyst who picked a random tech stock long in 1999?)
The gap down in the futures marks the end of this decline period. Exhaustion gap - exactly what I wanted and I'll be buying it with both hands.
Persecuted Comrade Anonymouse | Homepage | 10.08.08 - 6:10 am |
Care to instruct me on the terminology?
ING is buying some/all of Icelandic seized bank deposits
Everyone's favorite mask for this Hallowe'en
He did a lot of analysis on GGP, a mall REIT, which has gone from 40 to 4. He called Bear Stearns, which was how I found the blog. He called Lehman. He called Morgan Stanley the "riskiest bank on the Street", which has been borne out. He called Bank of America, Wells Fargo (the only real holdout), Goldman, American Express, and other banks, mainly with a thorough examination of their loan portfolios, a prediction of the rise in borrowing costs, and general macroeconomic deterioration. I read on his blog first that it was an insolvency, not a liquidity crisis, and that the main cause was securitization, not subprime lending. On HSBC, I can't remember the details now, but his record has been so good I don't mind. Don't be fooled by the amateurish style.
Believe me I'm skeptical of all analysts.
Ok Kitco shows the Australian Dollar down 9%, is kitco reliable, should i be scared.?
The Global Clusterfuck continues. Since the taxpayers are going to own their debt pretty soon, we should just net out global currency imbalances and wipe the slate clean.
Gotta run to another 12 hour shift of fun and adventure kids. Sorry I haven't posted more from MS&T08. I'll be back tonight to see if the UK dropping a nuke on Godzilla did much.
thanks for the reply yogi, I thought everyone was gone because haloscan wasn't updating. congrats on the credit crisis making you a millionaire
rqmedes, Forex is out of control, don't know why yet
Sure, sue. The invisible hand demands a single benchmark, and transparency.
More proud of my squash coaching, don't worry.
CNBC morning squak box anchors are stunned.
They actually discussed fleeing the US to Canada and spent about a minute just contemplating it
Bloomberg reporter says HSBC says they won't participate in bailout, but I read that all they said was that they had no plan to.
EvilHenryPaulson writes:
"CNBC morning squak box anchors are stunned.
They actually discussed fleeing the US to Canada and spent about a minute just contemplating it"
good riddance...careful the door.
Ok Kitco shows the Australian Dollar down 9%, is kitco reliable, should i be scared.?
rqmedes | 10.08.08 - 6:29 am
Checked Bloomberg and INO and yes, AUD is tanking... but whether you should be scared depends on your position.
INO Futures and Commodities - Currencies - AUSTRALIAN $ (S.B.S) Dec 2009 (E) (CME:6A.Z09.E) Price Chart and Quote
"Short selling reinstated tomorrow. Does this favor a further downturn or a major rally?"
Each short sale induces downward pressure immediately, and upward pressure at some future time.
The sudden parallel introduction of short sales should be a huge downer.
Look at the 20-45% pops upward that occurred when the shorts were originally removed. Think in reverse.
After that, volatility Hell.
Still no uptick rule???
EvilHenryPaulson writes:
CNBC morning squak box anchors are stunned.
They actually discussed fleeing the US to Canada and spent about a minute just contemplating it
EvilHenryPaulson | 10.08.08 - 6:39 am | #
Santelli is the only one with sense in the whole lot.....
Santelli is the only one with sense in the whole lot.....
Truly. However, I wouldn't wish that lot on Canada. Should we call some Canadians and warn 'em?
Provide liquidity but why are they holding onto this useless stuff?
Central banks all but stop lending gold | Gold Anti-Trust Action Committee
my Location is Australia is that what you meant by position or financial position?
Persecuted Comrade Anonymouse writes:
The gap down in the futures marks the end of this decline period. Exhaustion gap - exactly what I wanted and I'll be buying it with both hands."
... indeed looks OK scenario unfolding according to hypothesis yesterday, futes did reach the 200% Fib. extension 960 SPX
(futes did a small 50% final extension after 12am ending with cute little triangle suggesting retrace from the low 960s SPX up to above 1000 soon)
if so we will open about flat
retest 960 during the day?
Bloomberg going populist. Carrying AIG vacation story. Careers about to be terminated.
Feds cut .5
yeah aussie tanked .. crazy. from $1 to 65 cents in the space of a few months?
but don't worry, it (australia) is still here and everyone still seems quite relaxed. Local shopping mall (biggest in australia) was packed with consumers. Took out 5k from the bank they didn't blink.
Wow, global coordinated rate cut.
Can I haz free pony?
save that last bullet for you know who, Ben.
Hey guys,
Just want to let you know my buddy Bernanke is cutting rates 50 bp in an unscheduled rate cut as I predicted 3 weeks ago. They are joined, as predicted, by other central banks (Canada, England, ECB, others I guess)
I called the blad guy (Steve Leismann?) on CNBC and ordered him to report it. That was a few minutes ago, futures should start heading up
The PPT always waits and never sleeps . . .
Anonymous writes:
yeah aussie tanked .. crazy. from $1 to 65 cents in the space of a few months?
Actually i am shitting my self because its only been 3 weeks
Fed just cut interest rate to 1.5% Keep pushing that string, Be
rate cut...
ff at 1.5... what is the fed paying on reserves?
well yeah, you're right the fall was fast but it turned down longer than 3 weeks ago.
but I think it is hot money. If things get worse australian banking system will be one of the last standing.. and if not, money will rush back in..
anyway who needs to holiday in the USA? too many people with guns and a bad attitude right about now.
ECB and the Bank of England cut too
Nikkei down 9.38% . What are we in for today ?
Global 1/2 rate cute. US and Europe cut. BOJ does not cut rates. Pavlovian markets are rallying 2-3%.
I bet the rally fades by noon.
Nikkei down 9.38% . What are we in for today ?
Well, the markets got another fix today, but they need MORE, MORE, MORE!
I wouldn't trust this rally. Once the crack whores sober up, reality should reassert itself.
Leverage bad...easy money bad... we need to get back to real lending...
Hey, let's cut rates!
How many bullets left in that Bazooka?
Maybe sell the rest of my longs and but SDS or QID during the "rally"
"Comrade Baron Von Helmut III 1 writes:
Global 1/2 rate cute. US and Europe cut. BOJ does not cut rates. Pavlovian markets are rallying 2-3%.
I bet the rally fades by noon.
Comrade Baron Von Helmut "
Noon? How about nine.
Markets run on superstition. There is no rational reason a coordinated rate cut should be more effective. It's what Krugman calls "the slap in the face" theory, just an attempt to wake up the market. Problem is, the market is comatose.
Fed pays effective FF -0.25 on reserves
-0.75 on excess reserves
No, the market is on to their game.
LOL, even the CNBC shills are talking about how this rate cut isn't going to work.
holy crapola
Sweden + Swiss were also in on the rate cut
Remember when we used to talk about the real interest rate? The Fed will be -3% by the end of Oct
Japan wanted in. Ran out of bullets.
central banks need to buy glod to reset the game.
gold went down 5 bucks on the cut .. then bounced.
my 30 year treasury made 5% over the last week. Who said bonds were boring. This move should be good for a bit more..
I'm not sure, but I think when the SEC extended the short sale ban to no later than last night, that this would be the day of the rate cut. In any event, it pays to read the federal reserve data and not the FF futures which lagged the effective overnight rate the whole way dow
Ben has three bullets left. Of course, if he wanted to be really innovative, negative interest rates could be increased infinitely
3 bullets? how?
FRB press release
Some easing of global monetary conditions is therefore warranted. Accordingly, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank are today announcing reductions in policy interest rates. The Bank of Japan expresses its strong support of these policy actions.
(Japan wishes us all luck with our lost decade.)
Dow futures spiked 500 points. Still up 250 from before the announcement.
Three .5 caliber bullets and he's left with a 0% rate.
JPM Pre-Market: 42.41 +3.09 (7.86%) - Oct 8, 7:04AM EDT
BAC Pre-Market: 22.50 -1.74 (-7.18%) - Oct 8, 7:05AM EDT
C Pre-Market: 15.50 +0.35 (2.31%) - Oct 8, 7:04AM EDT
WFC Pre-Market: 30.00 -0.60 (-1.96%) - Oct 8, 7:00AM EDT
WB Pre-Market: 5.20 -0.05 (-0.95%) - Oct 8, 7:00AM EDT
GS Pre-Market: 118.00 +3.00 (2.61%) - Oct 8, 7:05AM EDT
MS Pre-Market: 19.25 +1.60 (9.07%) - Oct 8, 7:05AM EDT
Global rate cut pf 1/2 point.
VIx 53.68
TED 3.81
right................
FTSE back into negative territory
How will this additional fund get to juice up the economy when the intermediary conduits decide to keep the money themselves. Nationalize the insolvent banks, recapitalize the solvent ones, ..., only then rate cuts will have their meaningful impacts. A temporary suspension of the capitalistic financial system is in order to save the global economies from falling into a depression.
Bring on the negative interest rates already. Your gonna need to PAY me to borrow Bennie. It's only fair after all - the Fed has been collecting interest on funny money created out of thin air since 1913. 'Bout time they gave something back to the people!
I still see a down day today.
IF someone was long, would you use this rally to clear out and add to QID, SRS, SKF, or move to cash?
Those aren't bullets. Those are blanks.
No no the last bullet he keeps.
Those aren't bullets. Those are blanks.
On the other hand, I volunteer what is left of my 301K to buy real bullets for use on the banksters.
o rally being sustained. OIS crashed .. libor still fixing high.. spread blowing.. money mkts aren't easing..
Nothing stops borrowers from hoarding cash
There is no REAL policy response or socialistic ploy left..
you bought assets, you buy paper, you lower rates... WHAT ELSE?
Russia just suspended trading indefinitely.
Positives: Lowers cost of lending by 25% in most of the world, steepens the yield curve momentarily which is good for financial system
Negatives: You keep rates this low for long and it flatlines the whole yield curve which is counterproductive to growth because no one wants to lend in that environment. The commerical paper buying will be absolutely crucial to avoid cannibalizing short term lending
haha, all the financials popped up on the news and traders are already bored with the idea as prices return to pre-announcement levels
"IF someone was long, would you use this rally to clear out and add to QID, SRS, SKF, or move to cash?"
Take the Last Train to Cashvillej
(bubblegum classic)
confidence_does_not_cover_inco writes:
you bought assets, you buy paper
the model is broken i repeat the model is broken, let it die
Walmart same store sale at up 2.4% against an estimate of up 2.5%
OH MY GOD when will this end.
There is chatter circulating, apparently, that "global equity markets will be closed after the emergency G7 meeting this weekend."
End game folks. Reboot, reset.
There must be insider news about Wachovia.
It's up 4%, heading towards WFC's bid. Telling us that WF did indeed probably get 80% of the deposits
Drew, if you are going out on a limb like that at least entertain me with some kind of story or link.
Is the Pentavariat involved? The son of Colonel Saunders taking his revenge?
Definitely need to see a link on that kind of comment...
Drew writes:
There is chatter circulating, apparently, that "global equity markets will be closed after the emergency G7 meeting this weekend."
End game folks. Reboot, reset.
Drew | 10.08.08 - 7:40 am | #
Monday is a bank holiday.
My bad, I was quoting Denninger.
He doesn't provide references.
Sorry!
The Market Ticker
Hong Kong, Australia are jealous about the rate cutting party and have since joined in.
Pretty impressive spur of the moment decisio
Bill Poole: This isn't nuclear war.
Thanks Bill. Your candor is most refreshing.
theyieldcurve,
Bill Poole: This isn't avian flu
I think the BOJ said, been there, done that.
Monday is a bank holiday.
I think a bank holiday is more likely, but I think if THAT happened then we'd also have to stop the equities market too. Imagine the panic a bank holiday would create!