I hope they also take a seat on the Board, turf mgmt, and clean up the books (mark to market), and get some FSA agents to pour over the corresponsdence from the last five years - I can almost hear the shredders now.
and for the eurozone too if they can get their act together
but outside of Spain, all th Eurozone bailouts have involved seats on the boards for the national governments. Seems like the US and UK should get their act together instead.
we see the problem of trying a major change in capitalism in different regulatory regimes. Everything you do piecemeal has unintended consequences and can make things worse.
Holders of preference shares are first in line for payout of dividends but they do not carry voting rights.
I dunno. I'd say get voting shares but commit to sell the shares within 4-6 years. Clearly the boards of the banks need to start giving different guidance to the management teams. The government can't add its voice without some power.
But Europe still has a manufacturing base so if the Euro goes down, its all good, the rest of the world can buy cheap Mercedes and there will be lots of jobs for Johan 6 Stouts
that only works when the crooks are not running the entire gov't part and parcel.
Does make sense however you would actually need someone in our current administration that was not actively involved in creating the mess in the first place. We have nothing close to that now or in the immediate future.
There's a charting tool that measures standard deviation called Bollinger Bands, and right now the monthly SPX is about 11% bellow the lower BB value @ 1115. The weekly lower BB is at 1090. The last times such deviations occurred were in September 2001 and July 2002 - both leading to 30%+ rallies in 2-3 months.
I'm declaring right here that we'll see the same damn thing happen - not because the fundamentals of our economy or financial system demand it - but because markets can only be stretched so far before they snap right back at you.
Screw the shredders, they need to start launching the viruses on their systems so the "deleted" evidence cannot be retrieved....I think the recent electronic discovery laws are going to be a gold mine when the investigations start.
Don't see what the problem is over there.....people have opinions and are allowed to express them...no matter what they may be. Sounds like someone needs some web hits ala ritholz.
"I'm declaring right here that we'll see the same damn thing happen - not because the fundamentals of our economy or financial system demand it - but because markets can only be stretched so far before they snap right back at you."
Oh right, it HAS to happen because if you draw enough funny lines on the chart...
Sheesh, the more technical analysis I hear about, the more I'm convinced that it's the stock market equivalent of reading tea leaves.
mmckinl writes:
The banksters are capitulating to public ownership ... they know the charade won't last ...
question is : When do countries take the right to create Sovereign Money , money without debt !
SHHH! Banksters will kill you for suggesting that. If that happened, sovereigns would no longer have to pay interest on their own money. And we can't have that, now, hmmm?
What has been neglected over the last several months is the simple fact that Americans can still work. Burdened with debt, unable to make car payments and buy gas, and facing mortgages, they can still work. But if the economy snuffs out jobs in record numbers, the last wall defending the economy will have broken.
The amazing fact in all this is that unemployment is at 6.1% up from 5.1% in March. With the economic world collapsing around out ears, if people can manage to keep their jobs, the recession could be relatively shallow.
Companies may decide that they can keep most of their workers -- if, that is, they see credit become available. At that point the issues of meeting payroll and capital expenses will not be so acute. At least the consumer would have a job, and hope that he can go shopping again at some point. Liquidity does not work, jobs are the answer - BloggingStocks
Bernanke sounded heavily sedated today. Also he never mentioned Credit Default Swaps, how can you solve a problem you can't even mention? He seemed oddly detached from reality, as he blithered on about inflation, while prices crash all around him. Maybe he's been taking Ambien to sleep?
Self-Persecuted,
TA is a modeling technique. If Europe doesn't get their stuff together ahead of schedule, look for a further stretch; cuz real money is real money. And I say that with honest respect.
SHHH! Banksters will kill you for suggesting that. If that happened, sovereigns would no longer have to pay interest on their own money. And we can't have that, now, hmmm?
Buy coinz!
Coinz!
~~~~~~~~~~~~~~
Only way out my friend ... Sovereign Money with No debt ...
Britain has 'political banks' like Northern Rock. Can't be allowed to fail because Northern Rock owned most of the mortgages in Northern English towns that vote Labour.
Would imagine RBS is much the same as Scotland is also a Labour stronghold if trending to the SNP more and more.
Based on this political reality it will interesting to watch just how the Labour government invests taxpayer money and what they will demand of the banks in return. The capital injection will not be free.
"This is the type of plan supported by most economists in the U.S. (as opposed to Paulson's TARP)...if its good, it can be a model for US emulation".
Thought we already saddled the taxpayer with HP's TARP? So by 'emulating' the British, the US taxpayer will benefit by funding a nationalization plan too? Getting the worst of both worlds? Fool me twice?
FYI: Bear Stearns offered this hypothetical example at its Las Vegas presentation: A pension fund wants to buy $100 of CDO equity. Instead of buying it directly, the fund buys a zero- coupon government bond for $46 that will be redeemed for $100 in 12 years. That bond is paired with a $54 investment in CDO equity.
Zero-coupon bonds pay no interest; the investor is paid the full face amount -- that's $100 in this hypothetical situation - -when the bond matures.
Principal Protection
Principal protection is guaranteed,'' Fleischhacker says.It's AAA since you're buying a U.S. Treasury.'' If there are no defaults, this method of investing in CDO equity would return 9.3 percent annually, she says.
The presence of the zero-coupon bond ensures the pension fund will recover its $100 investment even if the equity tranche becomes worthless. While the fund wouldn't lose any money if that happened, there would be no return on the investment for 12 years.
If a fund manager puts all of the same hypothetical $100 into zero-coupon bonds only, it would more than double its money in 12 years, Das says. I would have thought with pension fund money, they don't really want to lose principal,'' Das says of this equity tranche sales technique.And clearly here the principal is very much at risk. You've got a highly leveraged bet on no defaults, or very minimal defaults.''
Now, Gentlemen, I beg you again to consider, that none of
these Persons above-named, can ever suffer the loss of one
Farthing by all the Miseries under which the Kingdom groans at
present. For, first, until the Kingdom be intirely Ruined the
Lord Lieutenant and Lords-Justices must have their Salaries. My
Lords the Bishops, whose Lands are set a fourth part value, will
be sure of their Rents and their Fines. My Lords the Judges, and
Those of other Employments in the Courts, must likewise have
their Salaries. The Gentlemen of the Revenue will pay Themselves;
and as to the Officers of the Army, the Consequences of not
paying Them, is obvious enough; Nay, so far will those Persons I
have already mentioned to be from suffering, that, on the
contrary, their Revenues being now way lessen'd by the fall of
Money, and the prices of all Commodities considerably sunk
thereby, they must be great Gainers. Therefore, Gentlemen, I do
entreat you, that, as long as you live, you will look upon all
Persons who are for lowering the Gold, or any other Coin, as no
Friends to this poor Kingdom, but such who find their private
account in what will be most detrimental to Ireland. And, as the
Absentees are the strongest views, our greatest Enemies, first,
by consuming above one half of the Rents of this Nation Abroad.
And secondly, by turning the Weight, by their Absence, so much on
the Popish side, by weakning the Protestant Interest. Can there
be a greater folly than to pave a Bridge of Gold at your Expence,
to support them in their Luxury and Vanity abroad, while hundreds
of thousands are starving at home, for want of Employment.
Lowering the Coins
by Jonathan Swift
1736
I respect a lot of opinions here as well, not just on markets. However, unless we get an '87-like crash - which I admit is more possible this week than anytime in the last year - we're going topside sooner rather than later. It's been a headache for those trying to buy "the low" - and I frankly have given up caring for the exact point - but nothing goes up forever and nothing goes down forever. Fear runs as extreme as greed, and I posted last thread that several fear/greed indicators are registering extreme pessimism that I can't ignore.
that only works when the crooks are not running the entire gov't part and parcel.
Does make sense however you would actually need someone in our current administration that was not actively involved in creating the mess in the first place. We have nothing close to that now or in the immediate future.
Ciao
MS
We need someone out of the political arena before this thing morph into the Weimar republic.
I have wrote here few times: Infalation is the enemy of democracy.
While for now the comodity bubble is bursting what BB is doing may result in such dollar devaluation that the US will suffer a serious inflation.
At least the Brits are trying something that has worked in the past.
I like the plan. Jiminy X-Mas, are we being outfoxed by the Brits? We've been kicking their butts for 200 years, we're on our way to owning half their soccer teams, but will they get the final revenge?
Britains taxpayers will tomorrow be committed to spending more than £50 billion to bail out the high-street banks in a bid to avert a cataclysmic failure of confidence, The Times learnt tonight.
Bwahahahahaha!
If I'm a taxpayer I know that move is surely going to add to my confidence level... NOT!
Self-Persecuted,
I find it difficult to argue with you; insofar as we are of like mind. However, I ask you to remember our first debate. I use a crayon while you prefer a sharps.
Clearly, everyone is talking about an impending bounce. Assuming that's correct, the question becomes how high and against what resistance. I see far more resistance than support.
Can the economy grow fast enough in real terms to redeem the massive increase in debt? In a word, no. As Frederick Soddy (1926 Nobel Laureate chemist and underground economist) pointed out long ago, you cannot permanently pit an absurd human convention, such as the spontaneous increment of debt [compound interest] against the natural law of the spontaneous decrement of wealth [entropy]. The population of negative pigs (debt) can grow without limit since it is merely a number; the population of positive pigs (real wealth) faces severe physical constraints. The dawning realization that Soddys common sense was right, even though no one publicly admits it, is what underlies the crisis. The problem is not too little liquidity, but too many negative pigs growing too fast relative to the limited number of positive pigs whose growth is constrained by their digestive tracts, their gestation period, and places to put pigpens. Also there are too many two‐legged Wall Street pigs, but that is another matter. The Oil Drum | Herman Daly on the Credit Crisis, Financial Assets, and Real Wealth
Back to the future?
out of office reply | 10.07.08 - 6:25 pm
Dr. Weir: I created the Event Horizon to reach the stars, but she's gone much, much farther than that. She tore a hole in our universe, a gateway to another dimension. A dimension of pure chaos. Pure... evil. When she crossed over, she was just a ship. But when she came back... she was alive! Look at her, Miller. Isn't she beautiful?
ullpointer writes:
...you are even betting against the established trend.
That's an interesting point, glad you mentioned it. What I'm doing is anticipating, not identifying a change in trend, which is basically how I always trade, but nonetheless it entails risk. Right now we've got markets that haven't been this over-stretched since major Intermediate Term bottoms in 2001 & 2002 that led to 30% rallies, volume is relatively drying up, and sentiment is extremely pessimistic. I'd call that an excellent reward to risk opportunity.
Popeye writes:
The Bollinger Bands are a lit fuze, but you also need fuel. It's the fuel that is lacking.
Once we look at "the bottom" in retrospect, there will be no identifiable "fuel" that set off the ensuing rally except exhaustion - and I'm not audacious enough to claim when exhaustion occurs, although by some measures we've had it the last couple of lows
again, realize you are talking to a former TA disciple, so i 100% get what you are saying.
just be careful man - the markets reaction this morning is quite telling, IMO...a 100 pt rally that lasted 20 minutes. that should have been good for a 4 week, 1500 point $INDU pop.
The speed of new comments coming is too great, cannot reply while trying to read everything. LOL
What I tried to say was that Britain's action will not hurt nor support Euro.
True, Euro countries have enough problems with their banks, but still more optimistic about them than their US counterparts.
And the European politicians are much better in making nasty and tough decisions. Politics is still more of a game of talent in Europe, vs. a beauty contest...
But there will be bad times enough for everybody ahead... So hope that US would get its act together. There is no easy painless way out of this swamp.
Yup, right on nullpointer. My toe went in this morning and it was instant frostbite. Stops got triggered within 20 minutes. I had been out for a long time, and have been thinking about the idea that the biggest rallies occur in bear markets and that we were pretty due, what with the story on the Fed and CP buying. But this is a susquatch market and it is not to be messed with on the long side.
I have read that in 1929 there were many false bottoms that sucked in players and then crushed them. There does not have to be a bottom or a big rally. There can just be continuing bloodshed. Caution children!
The Price of Land, and Houses falls
Mirac'lous Palaces, whose Walls,
Like those of Thebes, were raised by PlayAre to be let; whilst the once gay,
Well-seated Houshould Gods would be
More pleased t'expire in Flames, than see;
The mean Inscription on the Door
Smile at the lofty Ones they bore.
The Building Trace is quite destroy'd,
Artificers are not employ'd;
No Limner for his Art is famed;
Stone-cutters, Garvers are not named
Bernard Mandeville
As Pride and Luxury decrease,
So by degrees they leave the Seas,
Not Merchants now; but Companies
Remove whole Manufacturies.
All Arts and Crafts neglected lie;
Content the Bane of Industry,
Makes 'em admire their homely Store,
And neither seek, nor covet more.
U-No...thanks for posting that Bloomberg link on the CDO's. It is the most unintentionally hilarious thing I've seen in a while.
The setup: June 2007 and Bear Stearns is "hawking the riskiest portions of collateralized debt obligations to public pension funds." Guess the name of the BSC person doing the pitch...wait for it..."Jean Fleischhacker"...BA DUM DUM.
Then the piece quotes same Senora Fleshripper as follows referring to the CDO's in question: ``I think a lot of people are confused about what this product is and how it works.''
No flaming kidding...
Next, "Fleischhacker, 45, says she doesn't associate toxic waste with the equity tranches she's selling." No way, we only sell the good stuff.
So why are the pension funds listening to this bankster..."Many pension funds, facing growing numbers of retirees, are still reeling from investments that went sour after technology stocks peaked in March 2000. Fund managers buy equity tranches, which are also called ``first loss'' portions, even though those investments are never given a credit rating by Fitch Group Inc., Moody's Investors Service or Standard & Poor's."
That's right...they took it in the shorts with pension money in the dot bomb implosion and need to make it up fast. And they won't have the raters to blame, because this garbage is unrated.
Then, to top it off with a cautionary viewpoint the Bloomberg piece has this: "Chriss Street, treasurer of Orange County, California, the fifth-most-populous county in the U.S., says no public fund should invest in equity tranches. He says fund managers are ignoring their fiduciary responsibilities by placing even 1 percent of pension assets into the riskiest portion of a CDO."
They're quoting the treasurer of the county that perpetrated one of the biggest municipal defaults ever!
i noticed a lot of genius investors out yesterday on the boards saying how they were going all in today to catch the bounce that was obviously going to occur... Not so many out today, hardly any in fact. Probably chastened from a swift kicking this a.m.
So according to Murphy's Law it will probably bounce tomorrow instead.
While it is probably inevitable for governments to start taking stakes in banks in the current climate is this really a good idea?
Look at the GSE's and how they were allowed to operate with Congress as the overseer? Do we really want to let the Barney Frank's of this world play politics with our deposits. Isn't this more hair of the dog that bit us?
Once we look at "the bottom" in retrospect, there will be no identifiable "fuel" that set off the ensuing rally except exhaustion - and I'm not audacious enough to claim when exhaustion occurs, although by some measures we've had it the last couple of lows
Persecuted Comrade Anonymouse
Volume is getting rather light. And the positive divergence that is forming in intraday time frame SPX suggest shaking off the last trembling hands
At some point the prices are too low for the sellers and bad risk-reward short term for the shorts. When it is no longer anyones interest for prices to drop further, they will pump up again (I guess).
the short sale rule is gone within a day, so it is OK to cover some of the shorts in order to get a better entry point.
However, I would not imagine this is the final bottom. Rather just a bounce. Still very similar to chart pattern-amplitude of moves from 2001. Nothing new here ( not surprising since it is the same human behavior at work).
D.J.: I wasn't going to tell you this. I've been listening to the distress signal, and I, um, think I made a mistake in the translation.
[Plays the distress signal]
Miller: Go on.
D.J.: I thought it said "liberate me" - "save me." But it's not "me." It's "liberate tutame" - "save yourself." And it gets worse.
[Plays the distress signal again]
D.J.: There - I think that says "ex inferis." "Save yourself... from hell." Look, if what Doctor Weir tells us is true, this ship has been beyond the boundaries of our universe, of known scientific reality. Who knows where it's been, what it's seen. Or what it's brought back with it.
NC writes:
However, I would not imagine this is the final bottom. Rather just a bounce. Still very similar to chart pattern-amplitude of moves from 2001. Nothing new here ( not surprising since it is the same human behavior at work).
We're on the same page here. And your volume point was well taken - my primary T.A. method is benchmarking volume, and volume confirms price. These new lows have not been confirmed imo. But ya know, even though I went long the close I kinda want a gap down tomorrow or at least a sell-off into the SPX 960 so I can leverage my account, is that a contrary indicator meaning we'll crash?
The market was pushed up from late '05 until exactly one year ago on nothing more than hot air and cheap money.
Predicting it's bottom will be just as easy as predicting it's top (Oct. '07)
We didn't know it then however some of us rationally knew it was not going to last simply because the various mechanisms that allowed it to occur were being removed on a daily basis. TA became virtually worthless about the same time frame. All my models and methods were rendered moot by this happening. It has been just as worthless on the way down as well. I trade more on feel and instinct more than ever. In a 'normal' market that is a recipe for failure...unless you trade small lots and watch all the time.
I remember telling a fellow in August '07 who's business was resale Ferrari parts that "it" was coming....He laughed at me in early Oct. of last year as he extended himself further into debt to expand his catalog and shop space.
I can only imagine the predicament he is in now. Emails and phone no longer work. He bought into the technical theory a few month's before it became moot. His problem is that he never adjusted for anything other than "up". The exact same situation the banks are in now.
Turkey PM considering Iraq incursion
ANKARA, Turkey, Oct. 7 (UPI) -- Turkish Prime Minister Recep Tayyip Erdogan says he is considering launching a ground incursion into northern Iraq to target Kurdish separatists.
Erdogan made the comments Tuesday at a meeting of his Justice and Development Party's parliamentary group, the Turkish newspaper Hurriyet reported. The prime minister, it said, has pledged to step up Turkey's campaign against the outlawed Kurdistan People's Party, or PKK, which Ankara regards as a terrorist group.
PKK rebels Friday launched their deadliest attack against the Turkish military in a year, in which 17 soldiers were killed and 20 others injured along the country's remote and mountainous border with Iraq. On Tuesday, Turkish fighter jets attacked 21 PKK positions in Iraq's Avasin Baysan region, the newspaper said. Turkey PM considering Iraq incursion - UPI.com
Re: The setup: June 2007 and Bear Stearns is "hawking the riskiest portions of collateralized debt obligations to public pension funds." Guess the name of the BSC person doing the pitch...wait for it..."Jean Fleischhacker"...BA DUM DUM.
Then the piece quotes same Senora Fleshripper as follows referring to the CDO's in question: ``I think a lot of people are confused about what this product is and how it works.''
Yes, I agree, I just wrote about that at Nakedcapitalism, i.e, they need to toss in a covered bond into the package and wait ten years to get a string of cash flow, otherwise, these pensions will go broke!
As I recall, the S&P 500 bottomed in the high 700s after the dotcom and 9/11 drop. This problem is more severe -- much more severe -- than the problems that led to that drop. As earnings come in, I think that the P/E on that index will be seen to be too high, which will precipitate a further decline. Techincal analysis is useless in the current environment. Wait for the fundamentals to jive with the price of the index. Even so, it may be years before you'll see any benefits from that investment.
I must say, before this conversation goes any further, I am fighting between honored and amazed that folks I admire bother to address my take on things.
voodoo economist writes:
As I recall, the S&P 500 bottomed in the high 700s after the dotcom and 9/11 drop
You're off a bit; we actually had a drop in magnitude almost exactly as we had the last few weeks: the mid 1200's to the high 900's. I might post a couple of comparison charts to visually show how oversold we are
FYI: Sales in several Rocky Mountain resort towns are down 40 percent year-over-year. Prices, however, appear to be leveling out, or in some cases going up, a sign that investments in these areas tend to hold their value.
While the government bailout passed by the House and signed by President Bush on Friday doesnt specifically address second homes, many are hoping it will help the mortgage market and restore buyers confidence.
Frankly I'm surprised at all the negative comments about the UK move, it is the most sensable thing any govt has done so far in this mess. Take the TARP money and do the same here. Taxpayers get a good shot at making money, banks have better balance sheets and the current shareholders get punished through dilution. What is not to like?
wally writes:
Consider, please, that some things do go up and stay up and some things do go down and stay down.
The model I am anticipating calls for a very flat bottom. I have a love/hate relationship with the current volatility. I will hold cash for the time when everyone else has given up on quick cures.
Persecuted Comrade Anonymouse writes:
voodoo economist writes:
As I recall, the S&P 500 bottomed in the high 700s after the dotcom and 9/11 drop
You're off a bit; we actually had a drop in magnitude almost exactly as we had the last few weeks: the mid 1200's to the high 900's. I might post a couple of comparison charts to visually show how oversold we are
Persecuted Comrade Anonymouse | Homepage | 10.07.08 - 7:08
I though I remembered buying SPY for something in the high 70s. Maybe I'm getting old -- senior moments, 5 years is a long time.
Jackson, the average home sold in the first half of the year was a cool $2.1 million, up from about $1.95 million during the same time period last year, according to Jacksons multiple listing service. However, sales totaled 166 through June, down from 294 in the same period last year.
Park City, Utah, saw home sales drop to 675 from 1,166 in the first half of 2007, while the average sales price increased slightly from $1.10 million to $1.25 million, according to that citys MLS.
Vail, Colo., and Sun Valley, Idaho saw similar price gains and sales declines.
Struggling savings and loan operator Downey Financial Corp. is looking to sell the posh Newport Beach office buildings that long have served as its headquarters in an attempt to raise cash amid the ongoing financial crisis.
Downeys headquarters is part of the Bayview Corporate Center, a midrise office campus that sits near Jamboree Road and South Bristol Street, near the upscale auto dealerships that straddle Newport Beachs city line with Irvine.
The buildings that Downey owns at 3501 Jamboree Road include two connected six-story buildings. They total about 320,000 square feet of office space. The buildings are managed by DSL Service Co., a real estate development and property management subsidiary of Downey.
The high-profile buildings were built for Downey in 1988 and hold the bulk of its administrative offices. The savings and loanwhose stock has fallen some 90% in the past year as it has dealt with fallout from its marketing of adjustable rate mortgagesoccupies about 70% of the buildings.
Its unknown whether Downey would relocate any of its operations to less expensive offices following a sale of the buildings.
The most likely scenario is that Downey will lease back much of the office space and stay as a tenant after the buildings are sold.
CB Richard Ellis Group Inc.whose Newport Beach offices are also in the buildingsis marketing the property. The brokerage hopes for a sale by years end. Officials declined to discuss any possible deal.
so I can leverage my account, is that a contrary indicator meaning we'll crash?
Persecuted Comrade Anonymouse"
LEVERAGE!!??
I bought a small SSO 37 this pm.
I ""may"" add to it if correct, but for day trades only, if + after the 30 min+60 min. indicators look "solid".
let us remember the Fed psy: first project the shadow of the "action", then act at crucial TA points for max impact... we may be on track here
And the beauty of that is it's located on the Toll Road so any perspective buyer's will have the pleasure of not only watching the value of the property continue to decline....they'll be paying a toll to get to it as well.
The current insane volatility makes for some wild options plays - once the leverage has been squeezed out of the market then we get back to fundamentals IMNSHO.
[citizen energyecon writes: The current insane volatility makes for some wild options plays - once the leverage has been squeezed out of the market then we get back to fundamentals IMNSHO.]
IMVHO, my "feel" is we are about a month away from that. Maybe two.
Just out of curiosity and a bit OT - where does everyone think oil will end up? I say $70/barrel, but I think at this point anyone's best guess is nothing but pure speculation.
the banks are in deep trouble and don't even trust one another...
mmckinl
This begs the question: If the banks dont trust each other, why should we trust them by holding onto their stocks, bonds, mutual funds, mm funds, receivables, sellables, office furniture deliveries, courier charges, coffee deliveries, muni taxes, safety deposit boxes, certified checks, loan docs, promises to pay and reconcile, auto debits property improvment contracts, money orders, payments for security guard services, to name a few.....If you provide a service to a bank should you not only get a PO number but also a bit upfront to cover the risk?
If Ford falls just another $2.92, I am going to buy the company! And then I am going to give everyone that posts tonight a free car.
I'm thinking it probably won't happen until next week, but who knows.
I'm seeking a construction loan and I'm hashing out terms with my lenders. We had ben working under the assumption it would be LIBOR +400, which was obviously not great but workable with LIBOR at 2.90 like it was a month ago. Now, this is getting ridiculous.
Question to those more knowledgeable: It seems LIBOR as an indicator of a cost of capital to the bank is becoming worthless, as the banks seems to getting all the liquidity they can from central banks, thus no need to borrow from each other. As far as the bank is concerned, can't they still make great money borrowing at the discount window (U.S. regional bank) and lending to us at, say, 7%?? Assuming safe L/C, L/V and full recourse loan and all that good stuff....
What kind of reasoning can I use to get my bank off a LIBOR based loan?
My take, and I'm not betting $$ on it, is that it will find a bottom in about two-three weeks and then climb from there. It won't get back to $150 unless the I-banks re-ignite the comm. trade (likely IMO) since they have not too many options to chase any form of yield. The real problem with oil is the continuing demand destruction weighing on the need to really define peak oil and the pricing that goes along with it
If the Fed keeps handing money to the banksters then it could go above and beyond the last high. Not my area to play in so I don't.
If Ford falls just another $2.92, I am going to buy the company! And then I am going to give everyone that posts tonight a free car.
I'm thinking it probably won't happen until next week, but who knows.
Gainas | 10.07.08 - 7:31 pm | #
I'm seeking a construction loan and I'm hashing out terms with my lenders. We had ben working under the assumption it would be LIBOR +400, which was obviously not great but workable with LIBOR at 2.90 like it was a month ago. Now, this is getting ridiculous.
So here's what I meant by that Bollinger Band/standard deviation comment.
The <a href="http://img403.imageshack.us/my.php?image=bb0102ky2.png>first chart shows SPX weekly 2001-2002 with 2 extensions comparable to what we're seeing this week. Such 3 standard deviation corrections historically occurred during Intermediate Term lows in '66, '70, and '73 (the '87 crash is another matter).
The <a href="http://img119.imageshack.us/my.php?image=bb08cv4.png> second chart shows SPX weekly for the last 2 years. Notice how stretched we are and ask yourself: if you were given $1,000,000 to either buy or short the SPY and hold for the next 3 months, what would you do?
--
Born-and-bred American dopes inherited the rule of political gangs controlled financial gangs from the mother country -- Great Britain. What a bunch of morons who overthrew one govt only to imitate it later.
Forms change but the essence remains the same. Americans face far worse future than the Brits did after the fall of the British Empire.
Very good point Jas - once Tony bLIAR came on board and sucked up to GWB, the Brits were toast. They pretty much bought our system lock stock and two smoking barrels, which, unfortunately, were aimed squarely in their face. And uh, sadly, Cheney isnt at the other end, or else they'd have a chance.
Anyone follow mall REITs today? Obliteration across the board.
What fascinates me is how it took so damn long before the hit. The stock market is not a forward looking mechanism. Stock prices never anticipate to the downside. They wait for several quarters of confirmation in economic reports.
The second chart shows SPX weekly for the last 2 years. Notice how stretched we are and ask yourself: if you were given $1,000,000 to either buy or short the SPY and hold for the next 3 months, what would you do?
Persecuted Comrade Anonymouse | Homepage | 10.07.08 - 7:37 pm | #
My understanding is that we are all descendents from garbage left behind on earth from aliens billions of years ago. So, our essence must be trash. Makes sense for so many except me and a few others.
Ok, anyone here familiar enough with the Capitol to tell me what this building is, or at least its address or major tenant(s)? It's bounded by H&I, Vermont & 15th. (Not the Church in the se corner).
What kind of reasoning can I use to get my bank off a LIBOR based loan?]
Look your banker straight in the face and say, your "industry" is being bailed out by every government on the planet, and yet, you want to ask me to pay a rate that is at it's peak. So, instead of discounting the bailout you are being handed, you want me to lock in an obligation to pay you more than you can reasonably expect to ever receive again?? Do you, dear banker, think I am stupid ??
My take, and I'm not betting $$ on it, is that it will find a bottom in about two-three weeks and then climb from there. It won't get back to $150 unless the I-banks re-ignite the comm. trade (likely IMO) since they have not too many options to chase any form of yield. The real problem with oil is the continuing demand destruction weighing on the need to really define peak oil and the pricing that goes along with it
Part of me is inclined to believe, like you do, that there are issues associated with peak oil and increased demand have pushed prices up to the point where $90 is legitimate and another part of me which thinks that oil is an even greater bubble than houses were.
Self-Persecuted,
I have to agree with an earlier comment. 3 months is too much to ask at this point. However, if you pay me money up front, I'll provide a very learned opinion. : )
Ok, anyone here familiar enough with the Capitol to tell me what this building is, or at least its address or major tenant(s)? It's bounded by H&I, Vermont & 15th. (Not the Church in the se corner).
If the core issue is confidence, and this truly is a global issue, we don't see a bottom until there is a significant changing of the guard. That would include Paulson, Bernanke, Cox and half of the Fed Governors.
Why would you play craps if the house can change the rules after the roll?
Great charts and explanation. Very thought provoking.
It appears in the minds of a few posters here that you're the new Sebastian / O-Joe. For that matter, I don't think some of the people even read (let alone think about) what you say.
I don't remember every one of your comments, but you've more than clearly stated that:
a) This is a bear market
b) More carnage ahead, but
c) Looks like we may be getting ahead of ourselves, and
d) There may be a short-term bounce ahead (lasting as long as, but not to exceed, 3 months).
You've never called a "bottom" or "the bottom" ever.
Thanks for the insightful and intelligent commentary.
How much of this technical analysis relies on the existence of shorts? IMO you need fear for a real monster move and if the shorts are sidelined the fear of a rise is small.
Anonymouse-
Truly appreciate the analysis. Thoughtful and pragmatic. Two days, maybe two weeks. Two months, no way. I am on the sideline. We are in dog years right now.
We differ on that point. As to TA, I would like to suggest there may have been a rule change. The "factors" {subtle joke} that played in TA before are now broke. I know TA has a reliable history, but think about how many trading rules have been overwritten. Play the bounce; don't bet on any follow through.
OT: When I do a search for "bailout voting record", there are a lot of sites showing the results from the first House vote where it was defeated, but none showing the final House vote where it passed (at least from the first few pages of results I looked at).
We need a thousand web pages to go up before the election, clearly showing the vote of each representative, by state.
Fair Economist writes:
How much of this technical analysis relies on the existence of shorts? IMO you need fear for a real monster move and if the shorts are sidelined the fear of a rise is small.
Fair Economist | Homepage | 10.07.08 - 7:58 pm | #
TA is like industrial SPC... works great until it doesn't (like when some dipshit drops a wrench into a perfectly tuned and 'stable process' machine).
Yeah I worded that poorly. Don't get me wrong - I use stops to protect capital. But the prospect of fast returns topside are outweighed by the excitement of following our financial meltdown. As for TA, some of my most revered technicians are seeing it my way, so that's comforting.
Hey Nobody...maybe Downey will move into the brand new but still spankin empty Irvine Campus that WAMU just built. It would be hell giving up the Newport Beach address for Irvine (north of 405 - doh), but at least Downey could help a brother out with some lease payments when it needs it.
"Central bank Governor David Oddsson said an announcement earlier today in Reykjavik that the Russian loan had been agreed upon was incorrect and talks were 'ongoing.'"
The proposed 4-billion-Euro loan works out to about $18,000 per citizen of Iceland.
Russia "buys" Iceland. ... Now this is starting to unfold like one of the late 1980s/early 1990s Tom Clancy books. "Red Storm Rising" -- oil war with Russia, right?
El Cliffo writes:
No deal yet for Iceland, says Bloomberg.
"Central bank Governor David Oddsson said an announcement earlier today in Reykjavik that the Russian loan had been agreed upon was incorrect and talks were 'ongoing.'"
The proposed 4-billion-Euro loan works out to about $18,000 per citizen of Iceland.
El Cliffo | Homepage | 10.07.08 - 8:15 pm | #
MER Speaks and lead the sheep to the slaughter that should have occurred 6 months ago in a properly functioning market...
[Merrill Lynch said in a research note on Tuesday that it believed that U.S. banks could soon begin incurring losses from bad commercial real estate loans. The losses could match peak levels of the last real estate bust in the early 1990s, Merrill said.
Retail properties are "likely the weakest product" in commercial real estate and expect about 5,500 stores to close this year, Merrill said, adding that traditional shopping malls are not as vulnerable as strip malls.
Real estate research firm Reis Inc said on Monday that third-quarter vacancies at traditional U.S. malls reached their highest level since 2001]
Nice charts,
as we stand we have a 165% Fib. extension of previous drop. 100% extension would make week close around 1120... which fits with my preferred tool : pivot points, and we have strong pivot points around 1130 and at 1000, and then support at 940 (940 would be a 200% Fib. Extension!)
Weekly close in Oct. 2001 (outside BB) was a 165% Fib. extension of the previous drop. The next leg down (to July 2002) was a 100% extension of the previous move.
Don't understand all this Communism nonsense. This is the free market at work, with banks consolidating into bigger players, the size of countries, with more leverage and efficiencies of scale. Eventually they'll get too big and break up. Nothing new. Efficiency demands one world currency, and the US will eventually be forced to play ball, or be isolated into backwater.
"In 2007, WFAA-TV in Dallas revealed that the Ex-Im Bank had given at least $243 million in fraudulent loans to companies doing business with Mexico, including giving loans to companies with no verifiable address and individuals who were known associates of the Sinaloa and Juarez drug trafficking cartels"
MS writes:
you guys have fun talking TA....
you are wasting your time"
I do not trade according to these!!
these are more for fun indeed
I trade very short term as a function of price-volume action and integrating constantly my indicators on ALL time frames from 1 min. to 60 min. on various indexes and some markers (a few stocks) -you can get used to it-
MS,
With respect, there is a point to which Bollinger Bands can be stretched before systemic collapse sets in.
I don't adhere to TA or fundamentals. On the other hand, I don't think I need to build a bomb shelter or buy guns.
The main point on which you and I agree is that we face hard times ahead. But one of these days, granted it will take a while.... you're gonna have to say sumpin nice.
My forecast from August was an A-B=C-D decline to SPX 1075. Now the way those work, they can do extensions. Those would be 1:1.382, 1:1.50, 1:1.618, and 1:2. Now we're past the first two extensions, the 1:1.618 is around 960. The important thing about an extension of an A-B=C-D structure past a 1:1.50 (meaning either of the latter two) is that they're an immediate change of trend. I have never seen an exception. Obviously that's a parabolic extension, so you should see why an immediate change of trend would occur.
"For those that have cash sitting in a brokerage account, what do you have it in?"
At Schwab, if you ask over and over again, you will eventually get someone who knows how to assign your temporary balances to bank deposits. These are FDIC up to (what time is it?)
monta's ankle writes:
i appreciate your posts even if your bottom call was off (now by 15% or so)
Thanks but my 1:1 projection was SPX 1075, and I recall posting many times (as I did above) that there could be extensions. The 1075 target was my cue to exit shorts and look for a long entry. Plus, even if the market hits 960, that's still 10% off the 1:1 target - not 15%.
Ex-Im Bank had given at least $243 million in fraudulent loans to companies doing business with Mexico, including giving loans to companies with no verifiable address and individuals who were known associates of the Sinaloa and Juarez drug trafficking cartels
Yep - when the Administration asks for $700B and gets it, you wonder where some of it is going.
I don't trust our leaders or their institutional arms and legs.
Pasty-arse Brits.
segundo
kiss off the EURO
Ciao
MS
"And stop calling me Darling"
Nemo: 151681684684
My F5 key: TARP
Europe = communists. Oh.
Grapes!
Fuld Punch: Any more info on the mandatory 5% savings?
The banksters are capitulating to public ownership ... they know the charade won't last ...
question is : When do countries take the right to create Sovereign Money , money without debt !
mykillk writes:
Fuld Punch: Any more info on the mandatory 5% savings?
I have lotsa hay, wanna buy a straw ? Not much markup.
The Hugo Chavez Fidel Castro command economy is back!
Barack Obama's advisors will guide us to the promise land!
So... if... she weighs... the same... as a duck... she's made of...
wood?
I hope they also take a seat on the Board, turf mgmt, and clean up the books (mark to market), and get some FSA agents to pour over the corresponsdence from the last five years - I can almost hear the shredders now.
BURN.......BURN THE WITCH......
Ciao
Barley
London needs to check the books of these banks before taking a piece ...
"Recapitalize" is such a great word. Keeps the focus on where the wealth is going, not where it is coming from.
Definitely a doubleplusgood word.
Is this for RBS Barclays and Loyds or this is this for everyone?
Britain is not in Euro. They are sailing with US, as they are in Iraq.
Nemoize the banks - make them go first!
and for the eurozone too if they can get their act together
but outside of Spain, all th Eurozone bailouts have involved seats on the boards for the national governments. Seems like the US and UK should get their act together instead.
we see the problem of trying a major change in capitalism in different regulatory regimes. Everything you do piecemeal has unintended consequences and can make things worse.
One world government ahoy.
Holders of preference shares are first in line for payout of dividends but they do not carry voting rights.
I dunno. I'd say get voting shares but commit to sell the shares within 4-6 years. Clearly the boards of the banks need to start giving different guidance to the management teams. The government can't add its voice without some power.
London is the hedgie capital of the world...this is a hedge fund bailout
If we pay for it, we should own it.
Drake
Britain is taking on the banks ... no more hands off approach ... a good start ...
the pols know that it is either them or the banks ... it will be a fight to the finish ...
c&c I'm not so sure about that!
Hedgies are apart not part of.
Page Not Found
Re-capitalization is an exercise that can take place after the losses have been recognized; not before.
Sorry, have been looking at Maxed out Mama's blog. That is not me posting, but what a total nutcase this person is.
If we pay for it, we should own it.
What century are you living in?
What's new in commercial mortgages, x?
What century are you living in?
Nemo
LOL!
Bond Girl --
what a total nutcase this person is
Do you mean MoM, or the (deeply inferior) other Bond Girl?
The hold your nose caucus - Paul Krugman Blog - NYTimes.com
see comment #20
Nemo writes:
If we pay for it, we should own it.
What century are you living in?
Nemo | Homepage | 10.07.08 - 6:00 pm
That would be 1848....
The Communist Manifesto - Wikipedia, the free encyclopedia
"Britain is not in Euro"
Duh!!!
But the entire european union is and just happens to finance it's activities where???
It's all about perception....take a look at the previous post about Spain...that's the clue.
Lb. sterling is converted to what?
Thanks for playing..
Ciao
MS
On the Clock writes:
What's new in commercial mortgages, x?
On the Clock | 10.07.08 - 6:01 pm
As far as....the market or products available?
The blogger, but thanks for making me superior
Like Lefty says, you break it, you bought it!
PS - Recapitalization more than existing equity = all the shares? Right? What good would that be if they are all non-voting?
Or is this goofyness a result of not having an FDIC-like regulatory scheme?
mykillk writes:
Fuld Punch: Any more info on the mandatory 5% savings?
mykillk | Homepage | 10.07.08 - 5:53 pm | #
I'm searching the news - talk of health savings plans but nothing on the 5% plan. ...
What is a stake in a bank worth nowadays?
Bond Girl:
"Sorry, have been looking at Maxed out Mama's blog. That is not me posting, but what a total nutcase this person is."
What, you're not a Jesus-love-me-but-hates-democrats-and-blacks kinda gal?
But Europe still has a manufacturing base so if the Euro goes down, its all good, the rest of the world can buy cheap Mercedes and there will be lots of jobs for Johan 6 Stouts
Yal-
that only works when the crooks are not running the entire gov't part and parcel.
Does make sense however you would actually need someone in our current administration that was not actively involved in creating the mess in the first place. We have nothing close to that now or in the immediate future.
Ciao
MS
There's a charting tool that measures standard deviation called Bollinger Bands, and right now the monthly SPX is about 11% bellow the lower BB value @ 1115. The weekly lower BB is at 1090. The last times such deviations occurred were in September 2001 and July 2002 - both leading to 30%+ rallies in 2-3 months.
I'm declaring right here that we'll see the same damn thing happen - not because the fundamentals of our economy or financial system demand it - but because markets can only be stretched so far before they snap right back at you.
Been said before.
Went to an appliace store and bought a new toaster. They tried to give me a bank!
I used to read MoM for her economic insights, but then she went all political and I left.
"Sorry, have been looking at Maxed out Mama's blog. That is not me posting, but what a total nutcase this person is."
Heh. The haloscan handles can be whatever you want them to be. No guarantee that was MoM on the previous thread.
Or that the "Max" that just posted is the Max you're reading now...
Screw the shredders, they need to start launching the viruses on their systems so the "deleted" evidence cannot be retrieved....I think the recent electronic discovery laws are going to be a gold mine when the investigations start.
I think the US plan is much simpler. Appoint Goldman execs to handout 700B to Bank of Goldman.
Bond girl. MOM used to post here quite a lot. She appeared pretty rationale until the (see Max's comments).
Tanta seemed to like tho.
Don't see what the problem is over there.....people have opinions and are allowed to express them...no matter what they may be. Sounds like someone needs some web hits ala ritholz.
Ciao
MS
Heh. The haloscan handles can be whatever you want them to be. No guarantee that was MoM on the previous thread.
Or that the "Max" that just posted is the Max you're reading now...
I'm Spartacus!
I asked yesterday....what happened to Tanta? Just disappeared
Ciao
MS
Hey MS,
Guess I'm in good company re Ritholtz.
is it re-capitalization or re-capitulation
my spell-checker is off
"I'm declaring right here that we'll see the same damn thing happen - not because the fundamentals of our economy or financial system demand it - but because markets can only be stretched so far before they snap right back at you."
Oh right, it HAS to happen because if you draw enough funny lines on the chart...
Sheesh, the more technical analysis I hear about, the more I'm convinced that it's the stock market equivalent of reading tea leaves.
mmckinl writes:
The banksters are capitulating to public ownership ... they know the charade won't last ...
question is : When do countries take the right to create Sovereign Money , money without debt !
SHHH! Banksters will kill you for suggesting that. If that happened, sovereigns would no longer have to pay interest on their own money. And we can't have that, now, hmmm?
Buy coinz!
English Pols know ...
It's them or the banks ...
US Pols had better WTFU ...
What has been neglected over the last several months is the simple fact that Americans can still work. Burdened with debt, unable to make car payments and buy gas, and facing mortgages, they can still work. But if the economy snuffs out jobs in record numbers, the last wall defending the economy will have broken.
The amazing fact in all this is that unemployment is at 6.1% up from 5.1% in March. With the economic world collapsing around out ears, if people can manage to keep their jobs, the recession could be relatively shallow.
Companies may decide that they can keep most of their workers -- if, that is, they see credit become available. At that point the issues of meeting payroll and capital expenses will not be so acute. At least the consumer would have a job, and hope that he can go shopping again at some point.
Liquidity does not work, jobs are the answer - BloggingStocks
Hi Mouse,
Another thou off the Dow and I break into my margarine account..
Bernanke sounded heavily sedated today. Also he never mentioned Credit Default Swaps, how can you solve a problem you can't even mention? He seemed oddly detached from reality, as he blithered on about inflation, while prices crash all around him. Maybe he's been taking Ambien to sleep?
At least with tea leaves you get the tea first.
Self-Persecuted,
TA is a modeling technique. If Europe doesn't get their stuff together ahead of schedule, look for a further stretch; cuz real money is real money. And I say that with honest respect.
Deposit banking is a giant ponzi scheme.
Read Murray Rothbard's Case Against the Fed
or
Read Rothbard's Mystery of Banking
Those books are available for free at Ludwig von Mises Institute - Homepage
SHHH! Banksters will kill you for suggesting that. If that happened, sovereigns would no longer have to pay interest on their own money. And we can't have that, now, hmmm?
Buy coinz!
Coinz!
~~~~~~~~~~~~~~
Only way out my friend ... Sovereign Money with No debt ...
Anonymouse, with you on the idea of needing to lean long.
I went net long yesterday by taking off shorts that had overextended. Just a matter of practicing good money management.
Got me killed today.
Everything I know says we should bounce soon.
A global economic crisis handled by individual countries will lead to new definitions of allies and enemies.
Everything I know says we should bounce soon.
~~~~~~~~~~~~~
Unless you lived in Russia or Argentina during their crises, you don't know ...
Britain has 'political banks' like Northern Rock. Can't be allowed to fail because Northern Rock owned most of the mortgages in Northern English towns that vote Labour.
Would imagine RBS is much the same as Scotland is also a Labour stronghold if trending to the SNP more and more.
Based on this political reality it will interesting to watch just how the Labour government invests taxpayer money and what they will demand of the banks in return. The capital injection will not be free.
how would one hedge against such a nuke scenario as sovereign money...
"And stop calling me Darling"
Shirley you're not serious.
would seem stocks would actually be an excellent hedge against such a scenario - anything with perpetual eps power...should hold relative valuatio
"This is the type of plan supported by most economists in the U.S. (as opposed to Paulson's TARP)...if its good, it can be a model for US emulation".
Thought we already saddled the taxpayer with HP's TARP? So by 'emulating' the British, the US taxpayer will benefit by funding a nationalization plan too? Getting the worst of both worlds? Fool me twice?
Banks Sell `Toxic Waste' CDOs to Calpers, Texas Teachers Fund
Banks Sell `Toxic Waste' CDOs to Calpers, Texas Teachers Fund - Bloomberg.com
FYI: Bear Stearns offered this hypothetical example at its Las Vegas presentation: A pension fund wants to buy $100 of CDO equity. Instead of buying it directly, the fund buys a zero- coupon government bond for $46 that will be redeemed for $100 in 12 years. That bond is paired with a $54 investment in CDO equity.
Zero-coupon bonds pay no interest; the investor is paid the full face amount -- that's $100 in this hypothetical situation - -when the bond matures.
Principal Protection
Principal protection is guaranteed,'' Fleischhacker says.It's AAA since you're buying a U.S. Treasury.'' If there are no defaults, this method of investing in CDO equity would return 9.3 percent annually, she says.
The presence of the zero-coupon bond ensures the pension fund will recover its $100 investment even if the equity tranche becomes worthless. While the fund wouldn't lose any money if that happened, there would be no return on the investment for 12 years.
If a fund manager puts all of the same hypothetical $100 into zero-coupon bonds only, it would more than double its money in 12 years, Das says. I would have thought with pension fund money, they don't really want to lose principal,'' Das says of this equity tranche sales technique.And clearly here the principal is very much at risk. You've got a highly leveraged bet on no defaults, or very minimal defaults.''
A global economic crisis handled by individual countries will lead to new definitions of allies and enemies.
Anonymous
~~~~~~~
and just guess which country started this mess ...
US Banks screwed the pooch ...
Now, Gentlemen, I beg you again to consider, that none of
these Persons above-named, can ever suffer the loss of one
Farthing by all the Miseries under which the Kingdom groans at
present. For, first, until the Kingdom be intirely Ruined the
Lord Lieutenant and Lords-Justices must have their Salaries. My
Lords the Bishops, whose Lands are set a fourth part value, will
be sure of their Rents and their Fines. My Lords the Judges, and
Those of other Employments in the Courts, must likewise have
their Salaries. The Gentlemen of the Revenue will pay Themselves;
and as to the Officers of the Army, the Consequences of not
paying Them, is obvious enough; Nay, so far will those Persons I
have already mentioned to be from suffering, that, on the
contrary, their Revenues being now way lessen'd by the fall of
Money, and the prices of all Commodities considerably sunk
thereby, they must be great Gainers. Therefore, Gentlemen, I do
entreat you, that, as long as you live, you will look upon all
Persons who are for lowering the Gold, or any other Coin, as no
Friends to this poor Kingdom, but such who find their private
account in what will be most detrimental to Ireland. And, as the
Absentees are the strongest views, our greatest Enemies, first,
by consuming above one half of the Rents of this Nation Abroad.
And secondly, by turning the Weight, by their Absence, so much on
the Popish side, by weakning the Protestant Interest. Can there
be a greater folly than to pave a Bridge of Gold at your Expence,
to support them in their Luxury and Vanity abroad, while hundreds
of thousands are starving at home, for want of Employment.
Lowering the Coins
by Jonathan Swift
1736
Everything I know says we should bounce soon.
Apparatchik ZackAttack | Homepage | 10.07.08 - 6:15 pm
Dr. Weir: You know nothing. Hell is only a word. The reality is much, much worse.
Event Horizon (1997) - Memorable quotes
We just got a call from headquarters.
Headquarters? What is it?
It's a big building with generals, but that's not important right now.
Popeye,
I respect a lot of opinions here as well, not just on markets. However, unless we get an '87-like crash - which I admit is more possible this week than anytime in the last year - we're going topside sooner rather than later. It's been a headache for those trying to buy "the low" - and I frankly have given up caring for the exact point - but nothing goes up forever and nothing goes down forever. Fear runs as extreme as greed, and I posted last thread that several fear/greed indicators are registering extreme pessimism that I can't ignore.
@mmckinl,
Lived in Moscow in 98. You could buy good flats for $5,000. Going price now is $180,000. No leverage back then but?
Bond Girl writes:
What is a stake in a bank worth nowadays?
Somewhere around 8.77% less than it was worth yesterday.
anonymouse-
be honest with yourself - what you are doing is gambling.
you may be right, but what you are doing is highly risky - shit, you are even betting against the established trend.
job #1 right now should be capital preservation, not getting cute and swinging for the fences.
you know how the livermore story ended, right?
MS. Wherever Tanta is it appears to be subject-non-grata.
Lets hope she's telling someone off somewhere ...
Mouse...I agree. Also, if this is the end of the world my fiat money is only valuable as kindling.
Ok, if the goverment takes over the banks will not break. This does however not mean that they are going to work better than before...
Just check some older news on the ikb bank, or westLB, both ( partially) goverment owned.
Angry Saver writes:
"And stop calling me Darling"
Shirley you're not serious.
Angry Saver | 10.07.08 - 6:18 pm
just had to do it...David Allen Coe
YouTube - You Never Even Called Me By My Name!
"would seem stocks would actually be an excellent hedge against such a scenario"
well, throw in a commodity meltdown, and this summer's value trap is complete.
but, yes, they should be. theoretically.
GO UYG SSO BABY RUN RUN RUN!
MS, CRFan, I spoke with Tanta today, and hopefully she will be able to post tomorrow or later this week.
Thanks for asking ...
Best Wishes.
Ross
then you know very well where we could be headed ...
x writes:
That would be 1848....
Wikipedia, the free encyclopedia
The...unist_Manifesto
x | Homepage | 10.07.08 - 6:01 pm | #
Back to the future?
That's great news CR. Thanks.
MS writes:
Yal-
that only works when the crooks are not running the entire gov't part and parcel.
Does make sense however you would actually need someone in our current administration that was not actively involved in creating the mess in the first place. We have nothing close to that now or in the immediate future.
Ciao
MS
We need someone out of the political arena before this thing morph into the Weimar republic.
I have wrote here few times: Infalation is the enemy of democracy.
While for now the comodity bubble is bursting what BB is doing may result in such dollar devaluation that the US will suffer a serious inflation.
What next ?
At least the Brits are trying something that has worked in the past.
I like the plan. Jiminy X-Mas, are we being outfoxed by the Brits? We've been kicking their butts for 200 years, we're on our way to owning half their soccer teams, but will they get the final revenge?
We could use a Tanta-Ranta.
(Hope she doesn't hate that phrase).
Britains taxpayers will tomorrow be committed to spending more than £50 billion to bail out the high-street banks in a bid to avert a cataclysmic failure of confidence, The Times learnt tonight.
Bwahahahahaha!
If I'm a taxpayer I know that move is surely going to add to my confidence level... NOT!
CR,
So gald to hear about Tanta. I was really so afriad to ask. Glad to know she is coming back.
Aleister,
Post some of Bernard Mandeville's 'Fable Of The Bees' for us. Especially the part when they sober up!
Self-Persecuted,
I find it difficult to argue with you; insofar as we are of like mind. However, I ask you to remember our first debate. I use a crayon while you prefer a sharps.
Clearly, everyone is talking about an impending bounce. Assuming that's correct, the question becomes how high and against what resistance. I see far more resistance than support.
Can the economy grow fast enough in real terms to redeem the massive increase in debt? In a word, no. As Frederick Soddy (1926 Nobel Laureate chemist and underground economist) pointed out long ago, you cannot permanently pit an absurd human convention, such as the spontaneous increment of debt [compound interest] against the natural law of the spontaneous decrement of wealth [entropy]. The population of negative pigs (debt) can grow without limit since it is merely a number; the population of positive pigs (real wealth) faces severe physical constraints. The dawning realization that Soddys common sense was right, even though no one publicly admits it, is what underlies the crisis. The problem is not too little liquidity, but too many negative pigs growing too fast relative to the limited number of positive pigs whose growth is constrained by their digestive tracts, their gestation period, and places to put pigpens. Also there are too many two‐legged Wall Street pigs, but that is another matter.
The Oil Drum | Herman Daly on the Credit Crisis, Financial Assets, and Real Wealth
thanks for debunking the mystery CR...
Ciao
MS
Calculated Risk writes:
MS, CRFan, I spoke with Tanta today, and hopefully she will be able to post tomorrow or later this week.
Whooo hoo! Bagels, cream cheese and snark for breakfast.
Wikipedia, the free encyclopedia
The...unist_Manifesto
x | Homepage | 10.07.08 - 6:01 pm | #
Back to the future?
out of office reply | 10.07.08 - 6:25 pm
Dr. Weir: I created the Event Horizon to reach the stars, but she's gone much, much farther than that. She tore a hole in our universe, a gateway to another dimension. A dimension of pure chaos. Pure... evil. When she crossed over, she was just a ship. But when she came back... she was alive! Look at her, Miller. Isn't she beautiful?
Event Horizon (1997) - Memorable quotes
-That's all I have to say about that...
ullpointer writes:
...you are even betting against the established trend.
That's an interesting point, glad you mentioned it. What I'm doing is anticipating, not identifying a change in trend, which is basically how I always trade, but nonetheless it entails risk. Right now we've got markets that haven't been this over-stretched since major Intermediate Term bottoms in 2001 & 2002 that led to 30% rallies, volume is relatively drying up, and sentiment is extremely pessimistic. I'd call that an excellent reward to risk opportunity.
Self-persecuted,
The Bollinger Bands are a lit fuze, but you also need fuel. It's the fuel that is lacking.
Bond Girl writes:
What is a stake in a bank worth nowadays?
Bond Girl | 10.07.08 - 6:05 pm |
A stake in a bank is one less vampire preying on the people.
Voodoo how long have you been waiting for that opening?
Popeye writes:
The Bollinger Bands are a lit fuze, but you also need fuel. It's the fuel that is lacking.
Once we look at "the bottom" in retrospect, there will be no identifiable "fuel" that set off the ensuing rally except exhaustion - and I'm not audacious enough to claim when exhaustion occurs, although by some measures we've had it the last couple of lows
anonymouse-
again, realize you are talking to a former TA disciple, so i 100% get what you are saying.
just be careful man - the markets reaction this morning is quite telling, IMO...a 100 pt rally that lasted 20 minutes. that should have been good for a 4 week, 1500 point $INDU pop.
Self-Persecuted,
Go ahead and play the bounce, just don't count on a following rally. The fundamentals truly suk.
mmckinl
The speed of new comments coming is too great, cannot reply while trying to read everything. LOL
What I tried to say was that Britain's action will not hurt nor support Euro.
True, Euro countries have enough problems with their banks, but still more optimistic about them than their US counterparts.
And the European politicians are much better in making nasty and tough decisions. Politics is still more of a game of talent in Europe, vs. a beauty contest...
But there will be bad times enough for everybody ahead... So hope that US would get its act together. There is no easy painless way out of this swamp.
Save Bjork!
Yup, right on nullpointer. My toe went in this morning and it was instant frostbite. Stops got triggered within 20 minutes. I had been out for a long time, and have been thinking about the idea that the biggest rallies occur in bear markets and that we were pretty due, what with the story on the Fed and CP buying. But this is a susquatch market and it is not to be messed with on the long side.
Whooo hoo! Bagels, cream cheese and snark for breakfast.
Rob Dawg
Agree, and with a the incredible goings-on we've had, I suspect we're going to get an earful! Yay!
kiss off the EURO
Ciao
MS
You might have missed it but they use the pound.
Agree, and with a the incredible goings-on we've had, I suspect we're going to get an earful! Yay!
Whereismyretirement
Or an eyeful...
I have read that in 1929 there were many false bottoms that sucked in players and then crushed them. There does not have to be a bottom or a big rally. There can just be continuing bloodshed. Caution children!
The Price of Land, and Houses falls
Mirac'lous Palaces, whose Walls,
Like those of Thebes, were raised by PlayAre to be let; whilst the once gay,
Well-seated Houshould Gods would be
More pleased t'expire in Flames, than see;
The mean Inscription on the Door
Smile at the lofty Ones they bore.
The Building Trace is quite destroy'd,
Artificers are not employ'd;
No Limner for his Art is famed;
Stone-cutters, Garvers are not named
Bernard Mandeville
Appologies to Sir Bernard Mandeville.
The root of evil Avarice
That damn'd ill-natured baneful vice
Was slave to Prodigality
That noble sin; whilst luxury
Employ'd a million of the poor
And odious pride a million more
Envy itself and vanity
Were ministers of industry
Their darling folly, fickleness
In diet, furniture and dress
That strange ridiculous vice was made
The very wheel that turned the trade
After the conversion
As pride and luxury decrease
So by degrees they leave the seas
Not merchants now but companies
Remove whole manufacturies
All arts and crafts neglected lie
Content the bane of industry
Make 'em admire their homely store
And neither seek nor covet more.
Whooo hoo! Bagels, cream cheese and snark for breakfast.
Rob Dawg
would you like a bank w/ that?
As Pride and Luxury decrease,
So by degrees they leave the Seas,
Not Merchants now; but Companies
Remove whole Manufacturies.
All Arts and Crafts neglected lie;
Content the Bane of Industry,
Makes 'em admire their homely Store,
And neither seek, nor covet more.
Or an eyeful...
Elvis
When Tanta posts I always picture her speaking for some reason, especially if she goes on a tear. Can't wait;)
Enough with the Vogon poetry.
I don't know if it was mentioned above but BAC priced at $22...
U-No...thanks for posting that Bloomberg link on the CDO's. It is the most unintentionally hilarious thing I've seen in a while.
The setup: June 2007 and Bear Stearns is "hawking the riskiest portions of collateralized debt obligations to public pension funds." Guess the name of the BSC person doing the pitch...wait for it..."Jean Fleischhacker"...BA DUM DUM.
Then the piece quotes same Senora Fleshripper as follows referring to the CDO's in question: ``I think a lot of people are confused about what this product is and how it works.''
No flaming kidding...
Next, "Fleischhacker, 45, says she doesn't associate toxic waste with the equity tranches she's selling." No way, we only sell the good stuff.
So why are the pension funds listening to this bankster..."Many pension funds, facing growing numbers of retirees, are still reeling from investments that went sour after technology stocks peaked in March 2000. Fund managers buy equity tranches, which are also called ``first loss'' portions, even though those investments are never given a credit rating by Fitch Group Inc., Moody's Investors Service or Standard & Poor's."
That's right...they took it in the shorts with pension money in the dot bomb implosion and need to make it up fast. And they won't have the raters to blame, because this garbage is unrated.
Then, to top it off with a cautionary viewpoint the Bloomberg piece has this: "Chriss Street, treasurer of Orange County, California, the fifth-most-populous county in the U.S., says no public fund should invest in equity tranches. He says fund managers are ignoring their fiduciary responsibilities by placing even 1 percent of pension assets into the riskiest portion of a CDO."
They're quoting the treasurer of the county that perpetrated one of the biggest municipal defaults ever!
Great stuff.
ot to self tanta returns ---stay on topic, stay on topic, stay on topic
As scary as it can be to read this blog everyday, thanks to everyone for continuing my education.
i noticed a lot of genius investors out yesterday on the boards saying how they were going all in today to catch the bounce that was obviously going to occur... Not so many out today, hardly any in fact. Probably chastened from a swift kicking this a.m.
So according to Murphy's Law it will probably bounce tomorrow instead.
Comrade Bagholders,
Glad to see the Brits pouring their taxpayer money down the toilet as well.
This is going to work out Fabulously!
Nostrovia,
While it is probably inevitable for governments to start taking stakes in banks in the current climate is this really a good idea?
Look at the GSE's and how they were allowed to operate with Congress as the overseer? Do we really want to let the Barney Frank's of this world play politics with our deposits. Isn't this more hair of the dog that bit us?
Abbey Joseph Cohen forecasting SPX 1650 by year end.
Maybe she meant DOW ?
unit472 writes:
While it is probably inevitable for governments to start taking stakes in banks in the current climate is this really a good idea?
Unit472,
Show me a single prior financial crisis where society did not bail out the banks. And yet, we recovered.
Once we look at "the bottom" in retrospect, there will be no identifiable "fuel" that set off the ensuing rally except exhaustion - and I'm not audacious enough to claim when exhaustion occurs, although by some measures we've had it the last couple of lows
Persecuted Comrade Anonymouse
Volume is getting rather light. And the positive divergence that is forming in intraday time frame SPX suggest shaking off the last trembling hands
At some point the prices are too low for the sellers and bad risk-reward short term for the shorts. When it is no longer anyones interest for prices to drop further, they will pump up again (I guess).
the short sale rule is gone within a day, so it is OK to cover some of the shorts in order to get a better entry point.
However, I would not imagine this is the final bottom. Rather just a bounce. Still very similar to chart pattern-amplitude of moves from 2001. Nothing new here ( not surprising since it is the same human behavior at work).
Comrade Bagholder unit 472,
Unless the money is anchored by gold/silver, letting the gov't print fiat will lead rapidly to Zimbabwe.
Nostrovia,
NC,
Well said.
The Communist Manifesto:
"to overthrow the bourgeois social order and to eventually bring about a classless and stateless society, and the abolition of private property"
Comrade Hank and Ben are going in the right direction ...lol...
Not sure if anyone else noticed, but WaMu stopped offering its 5% 12 month online CD today (here in NJ at least). Now down to 3%.
"Unless the money is anchored by gold/silver"
chile's unidad de fomento is never mentioned, but it bears a look, at least as a superior cpi.
we could have the equivalent of gsg or djp as a currency, as well.
Capitulation writes:
Abbey Joseph Cohen forecasting SPX 1650 by year end.
Maybe she meant DOW ?
Capitulation | 10.07.08 - 6:52 pm
D.J.: I wasn't going to tell you this. I've been listening to the distress signal, and I, um, think I made a mistake in the translation.
[Plays the distress signal]
Miller: Go on.
D.J.: I thought it said "liberate me" - "save me." But it's not "me." It's "liberate tutame" - "save yourself." And it gets worse.
[Plays the distress signal again]
D.J.: There - I think that says "ex inferis." "Save yourself... from hell." Look, if what Doctor Weir tells us is true, this ship has been beyond the boundaries of our universe, of known scientific reality. Who knows where it's been, what it's seen. Or what it's brought back with it.
Miller: From hell.
Event Horizon (1997) - Memorable quotes
NC writes:
However, I would not imagine this is the final bottom. Rather just a bounce. Still very similar to chart pattern-amplitude of moves from 2001. Nothing new here ( not surprising since it is the same human behavior at work).
We're on the same page here. And your volume point was well taken - my primary T.A. method is benchmarking volume, and volume confirms price. These new lows have not been confirmed imo. But ya know, even though I went long the close I kinda want a gap down tomorrow or at least a sell-off into the SPX 960 so I can leverage my account, is that a contrary indicator meaning we'll crash?
"Bond Girl writes:
Sorry, have been looking at Maxed out Mama's blog. That is not me posting, but what a total nutcase this person is."
MOM is an excellent blog.
I guess we're in to the political stage of this nonsense, so people are taking sides when no upside exists.
Freedom of speech is the only currency.
SS writes:
I don't know if it was mentioned above but BAC priced at $22...
The b@st@rds had the nerve to claim the offering was "oversubscribed."
"We need someone out of the political arena before this thing morph into the Weimar republic."
I read that at the nadir of Weimar hyperinflation you could buy an entire residential block in Berlin for $200 American.
I wouldn't mind buying a neighborhood or two with my gold stash.
anon & popeye-
The market was pushed up from late '05 until exactly one year ago on nothing more than hot air and cheap money.
Predicting it's bottom will be just as easy as predicting it's top (Oct. '07)
We didn't know it then however some of us rationally knew it was not going to last simply because the various mechanisms that allowed it to occur were being removed on a daily basis. TA became virtually worthless about the same time frame. All my models and methods were rendered moot by this happening. It has been just as worthless on the way down as well. I trade more on feel and instinct more than ever. In a 'normal' market that is a recipe for failure...unless you trade small lots and watch all the time.
I remember telling a fellow in August '07 who's business was resale Ferrari parts that "it" was coming....He laughed at me in early Oct. of last year as he extended himself further into debt to expand his catalog and shop space.
I can only imagine the predicament he is in now. Emails and phone no longer work. He bought into the technical theory a few month's before it became moot. His problem is that he never adjusted for anything other than "up". The exact same situation the banks are in now.
BTW looks like BAC priced at 22.50...
Ciao
MS
Turkey PM considering Iraq incursion
ANKARA, Turkey, Oct. 7 (UPI) -- Turkish Prime Minister Recep Tayyip Erdogan says he is considering launching a ground incursion into northern Iraq to target Kurdish separatists.
Erdogan made the comments Tuesday at a meeting of his Justice and Development Party's parliamentary group, the Turkish newspaper Hurriyet reported. The prime minister, it said, has pledged to step up Turkey's campaign against the outlawed Kurdistan People's Party, or PKK, which Ankara regards as a terrorist group.
PKK rebels Friday launched their deadliest attack against the Turkish military in a year, in which 17 soldiers were killed and 20 others injured along the country's remote and mountainous border with Iraq. On Tuesday, Turkish fighter jets attacked 21 PKK positions in Iraq's Avasin Baysan region, the newspaper said.
Turkey PM considering Iraq incursion - UPI.com
"You might have missed it but they use the pound."
didn't miss a thing.....looks like you missed the post after.
I'll say it again.....pounds are converted to what??
Again thanks for playing...
Ciao
MS
CR, thanks for Tanta news. Had a fantasy that she was called to bunker to swat fdic/treasury officials with mop handle, then mop up this mess.
Kung fu,
Re: The setup: June 2007 and Bear Stearns is "hawking the riskiest portions of collateralized debt obligations to public pension funds." Guess the name of the BSC person doing the pitch...wait for it..."Jean Fleischhacker"...BA DUM DUM.
Then the piece quotes same Senora Fleshripper as follows referring to the CDO's in question: ``I think a lot of people are confused about what this product is and how it works.''
As I recall, the S&P 500 bottomed in the high 700s after the dotcom and 9/11 drop. This problem is more severe -- much more severe -- than the problems that led to that drop. As earnings come in, I think that the P/E on that index will be seen to be too high, which will precipitate a further decline. Techincal analysis is useless in the current environment. Wait for the fundamentals to jive with the price of the index. Even so, it may be years before you'll see any benefits from that investment.
Good News Everybody!
The Monopoly game starts tomorrow at McDonald's.
Victims bitten by large parabolas always collapse and often revive only after the application of circuit breakers.
I must say, before this conversation goes any further, I am fighting between honored and amazed that folks I admire bother to address my take on things.
We will fight it in the stock markets, We will fight it in the banks,we will fight it in the Treasury........We wll never surrender!
"but nothing goes up forever and nothing goes down forever"
Consider, please, that some things do go up and stay up and some things do go down and stay down.
voodoo economist writes:
As I recall, the S&P 500 bottomed in the high 700s after the dotcom and 9/11 drop
You're off a bit; we actually had a drop in magnitude almost exactly as we had the last few weeks: the mid 1200's to the high 900's. I might post a couple of comparison charts to visually show how oversold we are
Now that we've been given information about Tanta's return....I REALLY want to know where is Bernie from B'berg???
Anyone know?
I sent emails to Pimm Fox at B'berg and he has no idea....
They (B'berg) just have the lady from Singapore (haslinda) on in the time frame that the "bernster" had occupied...the 4pm-6pm PST slot.
Ciao
MS
NAR is pumping real estate, maybe...
FYI: Sales in several Rocky Mountain resort towns are down 40 percent year-over-year. Prices, however, appear to be leveling out, or in some cases going up, a sign that investments in these areas tend to hold their value.
While the government bailout passed by the House and signed by President Bush on Friday doesnt specifically address second homes, many are hoping it will help the mortgage market and restore buyers confidence.
A-mouse,
Yes I enjoyed the last charts you did for Jas "benefit"...
Re: MS, CRFan, I spoke with Tanta today, and hopefully she will be able to post tomorrow or later this week.
Thanks for asking ...
♥®
Frankly I'm surprised at all the negative comments about the UK move, it is the most sensable thing any govt has done so far in this mess. Take the TARP money and do the same here. Taxpayers get a good shot at making money, banks have better balance sheets and the current shareholders get punished through dilution. What is not to like?
Nevermind....Bernie on now...
There is a god
Ciao
MS
wally writes:
Consider, please, that some things do go up and stay up and some things do go down and stay down.
The model I am anticipating calls for a very flat bottom. I have a love/hate relationship with the current volatility. I will hold cash for the time when everyone else has given up on quick cures.
voodoo economist,
Correction, you were talking about the final low. Yeah that was 768.63
Friday: August Trade Balance data released. Will this have much impact or will it be lost in the shuffle?
Persecuted Comrade Anonymouse writes:
voodoo economist writes:
As I recall, the S&P 500 bottomed in the high 700s after the dotcom and 9/11 drop
You're off a bit; we actually had a drop in magnitude almost exactly as we had the last few weeks: the mid 1200's to the high 900's. I might post a couple of comparison charts to visually show how oversold we are
Persecuted Comrade Anonymouse | Homepage | 10.07.08 - 7:08
I though I remembered buying SPY for something in the high 70s. Maybe I'm getting old -- senior moments, 5 years is a long time.
Jackson, the average home sold in the first half of the year was a cool $2.1 million, up from about $1.95 million during the same time period last year, according to Jacksons multiple listing service. However, sales totaled 166 through June, down from 294 in the same period last year.
Park City, Utah, saw home sales drop to 675 from 1,166 in the first half of 2007, while the average sales price increased slightly from $1.10 million to $1.25 million, according to that citys MLS.
Vail, Colo., and Sun Valley, Idaho saw similar price gains and sales declines.
"Consider, please, that some things do go up and stay up and some things do go down and stay down"
life ends when you stay down...
scary...
The Market right now is playing like a windy day and your on the tee at #17 island hole at TPC
Meanwhile, back on the US front. How funny is this:
Downey Looks To Sell HQ to Generate Cash
Orange County Business Journal Online
Struggling savings and loan operator Downey Financial Corp. is looking to sell the posh Newport Beach office buildings that long have served as its headquarters in an attempt to raise cash amid the ongoing financial crisis.
Downeys headquarters is part of the Bayview Corporate Center, a midrise office campus that sits near Jamboree Road and South Bristol Street, near the upscale auto dealerships that straddle Newport Beachs city line with Irvine.
The buildings that Downey owns at 3501 Jamboree Road include two connected six-story buildings. They total about 320,000 square feet of office space. The buildings are managed by DSL Service Co., a real estate development and property management subsidiary of Downey.
The high-profile buildings were built for Downey in 1988 and hold the bulk of its administrative offices. The savings and loanwhose stock has fallen some 90% in the past year as it has dealt with fallout from its marketing of adjustable rate mortgagesoccupies about 70% of the buildings.
Its unknown whether Downey would relocate any of its operations to less expensive offices following a sale of the buildings.
The most likely scenario is that Downey will lease back much of the office space and stay as a tenant after the buildings are sold.
CB Richard Ellis Group Inc.whose Newport Beach offices are also in the buildingsis marketing the property. The brokerage hopes for a sale by years end. Officials declined to discuss any possible deal.
so I can leverage my account, is that a contrary indicator meaning we'll crash?
Persecuted Comrade Anonymouse"
LEVERAGE!!??
I bought a small SSO 37 this pm.
I ""may"" add to it if correct, but for day trades only, if + after the 30 min+60 min. indicators look "solid".
let us remember the Fed psy: first project the shadow of the "action", then act at crucial TA points for max impact... we may be on track here
For those interested in gold. Just a possibility at this point...
Video - CNBC.com
"near the upscale auto dealerships that straddle Newport Beachs city line with Irvine"
That Merc dealership is the largest Merc dealership in the world - measured by sales volume.
I wonder how they are doing?
This is pretty funny.
Facial features at different % drops.
http://www.thebandarlog.com/arch/arch54.html#10_7_2008_10_46_22_AM
lifted from dealbreaker link.
Ciao
MS
Nobody-
And the beauty of that is it's located on the Toll Road so any perspective buyer's will have the pleasure of not only watching the value of the property continue to decline....they'll be paying a toll to get to it as well.
Too funny...they are about two year's too late.
Ciao
MS
Who wins ?
The Pols or the Banks ?
not so easy this time ... the banks are in deep trouble and don't even trust one another...
Popeye,
The current insane volatility makes for some wild options plays - once the leverage has been squeezed out of the market then we get back to fundamentals IMNSHO.
Who wins ? or should I say : Who survives?
The Pols or the Banks ?
not so easy this time ... the banks are in deep trouble and don't even trust one another...
The Pols AND the Banks win. They just merged the biggest spenders in the world with the biggest thieves.
[citizen energyecon writes: The current insane volatility makes for some wild options plays - once the leverage has been squeezed out of the market then we get back to fundamentals IMNSHO.]
IMVHO, my "feel" is we are about a month away from that. Maybe two.
Ross
Wrong Ross ... the Pols are now on Bankster turf ...
the mob wants heads, plenty of heads ... the banksters heads will be served up and the banks re-regulated ...
someone will have to take the fall ...
Just out of curiosity and a bit OT - where does everyone think oil will end up? I say $70/barrel, but I think at this point anyone's best guess is nothing but pure speculation.
Nobody
oil ?
how bad does the world economy get ?
pretty bad I think ... but does OPEC hold together ?
I say $70/barrel, but I think at this point anyone's best guess is nothing but pure speculation.
Nobody
Anybody who know where the price of oil is going is lying. -- Ancient Proverb
What was it the wise man said - the price of oil will...flucutate.
Let's not forget the mark. This is earnings season. Chit hits the fan, and hope springs.
A man with three hands makes a good butcher but a bad clock. -- Another Ancient Proverb
the banks are in deep trouble and don't even trust one another...
mmckinl
This begs the question: If the banks dont trust each other, why should we trust them by holding onto their stocks, bonds, mutual funds, mm funds, receivables, sellables, office furniture deliveries, courier charges, coffee deliveries, muni taxes, safety deposit boxes, certified checks, loan docs, promises to pay and reconcile, auto debits property improvment contracts, money orders, payments for security guard services, to name a few.....If you provide a service to a bank should you not only get a PO number but also a bit upfront to cover the risk?
If Ford falls just another $2.92, I am going to buy the company! And then I am going to give everyone that posts tonight a free car.
I'm thinking it probably won't happen until next week, but who knows.
The Paulson plan has one goal and that is taking care of his buddies and a select cabal of friends and family.
Need advice:
I'm seeking a construction loan and I'm hashing out terms with my lenders. We had ben working under the assumption it would be LIBOR +400, which was obviously not great but workable with LIBOR at 2.90 like it was a month ago. Now, this is getting ridiculous.
Question to those more knowledgeable: It seems LIBOR as an indicator of a cost of capital to the bank is becoming worthless, as the banks seems to getting all the liquidity they can from central banks, thus no need to borrow from each other. As far as the bank is concerned, can't they still make great money borrowing at the discount window (U.S. regional bank) and lending to us at, say, 7%?? Assuming safe L/C, L/V and full recourse loan and all that good stuff....
What kind of reasoning can I use to get my bank off a LIBOR based loan?
Oil? Got about 3 hours?? JK
My take, and I'm not betting $$ on it, is that it will find a bottom in about two-three weeks and then climb from there. It won't get back to $150 unless the I-banks re-ignite the comm. trade (likely IMO) since they have not too many options to chase any form of yield. The real problem with oil is the continuing demand destruction weighing on the need to really define peak oil and the pricing that goes along with it
If the Fed keeps handing money to the banksters then it could go above and beyond the last high. Not my area to play in so I don't.
JMO
Ciao
MS
Barley
If the banks dont trust each other, why should we trust them by holding onto their stocks ....
~~~~~~~~~
We shouldn't until after we look at the books ...
Bank Holiday , my friend , Bank Holiday ... the only way to unfreeze the credit markets ...
Select market caps today:
TAP..........Molson Coors.....$6.7 Bil
F..............Ford Motor.........$6.4 Bil
GRMN.......Garmin..............$5.6 Bil
If Ford falls just another $2.92, I am going to buy the company! And then I am going to give everyone that posts tonight a free car.
I'm thinking it probably won't happen until next week, but who knows.
Gainas | 10.07.08 - 7:31 pm | #
I need a car - doesn't even have to be new!!!
I'm seeking a construction loan and I'm hashing out terms with my lenders. We had ben working under the assumption it would be LIBOR +400, which was obviously not great but workable with LIBOR at 2.90 like it was a month ago. Now, this is getting ridiculous.
WTF are you building?
Gainas, I'll take a Ford Bronco. White. Preferably with blood stains and McDonalds wrappers.
Anonymous writes:
The Paulson plan has one goal and that is taking care of his buddies and a select cabal of friends and family.
~~~~~~~~~~~
Yep and defer all those ugly lawsuits and criminal prosecutions ...
get my bank off a LIBOR based loan?
Flotown
Why not use the Fed's rate plus points - unless of course the bank does not trust the Fed.
I hear that LA county has auctions of impounded vehicles. Somebody won a 2005 Ford Explorer for $2500
If I were asking for a construction loan today, I think a man with a big net and a funny white jacket might meet me at the bank.
Fuld Punch - It is my understanding that some used cars/trucks are just given away by banks
if you map the oil bubble to the NASDAQ bubble and the home sales bubble, you'll get a bottomed out price of around $60, give or take a bit.
We're still about 9,500 points away on the Dow, from reaching a true bottom.
Flotown,
LIBOR plus 4 isn't a bad rate for a developer in this market. I assume it floats periodically?
LIBOR could be back around 2.5% soon.
So here's what I meant by that Bollinger Band/standard deviation comment.
The <a href="http://img403.imageshack.us/my.php?image=bb0102ky2.png>first chart shows SPX weekly 2001-2002 with 2 extensions comparable to what we're seeing this week. Such 3 standard deviation corrections historically occurred during Intermediate Term lows in '66, '70, and '73 (the '87 crash is another matter).
The <a href="http://img119.imageshack.us/my.php?image=bb08cv4.png> second chart shows SPX weekly for the last 2 years. Notice how stretched we are and ask yourself: if you were given $1,000,000 to either buy or short the SPY and hold for the next 3 months, what would you do?
--
Born-and-bred American dopes inherited the rule of political gangs controlled financial gangs from the mother country -- Great Britain. What a bunch of morons who overthrew one govt only to imitate it later.
Forms change but the essence remains the same. Americans face far worse future than the Brits did after the fall of the British Empire.
Jas
Fuld Punch - It is my understanding that some used cars/trucks are just given away by banks
Barley | 10.07.08 - 7:36 pm | #
thanks for the tip - I'll look for more info on this
Very good point Jas - once Tony bLIAR came on board and sucked up to GWB, the Brits were toast. They pretty much bought our system lock stock and two smoking barrels, which, unfortunately, were aimed squarely in their face. And uh, sadly, Cheney isnt at the other end, or else they'd have a chance.
Anyone follow mall REITs today? Obliteration across the board.
What fascinates me is how it took so damn long before the hit. The stock market is not a forward looking mechanism. Stock prices never anticipate to the downside. They wait for several quarters of confirmation in economic reports.
For those that have cash sitting in a brokerage account, what do you have it in?
"Fuld Punch writes:
I hear that LA county has auctions of impounded vehicles. Somebody won a 2005 Ford Explorer for $2500"
Don't tell me; the county paid them $2500 to take it away.
The second chart shows SPX weekly for the last 2 years. Notice how stretched we are and ask yourself: if you were given $1,000,000 to either buy or short the SPY and hold for the next 3 months, what would you do?
Persecuted Comrade Anonymouse | Homepage | 10.07.08 - 7:37 pm | #
Short, three months is too long.
Forms change but the essence remains the same.
Jas
My understanding is that we are all descendents from garbage left behind on earth from aliens billions of years ago. So, our essence must be trash. Makes sense for so many except me and a few others.
Huh? Free cars?
Ok, anyone here familiar enough with the Capitol to tell me what this building is, or at least its address or major tenant(s)? It's bounded by H&I, Vermont & 15th. (Not the Church in the se corner).
38.900281,-77.034631 - Google Maps
[Flotown writes:
What kind of reasoning can I use to get my bank off a LIBOR based loan?]
Look your banker straight in the face and say, your "industry" is being bailed out by every government on the planet, and yet, you want to ask me to pay a rate that is at it's peak. So, instead of discounting the bailout you are being handed, you want me to lock in an obligation to pay you more than you can reasonably expect to ever receive again?? Do you, dear banker, think I am stupid ??
.... or something like that.
anonymouse-
3 months, lets see...that puts us in mid january....Q3 earnings, dismal xmas.....
short, without a doubt.
Anon-
Your chart doesn't factor the hot air of '06-'07.
You paint a skewed picture with only the current drop as being stretched.
You need to widen your chart to get a true perspective of where we came from.
I wouldn't go all in on short side at this level but I certainly would be waiting for the next whoosh up to initiate a big position.
If you postulate holding for 3 years on the long side then why don't you show the activity of the last three years??
Ciao
MS
My take, and I'm not betting $$ on it, is that it will find a bottom in about two-three weeks and then climb from there. It won't get back to $150 unless the I-banks re-ignite the comm. trade (likely IMO) since they have not too many options to chase any form of yield. The real problem with oil is the continuing demand destruction weighing on the need to really define peak oil and the pricing that goes along with it
Part of me is inclined to believe, like you do, that there are issues associated with peak oil and increased demand have pushed prices up to the point where $90 is legitimate and another part of me which thinks that oil is an even greater bubble than houses were.
Of course that's all just gut feeling, mind you.
MS,
I wrote "buy or short SPY for 3 months" and two people have responded that's too long! Okay, I change that to buy or hold for 2 months
sorry that's month's not year's.
Same rationale applies since the levels we are at are three years ago.
Ciao
MS
For those that want to keep a close eye on Reykjavik:
« Webcam Eyjan
Mouse,
I understand you.
@Nemo and Penrod-and-Sam:
is it re-capitalization or re-capitulation
I believe the word you're looking for is "Decapitation" of the banks.
And "Decapitalization" of the taxpayers...
LOL
Self-Persecuted,
I have to agree with an earlier comment. 3 months is too much to ask at this point. However, if you pay me money up front, I'll provide a very learned opinion. : )
Ok, anyone here familiar enough with the Capitol to tell me what this building is, or at least its address or major tenant(s)? It's bounded by H&I, Vermont & 15th. (Not the Church in the se corner).
Bank of America?
Fuld: was that an educated guess?
Bank of America?
Fuld Punch | 10.07.08 - 7:49 pm | #
No - whoops- i'm a block off
Bond Girl writes:
"What is a stake in a bank worth nowadays?"
Bond Girl,
It depends, do ya want it well-done, or medium rare?
The benevolent fisting by the government has begun.
I'm still waiting on the Nasdaq bottom. We reached an interim bottom back in 02 and I didn't fall for it then. Maybe before year end.
Self-Persecuted,
We live in days when trading rules change without notice. TA rules may have to adjust as well.
If the core issue is confidence, and this truly is a global issue, we don't see a bottom until there is a significant changing of the guard. That would include Paulson, Bernanke, Cox and half of the Fed Governors.
Why would you play craps if the house can change the rules after the roll?
PC Mouse,
Great charts and explanation. Very thought provoking.
It appears in the minds of a few posters here that you're the new Sebastian / O-Joe. For that matter, I don't think some of the people even read (let alone think about) what you say.
I don't remember every one of your comments, but you've more than clearly stated that:
a) This is a bear market
b) More carnage ahead, but
c) Looks like we may be getting ahead of ourselves, and
d) There may be a short-term bounce ahead (lasting as long as, but not to exceed, 3 months).
You've never called a "bottom" or "the bottom" ever.
Thanks for the insightful and intelligent commentary.
Popeye,
I honestly don't care about making money - I'm really excited to see how this plays out.
Jas Jain | Homepage | 10.07.08 - 7:37 pm |
Yep ... and the Brits now face a fate worse than ours ...
Ed S.
Appreciate it.
Here is my solution which will work better because the preference shares will be recapitalized too.
So, in order to recapitalize the preference shares the assignates from 1793 have to be reinvented.
Let's see if this works... it's going to take time to see the affects. Cross your fingers, "pray to God and tie up your horse."
-Jenn Carter
What kind of reasoning can I use to get my bank off a LIBOR based loan?
Ask for a prime option.
How much of this technical analysis relies on the existence of shorts? IMO you need fear for a real monster move and if the shorts are sidelined the fear of a rise is small.
The b@st@rds had the nerve to claim the offering was "oversubscribed."
Rob Dawg
~~~~~~~~~
oversubscribed at $15 ... lol
Anonymouse-
Truly appreciate the analysis. Thoughtful and pragmatic. Two days, maybe two weeks. Two months, no way. I am on the sideline. We are in dog years right now.
Looks like the fun continues to circle the globe, with Oz down 4.1%. Yee-haw.
Per CNBC - Eurozone CC's not working in some places....head for the hills and get in your bunker.
[Persecuted Comrade Anonymouse writes:
Popeye,
I honestly don't care about making money.]
We differ on that point. As to TA, I would like to suggest there may have been a rule change. The "factors" {subtle joke} that played in TA before are now broke. I know TA has a reliable history, but think about how many trading rules have been overwritten. Play the bounce; don't bet on any follow through.
OT: When I do a search for "bailout voting record", there are a lot of sites showing the results from the first House vote where it was defeated, but none showing the final House vote where it passed (at least from the first few pages of results I looked at).
We need a thousand web pages to go up before the election, clearly showing the vote of each representative, by state.
Fair Economist writes:
How much of this technical analysis relies on the existence of shorts? IMO you need fear for a real monster move and if the shorts are sidelined the fear of a rise is small.
Fair Economist | Homepage | 10.07.08 - 7:58 pm | #
TA is like industrial SPC... works great until it doesn't (like when some dipshit drops a wrench into a perfectly tuned and 'stable process' machine).
Anyone lose any wrenches lately?
Timmy
Vote third party ...
Nader, Green or Bob Barr ...
Popeye,
Yeah I worded that poorly. Don't get me wrong - I use stops to protect capital. But the prospect of fast returns topside are outweighed by the excitement of following our financial meltdown. As for TA, some of my most revered technicians are seeing it my way, so that's comforting.
Uncle Billy Vs. Mt. Pelerin | Homepage | 10.07.08 - 7:49 pm | #
Looks like the Import-Export Bank of the United States
SPI Asia looking very ugly ... -5%
Russia bailing out Iceland......hmmmm
Fuld: Can you direct me to a link? I think it's the Sofitel Hotel - 806 15th St.
811 Vermont Avenue, N.W.
Washington, D.C. 20571
I think it's the Sofitel Hotel - 806 15th St.
that's on the south east corner
At least we are not Iceland
Yahoo! 404 - Page Not Found
Maybe it's both??
not a banker writes:
Russia bailing out Iceland......hmmmm
not a banker | 10.07.08 - 8:08 pm | #
That did not go unnoticed.
Hey Nobody...maybe Downey will move into the brand new but still spankin empty Irvine Campus that WAMU just built. It would be hell giving up the Newport Beach address for Irvine (north of 405 - doh), but at least Downey could help a brother out with some lease payments when it needs it.
Cheers Fuld. The church is over one block to the west. I was thinking the smaller building was the church.
McPherson Sq Metrorail station neighborhood
Iceland BK
Who's next ?
No deal yet for Iceland, says Bloomberg.
"Central bank Governor David Oddsson said an announcement earlier today in Reykjavik that the Russian loan had been agreed upon was incorrect and talks were 'ongoing.'"
The proposed 4-billion-Euro loan works out to about $18,000 per citizen of Iceland.
Russia "buys" Iceland. ... Now this is starting to unfold like one of the late 1980s/early 1990s Tom Clancy books. "Red Storm Rising" -- oil war with Russia, right?
El Cliffo writes:
No deal yet for Iceland, says Bloomberg.
"Central bank Governor David Oddsson said an announcement earlier today in Reykjavik that the Russian loan had been agreed upon was incorrect and talks were 'ongoing.'"
The proposed 4-billion-Euro loan works out to about $18,000 per citizen of Iceland.
El Cliffo | Homepage | 10.07.08 - 8:15 pm | #
How much per square foot of former NATO base?
Russian loan had been agreed upon was incorrect and talks were 'ongoing.'"
~~~~
as to the location of the Russian Naval Base ...
that's all fine and nice Ed S. however if you know not where you came from you can't have a clear picture of where you might go.
Looking at the last year and half is akin to blaming this entire mess on Bush.
The push "up" started long before anon's chart....so the question really is how far do we fall not how much bounce we can get in three months.
I'm not disputing his analysis however looking at a chart of 1.5 years does not put the latest drop in proper context at all.
nice try though...
Ciao
MS
map link for ex-im bank:
Ex-Im Bank :: Contact Us :: Headquarters
MER Speaks and lead the sheep to the slaughter that should have occurred 6 months ago in a properly functioning market...
[Merrill Lynch said in a research note on Tuesday that it believed that U.S. banks could soon begin incurring losses from bad commercial real estate loans. The losses could match peak levels of the last real estate bust in the early 1990s, Merrill said.
Retail properties are "likely the weakest product" in commercial real estate and expect about 5,500 stores to close this year, Merrill said, adding that traditional shopping malls are not as vulnerable as strip malls.
Real estate research firm Reis Inc said on Monday that third-quarter vacancies at traditional U.S. malls reached their highest level since 2001]
Who's next ?
Not exactly sure, but it probably also starts with an "I".
How much per square foot of former NATO base?
My calculator doesn't have enough zeroes.
Persecuted Comrade Anonymouse
Nice charts,
as we stand we have a 165% Fib. extension of previous drop. 100% extension would make week close around 1120... which fits with my preferred tool : pivot points, and we have strong pivot points around 1130 and at 1000, and then support at 940 (940 would be a 200% Fib. Extension!)
Weekly close in Oct. 2001 (outside BB) was a 165% Fib. extension of the previous drop. The next leg down (to July 2002) was a 100% extension of the previous move.
Barley writes:
the banks are in deep trouble and don't even trust one another...
mmckinl
This begs the question: If the banks dont trust each other, why should we trust them
The fact that you asked the question means you know the answer but don't like it. Indecision is a killer.
Try treasury direct. Although, outside of tips, it's a bit late imo.
you guys have fun talking TA....
you are wasting your time
Ciao
MS
Fuld: above and beyond. Nice work.
Don't understand all this Communism nonsense. This is the free market at work, with banks consolidating into bigger players, the size of countries, with more leverage and efficiencies of scale. Eventually they'll get too big and break up. Nothing new. Efficiency demands one world currency, and the US will eventually be forced to play ball, or be isolated into backwater.
Export Import Bank:
"In 2007, WFAA-TV in Dallas revealed that the Ex-Im Bank had given at least $243 million in fraudulent loans to companies doing business with Mexico, including giving loans to companies with no verifiable address and individuals who were known associates of the Sinaloa and Juarez drug trafficking cartels"
Efficiency demands one world currency
~~~
Yeah , we see the wisdom of the Euro .... a currency for the whole world ? LOL !
Don't understand all this Communism nonsense. This is the free market at work...
Free market = massive government intervention on a daily basis?
I will have LL in my lifetime. Want to bet?
a one world currency, ahhh the joy of monetary policy by the tyranny of the minority. just how the Fouding Fathers envisioned it.
MS writes:
you guys have fun talking TA....
you are wasting your time"
I do not trade according to these!!
these are more for fun indeed
I trade very short term as a function of price-volume action and integrating constantly my indicators on ALL time frames from 1 min. to 60 min. on various indexes and some markers (a few stocks) -you can get used to it-
MS,
With respect, there is a point to which Bollinger Bands can be stretched before systemic collapse sets in.
I don't adhere to TA or fundamentals. On the other hand, I don't think I need to build a bomb shelter or buy guns.
The main point on which you and I agree is that we face hard times ahead. But one of these days, granted it will take a while.... you're gonna have to say sumpin nice.
anonymouse
i appreciate your posts even if your bottom call was off (now by 15% or so) at least you posted ex ante
but please remember, the event in the credit markets has been a 7+ standard deviation 'anomaly'
using TA and noting a 2-3 SD measure as 'likely' to support a bottom is perhaps a mistake given the outlier nature of this event
NC,
That's nice work
My forecast from August was an A-B=C-D decline to SPX 1075. Now the way those work, they can do extensions. Those would be 1:1.382, 1:1.50, 1:1.618, and 1:2. Now we're past the first two extensions, the 1:1.618 is around 960. The important thing about an extension of an A-B=C-D structure past a 1:1.50 (meaning either of the latter two) is that they're an immediate change of trend. I have never seen an exception. Obviously that's a parabolic extension, so you should see why an immediate change of trend would occur.
There never has been any such thing as what you dream of as a free market. Ask the slaves who built the pyramids, or impressed serfs.
cracker writes:
a one world currency, ahhh the joy of monetary policy by the tyranny of the minority.
~~~~~~~
yogi is NWO ... probably a banker ...
Good grief. Tanta, come back! Clean up all this daytrading talk!
Mr. Mouse,
What were credit markets like last time your bands were 3 SD out? Crazy sick like this?
We had unregulated banking under Andrew Jackson. Various banks printed their own paper money. Total failure.
Market forces demand heavy regulation of banking.
"For those that have cash sitting in a brokerage account, what do you have it in?"
At Schwab, if you ask over and over again, you will eventually get someone who knows how to assign your temporary balances to bank deposits. These are FDIC up to (what time is it?)
monta's ankle writes:
i appreciate your posts even if your bottom call was off (now by 15% or so)
Thanks but my 1:1 projection was SPX 1075, and I recall posting many times (as I did above) that there could be extensions. The 1075 target was my cue to exit shorts and look for a long entry. Plus, even if the market hits 960, that's still 10% off the 1:1 target - not 15%.
NC, Trading your way either leads to burnout or gambling addiction. I hope you take weeks off at a time.
Market forces demand heavy regulation of banking.
citizen (of the world )yogi
~~~~~~~~
We need a public central bank that prints Sovereign Money ... money without debt ...
And capital will go to where banking is safe and transparent, not the US.
Ex-Im Bank had given at least $243 million in fraudulent loans to companies doing business with Mexico, including giving loans to companies with no verifiable address and individuals who were known associates of the Sinaloa and Juarez drug trafficking cartels
Yep - when the Administration asks for $700B and gets it, you wonder where some of it is going.
I don't trust our leaders or their institutional arms and legs.
We all recognize, of course, that the whole purpose of this exercise in the market was to free up tee times.... right ?
citizen (of the world )yogi writes:
And capital will go to where banking is safe and transparent, not the US.
~~~~~
no such place, as we have seen ... that's why we need a public central bank, not the privately owned Federal Reserve ...
I think the hunt for RED October is over 2008 . Could the whole month be red ? Dow 5k by election ?
Japanese government sees our 700 billion and raises us 1.5 trillion into short term markets.
BOOMSHAKALAKA!