Yeh...it kind of amuses me that CR spends the time updating these. Whenever he thinks to do this post, he should lay down and take a well deserved nap.
Yesterday's BS is what matters now. A good indicator would be to show the running tab for the bailouts, the contingent tab for the promises, and then show how our expectations of those figures for the future keep getting overrun each time we put them in print.
Contacts: Late Friday a friend (in management at a public company) told me his company just obtained a new loan (about $100 million) for expansion and a revolving line of credit. This is a good sign.:
I am doing lines of credit for businesses and am finding liquidity at good rates.
If you are, then so am I. As far as I know, these are actual CDS to insure against the U.S. government defaulting on U.S. bonds denominated in U.S. dollars.
Just think if all these deals by the Fed had been done in one day? Instant default for the US, dollar crash, stock market crash, etc. The reality though, is that we are in a worse position than we would have been if we had burned this giant pile of money months ago all at once.
So the strategy, that Ive been reiterating since the start of this catastrophe, has been to slowly leak the info out, and hope that we become gradually and increasingly inured to the fact that we the entire banking sector is insolvent, we are in a massive deflation already, and we cant do crap about it.
So when is the day when the alarm goes off? Clearly, even shrubbie said today this isnt the last bail bucket. So when does the total get so big as to be obviously ridiculous. Half of US GDP?
If you are, then so am I. As far as I know, these are actual CDS to insure against the U.S. government defaulting on U.S. bonds denominated in U.S. dollars.
On your tubes rubes; this just in from nakedcapitalist DH:
"A day after Ramanathans warning, the Treasury said it was reviewing the trading of two- and five-year notes after a scarcity in the securities led to rising fails. The Treasury has conducted at least nine such reviews, known as large position reports, to monitor against market manipulation since 1997.
A week later the Treasury Market Practices Group recommended imposing a penalty rate that equals either 3 percent minus the Feds target rate for overnight loans between banks, or zero, whichever is greater. The central banks target is 1 percent. The TMPG said it plans to discuss by Jan. 5 a potential plan to implement the measures."
WHAT this is like is this (this is a special treat, so no need to thank me, as usual {punk}):
Daniel Dicker, a former oil trader writing at TheStreet.com, contends that there is a way to test the hypothesis that speculation is influencing oil prices (a view that Dicker supports). Exchanges could impost a "liquidiation only" requirement, which was last used to break the Hunt brothers' attempted corner of the silver market in the early 1980s (hat tip reader Michael).
In one instance, however, the speculation premium was "successfully" tested - in the silver markets in 1980 when the Hunt brothers attempted to corner the market. As silver approached $50 an ounce in January 1980, the commercial participants asked for relief from the enormous margin calls from ever-rising prices. The CFTC and the Comex (the predecessor to the Nymex) responded effectively by imposing "liquidation-only" trading -- traders were allowed only to close existing positions and not permitted to initiate new positions.
This forced purely speculative positions to be closed rapidly, as they could no longer be "rolled" into future months at expiration. This caused the price of silver to drop by $12 the day after it was imposed, a decrease of over 20%! Over the course of the next three months, as contract months expired, the price dropped over 50%.
There is no credit crunch for businesses/people with good credit.
True. What makes this a crisis is that GDP has been built on people/business with bad credit borrowing and spending. Take that awayand GDP shrinks mightily.
No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way.
This system is based in US law, is it not?
Don't we have a legislature that will bend over backward to give the Fed and treasury any power they demand so long as those demands come in the form of threats of another Great Depression?
Anyhow it seems that historically it's usually the politicians (e.g. the ones that make the rules), not the bankers, that demand the money printing.
I know that we are all in a big international race to see whose currency can suck the hardest...and all of us nationalistic Amerikans think that despite our problems...bucky is still the best fiat going...
But I think he is not.
When the SHTF who ever has the energy + military + food = winner.
Energy being key. Is the SPR big enough to guarantee us the other two?
Thanks for this segment on your blog. I find it very useful in predicting mortgage rates for my clients and I've been able to put in timely locks due to your insight. Thanks again. You are appreciated.
I think Paulson should be put on the dollar in place of washington...just so that once dollars are roughly equal to pennies OR toilet paper....I can at least have the pleasure of wiping my ass with his face.
Remember the debate on Winter, oh, six months ago regarding FRN's vs Treasuries? Don't know which side you fell to on that one, if any, but there is a point to Misean's:
"No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way."
No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way.
The dollars have already been printed through asset valuations. The "printing" taking place now is merely trying to keep those assets artificially propped up. The same goes for these homeowner bailouts.
What these redefault rates tell us is the street-level attempt to keep house prices high is failing. Which we all knew would happen anyway.
"The dollars have already been printed through asset valuations. The "printing" taking place now is merely trying to keep those assets artificially propped up. The same goes for these homeowner bailouts."
"The company described an "online underground economy that has matured into an efficient, global marketplace in which stolen goods and fraud-related services are regularly bought and sold.""
Well I'm upper upper class high society
God's gift to bailout notoriety
And I always fill my bailouts
The event is never small
The social pages say I've got
The biggest bailouts of all
I've got big bailouts
I've got big bailouts
They're such big bailouts
And they're dirty big bailouts
And he's got big bailouts
And she's got big bailouts
(But we've got the biggest bailouts of them all)
And my bailouts are always bouncing
My bailout's always full
And everybody comes and comes again
If your name is on the guest list
No one can take you higher
Everybody says I've got
Great bailouts of fire
I've got big bailouts
Oh I've got big bailouts
And they're such big bailouts
Dirty big bailouts
And he's got big bailouts
And she's got big bailouts
(But we've got the biggest bailouts of them all)
Some bailouts are held for charity
And some for fancy dress
But when they're held for pleasure
They're the bailouts that I like best
My bailouts are always bouncing
To the left and to the right
It's my belief that my big bailouts
Should be held every night
We've got big bailouts
We've got big bailouts
We've got big bailouts
Dirty big bailouts
He's got big bailouts
She's got big bailouts
(But we've got the biggest bailouts of them all)
(We've got big bailouts)
(We've got big bailouts)
And I'm just itching to tell you about them
Oh we had such wonderful fun
Seafood cocktail, crabs, crayfish
(But we've got the biggest bailouts of them all)
I could see us ending the day at +400. Or at -200. Crazy times.
My gut feel says that the rally isn't going to hold today and that we're going to slide down into the close, since this entire runup was BS (what, Obama nominated Geithner and now Citi's getting bailed out? Great news! (Not)).
Also, every Wednesday since Sept. 10th, the market has gone down, and there is no trading Thursday.
"Authorities have broken up a gang gym thieves they say was responsible for using stolen credit cards to buy computers and other electronic equipment which was then sold for millions of dollars on eBay, according to federal charges."
Ebay's new business model...fence for stolen goods?
I a move to save money, Hank Paulson announced today that the Department of the Treasury will immediately suspend publication of all economic indicators. 'Given the size of government intervention in the economy,' Paulson was quoted as saying, 'all of the old indicators will be replaced by the PPH, or Paulson Phone History, which will indicate to whom I have been talking. These data will be released one week late, or in real-time to subscribers at hankypanky.net.'"
"Exchanges could impost a "liquidiation only" requirement, which was last used to break the Hunt brothers' attempted corner of the silver market in the early 1980s (hat tip reader Michael)."
I don't think this information is correct. I believe the CBOT imposed the "liquidation only" rule a few years later to head off another corner in soybeans.(several years after the Hunt soybean fiasco.)
Are you guys as disgusted as I am? We ONLY rally on government stick saves. I read on a blog that the Fed has pledged $7.4T to ease the credit freeze which is equivalent to half of last year's GDP, $24,000 for each man woman and child in the US, and 9 times what we've spent in Iraq and Afghanistan!
The Baltic Dry Index continues to go down and is beginning to approach its previous low (which was in the 810's somewhere, I believe). If it continues to decline at the rate it has been for the past few days, it will break that low before the week is out.
SPIEGEL Interview with George Soros: 'The Economy Fell off the Cliff' - SPIEGEL ONLINE - News - International
SPIEGEL INTERVIEW WITH GEORGE SOROS
'The Economy Fell off the Cliff'
George Soros, 78, has made billions as a hedge-fund manager and investor. SPIEGEL spoke with him about the current financial crisis, how he expects President-elect Barack Obama to respond to the economic disaster and the responsibilities borne by speculators.
Do you want the children to starve? Get a grip and Go America!
To reiterate, no, the children must not starve, only fat children will be served at this restaurant--may I recommend trying them with the seed corn? Delicious!
If you combine Elliot wave analysis and the credit indicators, you will notice we have hit an all time high on the one day moving average. If this continues, things are going to get really interesting.
We're going to oscillate between 8K and 10K for a while, until the bond vigilantes show up. Meanwhile, J6P's 401K will keep slowly dropping as the cream is siphoned off to pay the fees.
This is hilarious from Tech Ticker - integrity of the system.
"You can Monday morning quarterback and say, 'They could have done it better,' but they had to do something, and they did." says Dow, a former staff economist at Treasury and the IMF. "I wouldn't be buying Citi shares, but the Fed and Treasury are committed to protecting the integrity of the financial structure, and that has to be applauded."
Seriously isn't it a little bit loopy to think that a nation which can print dollars won't make good on a promise to deliver dollars?
Not at all. The US government responds to political pressure. Default by inflation causes a lot of damage to the US economy but the bond holders lose as much in real terms. The only gain is the income from printing, which is less than the inefficiency losses due to the inflation. A government concerned with the well-being of its country should prefer explicit default over inflationary default by virtue of causing less real damage.
Things were tricky but they gave money to Citi. The UK is promising money to their sad little banks also. This is good. Yet CR sez "We be havin problems." This because nothing has really changed.
citizen energyecon - sorry for the repost, I missed the earlier discussion. Since I had to look at that page 3 times before I believed the numbers, I thought it was worth noting.
.
Sometimes it's interesting to go back a little in time and review old articles. Here's one from 2006. Considering the current context, it's quite informative and validating. For those of you who thought Shelby was just a Good 'ol Boy protecting the interests of farmers in Alabama, you're sadly mistaken. Hey, Guess Who's Back In Town...It's Mack The Knife.
In the most stunning development yet in the scandal that is threatening to rock the very foundation of the US stock market, a former SEC attorney who was fired on September 1, 2005, has released two scathing letters accusing SEC officials of apparent wrongdoing in dealing with an investigation into one of the nations most prominent hedge funds, Pequot Capital Management.
First, on the same day that a federal court struck down a rule requiring hedge funds to register with the SEC, the New York Times reported today that Gary J. Aguirre had been fired by the SEC last August eleven days after he was praised for his work on the Pequot investigation and awarded a merit pay increase. His supervisor, Robert Hanson, wrote in Aguirres performance evaluation just before the firing, that His efforts have uncovered evidence of potential insider trading and possible manipulative trading by the fund. He has consistently gone the extra mile, and then some."
Apparently, going the extra mile wasnt what his superiors at the SEC had in mind, because Aguirre was fired without notice just eleven days later while he was on vacation. The next day, on September 2, 2005, he wrote a letter to SEC Chairman Chris Cox detailing his allegations of wrongdoing within the SEC in connection with the Pequot investigation three weeks before the Faulking Truth reported that Senate Banking Committee Chairman Richard Shelby (R-ALA) had killed a scheduled Banking Committee hearing into stock market fraud and naked short selling.
According to the New York Times article Aguirre has told Congress that the fund's trading had repeatedly aroused suspicion among stock exchange officials, prompting them on 18 occasions to refer cases to the SEC for further investigation. Although both letters have the names deleted, the Times reported that Aguirre was fired when he tried to take testimony from Morgan Stanley CEO John J. Mack, who at the time was the former head of Credit Suisse First Boston, and was under consideration for the Morgan Stanley position. Aguirre had begun to suspect that Mack was the person who provided inside information to Pequot CEO Arthur J. Samberg, that enabled Pequot to realize an $18 million profit involving General Electrics buyout of Heller Financial, when Hellers stock rose 50% in one day.
In the September, 2005 letter to Chairman Cox, Aguirre said, in part: I am compelled to write to you today, my last day with the Commission, out of a sense of duty to the Commissions missionto maintain the integrity of the financial markets and to protect the investor. Unfortunately, my supervisors--as far up the chain as I can seehave lost sight of the mission in the above matter.
When he suggested that they solicit testimony from Mack, Aguirre's Branch Chief, Robert Hanson, said it would be very difficult to obtain approval to take [suspects] testimony because of his powerful political connections." Aguirre said that "Hanson later repeated the same statements to me on several other occasions. Some are confirmed by emails. Assistant Director (Mark) Kreitman participated in one of these discussions.
He went on to say in the letter to Cox that after issuing approximately 100 subpoenas in the investigation where all documents came directly to him, that when he subpoenaed documents from both Samberg and Mack, they suddenly went over his head and began to deal directly with Linda Thomson, and that Pequots counsel also bypassed Aguirre and began to deal directly with Thomson. According to Aguirre, of hundreds of contacts with defense counsel, this is the first time any defense counsel began discussions at the top of the chain of command. Further, at the same time, my supervisors excluded me from the discussions involving [suspected tippee].
From late June through late August, Aguirre continued to send multiple e-mails to my Branch Chief Robert Hanson, Assistant Director Mark Kreitman, and Associate Director Paul Berger, as well as a brief e-mail to Linda Thomson, expressing my concerns. Instead, immediately following praise from both Hanson and Keitman for the excellent job he was doing on the investigation, Aguirre was fired.
After Chairman Cox took no action on the letter from nine months ago, Aguirre wrote another letter to Senators Chuck Hagel and Christopher Dodd of the Senate banking Committee, and sent copies to Senator Shelby and Senator Paul Sarbanes. The second letter, dated May 30, 2006, is 18 pages in length, and is stunning as an indictment of the SEC, the hedge funds, and the entire investment industry. Here are a few excerpts from that letter:
Dear Chairman Hagel and Ranking Member Dodd:
One stubborn question kept popping up when SEC officials recently testified before the full Committee and your Subcommittee: is the SEC adequately protecting the nations capital markets and their participants from the risk of manipulation and fraud by the nations 11,500 hedge funds? The answer is no.
And the answer is no whatever facts you consider. It is no when the SEC fails to consider any hedge fund fraud or manipulation against other market participants for a quarter century: from 1979 to 2004. It is no when the SEC fails to protect mutual fund investors when billions of dollars are siphoned from their accounts by hedge funds. It is no when you compare what the SEC is doing with what its counterparts in Europe are doing and saying It is a deafening no when the SEC halts an insider trading investigation of one of the nations largest hedge funds because the suspected tipper has powerful political connections, as they did with the investigation assigned to me. (page 1)
Fixing the SEC so it can protect investors and capital markets from hedge fund abuse will not be an easy task. Those interests are not just the hedge funds. They include the financial industries that are receiving tens of billions of dollars in revenues for helping hedge funds cheat other market participants or close their eyes to the carnage. At the top of the list are the big investment banks, e.g., Goldman Sachs, Morgan Stanley, Merrill Lynch, and Bear Stearns. Those interests know how to reward friends and punish perceived enemies. Their tentacles reach far. They stopped the hedge fund investigation I was assigned to conduct. They cost me my job. (pages 2 and 3)
Likewise, the value investor has no clue that an attractively priced small cap is on its way to bankruptcy via the naked shorting of an $8 billion hedge fund. (pages 4 and 5)
An investment bank can help a hedge fund make and retain illegal profits in multiple ways. For example, its computers can be programmed to miss illegal hedge fund trading, e.g., naked shorts or wash trades. That appeared to be the case with the prime broker in the investigation I headed. (page 7)
In another section of the letter, he goes on to describe in detail how the SEC mishandled one case after another, saying about one investigation If this case were a movie, it would be titled, The Keystone Cops meet the Gang that Couldnt Shoot Straight.
Aguirre presents damning evidence in page after page of his letter to Congressional leaders, detailing how SEC regulators either covered up or turned a blind eye time and time again to massive fraud in the stock market, fraud that has cost investors billions upon billions of dollars over the course of decades of stock market abuse. Next Wednesday, on June 28, the Senate Judiciary Committee will investigate the relationship between hedge funds and independent analysts. If they have any sense of honor and integrity whatsoever, they will broaden the scope of their hearing and call for a full Congressional investigation into the SEC and the entire securities industry. And their first and star witness should be none other than former SEC attorney Gary J. Aguirre.</i>
Yeah, I'm not saying this has repaired anything. Just re-confirming my observation over the past year that SKF tends to diverge like crazy during and immediately following big market lurches downward. Unfortunately, it's kind of tough to get a short order to fill at those times.
Just let the market keep going up. I thought that the rally would peter out as well, but the action in Europe is probably going to keep this action going for a little while longer.
And with the news that O is going to solve employment issues with money...it smacks of 1960s England with protected jobs that simply couldn't compete...
So, it's getting nigh time to reload and do some quail hunting.
"They earn money in the process. A qualified egg donor is compensated $7,000; gestational surrogates receive $25,000...."Rebecca" says protocols are similar for egg donation. She's a student using the money to help pay her way through school. I don't see how someone could go through all of this just for the money," she said. "You are putting your body through changes."
Shiver me timbers! Most posters here don't qualify for this little operation.
At the end of the day, I personally (at this momment in time) absolutely shouldnt of posted 24/7. With all due respect, its a nightmare and a fairly unique post.
Homedad43 writes: So, it's getting nigh time to reload and do some quail hunting.
So what's the target of choice?
In about a half hour, two segments of an interview with Tom Barack (nice name) will be up on CNBC.com - brilliant interview (not the talking head dunce, but TB). I'll post the links - an absolute must see -
Bill Sale : Treasury sold $28B of 3-month bills at a high rate of 0.15% and a cover of 2.41 versus last week's $27B at 0.15% and 3.14. The $28B 6-month drew 0.49% and a cover of 2.79 versus $27B last week at 0.84% and 3.38. A little soft considering recent demand.
"I am certainly more bullish today than I was even just a week ago."
840 was strong support. A significant break above looks to me like a sign that the bear rally could extend another 60-80. That would fit the pattern that started with the big bounce from 840 on October 28 that lasted about a week and got us back to 1000 before the new leg down. This time 740ish to ~900 before another roll over?
The economics of that seem weird. $7K for a mere egg, yet only $25K for carrying to term? Carrying a pregnancy to term is surely more than four times as physically and emotionally draining as having an egg extracted...
Not all eggs are viable nor are they a slam dunk for fertilization, unless of course, it's Conjure's little guy, smoking a blunt and sipping tiny 'tinis as he swims upstream to spawn...
You can make the argument that CDS on U.S. sovereign debt is silly because there is no counterparty risk when there is a printing press. However the printing press does have a real constraint ... what folks are willing to pay for its' product. Widening CDS spreads suggest that there is political risk in America and that the government may selectively default on its' debt.
Rich
Great call on commodities last week.
OnTheRun,
Thanks. Historically, commodities have had a very low or even negative correlation with stocks. It's very rare to have this kind of tight positive correlation.
Since there's no longer any upside for stocks other than govt. liquidity/bailout pumps, it means that when commodities do break out of tight correlation, they should do very well.
Although a lot of investors have been beaten down or dropped out, the black boxes remain alive and well. They are driving the correlation between commodities and stocks, as hedge funds and mutual funds continue liquidating.
I remember when I first found that Dicker citation. I was trying to understand the implications of the crude oil contract open interest contracting every month. It helped considerably to put the liquidation of crude futures in context. The y-o-y contraction in open interest is considerable.
Not today...but by friday..that's not out of the question.
Mmmm.... Friday....
a.k.a. "rookie trader day" on the street.
(Always hated that.... for a long time at my previous job, I was not only low man on the totem pole, I wasn't married.... so I always got stuck manning the desk on the Friday after Turkey Day)
If you stayed in SKF over the weekend after that run up, you deserve what you got for being greedy.
Second that. This was one of the most predictable rallies EVER. One of those brutal short squeezes that will decapitate the greedy and foolish. I was kicking myself last week for selling SKF early at $205 -- doesn't feel so bad today.
But I am also of the opinion that when this rally tapers off (likely by end of week if not before), the selloff will be equally brutal.
I'm looking forward to getting more puts on COF, SPG, MET, and GS. Highly discounted today.
looking back on friday's after T-day I've found that I've done really well. For the very reason you mention...
This time it's a bit different...it's necessary and not a side show it was.
I think the system is counting on it.
People need to feel warm and fuzzy on black friday....someone (FED, Treas.) and a host of institutions are already starting early this year.
Rich
Agreed. I'm a long time commodities trader. One market can have a big impact on another even if it's not always one on one. That why I watch all of them.
I think we are about to see a policy shift to trap people in over-priced Treasuries:
Re: Prior to the fall of 1970, Treasury sold notes and bonds for cash in subscription offerings and it sometimes refinanced maturing notes and bonds by offering to exchange new notes and bonds for the maturing securities.
Beginning in 1960, Treasury sometimes refinanced maturing debt by issuing new debt inone or more subscription offerings and using the proceeds to redeem the maturing debt. These operationswere called cash refundings.
There have been about 4 very good posts lately at nakedcapitalism by Yves with lots of very good comments which hook up well as a companion to this blog at CR!
The real US economic collapse won't occur until the financial crisis turns into a fiscal crisis. And that seems to be many years off, judging by the yields on 10 year bonds lately. The world's appetite for US government debt is even more insatiable than I had thought. If you had told me that the Treasury would signal its intent to borrow trillions of extra dollars in coming years, that the Fed would be cranking up its printing press, that China would start spending hundreds of billions of dollars on internal stimulus projects, that the oil producing nations would see their oil incomes plummet ...
and that we would STILL see sharply lower long bond yields then I would have said you were crazy. And yet it's true. And if you look at the yields on the Japanese government's 10 year bonds- 1.5% - then it would suggest that it might continue for many years to come. Japan's government debt is way higher than ours as a percentage of GDP, and if they can get away with paying 1.5% on 10 year bonds then that suggests that day of fiscal reckoning for the US is still a long way off.
Don't get me wrong- I do see the US facing Japanese-style economic stagnation for years to come. Our financial industry's ponzi scheme has been exposed, and there is far less credit- far less economic oxygen- to go around. As a result, I would be willing to bet that the Dow is below 10000 5 years from now and that the heydey of Wall Street and the US financial services industry is gone forever.
But as long as the world's producers are willing to ship their hard-earned dollars back to Uncle Sam by the shipload then we will still be able to muddle along for years to come. It won't be a collapse. You don't see an Iceland-style collapse until the world's banks and investors cut off the money spigot, and there are no signs of that happening with the US. Of course, it will happen eventually under the weight of Medicare debt, but that true fiscal crisis still seems to be many years off.
The only thing that might change that equation is a true derivatives meltdown that the US government feels the need to intervene in massively, but I confess that I don't understand enought about the dynamics of how that might play out (I doubt anyone does) to say how likely it might be. I suspect the derivatives situation will be fiscally expensive but manageable, given the experiences with Lehman and AIG to date, but we shall see.
Question: What happens if the world's central banks simply print their own currency and use it to buy other country's bonds? Say if we printed dollars to buy Euro bonds, and they printed Euro's to buy Treasuries?
Nahh...you know how it works. Cat's away....however this time these minions have explicit instructions and the Manager's actually gave out the real cell number's this time.
I have stories I could tell you....I'm sure you have some too.
Anonymous - someone else much more well-versed in the treasury world posted an article a few weeks back about the Great Bond Massacre of... some year in the 90s. It was pretty interesting and your post reminds me a litle of it.
To me, treasuries remind me of when my friend was saying he should get an ARM mortgage (LIBOR linked) because rates were at 1% back in 2002 or 03. I just stared blankly at him and asked him if he thought rates were going to 0 or something.
Zero jobs were created with this waste of taxpayer money, 10 million (and growing) Americans are out work and home prices continue to go down...yeah this rally will last...
Does anyone believe that the Citi deal might have finally been the straw that broke the back on the USD rally? It seems like the stock markets and commodities are following movements in the USD rather closely...something to keep in mind
Interesting Times: there are a bunch of ETFs that follow treasuries but they have varying levels of liquidity and volume as well as history. BIL, SHV, SHY, TBT, PST... a few others that I can't remember off the top of my head.
"Question: What happens if the world's central banks simply print their own currency and use it to buy other country's bonds?"
That's what China and certain other Asian countries have been doing for years to keep their currencies artificially weak. When a Chinese company is paid in dollars, they take those dollars to the Chinese central bank, which prints yuan to buy the dollars, then the central bank buys US treasury bonds with those dollars they just bought. They do that to avoid the appreciation of the yuan, and it certainly works.
And the answer to your question about what happens as a result: a huge worldwide trade and credit bubble forms and it's hell to pay when it pops.
With the Fed/Treasury buying crap thus driving many of these indicators, tracked by you as evidence of recovery, directly, how are these indicators still useful in distinguishing reality from manipulation of asset values? If it's that easy, why not just put out a press release indicating that the recovery is here, all assets are fairly valued, and all children are above average?
Somehow in someway when it gets reported it will be like this:
"Since retailers have already scaled back on inventory yesterday's
black friday returns were not up to last year's...however we anticipated far worse and can say that we are well positioned for the coming shopping season"
No matter what the actual #'s are.
The market will then interpret this as yet again not sucking as much as they thought it would.
irreverent writes:
hey I think we've done this whole run without mentioning that unmentionable committee. who's pulling this bummer in the last 10 minutes?
irreverent | 11.24.08 - 3:59 pm | #
the market is totally unhinged from reality. Nothing has changed other than learning the past few days we are backing $300B and then going to spend $1 trillion in stimulus. Wages continue to go down and unemployment up. So why not market rally.
"Failures to deliver or receive securities climbed to a record $5.311 trillion in the week ended Oct. 22. While the amount fell to $1.26 trillion by Nov. 12, thats still above the average of $165 billion before credit markets seized up in August of last year, based on Fed data that goes back to 1990."
I'm amazed that there is still so much money available to be thrown into the market to move it up after all these losses.
Why, it's almost if 700 billion dollars of gambling chips have been thrown unto the table.
I had to attend a non-stop 6 month marathon Monopoly game again this weekend. The guy running it is a horrible player, but every week his wife buys another Monopoly game and hands him the cash to continue playing. To make it worse, she adds the cost of the games to our beer tab!
Fitch expects department store same store sales trends to be considerably weak through 2009 and credit metrics to weaken from current levels. Fitch expects well-run and well-capitalized operators to increasingly consolidate share as weaker operators with thin operating margins and liquidity issues exit the market.
Home improvement retailers are anticipated to remain pressured by weak sales as consumers continue to cut back on spending in this category. Share consolidation for Home Depot (NYSE: HD) and Lowes, (NYSE: LOW) which account for less than 20% of the market, is possible despite these companies slowing their store growth to focus on strengthening existing operations.
BottomCallTabulatorMatrix writes:
ok, someone try and call tuesday's close, today.
Can someone explain just how all these bailouts are going to be paid back? Are lending spreads going to widen? Tanta use to tutor us as to how the best borrowers were a PITA making no money for the lender. Widening spreads and new lending means by definition looser lending. I sense a rock and a hard place.
And the pop, at least for our purposes is when folks insist that we print our money in their currency . i.e. issue debt in foreign scrip. Would suspect a selective default precedes.
Altair writes:
"Question: What happens if the world's central banks simply print their own currency and use it to buy other country's bonds?"
That's what China and certain other Asian countries have been doing for years to keep their currencies artificially weak. When a Chinese company is paid in dollars, they take those dollars to the Chinese central bank, which prints yuan to buy the dollars, then the central bank buys US treasury bonds with those dollars they just bought. They do that to avoid the appreciation of the yuan, and it certainly works.
And the answer to your question about what happens as a result: a huge worldwide trade and credit bubble forms and it's hell to pay when it pops.
Coming soon to a market near you...how much does FDIC have in the kitty atm?
Goldman to Sell Bonds in First FDIC-Backed Offering (Update2)
By John Detrixhe and Gabrielle Coppola
Nov. 24 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm to convert to a bank, plans to sell notes in the first offering of debt backed by the Federal Deposit Insurance Corp., according to a person with knowledge of the transaction.
Goldman is leading banks in what analysts said may be a wave of as much as $600 billion of government-guaranteed issuance. Goldmans benchmark sale may price as soon as tomorrow, said the person, who declined to be identified because terms arent set. Benchmark size typically means at least $500 million.
The government guarantee opens a new channel for bank funding after the credit seizure sapped demand for financial debt and sent yields to record highs of 7.24 percentage points above Treasuries. Banks, which havent sold dollar-denominated bonds since September, may raise $400 billion to $600 billion under the program within six months, Barclays Capital estimated in October. Goldman to Sell Bonds in First FDIC-Backed Offering (Update3) - Bloomberg.com
mp: I think these are the times when we see investors turn into desperate gamblers....straws are all they have
mykillk | Homepage | 11.24.08 - 4:15 pm | #
Mr. Market needs a quick Viagra patch and infusion drip with a back up ex-large bag and also maybe a hose connected to a truck with a high power pump! Lemmie at her!
Investors also moved their money out of the relative safety of government debt and back into Wall Street as stocks rallied for a second straight session. The Dow Jones industrials were up more than 200 points in afternoon trading.
Today's massive rally left the closing price on the S&P 500 lower than the closing price 11 years ago. Today's close was also one of the lowest daily closing prices this century.
It's okay though, the U.S. Government is going to go deeply into debt to make us all wealthy and prosperous.
Can someone explain just how all these bailouts are going to be paid back? Commissar Rob Dawg
yahoo news:"...Bush joined a meeting of top administration officials who are working on greater economic cooperation with China. Bush met on Friday in Peru with Chinese President Hu Jintao for talks focused in part on the global economic turmoil."
Sold to the highest bidder; Red China. Agreement will be SAIC gets GM and becomes the premier auto exporter in the US over Japan. I think that the GM plants in the US will become China owned but will be sold via the media as joint cooperation. Goodbye UAW. Hello disembowelment of labor laws.
"Anyone know if Citadel is still dangerously close to imploding?"
I'm pretty sure my neighbor works there. (It's like working for the CIA, nobody admits to working "for the outfit".)
He seemed to be in good spirits Saturday morning.
(Figures that Government Sachs would be the one to figure out how best to 'blow up' and 'rip the face off' the taxpayer. I believe that 'government-guaranteed issuance' helps explain why risk premiums are increasing on CDS for Amerikan sovereign debt. Do you think this will be limited to banks? -AM)
Nov. 24 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm to convert to a bank, plans to sell notes in the first offering of debt backed by the Federal Deposit Insurance Corp., according to a person with knowledge of the transaction. Goldman is leading banks in what analysts said may be a wave of as much as $600 billion of government-guaranteed issuance.
Market not wrong, just fixing to suck in as much retail money as possible before the next leg down...the efficient market hypothesis (er, efficient market crooks hypothesis).
Well said...the analogy between the US and Japan is apt. At the time that Japan's economy started down the conventional wisdom was that Japan would overtake the US as the world's most productive economy. So I agree; the US should be able to muddle along. We'll have our lost decade, to be sure...but demand for Treasuries won't be a problem.
"Methinks they haven't spent enough time studying historical charts."
--ac
It's one thing to study the charts, it's another thing to live it in real time. Besides, the comments section would be pretty empty without all of the Ooohing and Aaahing during market hours. And it's not every day you see the financials run up 15.2% in one day.
I agree with you on recent volatility in markets...from a historical perspective volatility was abnormally low during the period 2004-2007(pre-crisis). One can Google references to VIX during that period and find that the low volatility was occasionally commented on by MSM.
NEW YORK (Reuters) - Wachovia Corp (NYSE:WB - News), which lost $33 billion in the last two quarters, said 10 top executives may be entitled to $98.1 million in severance pay after the bank is acquired by Wells Fargo & Co (NYSE:WFC - News).
.
It helps to put it into context via historical charts however never has the system been so dependent on "up" then it is now. It's also plain as day who is doing it...not that I know but at some point someone involved is going to let something slip.
We all have our own idea's as to who it is...but IMO it's not that hard to coordinate massive buying when the entire system is leveraged and only makes money when "up" is achieved.
"There's a lot of profoundly stupid money out there, and all of it speculative. mp"
...And that's different how?
Is this so unexpected or hard to believe? We seem to be solidly in the 7,500 - 9,500 trading range. Any moves to the downside of this range will be met with a large volume of buying, any moves beyond will be met by everyone here.
I believe the rise of Hedge Funds, the use of Alternative strategies in Pension/Endowment Funds, rise of leveraged ETFs and other products will give require the average volatility level to remain at a much higher range vs historical.
Oh it is much more than that - we have experienced intraday volatility (as measured by % swing in the Dow) that is unmatched since 1929 - well not unmatched, but unmatched for continuing volatility... all days going back to 1928 where intraday range divided by the open was equal to or greater than 10% (as far back as Yahoo would puke up the daily data).
Before anyone gets all outraged over the Bush administration being out of the loop don't you think we should find out if Pelosi, Reid, Obama and Frank were equally clueless?
"I believe the rise of Hedge Funds, the use of Alternative strategies in Pension/Endowment Funds, rise of leveraged ETFs and other products will give require the average volatility level to remain at a much higher range vs historical."
I wish you all the luck you're going to need. Sincerely.
"Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the banks current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.
When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.
And since joining Citigroup in 1999 as a trusted adviser to the banks senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another.
Citigroup was ensnared in murky financial dealings with the defunct energy company Enron, which drew the attention of federal investigators; it was criticized by law enforcement officials for the role one of its prominent research analysts played during the telecom bubble several years ago; and it found itself in the middle of regulatory violations in Britain and Japan....As it built up that business, it used accounting maneuvers to move billions of dollars of the troubled assets off its books, freeing capital so the bank could grow even larger...."
So if you were sitting on a pile of money that you could use to purchase a house outright, is this the time to do it? Even though it is declinging. is real estate be a decent hiding place for your cash if you are afraid the government is going to default or cause massive inflation? By the looks of it, nothing appears safe including just keeping the cash in CD's or anything denominated in dollars. I sold my home in 2006 and have been renting. What to do with the money to keep it safe until I buy again?
The Allergists voted to scratch it, and the Dermatologists advised not to make any rash moves.
The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve, and the Obstetricians felt they were all laboring under a misconception.
The Ophthalmologists considered the idea shortsighted.
The Pathologists yelled, 'Over my dead body!' while the Pediatricians said, 'Oh, Grow up!'
The Psychiatrists thought the whole idea was madness, the Radiologists could see right through it, and the Surgeons decided to wash their hands of the whole thing.
The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said, 'This puts a whole new face on the matter.'
The Podiatrists thought it was a step forward, but the Urologists felt the scheme wouldn't hold water.
The Anesthesiologists thought the whole idea was a gas, and the Cardiologists didn't have the heart to say no.
In the end, the Proctologists left the decision up to some assholes in Washington!
While at Citi, Rubin tried to use his government connections to forestall ratings agencies from downgrading ENRON and thereby negatively affecting Citi.
To this day, no explanation has ever been put forth as to why this act by Rubin was not formally investigated by the Justice Department.
Likely, it had something to do with Rubin's work under the Clinton Administration in turning over much of the post collapse Soviet assets to foreigners and kleptocrats.
Rubin clearly knows a thing or two about grand scale looting.
"I wish you all the luck you're going to need. Sincerely.mp"
You can be right about the direction but it does you no good if you're not at least generally right on the price. Bad companies and bad economies can be underpriced. Expecting the end of the world will only work one time in history...and at that point, it won't matter.
"What to do with the money to keep it safe until I buy again?"
You can get 1 year CDs paying 4%+ - look around online. I'm in CDs- there's no sure thing out there, but deflation appears to be the order of the day for the coming year at least and FDIC-backed CDs seems like the best bet for me in a deflationary environment. If inflation unexpectedly returns, you can always cash out your CD with a 6-month interest penalty.
I'd personally wait to buy a house for a period when unemployment and foreclosures peak- maybe 1-2 years from now. But it's largely guesswork.
Thanks Altair, I appreciate the advice. There are so many posts about "upcoming financial destruction" etc that it is getting tough for me not to buy something just to be sure that I can actually get "something" for my money. My thought is that if dollars are going to be worthless or non-redeemable at some point soon I want to be sure my housing is secure.
[i wouldn't be a bit surprised to see a rally to $SPX 1200]
I would. But 1050 wouldn't surprise me. Got 90% long last week Wed & Thurs. Next week we get the auto bailout. We should see 1050 by 2nd week Dec. I already started paring back today just a little. Will be 100% cash by 2nd day after the autobailout. We should get some selling between then and the inauguration to SPX700 and then time to rally up again to 1000. Retail will get savaged the whole way selling & buying at the wrong times...
"My thought is that if dollars are going to be worthless or non-redeemable at some point soon I want to be sure my housing is secure."
Like I said in my earlier post, we aren't facing economic collapse as long as the world is eager to keep buying our treasury bonds at low yields. And they clearly are. We are in a much better position than somewhere like Russia, which is a kleptocracy whose economy is totally dependent upon high commodities prices. One advantage the US economy has- and it's a big one- is its firm foundation of laws, protection of property rights, and stable government.
I wouldn't have anything to do with the stock market in coming years, because we are in a very bad credit bubble collapse and there won't be nearly as much credit to go around, stifling economic growth. But I see no danger of a true doomsday scenario as long as the money is still flowing here from overseas- and it is.
I did read that (well I skimmed it) this morning and it scared the crap out of me, especially the part of it that you pointed out in your original post.
I am another one who is trying to figure out what to do with my cash. I have a large amount in one of those banks that were in the report that you posted and am kind of paralyzed. I thought about spreading it around in smaller community banks, and then I watched the Tom Barrack video that someone posted upthread. He says those banks are going to implode due to commercial real estate problems.
Robert Rubin deserves respect. Henceforth, he shall be referred to as "Bailout Bob"
Bill Moyers interviewed Kevin Phillips; BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM. Kevins referenced Rubin's career as Treas. Sec. under Clinton; "Bob Rubin as Secretary of the Treasury I mean, if he was a Hindu and he was being reincarnated, he'd come back as a pail because this guy bailed out everything you can imagine. They had the Mexican loan bailout. They had the long-term capital management bailout, the Russian Southeast Asian currency bailouts."
You're not the only one it's driving nuts. Conjure and I have been moving money like checkers since mid-year.
We pulled cash out Indy about one month before it fell over. You've just got to do your homework. We spend a lot of time on Bankrate.com and talking to a lot of people.
Eveything is so woerd right now it is tough to stay confindent. Seems the government is changing the rules every week, the stock market dives, unemplyment is rocketing (8% here in SoCal)and commodities are volitile. Hard to know what to do. I understand about the Treasuries being in high demand right now. What scares me is that the demand seems to be in very short term treasuries. That seems to imply they are waiting to move that money somewhere else once a better alternative is discovered. What that alternative is who knows?
Certainly feels like Real Estate will continue to decline here but I am certainly getting trigger happy with all the doom & gloom I read. I'd take a break from it but worry I'll miss something that would have helped my family...
Massive head-up-bottom chart pattern forming.
Speaking of indicators...
John Jansen at Across The Curve points out that CDS on U.S. Treasury debt have hit an all-time high.
Nemo,
So you're bullish here?
Nemo writes:
Massive head-up-bottom chart pattern forming.
Finally, a chart that's an accurate reflection of reality.
Captain Obvious says:
We are in a treasury bubble. Buyer beware!
These indicators have all been pretty stagnant. Is this because there is only one indicator that matters now? That being future US Gov't action.
Yeh...it kind of amuses me that CR spends the time updating these. Whenever he thinks to do this post, he should lay down and take a well deserved nap.
Yesterday's BS is what matters now. A good indicator would be to show the running tab for the bailouts, the contingent tab for the promises, and then show how our expectations of those figures for the future keep getting overrun each time we put them in print.
John Jansen at Across The Curve points out that CDS on U.S. Treasury debt have hit an all-time high.
Swaps on explicit default?
Seriously isn't it a little bit loopy to think that a nation which can print dollars won't make good on a promise to deliver dollars?
Or am I missing something here.
Captain Obvious says:
"We are in a treasury bubble. Buyer beware!"
So what do sellers do?
.
Contacts: Late Friday a friend (in management at a public company) told me his company just obtained a new loan (about $100 million) for expansion and a revolving line of credit. This is a good sign.:
I am doing lines of credit for businesses and am finding liquidity at good rates.
Shouldn't those be "3-month LIBOarrrrrr" and "2-yearrrrr swap spreads"?
Swaps on explicit default?
Because CDS are a creature of contract, the term "default" can take many forms.
Think "credit event"
ac --
Or am I missing something here.
If you are, then so am I. As far as I know, these are actual CDS to insure against the U.S. government defaulting on U.S. bonds denominated in U.S. dollars.
That's what makes it so bizarre.
Just think if all these deals by the Fed had been done in one day? Instant default for the US, dollar crash, stock market crash, etc. The reality though, is that we are in a worse position than we would have been if we had burned this giant pile of money months ago all at once.
So the strategy, that Ive been reiterating since the start of this catastrophe, has been to slowly leak the info out, and hope that we become gradually and increasingly inured to the fact that we the entire banking sector is insolvent, we are in a massive deflation already, and we cant do crap about it.
So when is the day when the alarm goes off? Clearly, even shrubbie said today this isnt the last bail bucket. So when does the total get so big as to be obviously ridiculous. Half of US GDP?
Anyone? Bueller?
Maybe Ben Stein can tell us. (asshat)
Or am I missing something here.
Zimbabwe ran out of ink for their paper and nobody would sell them more ink...
If you are, then so am I. As far as I know, these are actual CDS to insure against the U.S. government defaulting on U.S. bonds denominated in U.S. dollars.
That's what makes it so bizarre.
Maybe if there's a big cotton crop failure.
Although I do love these updates, I do have to wonder what it all means in the face of ever-increasing governmental intervention in the markets.
the govt is backstopping everything except for Middle America, thus is it a surprise that some of these numbers are holding steady/improved?
Money for nothing.
Although I guess the govt hasn't started giving out Chicks for Free.
yet.
"head-up-bottom chart pattern"
What do it mean?
"treasury bubble"
What are the characteristics / implications?
Thanks
ac, Nemo,
"That's what makes it so bizarre."
No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way.
Nostrovia,
There is no credit crunch for businesses/people with good credit.
My understanding is that CDSs on US Treasuries are bookkeeping instruments to hedge positions taken in Treasuries. That's it.
Improvement in the market for high grade corporate bonds?
(Engaging in a bit of perfunctory optimism to create an air of legitimacy about my opinions.)
I gues one could simply call CDS on Treasuries an inflation kicker;-}
why bother insuring treasuries against default anyway/
Why not just short them and call a cd broker and get your money into the banking system?
You could live the rest of your life on the spread between $1 billion in 1 year treasuries and 1 year of cds.
Gack, I am having a bill-the-cat moment.
That combined with Bonobo's commentary about the Balts blowing out next.
Bet Putin ties the Rouble explicitly to Gold and mandates payments for oil and gas in roubles.
Gah, this is going to get ugly fast.
Someday this war's gonna end...
On your tubes rubes; this just in from nakedcapitalist DH:
"A day after Ramanathans warning, the Treasury said it was reviewing the trading of two- and five-year notes after a scarcity in the securities led to rising fails. The Treasury has conducted at least nine such reviews, known as large position reports, to monitor against market manipulation since 1997.
A week later the Treasury Market Practices Group recommended imposing a penalty rate that equals either 3 percent minus the Feds target rate for overnight loans between banks, or zero, whichever is greater. The central banks target is 1 percent. The TMPG said it plans to discuss by Jan. 5 a potential plan to implement the measures."
WHAT this is like is this (this is a special treat, so no need to thank me, as usual {punk}):
From the Yves treasure vault:
Naked Capitalism
Daniel Dicker, a former oil trader writing at TheStreet.com, contends that there is a way to test the hypothesis that speculation is influencing oil prices (a view that Dicker supports). Exchanges could impost a "liquidiation only" requirement, which was last used to break the Hunt brothers' attempted corner of the silver market in the early 1980s (hat tip reader Michael).
In one instance, however, the speculation premium was "successfully" tested - in the silver markets in 1980 when the Hunt brothers attempted to corner the market. As silver approached $50 an ounce in January 1980, the commercial participants asked for relief from the enormous margin calls from ever-rising prices. The CFTC and the Comex (the predecessor to the Nymex) responded effectively by imposing "liquidation-only" trading -- traders were allowed only to close existing positions and not permitted to initiate new positions.
This forced purely speculative positions to be closed rapidly, as they could no longer be "rolled" into future months at expiration. This caused the price of silver to drop by $12 the day after it was imposed, a decrease of over 20%! Over the course of the next three months, as contract months expired, the price dropped over 50%.
You can have Nancy Pelosi, YTL, to keep you warm on those cold nights at sea.
Speed writes:
There is no credit crunch for businesses/people with good credit.
True. What makes this a crisis is that GDP has been built on people/business with bad credit borrowing and spending. Take that awayand GDP shrinks mightily.
No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way.
This system is based in US law, is it not?
Don't we have a legislature that will bend over backward to give the Fed and treasury any power they demand so long as those demands come in the form of threats of another Great Depression?
Anyhow it seems that historically it's usually the politicians (e.g. the ones that make the rules), not the bankers, that demand the money printing.
We are a nation governed by one and only one law:
Thou shalt grow the economy no matter the cost.
You can have Nancy Pelosi, YTL, to keep you warm on those cold nights at sea.
I think a live "Viking burial" would be a preferable method.
I know that we are all in a big international race to see whose currency can suck the hardest...and all of us nationalistic Amerikans think that despite our problems...bucky is still the best fiat going...
But I think he is not.
When the SHTF who ever has the energy + military + food = winner.
Energy being key. Is the SPR big enough to guarantee us the other two?
I don't know.
CR -
Thanks for this segment on your blog. I find it very useful in predicting mortgage rates for my clients and I've been able to put in timely locks due to your insight. Thanks again. You are appreciated.
I think Paulson should be put on the dollar in place of washington...just so that once dollars are roughly equal to pennies OR toilet paper....I can at least have the pleasure of wiping my ass with his face.
Darth as in Toll?
Remember the debate on Winter, oh, six months ago regarding FRN's vs Treasuries? Don't know which side you fell to on that one, if any, but there is a point to Misean's:
"No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way."
I find it very useful in predicting mortgage rates for my clients
rotflmao
CR, I want to re-iterate Nigel's thanks.
I find it very useful in predicting mortgage rates for my purchases and I've been able to put in timely locks due to your insight.
No it's not. It's something I've been saying for a while. $'s cannot just be printed. System doesn't work that way.
The dollars have already been printed through asset valuations. The "printing" taking place now is merely trying to keep those assets artificially propped up. The same goes for these homeowner bailouts.
What these redefault rates tell us is the street-level attempt to keep house prices high is failing. Which we all knew would happen anyway.
"head-up-bottom chart pattern"
This is actually a bent over bottom in the air chart. Very bearish for taxpayers today. Great for bankers.
Headlines from Bloomburg right now:
•Freddie Mac Portfolio Expands at 44% Rate in October Following U.S. Order
•AIG Auto Unit Will Drop Damaged Brand Name, Cut Jobs by 6.6% to Ease Sale
•Paulson May Ask for Last $350 Billion of TARP to Bolster Consumer Credit
Max,
"Which we all knew would happen anyway."
Check.
Nostrovia,
"The dollars have already been printed through asset valuations. The "printing" taking place now is merely trying to keep those assets artificially propped up. The same goes for these homeowner bailouts."
The illusion giveth, the illusion taketh away?
Speaking of Pirates:
Online black market valued at nearly $300 million
"The company described an "online underground economy that has matured into an efficient, global marketplace in which stolen goods and fraud-related services are regularly bought and sold.""
Bill gross should be tried for treason.
Well I'm upper upper class high society
God's gift to bailout notoriety
And I always fill my bailouts
The event is never small
The social pages say I've got
The biggest bailouts of all
I've got big bailouts
I've got big bailouts
They're such big bailouts
And they're dirty big bailouts
And he's got big bailouts
And she's got big bailouts
(But we've got the biggest bailouts of them all)
And my bailouts are always bouncing
My bailout's always full
And everybody comes and comes again
If your name is on the guest list
No one can take you higher
Everybody says I've got
Great bailouts of fire
I've got big bailouts
Oh I've got big bailouts
And they're such big bailouts
Dirty big bailouts
And he's got big bailouts
And she's got big bailouts
(But we've got the biggest bailouts of them all)
Some bailouts are held for charity
And some for fancy dress
But when they're held for pleasure
They're the bailouts that I like best
My bailouts are always bouncing
To the left and to the right
It's my belief that my big bailouts
Should be held every night
We've got big bailouts
We've got big bailouts
We've got big bailouts
Dirty big bailouts
He's got big bailouts
She's got big bailouts
(But we've got the biggest bailouts of them all)
(We've got big bailouts)
(We've got big bailouts)
And I'm just itching to tell you about them
Oh we had such wonderful fun
Seafood cocktail, crabs, crayfish
(But we've got the biggest bailouts of them all)
(Bailout sucker)
(Bailout sucker)
(Bailout sucker)
(Bailout sucker)
If you have Treasuries to sell, better do it today!
My peanut butter spread on my bagel was quite pleasing this morning.
Time for predictions:
1) Where do we end up for the day/week?
2) How long does this rally last?
I could see us ending the day at +400. Or at -200. Crazy times.
Even if this rally lasts through the week, it won't last much thereafter. We'll be heading much lower soon.
To summarize again latest FED/Treasury moves:
Hole, meet Head.
I could see us ending the day at +400. Or at -200. Crazy times.
My gut feel says that the rally isn't going to hold today and that we're going to slide down into the close, since this entire runup was BS (what, Obama nominated Geithner and now Citi's getting bailed out? Great news! (Not)).
Also, every Wednesday since Sept. 10th, the market has gone down, and there is no trading Thursday.
Speed writes:
There is no credit crunch for businesses/people with good credit.
Chicken/egg. People who qualify for new credit aren't looking for new credit.
Ahoy there, mateys!
Piracy in the Pacific NW:
Hit-and-run locker room theft ring busted, say feds
"Authorities have broken up a gang gym thieves they say was responsible for using stolen credit cards to buy computers and other electronic equipment which was then sold for millions of dollars on eBay, according to federal charges."
Ebay's new business model...fence for stolen goods?
We're all pirates now. Arrrr!
You can have Nancy Pelosi, YTL, to keep you warm on those cold nights at sea.
Huh? not sure what you're referencing.
as for Ms. Pelosi... I try not to sleep with vinyl and plastic, especially when it vibrates.
"Treasury to Suspend All Economic Indicators
I a move to save money, Hank Paulson announced today that the Department of the Treasury will immediately suspend publication of all economic indicators. 'Given the size of government intervention in the economy,' Paulson was quoted as saying, 'all of the old indicators will be replaced by the PPH, or Paulson Phone History, which will indicate to whom I have been talking. These data will be released one week late, or in real-time to subscribers at hankypanky.net.'"
"Exchanges could impost a "liquidiation only" requirement, which was last used to break the Hunt brothers' attempted corner of the silver market in the early 1980s (hat tip reader Michael)."
I don't think this information is correct. I believe the CBOT imposed the "liquidation only" rule a few years later to head off another corner in soybeans.(several years after the Hunt soybean fiasco.)
Paulson Phone History, which will indicate to whom I have been talking.
Best thing I have heard all day!
Arrrr...
Hooodathunk that gym's could be pirated.
Arrrr.....
Nostrovia,
I'm shorting the hell out of this little banana republic.
Paulson Phone History, which will indicate to whom I have been talking.
sounds like a promise from Ernestine.
Are you guys as disgusted as I am? We ONLY rally on government stick saves. I read on a blog that the Fed has pledged $7.4T to ease the credit freeze which is equivalent to half of last year's GDP, $24,000 for each man woman and child in the US, and 9 times what we've spent in Iraq and Afghanistan!
Insane rally in Europe today. Absolutely insane. Major World Indices - Yahoo! Finance
The Baltic Dry Index continues to go down and is beginning to approach its previous low (which was in the 810's somewhere, I believe). If it continues to decline at the rate it has been for the past few days, it will break that low before the week is out.
Becky writes:
Are you guys as disgusted as I am?
Why no sirreee Ms. Becky. I think this is what is needed! Do you want the children to starve? Get a grip and Go America!
SPIEGEL Interview with George Soros: 'The Economy Fell off the Cliff' - SPIEGEL ONLINE - News - International
SPIEGEL INTERVIEW WITH GEORGE SOROS
'The Economy Fell off the Cliff'
George Soros, 78, has made billions as a hedge-fund manager and investor. SPIEGEL spoke with him about the current financial crisis, how he expects President-elect Barack Obama to respond to the economic disaster and the responsibilities borne by speculators.
From Obama's speech today:
"Further, beyond any immediate actions we may take, we need a recovery plan for both Wall Street and Main Street"
At least he's honest; Wall Street before Main Street.
PeakVT,
Noted earlier - now that is a 'robust' jam job!
Do you want the children to starve? Get a grip and Go America!
To reiterate, no, the children must not starve, only fat children will be served at this restaurant--may I recommend trying them with the seed corn? Delicious!
"Insane rally in Europe today."
All problems solved. Got fixed over the weekend. Just needed to add a quart of oil and some water to the radiator.
Nostrovia,
If you combine Elliot wave analysis and the credit indicators, you will notice we have hit an all time high on the one day moving average. If this continues, things are going to get really interesting.
Really blackhat, a restaurant that served skinny children might also serve squirrel. Really not the proper place to take a date or potential client.
Nostrovia,
Insane rally in Europe today. Absolutely insane.
We're going to oscillate between 8K and 10K for a while, until the bond vigilantes show up. Meanwhile, J6P's 401K will keep slowly dropping as the cream is siphoned off to pay the fees.
Santa's gonna come down the chimney this year with a big stick and do some serious ass kicking.
IMO a zero 3mo Treasury makes for an infinite credit crisis. Divide by zero.
Anyway, the next shoe to drop; cargo piling up outside Long Beach and Port Hueneme either refused or awaiting payment.
Of course, fully expect Persecuted Comrade Anonymouse to tout the anticipated profits of
buying ANYTHING today!!!!
This is hilarious from Tech Ticker - integrity of the system.
"You can Monday morning quarterback and say, 'They could have done it better,' but they had to do something, and they did." says Dow, a former staff economist at Treasury and the IMF. "I wouldn't be buying Citi shares, but the Fed and Treasury are committed to protecting the integrity of the financial structure, and that has to be applauded."
Prediction: Dow to 9,100 by Friday, just tell O to keep the cabinet announcement and Presidential-promises coming.
Yes We Can Re-Leverage!
FRED writes:
Bill gross should be tried for treason.
but he seems such a mild mannered and pleasant sort of a person, collects stamps as a hobby I understand. I wonder if he had any exposure to C?
I can't even read all CR's postings, much less the threads. Good glod!!
lawyerliz | 11.24.08 - 2:37 pm
Well by Globnick Women - Ask for the Summary!
Seriously isn't it a little bit loopy to think that a nation which can print dollars won't make good on a promise to deliver dollars?
Not at all. The US government responds to political pressure. Default by inflation causes a lot of damage to the US economy but the bond holders lose as much in real terms. The only gain is the income from printing, which is less than the inefficiency losses due to the inflation. A government concerned with the well-being of its country should prefer explicit default over inflationary default by virtue of causing less real damage.
Futures sure seem to be jamming into the market open today. Head fake, or are we heading for a limit up day? All is well, right? Right?
OK, LawyerLiz,
Things were tricky but they gave money to Citi. The UK is promising money to their sad little banks also. This is good. Yet CR sez "We be havin problems." This because nothing has really changed.
citizen energyecon - sorry for the repost, I missed the earlier discussion. Since I had to look at that page 3 times before I believed the numbers, I thought it was worth noting.
BTW, there is something completely surreal about the seeing this on my ticker window:
SKF 188.74 -55.38
Still at nearly 190 despite a 23% haircut. Madness.
Not yet seeing a backoff in oil/gold or a rally yen or bonds. Looks like this rally in sp should hold today.
Money for nothing.
Although I guess the govt hasn't started giving out Chicks for Free.
yet.
Yearning to Learn | 11.24.08 - 1:54 pm
Ahhh yes, but the Chimp is in fact free (as of Jan 21).
9% decline rate
ACP,
Look at the XLF chart. This rally is insignificant compared to the damage that was done to financial stocks.
.
Sometimes it's interesting to go back a little in time and review old articles. Here's one from 2006. Considering the current context, it's quite informative and validating. For those of you who thought Shelby was just a Good 'ol Boy protecting the interests of farmers in Alabama, you're sadly mistaken. Hey, Guess Who's Back In Town...It's Mack The Knife.
The Keystone Cops meet the Gang that Couldn’t Shoot Straight
In the most stunning development yet in the scandal that is threatening to rock the very foundation of the US stock market, a former SEC attorney who was fired on September 1, 2005, has released two scathing letters accusing SEC officials of apparent wrongdoing in dealing with an investigation into one of the nations most prominent hedge funds, Pequot Capital Management.
First, on the same day that a federal court struck down a rule requiring hedge funds to register with the SEC, the New York Times reported today that Gary J. Aguirre had been fired by the SEC last August eleven days after he was praised for his work on the Pequot investigation and awarded a merit pay increase. His supervisor, Robert Hanson, wrote in Aguirres performance evaluation just before the firing, that His efforts have uncovered evidence of potential insider trading and possible manipulative trading by the fund. He has consistently gone the extra mile, and then some."
Apparently, going the extra mile wasnt what his superiors at the SEC had in mind, because Aguirre was fired without notice just eleven days later while he was on vacation. The next day, on September 2, 2005, he wrote a letter to SEC Chairman Chris Cox detailing his allegations of wrongdoing within the SEC in connection with the Pequot investigation three weeks before the Faulking Truth reported that Senate Banking Committee Chairman Richard Shelby (R-ALA) had killed a scheduled Banking Committee hearing into stock market fraud and naked short selling.
According to the New York Times article Aguirre has told Congress that the fund's trading had repeatedly aroused suspicion among stock exchange officials, prompting them on 18 occasions to refer cases to the SEC for further investigation. Although both letters have the names deleted, the Times reported that Aguirre was fired when he tried to take testimony from Morgan Stanley CEO John J. Mack, who at the time was the former head of Credit Suisse First Boston, and was under consideration for the Morgan Stanley position. Aguirre had begun to suspect that Mack was the person who provided inside information to Pequot CEO Arthur J. Samberg, that enabled Pequot to realize an $18 million profit involving General Electrics buyout of Heller Financial, when Hellers stock rose 50% in one day.
In the September, 2005 letter to Chairman Cox, Aguirre said, in part: I am compelled to write to you today, my last day with the Commission, out of a sense of duty to the Commissions missionto maintain the integrity of the financial markets and to protect the investor. Unfortunately, my supervisors--as far up the chain as I can seehave lost sight of the mission in the above matter.
When he suggested that they solicit testimony from Mack, Aguirre's Branch Chief, Robert Hanson, said it would be very difficult to obtain approval to take [suspects] testimony because of his powerful political connections." Aguirre said that "Hanson later repeated the same statements to me on several other occasions. Some are confirmed by emails. Assistant Director (Mark) Kreitman participated in one of these discussions.
He went on to say in the letter to Cox that after issuing approximately 100 subpoenas in the investigation where all documents came directly to him, that when he subpoenaed documents from both Samberg and Mack, they suddenly went over his head and began to deal directly with Linda Thomson, and that Pequots counsel also bypassed Aguirre and began to deal directly with Thomson. According to Aguirre, of hundreds of contacts with defense counsel, this is the first time any defense counsel began discussions at the top of the chain of command. Further, at the same time, my supervisors excluded me from the discussions involving [suspected tippee].
From late June through late August, Aguirre continued to send multiple e-mails to my Branch Chief Robert Hanson, Assistant Director Mark Kreitman, and Associate Director Paul Berger, as well as a brief e-mail to Linda Thomson, expressing my concerns. Instead, immediately following praise from both Hanson and Keitman for the excellent job he was doing on the investigation, Aguirre was fired.
After Chairman Cox took no action on the letter from nine months ago, Aguirre wrote another letter to Senators Chuck Hagel and Christopher Dodd of the Senate banking Committee, and sent copies to Senator Shelby and Senator Paul Sarbanes. The second letter, dated May 30, 2006, is 18 pages in length, and is stunning as an indictment of the SEC, the hedge funds, and the entire investment industry. Here are a few excerpts from that letter:
Dear Chairman Hagel and Ranking Member Dodd:
One stubborn question kept popping up when SEC officials recently testified before the full Committee and your Subcommittee: is the SEC adequately protecting the nations capital markets and their participants from the risk of manipulation and fraud by the nations 11,500 hedge funds? The answer is no.
And the answer is no whatever facts you consider. It is no when the SEC fails to consider any hedge fund fraud or manipulation against other market participants for a quarter century: from 1979 to 2004. It is no when the SEC fails to protect mutual fund investors when billions of dollars are siphoned from their accounts by hedge funds. It is no when you compare what the SEC is doing with what its counterparts in Europe are doing and saying It is a deafening no when the SEC halts an insider trading investigation of one of the nations largest hedge funds because the suspected tipper has powerful political connections, as they did with the investigation assigned to me. (page 1)
Fixing the SEC so it can protect investors and capital markets from hedge fund abuse will not be an easy task. Those interests are not just the hedge funds. They include the financial industries that are receiving tens of billions of dollars in revenues for helping hedge funds cheat other market participants or close their eyes to the carnage. At the top of the list are the big investment banks, e.g., Goldman Sachs, Morgan Stanley, Merrill Lynch, and Bear Stearns. Those interests know how to reward friends and punish perceived enemies. Their tentacles reach far. They stopped the hedge fund investigation I was assigned to conduct. They cost me my job. (pages 2 and 3)
Likewise, the value investor has no clue that an attractively priced small cap is on its way to bankruptcy via the naked shorting of an $8 billion hedge fund. (pages 4 and 5)
An investment bank can help a hedge fund make and retain illegal profits in multiple ways. For example, its computers can be programmed to miss illegal hedge fund trading, e.g., naked shorts or wash trades. That appeared to be the case with the prime broker in the investigation I headed. (page 7)
In another section of the letter, he goes on to describe in detail how the SEC mishandled one case after another, saying about one investigation If this case were a movie, it would be titled, The Keystone Cops meet the Gang that Couldnt Shoot Straight.
Aguirre presents damning evidence in page after page of his letter to Congressional leaders, detailing how SEC regulators either covered up or turned a blind eye time and time again to massive fraud in the stock market, fraud that has cost investors billions upon billions of dollars over the course of decades of stock market abuse. Next Wednesday, on June 28, the Senate Judiciary Committee will investigate the relationship between hedge funds and independent analysts. If they have any sense of honor and integrity whatsoever, they will broaden the scope of their hearing and call for a full Congressional investigation into the SEC and the entire securities industry. And their first and star witness should be none other than former SEC attorney Gary J. Aguirre.</i>
.
sm_landlord -
Yeah, I'm not saying this has repaired anything. Just re-confirming my observation over the past year that SKF tends to diverge like crazy during and immediately following big market lurches downward. Unfortunately, it's kind of tough to get a short order to fill at those times.
Just let the market keep going up. I thought that the rally would peter out as well, but the action in Europe is probably going to keep this action going for a little while longer.
And with the news that O is going to solve employment issues with money...it smacks of 1960s England with protected jobs that simply couldn't compete...
So, it's getting nigh time to reload and do some quail hunting.
So what's the target of choice?
Novel cash generating tactic:
"Surge In Egg Donors, Surrogate Moms Amid Downturn."
"They earn money in the process. A qualified egg donor is compensated $7,000; gestational surrogates receive $25,000...."Rebecca" says protocols are similar for egg donation. She's a student using the money to help pay her way through school. I don't see how someone could go through all of this just for the money," she said. "You are putting your body through changes."
Shiver me timbers! Most posters here don't qualify for this little operation.
Courtesy of Financial Arrrrmageddon.
At the end of the day, I personally (at this momment in time) absolutely shouldnt of posted 24/7. With all due respect, its a nightmare and a fairly unique post.
This is not rocket science
Morocco:
Would you please just provide a link next time?
Thanks.
PeakVT writes:
Insane rally in Europe today.
They probably figured out that the US is toast, hence the fireworks.
Panda:
Welcome to the 21st century.
It's in a sense, nothing more than a high-tech means of selling the body for the pleasure of someone else.
Call 'em a 7k girl.
The market agrees with the insanity. Up, up, and up on bad, bad, and bad news.
CR:
I do find this segment a nice reality base amidst the verbal carnage.
But could you post a video link of some bimbo in front of a blue screen with a pointer, perhaps?
Consider short call spread's on Fin's if you don't like this pump.
I think a live "Viking burial" would be a preferable method.
ac | 11.24.08 - 2:03 pm
Ahh...the good old days.
Homedad43 writes: So, it's getting nigh time to reload and do some quail hunting.
So what's the target of choice?
In about a half hour, two segments of an interview with Tom Barack (nice name) will be up on CNBC.com - brilliant interview (not the talking head dunce, but TB). I'll post the links - an absolute must see -
I am certainly more bullish today than I was even just a week ago.
Businesses need credit to hire, to expand and to plan. So do individuals.
Would you please just provide a link next time?
Yeah, my bad, I meant to post a portion of it and copied the whole thing and accidently hit the Publish button.
Homedad43
Target=? This is an interesting area right here. 840-860.
I have an update on the "Status Quo" in Washington.
The View From The Peak
Don't anybody be disappointed or surprised at how long they can keep this gin joint smokin'.
day two of the timmy and lassie rally
the news is so bad it's good
gotta pump til the end of the month
Bill Sale : Treasury sold $28B of 3-month bills at a high rate of 0.15% and a cover of 2.41 versus last week's $27B at 0.15% and 3.14. The $28B 6-month drew 0.49% and a cover of 2.79 versus $27B last week at 0.84% and 3.38. A little soft considering recent demand.
"I am certainly more bullish today than I was even just a week ago."
840 was strong support. A significant break above looks to me like a sign that the bear rally could extend another 60-80. That would fit the pattern that started with the big bounce from 840 on October 28 that lasted about a week and got us back to 1000 before the new leg down. This time 740ish to ~900 before another roll over?
Homedad-
"it smacks of 1960s England with protected jobs that simply couldn't compete..."
One of the other consequences of 1960's England was the instatement of bank holiday's.
Coming soon here.
Ciao
MS
They have rally envy with the Euro indices...
"They have rally envy with the Euro indices..."
With apologies to Seinfeld: Our bear rallies are fake, but they're spectacular.
head up bottom chart=ass hat?
Not that there is anything wrong with that...
Re: IMO a zero 3mo Treasury makes for an infinite credit crisis. Divide by zero.
"These indicators have all been pretty stagnant. Is this because there is only one indicator that matters now? That being future US Gov't action."
That and the Black Swan market.
The doublelong ETFs I feathered into M-W of last week are finally green again. Oh happy day.
With tomorrow the big economic data release is preliminary Q3 GDP... if that is too stinky, can this jam job (er, countertrend rally) be kept alive?
The economics of that seem weird. $7K for a mere egg, yet only $25K for carrying to term? Carrying a pregnancy to term is surely more than four times as physically and emotionally draining as having an egg extracted...
Q3 GDPis already priced into the market. what we have is a forward looking rally that sees a second half recovery . . . second half 2011
Rich
Great call on commodities last week.
After sauteing your Squirrel au Poivre Nothing found for Recipes Cookbook Poivre
there is still plenty to do:
The History of Felt Hats
and Hat Making
The History of Felt Hats and Hat Making
The woman is put on powerful hormones before hand. I forget why. To ripen several eggs maybe? It's very draining. Not just the extraction.
SRS starting to look pretty attractive again.
DOW 9,000 . . . . today!
Why no mention that the effective Fed funds rate is climbing towards the target rate? 0.57 on 11/21, up from the low of 0.22 hit on 10/31.
Federal Funds Rate Data - Federal Reserve Bank of New York
mal:
Not all eggs are viable nor are they a slam dunk for fertilization, unless of course, it's Conjure's little guy, smoking a blunt and sipping tiny 'tinis as he swims upstream to spawn...
Still no word on the "urgent" short-selling conference call.
That could get ugly.
(Like, 2,000 points worth of ugly).
Eric,
Have to get well north of 97 on the yen...just sayi
You can make the argument that CDS on U.S. sovereign debt is silly because there is no counterparty risk when there is a printing press. However the printing press does have a real constraint ... what folks are willing to pay for its' product. Widening CDS spreads suggest that there is political risk in America and that the government may selectively default on its' debt.
Long bond taking a dive.
BUY NOW OR BE PRICED OUT FOREVER ^H^H^H^H^H^H^H NEXT WEEK.
Andrew writes:
Why no mention that the effective Fed funds rate is climbing towards the target rate?
So much news, so little time.
We are forming a bicep, arm and middle finger. What does that signal?
The woman is put on powerful hormones before hand. I forget why. To ripen several eggs maybe? It's very draining. Not just the extraction.
Surely buying a child from China or Ethiopia is much less costly?
WAG:
8500 DOW
860 S&P
$160 SKF
Thanks. Historically, commodities have had a very low or even negative correlation with stocks. It's very rare to have this kind of tight positive correlation.
Since there's no longer any upside for stocks other than govt. liquidity/bailout pumps, it means that when commodities do break out of tight correlation, they should do very well.
Although a lot of investors have been beaten down or dropped out, the black boxes remain alive and well. They are driving the correlation between commodities and stocks, as hedge funds and mutual funds continue liquidating.
I am constantly humored by the sideline discussions that creep up in here.
Calculators
Guns
Liquor
Pregnancy
To name but a few. Too funny.
I've been a regular reader for 2 months now. How can I ever repay you all for the comfort I've taken from your comments?
Ah yes ..
Squirrel Recipes
"The 3-month treasury is still at zero ..."
I'm afraid that is going to be unchanged for quite some time.
"DOW 9,000 . . . . today!"
Not today...but by friday..that's not out of the question.
Low volume environments will allow it IMO, unless we get some blow-up that no one figured out...
We're pushing +400 on DJI already
Ciao
MS
This is worth watching
Mon. Nov. 24 2008 | 2:43 PM[09:10]Famed investor Tom Barrack shares his economic outlook.
Video - CNBC.com
HPQ reports AH today.
It's not participating in the rally, down 1.77%
Hmmm....
If you stayed in SKF over the weekend after that run up, you deserve what you got for being greedy.
Corporal Frazer +1
Is 12th Percentile going to get the $100 SRS he asked for for christmas?
Kona Surrenders -
I remember when I first found that Dicker citation. I was trying to understand the implications of the crude oil contract open interest contracting every month. It helped considerably to put the liquidation of crude futures in context. The y-o-y contraction in open interest is considerable.
Look at those pump monkeys run. Weeeeeeeee!
and QID...don't forget that one too...
Ciao
MS
There it is..We just got the finger.
What does it mean? To the moon Alice.
I love watching that 13-week Treasury, just lots of fun!
^IRX: Basic Chart for 13-WEEK TREASURY BILL - Yahoo! Finance
Great range for the volatility! 0.005 - 0.01
Not today...but by friday..that's not out of the question.
Mmmm.... Friday....
a.k.a. "rookie trader day" on the street.
(Always hated that.... for a long time at my previous job, I was not only low man on the totem pole, I wasn't married.... so I always got stuck manning the desk on the Friday after Turkey Day)
check that +420 on DJI...
Madness....
Ciao
MS
the middle finger is an old chart painting trick, generally it means you been f'ed
® writes:
If you stayed in SKF over the weekend after that run up, you deserve what you got for being greedy.
Second that. This was one of the most predictable rallies EVER. One of those brutal short squeezes that will decapitate the greedy and foolish. I was kicking myself last week for selling SKF early at $205 -- doesn't feel so bad today.
But I am also of the opinion that when this rally tapers off (likely by end of week if not before), the selloff will be equally brutal.
I'm looking forward to getting more puts on COF, SPG, MET, and GS. Highly discounted today.
Oh yea...The 3 oclock finger. Someone
is getting shafted right now:-)
US Dollar index down 2% today
Stocks Up
Oil Up
more cash on the fire
Eric writes:
Still no word on the "urgent" short-selling conference call.
The world still has Cox on hold. Cox has been listening to Muzak for 72 hrs. now. Self esteem issues obviously
eric-
looking back on friday's after T-day I've found that I've done really well. For the very reason you mention...
This time it's a bit different...it's necessary and not a side show it was.
I think the system is counting on it.
People need to feel warm and fuzzy on black friday....someone (FED, Treas.) and a host of institutions are already starting early this year.
Ciao
MS
...I'm an idiot but,....
Why couldn't DaFedGuv just set up a "Bad Debt Treasury Bank" kinda like Citi?
Then wouldn't they all just have a "Do-Over"?
"PSYCH....Bad Debt?...Just Kiddin"
2.2 trill in assets and market cap in the billions? pandit the bandit
I can't wait to reload SKF... thinking 120 - 140 is a safe play... depends on velocity when it gets near that range.
Rich
Agreed. I'm a long time commodities trader. One market can have a big impact on another even if it's not always one on one. That why I watch all of them.
Mr. Sparkle ,
I think we are about to see a policy shift to trap people in over-priced Treasuries:
Re: Prior to the fall of 1970, Treasury sold notes and bonds for cash in subscription offerings and it sometimes refinanced maturing notes and bonds by offering to exchange new notes and bonds for the maturing securities.
Beginning in 1960, Treasury sometimes refinanced maturing debt by issuing new debt inone or more subscription offerings and using the proceeds to redeem the maturing debt. These operationswere called cash refundings.
ice solid respectable 8500
happy daze are here agai
There have been about 4 very good posts lately at nakedcapitalism by Yves with lots of very good comments which hook up well as a companion to this blog at CR!
Government Lending Support Pledges and Measures At $7.4 Trillion « naked capitalism
Another day like this and I am going short agai
SKF: Good god.
@Rich / OnTheRun,
do you guys think the PMs are a intermediate/long term investment or is it a short-term trade?
TIA.
The real US economic collapse won't occur until the financial crisis turns into a fiscal crisis. And that seems to be many years off, judging by the yields on 10 year bonds lately. The world's appetite for US government debt is even more insatiable than I had thought. If you had told me that the Treasury would signal its intent to borrow trillions of extra dollars in coming years, that the Fed would be cranking up its printing press, that China would start spending hundreds of billions of dollars on internal stimulus projects, that the oil producing nations would see their oil incomes plummet ...
and that we would STILL see sharply lower long bond yields then I would have said you were crazy. And yet it's true. And if you look at the yields on the Japanese government's 10 year bonds- 1.5% - then it would suggest that it might continue for many years to come. Japan's government debt is way higher than ours as a percentage of GDP, and if they can get away with paying 1.5% on 10 year bonds then that suggests that day of fiscal reckoning for the US is still a long way off.
Don't get me wrong- I do see the US facing Japanese-style economic stagnation for years to come. Our financial industry's ponzi scheme has been exposed, and there is far less credit- far less economic oxygen- to go around. As a result, I would be willing to bet that the Dow is below 10000 5 years from now and that the heydey of Wall Street and the US financial services industry is gone forever.
But as long as the world's producers are willing to ship their hard-earned dollars back to Uncle Sam by the shipload then we will still be able to muddle along for years to come. It won't be a collapse. You don't see an Iceland-style collapse until the world's banks and investors cut off the money spigot, and there are no signs of that happening with the US. Of course, it will happen eventually under the weight of Medicare debt, but that true fiscal crisis still seems to be many years off.
The only thing that might change that equation is a true derivatives meltdown that the US government feels the need to intervene in massively, but I confess that I don't understand enought about the dynamics of how that might play out (I doubt anyone does) to say how likely it might be. I suspect the derivatives situation will be fiscally expensive but manageable, given the experiences with Lehman and AIG to date, but we shall see.
"nice solid respectable 8500"
Soon to be replaced by an even nicer, more solid and respectable 8600...
For the very reason you mention...
What, because you could trade against me?
(heh.... just kidding!)
At this rate, they're going to run that "It'll never get there" limit order I put in for the Jun SPY 55s......
Corporal Frazer
Ha, I could not believe my eyes.
Thanks for the link !
sum dooyd-
Long term.....(that means more than 1 year).
Some have different definitions of what long and short are.
I remember long term for me used to be a few day's based on action...
Ciao
MS
Question: What happens if the world's central banks simply print their own currency and use it to buy other country's bonds? Say if we printed dollars to buy Euro bonds, and they printed Euro's to buy Treasuries?
You are insane if you aren't long this market!
LOL!!
Market is still down BIG TIME..
all ARMS need to be automatically modified and tied to 1 Year Treasury.
lately we've been having 2 day bulls, so might want to sell into the last 5 minutes
Maybe up 600??
Eric-
Good one!!
Nahh...you know how it works. Cat's away....however this time these minions have explicit instructions and the Manager's actually gave out the real cell number's this time.
I have stories I could tell you....I'm sure you have some too.
Ciao
MS
Up 8% on the S&P, I love this country! I know I said Dow 9,100 by the end of Friday, but I may need to revise my timing.
We've hit bottom, folks. Get ready to ride the gravy train!
sumDyood
I defer to Rich on PM's. An aside: I don't do short term trades unless I'm wrong out of the chute.
Anonymous - someone else much more well-versed in the treasury world posted an article a few weeks back about the Great Bond Massacre of... some year in the 90s. It was pretty interesting and your post reminds me a litle of it.
To me, treasuries remind me of when my friend was saying he should get an ARM mortgage (LIBOR linked) because rates were at 1% back in 2002 or 03. I just stared blankly at him and asked him if he thought rates were going to 0 or something.
So let me get this straight-
Zero jobs were created with this waste of taxpayer money, 10 million (and growing) Americans are out work and home prices continue to go down...yeah this rally will last...
gravy train, didn't that used to be a variety of dog food
How do I short treasuries with leverage?
Say I have 100k, and want to short 1 mil of treasuries, how would I go about doing that?
Is there a highly leveraged etf or instrument ?
Buy now or get priced out forever! The market always goes up! Oh yeah, and it's contained...
Does anyone believe that the Citi deal might have finally been the straw that broke the back on the USD rally? It seems like the stock markets and commodities are following movements in the USD rather closely...something to keep in mind
BTW thanks to all the sucker's who have allowed me (and other's) to lather,rinse repeat.
Nibbled on more DIS puts today....looking to add more this week.
Was getting a bit worried there.....
Ciao
MS
Remember: the market is forward looking.
It knows that Geithner will save us.
Interesting Times: there are a bunch of ETFs that follow treasuries but they have varying levels of liquidity and volume as well as history. BIL, SHV, SHY, TBT, PST... a few others that I can't remember off the top of my head.
Any early rumors for "Black Friday"?
How do I short treasuries with leverage?
Say I have 100k, and want to short 1 mil of treasuries, how would I go about doing that?
Is there a highly leveraged etf or instrument ?
You could go with futures. Or lever into TBT or buy a bunch of TLT puts. I'm not sure about shorting treasuries directly.
Hahaha can we close in the red? Wouldn't that be a riot?
geez, didn't get my miracle fill.
nibbled on some Jun 55s and Mar 80s in the SPY though.
"Question: What happens if the world's central banks simply print their own currency and use it to buy other country's bonds?"
That's what China and certain other Asian countries have been doing for years to keep their currencies artificially weak. When a Chinese company is paid in dollars, they take those dollars to the Chinese central bank, which prints yuan to buy the dollars, then the central bank buys US treasury bonds with those dollars they just bought. They do that to avoid the appreciation of the yuan, and it certainly works.
And the answer to your question about what happens as a result: a huge worldwide trade and credit bubble forms and it's hell to pay when it pops.
ac and Mr. Sparkle - Thanks.
I'll look into those and report back.
hey I think we've done this whole run without mentioning that unmentionable committee. who's pulling this bummer in the last 10 minutes?
Mr. Market needs a quick Viagra fix.
That sounds like an order for the Cox announcement on shorting financials...
With the Fed/Treasury buying crap thus driving many of these indicators, tracked by you as evidence of recovery, directly, how are these indicators still useful in distinguishing reality from manipulation of asset values? If it's that easy, why not just put out a press release indicating that the recovery is here, all assets are fairly valued, and all children are above average?
who's pulling this bummer in the last 10 minutes?
Don't like the chart?? Just wait a few minutes.....
"Any early rumors for "Black Friday"?"
Rumors....no rumors....predictions?
Somehow in someway when it gets reported it will be like this:
"Since retailers have already scaled back on inventory yesterday's
black friday returns were not up to last year's...however we anticipated far worse and can say that we are well positioned for the coming shopping season"
No matter what the actual #'s are.
The market will then interpret this as yet again not sucking as much as they thought it would.
That's about the level we are at now.
Ciao
MS
irreverent writes:
hey I think we've done this whole run without mentioning that unmentionable committee. who's pulling this bummer in the last 10 minutes?
irreverent | 11.24.08 - 3:59 pm | #
PIT? The Plunge Induction Team?
ow THAT is a whipsaw!
Will that jack ass Cramer call a bottom (again) tonight?
Seriously, the chart is scaring me now...Huge jumps up and down? WTH is going on?
"Bloggers Blast US Government's Latest Bailout Plan For Citi"
They must have read the last few threads....
The "playing both sides without really saying much" Barry Ritholz is quoted.
Such a tool...that Barry.
Ciao
MS
"Bloggers Blast US Government's Latest Bailout Plan For Citi"
Seems like we could solve a lot of problems by getting rid of these damn bloggers.
Another day like this and I can convince my cardiologist that staying out of the shorts is bad for my health.
Looks like the market burped there at the end. Ate too much crap there from 3:00 - 3:45.
MS - I was thinking similar. Spending expectations are down by $250. If sales come in down $220 - to the moon!
The confidence number coming out tomrrow might give us a hint.
the market is totally unhinged from reality. Nothing has changed other than learning the past few days we are backing $300B and then going to spend $1 trillion in stimulus. Wages continue to go down and unemployment up. So why not market rally.
R-W-R
timmy and lassie rally a two dayer?
I don't know if this has already been posted, but:
Treasury Traders Paid to Borrow as Fed Examines Repos
"Failures to deliver or receive securities climbed to a record $5.311 trillion in the week ended Oct. 22. While the amount fell to $1.26 trillion by Nov. 12, thats still above the average of $165 billion before credit markets seized up in August of last year, based on Fed data that goes back to 1990."
ok, someone try and call tuesday's close, today.
5% delta days are the new black.
Looking at OTM TLT puts for Jan 09.
What a premium though!
DX down 2.3% atm...signs of life in UDN calls and 2010 TLT puts...just sayi
"ok, someone try and call tuesday's close, today."
I'll open the bidding with 867.1 on the SPX. +2%. A flat day, relatively speaking. Heh.
Joe6pack, who took all his money out of his 401k last week will start piling in again...just in time to lose even more, what a country!
crispy, you hit the nail on the head there...
I'm amazed that there is still so much money available to be thrown into the market to move it up after all these losses.
Why, it's almost if 700 billion dollars of gambling chips have been thrown unto the table.
I had to attend a non-stop 6 month marathon Monopoly game again this weekend. The guy running it is a horrible player, but every week his wife buys another Monopoly game and hands him the cash to continue playing. To make it worse, she adds the cost of the games to our beer tab!
"ok, someone try and call tuesday's close, today."
Can't even speculate on a number but it's going higher. Still have month end on friday, half day, rookie time.
If I had to guess for tomorrow it would be 8625 Dow, even 1500 NAS.....870 (or higher) S&P.
Betting money on it? Not at all.
Ciao
MS
"Looking at OTM TLT puts for Jan 09."
If you really want to see a premium, try the 90 Jan2010s. $8.50. Actually UP from when I got in last week while TLT was trading in the upper 90s.
Crispy, the marketing has begun again:
Joe Investor, the Markets Are All Yours Now
From the Yahoo "Beginning Investors" series today.
I'm glad I didn't puke out of the UYG I bought at 4 last week...I almost did when it went down to 3.2.
Gotta love the sea sickness..
Assume Crash Positions! - I am definitely late to this game...
I've never seen so much money clutching at straws. Scary, genuinely scary.
Fitch expects department store same store sales trends to be considerably weak through 2009 and credit metrics to weaken from current levels. Fitch expects well-run and well-capitalized operators to increasingly consolidate share as weaker operators with thin operating margins and liquidity issues exit the market.
Home improvement retailers are anticipated to remain pressured by weak sales as consumers continue to cut back on spending in this category. Share consolidation for Home Depot (NYSE: HD) and Lowes, (NYSE: LOW) which account for less than 20% of the market, is possible despite these companies slowing their store growth to focus on strengthening existing operations.
Fitch Says Holiday Retail Sales Could Be Weakest in 20 years -- Seeking Alpha
BottomCallTabulatorMatrix writes:
ok, someone try and call tuesday's close, today.
Can someone explain just how all these bailouts are going to be paid back? Are lending spreads going to widen? Tanta use to tutor us as to how the best borrowers were a PITA making no money for the lender. Widening spreads and new lending means by definition looser lending. I sense a rock and a hard place.
And the pop, at least for our purposes is when folks insist that we print our money in their currency . i.e. issue debt in foreign scrip. Would suspect a selective default precedes.
Altair writes:
"Question: What happens if the world's central banks simply print their own currency and use it to buy other country's bonds?"
That's what China and certain other Asian countries have been doing for years to keep their currencies artificially weak. When a Chinese company is paid in dollars, they take those dollars to the Chinese central bank, which prints yuan to buy the dollars, then the central bank buys US treasury bonds with those dollars they just bought. They do that to avoid the appreciation of the yuan, and it certainly works.
And the answer to your question about what happens as a result: a huge worldwide trade and credit bubble forms and it's hell to pay when it pops.
Coming soon to a market near you...how much does FDIC have in the kitty atm?
Goldman to Sell Bonds in First FDIC-Backed Offering (Update2)
By John Detrixhe and Gabrielle Coppola
Nov. 24 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm to convert to a bank, plans to sell notes in the first offering of debt backed by the Federal Deposit Insurance Corp., according to a person with knowledge of the transaction.
Goldman is leading banks in what analysts said may be a wave of as much as $600 billion of government-guaranteed issuance. Goldmans benchmark sale may price as soon as tomorrow, said the person, who declined to be identified because terms arent set. Benchmark size typically means at least $500 million.
The government guarantee opens a new channel for bank funding after the credit seizure sapped demand for financial debt and sent yields to record highs of 7.24 percentage points above Treasuries. Banks, which havent sold dollar-denominated bonds since September, may raise $400 billion to $600 billion under the program within six months, Barclays Capital estimated in October.
Goldman to Sell Bonds in First FDIC-Backed Offering (Update3) - Bloomberg.com
If you really want to see a premium, try the 90 Jan2010s. $8.50. Actually UP from when I got in last week while TLT was trading in the upper 90s.
Yep. I watched the price of some of the June 2009 puts basically not move through almost a 5 point rise in TLT.
I was trying to roll some calls into puts, but was so disgusted with the put spreads that I mostly just dumped the calls.
mp: I think these are the times when we see investors turn into desperate gamblers....straws are all they have
mp: I think these are the times when we see investors turn into desperate gamblers....straws are all they have
mykillk | Homepage | 11.24.08 - 4:15 pm | #
It's just monopoly money...
Mr. Market needs a quick Viagra patch and infusion drip with a back up ex-large bag and also maybe a hose connected to a truck with a high power pump! Lemmie at her!
Investors also moved their money out of the relative safety of government debt and back into Wall Street as stocks rallied for a second straight session. The Dow Jones industrials were up more than 200 points in afternoon trading.
ROTFLMAO! Moohawhahahahaha..
Here's the view from Angryville:
Today's massive rally left the closing price on the S&P 500 lower than the closing price 11 years ago. Today's close was also one of the lowest daily closing prices this century.
It's okay though, the U.S. Government is going to go deeply into debt to make us all wealthy and prosperous.
Woohoo!
Hmmm... think they can keep this dancing going to the weekend, then we get the announcement from Cox on another round of short banning?
Anyone know if Citadel is still dangerously close to imploding?
ms. market to mr. market: how many cox are there?
What is the USG at, 11 Trillion or 12 Trillion in debt?
Bookmark this for USG debt: Debt to the Penny (Daily History Search Application)
Thanks PeakVT
Man, can you imagine if someone had bought URE calls at oh, say, $.40 or so on Friday then sold them at $1.20 today?
-Jason
Anyone know if Citadel is still dangerously close to imploding?
I hope so.
Can someone explain just how all these bailouts are going to be paid back? Commissar Rob Dawg
yahoo news:"...Bush joined a meeting of top administration officials who are working on greater economic cooperation with China. Bush met on Friday in Peru with Chinese President Hu Jintao for talks focused in part on the global economic turmoil."
Sold to the highest bidder; Red China. Agreement will be SAIC gets GM and becomes the premier auto exporter in the US over Japan. I think that the GM plants in the US will become China owned but will be sold via the media as joint cooperation. Goodbye UAW. Hello disembowelment of labor laws.
LMFAO!!
HP just lowered earnings guidance...didn't they say these were great last week??
"Anyone know if Citadel is still dangerously close to imploding?"
I'm pretty sure my neighbor works there. (It's like working for the CIA, nobody admits to working "for the outfit".)
He seemed to be in good spirits Saturday morning.
(Figures that Government Sachs would be the one to figure out how best to 'blow up' and 'rip the face off' the taxpayer. I believe that 'government-guaranteed issuance' helps explain why risk premiums are increasing on CDS for Amerikan sovereign debt. Do you think this will be limited to banks? -AM)
Nov. 24 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm to convert to a bank, plans to sell notes in the first offering of debt backed by the Federal Deposit Insurance Corp., according to a person with knowledge of the transaction. Goldman is leading banks in what analysts said may be a wave of as much as $600 billion of government-guaranteed issuance.
Crazy day. Either the market is wrong, or all you geniuses are wrong. I'm thinking it's the market that has a problem.
Whose calling anyone a genius... we're all suckers.
The real geniuses will remain nameless and with billions of tax payer dollars.
Market not wrong, just fixing to suck in as much retail money as possible before the next leg down...the efficient market hypothesis (er, efficient market crooks hypothesis).
Crazy day. Either the market is wrong, or all you geniuses are wrong. I'm thinking it's the market that has a problem.
These types of movements are very typical of a bear market. Given the circumstances they're almost pedestrian.
I don't understand why people always seem so surprised by them.
Methinks they haven't spent enough time studying historical charts.
Interesting Times writes:
The real geniuses will remain nameless and with billions of tax payer dollars.
Interesting Times | 11.24.08 - 4:36 pm
They'll appear eventually. You have to spend those billions of USDs on something, and as soon as you do, everyone will know who has 'em.
Now, if we get up the courage and determination to tar & feather 'em will be a different discussion...
Altair | 11.24.08 - 3:47 pm
Well said...the analogy between the US and Japan is apt. At the time that Japan's economy started down the conventional wisdom was that Japan would overtake the US as the world's most productive economy. So I agree; the US should be able to muddle along. We'll have our lost decade, to be sure...but demand for Treasuries won't be a problem.
The real geniuses will remain nameless and with billions of tax payer dollars.
Worth repeating.
The wholesale looting of America continues.
ac +1
Huge intraday volatility and monster one day rallies (even with more than one day in a row lol) are exclusively features of bear markets...
Can someone explain just how all these bailouts are going to be paid back? Commissar Rob Dawg
Default via inflation.
What other option is there?
From CNBC Both these headlines on web page:
Pros Say: Forget RallyCiti Common Stock is Dead
Pros Say: Citi Stock Worth 6 Times More
crispy&cole writes:
LMFAO!!
HP just lowered earnings guidance...didn't they say these were great last week??
This looks like a job for.. The S-E-C!
Pardon as I don't hold my breath.
cognitive dissonance - it's not a bug, it's a feature!
"Methinks they haven't spent enough time studying historical charts."
--ac
It's one thing to study the charts, it's another thing to live it in real time. Besides, the comments section would be pretty empty without all of the Ooohing and Aaahing during market hours. And it's not every day you see the financials run up 15.2% in one day.
C up 60%...wow, I guess share dilution is a huge buy signal now
ac,
I agree with you on recent volatility in markets...from a historical perspective volatility was abnormally low during the period 2004-2007(pre-crisis). One can Google references to VIX during that period and find that the low volatility was occasionally commented on by MSM.
.
Expired
Wachovia execs may get $98.1 million severance
NEW YORK (Reuters) - Wachovia Corp (NYSE:WB - News), which lost $33 billion in the last two quarters, said 10 top executives may be entitled to $98.1 million in severance pay after the bank is acquired by Wells Fargo & Co (NYSE:WFC - News).
.
Bear market rallys don't concern me. God knows, I've seen some. However, the size of this today was just overwhelming.
There's a lot of profoundly stupid money out there, and all of it speculative.
There's a lot of profoundly stupid money out there, and all of it speculative.
mp | 11.24.08 - 4:44 pm | #
Sounds like the Chinese stock market has arrived in North America.
Makes sense now.
It helps to put it into context via historical charts however never has the system been so dependent on "up" then it is now. It's also plain as day who is doing it...not that I know but at some point someone involved is going to let something slip.
We all have our own idea's as to who it is...but IMO it's not that hard to coordinate massive buying when the entire system is leveraged and only makes money when "up" is achieved.
Ciao
MS
"Wachovia execs may get $98.1 million severance"
When I first read that, I thought I saw
"Wachovia execs may get 98 year sentence."
Wishful thinking, I guess.
i am the biggest bear out there, and i wouldn't be a bit surprised to see a rally to $SPX 1200
the gamblers are the ones that attempt to play counter trends
the smarties are the ones that wait for appropriate entries, and then exploit them in the direction OF the trend.
Whitehouse intelligence vacuum. Somebody should buy the President a Blackberry.....
Sunday Reuters Headline:
White House says unaware of any Citigroup rescue talks
"There's a lot of profoundly stupid money out there, and all of it speculative. mp"
...And that's different how?
Is this so unexpected or hard to believe? We seem to be solidly in the 7,500 - 9,500 trading range. Any moves to the downside of this range will be met with a large volume of buying, any moves beyond will be met by everyone here.
I believe the rise of Hedge Funds, the use of Alternative strategies in Pension/Endowment Funds, rise of leveraged ETFs and other products will give require the average volatility level to remain at a much higher range vs historical.
Time to Re-Leverage
ZKFP,
Oh it is much more than that - we have experienced intraday volatility (as measured by % swing in the Dow) that is unmatched since 1929 - well not unmatched, but unmatched for continuing volatility... all days going back to 1928 where intraday range divided by the open was equal to or greater than 10% (as far back as Yahoo would puke up the daily data).
11/13/2008
10/28/2008
10/16/2008
10/13/2008
10/10/2008
10/9/2008
10/20/1987
10/19/1987
5/29/1962
7/21/1933
7/20/1933
8/3/1932
12/18/1931
10/6/1931
11/7/1929
10/30/1929
10/29/1929
10/28/1929
10/24/1929
Before anyone gets all outraged over the Bush administration being out of the loop don't you think we should find out if Pelosi, Reid, Obama and Frank were equally clueless?
How much leverage is there in the gold market?
Gold Should be at 500 US dollars based on oil and commodity prices. Why is it at 800?
Washington (Reuters) - White House says unware it was the White House. It thought it was Somali Pirates.
Oh, come on now, Dawg, don't you know that they are much more intelligent?
"I believe the rise of Hedge Funds, the use of Alternative strategies in Pension/Endowment Funds, rise of leveraged ETFs and other products will give require the average volatility level to remain at a much higher range vs historical."
I wish you all the luck you're going to need. Sincerely.
RE Rubin from NYT:
"Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the banks current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.
When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.
And since joining Citigroup in 1999 as a trusted adviser to the banks senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another.
Citigroup was ensnared in murky financial dealings with the defunct energy company Enron, which drew the attention of federal investigators; it was criticized by law enforcement officials for the role one of its prominent research analysts played during the telecom bubble several years ago; and it found itself in the middle of regulatory violations in Britain and Japan....As it built up that business, it used accounting maneuvers to move billions of dollars of the troubled assets off its books, freeing capital so the bank could grow even larger...."
salute to Jesse
Let's see:
Enron...check
Level 3 assets...check
Telecom bubble...check
Prevented regulatory oversight...check
Seems like this guy is a one-man swindling machine
Anonymous writes:
There have been about 4 very good posts lately at nakedcapitalism
actually more A prolific day - this one is a classic (maybe the best) but already bumped off the list
Finance Has Lost Sight of Its Role
Finance Has Lost Sight of Its Role « naked capitalism
So if you were sitting on a pile of money that you could use to purchase a house outright, is this the time to do it? Even though it is declinging. is real estate be a decent hiding place for your cash if you are afraid the government is going to default or cause massive inflation? By the looks of it, nothing appears safe including just keeping the cash in CD's or anything denominated in dollars. I sold my home in 2006 and have been renting. What to do with the money to keep it safe until I buy again?
Thanks in advance for any advice...
Flaoting around:
Doctors' Opinion of Financial Bail Out Package
The Allergists voted to scratch it, and the Dermatologists advised not to make any rash moves.
The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve, and the Obstetricians felt they were all laboring under a misconception.
The Ophthalmologists considered the idea shortsighted.
The Pathologists yelled, 'Over my dead body!' while the Pediatricians said, 'Oh, Grow up!'
The Psychiatrists thought the whole idea was madness, the Radiologists could see right through it, and the Surgeons decided to wash their hands of the whole thing.
The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said, 'This puts a whole new face on the matter.'
The Podiatrists thought it was a step forward, but the Urologists felt the scheme wouldn't hold water.
The Anesthesiologists thought the whole idea was a gas, and the Cardiologists didn't have the heart to say no.
In the end, the Proctologists left the decision up to some assholes in Washington!
ZKFP: Yep and his disciples will be leading Obama's economic team...
Jason,
Thanks!
Zombie,
While at Citi, Rubin tried to use his government connections to forestall ratings agencies from downgrading ENRON and thereby negatively affecting Citi.
To this day, no explanation has ever been put forth as to why this act by Rubin was not formally investigated by the Justice Department.
Likely, it had something to do with Rubin's work under the Clinton Administration in turning over much of the post collapse Soviet assets to foreigners and kleptocrats.
Rubin clearly knows a thing or two about grand scale looting.
"I wish you all the luck you're going to need. Sincerely.mp"
You can be right about the direction but it does you no good if you're not at least generally right on the price. Bad companies and bad economies can be underpriced. Expecting the end of the world will only work one time in history...and at that point, it won't matter.
"What to do with the money to keep it safe until I buy again?"
You can get 1 year CDs paying 4%+ - look around online. I'm in CDs- there's no sure thing out there, but deflation appears to be the order of the day for the coming year at least and FDIC-backed CDs seems like the best bet for me in a deflationary environment. If inflation unexpectedly returns, you can always cash out your CD with a 6-month interest penalty.
I'd personally wait to buy a house for a period when unemployment and foreclosures peak- maybe 1-2 years from now. But it's largely guesswork.
Conjure dug up a Friedman Billings research report. I put it up late last night on the Citigroup thread, but think a lot of you missed it.
It is very good work and deserves reading.
This thing is a long, long way from being over.
http://online.wsj.com/public/resources/media/Financial_Strategy-20081119.pdf
Thanks Altair, I appreciate the advice. There are so many posts about "upcoming financial destruction" etc that it is getting tough for me not to buy something just to be sure that I can actually get "something" for my money. My thought is that if dollars are going to be worthless or non-redeemable at some point soon I want to be sure my housing is secure.
"Expecting the end of the world will only work one time in history...and at that point, it won't matter."
Who's talking about the end of the world? I'm certainly not.
[i wouldn't be a bit surprised to see a rally to $SPX 1200]
I would. But 1050 wouldn't surprise me. Got 90% long last week Wed & Thurs. Next week we get the auto bailout. We should see 1050 by 2nd week Dec. I already started paring back today just a little. Will be 100% cash by 2nd day after the autobailout. We should get some selling between then and the inauguration to SPX700 and then time to rally up again to 1000. Retail will get savaged the whole way selling & buying at the wrong times...
New thread, folks.
"My thought is that if dollars are going to be worthless or non-redeemable at some point soon I want to be sure my housing is secure."
Like I said in my earlier post, we aren't facing economic collapse as long as the world is eager to keep buying our treasury bonds at low yields. And they clearly are. We are in a much better position than somewhere like Russia, which is a kleptocracy whose economy is totally dependent upon high commodities prices. One advantage the US economy has- and it's a big one- is its firm foundation of laws, protection of property rights, and stable government.
I wouldn't have anything to do with the stock market in coming years, because we are in a very bad credit bubble collapse and there won't be nearly as much credit to go around, stifling economic growth. But I see no danger of a true doomsday scenario as long as the money is still flowing here from overseas- and it is.
mp
I did read that (well I skimmed it) this morning and it scared the crap out of me, especially the part of it that you pointed out in your original post.
I am another one who is trying to figure out what to do with my cash. I have a large amount in one of those banks that were in the report that you posted and am kind of paralyzed. I thought about spreading it around in smaller community banks, and then I watched the Tom Barrack video that someone posted upthread. He says those banks are going to implode due to commercial real estate problems.
It is driving me nuts.
Zombie Kung Fu Panda,
Robert Rubin deserves respect. Henceforth, he shall be referred to as "Bailout Bob"
Bill Moyers interviewed Kevin Phillips; BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM. Kevins referenced Rubin's career as Treas. Sec. under Clinton; "Bob Rubin as Secretary of the Treasury I mean, if he was a Hindu and he was being reincarnated, he'd come back as a pail because this guy bailed out everything you can imagine. They had the Mexican loan bailout. They had the long-term capital management bailout, the Russian Southeast Asian currency bailouts."
Rubin is a scum bucket.
@PSGirl
You're not the only one it's driving nuts. Conjure and I have been moving money like checkers since mid-year.
We pulled cash out Indy about one month before it fell over. You've just got to do your homework. We spend a lot of time on Bankrate.com and talking to a lot of people.
Good Luck.
Eveything is so woerd right now it is tough to stay confindent. Seems the government is changing the rules every week, the stock market dives, unemplyment is rocketing (8% here in SoCal)and commodities are volitile. Hard to know what to do. I understand about the Treasuries being in high demand right now. What scares me is that the demand seems to be in very short term treasuries. That seems to imply they are waiting to move that money somewhere else once a better alternative is discovered. What that alternative is who knows?
Certainly feels like Real Estate will continue to decline here but I am certainly getting trigger happy with all the doom & gloom I read. I'd take a break from it but worry I'll miss something that would have helped my family...
Not to be too tin foil hatish, but is there any reason I shouldn't keep my stock certificates in electronic form?
I do have the option of requesting them from the discount brokerage, but it looks like such a PITA.