reposting from earlier this morning:
The election was 2 days ago now. Obama's not even in office for another 2 months+. You can't sustainably keep talking about him all the time every day for 4 years, so please pace yourselves
Yes, credit markets improving, accept that this no longer means banks or private institutions lending, but direct Fed intervention. Can we cut-off the training wheels and see if we can ride this bike?
did anyone catch rick santelli this morning talking with the pimco guy...? basicly said the credit numbers are 'better' because pimco is manipulating the market since they assumed control of the abcp from the fed/treasury....i get the feeling that the numbers reflect pimco arbitraging paper and not an improving lending market....
Toyota hacks forecasts as U.S. carmakers seek help
Auto CEOs seek Fed borrowing, other aid
| Reuters
Toyota Motor Corp, the world's No.1 automaker, warned operating profits will sink to a 13-year low this year, as other carmakers sought more state help to ride out a financial crisis that is crippling demand and squeezing credit around the globe.
After a week of profit warnings from six of the seven other Japanese car makers, industry watchers had braced for similar pain at Toyota -- until recently the envy of the sector with eight straight years of profit growth.
But a 63 percent cut in forecast operating profit, to 600 billion yen ($6.1 billion), was far beyond the most pessimistic prediction -- and would be Toyota's lowest profit since 1995/96, and down 74 percent from a record 2.2 trillion yen last year.
The Christmas season looks to be the worst in memory, you'd have to go back at least to the '81-'82 recession period,'' Ken Perkins, president of research firm Retail Metrics LLC, said today in a Bloomberg Radio interview.You're going to have to do above and beyond to stimulate the consumer to come into your store this year.''
October same-store sales fell 0.9 percent, the first drop in seven months, and 4.2 percent excluding Wal-Mart (...) . Excluding the effect of the shifting Easter holiday, it's the first decline since at least 2000, Retail Metrics said.
Has the fed ever had to announce writedowns on collateral it held? or would that only happen if the primary dealer couldn't buy it back to complete the repo
steven hawkins is easier to understand than current treasury officials, and if hawkins uses one of those blow-tube-voice-box things like peter frampton, then it will be way more entertaining to listen to.
92.10 on SPY is the very high volume low from last FOMC Wednesday. I'm concerned w/ present volume it won't be able to break & hold. The 0.618 Fib level of 907 is of course open - that would really put fear in people if hit today
"Productivity growth is on track to get much worse before it gets better," wrote Nariman Behravesh, chief economist for HIS Global Insight. "Companies will likely have trouble cutting hours and jobs fast enough to offset the drop in output."
Aaahhhumm, cough, cough -- taps foot on solid ground; things are not improving I'm afraid:
Two-year note yields were already very low, below the depressed levels of September and October. Yields fell three basis points, or 0.03%, to 1.32%. For now, at least, we're holding above the level seen in 2003, when two-year yield reach a yield of about 1.06%.
According the the Wall Street Journal, Wall Street analysts expect yields to continue to plunge.
Has the fed ever had to announce writedowns on collateral it held? or would that only happen if the primary dealer couldn't buy it back to complete the repo
EvilHenryPaulson
The Fed charged JPM the 30 billion on the Bear take under.
"Dimon also predicted the investment banking industry would see sophisticated derivatives trading and principal investment using borrowings shrinking significantly."
Winner of today's Captain Obvious Award.
Didn't Dimon get the memo about IB's being a concept from the past. Holding banks are the new black.
The elephant that is not in the room is a financial system. By a financial system, I don't mean the tottering cartel of banks and insurers loudly sucking newly printed cash into "collateral postings" and "deleveragings" and other meaningless nonactivities. That is no financial system at all. It is an ecology of intestines and tapeworms, tubes through which dollars flow and are skimmed en route to destinations about which the tripe-creatures have little interest or concern.
Most U.S. companies rely on debt to survive. The Asian and Middle East has become more averse to buying in after getting burned. Banks won't even lend to each other. Pension funds are down 23%-50%. Individual bankruptcies are increasing every month and the 401K are decimated.
Most importantly, the cone of bullshit that has sheltered and buyoed the stock markets to record highs has evaporated.
All that's left is subterfuge and theft and plundering of the tax base.
Considering the above, how the hell can the big money engineer such an orderly decline? Do they have us all hypnotized?
In California you do not license cats.
Therefore, there is no real legal ownership of a cat.
Cat's, it can be said, are the 'coons and squirrels of the city.
And yet eating them will not occur to most.
Can we change the way we view and use resources?
Yes we can.
Agreed. Think I sold my SDS too early. But I looked at SLV and GLD and they just plunged as USO went to the $49s. Gold stocks tanking. And I think there are buyers again all the way down.
OT: Christie's last art sale a disappointment. From NYT,
The two collections brought a total of $47 million, less than half of its $104 million low estimate. Of the 58 lots, 17 failed to sell. (Final prices include the commission to ChristieÂ’s: 25 percent of the first $50,000, 20 percent of the next $50,000 to $1 million, and 12 percent of the rest. Estimates do not reflect commissions.)
Of the 30 works from the Lawrence collection, the highlight was expected to be “No. 43 (Mauve),” a classic 1960 Rothko painting. The dark abstract canvas was estimated at $20 million to $30 million, far beyond the $1.5 million the couple paid for it at Sotheby’s in 1988. Mr. Burge opened the bidding at $10 million, but he had no takers. (Before the auction, experts grumbled that the painting had condition issues.)
It is high time the entire country realizes that you cannot operate indefinitely on credit. You cannot infinitely expand credit and hope to make a serious go of it.
Credit has its place, while I don't like it most of the time. A company needs to replace a certain machine. An individual wants to buy a reasonably-priced home, or needs $2-3,000 for a car.
However, when you rely on consumption, which is greatly reliant on debt, to fuel 70% of your economy...
here is also a school of thought that the refunding can not be accomplished without a much steeper curve and the street is doing that trade in advance of the supply. [hat tip]
Credit card companies were shut out of the market for bonds backed by customer payments in October for the first time in more than 15 years, as investors shunned the debt amid the global credit freeze.
Though I suspect it might be related to how many traders think TA works...
There's some truth in that.
There's also a lot of spin going on.... if it holds, then "of course it works". If it doesn't, then "blah blah employment numbers, blah blah blah unexpected BoE moves".
I've noticed that deleveraging events can hit commodities first, then stocks a little later. I don't think volume means much. It means some big fund is cashing out or crashing.
I've been calling for SPY @ 92 since last Thursday w/ high volume swing as evidence. Now that we've reached it I closed my SPY short (went underwater) and SDS I bought Monday. Light volume up & light volume down is what I'm seeing atm.
re The fed and writedowns....I recall they wrote down (not off) about 10% of it's wonderful BSC "investment". I think CR had a post about it a few weeks ago.
That's why them reporting it's balance sheet is just a joke-CR using it as any indicator is also just as funny. All of it's input pricing is suspect. We've seen many other deals go off at much lower prices and they still ignore the real values because they are 'distressed sales'...
I've been calling for SPY @ 92 since last Thursday
Yup, and you're looking good right now.
I was just pointing out that a lot of TA will work, especailly if everyone is looking for it (golden crosses, big resistance, etc). But when it doesn't, it will (a) often not work in a spectacular fashion, causing huge losses and (b) there's always some "external reason" why it didn't.
I know you know this, but you can't argue that the chart knows all, and then also argue that "well, I couldn't have seen that coming".
You have been very good with calls. But many (especially the spammers here) are no better than sports-touts with their "games of the century".
Here is some clarity on CDS to help clear up any confusion:
The combined payout of around $7.3 billion exceeds the net cash payments of around $5.2 billion for settling CDS for Lehman Brothers and $1.3 billion for
Washington Mutual , according to DTCC data.
Credit strategists at BNP Paribas caution, however, that registration with the DTCC is voluntary, does not include all trades in the market, and so could understate cash transfers.
The payments will add to rising default losses for synthetic collateralised debt obligations (CDOs) on top of the defaults of Lehman and Washington Mutual.
Out of 3,771 synthetic CDOs rated by Standard & Poor's Corp. globally, the portfolios of 9 percent of them including one Icelandic bank, another 9 percent two Icelandic banks and 14 percent, all three, data from S&P and Barclays Capital show.
CDO portfolios typically include CDS on 100 to 150 corporate names, so the three defaults could amount to losses of up to 3 percent for some CDOs.
Volker, MS
I know about the nuanced Fed+JPM/BSC writedown. My concern was about the collateral they accept when conducting Open Market operations, you know their primary raison d'être
OT and slightly related to the topic of future value:
The quiet man of cars FT.com / Business Life - The quiet man of cars
Everyone agrees the world needs greener cars and Wang Chuanfu believes he is the man to deliver them – by combining Chinese brains and hard work with Warren Buffett’s money.
In that case (repo.) you are correct because they don't keep it around long enough to have to account for it. But neither does the original owner's either. Tossing the hot potato around...financially speaking.
Lamborghini Orange County, the world's largest dealer of the exotic cars, has shut down, the latest in a string of Southern California auto dealers to fold under economic pressure.
The Santa Ana dealership, which was under padlock on Wednesday, sold about 10 percent of the 2,400 Lamborghinis made in the world each year. NBA stars Kobe Bryant and Dennis Rodman were among its customers.
Lamborghini O.C. was renown for catering to the glamorous fans of the 12-cylinder, $600,000 sports cars.
It flew in actors Eric Roberts and Luke Perry by helicopter from Los Angeles to attend a company event earlier this year, while other promotional parties have featured stars such as Elton John and Sharon Stone.
CSC-You didn't let us know you were shutting it down...come on...
Thanks MS,
I did wonder, partly because accepting junk above market value has not been practiced by central banks at any point in history before the present
I'd normally agree with ya Yogi as there is opps. with USO however each time we have a hedgie blow up we get days like today. Not gonna touch it unless it gets to 40. Will I miss an opp. if it doesn't? Yes however I want to sleep at night.
Sheesh I should have reloaded those C puts......can't always do the right thing though.
MS,
The Federal Reserve accepts MBS that are non-Fannie/Freddie. Stuff that an honest bank would value at less then 20¢/$. They just accept it at like 80¢/$ of face value. It used to be more solid ABS paper, but the ECB, Federal Reserve and other central banks expanded the range of collateral they would accept over the course of 2008.
It used to be only Treasuries were accepted as collateral for the overnight cash
The Bank of Japan may be powerless to prevent the yen from rising to a 13-year high, according to the world's biggest foreign-exchange traders.
Deutsche Bank AG, UBS AG and Barclays Plc predict the yen will recover from its steepest weekly decline since 1999 as investors reduce carry trades that fund purchases of higher- yielding assets by borrowing in Japan. The currency will appreciate to 90 per dollar from 97.74 today in Tokyo even if the Bank of Japan intervenes to stem the biggest annual gain since 1998, they said.
Agreed. Dow getting ready to bolt downside. Election-based equity market window dressing is discontinued, and we are going to see at least 2-3 days of petulance before greed becomes overpowering.
EvilHenryPaulson writes:
MS,
The Federal Reserve accepts MBS that are non-Fannie/Freddie. Stuff that an honest bank would value at less then 20¢/$. They just accept it at like 80¢/$ of face value. It used to be more solid ABS paper, but the ECB, Federal Reserve and other central banks expanded the range of collateral they would accept over the course of 2008.
It used to be only Treasuries were accepted as collateral for the overnight cash
The Fed could hold to maturity and given certain losses inevitable occur, still will come out on the other side intact. But then holding to maturity is, well it's a long time.
yes I hear you with that....totally agree however the shit they were accepting in '05-'06 was just as worthless IMO...just not on the same size level. They were doing a few hundred million a week up to late '05...then it became billions. But the same problem existed..allowing the banks to assign value and exchange for cash....effectively printing money and lobbing it at the market. This was the test case for the system now. Just like the electricity crisis(2001) was for the commodity bubble (oil) this year.
They seem to do it small first then go large...IMO
Decaying infrastructure like sewers, water works, electricity etc. have suffered from the previous wave of retirements. Only the old beer bellies knew how this jumble was connected.
Now that they have to work longer, that cracked arterial lifeline can stay patched.
Sure, replacing it all is the answer, but at what cost?
As Praetorian Advisors Jack McHugh, who refuses to take a guess, noted, all the data is "worrisome" is concerned because, as most are aware, ADP's -157K guess is "all the more worrying because ADP has consistently underestimated job losses in recent months."
Re: Also, a report released by ADP Employer Services suggests the government's non-farm payrolls report, to be released Friday, will show a loss of 200,000 jobs in October.
"With the economy contracting and experiencing record home foreclosures, lenders tightened their credit standards further, according to the October Federal Reserve Senior Loan Officer survey," Nothaft said. "Approximately 70 percent of banks raised their lending standards for prime mortgages and about 90 percent of banks that offer nontraditional mortgages did so as well." U.S. 30-year mortgage rates fall in latest week
| Reuters
What did you think of this story from yesterday, i.e, Joseph Stiglitz, suggesting that "we" need a multilateral system that doesn't depend on any currency.
I'm surprised the play the ADP data is getting. Usually their reports just don't matter, or do a good job of catching any turning points in the economy. The ADP data just exists to be manipulated however the street wants them to be.
I'm not saying today's decline is because of it or manipulation. I also don't think today's decline is necessarily to do with the market being forward looking as everyone has known the holiday sales would be terrible for some time at least.
If the market were forward looking it would drop to a 600 S&P500 and wait there over the next year or two before plummeting to 300 or beginning a slow steady rise
Is there any truth behind a boogey-man hedge fund unwind today?
regarding Stiglitz, a multilateral basket of fiat currency is just that, and not immune to fiat foibles.
can we just put keynes to pasture? i'm not terribly hopeful on BWIII or whatever comes from this, we lack the maturity. unless the downturn is properly devastating.
can we just put keynes to pasture? i'm not terribly hopeful on BWIII or whatever comes from this, we lack the maturity. unless the downturn is properly devastating.
It may very well be. A reserve currency linked to a flexible basket of currencies may be the best we can achieve. Let's hope that having an international governing committee will help to mitigate the desire to goose the credit system for one country's benefit.
yes I hear you with that....totally agree however the shit they were accepting in '05-'06 was just as worthless IMO...just not on the same size level. They were doing a few hundred million a week up to late '05...then it became billions. But the same problem existed..allowing the banks to assign value and exchange for cash....effectively printing money and lobbing it at the market. This was the test case for the system now. Just like the electricity crisis(2001) was for the commodity bubble (oil) this year.
They seem to do it small first then go large...IMO
It's the same time and time again. Buffett summed it up best by referring to the process as the 3-I's: The Innovators, the Imitators, and the Idiots.
"At one point, his interviewer asked the question that is on all our minds: "Should wise people have known better?" Of course, they should have, Buffett replied, but there's a "natural progression" to how good new ideas go wrong. He called this progression the "three Is." First come the innovators, who see opportunities that others don't. Then come the imitators, who copy what the innovators have done. And then come the idiots, whose avarice undoes the very innovations they are trying to use to get rich."
"Governments are not really trying to save the system anymore," said Satyajit Das, a banking expert in Sydney, Australia. "They now realize that's impossible. They are just trying to manage the decline."
HUH? writes:
"Governments are not really trying to save the system anymore," said Satyajit Das, a banking expert in Sydney, Australia. "They now realize that's impossible. They are just trying to manage the decline."
Why doesn't this guy get more respect for seeing this crisis in 2005?
I'd like to say I've read a few of Satyajit's books, but that'd be a stretch. I opened them and turned the pages, reading the words I could understand (not Trader, Guns and Money; that one is easier). He's a smart fellow but was a voice in the wilderness in 2005, which is probably why he was ignored.
He called this progression the "three Is."
noobgoldberg | 11.06.08 - 12:33 pm | #
Hmm... That could describe the evolution of governments, too.
"Laws" like this one, and others such as "power corrupts, etc.", could lead one to conclude that periodic revolution is the only remedy, just as the Founders said.
Unfortunately, in the context of your quote, the solution would lie in fearless "innovation" into the future, not in "imitation" of the past.
Hey, even Dean Baker recommends Sheila Bair for Treasury Sec. At least she's not from GS
Persecuted Comrade Anonymouse | Homepage | 11.06.08 - 12:44 pm | #
The FDIC legislative affairs staff sucks up (pun intended) to Barney 24/7 so no doubt he is impressed.
Apartments
You and I are the only ones who think that the market bottomed in Oct. Why are you so optimistic? I think that we are more than Halfway through the housing decline.
Rant
1.Okay Holding REIT puts (only insurance to the downside now) and they are outperforming(!) here. Bought them On Friday and I am still not even. They were expsensive.
My landlord uses my bathroom when I am not home and doesn't flush.
Apartments
You and I are the only ones who think that the market bottomed in Oct. Why are you so optimistic? I think that we are more than Halfway through the housing decline.
Actually, I don't. I'm just being snarky; I actually have no idea. What I do know is that the market is too volatile to compensate for any return one could reasonably expect going forward.
I'm on the sidelines (mostly) in cash and bonds. No real estate.
newbie 101 writes:
He called this progression the "three Is."
noobgoldberg | 11.06.08 - 12:33 pm | #
Hmm... That could describe the evolution of governments, too.
"Laws" like this one, and others such as "power corrupts, etc.", could lead one to conclude that periodic revolution is the only remedy, just as the Founders said.
Unfortunately, in the context of your quote, the solution would lie in fearless "innovation" into the future, not in "imitation" of the past.
It all goes back to risk aversion. Most people are aware that the only real way to gain wealth is by taking acceptable risks. The problem, as I see it, is that most people are terrible risk evaluators. They do not want to start something completely new, as they is untried and risky. They prefer to start something after a suitable track record has been established. Unfortunately, by the time such a record has been established the space has become crowded; the longer you wait to pounce on an idea the shorter the amount of time left for which to make money at it. This should be completely obvious to even the most short-sighted investor; and yet the same response occurs repeatedly and leads to these ridiculous bubbles.
You're absolutely right that innovation is required; unfortunately, innovation is always vulnerable to the question "what proof do you have that it'll work". Since there is never proof, and decisions arrived by consensus always require a track record in order to convince the wary, governments and large corporations are usually terrible innovators.
My vulnerability has a dark and evil alter ego that tends to lash out in sporadic recollections of not being breast fed as a baby. This has haunted me ever since I received my very first toy sword as a child. Of course, the kids down the street had it coming, I really don't know why the authorities insisted on my being segregated and observed, especially for so long.
Good looking, smart, sassy, maybe sexy and a symbol of change:
Naomi Klein: Bailout = Bush's Final Pillage:
http://www.alternet.org/workplace/105452/naomi_klein:bailout%3D_bush's_final_pillage/
The Bush gang prefers bureaucratic instruments: "distressed asset" auctions and the "equity purchase program." But make no mistake: the goal is the same as it was for the defeated Portuguese -- a final frantic looting of the public wealth before they hand over the keys to the safe.
How else to make sense of the bizarre decisions that have governed the allocation of the bailout money? When the Bush administration announced it would be injecting $250 billion into America's banks in exchange for equity, the plan was widely referred to as "partial nationalization" -- a radical measure required to get the banks lending again. In fact, there has been no nationalization, partial or otherwise. Taxpayers have gained no meaningful control, which is why the banks can spend their windfall as they wish (on bonuses, mergers, savings...) and the government is reduced to pleading that they use a portion of it for loans.
I don't think either GM or F will file for bankruptcy. Given the huge job losses that would entail, I expect that the government will take over and "process" GM and F in an orderly manner.
Still not good for shareholders, but I doubt bankruptcy will be politically palatable.
safe_as_apartments,
but the risk is that the government forces them to go into BK to get the legal debtor in protection status which will allow for a super-senior government loan and the halting of fixed interest rate payments that would make help keep the loan smaller
Anonymouse,
That's where CR pays, try googling any of my past comments made here about LVS. Adelson was tapped out, and the business could not survive under its current debt structure.
Last week the miraculous rescue was to try and convert the Venetian retail space into a REIT
I'm not disagreeing that fundamentals could trigger a sell/short. However, it's chart also provided a powerful clue: volume fell off a cliff last Friday as it went into its first swing point, closed underneath it. The rally was clearly short-covering.
Nov. 6 (Bloomberg) -- Farallon Capital Management LLC's biggest hedge fund fell 23.8 percent this year through October, according to two people familiar with the matter, all but ensuring its first annual loss since opening 22 years ago.
Anonymouse,
Fair enough. For all your mysticism, you do protect yourself well
fwiw--LVS redid their Macau loan, and Singapore wants to become a gaming destination and are involved in a deal with LVS already, Temasek could buy a big stake from them for cheap (Adelson owns ~70% of the company through his and family's trusts)
OT-Arnold-CA is meeting in special session with legis. today..He's going to tell them how much in the red they are and about 90 day foreclosure moratorium...
I have this sneaky feeling it's really bad and deep crimson red....
governments and large corporations are usually terrible innovators.
noobgoldberg | 11.06.08 - 12:53 pm | #
And that is why force is required, once things get bad enough. Of course, I don't advocate that; I dread it.
Continuing in the context of your quote, marxism in any form would be imitation or idiocy... but I think we need a new "synthesis".
move by move, these spread will improve, however the demage is already done. Im starting to not follow does numbers anymore on my trading strategies. Start following econimic ones instead
Chuang Tzu one day saw an empty skull, bleached, but still preserving its shape. Striking it with his riding whip, he said, 'Wert thou once some ambitious citizen whose inordinate yearnings brought him to this pass? some statesman who plunged his country in ruin and perished in the fray? some wretch who left behind him a legacy of shame? some beggar who died in the pangs of hunger and cold? Or didst thou reach this state by the natural course of old age?'
When he had finished speaking, he took the skull, and placing it under his head as a pillow, went to sleep. In the night, he dreamt that the skull appeared to him and said, 'You speak well, Sir; but all you say has reference to the life of mortals, and to mortal troubles. In death there are none of these. Would you like to hear about death?'
Chuang Tzu having replied in the affirmation, the skull began: 'In death, there is no sovereign above, and no subject below. The workings of the four seasons are unknown. Our existences are bounded only by eternity. The happiness of a king among men cannot exceed that which we enjoy.'
Chuang Tzu, however, was not convinced, and said, 'Were I to prevail upon God to allow your body to be born again, and your bones and flesh to be renewed, so that you could return to your parents, to your wife, and to the friends of your youth, would you be willing?'
At this, the skull opened its eyes wide and knitted its brows and said, 'How should I cast aside happiness greater than that of a king, and mingle once again in the toils and troubles of mortality?'
The International Energy Agency said Thursday that import prices for crude oil will likely average $100 a barrel in the period between 2008 and 2015, and will rise to more than $120 in 2030.
OK, this is funny. OT, but funny. We're doing some business with CalPERS and I wanted to make sure I was following their stupid capitalization scheme, so I googled them. The Google summary of their web site begins: "Welcome to CalPERS On-Line CalPERS Seeks Chief Investment Officer We're looking for an experienced ... "
On the bright side, there should be plenty of "experienced" pros from Wall Street available.
I am eagerly awaiting the IEA release on November 12th...as part of their World Energy Outlook, for the first time they will include a supply forecast based on a 'bottoms up' assessment of the existing production base, decline rates and projects in the queue.
"At this, the skull opened its eyes wide and knitted its brows and said, 'How should I cast aside happiness greater than that of a king, and mingle once again in the toils and troubles of mortality?'
Byzantine_Ruins | Homepage | 11.06.08 - 1:31 pm | # "
That sounds about right. But to go on with this train of thought would be off topic. Still, financial gains and losses ought to be put in perspective.
That sounds about right. But to go on with this train of thought would be off topic. Still, financial gains and losses ought to be put in perspective.
A transient phenomenon within a dream, yes.
Where is the Life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
The cycles of Heaven in twenty centuries
Brings us farther from God and nearer to the Dust.
The main point of tracking credit crisis indicators is purportedly to monitor progress in unfreezing the credit markets. However, even with the significant drop in the LIBOR from its peak, banks are apparently still wary of lending to each other. One obvious reason is that they can still borrow cheaper from the Feds lending facilities.
Any improvement in the credit crisis is an illusion. To think that the problems that caused it in the first place are going away is a gigantic underestimation. The value has been lost, and it's not returning.
Downturn to last at least 12 months: JPMorgan head
Downturn to last at least 12 months: JPMorgan head
| Reuters
1st
Third, seventh
Whatever. See how I add nothing to the conversation.
Wish others would stop too.
Rant off.
reposting from earlier this morning:
The election was 2 days ago now. Obama's not even in office for another 2 months+. You can't sustainably keep talking about him all the time every day for 4 years, so please pace yourselves
"The yield is too low, but the daily volatility has declined."
Sure, but it can't be a good thing if the yield has stabilized less than half the target rate.
Yes, credit markets improving, accept that this no longer means banks or private institutions lending, but direct Fed intervention. Can we cut-off the training wheels and see if we can ride this bike?
did anyone catch rick santelli this morning talking with the pimco guy...? basicly said the credit numbers are 'better' because pimco is manipulating the market since they assumed control of the abcp from the fed/treasury....i get the feeling that the numbers reflect pimco arbitraging paper and not an improving lending market....
Toyota hacks forecasts as U.S. carmakers seek help
Auto CEOs seek Fed borrowing, other aid
| Reuters
Toyota Motor Corp, the world's No.1 automaker, warned operating profits will sink to a 13-year low this year, as other carmakers sought more state help to ride out a financial crisis that is crippling demand and squeezing credit around the globe.
After a week of profit warnings from six of the seven other Japanese car makers, industry watchers had braced for similar pain at Toyota -- until recently the envy of the sector with eight straight years of profit growth.
But a 63 percent cut in forecast operating profit, to 600 billion yen ($6.1 billion), was far beyond the most pessimistic prediction -- and would be Toyota's lowest profit since 1995/96, and down 74 percent from a record 2.2 trillion yen last year.
oh, and please don't feed the trolls, like it says on the sign, DON'T FEED THE TROLLS.
/that is all
Note: Once a week I will include the Fed balance sheet assets. If this starts to decline that would be a positive sign.
This will soon be seen as the understatement of the decade.
yes, let us stick to economic discourse in a civil manner.
best to be proactive politically than to rant about it. i'm sure we all want to see an end to plutocracy and a balance in the Gini coefficient.
The Christmas season looks to be the worst in memory, you'd have to go back at least to the '81-'82 recession period,'' Ken Perkins, president of research firm Retail Metrics LLC, said today in a Bloomberg Radio interview.You're going to have to do above and beyond to stimulate the consumer to come into your store this year.''
October same-store sales fell 0.9 percent, the first drop in seven months, and 4.2 percent excluding Wal-Mart (...) . Excluding the effect of the shifting Easter holiday, it's the first decline since at least 2000, Retail Metrics said.
Macy's, Target Monthly Sales Fall, Wal-Mart Gains (Update3) - Bloomberg.com
Pretty holiday number will probably bankrupt many stores, wal*mart as the only bright spot says a LOT about where consumers are headed.
Has the fed ever had to announce writedowns on collateral it held? or would that only happen if the primary dealer couldn't buy it back to complete the repo
Fortunately there have been some signs of a thaw in the credit markets over the last couple of weeks.
Maybe. Sometimes though I read "thawing credit" like I would read "increased availability of guns to three year olds".
In life it is important to grow up before doing adult type things.
Maybe. Sometimes though I read "thawing credit" like I would read "increased availability of guns to three year olds".
Thanks, ac. I really needed a laugh this morning.
I'm starting to think we ought to consider Steven Hawking for Treasury Sec...since we need an expert in Super-Massive Blackholes.
Jeeez -- three more progresses and Obama will say he did it.
I guess the question about credit markets now isn't "are we getting better" but "is this new credit market sustainable in the short or long term"?
meanwhile, our petro-dollar creditors are shoveling money to prop up their domestic investment companies.
kuwait-
Arab Times :: Kuwaiti banks to support ‘stumbling’ investment companies: CBK Governor
Oil broke its low from last month today - and after that 10% bounce! Talk about a "bear market indicator" - up moves of 10%
steven hawkins is easier to understand than current treasury officials, and if hawkins uses one of those blow-tube-voice-box things like peter frampton, then it will be way more entertaining to listen to.
Did Bush fire the PPT?
Down goes Frazier
Down goes Frazier
CR,
Note: Once a week I will include the Fed balance sheet assets. If this starts to decline that would be a positive sign.
If those numbers get too big most of us understand scientific notation. The rest can find convertors on the Web.
crispy&cole writes:
Did Bush fire the PPT?
Since BO was elected, SPX hasn't had 1 green hourly bar
Nice orderly sell-off continues. I don't see any reason for a hold at 920. We'll see.
Bush getting ready to speak.
Safe_Explain please, Thanks...
Look at that little EEV go.
OnTheRun,
92.10 on SPY is the very high volume low from last FOMC Wednesday. I'm concerned w/ present volume it won't be able to break & hold. The 0.618 Fib level of 907 is of course open - that would really put fear in people if hit today
"Productivity growth is on track to get much worse before it gets better," wrote Nariman Behravesh, chief economist for HIS Global Insight. "Companies will likely have trouble cutting hours and jobs fast enough to offset the drop in output."
http://www.marketwatch.com/news/story/workers-hours-slashed-keep-productivity/story.aspx?guid={004BE5D9-1368-4D02-9882-1DF2B13B32A8}&dist=msr_2
Unemployment will continue to stink up the party for a while.
crispy&cole writes:
Did Bush fire the PPT?
Their line of credit just got pulled.
Aaahhhumm, cough, cough -- taps foot on solid ground; things are not improving I'm afraid:
Two-year note yields were already very low, below the depressed levels of September and October. Yields fell three basis points, or 0.03%, to 1.32%. For now, at least, we're holding above the level seen in 2003, when two-year yield reach a yield of about 1.06%.
According the the Wall Street Journal, Wall Street analysts expect yields to continue to plunge.
Interesting post on Fed capitulation, liquidity traps, and the Bernanke Twist
FT Alphaville » Blog Archive » Fed capitulates: the central bank is broken
Bush: "...many of you are concerned about losing your home and finding a new job. I'm one of you..ha.ha.ha"
Maybe USO (oil ETF) should be on CR's credit reflation watch: just broke $50
Next wave, CDS implosion, will be jaw dropping. The recent spike on the VIX & credit indicators will look like noise on the charts.
A rally to end yerp's day?
USO hit a high of $119.17 in July!
C&C,
Have we not changed the calculation formula?
I know I am dragging this from the prior thread but I just started reading it.
Read this in order to see why we cannot compare unemployment rates from 80s to now.
Why the unemployment rate is artificially low.
Unemployment: The Bad News About Your Job | Newsweek Voices - Daniel Gross | Newsweek.com
"The Fed is buying higher quality commercial paper (CP)"
Yeah, high enough quality to wipe O-shit's ass even.
You can't sustainably keep talking about him all the time every day for 4 years, so please pace yourselves
EvilHenryPaulson | 11.06.08 - 11:03 am
EHP, I bet Rush Limbaugh and Sean Hannity find a way.
Has the fed ever had to announce writedowns on collateral it held? or would that only happen if the primary dealer couldn't buy it back to complete the repo
EvilHenryPaulson
The Fed charged JPM the 30 billion on the Bear take under.
The Financial Times Alphaville blog is linking to CR agai
EHP, I bet Rush Limbaugh and Sean Hannity find a way.
Uncle Ar
Rush is at least entertaining but Hannity might burst into a million little great American meatballs.
From the previous thread:
fake seb's world writes:
Hey DK why don't you find something else cute to call Obama, because you sound totally [eff'd] up.
We could call him BOB
(B[arock] O'B[ama])
A good word because it's easy to type and doesn't connote any racism.
"Dimon also predicted the investment banking industry would see sophisticated derivatives trading and principal investment using borrowings shrinking significantly."
Winner of today's Captain Obvious Award.
Didn't Dimon get the memo about IB's being a concept from the past. Holding banks are the new black.
this is great, thoughtful and always reserved Steve Waldman has a great new post up.
interfluidity
he cuts loose here, LOL!
The elephant that is not in the room is a financial system. By a financial system, I don't mean the tottering cartel of banks and insurers loudly sucking newly printed cash into "collateral postings" and "deleveragings" and other meaningless nonactivities. That is no financial system at all. It is an ecology of intestines and tapeworms, tubes through which dollars flow and are skimmed en route to destinations about which the tripe-creatures have little interest or concern.
Stating the obvious:
Most U.S. companies rely on debt to survive. The Asian and Middle East has become more averse to buying in after getting burned. Banks won't even lend to each other. Pension funds are down 23%-50%. Individual bankruptcies are increasing every month and the 401K are decimated.
Most importantly, the cone of bullshit that has sheltered and buyoed the stock markets to record highs has evaporated.
All that's left is subterfuge and theft and plundering of the tax base.
Considering the above, how the hell can the big money engineer such an orderly decline? Do they have us all hypnotized?
In California you do not license cats.
Therefore, there is no real legal ownership of a cat.
Cat's, it can be said, are the 'coons and squirrels of the city.
And yet eating them will not occur to most.
Can we change the way we view and use resources?
Yes we can.
Huge deleveraging is going on today.
Something big is blowing up.
The elephant that is not in the room is a financial system.
One thing that eventually needs to get done is to have a viable stand alone payments system.
Cat's? No..."Cats"
F*cking Cal State education.
rich,
Agreed. Think I sold my SDS too early. But I looked at SLV and GLD and they just plunged as USO went to the $49s. Gold stocks tanking. And I think there are buyers again all the way down.
cats are a vector for the Avian Flu. One more reason to not order the Poo Poo Platter.
Is it just me or is total trading volume on the NYSE about half of what it would be on a normal day, and only 2 hours i
OT: Christie's last art sale a disappointment. From NYT,
The two collections brought a total of $47 million, less than half of its $104 million low estimate. Of the 58 lots, 17 failed to sell. (Final prices include the commission to ChristieÂ’s: 25 percent of the first $50,000, 20 percent of the next $50,000 to $1 million, and 12 percent of the rest. Estimates do not reflect commissions.)
Of the 30 works from the Lawrence collection, the highlight was expected to be “No. 43 (Mauve),” a classic 1960 Rothko painting. The dark abstract canvas was estimated at $20 million to $30 million, far beyond the $1.5 million the couple paid for it at Sotheby’s in 1988. Mr. Burge opened the bidding at $10 million, but he had no takers. (Before the auction, experts grumbled that the painting had condition issues.)
Those condition issues will get you every time.
Bleak Night at Christie's, in Both Sales and Prices - NY Times
Wall street should pay bonuses early this year. The economy could really use the stimulus.
What a sham.
On easing metrics, it still seems like taking heart at a patient's regular respirations and pulse when you have them on a heart/lung machine...
EvilHenryPaulson,
Volume is still relatively light, makes me suspicious.
Re: The Financial Times Alphaville blog is linking to CR again
Ok, everyone watching your fuc-ing language!
rich writes:
Huge deleveraging is going on today.
Bah, wake me up when it's down 4% on some real volume.
Rothko always was overvalued, so this crash will help restore reality!
The Financial Times is the last good newspaper in the world.
And one of the few reminders that America is still the leader in information.
Anonymouse,
You're right, weird. Can't trust yahoo's website
PCA,
922 is a high volume swing - needs high volume to break it and hold or it will spring
We've been sitting right on 922 for a bit now after a steady decline. Enough to make a newbie to TA like me at least...wonder.
Though I suspect it might be related to how many traders think TA works...
And if enough do, maybe it does.
Speaking of cats, here's some fuel for thought:
GNN.tv is Closed
Personally, I take my cat fuel with a grain of salt.
Bill Payer writes:
Stating the obvious:
Most U.S. companies rely on debt to survive.
I was making this very same point last night.
It is high time the entire country realizes that you cannot operate indefinitely on credit. You cannot infinitely expand credit and hope to make a serious go of it.
Credit has its place, while I don't like it most of the time. A company needs to replace a certain machine. An individual wants to buy a reasonably-priced home, or needs $2-3,000 for a car.
However, when you rely on consumption, which is greatly reliant on debt, to fuel 70% of your economy...
YOU ARE TOAST!!!!!!!!!!!!!
here is also a school of thought that the refunding can not be accomplished without a much steeper curve and the street is doing that trade in advance of the supply.
[hat tip]
Credit card companies were shut out of the market for bonds backed by customer payments in October for the first time in more than 15 years, as investors shunned the debt amid the global credit freeze.
Volker: Asian chicks are also vectors of Avian Flu. I shall not eat in fear.
Volume is still relatively light, makes me suspicious.
Persecuted Comrade Anonymouse
Not so much that they're selling, rather that the buyers have walked away?
Though I suspect it might be related to how many traders think TA works...
There's some truth in that.
There's also a lot of spin going on.... if it holds, then "of course it works". If it doesn't, then "blah blah employment numbers, blah blah blah unexpected BoE moves".
Was it me that said Cisco to $5.00?
I've noticed that deleveraging events can hit commodities first, then stocks a little later. I don't think volume means much. It means some big fund is cashing out or crashing.
No worries, seems the Pony Promulgation Team has arrived.
rich writes:
Huge deleveraging is going on today.
Something big is blowing up.
I'm going to go with pure speculation that either Chrysler or GM will declare BK in some fashion tomorrow.
Eric,
I've been calling for SPY @ 92 since last Thursday w/ high volume swing as evidence. Now that we've reached it I closed my SPY short (went underwater) and SDS I bought Monday. Light volume up & light volume down is what I'm seeing atm.
evil-
re The fed and writedowns....I recall they wrote down (not off) about 10% of it's wonderful BSC "investment". I think CR had a post about it a few weeks ago.
That's why them reporting it's balance sheet is just a joke-CR using it as any indicator is also just as funny. All of it's input pricing is suspect. We've seen many other deals go off at much lower prices and they still ignore the real values because they are 'distressed sales'...
Ciao
MS
How bout a little Andy Williams this morning?
YouTube - Music To Watch The Girls Go By
On nice thing about the stock market tanking is we don't have to listen to all the idiotic bottom callers in housing.
3x income with a down payment. Mark it.
DOW ends in green. Headfakes after headfakes
I've been calling for SPY @ 92 since last Thursday
Yup, and you're looking good right now.
I was just pointing out that a lot of TA will work, especailly if everyone is looking for it (golden crosses, big resistance, etc). But when it doesn't, it will (a) often not work in a spectacular fashion, causing huge losses and (b) there's always some "external reason" why it didn't.
I know you know this, but you can't argue that the chart knows all, and then also argue that "well, I couldn't have seen that coming".
You have been very good with calls. But many (especially the spammers here) are no better than sports-touts with their "games of the century".
Borders Bookstores will not make it to next Christmas (2009).
Personally, I really like Borders. I also liked Oldsmobile.
Here is some clarity on CDS to help clear up any confusion:
The combined payout of around $7.3 billion exceeds the net cash payments of around $5.2 billion for settling CDS for Lehman Brothers and $1.3 billion for
Washington Mutual , according to DTCC data.
Credit strategists at BNP Paribas caution, however, that registration with the DTCC is voluntary, does not include all trades in the market, and so could understate cash transfers.
The payments will add to rising default losses for synthetic collateralised debt obligations (CDOs) on top of the defaults of Lehman and Washington Mutual.
Out of 3,771 synthetic CDOs rated by Standard & Poor's Corp. globally, the portfolios of 9 percent of them including one Icelandic bank, another 9 percent two Icelandic banks and 14 percent, all three, data from S&P and Barclays Capital show.
CDO portfolios typically include CDS on 100 to 150 corporate names, so the three defaults could amount to losses of up to 3 percent for some CDOs.
dow in green--look at europe...I don't think so today....
Currently Smoking Cannabis @ 11:45 am
CSC, you talking about the chicks or the cats?
As someone up thread wrote, I do not see any improvement until the training wheels come off.
Knurd!
Nostrovia,
Predictions?
Re: "Borders Bookstores will not make it to next Christmas (2009)."
Volker, MS
I know about the nuanced Fed+JPM/BSC writedown. My concern was about the collateral they accept when conducting Open Market operations, you know their primary raison d'être
Some auto maker isn't gonna make it past Friday.
Nostrovia,
If I had to pick between Petco and Petsmart I would want Smart to survive..they have realistic pricing that is obvious to any per owner.
Petco is just too over-priced....even more so than individual pet stores.
Ciao
MS
I've noticed that if they collude to turn the DOW they wait until Europe closes. Masters of the fakeout Universe.
EvilHenryPaulson, well...
You don't suppose they'd tell something we didn't have to know....
OT and slightly related to the topic of future value:
The quiet man of cars
FT.com / Business Life - The quiet man of cars
Everyone agrees the world needs greener cars and Wang Chuanfu believes he is the man to deliver them – by combining Chinese brains and hard work with Warren Buffett’s money.
Evil-
In that case (repo.) you are correct because they don't keep it around long enough to have to account for it. But neither does the original owner's either. Tossing the hot potato around...financially speaking.
Ciao
MS
Oil breaking $60 down today?
Largest Lamborghini store closes...
Lamborghini Orange County, the world's largest dealer of the exotic cars, has shut down, the latest in a string of Southern California auto dealers to fold under economic pressure.
The Santa Ana dealership, which was under padlock on Wednesday, sold about 10 percent of the 2,400 Lamborghinis made in the world each year. NBA stars Kobe Bryant and Dennis Rodman were among its customers.
Lamborghini O.C. was renown for catering to the glamorous fans of the 12-cylinder, $600,000 sports cars.
It flew in actors Eric Roberts and Luke Perry by helicopter from Los Angeles to attend a company event earlier this year, while other promotional parties have featured stars such as Elton John and Sharon Stone.
CSC-You didn't let us know you were shutting it down...come on...
And who is holding those CDO's?
Thanks MS,
I did wonder, partly because accepting junk above market value has not been practiced by central banks at any point in history before the present
Wholesale gasoline breaking multi-year lows under $1.34; pump prices at a buck fifty sound unreal (they're well under $2 in my former res. Tulsa)
919 sp500 is line in sand...
If by present you mean the last three year's that the repo's have been on steroids then I agree. It started in late '05. They knew.....
Just as the situation was presenting itself to the well-informed the repo. process went ballistic. Not a coincidence IMO.
Ciao
MS
Oh crap can't resist USO calls out of the money. Come on savers time to cash in on volatility.
Gas prices so low does tweak my curiosity? The most accurate indicator of world economic activity?
Does anyone read the subscription-only Lex section of FT? Is it worth the extra money? TIA.
[dow in green]
DOWN 400+ today.
I'd normally agree with ya Yogi as there is opps. with USO however each time we have a hedgie blow up we get days like today. Not gonna touch it unless it gets to 40. Will I miss an opp. if it doesn't? Yes however I want to sleep at night.
Sheesh I should have reloaded those C puts......can't always do the right thing though.
Ciao
MS
Nothing has improved. Corporate debt poised for severe dislocation.
MS,
Too many opportunities... lol
MS,
The Federal Reserve accepts MBS that are non-Fannie/Freddie. Stuff that an honest bank would value at less then 20¢/$. They just accept it at like 80¢/$ of face value. It used to be more solid ABS paper, but the ECB, Federal Reserve and other central banks expanded the range of collateral they would accept over the course of 2008.
It used to be only Treasuries were accepted as collateral for the overnight cash
Yee haw, boy, your gonna carry that weight:
YouTube -
The Bank of Japan may be powerless to prevent the yen from rising to a 13-year high, according to the world's biggest foreign-exchange traders.
Deutsche Bank AG, UBS AG and Barclays Plc predict the yen will recover from its steepest weekly decline since 1999 as investors reduce carry trades that fund purchases of higher- yielding assets by borrowing in Japan. The currency will appreciate to 90 per dollar from 97.74 today in Tokyo even if the Bank of Japan intervenes to stem the biggest annual gain since 1998, they said.
It must get cold sometime. And no one can even afford priuses anymore so Toyota is in trouble.
bearly writes:
DOWN 400+ today.
Agreed. Dow getting ready to bolt downside. Election-based equity market window dressing is discontinued, and we are going to see at least 2-3 days of petulance before greed becomes overpowering.
Buying a Prius when the market is soft would be a very smart move.
Gas will rise again.
Th FT is owned by Pearson a UK company.
Libor is wholy owned by the government so why is it even relevant anymore.
EvilHenryPaulson writes:
MS,
The Federal Reserve accepts MBS that are non-Fannie/Freddie. Stuff that an honest bank would value at less then 20¢/$. They just accept it at like 80¢/$ of face value. It used to be more solid ABS paper, but the ECB, Federal Reserve and other central banks expanded the range of collateral they would accept over the course of 2008.
It used to be only Treasuries were accepted as collateral for the overnight cash
The Fed could hold to maturity and given certain losses inevitable occur, still will come out on the other side intact. But then holding to maturity is, well it's a long time.
Never mind.
Don't worry about Toyota.
Soon Priuses (Priii?) will be only be available in shades of green and the horn will play "This land is your land."
Conspicuous Conservation is the new bling.
evil-
yes I hear you with that....totally agree however the shit they were accepting in '05-'06 was just as worthless IMO...just not on the same size level. They were doing a few hundred million a week up to late '05...then it became billions. But the same problem existed..allowing the banks to assign value and exchange for cash....effectively printing money and lobbing it at the market. This was the test case for the system now. Just like the electricity crisis(2001) was for the commodity bubble (oil) this year.
They seem to do it small first then go large...IMO
Ciao
MS
Kona I bought my yen at 5AM. You can not sleep in these interesting times.
Totally Unrelated Bright Side:
Decaying infrastructure like sewers, water works, electricity etc. have suffered from the previous wave of retirements. Only the old beer bellies knew how this jumble was connected.
Now that they have to work longer, that cracked arterial lifeline can stay patched.
Sure, replacing it all is the answer, but at what cost?
As Praetorian Advisors Jack McHugh, who refuses to take a guess, noted, all the data is "worrisome" is concerned because, as most are aware, ADP's -157K guess is "all the more worrying because ADP has consistently underestimated job losses in recent months."
Re: Also, a report released by ADP Employer Services suggests the government's non-farm payrolls report, to be released Friday, will show a loss of 200,000 jobs in October.
"With the economy contracting and experiencing record home foreclosures, lenders tightened their credit standards further, according to the October Federal Reserve Senior Loan Officer survey," Nothaft said. "Approximately 70 percent of banks raised their lending standards for prime mortgages and about 90 percent of banks that offer nontraditional mortgages did so as well."
U.S. 30-year mortgage rates fall in latest week
| Reuters
Volker,
I consider the market price to be over valued as transactions have been prevented by would-be sellers.
MS,
Oh, didn't realize they were doing non-Ts back in '05. good to know
EHP,
Regarding Fed collateral: It doesn't even need to fog a mirror and the fed will swap it for cash.
The losses will keep piling up. We're at an inflection point in monetary history.
It's a big sham.
kona, nicely done!
"Conspicuous Conservation is the new bling."
A keeper.
Going long those meaningless green symbol stickers.
"The Santa Ana dealership, which was under padlock on Wednesday, sold about 10 percent of the 2,400 Lamborghinis made in the world each year."
Not so many Orange County mortgage brokers buying ghinis anymore...
"919 sp500 is line in sand..."
Funny thing about lines in the sand on windy days...
oneworldcurrency,
What did you think of this story from yesterday, i.e, Joseph Stiglitz, suggesting that "we" need a multilateral system that doesn't depend on any currency.
http://www.asahi.com/english/Herald-asahi/TKY200811050060.html
[oneworldcurrency yogi writes:
Oh crap can't resist USO calls out of the money]
I was wondering who bought the calls I sold.
omg... tuesday night hangover is killing me.
what's going on today?
i'm inclined to listen to nova 1sy, then mr schumacher
ACP,
ayep...and how those floors can become ceilings...
Now it's starting to get interesting.
I'm surprised the play the ADP data is getting. Usually their reports just don't matter, or do a good job of catching any turning points in the economy. The ADP data just exists to be manipulated however the street wants them to be.
I'm not saying today's decline is because of it or manipulation. I also don't think today's decline is necessarily to do with the market being forward looking as everyone has known the holiday sales would be terrible for some time at least.
If the market were forward looking it would drop to a 600 S&P500 and wait there over the next year or two before plummeting to 300 or beginning a slow steady rise
Is there any truth behind a boogey-man hedge fund unwind today?
Buy the dips, young man. Buy the dips.
safe_as_apartments' Market Timing and Price Forecast Machine:
E(Gain at close|-38 at noon) = +68.9
Man, I just love EEV.
On days like this, EEV keeps you out of trouble.
When the whole world seems to be going to hell, EEV puts a smile on your face and gives you hope. Sorta like Obama.
Large Cap Bear 3x Shares BGZ gone from yesterday's low $61.38 to present $76.83. Looks like SPX wants to hit 907.
Will we get to see Donald Trump personally declare bankruptcy this recession?
You know, over and above the casino corporation that couldn't make money in the best market in history...
EvilHenryPaulson | 11.06.08 - 11:03 am | #
Actually many have made a career out of daily bush bashing for 8 yrs every day, ad nausem....
Maybe this way the tired old lines will disappear, or becaome present excuses...
ho knows
Good but I'll link a more in depth one.
When an untouchable in India can read and follow the slosh report your seignorage works less and less each day.
Taleb coming on, BBL
For the Bloomie crowd, Nassim Nicholas Taleb on CNBC next segment.
regarding Stiglitz, a multilateral basket of fiat currency is just that, and not immune to fiat foibles.
can we just put keynes to pasture? i'm not terribly hopeful on BWIII or whatever comes from this, we lack the maturity. unless the downturn is properly devastating.
Ha. USO KL's at a buck. That you?
EvilHenryPaulson writes:
Will we get to see Donald Trump personally declare bankruptcy this recession?
I sure hope so.
can we just put keynes to pasture? i'm not terribly hopeful on BWIII or whatever comes from this, we lack the maturity. unless the downturn is properly devastating.
It may very well be. A reserve currency linked to a flexible basket of currencies may be the best we can achieve. Let's hope that having an international governing committee will help to mitigate the desire to goose the credit system for one country's benefit.
MS writes:
evil-
yes I hear you with that....totally agree however the shit they were accepting in '05-'06 was just as worthless IMO...just not on the same size level. They were doing a few hundred million a week up to late '05...then it became billions. But the same problem existed..allowing the banks to assign value and exchange for cash....effectively printing money and lobbing it at the market. This was the test case for the system now. Just like the electricity crisis(2001) was for the commodity bubble (oil) this year.
They seem to do it small first then go large...IMO
It's the same time and time again. Buffett summed it up best by referring to the process as the 3-I's: The Innovators, the Imitators, and the Idiots.
"At one point, his interviewer asked the question that is on all our minds: "Should wise people have known better?" Of course, they should have, Buffett replied, but there's a "natural progression" to how good new ideas go wrong. He called this progression the "three Is." First come the innovators, who see opportunities that others don't. Then come the imitators, who copy what the innovators have done. And then come the idiots, whose avarice undoes the very innovations they are trying to use to get rich."
Sweet 2 day post-obama rally !
The End of National Currency | Foreign Affairs
I decided to keep my handle until
1: It happens, or
2: Broward Horne admits it will probably happe
"Governments are not really trying to save the system anymore," said Satyajit Das, a banking expert in Sydney, Australia. "They now realize that's impossible. They are just trying to manage the decline."
A credit crater too big to fill? - MSN Money
Why doesn't this guy get more respect for seeing this crisis in 2005?
Fidelity to lay off 2.9% of 44,400-employee workforce
Let's hope that having an international governing committee will help to mitigate the desire to goose the credit system for one country's benefit.
Amen...
Sweet 2 day post-obama rally !
Just the market beginning to return to reality from 8 years of pot and coke headdreams.
"You know, over and above the casino corporation that couldn't make money in the best market in history..."
...or the Condotel in Rosarito, right next to the sewage treatment plant, upon which he fixed his gilded impimatur...
All metals now in the red.
Pot for dreams
Coke for rational paranoia
OT, but not really: Obama's Chief of Staff choice is top Wall Street cash recipient.
Securities & Investment: Top Recipients | OpenSecrets
"Conspicuous Conservation is the new bling."
CSC: So are stoner eyes. Witness Rahm Emanuel.
"Only the old beer bellies knew how this jumble was connected."
ROTFLMAO!!!
Too true and waaaaaaaaaaaaaaaaaay too funny!
and now, a little black swan in honor of Taleb for your audio visual pleasure-
YouTube - Black Swan - Thom Yorke
The only things green on my streaming quotes list (about 100 items) are all ultrashort or short.... hahahaha
PNC the only financial holdout. Fishy.
Frank Says Bair Should Have Role as Obama Builds Team (Update1) - Bloomberg.com
Frank Says Bair Should Have Role as Obama Builds Team
HUH? writes:
"Governments are not really trying to save the system anymore," said Satyajit Das, a banking expert in Sydney, Australia. "They now realize that's impossible. They are just trying to manage the decline."
http://articles.moneycentral.msn...ig-to- fill.aspx
Why doesn't this guy get more respect for seeing this crisis in 2005?
I'd like to say I've read a few of Satyajit's books, but that'd be a stretch. I opened them and turned the pages, reading the words I could understand (not Trader, Guns and Money; that one is easier). He's a smart fellow but was a voice in the wilderness in 2005, which is probably why he was ignored.
FFDIC,
Hey, even Dean Baker recommends Sheila Bair for Treasury Sec. At least she's not from GS
guess that hussman call was a little early
He called this progression the "three Is."
noobgoldberg | 11.06.08 - 12:33 pm | #
Hmm... That could describe the evolution of governments, too.
"Laws" like this one, and others such as "power corrupts, etc.", could lead one to conclude that periodic revolution is the only remedy, just as the Founders said.
Unfortunately, in the context of your quote, the solution would lie in fearless "innovation" into the future, not in "imitation" of the past.
Using these oil down days to scoop up wind turbine shares. They seem to correlate exactly.
Taleb rocks. That is all.
well, that was a waste of time
Hey, even Dean Baker recommends Sheila Bair for Treasury Sec. At least she's not from GS
Persecuted Comrade Anonymouse | Homepage | 11.06.08 - 12:44 pm | #
The FDIC legislative affairs staff sucks up (pun intended) to Barney 24/7 so no doubt he is impressed.
VIXy putting on the pounds, up 15.9%.
GM, Ford, steel heading south.
Something's up.
CC
Anyone interested in going to the Olympics?
HIG imploding. Dominoes?
UB,
That was fun at the nakedplace.. ROTFLMAO!
Volker, you don't seem to be satisfied with anyone or anything lately. Give and ye shall receive.
Stop picking on me, I'm feeling vulnerable.
Apartments
You and I are the only ones who think that the market bottomed in Oct. Why are you so optimistic? I think that we are more than Halfway through the housing decline.
Rant
1.Okay Holding REIT puts (only insurance to the downside now) and they are outperforming(!) here. Bought them On Friday and I am still not even. They were expsensive.
Konookie: I know, but now I feel like Sergio Aragones.
volker, no worries, go for a bike ride!
rich writes:
Man, I just love EEV.
Indeed. Here's to EEV: Cheers!
Volker the Vulnerable Viking. Now there's a great idea for an econ flavored comic strip.
Apartments
You and I are the only ones who think that the market bottomed in Oct. Why are you so optimistic? I think that we are more than Halfway through the housing decline.
Actually, I don't. I'm just being snarky; I actually have no idea. What I do know is that the market is too volatile to compensate for any return one could reasonably expect going forward.
I'm on the sidelines (mostly) in cash and bonds. No real estate.
Speaking of people hurt by spreads tightening last month.
Clarium Capital, Peter Thiel's Hedge Fund, went from up 58% to down 3% on the year
Nothing found for 2008 11 Clarium-capital-up-58-to-down-3
newbie 101 writes:
He called this progression the "three Is."
noobgoldberg | 11.06.08 - 12:33 pm | #
Hmm... That could describe the evolution of governments, too.
"Laws" like this one, and others such as "power corrupts, etc.", could lead one to conclude that periodic revolution is the only remedy, just as the Founders said.
Unfortunately, in the context of your quote, the solution would lie in fearless "innovation" into the future, not in "imitation" of the past.
It all goes back to risk aversion. Most people are aware that the only real way to gain wealth is by taking acceptable risks. The problem, as I see it, is that most people are terrible risk evaluators. They do not want to start something completely new, as they is untried and risky. They prefer to start something after a suitable track record has been established. Unfortunately, by the time such a record has been established the space has become crowded; the longer you wait to pounce on an idea the shorter the amount of time left for which to make money at it. This should be completely obvious to even the most short-sighted investor; and yet the same response occurs repeatedly and leads to these ridiculous bubbles.
You're absolutely right that innovation is required; unfortunately, innovation is always vulnerable to the question "what proof do you have that it'll work". Since there is never proof, and decisions arrived by consensus always require a track record in order to convince the wary, governments and large corporations are usually terrible innovators.
I'm going to go with pure speculation that either Chrysler or GM will declare BK in some fashion tomorrow.
I'm going to go with pure speculation and say either one of them files in the next 99 days
My vulnerability has a dark and evil alter ego that tends to lash out in sporadic recollections of not being breast fed as a baby. This has haunted me ever since I received my very first toy sword as a child. Of course, the kids down the street had it coming, I really don't know why the authorities insisted on my being segregated and observed, especially for so long.
Naomi Klein for Treasury Sec!!
Good looking, smart, sassy, maybe sexy and a symbol of change:
Naomi Klein: Bailout = Bush's Final Pillage:
http://www.alternet.org/workplace/105452/naomi_klein:bailout%3D_bush's_final_pillage/
The Bush gang prefers bureaucratic instruments: "distressed asset" auctions and the "equity purchase program." But make no mistake: the goal is the same as it was for the defeated Portuguese -- a final frantic looting of the public wealth before they hand over the keys to the safe.
How else to make sense of the bizarre decisions that have governed the allocation of the bailout money? When the Bush administration announced it would be injecting $250 billion into America's banks in exchange for equity, the plan was widely referred to as "partial nationalization" -- a radical measure required to get the banks lending again. In fact, there has been no nationalization, partial or otherwise. Taxpayers have gained no meaningful control, which is why the banks can spend their windfall as they wish (on bonuses, mergers, savings...) and the government is reduced to pleading that they use a portion of it for loans.
CrazyAl,
Yeah Clarium had about $18bn (4.4x leverage) betting on term swap spreads. Mostly 10yr-30yr apparently
I don't think either GM or F will file for bankruptcy. Given the huge job losses that would entail, I expect that the government will take over and "process" GM and F in an orderly manner.
Still not good for shareholders, but I doubt bankruptcy will be politically palatable.
Kona,
Klein is also Jewish. She'll fit in.
Fidelity to lay off 2.9% of 44,400-employee workforce
REBear | 11.06.08 - 12:36 pm
and the fees are going up to compensate for that.
safe_as_apartments,
but the risk is that the government forces them to go into BK to get the legal debtor in protection status which will allow for a super-senior government loan and the halting of fixed interest rate payments that would make help keep the loan smaller
LVS is getting the SAS 59 special today....the kiss of death!
Klein is also Jewish. She'll fit in.
Token?
Volker the Vulnerable Viking:
Apocalypse Now - The Ride Of The Valkyries
YouTube - Apocalypse Now - The Ride Of The Valkyries
"Naomi Klein: Bailout = Bush's Final Pillage"
And we'd better have security escort george off the premises on his last day.
c&c,
Holy crap! LVS suckered a bunch of people who bought after it tripled in 3 days
"Klein is also Jewish. She'll fit in."
"Token?"
I don't follow either of these.
Anonymouse,
That's where CR pays, try googling any of my past comments made here about LVS. Adelson was tapped out, and the business could not survive under its current debt structure.
Last week the miraculous rescue was to try and convert the Venetian retail space into a REIT
[Ha. USO KL's at a buck. That you?]
Nope. Sold the KYs. I am a KY salesman today!
Naomi Klein on Real Time with Bill Maher
YouTube -
The hits keep on coming...will anyone be employed in a year:
"12:55 p.m. [WY] Weyerhaeuser closure to affect about 105 workers
12:55 p.m. [WY] Weyerhaeuser to close mill in Colbert, Ga. immediately"
EvilHenryPaulson,
I'm not disagreeing that fundamentals could trigger a sell/short. However, it's chart also provided a powerful clue: volume fell off a cliff last Friday as it went into its first swing point, closed underneath it. The rally was clearly short-covering.
I wonder how long Obama can blame the bush admin for the multi-year recession we are in. Bush blamed Clinton up until this year!
Hopefully not a repost: Farallon Flagship Fund Lost 23.8% Through October, Sells Stocks - Bloomberg.com
Nov. 6 (Bloomberg) -- Farallon Capital Management LLC's biggest hedge fund fell 23.8 percent this year through October, according to two people familiar with the matter, all but ensuring its first annual loss since opening 22 years ago.
The rally was clearly short-covering.
Persecuted Comrade Anonymouse | Homepage | 11.06.08 - 1:04 pm | #
Today is a long-covering rally.
"No worries, seems the Pony Promulgation Team has arrived."
At last, a blog in which writers have a vocabulary of more than 500 words.
Save some ky just in case. I admire your hopeful audacity.
HIG imploding. Dominoes?
oneworldcurrency yogi
boy that was fun - dumped at 16 or so had a 44% bump but I had some misgivings on the sale and was very tempted to hold - I made the right decisio
Pavel!
EHP are you in Van? Just curious..
y... releived about HIG.... now if I could just get this sword aouta my kidney
Madam Speaker
"We're not saving those companies, we're saving an industry. We're saving an industrial technological and manufacturing base..."
Saving companies would be cheaper...
Reloaded 17.5 puts in the "rally". Reggie M has been all over HIG.
Anonymouse,
Fair enough. For all your mysticism, you do protect yourself well
fwiw--LVS redid their Macau loan, and Singapore wants to become a gaming destination and are involved in a deal with LVS already, Temasek could buy a big stake from them for cheap (Adelson owns ~70% of the company through his and family's trusts)
OT-Arnold-CA is meeting in special session with legis. today..He's going to tell them how much in the red they are and about 90 day foreclosure moratorium...
I have this sneaky feeling it's really bad and deep crimson red....
the shock doctrine is in effect until jan 20... pentagon still worried.
yikes.
New lows. Obama we need another Speech
canucklehead,
from van originally. go buy olympic tickets. bring glorious cash
Just got the memo...PPT to return 1/20/09
"Byzantine_Ruins writes:
Pavel!"
Hi! Yesterday's poem:
KING LIU SHENG
Liu Sheng in a suit of jade
Taoist priests extolled the use of jade
To keep the life in royal cadavers
Ant-small plaques of precious jade
Sewn with thread of thin pulled gold
By artisans of minute work
Mask, gloves, boots
Sleeves and jade-sewn trousers
Tailored to a costume for all time to come
King Liu Sheng collapsed to dust
Nothing left of him but teeth
Inside the jade, and threads of gold
Who will dress me for eternity?
Jade is worn by mountain streams
And streams erode the mountains
To dress myself in drifting clouds
Is just as good as jade
And just as foolish
We will be buried in our steadfast love
A suit outlasting every stone
And hill, or lie undressed, alone
\t\t\t\t\tPavel
\t\t\t\t\tNovember 5, 2008
governments and large corporations are usually terrible innovators.
noobgoldberg | 11.06.08 - 12:53 pm | #
And that is why force is required, once things get bad enough. Of course, I don't advocate that; I dread it.
Continuing in the context of your quote, marxism in any form would be imitation or idiocy... but I think we need a new "synthesis".
EHP me too...
Are you old enough to remember Benny Lee's? (gold)
Konookie: Let me guess... now you've got a crush on NK.
move by move, these spread will improve, however the demage is already done. Im starting to not follow does numbers anymore on my trading strategies. Start following econimic ones instead
Huh, just learned Michael Crichton died Tuesday. Does this mean Jurassic Park 4 is canceled?
re: EEV / Emerging markets/ Brazil
http://media.economist.com/images/20081108/CAM386.gif
That is a good summary in a picture of why they're getting reamed
canucklehead,
Too young or ignorant to know about Benny Lee's
Calif to run out of cash by Feb..per bloomberg tv...looking in other areas for link...
Does this mean Jurassic Park 4 is canceled?
probably but the rough drafts showed that in this chapter the Dinosaurs die when the globe suddenly begins to cool confounding the Climatologists.
Toyota down 17% today. Wow
EHP It would be (A) too young.
When the whole world seems to be going to hell, EEV puts a smile on your face and gives you hope. Sorta like Obama.
RWM hasn't been too shabby either. Whats the forward P/E on the R2000 these days?
Thank you Pavel. I saved a copy.
Calif. Gov Schwarzenegger proposes $4.5 bln spending cut
Pavel
November 5, 2008
Chuang Tzu one day saw an empty skull, bleached, but still preserving its shape. Striking it with his riding whip, he said, 'Wert thou once some ambitious citizen whose inordinate yearnings brought him to this pass? some statesman who plunged his country in ruin and perished in the fray? some wretch who left behind him a legacy of shame? some beggar who died in the pangs of hunger and cold? Or didst thou reach this state by the natural course of old age?'
When he had finished speaking, he took the skull, and placing it under his head as a pillow, went to sleep. In the night, he dreamt that the skull appeared to him and said, 'You speak well, Sir; but all you say has reference to the life of mortals, and to mortal troubles. In death there are none of these. Would you like to hear about death?'
Chuang Tzu having replied in the affirmation, the skull began: 'In death, there is no sovereign above, and no subject below. The workings of the four seasons are unknown. Our existences are bounded only by eternity. The happiness of a king among men cannot exceed that which we enjoy.'
Chuang Tzu, however, was not convinced, and said, 'Were I to prevail upon God to allow your body to be born again, and your bones and flesh to be renewed, so that you could return to your parents, to your wife, and to the friends of your youth, would you be willing?'
At this, the skull opened its eyes wide and knitted its brows and said, 'How should I cast aside happiness greater than that of a king, and mingle once again in the toils and troubles of mortality?'
It appears CNBC anchors have now personally recognized major losses in the stock market. I guess they got their statements and opened them
They are deeply, personally angry. Not even bothering to tell people they can't make money if they get out of the market
they must have been listening to bluehorseshoe...
The International Energy Agency said Thursday that import prices for crude oil will likely average $100 a barrel in the period between 2008 and 2015, and will rise to more than $120 in 2030.
OK, this is funny. OT, but funny. We're doing some business with CalPERS and I wanted to make sure I was following their stupid capitalization scheme, so I googled them. The Google summary of their web site begins: "Welcome to CalPERS On-Line CalPERS Seeks Chief Investment Officer We're looking for an experienced ... "
On the bright side, there should be plenty of "experienced" pros from Wall Street available.
-Jaso
REBear,
I am eagerly awaiting the IEA release on November 12th...as part of their World Energy Outlook, for the first time they will include a supply forecast based on a 'bottoms up' assessment of the existing production base, decline rates and projects in the queue.
Robert "Doom is Nigh" blog: FT on spot again.
Must read, the FT article about this.
*****Breaking*****
California announces a $4.4 billion tax-hike.
Schwarzenegger: $4.4B in tax hikes to end deficit
"At this, the skull opened its eyes wide and knitted its brows and said, 'How should I cast aside happiness greater than that of a king, and mingle once again in the toils and troubles of mortality?'
Byzantine_Ruins | Homepage | 11.06.08 - 1:31 pm | # "
That sounds about right. But to go on with this train of thought would be off topic. Still, financial gains and losses ought to be put in perspective.
"newbie 101 writes:
Thank you Pavel. I saved a copy."
Thank you.
Pavel:
That sounds about right. But to go on with this train of thought would be off topic. Still, financial gains and losses ought to be put in perspective.
A transient phenomenon within a dream, yes.
Where is the Life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
The cycles of Heaven in twenty centuries
Brings us farther from God and nearer to the Dust.
-T.S. Eliot
The main point of tracking credit crisis indicators is purportedly to monitor progress in unfreezing the credit markets. However, even with the significant drop in the LIBOR from its peak, banks are apparently still wary of lending to each other. One obvious reason is that they can still borrow cheaper from the Feds lending facilities.
Libor's Biggest Drop Fails to Match Fed, Spur Loans (Update4) - Bloomberg.com
Any improvement in the credit crisis is an illusion. To think that the problems that caused it in the first place are going away is a gigantic underestimation. The value has been lost, and it's not returning.
Get your dirty hand out of my pocket!