Meanwhile, I'm getting 1.0% on my savings account.

Whew! These are looking better! (Not that I still entirely understand what they mean.) Still, some had suggested that the various government actions, such as buying agency paper (I think), made some of these indicators no longer particularly good ones. You had said you were giving it some thought, and would post about it. Are you still planning on doing that?

Also, while I'm not in a dead thread , does anyone have any suggestions about what to read to understand Conjure's Bond Market Clock? I've tried Bond Girl's site, and frankly, it's just plain over my head... (Then again, maybe the phenomenon itself is, too.)

Mr. Beach(Unrated) writes:

Now someone appoint me as Fed chair.
Mr. Beach | 12.22.08 - 3:06 pm | #

Alright, here's your scepter and funny hat. Notice we've already sold the gemstones from both.

Kung Fu Panda - They operate a huge refinery in town. I think the crude crash did them in...they wont be first

"Flying J. Inc., which operates 250 travel plazas and fuel stations across the country, on Monday filed for bankruptcy, citing a cash shortage brought on by plummeting oil prices and problems getting credit. The Ogden-based company filed a voluntary Chapter 11 petition in a U.S. Bankruptcy Court in Delaware.  Flying J said all its operations will remain open as the company restructures.  The company is seeking protection from creditors after facing "an unprecedented combination of factors," said J. Phillip Adams, Flying J CEO and president.  He cited a precipitous drop in the price of crude oil and a lack of available financing from its usual lending sources. "With this sudden and unanticipated inability to meet our liquidity needs, we regret we had no other choice than a Chapter 11 filing to enable us to stabilize our financial base," Adams said. Flying J is one of the largest privately held companies in the United States. Sales exceeded $16 billion in 2007." 
That was the blurb from the local fishwrap.  They must have locked in some crude futures contracts that came back to bite.  That is one large privately wealthy individual/family whose fortune just went up in smoke!!  I'm sure they diversified some, but being privately held with I think few to no outside investors other than bank loans and trade credit they were not too diversified relative to the size of the paper fortune.

...it faced near-term liquidity pressure from an unprecedented combination of
factors: the precipitous drop in the price of oil and the lack of available
financing from our traditional sources due to disrupted credit markets, said
Flying J President and CEO J. Phillip Adams in the news release. Adams says the
company's employees, customers and suppliers will continue to be paid in the
usual manner.

Flying J Inc. is among the 20 largest private companies in America,
employing more than 16,000 people in the U.S. and Canada.

Flight to safety.

Fear dominates the markets.

Return of capital is enough. Don't lose money.

This will pass.

To me, IRT to credit indicators, nothing is more shocking and revealing than the Moody's Baa-Aaa spread. The last time the spread rose to today's level is in September 1931, smack dab in the middle of a depression.

Yes, we are smack dab in the middle of a depression.

"Flying J., which is a major retail distributor of diesel fuel, said it intends to keep its doors open during its bankruptcy case. The company hasn't lined up bankruptcy financing, but is seeking court approval to use cash pledged to its lenders to fund its operations as it seeks to reorganize its business."

This looks like an opportunity for the banksters to get their hands on some hard assets; the above is from WSJ which also says that the initial defaults were on loans from BoA and Merrill. The creditors' committee is driving the train now...

Kung Fu Panda writes:
Holy smokes...Flying J going BK...

No biggie. Bankruptcy in America anymore is just another business planning tool. You don't go out of business. You don't change management. You just get to screw all your vendors, default on your debts, tear up contracts you don't like, and then start over again. It's a joke.

There should be no such thing as bankruptcy reorganization. Liquidation, liquidation, liquidation. If you don't have a viable business, it should be shut down and liquidated.

Dryfly, Yes. for good reason. But it looks like the bulk of the unusual spread is a function of the treasury demand - not the muni risk.

3 month treasury yield at 0%. The Feds are screwing things up not making them better. You think Obama will do any better?

bearly writes:
Can I haz panic hedge fund liquidations and tax-loss-selling ?

Yes, and possibly a rocket to the moon at the end of the day too, just for being a good market participant.

Eric writes:
And there ya go!

Thank you. Flattery from the man who taught me the words "we're skying them, baby". =)

Jas Jain writes:

Even guys on CNBC (Dillon Ratigan) are talking about legalized fraud by financial firms like AIG.

I watched Dillon get into a shouting match with Gasbagarino a couple weeks back. I was very heartened that someone out there is actually telling the truth.

I meant udited financial statements" above, obviously.

I guess the gist is that if the information is unreliable, there will be no investors, only speculators.

Wow, I can't even correct my typos. "audited financial statements" And I haven't even started drinking yet.

The_Littlest_Mandarin writes:
So, "saved" as in, they are an undead puppet of whom normal measures of business health like risk of default are no longer meaningful.

Lest I just seem doomful here -- ask yourself, if the national "TBTF" guarantees were withdrawn from these firms, what would they pay for credit? What would their default spreads be? What is the chance they would make a single quarter -- or even a single trading week -- before they were jammed down the death spiral?

Why aren't long lenders demanding to get paid for this in-the-tank inflation risk?
Anon E. Moose | 12.22.08 - 3:58 pm | #

Cause the see deflation ahead?

"CNBC is touting their upcoming special series on restoring "trust" in the financial system."

You get a lobotomy along with your 401k.

CNBC is touting their upcoming special series on restoring "trust" in the financial system.

If this involves Jim Kramer committing seppuku, I'll watch.

Anon E. Moose writes:
Why aren't long lenders demanding to get paid for this in-the-tank inflation risk?

"Wait for it... wait for it..."

BAC called the $200 million LOC for Flying J...another BAC employee sit in??

SO these clowns (BAC) take tax dollars and start pulling lines...WTF??

shadowjack62 writes:
Rates in Japan have been low for 20 years. How has that helped them?

"It's different here"

Why do people on this board bother to trade this market if they believe the PPT is actively manipulating the market?  Might as well just stay on the side lines.

The Japanese enjoy long life, good health, the best cars and no longer have to pretend to work 80 hours a week.

60 points last 4 minutes, slick

FYI, The blog "Accrued Interest" had a good discussion a couple of days ago regarding why Treasuries are at 0%, in the comment section. One example I found interesting was a company had several million $ in cash at Lehman before the collapse. They thought it was safe because (if memory serves) it was not in street name. Afterwards, they re-read the fine print in the contract and found out that Lehman had the right to move it out of a "protected" account and use it. Once burned, they don't care that they get no interest, they want safety.

*CIT GROUP WINS FED APPROVAL TO BECOME BANK HOLDING COMPANY

You think that MIGHT have something to do with the market running up?

pissed,

because adult People Prefer Tricks...

we had our fill of treats...

And crude is below 40.. !

bob writes:
So what happens tomorrow?

I'm quite open that I call equities markets for the sake of shouting rude things from the sidelines. So, here goes --

Does the market trade Friday?

I'd say it's got a two-digit loss and a decent rally -- 100+ points -- in it this week.

If there's a third trading day, it'll be a "mild" loss -- 100 - 200 pts.

Ask Eric if you want real predictions.

I believe that someone on tickerforum used to equate PPT to the stupidity of the masses.

I'm sure Exxon and other oil majors have been experiencing some reduced profitability as well. But they have enormous cash on hand and undoubtedly had less relative futures exposure as well.
Kung Fu Panda | Homepage | 12.22.08 - 4:18 pm | #

Yes, mostly the majors have no net debt - XOM, CVX, a couple of others IIRC - and a debt to capital ratio in the single digits...

wally writes:
Exactly. The Fed has not 'saved' the banks and the indicators listed by CR do not represent increased confidence in the banks.

Roger that. They do not have a flying plane, but they have an cockpit that behaves exactly as if you were in one. All the needles do the right things at least. Being economists operating at the behest of bankers, they are at a loss to explain why this is unsatisfactory.

They just mean that the Fed has now substituted itself for the banks.

I look forward with grim amusement to their efforts to explain to the market why anyone should lend into the commercial arena when they can buy public debt and have the transaction intermediated at effectively zero risk.

Getting OUT of this spot will be much harder than getting IN to it... as FDR found out in 1937-1938.

Economics Jokes

Three leading economists took a small plane to the wilderness in northern Canada to hunt moose over the weekend. The last thing the pilot said was, remember this is a very small plane and you will only be able to bring ONE moose back.

"Oh, just about a hundred yards east of the place there we crashed last year."

Jas might find this article interesting as he stated the (bankers-regulators-FED) were just as dumb in India...

Seems like they had a better fed guru...

How India avoided a crisis..

TALKING BUSINESS; How India Avoided A Crisis - NY Times

Was talking to a friend of mine that works for Cisco. The sales team got a large quota reduction across the board. His was 13%...They must be expecting quite a slow down.

seem pretty touchy about PPT mentions, just a comment board ya know

seem pretty touchy about PPT mentions, just a comment board ya know
irreverent | 12.22.08 - 4:52 pm | #

As long as I've been on this board PPT has been used to support every move in the market that doesn't make sense.

Market going up on bad news?  Gotta be PPT rather than short-covering.
Gold going down when it should be going up?  PPT rather than hedge funds unwinding long-commodity/short-dollar plays
Oil going down? PPT is hiding the fact that oil deposits are declining rather than demand falling faster than supplies.
Dollar getting strong?  PPT rather than interest rate differentials, emerging market/eurozone falling apart as well.

Is there manipulation?  Of course there is.  Is everything that doesn't make sense in the market being driven by the "Invisible Hand"?  Highly doubtful.

There seems to be a need by a lot of people to find a conspiracy behind every market move.