got pigged jd bastille day? 7-14th

But what happens on the 15th?

Imagine stocks being as illiquid as real estate?

It's easy if you try...

"But what happens on the 15th?"

The sun explodes. Stock market closes one hour early.

But what happens on the 15th?
The San Francisco Mime Troop puts on it's show in Mill Valley "TOO BIG TO FAIL".

A mime is a horrible thing to waste.

"News from 1930" is particularly good today, with a quote indicating how well technical analysis has worked thru the ages:

[Note: If only t'were so department.] F.H. Medart points out that depression years of 1921 and 1930 both added up to unlucky 13; therefore, after 1930 there should be clear sailing until 2029.

News from 1930: Favorites of the week July 7-12, 1930

When I first read "Irrational Exuberance" I literally couldn't believe how bearish he was. It took me years to come to terms with his argument.

I'd like to see Shiller maintain his focus a little more on economic prediction rather than economic healing to be sure he'll maintain some credibility in the future.

If people had listened to him in 1996 much of this wouldn't have happened.

BTW Hussman keeps making this argument about employment switching from a lagging to a leading indicator in this cycle, and I find it very compelling. It kind of supports Shiller's momentum view:

It is very important to recognize that the increasing unemployment rate is likely to exert a different dynamic in this economic downturn than it has in prior downturns, because of the high ratio of household debt-to-income, and the high ratio of mortgage loan-to-value at present. In normal downturns, unemployment does trigger a certain amount of loan losses, but the general tendency is for unemployment to behave as a lagging indicator. In the current cycle, high debt-to-income and loan-to-value ratios create a situation where unemployment can easily be the trigger event for further defaults, and could therefore create a tendency for job losses to lead economic weakness (rather than just lagging it). Now I don't think that the feedback will be strong enough to lead to a self-reinforcing collapse, but I do think that it is naïve to expect that the economy will just “shake off the blues” and roar ahead.

Hussman Funds - Weekly Market Comment: High Loan-to-Value + Trigger Event (Unemployment) = Default

July 13 (Bloomberg) -- Goldman Sachs Group Inc., which provided a $3 billion credit facility to CIT Group Inc. more than a year ago, said today that it has offset any exposure to the company with collateral and hedges.

“We have no material exposure because we are collateralized and, to the extent that we don’t have collateral, we are hedged,” said Lucas van Praag, a Goldman Sachs spokesman in New York. He declined to specify the nature of the hedges.

Well, thank goodness!

but who's backstopping those hedges, AIGFP? cough taxpayer cough

Forclosures in Az are moving up the food chain.

Job loss, small businesses closing are a part of that. And the Alt loans are going to roll over as well.

The very low end market has been picked over by deep pocket investors. However they are not going to buy $150,000.00 properties. Those are going to sit on the market for a very long time.

Bank boom day in the markets: increases on the big names of 2% to 5%. What do the buyers know that makes them superbullish?

lawyerliz, ignore the ticker tech title - that isn't what Shiller said. I excerpted the good stuff ...

Never ever believe a word (and especially the headlines) out of any organization from Henry Blodgett. He pulls that crap all the time on his other sites, clusterstock, tbi, etc.

The leopard doesn't change his spots, and blodgett is more like a housecat.

Any "momentum effect" is an artifact of the model parameters not the behavior of the underlying physical phenomena.

I would have to assume the guy (or his grad students) ran the correlation calc on the CSI in order to make the statement. Are you saying CSI has the momentum, or was he working off some model (and my reading comprehension needs work.)

Entrants into the labor force have a high education debt load and low chance of obtaining a decent income job.

So they move back in with mom and dad. Mom and Dad's resorces are already streached.

“We have no material exposure because we are collateralized and, to the extent that we don’t have collateral, we are hedged,” said Lucas van Praag, a Goldman Sachs spokesman

said the same thing re aig

The million who have had to walk away from their houses will not and cannot be back in for 7 years. Doesn't this pretty much guarantee a long tail?

Yeah, but you'll be laughing a different haha if it happens. Forget sunscreen .

Oh sure. It's all fun and games until the sun explodes.

"Bank boom day in the markets: increases on the big names of 2% to 5%. What do the buyers know that makes them superbullish?"

This might have something to do with it:

U.S. indices look as if they will start the session in positive ground, helped by strength among financial stocks following encouraging comments about banks from esteemed analyst Meredith Whitney.

NEW YORK (Reuters) - CIT Group Inc (CIT.N), which provides financing to many small and mid-sized businesses, said it remains in talks with regulators to find ways to improve liquidity, after losses resulted in a capital crunch.

CIT, whose shares tumbled 16.3 percent in premarket trading, said it is also discussing how it can bolster its finances if it fails to win access to the Federal Deposit Insurance Corp's Temporary Liquidity Guarantee Program. It said there is no assurance it will be granted access.

I'll have a Whitney Double Nothing Burger.
Hold the cheese.

"Momemtum effect" during the accelerating declines would have predicted continued accelerating declines and been wrong.

Momentum effect would have predicted continued housing bubble with no crash and been wrong.

Why is this momentum effect different?

Haven't read the MW comments yet. So I'll reserve judgment.

However, I do find it interesting that she is now "esteemed analyst" MW. Apparently you have to be bullish to be esteemed, cause that sure isn't what they were calling her in late 2007.

99 cent investment advice:

Anything and everything that has been propped up artificially (stocks-housing-dollar) is not where you want to be.

Today is as good a day as any to lose money. Gotta love being short.

From the geeks down the hall-- It is an old klingon saying: Today is a good day to die.

It's early yet, but examine the leaders in the block trades for selling on strength:
Money Flows: Selling on Strength - Markets Data Center - WSJ.com

Short version:
pump n dump

On a clear day it's possible to see the Eastern Front in Contemptkin Village, from an amazing distance away.

GS announces the results of their alchemy tomorrow pre-market

Won't take a full scale explosion, just a sufficiently large coronal mass ejection...

basel too and it will be a wonder to be hold.

thumbing his nose?

...and connect the dots that the financial sector profits are at the expense of the real economy. Keeping the vampire banks of Wall St alive by draining the life blood of Main St.

I also think that a forclousre on your credit report isn't going to mean a great deal when such a large percentage of people are in the same boat. Lenders will need to lend to earn income

I disagree, sort of. As per the story the other day, a credit report and score will begin to be less relied upon to make lending decisions. Instead, a full history of your borrowing habits going back many years will be required to underwrite a loan. It wouldnt matter if every single person in the US had a foreclosure on their 'record', its still going to be taken into account in a way that enriches the lender, not the borrower. In fact, there was a hint of irony when you used the phrase "A Large Percentage" in your comment, because in the future, the description of the interest rate being paid on loans for people who have a foreclosure in their past will be - "A Large Percentage"

Hey, all.
I, for one, would appreciate it if you'd use the "reply" button if replying to another poster.
That is all.
Thanks.

Pavel,

Simple is my definition of Beautiful...

My father is going thru cancer treatments over last month, went down to spend some time with him recently. We were sitting around having a beer and I told him that I could never remember anything he bought me but I remember every night dive or new dive spot discovery, every hunting and fishing trip, camping trip and lobster we cooked after catching them somewhere..

I spit in the face of over-consumption...

a poem/song I wrote long ago

Time to turn away
From the dollar bill
That I do not need
It’s a piece of paper
A plant without a seed

Too much out there
For the eye to behold
Too much to learn
And I’m tired of being sold
Like a coke in a machine

Distant to tangible things
I wait where no one sees
The pain is within me
But I am aware that someone
Does care, over there.

I reek of longing far beyond the miles
All the while I am alone.
Mired in some distant dream I wander aimlessly
Dreams, my heart yearning for one thing.
To be near, to someone so dear,
Tears surround my heart, while apart.

I am her father, a son in pain
Learning while these feelings pervade
Jaded by fear of rejection, far away in spirit
I lean towards the heart while the mind tries to carry on.
I’m someone’s son who seems to be running on empty
Fill this vessel Lord

Let me find the spirit of my child.
Let me see the laughter of her love
By giving so carefree
I know what satisfies me
So I will flee to the nearness of her voice.
Nothing shall taint the call of this child.
I am coming home soon. It is time.
And as the years slip by, I know where my soul resides
Near my child, where happiness is seeing her smile

Time will pass, and I will see these years as gifts of love.

"Inconstant Moon" - Niven 1971

I almost breathed my last, last week.

I was driving and a bulbous truck coming the other direction, with a 25 foot fuhrerwagon attached to it, took a corner too fast and briefly both monstrosities tilted on 6 wheels towards my lane. The woman in the passenger seat of the truck had a look of abject horror in the brief moment I saw her face...

OT:
Glad your Baseball teams are doing so well.
My team?
Cleveland Indians.
35-54 .393

We now return to our regularly scheduled programming.

Another excellent tale from that author, also demonstrates the issues of timing...and luck!

Also, don't fall for that green shoots BS cause they ain't real. No recovery.

this co called 'recovery' is artificial

Not surprisingly the head & shoulders seems to be failing juding by the futures activity. Not surprising considering that if the head and shoulders had engendered a huge selloff it would strike a major blog to the widely accepted efficient market hypothesis.

hat tip to: Blogger: Blog not found

If you are under 40, you have grown up in a casino, and haven't been outside of the doors yet.
Optimism makes a casino run, and it can't function without being peopled with mathematically challenged and unrealistic beings.
The scream will start, as the people are forced out the doors, and into the sunlight.

How do you run a correlation on an index?

Sorry, I should have explicitly said auto-correlation. (That is the only "price momentum" I know, is there another?)

Second, CSI is designed to smooth

That does not guarantee momentum of course. "Running average" would guarantee a meaningful auto-correlation.

Shiller says home prices have been appreciating 1% per year since 1890. Thing is the "same" house isn't the same house. transport that 1890s shack forward to 2010 and it isn't worth anything even in the same condition.

Careful, I think you're mixing the "irrational exuberance" graph with the CSI. The widely-published graph of data to 1890 was not the same methodology iirc.

Regardless, I've always wondered about that supposed 1% increase. If nothing else, error bars are missing from his data which could eat the 1%.

@Juv : Is your name aladinsane elsewhere (hbb)? Your style is a dead ringer at least, you should meet up.

PS to Dawg: I know the CA world is supposed to end @ 11am, but branding Wed as Dawg Day Afternoon requires a 12:01pm time. So I'm moving your prediction on behalf of the marketing dept.

Actually, to be truly "retentive" you would need to differentiate between the speed at which light would arrive and the speed at which the highly energetic particles would arrive...just sayin'

I'd wager that even the most boring politician known to mankind (Gray Davis) is gonna party like a rock star on Tuesday night.

Cinco-X (profile) wrote (in reply to...) on Mon, 7/13/2009 - 8:40 am

Not to be TOO anal retentive, but since the limitations of the speed of light will result in us not knowing about the Sun's explosion until the blast wave reaches the Earth, you should wear it all of the time, just to be sure;)

Half the Earth perhaps.

for a quick read on the ongoing financial crisis I suggest "liberation of earth" - Tenn 1950. Suck air my children.

JP (homepage, profile) wrote on Mon, 7/13/2009 - 8:43 am

PS to Dawg: I know the CA world is supposed to end @ 11am, but branding Wed as Dawg Day Afternoon requires a 12:01pm time. So I'm moving your prediction on behalf of the marketing dept.

2 PM Eastern in order to make the news cycle.

Dawg Days of Bummer, indeed.

"BTW, do you predict that the highly energetic particles would kill us all before we actually knew the sun exploded?"

The people on the dark side of the earth would probably survive any 'initial blast' for a while.

Spain orders its navy to search for sunken galleons of gold, like an underwater homedebtor scrounging for cans and coins at the beach:

Spain seeks sunken treasure - mirror.co.uk

and the entire earth need respirator devices to contend with the atmosphere being ripped away.

I'd suggest a pressure suit, but the rapid decompression would probably bork that idea too.

More on what Meredith Whitney said to boost the markets.

Goldman Sachs upgrade gives world markets a boost

Business Week Online > File Not Found

UPDATE: Ignore the Tech Ticker story title - Shiller said he felt an echo bubble was unlikely.

Aren't governments in Asia promoting real estate bubbles right now to generate short-term economic growth?

That seems to be an echo of the events here in the United States.

Earnings may disappoint after expectations rise

Earnings may disappoint after expectations rise - MarketWatch

what about the green shoots thingy?

was neckline tagged on head and shoulders snp at 894?

energycon's pump and dump could be forming....

Shiller's models tell something about general trends, but they aren't much help in predicting local markets. For example, prices here in Oregon are still high, and lending is still happening, whereas Liz says there is not much going on in Florida, despite lower prices and less unemployment. The doom is very unevenly distributed, and my recession looks very different from her area. It's like we have several different breeds of recessions moving in different directions, or something like that.

" notafriend_of_uncleben (profile) wrote on Mon, 7/13/2009 - 11:56 am

More on what Meredith Whitney said to boost the markets. Sad

Goldman Sachs upgrade gives world markets a boost

http://www.businessweek.com/ap/financialnews/D99DJRA80.htm"

Is there any reason to think that this "improved performance" is any more than the result of Uncle Sugar pumping billions into the banking system?

"Spain orders its navy to search for sunken galleons of gold, like an underwater homedebtor scrounging for cans and coins at the beach:"

Says a lot about the persistent value of gold.

Do you think 500 years from now people will be searching for hidden piles of 2009-vintage US dollars?

CA can order its state workers on a scavenger hunt for its 1992 bearchits.

Amazing how much wood is being sported for GS today. Pretty disgusting.

there is little or no chance of an echo boom simply because the credit won't be there to support it. that being said, house prices are bottoming, especially in california and miami. new york area prices are not yet a buy while phoenix is close to buy but not there yet. i have a real estate report using rpx prices -- Pangea Market Advisory and hit the real estate report tab.

From that perspective I'd have to agree with her argument.

Me too - unfortunately. GS is the financial services equivalent of Haliburton and every bit as 'connected'. Drill baby drill.

Looks like the market is going long for Meredith Whitney.

Elmo will lose this battle, but hopefully not the war.

Looks like the market is going long for Meredith Whitney.

If we had rational markets - it would be go go green for GS only and the rest of the economy & market would be double death red.

"Treasuries Record Demand Damps Concern Supply to Grow" - Bloomie, story not up yet. Kinda weird, if true.

"Shiller's models tell something about general trends, but they aren't much help in predicting local markets. For example, prices here in Oregon are still high, and lending is still happening, whereas Liz says there is not much going on in Florida, despite lower prices and less unemployment. The doom is very unevenly distributed..."

Agreed. I live over the hill from the Silicon Valley, and who's to say electronics spending will stop declining even when the recession "ends." Moreover, stock option bucks help buoy this housing market at its high level -- if they go away, even if employment doesn't drop much more, that's another hit.

And finally, on the big picture level -- what if the feds can no longer keep mortgage prices low for reasons beyond their control? After all, the value of our money pretty much depends on the kindness (and self-interest) of strangers. Americans buy on payment affordability; that may change, but not for a while. Take mortgage rates to seven or eight percent and housing prices will have to drop until payments are back where they were at six percent.

No Banking Regulation
No Congressional Banking System Oversight Management
No Consumer Protection From Government Licensed Bank's Misfeasance
No Accountability
No Change, not today, not tommorrow

Next Bubble ,Please

MLB

MLB - don't forget ZIRP. Another key ingredient.

She is extraordinarily bright, and talks as quickly as possible.

She said GS would do well and then the whole economy would do worse. It was not a rosy scenario. And she said "15% in a very short time and then get out."

Americans buy on payment affordability; that may change, but not for a while. Take mortgage rates to seven or eight percent and housing prices will have to drop until payments are back where they were at six percent. - BD

True. And the transaction costs are not coming down here like you might think. The less successful realtors are gone, and a smaller pool of very aggressive sharks are dominating the action. They also seem to have the buyers, so their power has become more concentrated, rather than less.

NervousRex,

Was that an interview? If so, which network? Would love to find a link.

would you recommend for a layperson trying to get a sense of how we got here

At this point "how we got here" depends upon your political agenda. So decide on your political viewpoint and buy the book that best backs that up.

There's no difference between the Elephants and the Asses.
None.
Nada.
Zip.

Yeah it was:

That changed after Meredith Whitney told CNBC Television that she had upgraded her recommendation on U.S. investment bank Goldman Sachs Group Inc. to "buy" and raised her price target to $186 a share

And she said "15% in a very short time and then get out."

Sounds like a pump n dump to me...

energy-fwiw denningers read also

The Market Ticker

Whitney video here:

Banks Stronger But Outlook Clouded by Job Losses: Whitney - CNBC

"pavel: let me help you out: It would be surprising if there was anyone we would recognize as a mammal."

Could be. And gosh, I have a great liking for mammals.

Scone,
Treasuries Record Demand Damps Concern Supply to Grow (Update2) - Bloomberg.com

July 13 (Bloomberg) -- Bond investors across the country are snapping up 10-year Treasury notes as expectations for a U.S. economic recovery this year disappear.

Firms from New York-based BlackRock Inc. to Franklin Templeton Investments in San Mateo, California, are turning more bullish a month after yields on Treasuries rose to the highest since October. Declining consumer confidence, falling stocks and unemployment climbing toward 10 percent has overcome concern that record auctions of government debt will overwhelm demand. Barclays Plc estimates $1.1 trillion more sales by the end of the year, on top of the first half’s $963 billion.

The tin foil hat wearing me wonders if this is not why she was brought onto CNBC to pump the financials?????

From Denninger:

"PS: CIT may blow up as soon as the next couple of days. How many small and medium-sized businesses will fail almost instantly if they do, and what will THAT do to unemployment?"

Maybe California and CIT both blow up on the same day?

Second bubble? Not really, but there's still plenty of money to be lost in RE. It'll make everyone feel better if they have company in their losses and they can pretend it was a second bubble. Hoocoodanode?

Watching the MW interview now.

Basically she is saying:
-GS will benefit from the terrible situation in the corporate and municipal markets as they help companies and states raise capital thru debt issuance. She is pretty bullish on GS's ability to profit from a BEARISH macro economy
-short term financials could go up 15% (she gives a lot of reasons that there Q2 and Q3 numbers could look pretty good even while their core balance sheet issues remain), then flatline and then trend down again

She used the words "trade" and "marry". You could trade the sector, but she wouldn't marry it. She seems to be happy becoming betrothed to GS.

I think it was some good analysis. Don't think she's cheerleading, just calling it the way she sees it. Not very bullish at all regarding the macroeconomy.

"From Denninger:

"PS: CIT may blow up as soon as the next couple of days. How many small and medium-sized businesses will fail almost instantly if they do, and what will THAT do to unemployment?" "

What about Dennigers Clown Nuclear Call near the bottom 670 on the S&P? He is just a fear-mongering perma-bull...

Bob Dobbs,
Your outlook is as good as any but this is the "one last chance" real last chance for California. Citi has stopped accepting scrip. We run out of real money in days if not hours. If things don't resolve in the next few days everybody gets Golden Bear Chits. There is no more cash. The news out of Sacto is all "frameworks" and agreements in principle and such. Those have never been the problems.

I think we have plenty of evidence that nothing too big to fail does around here.

This is at the core of Whitney's point about financial earnings. They are all bullshit, everyone knows they are bullshit, but if all the traders are in gentlemens agreements to keep on whistling and walking past the dead bodies.....then so should you.

I, for one, would prefer not to stick my fingers in my ears and yell NAH NAH NAH NAH, while I am sitting on the ticking bomb that is the stock market.

Cognitive Dissonance....is the overarching theme of the 00's and looks to have enough momentum for the 'teens too.

on denninger link- see fwiw in sentence...but what happened to Guarantee, Corus and other big banks that haven't been on the radar screen..

Maybe Portland could open a "Facial Piercings for Cash" store?

Maybe Portland could open a "Facial Piercings for Cash" store? - HG

The kids pierce each other with pins and stuff. Some of the results are pretty icky. And the latest trend is for large objects in elongated lobes, like Stone Age tribespeople. Along with all-over body tattoos. And so on.

Might as well put on a counter culture "uniform" - HG

Just basic human behavior, almost everyone wants to belong to some 'tribe' or other.

"One thing is true about housing, it is a very inefficient market - and it shows momentum. And in fact, when the rate of decline slows that is evidence that the rate of decline will continue to slow because there has been a second derivative effect that is actually in the data historically."
Robert Shiller, July 13, 2009

Very Interesting!

What is the function of which he speaks?To have any derivative, let alone a second derivative, there must be a differentiable function. It seems that the good Professor, like many others that pontificate on various aspects of the economy or any subset such as housing, toss the term "second derivative" around with abandon. It seems that they're dealing with a function of one independent variable, i.e. TIME, on the abcissa, and the dependent variable, e.g. Housing, on the ordinate. The inherent assumptions are that: (1) this is a function; (2) there is only 1 independent variable -- in this case "Housing" & (3) that such function is (a) continuous on the open interval & (b) differentiable on the closed time interval under consideration.

Too many would be "quants" -- I call them "quantabes," that is quantitative analysis "wannabes" -- are getting coverage to spout such nonsense as "a second derivative effect."

Again -- what is the FUNCTION?

.