Funny, so many of us are so... off our sleep patterns.... Not one of us is in a regular pattern.
I got up yesterday morning at 3 am mt,
then fell asleep again at 7am,
slept to 10am.
Up till about 2pm,
and took another nap, got back up at 5pm.
Up till 11am, back up at 3am.
I did have a GREAT RUN, ran a mile and a half(ok, I call it running... more like a periodic jog over a mile and a half) I drank a fat coffee, Then did another 3 miles.
but I'm sure there is another nap in my future...
but I see blog checks from just about everyone in the past 6 hours... Either people staying up way too late, or way too early....
I HOPE WE ALL HAVE HAD SOME NICE REST, We sure do deserve it.
Sunday, September 21, 2008
LOL
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8 comments:
Actually I'm on my regular schedule. No work today but my dog doesn't have a calendar so he's up at 6am.
Just trying to figure out what happened last week. Market, treasuries ended flat after 6% drop in S&P.
Is that the bottom? My gut says no, but some of the metrics (VIX, etc) say maybe it was.
How much de-leveraging has yet to go? People lie, charts don't. I feel ("feel") that some type of pennant will form over the next several days.
Good for you, I feel like I've had an Enema.
Santelli says you can buy them.
I say some kind of Pennant, 5 Waves, the first wave will probably end Monday or Tuesday.
We will have a pull back, then a nice move Up-ish. And maybe have a Peak...
That should be just before the week of October 1. That is the week of the NFP and the expiration of the "no shorting Financials", That should be the Real Test, maybe we will have a successful retest, Maybe we will set a new low.
So, either a nice Basing move, or a "Spike and Ledge".. but in a pennant.
Maybe I'm wrong and we just go to the moon.
Way too many people calling Bottom, But I tell you there is a hell of a lot of fear.
Stocks... still need to work on their quarter to quarter valuations, and who knows where they are, Maybe they are "Fair", but the F-P/E's are too large.
Eric & tony,
Where you state that "you're trying to figure out what happened" I would suggest that that is true for many people.
Thus, will price data [charts] reflect this confusion?
If so, how reliable are any analyses based on recent price data?
jog on
duc
ducat,
You can fill books on what I don't know, and it has never been truer than today.
I never would have expected such a large surge after the Ben and Hank show. After today's interview with Paulson on CBS's Face the Nation, I felt like I needed a shower. It was just a bunch of filthy lies, as usual from that guy. "The world's gonna if you don't buy into this..."
The Congress was rolled by the administration. This is a farce whereby Treasury and the Fed come out with this plan, the market responds, and now Congress HAS TO approve this plan or take the blame when everyone's 401(k)'s goes south on Monday if no deal is set.
Regardless, the value of stocks will be negatively affected by the de-leveraging that must continue. This is not a positive for the SPY. The no-short rule just delays the inevitable.
Tony,
I've been having trouble, I don't understand what all the paulson Bile is about.
I'm not saying you are wrong, Many people I respect have it. I would appreciate either here or on your blog if you would try and Bang out that sentiment.
Many say this bail out is what we "needed"/"have no choice but to do",
Santelli agrees
Pimco says it,
Nouriel Roubini too.
Maybe you don't understand how close we are to "The Brink".
I totally understand that you work, and don't have enough time to obsess about this.
Did you read this story?
http://online.wsj.com/article/SB122186563104158747.html
When LEH failed, one of the money market funds, One of the big ones, was holding 10% of it's holdings in LEH debt, and with that default that money market went to 98 or 97 Cents on the dollar. That huge money market fund "Locked Up" and the 97 cents can't be redeemed until next week.
After that happed, Tons of people pulled their money out of Money market funds, for fear of the same thing. Money markets fund most of the short term debt market, This includes Credit cards, and many companies that use short term debt.
This Locked up our Credit System, to the point the Reserve had to pump 180 billion into it, to try and keep the credit markets liquid. IT DIDN'T WORK. Banks Horded the Cash, and didn't Lend because the redemptions in 'money market funds' were "HUGE".
With the Possibility of AIG going under, the same thing was about to happen on a scale of 100 times that of LEH.
The End Game was this, Nobody's credit cards would have worked, after a few days. Companies that rely on short term debt would have folded, and caused even more defaluts. The "run" on money markets, would have Forced tons of Redemptions, This would have continued to Cascade into further Tightening of credit.
AIG debt is held internationally, and the idea that they were about to default on it, had the international banks in a 'panic'
The resulting Panic, of the Credit market, Probably would have resulted in runs on Banks, as Confused people, Just reacted Literally started shoving money into Mattresses.
The cascading economic failures of say... 50% of all the small and medium buisness in the country over the next 6 months. and for the most part would have stopped buisness in this country. and could have cascaded internationaly.
We would be lucky to get out of it With hyper inflation.
When I watched "Meet the Press" the only thing I thought he lied about was, that "they weren't panicked", He had no choice but to say that, because if people were Lucid about how Close things were, Heaven help us.
Our Financial system is a confidence game. Not just because of Fiat currency, but because that is how modern economics work.
I guess I could be over dramatizing it.
This bail out is the largest since the 30's, But it's being done Before, and not After.
Like everything, the more we delayed, the more "ounce of prevention" vs "pound of cure".
I only Fault Paulson and Uncle ben for not being more "pro-Active". But I doubt without us being "on the brink" that the legislative and executive branches would have been had enough support, I also think that the legislative branch would not have been able to get enough Constituent support, or political Cover. To have done anything else.
I could be wrong... and nothing would have been wrong with a good enema... and it's possible Thousands of people wouldn't have starved, in the resulting collapse.
Maybe I'm misunderstanding and it would only have been half that bad
The Paulson bile is pent up frustration at a system that has let the entire world down. It's an embarrassment.
I have no doubt there was panic this week. As you have summarized, the credit markets were locked up and the fed and treasury needed to get together to make money markets whole. I'm not disagreeing.
I have defended Paulson to friends just last night at dinner and I think Bernanke was also handed a bad hand. They are busily trying to polish this turd.
My problem with the manner in which this has been handled is the timing. In December, January, March, July and even more recently, Paulson has taken opportunity to tell us the economy is sound, the worst is behind us, there is no credit crisis, no housing bubble, and we have nothing to worry about.
Yes, investment is a confidence game and how can anyone have confidence in the system when Paulson has been wrong so many times? When was the last time he told the truth about the straits of the economic problems?
Granted, much of my spouting off is venting frustration at the prospect of having worked all week, handing 25% plus over to the feds in taxes, and then finding out I just bought a crapload of bad paper!
A few years ago I was talking to a friend about running deficits, increasing household debt, trade imbalance, lack of regulation, illegal expensive wars, etc and it's like having your garage full of oily rags and open gas cans. One small spark could ignite an inferno... such as we have. On the other hand, if the garage is clean and tidy, this type of spark would have been of no consequence.
Paulson made three specific pleas on CBS today to "pass a clean bill", which in my translation is to pass the bill as he has written it, with no provision for future regulation or cutting ex-executives' retirement packages or bailing out individual homeowners. In other words, the Congress is hamstrung and must acquiesce to the settlement as determined by Treasury. Are we forced to trust the knuckleheads who have been in charge during this debacle?
Then, after hearing the Democrat Barney Frank, I realized that they really don't have much to offer anyway. So, I'll grudgingly hand over a fourth of my paycheck to these idiots and let them buy more shitty debt paper or whatever they are going to do with it.
Hu!!!RAH!!!
I hope that felt as good to write as it did to read.
This week, Some asshole who is One the banking commitee, had NO IDEA, Who Pimco is. THAT WAS SCARRY!!!
I wish I had the answers...
I just want some idea on how to keep making money.
I worry about, the affect of just being the greedy asshole I am, where I just want to make money, and don't care.
My biggest worry, is that so much Power is being given to pauson. Even the best of us are not immune to the corruption of power.
On the lying, by paulson and Uncle ben. I think they knew things wern't "contained", But that was their excuse to not cut rates till the last moment.
I also think that I like the idea of "Rapid Sudden rate cuts" as opposed to the gradual ones.
It's good we are going to have significant "come to jesus" on the economy.
Thank you Tony....
Duc,
My observation is that when people are confused, it's because they are wrong. Most the "confused" are Super Bearish. The Bearish, are either Confused, or in some kind of Angry Denial of the Rally(and that is how every solid reversal has started)
But The emotional pattern from these bounces is the same, That first bounce is responded to with Denial.
The volumes are impressive, But is that because of Options?
My understanding is that it's going to take 2 things to get the bull going, Good Credit markets, and improving employment.
Up until Leh collapsed, we had the first one. If we have one of the 2 things we need, We should be able to move sideways.
My emotional Disbelief about this Rally. Tells contrarian Me, to "Fade" the Disbelief.
The Broader Disbelief of the reversal, combined with the Universal perma-bull "They have rung the bell at the bottom" that I have heard..... Well In an unbiased way, says "neutral".
If the Cyclical Bear and K-wave cycle from the 70's is our guide. Both the 71(financial colapse) and 74(inflation collapse) involved 50% corrections.'
But the early 70 part of that cycle were financialy botched, just as the 1930's... so to expect 50% this time, seems far fetched.
Also I could buy a 50% correction... but just over time. Quarter after quarter of slow deterioration.
I'm happy to be conservative, My mantra is "Never Chase"
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