... Today was like it used to be when I had a job.... I turned on CNBC, and it was ... Well just Juxtaposed the opposite of MSNBC... So much hope on one side... and on cnbc they are just repeating the same MEME from friday. With no news flow, of course they are stuck in Neutral...
So... I'm trying to enjoy my day...
Going over bank ballance sheets....
LOL
Damn I wish I had a life.
Monday, January 19, 2009
MLK day
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12 comments:
Tomorrow should be a banking bloodletting. Asia is getting hammered.
T.Lo's podcast is out. If the UK capitalizes RBS it would take more than 100% of the UK GDP. Great.
Treasuries are no bubble. As the economy re-flates and interest rates climb, the fear trade will knock them down again. She sites the low yields in Japan to this day.
Barry had a chart from 1974 to now and notes that we are at 40% below trend in the S&P, much like we were in 1974. One commenter, I think it was Bruce in TN, noted that the proper comparison would be Japan in 1991 and not US S&P in 1974.
Upsidetrader sees a lot of short opportunities in banks this week and sees FAZ going to $80 (although I agree with you that the levered ETF's cannot be analyzed technically)
Your thoughts?
Banks report in the morning, that will change everything.
The U.S. is not Japan... It's different.
This is not 1974, Japan, 71, 2000, 1990, 1929, 1941.... It's 2008.
I was looking at CRE, The default on Florida Mortage are 10%. CRE overall is about 2%, Even if that doubles it's not armageddon, and it won't be.
The dollar overnight made a move that looks like commodities are not so much going up.
But... the moves made by Europe and asia, are either another leg down, or a spike low. It's always fascinating to see if we lead Europe and asia or if they lead us. Some times they do, and sometimes they don't... Also sometimes they react like "no news is bad news"
Also... The inauguration could change everything sentiment wise.
Sentiment wise... It wouldn't surprise me for this to be a reversal.
Interesting contrarian take, and you may be correct.
One view is T.Lo's "objective sentiment indicator" of her stock universe is anything but bullish. Any drop below Nov lows could see a rather large leg down.
I was not implying that this is Japan or 1974 or 1991. The fact is that interest rates can stay down for quite a while in a deflationary environment and the fed has little ammo against that scenario.
While I can understand the idea that this will signal a reversal, I just cannot see sentiment pointing that way. We have had a 20% run up from the lows and the short ratio is not very high, which brings up other objective measures of sentiment, such as put-call ratios, etc.
I apologize if I am getting into the "GYOFB" territory by monopolizing the comments. Just interested in your interpretation.
It's all good... Not like anyone else talks to me, and you bring up good points. I'd probably stop If I was just talking into the void.
I tell you the most bearish thing is we just hit 1.29 on the Euro which is very bearish for the sector that bounced the most since Nov (materials)... but it could take a day or 2 for traders to realize it.... So if you want to talk about a reason for the market to sell off... That is a good one.
The target of that November Wedge is 730spx or so... so if you want objective T.A. That is it.
The attempt at a spike low in jpm and wfc are
You know she is talking about "PANIC"... I'm most the way through "The nature of risk" and Roughly speaking, that is the model teresa uses. I would encourage you to read it through a few times to the point where you feel like it makes plenty of sense.
I intend to read it about 5 times.
I don't have any illusions about those big banks... and I've been a little dissapointed by the decent ones picking up bad debt as well as the assets... one could think that Jamie Diamon may not think that the CDO's are worth ZERO, since he was willing to pick them up, with BEAR and WACHOVIA.
I'm dying to see balance sheets today...
If there is so much pain with the CDO's One could suspect that that is where most the deflation is going to be. As long as the Regionals stick with traditional losses in the 2-3% range(twice what the pain currently is) they should make it out alive.
I will be curious how WFC and JPM react this morning, which will give us an idea of how the rest of the market will go.
Sorry wamu not wachovia...
I have been trying to come up with a way to value the losses in the cdo's.
Obviously something that has no market has no value.. but if there is a Return on them... Net... they won't have no value.
When you figure a way value CDO's, give Bernanke and Geithner a call... I think that is the problem.
Which banks are too big to fail and which banks have had their prices hold up because investors *believe* they are too big to fail?
Technicals are disastrous and the fundamentals are useless froma trading standpoint.
Maybe I'm stupid.... But I just want to know what the return is on them... Maybe some of that data exists.. but all I have are data from parts of the country.. 10% loan loss in florida 3% in more rural areas. and .5%-.2% everywhere else.
and if I could chart it..
one could come up with a model...
Which theoretically what the banks were doing... You would think the some data would be out there.
If we need to get back to a more reasonable Wage to home price ratio.. as I covered a few weeks ago, there is still 20% downside for homes.
If you just took a 10% default rate on a generic CDO from florida.
you take a million dollar bond and took 80% default on it.(Twice Florida default), asuming a yield of 4%... the yield is only down to 3.2%... The Loss of Equity on that 200K haircut.. still should only hit 100K.
Sure some of those "Instruments" are of the Frankenstein variety.. But.... shit!!!
It seems like the default rate is a moving target. As the economy falters, more CDO's become worthless, and as more CDO's become worthless the economy tanks a little more.
Classic vicious cycle and it seems the govt is not only behind the 8-ball but may not have the tools.
What happened to optimistic Tony from a few weeks ago?
What we need is about a 600 point sell off in the morning.
I just get my brain wrapped around the fundamentals. There are no profits and the assets are all fictitious.
What the difference if JPM lost 34 cents or 4 dollars? The numbers are meaningless.
LOL
Look at the daily of WFC... That is enough to cut your wrists.
I think it's time to start digging that bunker in the back yard.
Seems like we must be getting close...
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