Cars

pictures of the build up of new cars around the world.

Too much money chasing too few goods? Is this the Inflationary effect Lauffer talked about, how companies can't produce enough goods to soak up the extra Lequidity?

I'm trying to remember how art lauffer talked about it, People don't have jobs so companies can't produce goods to soak up the money that is being pushed into the system.

Let us also remember how he said there was no recession, and how none of this was going on....

Art Lauffer, wrong about 90% of what he says... He just hopes you can't remember what he said 4 months ago. he doesn't

Santelli hoax

I looked up the domain record for chicogoteaparty and it's as reported.

It's impossible for me to know if the name and address track back to that specific person, but it does track back to that name and was registered Months ago. Either as reported( september) or as I'm remembering it back to march of 2008... I refuse to look it up again.

back to the counter thesis. I liked it monday tuesday because nobody believed.

the bad thing about friday is that we should not have been able to sell off on the bad news. "not selling off badly" isn't the good sign.

The other bad thing is that .... seems like there is some bullishness.

One could think that what we need sentiment wise is "Building bullishness"

Counter Thesis

I'm trying to give some counter thesis.

Seems like a sentiment shift. I'm not sure we could take another run without some of the usual suspects being taken to the hospital, Never to be seen from again.
You can't quite eliminate that possibility.

Umn...

is it odd that i started this and don't care to finish...

Maybe later

EISP list

Add this one to the "Everything is Someone elese's problem" list. Lack of responsibility.

Banks need to replenish the FDIC... Don't want to.

The banking industry faces a $27 billion assessment this year to replenish the federal insurance fund that protects most bank deposits, further reducing the money available to support new lending.

Some bankers had pushed the board to instead borrow money from the Treasury Department to replenish the insurance fund, and then repay the loan over time from the industry's regular assessments. Collecting the money directly from banks could reduce the industry's aggregate lending capacity by more than $150 billion, because each dollar of capital can support about $7 of lending.

"Somebody has to pay for things, and we're asking taxpayers to pay for a lot right now, and so I don't think that's a step we should be taking," Bair said in an interview after the board meeting. "The fact that the FDIC has not relied on taxpayer funds is a very good thing in these beleaguered times."

The board did approve a number of changes that require banks with riskier business models to pay a larger share of the assessment.

You have to love Sheila Bair. Still mind blowing that a bush appointee could be so competent. And that she was willing to stand up to Paulson last year.

The market

What I continue to get at, is that I expect the market to be ABSOLUTLY UNPREDICTABEL. so many people trying to game it in so many ways in the short term....

My suggestion is to work the unpredictable nature of it right now.

ETF chatter

I read something about the oil etf and how it scheduled it's rollover of it's contracts, and the oil traders have started gaming them.

with the interesting divergence of the leveraged etf's, If I worked for a big trading firm... I would be working out ways to exploit that divergence. If there is a predictable divergence, it can be gamed.

all of this is continuing to make me nervous about all the ETF's..

Was it yesterday?

Tony asks, what I see some times.... Ok, we had a first bounce out of the banks. we had a few days of minor consolidations. We hit a first target yesterday. Then had a major consolidation our first one. What we want to see, if for the stocks to have a low volume pull back, into a volume spike It should move up to that Trend line, and "Play with it" meaning Hit it, and follow it back down.... THEN we are looking for an upmove off of that trend. That is the good entry.

This follows for every stock after a major consolidation.

let me add some market stuff. This feels like a market nobody wants a part of. That feels good to me. But I expect CHOP, CHOP CHOP. I also will take the Gartman Tact... I want to be "Small" Moves are big. I have expected this for over a year. Once we have some kind of Consensus, to "range bound" and "Choppy" then we can move UP.

LOL

That is still sinking in....

Citigroup moved money from column A to column B, and they lost half their value....

must be armageddon

I just agreed with power lunch.

GE cuts dividend

damn!! power lunch just made a good point

with all this bad news that is 3 bad news things big ones
and that the market didn't sell off...

Isn't that an indicator... that we no longer go down on bad news.

I"M SO TIRED!!!!!!

Now back to power lunch.... I wanted to cut my wrists as they argued about if golf tournaments are good or bad for business... for like 20 minutes.

Tired

Well she is making me nervous... will that give us a 200pt run?

I'm close to turning it all off and I'll clean up the mess later..

tick trend

I want to see this be a downtrending consolidation of the tick

hold

I want to see this divergence hold....

ugh

it's friday... I just can't go into trending Tick ratios.

one would like to think that we are in a consolidation period during the day.

UGH!! so the permaBears wanted the tier 1 to be moved to TCE... Pandit being a puss did it.

Now Kudlow say that it's the government that wants the tier 1 to be moved to TCE..

like the tail wagging the dog

LET US POINT OUT HOW STUPID THIS IS... they moved money from column 1 to column 2...

YIPEE they are saved...... WTF is going on!!!

ticks etc

positive but low tick rate tends to mean we are drifting up. this can change quickly

trending the tick

800 is high for tick, over 400 is not sustainable. this is net positive, but it did show a near term high. My speculation was that we would trade sideways. as I'm typing this actually just spiked to 700 and we are making an intraday high.

vwap and tick

Uptrending tick
and wfc vwap

the irony too

as ivonka and donald talk about "the little people"

a family who has taken full advantage of corporate welfare and manage to declare bankruptcy several times..... earlier there was outrage about why there is no debtors prison.

Ya... donald should still be there.

You know

you have to buy this,
In relative terms it's as much as 500 pts at the 14K level.

Robert reich

I saw a UCTV thing where he was talking about the class warfare since the 1970's. I love that the Luxury class is starting to talk about the class warfare being placed on them.

I'm still trying to get what is going on with Citigroup.

I'm sticking with my guns...

funny funny funny

GYOFB

T.

Marx says that:
"History repeats itself, first as tragedy, second as farce. "

Wait that wasn't the right quote:
"Each age only asks the questions it can answer."-marx
(sorry to pull out the marx, imagine it's Zepo)

One would think that this time, we will ask different questions. History Rhymes not repeats.

I like to think we are in the information age, and there has to be some "Time series" advantage to socio-economic cycles. Also, we have the history channel, and biography, Wikipedia...etc.

All that stuff should be some kind of advantage, as opposed to 1929 when people were bairly off horseback and libraries were few and far between. Let us also not forget how fat and lazy most people are. In 29 they were fresh off the farm, Fit as Fiddle, they lost a job they took to the streets. They didn't even have central air. Now we lose our jobs, we are happy to watch Days of our lives for 6 months, "heck with the revolution Law and Order is on 24/7!".

Famous last words, and this could all be hope H-O-P-E and arguing that "it's different this time." but Secular bears are normal and Not different. Nice thing about this one is we were 10 years into it before we noticed. I swear this is overblown.

The social trends might be the; "Grey Swan" or "blue swan" or "pink swan", X-Factor of all of this, that as commando traders should be watching out for.... But I'm not falling for your Socratic question(damn! too late.)

Market action

Dioabolical market.

As much as all of this looks like caution. Do you know how pissed off I would be if that Idiot steve grasso had jumped onto this market this morning and it had run to 81. That piece of grap grabs 2 handles with no emotional risk...... Fortune favors the brave... not Stevie the bull.
and you know after going long he then turned around and shorted it..... And that Liar TeraNova.. who says.. "I just trade with the trend."

I made a comment to somebody yesterday to Expect some chop..... OF COURSE THEY ARE GETTING KILLED What stocks are "THEY IN" Healthcare, Utilities, Gold. And Safety plays....

Will those run? or will they end up puking them up?

Beyond that... I was up segnificantly....

I don't know if anybody notices, but they are so short the futures, they can't keep them down.

I say bring it....

My scoresheet says
winners:

Insurance
banks
construction
oil drilling
advertising....
gold mining

with technology trying to move up... if they wernt such weak holders.

If we open flat we will go up,
If we open up we will gap fade, and get an 11am reversal.

I don't think it can open down.

Winners and loosers today

Insurance
banks
Non ferrous metals
OIL
heavy construction Aluminum
financial

DOGS

Food retail
Real Estate
Healthcare
Medical Devices
biotech
Wireless
Pharma
entertainment.
Water transport

SO.... we have seen continued stregnth in semi's and even got a little mention on closing bell
EVERYBODY Is in Biotech and Medical devices.
We have to note all the stregnth in Oil. over past days.

also weak dollar today, I guess that is a function of the budget being released

Teranova on gold

I'm giddy!!!

Might he be ready to buy gold?... so we can finally make a "top".

Prepare for an update on the fast money final call....

[update]DAMNIT.... HE ISn't going to talk about gold... It's all about transparency.

HOW CAN YOU HAVE A SHELL GAME IF IT'S TRANSPARENT.

That and transparency will never be enough.

I guess at the end he will scream "BUY GOLD!"

[update] yep... we are at support or "buy the dip"

The spy and class warfare

Buyers came in this morning.... and were shaken out. but when will it again be Only shorts, and no longs?

This class warfare talk; UCTV has a robbert reich thing on his books. Class warfare has been going on for 30 years... it's those that talk about 'having it waged against them', that have been waging it for those 30 years....

As soon as paris hilton can buy 30,000 packs of potato chips and make the market go up... If 10 Percent of the population receives 90 percent of the bennifits from the economy, they can pay 90 % of the taxes.

Emotional memory

In my life, when a traumatic event happens, we tend to percieve Signals that set off those same emotions,and make us think it will happen again.

maria was just with some dude and they said "This feels Like September"...

.... Well, everything but Lehman collapsing.... ;)

Sallie Mae and dividends

SO.... they killed the subsidies for companies that provide financing for student loans.

As we know there is no financing for the student loans.

Why provide subsidies for companies that arn't doing what they are getting the subsidy for?

and as a Dye in the wool Capitalist... why would the free market need a subsidy?

Especially with the fed buying any of the student loans.

here is the catch-22 on dividends for the banks.

NONE OF THE TARP BANKS can increase the dividends till they pay off the tarp money.
Tarp money can't be paid back for 3 years.

They will be resistant to cut dividends, because if we recover this year, that is 2 more years till they can start moving the dividend. that caps the Yield and makes it hard to justify higher stock prices.

Steve Grasso

Who trusts their money with him... I love the guy, "Dow 9000, Come on In... the water is fine."

"yesterday when uncle ben said 'we arn't going to nationalize the banks' "

How long have I been pounding the table on this... when was that release a week ago?

Umn.... I guess he watches Fast money.

So... Cat is out of the bag It seems...

What does that mean? "the lemmings are starting their run",

What does that mean? Its mostly over as a move.
the targets start at 8.60... this isn't a clean pattern it's different.

Random story, I was talking to a friend of mine who works at MS. He was struggling with efficient markets. I started up with modern economic theory... It was like I was talking about space Aliens. Funny how it seems like to some people Economic theory hasn't moved much past Ayn Rand and Adam Smith..... That was like a thousand years ago.....If economics were Medicine, those doctors/economists... would still be amazed by antibiotics...... LOL....... Don't get me wrong antibiotics are great

march for confidence

If you notice, with the "Address to the senate" With Sheila Bair doing the town hall, with Uncle ben out selling the plans to congress...

There seems to be a concerted efort to try and get out and sell some confidence..

I don't know what they will do about geitner.. But... these plans look good to me... Seems like a solid plan. It may be like uncle ben, where Geitner needs some time to settle in.

BUT you know If CRAMER says he has to go.... OBVIOUSLY .... it must be so....*rolls eyes*

Interesting sentiment

I haven't felt like people were this fucking stupid since october 2007.....

Look at this piece at fast money

Don't Let Winner Run-

And it’s something Steve Wynn has commented on as well. "We are seeing changing patterns of behavior at the table. People are being more cautious. When they win, they are playing for shorter periods of time...where before they said, 'Oh boy we've got the house's money, let's play longer," said Wynn on a recent conference call.

we know what a contrarian I tend to be.... when things are this pervasive..

Here is the Karen video

2:20- I get where they are going, lets put some bad cases together... I do get the general way they are going. they are trying to say we are on top of this, the banks that they say are failing are not, there is capitol, and to the point that they fail the test, they say they will add capital and preserve the capital structure.

she says more at 4:00

Decompressing

I'm having a tough time.

"FAST MONEY" giving the banks a physical

The cnbc panel says that applying a stress test to banks is like making a person who had a heart attack on a treadmill....

Could it be that... or will it be like giving them an MRI?

Also once the MRI shows, things are fine...so that the market can calm the fuck down.

These people can't even read a release from the Treasury... what makes you think that traders can read a balance sheet?

Turning point for the markets?
What do Bridget Fonda, the rock group Kansis, "Phantom of the Opera" and the S&P 500 all have in common?:
"Past the point of no return, no backward glances. The games we've played till now are at an end." The Broadway musical aficionados out there will most certainly recognize these lines from "The Point Of No Return" in "Phantom Of The Opera."

And then we have the following lyrics: "They say the sea turns so dark that you know it's time you see the signs. They say the point demons guard is an ocean grave for all the brave." That would be from "Point Of No Return" by Kansas.

Now that we have taken a stroll into the truly abstract, I'll also mention that "Point Of No Return" was a 1993 movie starring one of my first Hollywood crushes, Bridget Fonda. She was totally hot.

Yes, I do plan to tie all this to trading. Thanks for your patience.

Yesterday the market reached its own Point Of No Return and responded incredibly well. We have been discussing a necessary test of the Nov. 21 low of 741 in the S&P 500 for quite some time now, and the index did exactly that.

Obviously, it could have gone one of two ways. The S&P could either have broken below that level and continued its downward spiral, or it could have touched it and bounced. The market chose the latter. I will add a interesting metric here as well: On Nov. 21 we had nearly twice as many stocks reach new 52-week lows as were made yesterday at the exact same level.

Mike Darda, chief economist at MKM Partners, pointed out yesterday that 100-plus years of market data shows that stocks have typically bottomed out around 13 times cyclically adjusted earnings. After the selloff Monday, that number came in around 12.

If nothing else, yesterday's action provides us with an incredibly well defined stop-loss level. No need to make this more complicated than it already is. I think you can have long positions in high-beta names with a stop-loss on any S&P close below 741. If the market accelerates higher, as I believe it should, I would look for a rally of at least 100 to 150 points.

OK I STOLD THIS.... I thought when I read the start of it it was bearish... it's from Guy. who btw I think has his shit together.

But, we are about 30/70 bullish to bearish right now.

Cramer: Geithner's silence means sell
February 25, 2009 Wed 2:37 PM CT

I feel better. Now I hope people selling stocks also feel better so they stop selling, so we can get higher prices, so I can sell.

There.

I think everyone agrees with me.

There.

Most important, I hope that everyone who is selling banks or shorting banks takes a bank holiday so we can get through this period.

There.

OK, now, let's speak truth. None of that is likely to happen. There is too much money to be made continuing to try to break the banks. There are so many crummy earnings releases out there--like the Radio Shack (RSH) and Foster Wheeler (FWLT) and Office Depot (ODP) reports--that we really can't believe anything good is happening.

The only thing that was good, really good yesterday, was that gold went down.

Everything else was same old, same old.

I was thrilled that Obama seemed less gloomy. That's great.

I like that Sheila Bair is doing a show with me and Erin Burnett today, and that could be great.

But without Tim Geithner telling us what is going to be taken away and what is kept, who shall live and who shall die, and what form of capital matters, then you have to start selling today.

Disclosures: At the time of publication, Cramer was long Foster Wheeler.

I have an interesting thesis on this.... this is more of the craziness everybody wants a plan from Geitner, and good solid plan... and they want it yesterday...

Unfortunatly, here in the tactile universe I call reality IT TAKES TIME. he got clobbered for having a partial plan... and they are working it out.

They will try and sell the plan... but in the past we have had "Black swans of hope" where the market trades up in hopes that someone will save us... NOT SO MUCH THIS TIME.

I was going through mamis, and he was talking about how in tops they turn bad news into good... and at bottoms they turn good news into bad... This could be the crazyness

and at bottoms they turn good news into bad.... Is it possible that this is what they are doing with the geitner plan... and how anything somebody does we just assume is going to be a failure. Convinced that bla bla bla they are going to nationalize... they have said it clear, Private capital along with the public... If they wipe out one more institution... It is a deathspiral... They know this .. and are not going to do it.... If the public sector scares away private money..... THEY KNOW THIS STUFF...

art laffer

I just heard about 30 seconds of his nonsense.
You understand he isn't rich, isn't a respected economist.... Just a chucklehead.

So.. This is his thesis

I own a widget company.
With the economic contraction I have fired people.
With the fed "PRINTING MONEY"*rolls eyes*
and with high unemployment inflation goes up.

there is too much money chasing too few goods. Because I fired people I can't produce enough goods to keep up with demand.... Therefor INFLATION

So.... this is how Art would run a business... with a FULL ORDER BOOK, he would fire people.
Then as the book got backed up, instead of pushing the plant to full capacity, where his cost ratios is highest... Just the usual backwards nonsense... business fires people because there is LESS Demand for goods, If there is less demand for goods. it's not inflationary.

Wholy Crap!

Karen Feinerman... Understands it.

WOW!!!! the first one... what does she have an IQ of 180...

I love Karen

Tough to be a talking head

I love maria... mostly because she shows her emotions on her sleeve.

She said:

'we knew that the president wasn't going to give details on the financial plan, but we traded up for it anyways, then the market was disappointed because he didn't give any details.'

We traded up for what we knew was going to be nothing, then because it was nothing we traded back down.

I'm into over share right now... I'm going to put some pants on and go outside....

tough trade

tough trade continues...

OMG

FAST MONEY FINAL CALL

"THERE ARE ONLY 2 POSITIONS, SHORT AND COVERING"

you have no idea how much I want to be long hearing this.

pete saying "we didn't get the wash out".....OMG!!!!!!!!!

FURTHERMORE

So. we have the 81 target or so.... as we look ahead we see that there is plenty of overhead resistance... and the potential of resistance back on the pennant.. many downtrends ETC...

The good sound is if we CONTINUE TO DOUBT... and we just see clear "WALL OF WORRY"...

Constant doubt.... calling all things bear market bounces and technical bounces...

O-BOMB-A... if I say this enough apparently it makes the stock market go up.

Yipeeeeeeeeeeeee

LOL.......... I should defiantly sell some

YIPEEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

ALL YOU FUCKTARDS ARE FUCKING CRAZY!!!!!!!!!

Maria and dyllan

"What happens if the bank doesnt' pass the stress test?"

"that bank goes bust!", dyllan said

OK, AGAIN... the bank then will get enough money to NOT FAIL the stress test.

THAT IS THE PLAN

John Tobacco

Sweet the guy who got me into some of my positions..

I'm going to predict, what he is going to say.

"Des banks ah Gowen Down, we don't know how any of this is going to help. the Bla bla bla of the bla bla bal... Means that I'm right and you all are a bunch of queers, Argue that one asshole"

Update: oh... dilution and preferred... I guess he is another person who doesn't understand those words "AS NEEDED"... I know it's tough those are very complicated words...

Killing me softly

as a head and shoulders

the target here is like 81

pattern

this is again.... we have some sketchy patterns... but the target here is 79 which mixes with the yesterday pattern and gets us even higher. but caviot is that this isn't much like a cup and handle... more like a c-cup and a b-cup. or a D and a double D....

My understanding

of the equity portion of this plan

The market has had a "Bear run" against the financials becaus TCE(tangible common equity) is too low in some of the banks(ok they are specific)

the FDIC uses Tier 1 assets and not TCE, but for some reason there is a MEME about TCE.

in response to this MEME

treasury is alowing the banks to convert the "Prefered stock" from being Prefered, to being Common Equity... AS NEEDED, based on the MEME.

The market goes "so common share holders willl be whiped out"

So then the treasury said "NO NO... because if they have to convert some of it into common equity that would be "SOME'... and because, the bank as needed will also be able to move it back to Prefered. Therefor it does not dilute the common shareholders

but this is way too complicated for traders at this point... they are this smart, but they are being very dumb at the moment.

xlf

I'm just throwing out TA.... Tons of good reasons to be cautious. Europe.... AIG... etc..

market would have to climb that wall of worry..(IF.......IF.....IF.....)
target here is 8.60-9.20 ish

position sizes

Say you are day trading 10,000 What one may want to think about doing is Continue to trade that position size during the day, But then leave Medium and short term trades in place. Leaving $2000 on the table in the direction of the potential of the Medium and longer term trends.
Let your winners run, let your losers go.
Then you make money from your 8k trade during the day. but if it keeps running, you make even more money from gaps.

and.... if it rolls back and becomes a loser, you sell it At Roughly par... but that losing position is only on a $2K trade size. which means, roughly You lose maybe $50 on the longer term trade, but in those longer term trends you can build significant gains. $500-$2000 in gains

the downtrend managed to get plenty scary, I wish it had only pulled back like 120-150 pts...

it has me cautious..

Just for perspective... Pre october, in a relative fassion these are 500 pt moves... We are very complacent, with what are VERY HUGE MOVES... it just doesnt' seem like it because we have become desensitized. From Jan of last year to July 500 and 250 pt moves would have FREAKED US OUT... and it seems to be just par for the course right now.

Ron Paul

Very giddy this morning... must be because his bunker of gold is more valuable...

Cost to insure treasury debt

100bps

whoever is selling that will never have to pay. Insurance on armageddon... it's fraud. Mind blowing it's even a statistic.

So...

Always good to have caution.

Sonic Youth today!!

You do have to turn off my music to listen.

Dreaming
dreaming of a girl like me
hey what are you waiting for?
feeding
feeding me?

i feel like i'm disappearing
getting smaller every day
but i look in the mirror
and i'm bigger in every way

she said
you aren't never going anywhere
you aren't never going anywhere
i ain't never goin' anywhere
i ain't never goin' anywhere

i'm in heaven now
i can see you Richard

goodbye Hollywood, goodbye Danny
hello Janis, hello Dennis, Elvis
and all my brand new friends
i'm so glad you're all here with me
until the very end

dreaming
dreaming of how it's supposed to be
but now this tunic's spinning
around my arms and knees

i feel like i'm disappearing
getting smaller every day
but when i open my mouth to sing
i'm bigger in every way

she said
you are never going anywhere
you are never going anywhere
i aint' never goin' anywhere
i aint' never goin' anywhere

hey mum look
i'm up here
i finally made it
i play in a drumsband too
don't be sad
the band doesn't sound half bad
and i remember mum
what you said
you said honey
you look so underfed

[lots of background talking (incomprehensible)]

another green salad
another ice tea
there's a tunic in the closet
waiting just for me

i feel like i'm disappearing
getting smaller every day
but i look in your eyes
and i'm bigger in every way

she said
you aren't never going anywhere
you aren't never going anywhere
i ain't never going anywhere
i ain't never going anywhere

goodbye Richard
got to go now
i'm finally on my own
but then i start again
keep your lovelights glowing
little girl's got the blues
i can still hear mama say
honey don't let it go to your head

I quote Tony's mind

'WHY THE FUCK DID I LET WFC GO AT 10.50!!!"

Ken Griffith

As the market goes down and down, the magnitude of the problems becomes clearer and clearer..

did the market bounce because we have more clarity on the solution..

I don't know!

the CEO of Vally national bank

Seems to think he can get money at 5%..... Good luck with that.

First Niagara CEO, seems to think that we are playing Good bank Bad Bank. even after the continued

The confusion of TCE and Tier-1, is all caused by wallstreet. Treasury said clearly it's Tier-1. But the street wants to pretend it's TCE.

You mean

"We are not going to allow any of these banks fail?"

I guess the market likes Lemon Socialism.

and I continue to think that It's actual Capitalism and free markets that they are afraid of.

Perfect early cyclicals lead market

Auto's
Retail apparel
banks
brokers
communications
semiconductors
Tech hardware
small cap value

Let me add that we do have drilling and gas utilities

It's like perfect NBER buisness cycle

WOW!

Guess what leadership is

EARLY CYCLCALS
banks retail semi's electronics

dogs

industrials/materials

I'm not drawing conclusions... I just havn't seen that for 6 months

Ok... Toxic Asset-Mark to maturity

I am a bank.

So, I have a loan, an ABS on a home 300K at 4%

it's a performer, made to a borrower paying back at full value.

is it toxic?

Well the value of the home is now 230K, but the borrower is still paying it back at 3%.

so that is $1432 coming in every month.

But... at best it has to be written down to .76 on the dollar.

Now it still is $1432 coming in every month..

but the thesis is, I need to get rid of it.... "Get the Toxic Asset off my books"

Mark to market....

If I take 230K... the value of the bond, which pays 230K at 3% over 30 years.

Right now I can buy Corporate debt AA at 6.86% over 20 years

Which means that the Market rate for my Money the 230K is Twice what it is in my ABS, and the credit risk is much less.

so if the Market rate for my money is twice that of what I'm getting. Then my ABS at .76 cents on the dollar... Is solidly 10-20% below .76 So now the Fair value is .60cents on the dollar.

So if I sell it, I get...$180,000, but it is returning $1400 per month over 30 years. That is $515520 Yield to maturity.

I'm taking 30% of it's yield to maturity value.... Why would I do that??? to make the market happy.

this is very simple look. and there are Tranches, and some mortgages that are not performing, and some ABS that are not at full yield, and will probably only return half of the money. There are some Very bad assets...

but the real problem is that the Value of money has come up, and that instead of bonds at 3% yield, we now have better quality borrowers who will now borrow money at 6-9%. That is where this "Mark to market" thing isn't working.

It's one thing to let the vultures feed, and it's another to Kill someone to Let them feed.

Joint Statement by the Treasury, FDIC, OCC, OTS and the Federal Reserve

There is no timestamp on this: must be from this morning.

"A strong, resilient financial system is necessary to facilitate a broad and sustainable economic recovery. The U.S. government stands firmly behind the banking system during this period of financial strain

Moreover, we reiterate our determination to preserve the viability of systemically important financial institutions so that they are able to meet their commitments.

Under this program, which will be initiated on February 25, the capital needs of the major U.S. banking institutions will be evaluated under a more challenging economic environment. Should that assessment indicate that an additional capital buffer is warranted, institutions will have an opportunity to turn first to private sources of capital. Otherwise, the temporary capital buffer will be made available from the government.

This additional capital does not imply a new capital standard and it is not expected to be maintained on an ongoing basis.

Any government capital will be in the form of mandatory convertible preferred shares, which would be converted into common equity shares only as needed over time to keep banks in a well-capitalized position and can be retired under improved financial conditions before the conversion becomes mandatory. (you know what that means, is that if it goes to Common equity, it can then go back to Preferred)

"Currently, the major U.S. banking institutions have capital in excess of the amounts required to be considered well capitalized. This program is designed to ensure that these major banking institutions have sufficient capital to perform their critical role in our financial system on an ongoing basis.

What is obvious is that this is a solid plan, and geitner is too scared to come out and sell it.... and the worst part is that we could lose a good secretary, because he is a bad speaker.

charts

I was looking at these... The lack of any form of bounce today..... that is just tough to dismiss as negative. AIG begging for more money, GM more money C, more money..... WTF!! you just think that every bank stock is going to .50 and our goose is cooked. There is this sort of wedge. When we look at volume.... today was less than friday.. but on par with Thursday/Friday. tons of macD divergences...

The only bull case I can make is that There isn't one case of bullishness out there.... and it's like Lord of the flies out there... you also look at the context of that fattie candle we put in today.. standard Candle its bearish as all hell.

Also... Right... they shoot the generals last. Problem is we don't know who the generals are... they were shooting tech and...healthcare....semi's... seemed like they were selling it all.

damn I'm tired...

so... My supposition is this is the hardest part of the market kids...

All I know how to do is stick to my models. and accordingly this was the last chance for a bottom.

I still like the idea that we don't get capitulation till everyone stops being angry.

Trading with TK:

He is in over his head. We are down almost 2000 pts since he was elected and he still doesn't get it. Very oversold short term and intermeiadte term so I expect a bounce but only a bounce. Unless he does something drastic which I don't think is in the cards.

I didn't see TK this angry when we went down the other 7000 points during the past year. Let us point out that since he was elected.. we are only down 1000 but 2000 since he won.

.... Michael Farr has quit... "I'd rather play Las Vegas."


On another note... all of this is socialisum, if not worse Lemon socialisum... PST..... that is what the market wants "Socialisum for the rich, and capitalisum for the poor"

on it's lows

market closes on it's lows you don't want to be short.

The market may think we will washout tomorrow.

My read is as bad as yours.

I continue to think about how much anger there is, and it doesn't quite fit with capitulation... if you are angry... you are not giving up, and that anger is still in some ebb and tide in the market.

It's tough... but.. 4 more days like that and we are at 6K.

and I've said it, I'm cautiously long... I'm not sure if I've ever been this cautious....

I hate CNBC.... I guess all the "lord of the flies" anger is rubbing off on me... or I'm starting it...

Did I mention I'm banned in the Chess chat room....

look at that nasty bar.

Fast money

Zack... what's his name... Bullish on materials for 3 years now...

Umn... I like that Mackey is in cash.....

Don't doubt... I'm mostly cash...

OH.... Carter Worth tonight on fast money... You know Carter "stuck between 8k and 10K Worth."

Carter "don't worry about it, earnings are priced in at 8k" worth.....

Melissa"traders have Given up trying to pick a bottom, this thing seems to be going on forever!"

Maria gets it "we have seen lost decades, and that is what we HAVE SEEN"

That is a huge tick ratio for the day... Very impressive to the negative...

I had to buy a couple things. I'm looking at tech and banks.

In other news

I may have officially been banned from my regular chess game. I suspect it was talk of socialisum, or .... could have been when I made fun of the jesus talk

ticks

these ticks are ridiculous... show much more panic than I see.

First on CNBC

Market bounces on "White house Repeats: Private banks are the way to be...... Daddio"

If they say it 10 times will the market go to 8K?

this one will drive them nuts

I can see the talking heads at CNBC running back and fourth trying to find the news story that caused the bounce....

didn't hold

that becomes a very loose trend at this point. we have seen some positive tick rates. but if we can see 76...

wedge

this is the wedge we have been working on... seems like maybe it resolves tomorrow, but Loosely we are breaking out of it.
To be honest, my chart here lost connectivity, and I didn't notice things are so slow..

Good to see the market showing "Something"

LOL

Now that is funny, Brian William of NBC News "We are using CNBC, to help us make sense of what is going on"

As soon as somebody explains it to CNBC... they will let you know.

Cause CNBC isn't effectively a thousand chattering monkeys, Right?

Tick ratio

the tick ratio is decididly negative "SO FAR".

but it has been uptrending... meaning getting less negative.

sentiment

we defiantly have that sense that things aren't getting better. Pain increases because of Known reasons seem to be getting worse, and feel like they are going to get worse tomorrow.

Dick Bove

Tangible common equity in banks...*eye roll* btw, that is a stupid way to value a bank. If you add common stock, stock go down, you have less TCE... so you add stock, stock go down, you have less TCE.... suddenly you realize you want off this ride.

Is dick in a new firm. some crazy name now.

So

on the gape fade, now after the morning euphoria... we now have ... GLOOM AND DOOM.
...
It does make me a little nervous to see all asset classes bing sold this morning.(cept banks apparently.)

but realize, they weren't orders that came in at the bell

some trend lines

ENDLESS ROAD OF BANK ISSUES

david Faber, just started talking about how these issues seem to be going On and on... on an endless road....

they sure are trying to sell this.

That is your gap fade

On the floor

Of the NYSE, they are announcing this as "an oversold bounce"

Treasury

The treasury has come out, saying "We will allow Preferred stock to be converted to Common, As needed"...

Let us stress "AS NEEDED"..

I think this statment was based on something over the weekend, that has been recycled.

here is this morning's statment.

"The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses," said the joint statement by the U.S. Treasury Department, the Federal Deposit Insurance Corp., the office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve. "The government will ensure that banks have the capital and liquidity they need to provide the credit necessary to restore economic growth. Moreover, we reiterate our determination to preserve the viability of systemically important financial institutions so that they are able to meet their commitments."

Sandard reversal

Many times, in a reversal. In EWT terms, the stock will shoot above wave 4, and hold that level as support.

Futures

I'm embolden by the fact that futures are not convinced, even slid down to +2.5 on the spx.

I think they are as creeped out by Joe going long as I am.

Thesis would be that the supply demand dynamics will just be overwhelming.

We shall see.

GYOFB

Nurial; there is this Crazy Pretend conversation I imagine went on in Washington. Dodd and Frank, arguing about nationalization, Frank talking about how we are trying to restore confidence for private investment in the financial sector, and Dodd sticking to his guns, "Because Roubini said so.". Basically, lawmakers in arguments based on the blogs they have been reading.

I had this thought this weekend, "If Rant's by Ayn Rand, freemarketeers were stock." I think I would have to go short. But I wonder if we are in Overt warning, or panic stage.. but I do hear "Fundamentals are good".

Joe Kernan, went long this morning. CNBC does have unfair advantage, since they just need to find the Apex of the Crazy incoming Email.(some of which I'm responsible for.).

Jack (DOW 16000) Bouroudjian... Total Bear!, even Joe mocked him.

For some reason nationalization and dilution of Citibank was a bad thing on friday, but this morning it is a good thing, no wonder they are crazy.

The supposition on the new Treasury plan, is that they may be planning to provide a private investment fund with a Treasury supported 'put' option.


LOL, Citibank has downgraded the regional banks from Buy to hold!

No!!!!!!!

Joe Kernan, officially went long the market this morning. Apparently it's the big debate around cnbc.!!!!

UGH!!!

On a positive note, CNBC is officially reporting the entire citi story with dilution, as fact.


OOOOOPPPPP!!!!!!!!!!!!! jack bouroudjian is calling "Short covering"! and calling for 600spx

even Joe mocked him, "at 1200 you were a bull, now you are a bear!"

word is...

out there tonight there is some crap about the government and a 40% stake...

SO... if the market was down on nationalization on thursday and friday.. why are the futures up when there is this "story" that it may happen.

DAMN

I was going to go heckle this guy... there is this blog that does fractal analysis. I have been heckling him for like 9 months, as his guesses have been completely wrong.

he started by, "Revising his analysis".. Strangely he seems to have given up the analysis.. But he used to let me do anonymous comments.. but now I have to Nut up and be myself...

that takes all the fun out of it.

Soros says "NO BOTTOM"

There are those magic words.


"We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

BBT

Tony is looking at BBT tomorrow, I figured I'd throw out some trend lines for him and some FIB.

It's late BUT.... FUCKTARDED TA

Alright I have my own Fucktardedness. Uck, I'm talking like the fly.

I saw this, Over at market Oracle because I needed a few good giggles before I went to bed. I'll even link it so I can Troll him. Monthly DJI, and of course as a solid member of the black helicopter tinfoil hat crew, you have to do TA on the most ignored and irrelevant index in the market. But... if you are going to do Irrelevant T.A. you have to do it on the DJI... Right? its like a double negative.

Thesis is DJI 4500. HOW THE FUCK DO YOU GET THAT. I ran FIB. I get 5191.
For those of you new to my T.A. I have 2 Pet Peeves in the market:
As I'm typing I think Tony has the first one

• YOU CANT DO T.A. PAST ABOUT 10 YEARS, BECAUSE OF INFLATION. If you had a proper inflation rated Index(not in gold Mr. Schiff).. MAYBE. SO, you cant do Trendline, and you can't do Horizontal. all you are doing is acting like a blind man in a Gymnasium trying to find a Glory hole.
• Second peeve is Horizontal resistance, by the time it's hit horizontal resistance you are WAY TOO FUCKING late. you may as well play the lotto.

Ok... here we are, Playing montly on the DJI... ooohhh I'm Giddy the above chart is the same one that shows where I'm running trend lines from.

• Ok... lets start by talking about the Primary Error, FIRST the Monthly February Bar.... is ... is NOT OVER... it has 2 weeks to close. so to say it has "Broken support" IS WRONG.
• Assuming we get a down close and it breaks support on a closing basis... what are the targets..
  

1. 4500 where did that come... out of your ass, there is support at 4K.. if you want something..
   
2. I guess the thesis is that, there is no support from 7k through 4k... But you are wrong, In fact there is tons of support from 7-6K. There is support at 7.3K 7K, 6.8K... In fact there is more sup pore t in the 6k-7.3k. Than there is at any other place besides 1-2K
3. I don't get where this meme has come from but there is a ton of support from 5-7 K TONS.
4. you people are crazy
5. And, THE RSI on that chart is so OVERSOLD, the earth will split first... or it will take over 2 years to hit that target.
   

How about more Creepyness

I've been trying to post content to my blog for 2 days.... If that doesn't tell you about some form of Armageddon, I don't know what will.

I saw this:

I'm just going to Clift's note it for you, or my perception. It's about the new Treasury program to get Private capital into the "Toxic Asset" market.

Roughly, it's a fund where people invest and buy assets from banks Near "Par Value", with a 3 year 'Put' option. or if the value of the asset goes down, Investors don't lose money. Roughly it's Treasury and the fed insuring the assets at "hold to maturity" prices... I'm not sure where he is getting all this.

Well that is what I read.

Just to be clear

Everything seems Weird enough to be "The B word".

There are some negatives... there are a ton of "bounce calls" right now, but there were few on Friday, or Thursday.

But let me say, just about any Kindergarten technician would have know that we would get "Some kind of bounce" off of 740. Though volume was good, it wasn't a very high bounce. but 150 pts in this market is higher than you think based on percentage.

There is an Axiom of "the first bounce is regarded as purely technical.". I can say that maybe that there seemed to be some hesitation in the bounce "Technically" that could be a good thing, sentiment wise.

As much as I showed those charts, what you should draw is that "There is potential." and nothing more. When I trade, what I'm looking for is a good place to start a trade and set a stop... A mental one.

About 9 months ago, I thought this Market point was going to be the hardest... I'm not sure if that was a self fulfilling prophesy or not.

not that it means anything

Futures up 80 dow
9.5 spx
14 naz

I'll have you know I just saw Hugh Jackman, singing all that Jazz with beyonce Knowels... I may be blind.

this is crazytalk!

Feb. 23 (Bloomberg) -- Citigroup Inc., the recipient of $45 billion in U.S. government aid, is in talks with federal officials that may increase state ownership of the bank, the Wall Street Journal said.

after all that talk about 22% credit cards... they are going to ask for more money...

My buddy nuriel

I'm being more Moderate today, because I've been so full of bile for 48 hours.

*Breath*

remain calm.

Nuriel says on, Stephanopoulos this morning "that we need to put more confidence in the banking system". I'm not at "we can just talk the economy up" kind of guy. The irony here kills me, as nobody is guilty of more; economic Hyperbole.

And... I'm not saying that he does not have very valid points.

Bad dataset

Check this out.: From Doctor Brett BTW, I'd link but he would stalk me and I'm about to make some fun.

I noticed on Friday that we had an explosion of stocks making new 20-day lows across the NYSE, NASDAQ, and ASE. New 20-day lows hit 4129, a level we've seen only 11 times since late 2002.

(Eric's note: The end of the 2000 bear cycle was..... LATE 2002 October. So this dateset he has is only the Bull cycle, and this bear cycle.)

Interestingly, when we've had more than 4000 new 20-day lows, there has not been an intermediate-term bullish bias. Indeed, 30 days later, the S&P 500 Index (SPY) has been up 5 times and down 6, for an average loss of 3.0%.

(Eric's note: Since this data is actually Neutral being 50% up and 50% down, assuming some margin for error... Especially since there are 11 data points, and since it's an ODD number. If you flip a coin 11 times, Odds are it will be either 5 heads, 6 tails. or 6 heads 5 tails, but it tells you nothing about the odds of it going Heads or tails, besides 50/50. So IN FACT This Data is in no way INTERESTING.)

A more interesting observation, however, is that--of the 11 occurrences of 4000 or more 20-day lows--all but one (5/10/04) has occurred since the second half of 2007. During the bull market, pullbacks led to an excess of new 20-day lows, but not such broad weakness. When markets have been broadly weak, it's been an indication of bearish trend conditions and we haven't seen a bullish edge going forward.

(SO, of the Dataset; of This bear market, ALL but one have happened since July. Except one, during the bull. .... ONE COULD SUPPOSE that this just reflects the violent move we had just 3 months ago.... Let us also think about where we were 20 days ago, and that the market has dropped some 30% since then..... One could suppose that all this data says is that it reflects a large slide in the market, in the past 20 days..... WHICH HAS A NEUTRAL BIAS.

Let us also talk about how this data set is 6 months. One data cluster has to be the July low, and August 15 we were up 30 days later. Another cluster in October 11, November 11 we were down 30 days later. The third Cluster is November 11 low December we were Up.....

Ok... I will bet that the 5 that were bearish were all in October(the 2004 one was bearish and is 6), and maybe January and the others were July, and November.)

I think I can include this in "Crazy shit that people are saying."

Discussion of sentiment

Sense that the problems are getting worse and will never end.

Volcker: Crisis May Be Worse Than Depression

"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world," Volcker told a luncheon of economists and investors at Columbia University.

"There is little correlation between sophistication of a banking system and productivity growth," he said.

This is also the same time he said "capitalism will survive"
the second quote I put in just to point out that it's obvious that we are going back to Glass Steagall. and increased regulation of what banks can hold.

Faber: The Fed Created This Recession

From here:

"Our currently disastrous global economy may also be attributed to governments that ignored market signals and central bankers who believed in endless booms, Faber says."

I'm just trying to point out the amount of CrazyTalk out there. In theory, Greenspan felt he could "fool in the bathtub" rates. But I don't think you could say that he ever thought that there would be a Never ending boom, in that classic "Endless summer" kind of mentality.

Getting worn out for the weekend

But, the other case against nationalization and let me back some of this out with a thesis I had before about how ignorant Nuriel Rubini is about "Markets"...

The problem, besides that when you wipe out the equity holders you wipe out Pension funds, and Endowments, insurance companies.

Kudlow talks about it, the problem is that the minute you nationalize one bank, suddenly you have a strong possibility of doing it to 15 more. You have what Sociology terms "Institutionalization".

This is the real Moral Hazard, that instead of giving them a "hand up" you are giving them a hand out, that then they are Dependant on forever. Also any time in the next decades, you could wind up having to Nationalize them every time. They will be like Lotto tickets instead of stock. Private capitol will not come in unless they have government come in first, then government will then have to give the "All Clear" to allow private capitol to come in, but every one of the equity values will go to Zero, until the all Clear is given.

Oh, and when he says we are in "round 3".... YEP! that I agree with. They nationalize banks, and we go back to "Round 1."

This is funny

- Asian investors won’t buy debt and mortgage-backed securities from Fannie Mae and Freddie Mac until they carry explicit U.S. guarantees, similar to those given on bonds issued by Bank of America Corp. or Citigroup Inc.

From Bloomberg.

They have them, They are called Treasuries. "we want treasuries from Fannie and freddy, with 5% yield"... Nope, you get T-Bills, at 1-2%, and we will arbitrage them at 5%. Because that Guarantee is worth 400 basis points.

I mean, I'm concerned about the moral hazard. Risk Equals reward.

If I were a Bottom Picker

Monthly SPY If I was looking for say a Bull flag. Or say I was looking for and ELLIOT Wave. on declining volume.

Weekly Spy
If i were looking for a developing MACD divergence.
3Day SPY
If I were looking for a 2 swing Bull flag ABC correction this month. Developing MACD divergence.
Daily SPY

Developed MACD, declining volume. Into a Volume spike.

Still takes time for patterns to complete. and some of the charts have yet to complete their bars.
And yet, some of this is the worst kept secret in the world... Only...

Most of them say "seems good for a Technical or Bear market Bounce"

And now.... Big Trouble in little china.

Weekend and more banks

There was a guy on fast-money last night. Who said roughly, you take the assets off the banks and you charge the banks for the actual losses. and that way only the actual losses are reflected on the bank balance sheets. Not the mark to market losses.

I never mean to oversimplify.

but the problem is that the banks have billions in 3% bonds, 3% ABS. and even a performing 3% ABS in "The market" is worthless, when you can get a Corporate bond at 7%.

yes, there are "toxic assets" which are various derivatives of those assets. and some of them are absolutely worthless.

Must be

Well, we either are close to Armageddon or a bottom, if I'm running around quoting the bible.

and I did not run around posting that quote on every site that talked about the revolution until 2am.

LOL

Let's talk about me... Am I my brother's keeper.

On Fridays, my emotions get fairly close to the skin.

I posted this huge hateful rant to some of the "Rick's Revolution crowd" I'm going to say ricks revolution too, to troll some of them to the blog.

What offends me most about it, is that simple idea that we need to take care of our neighbor.

I'm not a Jesus guy, or a bible guy in any way shape or form... but the overall theme of the bible is laid out in the story of cane and able:

And the Lord said unto Cain: Where is Abel, thy brother? And he said: I know not. Am I my brother's keeper?

This is the them of the entire bible.... It asks the question "AM I MY BROTHER"S KEEPER".

In the middle of all of this, there are 10 traders from the CBOT, Standing up in the middle of the floor saying "NO, I AM NOT MY BROTHER'S KEEPER."


If you ever wonder why we are in so much trouble.... It's that the answer to that question.

Idiot box is full of idiots

You want sentiment, this "ricks revolution" and the death of decades of Free market Narcissism.

I've reminded of a post depression movie called "Meet John Doe" all day.

there is a rant about all the Healots.

About the feedback loop of Materialism. But one can suggest that this new sentiment post the depression this feeling of hope, and that the other guy wasn't out to fuck you, is what brought us out of the depression. That when man asks "what is in it for me" suddenly we are caught in a ever narrowing economy.

Tops and bottoms

we can all tell we are close.

But what are we afraid of.. I saw WFC yesterday and said.... at 12... I know even on a reflex euphoria, it will go 14.

post market it is trading 11.20.

Michael Jordan. and Major tom-Space oddity

MJ-

Then I keep hearing this in a car commercial and keep missing the real thing.... and it's how I feel today!!

Check ignition and may God's love be with you

Ground Control to Major Tom
Ground Control to Major Tom
Take your protein pills and put your helmet on

Ground Control to Major Tom
Commencing countdown, engines on
Check ignition and may God's love be with you

(spoken)
Ten, Nine, Eight, Seven, Six, Five, Four, Three, Two, One, Liftoff

This is Ground Control to Major Tom
You've really made the grade
And the papers want to know whose shirts you wear
Now it's time to leave the capsule if you dare

"This is Major Tom to Ground Control
I'm stepping through the door
And I'm floating in a most peculiar way
And the stars look very different today

For here
Am I sitting in a tin can
Far above the world
Planet Earth is blue
And there's nothing I can do

Though I'm past one hundred thousand miles
I'm feeling very still
And I think my spaceship knows which way to go
Tell my wife I love her very much she knows"

Ground Control to Major Tom
Your circuit's dead, there's something wrong
Can you hear me, Major Tom?
Can you hear me, Major Tom?
Can you hear me, Major Tom?
Can you....

"Here am I floating round my tin can
Far above the Moon
Planet Earth is blue
And there's nothing I can do."

And peter Schilling version