Financial history doesn't repeat itself, but it often rhymes.
You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.
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
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"
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...
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.
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.
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..
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.
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.
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.
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.
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.)
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.
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
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.
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.
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
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*
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..
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.
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...
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.
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....
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.
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...
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....
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.
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.
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
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.
"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.
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 macDdivergences... 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.
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"
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....
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
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..
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.
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.
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
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."
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.
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...
"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."
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..
4500 where did that come... out of your ass, there is support at 4K.. if you want something..
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
I don't get where this meme has come from but there is a ton of support from 5-7 K TONS.
you people are crazy
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.
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.
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.
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...
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.
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."
"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.
"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.
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."
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.
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"
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.
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.
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."
pictures of the build up of new cars around the world.
