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 sellI 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...
9 comments:
Good presentation. Are you calling the "B" word? Man, WFC goes up a couple points and you get as giddy as Ron Paul at Fort Knox.
BTW, you say, "I was going through mamis, and he was talking about how in tops they turn good news into bad..."
I think that's backward, but I get the point.
Maybe you're right. I was listening to Grant's podcast on T.Lo's site and he seems to be saying the same thing, which is a new. Of course, he was mostly referring to high grade corporate bonds, but the gist was that the economy will eventually recover as we churn through all this debt.
And Grant made some point about this being the "good old days" when we should be value investors and the credit markets are a value right now. Selective MBS' especially.
I'm just going to stick with what I have been saying. It's worth "Trying to buy the down legs"
Hey... I'm chicken too... Isn't that a good thing for a B word.. everybody is negative, there are divergences new lows etc etc etc, Things got very crazy and they still arn't Sane but much more sane...
and see what happens.
I don't see a break down we didn't panic... and that could also be another sign.. if we are in a discouragement cycle Wouldn't we have discourage lows... and not panic lows?
I don't know.... In 10 years when we cycle again... I'll have a better sense.
ya I corrected that.. I was going to talk about tops and bottoms, and sort of skipped the middle.
Ron was Giddy about his gold today... Like the cat that ate the canary today. Even resigned to the fact that I'm right and everyone will know. and when the system collapses I'll be king shit around here...
I was looking at the charts in mamis, and though some of them show a V bottom, some have some nice chop at the bottom.
also if you look at leadership today... again it's banks retail some transports, early cycle recovery.
also... you want a new indicator... I get freaked out at T-lo at inflection points..
maybe a short term bounce...
Also there is some solid stuff about how at "trough earnings" P/E should be like 20... we are at 15 right now. In 2000 PE bottomed at 40...
I know it's stupid, but that sounds like good time to be a value investor.
Maybe later in the year, fundies will get worse... and things will get worse...
All the people freaked out are the random walk people
Along those lines:
http://online.wsj.com/article/SB123552586347065675.html
I'll let you read it, but I do have a problem with market- weighted earnings calculations. If Jones Apparel loses $10 billion in a quarter (a mathematical impossibility unless they are leveraged out he wazoo), then the S&P index still lost $10 billion dollars. What the market cap of the lose is should make no difference.
In fact, this is part of the reason the S&P aggregate earnings are low-- leveraged assets. BAC still has revenue coming in, but it is more than offset by loan maintenance which is astronomical due to leverage, so their profits are negative... and theoretically, at 30:1 leverage, that can be a big negative number.
Or am I getting this wrong?
Better link:
http://tinyurl.com/awnyec
Like I suggested Trough earnings bottom with a P/E of 20, and in 2000, "Calculated the same way they have always done it", It bottomed with a PE of 40
this is like Inflation, if they change the way it is calculated, you can't backtest it, and it's hard to use it as a valid economic metric...If they skrew with it, suddenly you can't figure out where the PE is this recession vs the last 6.
So with the S&P at 15PE and that means that if the market went to 600 spx the PE would be even lower, like 13. that would be UNPRESIDENTED to achieve value like that. If the market bottomed trough earnings with a P/E of 40 we would be Much higher.
If you are looking at PEG ratios, if we hit Trough earnings after that, the G is positive, which means that instead of Contracting P/E should be expanding. Meaning even a 20 P/E isn't unreasonable.
all we really need to know is that 2010 q1 will be better than now.
Worst case(famous last words) we bounce to say...800 spx, then turn around and test 720, scare the bejesus out of everyone... and that is it.
I just commented to someone about that that if Siegel wants and ego boost he should get a hooker and stfu.
the only bad thing... is that there are a few technicians that are saying the B word.
but they are doing it after the fact.
some of them are very cautious.
You know... it seems like you want to have a fundimental argument.. You should know I'm giggling already.
Like I said on monday. All I have are my models, and they tend to work.
Sentiment feels like it's shifted. Things were insane,and it seems like "the fog of war" is lifting.
Some say people are bullish, but I just don't see it... I keep trying to find it, and besides Joe Kiernan, who... is mostly taking a wag and judging things on the sentiment basis of santelli and the letters they were getting.
But... I had that nice Wedge, target mid 80's, Now I have these other consolidation patterns that still point into 81 or 83 etc..
That is all I have.
These bounces are sickly... but still in context...Imagine if in July things were bouncing 500 pts.
Seems like things get overbaught and oversold fast... even though we don't see 200 pts as that much it's like 2% or 3.5%... that is huge. Bounce would be expected both ways.
Mamis says the first bounces are always called "technical" so as to keep people guessing and not believing...
Nobody believes this... EVEN ME!!
Objectively... we need to think "Maybe" at least.
Mamis says " at the bottom things go down for known reasons, and seem like they will never end and seem like they are just going to get worse."
as we talk about the failure of 6 or 8 Banks.... It is just Sureal.
It's not for systemic problems that the system fails if a systemicly important company fails... ITS FOR CONFIDENCE REASONS. They know it, and will print money to stop it from happening. but they also are aware that they need to make sure they don't scare away investors, including current shareholders.
You know If you held onto citigroup through $1... You are one brave fucker, You can get bailed out in my book. all the way to $15 per share where Citi will be a zombie for the next 5 years.... God Bless
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