Morning Call [8:05am ET] On Thursday morning, shortly after the equity market opened in NY, there was a failed attempt by Mr Market to push through the technical resistance of the 200-day Moving Average of the S&P 500. A second attempt earlier this morning failed. The market has come to a fork in the road and the sign-post is dead ahead at 8:30am ET, called the US National Jobs Report for May. From last week-end’s WIR, let’s review the Econoday notes:
US National Jobs Report for May. Prior to release of the data on 6/4/2010 8:30:00 AM ET, Econoday reported, “Nonfarm payroll employment in April grew a healthy 290,000, following a revised 230,000 advance in March. Payrolls have risen for four consecutive months and in five of the last six. And April's boost was the largest in four years. Thus far, the contribution from Census hiring has been modest, added 66,000 to April's jobs, compared to adding 48,000 the prior month. Wage inflation is nonexistent currently but it is hard to tell initially if weakness is related to shifts in the composition of hiring, though that likely partially explains the weakness. Average hourly earnings were flat in April, following a 0.1% dip in March. The unemployment rate rose to 9.9% from 9.7% in March due to an 805,000 surge in the labor force. Looking ahead, the Philly Fed and Empire State surveys showed improvement in employment growth for May although the Chicago PMI survey indicated moderation. Nonetheless, Census hiring should boost employment notably in May, so pay attention to private sector hiring for the real trend.”
I have a slightly different take on this. I agree that we look to the private sector for jobs that would increase wealth and that public sector jobs, like census taking for instance, don’t add to the size of the economy, but presumably add to its efficient operation. That’s the thinking anyway. But my point is that, just like Katrina created many jobs in the private sector that did not create wealth, so too is the Gulf oil spill. So I am not going to pay much attention to the employment data this morning, although I do agree the data will be used as part of the market’s game to spin you.
For several years I have complained that the macro-economic data provided by the US government administration is next to useless, and moreover it is used tactically as a policy implementer. I resent the public sector being used this way against the needs of the business and capital owners and taxpayers for clean, accurate data. I take it as a fact that data is biased because that is what a well-known former Canadian Minister of Finance and former vice-chairman of the country’s largest broker-dealer stated was the case.
So yesterday I corresponded with Rick Davis of the Consumer Metrics Institute who kindly consented to my use of his data. Going forward, I will add his charts and explanations to the Week In Review economic studies of Econoday, which, while not perfect, are in my mind outstanding and the work of Consumer Metrics Institute will add to it.
The bottom line is that we need independent data on which to do our own analysis rather than the biased data from government which is then further spun by vested interests in the private sector, resulting in fiction being reported as fact.
Below is the data published this week from Rick Davis, reflecting changes in consumer behavior concerning their debt:
The Consumer Metrics Institute's Personal Finance Index continued its
decline for the sixth consecutive week, with it now showing a year-over-year
decline in consumer confidence in excess of 40%. This contrasted sharply
with the situation as recently as the end of January 2010, when the same
measure of confidence was showing a year-over-year gain in excess of 7%. The
Consumer Metrics Institute's Personal Finance Index is composed of a number
of data series, some of which collect transactions that are precursors to
the initiation of default and/or foreclosure activities. The levels of these
negative activities are inverted before being included in the 'Personal
Finance Index', so that a rapid rise in Consumer transactions with default
and foreclosure counseling services, for example, will drive that particular
index down.
The Personal Finance Index is not alone in reflecting continued weakness. In
fact, our 'Weighted Composite Index' (which is by far our best daily
aggregate measure of the consumer 'demand' side of the economy) has shown a
relatively steady deterioration since peaking in August 2009, with the
trailing month now recording contraction in excess of 2%.
The sliding 'trailing quarter' as reflected in our 'Daily Growth Index' has
also reached a level consistent with a year-over-year contraction rate of
about 2%, after initially dropping into net contraction on January 15th.
When compared to previous contraction events in 2006 an 2008 this particular
episode of contraction in consumer demand is following a unique profile: at
its worst it is still milder than the mild 2006 event but it has gone on
longer than even the 2008 event without forming a clear bottom.
If the housing market is expected to recover soon, a significant increase in
demand for residential real estate loans will need to be occurring in the
near future. Although there has been a recent minor upturn in consumer
interest in refinancing on a year-over-year basis, it may only be a sign
that consumers are beginning to expect that the historically low mortgage
rates are nearing an end.
A more telling development would be for a similar upturn in consumer
interest in new loans, which we have not seen. In fact the year-over-year
change in consumer interest in new loans has dropped to the lowest level we
have ever recorded, slightly surpassing the previous low set back in August
of 2008.
If there is a strengthening recovery, we are not seeing clear signs of it.
In fact, we could argue that most consumers are increasing their already
substantial caution about taking on new debt, while others are exploring
their legal options should their current debt loads become harder to
manage.Our data is significantly upstream economically from the factories and the
products measured by the GDP, putting us far ahead of the traditional
economic reports.The indexes of the Consumer Metrics Institute can be found at http://www.consumerindexes.com.
As we prepare for what could be the S&P 500 index assault on its 200-day Moving Average, winning or losing, turning the market higher or lower, let’s all understand that the end game is honesty. To be continually positioned by vested interests as winners when we are not is dishonesty in the extreme.
The public has been fleeced like sheep for too long. It’s time we take matters into our own hands. If the market has to go down, it will, and we who prepare for that are not losers.
Here is the chart of the S&P 500. The 200-day MA is 1106.24, shown by the solid red line in the chart. Note the rejection on May 27 of the market to move higher. Same thing happened earlier today as seen by the chart that follows the next one.
Note also that the 50-day MA, presently at 1158.66, rejected the attempts of the market on May 12 and 13 to move higher (i.e., up around 1170 at that point).
The S&P 500 future has been pulling back in the past two hours. We only have 25 minutes before the battle begins… It’s all quiet on the Western Front.
The battle is about to begin. Like the rest of our troops, just try to stay alive.
Good luck.
CTA Trading Desk Post-Close Report
The point of recognition, referenced last evening, appears to be at hand. A meaningful violation of the February lows (S&P 1045ish) will signal the investing public has rejected the fiscal policies of world governments, a potential 3rd wave down in Elliott Wave Theory, a watershed Eureka moment as the masses realize they’ve been hoodwinked.
Hopefully, our commentary has helped you understand the ebb and flow of stock price behavior and shed some light on the seedier side of stock promotion. We try to stay one step ahead of the herd, alerting our readers to money flow or price action that we believe is noteworthy and may have bearing on the future direction of equity prices.
A prudent investing strategy requires diversifying risk, never putting all your eggs in one basket. The temptation to keep increasing your exposure after a winning streak is a recipe for disaster. An old Wall Street adage comes to mind, “Bulls and bears make money, pigs get slaughtered”. Suppose you were lucky enough to sell your longs and put out a few shorts at the 200-day moving average (S&P 1106), a level we have identified as first upside resistance. As the market cascaded lower today (S&P-3.44%) do you add to a winning position because you are sure the world is going to Hell in a hand basket?
The answer is no – key support has not been broken, so you are entering positions at low reward/high risk areas, letting your emotions get the best of you. Remember, all world governments and 99% of the investors want the market to move higher all of the time. You can bet the vested interests will be working the PR machine overtime this weekend, and may even announce coordinated actions to stabilize markets. China may signal an insatiable appetite for the Euro, as world leaders figure that a definitive policy statement from the world richest country will calm international capital markets.
No one knows what will happen tomorrow, but you can control your risk by having a game plan. If that game plan calls for taking profits at support or resistance you need to follow the plan and be unconcerned if partial profits are left on the table.
The market stands at a precipice and authorities will do everything they can to hold the S&P 1045. They are not bigger than we the people, so if that level gives way WE will have spoken – trade accordingly.
Have a great weekend.
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Comments
My working assumption
... for today and nearest time is, any attempt to rally will be used to sell as much as possible, Europian situation being the biggest factor. Things get worse, Hungary shows that contagion spreads (as if there was any ever doubt), and even good job numbers can't be taken seriously. I mean, in context of a sneaky bull market they would be bought, of course, but we are rather in "be ready to panic" environment. Looking at the last headlines:
08:25 EUR/USD Brown Brothers' Head of Currency Strat Chandler: Euro headed much lower
08:22 EUR/USD (FR) French PM spokesperson: Comments made by Fillon on euro did not refer to parity
- Comments refered to euro rate evolution
08:20 OTP.HU Trading halted following share decline
- Note: OTP bank is 25% weighted in main Hungary index
How's that for optimism?
Jobs Report
A bad one! Capital moving to bonds and out of equities, euro, metals and oil.
Not so hot
8:30:02 AM
*(US) MAY UNEMPLOYMENT RATE: 9.7% V 9.8%E
8:30:02 AM
*(US) MAY CHANGE IN NONFARM PAYROLLS: 431K V 536KE; CHANGE IN PRIVATE PAYROLLS: 41K V 180KE
- Change in Manufacturing payrolls: 29K v 33Ke
- No Revisions to Prior Nonfarm Payrolls at 290K
- Prior Private payrolls revised lower from 231K to 218K (widely expected to be revised higher)
- Prior Manufacturing Payrolls revised lower from 44K to 40K
- Census related hiring: +411K v +66K prior
8:30:03 AM
*(US) MAY AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.1%E; AVERAGE WEEKLY HOURS: 34.2 V 34.1E
- Prior Average Hourly Earnings MoM revised from 0.0% to 0.1%
Battlefield
Crap. I am no longer manning the long range missles on the battleship. They now have me in a fighter plane. Hopefully won't be put to hand to hand combat. Not my specialty.
Meaning I am making more day trades than usual. Not usually my style but I have to adapt to the volatility.
Good luck today everyone.
"stocks are sold"
Cara 100 Ratings Changes
JOYG - Upgraded to Buy @ Longbow. The firm believes the sell-off in shares is overdone. Target $75.
MCD - Susquehanna Financial Initiates Coverage with a Positive. PT = $78
NE - Downgraded to Hold @ Weeden citing the company's uncontracted exposure to the Gulf of Mexico.
--------------------
Job numbers awful....U.S. nonfarm payrolls expanded by a seasonally adjusted 431,000 in May, but virtually all the new jobs were temporary jobs at the U.S. Census, leaving private-sector hiring very weak in May, the Labor Department reported Friday.
http://www.marketwatch.com/story/hiring-weak-in-ma...
Copper (HGN10)
$2.85 which is the February low. Chances are it won't hold.
Becky to Joe ( at break )
' I'm getting a killer headache.. I can't keep up with the script changes... Jack's really po'ed about the jobs #.. can't that old goat just go play golf ? btw, I'm cashing my check at the 10 o'clock break, just in case.. and I'm calling Warren '....
SOMEONE is looking at the gubermint's jobs report!!!!!!!!!!!!!!!
U.S. stock futures pointed to a much lower open Friday as the government's nonfarm payrolls report showed lower-than-expected job increases of 431,000 in May. Futures for the Dow Jones Industrial Average were 180 points lower at 10,078 and were 170.28 points below fair value. S&P 500 futures were down by 21.60 points at 1082 and were 20.18 points below fair value, while futures for the Nasdaq were down by 32.5 points and were 30.61 points below fair value.
S&P levels to watch
1050, then 950.
Odds are higher we'll see 950 (i.e., -180) before moving +180 back into the range of recent cycle highs.
Europe, which has its own problems, clearly did not like the US Jobs Report.
Say goodbye to a V-shaped recovery.
Cara 100 Update
AAPL - estimates, target raised at Susquehanna. Shares of AAPL now seen reaching $325. Estimates also increased, given better iPad sales. Positive rating.
GOOG - estimates tweaked at Barclays. GOOG 2010 and 2011 EPS estimates lowered to $27.67 and $31.61, respectively, on Nexus One distribution and foreign exchange. Maintain Overweight rating and $650 price target.
JOYG - target, estimates boosted at Barclay. JOYG price target jumped to $70 from $67 after the company reported strong 2Q10 results. 2010 and 2011 EPS estimates raised to $3.90 and $4.35, respectively. Overweight rating.
JOYG - numbers upped at UBS. Estimates were boosted through 2011. Company raised its forward guidance. Buy rating and new $77 price target.
ORCL - Upgraded to Buy @ Caris & Co. PT = $29
RIMM - numbers cut at UBS. Shares of RIMM now seen reaching $70. Estimates also lowered, as competitive pressures remain high. Neutral rating.
WAG - estimates, target reduced at Jefferies. WAG estimates were cut through 2011. Company is seeing lower sales, and will be hurt by Duane Reade. Hold rating and new $36 price target.
jobs
Yesterday Gov Sachs let it slip that the number would be 600k. They have a rep for being right. Taking us for a ride this time.
Re: jobs
They were half right if you count the new gubermint jobs 311,000, that were added last month, twice!
By the way, private sector jobs added were down to 41,000. I'll guess half of the 41,000 were temp jobs....
Today is My Conviction Day and I am Loving IT :)
I have been mostly short on this market since last Sep/2009 and got beaten up bad in my short trades as market continued to grind up against all odds and against all common sense but just since April 27, 2010 I made back all my losses for the whole last year and tripled my profit just by staying SHORT on this market. I am fully invested in INVERS triple ETFs like TZA, FAZ, BGZ, ..etc and have been making a killing in those lately specially last May and of course Today and for more days to come watching the resistance and support points on the S&P and the DOW.
So today is my conviction day and I am loving it. Thanks Bill for your daily insight and great analysis. I have learned a lot from you over the last few months. Thanks you.
Good Morning
Bill, I would have to think, that at this point in time/history, Credibility matters more than Facts.... President Obama, the US Congress and corporate leaders/banks have no credibility left with the public... lower the sails, boys.....
BP sued for securities fraud violations
Relating to its ADRs. Probably not significant.
Another way to look at the health of jobs
David Stockman
Director of Office and Management and Budget for Reagan Admin. impressive cv: http://www.minyanville.com/gazette/bios.htm?bio=283
Wrote yesterday re jobs: "My watch level for tomorrow's jobs report is 139,817,000. That's the "must have" household employment number for May." I"m not sure where he gets this number.
http://www.minyanville.com/businessmarkets/article...
Also wrote insightful series: Did Washington Save The Economy? In view of his CV, you might want to give it a read.
http://www.minyanville.com/businessmarkets/article...
All told, 15 million people were unemployed in May.
"Virtually all the job creation in May came from the hiring of 411,000 census workers. Such hiring peaked in May and will begin tailing off in June.
By contrast, hiring by private employers, the backbone of the economy, slowed sharply. They added just 41,000 jobs, down from 218,000 in April and the fewest since January.
The unemployment rate, which is derived from a separate survey than the payroll figures, fell to 9.7 percent from 9.9 percent. The dip partly reflected 322,000 people leaving the labor force for a variety of reasons.
All told, 15 million people were unemployed in May."
I have nothing to comment on this other than what did you really expect?
http://finance.yahoo.com/news/Economy-adds-431K-jo...
All told, 15 million people were unemployed in May.
duplicate msg
Obama Sez:
The May jobs report is evidence that the U.S. economy is "getting stronger by the day."
-----------------
Are mind altering drugs legal in Washington, D.C. ?
Re: Obama Sez:
Lockhart: Expects Unemployment Rate Under 9% By End 2011
Talk about setting the bar low.
Those who forget the past...........
An old friend of mine passed away a few monthes ago. Prior to that for many years we spoke of politics and the economy, both of us being those damned union weldor socialist bastards. We conversed many times from the crash of the 80s going forward, about another depression. The day Mr. Cara wrote on the blog and brought the housing financial situation to light, I let him know the score and thankfully he was able to get out on time. I wanted to say thanks for that and for the many efforts of the participants of this blog.
I'm still short this market.
Re: Good Morning
baz22,
Credibility extends to all Talking Heads, and the closer they get to being movers and shakers the closer is the scrutiny. I was a big fan of Obama before the election and early on, but I now believe he has surrounded himself with aides who are little more than lobbyists. It would not be surprising to me if there pops up a Watergate-type affair during the course of his Administration.
Earlier this week there was another noteworthy person who was put under the microscope and I thought failed miserably. I didn't write anything because I no longer care about Warren Buffett, but I see that many others have and Buffett is not looking so good at this point.
http://seekingalpha.com/article/208318-buffett-s-p...
Nice chart set up
in EDU to retest highs.
Re: S&P levels to watch
These seem like fairly drastic levels to have to watch for, aren't they Bill? Do you judge by the action this morning after the jobs report that the market hadn't priced this in during May's swoon? Or is it the rejection of the 200MA that has you so negative?
Looks to me that today's action represents nothing more than a little daily noise. In fact it's merely a 50% retracement of the gains made over the last two days! I'd even venture to say that the Bull crowd will look favourably upon today's morning pullback and might even use it as an entry point into, what IBD called, a new uptrend on Wednesday.
I don't need IBD to tell me that May 25 was an intermediate low and that a new uptrend in the markets was pretty well confirmed two days ago. We've all been watching like a hawk for the signals that these oversold markets are finding a bottom. Well, the signals seem to be there - MACD crossovers, improving RSI, successful test of support at 1040, etc, etc.
I say all this because I'm just a little surprised by the negativity on the blog recently. We used to be concerned about the preservation of wealth and sensible allocation of capital for the long and short term. All that seems to be discussed these days is conspiracy and wild speculation about market direction based on minor market spasms within minute time-frames.
Sorry to be so contrary but I ain't panicking until 1040 gets taken out and this morning's action doesn't even come close to suggesting we're even heading in that direction. Of course, all that could change in minutes and hopefully we're all prepared for such an eventuality, ... I'm just saying ...
Re: Good Morning
I watched those hearings and I agree. He didn't come off very well at all. At several times his opinions contadicted and his folsky "gosh, I'm just trying to make a buck" routine just came across as the same kind of excessive greed that we've been seeing out of the rest of HB&B.
Re: S&P levels to watch
Well Mackinaw, I'm not sure what you're reacting to, but from where I sit, when the market reacts negatively to bad news, its not a good sign. We've got lower highs and lower lows, the market trying to overcome resistance twice and failing, the euro looking sick (before today it was in this descending wedge formation that caused even me to bail out of my euros - and I'm a euro bull), and it just doesn't paint a very pretty picture.
ANd to suggest our discussion of late has had nothing to do with preserving wealth when we're faced with an astonishing set of sovereign defaults which hasn't happened for two generations now - I can't imagine something more germane to our current investment climate than that. And that's not a "wild conspiracy theory", if you're a reader of history, this HAPPENED during the depression, and it's playing out the same way again.
Just my two cents.
Re: S&P levels to watch
I'm surprised that the markets are holding up as well as they are today. IMHO, this mornings job report is proof of the pudding that the U.S. economy is not only not getting better but, in fact, is deteriorating.
Something is holding this market up but damn if I can figure out what it is.
RSI Tool
still appears to not be working. I used the Cara 100 list and various bookmarks I've created with symbols.
TIA
Re: Copper (HGN10)
The support line running from October 2009, February 2010 and May 2010 has been
taken out today. The rebound of late May was just a failed test of MA200.
Euro vs US Dollar
Euro vs US Dollar Euro approaching 1.20 figure for fresh 4-year lows
- Last tested below the 1.20 handle on Mar 27th 2006
Edit:
11:35:16 AM
Euro vs US Dollar *BREAKS BELOW 1.2000
- Reminder: 1.18 is the next big level dealers are focusing on as it was the level at the launch
response to kaimu's 6/3 post #63935
Kaimu wrote:
"IT ALL WORKS UNTIL IT DOESN'T! That'd make a great motto for our money, instead of IN GOD WE TRUST ... So in other words we TRUST IN GOD to be consumed by debt? Only one letter is missing in our money motto that would turn our currency around 180 degrees. Its the letter "L" ... Is any of this BS really what GOD intended? Okay Congress, tell us ... exactly what side of the aisle does GOD sit?"
God is Omnipresent, Omnipotent.
Re: S&P levels to watch
Mackinaw,
Those levels are merely longer-term technical support levels and my point was that the odds now seem to favor a drop in the S&P than a move to new cycle highs over the next several months.
The number of geopolitical and macroeconomic concerns are increasing, and volume in the S&P continues to fall. Equities, commodities and precious metals need a lower Dollar and stronger Euro for any kind of a sustainable move to higher levels, and that's not happening. So traders are more concerned, and negative.
RSI is down on the Daily-Weekly-Monthly following the S&P peak at about 1217 in late April. Was I too negative in late April when I published the three Briefs that are linked on the top right corner of the blog homepage? I opined then that prices were quite over-bought. A lot of the Bulls were surprised I was so negative then too.
The point is I am not a Bull or a Bear. I am just a trader like you with an opinion. My opinion has not changed since late April. When it does, I'll write about it. So far, the "Sell in May and Go Away" theme has been a good one, and, judging from the price-volume action, apparently a lot of traders have done that. When too many do, it will be time to go back in.
Local snapshot, Loannetter
Looked at a Really nice home for sale yesterday in small, quite town,...... brick bungalow.. Structually in great shape.. Bank just paid for $ 900 termite inspection/treatment ( no activity, no damage anywhere ), good street, all new plumbing/electrical and all new replacement windows .. roof six years old. Passed stringent ' certificate of occupancy ' city inspection with no items marked ' repair '.. city water/sewer .. needs new carpet and a stove and frig, front door ... 1400 sq ft. heated.. sold in 2006 for $ 82,000.00... foreclosed in Dec., 2009 (FHA).. bank is asking mid- $ 30,000's........ unreal... made a bid.
Re: Local snapshot, Loannetter
What city? good luck. I love bungalows.
Re: Local snapshot, Loannetter
Baz, could be a good deal, but.....
Houses in surrounding area much higher priced ?
Stick to your first bid, be patient.
SEE NO EVIL
ALOHA!!
Regarding the jobs report ...
Only one sector interests me and that is the "private sector". The US government can hire 1 billion more workers and it would not impress me. Government workers are paid by debt issues.
Aside from the usual "economic growth is rising" message, that is so robotic, Obama said this:
Obama acknowledged that most of the new jobs were the Census positions. "So these are temporary jobs that are going to last until the fall, and that may be reflected in future jobs reports," he said.
But here is the meat ...
But U.S. private employers hired fewer workers than expected in May, just 41,000 after rising 218,000 in April, a setback for the labor market recovery, even as temporary Census hiring pushed overall payrolls growth to its fastest pace in 10 years.
Then Obama went on to say this dismissing the lower than expected private sector job growth:
"But even if you put those temporary jobs aside, there's no doubt that we saw another month of private sector job growth, and that is obviously critical, because when businesses are hiring again, people start spending again and that, in turn, gives businesses more and more incentive to grow."
He shows his true Keynesian colors when he worships the very boring and inane motto of SPENDING TO PROSPERITY! As if spending will save us. If any one should know anything about "spending" and how it has ruined America's fiscal viability it is Tim Geithner, top dog of the US Treasury. No greater spender exists in this World than the US Treasury. Look how prosperous the US Treasury is due to spending!
Chart Of The Day puts the meat on the table ...
LINK: http://www.chartoftheday.com/20100604.htm?T
This shows jobs are down to 2000 levels of employment and broken a 40 year trend line that started in 1961. A leading indicator of the true jobs picture was US tax revenues, which I first reported on back in 2008, using Matt Trivisonno charts, which showed revenues falling off a cliff. Now that trend has been confirmed I still follow revenues via US Treasury reports which show a 8:1 ratio on spending, I term the REVENUE DEFICIT RATIO. We have a severe tax revenue deficit in America whereby $8 is spent for every $1 of revenue. You cannot successfully run a business on such metrics and you most assuredly cannot maintain a strong dollar on such metrics. So NO Mr. President "spending" is not our salvation it has and always will be our destruction ... You just cannot spend capital you do not have.
Re: Local snapshot, Loannetter
ALOHA!!
$30,000 ...
If its Carmel or Lahaina, I'M THERE!!
Dick Cheney's Oil Spill
Like most of the messes the nation faces, Cheney and Bush usually have had their fingers in it.
http://www.salon.com/news/politics/war_room/2010/0...
http://uncyclopedia.wikia.com/wiki/Dick_Cheney
Re: Obama Sez:
Apparently yes, the same drugs that Bush took for 8 years ("our economy is strong"). You keep repeating that statement Mr. President, but in reality our economy is built on debt, on services and on the consumption of cheap goods made in China, and we don't make anything here anymore. What is your plan for changing this? The same drugs that Reagan took for 8 years ("the deficit is big enough to take care of itself"). Really Mr. President, what about our kids, won't excessive debt break their backs. Shouldn't the current generation pay its own way? Both parties are to be criticized.
DOW 10K
ALOHA!!
Wow ... DOW 10,000 must be made of concrete, reinforced with titanium rebars and backed by the Rock Of Gibraltar! Looks like it has bounced off it three times in less than 90 minutes so far. Its just laying there now ... Knock ... knock!!
On the other side POG has gone straight up since the jobs report and the USD is up as well. I guess the US jobs report is better than the EU! Its LESS WORSE WORLD!
Brits go for 'Complex Loans'
Subprimes are being introduced under a new name via GE, HSBC and 1st Direct. The terms are fixed for 2 years with exploding floating rates for people with impaired credit histories. How's that for irony?
GS is officially in charge of the SEC
Take what's left of your retirement savings accounts and sign them over to GS, BAC, JPM, and the rest of the crooks?
http://www.thestreet.com/story/10774983/1/goldman-...
Re: RSI Tool
bsi87,
Is the RSI tool working now? I believe the software error was corrected.
Re: RSI Tool
Bill -
RSI tool working now but slow to load which happens from time to time.
Thanks.
Re: Local snapshot, Loannetter
Cool! Go for it--near Boone NC?
"Okay Congress, tell us ...
"Okay Congress, tell us ... exactly what side of the aisle does GOD sit?"
God is Omnipresent, Omnipotent.
You left out omniscient. Of course, any combination of two would probably presuppose the third ;)
Only 38 stocks above their 50 day moving avg. Mkt Cap 10B+
Sorted by Market cap.
http://bit.ly/a6NBd5
as this list shrinks, i am going to keep the list that hold on for dear life longer than the rest.
Eventually, that may be my 1st watch list on the uptrend.
Re: "Okay Congress, tell us ...
2nd feeling the love for the weekend long hold? Just unhinged my shorts considering getting long at the ol'e 1066 level in the "long term" portfolio.
Many are talking follow through into Monday. If we hold 1066 I will go in 1/4 again I think for the long trade.
Re: Obama Sez:
I never thought I would long for the "good old days" of Bill Clinton.
At least he only messed with a young intern — Bush and Obama have diddled with our entire country... now the world.
Battle of Hastings
Back at Bill's spx of 1066. I wouldn't be surprised if the ECB tries to pull some rabbit out of the hat this weekend. Probably will bungle things if they do.
Re: Battle of Hastings
Amazing how short peoples memories are. This HB&B manipulated market has the makings of October 2007 to March 2009 written all over it.
In case everyones memory is foggy......Dow 14,125 to Dow 6,590 in 15 months!
All the working people need to learn the art of begging or armed robbery, what every works for their survival!
Great call on the 1066, just a tad high............
HB&B 31 investors 4.......it's not rocket science with Spain getting ready to kick down the door and Japan running up to the threshold!
Re: Only 38 stocks above their 50 day moving avg. Mkt Cap 10B+
FINVIZ has become my favorite site and the screener a big aid defining market direction... identify stocks by mktcap, relative volume, growth vs value, and the strength of their moves
Oil washes up on Pensacola FL beaches.
Video further down the page on the link.
http://huff.to/9cTJlk
Quick setup example
Very clean nice chart on today's "catch of the day" example, with additional self-test on the same chart, don't miss it:
http://tradinglog.realitytrader.com/2010/06/jun-04...
Re: "Okay Congress, tell us ...
Pz- Sorry for the late response. I think the odds of Black Monday are high enough to keep me in cash over the weekend. Haven't had the urge to trade much this week. Hope you're doing well.
Census Fraud?
Guy goes undercover.
If this is true this is a true waste of time and tax payer money.
http://bit.ly/cULJdV
Re: Obama Sez:
'I never thought I would long for the "good old days" of Bill Clinton.'
Those were better days indeed. But a lot of the financial and housing bubble got it's start during the Clinton years. I was young and naive then, and the world was my oyster - but I voted for Perot. I remember his warnings about our deficit back then and the damage that "foreign lobbyists" would do. I was thinking back then, "why isn't he mentioning the domestic lobbyists?"
Three letters that nearly robbed me blind tonight
Someone said this afternoon "the PPT will push the market up before close".
fair enough. at 3pm FAS hits .50 and reverses. I'm in at .56, nice tight 5 cent stop. FAS hits .80 and reverses, before bouncing a few times as high as .80 again, no problem I thought as the market is going higher, AND THEN BEGINS TO DROP. Bad enough that I'd let $60 slip by (just 200 shares, as I was anticipating a big juicy run up into close), I stopped out for -.07.
Then I cannot begin to explain the nightmare that subsequently occurs as I get sucked into the rinse cycle as the market leaves both sides guessing which way the closing minutes will go.
I've gone from $460 down to $70 in multiple trades trying to second guess the market, while the present FAS trade I'm in is sufficiently red to leave me with a large tab if it doesn't swing my way, which fortunately it does. At this moment I start to wake up to what is happening and 2 quick scalps permit me to finish the day with over $300 - not a total disaster.
I've been honing my trading to go live with a real account hopefully next week and have been making progress. I'd forgotten about the so-called PPT, just traded what was in front of me. But bloody hell, take on a particular frame of mind - think that something will happen - and watch how all the discipline just evaporates, the flexibility to act and react is lost and the market just takes you for a ride.
From this evening forward the PPT no longer exists.
Re: "Okay Congress, tell us ...
Have a great weekend all!
2nd- went in for 15% of "long portfolio" divided it b/w financial/energy MF's. We shall see.
Crazy as this may seem. [Part II]
On May 24th I posted here what some traders are calling fake prints. It showed a target for the Wilshire 5000 on June 25th of 7450. Although the chart had a date of June 25, it was allegedly captured by a trader sometime in March.
Well a few days later after my post here, another fake print was captured on the 27th, showing a target of 1061 [see pic A]. But this time the date on the chart was correct. Strange isn't it we hit 1061 today [see pic B]?
Sure will be interesting if the June 25th call pans out. After today's sell off it very well could by then. Pull up the Wilshire 5000 and do the math for a H&S target.
Just thought you may enjoy seeing this.
Have a good weekend everyone!
Re: Crazy as this may seem. [Part II]
What are fake prints? Care to elaborate.
TREASURY GONE WILD!
ALOHA!!
A huge day, yesterday, June 3rd, over at the US Treasury ...
JUNE 3 HIGHLIGHTS:
- $141BIL in marketable ST Debt issues created(debt for one day)
- $172.2BIL outlays(spending for one day)
- $22BIL spent on Social Security for one day
- Total net tax revenues $6.95BIL for the day
- One day REVENUE DEFICIT RATIO 25:1
- YTD REVENUE DEFICIT RATIO 8:1
There's your reserve currency safe haven ...
Down market helps mortgage rates!
FNMA 4.5% 102.69 +63 bps today (+69 bps this week).
30 year fixed rates are 4.625 - 4.75% today for best credit purchases in our region.
Re: Three letters that nearly robbed me blind tonight
Likewise, I have never seen any productive discussion related to the mysterious actions of "the PPT". It's commonly used a scapegoat by angry traders to justify why this or that trade went bust as market moved in the opposite direction than expected. Just a bunch of noisy noise.
Re: Obama Sez:
Hi Bluesky,
I also voted for Perot. He thought like a businessman and knew what a balance sheet looks like, what it takes to employ people and that without products to trade with other countries we cannot exist as a nation.
With that in mind, I also began writing my Congressman and everyone else I could think of who may have the power to stop it when NAFTA was first approached by Bush, the First ("I don't have much of the vision thing."), and later pushed by Slick Willie.
This mess was a long-term, bipartisan boondoggle which was aided and abetted by a whole group of GS alums — Greenspan, Rubin, Summers, Paulson and their close associates Bernanke, Timmy, from the NY Fed.
Ah, the good old days before computer models and the "new economy".
Re: Three letters that nearly robbed me blind tonight
Les,
this is music to my ears. Maturity as a trader, seriously.
Re: Only 38 stocks above their 50 day moving avg. Mkt Cap 10B+
Scott...I agree about FinViz.
NYUg....Eliminate ETF's from the screen and your down to 31. Your culling only bond funds which are overvalued because of their safe-haven halo. That is a wrong perception now, IMHO.
Re: RSI Tool
Yes Bill...the RSI Calculator is working.
As one of the 'Romans' I used to work with in the 'Grinder Room'of the Pulp Mill, would say to me when I performed an electical task he was waiting for..."next time I get married, you can have my new wife for the first night".
Thanx again.
Later.
loannet, nyu
got gone for the day... between charlotte and boone... allen, average sales comp. basis on street is $ 85,000...being the tight-wad that I am, probably bid to low, but I restored older homes for over 30 years, so maybe I am to critical... anyway, per todays climate, nothing ventured, nothing Lost !
Re: Dick Cheney's Oil Spill
This is a great song (irrespective of politics...)
Cheney's Toy
http://www.youtube.com/watch?v=aKUE0RTuw24
Give it a listen, and enjoy.
KC
Re: Only 38 stocks above their 50 day moving avg. Mkt Cap 10B+
I'm not too good at technicals but I'm an avid tape reader at least once a week or so. When you get old you get bored. I have to say that they take the fun out of it by printing the NAME of the stock along with its symbol. The terms Jersey Standard, Big Dog and Little Dog have faded like I have. We don't get dark pool prints so tape reading may have become a fool's errand. Time will tell.
The 'tape' didn't trade that heavy today. The fade into the close had no volume. The initial minus 250 Dow points was die cast from the sloppy employment report but that 'number' is always suspect either way. One can always hang one's hat on ANY reason Mr. Market does what he does. Man worships at the throne of 'sacred causality.'
My guess is that the adults were in the Hamptons playing pasture pool at Sebonack or Shinnecock and the children were left unguarded with the Bots.
I could be wrong but 'good form' suggests we don't set up for a potential crash til Sept/Oct. There is such a thing as tradition after all... Given what I surmise of the Presidential Cycle, we may have seen the lows at SP 665 til 2013/14. As Kaimu observes, if we are creating $8 for every $1 in tax receipts, why couldn't we see $10, $20 or $30 in outlays per a dollar of tax. After all, they are just digits.
Re: S&P levels to watch
The fundamentals are the most horrific that I can possibly imagine. 5 years ago, I could not have possibly even imagined fundamentals this horrific.
just saying.....
Re: S&P levels to watch
The fundamentals are the most horrific that I can possibly imagine. 5 years ago, I could not have possibly even imagined fundamentals this horrific.
just saying.....
Re: Only 38 stocks above their 50 day moving avg. Mkt Cap 10B+
Ross - "if we are creating $8 for every $1 in tax receipts, why couldn't we see $10, $20 or $30 in outlays per a dollar of tax. After all, they are just digits."
Thats the temptation of course. I've noticed the market is funny that way. There is no incremental ratcheting up of borrowing costs. The market doesn't fire warning shots to discourage bad actors from behaving incrementally badly. Instead, this sort of thing really doesn't matter at all, right up until the point when the paradigm shifts, and then things gap suddenly downwards. Then the market takes an absurd interest in the minutiae of just exactly how bad the problem is. Things were all fine in Spain with a 12% deficit, right up until the Greek crisis, and now of course its cut cut cut or else those bond vigilantes will tear you a new one, and the wonder of course is, how this horrific information could have been ignored for so long.
Effectively, the ratings go from AAA to BBB-, ignoring all the steps in between.
I think its also about inertia and repeating strategies that have worked in the past. Problems in the world? Run and hide in dollars - it's always worked before, hasn't failed us yet, everything else seems like a scarier option. You never get fired for buying IBM.
Perhaps financial historians will be able to piece together the exact "warning shots" that we all should have seen coming, but living through it in real time, it's tough to distinguish the "normal, everyday" treasury absurdities from the ones that will end up breaking the camel's back.
Perhaps Chuck Prince of Citibank (2007) summarized this kind of thinking the best: “As long as the music is playing, you’ve got to get up and dance,” he told The Financial Times, adding, “We’re still dancing.”
We know how well that worked out.
baz22/rebuilding
hi.....Sat am so I am off to LOW to get building material and then out for the day remodeling a house, 10/15 years ago when I was a stock boker in central texas (always have specialized in options...fits my personality....mostly on the sell side although I am long July SPY 105 puts and short the same current month w/some long 103/short 100 puts for this mo just in case it breaks down) people would always ask me how come I would rebuild houses for myself and I would tell them that I could leave the site, come back in three weeks and everything would be as I left it, I would then ask them where they thought dell would be in that time frame????? point made //// one son is in central VA and has just bgt his third fixer-upper and I am generous w/that term, daughter in Magnolia TX now has five rentals within 5 miles of her house and paid less than 30m for each....good cash flow but alot of sweat equity in each.....her husband has become a cracker-jack carpenter over the years........keep sending them all articles on possible?probable double dip in real estate and urge caution, I went from mid-six figure to minus low six figures in less than two years in the late 80s because of stock market/realestate plumeting.... not many cared then about the 50% haircul in the mid USA in RE as the coasts chugged along during that period but unlike todays environment thousands associated w/that debacle went to jail........remember the Keating five??? I am rambling buts its saturday.............baz22, the best of luck
Re: Three letters that nearly robbed me blind tonight
Les,
According to Wiki (I only vaguely remember the actual event.) in 1988 Reagan established The Working Group on Financial Markets in response to the october 1987 crash for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence".
As established by Executive Order 12631, the Working Group consists of:
• The Secretary of the Treasury, or his designee (as Chairman of the Working Group);
• The Chairman of the Board of Governors of the Federal Reserve System, or his designee;
• The Chairman of the Securities and Exchange Commission, or his designee; and
• The Chairman of the Commodity Futures Trading Commission, or his designee.
I'm sure Bernanke would use any means to attempt to control the markets.
It may just be my increasingly cynical attitude, but I don't trust the government's open declarations of intent (or ability) and trust their implied capabilities even less. Although I occasionally suspect such is happening it seems to be as unpredictable as Lady Luck. But then, I had such a "tool" at my disposal I think I would severely limit its use to avoid any chance of predictability.
Re: Three letters that nearly robbed me blind tonight
This was a realisation of metaphysical importance Grym. It is to assert my independence of action against erroneous beliefs and undue influences which do not aid me in becoming a (profitable) trader.
http://www.youtube.com/watch?v=YXKFTzlBziI
I understand the above scene differently now, from when I first saw it.
Re: Three letters that nearly robbed me blind tonight
So here's the thing. If the PPT intervenes, it must do so in ways that look like standard market operations of any other actor. It is visible, and acts like any other market participant. But what Les was talking about was something else entirely. He was letting imagined or potential PPT interventions mess with his head, and that got him all turned around.
These guys don't have a magic wand, making the market do whatever they want. If they did, the market would not have had this major move down, right? Stops still work just fine, patterns still appear, volume signals interest, and really nothing is changed mechanically (at least on an intraday basis) by the existence (or non-existence) of an active-participant PPT.
One can argue that often, "someone" seems to be moving the market during off-hours, resulting in big gaps up or down that cause major market moves in price without requiring major commitment of money. Is that PPT? Who knows. All you have to know is, it's dangerous to hold overnight, or over the weekends as indicated in the post close report.
Re: RSI Tool
working now,
Thanks!
G-20 Is Nearing Accord On New Capital Rules
http://bit.ly/a5FMqw
Thank you Bill and others
I just wanted to post my thanks to Bill and all of you for educating me. The learning process is neverending, but I have learned so much from this community. I am learning about technical analysis now, and your charts along with commentary are helping me greatly. I just wanted to show my appreciation to you Bill, and the rest of the community. Thank you.
Re: Three letters that nearly robbed me blind tonight
Music to my ears continues... If PPT acts as one of market participants, what is it from a trader's standpoint but one of market-moving forces to watch for, whose actions to read and structure trader's own actions accordingly?
The only addition I have to make is about overnight holds - gaps up or down existed before even term PPT was coined, they are caused by pricing decisions made in the morning and are not based on after-hours activity. In other words, whether there was after-hours prints at the prices different from the closing print, in the morning market participants bid and offer accordingly to their morning views, new information that became available etc. G-20 announcements over this weekend, for instance, will influence opening prices on Monday - and that would happen whether there was after-hours market or not.
And Les... remember our conversation some months ago where I said that the crucial part of learning to trade is not chart reading, order execution and other technical stuff... it's learning what market is, what role various forces play and what your place among them is - in the most broad, philosophical if you will, sense? When the right picture of this part of the world is worked out, all other elements fall in their places naturally.
Re: Thank you Bill and others
AngryNJ,
I learn too. Every day.
Re: Three letters that nearly robbed me blind tonight
Yes I never imagined when I signed up for an international relations course following 9/11 that I'd end up turning my back on the education provided and looking elsewhere for understanding.
Tao, as has influenced your learning materials and modus operandi and my eventual understanding of them these last 7 months has hit me like a lightning bolt out of the blue. I look forward to your publication on this subject.
Re: baz22/rebuilding
Hi Toby, yeah, know what you mean ( re: dell )... have always loved restoration, as I did it for others (realtors/investors) till about 20 years ago, when I was finally able to do my own. The economy is forcing families to ' double-up ' and share living quarters ( rental), and I, also, don't see any economic improvement anytime soon. I still do most of the work myself, except hvac (and sub-out when it saves money and time - insulation, driveways, etc ).. The thing I like the most, however, is the ' Thank You's ' the neighbors give. Its a pretty damn good feeling to bring a house back to life, and in the process, help a neighborhood... good luck to you, tobyt..
Re: Three letters that nearly robbed me blind tonight
Yes Vad your posts have been influential in shaping my views of how things work. Specifically, even if there is a massive global conspiracy, the conspirators must breathe air, put on their pants one leg at a time, and buy in the marketplace with their volume showing up like everyone else's. Something to watch for, certainly, but they don't defy nature, bend steel in their bare hands, etc. They must follow laws of (market) physics too.
Regarding gaps up and down - I was referring to gaps whose "new information" is simply the overnight movement in S&P futures prices. Specifically, it appears to me that the futures markets drive opening prices; if the futures markets are down overnight and this persists until the NY market opens, the NY market will open down. Adding to this, the SP futures volumes are much, much thinner overnight. Were I attempting to influence market direction (at least to the point of the open, anyway) I'd consider buying when volume was thin, and a small amount of money could make a large impact.
Of course this can't dictate market direction, it simply provides an initial impulse. If the overall trend is down and traders are looking to get out on strength, then this manufactured "gap up" will likely be sold at the open. However, if done at the right time, it could cause short covering at the open which might, over weeks of operation, cause a significant move in the overall market.
One question I have never asked you before: Vad, if you were tasked by the government to influence market direction, could you design a computer program that would be able to influence market movement over the medium to long term? Let's assume you had a few trillion dollars, and access to complete information - stops, short interest, and the contents of government information in advance of release, in real time. In this thought experiment, imagine your goal was not to make money, but to simply cause the market to move up. Another requirement is, you can't end up owning a large position; you need to be relatively flat over time. So clearly you have to take money from someone to do this, but given enough short interest, presumably they would be the fuel for your operation. Possible to do - at least for a time?
Presentations, late yesterday, at ASCO showing
some really good results.............
Extreme up/down volume
"Look at the DOWN/UP ratio at the bottom. Looks like panic extreme today. $QQQQ $DIA $SPY"
See bottom of chart...
http://chart.ly/e447mw
They must intervene in the market Sunday night
Re: G-20 Is Nearing Accord On New Capital Rules
There is always a flip side(s).
http://tinyurl.com/24az9dw
More delays plague G20 bank reform
"...this time around how much and what type of capital lenders should hold, and when these tougher regulations should be implemented.
News of further delays could prove costly for the financial reform agenda, experts warn, and is another setback for Canadian banks that have refrained from raising dividends or pursuing acquisitions until rules are known. As originally envisaged, the goal was for new rules regulating bank capital and leverage limits to be unveiled by the end of this year and brought into force as of 2012.
"It is bad news," said Morris Goldstein, senior fellow at Washington-based Peterson Institute for International Economics. "But, if that's the price for a substantial increase in capital levels, then it's worth it."
How long a delay remains unclear, as published reports indicated Germany, France and Japan sought to have implementation pushed back by up to a decade. "That would be ridiculous," Mr. Goldstein said of a decade-long delay."
Re: Three letters that nearly robbed me blind tonight
Dave,
it's true of course that thinner markets in general are easier to influence with lesser monetary commitment... however, on average this kind of after-hours "nudge" will help move things along in the direction market is inclined to anyway. It won't reverse market trend; it won't by itself create a trend where there is none. Just think of the massive force of the market once trend has established and what it would take to reverse it - 1 trillion dollars commitment has helped Euro for what, two days, before the trend has resumed? Or, all the measures undertaken in the fall of 2008 which did absolutely nothing to stop the decline until the market was good and ready in the March of 2009... Sure, applied at the right moment in the right place, impact can be greater by the principle of lever... but after all said and done, no one is big enough to influence market directly. It requires introduction of the whole new factor or combination of a few - like interest rates policy + injection/withdrawal of really really big money wad + tweaking of this and that in order to change the motivations between equities, bonds and commodities - to start turning the ship in desired direction... and I would venture to suggest that architects of such decisions will encounter many unexpected consequences. That's (one of) the problems with interventions... as with any natural force, once you start meddling with market you are bound to encounter many outcomes, both foreseen and not so much. It's like spaghetti - pull one with enough force, and there won't be any single piece remaining uninvolved in tho whole dish.
This above partially answers that hypothetical question about influencing market... For a short time on a smaller scale, in some particular stock or group - sure, can be done by smart application of force aligned with major understanding of how market participant think and react. Beyond that - no, not on a scale exceeding nearest time - a few days maybe at best? See that same example with trillion and Euro...
Here is underlying problem such manipulator is bound to run into: if he has to unwind his position for profit or at least breakeven, he needs to find the way to do so without undoing the result of his entry. To achieve that, he must use market trend to "feed" his position into. We have three possible cases here: a)flat market, b)trending in undesirable direction and c)trending in the direction manipulator needs. In case a), if the trend was created solely by his intrusion from the flat market, equal size of intrusion on the opposite side will reverse the trend and he will find himself where he started - not just by the simple arithmetics of his buys and sells, but by the influencing other market participants since he will balance his initial optimistic input by the consequent pessimistic one. If he goes against the trend (case b), he will just provide the market with "dumping grounds" - we have seen it recently as ECB started buying treasuries directly, and holders were only to happy to get rid of those. Finally, if he moves in trend direction (c) - well, what's the point really?
This is a very general summation, there are plenty of details to each of the cases, but the details are just that... details. They give insignificant variations that may matter on some particular day in some particular sector. Big picture won't change much.
Re: Three letters that nearly robbed me blind tonight
Ok, let me refine some things a bit more.
If you have complete information, a thin market, a big short interest, and a big capital base, it seems to me that one could deliberately set out to cause people involved in shorting some serious pain. The result would be to move the market up, fed by short covering. Again, requirement is a big short interest and/or a relatively thin market.
But once the shorts are burned, things won't move up unless you get other traders injecting money. And if the shorts come back into the market, they'll move it down. You force them to cover, you move it back up. That's a trading range - perhaps that's the best you can do with direct intervention without actually injecting money (or convincing others to do so) long term.
And I agree, without short interest any buys you make to change the trend have to eventually be matched by sells you make, which result in a net zero effect - unless the sells happen in a time of high volume, and the buys happen at a time of low volume (i.e your buys result in a disproportionally higher price move than your sells). That's hard to manage - possible, but not something you can count on for a system.
Now I'm beginning to agree with you that its not really possible to permanently move the market up with direct intervention without injecting money. Injecting money - now that has to be Central Bank action; buying all that bad debt and calling it QE, for instance. There's a trillion new dollars that needs to find a home. Perhaps a combination of periodic direct intervention causing short-covering rallies, and QE for the long term, that constructed that rally we saw. Well that, and the other policy interventions as well. An entire orchestra of interventions. But now - where are we? No more QE. QE got us to 1170, it ended March 31, we got another month out of happy earnings results, and a few weeks later, here we are at 1064.
So the best we can expect out of PPT is exacerbating the short covering rallies, unless the Fed starts up the presses again. Perhaps Commercial Real Estate is next on the Fed's buy list?
I should do some math and figure out how much money flowed into the market during the rally. Price times daily volume should yield the money flow in or out, yes? Wouldn't it be interesting if the net money flows in was close to the 1.4 trillion the Fed printed?
One last point. The "1 trillion euro intervention" wasn't. A trillion euros were never spent. It was all just a threat. If they'd gone out and spent them, then who knows what would have actually happened, but I think the ECB has spent perhaps 30 billion buying Greek debt. That's hardly a trillion.
If they'd really done a trillion - can you imagine, going to the bond market for a trillion dollars and then spending at one moment? Bonds for Germany et al would have been hammered (and rates would have gone up), which of course is why they just threatened, and didn't actually do it. So call this a 30 billion dollar intervention. Successful, too - sort of. As long as you don't mind owning the market for Greek debt.
Re: S&P levels to watch
Can't say goodbye to something that never was.
Re: loannet, nyu
baz22
Are you renovating homes in the Mecklenberg area? That bungalow in Allen sounds like a steal only 20 minutes to Charlotte. I could be headed back that way myself (family there) if RE prices are that reasonable!! I hear the unemployment is the issue.
11.2% chart for Mecklenberg county unemployment: http://tinyurl.com/2dse2zn
9.5% my area http://tinyurl.com/29r83qp
Saturday Snacks: Hungary, Hungary Hippos
http://ronsen.blogspot.com/2010/06/hungary-hungary...
Monthly charts. Hungary hippos eating our returns?
Re: Three letters that nearly robbed me blind tonight
Les,
Hey, if it works for you fine. But for my investments (I seldom trade short term.) it makes no difference if there is a PPT or not since I ignore all government commentary and assertions when buying or selling anyway.
However, as a citizen it matters immensely — because they have no Constitutional authority to be doing such things. The whole idea of a PPT is manipulative and therefore repugnant to me.
In that case there is a "spoon" and we will pay a price for it sooner or later in a loss of truth, freedom and security.
Re: Three letters that nearly robbed me blind tonight
A lot of points in that so let's do it by paragraphs, readability sake.
If you have complete information, a thin market, a big short interest, and a big capital base, it seems to me that one could deliberately set out to cause people involved in shorting some serious pain. The result would be to move the market up, fed by short covering. Again, requirement is a big short interest and/or a relatively thin market.
Sure but then again - with all those factors present you won't even have to do anything, market will punish shorts overstayed their welcome all by itself. Just make sure that the instrument itself doesn't collapse rewarding shorts by ceasing to exist and trade - i.e., stock doesn't go bankrupt, currency doesn't disappear etc. From this point of view, why spend much money at all - simply try to convince market participants that the situation is so and so and not such and such, and if you are successful, they'll do everything themselves. That's exactly what most interventionists try to do by jawboning - rarely successful because when you repeat every day "banks need no more capital, Euro is sound" etc, will the "wolfpack" listen? They tried to do scare markets into buying by committing to that trillion... didn't work.
By the way, you focus on shorts in your line of thinking, but too big long interest will act in the same way.
But once the shorts are burned, things won't move up unless you get other traders injecting money. And if the shorts come back into the market, they'll move it down. You force them to cover, you move it back up. That's a trading range - perhaps that's the best you can do with direct intervention without actually injecting money (or convincing others to do so) long term.
Shorts coming back, or simply longs exiting - either or both will restore the balance... after all, there are markets with no shorting allowed at all, and they too reverse and drop back down, simply by virtue of longs exiting and no new longs wanting to enter until certain price level is achieved. One of key difference is, markets without shorting tend to drop faster and deeper.
And I agree, without short interest any buys you make to change the trend have to eventually be matched by sells you make, which result in a net zero effect - unless the sells happen in a time of high volume, and the buys happen at a time of low volume (i.e your buys result in a disproportionally higher price move than your sells). That's hard to manage - possible, but not something you can count on for a system.
Correct, but notice - you just actually described a foundation of a sound trading approach - buy when no one is there, sell when everyone wants it. Sounds familiar? :) See, where we arrived is actually how the market works, and if that is the only way successful manipulation can be done - then the very definition of the manipulation will have to be "just trade right in order to make money..." which is obviously not what we assumed from the get-go. So, what we come to is - either you obey market laws and exploit them and rewarded will you be, or try to fight them and be burned. Which is true for anyone, including such direct manipulator.
Now I'm beginning to agree with you that its not really possible to permanently move the market up with direct intervention without injecting money. Injecting money - now that has to be Central Bank action; buying all that bad debt and calling it QE, for instance. There's a trillion new dollars that needs to find a home. Perhaps a combination of periodic direct intervention causing short-covering rallies, and QE for the long term, that constructed that rally we saw. Well that, and the other policy interventions as well. An entire orchestra of interventions. But now - where are we? No more QE. QE got us to 1170, it ended March 31, we got another month out of happy earnings results, and a few weeks later, here we are at 1064.
Any factor acts as long as it acts, and then it ceases to act... (I can hear kaimu chanting "it all works until it doesn't"). We can theorize about which factors contributed to that rally, but that's beyond my area of expertise. Main point for a trader is - the decline was so fast and deep that the bounce was in order, intervention or not. Once it started, the skepticism about it was so widespread that it was bound to be much bigger than anyone expected. As it progressed, it was dismissed so widely and loudly that from a trader's standpoint it had nowhere to go but up... etc, once again acting as market always does, intervention or not.
So the best we can expect out of PPT is exacerbating the short covering rallies, unless the Fed starts up the presses again. Perhaps Commercial Real Estate is next on the Fed's buy list?
I should do some math and figure out how much money flowed into the market during the rally. Price times daily volume should yield the money flow in or out, yes? Wouldn't it be interesting if the net money flows in was close to the 1.4 trillion the Fed printed?
Not my area of expertise, sorry.
One last point. The "1 trillion euro intervention" wasn't. A trillion euros were never spent. It was all just a threat. If they'd gone out and spent them, then who knows what would have actually happened, but I think the ECB has spent perhaps 30 billion buying Greek debt. That's hardly a trillion.
Right, but that's what I implied from the beginning when said "1 trillion commitment".
If they'd really done a trillion - can you imagine, going to the bond market for a trillion dollars and then spending at one moment? Bonds for Germany et al would have been hammered (and rates would have gone up), which of course is why they just threatened, and didn't actually do it. So call this a 30 billion dollar intervention. Successful, too - sort of. As long as you don't mind owning the market for Greek debt.
Yes, and the next question is - well, and what's next after you are done spending? You moved the point of the balance to some new level, then you run out of money and market forces resumed their action - robbing you of your trillion in the process, because from the market point of view you simply took huge and non-viable position. How long will it take for the market to return to where you started, leaving you 1 trillion poorer and with nothing to show for it? Plus, your action would have caused a whole lot of unintended consequences in the process. After all, US actually proceeded to inject all that money - didn't stop the decline, and the consequences are ours to deal with for decades to come...
Which in turn takes us to the final conclusion: there is just one way to fix things. As novel as the idea may be, this way is to actually fix them, cure illness instead of fighting symptoms. You want shorts to stop attacking a stock - make the company fundamentally sound. You want market selling to stop - make the economy sound, don't just tell us it is. You want Euro to stop sliding into abyss - create viable Union. If you don't - market will seek the point of the balance until it finds it - and only then will it reverse. Unless the subject of trading ceases to exist, that is... in which case they'll scream that darn speculators destroyed it. Yeah.
Re: Three letters that nearly robbed me blind tonight
ALOHA!!
Vad posted:
Which in turn takes us to the final conclusion: there is just one way to fix things. As novel as the idea may be, this way is to actually fix them, cure illness instead of fighting symptoms. You want shorts to stop attacking a stock - make the company fundamentally sound. You want market selling to stop - make the economy sound, don't just tell us it is. You want Euro to stop sliding into abyss - create viable Union. If you don't - market will seek the point of the balance until it finds it - and only then will it reverse. Unless the subject of trading ceases to exist, that is... in which case they'll scream that darn speculators destroyed it. Yeah.
Yeah indeed(applaudes) ...
From what I have read in FOMC meetings going back to the early 1960s and 1970s is that there has been cooperation between global central banks to move currencies and agendas vis vi interest rates and swaps. Many times I have read about the mechanics, which is simply put purely a "momentum play". The central banks use "momentum" to put forth their agendas with currency swaps. These guys actually sit around and talk about how their "momentum play" worked or did not work and how much they gained or lost to generate the momentum and its efficiency. This "Art" has been practiced now for over forty years that FOMC Meeting Minutes will attest to. Central banks have all the insider knowledge as they have been granted the privilege of setting interest rates in hopes of preserving political agendas and the powers that be status quo. In that regards they have done an admirable job of keeping the monopoly alive and well. Imagine if you knew in advance where interest rates were going. Granted such privileges eventually succumb to market forces, but nonetheless even if central banks eventually fail in one agenda they and their private bank member cartels can "reload", whereas the average investor or fund has limited to zero "reload" capabilities. TARP and QE was a "reload". It becomes a game of attrition. The number one rule between central banks is self-preservation of all central banks as a central bank is nothing more than a cartel of private banks who operate within its jurisdiction with governmental impunity. Nevermind the masses or their 401ks. Who knew how high Volcker was willing to raise rates in 1980? He did and so did the governors, the member banks and the foreign central banks. When foreign central banks were caught holding gold long in 1980 I found a FOMC Meeting Minutes that said the US FED would make it good with a currency swap of USD. Of course I do not know what central banks were involved as those details are either left out of recorded "real time" dialogue or whited out later. How many "speculators" in the gold market were "made good" after 1980? They either succumbed to "attrition" and were forced to sell or held gold and/or silver for 20 years, which offered a whole new set of "attrition" related issues that took them out of the markets completely within that time period. No reload and you're flat out of ammo for the next bubble~
When I buy a company or move in and out of currencies it is purely based on fundamentals and money metrics. I only look at charts to determine entry and exit points. I have never owned the Euro because I never believed in a monetary union. I have and still do own Canadian Dollars, Swiss Francs and Australian Dollars and of course I hold US Dollars to pay bills and a reserve to move into other currencies at opportune times in hopes that at some future point once the markets realize the myth of safe haven "reserve currency" in relation to "fiat" that I will have as few "greenies" left in my possession as possible and hedged out and diversified at my maximum. The best laid plans of mice and money ... eh ...
Today I was out in the greenhouse watering and I was thinking about currencies. I thought, if we combined currencies what would be the optimal "paper" currency in this World today? In my opinion it would be the Swiss Franc and the Australian Dollar, combining the frugality and efficiencies of governing the Swiss have with the shear commodity power of Australia and the Australian work ethic. No Kevin Rudds allowed! I thought of the Canadian Dollar in there but then decided it was too close and intertwined with the USA on too many historical levels that some day in the future would work to Canada's detriment. Its a tough task to find any single "floating currency" that has it all, which can offer up a superior "store of value" for the long term. Then this is a World of "tough calls" now ... Certainly the level of leadership globally, is suffering all time lows. Snake belly lows! Hummmmmm ...
Re: loannet, nyu
Susan, hi... Mecklenburg is the Welfare Nation, so it will take time to weed out the yard. Charlotte will be continue to grow.. But I can't take it anymore... that ol' ' Southern Charm ' is about gone. Thats why I'm heading to the mnts.. Charlotte is a crowded, aggressive habitat. Grew up there, worked there. I don't think you would like it, not compared to where you are now. I only focus on the surrounding areas because I am very familiar with those counties and the homes are built like those that use to be affordable in the inner city. ** Allen is not the community, loannet, I was just responding to allen on the blog... good talking with you.
Banks Stress Test Part II - ECB
Can a take home test, similar to the one in 2009, lift the markets again? This time from across the pond?
Chart since the last Bank Stress tests:
http://bit.ly/dekfm1
Link to ECB Stress test news from S. Korea:
http://bit.ly/cEVpl5
allens I have known
baz22,
Does Allen know there are towns named after him in:
Alabama Mississippi
Arizona (historic<2>) Montana (historic)
California
Colorado
Florida
Georgia
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maryland
Michigan
Minnesota
Nebraska
New Mexico (historic)
North Carolina
Oklahoma
Pennsylvania
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
West Virginia (historic)
Wisconsin
:)
Job Ads: 'The Unemployed Will Not Be Considered'
http://huff.to/b71wx8
I can also confirm this report. There is a stigma when hiring, that you want to try to hire the best talent from competitors or relevant fields who are still sitting on top of their game. Versus someone who might come cheaper but also has been unemployed for 99 weeks.
This is a cruel iteration of survival of the fittest, or in this case, sorry if you were in the wrong company, wrong industry, wrong time.
Then you have the millions of college grads this spring who prob have been scrambling for jobs back in the fall of 2009.
The business climate for small businesses (i work for one), that employees less than 100 people, are going to run lean and all muscle until revenue/profits accelerate.
EDIT: even if an employer doesn't advertise it, most businesses think this way. It's a shame since there are some really really eager and MOTIVATED talent that are unemployed right now, that would take a pay cut to just get back in the game.
Re: Three letters that nearly robbed me blind tonight
Many points of agreement here I think. So let's take the one where I differ. :)
"Main point for a trader is - the decline was so fast and deep that the bounce was in order, intervention or not. Once it started, the skepticism about it was so widespread that it was bound to be much bigger than anyone expected. As it progressed, it was dismissed so widely and loudly that from a trader's standpoint it had nowhere to go but up... etc, once again acting as market always does, intervention or not."
Agree with the first part - we were due for a bounce for sure. However the second part I would dispute. Why the rally lasted so long may have been skepticism, or it may have been monetary injection from the Fed. Money injection plus light volume equals "market goes up." You prefer the "widespread dismissal" explanation (I believe that's probably one of your "articles of faith") while I would tend to side with the widespread money printing and the philosophy that new money has to find a home somewhere. That's my article of faith too, of course. :)
There may also have been a quid pro quo with the big banks - we'll give you 0% money and TARP, and you guys stop shorting and start buying with all that free money.
And then again, it might be all of the above. Humans like to have explanations as to why things happen. If we don't have evidence, we tend to construct explanations that go along with our belief systems.
I will note one bit of market perversity which I found interesting. At the end of money printing, many people (including me) was sure the bond market would tumble. Of course it did exactly the opposite. Europe might have had something to do with it, but to me it was a pretty striking example of the obvious trade being wrong...
Re: Three letters that nearly robbed me blind tonight
No big event or process has a single reason, it's always more complex so yes, there were a few. I am not even trying to find and list them, nor to say honestly I am interested in them... You misunderstand my "widespread dismissal" remark - to me it's not an explanation of the reason, it's a method of reading. As in: when I see this situation I take it as a signal for a certain market behavior - whatever the reasons may be.
One thing though I'd have to exclude from possible reasons... "There may also have been a quid pro quo with the big banks - we'll give you 0% money and TARP, and you guys stop shorting and start buying with all that free money" - this is not something that can happen in reality, IMO.
Re: Three letters that nearly robbed me blind tonight
This may be a difference in our approach. I really do try to understand the process, all the factors that go into why things happen. I like to understand the connections, which things affect what, develop a model for how the universe (or at least the trading world) works. I won't delude myself that I will ever come to a good understanding, but I really do like seeing the connections and how they affect one another.
For instance just yesterday I noticed the euro approaching the apex of a descending triangle, and even though my macro view of the buck is quite bearish, I bailed out of half my euro position, and shorted SPX at 1102, because I understood how the euro's moves are linked to the US market, and that a failed test of 1105 combined with the weak euro looked doubly bearish. Sure enough, the euro blew through support, and SPX dropped 30 points. That's why I like to understand linkages - between the Fed, money printing, bank action, currencies, commodities, and equities. One thing affects another, and when I get a signal in one area, I know what move has a good chance of occurring elsewhere.
That's why I would like to understand the impact of Fed money printing on equities and commodities. That way, if they start printing again, I will know what to look for. Perhaps it will manifest in the same way, or perhaps not.
You're right, I didn't understand your "widespread dismissal" comment. I think I get it now though.
iran sells euro reserves?
So Iran is selling euros for dollars. Must be galling for them. it also might be a signal that the euro decline is nearing a climax... I mean if Ahmadinejad is selling euros and buying dollars, who else could possibly still long euro???
http://www.bloomberg.com/apps/news?pid=newsarchive...
AMERICAN FUNDS
ALOHA!!
I follow the AMERICAN FUNDS because that is where my ex-brokers at Merrill Lynch and Morgan Stanley recommended I "park" my hard-earned income that I did not want to trade ... my "nest egg".
Look how large this fund is ... $900BIL, nearly $1TRIL and some 50 million investor accounts to manage. Amazing! I would say that wherever AMERICAN FUNDS moves they move some markets with them.
AMERICAN FUNDS
Who we are
* One of the nation’s oldest mutual fund families, serving investors since 1931.
* Distributed through financial advisers because we believe in the value of professional advice.
* One of the nation’s largest mutual fund families with more than $900 billion in investments and over 50 million shareholder accounts.
* Globally focused, managing more than $300 billion in investments outside the U.S.
Here is a link to the AMERICAN FUND and its performance of its various products. First notice how much lower the returns are after the "sales charge". Also look at the 5 year and 10 year performance compared to the recent rally 1 year gains. Then scroll down to the bottom and see how those "TARGETED FUNDS"(aka: Target Date Retirement Series) are doing for retirement at various dates. Those performance rates for retirement accounts tells me that even baby boomers with means are in trouble. Also if this FUND has been around since 1931 then where are the 50 year performance rates, why only 10 year max? Then take note that those gains even after the "sales charge" are pre-tax gains, except for the "tax-exempt" funds, so Uncle Sam still needs to take his cut, which further reduces investors "net" gains! The best results get even more dismal.
None of the AMERICAN FUNDS products have outperformed gold on a 5 and 10 year basis. With further stock market plunges in sight I doubt that 1 year performance will hold, which will severely impact the 5 and 10 year terms. Yet as I pulled my capital out of Morgan Stanley and Merrill Lynch back in 2002 and 2006(respectively) and into gold/silver and PM companies it was essentially "Don't let the door hit you on the way out!" How can any of their 50 million investor accounts retire on such long term dismal performance rates? More elderly Americans will be crowding the job market in years to come. AMERICAN FUNDS and its "investors" have a heck of a lot of catching up to do even if inflation using the government CPI rate is at 2%. The entire performance, especially for TARGETED FUNDS begs why management at AMERICAN FUNDS should get paid anything? More OPM in action! BUYER BEWARE!
LINK: https://www.americanfunds.com/funds/returns/alphab...
Re: Job Ads: 'The Unemployed Will Not Be Considered'
NYUGrad,
"I can also confirm this report. There is a stigma when hiring, that you want to try to hire the best talent from competitors or relevant fields who are still sitting on top of their game. Versus someone who might come cheaper but also has been unemployed for 99 weeks."
Everything you written here makes a good, logical case for business.
What I found happening in the past two decades is this:
Several clients, medium sized to Fortune 500 companies, fired (forced to take early retirement) even their best people (most experienced and highest paid) when competitors moved to cheaper labor countries. They were replaced by recent grads or worse, incompetent idiots — anyone cheaper — due to edicts from on high to cut X percent across the board.
The last 10 to 15 years I worked with some of the most frustrating company people I have ever seen — at times it was impossible to even communicate in terms my industry had used for generations. There was no one on the inside to mentor them, but the accountants were happy.
Our best local teachers got "20 and out at 55" with full pensions and two brand new teachers were hired for the same dollar as one had cost.
To meet racial quotas inexperienced (though at times bright) people were hired or kept while better workers were let go.
A combination of the above happened widely in government positions, but that has probably always been true.
Where I found your criteria mattered most was in small businesses where the owners were paying from their own money and looked for value first.
Re: Three letters that nearly robbed me blind tonight
Vad,
Yes, it is always more complex, especially when the human element (emotions and ulterior motives) is a large factor.
But I loved your simple and direct conclusion to attack the real problems, not the symptoms in a truthful, honest manner.
What a concept!
Instead we get legislation which no one could possibly read or understand even if there were time allotted. Obfuscation reigns supreme.
A Little Humour
http://www.abc.net.au/news/video/2010/05/20/290530...
Re: Job Ads: 'The Unemployed Will Not Be Considered'
Yeh. I can see your point of view at larger firms. There is a culture of fat to shield the top dogs at larger firms.
The only prob is smaller business make up most of the jobs and job growth.
G20 updates
http://tinyurl.com/2628uxk
Sun Jun 6, 2010 7:38am EDT
Analysis: G20 doesn't even try to put brave face on debt mess
excerpts --
"...And bank lobbying appeared to pay off as several ministers signaled that a lengthy phase-in for new capital rules, aimed at reducing the risk of a re-run of the 2007/08 global financial crisis, was now inevitable."
-------------------
"We are not out of the woods," said Egyptian Finance Minister Youssef Boutros-Ghali, who also heads the International Monetary Fund's policy-steering committee. ... "The measures they have been required to implement are fairly tough. And there are in some areas doubts whether they are able to continue implementing such tough measures," he told Reuters."
-------------------
GEITHNER ON THE LOSING SIDE
One reason why the talks were heated, in the words of a senior South Korean official, was a rearguard action fought by U.S. Treasury Secretary Timothy Geithner, who argued that restoring fiscal sustainability was a task for the medium term.
In a frank letter to his counterparts, Geithner warned that global growth would be sub-par if Europe -- especially Germany -- as well as China and Japan did not boost domestic demand to make up for the retrenchment forced upon overindebted U.S. consumers.
-------------------
The only crumb of comfort for Washington, according to one U.S. official, is that Berlin will not start tightening its belt until 2011. ....
"With Europe signing up for austerity, it is no wonder that pessimists such as U.S. economist Nouriel Roubini see the euro zone heading for stagnation if not recession."
Assessing the Chrysler Bankruptcy
"Chrysler entered and exited bankruptcy in 42 days, making it one of the fastest major industrial bankruptcies in memory. It entered as a company widely thought to be ripe for liquidation if left on its own, obtained massive funding from the United States Treasury, and exited via a pseudo sale of its main assets to a new government-funded entity. The unevenness of the compensation to prior creditors raised considerable concerns in capital markets, which we evaluate here. We conclude that the Chrysler bankruptcy cannot be understood as complying with good bankruptcy practice, that it resurrected discredited practices long thought interred in the 19th and early 20th century equity receiverships, and that its potential, if followed, for disrupting financial markets surrounding troubled companies in difficult economic times is more than small."
http://tinyurl.com/2745wnr
Efficient market theory?
If this is truly the conclusion, may the lord help us all:
"Vad posted:
Which in turn takes us to the final conclusion: there is just one way to fix things. As novel as the idea may be, this way is to actually fix them, cure illness instead of fighting symptoms. You want shorts to stop attacking a stock - make the company fundamentally sound. You want market selling to stop - make the economy sound, don't just tell us it is. You want Euro to stop sliding into abyss - create viable Union. If you don't - market will seek the point of the balance until it finds it - and only then will it reverse. Unless the subject of trading ceases to exist, that is... in which case they'll scream that darn speculators destroyed it. Yeah."
That sounds like textbook efficient market theory to me, no? Not trying to pick a fight, but just very respectfully pointing out that we've gone 180 degrees on this thread from paranoia about the PPT as puppemaster to the conclusion that the market is efficient, fair and just? I think we all know better than that. My point is that its quite amazing to see how one's discourse evolves to solid conclusions.
Re: iran sells euro reserves?
Dave, interesting thought and it makes sense to me. Even a dead cat can bounce. Also noted the last paragraph of your Bloomberg link re gold.
Re: Extreme up/down volume
Yes, the $NYDNV:$NYUPV ended up at 119.12 eclipsing the 80.16 reading on December 1, 2008. There was a strong rally that started December 2, 2008.
However, also of note that the VIX was at 68.51 on 12/1/08 vs 35.48 Friday.
No rally from here would be quite ominous!
Perhaps naive but I'm optimistic at least in the short term.
Sunday Brunch: Something to Believe In
http://ronsen.blogspot.com/2010/06/something-in-to...
The Pyramid of Success
Multi-time frame analysis
Four kinds of money?
As goes the Euro?
Price and Valuation
" Price and valuation seem to make no difference in this sorting of supposed sheep and goats. Regarding ' risk ', it all depends on price. Mr Market delights in switching labels. When he thinks nobody is looking, he switches the ' risky ' label on the ' safe ' asset and the ' safe ' label on the ' risky ' asset. Yet, not infrequently, its the supposedly risky asset that winds up preserving capital or even delivering capital gains. At a price, junk bonds are gilt-edged and treasuries are junk. At 20 cents on the dollar, sub-prime mortgages can be truly, if unofficially, triple-A. More often than not, investment saftey is what you find on the scrap heap ".. Jim Grant, from Fleckenstein Capital....
Fleck went on to note " these non-sensical ' strategies ' aren't designed to produces losses, but they can create quite a good deal of volatility, head fakes, noise and angst, while they are working their way to the trash heap "......
Re: Efficient market theory?
Of course the best way to fix problems is to actually fix them. To me that's like saying, "to get into heaven, you have to be good." Well, duh. What is particularly disheartening is realizing this approach is completely missing from today's policy selections. The lengths the worlds leadership have gone to postponing or avoiding solving problems is astonishing, (or pathetic, or shocking, pick your adjective), not to be believed if we hadn't actually lived through it.
Pick any pragmatic small businessman and ask him to lead the country, and we'd get somewhere. "What do you mean, the solution to a debt crisis is to increase spending? That's a load of crap. And you're fired, by the way."
Churchill comes to mind: "You can always count on Americans to do the right thing - after they've tried everything else." Only this time, it's gone global. We are all Americans now. Hopefully one day we'll get around to doing the right thing. May I live long enough to see it.
Of Possible Interest To Swing Traders
A series of three short videos featuring Komal Sri-Kumar, Chief Global Strategist of Trust Company of the West.
Double-Dip Recession....deflation rules short term....short gold & Euro
DENSA approved....well worth a listen.....from Morningstar:
http://www.morningstar.com/cover/videocenter.aspx?...
Re: Efficient market theory?
That's quite a leap, from what I wrote to efficient market theory... I don't think anyone who ever actually traded for any significant period of time would sign for that academic invention.
U.S. Lawmakers' Lack of Energy Policy Resolved by Force
Buried in a book recommended by kaimu:
"Julius Caesar, whose aunt, Julia, was the wife of Marius, founded his career on a famous remark of his uncle’s. 'The law,' Marius had said, 'speaks too softly to be heard amid the din of arms.'" – The New Deal in Old Rome, H.J. Haskell, p 141
http://en.wikipedia.org/wiki/Gaius_Marius
This Roman General's solution to poverty, Roman social unrest, and broad economic crisis was to expand volunteer military recruitment paid for by conquest. Simple. The Senate, dominated by big business interests (preservation of slavery = to today's personal debt crisis), was easily intimidated by his direct threats on their lives in the Forum. Social reform with the sword. Bye bye Republic; hello Empire. Will the U.S. stop pretending to be the global 'peacemaker' and overtly seize Chavez's massive 99.4 billion barrels or Iran's 136.2 billion barrels in oil reserves to shore up it's massive debts and energy dependence? Makes Chevron's 7.3 billion in reserves look like peanuts. What's the world's biggest and most powerful volunteer military force to do with its 11 Carrier Strike Groups? Who's today's Marius?
Libor stabilises after recent increase seen as "excessive"
"The dollar Libor-OIS spread, a gauge of banks’ reluctance to lend, was little changed at 30.6 basis points today. That compares with an average of about nine basis points in the first three months of the year. The spread surged to 364 basis points, or 3.64 percentage points, after the collapse of Lehman Brothers Holdings Inc. in September 2008."
http://www.bloomberg.com/apps/news?pid=20601009&si...
fear is up in the banking world. With every little peripheral state in Europe denying difficulties in servicing debt a speculator on credit risk has got to be asking themselves "am I feeling lucky?" I was amused by the little snippet denying Hungary's problem for a 3rd time in 3 days:
"June 5 (Bloomberg) -- Hungary’s economic situation is stable and recent comments about a possible default were “unfortunate,” the government said, pledging to stick to the budget deficit goal approved by the country’s creditors."
Good to see governments governing. But I guess that is my understanding of efficient market theory. Lehman's MK2 approaching? Fund investors in equities certainly seem to think so:
http://www.businessinsider.com/fund-flows-06-2010
Re: Three letters that nearly robbed me blind tonight
Dave,
I really want to provide a feedback to this concept of links between various factors - I consider this piece to be one of the most important cornerstones of understanding the markets. I however will have to do it tomorrow because I don't want to do it in a rush and family keeps insisting on Sunday being for something other than work :)
Re: Assessing the Chrysler Bankruptcy
Of course, it did help somewhat that the SEC "forgave" them $1.6 billion dollars in loans.
We taxpayers will be forgiven if we should make an honest tax "mistake" of say, $30,000 like Treasury Sec. Geithner. Right?
Re: Assessing the Chrysler Bankruptcy
Of course, it did help somewhat that the SEC "forgave" them $1.6 billion dollars in loans.
We taxpayers will be forgiven if we should make an honest tax "mistake" of say, $30,000 like Treasury Sec. Geithner. Right?
"To err is human — to forgive is divine." (Well, now we know who think they are God.)
Iran palying the currency shell game perfectly wrong
I thought this was hilarious.
In this article from Oct 2009 I stated:
Also seems like the buck could be used as a punishment tool for Iran. They want out of the buck....OK, let them sell into an abyss. then when they have taken a hit and got out of the buck, then rally up the buck, punishing Iran.
This seems to have played out nicely. Now the hilarious part. Iran sold their dollar assets into an abyss, now they want to sell their Euro assets (into an abyss), and buy back Ol' Bucky. See this article from Bloomberg.
http://www.bloomberg.com/apps/news?pid=newsarchive...
Goldman bet $35m against California
"Goldman Sachs made a $35m bet in the credit derivatives market against California, the biggest such trade in the past few years by Wall Street banks that underwrite the state's bond sales, according to information that the banks provided to the state.
California, the biggest issuer of US state debt, earlier this year began an inquiry into the trading of credit default swaps by its six major underwriters, who have earned $215m of commissions on its bond sales since 2007. CDS are privately traded derivatives that pay out when a bond issuer defaults."
http://www.ft.com/cms/s/0/75b12d70-703a-11df-8698-...
Shorting Canadian and Australian housing
Anyone have any comments on this theory, or better yet, how to do it with simple tickers that can be got at from the US?
Re: U.S. Lawmakers' Lack of Energy Policy Resolved by Force
I remember Marius, Dr. S. He tried to sell me a used chariot with a defective axle! He was a grain trader on the RME and had an office on the docks of the Tiber. That was the year that Toga hemlines bottomed out at the ankle.
That reminded me of the scene in the movie 'History of The World-Part I' where the gladiator was in the unemployment line. He was asked 'did you kill yesterday?' Answer 'no'. 'Did you TRY to kill yesterday?' answer 'yes'.
What's wrong with 11 carrier battle groups? Without them the Chinese would be sending gunboats up the Mississippi to protect their laundry interests in St. Louis...
I understand your points. The decline of every past civilization exhibits eerie parallels. Thankfully it takes many centuries to finally collapse. I suspect the next great conflict will include the use of chemical, biological and cyber disruptions. Iron bombs are sooo 20th century.
Re: U.S. Lawmakers' Lack of Energy Policy Resolved by Force
Ross, you're funny.
WIR
Another great WIR, Bill.
Possibly the most important one of the year.
Thanks for all that you do.
Regards,
BH
-------------------------
Live underwater feed from BP oil spill:
http://tinyurl.com/2w62yfu
Re: WIR - A big thanks to Bill
Let me get in on this, too, BH.
Bill, every once in a while I feel like a post is in order to let your know how much we all appreciate what you share on this site that you've brought to life.....As always, your insight is deep, and it is well appreciated here. Thanks again for your work and inspiration.
Link at the end of WIR!!
Bill, that link to the short clip of the ABC's satire was absolutely sidesplitting. Classic stuff.
Thanks also for your tireless efforts. There are thousands of us around the world who appreciate it and have learnt so much because of you
Cheers from Down Under
Ad
Re: WIR - A big thanks to Bill
Yep. Huge thanks to Bill once again for the WIR.
Now if you can just make it a black Tuesday instead of Monday. Kidding of course.
:)
WIR and Commercial Real Estate Observation
Interesting in the Reuter's article regarding G20 gameplan that the Volker Rule is more or less off the table. Suggests the bankster is still translating into the politicians' headsets.
Nikkei already down 3.84% on Monday morning. Black Monday it is then ...
Bill, you are indeed THE wizard. I'm all cash except the physical stuff thanks to your teachings.
Latest trend in commercial real estate around here in my college town: Naive buyers jumping in at big prices thinking seller financing makes it a good deal. Best way to cover an underwater debt with a sucker's obligation until default. Greedy private sector can play the bankster game too. Brokers are only too happy to assist.
Also, don't miss this front page Detroit post-urban reality check from this weekend's WSJ: http://tinyurl.com/2bbhrt3
Only enough law enforcement for homicide work leads to exodus.
Cheers.
Black Monday? That's what Mondays are for...
http://www.youtube.com/watch?v=h-B3bWwK_Bk&feature...
I think we're ready. Even Pz.
Nikkei down over 4% in Monday's Morning Session
http://e.nikkei.com/e/fr/tnks/Nni20100607D07JF468.htm
OMG.
Re: WIR - A big thanks to Bill
Sir William. You have exceeded even yourself. This weeks WIR was masterfully entertaining and insightful.
There has never been any question in my mind that the recovery would take the form of a square root sign. The question becomes whether or not we get an upward curving tail after a period of malaise. Given Timmy's take at the G-20, I would expect another round of QE and shortly.
A double copper roof in less than 2 years seems foreboding. Without construction somewhere, the base metals will glide down the slippery slope to perdition. Not a prediction. She can go both ways but not without the artificial support of debt demand. Print print print. I too hope we can have 'good Euros' as distinguised from 'bad Euros' within the next few years. D-Marks were my friend.
As for crossroads, I take liberty from a Yogi Berra quote that 'when you come to a crossroad, take it.' I think it was a fork in the road but no matter.
Monday-Tuesday this week is no Lehman event. It could be a close '87 but I doubt it. SPX 940 would be a gift so I will hone my Vorpal Sword to go 'snicker-snack.'
Bless you mi boy and may your road be free of stones.
Re: Black Monday? That's what Mondays are for...
Other than the poor scouts I sent out Friday the rest of the force is in the bunker (cash) or very close to it. I will cut those guys down myself if need be. I eagerly await the market action tomorrow. Defense will be played if price action dictates. As Bill noted, close attention will be paid to the loony and TLT for tomorrows decisions. Good night all.
wow tough love to embrace on a Monday morning
thanks for the heads up Bill.
NOISE OFF
ALOHA!!
Thanks Bill for the WIR ...
The power of disconnecting from the mainstream. I have been amazed at what I have accomplished by booting my HB&B brokers and turning off the noise and following my own path. Of course I took the "noise off" route a long time ago and threw my TV out the window!
I recall watching a quickie MAD MONEY episode in a hotel room a few years ago during a big down day in the global markets and Craemer was saying, "Blah, blah ... somewhere in the World right now someone is making a profit ... blah ... blah!!!"
Well ... here is one ...
LINK: http://tinyurl.com/26cyzwt
A three month chart that outperforms gold, silver, Dow, GDX, Nasdaq and even Apple! In America this company is totally unknown ...
where oh where....
The drop in mortgage rates against the flight to bonds is seriously freaky to a pummeled US populace. I sense rigid fear in the ranks freezing decision making. If you could pick a place to be working in the morgage banking world right now where would that be? Nebraska? Perth? Stockholm?
Re: Black Monday? That's what Mondays are for...
Pz- Your scouts found a way out, man. Right now, futures are green.