[8:28am ET] The equity market Bulls tried to carry on yesterday’s aggressive corrective move to the upside by booming the banks in overseas markets again today. While little enthusiasm is apparent for stocks in most sectors, clearly there is buying pressure in the banks of China, India, UK, France, Greece, Ireland, among others.
While I don’t know the reason and I have not read anybody else make reference to this fact, I interpret the data as being a coordinated action by central banks of the G-20 to try to hold up the share prices of these companies until they are to get additional funding. In other words, the Interventionists are screwing with the capital markets again.
We are used to the intervention at this point, but it would be appropriate, I think, to be properly informed in advance of central bank action so that all of us can plan accordingly, rather than just Goldman Sachs, JP Morgan and the agents of these central banks. What is happening today, with central banks telling the public the markets are transparent and fair to all, is nonsense and only serves to undermine the public’s confidence in the capital market.
Intervention in the extreme as we saw in 4Q1999 and 3Q2006 always ends badly.
Like wind and water, there is a flow to capital markets, always seeking to find a natural balance. For some reason, the Interventionists have always believed they are more powerful than the forces of nature, and clearly they are not. I recommend they try to ground themselves by understanding the principles of feng shui.
http://en.wikipedia.org/wiki/Feng_shui
Comments
Cara 100 Ratings Changes
Good morning.
There are NO Cara 100 Changes to report at this time.
Why we shouldn't believe government numbers
http://news.yahoo.com/s/ap/20091030/ap_on_bi_ge/us...
qid
long qid at 23.03(short nasdaq)
Cash for Clunkers - outshout the nay sayers?
There is an interesting piece on the effect of the “Cash for Clunker” program at the link below. Reportedly the Gov (Obama’s people) has challenged Edmonds.com on their opinion that the CfC program cost taxpayers $24,000 per new vehicle that was sold. Here is a clip from Edmonds’s response.
“ ... It is also claimed we missed the possibility that Cash for Clunkers generated excitement and consumers bought vehicles even if they didn't qualify for the program -- a claim that has been widely supported by anecdote but by little analysis. It does, after all, seem a bit odd that masses of consumers would elect to buy a vehicle because of a program for which they don't qualify -- doubly so when you add in the fact that prices shot up during Cash for Clunkers, creating a disincentive to buy. [Note: I saw and reported here on this, myself. In my area, I actually saw dealer prices jump about $4,000 going into the program with the result that the dealer got the incentive on each car that was sold and not the consumer - sucker born every minute concept from a car dealer?? - ng.]
Finally, the White House claims that the increase in fourth-quarter production reported by the car manufacturers can be attributed to Cash for Clunkers. But here is a better reason: the economy is recovering accompanied by improved car sales. No manufacturer increases production -- a decision with long-term consequences -- based on the 30-day sales blip triggered by an event like Cash for Clunkers.
With all respect to the White House, Edmunds.com thinks that instead of shooting the messenger, government officials should take heart from the core message of the analysis: the fundamentals of the auto marketplace are improving faster than the current sales numbers suggest. ... “
More at link:
http://www.businessinsider.com/edmundscom-fights-b...
What is the actual truth in the matter - "only the shadow knows.."
spot
Personal Income and Outlays
Released on 10/30/2009 8:30:00 AM For September, 2009
Prior
Personal Income - M/M change 0.2 %
Consumer Spending - M/M change 1.3 %
Core PCE price index - M/M change 0.1 %
Consensus
Personal Income - 0.0 %
Consumer Spending - M/M change -0.5 %
Consensus Range
Personal Income - M/M change -0.2 % to 0.2
Consumer Spending - M/M change -0.8 % to 0.5 %
Actual
Personal Income - M/M change 0.0 %
Consumer Spending - M/M change -0.5 %
Core PCE price index - M/M change 0.1 %
Highlights
The consumer sector softened in September in both income and spending. Personal income in September was unchanged, following a revised 0.1 percent gain in August. The September number matched the market forecast for no change. The wages and salaries component, however, declined 0.2 percent after rising 0.2 percent in August. With cash-for-clunkers having expired in August, consumer spending in September fell significantly on a plunge in motor vehicle sales. Personal consumption expenditures dropped 0.5 percent after a 1.4 percent surge in August. The September decline was led by durables, which fell a monthly 7.0 percent. Nondurables increased 0.7 percent while services advanced a moderate 0.2 percent.
Inflation was subdued in September. The headline PCE price index eased a little to a 0.1 percent increase, following a 0.3 percent jump in August. Core PCE inflation was steady with a 0.1 percent boost in September which is the pace seen for several months.
The bottom line is that the consumer sector weakened in September but in line with expectations. The news itself should have no impact on the markets since expectations were met. But equity futures are down on profit taking and belief that yesterday's run up was a little too much. Softening a possible dip in equities is Chevron's pre-open announcement of earnings beating estimates. Markets now will be focusing on the consumer sentiment index coming up shortly this morning.
Market Consensus Before Announcement
Personal income in August edged up 0.2 percent after a 0.2 percent increase the month before. Also, the important wages and salaries component also rose 0.2 percent in the latest two months. Consumer spending spiked on cash-for-clunkers auto purchases as personal consumption expenditures surged 1.3 percent in August, following a 0.3 percent rise in July. But spending in other components was generally healthy. Inflation was mixed as the headline PCE price index jumped to 0.3 percent while core PCE inflation was unchanged at 0.1 percent. Looking ahead, at least the wages & salaries component is likely to dip as average weekly earnings slipped 0.2 percent in September. Personal consumption expenditures are likely to be mixed. Overall PCEs are likely to drop in September as unit new motor vehicle sales plunged a monthly 34.6 percent for the month. But retail sales excluding autos rose 0.5 percent, indicating that outside of autos, PCEs should be moderately healthy. For inflation, look for moderately firm numbers as the headline CPI rose 0.2 percent in September as did the core CPI.
Employment Cost Index
Released on 10/30/2009 8:30:00 AM For Q3:09
Prior
ECI - Q/Q change 0.4 %
ECI - Y/Y change 1.8 % 1.5 %
Consensus
ECI - Q/Q change 0.5 %
Consensus Range
ECI - Q/Q change 0.3 % to 0.7 %
Actual
ECI - Q/Q change 0.4 %
ECI - Y/Y change 1.5 %
Highlights
Third-quarter wages popped higher compared to the second quarter but not at all compared to the year-ago quarter in what are mild results for the employment cost index. The employment cost index, a measure of total compensation, rose 0.4 percent quarter-to-quarter, the same rate of increase as in the second quarter and 1 tenth less than the 0.5 percent gain that was expected. What pressure there is is in the wages & salaries component which rose 0.5 percent vs. two consecutive quarters at 0.2 percent. The benefit component lagged wages, at a gain of 0.3 percent, mild but still a 1 tenth increase from the prior two quarters.
Year-on-year comparisons are the lowest in the 27-year history of the series. Total compensation is up only 1.5 percent, down sharply from 1.8 percent in the second quarter, with wages & salaries up 1.5 percent and benefits, which historically have been a center of concern for policy makers, up 1.6 percent. But private industry, a reading that excludes government employees, shows much less year-on-year pressure with total compensation up 1.2 percent and the benefits component up only 1.1 percent. The cost of labor is not yet a concern for policy makers who instead are focused on the critical need to boost the labor market.
Market Consensus Before Announcement
The employment cost index for civilian workers rose 0.4 percent in the second quarter, up from a 0.3 percent rise in the first quarter. But the year-on-year rate of increase eased, to 1.8 percent from the first quarter's 2.1 percent. Surprisingly, pressure in the second quarter, despite a weak labor market, was in wages & salaries, up 0.4 percent vs. the first quarter's 0.3 percent. Benefits eased to an increase of 0.3 percent vs. an increase of 0.5 percent in the first quarter.
paint the tape
even if we have a sell off this morn (profit taking) i am concerned that hb&b may try to paint the tape later - any thoughts?
Re: paint the tape
ike- I see the CC notes mention 1039 and 1080 as levels to watch.
No positions right now.
Cara 100 Update
PG - estimates boosted at Barclays. PG 2010 and 2011 EPS estimates increased by a penny to $4.10 and to $3.96 from $3.93, respectively. Maintain Overweight rating and $64 price target.
PG - numbers raised at Government Sachs. Shares of PG now seen reaching $63, Government Sachs said. Estimates also increased, to reflect improved sales guidance. Neutral rating.
XOM - estimates reduced at Government Sachs. XOM estimates were lowered through 2013. Company has cut back on its share repurchase program. Neutral rating and $82 price target.
consumer sentiment: 0955 ET
I'm going to guess the numbers won't hold up to expectations, given that other recent consumer sentiment surveys have been just so-so, and PCE is down a bit. It will be interesting to see how the market reacts. Futures are already down a bit.
Now how might this inform my trading? I'll be more suspicious of long setups around 0955 ET. :)
Adding to SPY puts
Despite yesterday's rally, according to the P&F bullish percent indexes from Investors Intelligence Data, all bullish percents for the major indexes declined, which means supply was ahead of demand. I'm therefore adding to my SPY puts today.
Chicago PMI - higher than consensus 54.2 vs. 48.5
Released on 10/30/2009 9:45:00 AM For October, 2009
Prior
Business Barometer Index - Level 46.1
Consensus
Business Barometer Index - Level 48.5
Consensus Range
Business Barometer Index - Level 47.1 to 51.0
Actual
Business Barometer Index - Level 54.2
Re: Chicago PMI - higher than consensus 54.2 vs. 48.5
Bear roast again?
SLW- Here we go (again)
Buying, allen?
Consumer Sentiment - in line 70.6 vs 70
Released on 10/30/2009 9:55:00 AM For October, 2009
Prior
Sentiment Index - Level 69.4
Consensus
Sentiment Index - Level 70.0
Consensus Range
Sentiment Index - Level 68.0 to 74.0
Actual
Sentiment Index - Level 70.6
Highlights
Consumer confidence held steady and at least didn't deteriorate further in the second half of October, according to the Reuters/University of Michigan consumer sentiment index that rose 1.2 points from mid-month to 70.6, a level however that is nearly 3 points lower than September and confirms weakness seen in Tuesday's monthly consumer confidence report from the Conference Board. The improvement from mid-month was split evenly between the assessment of current conditions and future conditions, which in this report show current conditions slightly ahead of expectations (a big contrast to the Conference Board's report where current conditions are severely lagging expectations). One-year inflation expectations rose 1 tenth from mid-month to 2.9 percent for a 7 tenth gain from September that no doubt reflects gains in gasoline prices. Five-year inflation expectations are unchanged, also at 2.9 percent. Today's results are a marginal positive for the outlook but are having no effect on the markets.
Market Consensus Before Announcement
The Reuter's/University of Michigan's Consumer sentiment index for mid-October fell back more than 4 points to 69.4. Weakness was concentrated in the expectations index component which fell nearly 6 points to 67.6. The current conditions index dipped almost 1-1/2 points to 72.1. On the positive side, the latest overall number was still much improved from July and August’s depressed levels and especially from latter 2008.
SLW- trying for a single @ 12.60
...
UNG @ 10.67
Just closed Dec call 8 @ $2.7 with $0.30 gain.
It's not bad for 12.5% gain in 1 day.
Consumer Sentiment Slips on Debt Worries
U.S. consumer sentiment slipped this month as Americans worried about their personal finances and focused on paying down debts, though confidence in a national recovery remained high, a survey showed Friday.
The Reuters/University of Michigan Surveys of Consumers said its final index of sentiment for October slipped to 70.6, from 73.5 in September.
Overall consumer confidence remained at its highest level since September 2008, when it stood at 75. It collapsed to 57.3 in October 2008. This month's reading was also a touch above the median expectation of 70.0, according to a Reuters poll.
But while their view of the national economy improved, "consumers continued to voice very dismal assessments of their personal financial situation," the report said.
"These grim financial evaluations, coupled with intentions to increase savings and decrease their indebtedness, will limit any rebound in consumer spending."
The index of consumer expectations fell to 68.6 from 73.5, while the current conditions index edged up to 73.7 from 73.4.
Re: SLW- trying for a single @ 12.60
2nd, you should look at TSX SLW numbers are off a little
Extensive Chart Analysis video series - for "Cheapy" and others
For community members like "cheapy" I want to offer these video resources i observe and learn from. I watch them without excuse religiously every day. This amounts to more class time than prob my entire 4 yrs at NYU studying PE Ratios and FIFO/LIFO.
The Chart Pattern Trader
http://bit.ly/j03Ko (each vid is 20min plus and you can go back prob for several yrs! he posts videos every night on each trading session) this is a cannot miss!
TheStockmentor.com
http://thestockmentor.com/index-2.html
This site is fairly new to me but i stumbled on it a few weeks ago. here is an excellent video from today, http://bit.ly/1CtaKH. He provides both cases for correction vs rally.
This is almost 40 minutes of charting videos every day, for Free! My recommendation is to use resources like these to learn to fish, and not expect stock tips. ask yourself "Why are they looking at the charts the way they are. do i agree/disagree?" I then use stockcharts.com to make my own trendlines and view my favorite indicators and analyze the charts on my own.
Disclaimer: Chartpattern is free but he often asks for donations/contributions to keep things going. thestockmentor sells an email newsletter and tutoring. But you dont have to pay a dime to go and view their videos.
All you have to do is invest some time, stay consistent and develop a routine of learning, and be ready to think and plan.
In accompaniment of these daily video resources, I highly recommend you pick up Bill's book, "Lessons From the Trader Wizard"
Re: SLW- trying for a single @ 12.60
Current numbers
TSX 13.56 -0.44 -3.14% 282,172
NYSE 12.54 -0.58 -4.42% 269,300
note Toronto % lags behind NY, who could be arb ing this ?
Re: SLW- trying for a single @ 12.60/ OFF 12.55
struck out
home purchase "help"
Loannetter - (carried over from Thursday) - Individually it may feel great to put your EMT in a home with a 102% loan and a taxpayer funded home buyer credit, but in aggregate, enabling people who could not afford down payments puts them into homes where they do not have a financial stake to stay there. Historically those "no money down" loans have not performed well. Again, I'm speaking of the policy, in aggregate.
So what's the result of your anecdote?
Sure your EMT is happy - he's got nothing to lose, he's got a free call option on the RE market in his area, courtesy of the taxpayers. And if it goes south, he can always walk away. You are happy - you get the business, and you get to feel good at the same time. And the bank selling the foreclosure is happy too, since with more buyers in the market getting these free call options, the prices they can command for their foreclosures goes up (or at the very least, it goes down more slowly). That's just how economics works: increasing the number of buyers via "no money down" loans makes for higher prices than otherwise would have been the case. If we didn't learn that from the bubble, what did we learn?
Of course folks that fund your party may not be as happy. Speaking as one of them, I can tell you, I'm not happy at all. Your anecdote aside, I still feel its terrible policy. Its how we got here in the first place. I'm still not a fan, regardless of how happy you both are on your EMT's free call option.
If we are to judge policy on how happy and deserving the select beneficiaries are, why not give all those EMTs a free home. They'd be absolutely ecstatic, right?
SRS @ 10.15
Just Friday cruising.
Bill, Good Morning. Am I wrong to think that if ' Stagflation
rears its ugly head. ( as you and Fleck have mentioned as a real possibility ), will that not, in fact, be a strong positive for precious metals ? Thanks for all..... Robert.
Re: SRS @ 10.15/ OFF 10.10
That's it. Not my day.
Re: SLW- trying for a single @ 12.60
allengg, re SLW vs SLW.to, as of 10:46AM the Canadian dollar was off 1.3% vs USD.
Today SLW in USD is worth 1.3% more in CADs, so nominally, the loss in SLW is smaller by the same percentage. The exchange rates change every second, so this changes all the time.
' Stagflation '............
... http://www.washingtontimes.com/news/2009/jun/28/wh...
Do you feel we may be resuming the slide today..
USD index is higher today, VIX is back above 25, market indexes across the board show weaknes. Traders mostly don't keep cash over a weekened and will sell the yesterday's rally today if they have not done so already.
Did the Cat fell off the roof today after its strong bounce yesterday? I just wonder..
NYUGrad, can you comment plz?
Re: Do you feel we may be resuming the slide today..
My opinion is going to sound like a broken record so i will refrain from going into detail. simply put, i am watching for higher high or lower high. Higher low or lower low. Until prices can show a higher high, this is a downtrend. buying volume vs selling volume.
Re: Bill, Good Morning. Am I wrong to think that if ' ...
baz22,
stagflation is a killer for stock and bond prices generally because wealth is not being created quickly and yet interest rates are rising. This happened in the 1970's. Today's Middle East folly was Vietnam back then, and we are early in the cycle. Gold was great back then, and it should be now as well. But what you need to do is avoid the periodic downdrafts in the gold price cycles caused by interest rates and bond yields rising too fast and moving the $USD higher. That's when you need to step aside for several weeks, as I have done right now, waiting for any $USD strength to play for a while. Then I will be back into the gold and silver miners in a big way.
Might be prudent to advance a few puts on HGSI....
never know if there will be an April 28, 09' repeat ( of the Bear raid on DNDN )... This baby has been riding high since the $ 2.00 days not so long ago... Is Monday not the day scheduled for the second clinical reults for Lupus ?
Re: SLW- trying for a single @ 12.60
the exchange was factored in, check it here http://www.xe.com/ict/
my point was possible arbitrage, by (say) G-S ?
call me crazy....
gold's action overnight was geometrically odd.
look at the kitco 3 day overlay chart and tell me something is weird.
volumes are all over the map w/ different gold stocks.
while it looks like we erased any gains made yesterday something seems fishy, something is not right. its almost too perfect of a USD bounce here.
too many trying to call the top, to avoid getting stung again by a landslide decline.
mabey people are just that much smarter than we think and have learned the lessons of excess.
you might recall my exit from gold last week, my posts tell the real-time story and ive been wrong more often than right, but i just bought back into the miners in this market.
i feel an odd sense of guilt that im going against my own instinct and buying here. i have a fundamental sense that gold is going to fall, yet i still bought.
ill have to let this sink in for a few weeks before declaring im right or wrong on this trade, im giving it some wiggle room considering the volatility here as prices could move south very very quick.
i wonder if the wall of worry isnt so much a wall but a mirror?
Re: Do you feel we may be resuming the slide today..
Indicators on "resuming the slide":
Bill's two favorites are going down - people are selling risk.
XLY:XLP (cons discretionary vs consumer staples) and SLV:GLD.
One of my favorites too: USO:GLD, is also moving down as well.
Vad might point you at volume, or at the $VIX. Alas, I don't know how to get daily volume comparisons without having to do actual addition.
Re: home purchase "help"
davefairtex -
Anecdotal use of EMTs (and U.S. Soldiers) as the deserving beneficiaries of inflated home prices and crushing personal debt is the antithesis of the deceptive services provided by Vassals of Lord Freddie and Lady Fannie. Blame the declining home prices on HVCC and those mischievous appraisers determined to be deal killers for the fixed fee of a few hundred bucks. Pray tell, what's the appraiser's motivation?
The truth is that U.S. housing prices will crash much further when the home tax credit ends. The Obama adiministration is just pulling housing demand forward to delay the trillions more that will become necessary to shore up the derailed slowmotion trainwreck now socialized into the mother of all credit collapses and magnified 1000x by a nuclear derivatives time bomb.
http://tinyurl.com/6fy5gd
Cheers.
How about that.... Fellow on CNBC just quoted Bill's purposed
percentage decline ( 7 - 17 % )..... Maybe bubblevis. should read Bill's thoughts more often, eh ?!... Naw, GE would lose too many sponsers..!!
Re: SLW- trying for a single @ 12.60
Humm, SLW closed yesterday at 13.12, SLW.to at 14.00, delta 6.70%. Today delta is higher by 1.5%, so 8.20%. My numbers today match this almost exactly, but it's a wildly moving target. Arbitrage probably happens all the time, but SLW is such a small fish.
Gold : ... ABX still has 1.9 million ounces to purchase
in their hedge.. ( thoughts ?? ) ... My favorite, AEM , reduced production expectations for the remainder of 2009 by 5 %, and lowered 2010 expectations by 10 % ... They did, however, set an Aggressive Production schedule for this coming Fourth Quarter ( which is now one-third over with )... Are they following Tech.'s lead, and lowered the bar for next year ?? ...
Re: qid
closed my qid - in premarket 23.03 sold 23.42 - gather those rosebuds - who used to say that? - NEXT - now what? back to the fishing pond
Re: qid
2nd,
left a chunk on the table again - a win is a win though
Playing the failure
We had one unusual setup today, far from garden variety. I call it "trading the failure". Worked like charm, too, for a very nice intraday move. I will make a screenshots of it for the CTA conference where I give more detailed explanations. For today though make sure you read the discussion of it in our trading log starting from 11am; log will be posted after market close, as always.
Re: Playing the failure
Vad, it's not nice to tease.
Re: Playing the failure
Vee haff vays to make you tell us effree ting
AMZN, MSFT
Both look like descending triangles on the 60 minute charts. Moreover, the charts are getting close to resolution...
FD: I'm short both of them already
But, my all time favorite.. ' Oh Brother, Where art Thou '......
Pete: " I've always wondered, what's the devil looked like "....
Ulysses Everett McGill: " Well, there are all manner of lesser imps and demons, Pete, but the great Satan hisself is red and scaly with a bifurcated tail, and he carries a hay fork ".
Tommy Johnson: " Oh no, No sir. He's white, as white as you folks, with empty eyes and a big hollow voice. He likes to travel around with a mean old hound. Thats right "..
Ulysses Everett McGill: " Why are you telling our gals that I was hit by a train " ?
Penny Wharvey McGill: " Lots of respectable people have been hit by trains, Judge Hobbie over in Cookville was hit by a train. What was I gonna tell them, that you got sent to the penal farm, and I divorced you from shame " ?
Ulysses Everett McGill: " Uh, I do take your point. But it does put me in a damn awkward position, vis a vis my progeny "
Re: Playing the failure
Not teasing Dave, just will have to leave right on the market close so alerting in advance... Olympic torch relay is going to go through the spot about 5 minutes drive from my house, so thought I'd go and have a look...
Allen, LOL! I see Threeiish studies go well
leading us down today are:
Gold Miners: -4.11%
Oil & Gas: -3.68%
Solar: -3.30%
Financial: -3.05%
Best performer: healthcare: -0.46%
Re: Do you feel we may be resuming the slide today..
Well, looks like the feeling is now confirmed, any one in agreement here :)
Re: Do you feel we may be resuming the slide today..
SPX is rigt at Wednesday's low now: 1042.
XLE is through its Wed low, but GDX and XLF are not.
For a down day........
... http://www.youtube.com/watch?v=OF5OtSO3j6I
Re: leading us down today are:
just to add to this, gold mining stocks have been underperforming for a few weeks now, and their beta to the market has been particularly high this year.
Re: home purchase "help"
Davefairtex,
the result of my EMT couple now able to build personal equity in a home is that it has other benefits to the local economy than just my commission. This new homeowner is now engaged in the joys of home ownership including paying property taxes which help pay for the very public services like schools and EMTs. They invest in their homes by making trips to Home Depot and appliance stores. They start to take more if a role in their local community as a vested owner. Not to mention the ongoing tax writeoffs they get for having a mortgage. In short we are encouraging citizenship over peasanthood.
I am frankly surprised you would be angry at helping familes afford to buy a home. We are not talking giving houses away. We are talking about helping local economies and becoming contributors on several levels. New home owners add to the bottom line of your precious CD swappers by paying them interest and funding their game against which you trade. I don't feel your outrage at the ginormous multimillion dollar bonuses gifted to your corporate cronies from our taxes. Did they somehow earn your respect for their craftiness in bringing our markets crashing down?
CIT is down 20%++
The small business owners have spoken!
There is no recovery going on. Just go walk around your local town. Try selling your home. Try finding a better quality, higher paying job.
Re: CIT is down 20%++
Looks like ma and pa kettle aren't buyin the koolaid anymore.
Re: qid/ Yesterday 10000 was back on the table, today the crash?
Nicely done, Ike.
Still think cash is an excellent alternative to being short during a sell-off.
Reasons why trades fail
Hi,
Being an engineer (equipment reliability at that) I tend to always analyse why things fail and what can be done to improve it. From my experience most systems fail not by design but due to human factors (poor management, training, lack of ownership, poor behavior, lack of standards, etc...).
For example this morning I traded 1000 shares of SLW.TO saw a setup this morning, bought in at 13.49 and jumped out 13.52 with a $10 gain avoiding loss. I also had a trade with 10,000 shares of SVM.TO with the same setup but was too slow jumping out. My greed (large number of shares) was a factor in me losing $420. On the plus side I have good runs at the moment with HOD.TO (in at $8.48) and HGD.TO (in at $5.58). I will sell these by days end. I usually sell too early (I suck at letting winners run).
The point of my story is I am building a list of reasons why trades fail. Below is what I have gather to date from the net and from my past experiences.
If you know of others please let me know. (top 10-20 max). I will be adding these to my stock trading tracking spreadsheet.
Root Causes
1 Chasing prices
2 Emotional
3 Gamble
4 Impatience
5 Inability to cut losses
6 Inability to let profitable trades run
7 Negative News on stock
8 No plan
9 Trading against trend
10 Listening to talking heads
11 Greed
Re: home purchase "help"
loannetter - I know you are a well meaning person, all I can assume is that your judgement is clouded by your personal involvement here, and your desire to help people buy houses. I'll try once again, and then I'm done.
Every element of your first paragraph could have been written at the hight of the bubble. This very same well meaning but misguided attitude helped CAUSE the bubble.
It is my contention that "helping families buy homes" using zero down loans IN THE AGGREGATE makes homes LESS affordable, not more, because it brings MORE BUYERS into the market, thus artificially driving home prices higher. Banks end up the winners, since mortgages are bigger, as do current homeowners who can sell at higher prices. States are winners too, since property taxes are higher on the new homeowners as well. New homeowners have massive mortgages, higher property taxes, and prospective buyers who do not qualify for "help" have to compete with those who do for the available homes to buy. Thus, over time homes are LESS AFFORDABLE, not more.
And I get to fund it all through my taxes. It's like we learned nothing from the past 6 years of bubble financing.
As for your suggestion that I somehow am in favor of bankers, their large bonuses, the bailouts that enabled it all, and the rest - I'm going to dismiss your red herring for what it is. Go through my other postings if you want to find evidence of my banker cronyism! Sheesh.
Who ( and How ) in India, is buying US goods ?
Do you really believe they ( people of India ) have the capital to pay for American goods ? And remember, the average India citizen Makes More than the average China citizen.... http://ijobs.blogspot.com/2006/10/payscales-in-ind...
Re: CIT is down 20%++
I think some of this selloff has to do with CIT...
USO giving it all back
Oil has given its gains from yesterday all back and then some. For a change my long gold short oil trade is looking happy today.
Re: home purchase "help"
I usually don't like to quote other blogs, since I think many of us read the same ones anyhow, but this particular topic has been on my mind for a while, and Mish has a post laying out better than i could.
http://globaleconomicanalysis.blogspot.com/2009/10...
Bottom line: any time you provide debt funding for anything, the pool of money increases, which is inflationary to the value of what is being funded. House prices would never have reached 400K+ with 20 year, 20% down mortgages. Tuition would never have reached the ridiculously lofty heights they have without student loans. And car prices wouldn't have jumped without cash for clunkers. And median home prices wouldn't have rebounded without the 8K housing credit.
SRS stop not hit, sold DGP and picked up more FAZ
Lucky me -- SRS did not hit the sell stop order I placed on it at $9.88 last night. It would be a bummer to be without SRS on such a day. :)
As I noted last night, S&P rose for at least 4 straight days after each of the last 3 lows it made during the past 3 months. Today's action shows clearly that yesterday's advance was not the start of the move to new highs. Moreover, the fact that such an advance after a 6% decline from the market top did empower the "dip buyers" to keep piling in until new highs were achieved shows that the market mood has definitely changed and a medium- to long-term downtrend might indeed be in place. With this view in mind, I picked up some FAZ a little while ago at $22.34, for 8% of my portfolio. Also, after seeing that gold is below $1050 (which I decided to use as my "line in the sand") I decided to take a loss on my DGP position and closed it at $24.18 (in at $25.49) for a 0.3% hit to my portfolio. Still keeping my SLV, GLD, and UXG positions as long-term "core" holdings, which I am "hedging" with SRS and FAZ.
Vadym -- I didn't intend to create a "contest" with mentioning last night that my sell stop order on SRS went "against" your point of view. I don't like any ego contests myself. I was sincerely expressing my apprehension of placing an order that seemed to go against your medium-term view of the market. It was late at night and I was just writing the thoughts that were going through my head. I'll try to remember not to mention anyone's name when stating my rationale for a trade.
Out of QID @ 23.94
After a long time of lurking and doing nothing, I finally got an old retirement account rolled over into an IRA on 10/1. This is my first trade.
Bought at 22.02, 5% of portfolio, and held 5 days. I have a full time job and just cannot do the constant watching of day trading. What I thought was this market has a good probability of a significant retracement, and a lower probability af further advance. What I saw was a market that is bouncing up and down without clear direction. I bought at one of the spikes in the S&P with the intent of finding an exit point before the weekend. I'm back to 100% cash and smiling today!
May try this again, but I'm really looking forward to loading up on some Cara 100's after the retracement I think is coming has run its course. Now, we just have to see...
Sincere thanks to all those who post for the education!
out of FAZ at $22.75
Just as I was typing my previous message, I saw FAZ making a spike up, and so I decided to do a little "day trading" around my idea of holding more ultra-shorts and sold my FAZ position into that spike. Will re-enter at around $22.60, which will be the lower trendline for FAZ for today.
Re: home purchase "help"
Thanks Papa for your post. That's what I was trying to say, but not nearly as well.
Re: Do you feel we may be resuming the slide today..
Well, well, even injecting $1 billion into CIT by Carl Icahn is not helping the market, The reversal continues on the DOWN side and all Europe closed down sharply. I guess folks I am going to make a DARING CALL HERE TODAY and say the CRASH has just started and will continue for few days as Bill said to shave off 10 to 17% of the market in a steady correction. Feel free to comment if you like..
Thanks.
Tick by tick headache
Is anyone else tired from watching the ticks! Feeling like some strange POMO buying will come in at any moment and reverse this all?
Fact is I see many tickers at eod Wednesday lows and in a holding pattern, will they breach?
Companies that had ' splits ' in the past year.......
I do believe, at This point, there is going to be some serious selling especially in the ' 2 for 1 ', before years end.....
Re: out of FAZ at $22.75
Man, I thought FAZ going to $22.75 was a spike up -- going to $23 was a REAL spike up. Now, picking up FAZ at $22.75 will feel like an intra-day bargain (as it would now seem to coincide with lower trendline in FAZ), and so I just placed a buy limit order at that level to "trap" FAZ if it falls that low. It may not get that low, however, and so I just picked up at $22.87 1/5 of the shares I sold at $22.75 as a way of "scaling into" FAZ.
reloaded FAZ
As FAZ was retreating from its spike, I bought another 1/5 of the shares I recently sold at $22.80 and then re-loaded the full position at $22.75.
$VIX: another indicator
The $VIX is just going nuts. Its +25% today. Incredible. Those puts just got a lot more expensive.
And interestingly, TBT isn't getting killed as much as it might, down only -2%.
Gold is holding up well -0.75%, silver not so well -2.6%, and oil is getting its butt kicked -3.45%.
And the buck, while up, doesn't seem to be the major driver of today's market performance.
I think it has an influence, but it's definitely not calling the shots.
$VIX 25.5%
time go long?
Cramer said " The Funds will defend their positions Friday "...
How ???... Cash flow into the equity oriented Funds has been the Weakest in a year, since August... The Funds are at their lowest ' cash level ' in a year... Are they bold ( crazy ) enough to buy calls or sell puts with what they have left ????
Re: Tick by tick headache
navid--the esz9, nqz9 just did...now the follow-through but which way?
out of FAZ at $22.69
So as not to let a profit turn into a loss, I exited all my FAZ (temporarily) at $22.69.
Quote of the day from Tout TV
I'd like to hear your best. The one I just heard from the Bloomberg anchor is pretty good:
"The market is down -2.5%, off its lows of the day if you can believe it."
Since when did Bloomberg become a social network? I thought they were supposed to be financial reporters.
I really believe that whoever is pulling the puppet strings at Financial Television ought to be thinking about the damage they do.
This anchor just went on to say "We have a massive flight to quality underway" -- well, no, I don't think so.
Who writes their stuff anyway?
omg, the same Bloomberg anchor just called the worst performing industry groups, "the leading laggards if you will." It just cannot get funnier than this.
puts & calls
All my puts and calls, both short and long, have suddenly gone up in value today. Its an interesting and quite visible effect. Even some whose underlying hasn't moved very far today have moved visibly higher. I guess that's what they mean when they say "I'm going to buy volatility." Even if the underlying doesn't move that much, you can make some serious cash if people expect it to.
back into FAZ at $22.77
My previous decision to sell FAZ at $22.69 was an impulsive one -- that price level was close to the lower trendline for FAZ intraday and so it was actually a "bargain" level to BUY at. Realizing my mistake, I reloaded FAZ at $22.77. I am stopping my day trading for now and going to see what happened at work while I was on vacation. :)
into SLW at 12
Why: ascending triangle on SLV, the buck seems to be tracking sideways, and SLW may be at a bottom. Stop under the low. I'd write some puts, except its more difficult to put stops on them.
Re: home purchase "help"
Davefairtex,
I live in smalltown rural America with many RE speculator's bubble priced homes (80/20 combo purchases!) on the foreclosure market. We are not inflating prices by offering a tax incentives IMO, at least not here. Ask any real estate investor around here who owns a couple of rentals what they do when a renter's husband has a work related injury. The safety net is flimsy workmen's comp and inadequate insurance so this couple is now distressed and stops paying their rent. RE investors are offering lease options and private financing to get out of their overleveraged positions. The condo market is even worse.
I don't help people who can't qualify to buy. The problem this market has created for many wouldbe buyers is having to spend their savings to stay alive when the local factory fires one spouse. The other very real problem is a reactive tightening of guidelines that has frozen credit for most small business owners. The hype on talkinghead TV about abuses of the tax credit are yet another example of smalltime opportunism. Both for ratings and to feed the indignation meter. I have a hard time equating your Goldman Sachs execetive's $8 million gift with my ambulance driver's $8 thousand tax credit, which, by the way has to be earned against actual tax debt.
I guess in the end we have to ask: if a sudden crash in property values becomes permanent...Making homes 'more affordable' for some... who loses?
BAC $15 - The standoff
Seems like this > $15 everything is great and currency depreciation/bailout is forward way and < $15 the banks are going to be nationalized and the derivatives bomb is going to go off....well at least that is how it feels...
Re: Quote of the day from Tout TV
Heard Robert Halderman was auditioning for some ' news ' jobs .... just kiddin' !!
paint the tape
here they come - got to get good prints for the fund managers - imho
picked up a little more FAZ
Ah, THAT was the move down in FAZ I felt would arrive, when I initially sold my FAZ at $22.69. It went down right to $22.50 -- the level where I felt a decent pullback should reach. Still, unless S&P manages to rise above Thursday's close of around $1070, I think the market direction should be perceived as being down, and so pullbacks in ultra-shorts should be used to add to positions. I think that would be a much more productive day trading strategy than placing stops and getting stopped out. So I just picked up a little more FAZ at $22.55.
Guess Roubini will be on the morning shows next week....
........ I, personally, will be very interested how CELG, AMGN, ISIS, CEPH hold up , both volume and pricewise....
BA Report-Thanks!
Thanks, Bill and team for the amazing BA analysis. It's more than a study of BA - it's a complete mini-course in the mechanics of analysis, trading, and executing strategy.
Re: home purchase "help"
"the result of my EMT couple now able to build personal equity in a home is that it has other benefits to the local economy than just my commission. This new homeowner is now engaged in the joys of home ownership including paying property taxes" - loannetter
How does the EMT couple build equity? For starters, they have no equity and anyone in real estate knows that when interest rates rise, values decline. QE is over as of today according to Bernanke. Time for interest rates for the banks to rise from zero. So perhaps negative equity is a good thing along with "enjoying" those property taxes: These first-responders won't lose equity when they walk since they were merely titleholders paying inflated rent in the form of debt/taxes in a foolhardy gambit to build ownership through an ever expanding balloon of appreciation and, once their credit gets trashed when they walk after the balloon breaks, they won't make the same mistake again.
loannetter, you're a hardworking person well versed in the mechanics of the FHA and trying to rationalize this economic mess centered on a massive housing bubble. I know some great people who also happen to be mortgage brokers. But the big picture is ugly and there is no way to get around it in the long run.
http://tinyurl.com/yzze3b3
Cheers.
The initial ( low and high ) spikes of Aug. 13, 07' and early
Jan., 08', could put AEM around the $ 44 - $ 46 area when all is said and done....
Re: home purchase "help"
loannetter -
I want to correct one misunderstanding you have about me: it is not MY Goldman Sachs executive. You insist on setting me up to be this banker-supporting straw man, and then proceeding to argue points with that straw man. This is confusing for me, because that's not my position at all. If you'd read my other postings, you would know that I'd have let them all fail, wound them down like Lehman, have a nice day, that's what you get for gambling, perhaps sell your home in the Hamptons to make ends meet. I don't know how much clearer I can make it for you.
Perhaps your continued insistence that I'm some Goldman Sachs cheerleader helps to explain your other positions as well.
Simon Hobbs should be the ONLY anchor on CNBC.....
This man is Very sharp and definitely challenges the generic B.S. of the parade of zombie's thru bubblevision...
sold some FAZ at $22.85
Just sold at $22.85 the small bunch of FAZ shares I picked up at $22.55 a little while ago, so as to be consistent with the strategy of "booking profits" when I see them and also to bring down my position size to a more manageable amount that I wouldn't mind holding long-term.
Re: sold some FAZ at $22.85
David- I see a week in Vegas has improved your driving skills. Nice to see you hitting on all cylinders.
shorted some FCX
I also noticed that $USD index is above the 76 level and the copper price seems to have made a double top at $3/lb (currently at $2.91/lb). So I have just shorted some FCX for 10% of my portfolio, with the intent of covering that short if copper rises above $3.
Frank Holmes interview
I just watched the Frank Holmes interview on Yahoo. He's saying that gold will go to $2000 or $2300. I read a book on gold by him and another writer whom I've forgotten, and found that he had very good things to say, particularily wrt how mining companies leverage the gold price and how it's also important to look at the currency of the country of origin for a miner. What I don't understand is why it is only now, now that gold is over $1000 that we hear from him. Is it because he would not have been offered an interview by Yahoo in March or last December? Or is it because now that gold is so high, he thinks that he will have more of an audience for what he has been thinking all along? It seems like we only hear what a great investment gold or anything else is only after a prolonged rise in the price. Does anyone know who might have said the S&P was a great bargain at 666 in March and would rise in six months to practically 1100? (I'm sure Bill said something about the market being very oversold in March, but perhaps I wasn't paying enough attention myself.) I just find it frustrating to hear about these great investments *after* a prolonged rise in price.
Re: sold some FAZ at $22.85
"David- I see a week in Vegas has improved your driving skills. Nice to see you hitting on all cylinders."
Yes, I am going wild today after not being able to do anything for 4 days. :)
Re: sold some FAZ at $22.85
Yes, I am going wild today after not being able to do anything for 4 days. :)
Well, most people would be saying something like that upon arrival in Vegas (rather than upon return).
Re: shorted some FCX
David, are you looking for the $ 72.60 range today ?
Re: paint the tape
boy was i wrong - no support so far - im steppin aside
stopped out of my GLD calls
I have just noticed that while I was away, I was stopped out at $12 out of my January 2010 $90 GLD calls that I had purchased at $11.11 when gold just broke out above $1000. The gain on these calls has almost completely offset my loss on the DGP trade I did later on.
With what seems like a downtrend in the market establishing itself, holding such calls would have been a dangerous proposition, and instead it might be better for long-term "gold believers" to scale into GLD on weakness, which would allow one to "wait out" even a year-long dip in GLD.
Re: shorted some FCX
"David, are you looking for the $ 72.60 range today?"
No, this is a long-term trade for me. As we were all discussing on this blog, instead of shorting the market on the way up, the right time to enter shorts is when the rally will clearly top out and a downtrend would start.
The few long-term indicators I was monitoring broke down this week: EUR/JPY making a triple top at 139, copper making a double top at $3, AAA-rated CMBX securities making a double top (a lower high, actually), HYG breaking below $85.50, $USD rising above $76, etc. This is the time to enter into long-term shorts and take them off only when/if the above indicators will show, once again, new heights in risk appetite.
miners doing well
In case folks didn't notice, both GLD and the miners are doing exceptionally well, on a day when other commodities are getting hit pretty hard. I can't explain it, but I'm going with it.
One more point: UXG is often late to respond to the party. So I picked some up for when it gets invited to join.
TNA/DUG/PCS
TNA buy market on close
DUG sell market on close
PCS buy market on close
explain later.
REIT news anyone?
Ok, so something happened around 300 ET that caused the REITs to take off like scalded cats. Anyone know why?
bought some SRS
I stepped aside from the computer for a little while, and when I returned, I saw that SRS took a major plunge down. So I bought some at $10.27, increasing my total SRS position by about 12%.
Re: REIT news anyone?
I noticed the same. There was some story out today about Soros being negative on the entire sector - maybe someone covering shorts?
Re: REIT news anyone?
I don't know what happened a little while ago, Dave. But I am pretty sure that REITs won't survive a general market downtrend. In fact, when holding SRS long-term, it is better to see a slow but steady decline in IYR (because of the compounding effect it has on SRS) as opposed to sharp spikes down in IYR and then re-traces (which will keep eroding the value of SRS). So I'll settle for a small drop in IYR today, another one tomorrow, etc. :)
Re: home purchase "help"
Hi All - Gotta quit banging on Loannetter. Everyone wants to blame the mortgage brokers/correspondents as the bad guys in all this mess we find ourselves in. As you all know the true roots of the crisis lie in the elected officials - primarily the party of the current regime leader, who wanted every standing voter to get in a home regardless of qualification ability - all to extend political power. Banks then responded to the government by creating vehicles to pawn off the faulty debt and rating agencies mislabeled quality of the debt to move the crap intermingled with the A paper - again all at urgings of the likes of C.B Rangel. Way down the totem pole lies the mortgage puke (I be one too after 25 years as a geologist). I have done loans for people who benefit from the government (read taxpayer) give away, and I don't like any more than most of you, along with all the other wasteful programs of today to keep the undereducated regime voters content. Happy Trading
SPY
Moved 20% of my LT trading account that I moved into cash about a week and a half ago into SPY at the close. I'm planning on scaling in as the market moves down as I targeted 950 on the downside but I know I can miss the bottom...
Long Positions
I also decided to hold on to my long positions that I opened up on Wednesday as I see this downturn being nothing more than a short term dip.
Re: home purchase "help"
Hey, I like loannetter. But when she proposed that we write our congresspeople in support of the home buyer bribe, I had to take issue with her on the merits of the matter. I am not blaming her, or mortgage brokers in general for the bubble. At the same time, I'm also not going to stand by just watching while she encourages folks to support a useless and costly effort to prop up home prices with my tax dollars.
King Canute was unable to command the tide to cease rising, and King Obama will be just as successful at holding back the housing price correction. Let's let the market correct. It will be faster, and cheaper, to go with the flow. If you want to help someone, help former homeowners find nice rental units.
FD: I'm a former homeowner myself :)
Re: home purchase "help"
"$8 thousand tax credit, which, by the way has to be earned against actual tax debt."
http://www.federalhousingtaxcredit.com/2009/faq.ph...
Re: BA Report-Thanks!
wpeyton,
Thank you for commenting. If there is anything in this type of report you feel we could be doing a better job of, then we will consider it.
Next week, we will be looking at RIMM/RIM, which is one that many people have asked me for. Same thing a week later because many of you want investing alternatives in Latin America, and particularly Brazil. We are going to look at that in depth too.
Press Release Release Date:
Press Release
Release Date: October 30, 2009
For immediate release
The Federal Reserve Board announced Friday that a temporary exemption to the limitations in section 23A of the Federal Reserve Act, instituted as part of the response to the financial crisis, will expire as scheduled on October 30, 2009.
The exemption, which was subject to various conditions to promote safety and soundness, allowed all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market. It was originally approved on September 14, 2008, and was extended on January 30, 2009.
Since the approval of the extension in January, the functioning of the tri-party repo market has improved considerably.
2009 Banking and Consumer Regulatory Policy
Re: BA Report-Thanks!
second the thanks. I am waiting for a good entry once the market drops a bit and definitely appreciate you listing out those 3 bull strategies - helps me visualize how you think about this all...
Press Release Release Date:
Press Release
Release Date: October 30, 2009
For immediate release
The Federal Reserve Board announced Friday that a temporary exemption to the limitations in section 23A of the Federal Reserve Act, instituted as part of the response to the financial crisis, will expire as scheduled on October 30, 2009.
The exemption, which was subject to various conditions to promote safety and soundness, allowed all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market. It was originally approved on September 14, 2008, and was extended on January 30, 2009.
Since the approval of the extension in January, the functioning of the tri-party repo market has improved considerably.
2009 Banking and Consumer Regulatory Policy
Re: Frank Holmes interview
aucourant,
I think Frank has been very consistent in his views, and very forthcoming in the media and investor conferences. He is very good at his job, and he is a skilled communicator.
Unfortunately, it was not me who made that 666 to 1100 forecast. We did perform very well for several months after the bottom with only about 20-25% of capital committed to the market, and that was done mostly due to an amazing string of put write wins. But then I turned ultra-cautious too early, and missed quite a few points. This past week or two has been good though as the market is playing out pretty much as we had thought it would a few months ago.
Re: BA Report-Thanks!
That sounds great Bill...I hope you also make many reports available about Alternative energy, Semiconductors, and biotech and maybe others that you will be testing in the future.
Thanks
Re: BA Report-Thanks!
TN_blogger,
Agreed. These are three I will definitely take on. In the first two, we have traded First Solar (FSLR) extremely well, so that's one I will probably write up. Biotech for sure.
Re: TNA/DUG/PCS
"Now that the market is closed, could you please explain your reasoning for your recommendations? I am staying short on this market by the way. It's not over until the FAT LADY SINGS and she may not sing for a while in my opinion. I could be wrong though still but I am betting on more volatility and more downside trend next two week with few up days here and there. The Media now will be full of talks about how it's time now for market to correct, it’s bound to happen, we have been expecting this, look for 17 to 20% correction, …etc …etc. This will scare off many people plus margin calls will chase many investors out of their recent positions they bought on the high. Your thoughts are welcome."
Bill, Can you please comment on the statement I made above, ...your thoughts are appreciated as always.. Thanks.
Re: BA Report-Thanks!
also wanted to say, the reports have great graphic design and i love the landscape format much more sensible for digital viewing.
Relationships
I feel like I am channeling David this day, except until I reach that elusive 25,000, I can only do 3 trades in a 5 business day spree. Monday is a reset on that.
I can now see the big picture infinately better like Bill remarked in either a DR or CC. I had been noticing that the world sold off before the strength in the dollar...this tells me that others Central banks knew the tempory jig was up! The new oil echange rumor was very convenient indeed.
CNBC was saying things about staples or jokes about staples that would lead one to buy them out of comfort. I could be wrong, as I barely turn the mute off these days. Even Rick S. got into the "they better be buying commodities" spin yesterday.
Take care...have a relaxed and great weakend all.
Re: home purchase "help"
Luggie -
Mortgage brokers can be part of the solution if they stop pushing FHA product on consumer junkies. I'm drawn to Bill Cara, a professional advisor/trader, because he set up a free investment blog with social equity in mind. That's a pioneering endeavor that's got my rapt attention ever since he wrote the opinion in the WSJ several years ago. Maybe loanneter could be the FIRST mortgage broker with a blog warning against the myriad of pitfalls associated with FHA products and that only the truly qualified need apply to her firm. Ultimately, the survivors of financial service industry will be those putting integrity before profit.
Cheers.
Re: Who ( and How ) in India, is buying US goods ?
baz22,
take a look at the pictures 2nd_ave posted from china:
then, scroll down to picture 6, labeled '6. Guiyu, Guangdong province'
to the left of the woman in a red shirt, you will see, there in the river floating, a box of tide. someone has enough capital for those goods, no?
[ps - nice work, 2nd_ave]
Re: home purchase "help"
Dr. Strangelove,
loannetter and her discussion partner of the past day or so, davefairtex, were attendees at Cara Bahamas 2009 Conference as were Vad, NYUGrad, kaimu and many others you see here. Maybe even you were there -- there are so many nicknames to remember, I apologize if I have forgotten. In any case, I am sure if you and they are able to return to the conference in January, these kinds of discussions will be endless and fruitful. We are anticipating many more attendees btw. Unfortunately, while compiling the BA Report, Pascal let me know that for an important family reason he cannot leave Belgium in January. But there will be more speakers, and more social sessions, and to accommodate everyone we even extended the conference an extra day.
Re: TNA/DUG/PCS
analyst65,
That's how I see it too.
Have a good weekend.
Re: Reasons why trades fail
I say you switch number 1 with 11 and you would be right on !
Re: Frank Holmes interview
Frank Holmes interview in which he says the path higher for gold will be rocky and subject to frequent 10% price swings. You know I agree.
http://finance.yahoo.com/tech-ticker/article/36368...
http://tinyurl.com/y9saxz2
Re: home purchase "help"
Dave, dave, settle down. I am just speaking to the trader in you that feels perfectly fine about riding the GS back up or down. What do you think is propping up this game? OUR tax dollars making him smile with the bit in his mouth!
In the case of my game, yes real estate is hurting all over, but what would be the point of pulling the rug out from under property values precisely the month that lower sales set in for the winter? We have started messing with the system and we can't just drop it and walk away. What I see are around here now are houses that were owned by people who couldn’t afford to maintain them when thing went sour, or builders who ran out of money before completion because their bank pulled the rug out. Your average borrower won't touch anything that needs work. These houses are missing appliances, doors kicked in and other lovlies including vagrants burning fires in them!
The tax credit is a mechanism only...it is designed to compensate for a distressed market weakness. It's not about current buyer weaknesses. This incentive is helping clean up distressed homes and putting them back to usefulness. Even Strangelove would cringe at the wasteland of empty homes in some cities...just going to rot. What does that do for the local psyche?
What this incentive is doing is helping folks get off the fence who CAN afford to buy. We have a disincentive for people who have become accustomed to renting even though they do have sufficient income and credit. OK so maybe savings is a problem because they have lived up to their consumer training and many I meet never thought they could afford to buy a home so they bought a motor home and a ski-do instead. Call it renter's mentality. I have rented gleefully for years while traveling and being able to experience that freedom completely changes when you have put down roots in a community.
I am not suggesting you are a GS cheerleader, Dave. Just open your heart to the possibility that if more people had the option to own their home, we might start to address the gap between the haves and the have nots in this country. Equity also comes with sweat and commitment, Strangelove...not just property valuations. Most people who buy their first home plant trees and renovate and enhance the value themselves for themselves over time.
EDIT: after I answered Davefairtex's last post I saw the conversations that followed. I agree with Bill ..by sharing ideas we might engender some better answers. Express your opinion to your congress person whether you agree with me about the tax credit or not. We are their eyes and ears on the ground.
Re: home purchase "help"
Strangelove, we might get on the same page yet! Fondly, loannetter
Re: home purchase "help"
I will agree that these statistics are convincing. But we are talking about the bottom tier for most first time buyers, not the median priced home. What you can buy in Michigan for $70,000 costs $150,000 in my area to the same wage earner who is just as scared of losing their job in this market. On the upside: you have your choice of really nice homes in the upper values to rent!
Re: TNA/DUG/PCS
These are ST trades. I expect them to last a few days to a week. The pressure will be on the big boys to rally the markets to get that IRA/pension fund monies in.
I look at a lot of indicators but I look at how the stock/ETF trades in the first half hour when the overnight market orders, the stop orders, etc are executed. Generally the big boys see those stops and gun them. Then I look at the last hour when the big boys are deciding whether to take them home.
In the case of TNA, it was down 1.55 in the 30 minutes and .18 in the last hour so selling has trailed off. PCS down .06 in the first 30 minutes and .03 in the last hour but the stock 10 day ATR is .39 so the stock was barely moving. DUG, my sale, was up .28 in the first half hour and flat for the last hour so there was not much buying at the EOD.
I also look at max pain as well to see if the wind's at my back.
Then I look at volumes. TNA volume was up 55% over 10 day average so I'm expecting selling has/will tail off. DUG was up 100% so buying looks (to me) that it may have peaked. PCS volume was 1/2 of 10 day so selling pressure appears to be weakening.
I also look at divergences and risk/reward. TNA and PCS made lower price lows while the RSI did not. DUG made a high high but the RSI looks about the same from 2 days ago. Comparing to IEF, the risk free alternate (we can argue about that for days...LOL), TNA:IEF RSI is 26, PCS:IEF is 25, and DUG:IEF is 63.
Looking at the charts, DJIA is bouncing off the 50 DEMA and the Naz and SPX broke thru the 50 DEMA. This is generally an area for reversals.
The unexpected move to hurt the most people in the worst way is a rally back to the mid Oct highs, specially, Oct 21, for most. THAT's where I want to get short.
LT, based on the RSI Triple Screen, I expect these markets to be much, much lower sometime after the first of the year. (The big boys gotta make their bonuses after all). Too many people saying the March 2009 low is THE generational low. I would assume the RSI Triple Screens will be flashing buy signals but no one will feel like buying.
I'll wait till Monday's close to put a sell stop limit order on in case I'm wrong.
FD: I'm always early, sell too soon and buy too soon.
Since I'm away from the computer, I have to wait for the stocks to come to me at attractive levels to buy or sell.
GL
Is Fed Abandoning Bailout Of Commercial Real Estate?
"In what could have been the biggest piece of news today, yet making little headway into the media, the Fed announced that it is adopting a policy statement supporting prudent commercial real estate loan workouts."
"seems to imply that the Fed is now encouraging active loan workouts as a matter of policy. The other implication is that firms with CRE exposure can no longer rely on the Fed as a perpetual guarantor of risky exposure."
"The implications of this Fed action for the economy could be staggering as the $3.5 trillion CRE market will likely not receive the same largesse that residential real estate has been the recipient of ever since the conservatorship of the GSEs."
http://www.zerohedge.com/article/fed-abandoning-ba...
Friday PM
I scaled in too early!! I didn't expect the large drop today. 2nd, are you playing tunes tonight? I could use some!
Also, what happened to Cheapy??
Great help from Bill with reports on fslr, ba and upcoming brazil. Also thanks Bill for the heads up to expect swings of 10 percent on gold. Need to be supportive during this time!
vb
Re: Friday PM
Cheapy is mostly metal and balance cash, sitting on the sidelines, playing with mass qtys of charts. I didn't make or lose any money today. I almost bought the close, but decided there might be pressure Monday am from mutual fund redemptions, so decided to wait. Thanks for all the suggestions yesterday and today, which I have been following up on.
I'm an ex IT guy, so the past few weeks I decided to build myself a new system. I started trading/investing with one old 100 mhz laptop in 2002, and recently went to 2 laptops, then started adding screens. I found that if I could watch more different issues, I could find more opportunities. Anyway, as I made money I needed to split the money into different brokers to stay within the $500k SIPC limits per account, anyway. As it turned out, the past few days I was much better off playing on computers getting a Win7 system going than being long anything but reverses anyway. Before you ask, note my user name. Most components of these systems were scrounged or bought used, refurbished or open box, and assembled myself, and as a result were very cheap for what they are.
Since its friday night, I'll make you druel and detail out the systems...
The room used to be a 14 x 20 living room. In the largest corner it has 3 computer desks arranged in a "C" shape with bookcases bolted to them and a rack of screens bolted to the bookcases going around in a "C" shape, each screen oriented 20 degrees more than the preceding one, 9 screens per row, 2 high, with the lower row just on the desks below. I made the entire mounting system from red oak and bought vesa swivel mounts to match the oak desks and bookcases. I have cnbc in one ear and bloomberg in the other. When it gets to be too much I have blues, bluegrass, old rock, celtic or classical playing instead. There are 4 UPS systems to keep me running a while, so in event of power outage I back down to the 2 laptops after 20 min, and can go 4 more hours on them. My internet and switch are also on the longest running UPS with the laptops.
System #1 - Intel Core 2 quad tower with 8 gb memory running Win7 with 8 22" LCD screens running just Tradestation. On each of the 8 screens I have 1 stock or etf with 6 charts of different timeframes, a time/sales window, a Level II window, and order entry and position section. I am watching them for opportunities.
System #2 - Intel Core 2 quad tower with 4 gb memory running debian linux 5.03 with 6 22" LCD screens running just ThinkorSwim. 5 of the screens are dedicated to charts and the last has a watchlist, order entry, streaming news and live cnbc TV. The dollar and gold futures charts here get watched a lot.
System #3 - Intel Core 2 Duo Laptop with 4 gb memory with a 17" screen built in and an additional 22" screen running Vista for TCNet with 8 charts, music, chat and my Interactive Broker accounts.
System #4 - AMD Turion 64 Laptop with 4 gb memory with a 17" screen built in and an additional 22" screen running Vista for browser, live bloomberg TV, and my TD Ameritrade accounts.
Next week I will move one 22" screen over from system #4 to system #1 to get a 9th Tradestation screen as I like their charts best for trading, and I'm not using it that much currently.
PS: there are 1/2 dozen more working computers, but they are no longer used for active trading
Cheers....
Re: Friday PM
wow, that sounds like some set up you have. Can you post a picture??? Reminds me of my startup years ago working in the corner of my living room all hours of the night. Are you or can you write a program to integrate it all into one?
can I ask where you reside? Just curious since you said cheers
vb
Re: home purchase "help"
loannetter - ok I'll settle down. Thanks for clarifying. :)
I'm all for folks owning their own home. Heck, I'm all for people owning their own cadillac, or BMW - or sport bike. Whatever. If they save their pennies, they deserve it. They become a "have". That's how the country works. It doesn't work by the government stepping in and saying "wow, you guys should be homeowners because home owning is such an awesome experience, here's $8000 now go live the good life and join the ranks of the haves!" If you have the down payment and income to qualify, you get to own a home. If you don't, then you get to rent. Period. Otherwise, homes prices become artificially inflated beyond their economic value and a bubble is born.
Your suggestion that "we started intervening in the housing market, and we can't just stop now" smacks of the same logic used by Nixon as to why we needed to continue fighting in Vietnam. American Credibility is at stake, all those men would have died for nothing, and so on. Just because we started off doing something stupid bribing people to buy houses doesn't mean we have some moral obligation to keep doing so in perpetuity.
I think your foreclosed property situation is a red herring also. Banks have a huge amount of shadow inventory, and all I hear about is bidding wars for foreclosed places because there are plenty of buyers, but not enough properties. Meanwhile, banks are not willing to sell their shadow inventory at market-clearing prices, so there the properties sit, rotting just as you say. I suspect in most places [except Detroit] there IS a price that will move the shadow inventory.
If the banks were forced by regulators to liquidate that shadow inventory forthwith, the problem would be quickly addressed and then things could get better. I daresay the market clearing prices might be quite low - but isn't that what we want? Affordable housing for your EMT people? Banks liquidating all that inventory would sure drive prices down to - affordable levels! There we go. Affordable housing, done in one easy step, with no government money involved at all. Flippers would come out of the woodwork, there would be an entire cottage industry for a few years, and at some point not too far in the future, it would all be over.
But no, instead our fix is to go back to government sponsored bubble style zero down financing, which pumps up housing prices. At the same time, we allow banks to keep shadow inventory off the market, and we allow those banks to continue marking their shadow inventory to fantasy.
As for opening my heart to the possibility that home ownership is the path to have-nots becoming haves - during the housing bubble, we had the absolute highest percentage of home ownership in the history of the United States. Those have-nots got their shot, exactly the way you suggest. Housing prices were pumped into the stratosphere. As Dr. Phil says, "how's that working for you?"
Here's my last point, and it's a critical one: contrary to established folklore, you should not buy a house in order to join the ranks of the "haves" in society. Home ownership is not the path to financial freedom. You buy a house because you want to live there - and because it is cheaper to buy than to rent. If owning a home is more expensive than renting, you might just consider -- RENTING!! -- and leaving the moral advantages of home ownership to those willing to pay the premium for it.
Olympic torch relay
Here is what I left 30 min before the end of trading day for:
http://www.realitytrader.com/photography/
Thought I gotta drop by and see it - how often do they carry Olympic torch in 5 minutes driving from your home? :)
Hope you guys dropped by to the log to see that setup I promised earlier - it was an elegant one, perfectly aligned with general read of the market and technically appealing.
Re: Press Release Release Date:
"The Federal Reserve Board announced Friday that a temporary exemption to the limitations in section 23A of the Federal Reserve Act, instituted as part of the response to the financial crisis, will expire as scheduled on October 30, 2009"
Oh this may explain the move down this week. I recall reading an article which suggested that the Fed was allowing all sorts of crazy collateral for the Primary Dealer Credit Facility. At first the collateral had to be treasuries, but then it was changed with that "temporary exemption" so that pretty much everything under the sun could be used as collateral for a loan of cash from the Fed.
Now, if that exemption expired today, that might explain the timing of the move down this week a bit better. If this is true, what we saw today was liquidity being sucked out of the market, as all that equity which used to be posted as PDCF collateral in exchange for Fed cash now had to be sold on the open market, in order to keep the various firms capital ratios intact.
Re: Friday PM
I said cheers because its Friday night, and on Friday night, if I survived the week, I have a beer :)
I will try to post a small pic. It was taken the day I got all the screens mounted, but there are 4 screens which are hidden from view just because my camera can't take a picture that wide. From inside the circle you can see them all if you swivel a bit this way or that. Hence, I put a nice comfy swivel chair in the middle...
PS: Total power consumption including lights, fan and stereo is 1131 watts
Re: Friday PM
cheapy, thanks for the image. that is very exciting to me! I wish one day I could be in your seat!
vadim, I think you said early today it was going down, I went with the gut and bet the wrong horse.
well, maybe you both can help me out of my 100% invested problem - really, i think it will turn next week but let me know if I need to bail out monday before a bigger problem.
thanks!!
vb
Re: Who ( and How ) in India, is buying US goods ?
Yes, I saw that !!.. But, ya know, it had to have belonged to a very important Party member ! Truthfully, the pictures were numbing.... I feel terrible for the people that have to live that way... I witnessed some very distressing sights in Pleiku, Vietnam... these photo's reminded me of that... This is why I get so upset with the greed of a few in America... Most all Americans are honest and decent, and it pains me to see others that try to take advantage of the goodness in people.. This IS such a great country, and we Really do help others around the world... I guess its all a question of balance...
Re: Friday PM
Not so sure that, vb. It can be very stressful in that seat on any given day if things don't go the way I figured them to. With my size, it takes a couple days to exit, because the risky stuff I typically buy isn't so liquid. But then again, that's how I've gotten big rewards, too.
The beer helps, LOL. I just wish I had a homebrew. They are always better, even if they aren't.
Cheapy,
Do you do a lot of intra-hour options ? Thanks for sharing with the community... There are so many really cool people around here... Thanks..
Re: Cheapy,
I tried it for a while, but wasn't good enough to beat the pros at it. TARP buddies have infinitely deep pockets, IMO, so never get scared. Look at the size of their gold short positions.
All I NEED to do is make $200 a day on average. Anything more is gravy. Average this year so far is $2500 a day. LOL, didn't make that today!
Re: Friday PM
cheapy
I am not a beer drinker but know what moonshine is - had it once. Drove up to the back door of someone's house in talledega, alabama to buy it, I think illegally(around 1976). What an experience.
cheers to you!
vb
trading
I agree with your comments. How can all these big firms be actively trading against others (including individual investors), when they have all kinds of info that nobody else does? Is that fair trading for every one? I do not think so.
daskas
admin: http://invetrics.com
Interventionists
A classic Greek tragedy, hubris in full form.
It's unfortunate that we all pay the price.
BTW, love the Tilt-A-Whirl metaphor !
Insider selling ramps up at RIM
Insider selling at Research In Motion Ltd. (RIM-T63.82-1.61-2.46%) has picked up. Over the past three months, RIM officers and directors who are insiders sold, as a group, 541,341 shares in the public market, net of any shares acquired through the exercise of options or public-market purchases. Co-CEO James Balsillie was a net seller of 438,490 shares while co-CEO and board member Michael Lazaridis was a net seller of 126,152 shares during the period.
http://www.theglobeandmail.com/globe-investor/inve...
Re: home purchase "help"
Hi DaveF - Glad you two made nice. FHA has been around forever - we kind of got away from the product due to the ease of credit programs initiated in the Clinton years, but now it's a good option for entry level. Generally it requires 3.5% down, with additional closing costs (closely controlled by HUD, which can be paid by a eager seller). The basic commitment of a FHA borrower is not insinificant.
I have had a dog forever after some snafu with a China subsidiary, but they just put out an updated financial statement on Monday which after pullpack I doubled down on today. DYAI - deveolped an enzyme for cellulostic ethanol - see detail a website, which I think is worth a flyer, but probably once a dog always a dog. Happy Trading
So true then... So true now ( and some of the best damn
guitar work around ).... http://www.youtube.com/watch?v=hUokMbJC3P8&feature...
Re: home purchase "help"
Davefairtex,
Define shadow inventory! Who can afford to buy these properties? Are they distressed owners in forbarance, builders in repossession or developers on the verge? Flipping is practically illegal now. If you need to finance your transaction: expect 30% skin in the game and hard money terms (10+%) plus 6 plus points to close. Not for the amateur. The best option to soak up the excess inventory are: RENTERS!!! Believe it that the (I edited out 'your') GS Fannie Freddie AIG Norwegian Chinese investors know this and THEY are behind the emerging market (FTimer) buyers. It's rigged. In a way I have to accept the rules of the game and make the best of it. We use the tools we have.
One last point: the transformation of a renter to a homeowner is akin to becoming a parent. It changes everything. Sleep well.
Re: Cheapy,
Cheapy not Cheap,
Now I know you are not cheap with all that stuff. Just frugal and smart enough to bring yourself to where you are now. Congrats.
Btw, when you need spending money how do you use that heavy metal to get cash? Or does it not ever come to that? Just wondering about the apparent lack of liquidity in PM's.
Re: home purchase "help"
Luggie - yeah of course I made nice with her, she's a cool lady. Just a policy difference with her, that's all. Maybe sometimes I can get carried away. :) If I needed a mortgage, I'd for sure look her up. I have, in fact, for my mom's refi a few months back.
Re: home purchase "help"
Gad, the other folks on the blog are for sure getting tired by now.
Definition of shadow inventory:
* 90+ days NPA, but no foreclosure filed
* bank REO, not listed
Concept is, lender either doesn't want to foreclose (they hope things will get better, but in reality the homeowner will never become current in that loan), or the bank has foreclosed, but they don't want to put it on the market just yet.
I owned a house. For me, it wasn't transformational. It cost me an absurd amount to get out of. Perhaps I'm a philistine - or just a happy renter. Who owned the property, really? Wells Fargo did, since the note was $320k. If you have to pay someone every month, there's really no difference between renting and "owning" - it's really more about who you pay your rent to. Perhaps I'm just too much of an engineer to appreciate the sublime concept of ownership.
http://en.wikipedia.org/wiki/Philistinism
"Oh yes, I own the property. Well, if I don't pay Wells Fargo, I lose it, but - no, really. I OWN THE PROPERTY!"
Re: home purchase "help"
Thanks Bill for the invitation. I've never been to your conference nor the Bahamas. Putting faces to cyber names sounds fun. I'll see what I can do.
Re: Friday PM/ Ain't No Sunshine
vb-
Unless I missed a recent post, my recollection is that you went 100% long some time ago. In which case you've done quite well.
Nothing wrong with cashing out Monday, should you decide that we go down from here.
Our minds play games with us all the time. I have come to EXPECT a (momentary) sting whenever I miss a bottom or a top, or get played the way I did twice this morning. That's a game that our emotions play with us, and I've found (from experience) the sharpest way to handle it is to let it go. It's similar to the many times we get cut off on the road- it incites a fleeting anger which is best dealt with as the price one pays for (the privilege of) driving.
So you've been knocked back for a few percentage points? No big deal. Don't let it blind you to the right move. The right move may end up saving you ten-fold that number of percentage points.
Sting's version of the Bill Withers classic:
http://www.youtube.com/watch?v=zNB4rvHPjPg
Re: home purchase "help"
Leave the 'Harvard- The Michigan of the East' T-shirt at home, alright?
Re: home purchase "help"
davefairtex -
Renting is okay but you're missing out on the long standing mortgage interest write off on earned income (the American dream). Take 50% equity on a maintained well located residence with a low FIXED interest rate (it won't last!) using amortization (no balloon) ending before you plan to retire and wait for inflation to turn your mortgage payments to peanuts with your tax-deducted inflation-charged future income (you're a smart guy). That's how our parents did it. My father built (general contractor) his home in 1963 for $30,000 total with a 3-4% 30-year loan that he paid in full over the entire 30-year period. His monthly payment became a joke at something around $80/month with his final fixed payment in 1993. It was a joke because his income in the 1980s (oil embargo; inflation) had soared well above his 1963 income. It was basically free money in the final 10 years of the loan since principal outweighed interest in the payments. He purchased the lot outright and had maybe $10,000 of his own skin in the deal up front. Today my mother enjoys that house and it's worth well over 15x what he paid for it. That's how it's done right and now may be the time to do it that way again.
Cheers.
Re: home purchase "help"
Doctor - I hear what you are saying. I've actually done the math that includes the mortgage interest deduction.
Your dad was "fortunate" to live thru the 70s, with its massive inflation, which effectively paid down his debt with no effort on his part at all. Inflation is awesome for debtors, and not so good for savers and creditors. We might be in for the same thing again coming soon - or we might be in for serious deflation. In deflation, I'm screwed. In inflation, I win big time.
I'm feeling like I want to stand aside from this trade at the moment, because I don't have a sense of what the odds are. If I see some S&L crisis liquidation opportunities, for sure I'll snap them up, but a standard property? Not just yet. With houses, I'm content to be patient. Trading costs are so darned expensive.
I do appreciate your story however. There will be a time to buy property. I'm just not certain it's time just yet. Like Buffet, I want to see blood in the streets before I buy, and I"m just not seeing that.
I'm fond of a story too. During the S&L crisis of the 1990s, my uncle bought some properties in Oklahoma City. One house he got for $9000. He rented it out for $400 per month. That's what I'm waiting for.
Re: home purchase "help"
It is interesting we are having this discussion in what I consider an englightened group of people - which tells me why it must be so hard for the administration not to tinker, and why we are doomed for currency debasement.
The discussion about any tax incentive is at first principles the myth of the photocopier. Any tax revenues lost through such credits - from people who actually pay taxes - means the country drives deeper into debt. Our solution to debt is only one - photocopy the currency. All that does is devalue the currency and drive us rapidly toward the 3rd world. MONEY is a notational book entry for productivity. You can't make true MONEY with a photocopier.
Giving a 3.5% down mortgage and $8000 to people will wreak havoc more on society. We don't have the numbers of people who can afford these things, so we're going to stick people "aspiring" to have something they can't earn. If someone creates $40K a year in productivity, I'm sorry but it isn't realistic they will generate true money to "buy back in time" a $300K asset. You are letting them borrowing now, but their future productivity will never catchup to that (WITH INTEREST MIND YOU!)
The only, and I repeat, the only way to make housing cheaper is to let housing fall fall fall and get jobs jobs jobs to make real money money money.
Some stats for you
- Right now there are 18,000,000 vacant homes which represents roughly $36 trillion (approx). The only way to make $36 trillion is NOT debt but massive productivity.
- If we gave $8000 to fill those homes, it would cost every tax paying adult about $1500. Consider that the average American saves about $400 a year. So clearly the money will come from money printing which is the myth of the photocopier again.
- The only reason for the price of homes being so high is letting everyone get access to debt they could never pay back, creating a bubble. A temporary distortion. If I gave every toddler a $200K loan we could make housing drive up in price really fast.
- Consider the shadow inventory. It is huge. Massive % of Option Arms are in default. This is 100% evidence that people couldn't afford these things even at the cheapest interest rates.
The only reason we are not letting houses fall back in line with real incomes (not cheap money spending power) is because the banks would be wiped off the face of the map in a nanosecond.
Re: home purchase "help"
navid - thank you. there is no free lunch. not everyone can be above average.
What future for oil sands when a hedgie says "forget it!"?
"3) Anyone who has any illusions about the Canadian tar sands business should take a look at the March issue of National Geographic (click here), not normally a prime source of financial and economic news for me. I’m not a fanatic, sandal wearing, organic bean sprout eating environmentalist, but just looking at the glossy, eye opening pictures tells you that is this an eco disaster of Biblical proportions"
http://blog.madhedgefundtrader.com/
So sand tar mining continues with associated hidden costs, or is it abandoned due to litigation driving petroleum costs significantly higher than what is already anticipated? I don't think you can lose going long on the next dip (just avoid those companies making hell out of Canada). Is Suncor in this boat?
MHFT sourced National Geo: http://ngm.nationalgeographic.com/2009/03/canadian...
Re: Cheapy,
There is no lack of liquidity in metal, once you go get it from the s.d. box and its known by the buyer that its real. It might take a week or two to convert it to paper if you want a good price for it.
Unless I lose a lot in the stock casino, I probably won't live long enough to need to trade it for paper, assuming no more winnings or inflation. I guess that means that all I need to do from here is just keep up with inflation and I'll be fine.
LOL, its a pretty low bar, but it wasn't easy or quick getting there. I just try to know my own flaws, and avoid running into them if possible. People I talk to said I shouldn't have sold a couple days ago, then yesterday they were telling me I should buy it back quick before it takes off. I'd have been very sad and scared tonight if I had. Sometimes it would be better just to sit out the worst part of the battle than to be in it.
Having 18 screens in front of you won't make you wise, nor will it immunize you from excessive fear or greed.
Saturday Morning Coffee: V-W Bug
http://ronsen.blogspot.com/2009/10/saturday-mornin...
Japan=Lehman?
http://tiny.cc/CIppZ
I doubt that the prospect of a sudden acceleration of Japan's 20 year decline has been generally anticipated just as the failure of Lehman wasn't. Lehman's failure shocked the financial system. I can not comprehend the impact Japan's implosion would have.
"Einhorn’s firm, Greenlight Capital Inc., has bought options that anticipate much higher interest rates. He is betting on a phenomenon many tried to time for a decade: a meltdown in a bond market with irrationally low yields.
Talk of a default may be farfetched. Japan has defied such predictions for two decades and will continue to do so. It can always tap $15 trillion of household savings through higher taxes or sell state assets in a worst-case scenario. Officials in Tokyo really are crisis-management experts.
Concern that yields will surge in 2010 is more justified. In the next 12 months, there will probably be a big increase in Japanese market rates.
No, the Bank of Japan isn’t about to boost its 0.1 percent benchmark rate. The persistence of the nation’s recession can be seen in the drama at Japan Airlines Corp., which is seeking debt forgiveness from lenders and a fourth state bailout since 2001. Japan is hurting for its failure to become more competitive.
It’s About Debt
The real issue is debt. Six weeks into his tenure, Prime Minister Yukio Hatoyama’s honeymoon is already over. Weak global growth and plans to upgrade the social safety net require more borrowing. Japan’s public debt is already the largest in the industrialized world -- almost double the size of the economy.
That’s why economists such as Carl Weinberg of High Frequency Economics in Valhalla, New York, accuse ratings companies of “criminal negligence” for not lowering Japan’s debt to below investment grade."
Re: Friday PM
vb,
For what it's worth (remember you get what you pay for:-) I think Monday (AM at least) will be a down DOW/SPX) day.
I would not be surprised to see some pumping up of markets going into the congressional elections — dollar tweaking, more crap about the benefits from the stimulus (like the 1 million jobs gained ?!?).
But this is, IMO, only a bear rally within a long term cyclical bear market.
Think of Vad's advice and ask, "What has really changed?"
I must add — I am hardly ever a day trader — I'm watching for a major trend to buy into either direction.
Re: Saturday Morning Coffee: V-W Bug
LOL — Your VW Bug headline got me. (I've owned 6 VWs including 2 bugs.)
re; your question...
"Can you have asset inflation and cost of living deflation simultaneously? I suppose that depends on your definition of money, but more important the amount of CREDIT the central planners attempt to stuff into the system."
To me it seems the opposite case. I believe we are seeing massive deflation of assets and it will continue even with the lowering of the dollar for some time. Cars are plentiful. Housing is the biggie which will take a long time to get real again. Jobs (the most important asset to many) are in a reverse auction mode. The over 55 crowd is willing to work cheaply and those on Soc. Sec.& Medicare need no company benefits.
Tech is continually getting cheaper (I paid $45.50 per MB for RAM in 1993, $0.04 per MB this year.)
From autos, to workers — we have over produced for decades. A huge deflationary supply/demend effect. Six people apply for each job opening.
At the same time all of those things we must have are going to rise in cost — food and water, energy, and the biggest and most stealthy... TAXES will continue to inflate.
My main concern is the political trend which I see as increased government in ALL aspects of life — what we'll be allowed to eat, who decides on my medical treatment, can I own a gun, what we can say to or about whom. I see us following the pattern of (formerly) Great Britain a century ago. I'm sad for my kids, but glad I won't see the worst of it.
Examples: Today I read of a new law to prevent switching an auto franchise without compensation. (Now that gov owns two.) Earlier in the week "The Big O" talked of an orderly transition in case of bankruptcy. (We have courts for that — remember the Constitutional separation of powers? The last two in the WH seem to have forgotten it.
Re: Japan=Lehman?
Debt....
I have this theory that depressions don't end until excess debt is either wiped out or repaid.
Until both banks and people get to where they trust each other and have an optimistic view of the future, depressions seem to linger.
Too bad we are on the same path because our government has now made sure the debt won't be wiped out...
Re: Friday PM/ Ain't No Sunshine
thanks 2nd and grym for advice.
yes, 2nd, I have been long since march and done well so a few percentage points doesn't matter too much.
I sold out 2 weeks ago thinking I might reinvest in equities overseas in non us dollars since I believe the us dollar is in trouble and my concern the state of the Union is weakening instead of improving like the media reports. Later, I decided perhaps other currencies might be in the same boat and to stay in us dollars till the end of this year and ride this last swing up (over 11,000).
Bought back this past week in miners, oil, suncor, gas, fslr, hig and aig (small),rimm (rimm, since we are going to 4 quarter sales).
Mistake 1. Should have waited for a bottoming process to define better before scaling in. Hedge funds sell the last day of October? I should have known better. 2. Maybe should have stayed with plan A and gotten out of usd and bought miners in other currencies in other countries , like kaimu did. 3. Most likely will ride the wave and not sell monday- maybe lighten on any strength. I don't have a margin account so if I sell - i could miss the next cycle up.
thanks for the music and feedback and please feel free to critique my plan above further as I am a student. I am hoping for a sunny monday ;)
vb
Re: Friday PM
and I've never tasted moonshine, LOL, but made some good high alcohol cream sherry once...
Re: Friday PM
Cheapy, It tasted like rubbing alcohol and driving to the back door was like out of the movie Deliverance. Many dry counties (http://en.wikipedia.org/wiki/Dry_county) still exists in Alabama. These are Voters too.
I am going to spread the links below. I suggest everyone add the links to high traffic forums and blogs. Also, link back to billcara.com. It is our responsibility.
Dylan Ratigan’s YouTube on Goldman Sachs magic trick.
http://tinyurl.com/ykbteh8
Goldman Sachs Fraud and Theft
http://tinyurl.com/yky6zmw
http://www.pbs.org/moyers/journal/10302009/watch.html
vb
Re: home purchase "help"
Navid,
If a tax incentive is 'money off a photocopier' then what are bailouts to banks and auto companies? If we are just delaying the inevitable crash of pumped up property values then what happens if we let them crash? Houses are not trades. People live in them and for many Americans their home's 'value' is what they literally rely on in the absence of adequate retirement funds.
People with $40k a year incomes are unlikely to qualify for $300k homes...more like $150k. The story of how to make the most of option arms and interest only loans is touted to give you use of your money for other investments so that thirty years later your inflated earnings will pay off your home loan like the examples offered by Dr. Strangelove.
The huge shadow inventory of homes in default was essentially created by the banks to feed their over leveraged coffers. No wonder the try to keep it off their books. SO what happens just after that nanosecond when all the banks fail? That's the question!
Re: home purchase "help"
Agreed - bailouts and auto loans are the same, and definitely far worse!
The idea of "what happens if we let them..." implies we can prevent this. We can't we are just throwing good money on bad. Suppose someone has over borrowed on 3 credit cards, will taking out another one give you any feeling of security that they will prevent a crash of their debt and somehow that is a good thing?
I think the inevitable is going to happen and is happening. Judges will write down property values and life will go on. The CRASH IS HAPPENING. The thing THAT SHOULD NOT happen is using public debt to prop up these companies for 1-2 years so that insiders can sell their stock, and some insolvent companies can take YOUR money from you in rescues.
The idea that option arms are smart for use of other investments is not reality, almost everyone taking those loans was buying "too much home" - and then taking out 2nd mortgages to buy toys.
Failure is something good. In the digital age it is entirely possible to close a bank in an EVENING and open up the next morning operational in a NEW NAME. DEBT can be WIPED out by bankruptcy. This is what needs to be done.
Do you really think if the JPM Quadrillion $ derivatives books fails it could be bailed out by the entire world? NO. Would you ask your kids to sponsor the JPM derivatives book by taking on debt with interest now? NO. Exactly, so there you have you answer.