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"Dude, you owned this story all weekend."

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So said one of the many comments we received over our weekend Freddie (FRE) and Fannie (FNM) coverage. And it shows in the Traffic logs. Typically, heading into the weekend, things begin to quiet down. Friday is softer than Monday – Thursday, and the weekends see traffic cut by more than half.

Not so this weekend. Friday saw a big spike up to ~65k, then Saturday and Sunday ran hot too, with 46k and 56+k respectively. 

The came today, and as of 5:05pm, traffic was already over 70k! That’s pretty big.

The reason I bring this up, is in the past, big traffic spikes have occurred around short term bottoms. Yes, we saw eventual lower lows, but as a trading indicator, its worth noting.

Now, perhaps the traffic is not the result of psychology, fear, and trader nervousness. Hell, the VIX is at the bottom of its trading range. So I am less sure if this is a case of the kind of panic that leads to traffic spikes that leads to a substantial trading rally — or evidence of the mostly mediocre job the mainstream media did covering this over the weekend. (Yes, there were exceptions).

It sure is worth thinking about.

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30 Day Traffic, The Big Picture

Fannie_traffic

Previously:
Blog Traffic as a Contrary Market Indicator  (February 04, 2008) 
http://bigpicture.typepad.com/comments/2008/02/blog-traffic-as.html

Contrary Indicator: Page Views Skyrocket!  (March 18, 2008)   
http://bigpicture.typepad.com/comments/2008/03/contrary-indica.html

Traffic Indicates . . .  (June 21, 2008)
http://bigpicture.typepad.com/comments/2008/06/traffic-indicat.html

Traffic Peaked Again Near Short Term Bottom (July 18, 2008)
http://bigpicture.typepad.com/comments/2008/07/traffic-peaked.html

Category: Contrary Indicators, Psychology, Weblogs

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

18 Responses to “Crazy Fannie/Freddie Traffic Spike!”

  1. constantnormal says:

    If this is a short-term bottom, with the swirl of chunky ugliness clogging the financial air to the point that it is difficult to breathe, then I am living in fantasy-land. This CANNOT be the Real World.

    The flush has got to lower the fluid level before the bowl can begin to refill all nice and clean again.

    How is it even remotely possible, that with ginormous levels of national debt, with Uncle Sam paying out somewhere north of 10% of his annual take on interest alone (probably closer to 20%, someone with actual numbers please nail it down), and having just nationalized the financial system, either via Frannie or via Boom-boom Bernanke’s shoveling credit toward any and all — how is it possible ion the most fantastic of realms, that we could have a short-term bounce from here?

    What’s next, federal credit cards for all, giving each citizen a direct line to the Fed? I understand that the citizenry is getting a little strapped for cash, can I have some too, please?
    Where is the line that I wait in for my money?

  2. Ted says:

    Barry,

    This really isn’t about capital markets for mortgages is it? I mean, due the the housing market slowdown, the demand for mortgages is down.

    This really is about not defaulting on obligations to MBS purchasers, right? Which are predominently foreign investors, right?

    Ted

  3. DenverKen says:

    Barry, there’s a ton of anxiety out there around the economy and markets. Nothing is making sense trading-wise, and we’re all looking for info to help answer our questions. You provide good info! Thanks.

  4. MarkTX says:

    Barry,

    Are there “Events” that occur during these
    traffic spikes?

    ie….bailout(s), fed cut(s), or maybe something that just makes the avg. person say/think WTF?

    Stay thirsty my friend…..

  5. Jonathan says:

    Barry,

    Do you think the issues with the London Stock Exchange (http://www.reuters.com/article/ousiv/idUSL01084620080908?pageNumber=1&virtualBrandChannel=0) may have affected how the markets responded to the Freddie/Fannie news?

    Perhaps we will really see the result tomorrow rather than today.

    Off topic, I know.

  6. Mich(^IXIC1881) says:

    This has to be the only time where a corporation gets nationalized and the stock markets doesn’t plunge…

    Barry, if it wasn’t for blogs like yours and commentators like you have, one can’t help but self-doubt when faced with constant cheerleading. It’s on yahoo headlines, it is on CNBC. Everywhere you look it says “nationalization is great” where your minds says “that can’t be”, and I find that much needed realism on your blog…

    Thanks to you and all other viewers… Confirmation bias? so be it

  7. Paul Jones says:

    Unless we wake up tomorrow to see our factories magically restored to us, we are no where near The Bottom.

    According to the Government GDP numbers, we are in the middle of, not a recession, not a “slow-down”, but boom times! (3.3% growth and really low inflation!)

    It’s time to jack-up rates to reign in growth!!!

    Uncork the champagne boys, the good times are here again!

  8. JustinTheSkeptic says:

    The next time you hear that Chavez is nationalizing another company in Venezuala, or the Dud in Ecuador says that it is time to nationalize oil. Americans don’t take the “high-horse,” and say that only happens somewhere else. Bull-Shit it is happening right here!

  9. rww says:

    Wish I could put my finger on it but it doesn’t feel the same. Nothing was crashing here.

    I think a lot of us are feeling cheated by these events and are trying to figure out whether we should.

  10. Hey Barry,

    The reality is that the smartest stuff being said about financial markets nowadays is coming out of the blogs.

    — not the newspapers/financial media (they can’t afford the people who are smart enough to know better).

    - and not the financial institutions (who are hamstrung by their investment process).

    I think the trend towards the blogs is clearly accelerating — witness how the “serious” newspapers are always referring to blogs nowadays and vying for our links.

    And you’re one of the best — and you worked your tail off this weekend. thanks

  11. dude says:

    The housing problems is contained.

  12. Zouzou says:

    I side with the opening citation.

    Noteworthy also, that I find use in reading the comments. Akin to a market being simulated on these discussion boards; good cross-section of opinions voiced. Moreover, interesting resources readers link to.

  13. BobC says:

    JustinTheSkeptic wrote:

    “The next time you hear that Chavez is nationalizing another company in Venezuala”

    This is not a valid comparison. Chavez nationalized profitable entities so that he could control the income. Now if the treasury took over Microsoft, that might be a more Chavez-like.

  14. wisedup says:

    we do not have the gold equivalent of the debt held by the overseas investors.
    Paulson may have prevented an immediate bond failure but has he established the trust that ensures the continued purchases of new debt?
    Given the strength of the dollar it is unlikely that prior rates of return will be sufficient to overcome the risk of dollar depreciation etc. Deflation is here to stay — the rich boys have moved to Dubai.

  15. Mike in NOLa says:

    FWIW, Asia appears to be giving back much of yesterday’s gains. Shanghai about even, but it didn’t join in the party.

    Michael Pettis has a couple of blog entries about the liquidity problems occurring in China. Not because of us, but because of the way their financial markets are structured.

    Michael Pettis Blog

    BTW, his blog appears on Seeking Alpha, but I have deleted Seeking Alpha from my RSS feeds use his RSS feed so that seeking Alpha doesn’t record the hits. Encourage others to do the same.

  16. Mike in NOLa says:

    Barry,

    As to the theme of the page, this just doesn’t feel the same as when the March spike occured. As you pointed out, the VIX is relatively low. Back then it was up over 30 if I remember correctly.

    Then, there was a feeling of crisis. Not so here. No indication last week that there was any immediate danger of a collapse, just a further leg down in the averages, which was more or less accepted even by those at CNBC. The only crisis seemed to be Bill Gross’s whining.

  17. wonderwood says:

    Barry,

    Your coverage of the fannie / freddie scandal is impressive, but I must admit, it’s a little overwhelming. As a person under 30, I’m terrified at this whole thing. I’d like to see one post from you that explains what this mess means for younger generations. If a simple “you’re screwed” will suffice, then so be it…

  18. [...] peaked in October 2007, I have pointed out (repeatedly) when TBP traffic soared in response to the credit crisis. Each time, we noted this was a good contrary indicator, and used it as a good short term buy signal [...]