Interesting chart via Sentiment Trader: We see Hedgies are now as short as they were in 2004.
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I am not sure that hedgies are that short, but that’s merely a low confidence anecdotal info. I’ll ask Sentiment Trader where they get this data from.
Tags: http://www.sentimentrader.com/subscriber/charts/WEEKLY/HEDGE_FUND_EXPOSURE.htm
In any great organization it is far, far safer to be wrong with the majority than to be right alone. —John Kenneth Galbraith
Asian currencies continue to sell off vs the $ on the heels of the news yesterday that South Korea said they will look into hot money inflows stemming from the $ carry trade and the Bank of Indonesia said they are looking into the foreign buying of bills. This follows the news a few weeks ago that Taiwan was limiting foreign deposit holdings and Brazil was taxing foreign inflow transactions. As I mentioned yesterday, we may have reached a short term pain threshold in terms of $ weakness and foreign countries are fighting back as they certainly won't wait for...
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September 18th, 2008 at 3:15 pm
You gotta know when to hold ‘em.
Know when to fold ‘em.
Know when to walk away.
Know when to run.
September 18th, 2008 at 3:17 pm
BR: Hopefully this is not OT, but this news of an RTC-type band-aid has got me flustered. I made out HUGE on an RTC condo buy a decade ago, but the government stepping in now on housing is premature. As you yourself have said, housing is not yet at the bottom, and taxpayers should not be held liable for propping up the housing market when it still has a ways down to go.
I look forward to your commentary on this RTC-type deal which has boosted the Dow in the last hour.
September 18th, 2008 at 3:20 pm
Contrary indicator, Barry? Some hedgies are smart, some are tools, perhaps slightly more of the latter?
Bruce and I are competing today to see whose calls function as a contrary indicator. I was long, he was short. Actually, to hear others tell it, Bruce was smart, and I was lucky. Of course the day isn’t over yet.
Geez Louise, this squeeze is a MONSTER….
September 18th, 2008 at 3:29 pm
re: the RTC-type deal, it’ll be another vacuum like the AIG-deal
~~
I’ll ask Sentiment Trader where they get this data from.–BR
Good Q–maybe they have a backdoor in/on CARNIVORE..
http://w2.eff.org/Privacy/Surveillance/Carnivore/
September 18th, 2008 at 3:30 pm
It’s crazy how quickly fear can turn to greed and back again.
Fucking crazy.
September 18th, 2008 at 3:33 pm
Wow… ned nailed the bottom
Taken From Ned’s Blog
Screenshot taken today
market up 380 points since the screenshot was taken today..
September 18th, 2008 at 3:35 pm
They put on a full court press on the shorts today. I guess al of that repo money was needed because the short positions were too strong.
September 18th, 2008 at 3:36 pm
I’ve been out of equities since July ‘07 and I have no interest in them for the foreseeable future.
So they can ban short selling and even ban selling stocks that you actually own. I don’t give a shit anymore how they try to manipulate the “free” market.
The only thing that would piss me off is if they actually figure out some way to force me to buy.
September 18th, 2008 at 3:37 pm
i still think this rally is a result to two factors:
1. options expiration
2. the prospect of a short selling ban
seriously, you can’t ban it in one exchange and not the other or you’ll invite them over here
wistfully looking at the 10 pts i could have had in srs and the 4 pts in sso. you could hardly go wrong being long or short today as long as you didn’t hold to long.
September 18th, 2008 at 3:39 pm
This is GREAT! As a citizen/taxpayer, looks like I am soon to be part owner of not only corrupt insurance companies, failing brokerages, and miserable banks, but also toxic paper.
All along the problem was just short sellers, not the economy, after all. Whew, we sure dodged a bullet here.
September 18th, 2008 at 3:41 pm
wow, i’m just full of typos today
LOL at al’s comment, thanks i needed that
September 18th, 2008 at 3:41 pm
BR,
come on man, I know you never sleep or stop working, I would like an up to the second post on the new entity.
Also, on top of what you think about it, I’d like to understand what this does to change the banks problems as it relates to housing. If the bad debts can be sold to this entity doesn’t that stop a lof of the mark to market issue, at least short term, and helps prevent the risk of more firms going the way of Lehman, AIG, etc.
Certainly the underlying economy is still weak but this appears that it could be the trigger to the short term rally many of us are looking for right now.
September 18th, 2008 at 3:43 pm
http://biz.yahoo.com/ap/080918/wall_street.html
That is the reason for the 400 Point rally
September 18th, 2008 at 3:45 pm
Okay, still fairly young but had a question. They decide to ban naked shorting and then announce this big news. Doesn’t that reduce liquidity in the market? I mean driving shorts out then not allowing them back in?
September 18th, 2008 at 3:49 pm
They call it a repository for banks’ bad debt
it really is a suppository for taxpayers and
anyone with an inch of honesty.
September 18th, 2008 at 3:53 pm
Fucking amazing call
Called the bottom with proof
September 18th, 2008 at 3:54 pm
Barry, please tell me you are going to post something on the “shorting is unpatriotic” and “shorting is financial terrorism” discussion from CNBC today.
September 18th, 2008 at 3:54 pm
Posted by: Al Czervic | Sep 18, 2008 3:36:29 PM
hey Al, double-check your confirms, They already have!
September 18th, 2008 at 3:58 pm
This RTC idea is great. Basically, the government is going into buying housing that has its price going down while there is a trade and a budget deficit? So, they are going to print more money and basically lose it on purpose?
Gotta love gold. The drunken sailor ain’t done spending yet by any means.
September 18th, 2008 at 3:59 pm
wow
What a call!!
September 18th, 2008 at 4:00 pm
perhapsmaybe,
naked short selling was already banned. they’ve just declared they will enforce it… that is separate from the UK’s announcement but i fear/trust the SEC will follow suit.
you can do a little homework on naked short selling, short selling, and market makers “legitimate” naked short selling.
September 18th, 2008 at 4:02 pm
Karen,
You may have a point re Op Ex. This RTC-type thing was such an obvious possibility that they could have floated it days ago. But then there would have been at least some risk that the pop woudn’t have held into expiration.
September 18th, 2008 at 4:05 pm
First the Boomers had a summer of love; then they moved on to a fall-time of greed, and now let’s try a winter of socialism…and wouldn’t you know it, right on que they trot out the “in the name of the greater good” -ism that has lead many good souls to their demise.
Like it or not any eventual destination involves a supremely corrupted currency. Why not act with integrity now?…for the next generation, so that they get a similar chance to try do it better next time.
Will someone please ask our Treasury/Fed officials if history shows that limiting shorts has ever produced a meaningful solution…ever?
September 18th, 2008 at 4:07 pm
Posted by: Mark E Hoffer | Sep 18, 2008 3:54:59 PM
Mark,
First I laughed.
Then I actually checked; just to be on the safe side.
September 18th, 2008 at 4:07 pm
Yeah, RTC. Great.
Does this mean I get my $250 billion back?
September 18th, 2008 at 4:08 pm
Barry was right, and early, as usual !! Cramer will pump everything up tomorrow and then a whole new group of fools will enter where angels fear to tread.
@VT Trader: you’re right, even for this market, today was insane. You are also right about knowing when to fold ‘em… that extra greed will get you every time but only if you let it.
@Karen: today was a fear trade again but from the opposite side. where do you see gold going from here? holding my gdx.
@Bruce in TN: I have no idea whether this is a bottom, but I think there is little doubt that you owe me a hamburger. Cheers, mate.
September 18th, 2008 at 4:10 pm
Sure glad I was not the one buying SKF today in the 150s. Kudos to those who did well today. Sympathies to those who did not.
Best regards,
RF
September 18th, 2008 at 4:11 pm
We can stop this idiotic mess by everyone refusing to bail out our federal government.
Stop paying taxes!
Oh, I forgot… inflation from running the printing press 24/7 is a tax, isn’t it?
We are all f—ed now. Even the currency trade won’t work…the Europeans will have to start printing money to bail out their banks.
Guess AU or maybe black AU is the only play left.
September 18th, 2008 at 4:18 pm
leftback, i think we will see a lot of big ups and big downs in gold but more big ups than downs
you know it’s going back over $1000… i really, really, really want to set up a goldmoney account to get $$$ out of the us banking system.
tg, the other day i was screaming to my husband about not wanting to pay taxes because i don’t want to pay for these bailouts; but then i dutifully send in my checks on 9/15. sigh.
September 18th, 2008 at 4:21 pm
Posted by: leftback | Sep 18, 2008 4:08:22 PM
you ever go to jsmineset.com?
Sinclair’s looking for U$D 1650 by 2011..
he’s definitely against Margin of any kind in that trade tho..
Posted by: Al Czervic | Sep 18, 2008 4:07:39 PM
Al,
always good to 2x check, never hurts to remember the ol’ Carpenter’s saw: “Measure twice, cut once.”
though, sadly, it’s Tru, they already have, just wait until ol’Hank upgrades to an RPG(RTC)..we’ll have pieces of every exurban doom-town from here to Henderson..and then some–gotta luv the benefits of an elastic currency..
September 18th, 2008 at 4:22 pm
As short as they were in 2004, yes. But also true: as short as they were in 2000.
(It’s a wash)
September 18th, 2008 at 4:30 pm
Caught El-Erian this morning. Looks like its 3 bazookas down, 1 to go.
http://www.cnbc.com/id/26771289
Wonder if it will work.
September 18th, 2008 at 4:32 pm
I will be interested to read Barry’s take (Mish is already in full rant mode) on the Resolution Cesspool.
This is obviously bad for Treasuries. The money from Treasuries will flow to? Stocks, maybe for a while? Gold. RYJUX, DXKSX, are worth a look for a low risk trade, maybe?
Have a good night everyone, and good luck tomorrow. Bruce, you can leave the hamburger with the doorman…
September 18th, 2008 at 4:36 pm
Looking at the url on that graphic (CarpenterAnalytics.com), it looks like their “hedge fund data” is actually CTA data. “Hedge Fund Analytix tracks CTA fund exposures in analysis of their returns streams.” I am not sure if using CTA managed futures funds should really be considered a model for “hedge fund positions.”
September 18th, 2008 at 4:41 pm
I was controlling 12,000 shares ggp via puts today…needless to say I’m taking a few days off. Oh, 20 – oct 22.50, and 100 – sept 22.50. Best move I’ve enjoyed to date. Good luck everyone! Thanks BR, your insight/macro perspective is priceless.
September 18th, 2008 at 4:42 pm
Great ideas as usual from the government…first, to solve a problem cause by loose money and credit standards, have central banks flood the system with money…then change the rules to hurt the shorts, who are buyers of last resort in these times. I guarantee that if they really make it hard to short, when the market is tanking and no shorts there to cover, it will really meltdown…I dare you to do it.
September 18th, 2008 at 4:45 pm
Hey Baz, you’re on RTE at the moment talking sense! You don’t hear much of that over here!
September 18th, 2008 at 5:28 pm
He gets the hedge fund short data from Carpenter Analytix.
September 18th, 2008 at 7:05 pm
We will not have an RTC deal. RTC was a clearing house for bankrupt companies. It will be an equity for loan deal that keeps this shit off of the government’s balance sheet and allows the temporary creation of credit.
Shorts should have been covered in the first hour of the open today. The market rally was because of the counter-trend moves associated with OE week. Too much money would have been lost to let the market get away on the downside this week. A resumption of the downward move or at least a retest of the lows will likely happen soon enough.
September 18th, 2008 at 8:42 pm
Just saw the Paulson, Ben and Congress folks on CNBC.
Here would be my proposal (borrowed from the AIG solution):
1. If you want to sell/off-load your CDX’s on the newly formed RTC-like governmental entity – CEO and his team must submit their resignations along with application.
2. If there is ANY upside, the people get returned capital and LIBOR + margin…then Bill Gross (I mean bondholders), then regional banks (I mean preferred holders), and then Bill Miller (does he still have a job
3. It won’t really help… unless, of course the taxpayers are lied to and they make us pay, i.e. solve cure root-cause by giving these fat cats $$’s in order to avoid insolvency (stop, stop hiding behind the liquidity issue).
Shawn
September 19th, 2008 at 12:05 am
Al Czervic: “The only thing that would piss me off is if they actually figure out some way to force me to buy.”
Don’t look now, but hasn’t that already, several times, recently, plus soon, again, in the near future, happened, happening, and going to happen again, in a tax bill near you?
September 22nd, 2008 at 5:44 pm
Did Barry ever figure out where ST got there data from?