Smart Money 30 Video
By Barry Ritholtz - October 16th, 2008, 3:00PM
I did a video interview with Smart Money a few months ago — warning that the credit and financial crisis about to get a lot worse — and by the time they were ready to post it, the Dow had already plummeted 2000 points (or as its been known around here lately, Tuesday).
They had me come in and reshoot another 4 minutes worth:
Jeez, look at my eyes . . . I have to stop smoking those big fatties in the car on the way to these things. Visine no longer seems to do the trick! (heh)
~~~
Hat tip George at Agoracom
October 16th, 2008 at 3:21 pm
you should have waited until 4:20 to post this one.
October 16th, 2008 at 3:26 pm
Were you guys in a cave? If SM reads this, might I recommend you splurge and spend $50 on a new background. Black might look good on Johnny Cash but not so good as a backdrop to an interview.
Doesn’t Luskin write for these guys? You guys could do cocktails and talk about Reaganomics.
October 16th, 2008 at 3:32 pm
The crisis needs to abate slightly, if only so that BR can get some sleep.
October 16th, 2008 at 3:38 pm
BR,
Looks like you need some rest bro.
Good to see you aren’t wearing that purple tie again!
As always, good insight.
October 16th, 2008 at 3:42 pm
Successful re-test of Friday’s intraday lows? Or just a dead cat bounce? I guess tomorrow is going to be pretty interesting…
HCF
October 16th, 2008 at 3:50 pm
Barry,
Yes, get some rest. Back off a little. I know there is blood on the streets and opportunities but this crisis is in the early stages. You’ve got lots of time.
Also, please take a look at this chart. It’s very inteesting.
http://www.propublica.org/special/degrees-of-hank-paulson/
October 16th, 2008 at 3:51 pm
I’m long hemp…
October 16th, 2008 at 3:54 pm
@ HCF: I would have to say that the market is probably in the process of forming a bottom here, based on higher lows. But I will also tell you that the market can form one without me tomorrow. I am going to heed Bruce for once and stay out of the pool. There will be plenty more trades in the future.
We know that there is at least one large and badly wounded hedge fund out there. If you recall the LEH collapse, it’s when the denials begin that you need to worry. Also you can figure when you see one cockroach there are a hundred more. LTCM was nothing compared to half of an entire hedgie industry unwinding. This is not going to happen all at once, a little bit more now, probably a fair bit more in January.
I joked a few weeks ago that hedge trimmers were the most popular sale item at Greenwich garden stores. It seems like I was correct.
October 16th, 2008 at 4:05 pm
Anybody have any explanations for today +425 point bonanza? I mean, seriously. You had mixed economic data at best in the morning. I think this country has won wars without the stock market reacting so positively.
Are there just too many FIRE workers out in the market? Too much devalued currency? Too many memories of good times that people want to hold on to? They might as well just pull everyday’s close out of a hat.
October 16th, 2008 at 4:07 pm
It is hard to believe we now have 10% trading-range every single day!!!!!
The battle between Bulls and Bears is insurmountable!!!
October 16th, 2008 at 4:09 pm
Hey, I just noticed the slight eye roll during the comment:
“If you liked the S&P at 1,200, you’re gonna love it at 900″
I guess you don’t play cards?
October 16th, 2008 at 4:11 pm
BR said:
“Jeez, look at my eyes . . . I have to stop smoking those big fatties in the car…”
Stay away from Lindzon.
October 16th, 2008 at 4:12 pm
Bags under the eyes are family traits — no matter how much sleep I get, i always have those valises . . .
October 16th, 2008 at 4:25 pm
@ CNBC Sucks: Beats me, the DIG rallies 12% with oil down $4?? Maybe we are oversold here.
BTW, do you have any space on your site for Bloomberg presenters or is it all CNBC all the time? I guess there are so many suitable subjects for your attention, but most of them are such idiots.
You have to just admire the way Betty Liu on Bloomberg’s Opening Bell this week was always so cheerful, yet matter-of-fact: “a very good morning to everyone, as investors in Japan saw 12% losses in the Nikkei overnight, the Dow was down a record 770 points and the VIX reached a 50-year high..” So calm and composed compared with the tools on CNBC.
She and Scarlet Fu always remind me of those amazingly bright and cheerful girls at university who were always excited to get to calculus and algebra class. Awesome, really.
October 16th, 2008 at 4:29 pm
+425 is seemingly due to the all of the cash waiting around for some action and an itchy trigger finger. MSFT says YHOO and bam, up +200…GOOG pleases the street, bam up +425!
Go figure…
October 16th, 2008 at 4:32 pm
Is anyone talking about the Cali auction that took place, I think yesterday? I haven’t heard much about it other than it went better than expected.
Does anyone know a way to short muni’s?
October 16th, 2008 at 4:33 pm
stop hitting on the au pair Bare…
October 16th, 2008 at 4:37 pm
@ BR:
Hey, its the healing of the nations.
You know the I-Man know about the bush ganja… Ta Ras!
PS: I saw the Ken Boothe on your site, he’s one of the greats. You should check out “Midnite” if you like reggae. One of the best unheard of groups. They’re from St Croix.
@ Ben:
The battle between Bulls and Bears is insurmountable!!!
Yes indeed it is. Many technicians will tell you that market tops and bottoms are often fraught with volatile swings like we’ve seen, as it is an indication that the bulls and bears are in a HEATED battle for control of market direction. I’d say the bears have had their show for a spell. The market will be VERY sensitive to good news, as we have started to become desensitized to bad news. I maintain what I’ve said before that we’ve priced in a very doomsday like scenario… almost on par with an asteroid hitting earth. Its times like these that you want to buy. It takes balls but you gotta take a stand sometime.
October 16th, 2008 at 4:41 pm
Yo Barry! Do you and Charlie Rose have the same dealer?
October 16th, 2008 at 4:49 pm
Hey leftback – Yeah, I think DIG got oversold yesterday, and you have to remember that crude and refiners should be uncorrelated, if not inversely correlated. Think of it as Exxon buying crude from Aramco at $70 per barrel and then still charging you $3.50 per gallon gasoline. Most people like to blame oil companies when oil prices go up, but this is one area where I will defend them. With the VIX breaking 80, I guess the answer to my own question is that nobody knows anything and are behaving accordingly.
As for Bloomberg, it sucks probably as much as CNBC, although I am just not interested in knowing any of their women’s names.
October 16th, 2008 at 4:50 pm
@ CNBC said: “Anybody have any explanations for today +425 point bonanza?”
I’ve got it. NO F***ing SPEECHES from Paulson, Bernanke or Bush. Administration press conference arbitrage…. this could be big.
@ I-Man said: “I’d say the bears have had their show for a spell. The market will be VERY sensitive to good news … we’ve priced in a very doomsday like scenario… almost on par with an asteroid hitting earth. Its times like these that you want to buy. It takes balls …..”
I concur with all of the above, good luck to you tomorrow, mate – now just watch out for that f***ing asteroid (e.g. major hedge fund collapse).
October 16th, 2008 at 4:55 pm
ben @ 4:32:22 PM
I’m not the best person to answer this question. However, I would note that there are several muni bond ETF’s (e.g., MUB and TFI), and a whole truckload of “closed end” muni bond funds.
Daily volume tends to be low, however.
October 16th, 2008 at 5:02 pm
ya know, no offense, but for as much I enjoy Chess, I’m not interested in playin’ Big Blue..yeah, right?
All to say, I don’t y’all have much insight into the abilities of Cary the Computer, nor the Nature of ‘Dark’ ‘Liquidity Pools’..
what’s that matter?
I’ll put it this way, if you think that these ‘whipsaws’ we’ve been entreated to, are the Product of mere’ manic/depressive peeps on fear/greed spasms, you’re solving the wrong Equations..
Someone on these threads, not to long ago, put it quite correctly..ISMW: “It’s a minefield out there, And it’s Your Leg.”
October 16th, 2008 at 5:04 pm
> I’ve got it. NO F***ing SPEECHES from Paulson, Bernanke or Bush. Administration press conference arbitrage…. this could be big.
I love your commentary, leftback, since it is dead on. It seems that in this crisis, anyone who has to say anything is basically DEAD. “We have no liquidity/solvency problems” has been translated as “We are F—D, but we have to claim no problems anyways.”
It will be interesting to see what becomes of Citadel now that it’s public knowledge that it’s hobbled. Certainly a major fund collapse is possible, but a series of collapses would certainly wreck havoc and lead to new lows. Either way, it’s sick how these 800+ swings seem to be routine these days.
HCF
October 16th, 2008 at 5:10 pm
@ Ben: good thinking on shorting munis – you can also short bonds the lazy way if you like to use funds – junk bonds (RYIYX) and the 10-year (DXKSX) and the 30-year via the original – Juno (RYJUX).
Not as exciting as options, but I like to be lazy sometimes. RYIYX and DXKSX are up about 5% as of yesterday since I bought them and I have had to precisely nothing. This is despite the fact that the long end of the curve has not begun to sell off. Once longer term interest rates start to rise….. this ain’t Japan, we will not see Treasury yields go as low as JGBs.
October 16th, 2008 at 5:19 pm
a doomsday scenario priced in for equities? LOL this is still the asset of choice as people still funnel weekly and biweekly money into 401k’s. 20 year psychology is very hard to break and the 401k babies are still convinced equities for the long term is the way to go. why? we have broken the 1982 uptrend and the 1974 uptrend is next. equities will be a terrible investment for the next decade or so. if you catch a trade good for you but by and hold in my opinion is finished. look for the 2001 lows to be taken out in timne
October 16th, 2008 at 5:20 pm
Barry,
I find some strains of weed make eyes less red. You should investigate.
October 16th, 2008 at 5:20 pm
CNBC sucks said: “..you have to remember that crude and refiners should be uncorrelated, if not inversely correlated…”
Dead right. I agree completely. I am at a loss to understand why the refiners are trading where they are, and will buy TSO as soon as the asteroid impact is averted. Should have bought it today instead of PBR and I am therefore a complete tool.
“As for Bloomberg…. I am just not interested in knowing any of their women’s names.”
Take another look. Smart women are so much hotter than dumb actresses like Melissa Francis. Your site is a tremendous achievement, by the way. It’s not hard to understand your Margaret Brennan obsession, in a way. I voted for MCC as biggest tool, ahead of Dennis.
October 16th, 2008 at 5:23 pm
My signal for buying today was the simulatenous spike in vix, fall of yen, rise in t-bills, etc. i will be light on my feet though and not be long for long, since this is countertrend after all.
October 16th, 2008 at 5:25 pm
not a one! not a single person i have spoken to is willing to throw in the towel. retirement accounts have been dessimated due to poor and disgusting advice from financial fraud advisors. everyone continues to believe. no doubt new los and a soft depression is coming. s+p 650 and below. i do realize the gov will do EVERYTHING in its power to protect the 2001 lows but ultimately they will fail
October 16th, 2008 at 5:29 pm
@ Harold H:
“by and hold in my opinion is finished”
I agree…
But did it ever work anyway?
Most of the clients I have to deal with (My day job is a support role at a major brokerage firm) talk the buy and hold, but none of them truly “buy and hold”.
They buy when there’s a Bull on the cover of the newspaper, and sell at times like these.
Buy and hold doesnt work for most people because they are just plain too emotional and they dont do any homework. They expect to just buy mutual funds, get a xmas card from their broker, and maybe a yearly review if they’re lucky… And HOPE everything will be ok. Its a fatally flawed idea to begin with. All these types of folks should do is throw it all into index ETF’s and pray that their retirement happens to occur the same time as a bull market. Actually learning something is too much to ask. Making their own decisions? Thats just plain ludicrous. They probably know more about “ludacris” than whats in their portfolio.
October 16th, 2008 at 5:38 pm
Posted by: harold hecuba | Oct 16, 2008 5:25:59 PM
hh,
no kidding, those 200.5k dead-enders are truly a breed apart, it’s almost Biblical–The Stumbling Herd shall Always be with you.
I just got off the phone w/ a friend, a MutFund Pimp, his ownself, who’s been trying to lever his clients/advisees out of their positions for over two years( yes, file under: Ripley’s ) a solid 60 % are, still, in Full Buy ‘n Die Mode AND Complaining to Him about their Ports being, after contribs, Down ~40+%…
To call it Surreal would be an insult to Dali..
October 16th, 2008 at 5:50 pm
@ I-Man: LOL !! “Ludacris” is right…. You are on good form today. Buy-and-hold leads to cry-and-fold.
@ Mark Hoffer: “Someone on these threads, not to long ago, put it quite correctly..ISMW: “It’s a minefield out there, And it’s Your Leg.”
Respect, bro’. That is exactly how I feel about tomorrow’s expiration. I would like to have both my legs by Tuesday, then we’ll see about putting another toe in.
Mark, I know so many people who are out >40% and they barely know what day it is. I personally saved one person from three funds that have had 60-70% haircuts. Buy-and-hold leads to cry-and-fold.
October 16th, 2008 at 6:01 pm
You ever look at the back of a CDS contract?
You ever look at the back of a CDS contract… ON WEED?!?!
October 16th, 2008 at 6:44 pm
I know so many people who are out >40% and they barely know what day it is. I personally saved one person from three funds that have had 60-70% haircuts. Buy-and-hold leads to cry-and-fold.
Posted by: leftback | Oct 16, 2008 5:50:18 PM
lb,
isn’t that the most rippin’est? Still, it’s Good of you..
it’s been the craziest thing–from the response of NFW! to, now, @200.5, “What should I do?” and they Still refuse to get out of the middle of the road..
I really wonder how others are handling that, similiar, Schism.. I mean some have always been telling me ISMW: “F*’m, They don’t care, why should you?” Somehow, I never saw that to be the Key..
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Schism
October 16th, 2008 at 6:56 pm
Barry,
when visine stops working you switch to clear eyes. It gets the red out.
ll
October 16th, 2008 at 8:32 pm
Barry,
You look great compared to ‘the church lady’ that was interviewing you. Good grief, she needs some color …
October 16th, 2008 at 11:34 pm
I saw you on CNBC yesterday and you were the only one who made any sense.
QLD it is.
October 17th, 2008 at 1:26 am
I don’t think it’s worth playing guessing games in the market right now.
The Central Banks are pouring enormous amounts of liquidity into select financial institutions while pulling out their own principal. The bankers are printing fiat at an unprecedented scale and using it to prop equities after they dump their own shares. This would partially account for some of the huge price swings and volatility in the Vix.
You also have to take into account the run that’s occurring on major hedge funds. Hedge fund redemptions are leading to mass sell-offs of just about everything. Commodities the only asset with any real intrinsic value are being liquidated to raise capital.
Commodities will eventually be great investments when the market is finished imploding and liquidations slow down.
The long and short selling game could turn out to be a real gamble right now. There’s no way to know which financial institution will collapse next, or the next assets that will be liquidated.
Remember, the bankers are trying to unwind a quadrillion dollar derivatives bubble or as Warren Buffet called it “Financial Weapons of Mass Destruction”.
The following is a good article on Treasury Secretary Hank Paulson’s changing of the rules for short sellers…. http://www.bearmarketinvestments.com/paulson-2
October 17th, 2008 at 10:04 am
Barry, ROFLMAO on the Fatty comment. I’m looking roughed up myself at this point. Not because I haven’t done many right things, but because of the recognition of what we are leaving our children and grandchildren. Get some rest and double up on Fatties per Dr. SPECTRE’S orders!