Damn Railroad
By Barry Ritholtz - November 19th, 2008, 9:12AM
I am stuck on the LIRR, thanks to a thankfully minor train collision (fender bender).
Posts may be delayed a bit . . .
Anytime four New Yorkers get into a cab together without arguing, a bank robbery has just taken place. —Johnny Carson
Macro Notes
Let’s compare creditsPeter Boockvar
With sovereign credit risk, particularly Greece, being a main backdrop to= today's $ rally and equity weakness, here is a midday scorecard on sovere= ign 5 yr CDS. Greek CDS is widening out by 32 bps to 268 and is up about= 100 bps in just the past two weeks. Spain is wider by 8 bps to 102 and vs= 87 two weeks ago. Mexico is wider by 11 bps to 146 up from 139 two weeks= ago. US is wider by 4 bps to 39 to the highest since July and up 6 bps ov= er the past two...
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November 19th, 2008 at 9:16 am
No worries. CPI deconvolution can wait a few hours.
No meltdown today just fugly chop like yesterday.
Gold is up in the face of that CPI data, in which inflation lurks.
Thanks for the Jim Rogers vid, it was really very good.
November 19th, 2008 at 9:21 am
Jamaica or Merrick?
Glad u are okay. Lot is happening on default swaps for commercial. Up almost 4 fold now in 1 month.
November 19th, 2008 at 9:28 am
Guess nothing new in Jamaica, lol. Been about 10 yrs since I’ve taken the trains there but I see it hasn’t changed.
Wednesday, November 19, 2008 9:10 AM
There are systemwide delays of up to 1 hour due to an ongoing investigation involving two trains bumping into each other as they were leaving Jamaica Station. Local westbound service from Jamaica to Kew Gardens, Forest Hills and Woodside has been restored. New York City Transit is honoring LIRR tickets at Jamaica and Penn Station.
November 19th, 2008 at 9:37 am
Gold is making a good move here. USD is going down in flames.
November 19th, 2008 at 9:59 am
Called it this morning, JM. In real time:
leftback Says:
November 19th, 2008 at 8:57 am
Fuggedaboudit as far as debating this, it is going to get done. This is all going to be very expensive. When Barry coined the phrase Bailout Nation, I am not sure even he could see how far this would go. The $ is toast. I am calling a top here at 87. This is it. From here on we will see a whole different set of horrors start to be revealed.
November 19th, 2008 at 10:03 am
Baz, I hope they keep the heat on. It’s cold out.
November 19th, 2008 at 10:15 am
I went all in gold yesterday left. I have investments in SPY and I’ll ride that out. Even at 1% dividend or so that can buy a good amount of junk stock over time it should be okay (I have 30 years)
The market is moving up only because PPT is buying AAPL and some others. When that game is over it’ll go kaput.
November 19th, 2008 at 10:16 am
Leftback, Gold probably done going down because the hedgefunds which were looking for $2K gold didn’t get it and had to sell it.
November 19th, 2008 at 10:19 am
Baz, do you want to comment later today on the CDS null and void rumors that are running around?
Talk about a move to increase transparency.
jm: It’s Dennis Kneale buying AAPL. There is no PPT.
November 19th, 2008 at 10:32 am
No there definately is a PPT. Look up the Presidents Working Group in US Law. They did it after 87 crisis to try to prevent stock market from going down 40% in one day.
November 19th, 2008 at 10:41 am
Ya, ya, ya…
The PPT is all in your head.
And the Working Group isnt out there buying SPU’s… if they were, there’d be no need to debate it, you’d know.
November 19th, 2008 at 10:41 am
There is a PWG, there is no PPT.
Find me one person with first-hand knowledge of the PWG trading equities. Show me an attributed quote from the person in media I can trust.
I think the fact the market is down over 40% in less than a year should be enough to tell you there is no PPT.
November 19th, 2008 at 10:44 am
@ jm: Turn on your snark detector. Any time Dennis Kneale is mentioned, there is little seriousness…
I see refinery utilization is up, no wonder with all those cars out there and people heating their homes and stuff. Watch the panic buying when everyone realizes that the oil companies are at bargain prices. I am long COP and PBR.
November 19th, 2008 at 10:44 am
Just because market is down 40% in one year doesn’t mean there is no PPT. Only purpose of PPT is to prevent panic so people can liquidate at the maximum value.
HPQ threw a hail mary to try to get the market working yesterday and give people hope.
November 19th, 2008 at 10:52 am
Barry, are you STILL stuck on that train?
Have a good day everyone, I actually have to go and catch a train….
November 19th, 2008 at 10:57 am
hedge fund friend in NYC (Soros pedigreed fund), says pretty common knowledge the PWG buying futures.
makes sense, we haven’t seen a single day -10%+ move. . . yet.
~~~
BR: And yet, no one has ever adduced any evidence — no trade accounts, executions, trader interviews — nothing.
The government cannot fire 9 attorneys and the whole world finds out about it, yet somehow a $500 billion in futures trading takes place without a single confirm ever being found.
Strange, isn’t it?
November 19th, 2008 at 11:02 am
If there’s a PPT, they’re not very good.
Markets feel weird today, just like yesterday. Major indices look like they aren’t off too much, but almost every stock I look at is down 2-3% or more…
November 19th, 2008 at 11:13 am
Move to Manhattan! We need the buyers anyway! Market crashing faster than GM’s crash-test dummies
November 19th, 2008 at 11:18 am
every rally gets sold into as if the S&P will be at 650 in 3 weeks! Damn, this market is tough to bottom nibble after a selloff without some skf, srs, mzz, dxd on the side!
November 19th, 2008 at 11:25 am
The yield on the S&P is now higher than on the 10 year. How do we short Treasuries?
November 19th, 2008 at 11:28 am
TBT/PST
November 19th, 2008 at 11:39 am
All the all in players will sell on each other. It will be a disaster.
November 19th, 2008 at 11:45 am
Scottrade down. Anyone else have a live DOW quote?
November 19th, 2008 at 11:47 am
Scottrade back up. i can see how today is going to go.
November 19th, 2008 at 11:50 am
-181, was just down 220
November 19th, 2008 at 12:20 pm
jmborchers @ 10:44
Why the hell would Bush care if the market tanks? The election is over.
November 19th, 2008 at 12:33 pm
It’s a Federal law DL and the PPT is controlled by the Fed, Treasury, SEC and the Pres. They have to try. It’s clear they are trying but the financial system has failed. Some AAA corp paper has already defaulted.
November 19th, 2008 at 12:41 pm
Hey, who the heck are you guys? You drove lefty away. Where did all the TBP old timers go?
Ritholtz – stay in Long Island. Go home, have a coffee, take the day off. The Dow is down 200. That means it is down 500, up 900, down 600, up 700, down 400, up 150, down 200 (I am too lazy to quote actual figures, newbies). This crash sucks and it’s a long and winding road to hell. You’re not missing anything.
November 19th, 2008 at 12:42 pm
Not missing much Barry.
Just another “retest of the lows.” How many of these tests are we going to have? I’ve never heard of a quintuple bottom….
If this is bottoming action, it surely is VERY WELL disguised.
- AT
November 19th, 2008 at 12:43 pm
Here’s my tin foil hat theory which I suppose runs counter to the PPT idea (either that or there’s a big battle going on). Big funds/hedges have plenty of puts on, low market volume doesn’t take much to move it, they’ll run it down until the end of the week, cash out of their puts then rush in and buy up the market.
For the fund managers fear of being out has to be as big as the fear of being in, which of them wants to have this conversion next year?:
“So I stayed with you when you were down 50% because I believed in you long term and believed in a n eventual market recovery. Then you MISSED the recovery?! Wtf?!?!”
November 19th, 2008 at 12:50 pm
Barry stuck on a train. Now here is a perfect example of how to rebuild the country. The frickin trains suck, the track sucks and everyone knows it. Our trains are a laughing stock (geddit: stock…) compared with Japan and Germany.
Invest in solar, nuclear, and transportation infrastructure, especially ex-automobiles.
I am waiting for a train in DC and I hope I have better luck than Barry.
November 19th, 2008 at 12:56 pm
Damn Railroad…
it’s sort of a good description of where we are today in the markets, we are stuck on the tracks, not sure if we should take the D train or the R train or if the bloody wheels are going to come off the darn thing..
November 19th, 2008 at 12:58 pm
Looks like the Japanese are finally coming to their senses. One call for the U.S. government to issue treasuries denominated in yen:
http://www.atimes.com/atimes/Japan/JK19Dh01.html
November 19th, 2008 at 1:26 pm
Boomer108 @ 11:25
“The yield on the S&P is now higher than on the 10 year”.
What’s going to happen to that yield if Obama raises taxes on dividends?
November 19th, 2008 at 1:27 pm
Even Ben Stein has thrown in the towel:
“Mr. Obama clearly has a better idea about this than Mr. Bush, who is dragging his feet about Detroit and other aspects of reflation. I hate to say it, but I think we are lucky Mr. Obama won the election.”
I hate to say it, but it is probably too late to make a difference.
November 19th, 2008 at 1:37 pm
So if there isn’t a PPT why does the Treasury & Fed prevent Congress from seeing the list of purchased assets? Maybe they are outright stocks? Maybe…
November 19th, 2008 at 1:42 pm
SPX 825. Maybe we will see AT’s next wave down after all. Where is the trapdoor, Andy?
This is one ugly week, and it is only Wednesday. Then again, Ben Stein contrary indicator???
@ Elvis P asked: why does the Treasury & Fed prevent Congress from seeing the list of purchased assets?
Because it is all absolute garbage owned by GS, that’s why.
November 19th, 2008 at 1:46 pm
>>why does the Treasury & Fed prevent Congress from seeing the list of purchased assets?<<
because we’ll see a bunch of S+P futures in there?
November 19th, 2008 at 1:52 pm
hey leftback.
To be honest, with last weeks price action, it opened up all sorts of wave count possibilities. At the end of last week I could envision huge snapback rallies to 900’s or the final puke out. So, I had to admit to myself that I lost the count and therefore could not trade it.
I’m stuck with the following belief: We will set new lows before the end of the year. I still like the 768 level as great level to bottom from. However, I think any kind of prints in the mid-700’s will be a scale down buying opportunity. Yes, I actually wrote “buying opportunity.” At this point I’m trying to psychologically prepare myself for that day, because on that day, it will seem very, very DARK. The bears that have been bottom picking will start coming on TV explaining that it “could go much lower now…”
I’m still wondering what will cause that bottoming day? Citibank going into Conservatorship? GE or GS pre-announcing something really horrendous?
- AT
November 19th, 2008 at 1:58 pm
Myr @ 1:46
“Why does the Treasury & Fed prevent Congress from seeing the list of purchased assets?
I suspect that Barney Frank and Nancy Pelosi (and a few others) know what’s in there.
Bernanke probably wants to hide the fact that the assets that they’ve lent against are worth a lot less than the amount that they’ve lent.
I think this is all part of an effort that we’ll see in 2009 to obscure the true size of the deficit. To the extent that they can fool the markets, they get to borrow at lower interest rates, and the dollar will be stronger.
I think that sometime in 2009, gold will begin a nice bull run.
November 19th, 2008 at 2:03 pm
750 is the new 850.
November 19th, 2008 at 2:11 pm
Conservatorship. I like the sound of that. The MSM should start using it frequently so people get used to the idea, avoiding the emotionally fraught semantics of “bankruptcy.”
November 19th, 2008 at 2:13 pm
So…
As this is kind of an open thread now…
Any bets on another end of day upside reversal? I and I smell one a brewin.
November 19th, 2008 at 2:14 pm
Trains bump into each other in Third World… er… a… emerging market nations as well.
Start boiling your water. You heard it here first.
November 19th, 2008 at 2:19 pm
If there is a list of stuff, and there is stuff on there that would be controversial, the fact that more than two people know it basically means it would be public knowledge by now.
November 19th, 2008 at 2:23 pm
Even the Fed has thrown in the towel:
“Under its new economic forecast, the Fed now believes gross domestic product could be flat or grow by just 0.3 percent this year. GDP could actually shrink or expand by 1.1 percent next year. Both sets of projections are lower than the Fed’s forecasts delivered to Congress in July.”
In fact, things have become so dire that Obama has asked for a recount.
November 19th, 2008 at 2:31 pm
I-Man:
Agree with a possible end of day reversal. Under my “falling wedge” fifth wave model, I’ve got support at 800 which should trigger a snap back rally back to 850 ish…
Also, 800 has to be some “psychology.”
- AT.
November 19th, 2008 at 2:36 pm
The problem with the blog today is that it’s like a bunch of cats wandering around in different directions.
We need the “cat-herder in chief” (BR) to bring some order.
November 19th, 2008 at 2:40 pm
Well, here we are a handful of points above where an 11% intraday rally was launched. This should be interesting.
November 19th, 2008 at 2:41 pm
When we look at the charts and ponder how low this thing can go, I believe we sometimes fail to take into account the real world activities. Bill Bonner helped clarify that today:
“The latest report from MSCI shows the planet’s losses from the sell-off of equities has now reached more than $30 trillion….And this is just stocks. Reported write-downs, write-offs and credit losses have reached almost a trillion. And losses of housing prices in the United States alone – the only country for which we have reliable figures – has reached about $5 trillion.”
That is $36T – and counting.
Who is left with cash or leverage with which to speculate?
November 19th, 2008 at 2:42 pm
AT:
I’m starting to get very intrigued by your Elliot Wave analysis… I’ve done some searching on the web, but would you mind sharing with me your best introductory source to the EW principles? Its an area I’d like to expand my TA into.
Thanks,
-I-Man
November 19th, 2008 at 2:46 pm
“In fact, things have become so dire that Obama has asked for a recount.”
Yes, if he were really smart, he would retire now while he’s on top.
Then he could, no doubt, become the King of Kenya, and that would be a much easier job.
November 19th, 2008 at 2:53 pm
DL….
Yes, we’re in herding cat mode…but if we were true Libertarians we would ascribe to the notion that we will ’spontaneously organize’ this blog.
The Plunge Protection Team Alerts went off in the last hour….
ALERT ALERT. WE ARE TESTING THE LOWS AND COULD REALLY FALL APART BADLY.
Plunge Protection Team Powers ACTIVATE!
Ring ring:
“Goldman Sachs Trade Desk?”
“This is the PLUNGER (PPT). Buy me 100,000 Dec futures at the market.”
I wonder what Goldman’s nickname is for the PPT? For major clients, Goldman has nicknames so that nobody on trade floor knows who’s calling in for the Big trades.
November 19th, 2008 at 2:55 pm
@ DL:
“The problem with the blog today is that it’s like a bunch of cats wandering around in different directions.
We need the “cat-herder in chief” (BR) to bring some order.”
Ahh… Fret not… the eye of Jah Ritholtz is ever watchful.
November 19th, 2008 at 3:00 pm
Well, let me tell you of the story of a man named Barry
On a tragic and fateful day
He put a hundred bucks in his pocket, kissed his wife and family
Went to ride on the LIRR
Well did he ever return, no he never returned
And his fate is still unlearned (what a pity)
He may be stuck forever ‘long the streets of Flatbush
He’s the man who never returned
November 19th, 2008 at 3:19 pm
Apparently the PPT folks got stuck on the same train?
November 19th, 2008 at 3:40 pm
There it goes! A new low to retest.
November 19th, 2008 at 3:55 pm
A long GLD/ short SPY position would have produced a very good return over the last two years. But it would have also produced a positive return over each of the following periods: the last 6 months, the last 1 month, and the last 5 days.
(Obviously, short SPY would have been good also. But the paired trade GLD/SPY is less risky).
I wonder how much longer that will go on.
November 19th, 2008 at 3:55 pm
Can’t believe how crushed some of the bank stocks are at the moment:
GS at 57!!! Down 8% for the day.
BAC at 13.30. Down 12% for the day.
And C at 6.65. Down 21% FOR THE DAY.
All new yearly lows.
Paulson sure rescued the banks. NOT!
November 19th, 2008 at 3:55 pm
Hey everybody, it’s a fresh LOW. But I guess when we bounce from the 800 zone it’ll seem like another “successful test” of the lows. Great market.
November 19th, 2008 at 3:57 pm
About to break 8000!
November 19th, 2008 at 3:59 pm
Just read at MarketWatch that today’s Citibank drop is the biggest % drop EVER.
November 19th, 2008 at 4:01 pm
No knife-catchers at today’s close; maybe tomorrow.
November 19th, 2008 at 4:04 pm
It would be nice to see a big rally tomorrow, with a bit of follow-through Monday morning. That should be a good entry point for a short, if it happens.
(In any case, we’re about due for one of those “one-day-wonder” rallies)
November 19th, 2008 at 4:10 pm
“Any of you boys see an aircraft carrier around here?”
I almost bought some C today into the close, but I smacked myself first.
November 19th, 2008 at 4:13 pm
“I almost bought some C today into the close, but I smacked myself first.”
LOL. That may be a great trade, but I’m not that brave. But C redefines “oversold.”
November 19th, 2008 at 4:13 pm
Wow. I couldn’t stand it any longer. I sold QID, SRS, SMN, TWM, and SCC today at very good gains. I still have DUG and EEV.
I just couldn’t take anymore whiplash rebounds from this area. That means we will probably set new lows later this week. But I am happy to have most of my money out of this horror of a casino, for the time being anyway. I’ll probably go back in after the holiday week.
November 19th, 2008 at 4:28 pm
Well Barry got up
all dressed in black
went down to the station
and he never came back
they found his clothes
scattered somwhere down the track
and he won’t be down at Wall Street
in the morning
In a New York Minute,
watch out, there she blows
In a New York Minute,
you can lose some toes….
November 19th, 2008 at 4:34 pm
I just wish you guys would give up and capitulate, so I could close out my calls on QID …