Professor Jeffrey Frankel of Harvard University’s Kennedy School of Government is also on the Recession Dating Committee at the National Bureau of Economic Research.
Last night, he was on Bloomberg discussing the recession. He has a terrific piece in the cafe on the same subject, titled, NOW Are We In Recession?
Go check em out.
"My formula for success is rise early, work late and strike oil." —John Paul Getty
Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July '08. After a flat reading in Aug, (didn't fall b/c of the CARS program), non revolving debt outstanding fell by $4.9B. Revolving (mostly credit cards) balances outstanding fell by $9.9B. To fully put into perspective today's data, look at the current level of consumer credit (doesn't include mortgages, the biggest chunk of consumer credit) relative to GDP. As of Q3, it totaled 17.2%...
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November 11th, 2008 at 12:04 pm
OT:
today is Veterans’ Day, maybe this: http://www.chycho.com/?q=node/1887
will help put some perspective around it.
and,yes, it isn’t wildly OT, much of our current recession can be traced to the massive malinvestment know as OIF y GWOT/DHS y DoD..
November 11th, 2008 at 12:24 pm
It was OT, Hoffer, but well worth it.
November 11th, 2008 at 12:36 pm
Yes but then oil price is still too high. Oil price is still higher than Xmas 06.
November 11th, 2008 at 1:11 pm
I was early but the squeeze is on the way. You can see is mostly in Tech. Coming to a market near you.
GLW leading the way.
November 11th, 2008 at 2:18 pm
There are no shorts
November 11th, 2008 at 2:20 pm
@JB:
I dont think this is a squeeze JB… looks like plain vanilla buying to me. And werent you just calling for a crash, yesterday??? I dont get it man, are you long or short? You’re keeping us guessing I suppose.
Market is ultra sensitive to good news… and becoming more and more resilient in the face of bad news… which is pretty much the only news.
Bears should tread carefully on shorting this spike…
November 11th, 2008 at 2:28 pm
I put a post yesterday when I changed sides. I saw multi million $ insider purchases. Now that in itself doesn’t mean things are hunky dory. However, it does put back confidence for shareholders and that’s mostly what is missing right now more than anything else.
November 11th, 2008 at 2:29 pm
Well after some buys this morning and selling into this spike, Ameritrade now has me officially flagged as a “pattern day trader” and are spamming me with all kinds of crap about capital / margin requirements.
My account is more than 60% cash and I never trade on margin (other than indirectly via leveraged etfs), so do I need to care about this new label?
November 11th, 2008 at 2:32 pm
@ DP:
Take a look at your account agreement, I remember when I was at ETrade, if you got labeled “Day Trader” it changed your commission levels, and affected your free trade amounts. Definitely something I would look into.
November 11th, 2008 at 2:32 pm
DP you have to use margin if you day trade (5 or more round trips per trading week). Otherwise you have to wait the 3 days for settlement to use only cash.
My experience I do much better with using cash than margin. Because you have to borrow the cash for the 3 day period margin fees add up quick. I also make better decisions when I know I am stuck with something for a few days.
November 11th, 2008 at 2:33 pm
How can you call short-term moves on thin holiday trading?
1) There are no shorts to squeeze…dont even go there.
2) 10 day put/call is putting in a bottom
3) TickerSense blogger poll sentiment is rampantly bullish
4) CNBC is in HEAVY “silver lining” mode…pumping for all they are worth
5) AAII and II surveys had spikes in bullishness
I don’t know what will happen in today’s light volume, but this market is dangerous for longs.
November 11th, 2008 at 2:49 pm
I don’t know but I’m getting it right.
November 11th, 2008 at 2:58 pm
jm, you are hilarious : )
steve, show me a stock that doesn’t have a short position, pls. i can’t spend the rest of the day typing in tickers, but i just found two for jmborchers and me, lulu and jcg…
November 11th, 2008 at 3:03 pm
karen,
I’m speaking realtively of course…QQQQ has a short ratio of 1/2 day’s volume for example. In my book, that is no short interest that can be squeezed. Same for major Nasdaq names. Based on market trend, we should see 3-4 days minimum.
November 11th, 2008 at 3:05 pm
I would like to see this taken back up into the close. I didn’t get enough gain to sell my options. I didn’t buy my covered calls back either.
November 11th, 2008 at 3:08 pm
sorry, steve, i’m literal to a fault, just one of my many shortcomings. i bet you’d enjoy this article by michael lewis of liar’s pocker fame:
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom
November 11th, 2008 at 3:12 pm
Idiot Fund Manager on CNBC:
“I like Goldman Sachs…they are probably shorting the market and will make a killing. I own it…I loved it at 160 and still like it. They will continue to do well.”
The stock is at 72. What a moron.
November 11th, 2008 at 3:13 pm
jm, another one that’s gonna get squeezed is urbn.
November 11th, 2008 at 3:17 pm
Bring on that 1000 point drop, let’s just get it out of the way already.
I find myself wondering how many hedge funds will turn out to be in more cash than they need…
November 11th, 2008 at 3:24 pm
If I were a pension fund… The Lewis article made my teeth hurt. The Vegas dinner scene is beyond priceless. But now the same compulsion, the reach for yield, that made our current disaster possible should actually begin to put a floor under our stock market. If I were a pension fund I believe my need for yield and my fiduciary responsibilities (now thats quaint) would have the likes of PFE or GE or DD with their rather handsome payouts begging to be bought and held. The sniping about Buffett and Grantham, or even the MSM’s new darling Ritholtz turning bullish ignores the realities of institutional needs and the emphasis on the next big swing (as opposed to a bit of scalping)… The very bold bears around here who have been right for a year or more are growing increasingly ideological in their rationales for a continuation of the current trend, while the market itself seems to have passed out of the panic phase and into a fetid yearend funk .
November 11th, 2008 at 3:25 pm
Am I undertsanding this right? Is CNBC encouraging people to trade currencies? Please tell me I’m wrong.
http://contests.cnbc.com/milliondollar/main.do
November 11th, 2008 at 3:27 pm
Great article, Karen. But the prevailing question is – will people ever TRULY learn? Is the jig really up?
Why do I get the feeling we’ll go down this path again in another 4-5 years?
November 11th, 2008 at 3:35 pm
JM:
You WERE right…for about an hour
November 11th, 2008 at 3:41 pm
yeah, but Steve, just wait 10 minutes. only kidding… this market is so broken; i’m not sure if it can ever be fixed. heck, we can’t even call it a market. it’s a casino.
November 11th, 2008 at 3:52 pm
oops, looks like we’re in Montana now, if you don’t like the weather, wait 10 minutes.
this isn’t a market, this is a casino. or maybe a rodeo and we are the clowns…
November 11th, 2008 at 3:56 pm
we aren’t in kansas anymore! we’re in montana where it’s said, “if you don’t like the weather, wait 10 minutes.”
this isn’t a market, it’s a casino. or maybe a rode and we are the clowns.
November 11th, 2008 at 4:07 pm
On the recession theme, this: http://www.chycho.com/?q=chycho_economics_2008
is well done, and informative..
November 11th, 2008 at 4:08 pm
But don’t forget Steve, “we closed well off the lows of the day”
November 11th, 2008 at 4:17 pm
On the shorts question, Nasdaq just put this out:
Short interest in 532 securities on The NASDAQ Capital Market(sm) totaled 145,998,762 shares at the end of the settlement date of October 31, 2008, compared with 154,938,214 shares in 530 securities for the previous reporting period. This represents 3.95 days average daily volume, compared with the previous reporting period’s figure of 3.90.
In summary, short interest in all 3,142 NASDAQ(r) securities totaled 7,858,548,859 shares at the end of the October 31, 2008 settlement date, compared with 3,139 issues and 8,113,949,271 shares at the end of the previous reporting period. This is 2.73 days average daily volume, compared with an average of 3.43 days for the previous reporting period.
The open short interest positions reported for each NASDAQ security reflect the total number of shares sold short by all broker/dealers regardless of their exchange affiliations. A short sale is generally understood to mean the sale of a security that the seller does not own or any sale that is consummated by the delivery of a security borrowed by or for the account of the seller.
November 11th, 2008 at 4:21 pm
DP:
Great…thanks for the new data…and yes, we are well off our lows of the day. Another mustard seed.
November 11th, 2008 at 4:35 pm
@ KAREN:
Karen, You rock. Thanks for posting that link to the Lewis article… a must read.
I’d like to share my favorite quote from the article.
“It’s laissez-faire until you get in deep shit.” -John Gutfreund
November 11th, 2008 at 9:38 pm
so sorry for the triple post… blame barry : )
i’m embarrassed; but my first post wouldn’t take. i do not have a photographic memory and i finally figured, after 3 strikes, i’m out…
glad you enjoyed the michael lewis link, as did I!