SELL ON THE NEWS
By Barry Ritholtz - February 10th, 2009, 11:45AM
Down 300 Points: Traders don’t seem to be in love with the new rescue plan:
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
February 10th, 2009 at 11:47 am
Off topic: Markets don’t seem to like game of “pretend” today. Some days it likes this game fairly well. Not today. Maybe “charades” would be better. The insanity continues…….
Where’s the PPT when you need them?
February 10th, 2009 at 11:52 am
“Down 300 Points: Traders Hate New Rescue Plan”
Right. As if GM laying off 10,000 has nothing to do with it.
February 10th, 2009 at 11:55 am
Traders hate this? Au Contraire. Short traders love this.
What Geithner just said is, “We’re not even thinking about putting anybody in jail for this shit, so feel free to continue burning down the house”.
And that’s just what Wall Street’s “best and brightest” are doing.
February 10th, 2009 at 11:58 am
Where’s the Beef. You need to delay a news conference to announce the plan is to come up with a plan? Little wonder the market is supremely disappointed. Bad news then becomes even more salient as it is now clear the PTB really cannot come to grips with the scale of the problem. Huge confidence hit today, huge.
February 10th, 2009 at 11:58 am
Agree with Manwich, hard to figure when the market likes the charade or doesn’t or maybe it’s all the traders guessing when they think other investors will believe it or not.
Gotta agree with Barry’s choice of words — “Traders Hate New Rescue Plan”. Because that’s all this tells us. And maybe it’s just the short traders at that.
February 10th, 2009 at 11:59 am
Traders don’t like the “rescue plan”? I am sorry, but “traders” couldn’t predict what would be for lunch tomorrow. Much less understanding the rescue plan.
And Paul S is right. 10,000 overly paid employees of GM has much to do with it.
February 10th, 2009 at 11:59 am
I’m really unimpressed with the plan.
* Form a bad bank
*More efforts to pump us to borrow and spend
* Ask the banks to guestimate future losses (they’ve been so good at this so far)
* $50 billion bailout for homeowners – at $250k/mortgage it’s about 200,000 homeowners. There are almost 20 million underwater. This is just window dressing.
Geithner still acts like he’s trying to save the banks rather than fix the banking system – IMHO.
Separately, how about a little love for those of us that were prudent with our money. I propose a tax holiday in 2009 for any household that has at least 50% equity in their home (based on current market values). It would never fly but it’s nice to dream.
February 10th, 2009 at 12:01 pm
Boy, this sucks big time. I figured they would come out with some bailout that I would hate, but the Wall Street crowd would love it. Pigs would be back in clover. So, I bought some ultralongs, figuring I could bail at the end of the day. Stupid move. Stops triggered before he even started talking once they distributed the speech. This administration has managed to come up with something no one likes. They would have done better remaining silent.
Clearly, the administrations have significant internal divisions. My guess is Tall Paul against the Wall Street boys and Obama hasn’t made a decision, if he will.
February 10th, 2009 at 12:02 pm
krice2001 said: “or maybe it’s all the traders guessing when they think other investors will believe it or not.”
I think you nailed it right there. This is just pure gambling now. The Ponzi market. Nothing more, nothing less. Why go to Vegas when you can do it in your jammies at home? No wonder why Vegas business is off.
February 10th, 2009 at 12:04 pm
Grindstone said: “Separately, how about a little love for those of us that were prudent with our money. I propose a tax holiday in 2009 for any household that has at least 50% equity in their home (based on current market values). It would never fly but it’s nice to dream.”
Amen brother. Amen. Until we prudent types get ours, I will be on consumer strike and not taking on any new debt or buying anything that I don’t truly need. Or course, this has been my mantra for 5-6 years now, so it won’t require a change in my habits. Me-thinks that others (not by choice) are now joining me in droves and aren’t going back to debt slavery once they get out.
February 10th, 2009 at 12:06 pm
I’m just not sure that there has ever been anything to the stock market other than a game of chicken.
First post here. I’ve been lurking for a couple months. I hope to add to the conversation around. I can tell there are some smart people, and also some “sky is falling” folks. My take…..and all of my posts will have this theme undermining them….It’s never as bad as it seems, and never as good as it could be.
February 10th, 2009 at 12:06 pm
@ Grindstone Financial:
Geithner did mention a plan for those of us who are prudent…you must have missed it…he called it the GTIH plan….
..Give ‘Til It Hurts…
Coming this April 15th I understand, and it will be reissued yearly…
February 10th, 2009 at 12:10 pm
I can’t get past Geithner’s demeanor. Why do I feel sorry for his spouse?
February 10th, 2009 at 12:11 pm
@ Bruce N:
I expect at some point to receive a garnishment notice against my child’s future earnings potential b/c she ranks high in her third grade class :)
February 10th, 2009 at 12:11 pm
Traders are clueless crybabies. They don’t know what they want, but they know that their latest tantrum did not produce the desired effect of a full-blown bad bank, i.e. let’s pretend none of this ever happened and amortize it over the lives of a generation of taxpayers. Very free-market.
On CNBC the typically “balanced” panel of Kudlow, Regan, Kneale and Gasparino are falling all over each other to find new ways to criticize the hours-old plan. The crawl asks whether Geithner’s job is on the line. Trish Regan actually asked if this is all a PR stunt. Trish has now officially fallen below moron status.
Geithner’s chair is not even warm and these swine are trying to drum him out. Of course these are the same people who cheered his appointment because he was “the only” person for the job (just as they had done for Paulson prior).
Traders, broadly speaking, have gotten every single thing they’ve demanded over the past three years from rate cuts to bailouts. Look where that got us. If the market shot up 300 after the speech it would sell off tomorrow. Today’s selloff may turn around as second-guessing kicks in. Nobody knows.
Traders are lemmings and little else. CNBC is a treasonous load of crap in chorus with Limbaugh as they hope Obama fails. The market is no longer remotely rational (if it ever was) and traders are digging their own graves as a generation of small investors turns away for good, knowing the system is hopelessly rigged.
February 10th, 2009 at 12:12 pm
Manny:
I have gone back to short term cd’s…and the only reason for that is that if for some VERY unknown reason they manage to reignite inflation, I can change horses with the short stuff…but like Mike in NO, I am having real trouble figuring out a buy that will make money more than 48 hours at a time…
February 10th, 2009 at 12:14 pm
Had we not propped up the markets we would be in a Bull Market by now.
Let the markets breach 7,000 and then you can invest, rather than trade.
Let capitalism work.
February 10th, 2009 at 12:20 pm
It’s the bank plan to create a bank plan. Ha. I nailed this one:
Http://pragcap.com/fade-the-stimulus-bill
February 10th, 2009 at 12:25 pm
There more I watch the market reactions to news, I realize that it has the same demenour as a ten year old. The fact is nothing changed between today and yesterday except that Geitner ( Dad) said he was going to act tough.
The shorts are going to have a heart attack by late in the day when Jr. gets over today’s tantrum.
February 10th, 2009 at 12:25 pm
Bruce:
I wish I could figure out a buy that will make mone in any time frame :)
All of our non-retirement stuff is in cd’s and high yield savings, but the brokerages are screwing everyone with a retirement account who doesn’t want to trade right now. They are offering cd’s with roughly half the yield that you can find at bankrate.com. Private bonds aren’t much different. I suppose they are raking off the spread to support their losses in other areas. Fortunately, the amount I trade with is a small percentage of the total.
February 10th, 2009 at 12:25 pm
This about sums it all up:
http://www.youtube.com/watch?v=Ct9aBySJkRQ
February 10th, 2009 at 12:28 pm
I’m still 20% long, 20% short, 60% cash. Sold some covered calls last two days. Sold some BAC yesterday, should have sold all but still holding some at ave cost of ~$5.
Looking for bargains, but there is not much yet after the recent run-up.
Hopefully, we will finally get the next step down in this Bear.
February 10th, 2009 at 12:32 pm
The problem is, this plan is Paulson I and II revisited.
The “Bad Bank” is “Super SIV” redux, which means it either won’t solve solvency issues (if at “market value”) or is a gift to the bank (if “above market”). Private money involved simply means it will be market value, so no solvency gain.
The “capital injection”, without being common stock, is the same crap that the TARP did already, which doesn’t work.
Its Japan all over again! If I was an active trader, I’d sell too.
February 10th, 2009 at 12:35 pm
I’ve got an idea. Let’s put on a play!
February 10th, 2009 at 12:35 pm
Isn’t it obvious by now they still don’t have a clue of what to do with the banks? Deep down, they know that nationalizing the insolvent banks is probably the best way to ultimately fix the mess, but they do not have the political will to carry it out. After all, that would mean we’re admitting that we’re “socialists” now. Of course, that genie is already out of the bottle, so let’s get on with doing the right thing. Until then, we can all play “pretend”.
February 10th, 2009 at 12:38 pm
Winston – your age is showing. Classic.
February 10th, 2009 at 12:38 pm
The greedheads on Wall St. hate the plan because it doesn’t do what they want: Take the toxic crap off their books at their price. Suck it, boys. It’s called capitalism.
February 10th, 2009 at 12:41 pm
My guess is there was some hope held out that mark-to-market would be suspended by the new plan. Didn’t we have a mark-t0-market rumor rally last week? This just brings it back.
February 10th, 2009 at 12:44 pm
Dear Mom[stop]
Lotsa bargains out there. [stop]
Not exactly having a bad time of it. stop]
Made money Friday and Monday, not complaining[stop]
Please send multiple changes of underwear cos it’s a bit scary out here[stop]
February 10th, 2009 at 12:49 pm
Marcus Aurelius,
What do mean old? You never heard of Turner Classic Movies? :-)
February 10th, 2009 at 12:53 pm
New York Dolls………LOL
Today’s close should be interesting.
February 10th, 2009 at 12:54 pm
Winston, will it be “pay as you exit?”
February 10th, 2009 at 12:55 pm
Now onto more pressing matters on CNBC: The S.I. Swimsuit issue. Bread & Circus for the masses.
February 10th, 2009 at 12:58 pm
$838 Billion – vote 61-37 for.
Add this to the $1.2T baseline deficit and to whatever TurboTim needs. Now, where do they get the money? That’s the question to drive the other markets.
February 10th, 2009 at 12:59 pm
Paul Jones @ 12:14
I’ve heard numerous pundits say that it would be “irresponsible” to let the Dow fall to 7000.
(There was a time in the past when it was deemed “irresponsible” to pile on endless amounts of government debt. Those days are obviously gone).
February 10th, 2009 at 1:01 pm
mitchn @ 12:38
Yeah, I think you more or less nailed it.
February 10th, 2009 at 1:01 pm
Paul Jones Says: February 10th, 2009 at 12:14 pm
Had we not propped up the markets we would be in a Bull Market by now.
Let capitalism work.
Amen, brother. Now watch the big boys come in and buy at the end of the day after Johnny Retail is done selling. At least this crew have the sense to see the importance of short sellers in a free market.
February 10th, 2009 at 1:02 pm
Barry,
DOW still down 280…we took a vote and decided it was time you sacrificed another toe for the sake of the market..
If it works, we plan to rename your foot the “plunge protection team”…
February 10th, 2009 at 1:03 pm
I’m interested in Barry’s opinion.
February 10th, 2009 at 1:08 pm
We’re in kneejerk territory and will be for a day or two. Check the situation on Friday. I haven’t had time to digest yet but it at first pass it doesn’t look crazy and avoids a political flameout for the moment.
February 10th, 2009 at 1:08 pm
The Geithner plan:
1. Pleased to announce that we have a plan to make a really good plan.
2. When we have the plan it will be really big. In fact it may be even bigger if needed.
3. There will be lots of things in the plan so we are not going to be really sure what is working and what isn’t. We are trying to be all things to all people, which is really difficult.
4. We are going to partner with the guys who got us into this mess and hope they don’t trick us.
5. I know I look like I am 16 years old, but trust me — we are not making this up as we go along.
6. We will make mistakes, but at least we plan to tell you about them after they happen.
7. Things may get worse before they get better. Things can’t get better unless they get worse. It is all relative.
8. TARP I had issues and we don’t plan to repeat those mistakes, unless we do and then “our bad”.
9. The plan will be flexible to deal with changing conditions. So flexible in fact that you are not really going to be able to figure out what our plan is until after we are done and we are not sure we will ever be done.
10. Some homeowners are worth helping and some others are not. Same for banks.
That is the plan, so please go back to your focus on the awesome stimulus plan that may also not work.
February 10th, 2009 at 1:09 pm
Markets don’t seem to like game of “pretend” today.
They have to keep up appearances you know. Even though the government and Wall Street are on the same team, Wall Street has to go down like the dog shot by the master’s finger gun lest the public catch on that they are both on the same side. So when the government does anything significant the ‘free’ market has to scream and make it look like it hates the ‘medicine’ even though Wall Street will net out more than their share of the blank checks
February 10th, 2009 at 1:12 pm
UFD = Unmitigated F*-&ing Disaster
There’s a real problem here. This guy Timmy Boy strikes me as a wet noodle weasly type. He does not instill confidence at all. At least Hank Paulson carried some stature. He was misguided, but at least you could tell it wasn’t his first rodeo.
This guy Geithner is scary. Not ready for Prime Time. He needs another 10-20 years of experience somewhere other than government-related work to be ready for this Job.
- AT
February 10th, 2009 at 1:14 pm
Winston: But everyone is in the play.
February 10th, 2009 at 1:16 pm
We’re back to the same two problems that we had in August. The banks need to take the writedown on their toxic assets that they alone created through leverage. Homeowners need to take the writedown on their mortgages that they alone created through refinancing. This is how the market separates the chaff from the wheat, always has and always will. It is called taking responsibility. Until these two actions occur no amount of stimulus, bailouts, or other cockamamie schemes will work. By trying to impede this natural process from occuring the government is simply dancing around the real problems. That will only lead to larger governmental deficits which we can not afford.
February 10th, 2009 at 1:17 pm
@ Bruce in TN:
The World Is Not Ending. Yet. Everything is not going to zero.
TED spread, Baltic Dry, $gaso all somewhat improved in recent weeks. It’s a process.
Despite the problems of the banks, commerce is continuing and there is currency in circulation. There has been little pass-through from commodity price deflation into the economy.
@ whatthe: that was very amusing. Thanks.
February 10th, 2009 at 1:21 pm
I used to be a long term investor. Now I am a short term trader. A reasonable economic system allows for reasonable investments to be made. Invest in quality assets for the long term and you will do fine. A crazy economic system (which is what we have) allows for only trading and speculation. I’ve made more money in a month of trading than I did in 3 years investing. Shrug.
February 10th, 2009 at 1:24 pm
@whatthe:
But if I am not helped but feel I should have been helped and know that my feelings of helplessness come from that lack of help that I felt didn’t help me, then what help can I then count on from the plan?
February 10th, 2009 at 1:25 pm
@ Lefty:
“Amen, brother. Now watch the big boys come in and buy at the end of the day after Johnny Retail is done selling. At least this crew have the sense to see the importance of short sellers in a free market.”
Thats the most reasonable thing I’ve read on here today. Who is really surprised at this move??? Its the most predictable thing I’ve seen all year besides fading the Obama rally.
I, like Left, wouldnt be the least bit surprised to see the big boys come in here any minute so they can buy this thing on the cheap after the weak longs have been flushed.
The buying opportunity is probably right here… dont know it for sure, and I’m not a soothsayer, but it sure smells like one of those rip your face off reversals is brewing.
February 10th, 2009 at 1:27 pm
leftback.
Don’t get too hung up on that Baltic Dry Index. It fell over 90%. At some point ships have scrap metal value. So ships will simply go idle, crews get fired, and supply of ships get taken off market. Don’t take it as signal that “demand” is picking up. It may be that the worst tonnage out there is simply getting mothballed.
February 10th, 2009 at 1:35 pm
Baltic Dry Index has been up a lot lately. Capesize rates are probably getting ahead of themselves.
Where is today’s PPT rally?
February 10th, 2009 at 1:39 pm
http://doomisnigh.blogspot.com/2009/02/bailout-plan-25.html
We are getting a Another Bush Solution. Change you will not get. We need some serious new idea not the rehash of the crap that got us here.
February 10th, 2009 at 1:40 pm
@Bruce N Tennessee:
This new plan is not meant to address your feelings of “helplessness”. What the plan is after is to address haplessness. If you felt hapless, then you would feel better about the plan. Helplessness implies you have given up “hope”. But hope is what the American people voted for. So we now have hope.
The plan is not about hope, it is about hipe. Hipe for the hapless. So, in conclusion, convert your feelings of hopelessness into feelings of haplessness. Only then will the hipe set you free!
February 10th, 2009 at 1:43 pm
I am so hapless, I’m hopeless..
February 10th, 2009 at 1:43 pm
PPT doesn’t go into affect until after 3 union rules. Another 8k landing is in store for today.
February 10th, 2009 at 1:44 pm
@Bruce N Tennessee Says: February 10th, 2009 at 1:24 pm
But if I am not helped but feel I should have been helped and know that my feelings of helplessness come from that lack of help that I felt didn’t help me, then what help can I then count on from the plan?
I think that was a Beatles song
February 10th, 2009 at 1:46 pm
Nice move in the Ten year notes today. Very powerful looking intraday move off the lows. It has an impulsive look to me. We may get a pull back tomorrow, but we should see more upside on the ten year. So if you’re a short term trader stuck in the TBT on the back of “everyone’s” recommendation, tomorrow may be a good day to extricate yourself from the trade unless you’re OK enduring a more painful advance.
I’m not sure what the next several weeks hold for the Ten year notes, but in the next several days we will have an upside bias.
February 10th, 2009 at 1:48 pm
It appears the new Bank Asset Rescue Fund induced the market to react eponymously.
February 10th, 2009 at 1:49 pm
And furthermore… todays action has absolutely nothing to do with “The Plan”…
And everything to do with price.
Geithner could have brought Elvis back to life to deliver the address, announce a cure for cancer, and a cure for AIDS and we’d still be selling off right now.
February 10th, 2009 at 1:52 pm
AT: I put on a TBT trade today, lately I had been expecting a rally in Treasuries – but I also expect it will be faded as traders take an opportunity to exit. The 10-year feels like it may be range-bound here for a little while as yields had moved up a long way in a short time. Longer term you have to be bearish on the 10-year…
February 10th, 2009 at 1:52 pm
DOW down 4 per cent…I am thinking Obama should shout “Mulligan”, throw his ball back on the fairway from the trees, and hit it again…this one was hooked and the gallery seems unimpressed..
February 10th, 2009 at 1:52 pm
Gang,
If you could choose a country to live in today that could provide the best opportunity for your young (3 y.o. twins and a 10 m.o.) family to succeed (personally, financially, etc.), what country would that be? US? Australia? New Zealand? Others? I’m not ready to give up on the US yet, but “Rome” does appear to burning and no one seems to want to put out the fire. Thoughts?
February 10th, 2009 at 1:54 pm
@ I-Man said: todays action has absolutely nothing to do with “The Plan”. And everything to do with price.
Exactly. It’s a technical market.
February 10th, 2009 at 1:54 pm
Geithner could have brought Elvis back to life to deliver the address, announce a cure for cancer, and a cure for AIDS and we’d still be selling off right now.
WELL..OK…but maybe only down 100…
February 10th, 2009 at 2:01 pm
“buy the rumor sell the news”- bought SEF on Friday in anticipation. Did anyone really expect anything else? Until the major banks are seized/nationalized (which will force the market down in the short term) there will no end to the turmoil in the financial markets. The banks cannot be valued until they write down their bad assets and if they do that they alert everyone to thier insolvency. By nationalizing you take out the shareholders and management- but who cares- what you are accomplishing is much more- you remove the hazy vision of uncertainity and bring in the bright light of clarity.
February 10th, 2009 at 2:02 pm
“Change is what you have left after you’ve spent the rest of your money” – Hapless Gilmore
February 10th, 2009 at 2:02 pm
TCA: That’s a great question. I’ve thought about the same thing – Singapore is on my list, but New Zealand is also very attractive. I’m still hopeful that the US will get it turned around, but have your talked to the average US teenager lately? Oh boy – our local high school requires all graduates to do an exit interview with community leaders (great idea btw). Even the best and brightest would have struggled to keep up 20 years ago.
February 10th, 2009 at 2:02 pm
@ Bruce @ 1:43
“I am so hapless, I’m hopeless..” as in….. shite out of hap
hap c.1205, “chance, luck,” from O.N. happ “chance, good luck,” from P.Gmc. *khapan (source of O.E. gehæp “convenient, fit”). Meaning “good fortune” is from c.1225. http://www.etymonline.com/index.php?term=hap
February 10th, 2009 at 2:02 pm
Guys,
be simple: Stocks will stabilise when the unemployment will stabilise.
Chart says: still a 5th wave to do to 600/620 SP
Stimulus will not compensate the loss of GDP due to loss of jobs and negative economic cycle amd Housing ARM
Bank system is still locked because it is too complex to find a solution and the governement doesnt want to nationalise. Why do you think they seem unable to find a solution ? You still need more pain for people to accept a more radical solution.
Conclusion : In March or April , after 1 or 2 more horrible unemployment reports, you will have a selling climax to the target at 620 SP
February 10th, 2009 at 2:03 pm
Bartender!….I would like to buy Ron Paul a beer.
@DC – RE: CNBC – change the channel and poof….it doesn’t exist.
I believe you may be giving CNBC too much credit. In the end it’s just entertainment, or lack of.
“You’ll find many of the truths we cling to depend greatly on out own point of view.” -Obi Wan Kenobi
February 10th, 2009 at 2:11 pm
All I want is the market to stay range bound, and the VIX to stay above 50. It’s all about the premiums.
It’s been this way for 3 months now, can they keep it up?
February 10th, 2009 at 2:11 pm
@Winston:
Very good, had to laugh…
February 10th, 2009 at 2:13 pm
The good news is that expectations on the plan are now low. A plan delivered by a guy who does not know that self-employment taxes need to be paid on self-employment income is naturally going to have low expectations. This leaves room for a suprise to the upside if expectations are exceeded.
High expectations would have set us up for likely failure. Therfore, high expecations are bad.
This seems to be the new theme from the new administration:
1. Set low expectations so any improvement looks like a win.
2. Say things like “we are not perfect”, “we will make mistakes”, “it will get worse before it gets better”, “we inherited this situation” and “doing nothing is wrong” to show that if expectations are not met, at least you warned everyone and it is not your fault.
These are things I do and say in my job and marriage everyday and it seems to be working so far. I like the administration’s strategy. We don’t expect much and that is what we are likely to get.
February 10th, 2009 at 2:14 pm
@ onlinebroker
Amen brother- you can only trade right now- there is no floor and stocks can always go lower- even to zero as we will see in C and BAC. I would wait until the 50 crosses the 200 before I considered any long term strategy.
February 10th, 2009 at 2:15 pm
“You’ll find many of the truths we cling to depend greatly on out own point of view.” -Obi Wan Kenobi
You know you’re on a good blog when the commenters put out Stars Wars quotes.
Always love it when R.Paul dresses down Bernanke.
February 10th, 2009 at 2:15 pm
tCA Says:
February 10th, 2009 at 1:52 pm
Gang,
If you could choose a country to live in today that could provide the best opportunity for your young (3 y.o. twins and a 10 m.o.) family to succeed (personally, financially, etc.), what country would that be? US? Australia? New Zealand? Others? I’m not ready to give up on the US yet, but “Rome” does appear to burning and no one seems to want to put out the fire. Thoughts?
I’d like to investigate any of the Scandinavian countries. It seems that they have progressed their thinking so far that they can tax anything, and the public accepts it, as long as universal health care is decent. Norway, Sweden, or maybe even another European nation like Luxembourg seems like a great place to be these days. The USA is going to be speaking Mandarin Chinese in our children’s lifetime. If I were a hispanic immigrant, I’d be RUNNING to get back to my homeland right now!
February 10th, 2009 at 2:24 pm
@whatthe:
You aren’t my wife at home today are you? I recognize the “you are not perfect” comment…
and let me know if I need to bring anything home when I leave the salt mine…
February 10th, 2009 at 2:25 pm
So the Geithner speech was from the “Cash Room” at the Treasury Department building.
This seems like the wrong venue to me. Based on the content, it should have been given from the “Printing Press” room or maybe the “Loose Change” room. Better yet, how about down one floor in the “Currency Debasement”.
February 10th, 2009 at 2:30 pm
tCA,
I would look for countries that are governed relatively responsibly; where income inequality is decreasing rather than increasing and societal conditions are improving rather than deteriorating. Even if they still have a ways to go on both counts, that would be the trend you want to see. Might be a pretty small list. Chile might be one example although I haven’t yet been there to check things out “on the ground”.
February 10th, 2009 at 2:32 pm
@tCA:
The country you are describing is called FantasyLand at Disneyland. I tried living there for a year and I got arrested.
February 10th, 2009 at 2:34 pm
2:34 and do you know where your PPT is?
February 10th, 2009 at 2:36 pm
@ tCA
Zimbabwe sounds good- I hear they get paid millions of dollars every day- WOW!
February 10th, 2009 at 2:38 pm
Wow, lots of amens on here today! No comments from AmenRa though?
Where has Mark E Hoffer been?
Borchers?
AT,
I’m still holding out for re-entry on TBT @ 40. Said it before and I’ll say it again, it’s a 28 year bubble, that will be a good short, in spurts, for a long time IMO.
I agree Dry Baltic may need to cool off some here but you might be able to set yourself up with a very nice trade in DSX.
February 10th, 2009 at 2:40 pm
I’m with Mannwich and Grindstone. The big banks can go to hell til they clean up their act, I won’t ever deal with them again myself.
February 10th, 2009 at 2:41 pm
Where is Borchers when you need a rally call? It is coming.
February 10th, 2009 at 2:42 pm
BR –
(or @ any of the knowledgeable commenters here who likely know or can find out this sort of thing)
You’ve noted on several occasions the bail-out amounts are multiples of the current market caps of the TBTF insolvent banks.
For some perspective, could you generate and post the numbers for the total market cap of all U.S. banks, maybe broken down in classes of locals, regionals and the TBTFs? even guesstimate the %s of survivable entities in each class?
February 10th, 2009 at 2:46 pm
@onlinebroker
I’ve made more money in a month of trading than I did in 3 years investing.
substitute 6 months for 1 month and I’m in full agreement with ‘ya.
There came the day when I said; “I can’t just sit here, I’m getting annihilated” and realized I would have to “trade my way back” if there was to be any hope of not losing the whole shebang. A few years into retirement, this was a profoundly unpleasant conclusion to come to.
I never saw myself as a “trader” – not because there was anything wrong with being a trader – on the contrary. I always saw professional traders as being (somehow) in possession of various and sundry magic spells. To some extent, I still see ‘em that way, but the past year has been one helluva learning process, and enlightening. To learn a whole new mindset, vocabulary and mental approach at this stage in life was not the simplest thing, and not without its share of inner pain and frustration.
For better or worse, I’m now a trader too, something of a journeyman perhaps, but the point is after taking a vicious bath once or twice in the beginning, I learned the ropes…or enough of ‘em to get by at least. In the eyes of many, probably not a very good trader, but I’ve almost reversed a year of savage losses, and that’s the purpose. In retrospect, I’m mildly surprised that such was even possible.
The thing that strikes me about this period is that almost always there’s money to be made. Not a lot sometimes, and at other times it’s quite remarkably lucrative. The biggest lesson(s) I had to learn – and not necessarily in order of priority – were
not to overtrade, an easy trap to fall into when your inner gunny is screaming “do something you &^%*’ing worm, don’t just sit there!” Recognize that some days it’s perfectly OK to sit it out, and not get involved. (my nature is “do” not “watch”) and the adaptation felt more than a bit counterintuitive.
not to sit on a bad position and indulge in false beliefs – take a loss and GTFO
stops – oh boy I learned that one the hard way! argh
“know thyself” – know what weaknesses and strengths exist in this wizened old shell, exercise the requisite amount of discipline to stomp on the weaknesses.
This site helped enormously. First came the content itself of course, and then the comments which have been (in general) hugely illuminating. It took a while, but I gradually became aware that I wasn’t on my own, there were innumerable others undergoing various shades of the same.
Well, that’s my damn story – that ‘n a buck’ll get me on the subway. I thank y’all for your patience, and now back to our regularly scheduled broadcast.
February 10th, 2009 at 2:49 pm
I was wondering the same thing about Hoffer. Kind of dropped off the map for weeks now. Borchers more recently. Where are you guys?
February 10th, 2009 at 2:53 pm
Didn’t read all these posts, but I head the spike just before the speach was due to a rumor that Geithner would say they were abolishing the Fed Reserve…
anyone else hear this?
February 10th, 2009 at 2:54 pm
Maybe all at the bar with Steve Barry?
February 10th, 2009 at 2:59 pm
I doubht Borchers and Barry are hanging out. That’s like Dennis Kneal and Roubini teaching a class together at NYU.
Schoolsout,
I didn’t hear that, that’s interesting though. total bs most likely, but interesting I suppose.
If this continues into the close I’m going to do some selective buying. I agree with a lot of people above, this almost seemed like way too easy a set up.
February 10th, 2009 at 3:01 pm
I nibbled a little bit at a few longs today. Just a little toe though.
February 10th, 2009 at 3:16 pm
Mannwich,
I’d like to think I’m going to put a middle finger in.
February 10th, 2009 at 3:18 pm
If someone is shorting, they are going to start covering about 3.35.
Just a thought. Free markets in operation.
February 10th, 2009 at 3:22 pm
Wow, this is some drop today. Will we get a little reversal at all before the close? I’m guessing not. Tomorrow should be very interesting, and, of course, I am out of pocket for most of the morning and will miss all the action (actually, that’s probably a good thing for my mental health!).
February 10th, 2009 at 3:24 pm
ben22, lol. let’s see what happens at 821… some hilarious posts in this thread. made my day… well, being long gold helps today, too.
February 10th, 2009 at 3:28 pm
While I am not crazy about today’s plans, if you can call them that, I was wondering what people’s suggestions are to get us out of this mess. I have yet to hear of a viable alternative from any pundit or blogger/online poster for this proposal or previous ideas that have been floated out there by Treasury. My qualm with this latest plan is that it is a continuation of a temporary move to just throw money at the problem, and hope that it is enough to cover the banks’ losses. With more people losing their jobs, investments and savings, and falling deeper into debt, I do not see how handing money to banks to provide them with a cushion is enough of a fix.
Ultimately, I believe the only way out of our situation is job creation. One will not buy a home or otherwise spend significant amounts of income on non-essential items when he or she is scared about losing his or her job. The private sector is not generating growth or jobs. The tax base is shrinking. When 70% of our GDP depends on consumption, it is only natural for the whole system to collapse when people no longer have money to spend. I think the solution is to scrap TARP/whatever the heck they started calling it today, and spend the money on public works, temporary public welfare, and growing the tax base once again. We can phase out of an economy largely dependent on consumption over the next several years through government sponsoring technological innovations like the smart grid, bitotech research, improving broadband and communications, but for now, nothing will improve until people have jobs and money to keep a normal economy flowing once again.
February 10th, 2009 at 3:29 pm
Nationalize
February 10th, 2009 at 3:29 pm
I think Borchers is hanging with Obama about now, scrounging for some change.
February 10th, 2009 at 3:31 pm
I like that too ben 22…
February 10th, 2009 at 3:36 pm
Karen,
I just came across something that might appeal to a fellow inflationista like yourself.
I am loving my gold today as well.
Might not be for you but I might put a little money in, as young as I am.
Morgan Stanley structured note
Due 5/16/2018
cusip: 61745ETB7
structured to pay 3% plus the rate of inflation.
Since it sells at a price of 66, it actually pays 4.5% plus 1.5 times the rate of inflation
Now all the deflationists can bury me.
February 10th, 2009 at 3:36 pm
Now I-Man is really going for it… just bought some GS calls.
February 10th, 2009 at 3:37 pm
I picked up some WFC. Small amount. Now I will go take a shower to clean off the grime.
February 10th, 2009 at 3:39 pm
Yawn.
Good day to buy or hold.
February 10th, 2009 at 3:41 pm
ben, thanks for thinking of me, but those yields are way too low for me… : ) show me something super safe around 25% and i might park my son’s next 4 year college tuition in it.
February 10th, 2009 at 3:45 pm
@ karen:
Show me where that is and I’ll quit trading.
February 10th, 2009 at 3:46 pm
karen,
lol, I sort of figured that might be the response. I can hear everyone here now, isn’t that johnny hard asset there saying he’s looking at a wimpy structured note based on inflation.
February 10th, 2009 at 4:07 pm
@ben22, does that structured note pay less if there is deflation?
February 10th, 2009 at 4:31 pm
The FINANCIAL STABILITY PLAN said “THIS BANK IS A LEMON”. Actually the plan is dealing with “The market of lemons” . If one cuts and pastes sentences on the blog sphere, including one or two from me (see my blog for example), one could get the same plan…
February 10th, 2009 at 5:27 pm
There are some good private investments, (accredited investors) getting 20%.
February 10th, 2009 at 5:28 pm
I guess the big boys stayed home this afternoon.
February 10th, 2009 at 5:32 pm
i am wondering of the reason the market tanked is that investors are terrified that the stress test will actually reveal that the banks have no clothes. so they fled the financials. and i wonder if to many of them fail the test (if its not rigged of course) that they don’t decide to just nationalize them. another reason to flee them.
February 10th, 2009 at 5:37 pm
I did call Obama to find out what went wrong…Timmmmaayyyyy is being made to stand in the corner, and will try to explain things again tomorrow.
He apparently is just not camera friendly, or so I was told…..they are getting Vidal Sassoon to make over his ‘do….
:)
February 10th, 2009 at 5:51 pm
call me ahab Says:
February 10th, 2009 at 2:14 pm
Amen brother- you can only trade right now- there is no floor and stocks can always go lower- even to zero as we will see in C and BAC. I would wait until the 50 crosses the 200 before I considered any long term strategy.
Short BAC was my play today. In and out clean. Low risk, high reward. In comparison, go build a portfolio of “high quality” companies and wait 5 years – you just took 10x the risk that I took today. I have re-defined what I call risk in the last year.
bogwad_seigneur (the smelly one) Says:
February 10th, 2009 at 2:46 pm
substitute 6 months for 1 month and I’m in full agreement with ‘ya.
There came the day when I said; “I can’t just sit here, I’m getting annihilated” and realized I would have to “trade my way back” if there was to be any hope of not losing the whole shebang. A few years into retirement, this was a profoundly unpleasant conclusion to come to.
I never saw myself as a “trader” – not because there was anything wrong with being a trader – on the contrary.
I would not say I got annihilated as I was mostly in cash during the crash but of course the few stocks that I owned got pummeled. I only started day trading to test out brokers more thoroughly for my site (see my name). I wanted to be a Benjamin Graham style investor but ohh well. Maybe that playbook will work again someday.
February 10th, 2009 at 6:10 pm
Can’t the PPT work in reverse – create a little market panic to “concentrate minds” just when the Congress is going to vote on the big stimulus plan? What if the vote is Friday and the Dow is below 7000 by then?
February 10th, 2009 at 6:32 pm
The traders didn’t seem to like like the plan???? And your point is????? Who cares. Something that doesn’t focus on saving some idiotic financial institution is really needed and I don’t think Tim’s plan did anything but try to protect them more. I guess I don’t really think the market collapse was tied closely to the plan.
February 10th, 2009 at 6:41 pm
whammer,
I’m not sure if you are joking but that investment is a terrible idea if we don’t get inflation, you will get your 4.5% based on the current price and thats it, not very liquid and you could most likely do better other places, such as treasuries in that environment (which I wouldn’t personally touch). If we do in fact get heavy inflation is where something like that really works. A la the structured note, I haven’t looked at it very hard yet, just came across the basics but I think you can find shark fin notes right now on some hard assets that look extremely attractive to me during a shorter term (3-5 years) duration.
JMO.
February 10th, 2009 at 6:44 pm
@Ethel to Tilly,
the Dow at 7,000 isn’t going to concentrate anyone’s mind in congress, like they could care less where the dow trades by the end of the week, we had a peak to trough decline of over 50% in just over 12 months, wealth destruction in the trillions (stocks, re, biz) and they still don’t get the severity of the situation, a dip from these levels to 7k, as if that means shit to anyone in congress, won’t make a bit of difference.
February 10th, 2009 at 7:02 pm
What s typical wall street reaction…unless it’s free-money-for-all… the world-will-end-tomorrow drop is a tiring reaction from investors. Of course, they always come crawling back because they don’t know where to invest besides wall street.
February 10th, 2009 at 8:23 pm
@whatthe
Hilarious.
February 10th, 2009 at 8:45 pm
Whatthe,
I just read all your posts, hilarious I was actually laughing out loud, that line about the currency debasement, you should do stand up or something, that was great. they were all good but that one was tops.
February 10th, 2009 at 9:22 pm
yup, what-the, had me lol, too… and don’t we all need the humor.
February 10th, 2009 at 10:14 pm
I didn’t hear a plan from Geithner. I heard “would’ve, could’ve, should’ve” but no plan. Anyway, the market dropped as soon as Geithner was introduced and never looked back. Beautiful I tell you. Beautiful.
February 10th, 2009 at 10:21 pm
AmenRa, been meaning to tell you that my license plate is UBASTI.
February 10th, 2009 at 10:54 pm
Very nice Karen. I’ve considered vanity plates but don’t want to get followed :)
February 10th, 2009 at 10:59 pm
In CA, it’s for a good cause. : )