Here’s a little counter-programming to my screed this morning:
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I am fair and balanced, or fairly unbalanced, or words tot hat effect . . .
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.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
Knowing that the vote over the weekend in Greece was really a referendum on Euro membership, a majority of the Greek Parliament said yes to staying. European Finance Ministers meet again on Wednesday to solidify the 2nd bailout package for Greece at the same time hopefully a deal is consummated between Greece and its creditors this week. The Greek 14.5b euro bond that matures on March 20th is up by 2 pts. The optimism that all will be completed and contained AGAIN to Greece has yields lower in Portugal, Spain and Italy. The iTraxx Financial Index is also narrower by...
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March 5th, 2009 at 6:41 pm
Where’s the panel where the bear eats Timmy?
March 5th, 2009 at 6:50 pm
That is REALLY funny….
Second day without CNBC. I’ve quit caffeine before, and getting off of CNBC is sort of akin to kicking a bad habit….it’ll take 28 days.
As they say in 12 step programs…it’s not about coming to the first meeting that is important, it’s making it to the second. I urge all traders to kick the habit….I find my mind getting clearer by the day. Take the pledge Today!
I still watch Fast Money, but it comes on after the markets are closed and I actually like hearing from that crowd.
March 5th, 2009 at 6:59 pm
looks about right. except i think the market is throwing a tantrum instead just yelling (or maybe thats teh same thing?)
March 5th, 2009 at 7:00 pm
too damn funny!!!! And True!!!!
March 5th, 2009 at 7:28 pm
I am totally fascinated at how at sea so many are. Doom and Gloomers believe a long-term major economic restructure has to happen, and then things will be cool. Others think a year of govt stimulus spending will kick us back in gear.
Does anyone out there really, really believe that the last ten years bore any resemblance to the underlying realities? And exactly how does that change kicking the can down the road hoping several trillion will maintain the status quo?
Smart money must be finally looking at earnings and not the hype.
March 5th, 2009 at 7:49 pm
I’ll wait until the market turns around for a while in a year or two and see whether Barry credits Obama and the Democrats for the turnaround. Seems Bush gets no credit for 2002-07, why should Obama get any credit if the market doubles from 2010-15? But Barry will give it to him. Count on it. IIRC, Barry was the “bear turned bullish” a couple of months ago. How’s that turned out so far?
March 5th, 2009 at 8:22 pm
LOL. I think we are all having a drink tonight. Love your last sentence, Barry, “or words tot hat effect . . .”
wow, putting spaces in between those periods was not easy.
March 5th, 2009 at 8:39 pm
I might add that I love bears. “Lions, and tigers, and bears. Oh, my!”
Got gold? the slippers were silver, not ruby, for those that don’t know…
March 5th, 2009 at 8:43 pm
Barry,
There seems to be a lot of ink about ‘systemic risk’.
Could you screed a post on what some systemic risk scenarios might look like?
Carl
March 5th, 2009 at 8:48 pm
Does anyone out there really, really believe that the last ten years bore any resemblance to the underlying realities?
No. it was a mirage. the last 8 years were basically based on credit.
if it wasn’t, why is it that wages are now less than they were in 2000.
and why is it wages with inflation are no better than they were in the 70s?
we were sold that if we cut taxes for the top %1 that the economy would just take off, it never did, it does give a good imitation of chicken trying to fly.
that if we just sent jobs offshore nothing bad would happen to us, never mind nobody could identify what the new jobs were going to be to replace them (none ever did).
March 5th, 2009 at 8:57 pm
Andy Tabbo, you are missing the fun. I just watched Ron Insana tell the panel that there is still $24 trillion in toxic assets on Euro bank balance sheets. Leisman tried to put up a fight, but it’s becoming weaker and weaker.
The CNBC capitulation will be the bottom. Watch for it.
March 5th, 2009 at 9:02 pm
Three months ago, Barry gave an interview in which he said he was “waiting for a couple more things to line up: Some clarity on earnings, which we won’t have for a while, some sort of resolution on these bailouts, and some sign from the new administration that, unlike the outgoing group, we have a plan — “Here’s what we’re going to do about credit, banks, the economy, GM.”” So how’s the plan going so far? Three months later do we have any idea “what [they're] going to do about credit, banks, the economy, GM”? I don’t watch this blog every day, so I’m wondering – having re-read the interview – what does Barry think today about his remark that Citigroup was a good buy at $5 in December?
March 5th, 2009 at 9:07 pm
I should mention that in December Barry sure sounded like the incoming administration had something to do with how the stock market was going to react in the short term. Waiting for “some sign from the new administration that, unlike the outgoing group we have a plan” sure sounds like Barry thought – at the time – that the market level would rely on how “signs from the new administration” were perceived. Today, apparently, not so much. I wonder why?
March 5th, 2009 at 9:13 pm
jdp629,
what does Barry think today about his remark that Citigroup was a good buy at $5 in December?
WTF does it matter, really?
Three months ago almost seems like an eternity at this point.
Apple @ $ 100 didn’t look bad several months ago either.
Again, WTF does it matter?
March 5th, 2009 at 9:21 pm
Foghorn – He’s complaining about people (Bush, et al.) who “didn’t see it coming” five years ago. But he didn’t see it coming three months ago. You don’t find that slightly hypocricital?
March 5th, 2009 at 9:26 pm
I don’t play political party bullshit.
I’ll move along.
March 5th, 2009 at 9:32 pm
Foghorn – Sorry. I only come around here once in a while. But it seems that I’m unlucky in that every time I look here Barry is complaining about Republicans this or Republicans that. I honestly think that for all the “I’m an independent” crap Barry pulls, I am more of an independent than he is. But I’ll desist to those who know him better.
March 5th, 2009 at 9:41 pm
haha thats a funny cartoon. that bear is hilarious.
March 5th, 2009 at 9:43 pm
fitting that someone would comment on the cartoon thread about BR’s record on stock picks. The short call on AIG alone would make up for any loss on C for buying at $5.
and then probably getting stopped out quick.
not a BR groupie, just sayin.
March 5th, 2009 at 9:58 pm
Okay, let me try one more time, because I can’t figure out how to edit on this comment thread. I don’t care whether Barry was good or bad on any particular stock pick. I apologize for putting noses out of joint by reminding people of the Citi thing. Two things I do take issue with: 1. Barry claims to be a-policital yet every time I come to this blog I read an entry that has to do with politics. I come here for financial information, not politics. 2. In the December interview Barry (who was described as a “bear turned bullish” type) put a lot of weight on how the new administration’s policies would be viewed by the market. Now he seems to be sloughing the downward slide off on prior administration(s). Either he meant what he said then – that the market was going to react to the new administration’s policies; or he means what he says today – that the whole problem rests at GW Bush’s administration’s feet. Can’t both be right.
March 5th, 2009 at 10:11 pm
jdp629:
If you can’t see the inane bullshit the Republicans have pulled over the past decade, you are blind. Are the Dems blamelss? No. But the Republicans are the party that claims fiscal restraint and responsibility. That claim is not supported by facts. The Republicans are about diverting attention to “culture wars” and real wars against bogeymen of their own creation – against the wrong parties and only when they can capitalize on them. They distract the weak-minded with issues like abortion, gay marriage, Teri Schiavo, “death” taxes (that no one you know will pay), the “war on Christmas” (that never existed), and other emo issues that are none of my business, and certainly none of mine (this being a free country, and all). They claim Jesus, while they torture their enemies without the benefit of trial.
The elite among them profit from all of this.
They are big government big spenders – but only on their own cronies. They are the party of cost plus, no bid, insider contracts. They are the party that has bamboozled it’s membership into supporting limits on liability claims against corporations (it’s called “tort reform”), so that the average person, when hurt or defrauded by corporate interests, can’t receive full restitution (as determined by their own peers) for the damages they have suffered. They want the right to drill for oil in our only remaining unspoiled places, when they haven’t even begun exploring in the places they already have the rights to. They encouraged you to laugh at Al Gore when he mentioned Social Security lock-boxes, while trying to get you to support putting your hard-earned cash into the freekin’ fraud fest we call the stock market (SS, by the way, was created at the behest of your grandparents, who didn’t want you to suffer in old age as they and their contemporaries had). Are you laughing now?
If you think this is untrue, tell me what we got for the record Bush deficits and tax cuts. Roads? No. Bridges? No. Schools? No (and I remind you that “No child left behind” was an unfunded mandate by the Federal (R) government, and unfunded mandates are supposedly something they’re against). Healthcare? No. A balanced budget? No. Lower energy costs? No. Higher wages for the working classes? No. Enforcement of our laws? No. Funding of scientific research? No. Enhanced moral authority? No. Improvement of our reputation and standing in the world? No.
You got NOTHING. Our country got NOTHING.
Grover Norquist – a darling of the Republican Party has said clearly that he wants the US government reduced to the size where it can be drowned in a bathtub. Well, people like you have granted his wish – we let Republican government bullshit us into the ground, and now we’re paying for it.
I posted here, long before the election, that the next President would be saddled with the debt of Bushco and the (R) Congress. That’s what’s going on now. If McCain had won, the exact same thing would be happening.
You have been rode hard and put away wet.
March 5th, 2009 at 10:13 pm
Correction: that are none of my business, and certainly none of YOURS…
March 5th, 2009 at 11:06 pm
jdp629, you seem a little bit whiny tonight. You don’t read this blog very much, as you’ve stated. In case you missed it, Barry doesn’t believe in predictions but it doesn’t stop him from making them, usually with plenty of qualifications.
He is also not a buy and hold type, so if you invest as he has recommended numerous times, a C buy at $5 would have netted you about 20% when you got stopped-out as it started down from 7, at least that’s what it looks like from the chart.
Also, many of his posts are to kick-off some fun debate/arguments in the comments, but not to attract whining.
March 5th, 2009 at 11:08 pm
What it come down to Marcus Aurelius, is that in the world according to Santelli, the poor rule the United States and are reponsible for all of its problems.
March 5th, 2009 at 11:23 pm
I have a question:
1. Did Larry Summers pave the way for Credit Default Swaps (CDSs)? Did he obstruct the regulation of these swaps? (Credit default swaps are basically insurance policies under another name…except that they aren’t regulated like all the other insurance products.)
Can someone provide evidence of this?
March 5th, 2009 at 11:42 pm
Marcus Aurelius – I agree with your view that Republicans didn’t do very well when they held both houses of Congress and the presidency. I disagree with pretty much everything else in your screed.
wnsrfr – Again, I apologize for mentioning the Citigroup thing. It seems to be a thorn among commentors here. The bigger issue I tried to raise was that Barry seemed to be of the opinion that the market would react either up or down based upon how it perceived the “plans” or lack of same from the incoming administration. That was in December. While everyone seems to be fast to defend Barry’s Citi call, nobody seems ready to explain his view that the plans detailed by the incoming administration would have an impact on where the market would go from December to – now. If he wanted to say that it didn’t matter what the new guys did – the previous administration had screwed things up beyond fixing – he should have said that. But he didn’t.
March 5th, 2009 at 11:54 pm
jpd,
last I knew, and I’d still be betting it, BR doesn’t futz w/ the archives on this site.
to that end, if it’s so important to you, pull up what you’re referring to..
as they used to teach Journalists: “Research is key.”, take a page..
March 6th, 2009 at 12:06 am
jdp,
I’m gonna have to second hoffer here and say pull it up. I read this site every day and the last larger view market call that stands out to me from BR was his “maybe it’s time to dust off the DOW 6,800″ statement.
March 6th, 2009 at 12:31 am
Here (read the whole thing, as they say):
http://www.ritholtz.com/blog/2008/12/the-barrons-interview/
“Everybody on Wall Street is wondering if we’re going to see a year-end rally of any substance, or, if we’re heading down to 7100 on the Dow, or 850 on the Nasdaq. [On Friday, those indexes were at about 8200 and about 1430, respectively.]
What say you?
We’re waiting for a couple more things to line up: Some clarity on earnings, which we won’t have for a while, some sort of resolution on these bailouts, and some sign from the new administration that, unlike the outgoing group, we have a plan — “Here’s what we’re going to do about credit, banks, the economy, GM.” We wouldn’t be surprised to see earnings seriously damaged.”
Seems to me his view at the time was waiting for some “sign from the new administration” on some things. Now the thing has gone backward and he’s saying it’s not on the new administration at all, it’s all on the previous administration. At least, that’s how I read him. I could be wrong. But I’d be interested in reading what Barry has to say about it. In the interview, he mentioned the possibility of going to Dow 7100 at the low point. Now we’re at Dow 6590 and no low point in sight. Does nothing of it have to do with the “signs from the new administration”? It was all preordained based on stuff George Bush and co. did four or five years ago? That’s impossible to square with what was said in December.
March 6th, 2009 at 12:56 am
@jdp,
how about just read the very first answer he gave in the interview
Ritholtz: In 2006, I was probably the most bearish guy on the Street; now at a table of industry people, I’m the bullish guy. We’ve cut this market in half; that doesn’t mean it can’t go lower.
I’ll translate that since you don’t come here often:
I was way ahead of this thing, called it a long time ago, warned about it a lot, now that the market has gotten killed I think I can find some value as not everything is shit. That said, I’m prepared for things to get worse and I’ll have an exit strategy if they do.
And, btw, the market was in fact rallying hard at the time this came out, and BR had made some buy calls not long before that right here, which I think he stressed were for trades. Last, he never said in that interview that the Dow was going to 7,100 as the low point, where does it say that? He said we could be going there on the Dow, no mention of that being the low.
Here
There is a significant rally, 20% or 30%, waiting to happen. But there’s also the possibility of a lower low, as we get deeper into the recession
He says this right before the mention of the 7,100 price and we did get that rally so yeah that looks pretty good to me.
You know, I’m not even sure I like Obama, but my version of fair isn’t to blame him since he hasn’t been able to prop up the market in the first 40 something odd days or prevent a new low IMO that was inevitable regardless. I think people need to get off his ass on the whole politics thing, this site is mainly economics and markets.
And yeah, I’m thinking that the terrible earnings, the massive losses at the banks, the foreclosures, etc are not b/c of any corporate actions taken in the last 40 days, it IS a result of things that were going on 4 and 5 years ago, and further back than that.
I’m not trying to be a complete jerk here but it looks like you read it and then made up your own conclusions and said they were his.
March 6th, 2009 at 3:06 am
I see social unrest.
March 6th, 2009 at 4:03 am
I should mention that in December Barry sure sounded like the incoming administration had something to do with how the stock market was going to react in the short term. Waiting for “some sign from the new administration that, unlike the outgoing group we have a plan” sure sounds like Barry thought – at the time – that the market level would rely on how “signs from the new administration” were perceived. Today, apparently, not so much. I wonder why?
Did you look at the cartoon? Really? You did? And then you post this comment?
BR has been saying Geithner sucks all along. Sure the markets are reacting badly to his plan to feed cash to the black hole that has become our financial “system”.
I think the sentiment he’s been trying to express is that it’s not Obama’s fault these black holes exist. Obama is a constitutional law expert, not a quant. Or the remnants of a supernova, or whatever it is that’s responsible black holes.
March 6th, 2009 at 4:35 am
From Wikipedia:
Gravitational collapse occurs when an object’s internal pressure is insufficient to resist the object’s own gravity. For stars this usually occurs either because a star has too little “fuel” left to maintain its temperature, or because a star which would have been stable receives a lot of extra matter in a way which does not raise its core temperature. In either case the star’s temperature is no longer high enough to prevent it from collapsing under its own weight (the ideal gas law explains the connection between pressure, temperature, and volume).
The collapse may be stopped by the degeneracy pressure of the star’s constituents, condensing the matter in an exotic denser state. The result is one of the various types of compact star. Which type of compact star is formed depends on the mass of the remnant – the matter left over after changes triggered by the collapse (such as supernova or pulsations leading to a planetary nebula) have blown away the outer layers. Note that this can be substantially less than the original star – remnants exceeding 5 solar masses are produced by stars which were over 20 solar masses before the collapse.
If the mass of the remnant exceeds ~3-4 solar masses (the Tolman-Oppenheimer-Volkoff limit)—either because the original star was very heavy or because the remnant collected additional mass through accretion of matter)—even the degeneracy pressure of neutrons is insufficient to stop the collapse. After this no known mechanism (except maybe the quark degeneracy pressure, see quark star) is powerful enough to stop the collapse and the object will inevitably collapse to a black hole.
This gravitational collapse of heavy stars is assumed to be responsible for the formation of most (if not all) stellar mass black holes.
Now let’s change the words around for fun!
Financial collapse occurs when the banking system’s reserves are insufficient to cover the system’s own obligations. For banks this usually occurs either because a bank has too little “credit” left to maintain its profitability, or because a bank which would have been stable receives a lot of extra debt in a way which does not raise its core profitability. In either case the bank’s profitability is no longer high enough to prevent it from collapsing under its own debt (The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital.).
The collapse may be stopped by the degeneracy pressure of the bank’s constituents, condensing the debt in an exotic denser state. The result is one of the various types of compact bank. Which type of compact bank is formed depends on the debt of the remnant – the debt left over after changes triggered by the collapse (such as credit default swaps or mortgage backed securities) have blown away the money. Note that this can be substantially less than the original bank – remnants exceeding $10 million market cap are produced by banks which were over $700 billion before the collapse.
If the debt of the remnant exceeds $3 trillion (the AIG-Citibank-Merril Lynch limit)—either because the original bank was very stupid or because the remnant collected additional debt through ill-advised mergers)—even the degeneracy pressure of CNBC cheerleaders is insufficient to stop the collapse. After this no known mechanism (except maybe the money printing inflationary pressure, see SUCKERS) is powerful enough to stop the collapse and the bank will inevitably collapse to a black hole.
This inevitable collapse of stupid banks is assumed to be responsible for the formation of most (if not all) Recessions and Depressions.
March 6th, 2009 at 4:40 am
From Bloomberg:
“Investors are paying as much for contracts that protect against a default on the bonds of Omaha, Nebraska-based Berkshire, which has $25.5 billion in cash, as for KB Home, the homebuilder that lost money for seven consecutive quarters. The cost of credit-default swaps on the finance arm of GE and its $45 billion in cash is about the same as for building materials- maker Louisiana-Pacific Corp., which posted nine straight quarterly losses.” http://www.bloomberg.com/apps/news?pid=20601014&sid=a3n09_G7DlxU
Is this a sign of panic that accompanies market bottoms?
March 6th, 2009 at 5:15 am
Hume,
No, it’s a sign that people are scared of Berkshire and GE being on the wrong side of CDSs if more shit goes down. If it does go down, and they are on the wrong side, it could easily cost way more than $45 billion cash.
Until AIG and the major banks come clean on what their toxic “assets” are really worth, stop looking for the market bottom. We’re not there yet. For a primer on what they are actually worth, read this article in the upcoming NYT Sunday Magazine: http://www.nytimes.com/2009/03/08/magazine/08Foreclosure-t.html?scp=2&sq=magazine%20preview&st=cse
March 6th, 2009 at 7:36 am
Kyle @ 4:35 a.m.
“even the degeneracy pressure of CNBC cheerleaders”
“degeneracy” and “CNBC cheerleaders” in the same sentence pretty much captures the essence, wouldn’t you say CNCSucks?
March 6th, 2009 at 8:16 am
I just noticed one more thing about the cartoon, that new bailout plan looks like shit.
March 6th, 2009 at 11:10 am
Timmy may have to eat his own cuisine very soon…..
March 6th, 2009 at 12:21 pm
In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten. -Peter Lynch
What kind of bullshit is this?
So with all your fancy schooling, all your inside info, all your contacts, the best you can do is %10 better than flipping a freakin’ coin.
And people are supposed to send their hard earned cash to you in exchange for a worthless piece of paper.
Whatever.
March 6th, 2009 at 4:45 pm
Some here keep wanting to beat up a particular party.
I for one am beating on BO because he’s the man of big promises we all voted for. Unfortunately, as his former pastor said: He’s a politician. What do you expect. And he will break all his promises. I learned that when he promised to filibuster the surveillance amnesty bill, and then rolled over.
The Dems want to beat the Republicans and the Republicans want to beat the Dems. But in the end, they find a way to do what US corps want. It’s high drama solely intended for cable TV, where the chamber is completely and totally devoid of anyone other than the speaker and the next one or two on deck.
And that’s our govt’s idea of late night TV. Excuse me.
If our Representatives were really into being representatives, and not pressured into constant campaigning, there would be none of this circus. There’s nothing real about the broadcasts. And it insults the American voter.
So, who exactly is watching?
So really, all of this jibber jabber about one party versus the other is a distraction ploy. Playing pin the tail on the donkey. Keep everyone amused, while cutting the deals off camera late at night.