US Futures Higher: Dow 212+
By Barry Ritholtz - March 23rd, 2009, 5:50AM
Good Monday Morning. Looks like we have green on the screen this morning, with markets recovering from Friday’s sell off in the early going.
Asian markets were up huge: The Nikkei 225 had gains of 3.39%, the Hang Seng Index up 4.78%, and the S&P/ASX 200 Index tacking on 2.44%.
Nothing like the prospect a trillion giveaway to get the animal spirits moving . . .
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March 23rd, 2009 at 6:35 am
Unintended consequences of this toxic buyout scheme (don’t call it a plan):
1) You are basically turning bank losses into public debt…worsening debt to GDP…that is hopeless as it is
2) Private investors will want to examine these assets before buying…what will this reveal?
3) Investments in toxic assets make no sense…further misallocation of capital…and that capital will NOT be going into equities.
March 23rd, 2009 at 6:45 am
Are you suggesting a “Short the Dollar, Short Bonds, Long Gold” trade ?
March 23rd, 2009 at 6:49 am
Today is going to be something else… i’m just shaking my head and thinking it’s a mad, mad, mad, mad world.
6:43 AM ET 3/23/09 | Marketwatch
HONG KONG (MarketWatch) — China will continue to purchase U.S. Treasurys and support the dollar’s role as a global currency, according to comments Monday by a senior Chinese official in Beijing.
U.S. government debt is viewed as “an important element of China’s investment strategy of its foreign currency reserves,” Hu Xiaolian, director of the State Administration of Foreign Exchange and vice governor of the People’s Bank of China, was cited as saying Monday by Bloomberg News.
The comments were seen as timed to help support the Obama Administration’s efforts to revive the economy, coming just hours before U.S. Treasury Secretary Timothy Geithner is due to unveil details of a plan to get private investors to take some of the troubled financial assets off bank balance sheets.
Asian stocks rallied sharply ahead of the plan, with Japan’s Nikkei rising 3.4%, Hong Kong’s Hang Seng up 4.8% and South Korea’s Kospi index adding 2.4%.
March 23rd, 2009 at 7:00 am
Steve,
I graphed the DOW vs QID for the last 12 months last night…and while the DOW is now down still 40 %, QID is only up about 10….most of us feel Obama is lost, but I don’t think you can fight the trend…to me it looks like even QID has become one of those things that can’t be “bought and held”…
http://www.youtube.com/watch?v=VNu9xjUwPEk
60 Minutes Kroft To Joking Obama “Are You Punch Drunk?”
Bush was stupid, and the new guy is just lost…I find investing here to be really difficult, but I think I am taking Lefty’s advice today.
March 23rd, 2009 at 7:12 am
SB will be proven right over the longer-run..
that said, Markets don’t, continuously, move in straight lines..
to Bruce’s point, the trend seems to be up, and we haven’t had a Major Rally since these ‘Waterfalls’ started..barring, of course, the one that seems to be continuing, now..
Volatility seems to be coming back into the ‘Markets’, as well..
As always, tight stops, in any direction, are your friend.
as an aside, to give one an idea of the ‘putes one is trading against, check FAZ closing @ 35.00 Friday afternoon..
that is some precision s**t..
March 23rd, 2009 at 7:12 am
(TBT) not yet, but soon!
March 23rd, 2009 at 7:14 am
Looks like we are going to see my tidal wave today…
March 23rd, 2009 at 7:17 am
But here is the big picture from Europe this morning:
http://www.rttnews.com/Cust/ArticleView.aspx?Id=889952
Eurozone Jan. Trade Deficit Widens More Than Expected
It is the collapsing imports and exports thingy….
March 23rd, 2009 at 7:17 am
equities are simply over emotional. typically i’d say equities are always grasping for news that may be PERCEIVED as positive when in reality that is not the case. equiity traders and investors always want to believe everything will be ok if they just sit tight. most of the globe would like the equity market rise 365 days a year. just look at how emotional the globe is with release of this taxpayer travesty plan by our incompetent treasury goon. this is nothing but another version of the paulson plan. the entire globe is working off 30 years of flawed economic theory. god help us when this plan fails and it will. the revolution will start
March 23rd, 2009 at 7:23 am
The PLOT thickens, the Mother of all Ponzi Schemes advances one more step….
The powers (Fed, Treasury and Obama) have a fixed-set of words in their bag (Toxic assets, Private-public partnership, credit revival, etc.) , they rearrange them but wonder why they keep getting the same outcome! It’s like flipping an equal sides coin.
Short them all, but long live commodities.
It would be great if euphoria develops today(i.e. S&P at 810) to give me good shorting positions for Q1-data, keep the fingers crossed for now!
March 23rd, 2009 at 7:42 am
Hey Ritholtz, I could not wait for your Geithner Public Investment Corp. post today, so the peeps already discussed the “trillion giveaway” last night: http://www.ritholtz.com/blog/2009/03/understanding-lehman-aig/
Of course, this is no trillion giveaway. This will be a 4 – 5 trillion giveaway if not more.
Hoffer and I have different takes given our diametrically opposing views on politics and the world, but we agree: It is a dark day for America. But I am still hoping this is some Machiavellian Obama maneuvering to propose a solution so clearly odious that Congress, including the Republicans, will decide some targeted bank nationalization (including some bank failure) program is the only politically viable alternative.
Assuming Geithner’s supply-side Keynesian turkey sees the light of day, yes, Ritholtz: Short the Dollar, Short Bonds, Long Gold, Long Foreign Marriages, Long Wheelbarrows and Cyanide Pills, Short Obama’s Presidency, Short Ritholtz.com When the Inevitable Police State Arrives
March 23rd, 2009 at 8:05 am
CNBCS,
the sad thing is that so few give any real thought to the Police State that, already, has grown up around them.
it was one of the very few, remaining, booming businesses/sectors, so far, in the 21st C.
but, hey, it wasn’t on the MSM’s HeadlineNews, so it Must not exist..
as but one ex.:
Sixty years ago, the Raytheon Company gave us the first microwave oven. Today, the company, perhaps better known for its missiles, is looking to sell the U.S. military a microwave-based weapon they say will help soldiers control crowds without the risk of seriously injuring anyone.
Raytheon calls its Active Denial System (ADS) technology a “revolutionary non-lethal protection system that employs millimeter wave technology to repel individuals without causing injury.” Here’s how it works: Active Denial emits a focused beam of wave energy that travels at the speed of light, heating the water in a person’s outer layers of skin and producing an “intolerable heating sensation that causes targeted individuals to flee.” Translation: You feel intense pain, but you don’t get hurt, according to Raytheon, which claims that tests show the effects can reach through cracks in and around concrete walls and even through the glass of automobiles.
http://www.sciam.com/blog/60-second-science/post.cfm?id=a-pain-ray-military-plans-to-use-mi-2008-10-15
silly me, I thought ‘beneficial use’ went in the other direction, hmm, I guess that’swhat ‘dual use’ means..
should be fun times..that flippin’ thing will give ‘Don’t Tase me, bro” a whole new wave of popularity..
March 23rd, 2009 at 8:29 am
The relentless negativity continues to assume parodic proportions. This morning’s selection. Police states, cyanide pills, Ponzi schemes, Obama is lost, supply side Keynesians, etc etc etc. And no they are not going to nationalize the banks either….Boo hoo….Actually I thought Obama gave a stellar performance last night….Historically I’ve been a mild Republican but boy am I thankful we’ve got this guy who is a model of intelligence and level headedness…..Amongst the many doofuses that seem to find there way to 1600 every so often we seem to get lucky and get a Lincoln, FDR or Truman and we seem have done it again.
March 23rd, 2009 at 8:35 am
Get this: 8:26 AM ET 3/23/09 | Dow Jones By Terence Poon
Of DOW JONES NEWSWIRES
BEIJING (Dow Jones)–People’s Bank of China Gov. Zhou Xiaochuan called Monday for the creation over time of an international reserve currency that isn’t linked to any one nation as part of reform of the international financial system.
“The reestablishment of a new and widely accepted reserve currency with a stable valuation benchmark may take a long time,” Zhou said in an essay published on the central bank’s Web site Monday, titled “Reform of the International Monetary System.”
Zhou didn’t explicitly mention the role of the U.S. dollar, but said having a national currency act as an international reserve currency may have outlived its usefulness and that a desired goal now should be creating an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run.
My commentary: got gold? the perfect international reserve currency that isn’t linked to any one nation.
March 23rd, 2009 at 8:42 am
My commentary: got gold? the perfect international reserve currency that isn’t linked to any one nation.
…..I don’t see a return to the gold standard on the horizon…..Montague Norman is dead.
March 23rd, 2009 at 8:57 am
“most of us feel Obama is lost, but I don’t think you can fight the trend”
try
many of us feel America is lost .. and I don’t think you can fight the trend
we should have wrote in Darth Cheney .. he would have kept us safe another 4 .. and then why not 4 more in 2012
March 23rd, 2009 at 9:01 am
what can I invent to get the north off salt in the winter ? …. hum
March 23rd, 2009 at 9:14 am
karen, do you see your posts on China at 6:49 and 8:35 to be conflicting? The Chinese leadership is under increasing internal political pressure to not have so much of their reserves be dollar denominated. I don’t know if this is necessarily a gold trade as I think the G20 are thinking of a unified, global fiat currency, which they might call the Ritholtz.
March 23rd, 2009 at 9:17 am
C, not conflicting at all… 2 different time frames.. not that i think you really wanted me to answer : )
March 23rd, 2009 at 9:18 am
“should be fun times..that flippin’ thing will give” I wonder what it could do from say a Space Station
March 23rd, 2009 at 9:19 am
I’ve got a great refrain playing right now, “this feels like a nightmare, we’re all in the spot…” lol, laughing is preferable to crying, imo.
March 23rd, 2009 at 9:54 am
Greg,
see: http://www.globalsecurity.org/military/systems/munitions/hpm.htm
HPM High Power Microwave, the little ones, like the one above, simply, not much..
LSS: it a major reason many satellites have nuclear reactors onboard, to go w/ their solar arrays..
Lasers are muy popular, as well..though, typically for different apps..
March 23rd, 2009 at 9:59 am
Leftback is contemplating his extraordinarily long ring fingers and thinking that if we get a massive screamer through 800 today it would be a good time to get short. A more modest advance and the rally continues.
After reading some of your weekend notes, we are tempted to get long cabbage.
March 23rd, 2009 at 10:36 am
lb,
re: cabbage, only if you stand for delivery~the + side is that it stores well..
if you’re looking for “LEAPs”, see: http://www.savingourseeds.org/seedbank.html
and, for a refresher: http://www.heirloomseeds.com/colecrop.htm
better than standing in line, waiting for your # to be called..
March 23rd, 2009 at 11:10 am
@MEH: I already laid it off, no worries.
But I’m having coleslaw for lunch, nonetheless.
I may try to catch a few rays as well..
March 23rd, 2009 at 11:46 am
lb,
you’re getting serious milage out of those ‘ring’ fingers~trading Quick, trading Heavy?
no wonder that front-month chart looks like it came from seismometer in SoCal..
March 23rd, 2009 at 12:14 pm
Mad dogs and Englishman go out in the midday sun… what is it, 32 F there? you might freeze, whither at a minimum… lol.