New Posts . . .
Took forever to get home from Indianapolis yesterday — 90 minute flight, with weather and congestion delays. took far too many hours. I am still recovering, but it was a great conference and the trip was well worth it. I love speaking to sophisticated farmers and ranchers who run a cooperative power association — surprisingly savvy folks, smarter than the geniuses who caused the meltdown.
Anyhow, I have a a few posts today after the open today, but here’s what I am looking at this morning:
• Why the Bulls Just Won’t Die (Barron’s)
• Profit Rebound Still Has Long Climb Back (WSJ)
• Profits Squeezed at the Margin (Barron’s)
• Banks Balk at U.S. Push to Rein In Derivatives (WSJ)More Homeowners Facing Foreclosure (NYT)
• Bernanke Bid to Lift Housing Scuttled by Rising Rates, Defaults (Bloomberg)
• Borrowers with good credit fuel foreclosures in 1Q (AP)
• Did the CRA cause the mortgage market meltdown? (Minnesota Fed)
• The Big Banks’ Best Friend in Washington (Washington Post)
• Credit Relief May Not Last Long (NYT)
• Roubini Finds Economy Even He Can Be Bullish On (Bloomberg)
• Banks’ Appraisal Conflicts Could Continue Under New HVCC Rules Cuomo’s office: “GSE’s knew they were buying loans with appraisal fraud…” : “Outside industry experts on Bank of America’s advisory council, speaking on the condition of anonymity, said they had hoped Countrywide’s shady past would be cleaned up within a year of the new ownership. But nearly a year later, we’ve learned that the Charlotte-based BofA has simply assumed the same practices that branded Countrywide a financial predator.”
May 29th, 2009 at 7:24 am
My travel tip of the day: Always travel with baby wipes — they can be a lifesaver!
May 29th, 2009 at 7:41 am
@BR
I love speaking to sophisticated farmers and ranchers who run a cooperative power association — surprisingly savvy folks, smarter than the geniuses who caused the meltdown…
Thanks Barry…I “resemble” that remark [cooperative farmer]…
I don’t know how savvy any of us are, but the fresh air, and food on the plate sure gives one a sense that to enjoy prosperity in this country, one need not go looking for too many gimmicks…
It seems we spend more time “cleaning up messes” in this country than we do enjoying simple things…
May 29th, 2009 at 7:42 am
PPIP simply isn’t needed…
http://online.wsj.com/article/SB124346787723260427.html
…the next bold statement is: Fed should raise rates in late summer, just a little. Would be a huge show of confidence, tighten the yield curve spread a bit, etc.
May 29th, 2009 at 7:42 am
@BTW
The book just arrived…congrats!
May 29th, 2009 at 7:59 am
hmmm, I wonder what her discretionary spending looks like, i would also guess she has 0 savings:
Nadine Harris in Bakersfield, Calif., is hoping to modify her 30-year fixed-rate mortgage under President Barack Obama’s loan modification and refinancing program introduced earlier this year.
The 55-year-old was laid off two years ago by Sears after working there 34 years. Harris found another job, but she makes $20,000 less a year. The $925 she takes home every two weeks doesn’t cover her $1,522 mortgage and other living expenses. She’s used all her savings to stay current on her payments, but next month the reserves will run dry.
“I’ll have to scrimp to make up the payment in June,” she said
May 29th, 2009 at 8:04 am
Anyone have any thougths on this?
http://online.barrons.com/article/SB124275522397735517.html
Robert Pritcher, Elliot Wave Theory “Guru” has some harsh views on where we’re heading. Harsher even perhaps than some I frequently read here. For example he says in the interview:
“It’s a developing global depression. Economies and societies are so closely entwined in the modern world that social mood is much more pervasively shared than it was centuries ago. So the world had a boom together, and it’s having a bust together. The canary in the coal mine was Japan, which reached impossible-to-maintain extremes of debt and investment values a decade earlier than other countries did.”
No chance for green shoots in his dire perspective. I have not been in the green shoots camp – because I just can’t make a good case for it, but here is a pretty bright guy with some rather dark predictions.
May 29th, 2009 at 8:07 am
when are we going to put this CRA thing to rest. Anyone still trying to blame the crisis on CRA is a damn fool.
May 29th, 2009 at 8:13 am
krice,
we have been talking about prechter here at length for almost a month now. If you want to see more go to the video’s section or troll the comments sections of almost any market post over the last 4 weeks.
Here is another very interesting prediction from Prechter based on Socionomics:
Pioneering Studies in Socionomics, Chapter 17 (excerpt): “In 1985, The Elliott Wave Theorist’s original study on ‘Pop Culture and the Stock Market’ asserted, ‘Trends in sports reflect the prevailing mood.’ The emergence of a bull market produces an escalating energy level that is physically embodied in the organization of athletic competitions. As the rise in social mood progresses, people share the optimism of the time by heading out to the ball park in larger numbers and constructing elaborate events.” Ch. 10 (excerpt): “Our ‘Popular Culture’ Special Report of 1985 concluded that baseball is a bull market sport (good guys are the good guys) and football a bear market sport (bad guys are the good guys).”
Hockey is also on the “bear market sports” list — see Pioneering Studies in Socionomics, Ch. 12. Also, the January 2003 Elliott Wave Financial Forecast said: “To suit a bear market of high degree, entire new forms of athletic competition will emerge. In our 1996 report, we noted that after 200 years of rising stock prices, it is ‘hard to imagine what a bear market sport would be like. We envision something along the lines of boxing, where it’s man against man. There is no ball to displace man’s natural aggression and no hoop to make us focus on any loftier ambition than survival.’ The rising game on the scene is just such a sport: Ultimate fighting…”
May 29th, 2009 at 8:17 am
@ben22
I agree…enough already with CRA & the “blame game”…
I mean for goodness sakes…If we’re so smart in hindsight and have correctly identified all the things that that caused the problem, and heaped out all the blame…
THEN WHY IN THE WORLD ARE POLICIES THAT ARE BEING ENACTED A COMBINATION OF THE SAME THING (WITH AN EVEN HIGHER PRICETAG)?
It’s like ‘curing’ your addiction to gambling (which you lost your home on), by going to the mob and getting one more pile of cash to get you back to even…
May 29th, 2009 at 8:23 am
@ben22
I like that story [Precchter]…
Perhaps yet another “team sport” will emerge as well in the near future…
It will be called “Storm the Castle” (White House, Capitol, Wall St….you nominate the “castle”)
or how about ressurrecting old childhood games like “Smear the Queer”
May 29th, 2009 at 8:28 am
Ben22,
Appreciate the further mood references from Pretcher, and I can’t gauge whether we’re cheering baseball (bull) or football (bear) more at this time. My hometown Philles won the World Series and that was bullish for me, though I’m in Red Sox territory these days and it did nothing for them here.
I guess my greater concern is how low we can go…? And if the happy (happier?) talk currently being spread by the media, from mainstream on-line news to TV and print MSM, to business networks like CNBC are just setting us up for the kind of optimism (still muted perhaps) that will set us up for the next big fall. And most self-centeredly, I worry as cynical as I am that I will eventually get caught up in the updraft at some point only to get caught in this next fall.
May 29th, 2009 at 8:28 am
I sympathize with your travel difficulties. For the past couple of years, I had the privilege of flying around in a small corporate jet (alas, it belonged to a home builder who can no longer afford it). It ruined me forever. I dread airports, security checks, shuttles, satellite parking, and the associated glamour of modern air travel. What a pain in the ass.
May 29th, 2009 at 8:31 am
Cvienne,
you said:
THEN WHY IN THE WORLD ARE POLICIES THAT ARE BEING ENACTED A COMBINATION OF THE SAME THING (WITH AN EVEN HIGHER PRICETAG)?
The Fed’s plan will not work because it only tinkers with symptoms of the decline, it doesn’t fix the problems. There is just too much debt. I’m sorry, but in general, people just are not interested in expansion right now, especially of the personal balance sheet type. Frugality is in, not Escalades and McMansions. Remember when were were all supposed to turn the lights out in March? Or, an even better example, look how popular Craigslist has become. It’s a form of barter after all.
May 29th, 2009 at 8:33 am
krice-
thanks for the Pretcher post- who I am inclined to agree with- the problem is that Pretcher is a long term Bear for the most part with some calls here and there to take some money off the table if you were in short position-
so- he may see the big picture- and he may be correct- but the market can run up contrary to reality- and seems to be able to hang on by sheer optimism far longer than it should
May 29th, 2009 at 8:34 am
Yardeni on Bond Vigilantes…
Gotta listen to this…(especially YOU Franklin)…
http://www.bloomberg.com/avp/avp.htm?N=av&T=Yardeni%20Says%20Bond%20Vigilantes%20%60Up%20in%20Arms‘%20Over%20Deficit&clipSRC=mms://media2.bloomberg.com/cache/vCegYebgAHQ0.asf
May 29th, 2009 at 8:51 am
Story of government evil and immorality.
http://theburningplatform.com/economy/aint-no-rest-for-the-wicked-1
May 29th, 2009 at 8:52 am
on the “why the bulls just won’t die” link above-
interesting observation was made- that on very light volume days the market rallies and on higher volume days the market goes down-
that would appear to be bearish
May 29th, 2009 at 8:59 am
and- I still think the oil rally is bogus- unless I am the dumbest mofo walking on the planet- I just don’t buy it-
we may get inflation- but I don’t see it on the horizon anytime soon- I see it as a play against the $- but mostly a bullshit story-
that oil went to +$140/barrel last year only to deflate faster than a popped balloon- should send chills up anyone’s spine
May 29th, 2009 at 8:59 am
Barry,
What did you think of the preliminary GDP released this morning?
May 29th, 2009 at 9:02 am
BR – That’s for the awesome blog site. It is my “go to” site for financial information. I check other sites, but this is my first click in my favorites list. It’s great that you allow posters to link to other articles and blogs (which could be considered competition). It make this site a very complete source.
May 29th, 2009 at 9:05 am
Does anyone else think the FED is swooping in every time the credit markets become dysfunctional? I’m not talking about the big bailouts, I’m talking about holding back the spike in the 10 year when it starts to “break” the mortgage market (and things like that). I think they realize they can’t control the market except at the margins (short term, slight impact), but maybe they think that’s enough if they time it right.
If this is happening, how long can the facade of green shoots be held up be this behavior? It always seems to go on much longer than I would ever imagine is possible.
May 29th, 2009 at 9:07 am
@call me ahab
“the market can run up contrary to reality- and seems to be able to hang on by sheer optimism far longer than it should”
You’re correct in stating that, but everything has its limits…
At the moment, it appears that its setting up that VECTOR of optimism is KEY…I’ll explain…
Looking at the charts, the S&P has been in “consolidation” mode for the past 3 weeks or so…It’s RANGE is getting squeezed tighter and tighter and will eventually get resolved one way or another 9I’d say that break will occur within 2 weeks time (or June 12)…
A lot of BEARS are going to think that the market will stall at the 200 day MA (but they may be mistaken)…There is A LOT of room to the upside “technically” on the energy & commodity charts and that seems to be where the ’speculative’ money is flowing right now…So the SPECS might call energy up some more, and since it is the largest component of the S&P, the S&P may actually do a break above the 200 day MA…If THAT happens, then there will be YET ANOTHER short squeeze which rallies the S&P all the way to ben’s famous 965 – 1k levels (Andy T has 962 & 979 as targets, I think)…
My point is…That kind of PRESSURE seems very likely on the charts right now and can happen so fast, there is nothing POLICY wise that could stop it, or throw a wrench into it…
Now enter the BOND VIGILANTES…
We saw this past week that they have just about had ENOUGH of the spending in Washington…They rang a “shot across the bow” on Wednesday, but then eased back on Thursday…If, during the first two weeks of June, you see oil rally to $70, and the S&P up at 962+, EXPECT THE BOND VIGILANTES TO TAKE DEAD AIM AT THE SHIP…
When they pull the plug, the Fed is going to have to go back into crisis mode (only this time, they’ll be talking about how to DRAIN $$ from the system NOT pump it full of cash…That will involve a few visits to the WH & Capitol Hill…
This will occur just about the same time Obama is trying to get spending approved for health care reform and CAP & TRADE…
I expect A LOT of the HOPE for the big utopian society will end up getting torpedoed this summer…
Buckle your seat belts & put your life preserver on…
May 29th, 2009 at 9:09 am
Precious metals are behaving well lately. Treasuries spiking too. Commodities trend is up. If this doesn’t reverse soon (at least two out of three)… look out below. The expectation that the rally will take us higher is quite common now, therefore it may be proved to be wrong.
May 29th, 2009 at 9:17 am
This is a complete nonsense market now, it has lost all direction. When nothing makes sense, it’s because the market is being dominated by quant fund momentum trades du jour, most of which are leveraged $ hedges. Those chasing these trades should be aware that a rally in the greenback will change the momentum very abruptly.
Anyone else think gold is a good short here? No fear, no immediate inflation, and no deflation. Hmm….
May 29th, 2009 at 9:22 am
@LB
read my 9:07 post and you’ll see that YES, I do agree with you that gold is a short here (as well as oil)…
But here’s the kicker…
You may see ONE LAST BLOWOUT to the upside on both…
- Taking oil to around $70
- Taking S&P to 962
- Inching gold up just a little higher
Probably ALL of the three moves will look like a “technical breakout” and suck in a lot more short covering…
When you see that happen…I think the BOND VIGILANTES step in and lower the boom…That’s when you get your dollar rally…and equities say GOODBYE to LA-LA LAND…
What’s interesting is that HEALTH CARE REFORM & CAP-EX will probably get torpedoed in the process…
It might be a “cruel summer” for Big O…
May 29th, 2009 at 9:24 am
I read somewhere that the rise in yield on the 10yr note was a challenge to the Fed to live up to its promise of buying treasuries.
Does anyone have info or links to sites that have stats of the credit cards (business)? I know Advanta is not the only company in trouble. I’m curious as to who else is in trouble.
May 29th, 2009 at 9:27 am
@cv: Agreed, your last blowout is possible and that is my PAIN TRADE. But I see so many signs of exhaustion in this rally that my money is heavily skewed to the short side. I am early, as usual.
May 29th, 2009 at 9:28 am
@ AmenRa-
please see cvienne’s post (bond vigilantes) which appears to contradict what you are asking
May 29th, 2009 at 9:29 am
I like cvienne’s thoughts on the upside false breakout-blowout. Not sure what the odds are on that. I’m a little worried that a breakout would just driver everything higher (make it easier for the bulls), before reality hits.
The real wildcard is an event which the gov’t-FED can’t control. Could be further downside in treasuries. Could be the dollar moving big. It’s like reality is waiting for a catalyst.
As LB says, the dollar is key here.
May 29th, 2009 at 9:30 am
@LB
The PAIN TRADE…:-)
It’s time to embrace the horror!
May 29th, 2009 at 9:33 am
@hopeI’mwrong
Don’t worry my friend (about a breakout making it EASIER for the bulls)…IT WON’T
It’ll be like that scene in Wall St. where the 3 union leaders from Blue Star Airlines charge into Gordon Gecko’s office and tell him to SHOVE his contract…
Union Leaders (from movie) = Bond Vigilantes
The whole trade unravels…
May 29th, 2009 at 9:33 am
leftback Says:
May 29th, 2009 at 9:17 am
This is a complete nonsense market now, it has lost all direction. When nothing makes sense, it’s because the market is being dominated by quant fund momentum trades du jour, most of which are leveraged $ hedges.
reply:
—————
Agreed it’s all traders and big money controlling this market. Underlying value is not the controlling influence. The old saying “If you don’t know who the sucker is, it’s you” applies. The leveraged speculators will suck in the mutual funds and others with excess free cash who can’t afford to sit on the sidelines just in case it’s a real rally and not a leveraged, manufactured one.
I suspect the sharp rallies that happen in a few minutes every day are designed to trigger computer buying programs elsewhere. These sucker programs drive the prices higher and the stocks that were purchased to trigger the run up are off loaded to the sucker programs who want a part of the action. Thus, the players who started the rally are substantially out of it before it tops out. Enough free cash on the sidelines can keep this scam going for a longer time than we might expect. At least, that’s my speculation on the frequent mystery market spikes.
About inflation … it needs to be redefined. Traditionally, wage and price increases were considered inflation. These were caused by too much cash in circulation and the ability to raise prices. Today, hte unfettered ability to raise prices only exists in the commodity markets, And the regulators ignore this.
May 29th, 2009 at 9:34 am
It’s one thing to be right and another to make money. Someone stated this here and I could not agree more.
The the trick should be to understand what is going on (being right) and making money off of everybody’s stupidity (those not seeing the light).
The problem is that if I am right and the Western world is going to hell in a hand basket, then as a moral person, it is very difficult to make money off people who are wrong yet making the market go up.
Furthermore, in my experience, I have met very few people who could change strategies on a dime. There is something about the human psyche that makes it very difficult to detatch oneself emotionally.
May 29th, 2009 at 9:37 am
Lefty,
I don’t know about the gold short, we might see another move higher here in the short term. I thought about doing it a few weeks ago. I would have lost money on that trade so I’m glad I didn’t.
This market is a mess right now, I’m really going to have to think hard about holding my remaining longs over the weekend. I may take them off and sit it out for a while. Sometimes it’s just good to watch. Thus far, it’s been a great year.
Down .21 on my UUP trade.
May 29th, 2009 at 9:40 am
@dead hobo
You don’t need REGULATORS IGNORING THINGS to cause commodity spikes…What’s happening isn’t even nefarious…
It’s BB & BHO in Washington handing out gobs of free cash to everyone (under the guise of “saving the economy”)…
Are the banks taking that free cash and using the steepening yield curve to make loans?
NNNNNNNNNNNNOOOOOOOOOOOOOO!
They’re trading with it…They were the first to the party, and when joe dumb mutual fund manager arrives to the party, they hit the sell button, plow their profits into the dollar, buy some puts, pay back the TARP, and go on bonusing themselves for a job well done…
May 29th, 2009 at 9:42 am
cvienne Says:
May 29th, 2009 at 9:40 am
@dead hobo
You don’t need REGULATORS IGNORING THINGS to cause commodity spikes…What’s happening isn’t even nefarious…
reply:
————
Sorry. My mistake. I thought something fishy was going on.
May 29th, 2009 at 9:45 am
The market’s acting weird.
May 29th, 2009 at 9:46 am
thetanman Says:
May 29th, 2009 at 9:45 am
The market’s acting weird.
reply:
———-
It’s way too soon to say, but a look at the S&P for today makes it look like the sucker programs didn’t bite this time.
May 29th, 2009 at 9:47 am
Can anyone explain the GDP deflator and what impact that had on the revision this morning?
Also, it might be worth noting when looking at the TIF report this morning it’s been the common trend in this reporting period:
If we’ve had any surprises it’s been in earnings, but it has not been in revenues.
May 29th, 2009 at 9:48 am
Chicago PMI 34.9 (40.1 previous). These green shoots are looking more like dandelions. Where’s my weed & feed.
May 29th, 2009 at 9:49 am
RE: why the bulls won’t die. When you have state capitalism and a spin machine in full overdrive, little wonder. This recent GDP print of -5.7% was lower than last quarter partially because of a greater decrease in imports. This boosted GDP yet imports, a sign of consumer demand, if falling harder are in fact a measure of further consumer tightening and economic strain in a consumer lead economy. Even though it boosted GDP it is in fact a very negative sign of worsening economic conditions… yet spun out as a positive. I have yet to see anyone in the MSM talk through this point and similar instances where a disconnect exists between the measured target and the actual statistic, each yielding a different conclusion.
May 29th, 2009 at 9:50 am
Re: the Bloomberg piece on Roubini and South Korea
IMO a key element a lot of people are missing about the export-driven economies of Asia is relatively weak domestic demand. Take away US consumption from China and South Korea and you are confronted with the paradox of thrift. Remember that the per capita GDP in China is only about 2000 USD. Yes, the aggregate savings of 1.4 billion people on deposit in Chinese banks is something to behold, but the savings rate does include public savings as well.
The reality for the rest of the world is that the US is TBTF. Not saying that’s a good or honorable thing, but it is what it is.
May 29th, 2009 at 9:53 am
Transor,
Nice post at 9:50. This is why the credit deflation will be global. And another reason why the worry about the US$, at least in the short term, imho, is misplaced.
May 29th, 2009 at 9:54 am
I’m reading everyone’s posts here and I can sense the noose is getting tighter (on both BULLS & BEARS)…
The range is tightening…Furthermore, it’s FRIDAY…
I like what LB said…(and Mr. ‘T” for that matter also)……PAIN…
I’m thinking the MAX PAIN scenario is that the S&P continues to consolidate within 10 points of 900 for another two weeks…
THAT ought to cause a lot of sleepless nights!
May 29th, 2009 at 9:54 am
Stuart Says:
May 29th, 2009 at 9:49 am
I have yet to see anyone in the MSM talk through this point and similar instances where a disconnect exists between the measured target and the actual statistic, each yielding a different conclusion.
reply:
————
Why should they talk about this when they are successful in their work by ignoring everything else of substance. If someone can figure out how to turn your observation into a sales pitch, they’ll be right on it.
In fairness, a few business newsies have gotten better. Rick Santelli is making an effort. I caught a couple minutes of Fast Money last night. They noted that high oil prices might crush the economy again if they don’t abate. Then they talked about making money from the commodity scams in progress. Some headlines actually reflect reality, although they are scant few still.
May 29th, 2009 at 9:55 am
ben22: I started small in DZZ. If this isn’t the dollar turn I will be slaughtered and then try it again later..
May 29th, 2009 at 9:57 am
Jump on the next bubble – commodities and emerging markets. I know the commodities theme has been hammered by many here, but t’s either one or both. All aboard.
GDX going bananas lately. Sold some of my holdings too soon but still have some.
May 29th, 2009 at 10:01 am
Left,
I think Karen took a tiny short position in gold but I could be wrong.
May 29th, 2009 at 10:03 am
Hyperinflation: Regardless of the politics, I think Krugman has it right about the lack of danger of immediate hyperinflation. Money that is printed and sits in vaults has no effect.
http://www.nytimes.com/2009/05/29/opinion/29krugman.html?_r=3
Mish has been talking about this for the last six months:
http://globaleconomicanalysis.blogspot.com/2009/04/money-multipliers-velocity-and-excess.html
green shootsEven Bloomberg has joined the cheerleading. Has Timmy been around to see them with a bazooka in his pocket? This article was rightly dubbed “the Orwellian post of the day” on some blog:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZhCpkVnhzo4
Similar here:
http://www.nakedcapitalism.com/2009/05/pangloss-watch-japans-industrial.html
commoditiesA repeat of last year, showing that most money managers have really short memories. Or are confident they can always find greater fools. Starting to hear stories to justify the speculation, e.g. “Saudi’s want $70 oil,” as if the Saudi’s had any control over price. If they had, it wouldn’t have dropped to $40 a barrel last year.
It’s being driven by big speculators, like hedge funds and SWF’s.
http://ftalphaville.ft.com/blog/2009/05/29/56403/funds-piling-back-into-the-commodities-trade/?source=rss
Hard to predict where the top is but expect lower than last year, as many hedge funds have gone under and the SWF’s are severely shrunken after brilliant investments in banks last spring. Expect the same result in a few months.
May 29th, 2009 at 10:03 am
The Goldman Boys are probably out there WRITING SPY 88 puts and SPY 91 calls for the June contract and laughing their asses off…Then they unwind it all on June 12, take off the harness and get ready to fade the next largest move in either direction…
May 29th, 2009 at 10:07 am
This ought to be good for CRE. Who else is getting in this line with Starbucks? Someday that shoe WILL drop. Who the fvck is buying REITS right now? Are they insane?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aPQv7BPDql9s&refer=home
May 29th, 2009 at 10:09 am
Consumer sentiment hits 68.7, which is the highest reading since September. Also,
Some executives have expressed optimism. Global capital markets have improved “dramatically,” General Electric Co. Chief Executive Officer Jeffrey Immelt said this week.
“The worst is over” for the economic downturn, Immelt said in a speech in Tokyo. Improved liquidity and the ability to raise equity in capital markets have stabilized the economy, producing “green shoots.” As a result, he’s more confident now than any time in the last nine months, he said.
Green shoots, patriots! Green shoots!
May 29th, 2009 at 10:10 am
ben: Karen knows that market. I have shorted gold on Fridays many times and usually made money.
Little by little it seems that fundamentals and technicals are starting to align here for a summer sell-off. We know that earnings are weak and that recovery in earnings will be slow at best, meaning that P/E is elevated. Yields in Treasuries have become more attractive, providing a safe haven in the short term. As far as technicals are concerned we have a top at SPX 930, the 200DMA above as resistance, and we have made a lower high in the 910-915 range. So although we can’t be sure until there is a decisive break below 875, it does seem as though this is a bearish set-up. Add to that picture that energy and commodities seem to be overbought.
f411: If you weren’t so green, we’d have to shoot you.
May 29th, 2009 at 10:11 am
We love you Franklin…we really do!
It’s like having a little puppy around…
May 29th, 2009 at 10:14 am
@LB
It would seem that way now wouldn’t it…
Don’t be hasty there partner…Wait until you see the whites of their eyes before you shoot…
May 29th, 2009 at 10:14 am
leftback,
About TA, I think this might be a time where it is relevant because the computers making the trades are probably using TA based statistics as trigger points. The tail might be wagging the dog, but the motion is real.
Give this assumption as possibly true, what factors in the charts now might make a computer program balk?
May 29th, 2009 at 10:16 am
The market is being rational (valuations and prices) for deep value stocks. They are being ignored by most. When I say deep value, I’m talking about stocks with more predictable revenue and profits going forward, and good dividends. I would put MO in this group. Kind of a boring stock, but rational price moves, and good value.
LB, I’m long gold, silver, and PM miners, and holding, watching closely. Just a little nervous on the precious metals.
May 29th, 2009 at 10:16 am
Leisman said this morning that US revenues were down 34% this year compared with this time last year…that got me to thinking…when we mull over the debt to gdp ratio…we really aren’t talking about the GDP…we are talking about the amount of tax revenue that that level of GDP brings into the government…so when Leisman says revenues are down by 1/3, one could posit that the effective level of GDP (tax revenues) is down by effectively 1/3 and should make the debt/gdp thingy much worse than the surface would show…
my 2 cents..
May 29th, 2009 at 10:16 am
Geez franklin. Imelt wouldn’t lie, would he? Just like old Harold Hill from “The Music Man”. My wife with her musical theater background would be proud that I worked that reference in on this blog.
May 29th, 2009 at 10:17 am
I went short the July silver futures at 15.49 this morning. I totally agree, there is something about shorting precious metals on a Friday morning.
Silver futures are like a hand grenade. Very effective if used properly, but …
I won’t hold the futures past the low 16’s. 50 cents on the downside, 2 to 3 dollars on the upside on the short position looks good to me.
May 29th, 2009 at 10:18 am
lol Franklin using quotes from Jeff Immelt.
Priceless.
Hey Franklin, did you ever hear him say this one:
“the dividend is safe”
LB,
don’t forget to add the following to your 10:10
13% dollar bulls last friday at trade-futures vs. 93% Euro bulls. Little crowded if you ask me. If that reverses we go back to the correlation with the markets, dollar down stocks up, dollar up, stocks down.
Still, we are awash with optimism right now, as was so easy to call when this rally started, even I predicted it. That should be good enough for one last push above those 200 days, but we’ll see what happens.
May 29th, 2009 at 10:19 am
I like Franklin. I’ll make him the poster of the day right now, because he deserves it.
May 29th, 2009 at 10:20 am
@AmenRa
If you read the whole Chicago PMI report, you’ll notice this passage:
“If this were an average recession, it would end four months after the low point in the barometer. Based on the current reading, August 2009 would mark the end of the recession. Since this is not working out to be an average recession, a more conservative rule appropriately draws an analogy to the 1981-82 recession. Using such a rule, the end of this recession would be projected to be nine months after the lowest value of the Chicago Business Barometer. With March 2009 as our best current estimate of that minimum, the recession can be projected to end in December 2009.”
Three observations:
1. The discussion has shifted from “the recession will never end!” to “what month will the recession end?”
2. This is not an average recession, but the 1981-82 recession did not have the benefit of a meaningful stimulus package to kick-start a recovery. So I would say the recession will end somewhere between August and December.
3. Green shoots, gentlemen! Green shoots!
http://www.kingbiz.com/reports/ISM-C%2009%2005.pdf
May 29th, 2009 at 10:22 am
my ears were ringing.. yup, i still have my gold short (but i’m also long from long ago.) they are trotting this story out again so who knows what will happen with gold:
http://www.commodityonline.com/news/IMF-gold-sale-US-Congress-approval-next-week-18234-3-1.html
you’d think the big money would and could jam it down, just to buy it back again..
now if you want to talk about my pain, it’s in my oil short.. lowered my cost basis today, but i’d hate to see crude at $70.
i’m long sso, and my shippers are making me very happy, tho..
May 29th, 2009 at 10:25 am
@Bruce:
Roubini made a similar point re: long-term debt servicing. Basically, according to him, the USG will need to set aside 3% of spending just to service the debt we are creating. VAT anyone?
May 29th, 2009 at 10:26 am
alright- just got back from a run- not raining out here in good ol’ Virginny for a change-
and the headline-
“U.S. business activity contracted at a faster pace than forecast this month as orders and employment dropped.”
well there is some good news
May 29th, 2009 at 10:27 am
About TA and the S&P: I read a book on TA once and it described a formation that is appearing again.
The S&P has topped several times around 910, but the local bottoms are consecutively higher, with the bottoms converging on 910. This might be the pennant formation people have written about recently. The book said that, absent and significant fundamental news, the market moves against the pennant. So if the tops are stable, this means a big drop is likely.
I recall seeing this formation at a recent bottom but didn’t believe it as a possible prognosticator. It apparently was as the market went up a lot.
Psychologically, I can see relevance in this formation providing it reflects current events and not a decade of magic charts.
May 29th, 2009 at 10:29 am
@dead hobo
Re: Computers making the decisions…
I’ll take a stab at that…
OK look…It’s sure as hell ain’t your computer or my computer that are making those trades (or our bank accounts)…
So who can possibly do that? yes! Goldie & Co…
So you look at the S&P and say, HEY, I’ve got an easy floor here at 881…& I’ve got a 200MA up at 930 today (which is declining at the rate of 2 points a day)…There are 10 trading days between now and Friday, June 12th, and 15 trading days before the June 19th OPEX…At the rate of descent, I could keep the RANGE in the S&P established for that long pretty easily…
-On June 12th you’d have 200 day MA at 910 and floor at 880
-On June 19th you’d have 200 day MA at 900 and floor at 880
So you WRITE both “puts” & “calls” on the SPY for the June contract (sell 88 puts, sell 91 calls)…
Then you go do your “computer trade” thingy…Every time the S&P challenges to the downside, you have buy orders ready, everytime it gets up to the high end of the “moving” end, you have sell orders ready…Uncle Ben in Washington is giving you free money to do it, so if you just borrow what you need at the short term window…
I doubt VOLUME is really an issue anyway (because they have been anemic on both sides for the past month – yet the VIX is still around 30 so that’s some pretty good premium)…
Let the other poor hacks battle it out…
Then I’d say “let the pigeons loose” on June 12th (one week before expiry)…
May 29th, 2009 at 10:29 am
@karen: As per your recommendation, I also grabbed some DRYS as a while back. Nice call. Gonna hold that one for a bit, I THINK.
May 29th, 2009 at 10:30 am
That bond vigilante article on bloomberg today was very good, and sums up a lot of the bond market rumblings of this week… I’ll throw it in here because its not on BR’s list:
http://www.bloomberg.com/apps/news?pid=20601087&sid=akW9GQw.X9KM&refer=home
Pretty much required reading IMHO. Which is certainly… humble.
And on the crazy indirection in the market… consolidation patterns are the cause of many a Short’s frustration and consternation… dont ask me how I know this…
Cvienne, I think you are onto something at 9:22 and 10:03… fwiw.
May 29th, 2009 at 10:33 am
dead hobo @ 9:33
If you exclude food and energy, I think we could go another 3 years without seeing any inflation.
Ha.
May 29th, 2009 at 10:35 am
@ahab
We’re reading the same article. Perhaps you should have read past the headline:
“The report ran counter to others this month that indicated manufacturing was starting to improve this quarter, perhaps signaling that Chicago’s proximity to the auto slump in neighboring Detroit may be affecting the entire Midwest.”
“Other regional figures earlier this month were more upbeat. The Federal Reserve Bank of New York factory index rose to minus 4.6, the highest level since August, and the Philadelphia Fed gauge climbed to an eight-month high.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=ae_x0dWSTGsk&refer=home
May 29th, 2009 at 10:36 am
consumer sentiment is driven by the pundits on TV telling everyone “everything is a go” for economic recovery- absolutely nothing to do with facts on the ground-
I am certain General Custer wasn’t too optimistic when faced with reality- outnumbered and surrounded by Indians (sorry- Native Americans)-
but I am sure he felt cocky enough- with his troops following- before he realized things were not going to end well for him
May 29th, 2009 at 10:36 am
My daily rate email just came through:
30 year fixed w/pt is at 5.5%
15 year fixed w/pt is at 4.875%
Here is what’s funny, without points it shows:
N/A on the 30
May 29th, 2009 at 10:37 am
DL Says:
May 29th, 2009 at 10:33 am
dead hobo @ 9:33
If you exclude food and energy, I think we could go another 3 years without seeing any inflation.
reply:
——–
You are now qualified to sit on the FOMC. Take the rest of the week off.
May 29th, 2009 at 10:38 am
Like some of you, I’m short oil, long USD so I feel your pain…
I don’t buy the commodity play – at least in the short run. It reminds me of the housing bubble, people want tangible investments, they want diversification outside of equities and apparently did not learn their lesson with oil at $147 then to $35.
When in all of HISTORY has a rise in input prices preceded an economic recovery??? Unless productivity improves, we are unlikely to see any improvement in PROFITABILITY until input prices decline and I don’t mean labor. There is more deflation ahead.
May 29th, 2009 at 10:38 am
Transor Z @ 10:25
I’m sure that “Mr. O” would love a VAT (on top of his carbon tax).
But, the higher the rate on the VAT, the more cheating one can expect.
May 29th, 2009 at 10:40 am
Try this link for the bond vigilante article, it works better.
http://www.bloomberg.com/apps/news?pid=20601009&sid=akW9GQw.X9KM&refer=bond
May 29th, 2009 at 10:46 am
@ben22 (10:36)
What’s WORSE is that they have been SEVERELY understaffed at all the mortgage desks…
There was a 45-60 day WAIT due to backlog to get a loan closed before the “bomb” that hit on Wednesday…Most of what was in the pipeline was stuff that was waiting around to get 4.5% or so (and that literally wouldn’t qualify otherwise)…
So now, it’s BACK TO SQUARE ONE for everybody…We might as well be back in March and rates are 5.5 and higher…It takes a good month (if everything goes well) for things to get back 100 basis points…It never will…even if it did, the loans wouldn’t be closing until sometime in September…That’s too late…we’ll be in another world by then…
The whole operation is blown up…
May 29th, 2009 at 10:46 am
I think the VAT talk is a trial balloon- to get an idea how much opposition could be expected if pitched by the administration-
if it is pitched as a way to pay for universal health care- well- it may work-
one thing universal health care creates is opportunities- maybe someone would be willing to strike out in their own- start a business- change careers- if they knew their family’s health care was covered-
just a thought
May 29th, 2009 at 10:47 am
@f411
Who said March 2009 IS the low for the Chicago PMI? No increase in production, new orders fell, inventories increased, employment fell, supplier deliveries fell and prices paid increased. The green shoots are looking more like poison ivy.
May 29th, 2009 at 10:51 am
cvienne,
I just made that point yesterday as a matter of fact. Lots of people are going to find out in the next week or two that they weren’t able to lock in the rate they thought they were gonna get.
May 29th, 2009 at 10:52 am
@AmenRa
Who said May 2009 isn’t an outlier? There are better indicies of manufacturing/production (Philly Fed, for example, is a more pure index of manufacturing. Chicago PMI is a mix of service/manufacturing) and we’re seeing dramatic improvements in those regions.
Anyway, that’s a quote. The economist who wrote the passage seems to think that March 2009 was the low, so perhaps if you disagree with his conclusions, you should also be questioning the reliability of his data.
May 29th, 2009 at 10:53 am
Indy to LGA…Big time author flying commericial!
Spend the coin…. fly private!
May 29th, 2009 at 10:54 am
@Franklin411
So consider this (and you have to read several of my posts today to piece this together)
- Obama’s MORTGAGE plan just got blown up by the bond vigilantes this week.
- The end of this commodity price spike is going to cause round #2 of bond vigilantiism this summer
- That will effectively blow up HEALTH CARE REFORM
- & it will blow up CAP & TRADE
- The PPIP is an abject failure
- & the “confidence indices” (which have been bolstered by equity prices), will REVERSE leading to a new round of pessimism
I’ll be interested in seeing the approval ratings come this fall…
Oh yeah, remember that at that point GITMO will still be in operation, we won’t have had reduced troop levels in Iraq by anything, the war in afghanistan will have escalated, Iran & Israel will be at each other’s throats…
Anybody want to chime in with any other ideas?
May 29th, 2009 at 10:57 am
Have you guys seen some of the spin on interest rates rises lately?
Here’s one via TPC’s blog: http://pragcap.com/misinterpreting-the-bond-sell-off
I’ve seen a couple others out there. Basically saying that the rises are due to the normal interest rate pressures in an economic recovery. These things are always terribly complex (global markets are hard to really nail down) but it’s really beyond comprehension how somebody can make this argument in the face of the current global economic situation.
It’s something I’d expect from Kudlow and Luskin. Maybe they’ve been making this argument. I don’t know, I stay clear of them lately. Can’t stomach the B.S.
May 29th, 2009 at 10:57 am
@ben22: My mortgage broker didn’t sound too happy about these developments yesterday. I believe they believe that unless rates get below 5 again, they’re done and this whole thing blows up again. Not real green shooty. What’s plan B?
May 29th, 2009 at 10:58 am
franklin411 Says:
May 29th, 2009 at 10:52 am
Anyway, that’s a quote. The economist who wrote the passage seems to think that March 2009 was the low, so perhaps if you disagree with his conclusions, you should also be questioning the reliability of his data.
comment:
—————-
Just because 50 billion flies eat shit, that doesn’t mean it’s good food. You claim to be studying economic history for a paper. I hope that means you are acquiring the ability to put pictures together on your own without using the conclusions of others as ‘facts’. For crying out loud, stop looking foolish and read past the headline.
May 29th, 2009 at 10:58 am
@Onlooker: Of course they’d spin it in a positive way. Better than expected, right. The whole thing is beyond a farce at this point.
May 29th, 2009 at 10:58 am
@Bloomberg “Getting Technical”: “To be sure, all technical patterns can and do resolve in either direction.”
rule 1 of technical analysis!
May 29th, 2009 at 10:59 am
“expect A LOT of the HOPE for the big utopian society will end up getting ____”
was watch’g tv last night .. scene: asian teens at party gather’g of run of the mill Americans: an innuendo begets a shove escalates to a punch then escalates to pulling of a gun then onto an apology backoff (Hollywood)
saw on tv minutes ago the US steel melt abilities .. brought to mind Conan and his god Krom and the 3 things that are best in life for the warrior king
It’s one thing to be right and another to make money .. and another to be strong (self contained strong)
.. martial law is an avenue .. the SPR would require in such a state for bs job holders not burn fuel .. so visit readydotgov
gold is up .. time to boil down your 8088s and 4:3 tvs .. cash in smelt for ____
BN2.0 .. Begger Nation sell Hollywood on that take
May 29th, 2009 at 11:00 am
call me ahab @ 10:46
VAT will be a disaster.
And universal health care will also be a disaster, unless “Mr. O” makes a serious attempt to limit costs. So far, no one has a plan to limit costs.
May 29th, 2009 at 11:01 am
Kedrosky predicts dow 10k/1-1.1k s&P “considerably higher” by year end. See the video’s section.
He does say though, just a bear market rally.
May 29th, 2009 at 11:03 am
@ahab:
Full disclosure: I’m a convert to single-payer universal healthcare. It’s too bad that Michael Moore was the mainstream messenger in “Sicko” because he is so polarizing. IMO there is an awfully compelling case to be made for scrapping the US health insurance framework. Bill Moyers showed a clip of Obama speaking at a town meeting and stating that the US has a “tradition” of employer-provided healthcare insurance, implying that it is too entrenched to dismantle without great disruption.
Ask the average HMO staffer whether he/she would mind being hired into a state or federal job as part of a national health agency — expanded Medicare or whatever it would be. Ask the top execs and obviously you’ll get a very different response . . .
May 29th, 2009 at 11:04 am
Manny,
What’s plan B?
QE 2, ……3, 4, 5, ?
Hell if I know. When this all started the Fed didn’t even have a plan A.
May 29th, 2009 at 11:05 am
@Franklin411
&BTW Franklin…
If you’re using equity markets & what appears to be ‘bullishness’ in the commodity space to bolster your argument for whatever the “article du jour” you happen to pick off, just understand this…
It is HIGHLY LIKELY that you’ll continue to have your way for AT LEAST another 2-3 more weeks…
Anything could happen at any moment, but there is ENOUGH “stuff” out there right now that either support equity prices right now (or in fact, could give it just A LITTLE more juice to go higher)…
So have fun while it lasts…
By July-Aug-September you may start to see what people on THIS BLOG have been saying all along…
May 29th, 2009 at 11:05 am
Mannwich @ 10:57
Plan B…? Obama’s going to end up learning a thing or two about how the bond market works. Clinton learned a few things about that in his first term.
That being said, mortgage rates are still pretty low by historical standards.
May 29th, 2009 at 11:07 am
@ben22
So Kedrosky can draw lines on charts…goody for him…raise his pay!
May 29th, 2009 at 11:08 am
Hey guys and girls. Been reading but my long post is still “awaiting moderation.” Another name for the maw of Cthulhu. Guess I had too many links in it. I’ll post them separately. Agree with the majority.
Hyperinflation:
Regardless of the politics, I think Krugman has it right about the lack of danger of immediate hyperinflation. Money that is printed and sits in vaults has no effect.
http://www.nytimes.com/2009/05/29/opinion/29krugman.html?_r=3
Mish has been talking about this for the last six months:
http://globaleconomicanalysis.blogspot.com/2009/04/money-multipliers-velocity-and-excess.html
May 29th, 2009 at 11:08 am
@DL: I agree they’re still low, but psychologically people were/are thinking they can lock in under 5 for quite a while now, so anyone holding a pretty big mortgage is going to feel the difference big-time and might not even be able to afford it or qualify at these higher rates. If this thing goes to high 5’s, it’s game over for the housing market.
May 29th, 2009 at 11:10 am
DL-
no doubt- because it is on top of everything else including the income tax- from a philosophical perspective- I believe in a consumption tax- as opposed to an income tax-
I think there is some merit to the idea of increased opportunities- for instance- DL wants to open up his own surfboard company- but- keeps the secure job pushing paper because it provides health care benefits for his family- too much risk to leave
knowing that your family is covered however- DL gets a bit of savings together and starts making surfboards- revolutionizing the industry- and creates hundreds of jobs-
that is the upside
May 29th, 2009 at 11:11 am
green shoots:
Even Bloomberg has joined the cheerleading. Has Timmy been around to see them with a bazooka in his pocket? This article was rightly dubbed “the Orwellian post of the day” on some blog:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZhCpkVnhzo4
Similarly here:
http://www.nakedcapitalism.com/2009/05/pangloss-watch-japans-industrial.html
The market is even showing signs you see late in bull markets, like crap being pedalled. Looka this Souther Cal Reit offering. Anybody want some:
http://finance.yahoo.com/news/Kilroy-prices-public-offering-apf-15381048.html?.v=1
May 29th, 2009 at 11:12 am
@ben22
Although I’ll say something…When you look at that 10/6 – 10/7, 2008 let’s call it a GAP (even though it wasn’t technically)…I’ll bet there are a lot who’d like to see that GAP filled in with some trading…
Look at the Goldman Sachs chart right now…
It’s making every effort to “fill in” the gaps from March 17th of last year & September 15th of last year…
May 29th, 2009 at 11:12 am
Mike,
Another nice post.
On another note, who really cares what Franklin says anymore. Seriously. There are probably 50 posts a day just in response to his nonsense. It’s clogging up the blog. Then again, this happened with borchers and otto and cinefoz as well.
May 29th, 2009 at 11:13 am
@Transor & ahab: Employer-based coverage has created a whole population of Zombie employees who only stay for the health care that covers them and their families. Like many things in the U.S. today, the model is completely broken and needs to be fixed. It’s all about the WILL to do it and crush the special interests. I can’t believe that we’re not creative enough as a country to come up with the best of other country’s plans and put our spin on it. It’s beyond absurd that people are having their lives destroyed through a health event in such a rich country as ours. We should be able to come up with a system that makes sense and covers everyone to SOME degree (but ensuring that everyone pitches in some $$$ as well) on preventatitive and catastrophic care. And the market for extra services would always be there and could be offered to those who can afford it.
May 29th, 2009 at 11:14 am
commodities
A repeat of last year, showing that most money managers have really short memories. Or are confident they can always find greater fools. Starting to hear stories to justify the speculation, e.g. “Saudi’s want $70 oil,” as if the Saudi’s had any control over price. If they had, it wouldn’t have dropped to $40 a barrel last year.
It’s being driven by big speculators, like hedge funds and SWF’s.
http://ftalphaville.ft.com/blog/2009/05/29/56403/funds-piling-back-into-the-commodities-trade/?source=rss
Hard to predict where the top is but expect lower than last year, as many hedge funds have gone under and the SWF’s are severely shrunken after brilliant investments in banks last spring. Expect the same result in a few months.
Remember this chart?
http://en.wikipedia.org/wiki/File:US_oil_price_in_dollars_from_1999_to_2008_November_21.svg
May 29th, 2009 at 11:15 am
@cvienne
Rates plunged in March when the Fed announced it would buy bonds. They spiked above 5% a week or two later. Then they plunged again in mid-April, then they rose to a middling level in May. Now they’re spiking. How do you know they won’t plunge again tomorrow? What makes you think your “bond vigilantes” are reliable allies in the bear’s attempt to destroy America?
@Mannwich
I wouldn’t be so quick to declare “game over” if rates go to 6%. I think the pain would be so bad that it would hit white people, and then you’d see bipartisan support for a massive Federal mortgage refinancing program. The private student loan companies, the Chrysler bondholders, and the GM bondholders all thought they could buffalo the administration.
They all paid in blood.
May 29th, 2009 at 11:18 am
@call me ahab (11:10)
It’s not as simple as VAT…I lived in Europe with VAT and earned wages there as well so I’m familiar with the system…
While your INCOME is not taxed, your EMPLOYER pays a tax off of what they pay you in the form of a VAT…
In the end it means less jobs because it’s too costly to hire a large staff of workers…Furthermore, when you go to this type of system it’s VERY HARD to fire workers…Companies are very cautious about hiring, and growth is very stagnant…
Europe only survived the past decade on the fact that it was able to EXPORT goods to America who were taking out 2nd mortgages to buy them…
May 29th, 2009 at 11:18 am
This is exactly the type of sh*t I’m talking about:
F411@ 11:15
bear’s attempt to destroy America?
Yeah, it was the bears that did this. Not Greenspan and his bubbles or almost 30 years of misguided Reganomics.
May 29th, 2009 at 11:23 am
@Franklin411
The “point of view” of the bond vigilantes is that they’re SAVING America by keeping a watch on the purse strings…
And to “kind of” answer your question about what rates might or might not do today or tomorrow…
The POWER of the bond vigilantes is much stronger than the FED…The FED will lose…PERIOD!
This past week was just a “shot across the bow”…The BV’s took down Clinton’s health care package with ease…They can do anything they want because at some point SOMEBODY has to buy all the paper that Obama wants to issue…
$10 trillion in 10 years (& climbing), is too much…
May 29th, 2009 at 11:24 am
Ahh benny boy…
It’s so hard to ignore him… but you just gotta do it. We all gotta do it. Little tidbits snuck in like: “bear’s attempt to destroy America” or “Shorts being unAmerican” are only designed to provoke and get a stir going.
A desperate stab at getting attention, perhaps? Or maybe, just the sophomoric tendencies at work again?
Who knows? Who cares?
Short Franklin, Long TBP. Nuff said.
May 29th, 2009 at 11:26 am
@Franklin411
The Chrysler & GM bondholders “paid in blood” because they’d already lent the money…
After this, they’re not going to be lending anymore money to Obama who is asking to borrow it as we speak…
Who has whom over a barrel?
May 29th, 2009 at 11:27 am
Investment bankers: CIA wants you
http://marketplace.publicradio.org/display/web/2009/05/28/pm_cia_recruits/
ROFLMAO! Investment bankers in the CIA. We’re doomed.
This is comical. Unless the CIA needs to sell something to somebody – that they don’t need when they’d be better off indexing – these Inspector Clouseau-esque bankers would make the Keystone Cops look like the Founding Fathers. Queue the Pink Panther theme…
I would love to see the vetting process after the interviews when the CIA HR folks realize these dopes’ only skill is going to lunch.
CIA HR: “Hey, let’s send them out to take Kim Il Jong , Ahmedijad et al to lunch.”
…a few months later…
Ibanker turned CIA spook: “Well… uh… sorry we lost the global war on terror due to the poor incentives you gave us, but we’re here to discuss another bailout. Lunch anyone?”
May 29th, 2009 at 11:29 am
@Franklin411
Bottom line:
You can PRINT all the money you want (or toss it out of helicopters)…You can’t FORCE anybody to buy anything with it…
May 29th, 2009 at 11:29 am
@f411 (I don’t even know why I bother anymore): How many mortgage people have you talked to in the industry? Well, I’ve talked to a few and they tell me that many of their re-fi’s aren’t getting done. Some of these HAVE to get done to keep people in their homes. Actually, a lot of them, especially in places like your home state. Re-fi’s in the high 5’s/’6 won’t get done and these people will be foreclosed upon and people like me simply won’t re-fi and will hang tight for the time being. Mortgage re-fi market DOA as a result. More lost jobs too.
May 29th, 2009 at 11:31 am
I-man,
you are right. that’s my last time. my blood pressure just went up.
Like you said, who knows what he’s trying to do and who cares.
May 29th, 2009 at 11:32 am
Mike in Nola: Same BS commodity rally as last year, same culprits (GS, hedgies, Pension Fools), reduced leverage.
“Saudis want $70″ “Nigerian incident” “Pipeline explosion”. All BS stories that don’t affect supply/demand curve.
Storage is full. The world is awash in oil, this is all speculation. I wonder if Krugman gets it this time around? Princeton’s Nobel Laureate posted a bunch of nice equations last year apparently unaware that GS was jacking the market up by toasting hedgers and shorts. (It’s Trading, Paul !!) Watch crude fall like a stone when the $ rallies.
May 29th, 2009 at 11:32 am
@VennData: North Korea’s Dear Leader could just pay them off to switch sides. Would almost be too easy for them.
May 29th, 2009 at 11:35 am
No green shoots on this map. More like red shoots….a couple of pink and fuscia ones as well.
http://www.calculatedriskblog.com/2009/05/philly-fed-state-coincident-indexes.html
May 29th, 2009 at 11:36 am
cvienne Says:
You can PRINT all the money you want (or toss it out of helicopters)…You can’t FORCE anybody to buy anything with it…
that is the truth of the matter- however it can allow banks to trade all they want with free money
also- point noted on VAT- never said I was a fan- just said that the way to sell it would be to link it to health care
May 29th, 2009 at 11:37 am
[...] Hat-tip: The Big Picture [...]
May 29th, 2009 at 11:37 am
Mannwich http://www.ritholtz.com/blog/2009/05/new-posts/comment-page-2/#comment-177366
My feelings exactly re: healthcare. There is pressure building out there. And this recession just may push it over the top, we’ll see. The millions of people who’ve lost their job and health care benefits/insurance are screwed and it will start showing up as the social unrest increases.
The whole system has been rigged so that the individual is at such a disadvantage if not in a company plan or govt employee. The health care insurance industry has us by the ‘nads and will fight tooth and nail to keep the status quo. Doctors and hospitals don’t even know how to deal with somebody without insurance.
And I’m a lucky one. Military retiree with great coverage as a result. But I feel so badly for those out there who are hanging in the wind right now with the threat of a health problem completing ruining their lives. If you’re unlucky, you’re screwed. I’m wary of a socialized health care system, no doubt. But we really should find a way to craft a system that doesn’t leave the unlucky out in the cold. Maddening stuff.
May 29th, 2009 at 11:38 am
Ben 22 is on target re: F411. Day/day; month/mo. moves are as irrelevant as the pom pom crowd.
Think Debt– Deleveraging– Demographics–Decimation of assets–Drag as mood sours again.
May 29th, 2009 at 11:38 am
@LB (11:32)
Chill out lefty
Just let it go for a tiny bit longer…
- Get your $70 print
- Let it help the energy sector break the S&P up a little higher
- Be patient and let that happen so the bv’s can come in and restore order
SHORTS will be cheap at that point and we’ll all ride the “green chutes” down together…
Do you want a dollar today? or 2 tomorrow?
May 29th, 2009 at 11:39 am
Chicago PMI = horror show. Re-accelerating manufacturing decline.
May 29th, 2009 at 11:42 am
@Transor: Better than expected?
At least the banks are doing well. Really happy for them.
May 29th, 2009 at 11:43 am
http://www.tracetracker.com/?tag=GTN
yet, the “War on Drugs” is an ever-losing battle?
~~
as an aside, “All the News that’s Fit to Print.” was a Typesetter’s Joke, never a Guarantee of Journalistic integrity..
May 29th, 2009 at 11:47 am
[...] Hat-tip: The Big Picture [...]
May 29th, 2009 at 11:47 am
call me ahab @ 11:10
“DL wants to open up his own surfboard company- but- keeps the secure job pushing paper”
You’re right… I’m much closer to the second category than the first.
But to use your example, WHO exactly is going to pay for the health insurance for workers of the surfboard company? Obama is likely to say that, as the owner of the company, I’ll have to either pay for the workers’ health insurance, or else pay a higher tax. Your argument sounds much like what I heard from Hillary during the presidential campaign. So, you’ve got to explain to me, as the owner of the company, who will pay for the insurance? There’s not going to be any free lunches here (except perhaps for some people at the bottom of the income scale).
As for the consumption tax, if there were no enforcement problems, I would say do away with the income tax altogether, and just have a consumption tax. But with a high VAT, tax avoidance will be rampant. And then there’s going to be all the exclusions. Exclude medicines, exclude food, exclude diapers, exclude this, exclude that, which means that the tax has to be that much higher for everything else, which means that much more cheating.
May 29th, 2009 at 11:48 am
@MEH
You NEED things like “drugs”, & sports, & American Idol in society to keep the sheeple “comfortably numb”…
Otherwise, they might all be on blogs like this and holding their politicians “accountable” for things…
May 29th, 2009 at 11:50 am
“Do you want a dollar today? or 2 tomorrow?”
I’ll take both, please, cvienne. Thanks. You might enjoy this from MacroMan this morning:
“And while “everybody else is doing it, so why don’t we” can on occasion be a persuasive argument, it’s also paved the road to some of the most spectacular crashes of the past couple of decades. Put another way, just because some other doughnut decided that it’d be fun to buy GM stock (which traded in positive territory for most of the day) the day that they announced their imminent bankruptcy timetable doesn’t mean that it’s a good idea for you or Macro Man to do it.”
My thoughts exactly.
May 29th, 2009 at 11:51 am
Alright already. Who is forcing down the yield on the 10yr note by 134 bps?
May 29th, 2009 at 11:51 am
The first link up there from Barron’s was actually a decent article on technicals and pennant formations…
Professionals don’t trade pennants until it breaks one way or another…..
Here’s the other thing about this particular pattern on the SP500…if this is a triangle, and we break out higher, the thrust should be limited to 75-125% of the widest part of the triangle, so 950s tops. If, however, we thrust lower out of this triangle, then we probably put in a spring peak and it would be best to exit the markets….
The existence of a triangle type pattern at the end of a big move is a sign of exhaustion, sort of like finishing a marathon…a struggle to the end….you either a) get the last rush that takes you to the finish line [where you collapse], or b) lose energy and collapse before the finish line [call the ambulance].
May 29th, 2009 at 11:53 am
VennData: Maybe the CIA intends to send investment bankers as moles into China and have them blow up the Chinese economy.
May 29th, 2009 at 11:54 am
mannwich, transor, onlooker, DL-
I am all for health care- universal is fine- but- need to go to my own doctor- do not want a clinic-
I talked to my doctor who i have been seeing for 20 years- and he is as frustrated as everyone else regarding the insurance companies-
and just instinctively- I have a innate suspicion of insurance companies anyway- as soon as shit gets rough companies pull out of whole States like State Farm did in Florida with homeowner’s ins-
and pre-existing conditions- how do you get around that conundrum-
with ins companies it’s basically- give us money until you start costing us money- then- adios amigo
May 29th, 2009 at 11:55 am
@DL
Re: who is going to pay?
I already answered that question in an earlier thread…
The owner of the company pays…I know…I lived in Italy for 12 years…My business had 17 staff on the payroll…I PAID THEIR HEALTHCARE PREMIUMS…
what people STILL don’t realize is that if we ever move to a system like this, the RESULT is going to be a lot of “undocumented workers”, and money “nero” coming into the cash register…
Commerce will literally revert back to CASH BASED…Businesses will try to incentivize customers by offering “discounts” if they pay in cash…The customers will accept because they avoid paying the 20% or whatever VAT…
In the end…It means you have LESS revenues coming into the US Treasury…You’d have to establish a whole force of “tax police” to roam around knocking on doors of small businesses and looking at their books…
Trust me on this…
May 29th, 2009 at 11:56 am
the fly in the oinment of the ‘deflationista’ argument is that it’s based ‘on the ‘dollar”..
primarily, that it holds/increases in value..
that’s a high-risk proposition. caeteris paribus, aka “Freeze Frame”, can leave you cold.
“snapshot image froze without a sound.”
http://www.metrolyrics.com/freeze-frame-lyrics-j-geils-band.html
May 29th, 2009 at 12:01 pm
In Italy they call the “tax police” the…Guardia di Finanza
Look it up…
I had MANY visits from them during my years there…It’s a big “cat & mouse” game…
It’s why Italy is “charming”, but backwards…
May 29th, 2009 at 12:05 pm
[...] Hat-tip: The Big Picture [...]
May 29th, 2009 at 12:07 pm
ahab
No doubt the health care problem is a tough nut to crack. You want some market type forces at play to keep things in check, but you don’t want insurance companies doing what they do: collect premiums and then play gotcha and run interference to try to minimize pay outs. And add huge overhead to the whole thing. How much health care money is sucked down the administrative hole?
And the health care providers are truly fed up and frustrated too.
If we don’t craft a good compromise soon I think the balance of political will from the masses is going to push us towards single payer by the time we get through this grinding economic period. I think you can tinker with a universal system to add some flexibility for those who want to pay up for more without leaving others out in the cold. I’m hesitant to call it a right, but it sure feels rather crappy to just say those who lose the genetic lottery are just screwed.
May 29th, 2009 at 12:08 pm
DL Says:
“There’s not going to be any free lunches here (except perhaps for some people at the bottom of the income scale).”
it already is free at the bottom of the scale- meidcaid
with the universal health care I see a tax to pay for it either payroll or national sales tax- I think the impetus will be getting stronger to enact the more unemployed people and distressed families there are- as well said my mannwich and onlooker-
at this point of time in America- I much fell like taking my guitar and working the streets in DC for tips for playing some poorly played songs-
tax free
reminds of a story of when I was in Santa Monica- full of homeless people everywhere- not necessarily a bad thing- but just the way it is because of their open arm policies-
anyway- in the morning I would be in standing line at an eclectic little coffee shop I found- and in line with me were the same dudes who were bumming for change the day before- getting latte’s and what not-
quite the life
May 29th, 2009 at 12:08 pm
CRA didn’t cause the meltdown, but to say it didn’t have any substantive impact is not accurate and I’m not buying it.
May 29th, 2009 at 12:13 pm
cvienne,
see: http://www.marketing-interactive.com/news/12193
“Hong Kong – Visa has appointed Sunny Cheung (pictured) as country manager for Hong Kong and Macau and will oversee the development of the Visa brand across both territories. He replaces Jim Dixon who has relocated to head up Korea.
Cheung said he looks forward to diversifying Visa’s products and services further as well as demonstrating the value of Visa more in the electronics payment industry.
He explained that Visa’s vision is to encourage people to use electronic payments rather than cash and checks and sees opportunity in the ongoing migration from paper-based payments to card-based and other electronic payments.
Cheung said Visa recently launched the “More people go with Visa” campaign which for the first time gives Visa a single global marketing message that will be executed locally for maximum relevance and impact in local markets.
He said the campaign is consistent with Visa’s core growth strategy – migrating consumer and business spending from cash and checks to a better form of electronic payment, Visa.
Cheung said he will also focus on high-opportunity segments where Visa products and services are currently under-penetrated…”
~~
and: “Peter Ayliffe said that, by 2012, using credit and debit cards should be cheaper and more convenient than cash.
Some retailers could soon start surcharging customers if they choose to buy products with cash, because of the greater cost of processing these payments, he warned.
Visa Europe briefed the British Retail Consortium last month on new “contactless” cards that can be waved in front of a scanner to make small payments.
However, the consortium dismissed this vision and claimed that card processing fees, which regulators are investigating, are still too high.
One member of the consurtium said that the estimated “interchange” fee charged to retailers amounts to some 4p for each transaction.
Nick Mourant, treasurer at Tesco, said: “There is a duopoly between Mastercard and Visa in the UK. Their setting of fees is anti-competitive.” …
http://www.independent.co.uk/news/business/news/cashless-society-by-2012-says-visa-chief-439676.html
to Mourant’s point, VISA, half of the mentioned duopoly, would have been crushed, long ago, if they weren’t doing somebody’s bidding–and, yes, save me the talk of AmEx settlements..
obviously, these dudes (wet)work for VISA– spin keyword: Cashless Society through your fave web crawler..
LSS: Cash has been under attack for, literally, decades..
May 29th, 2009 at 12:13 pm
“The existence of a triangle type pattern at the end of a big move is a sign of exhaustion”
Quite. As if further evidence were needed. We are at a stage of equal bear and bull exhaustion now. TWINE™ (”The World Is Not Ending”) is not going to be enough to drive the market higher from here.
@MEH: Ray Dalia has explained this pretty well, in his article about the “D-process”. Debt is denominated in $. Deleveraging must therefore lift the $. We will be on the D-Train™ this summer.
May 29th, 2009 at 12:16 pm
hoffer Says:
“the fly in the oinment of the ‘deflationista’ argument is that it’s based ‘on the ‘dollar”..
primarily, that it holds/increases in value..”
good point- what do you think Mark- a slow slog to 1.5 per Euro- a 1.6??? 1.7??? No $ rally forthcoming?
I am starting to wonder if the air is being let out slowly
May 29th, 2009 at 12:22 pm
@MEH
The article was fine MEH but you’re missing my point…
I’m speaking of “behavior changes” in the context of moving to a UNIVERSAL HEALTHCARE SYSTEM…
I’m just referring what I actually experienced for 12 years…
-Who pays for healthcare?…Employer
-Result: Small businesses try to hire UNDOCUMENTED workers (and pay them cash under the table)
- VAT tax is imposed on consumption (say 20%, which has to be reported as income by business)
-Result: You NEVER want your business to show profits…Too onerous…You incentive customers to buy things and pay CASH for them…Offer them a 25% discount…20% is what they save from the VAT, and 5% is what you knock off your margin to entice the sale…
-You SIMPLY CANNOT USE CREDIT OR DEBIT CARDS because it is an electronic transaction (subjecting you to taxes which would KILL your margins or possibly make you close down)…
Believe me, if Healthcare is passed, thhe ABOVE described black market will ensue…
May 29th, 2009 at 12:23 pm
@Onlooker: Reality of the health insurance market is hitting a lot of people in the face, my family included. My husband recently lost his job. We have to take the COBRA for him because of a single instance of accelerated heart rate last fall. He doesn’t take meds, he doesn’t have any heart issues, but no carrier will take him. You cannot qualify for personal health insurance if you take blood pressure meds, cholestrol meds, or any anti-anxiety meds. Don’t even consider it if you have diabetes. So, we eliminate, what, 75% of the population over age 50?
May 29th, 2009 at 12:23 pm
ahab: The $ may be more trash than cash, but the same can be said for any of the currencies: $, £, ¥, €.
This is the proverbial Race to the Bottom, and someone else’s currency is going to take a beating soon.
May 29th, 2009 at 12:24 pm
today, the $tran has broken out and up from the May downtrend… looks like anyone betting on that H&S from mid april to mid may is short and wrong. $wlsh still looking good on decent volume today as well.
fwiw, the p&f for the spx is 935, for the $wlsh it’s 10550.. and for the $tran, 3680.
May 29th, 2009 at 12:27 pm
@MEH
note: it won’t be wholescale and across the board, but you watch…IT WILL HAPPEN…
People in this country have “blinders on”…
and I’ll make ANOTHER point…These BK & foreclosure filings mean bad credit ratings on the way for a lot of Americans…
They won’t be able to get anything other than a SECURED card anyway (with a very limited balance)…The CARD FEES will be too high because it is part of Obama’s “genius” plan regarding credit cards (where carrying fees go up)…
Many will turn back to cash…
May 29th, 2009 at 12:28 pm
@karen
Thanks for posting that ($TRAN)…
It had been one of the things I was watching (but I hadn’t looked at it today)…
I think it’s an important indicator of the next direction after AndyT’s triangle…
May 29th, 2009 at 12:32 pm
a simple $tran chart: http://stockcharts.com/h-sc/ui?s=%24tran
it’ll be interesting to see how it ends the week and month! i’ll post a weekly and monthly next.
May 29th, 2009 at 12:36 pm
@karen
What’s interesting too is that the DMI indicator had come into complete tangent and is now separating apart off this past week’s consolidation (on the $TRAN)
May 29th, 2009 at 12:36 pm
$tran on a 10 year monthly: http://stockcharts.com/h-sc/ui
$tran on a 3 year weekly: http://stockcharts.com/h-sc/ui?s=$TRAN&id=p45236901427&def=N&listNum=1
May 29th, 2009 at 12:37 pm
lftbk-
good point- £ especially
May 29th, 2009 at 12:39 pm
May 29th, 2009 at 12:42 pm
We should simply tell the so called foreign bond vigilantes that we will remove all our defense bases and leave them on their own since we can’t afford to protect them anymore. Pull the pay to play card on them.
Tell the various Kingdoms, Japanese, Germans, all of them. The burden the US bares as the Global police force needs to be put in economic terms. Lets monetize that!
May 29th, 2009 at 12:43 pm
@LB
If there ends up being the famous RACE TO THE BOTTOM (which most agree on), once the € goes under $1.16, they’ll start thinking of dismantling it altogether…
The Germans will want to go back to the mark
French francs
Italian Lira
Spanish peso
etc…
So then your € will be REALLY hard to find (especially on BR’s new Mac)
May 29th, 2009 at 12:46 pm
@Moss
It may come to that someday…
But then we’d probably have to start drilling for oil here again or start riding our bikes…
It’s all a Mexican standoff isn’t it?
May 29th, 2009 at 12:48 pm
@ Left:
Would you mind linking that Dalia article, young brotha?
May 29th, 2009 at 12:52 pm
ahab,
re: ‘dollar’–short term? http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax
the best thing one can say about that ugly chart is that it looks overextended to the d-side..
if it were me, I’d be preparing for serious financial market ‘liquidations’ occuring August-timeframe..
LSS: people are, still, not awake to the “Derivatives” issue(s), in general.
all this “we’ve dodged the bullet” chest-thumping, and “greens shoot” parrotting, is delusional in the extreme.
if one has their ‘ability’ to function wrapped up in electronic bleeps and flashes, they’re the type of Risk-taker, wittingly, or not, that would make Evel Knievel Run the other way..
~~
cvienne,
as I was saying, alluding to, Cards are more the Financial Transaction vehicles these daze..
websearch: Real ID, and EEVS
see: http://www.eff.org/deeplinks/2007/06/harper-real-id-and-federal-no-work-list
May 29th, 2009 at 12:55 pm
@ Cvienne and MEH:
When can I sign up to have the chip implanted in my wrist?
Get my gist?
May 29th, 2009 at 12:57 pm
Re: hyper-inflation.
Probably hyper-inflation is way off, but if the dollar trend doesn’t reverse, high inflation is coming soon.
May 29th, 2009 at 12:59 pm
Lefty: Is the superscripted TM actually an ascii code? I tried html and it didn’t work.
BTW, I think you know finance too. Must be your international outlook.
May 29th, 2009 at 1:02 pm
10 yr down to 3.50% and the Dow and S&P are relatively flat. Explain.
May 29th, 2009 at 1:05 pm
@MEH
Grrrrrr…..
I get your gist MEH…I get your gist…(yours too I-man)
But both of you are still making your conclusions based on the way the system exists today…
So if the present structure never changes…that is:
- No healthcare reform
- No VAT
I’m in agreement with you…
I think, however, the system will change…
And I’m telling you that the more the government succeeds to nationalize and/or socialize everything, the more of an UNDERGROUND of “under the table” commerce will begin to formulate and proliferate…
Who was it that posted a few threads ago here about going to Washington DC and playing his guitar on the streets?
Trust me…He’s not going to be asking for debit cards or imbedded chips to get bar scanned into his guitar box…
If I’m Starbucks…I keep the cash register OPEN…and when someone I know comes in to buy a latte, I make it for him and charge him 50 cents less for it (but I don’t punch the transaction into the cash register)…
When the government wants a cut of ALL TRANSACTIONS, margins are tough to come by…So the only way to survive is to AVOID EVIDENCE OF THE TRANSACTION…If you want to stay in business…
May 29th, 2009 at 1:08 pm
I-Man: Ray Dalio, sorry. Thoughtful article. Here it be, brotha:
http://paul.kedrosky.com/archives/2009/02/07/barrons_ray_dal.html
“10 yr down to 3.50% and the Dow and S&P are relatively flat. Explain.”
It’s a summer Friday. The A traders are in the Hamptons – the B team desk is eating takeout and watching p*rn.
Mike: Trade secrets. Now if you subscribed to Schadenfreude’s Investor Newsletter…
May 29th, 2009 at 1:14 pm
AmenRa: Who knows? It’s dangerous for mortals to meddle in the affairs of the gods for they are quick to anger.
A friend who bought GM bonds 6 months ago on a flier when they had some enourmous yield because they were so shakey is now whining about Obama screwing him. It’s what happens when you gamble.
May 29th, 2009 at 1:22 pm
Karen,
I also noticed that in $TRAN.
@ MEH,
Just remember, being short the $ right now, is running with the crowd.
Though, Clearly, I’m talking my book here, given my new position in UUP @ $24 yesterday
May 29th, 2009 at 1:23 pm
“It’s what happens when you gamble.”
It’s what happens when dipsticks buy illiquid instruments they cannot unload. I know tons of people who piled into bank bonds in December, I wonder how that’s going to turn out.
“If I’m Starbucks…I keep the cash register OPEN…and when someone I know comes in to buy a latte, I make it for him and charge him 50 cents less for it (but I don’t punch the transaction into the cash register)…”
This describes a significant fraction of the bartender business, unless the owner is all over it all the time.
May 29th, 2009 at 1:23 pm
Lefty: ĤŰĤ? ™
May 29th, 2009 at 1:26 pm
Cvienne,
“And I’m telling you that the more the government succeeds to nationalize and/or socialize everything, the more of an UNDERGROUND of “under the table” commerce will begin to formulate and proliferate…”
this isn’t 1940’s-era Vichy France, or Lira-devaluing pre-e-comm Italy..
add in, http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Civilian+National+Security+Force of all the newly ‘available’ unemployed..
you’ll have 168. Track n’ Trace that would be the envy of the Stasi’s wettest dreams..
the type of ‘underground’ you’re referring to would be seen on Breed’s Hill, not Nob Hill.
May 29th, 2009 at 1:26 pm
Has anyone else noticed that pessimists (bearish propensity) want to catch the cusp of a move more than optimists (bullish propensity)? Optimists seem to want to catch the momentum of the move, not the cusp. Or is it something else that differentiates these two behaviors?
May 29th, 2009 at 1:27 pm
LOL. ™ is option-2 on my Mac. The € is shift-option-2, for those who are bored..
May 29th, 2009 at 1:30 pm
ben22,
I’m not short the U$D, I’m long Silver.
and, I’d love to see the DX=~90, if not ~120, just saying it’s, certainly, not a given..and, that, there are, significant, Risks, well, and truly, about.
May 29th, 2009 at 1:34 pm
What would be the catalyst to push the spx over 925 today? Looks like that’s a real possibitly on the 60 minute chart…
May 29th, 2009 at 1:35 pm
Mark,
No doubt. I’m curious, did you just buy silver, or are you doing that via a mining outfit, or something else?
May 29th, 2009 at 1:37 pm
Lefty: you gave away nothing by telling me that
Use a pc laptop and have never tried ot memorize keyboard combos; if it ain’t marked on the keys, I’m not typing it. Found a page of ascii symbol codes and save it to my desktop as a cheat sheet to copy and pase. £©£
May 29th, 2009 at 1:38 pm
@Mike
Hahaha. I think it’s because of the short week. As leftback said “the A traders are in the Hamptons”.
So next week it begins. I’m just wondering how much spin is going to happen over the weekend.
May 29th, 2009 at 1:38 pm
Which does not answer the quesiton of why Wordpress accepts html tags for bold, italics, etc., but not the super and subscripts.
May 29th, 2009 at 1:41 pm
I have slv for silver holdings.
May 29th, 2009 at 1:42 pm
i might have answered my own question… http://www.stocktiming.com/Friday-DailyMarketUpdate.htm
and http://bespokeinvest.typepad.com/bespoke/
May 29th, 2009 at 1:43 pm
Karen,
You are a chart diva but I don’t think so. We haven’t crossed over the intra-day high of earlier this week. IMO we are going to need some big buying push, perhaps around 3:30 for that to occur. Does there need to be a catalyst anymore for anything though?
If it does happen,
That would be the double, or triple zig zag scenario on the way to new highs but I’m not sure about that just yet.
May 29th, 2009 at 1:48 pm
ben22,
two ways, no third way.
Physical y CONEX
if you’re willing to stand for delivery, you can start making Silver(Metals) Pay you to hold them, as well..
No Paper Silver, as in Miners, ETFs, et al., here.
btw, if you want a new way to keep track of how you’re doing ‘in the Mkt.s’ use the Silver Oz. as basis, rather than the Paperback–might get a clearer picture/better focus.
May 29th, 2009 at 1:49 pm
ben, if we get over 912.50, it can move of its momentum.. and look at transports..
dto is getting jumpy.. it just made a multi point move in the right direction.
next, did you read the bespoke link? did you see jcg today? (meant to buy that earlier… too many stocks and two few eyes… ha ha ha)
May 29th, 2009 at 1:50 pm
@MEH
OK then my friend…But there will be two different economies…”Nob Hill” & “Hillbillies”
@karen
Implied volatility is pricing in roughly 25-27 point peak to trough moves in the S&P…
the last low was 888, so I’d say 915 would be “tops” for today…
So I suppose to answer your question, any catalyst to go above 925 would be any euphoria that might gather…I don’t see it happening…It’s 76 degrees and low humidity on Long Island…Time to hit the beach…
On Monday, you’ll have a minor reverse H&S pattern formed…
So you go to 915 today…Retrace and test 906 on Monday…Then tack on 27 points after the 906 test…
May 29th, 2009 at 1:50 pm
Here’s a shocker. Looks like S&P is being influenced by the Street again, this time on their CMBS potential ratings downgrades….
http://www.calculatedriskblog.com/2009/05/more-on-s-and-possible-cmbs-downgrades.html
May 29th, 2009 at 1:52 pm
karen Says:
May 29th, 2009 at 1:34 pm
What would be the catalyst to push the spx over 925 today? Looks like that’s a real possibitly on the 60 minute chart…
The catalyst is always something that is unknown until after the fact….a move to 925 would start breaking out of the pennant and would create that last rush to the 950s/960s. The only question is which path would cause the most damage to most people:
a) a rush to 950/960 followed by a collapse?
b) an anticipation of a rush out of this pennant/triangle that never materializes and we end up just collapsing.
I honestly don’t know the answer….thus I sit and wait patiently for the market to tell me….
May 29th, 2009 at 1:52 pm
cvienne,
the “War on Bubba” has been on for years..
and this: http://animalid.aphis.usda.gov/nais/index.shtml
will put ‘hillbillies’ on the Grid, or OOB..
May 29th, 2009 at 1:55 pm
@Karen,
No I only read your first link so far. I’ll get to the second one in a minute. I had to place a few trades in between. Just sold some DBA for a nice gain. The $TRAN action is really worth paying attention to. Good eye, you must put carrots in your salads.
@Mark,
I have watched a chart of the DOW priced in Gold (real money) for a while now. It spells credit deflation if I ever saw it. It’s down huge since the 2000 peak. If we still used real money more people would understand exactly what is going on here.
May 29th, 2009 at 1:59 pm
MEH @1:52 – just when my stress reduction program was starting to work, you have to post that link!
May 29th, 2009 at 2:00 pm
My cows (when I get them) will be off the grid. My chickens too.
May 29th, 2009 at 2:01 pm
ben22,
why do you think we use Paperbacks?
Peep have been F*****g Crushed, in Real Terms, since ~2000, at the minimum..
good thing they collected those ‘Statehood Quarters’..that’ll tide’m over..
I’ll say again, the whole World begins in Commodities, peep that ignore that Reality, are, to borrow a phrase, Walking around Blind, without a Cane.
May 29th, 2009 at 2:01 pm
@MEH
I hear ya bro…but when FULL SCALE socialist government hits (and it begins to impact people’s lives in a “behavioral” way)…
The government is going to see the problem…It will be like Roy Scheider’s character in Jaws…”We’re going to need a bigger boat”…
May 29th, 2009 at 2:04 pm
hopeImwrong,
then add: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=census+GPS
and, http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=UAV+drone+surveillence
it’ll be Fun for the whole family..
May 29th, 2009 at 2:09 pm
@Andy T (1:52)
I nominate the “a” scenario…
Commodity & Energy bulls are in full command right now…
The BV’s volley was just a “shot across the bow”…for now…
It’s going to take the commodities & energy to push this market up before the BV’s come back to torpedo the whole idea…
May 29th, 2009 at 2:13 pm
MEH – Call the stroke team. Code Blue.
For those bearish on gold – you need to worry about
1) GDX high volume breakout above $40 and successful re-test (so far).
2) GDX and GLD above rising 200 day MA. Silver almost there too.
3) Potential 4th retest of the $1000 area by Gold. Seems a breakout is more likely on the 4th try.
4) Potential (highly anticipated, unfortuantely) longer term reverse head and shoulders on gold.
5) Dollar down trend is intact. Below 50 day and 200 day MA, with 200 day having potential to roll over in a week or two.
May 29th, 2009 at 2:21 pm
True… But, this would be a great time to take gold down and cause maximal GOLD BUG pain, would it not?
May 29th, 2009 at 2:27 pm
@hopeImwrong
Obama is heading off to Egypt to give a speech to the Muslim world (on June 4th) telling then what great citizens of the world they’ve been and how we all owe a great debt of service to them all…
Then he has a “private dinner” with the Saudi King, followed by, probably, a “tounge lashing” of Netanyahu telling him to “get with the program” (and cede back land to the Palestinians)…
He’ll top it all off with a D-Day visit with Sarkozy on the Normandy beach (which someone forgot to invite Queen Elizabeth to – or – Obama instructed her that she wasn’t invited unless she could recite BY HEART all his famous speeches on the iPod he gave her)…Even though QE was the only one of the three that had a “physical presence” during that invasion…
So I suppose gold will trade in accordance with idiot crap like that…I don’t care what technicals say, I’d fade it after that…
May 29th, 2009 at 2:31 pm
@LB –
Yes, max pain could be down for gold, at least for me. But, there seems to be less excitement about this run up to $1000. So, I’m not sure. I’d gage sentiment as more bullish than I would like, but not close to scary. For gold, this move has been sedate.
I’ve seen J6P interest in gold, which worries me.
Another concern for the bears should be this week’s move up around options expirations.
May 29th, 2009 at 2:36 pm
@ cvienne 2:27
I’m not saying there isn’t a bearish case to be made. Just laying out the risks for the bears. My humble opinion is, risk is higher for shorts than longs at this juncture. But, I’m not married to that. And I’m not adding to positions. Any new positions should be protected with stops.
May 29th, 2009 at 2:40 pm
@hopeImwrong
Disclosure: If you didn’t know it b4…I’ve OWNED gold bullion since 2004 @$375…I don’t TRADE it…
I still think it goes much higher in the long run (and I’m actually looking to add more to SILVER these days)…
But I don’t need to ADD any gold unless I see it at $820 – $750 (which I’d love to see)…
May 29th, 2009 at 2:43 pm
@hopeI’mwrong
My last gold purchase was October 2006
May 29th, 2009 at 2:47 pm
@cvienne
I am all for a Mexican standoff.
We can not allow the rest of the world to take for granted the incredible cost we endure year after year to keep the world safe for commerce. The recent past has seen the erosion of respect for the US and what we bring to the table. It is time for us to leverage our superior defense, intelligence and statesmanship capabilities. It has been acting as a detriment due to its imprudent use. Our dependence on Oil is certainly a weak link but we should continue to depend more and more on Canada and our own reserves.
I would love to see the the when we can tell the Kingdoms to take their heavy crude and stick it.
May 29th, 2009 at 2:54 pm
@Moss
Actually the KINGDOMS have the light sweet crude (as does Nigeria)…
Canada has the heavy stuff…
Our own WTI is light…
But those are just ‘technicalities’…In principle I agree with parts of what you’re saying…In the end, it’s a fascinating ballet of soverign interests…
May 29th, 2009 at 2:57 pm
Obvious update of the spx outlook, 3 minutes to go but 60 minute candle bearish… last 30 were bearish as is this 30 minutes… lets see how the hour ends.. if we can bet back to 908, my bias would still be up..
May 29th, 2009 at 3:01 pm
Just read today’s discussion – must say one of the best and most insightful in a while.
Cvienne – great view points re March 12 and March 19 – but doesn’t decide then this rally is over?
Any guess for Monday’s S&P – it has been hammered the last 2 Mondays (even though last Monday was technically a Tuesday)
May 29th, 2009 at 3:06 pm
@karen
To me it looks like its formed a nice REVERSE H&S (with support at 906)…
Probably sets up for an upward bias going into next week…
(Although I wouldn’t be surprised to see a “knee jerk” down under the 906 in the first 30 minutes of trading on Monday just to play head games with some)…A “seek & destroy” mission…
otherwise…It’s 76 in the Hamptons right now…This will most likely end quiet…
May 29th, 2009 at 3:11 pm
btw
My “seek & destroy” level (on Monday) would be around 897…So it have to zip down and then be back above 906 by 10:00 am…
May 29th, 2009 at 3:13 pm
sorry June 12 and June 19
May 29th, 2009 at 3:26 pm
.. probably, a “tounge lashing” of Netanyahu telling him to “get with the program” (and cede back land to the Palestinians)… ??
interesting perspective..
May 29th, 2009 at 3:39 pm
On deck for Monday: personal spending, personal income, ISM index, and construction spending…
cvienne, i’ll walk with you on that spx scenario…
May 29th, 2009 at 3:40 pm
@MEH
I just get the feeling that Obama is throwing Israel under the bus…
That’s just how I see it…
May 29th, 2009 at 3:46 pm
OK. So the oil market seems irrationally up in anticipation of a rapid global recovery, or high inflation [that's the rational arguements] OR speculators are driving it up for profit [possible].
What about non-precisous metals (xme) run? Is this speculators also?
May 29th, 2009 at 3:47 pm
GM is finally finding it’s rightful value; just about 75 cents more to go. A most bizarre tale on that one. Still can’t figure out why it stayed elevated for so long. Even without BK it should have been a penny stock it would seem.
JCG – major short squeeze? 25% up, good grief. Wonder where it will settle to.
May 29th, 2009 at 3:48 pm
@karen
Re: SPX
It would basically explain today’s action…in short…
- Reverse H&S formed with around a 906 base on the S&P (since Tuesday)
- But maybe the market looks to do some GAP “filling in” in the 897 to 899 range (3 “gaps” there in the last 7 days)…
- So you get a 899 GAP down open on Monday…It spends a half hour filling it in…then it charges up to 906 right at 10 o’clock (which would pretty much keep the reverse H&S in tact on more than a 30 min chart)…
- You still have implied volatility which could move the S&P 27 points all week
- So you have a new BASE of 897, with topside of 925
- It bumps around there all next week
- The 88 puts and 93 calls that one of the big boys wrote are still in tact (and the PREMIUM is decaying fast for the buyers)…
- Rinse & Repeat the following week…
- Technical breakout on OPEX week
over & done
May 29th, 2009 at 3:50 pm
@karen
oh…and that ‘gap down to 897…if you need a bulls**t story to pin it to…let’s just say the GM bankruptcy for sh**s & giggles…
May 29th, 2009 at 3:51 pm
The mania in NG seems to have cooled off today. Anybody think it resumes a meaningful rise from here? Just doesn’t seem like there’s a fundamental case for it doing anything but staying down around 4 bucks without a REAL recovery in sight. No weak dollar affect like oil.
May 29th, 2009 at 3:53 pm
Onlooker, I’m showing a 30% short postion in jcg… darn I missed it… thot they’d post better than expected.. i just dumped a bunch of money their way yesterday : )
May 29th, 2009 at 3:55 pm
@Cvienne
I just get the feeling Obama is throwing American under the bus…
May 29th, 2009 at 3:56 pm
America – can’t type today
May 29th, 2009 at 4:05 pm
That was one hell of a last print on SPY… Selassie.
May 29th, 2009 at 4:06 pm
Whoa, nice steep ramp job into the close! Almost hit your target karen. How’d you do that again?
May 29th, 2009 at 4:20 pm
Onlooker, just remember how wrong i was this week on gold, crude and the usd… : )
May 30th, 2009 at 1:12 pm
“Did the CRA cause…”? Without reading more than two paragraphs – it is blatant neocon, Chicago School nonsense. Did you post ironically?
Ah, the great myth of The Government Distortions in the Marketplace. Paul Krugman puts it this way more or less: if the free market is so nimble, how can a little thing like a government get in its way? Put another way, what’s wrong with a rule that ensures that we unhinge our next dollar of GDP growth from our next barrel of imported oil (as was done in Japan, France, Britain, Denmark, … after the 70’s oil crisis; countries that today use the same amount of oil as they did then – from P. Tertzakian’s ‘Thousand Barrels a Second’)?