This is just my guess…but the volatility in the bond market doesn’t strike me as being particularly odd (by historical measures, yes, but in a small window, no)…

I think there was a tremendous run (probably a lot due to a rare equity run up in which profits were searching a home for the short term – BEFORE THE END OF THE QUARTER mind you)…

Now – there is a side political agenda (the Healthcare Package – a version of which was passed in the Senate)…So the Bond Vigilantes make a ruckus, and the ruckus is in concert with an equity rally which is happening for no other reason than to say WTF? why the hell not?

I predict a return to order in due time…

I’m sure that CIT has shared its list of exposed customers with the appropriate parties in the course of its struggles to get funding, so they would have all the knowledge to reallocate those business relationships to other lenders. The FDIC is performing this same game every weekend as it closes more and more smaller banks.

I think that just about anything can happen — mainly because there are apparently no limits to how far the powers-that-be are willing to spin the controls. Scary beyond belief.

“A failure of CIT would impact thousands of retailers and, consequently, the consumer spending that makes up two-thirds of our nation’s economy,” Tracy Mullin, the chief executive of the National Retail Federation, an industry group, wrote in a letter to the Treasury secretary, Timothy F. Geithner, earlier on Wednesday. “That cannot be allowed to happen at a time when retailers are already struggling to survive the national recession.”

….from the same NYT’s article…Constant I hope you are correct…

And constant…you “allow to fail” remark…isn’t it funny that such a thing just 12 months ago…ONE YEAR AGO…would have been such an alien concept that if you’d told people such a widespread government bailout of all things economic was in full swing in July 2009 they would probably have looked at you funny and then taken the baby inside to be sure it was safe.

There has been remarkable economic history made in less than one year….you traders have my admiration…

Except for Leftback who is coached daily by the twins…

I look to see a coordinated herd of banksters quickly swoop in to hoover up CIT’s business, so as to not inconvenience their customers, and to minimize any collateral damage. That’s what ought to properly happen, in any event.

The way that Lehman was allowed to crash without any planned support for their “dependents” was disgraceful, and IMHO designed to damage the economy.

But that’s just my twisted way of seeing things. Everybody has their own perceptions, and from outside the bubble it’s hard to say what is real and what is orchestrated.

that’s not bad…

In the end too you have to be a bully…If you’re going to box them into a canyon, you have have to have the power to stampede them out…that requires more than a firecracker, you may need a stick of dynamite…

But I think there’s even more to it than that…

Since the March lows, I have noticed a migration into what I’d describe as “sentient” and “insentient” camps…

The “sentient” ones are the ones with SOMETHING POTENTIALLY TO LOSE…The “insentient” ones are the ones who don’t want to lose, but are so loaded with money that they basically say WTF…Let’s just trade the thing and see how it goes…

The “sentient” ones are the ones who embrace fundamentals (who KNOW IN THEIR HEARTS that righteousness will prevail in the long run)…

The “insentient” ones, who are free and clear a couple of mil here and there can clown around about winning or losing 20K per day…So they just TRADE, they go where the prevailing wind takes them…If someone wants to take the S&P up to 1,050, so be it…WHO CARES IF IT MEANS P/E RATIOS WILL BE AT 1,800+…THEY CAN DRINK THEIR GLASS OF WINE AT THE END OF THE EVENING AND EVEN BRAG TO THEIR FRIENDS HOW GREAT THEY ARE…It doesn’t matter to them if, based on how the MSM portrays the “health” of the economy, if a run-up to bubblicious territory actually ends up EXACERBATING the eventual economic demise of this country (hey, they made a half mil “beer money” on the side in the process because they were so smart)…They are the PUPPETTEERS…God love ‘em for it…

The “sentient” ones care about their families, hopefully their clients, and perhaps the general welfare of the citizens of this country…NOBODY WANTS THIS COUNTRY TO GO DOWN THE TUBES…But they realize that the “hard medicine” may be the best thing at this point…So they play it cautiously…In this period of WHO KNOWS WHAT?…they’re probably happy to tread water or break even…

I don’t know…but besides QUANT MODELS…I think THAT is something one has to factor in…And my biggest FEAR (for not going 100% short this market right now)…is the fear of the INSENTIENT folks with a wad of cash they don’t know what to do with…

CIT Says It Won’t Get More U.S. Aid

“We have a comprehensive and aggressive strategy to restore stability to the financial system as a whole so that credit flows to both businesses and consumers and puts us on a path to sustainable growth,” the Treasury said in a statement. “Even during periods of financial stress, we believe that there is a very high threshold for exceptional government assistance to individual companies.”

….Little Lehman or no big deal tomorrow? This apparently is the final word…and if last week’s initial claims were altered by the holiday, could be interesting Thursday…..

I’ll say this: yes I have begun to recognize the prints that the machines leave behind. I cant say for certain because I dont have the techno ability… I dont know anything about Level II either, or really have the inclination for it. So my observations, or my perception of them anyway, are clearly not backed by data…

But nonetheless, I am confident that I can recognize a computer generated “pattern” or “breakout” versus a more natural one.
That being said though, and I am struggling with coming to terms with this viewpoint myself, it really doesnt matter who is doing it or not, or how the tape is being shown, what matters is that its happening, and we need to accept it and make the decision to either trade with it or against it.

To me, I think that manipulation has always been a part of the game and it always will be… if you call what the machines are doing manipulation, well, then…

as I remember, this comment (last week) was directed to you…

http://www.ritholtz.com/blog/2009/07/art-cashin-on-secular-cycles/#comment-191116

Notwithstanding, I’m in TOTAL agreement with you…Fundamentals will eventually play out (quants or no quants)…

One old anecdote that I was reminding myself of today was the following notion:

How many UP 2.5% – 3% days have we had in the S&P since March…I don’t know, but A LOT I’d bet…Those types of moves simply don’t happen in BULL MARKETS with PROPER FUNDAMENTALS…

However, once can go broke playing fundamentals too rigidly…Frankly, I’m happy to stay EVEN during this time when Mr. Hope meets Mr. Obvious (no offense to you karen)…

The time will present itself…The last pullback I ‘started’ to see the right tumbler locks fall into place but I didn’t hear the CLICK…we’re getting closer…