Stopped Out

I came back to the office from a noon meeting to see all of yesterday’s "Toe-in-the-Water" Cramer trades had been stopped out for modest (small) losses.

After opening up 150 or so, we reversed hard and headed south — a 500 point Dow swing — and closed on the lows (never a good sign).

We now have a Dow 9,000 down side target.

Its a tough, but target-rich, environment 

Category: Trading


Category: Psychology

Bernanke: “extraordinary stress, worsening outlook”

Category: Credit, Economy, Federal Reserve

Bernanke: “extraordinary stress, worsening outlook”

Category: Credit, Economy, Federal Reserve

Vanishing Act Timeline

How various firms on Wall Street are disappearing: > click for ginormous > Source: Wall Street, R.I.P.: The End of an Era, Even at Goldman JULIE CRESWELL and BEN WHITE NYT,  September 27, 2008

Category: Bailouts, Corporate Management, Derivatives, Valuation

Modern Finance

Category: Credit, Derivatives, Real Estate

Commercial Paper Funding Facility (CPFF)

Speaking of pulling another trick out of the bag, here is the Fed statement on the latest alphabet scramble (CPFF) form of lending:

"The Federal Reserve Board on Tuesday announced the creation of the Commercial
Paper Funding Facility (CPFF), a facility that will complement the Federal
Reserve’s existing credit facilities to help provide liquidity to term funding
markets. The CPFF will provide a liquidity backstop to U.S. issuers of
commercial paper through a special purpose vehicle (SPV) that will purchase
three-month unsecured and asset-backed commercial paper directly from eligible
issuers. The Federal Reserve will provide financing to the SPV under the CPFF
and will be secured by all of the assets of the SPV and, in the case of
commercial paper that is not asset-backed commercial paper, by the retention of
up-front fees paid by the issuers or by other forms of security acceptable to
the Federal Reserve in consultation with market participants. The Treasury
believes this facility is necessary to prevent substantial disruptions to the
financial markets and the economy and will make a special deposit at the Federal
Reserve Bank of New York in support of this facility."   
(continued below)

Markets give up 100+ gains, still unsure of what direction to take . . .


Commercial Paper Funding Facility (CPFF)
Federal Reserve, October 7, 2008

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Category: Federal Reserve

Stealth Easing ?

Category: Credit, Federal Reserve, Fixed Income/Interest Rates

Fears of Recession?

Category: Credit, Economy, Financial Press

60 Minutes on the Financial Storm

On Friday Congress finally passed – and President Bush signed into law – a financial rescue package in which the taxpayers will buy up Wall Street’s bad investments.

The numbers are staggering, but they don’t begin to explain the greed and incompetence that created this mess.

It began with a terrible bet that was magnified by reckless borrowing, complex securities, and a vast, unregulated shadow market worth nearly $60 trillion that hid the risks until it was too late to do anything about them.

And as correspondent Steve Kroft reports, it’s far from being over.


Watch CBS Videos Online


A Look At Wall Street’s Shadow Market: How Some Arcane Wall Street Financial Instruments Magnified Economic Crisis 
CBS 60 Minutes, Oct. 5, 2008



Category: Credit, Derivatives, Television, Video