Morning Audibles 3.30.10 - P2, The Run of Forrest Gump

On just about every financial blog I read, the constant topic seems to be, "How long will this bull run continue, seemingly unabated"? I've been known to ponder the same question from time to time. My ponderer is sore. So instead of trying to figure it out on charts or anything (which enough, ahem, "experts", have done already). I thought I'd illustrate what seems to be the path we're following in a metaphorical sense (both in terms of possible duration, and underlying motive for doing so).


Everyone remembers Forrest Gump running across America. Most famously, he ran across America back to back several times over a span of three years to get over the heartbreak of Jenny's leaving him.
Putting aside the symbolism of all his runs, one wonders how realistic his ultramarathon run was (even though it's supposedly fictional). What route he had completed? How does that measure up vs. real ultra marathon runners? Here's are some clues:
  • Forrest started his three-year-long run from his front porch in Greenbow, AL in the early morning of July 5, 1976.
  • Forrest headed to the west first. Across Greenbow (fictional) County, followed by the "Great State of Alabama", and clear to the Pacific Ocean (reaching it at the location of the Santa Monica Pier, Santa Monica, CA. He then turned around, and as he says "kept on going" and got to another ocean (Atlantic Ocean) at Marshall Point Lighthouse, Marshall Point Road, Port Clyde, ME. He only stopped for sleeping, eating and going to bathroom.
  • After more than two years, Forrest was about to cross the Mississippi River for the 4th time somewhere near St. Louis, MO. The TV screen (in the background of the film) actually showed a sketch of his route up to then.
  • Nobody really knows what route Forrest took after he crossed Mississippi River for the 4th time, but we do know where and when he ended his run. It is obvious from the location in the film, when Forrest states "I'm pretty tired... I think I'll go home", he ended his run at Monument Valley, UT on US Highway 163 near UT and AZ border in the evening of September 19, 1979. He had run for 3 years 2 months 14 days and 16 hours.
Obviously, the single most important clue is the sketch of the route on the TV screen. The following image shows a enlarged and sharpened frame of it.
From this sketch we know in more than two years he ran across America about 3.5 times. For the remaining a year or less, he probably kept running to the east, hit the east coast somewhere, turned around and started his fifth crossing from east to west. We know he ended the run in Utah. The question is: did he stop in Utah before he finished the fifth crossing or after he finished the fifth crossing and started the sixth crossing from the west coast? My guess is that he didn't finish the fifth crossing because he probably didn't have enough time otherwise, if he kept the same pace throughout his journey. The last movie clip indicates that just before he stopped at Monument Valley, UT, he was running from east to west because when he said "I'm pretty tired. I think I'll go home now", he went to the opposite direction, his home direction.    Based on the sketch and some filling in of blanks, the following is list of cities that Forrest probably passed through:
Cross1 Cross2 Cross3 Cross4 Cross5
Mobile, AL Santa Monica Pier, Santa Monica, CA Marshall Point Rd, Port Clyde, ME San Francisco, CA Norfolk, VA
Dallas, TX Las Vegas, NV Burlington, VT Reno, NV Pittsburgh, PA
Alamogordo, NM St George, UT Watertown, NY Salt Lake City, UT Indianapolis, IN
Phoenix, AZ Albuquerque, NM Cleveland, OH Fort Duchesne, UT Lincoln, NE
Santa Monica Pier, Santa Monica, CA Oklahoma City, OK Lansing, MI Craig, CO Denver, CO
Knoxville, TN Chicago, IL Denver, CO US-163, UT
Harrisonburg, VA Rapid City, SD St Louis, MO
Washington, DC Boise, ID Richmond, VA
New York, NY Portland, OR Norfolk, VA
Boston, MA San Francisco, CA
Marshall Point Rd, Port Clyde, ME
Using these cities as waypoints, it's loosely possible to generate the Forrest Gump Route. This is what it looks like.
Notice that the route generated does not match the sketch precisely. This is because 1) The route is entirely based on drivable roads. The route engine used tends to pick fast, major highways, while Forrest might pick any roads, including less important country roads; 2) The sketch is not very realistic in areas such as big mountain ranges and deserts, where there are simply no roads, assuming he always ran on some kind of roads. Forrest wasn't THAT dumb. Here's a comparison of Forrest Gump with some famous REAL long distance runners:
Runner Forrest Gump Jesper Olsen Dean Kamazes Mark Covert Frank Giannino
Duration (days) 1169.7 660 50 14600 46.3
Distance (miles) 15182 16156 1310 150000 3000
Speed (miles/day) 13.0 24.5 26.2 10.3 64.8
Description Forrest Gump ran across America back-to-back for five times in a span of three years (1976 - 1979), covered a distance of some 15,000 miles. Jesper Olsen of Denmark is the record holder of world run. He ran around the world in 22 months, on a route consisting of: London-Copenhagen-Moscow-Vladivostok-(air)-Niigata-Tokyo-(air)-Sydney-Perth-(air)-Los Angeles-Vancouver-New York-(air)-Shannon-Dublin-(air)-Liverpool-London. It covers a land distance of some 26000 km. Dean Kamazes, the ultramarathon man, was ranked by a TIME magazine poll as one the "Top 100 Influential People in the World." One of his recent endeavors was running 50 marathons, in all 50 states, in 50 consecutive days. Mark Covert, a teacher of Lancaster, CA, is the longest streaker in the U.S., having run at least one mile a day everyday since July 23, 1968, which is more than 40 years and still counting! His lifetime total distance is over 150,000 miles so far. The trans USA ultramarathon record is 46 days 8 hours 36 minutes (San Francisco, CA - New York, NY) set by Frank Giannino in 1980.
By comparison Forrest Gump was more like a streak runner than a marathoner. He ran at a moderate rate everyday for a relatively long period of time. Keep in mind that he did not run for setting record. He did it for clearing his mind as he explained "My mama always said 'you got to put the past behind you before you can move on' and I think that's my run was all about." Lastly, (getting back to equities), I say... "Forrest...Go back to Greenbow"...

264 comments:

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Prashant said...

Don't give up CV, this too shall pass. ;-).

On the other hand, (pardon me, economics was my subject), I think I should give up. Been bleeding too much.

Ben22 said...

The new (old?) signs of bubble mentality are everywhere again so only fitting that people are calling this a bull market and the only concern is how much longer it is going to last. The very statement implies fed control, which is also bubble thinking.

I can only see this sentiment in hindsight, I thought it was there in January but no. Of course, who really knows what a bear market of this degree is "supposed" to look like.

CV said...

Hey finally...

People... For some reason, the POST A COMMENT function seems to be giving me problems, so, if it persists, I might start a newer thread...

Be on the lookout for it if I'm absent for awhile...

Prashant said...

The best I remember is that it was in 2005 that I read about Stephen Roach and RGE Monitor talking about US housing bubble. And guess what, the mkts just kept moving up. Even after the sub prime thing came out in the open, i think in Aug 07, nothing happenned. In fact, I remember in India, a big IPO came out in Jan 08, and in true sign of a nasty bubble, there were entire families who had their depository accounts opened so as to subscribe for the issue. People were filling in applications everywhere. We all know what happenned thereafter.
The point is people almost will the markets to move up. And more people will the mkts to move up than the people who want it done in the opposite direction.
Even since Mar 09, people have been moving the targets at which to short, only up. 850, 950, 975, 1130, 1150 almost all in, etc and then some more. But mkt, just grinds higher. Very frustrating but I wonder why this momentum or bubble psychology is not studied more.

CV said...

@Amen

From my count, we're 230 trading hours since the 1044 low...

35 (open market) trading days, plus 3 hours...

Do you want to verify that math?

72bat said...

in last evening's wrap thread, manny said
"On another note, BR seeing some 'weakness' or 'technical deterioration' in the markets."
fwiw, the last buy in my fa account was 1/19 and since then 11 of 13 positions have been sold. as of yesterday, it was 88% cash.

call me ahab said...

"Even since Mar 09, people have been moving the targets at which to short, only up. 850, 950, 975, 1130, 1150"

and thus shorts become the impetus for a move higher

call me ahab said...

or maybe "catalyst" would be more apropos

CV said...

@ahab (9:06) @prashant (8:55)

I'll re-post this from yesterday:

---

The SPX is up around 11% since the closing low in February... BAC/C/AIG & friends have been more than 25% of the daily volume on shares exchanged...

Thus makes the case for HFT & computer driven algos calling the market higher... You can almost SEE it in the daily trading patterns... Futures are set, markets open, and trade off of minor technicals all day... Assuming no plunge, support to finish...

Here are some various numbers since the same time period:

C (up 40%)
BAC (up 30%)
AIG (up 80%) - since February
M (up 45%)
FNM (up 30%)
Simon Property Group (up 25%)
Freeport McMoran (up 25%)
Ford (up 40%)

TLT (down 2%)

I suppose you're doing just Jim Dandy though if you own AIG or Citi shares (and they account for most of the S&P movements)... Probably makes one sleep real easy at night...

This is likely so as to get us through the QUARTER with no major hiccups...

CV said...

There are 2 trading days left in the quarter:

I see two possibilities...

1) One last chance to do "window dressing" (if that's the case, I don't expect much better than 1183 (which I'd identified last week)

2. Perhaps a sharp selloff late in the day today (lasting into tomorrow)... Catch "on or near" 1150-1155...

Momo Thursday (as Thursday is 1st of April), probably some "whisper" crap about the NFP number)... Maybe one last chance to call up the markets next Monday (while Europe is closed)...

Then a chance for a real correction starting next Tuesday... Not THE BIG ONE, perhaps, but just enough for the markets to get a head start on the quarter (in terms of - if it goes down - to "foot save" before the end of June)...

AmenRa said...

CV

Yesterday brought us to 227.5 hrs. So we need 5.5-2.5 (since the low occurred at 13:30)=3. So my take would be sometime during the 3rd hour.

call me ahab said...

to anyone that cares-

my view is the following-

the Fed- will under no circumstances raise rates without a declining unemployment rate and signs of inflation-

if they are not being punished by the markets for their actions- in fact- they have been rewarded- they will keep ZIRP in play forever if necessary- and use the new favorite- QE- off and on as necessary-

also-

reality- the USG is the mortgage market- and they can do what they want-

they will keep as many foreclosures off the market as possible-

they will use HUD, Fannie and Freddie as conduits to wash and rinse the bad loans-

I envision the USG getting to the point where the underwater loans will be purchased by the governmental agencies at 100% inflated book value- modified to market value at a fixed rate- and presto-

new happy homeowners- only requires the creation of $$$-

but why not- the market's seem to love it

call me ahab said...

"Home Prices in 20 U.S. Cities Unexpectedly Climb 0.3%, Case-Shiller Says" Bloomberg

get in now folks- the market is on fire!

call me ahab said...

"Tax Receipts Rebound in U.S. as 15 Biggest States Forecast 4% Gain in 2011" Bloomberg

the news just gets better and better

CV said...

@ahab

I read this the other day and it seemed to be plausible in theory...

---

Swap Spread Inversion and Carry Trade Unwinds
as many know by now the sloppy 5YR auction on Wed coincided with an inversion of 10YR swap spreads, something that should never happen due to the credit risk embedded in a swap transaction. What also happened but is garnering little attention is the breakout in the USDJPY that we highlighted that same morning prior to the auction. Was the swap spread inversion a function of US sovereign credit fears as many in the mainstream press have reported or is there something else going on here. I have read 5 reports of this occurrence in blogs, WSJ and FT all with different explanations. We will offer another:

We have posited that the dollar carry trade as many call it is not in stocks or commodities as many suggest but rather in the front end of the yield curve. It is not being executed by high flying macro hedge funds but rather global money center banks. The US treasury has auctioned off the most one year supply in history at the lowest rates in history. At the same time the Fed has been buying roughly a similar amount of MBS presumably from banks, the largest holders. With loan demand falling banks are replacing these MBS with treasuries and as they are hesistant to hold long duration with interest rates presumably rising soon they park in the 5YR sector which also happens to be the WAM of the supply the UST has issued. Banks have simply borrowed money at zero from the Fed and bought 5YRs. This is a true carry trade. To hedge this position banks would enter swap positions that pay fixed and receive floating.

Now as we enter quarter end and the Fed’s MBS purchasing is ending with a tightening of the discount rate penalty these banks may be unwinding this lucrative carry trade and flattening up their negative gap. As such they are unwinding the negative gap risk hedge which is borrowing fixed/receiving floating swaps. This unwinding so USDJPY shorts cover – buy back their hedge and selling their 5YRs. a large institution or a few at the same time like quarter end covering this swap hedge could be driving the inversion. typically when you get a large move like this that shouldn’t happen in a very deep and liquid market its not because someone is betting on that specific movement but rather a forced unwind of the opposite trade. the fact that it occured with USDJPY breaking higher and 5YRs breaking lower tells us its all related.

Is this a quarter end event or change in trend? we can’t be sure but with charts breakin out we would not be challenging a potential change in trend.

CV said...

My best guess, still, is that the government has a funding problem... (in Bills), but basically, across the curve.

The easiest way to attract Bill purchases would be to 'correct' equity markets for a bit...

So, as far as the Fed is concerned... They basically only need to "jawbone" about imminent rate hikes to accomplish that...

If it is coupled with the next bout of Euro weakness, it ought to be enough, for a few weeks at least, to lop about 80 points off the S&P...

We can all start talking about Karens TOP again...

McFearless said...

I couldn't get the comment function to work after I posted this morning at home, works fine at the office though.

"Very frustrating but I wonder why this momentum or bubble psychology is not studied more."

It is studied a great deal, it's called Socionomics, it just isn't very popular.

"the Fed- will under no circumstances raise rates without a declining unemployment rate and signs of inflation-"

Not sure if I agree with that at all. I believe the Fed will continue to do what they have done for over 30 years, rates will go up when the bond market, not inflation or unemployment (and by which measure?) tells them to move rates up.

Adding to FXP this morning.

McFearless said...

not that I really need to state why but the tax collections article on bloom is a laugher. Still, it didn't top peter Boockvar referring to comic books as hard assets and then claiming "asset" inflation based on comic book sales. I could never top that really.

CV said...

@ahab

State tax receipts are reported, what?, once a year?

I'm sure 2009 was better than 2008...

They tax unemployment benefits, don't they?

CV said...

Social Security benefits are taxed (so are just about every other BENEFIT that the government bestows upon you)...

So I suppose when the ENTIRE COUNTRY is on welfare, social security, and unemployment, the TAX RECEIPTS will be thru the roof!

McFearless said...

ahab,

higher interest rates will destroy any attempt at the USG having its way with the mortgage market.

We have a credit based system, so people have to borrow, so they are in control of nothing in the end, you can't force people to borrow.

AmenRa said...

Today is the second test of 1176.22 which is the 76.4% increase from the low of 666.79. FYI

CV said...

@ben

I looked at FXP this morning too, but couldn't pull the trigger...

Simple reason... FXI made it's most recent high in November... Almost ALL re-tests I've seen in the past year have gone past 61.8% and onto 78.6%... FXI is still shy of that mark...

I'm holding powder to see if the SPX hits 1183 here...

That number would coordinate WELL with some fibo and GAP retrace numbers underneath (all the way back to 1076)...

McFearless said...

C,

I'm building a position for the next several months, this is not a short term trade fwiw.

call me ahab said...

CV/b22-

dude's- it's not the news- it's how it's reported-

this-

"Moscow subway bomb- 38 dead"

or this-

"Islamic terrorists STRIKE Moscow- disaster, carnage- at least 38 dead"

subtitle- "Putin vows revenge"

CV said...

FOR THOSE OF YOU WHO ARE CONFUSED ABOUT FIBOS

- Sometimes you'll see CV throw out a number like 78.6... That represents an 'extension' of a 61.8% ratio...(so CV is describing a ratio 'between two points')...

- Amen's numbers tend to be direct linear FIBO extensions from a starting point... At least how he usually expresses it...

I hope that explains it...

CV said...

@ben

That's cool... I just wanted to add 2c...

CV said...

@ben

FWIW - That IS a nice looking declining wedge there on FXP...

call me ahab said...

"Consumer Confidence Rebounds More than Expected to 52.5 in March" CNBC

any why not- we are in such better shape than we were a year ago-

we've nationalized health, the auto industry, banking, mortgage market, housing market-

we're creating money at will- and the market loves it-

can it really get any better?

Prashant said...

Copper, like everything else, continuing its steady upwards march.

karen said...

Good morning! CV, my ponderer is sore after that post of yours!

call me ahab said...

edit- last post - "and why not"

CV said...

@ahab (10:14)

I'm still waiting for Obama to pay my gas and mortgage...

Oh wait, my truck runs on natty and my house is paid for...

S***... I'm F***ed!... What a dumba** I am!

McFearless said...

ahab,

I believe the idea that the way news is reported actually changes both

a; the outcome

and

2. people's social mood

is false.

Are you saying, for example, that if it is reported as a good thing that interest rates are going up that it would have no negative effect on real estate?

karen said...

copper could be putting in a dble top.. seriously, we will know soon what is going to happen..

CV said...

@prashant

Those Chinese pig farmers must be 'billionaires' by now!

CV said...

@karen

Probably an EW'er could give you a count on copper... But it definitely looks like it's concluding a pattern in a final wedge...

A couple more points higher

CV said...

FWIW -

Before it collapsed 70% in 2008, copper also did what "looked" to be a price breakout in the summer...

McFearless said...

C,

As I recall, there were tons of things that appeared to break out in summer 2008, copper, oil, nat gas, fertilizers, China, Brazil, etc. etc. Of course, the breakout was very quickly followed by some of the largest ever price collapses for many of them. Oil, I believe, had never dropped so much so fast as it did from summer 08 to early 09.

AmenRa said...

CV

I still look at the 0%-100% fibo retracements. I view the starting points as a large stone dropped in the water causing its own ripple effect. So fibo levels from the top and from the bottom have to be conquered as we progress.

McFearless said...

Johnny hour comes to an end, I think we close red today, but I won't bring up P3 until we trace out five ways down, which is just a dream at this point.

I don't know if there is something above overbought but we have to be whatever that is right now. A healthy market doesn't rise virtually every single day like this.

karen said...

well, i feel that copper needs to halt here at 354 and jjc at 48.. you know what is not making new highs? gold.

Leftback said...

Someone has posted a little musical ditty at Macro Man this morning.

call me ahab said...

b22-


you may have a point to some degree- as it relates to the long run-

but how news is presented does make a difference-

one need only look at the barrage of criticism and negative coverage aimed at Hillary Clinton who was beat down and kicked around by the MSM during the primaries-

because- Obama WAS the candidate being supported by the MSM and received much better coverage-

and again- the Fort Hood "shooting" could have been reported differently- causing different reactions- i.e shooting or massacre- Islamic attack or lone gunman-

also- news appear to make a difference since state apparatus over the course of history have tried to control and manipulate it-

and lastly-

what is propaganda but state sponsored news designed to sway the minds of others-

but maybe we should have no news- zero-

why bother if it makes no difference

CV said...

@Amen

I'm sure you do...

I just said what I said because most of your EXPRESSIONS of levels have been of the linear sort...

AmenRa said...

McF

Celestialbought? Starbought? Sunbought? InsaneInThe MembraneBought?

CV said...

@ben

Well I just think you're wasting your time with the FXP [snark]... You should be piling your $$ into Brazil like your co-worker...

After all, they're getting the Olympics! :-)

CV said...

@BEN

According to ICAP... DAX has just concluded either a 5 leg IMPULSE or a wave 3...

http://www.zerohedge.com/article/dax-update

CV said...

@LB

Care to take a crack at parsing my (9:46)?

call me ahab said...

I have to roll out-

all have a most awesome day!

Leftback said...

Guys, you need to watch this. I really think they are going to default. IMF, restructuring, the whole deal. Greece is the next Iceland.

Greek Bond Sale A Complete Disaster

Bear in mind there would be a rush for dollars, and oddly, perhaps bullish for gold at the same time. But a default would be risk asset negative, and the Greeks are not going to run out and buy copper...

You need to have a plan for this b/c I think it happens this Spring.

CV said...

@LB

Starting April 6th, I'd suppose (and ending May 4th)...

CV said...

That way EUROPE 'bookends' Easter thru Labor Day (their Labor Day)...

Leftback said...

CV: A bit over-complex, but a lot of it makes sense. We have largely stayed out of the 5-7y bond space b/c of the massive issuance in the belly of the curve, but we buy a little on massacres. April is the worst month of the year for USTs, by the way, statistically, so we will be hedging on and off. Until Greece defaults.

CV said...

@LB

How many European "mega-banks" do you suppose, have exposure to THAT fallout? (when you start doing the "country to country" domino thing)...

Mannwich said...

I see I've become a "contrarian indicator" for some over at TBP. I love it. I never realized that I'd wield so much influence anywhere. ;-)

Leftback said...

Well, if you're talking Greece, the big turkey would almost certainly be DB. But the German Landesbanken are really going to be in dire straits when E Europe blows. CS and UBS probably have exposure as well, then there's SG and BNP. It's not hard to guess. Since they compete in the same markets, it's likely they all carry some of these sovereign turds and associated Greek corporate turds.

CV said...

@Jeff

You're more powerful than Bernanke himself...

Leftback said...

Not sure much is going to happen today. Tempted to fade any move that involves dollar weakness later today, but honestly could sit on my hands all week long quite happily. Probably will have to hedge long bond exposure into the ADP number.

karen said...

$xad topping out today and financials weak.. gs just gave up yesterday's gains.. C volume not so hot today! sitting on its 10ema..

CV said...

@LB

There was a big "hoopla" over the weekend about UBS having sold about $1 billion worth of SPY put contracts (and raising cash levels)...

The odds are against that being directly related though...

But you never know!

karen said...

No worries.. it is TT afterall, and we are turning. uup will regain 24..

Leftback said...

Sorry we missed 1110 as a great entry to short gold.... oh well....

Karen, C has been bleeding down ever since several Bloomberg talking heads were telling us that Timmy's planned sale of C common was a positive for the stock. Yeah, right...!!

You're looking lovely today, BTW. At least LB imagines so.

CV said...

@karen

Yeah the "less volume" in C probably means the Treasury put some blocks on the counter top and the "marketplace" is holding their nose...

LOL

CV said...

@LB (10:56)

Tag! Like minds...

On a more important subject... Score any goals yesterday?

CV said...

Might end up to be a day of:

WINDOW UNDRESSING

today...

McFearless said...

@ahab,

I think we could get into a deep discussion about why Hillary lost, myself, I find it has very little to do with her presentation in the MSM, social mood demanded something that she couldn't offer. Obama will likely be painted in a positive light while in office but I'd bet if the market tanks so will his popularity, no matter what the news says about him. Social mood creates the news, not the other way around and that is why no trend extends forever.

I've talked to enough bat shit crazy people in my life to also know that many have often already made up their mind regardless of what the news tells them. Wouldn't you agree? You really think someone completely against Islam cared that one media outlet (or even all of them) might have described Fort Hood as a "lone gunmen", I have a hard time believing that.

Really though, for market considerations, I keep seeing people saying something along the lines of "if everyone believes something is significant, doesn't it make it so?"

What I find to be very common on all of the blogs is that more often than not people are using news or some other "event" as a basis for the rationalization of a market opinion formed simply by one's emotional state, and the reason why markets are in fact patterned is because of how common this is. This rationalization allows people to avoid exercising reason and therefore to act on the basis of their emotional states. We are living this right now. I think the pervasiveness of people's pretending to follow news is why markets are patterned and why following news can't work for trading.

As for why the news matters, well it does for me because I'm interested in profits on my investments/trades. News helps me to recognize extremes in psychology, and I believe I know where they come from which require knowing the elliot wave patterns. That natural path of psycholigical development is described by Wave Principle.

CV said...

@McF

Social mood...

What was "W"'s popularity rating immediately after 9/11? What was it when he left office?

Nuff said...

CV said...

Bad example?

OK... How about Tiger Woods?

Mannwich said...

OK, there you go. All the markets needed were my TRUE capitulation. Great. Have at it, boys.

CV said...

TLT printed a low (88.27), just 7 cents above the closing low last June 10 (low for '09)

DL said...

Mannwich @ 10:46

Yeah, I noticed that.

You've become a real bellweather.

CV said...

@Manny

We need you to go on vacation (but one that requires a "stronger dose")...

How about getting on one of those Richard Branson planes that carries you out of the atmosphere?

DL said...

Mannwich @ 11:09

The only problem is, once a person knows that he has become a contrary indicator, he tends to be less effective in the future.

Leftback said...

Score any goals yesterday?

Sore point. The ball was glued to my feet the whole game, was making interceptions, speedy runs down the field all night, laying off perfectly weighted slide-rule passes to create goals, dribbling past defenders, even the keeper on one occasion, but....

JUST COULDN'T PUT IT IN THE NET. To the amusement of team-mates. But the beer tasted good.

Mannwich said...

@cv & ben: We need to cling to our happy illusions and delusions. It's keeps many of us from going completely bonkers.

Leftback said...

TLT calls?

Mannwich said...

Shit, DL. You just burst one of my happy illusions that I'm somehow influential in some way. ;-)

Mannwich said...

Or should I say "delusions"?

AmenRa said...

Go Bucky! Go Bucky!

Mannwich said...

If the market crashes, just make sure some of you put some money into TLT and pump that sucker up for me a bit.

karen said...

BTW, the $xad:$usd is officially/technically in a downtrend based on the 13/34 moving averages. I also want to point out the disconnect between $xoi and $wtic..

CV said...

@LB

"But the beer tasted good."

Bend 'em like leftback (the elbows - that is)...

Double Down Jonhnny said...

Oooooowwwwwwwwww! A dip! I'd better dou.... hmmm....I don't like this dip. Think I'll close out my longs for the time being.

McFearless said...

CV,

I think Tiger is a great example of social mood, we tore down the persona not the person.

As for GW popularity, another great example of social mood, he tanked right along with the market.

@Manny,

So does that mean you went long?

CV said...

@ben

On first glance to you (or Andy T - if you're lurking)...

Do the waves in the USD (off the lows), look to have the form of a running 3?

Leftback said...

Emerging markets are soft since January as BUCKY goes on a run.

Mannwich said...

@ben: Nope. Hanging mostly in TLT and cash. I had some longs from before that I'm still hanging onto but not adding any new ones. Just lying in the weeds. Would like a big move either way at some point before I do anything significant.

CV said...

@ben

IMHO - The thing that "did Bush in" were as follows:

1. Beating Gore by "hanging chads" (dems NEVER got over that, and ALWAYS had it out for him from the git-go)...

2. 9/11 made Dems even ANGRIER (because it helped "rally" people around Bush for a brief period)... Quickly - attempts were made to portray 911 as an "inside job"...

3. Iraq War

4. Beating John Kerry - It was like Gore II...

The "market meltdown" was simply, IMO, and "extended wave 5"... moodwise...

From an ECONOMIC STANDPOINT (in pure "dollar cost")... Obama is already on pace to do far worse damage that Bush could have ever hoped to achieve if he tried...

Although, that said... Given the economic collapse, there is probably NOBODY (save for Ron Paul) that would have fared much better... Ron Paul probably would have been IMPEACHED by now...

Obama is truly assuring that the "worst of the worst" will eventually occur...

McFearless said...

C,

I don't think so on the USD, I think it looks like a basic five up from the lows, done or almost done unless the fifth wave extends. What time frame are you charting, daily/monthly, other?

McFearless said...

Manny,

I'm not going to count you as having really capitulated until you go long. Until then you are just a bear hibernating.

Mannwich said...

OK ben. I distinctly made that point over at TBP as well so that nobody over the gets confused. ;-)

Nic said...

Finally it will let me post! I was feeling left out.
Go Bucky, die Aussie!

CV said...

@ben

Actually - I was looking at those USD waves on a WEEKLY candles basis...

and my time frame extends through, perhaps, the first week in May...

McFearless said...

OT:

How about McNabb might end up with my squad in Oakland?

CV said...

where I see the potential for an UPPER 84 handle...

karen said...

I wonder what a 4% mtg rate would do for this chart..

http://static.businessinsider.com/image/4bb0ebca7f8b9afd24310300-540-331/chart.png

CV said...

@McB

Oakland... Ha! I think Darren Sharper (Saints) had more interceptions and return yards than Darius Heyward Bey (Raiders) had receptions and yards...

Nic said...

If you use measured moves I think it comes out at 84.22 for Bucky at the top of the channel ...

CV said...

@karen (chart)

1 1/2 more days to go and we'll see if the Fed is REALLY out of the MBS market...

McFearless said...

Sure, I could see an 84 handle on the dollar, but I think you'll end up counting that as wave 5, not a third. I can't remember off the top of my head but I think EWI had a 83 and change target. That's a nice move from the 74.50 we talked about for so long.

McFearless said...

Natty had quite the move so far today.

On another note, I know a lot of people here are using the ETF's that are Lp's, just a heads up, I just this past week got my K-1 for ZSL. Just a warning if you've already done your taxes and didn't get any K-1's, UUP triggers one as well.

I-Man said...

Yeah, so whats the deal with this K1 business, McF?

mcHAPPY said...

Five waves up on DXY. Went below 81.04 top of wave 1 therefore in correction A of ABC. Comments based on Lara at forexinfo.us. Action is reconfirming a crash is most definitely a possibility in 2010 - my thoughts.

Currently in London. Amsterdam was crazy.

karen said...

Somehow I missed this yesterday... Elizabeth Warren on CRE

oh, and she wants to pull the plug on fre and fnm, hallelujah!

Nic said...

Leftback ... about 3mins in is the good bit:
http://www.youtube.com/watch?v=rv5t6rC6yvg

McFearless said...

I,

http://seekingalpha.com/article/76542-currency-precious-metal-and-futures-etfs-don-t-get-caught-in-the-tax-trap

thought that was a decent overview for starters

Mannwich said...

Got mine recently too, ben. Why do they send them out so late?

Mannwich said...

Housing about to go into "double dip". Nobody could have predicted......

Seriously though - what kinds of new programs will be implemented to prop up homes? They're not going to stand pat, especially with QE ending. We know that by now. What say ye?

For one - maybe they'll extend and expand the homebuyer credit? Double it, perhaps? Heck, triple it.

Mannwich said...

Here's the link:

http://www.nytimes.com/2010/03/31/business/economy/31econ.html

CV said...

@ben

They don't K-1 you on the PHYSICAL :-)

Unless the IRS is going to come to my house with their new guns and shave off a few slivers off...

I'll just hand them a "pie fork" or something and call it a day...

McFearless said...

Manny,

I don't know what the deal is, my taxes were done as were my biz taxes by the time I got the one's for ZSL. Very annoying to be getting them this close to the due date.

Anonymous said...

Some notes from Canada, CAD/AUD is red, FXI is green.

"Many Canadians Struggling to afford their homes - Most read story -thestar.com/business/article/787529

Second story, also from thestar,com "CIBC doesn't see opportunities to invest outside fo Canada, CEO says"

CIBC - Canadian Imperial Bank of Commerce, it seems has learned its lesson - burned several times- the tech bubble, Enron, Worldcom, and American housing meltdown, lost billions in writedowns from various credit related items, today their CEO said,"First of all, we believe that if we do deploy outside Canada, it should be in areas where we have a high degree fo familiarity and comfort, areas that are regulatory similar to what we have experience with, and similar legal and legislative regimes. So when we look at that, it basically confines us to Canada".

So, If bad boy CIBC is staying put, then bears have a case.

Leftback said...

CIBC has been told to hang on to capital.....

DL said...

Mannwich,

I notice you guys in Minnesota want to put in a tax on tattoos and body piercings

http://tinyurl.com/ydxb7w7

I’m sure it’ll go a long way towards balancing the budget deficit.

Nic said...

If you all think australia has a housing bubble you have not taken a look at Toronto, trust me. When the us market was collapsing the canadian govt was loosening lending standards to prevent a collapse. AUDCAD is a very pretty wedge to short ...

DL said...

CV @ 11:26

"Obama is truly assuring that the 'worst of the worst' will eventually occur".

I'm with you on that. But Mr. "O" does have his fans on this blog.

Nic said...

Have you guys seen the terms of the Irish "bad bank" deal? 50% haircut. Timmeh should read it:
http://ftalphaville.ft.com/blog/2010/03/30/191941/irelands-bad-bank-haircut-sir/

Leftback said...

Nic, who are the bondholders who are joining the Marines?

The Toronto/Vancouver housing bubbles were started by HK exodus and fed by low rates, yes? I know people were buying up 3 or 4 apartments at a time in Scarborough, b/c the market always goes up.

karen said...

if you have time, watch the latest Jim the Realtor

i have to roll my eyes at the Case/Shiller Index.. and any interpretation the home prices have leveled or are even rising.. price per SF is still dropping hard.

Anonymous said...

@LB, all Cdn banks are well capitalised. Billions sitting on RBC's b/s.

Here's quote from Royal Bank of Canada'CEO, "I never short America, and I never short the U.S. dollar. The United States has an instinctive ability to self-correct - Gordon Nixon". www.financialpost.com -opinion Dian Francis.

Nic said...

The canadian government LB
All the new riskier mortgages are CMHC (Canada mortgage and housing). They introduced 0% down and 40yr terms and loosened lending criteria as the US market faltered. That combined with the low rates has produced quite a boom.

DL said...

Karen @ 12:23

C/S index may be accurate at the national level.

(California and Florida are hopeless cases).

CV said...

@DL

To Mr. O and his adoring fans...

I wish them all which they've endeavored to come into being (and all that is attached to that)...

Here... Since I'm such a nice guy, I'll toss you all the lifejackets that you'll need when the time comes...

http://www.cartoonstock.com/newscartoons/cartoonists/awh/lowres/awhn324l.jpg

Leftback said...

There are some very big housing bubbles that haven't burst yet:

Manhattan
Vancouver
Toronto
Sydney
Shanghai
Beijing

and high end property all over the place.... you get the idea.

Leftback said...

All banks everywhere are now "extremely well capitalized" and offer "tremendous shareholder benefits" as the economy "recovers robustly" promising "strong business conditions going forward".

I am sure that was written in 1931...

karen said...

DL, but if CA is hopeless (the eight largest economy in the world).. i shudder to think!

Leftback said...

Greece, Latvia, California, Portugal, Spain....

DEFAULTS ahead.

DL said...

An editorial in today’s WSJ discusses some of the ways that the “fat cats” will change their behavior to avoid paying higher taxes:

http://tinyurl.com/ygrpy2v

Leftback said...

The US bond market is somnolent.

Leftback said...

LB is a renter b/c of the bubblicious prices of Manhattan RE. He is also in the top tax bracket. What's wrong with this picture?

CV said...

@LB (12:42)

...or by Dick Bove

Nic said...

Greece and Portugal are affordable, Spain and California are big problems ...

CV said...

@LB (12:51)

"What's wrong with this picture?"

Probably the same thing that's wrong with this picture

Nic said...

I hope you have a very large tax deductable home office LB, and you sleep/live in the closet.

DL said...

CV @ 12:58

Looks like they may be "upside down" on their mortgage.

CV said...

@DL

I wonder if they'd made a mistake too when they filled out their ballot...

karen said...

DL, i couldn't see the entire WSJ article.. just the first two paragraphs.

Leftback said...

Nic,

LB inhabits a small bear cave not far from Central Park but is eager to exit for a more attractive domicile. Buying doesn't make sense in NYC, because of the likelihood of being locked in to high carrying charges in co-ops as associations deal with a market under increasing duress.

LB is neither in nor out of the closet... unlike, say, Ricky Martin.
Sorry, Karen and Nic, another one bites the dust.

Nic said...

hahaha

CV said...

Max time they hold this market together is April 6th...

http://www.zerohedge.com/article/curve-flattening-way-weakest-4-week-auction-august-2009-closes-8-month-high-015

DL said...

K @ 1:05

O.K., I guess a subscription is required then.

(Not really important, just a subject that I have some interest in).

DL said...

Yeah, if I lived in Manhattan, I'd be a little reluctant to buy real estate there at this point.

Bruce in Tennessee said...

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201003300955dowjonesdjonline000284&title=currenciesdollar-pares-decline-as-greek-bond-spreads-widen

"Regarding Greece, the yield premium demanded by investors to hold the nation's 10-year government debt instead of German bunds widened significantly, to around 3.3 percentage points from around 3.15 percentage points on Monday, analysts said.

Greece's Monday sale of a 5 billion euro ($6.7 billion), seven-year bond was priced at 310 basis points over mid-swaps, equal to a yield of around 6.01% to 6.02%. That compares to a yield on a comparable German bond near 2.67%.

The Greek issue was covered 1.4 times, a ratio called "less than impressive" by currency strategists at BNP Paribas. It "suggests that further issuing activity is likely to be far from easy."

That makes the corrective rebound seen by the euro in the wake of the agreement appear "fragile at best," they said."

DL said...

Doesn't look like the SPX is going to quite make it to 1180 today, as I had suggested on Friday. Although it did touch the 1177 level (good enough for government work).

CV said...

@LB

Screw the closet... Why not just SQUAT in a spacious empty office tower penthouse?

Downtown New York Towers Empty as Best Market Falters

AmenRa said...

Karen

Try this: The Rich Can't Pay For Obamacare

hint: do a Google search for the title of the article to find the full release.

Leftback said...

Bruce, the Greek debt auction was less successful than, say, Bruce's burger bets with LB...

Bruce in Tennessee said...

I bet you could afford a penthouse in Athens next year, Lefty...any thoughts of transfering?

McFearless said...

oh the greek auction's lack of success was all b/c of Easter. Come on guys.

Leftback said...

C: Manhattan is MASSIVELY overbuilt now in residential and commercial real estate, and it is already reflected in falling rents. NYC realtors are spinning furiously to revive the "priced out for ever" mentality, but I think they know it is over. A long slow decline is beginning, especially if a revised Glass-Steagall is enacted, and the funny money tap is turned off downtown. Of course this would be the best thing that ever happened to middle class New Yorkers, as long as you have a job.

CV said...

Speaking of Greece...

Looks like the California State Treasurer is having his Papandréou moment

@McB (1:25)
They can blame it on the Easter Bunny!

CV said...

California's bond risk is worse than Bulgaria - LOL

CV said...

Must be that 'Austrian School of Economics" that got it that way...

karen said...

Volcker: Commercial banks must be commercial banks 1:20 PM ET 3/30/10 | WASHINGTON (MarketWatch) -- Lawmakers need to approve a mandatory measure barring big commercial banks from making speculative investments in stocks and derivatives and prohibiting them from owning hedge funds or private-equity firms, an influential proponent of the restrictions said Tuesday. "Commercial banks should be commercial banks, concentrating on commercial interests," said Former Federal Reserve chief Paul Volcker, who now chairs President Barack Obama's economic-advisory panel, at an event hosted by the Peterson Institute for International Economics. A variation of a measure that would impose these restrictions is in a Senate bank reform bill under consideration on Capitol Hill.

karen said...

AR, thanks! i knew there was a trick but couldn't remember it!

Lord Blankfiend said...

Ever wonder if the ol' Squid has finally gone too far?

Obama said...

I'm just waitin' for a visit from the credit fairy.

CV said...

@LB

After you convince Obama to go a couple more trillion in the hole, you can write some CDS's on the US...

Bruce in Tennessee said...

All I know Ben and Lefty and CV is that I have good Friday off. I can't wait.

I am a little too seasoned to hunt eggs with a basket and all.....however, if Obama could come up with a little dough, I could try to blend in with the other little egg hunters....Cash for the "Spring Holiday" Egg Hunt. CFTSHEH.

Nic said...

First 10yr now today 7yr swap rate turns negative 0.6bps

CV said...

@Nic (1:38)

UFB

CV said...

@Nic

Did you read the (9:46) comment?

CV said...

@DL

We ought to be on a collision course with 1150 within a few trading days...

Nic said...

CV - I have now, you make a lot of sense.

McFearless said...

C,

1:42, I think so as well, and then the decision comes, do you buy that dip, or is it the start of something more....serious.

karen said...

deja vu the perfect storm

Leftback said...

Bruce. I'd have to take a couple. Egg Management Fee.

Nic, I think the swap rate turning negative is aberrant and abhorrent. It reflects a situation of ultra-compressed spreads where all risk has been transferred from corporates to government. In my view, this is a sign that it is high time the Fed withdrew its interventions from a variety of markets. If this situation continues, the resulting orgy of corporate issuance will drive all rates higher in a way that would not be completely controlled. They need to nip this in the bud very soon.

McFearless said...

OT: Anyone watch the show Spartacus on Starz?

Pretty cool show.

karen said...

uup approaching hod.. and faz up over 2%.. !!

CV said...

@McF

I vote "something more....serious"

But that's just me.

CV said...

@McF

That was a WISH, not a prediction...

DL said...

I'm thinkin' that the VIX pays at least one more visit to the 16.3 level before the SPX makes any big moves to the downside.

McFearless said...

speaking of vix, I just pulled up that blood sucker vxx, man is that thing a pos.

McFearless said...

I'm still watching HYG:LQD as well.

CV said...

@ben

The US Treasury should just get into marketing it's own 'levered ETF's' to make some coin on the side...

DL said...

McF @ 1:50

If you think you know where the VIX is going, try trading VIX futures.

Bruce in Tennessee said...

Ben:

The full term, for future reference, is wpos.

Worthless pos.

I know you youngsters talk in such new jargon...

DL said...

CV @ 1:53

...and of course, short-selling will be prohibited.

CV said...

Man fleeing Ohio police jumps fence — into prison

CV said...

@DL

Why worry about the VIX or futures?

We have the "Mannwich Indicator"

DL said...

CV @ 1:56

As I posted above, he knows he's being used in that way... knowing that will alter his predictions

McFearless said...

DL,

Oh, that must be the issue with Kudlow then....

CV said...

@DL

Don't key on the "comment section"... Key on the subconscious "dog walking" patterns...

DL said...

McF @ 2:01

It's conceivable that he's been humbled somewhat. He was wildly bullish in October of '07, and bullish through the summer of '08.

He may have learned something from the experience.

(Or maybe the producers told him to STFU about it).

DL said...

CV @ 2:03

No, I use the dog-walking pattern to predict percent changes in the VIX.

CV said...

@DL

Or maybe he switched from "coke" to "ludes"...

Mannwich said...

@cv: All "indicators" are now broken. We're in unchartered waters. Going to be extremely fascinating to watch.

I-Man said...

@ C

Ha ha...

Just busy with the real job today... and no, no flowers during market hours...I learned that the hard way in 2006.

But it would be nice on a day like today, where the dayjob seems mundane, and dead end as all hell.

Channel John Mauldin, I-Man...
Be happy you have a job.
Be happy you have a job.
Be happy you have a job.

I-Man said...

Fuck it, who am I kidding?

I just want to trade!!!

CV said...

@Manny


This one - IMO - is still forming

Nic said...

http://www.bloomberg.com/apps/news?pid=20601085&sid=a0x5QrLPqgJA
Why can't the US just have a bad bank and get it over with ...

Mannwich said...

@Nic: We already have a "bad bank". It's called The Fed (and by extension, the American taxpayer).

Nic said...

" “Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin today. “The detailed information that has emerged from the banks in the course of the process is truly shocking.” "

karen said...

3 & 6 mo yield just dropped.

McFearless said...

I don't think all indicators are broken at all, seems that plenty of people have done very well the last few months just using some basic TA.

@DL,

Maybe that is the case with Larry, I haven't watched his show in well over a year so I'm not sure what he says anymore.

As for Ireland, hell, I can already hear something like "it is contained" AT least they were only off by 17% on the haircut those loans would need to take, lol.

These debt issues aren't just going to float away into dreamland. That should seem more than obvious by now yet it isn't, and inflation calls remain....

Mannwich said...

New 52-week high for FDX. Economy going gangbusters. LOL.

CV said...

@Manny (2:32)

Probably people trading in their gold for CASH...

Leftback said...

"detailed information that has emerged from the banks in the course of the process is truly shocking"

but probably not to the Irish Finance Minister or to us. To the Irish people possibly, as they are going to carry the can. More shocking information to be revealed in the future, domestically. This is why they don't want an audit of the Fed. Because it's worse than maybe even we think.

Nic, friends of LB knows that he is a fan of The Swedish Model.

karen said...

Jeff, i watched qcom do that in 2008.. then it got halved.. so much neg divergence in the chart!

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