Morning Audibles 4.5.10 - Back to Work (I guess that means buying stocks - It seems they're getting more expensive by the day)

No you're not seeing double (nor did any comments get deleted)...


If you're just getting here after being away for the weekend, I decided, here, to REPLAY Andy's T's chart post from last evening as the MONDAY THREAD.


Andy, given time, will produce some weekly thoughts which will launch on Sundays at 5:30 PM... Since this was a holiday weekend, I wanted to make sure nobody would miss it (which I'd risk to do if I jumped on top of it with a new thread. (Note: there are a few comments in the 'Sunday' version of this - they have not been deleted - they're just on the other thread)...


---
From Andy T - (Sunday, April 4, 2010)


Good Evening Survivor Capitalists.
Attached here are some latest thoughts on the S&P 500. The bottom line for short term trading is that 1167 should now be considered key support. It looks like the market wants to take a quick ride to the low 1200s before terminating the wave up from the early February.
~~~~~~~~~~~~~~~
I missed putting out a report last weekend due to the fact I was out of town supporting my wife's business at the last frontier of capitalism: the Warrenton/Roundtop Antique Festival. I think of it as the last bastion of capitalism because of the unrestricted nature of the event. Anyone can set up a booth for 10 days for a relatively cheap price (i.e. $200-->$1,000 for a 200 sq.ft space). There are few restrictions on what you can sell, how you sell it, or your hours of operation. Basically, if one brings good inventory and presents it well, one can have some good success. Alternatively, in one brings crap products, the marketplace lets you know it very quickly and the vendors don't return. This market efficiently "separates the wheat from the chaff."
I love going to this show mostly for the people. It's pure "Americana," as it's a beautiful cross-section of this country: from the true "gypsy" dealer who lives in his truck to the high end dealer accustomed to serving only the rich and famous. Everyone is welcome here.
Last night, while watching the Final Four, I had the privilege of chatting with a few folks at the "Third Base" Bar (A "real" country bar that only takes cash, serves only beer and has the menu scrawled on the wall) in Warrenton, TX. One person was an African-American furniture mover from Atlanta, GA. He had been moving furniture all over the state of Texas for weeks and was sleeping in a tent. He had this to say: "Hey, you gotta go where the work is. I've got a mortgage to pay. My wife complains about me being away so much, but this is good work. I gotta be here. This is good money. The bills don't stop." Indeed....
The other person I chatted with was a lady named "Jackie," who had been working non-stop in a food both for several days. She was a local who was studying to be a Registered Nurse. Her plan was to get her license and open an "Assisted Living" home nearby, bankrolled only by her family and friends (No TBTF banks involved here).
Both of these people look exhausted, but satisfied in their own way. Each was doing what they had to do in order to "make it." Those kinds of conversations make me hopeful about this country, despite our many problems. This remains one of the few places where you can easily "go where the work is" and improve yourself if you have the determination and a little bit of help from friends and family.
Let's hope it continues to be that way....
Hope everyone had a good Easter Weekend.
S&P 500 Update 4 Apr 10

173 comments:

CV said...

@Andy

I liked your story, and especially the fact that it came from the guts of America...

However, I couldn't help but to think of the 'economics' of the two individuals you illustrated (not their 'balance sheets', but the things they were doing, or THOUGHT OF DOING, to get by)...

Tell me what makes what they happen to be doing right now viable in any sense? (That's not a criticism - just an observation)...

1. Ostensibly, the man who is MOVING FURNITURE, is moving it 'out of' foreclosed homes and office spaces and NOT INTO 'more plush digs' (more likely it's either going to 'Rent a Centers', Public Storage, or into a landfill). Who is paying for the moving (if it's people whose homes were foreclosed upon - I doubt it's them - Instead, it's probably the bank [which means, these days, it's the taxpayer by account of transfer from our wonderful leaders in Washington])... I'm sure "moving businesses" can thrive on their own as well, but the type of business that they're doing right now might only serve to give them "on the margin" livelihood, nothing else...

2. "Assisted Living Centers"? This is something that can only exist in either Capitalistic or Socialistic Western cultures... How is it done in other cultures? You move back in with your family (and they don't "charge you" for it)...

I don't want to go around busting people's dreams, but the LARGEST part of America's problem is that we don't manufacture or produce anything, CHEAPLY, that the world needs...

Both of the instances you referred to are still "service" jobs... Therefore, they're not much different from a "white collar" service job that produces nothing...

I don't want to say I see HOPE, but I don't see HOPE THERE...

America needs a A LOT more re-configuration than to see a bunch of people doing things for others (and in the end, the whole economic 'food chain' of things they do come from the Federal government who have decided that the best thing to do is create CENTRALLY PLANNED SYSTEMS, then tax citizens for the cost of servicing the systems, rake a few benefits to line their own pockets with in the process, find that they have created UNSUSTAINABLE DEFICITS in the process, and show up on your lawn with a larger backhoe then next time they come to 'crisis mode'...

Personally, I'd rather sit down at a bar drinking a beer with a bunch of people with "pitchforks"... Then CV would feel like we were getting somewhere...

I'm more curious what those two people thought about YOU... I'm wondering who (in that bar), asked you for some casual "stock tips" once they knew what business you were involved in...

THAT would tell you a deeper story - IMO...

CV said...

It's been a LONG WEEKEND (and a great weekend of weather here in the Mid-Atlantic region)...

CV did a lot, A LOT of planting and cultivating...

Anyway, to re-iterate the things I'm looking for with regards to a possible 'correction' level on the SPX, here are some criteria I'd mention 'ad nauseum' last week...

- 10 year note with a "4" handle
- 30 year note with a "5" handle
- VIX in the low 16's
- SPX "how it behaves" around 1183 level
- Dollar showing interest in making another rather strong move higher


The more of the above that happen in 'harmony', the more I'd have my radar out for a 'corrective' move in equities...

There is quite a lot of issuance coming out from the Treasury this week (bills today, followed by TIPS, 10y & 30 y)...

Seems like the government just can't control itself spending YOUR money for you... (But that's what you wanted then to do because you voted for it in 2008, right?)... You should be happy!

CV said...

Oh & right... Alcoa kicks off "earnings season" this week...

Jeez, to me, with all the COKE & BEER cans flying around, it would seem to me that the human race would never, ever, have to mine another gram of aluminum out of the ground for the rest of eternity...

But, of course, the maggot of a human race will not be happy until EACH & EVERY of the 6 billion humans (and by that time the number will have doubled), has at least 2 "24-packs" sitting in their cupboard (with another 3 "24 packs" in plastic bags waiting to be carted off by guys in a truck who will receive lucrative pension packages and vote "pro-union" until the day they die)...

Now that's what I call HOPE & CHANGE!

CV said...

Oh - & don't worry if the can of coke you drank was bad for you...

Someone will pass a HC bill to take care of that!

Bruce in Tennessee said...

http://online.wsj.com/article/SB10001424052748704207504575130171387740744.html?mod=rss_whats_news_us

Bank of Mom and Dad Shuts Amid White-Collar Struggle

Karen...as CV already noted then ten year is 4 per cent today...and LB...being "massively short" last week...what is the world coming to?

Prashant said...

CV, everything is so weird and even there things are relative.
In India, there is so much inequality that even in this Age, people die of hunger while rats eat up the mountains of stored grains. Was just reading a news where poor kids have taken to eating Mud to curb hunger pangs.
I wish I could do something about that but then I guess I am too chicken for it.

CV said...

@Prashant

It's hard to go 'raging around' with a pitchfork when you're too poor to afford a pitchfork

Even worse for some as you describe (who I'm sure would be more than happy to forego a pitchfork if there were only a little HAY around to bail in the first place)...

CV said...

I'm sure the RATS are happy though!

Rats usually are... Just ask anyone who works on Wall St. or in Washington...

Bruce in Tennessee said...

CV:

Interesting drive into work this morning. FM 100.3, the talk station I listen to in Knoxville on the way in, was spending the morning talking about how doctors feel about the new health care bill. As expected many are outraged. The came about from the Florida urologist who posted a sign outside his office last week asking people who voted for Obama to consider going somewhere else for care. I know you've heard the story. Reported to make it as flammable as possible. Well, doctors are hopping mad, and peeps (patients not involved in health care) are amazed at the MD's attitudes.

Very busy day in the salt mine, so I may not get to check often, but will try to elaborate around lunch.

Anonymous said...

@Parshant, the Ambani brothers are 4th or 5th on that list of world's richest people. Tata, Mittel, all of these "Monarchs" are always in win-win situation whether India was closed/open to free trade...

Nic said...

Bonds certainly seem to have more fun.
Treasury has another 165 billion to roll out the door this week.

CV said...

"Treasury has another 165 billion to roll out the door this week"

Yeah Nic... Only 7 months to go before Obama has to ask for the "debt ceiling" to be raised for the 3rd time since he's been in office...

If they time it right, the request will come in sometime AFTER mid-term elections, and in that "good cheer" time between Thanksgiving - Christmas (while the bankers are getting their bonuses)...

Yet I read an article yesterday (Headline: WHite House cautions not to expect too much in terms of job growth)... Oh Thanks, NOW you tell us...(rolls eyes)...

call me ahab said...

B in T-

the future sees all MD's as public servants-

just like tax collectors and social workers-

was this a great country or what?

call me ahab said...

. . .and doctors- who do they think they are?

so what if takes 4+ years post graduate education to become a doctor- if you make it through that is-

your duty is only to care for the thankless masses

Nic said...

AndyT's article reminds me last week of an article about why the savings rate is falling when households should be deleveraging. The big numbers of people working part-time (not through choice) are just the official numbers and there are likely way more people working part-time under the table and doing "whatever it takes". Rebecca Wilder says this non-market income flow is boosting the spending rate and causing the savings rate to drop but its not a sign of a healthy growth in spending just people trying to get by anyway they can.
http://www.newsneconomics.com/2010/04/saving-rate-paradox.html

CV said...

@ahab

Here's a definition of the "thankless masses"...

Last Thursday I was at the grocery store picking up a "lamb roast" for Easter dinner...

While I was there I couldn't help passing up some "bargains" that they were having on various things... (a lot of it in the meat section where I was shopping)...

Rib Eye Roast for 2.49 a pound, baby back ribs, roasting chickens for .89 cents a pound... I can "freeze" all this stuff so bought almost 50 pounds of meat (and my bill came to just over $100)...

By myself, if I were eating, say, 1/3rd pound of meat a day (which is abundant), and mixed it with a cup of rice a day (from the 50 pound bags I have), and the vegetables I grow... I could EASILY be eating for 150 days (5 months), abundantly (and mostly healthy)...

Instead, the guy in front of me had 4 bags of cheetos, and 8 2 litre bottles of DIET PEPSI...

His bill came to $20 something...

Bruce (and friends) will be forced to take care of him when it all, inexplicably, goes wrong...

CV said...

@Nic

"Rebecca Wilder says this non-market income flow is boosting the spending rate and causing the savings rate to drop but its not a sign of a healthy growth in spending just people trying to get by anyway they can."

People are "spending their money" on large plastic bags so they can move their stuff into them...

You get a free shopping cart to go along with that purchase...

CV said...

Ladies & gents... CV's 1183 has been tagged... Not "calling" a top here... But this is what I was looking for...

call me ahab said...

CV-

no doubt- the dude just needs to be "retrained" properly-

I am sure a state sponsored program for that is on the drawing boards

CV said...

It bothers me though that the "other indicators" I mentioned are not quite there yet...

Equities always seem to ignore things until the last minute...

call me ahab said...

gotta roll out- hope everyone had a great weekend-

weather was beautiful here on the east coast. . .later

karen said...

perhaps i'm missing something, but i see the ten year at 3970 the previous high should hold 4014.. and good morning everyone! market malaise has set in big time for me.. anyone read the nytimes this weekend? interesting articles..

karen said...

1183 it is.. hope you are happy, cv..

CV said...

@ahab

I wonder how much THAT will cost us (to tell some poor unknowing soul that "Cheetos" aren't in the food pyramid)...

Leftback said...

Selling concentrated in the 2-3y today, with the 3y auction tomorrow. It's not hard, this stuff, is it? We are still short the long end. Big gains...

Nic said...

Pending home sales smashed expectations ... go figure

karen said...

Gretchen Morgenson profiled CVB Financial in her write up on Sunday.. anyone else read it?

CV said...

@karen

good morning... "interesting articles"

LOL- That reminds me of that guy that used to come on TBP last summer and always had a spam link to his site and captioned it all off with

"good articles"

Leftback said...

"Cheetos" aren't in the food pyramid...????

You had to spoil my day, didn't you?

karen said...

tbt at 50!

Leftback said...

EUR:JPY is flat. It's hard to see how we can be off to the races today. A slow grind into 1200 this week? Possibly.

I-Man said...

No Left, its Fritos that are in the pyramid... not Cheetos.

karen said...

NEW YORK (Dow Jones)--Apple Inc. (AAPL) sold more than 300,000 iPads in the U.S., including preorders, on the first day the new device was available, hitting all but the highest estimates for the much-hyped product.

Leftback said...

Thanks, I. Still on a Seafood Diet here in NYC.

I SEE food, I EAT it.

CV said...

@karen

"hope you're happy"... I only like(d) 1083 with regards to it's technical relationship with the 1076 level (chart gap on 2/16/10)...

That said... The highest the S&P could go and do a .09 RETEST back to that area (which is now very close to the 200 EMA)... Would be 1186... That would 'test' the level, but fail to cover the gap which starts under the candle of 1079.10...

These can be "around" numbers (they don't have to be exact)...

I liked 1183 because it would have 'filled' that gap... to do that level of retest...

I'm still biding my time here...

CV said...

4 basic food groups:

- Vegetable Group = CORN NUTS
- Fruit Group = Sweet Tarts
- Dairy Group = Milk Duds
- Meat Group = Slim Jims

Any questions?

Leftback said...

Tightened the stops on our massive TBT position.... :-)

Nic said...

FX watching the surprise discount rate meeting today.
Crude on its own rocket ship to 90 I reckon

Nic said...

CV ... you forgot the fifth group ... alchohol?

Leftback said...

Colt 45 belongs in there...

Don't let the SMOOTH TASTE fool ya....

CV said...

... some have 'finer' tastes and drink only fancy things like champagne...

If that's the case, I recommend:

"Andre'": "The BEER of champagnes"

Leftback said...

Bonds are selling across the board today, even top quality issues like "JNK" are not finding buyers.... (grin) so this is where the boys at the FED start to worry a little with all the issuance ahead this week.

The plug will get pulled soon, at or even before a break of 4.00% 10y and 5.00% 30y. The plug-pulling will consist of a change in the language about "extended period", and that's all the market will need. Do not own the short end of the Tsy market or you may be "flattened". You have been warned.

Leftback said...

We honestly don't think that the market can take another week of dreadful auctions. So, we won't get one. Foreign and domestic buyers will show up in force this week, but maybe not for the 3y...?

karen said...

Squatting Laguna Beach Style

http://www.irvinehousingblog.com/blog/comments/squatting-laguna-beach-style/#more

CV said...

@LB

Everyone in Euroland will run as fast as they can from "Greek Bonds" and into the SAFETY [snark] of US 10 and 30year notes...

And get a little currency pop to go along with that (while it lasts)...

Leftback said...

Interesting fact # 5687:

My LONGS are actually down on the day, dividend stocks are weak in this ALICE in WONDERLAND market while micro-caps loaded with debt SOAR...

Day after day of insanity.

mcHAPPY said...

Back from Europe. Speaking with a few of England's finest there seems to be very much contempt for government and corporations. Very upset people that banks and the upper elite continue to get rich from taxpayers. Basically, same there as in US - of course, only among those informed and willing to look beyond the b.s. media and government are force feeding.

Nic said...

I want to break free .... any FX'ers check AUDCAD

Leftback said...

If they let the bond market break, the FED are criminally insane.

Hmm.....

mcHAPPY said...

http://market-ticker.denninger.net/archives/2152-Come-To-Jesus-Part-Deux.html

I enjoyed Karl D.'s post today. Worth the read. Especially enjoyed the ending.

"But if you're investing in this market today then your bet is that the government can borrow and spend a trillion or more beyond tax receipts in perpetuity, that cash flow will never catch up with the banksters, and that none of the nations currently in trouble (such as Greece) will actually default.

That's your wager in a nutshell, and IMHO those trying to get you to either be or stay involved here have motives that have absolutely nothing to do with your financial success.

Down the road don't say you weren't warned - because you just were."

Full disclosure: 100% in cash waiting to short the shit out of China, oil, or R2000.

CV said...

@karen

Angry Americans with pitchforks needn't go after the US Government...

They ought to start by showing up at the doorstep of that guy in Laguna Beach...

Hell, if he's going to squat, and I'm going to pay the bill... I want a room (with a deck) to blog from...

Leftback said...

Flirtations with LOONIE parity usually terminate with a dollar rebound.

Agreed with McHAPPY regarding cash, and shorting R2000. Additionally, we own Treasuries but reserve the right to short the hell out of them from time to time into auctions - until RISK and FEAR return to this land.

Leftback said...

LB is going to sit on that guy's terrace at LAGUNA BEACH and wait for Karen to show up on the beach....

karen said...

This is a must read: http://www.bubbleinfo.com/2010/04/03/stealth-bailout/#more-7416

Of course, they’re “purchasing mortgage bonds”, because the government is going to insure them. It’s a “no brainer”. And don’t you love that expression, “a handoff”, because that’s exactly what it is. The government hasn’t stopped pumping liquidity into the system; they’ve just found another entry-point where they can push it in. Here’s how it works: The new program offers incentives to banks and other deep-pocketed investors (in mortgage-backed securities) to slash the principal on underwater mortgages which keeps people from strategic default or foreclosure. Sounds good, right? But here’s the catch: When the mortgage is refinanced, it’s converted into a FHA-backed loan which provides an explicit gov-guarantee. So, for a slight loss on the face-value of the MBS, the investors (ie–investment banks, hedgies, etc) are able to resuscitate their moribund securitizations (MBS) and reap hefty gains. It’s like taking Fido’s steaming pile on the front lawn and turning it into the Hope Diamond. Abracadabra!

CV said...

UPDATE

I just checked... At the current pace (from the March '09 lows)... We're on track to have the S&P break out to new ALL TIME highs right around the November '10 elections...

That's a setback (because without the January - what was it TWO WEEK correction)... We'd have been at ALL TIME highs by the 4th of July!

Nic said...

Eurodollar rate futures are dropping fast, yields higher. Eurodollars maybe show a real reassessment of US Dollar Yield Expectations

2small2bail said...

Who knows if/when this trend matters/reverses, but it was buried in a little box on B5 in today’s journal: Commercial Bankruptcies Increase … the ‘10/’09 Q1 growth appears to be about 4.8%

Leftback said...

Eventually risk matters. But only when the man behind the curtain announces that there is a fire in the theatre.

Leftback said...

3.99% on the 10y. We are at the top of the range in yields now - the 5y is at 2.72%, probably see buying at 2.75%.

Nic said...

Upper trendline has broken in 2yr yields? Or do I see it wrong.

CV said...

@LB

"Ladies & Gentlemen, the theatre is on fire... Please return to your homes in an ORDERLY FASHION"

Try not to get stuck behind that lady with the fat bum on the way out the door!

McFearless said...

Over the weekend my mind was on jobs, underlying the jobs report last week I suppose one could argue it was green shooty in the sense that Census didn't add as many jobs as I/others expected. That has to get most humans thinking things must be getting better and might lead to some stock buys. Is that smart?

Maybe not, as a reminder:

The economy follows stocks; it doesn't "boost" them, as it's commonly believed. Look at the facts:

>> In 1968, the DJIA topped on December 2 and lost 36% over the next 18 months (the largest percentage sell-off in well over 20 years). According to the U.S. Bureau of Labor Statistics, that year the unemployment rate improved from 3.7% in January to 3.4% in December.
>> In 1987, the year the Black Monday stock market crash erased 22% of the Dow's value in ONE day, the unemployment rate improved from 6.6% in January to 5.7% in December.
>> In 2000, the year the tech bubble burst, the unemployment rate again declined -- from 4.0% in January to 3.9% in December. The DJIA went south for the next three years, nevertheless.
>> Most recently, the Dow topped in October 2007 with U.S. unemployment at 4.4% "good for stocks", and bottomed in March 2009, when unemployment had more than doubled to 9% "bad for stocks".

Also, along the lines of 2s2b's point, I know it caught a little press over the weekend but I think personal bankruptcies were up some 35% month over month. As I'm to understand it this is common to see spikes in March and April but that is probably something to keep an eye on.

Nic said...

Breakfast with Dave
https://docs.google.com/fileview?id=0B7not0MAZdrXYzdiZjVkODktMGViNy00YzEwLWI3NjAtY2RjZjRmZGUzMDY1&hl=en

Leftback said...

Nic - wouldn't touch the 2y with one of those punting poles we used to glide along the River Cam on days such as this.... ah, nostalgia.

McFearless said...

I would also just add to my above, the average monthly rate of unemployment from 48-66 was 4.9% vs. 6.6% from 75-99.

We all know which time the stock market did better.

Robert Prechter said...

P3 should come along any day now.

Maybe by the end of the week.

McFearless said...

Hmm, Bobby, perhaps you'll find the need then to actually discuss the markets in the next Theorist letter?

CV said...

@Bobby P

Hey Bobby P... I'm looking at this little micro-cap "penny stock"...

The guy toutin' it says it's a MOONSHOT...

Can you give me an EW analysis on it? :-)

Nic said...

All these rising yields make me wonder why shiny things with no yield are still so attractive.

Nostalgia LB - yesterdays race:
http://www.youtube.com/watch?v=j8xxIE-QDC8&feature=related

Mannwich said...

I thought we'd get a bigger bump in equities today, but the day is still young.

This thing feels like it's petering out to me. Like lb opined, hard to see them "allowing" the bond market to get away from them. If they do, it's "game over" anyway. They're walking a tightrope and had better not fall off.

Leftback said...

We sank in my first year (78) !

Speaking of nostalgia, a pint of London Pride in the sunshine at a pub overlooking the river in Putney. Can taste the hops.

Lord Blankfiend said...

If they do, it's "game over" anyway

Exactly, that's why we are STEALING (I mean, TRADING) as much as we can before the WHOLE THING BLOWS UP leaving JOHNNY holding the bag.

CV said...

I think equities have retraced to JUPITER thus far...

We're not all the way back to PLUTO yet...

Leftback said...

SPY yielding 1.77%, gold yielding DIDDLY SQUAT, aka SWEET F.A.
Ten year yielding 3.99% and YOUR MONEY BACK.

Leftback said...

Who is buying JPY today? EUR-JPY really weak now.

Carry trade is not on - means HFs and bank desks are not especially active in pushing the market up today. JNK not making new highs. This thing hasn't got much further to go.

Leftback said...

Anyone feeling like gold 1130 is screaming: "SHORT ME !!!" ???

Nic said...

I think USDJPY back to 93 or lower this week. Has to some time so we can buy ...

Nic said...

I like gold short too. Bearish ABCD
1085 low to 1114.60 high = 1101.60 to 1131.20ish

CV said...

TLT hit a low 2 cents BELOW the low on June 10th of last year...

Equities CORRECTED for the next 22 days after that occasion...

Leftback said...

C: Agreed. We are REAL CLOSE. But it is still Momo Monday.

mcHAPPY said...

Denninger is making up for a weekend with no posts - he is ripping them out faster than I can refresh.

LB I would love to hear your thoughts on this as it is about the 10yr.

http://market-ticker.denninger.net/archives/2157-Ten-Year-Bond-Breakout!.html

Leftback said...

FYI, bond yields matter.... this will not help Buddy and Babs Bankster buy Timmy's house in Mamaroneck at FULL BUBBLE PRICE. The jumbo closing in on 6%...!!!

Loan Type Today Last Week
30 Year Fixed 5.23% 5.11%
15 Year Fixed 4.56% 4.37%
1 Year ARM 3.23% 3.22%
30 Year Fixed Jumbo 5.93% 5.85%

CV said...

@LB

Agreed... As I stated in my thread from last week, I always give MOMO's 2-3 days to pay inflated prices for the clients they so well serve...

Thursday was DAY 1, Today is DAY 2, perhaps tomorrow a little more buying in the morning, then when are those 10y note auctions? Wednesday? and 30 year Thursday?...

It's still nice weather here... I'm still sowing seeds :-)

Leftback said...

A Bond Breakout would bury SAINT JAMIE and his INTEREST RATE SWAP book so deep that not even BENNIE and a fleet of bailout backhoes could dig him out. This will not happen. Prepare for an ISSUE that precipitates an equity sell-off. BANKS own a lot of Treasuries too.

However, a rise of 10y yields to 6% would be a CATASTROPHE for the housing market, which would then eliminate the TBTF BANKS, and make housing affordable to renters. So LB says: BRING IT ON....!!!

Leftback said...

Just tickled 4.00% as predicted.

TLT calls are looking nice here, C.

CV said...

@LB (12:52)

Not to mention what it would do to Maiden Lane...

(12:55) I know ;-)... I'm wondering if I can wait a day, or not on that...

Leftback said...

Happiness is a really enormous TBT position held over from last week.

This is the closest we have been to a bond market meltdown. Expect a change in SPX "profit forecasts" or the Fed's "economic outlook" later in the week. Could earnings just possibly come in WTE this time?

Leftback said...

C: Some now and some more tomorrow if they buy the 3y and put on a curve steepener into W/Th auctions? Personally LB thinks it is all priced in now, including default by the USA and GDP of 15.0% annually....

DL said...

With all this talk about the bond market, it's also worth pointing out that XLU has really lagged the SPX over the last 6 weeks or so. Often foreshadows a correction in the broader market.

Leftback said...

Nibble on a few 5y Ts for the first time in ages at 2.74%...?

Leftback said...

XLB also hasn't made new highs.

Shorting miners and metals again when the time comes.

Nic said...

10yr TIPS auction seemed to go well ...

Leftback said...

Peter Boockvar bought them all. He loves TIPS.

DL said...

TIPS are great.

I mean, the government would never lie about the inflation rate.

Mannwich said...

@DL: It's not that they don't lie. It's that they DO lie and we pretend to believe them. Over and over and over again.

Mannwich said...

Comment eaten again. Sigh. Wordpress sucks.

Leftback said...

Need food. DL, please control the markets while I am away.

karen said...

Bespoke on the Ten Year

karen said...

StockTiming on Liquidity Levels

CV said...

@Mannwich

Actually, I pretend to BLOG about pretending to believe in them...

Just so that's clear...

karen said...

Canada Bank Chiefs Wary of U.S. Takeovers as Doubts Persist

"Canadian lenders are treading carefully after pouring more than $20 billion to expand their U.S. consumer business over the past decade. The banks, leading the world’s soundest financial system according to the World Economic Forum, face pressure from regulators to conserve capital, while some are concerned about the quality of U.S. assets."

http://www.bloomberg.com/apps/news?pid=20601109&sid=aMMYbAg3saFk

Tom Cruise said...

CV,

Crystal clear

karen said...

C is looking very abandoned babyish.. humor me, pls.

karen said...

another C loan going bad?

Terra Firma May Sell Stake In EMI If Raising Fails - 8:30 AM ET 4/5/10 |
LONDON (Dow Jones)--Guy Hands' private equity firm Terra Firma may be forced to sell shares in music group EMI Group PLC to new investors if its current backers refuse to take part in a GBP120 million plan to save EMI from the hands of its lender, Citigroup Inc. (C), reports The Daily Telegraph on Monday, citing unidentified sources close to Terra Firma.

Sources close to Terra Firma insisted that EMI was unlikely to be forced into the arms of hedge funds and other potential new investors, saying that its current ones seemed keen to back the fund-raising, according to the newspaper report.

Terra Firma, which bought EMI for GBP4.2 billion just before the credit crunch hit in 2007, has until June to plug a GBP120 million funding gap and save its flagship investment from being seized by Citigroup.

EMI and Terra Firma couldn't immediately be reached for comment Monday.

DL said...

So on Friday, the Fed finally admitted that they have toxic waste on their books.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZA_RWY3IJ2I


I don’t know about you, but I was shocked, shocked, and more shocked.

No one could have seen this coming.

Bruce in Tennessee said...

Good grief, Batman, what a morning.

Ahab, I do strongly agree with you comment that this administration thinks doctors will go gently into that good night of socialism without difficulty...but that isn't the thread...so.

Lefty, I called Chuck (Schwab) this am to talk about bond rates and couldn't get an answer you could shake a stick at. I see Ms. Sonders, the Abby Joesph Cohen of Schwab, thinks we are in a V-shaped recovery and all is right with the world....

You want to tell me what the guy with Maggie Thatcher tattooed on his chest thinks about interest rates over the next year...(That means you..)

CV said...

@DL

Swine & crap attract flies... Didn't you know?

Mannwich said...

Very clear, cv. Very "matrix-esque".

Mannwich said...

@bruce: And cognos. Don't forget him. Fucking tool, that he is.

Leftback said...

Bruce,

We are short long bonds today. Massively so, and LB is whistling all the way to the pub. But looking ahead we see a range bound market in Treasuries this year, capped by 5.00% on the 30y. Otherwise, it is going to be Armageddon for the real estate and banking industry.... which would be Nice !!!

Actually not a fan of Mrs T., although she was a smart operator.

DL said...

I would bet that 10-year T-note futures (ZNM0) would produce a nice gain if purchased at or below 114'00.

karen said...

I am fixated on C today..

http://www.breakingviews.com/2010/03/29/citi%20stock%20sale.aspx?sg=nytimes

CV said...

Kids on Easter egg hunt find body in Iowa park...

http://www.azcentral.com/offbeat/articles/2010/04/03/20100403egg-hunt-body-ON.html

CV said...

@karen

"I am fixated on C today"...

Most of the ladies that take my classes say the same thing :-)

Leftback said...

CV: Classic. Egotism worthy of LB at his (?) best....

CV said...

Egotism?

I'm just stating facts :-)... LOL

E-Trade baby said...

This guy LB saved me a pantload today...

Johnny Retail said...

Everything is wonderful. We are naming our next child BRIAN. Even if it's a girl.

E-Trade baby said...

Karen, if the market crashes I will be an abandoned baby...

Leftback said...

The 2 o'clock PUMP in action.

DL said...

Linsay, is that you?

You milkaholic.

karen said...

an article written for the masses..

http://www.azcentral.com/business/realestate/articles/2010/04/05/20100405risky-mortgages.html

(that azcentral is hilarious CV!)

karen said...

btw, C earnings report on 04/19..

CV said...

@karen

My question is... WHO WAS HIDING THE FRIGGIN EGGS (and didn't see it)...?

Leftback said...

2s10s is 281 bps. The short end has been beaten with a stick while everyone has been focused on the long end. Now that QE is over, we should see a FLATTENER take hold, especially if they keep the size of the long bond auctions under control. If the economy slows into 2011, we might eventually see an inversion.

E-Trade baby said...

The Market Made Easy by E-Trade Baby.

MONDAY - MOMO MAGIC - Squeeze....
TUESDAY - TURNAROUND TUESDAY - sell before 1pm. AUCTION DAY.
WEDNESDAY - INVENTORY BUILD DAY - AUCTION DAY pt.2
THURSDAY - AUCTION DAY pt 3. SOME ECONOMIC THING is weak.
FRIDAY - BID EM UP AGAIN. Take Control.

Repeat ad nauseam.

karen said...

An Andy Xie read at tbp.

DL said...

Karen @ 3:03

CV thinks that a trade war with China would do us good.

karen said...

dia volume less than half of 10 day average with 50 min to go.

CV said...

@DL

i didn't say that...

I just said "F**K CHINA..." They can kiss my @ss

CV said...

TLT sitting right on it's daily low...

Lower than last June 10th...

Mannwich said...

@karen: Earnings, Schmernings. If the banks can just lie about their numbers forever, who cares what earnings they announce? I'm sure it won't be real anyway but nobody cares. Extend and pretend baby.

Leftback said...

Go on C, buy some calls.... you know you want to.

DL said...

Who knows?

In 20 years, we may all be speaking Mandarin.

Saint Jamie said...

If the banks can just lie about their numbers forever, who cares what earnings they announce?

Exactly. Just send me all your money.

Leftback said...

DL

You channelling Mister Rogers there...?

Bruce in Tennessee said...

When I die, I'm coming back as Joe Biden, the only man ever to ride the short bus to school and be elected vice-president. Life would be good...

Leftback said...

Our one week profits on the hedge are absolutely enormous. We feel more and more handsome as the yield rises on the 30y, Bruce.

Mind you, the position size was not insignificant and certainly raised a few eyebrows around the office. Still, it was a no-brainer. I bet Soros is COINING it today, as well.

CV said...

@Bruce

Then if Barry & you both go down...

Nancy Pelosi is President... Therefore, please stay healthy!

Bruce in Tennessee said...

Feelings are tricky, LB...were I you, I would keep my mirrors covered...

Bruce in Tennessee said...

Size is not important either, LB...

Bruce in Tennessee said...

My brother lives smack in the middle of Pelosiville. He sent me an e-mail today..since this is sorta a family site, I will not reproduce it....

Leftback said...

Bruce,

Just keep cooking the burgers, buddy. Delicious.

CV said...

@Bruce

If this is a "Family Site"...

It's more like "The Simpsons" than "The Waltons"

June Cleaver said...

Ward, don't you think you were a little hard on the Beaver last night?

Bruce in Tennessee said...

It was an interesting day...I was worked down to a pile of mush...but did notice a couple things. Besides the 4 on the ten year there is this, as noticed by the media...

http://finance.yahoo.com/news/Gasoline-oil-break-out-to-apf-3674064248.html?x=0&sec=topStories&pos=1&asset=&ccode=

Gasoline, oil break out to 18-month highs

...Of course with our shiny new taxes (mine have a bell that does ding, ding) and rising rates, and gas prices...I see lots of profits for CV and LB and the gang, and maybe not so much for J6P...(teacher layoffs coming in my county...)

Leftback said...

I wonder what bollocks the FED is going to announce next?

DL said...

B in T

"...Of course with our shiny new taxes"

Obama's got you in his crosshairs.

karen said...

This is from Trader Mark last Thursday.. I don't remember seeing it..

Doug Kass 20 signs that could mark a top

i know that we have been talking about 4 being a top in the ten year.. and the spx did correct that last time 4 was tapped..

Leftback said...

Bruce,

Gasoline prices feed inflation via delivery prices, but they are effectively a tax on J6P, so he will be getting it at both ends. The recoveryless recovery will nip itself in the bud quite soon.

A honking amount of LB's profits will disappear as taxes, BTW.

DL said...

Karen,

We'd like to know where YOU think the top... I mean pinnacle might be.

Leftback said...

Karen's Top is exactly where it is supposed to be, I'm sure. In a tiny bikini, on the beach.

Dougie Kass is wise, and funny. Thanks.

BinT said...

One year ago 10 year was 2.91..wonder where it will be in 12 months...

http://www.mortgagenewsdaily.com/mortgage_rates/

Leftback said...

Hate to push this short trade, but with tomorrow's 3y auction, a further steepening to 4.90% or so is definitely not out of the question. Then if there were a weak 10y auction... but the whole scenario is priced in.

Tight stop, been raising it all day.

Bruce in Tennessee said...

http://www.cnbc.com/id/36180715

Would You Take a Pay Cut to Save Your Job?
Published: Monday, 5 Apr 2010 | 3:20 PM ET
By: Jane Wells
CNBC Correspondent

Are you willing to sacrifice your salary to hold onto your job?

Glassdoor.com conducted a survey which shows employees are more confident they will not lose their jobs. However, three out of four are willing to take a pay cut to make sure. For people who are unemployed, nine out of ten are willing to work for less than they originally expected.

...Union members???

Leftback said...

One year ago we were long equities and short the 10y, not buying until the yield approached 4.00%.

Bruce, they will not allow 5.00% on the 10y, or there will be a second bloodbath in housing/banking. Which, BTW, would be great for LB.

AmenRa said...

Just catching up. Momo Mondays (expected after a three day weekend)

Leftback said...

There is also China to be considered. They wouldn't fancy taking a 20% haircut on their Treasury holdings. One would think...

E-Trade baby said...

Yes, Momo Mondays.

Ra, see the guide to markets above. So easy a baby can do it.

Bruce in Tennessee said...

Bloodbath sounds so ucky...I think you have been watching too many Freddie movies.

Mortgage rates jumped today, along with everything else...I hope Geithner's wimpering to the Chinese works out this time. Maybe the Chinese like Freddie movies...

DL said...

"They wouldn't fancy taking a 20% haircut on their Treasury holdings"

One of these days, they'll take more than a 20% haircut on forex losses.

CV said...

Gotta go to my own "salt mine" & mine my own salt for awhile...

Catch y'all momo's later!

DL said...

Momo's and mofo's.

AmenRa said...

LB

What happens if they initiate a selloff in equities but the yields continue to rise?

karen said...

DL, i am perplexed.. if i didn't know what i know, i'd be bullish from a pure QE standpoint and say 1300 was where the spx is headed.. 1225ish at least.

eventually, capital requirements should force financial institutions to dilute again.. non performing loans cant be hidden forever and assets will have to be marked to market eventually..

Mannwich said...

Just saw some photos of Tiger out on the links. He looks terrible. Like he hasn't slept in weeks. I thought I also detected a little paunch going in the mid-section.

DL said...

Karen @ 4:12

You speak Greenspanish!

AmenRa said...

Karen

Eventually they'll convert all mortgages in tranches to FHA loans backed by the USG, rate them at par and put them back on their balance sheets.

Leftback said...

The Bond Report 4.5.10

Today was perhaps the first example we have seen of a broad sell-off in the bond market. Such events have usually presaged equity weakness in the past, but the proximity of a massive week of issuance may make this a reversible event. Treasuries sold off across the board, and corporates were also weak with the exception of some HY issues. The TIPS auction was strong, although there was heavy selling into the 1pm auction.

Corpies: LQD -0.89%; AGG -0.64%; JNK -0.48%; HYG 0.00%;
Govies: TLT -1.66%; IEI -0.62%; TIP -0.70%

We have carried a massive hedge since last Tuesday, so we did pretty well today, since the hedge exceeds the underlying. Despite raising stops, we think it is wise to keep this on for at least one day, possibly longer. The hard ceiling for the 10y is at 4.30%, that is, if 4.00% were to be decisively breached. We think China and Japan will show up this time, so the big move is already in.

Having said that, we smell intervention close at hand. The Fed might reach into its bag of tightening tricks if the auctions don't go well. Or better still, Timmy can indicate that future offerings will be smaller.

Bruce in Tennessee said...

http://www.youtube.com/watch?v=fuoTI3xxDzo&feature=related

I know you have all seen this...the tipping point for Guam...if you haven't and you got through today without being angry, don't watch.

Leftback said...

Amen Ra asked: "What happens if they initiate a selloff in equities but the yields continue to rise?"

Cannot happen. Not here. That is an outcome associated only with strongly INFLATIONARY environments, and with a FALLING CURRENCY, and the outlet for flows is COMMODITIES.

Now, in a LIQUIDITY TRAP, any shock means that capital flows from risk assets (equities, EM equities and bonds, HY bonds, commodities, and commodity currency) back to the ground state - money markets, funding currency, German bunds, JGBs and Treasury bonds, and this results in a STRONGER CURRENCY.

Bruce in Tennessee said...

NY. April 6, 2010. AP

Market prognosticators are baffled at the huge sell-off in the DOW during today's session. Our market maven, Ricky Rocket, interviewed Mr. L. Back, recently famous for his prediction of Joe Biden's IQ.

"It is simple" Mr. Back said. "The 10 year hit 4.1% early this morning, the Germans said the Greeks were slicker than olive oil, and the Chinese decided they had enough treasuries to last a lifetime. In addition, Mr. Bernanke kept threatening to stop quantitative easing, and the only new jobs creating this week were for congressional aides to Congressman Barney Frank. Easier than eating crumpets at tea time..."

AmenRa said...

LB

Gracias.

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