Morning Audibles 5.19.10 - Of all Elaborate Plans


"...of everything that stands..."


"I love the smell of napalm in the morning..."


"The horror, The horror"

252 comments:

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BinT said...

http://www.businessweek.com/news/2010-05-18/hugh-hendry-shorts-china-betting-on-1920s-japan-like-crash.html

"May 18 (Bloomberg) -- British hedge fund manager Hugh Hendry is betting China’s “credit bubble” will burst, causing its economy to contract and triggering a global crisis.

Hendry’s Eclectica Asset Management has bought options on 20 companies in international markets that will profit from “a dramatic collapse” of China’s growth that’s been fueled by an unprecedented lending boom, Hendry said in a May 17 telephone interview from London.

Hendry joins hedge fund manager James Chanos and Harvard University professor Kenneth Rogoff in warning of a potential crash in China. The nation’s 13 trillion yuan ($1.9 trillion) of new lending in the past 16 months, bigger than the economies of South Korea, Taiwan and Hong Kong combined, is spurring industrial capacity expansion in the same way Japanese credit built inventory during and after World War I, Hendry said.

“There are striking parallels with Japan in the 1920s, when ultimately the whole system collapsed,” said Hendry, 41, whose firm manages $420 million in assets. “China could precipitate a much greater crisis elsewhere in the world.”

BinT said...

http://finance.yahoo.com/tech-ticker/europe's-mounting-crisis-%22we're-on-life-support%22-chris-whalen-says-490996.html?tickers=euo,UUP,tbt,%5Edji,%5Egspc,xlf,FXE

"So what does Europe's end game look like?

"For Europe, basically they have two options: Individual countries can continue to borrow money until they can't. Then they hit the wall," says fellow guest John Mauldin, president of Millennium Wave Advisors and author of the Thoughts from the Frontline e-letter. "Or they can willingly throw themselves into a Depression by cutting their deficits dramatically."

mcHAPPY said...

Bruce,

It is funny how a piece of 'advice' or 'forecast' becomes set in stone. Even after a 20% decline in China people still think I am crazy for saying China is a bubble about to burst. The stares I get back are funny and the comments are priceless, "No way, I saw a guy on TV a few days ago saying to ignore the conventional wisdoms of 5-10% in EM and to up it to 30-40% because China and India are where the growth is going to come from moving forward." Sounds good in theory though.

mcHAPPY said...

FYI we are about 90 points above a BAM trigger point and not far away from a trap door from there.

mcHAPPY said...

I'm thinking resistance comes from the closed trap door... next week the door will be open.

BinT said...

McHappy:

The command economy changed that equation into the unpredictable.

I think when historians look back on this in twenty years they will see several things:

Ultra-low interest rates are probably never a good thing.

Obama was elected at just the wrong time. Since 1960 we'd been on a deficit spree, and his solution of greatly larger deficits was the wrong medicine for the patient in this illness. Reminds me of House when House treats the patient and he doesn't get better. House says,"Damn, shoulda thought of plan B first."

Government solutions are taking a real toll on the American can do attitude. With 47% paying no federal income tax, this is simply too sharp a division in the taxpayer economy to be viable in the future.

Historians will see that it was the capitalistic goose in America that laid the global golden egg. Is the crisis/Obama already killing it with higher taxes in a time of economic weakness? I would suspect so.

mcHAPPY said...

@Bruce,

Fearing group think but there is no argument from me in anything above.

Futures are making a comeback. I will be watching 1130.35.

AmenRa said...

I'll be watching some "minor" fibos (aka divide each fibo by 10 for the smaller moves). The .0764= 1134.86, .0854= 1123.79 and .091= 1116.92. This is how I find levels to look for in-between the main fibos.

AmenRa said...

Oh and Euro back above 1.22 but still below the .1855 fibo of 1.2336.

mcHAPPY said...

@Ra

Thanks for your numbers. My reason for 1130.35 is because if my wave count is correct, that would be the end of 1 and we cannot go back in to there.

AmenRa said...

mcHAPPY

We are also well below the monthly 3LB mid of 1141.16 and weekly 3LB mid of 1164.08.

bob said...

Not much time this morning, good but long night.

Wanted to post this, more on ETF's

http://ftalphaville.ft.com/blog/2010/05/18/235011/who-exactly-are-authorised-participants-anyway/

call me ahab said...

Apocalypse Now-

one of the best movies of all time- I wasn't too up on Kurtz being played by Brando- but it worked out ok I guess-

on the previous thread-

DL- if I misinterpreted- sorry my man- I'm sure it wasn't the first time I made such a blunder- and I am sure it won't be the last(-:!!!!

CV- dude- are thinking about going Amish on us? The only way I could see you quitting your blog is if you had no electricity(-:!!!

also-

"Consumer prices unexpectedly fell in April for the first time in a year, with the core annual rate recording its smallest gain since 1966."

deflation anyone

mcHAPPY said...

@Ra

Don't forget you are in my favourites. One of the first thing I do Saturdays is check your site.

CV said...

@ahab

I have solar & wind power...

I'm not going Amish...

mcHAPPY said...

On the next bounce I will be definitely getting back in to FAZ. Financials are getting slaughtered. I would like to be in on that during a third.

call me ahab said...

CV-

dude I lived in Amish country in NE Indiana-

use to see the horse and buggies out on country roads-

and it was the Amish that were on the framing crews for all the builders-

except they had to be driven to the sites- as none of them drove-

it's the Amish who are oblivious to power outages and gasoline prices-

as they use no electricity or gasoline- these folks are ready for anything- as they fend for themselves and grow and store their own food within their own communities

72bat said...

with the proposed sec 5 minute trading halt on stocks that are down (or up) 10% within 5 minutes, any speculation on how that might affect etf's which are derived off indexes that include one or more stocks in which trading is halted?

CV said...

@ahab

I know all about 'em

call me ahab said...

German Chancellor Angela Markel, spooking investors on Wednesday by saying the euro was in danger, urged speedy action to stop market "extortion" and said the EU needed a process for "orderly" insolvency of members.

Recommending tough moves against "notorious deficit sinners" in the euro zone, such as withdrawing voting rights, the German leader told parliament in Berlin: "Above all, what's necessary is to develop a process for an orderly state insolvency.


the Germans- man- they just go to it

call me ahab said...

CV-

I imagine you do(-:!!!

much to be learned there

CV said...

@ahab

I don't blame them...

I mean, WTF?...

All these other nations can just spend and do what they want and in the end Germany has to bow to pressure and bail them out?

CV said...

@ahab

...on the Amish

I doubt they're too worried about P3...

mcHAPPY said...

http://market-ticker.denninger.net/

The first three posts at KD's site should be required reading for anyone needing a fundamental reason why the market is in trouble for the next day or two.

Once there head over to Mish's for:

http://globaleconomicanalysis.blogspot.com/2010/05/individual-stock-circuit-breakers.html

http://globaleconomicanalysis.blogspot.com/2010/05/shock-awe-phase-ii-germany-to-ban-naked.html

http://globaleconomicanalysis.blogspot.com/2010/05/rant-of-day-putting-money-to-work-where.html

karen said...

good morning! darn futures seesawing.. i hate that!

call me ahab said...

from mchappy's link- regarding the inflow of $$$ into junk rated bonds-

Of course there is a choice. If a fund manager does not think he can wisely invest fund flows, then he should not take them.

The correct choice is to say, "We think this market is fully priced, we do not like the risk-reward setup, and we advise treasuries, or sitting in cash, or whatever."


no doubt- also like this-

If the US was in the midst of a recovery, 10-year treasury yields would not be at 3.39 and falling.

CV said...

@karen

pretty soon they'll be "Hee Haw"-ing

call me ahab said...

"Goldman Profited on its Trades, Clients Lost on its Advice"

and then we had the head of MS say yesterday that Wall Street needs to rebuild trust with main street-

ok then

Nic said...

The best headline (apart from CV of course :) )
goes to Jesse's Cafe:
Merkel to Banks and Hedge Funds: Sprechen Sie Deutsche, Droppen Sie Dead

mcHAPPY said...

Anyone looking for an EW perspective/technical perspective on the markets should look here:

http://www.apartofny.com/

Fundy + Techy = Death to Johnny

mcHAPPY said...

Look out if that 200MA goes.

Anonymous said...

Morning all.
Following up on yesterdays Gulf report.

From here:
http://www.chron.com/disp/story.mpl/business/deepwaterhorizon/7011584.html


...“The scientific community in the Gulf of Mexico is fairly small ... and we've been very dedicated for a long time and not only is nobody listening to us in this, but it seems like they really want us to shut up,” MacDonald said. “It's very, very punitive and anybody who is doing this is getting attacked by NOAA.”
A NOAA spokesman did not address MacDonald's claims directly, but said that the agency's spill response includes scientists with key federal agencies as well as partners in the scientific community and the private sector."...

Every day, every story exposes that we truly are a "Banana Republic"
Have fun fellow monkeys.

foghorn

call me ahab said...

from Nic's link-

"German Chancellor Angela Merkel accused the financial industry of playing dirty. 'First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to launch recovery packages, which increased our debts, and now they are speculating against these debts. That is very treacherous,' she said. 'Governments must regain supremacy. It is a fight against the markets and I am determined to win this fight.'"

I like that resolve

mcHAPPY said...

@ahab

I believe that is word for word what KD wrote a week or two ago - and both are 100% correct.

mcHAPPY said...

Financials seem to be see-sawing - FAZ is negative although XLF is slightly green.

call me ahab said...

and then there's this- Jesse's inside scoop-

I have heard from several sources that there was a general disappointment in Europe and in some parts of Asia at the lack of progress being made in the US Congress towards creating meaningful reforms in their financial system. In fact, there is a widespread belief that Washington is being dictated to by the Banks, and that their lobbyists are directing the conversation, and in many cases writing the actual legislation. The final straw was when the Obama Administration itself sought to water down and block key provisions of the legislation to limit the power and size of the Banks.

no doubt- if it weren't for big finance- what would be this country's claim to fame-

outside of McDonalds, KFC and Coca Cola

CV said...

@ahab

Now if Obama would only grow a pair...

Nic said...

Ahab
Wasn't that the best part. I wonder if the moves in Europe will prompt the US to toughen up?
Dodd has proposed a delay to the Swaps Bill this morning so it doesn't look good.
http://www.bloomberg.com/bb/n/a9u6Y_8wLMTY

call me ahab said...

another awesome insight of mine-

regarding the report on subdued inflation- in fact a negative CPI- deflation- good news?

when in my mind- BB is looking for inflation- begging for it-

so when the headline reads that CPI is down 3% or 5% or whatever-

how will that be received- as a great sign?

Anonymous said...

Jamie: BACK OFF LLOYD! IT IS MY TURN TO SWTICH THE BUTTON!

Lloyd: Back off Jaime or I cooperate with the SEC.

Jamie: OK, OK, Relax! You do it.

Anonymous said...

http://www.fastcompany.com/1649375/bp-releases-four-disturbing-new-videos-of-gulf-oil-leak

foghorn

CV said...

bb will eventually get his inflation...

Precisely at the moment when it will screw everybody in the worst way...

call me ahab said...

CV-

man I don't know- that would be some time in the distant future I would think-

also-

Demand for loans to buy U.S. homes shriveled to a 13-year low last week, following the expiration of federal tax credits

it's going to be grim folks- I see it hitting across the board and lower priced homes for first time buyers- prices most likely will resume falling-

all this stimulus nonsense- only a delaying tactic

mcHAPPY said...

I hope nobody here bought the dip.

mcHAPPY said...

14% of mortgages are in foreclosures or delinquent.

LOL

FAZ has a date with me in the near future i.e. after the bounce.

Nic said...

Gold is back below 1200 ...

karen said...

Bulletin:

More than 14% of U.S. mortgages in foreclosure or delinquent
05/19/2010 10:02:59 AM

CV said...

@ahab

When the system burns to the ground, then the inflation will start...

The only thing preventing "burning the system to the ground" are all these idiotic policy maneuvers...

So that "TIME IN THE FUTURE" could be a long way off, or they might be just around the corner...

Unimpeded, the markets will work quickly to resolve things...

karen said...

Nic, let me know when it's under $1k! : )

Anonymous said...

@Ahab deflation? Says who? Here in Canada, inflation everywhere, in things you need. Food, housing, clothing, education, insurance, medicines etc.

Perhaps, deflation in things you don't need. Junk from China.

AmenRa said...

Johnny hour isn't over but the fun has already begun.

call me ahab said...

well FWIW-

I like Germany's stance-

this county's response to the financial crisis has been a joke-

and what has it resolved- nothing- everyone just want's it back to the way it was- credit induced consumption-

for instance- GM now wanting a piece of the subprime borrower's for its cars-

and this after barely surviving as an ongoing concern-

disgraceful if you ask me

call me ahab said...

anon-

isn't Canada enjoying its own housing bubble now?

I posted something here a few weeks ago-

"Mansion or Crack House"- relating to home prices in Vancouver-

what a show that was

AmenRa said...

Sniff sniff. Do I smell 1110? The next fibo level is the .1459 at 1041.83 if 1110 gets taken out.

mcHAPPY said...

@Anon

I am Canadian.... wait for it buddy. You might with to read this:

Only difference between Canada and US is their bubble popped - we are 4-5 years behind.

What do you mean our exports are down?

What do you mean China is a bubble? Well if they slow down it is o.k. because Canada and Australia have a bunch of commodities that the Chinese have been buying like crazy.... oh wait *gulp*

karen said...

AR, 1110 taken out and don't forget my top!

call me ahab said...

saw 1110- lol

AmenRa said...

DXY, GOLD, EURJPY, AUDJPY, WTI all down. TRIN @ 0.50 (go figure). SPX down. What's wrong with this picture?

72bat said...

karen -
not only is your top coming back, and a welcome sight at that, but your avatar has stepped into the sunlight. looking good.

McFearless said...

sweet, the q's puts are at a double now this morning. this is about the best action I could think of for a day/swing trader.

mcHAPPY said...

@Ra

This is what I was talking about a couple of weeks ago. Look back to chart from September '08 and lay the DXY over the S&P. You will see they both go down together for a short time and then one plunges and one soars - guess which one goes where!

This is the 5th or 6th warning shot across the bow.

karen said...

A REIT if follow, (what could go wrong?): "We are also pleased that portfolio occupancy continues to remain high at 96.7%. Portfolio occupancy has been maintained at a very high level even though there have been significant challenges in the retail environment. Over the last two years we have dealt with a number of retailers that have experienced operational and financial challenges and our portfolio management team has continued to do a great job of handling the re-leasing of any vacant properties. While a few of our tenants continue to address these challenges, we have recently seen firming in the majority of our tenants' sales, and we would anticipate that occupancy should remain at or above the 96% level, absent any unforeseen events during the rest of the year."

McFearless said...

@all,

look at put/call this morning:

http://www.cboe.com/data/IntraDayVol.aspx

I haven't seen put/call like that in a long time, it looks like big players are making heavy bets right now on the downside. Banks are short XLF, as an example.

72bat said...

"our portfolio management team has continued to do a great job of handling the re-leasing of any vacant properties" by offering to cut lease rates to the bone and to fell8te tenants

72bat said...

kd addresses earlier question re etf's and the proposed sec 10% 5 min rule
SEC's Circuit Breaker Rule: Idiotic

karen said...

from Jim Sinclair:

We live in market run by hedge funds like all other markets.

When momentum of gold appreciation slows the selling starts. When an uptrend line breaks, the slower computers come on with selling.

Fundamentally there is no change from the intact Western world economic downward spiral.

Technical damage has been done to gold which will work itself out. The reverse is that when the decline's momentum contracts then the shorts are covered and the computers turn bullish.

This is the drama you have seen a million times.

Gold is the only insurance that can be purchased that will carry us whole to the other side of this economic madness.

Gold is going to $1650 and beyond. Dig a hole and pull a rock over top once again. Look out once a day until you see the downside momentum decelerate or a major bullish formation starting.

call me ahab said...

72bat-

that's funny!

nothing like a little inducement to sway a prospective client(-:!!!!

mcHAPPY said...

@72bat

re: KD and circuit breakers

My read is do not go long on anything.

karen said...

"There's dumb, and then there's criminally insane. "

McFearless said...

I totally agree with KD, the entire proposal could only come from a group of idiots, as I said last night.

karen said...

Happy, exactly! If you can't sell, why buy?!

McFearless said...

the rule can effectively make everyone long into a buy and holder...

mcHAPPY said...

The drop from 1124 looks like maybe 3 started there. Thoughts?

If I am right, we are in for one major dip today. 1044-1041 most def possible.

AmenRa said...

Just bought some more S&P puts. 1110 has been a magnet. I'm eyeing the Trin though since it has stayed bullish (but very close to overbought).

CV said...

While the SEC has their eyes on "North"...

The markets will head "South"

72bat said...

"...you must also impose the same rule on every instrument that includes or references that issue. If you don't, the result will be an instantaneous detonation as soon as the "circuit breaker" trips in all the referencing securities, as those who want to get around the "circuit breaker" will simply divert to the less-liquid references and destroy them instead!"
meaning an inverse leveraged etf would "go to the moon"?

McFearless said...

Ra,

TRIN is a nice tracker. The 30 day MA in April of this year on Trin was .9, hadn't been that low since June 2007.

72bat said...

mchappy -
already have my conditional order in to unload sds when s&p hits 1043

McFearless said...

"meaning an inverse leveraged etf would "go to the moon"?"

Alright, I think its obvious I have thought this through for a few years now.....in theory, this is exactly what should happen in a P3.

That said, ....are we going to be able to liquidate our leverage ETF positions when the time comes?

McFearless said...

OT: any Cat Stevens fans?

AmenRa said...

VIX is bordering on "extreme fear" levels.

McFearless said...

yes, VIX....bullish.

call me ahab said...

you mean Yusuf Islam-

not a fan exaclty

McFearless said...

some of the elections last night were interesting to say the least.

karen said...

ben, when i was 18! that's not his name any longer, however..

McFearless said...

ahab,

that's what I have on now, his Yusuf album, his old stuff is great, or I think so. Father and Son....great song.

call me ahab said...

I like that Specter lost in the primaries-

what a douche bag- and the dude is 80-

give it a rest dude

mcHAPPY said...

Would this be good for a short ETF?

CV said...

Time to start putting those "1 cent" orders in...

karen said...

Neat rent vs. buy calculator in the ny times:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

72bat said...

ben -
"are we going to be able to liquidate our leverage ETF positions when the time comes?"
sorta what i was getting at by the earlier question, on how it would affect etf's, though the inverse might skyrocket who's to say they'd be able to pay up?

72bat said...

or would those etf trades fall into the "greater than 60%" type of "1 cent order" trades that get cancelled after the fact?

McFearless said...

@72,

I suspect we will not be paid, not fully anyway, and new rules will follow. I've been thinking this for a long time now.

mcHAPPY said...

If I buy FAZ at 14 and it goes to 100 but I only get 50 I'll be peeved but I'll live.

McFearless said...

If this wave count is corrective we could be putting in a short term bottom now, the 1105-1107 is a key long term pivot.

McFearless said...

silver short is much better today....

McFearless said...

re: 11:22, not my primary count at this point, but probability is still too high to ignore.

McFearless said...

ANF hehehe

mcHAPPY said...

Ben,

Looking at 1117-1124, that looks corrective. The move down from 1124 looks impulsive IMO. What do you think?

I had been using 1130.45 but in doubt now.

If that was that was only the end of 1.... OMG.

AmenRa said...

Did I just hear that protesters have set fire to the Thailand stock exchange?

McFearless said...

McHappy,

I like the count right now that says we are going to enter a 3 of 3 soon, small bounce first and then the hammer comes down. My bearish bias of course.

I tend not to count the squiggles that short term but the 1105-1107 pivot was bigger picture view.

McFearless said...

fwiw, McHappy, I've come around to the idea we've had a give down, a second wave and we've likely completed wave 1 of 3 or we are in wave 5 of 1 of 3.

sorry no degrees....nor do the degrees really matter at this point.

On another note, does anyone here follow Charles Nenner? http://charlesnenner.com/

He's calling for new highs into the summer and then a very huge and very fast crash, quite similar to Harry Dent views.

McFearless said...

give down = Five down...11:36

call me ahab said...

CV may find this interesting- LOL

http://www.rottentomatoes.com/m/macGruber/

mcHAPPY said...

Thanks, Ben.

After giving back all those gains afew weeks ago, 2's scare me. Although better to be on board for 3. Whatever happens over the next day or few will most definitely be resolved quickly if this is in fact the start of P3.

BAM is calling for 529 end of year.

I-Man said...

hell of a vacation week...

CV said...

KT

karen said...

oh brother, will we bounce here or slice thru.. we are strangely subdued if you ask me..

CV said...

Katherine?

I-Man said...

Strange how the AUDUSD is still in the gutter but the EUR's are fairing better...

karen said...

that wasn't what i'd call a bounce, nor was it a slice.. i think the next 15 min is critical.. but i bet we go lower..

CV said...

CV might be changing his "1083 on May 25th" call to "1042 on May 25th"...

AmenRa said...

Algos currently on a search and destroy mission for stops...

CV said...

@Amen

LIMO baby... LIMO!

CV said...

But "Johnny" needn't worry...

he has his "pattern recognition" software set and ready to fire off the trade...

call me ahab said...

check in in the PM-

all have a great day

AmenRa said...

CV

I wonder (I know) the parameters for pattern recognition have been programmed into the algos. Its goal is to trap everyone into a losing position.

Nic said...

I-Man
Pull up a chart of GBPAUD or EURAUD or EURNZD. That was THE macro trade of last year and those are being liquidated by hedge funds. Thats the main difference between EUR and AUD right now.

karen said...

so if we can't better 1110 are we heading south again?

AmenRa said...

C, BAC, JPM, GS all green. That's the only reason the market hasn't crashed...yet.

mcHAPPY said...

@karen

1115 is the number I am watching. It is also around the 200MA and and if something new started at 1124 it would also be around the .618 retrace IF 1100 was the bottom.

CV said...

@Amen

C, BAC, JPM, GS all green

"Gettin' high on their own supply"

karen said...

Happy, 1102 is the 200 ma, 1110 is the 5 ema.. since yesterday, when the 5 and 10 emas crossed under the 20 (now at 1114) that line, the 20 has been the ceiling..

karen said...

oops, i should clarify.. they were above the 20 on yesterday's gap up (distribution to dummies) open..

just ignore me.. i'm into moving averages!!

mcHAPPY said...

Thanks, Karen.

karen said...

CV, what were you drinking last night? you were raining on my parade : )

karen said...

HOME EQUITY STUNNER

McFearless said...

karen,

money line from your link:

This is an average; backing out the approximately 1/3 of homeowners with no mortgage at all likely makes the average among those with a mortgage somewhere around 85% loan-to-value. But we digress.)


I would argue based on my own personal observations of hundreds of households that the 85% loan-to-value is common, and likely the more accurate figure since roughly 1/3 do not have a loan.

Bruce in Tennessee said...

http://www.bloomberg.com/apps/news?pid=20601110&sid=aB4M2R7TYkV8

Florida, Gulf Cities’ Credit May Suffer From BP Spill (Update1)

By Darrell Preston

May 18 (Bloomberg) -- Florida and Gulf Coast cities in Louisiana, Mississippi and Alabama may see credit ratings cut because of the BP Plc oil spill if tourism falls and property values drop, Moody’s Investors Service said.

The spill may have “severe” effects if it reaches coastal communities in Florida’s northwestern panhandle, since they rely on tourism and the state depends on sales taxes from the region, Moody’s analyst Edith Behr said today in a report.

“Cities, towns, school districts and counties will likely experience a decline in property-tax values, which will necessitate a reduction in services or an increase in other revenue to maintain current rating levels,” Behr said.

McFearless said...

This is why it blows my mind so many Canucks think they have "equity". Real estate is hardly liquid, that's like bragging about unrealized gains in the market.

McFearless said...

@Nic,

do you follow DAX at all?

That market seems to be on its own planet at this point.

Bruce in Tennessee said...

Morning, fellow gloomy capitalists!

My thought for you is: If you are concerned here, think how Joe Blow who simply has invested and hasn't followed the markets (once again) except to open his 401k statement must feel. I suspect not even Arrid extra dry is keeping him cool and comfortable.

You got it made! You got the tools, you know what's happening. Even Patton didn't get this number of opportunities...

AmenRa said...

Trin for Nasdaq and Russell above 1. Trin for S&P and NYSE below 1. BKX & XLF down. There's a battle of wills going on.

McFearless said...

Ra,

this is what you'd like to see right before a 3rd or a 3rd. F-in-A Peter Man! (Office Space)

karen said...

ben, i was thinking that very thing this morning.. that real estate is hardly liquid! it is one of the hang ups with my husband and i having so much money tied up in our home.. even if i could buy him out, how do i discount that fact? (rhetorical question)

the 10 day ema held as resistance for now..

karen said...

ben, that was a good trick! i pulled up a 3 year weekly of $dax and did a dbl check as i thot i was looking at the $spx!!

BinT said...

Mr. Klarman is President of The Baupost Group, L.L.C. Founded in 1982, Baupost discretionarily manages $15 billion for a number of institutional and wealthy individual investors. Baupost uses a value discipline with an event-driven bias to find global opportunities in such diverse areas as publicly-traded and private equities, bankrupt and financially-distressed debt, and real estate. Seth has managed Baupost’s investments from inception. Baupost’s largest partnership vehicle has achieved net annual return to investors of just over 20% and has experienced only one money-losing year since it was formed in 1983. Seth is a 1982 MBA graduate of Harvard Business School, where he was a Baker Scholar. He received his Bachelor of Arts, magna cum laude, in Economics from Cornell University in 1979. In 1991, he wrote a now out of print book entitled ''Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor'', which sells for $1,200 on Amazon and $2,000 on eBay and has been stolen from most libraries. Seth is also a world-class worrier. In one letter, Mr. Klarman said, ''At Baupost, we are big fans of fear, and in investing, it is clearly better to be scared than sorry.'' In an earlier note, he wrote, ''Rather than ratchet up risk, our approach has been to hold cash in the absence of opportunity.'' Seth serves on several not-for-profit boards and lives in Chestnut Hill, Massachusetts with his wife and three children.

....OK...then:

"From The Business Insider, May 19, 2010:

Legendary fund manager Seth Klarman of the Baupost Group made some rare public comments recently at the CFA Institute in Boston. Suffice it to say that he does not have a bright and sunny view of the world.

Some choice quotes relayed by Aaron Pressman at Reuters:

* "Given the recent run-up [in stocks], I'd be worried that we'll have another 10 years of zero returns."

* "I'm more worried about the world broadly than I've ever been in my whole career."

* Current market conditions remind Klarman of a Hostess Twinkie snack cake because "everything is being manipulated by the government" and appears "artificial."

DL said...

I hate to rain on everyone's (bear) parade, but I think this correction is going to be over in a matter of days.

McFearless said...

@Karen,

re: 10 ema

also touched just below the 200 real quick. The move down today is a little choppy, maybe it's just 3 waves....but I wouldn't even try to play the bounce that is happening, we could see 1080 fast and if that breaks 1040.

Ideally bears can get a close below the big flash crash intraday low...if not, we may have to endure another grind higher before this bitch really comes down.

McFearless said...

DL,

any particular reason or is it just a feeling at this point?

karen said...

Bruce, thanks for that.. i guess i feel better that i share his views ??

I-Man said...

this 1110 level is big

DL said...

McF @ 1:20

Yeah,just a feeling.

I'll also venture a guess that, over the course of the next two months, the SPX doesn't CLOSE below 1090 (intraday pricing is a separate question).

I-Man said...

Karen, love is a battlefield.

So is your top zone.

McFearless said...

''Rather than ratchet up risk, our approach has been to hold cash in the absence of opportunity.''

That's refreshing.

mcHAPPY said...

1115.48 was the .618 retrace off 1100.66.
1119.21 is the .786.
If we break 1124.27 decisions to make.

BinT said...

Karen:

I didn't know who Klarman was until this morning I started reading about "large cash positions". Babe, that has been me since I started. When I invest, in equities, I take chances. When I don't like my chances, I am usually 100% in cash. And I sleep like a baby when in cash, and I get up in the middle of the night to check Japan when I am all in. Now at my advanced age, what would you advise? A good night's sleep, or staying up and figuring out what I need to own the next day?

I-Man said...

I'm watching 1100, 1110, and 1126 as pivot points right now.

So, unless new sellers come in, (they were just baited on the 5min charts, and didnt take the bait,) before the close, I'll be in wait and see mode until 1126.

So for high/low swing levels, I'm looking at 1126 and 1076.

mcHAPPY said...

@Bruce,

"A good night's sleep, or staying up and figuring out what I need to own the next day?"

I hear you. I have not been getting good sleep lately.

BinT said...

http://finance.yahoo.com/tech-ticker/seth-klarman-stocks-will-have-zero-return-for-a-decade-491047.html?tickers=dia,spy,xlf,%5Edji,%5Egspc,%5Eixic

Seth Klarman: Stocks Will Have Zero Return for a Decade

....Again, I had to look up his record before I thought this was worth reading...but he does seem to have enough brains to keep the two sides of his skull from collapsing in a vacuum...and his record is, uh, not bad...

McFearless said...

I'm thinking sellers aren't coming back today. Put/call dropping all day long from some lofty levels:

http://www.cboe.com/data/IntraDayVol.aspx

karen said...

Ben, does your 1:19 mean you are not going to let DL change your mind? smiling

DL said...

Karen @ 1:38

He's a pretty independent thinker.

Although, Prechter does influence him.

karen said...

Bruce, thanks for the link.. and for compiling that post.. I've sent it off to a few people..

mcHAPPY said...

Looking at some retracements on the RUT (see above for S&P):

678.39 is .618
681.80 is .786
IF wave one started at 686.15 and ended at 665.83.

High thus far on retracement is 677.91.

Also looking at 1min candles on both S&P and RUT there appears to be numerous mini air gaps on the way up.

Not going to base my decisions on them but they certainly add to overall possible picture.

@I

I with U.

McFearless said...

karen,

lol, nah, but the waves are really choppy right now so it's valid on a lot of counts that we are going back up again. How high I just can't say for sure right now, so cash it is.

McFearless said...

and I still favor the bearish count whatever that is worth.

mcHAPPY said...

DL by any chance are you Thor? Just wondering and if I'm wrong, I apologize.

McFearless said...

"Although, Prechter does influence him."

Who's prechter?

lol!

I-Man said...

We might go a bit higher... but not like Rasta high or anything...

:)

McFearless said...

no way is DL thor, I can answer that. No way.

karen said...

and i can second it! no way!!!

karen said...

fomc minutes in ten?

mcHAPPY said...

I think we flash green and dump hard.

karen said...

i think we've established a pattern here.. big up days go flat to red.. big down days to flat to green. lol

karen said...

no one cared for my Alice? I can go back to being Me.

mcHAPPY said...

Of course if we go down hard before green, I will not be upset I was wrong.

McFearless said...

how many arm-chair tecs are waiting for a close below the 200 sma before they just starting puking up longs?

72bat said...

believe thor's in l.a. and mchappy north of the border

I-Man said...

you didnt like my pat benatar ref karen? wtf?

mcHAPPY said...

@Karen

re:FOMC

Word changing would certainly be a good way to start off a third down!

McFearless said...

DL lives down in or near VA if I'm not mistaken, he used to live out west, maybe he said San Diego.

72bat said...

karen -
your alice is a little bit dark and scary; you're a creature of sunshine

karen said...

I-Man, I'm embarrassed.. that went right over my head! got it now!

72bat said...

how did i get mchappy out of dl? oh, i see, i saw mchappy above "dl" in mchappy's question. doh. read more carefully bat.

I-Man said...

its cool, just thought for sure you would be on top of that one...

I-Man sure would like to see a clavadista right about ahora... y'know... fi ole time sake.

I-Man said...

Carry trade liq's are seldom orderly, inna I humble albeit limited experience...

DL said...

McF @ 1:46

Thank you for that.

I-Man said...

I see Tweedle Dee (Tim Geithner) on tv saying we can double exports in 5yrs... just curious, what are we exporting, exactly?

Thats a genuine question btw, anyone want to take a stab at it?

DL said...

McF @ 1:57

Correct on both counts.

Lived in a few other places also.

mcHAPPY said...

@I-man

Probably going to be food stamps in a program called SNAP provided by the IMF but 17% funded by the USA.

karen said...

bat, i agree; she was rather Burtonesque, although i was quite enchanted when i happened upon the entire sculpture in the Park.

i-man, you thinking bull trap?

I-Man said...

Just so you know we're keeping tabs on you, DL...

72bat said...

@ karen
maybe you just feel you've been down the rabbit hole of late

I-Man said...

'Twould be nice... the bull trap.

No better way to cut bull crap, than with the bull trap.

DL said...

I-Man,

What's the expression?

It's better to be looked over, than overlooked?

mcHAPPY said...

Ironic that the next leg down will probably be by banks dumping banks.

karen said...

spx doing a perfect rollover on the 15 min chart..

I-Man said...

aud breaking down again... all the dominoes lined up.

McFearless said...

Karen,

yes, this might be the woosh down and then we'll really see what happens.

McFearless said...

I like the 1070-1085 range, think AT is looking at about the same....

I-Man said...

I think one could make alot of cheese shorting EURUSD over the next hour or so...

Seattle Chill said...

"just curious, what are we exporting, exactly?"

Well, thanks to BB reopening the swap lines, we're probably exporting quite a few dollars at the moment. But as Max Keiser would say, financial fraud is the only real American growth industry.

I-Man said...

This wont stop at spx 1110...

Lloyd said...

FIRE! FIRE! EVERYONE OUT! FIRE!

McFearless said...

wow, I hadn't looked at gold until today, little smackdown there, I'm sure gold bugs are just thinking it's like 1:31 in this video:

http://www.youtube.com/watch?v=zKhEw7nD9C4

McFearless said...

Wasn't that part of Obama's SOTU, doubling exports over a few years?

I recall lol-ing at the tv on that one.

karen said...

notes:

Treasurys stayed under slight pressure after the Federal Reserve said the Greek crisis is a possible threat to U.S. markets, according to minutes of their last meeting.

Minutes from the latest Federal Open Market Committee also showed officials see the pickup in the U.S. economy slower than past recoveries. The majority still don't expect to sell assets bought to support markets during the crisis until after raising interest rates, which analysts increasingly don't expect to occur this year.

CV said...

@McF

Instead of doing a SOTU... Obama needs to work on his STFU for awhile...

McFearless said...

Darn karen...was really hoping in this one they'd state how the whole recovery was a big illusion. :)

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