Morning Audibles 5.5.10 - Cinquo de Mayo

Not many people know it, but Nevada used to be part of Mexico. It all started with the Spanish conquistadors. Exploring expeditions in the 16th, 17th and 18th Centuries allowed Spain to lay claim to a vast portion of North America, stretching from Florida to California, and from Tierra del Fuego at the southernmost point of South America to what is now the Canadian border. The Spanish called their vast empire in North America “New Spain.” It lasted for nearly three hundred years.

After the French revolution, Napoleon Bonaparte invaded Spain and made his brother, Jerome, king of that country. Jerome sold a large parcel of New Spain to Napoleon, who in turn sold it to the United States – the Louisiana Purchase.

With the overthrow of the Spanish monarchy by the French, the Spanish colonists in both North and South America grew restless. In Mexico, the colonists declared their independence and established the independent country of Mexico on September 16, 1810.

Like many newly-established countries, it took a while for Mexico to settle upon a form of government. The country was administered by the Generalissimo of the American Armies (1810-1811); the Supreme Governing Junta of America, also called the Supreme Junta of the Nation (1811-1813); a Generalissimo of the North American Armies in charge of the Executive (1813-1814); an Executive Power (1814); several Presidents (1814-1815); a non-functioning Executive Commission (1815-1817); a President of the Provisional Governing Junta (1821); a President of the Regency of the Empire (1821-1822); an Emperor (1822-1823); a President of the Constituent Congress (1823), by Presidents of the Supreme Executive Power (1823-1824); and from 1824, by Presidents of the Federal Republic of Mexico.

This turbulent era also saw a number of wars, which reduced the territory of Mexico by over one-third. In the north, the state of Tejas seceded in 1835, forming the Republic of Texas in 1836. Shortly after the Republic of Texas became one of the United States in 1845, another war broke out. This war (the “Mexican War” of 1846-1848) was a disaster for Mexico. The United States annexed all of the northern part of that country, which included the present-day states of California, Oregon, Nevada, Arizona, New Mexico, Utah, Idaho, Montana, and parts of Colorado, Wyoming, and Washington.

After the Mexican War, more troubles were in store for the Republic of Mexico. In an effort to end the economic stranglehold of the Catholic Church over the land and people, Mexico adopted a new constitution, and in 1857 the country broke down into civil war (la guerra de la Reforma, “the War of the Reform”). The combatants in the fighting were the Liberals and Conservatives. The Liberal faction was headed by Benito Juárez (Benito Pablo Juárez García), Mexico’s greatest statesman, whose capitol was at Vera Cruz. The United States gave its diplomatic recognition to this government. The Conservatives, with their capitol at Mexico City, had several leaders, the most prominent of which was General Félix Zuloaga (Félix María Zuloaga Trillo). By 1860, the Liberal party prevailed, and Benito Juárez took control of Mexico at the end of the year.

At the same time, the United States was sliding into a civil war of its own. Following the election of Abraham Lincoln in November of 1860, most of the southern states seceded and formed the Confederate States of America. When the Confederate troops of South Carolina bombarded and then forced the surrender of the US garrison at Fort Sumter in April of 1861, the War of the Rebellion began and raged until May, 1865 -- four long years.

In Mexico, the various factions that fought their civil war had borrowed large sums of money from foreign creditors. The fighting devastated Mexico’s economy, and the country had to suspend payments on its debts. Taking advantage of the relative weakness of the United States during the US Civil War, in December of 1861 the governments of France, Great Britain and Spain landed an allied military force at Vera Cruz to protect their interests in Mexico and to try to collect the debts owed to their citizens. Juárez negotiated with the allies and promised to resume payments, and the British and Spanish troops began to withdraw from Mexico in April, 1862.


The French, however, did not withdraw and instead sent reinforcements to their troops in Mexico. At the time France was ruled by Louis Napoleon, the nephew of Napoleon Bonaparte. Louis Napoleon was elected President of France, but after the election he proclaimed himself Napoleon III, Emperor of the French (the British referred to him as “the nephew of the uncle”).

While negotiations for the Mexican government to repay its debts were ongoing, the French commander, General Charles Ferdinand Latrille, comte (Count) de Lorencez, advanced on Mexico City from Vera Cruz, occupying the mountain passes which led down into the Valley of Mexico.

At this point it became clear that Napoleon III planned to turn Mexico into a colony. The French advance was along a route that had been used several times in the past to conquer Mexico, first by the conquistador Hernan Cortes and most recently by US General Winfield Scott during the Mexican War.

France declared war on Mexico, and called on those Mexicans who had fought on the side of the Conservative Party in the civil war to join them. Napoleon III planned to turn Mexico into an empire ruled by Archduke Ferdinand Maximilian Josef von Habsburg, the younger brother of the Emperor of Austria-Hungary.



Historians, of course, would tell you "the more things change, the more they stay the same" (advice which seems to be lost in the "JOHNNY come lately" world of WSWB)...

All the "sophistication" that technology has awarded us  in the past sesquicentennial seems to have simply been transferred to electrons and balance sheets...



Nevertheless, the world (and ALL these players), seem to always find themselves between the same ROCK, and the same HARD PLACE)...



Sigh... Have no fear though... The ECB is meeting in Lisbon this afternoon, and I'm sure they'll sort it all out...


They're probably calling this guy here as we speak... You know, to see if he left any BAZOOKAS lying around...

283 comments:

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mcHAPPY said...

Euro continues to get butchered. Portugal to be downgraded a couple of notches - you mean it isn't junk yet? People dead in riots/fire in Greece. Yields spreading in Spain and Portugal. There is nothing to worry about though..... riiiight.

CV, still amazed by your call. Not that it reached there, I knew that it would get hit in May, but you nailed the day. It is impressive.

call me ahab said...

interesting post- and who knows- it appears that before long all the conquered land will be Spanish speaking yet again-

my daughter is required now to take Spanish in 6th grade- no option- and that's in Virginia- the original colony- the home of Jamestown

CV said...

@McHappy

May 4th made a lot of sense to me...

Besides the fact that the charts (back in february), showed the possibility of a declining wedge pattern shaping up to hit around the first week in May...

I also applied some "old school" logic to it...

I've said MANY times (on this and other blogs), that big currency moves (& sometimes "commodity" moves) tend to take place over holiday weekends...

Most Americans (unaware of anything besides American Idol & Dancing with the Stars), don't realize that May 1st is a holiday weekend in most of the rest of the world...

May 1st fell on a Saturday (which made Monday the 3rd, a bank holiday)...

May 4th was a logical choice...

mcHAPPY said...

Ahhhh a glimpse inside the mind. Not as scary as I imagined :P

McFearless said...

Isn't LA out of money today?
Also, ADP is offering us such a perfect example today of the exact basis behind wave theory.

CV said...

@McHappy

You don't want me to say "I used my MAGIC 8 BALL" do you? :-)

call me ahab said...

and my thoughts regarding housing- as oft repeated- first permits then pending sales will soon see a precipitous slide-

you see- you can con people into stepping up and buying a depreciating asset that costs hundreds of thousands of dollars by offering them an incentive of only $8,000-

as long as they were soon to be in the market anyway

mcHAPPY said...

Now, maybe I am a little green BUT wouldn't you think the job of a ratings agency would be to be PROactive rather than REactive?

Moody's said it expects to complete the review within three months (I bet the bond market forces your hand before JULY)

CV said...

Other things... CV has on his mind...

If none of you have CLICKED on the illustration (in the thread), of what I'll call"

"THE OWE FLOW"

One thing SHOULD, suddenly occur to EVERYONE...

- When you think that the debt issuance/rollover for the US Treasury (for 2010) was tipping on $2 trillion...

- Then when you look at the various flows on that chart (and add up the amounts)...

- Then when you consider that even GERMANY (the "safest" of all, perhaps had a failed auction a few weeks ago)...

Well, it makes you kind of wonder...

LB... Do you have any calls on 10y note & 30y note handles in the short & medium term...

These last few days have been quite impulsive!

call me ahab said...

and I don't know what anybody else thinks- but this girl is sexy-

http://d.yimg.com/a/p/rids/20100409/i/r100128668.jpg?x=234&y=345&q=85&sig=P66U9xbvXWKbFLf04y4Scg--

what department does she run again?

mcHAPPY said...

Mish on GS, Buffet, and ratings agency. Ratings agency piece is particularly timely.

CV said...

@ahab (8:55)

That's all this ADMINISTRATION has done this far...

Bring future demand FORWARD (with a cost to benefit ration near 5:1 - IOW, the "cost" to generate an immediate bounce to economic activity is roughly 5x the ultimate real value it created)...

Purely "policy for vanity"...

It simply would not be right for them NOT to have to ultimately EAT their own failure...

call me ahab said...

and Hallelujah and Praise The Lord-

"D.C. passes medical marijuana, bill goes to mayor"

'bout damn time

Mack said...

daneric had some interesting thoughts on srs today/last night..

call me ahab said...

CV @ 9:04-

no doubt- as opposed to having a buyers spread a bit more equally- they have opted to get as much as they could in the Spring selling season- and anyone on the fence about buying would have done so-

doesn't bode well for future demand

mcHAPPY said...

HOLY OIL!

HOLY EURO!

Nic said...

Hmmmmmmm Napalm

call me ahab said...

alright- so my 9:00 link did not work- far be it from me to keep people from taking a peek at this beauty-

<a href="http://www.wehaitians.com/janet%20napolitano%2010.jpg> http://www.wehaitians.com/janet%20napolitano%2010.jpg</a>

I like the earrings- and it appears everything is a thumbs up

CV said...

@ahab

I bet Marion Barry is saying...

"Now WTH didn't they legalize CRACK COCAINE"?

call me ahab said...

did anyone catch BR's post this morning?

"Market Changes Tone During Correction"

lol- BR- so prescient and all knowing

CV said...

@ahab (9:18)

You just ruined my day!

CV said...

@ahab

TWSWB

call me ahab said...

CV-

I miss ol' Marion-

always liked this line-

"better on the city's payroll than on the welfare rolls"

only the best and brightest for DC obviously

call me ahab said...

but CV- the earrings are nice touch- lol

Nic said...

HAHAHA

call me ahab said...

. . .so . . .does anyone think there is a chance the market will head a little lower this morning- lol

spoonman said...

Wish I still had those puts...

And Nic - that made me laugh

Mannwich said...

Am going to miss the afternoon action today down at a windy (but sunny) Target Field. This is one day that I'd almost rather stick around my desk. Oh well.

Keep on running little TLT doggie.

CV said...

@Amen

Valiant effort at 5!

karen said...

morning! still needing my coffee.. caught the futures from my bed and decided no rush!

CV said...

1152 will have a lot wondering if this is an "A-B-C"...

karen said...

I <3 Meredith.. nice kick!

May 5 (Bloomberg) -- U.S. lenders face “tough” comparisons when they report second-quarter results because of weak revenue growth, according to banking analyst Meredith Whitney.

Banks benefited from write-ups tied to fixed income assets as consumer banking lagged, Whitney said today on Bloomberg Television. While Whitney doesn’t see “earnings power” at banks, she said she might be a buyer if prices were lower.

“I’m always a sucker for valuations,” Whitney said.

call me ahab said...

manny-

I wish they would stop naming stadiums and ball parks after companies-

I know it brings in $$$- but it's pretty damn annoying

CV said...

Goodbye TRENDLINE from 3/9/09 - 2/5/10

AmenRa said...

CV

I know. I know.

EURUSD fibo possible support levels:
1.2336 (the .1855)
1.2028 (the .2058
1.1571 (the .236)

Leftback said...

Nic said "Hmmmmmmm Napalm"

Acropolis Now...?

CV said...

@ahab (9:41)

Agreed...

I like better the ballparks like the "Durham Bulls" field...

Where you can just hit it off the steers ASS in right field & he snorts a puff of smoke and you win a free steak...

Now THAT'S baseball!

CV said...

@Amen (9:43 - continued)

.085 (the all time low)
.000 (the eventual destination)

Leftback said...

I will be back to discuss bonds IN DETAIL late in the afternoon. Suffice to say that we have entered a new regime in the last ten days or so.

Just watching for now and happy to be very very very long Treasuries. Anyone got input on what we are seeing? ADP? Weaker than expected? Or are we watching weakness in the Euro translate into forced carry unwind as we have all predicted?

Mannwich said...

I agree, ahab. Just plain old Fenway Park or Yankee Stadium works just fine for me.

CV said...

@LB

The latter...

karen said...

In my email this morning: Did anyone think that the oil and gas industry was any better regulated than the banking industry?

U.S. exempted BP's Gulf of Mexico drilling from environmental impact study

http://www.washingtonpost.com/wp-dyn/content/article/2010/05/04/AR2010050404118.html?wpisrc=nl_headline

Bruce in Tennessee said...

I think I will take that last door , Lefty. In the age of innocence we'd call what is happening the domino effect. Can be impressive...

call me ahab said...

CV-

no doubt-

Lambeau Field and Soldier Field sound a hell of lot better than M&T Bank Stadium- formerly PSInet Stadium (you know- one of the many companies that went bankrupt after the dot com bust)-

where's the glory in those names?

CV said...

@Mannwich

How about we just name them all "Obama Stadium"?

In the end, they'll all consolidate into one, because it wouldn't be fair for franchises to lose money...

...& every season, all teams should finish with 81-81 records... Then all the post season games should go into EXTRA INNINGS...

Keep "extending" baby!

I-Man said...

Booya.

Leftback said...

Yes, that was my instinct too. Just wanted to see what others were thinking.

Manny, Yankee Stadium is no more. The new one is nice, though. Anyone ever been in Old Comiskey Park? Smelled like an old ball park, of sawdust, peanuts and urine...

Bruce in Tennessee said...

Ahab:

You mean you don't feel a thrill buying tickets to the Poulan Weedeater Bowl?

...Luddite... :)

AmenRa said...

DXY
.09= 80.95
.1459= 85.11
.1618= 86.29
.236= 91.80

for future reference :)

CV said...

@LB

Smelled like an old ball park, of sawdust, peanuts and urine...

Sure you're not thinking of "The Kop"?

call me ahab said...

well- all I can say is- the market changes tone during a correction (hat tip BR)-

instead of going up- well- it goes down- lol

CV said...

@Bruce

I was always kind of fond of the "Muffler Bowl" myself...

CV said...

@Bruce

Speaking of Stadiums...

Nashville is UNDERWATER... One good "frost" and you could play hockey there!

Mannwich said...

@lb: Yeah, that makes me sad about Yankee Stadium. Don't get me wrong. I loathe the Yankees with all of my being but I really enjoyed the Stadium. There was a vibe and electricity in that place like no other, especially during Red Sox games and other big games. It always felt like an important "event" in there. Haven't been to the new place. I'm sure it's nice but I'll be the vibe ain't the same. Can't replicate a place like Yankee Stadium. Too many things happened there over the years. Too many memories for people to replicate at a replica.

Leftback said...

The Kop smelled of sweat, beer and urine - and inevitable victory.

AmenRa said...

Weekly 3LB reversal at 1166.59 has been broken. Will the SPX stay below through the Friday close?

I-Man said...

Manny-

Hit me up at the dread cap email if you ever come out to safeco.

Certainly not one of the old classic ballparks, but well worth a visit.

Mannwich said...

@lefty: Never went to the old Comiskey Park but have been to Wrigley. Similar smells in there. Same with Fenway. Fenway just feels like "home" every time I go back. So many memories. Of course, they're never going to get rid of that place in my lifetime. The owners have dumped too much money into renovating and expanding it.

karen said...

the jnk candle is mind boggling.. it better hold below the 39...

CV said...

@ahab

"the market changes tone"

You know... I've been thinking lately...

Perhaps this interminable suffering of GREEN for the past 14 months will, in fact, pay off in the end...

It's hard to imagine that all of the BULLS are going to give up after only two large down days...

The second the market starts to rally to cover some of that lost ground, they'll be at it again...

...but this time...

Mannwich said...

I will do that, I-Man. Sadly, I've never visited Seattle or Safeco. It's on our short list though. Have been to Portland a few times for business. Was always raining. Of course it was winter.

I-Man said...

See this Left?

"Treasury reduces auction sizes for first time since 2007."

http://www.marketwatch.com/story/treasury-cuts-auction-sizes-in-refunding-2010-05-05?reflink=MW_news_stmp

call me ahab said...

I have only been to three ball parks-

Wrigley's Field, Camden Yards, and RFK I guess where the Nats started playing- so I don't think that even counts-

LB- I remember when they were building the "new" Comiskey Park aka US Cellular Field- butted right up to old Comiskey Park- pretty wild seeing the two ball parks back to back so to speak- before they demolished the original

McFearless said...

Notice that so many (most?) have already determined this is a correction. It also helps to "church" it up if you call it a "healthy correction"

CV said...

@karen

on JNK

38.85 is the .0344 FIBO backtest...

38.01 is more likely than not to get hit again...

Then 36.62

Leftback said...

"Treasury reduces auction sizes for first time since 2007."

Indeed. This is a very bullish scenario for Ts, I-Man.

We have long expected USTs to follow a JGBs 1990s trajectory, a view hitherto shared only by nutcases like Gary Shilling and Albert Edwards, and my Leftyness. Look for this view to catch on. We will give this a fleshing out later on.

CV said...

@McF

I already said above that if(as) we hit the 1152 FIBO extension, it's going to have the "look" of an A-B-C...

That (1152) will likely be hit tomorrow as it will play out 8 days from 1219.8...

I wouldn't be surprised to see a RALLY coming tomorrow...

...and YES... LB... That part of it will play into your preponderence of ADP/NFP... The "big rally" will be chalked up to BTE expectations for NFP on Friday...

They'll try and put lipstick on this PIIG

Leftback said...

"The second the market starts to rally to cover some of that lost ground, they'll be at it again..."

There will be more ECB rescue nonsense and we will hit that SPX 1182-1192 zone of resistance. That's when we expect the big short equity positions to get put on. It's too late to prevent the Euro going to parity.

mcHAPPY said...

@LB

The market action is pretty impressive. However given how long this thing played out I would not be surprised to see a bounce back in the low 1100's or very high 1000's on the S&P. It would be the scenario that frustrates the most market participants. Although market action with little retracement would certainly catch everyone off guard as well.

GS continues to tread water. Probably something to keep an eye on. The financials are probably holding on due to the prospects of an infusion of more government aka taxpayer money. The day one of the PIIGS default or the Greece bailout gets rejected, financials will be crushed IMO. As we all know and has been said here before, these bailouts are not about countries or its citizens, this is about BIG BANKS.

call me ahab said...

b22 @ 10:06-

I would get a good "healthy" laugh- if it just keeps going down week after week-

if only just to get the bulltards to STFU

I-Man said...

Piece of shit euro!

CV said...

@LB (10:07)

Now THAT is a curious idea...

I mean... on one side, reducing auction sizes would likely reduce the possibility of them FAILING (which would not be good)...

OTOH - With Europe not being able to fund ANYTHING at the moment, you'd think that the UST would want to take the whole kit and kaboodle to the window as soon as possible if there is an appetite for, er, um, "safety"...

CV said...

@LB

"The Kop smelled of sweat, beer and urine"

Are you sure you're not talking about cognos/Harry Wanger's "tradestation"?... :-)

call me ahab said...

from yesterday-

"Economic Slowdown Ahead, But No New Recession"- ECRI

wow a slowdown- whew!- things have been so gangbusters 'bout time it took a "healthy" pause in the "robust" growth we been having

Leftback said...

BUCKY hit 84.30... remarkable... charting BUCKY will be huge from here. Congrats to all those who have paid attention to FX of late !!

CV, reducing auction sizes means that they are reducing supply and playing safe, having survived the weak auctions earlier in the year. With trouble all over the place, demand for Ts is set to be strong and may even go through the roof.

BTW, we are selling some 5y Ts today to raise cash and would re-enter at the long end where the risk/reward ratio remains more favorable.

With Bucky strong and weakness elsewhere we might even see strength in US bond and equity markets together for a while.

mcHAPPY said...

KD's take on ADP.

I would look at the situation as this:

It is early Monday morning after a weekend of partying (like Tiger Woods hardcore with a litle ambien thrown in for good measure) and the alarm has been going off for a good hour but you've been hitting sleep every five minutes. Unfortunately you can't put off getting up any longer as you have that meeting at 9am. You get up and face the music of the hangover, wobbly knees, and dry heaves. It is not a pretty sight but we all have to face the music (or in Tiger's case Elin with a club). It ain't pretty and the fallout is massive (ask Tiger).

McFearless said...

"Anyone got input on what we are seeing? ADP? Weaker than expected? Or are we watching weakness in the Euro translate into forced carry unwind as we have all predicted?"


This from RP, seems fitting as ever on a day like today:


"It is not precisely correct to say that news and other extramarket events and conditions are irrelevant. For one thing, they can provide a basis for the rationalization of market opinion formed simply by one's emotional state, the pervasiveness of which is precisely why markets are patterned. It is rationalization that allows people to avoid exercising reason and therefore to act on the basis of their emotional states. So the pervasiveness of people's pretending to follow news is why markets are patterned and why following news cannot work."

CV said...

@ahab

"pause in the "robust" growth we been having

The way CV sees it, all those "shovel ready" projects that Obama/Biden kept referring to were just their Administration (and their media pals) "shovelling s***' to Americans in the form of propaganda...

Leftback said...

Are you sure you're not talking about cognos/Harry Wanger's "tradestation"?... :-)

I bet COGNOOSE and HW are sweating buckets today, all is calm at LB's desk today as those much derided fixed income positions [assembled during the DEATH OF TREASURIES era in late 2009] are looking extremely good.

Mannwich said...

Personally, I feel quite relaxed hanging in my TLT.

Leftback said...

So the pervasiveness of people's pretending to follow news is why markets are patterned and why following news cannot work

By the time peeps read the financial NEWS tomorrow, it's the OLDS...

I-Man said...

5 minutes Johnny...

Then the wolves come back out to play...

CV said...

JNK hanging just below the surface of that 38.85 fibo extension...

PUSHING UP DAISIES

McFearless said...

should be able to identify targets for this bounce if this mornings lows completed 5 down, some simple math to figure out when we can eliminate it being a wave 2 retrace rather than a move up now to new highs to complete the March 2009 rally.

Mannwich said...

Exactly, lb. Many of my family and friends are now paying attention to the stuff that I was exorcised about 6 months - 1 year+ ago because it's now finally coming out in the MSM. Only now they now are starting to understand why I was so apoplectic back then. I just nod my head at them now.

Leftback said...

TLT has broken out. Sliced right through the resistance zone we discussed yesterday. We are in a new regime. Fear has returned to the markets.

Leftback said...

No new highs from here.
JNK is showing us that this is not just an equity pause.

Leftback said...

The economy is slowing as we sit here. Transfer payments and Kash for Klunkazz cannot sustain a huge economy.

call me ahab said...

someone a few weeks back was postulating that cognos and Harry Wanger were the same person and was a "mastermind of deception" who spent his days trying to "outwit" other posters with his incredible skills in subterfuge-

ok then

I-Man said...

I dont think this wave completes until 1150...

Thats the target.

Mannwich said...

@ahab: I believe that person was me. I'm sticking to that theory, BTW.

I-Man said...

Ahab, I believe that poster was also implying that CV, Cognos, and HW were ALL the same person...

I think CV is everyone, and everyone is CV.

B22 is also DL, btw.

Mannwich said...

But I didn't use any of those terms that you quoted - LOL.

I-Man said...

Wasnt you that I was thinking of Manny, it was some anon.

call me ahab said...

"The European debt crisis likely will not end until the euro collapses as a currency and takes the entire European Union with it, said hedge fund manager Dennis Gartman."- CNBC

I wonder what the timeline is on that scenario to play out

Mannwich said...

@I-Man: That person was definitely NOT me! Maybe I'm wrong about Wanger and Cognose, and that all bulltards just sound the same and have similar prose.

call me ahab said...

I am w/ I-Man- it was someone posting as "anonymous"-

saying we were being outwitted by this incredible poster-

to what ends I wonder?

Leftback said...

B22 is also DL

I-Man is LB
Lord Blankfiend is Denise Garterman

Karen is.... unique...

CV said...

@I-Man

CV is the "Uni-bomber"

karen said...

I was just checking the div payout in JNK.. (as I was wondering who in their right mind would have bot that junk up to $40).. May's div was .31.. ten cents lower than last August's. It was been dropping steadily 41, 39, 38, 36, 35, 33, 31

call me ahab said...

CV @ 10:37-

lol- I remember that- wasn't that Thor?

I-Man said...

Unibomber...lol.

Anonymous said...

Karen, did you look at the holding of JNK?

Top ten list of GSE's

CIT
GMAC
AIG

bob

McFearless said...

"By the time peeps read the financial NEWS tomorrow, it's the OLDS..."

LB, what I'm getting at is I think the following applies:

1. How do you identify what news to follow. The answer is you can't, but the media tries to explain everything and when they can't explain it, as we've seen before, they call it "technical". Today is providing all kinds of outlets to claim causality.

2. We've all seen the market bounce or dive on the release of "news" and then sometimes it doesn't react at all. It need not do so because after all, what created the money supply figure, or the CPI figure, the home sales numbers, or the ADP number in the first place but people acting in concert *before* the number was announced?


Collective actions are the fabric of our experience well before the number comes out, and the motivations that produced it come even before that. The release of figures like these never change the markets larger trend. On all time horizon longer than two minutes, news lags the market.

the market doesn't see into the future, as the discounting concept suggests or what we call "priced in"; it just records the causes of the future. Increasingly optimistic people expand business; increasingly depressed people contract their business. The results show up later as a "discounted" future.

Doesn't it sound dumb, to say out loud, for example, that investors started to panic in 1929 because they suddenly realized that the worst depression in history was coming and that ten years afterward, Germany and Japan would be bombing everyone?

it does to me....but I could certainly be wrong.

call me ahab said...

any thoughts on my 10:32 post?

CV said...

@ahab

I never took it as an insult, because, frankly, nobody ever called me the "UNABOMBER"...

...so I have that going for me

McFearless said...

yeah, I probably couldn't be more different than DL, I'm sure he would agree.

I don't, for example, think Captain Obama has any control over anything, not even what comes out of his own mouth.

call me ahab said...

"so I have that going for me"

lol

"I don't, for example, think Captain Obama has any control over anything, not even what comes out of his own mouth."

another lol

I-Man said...

Looks like someone is buystop fishing on EURUSD... seeing the same in SPX. (of course)

Mannwich said...

Whither the "correction"? Dip buyers doing their thang?

CV said...

"not even what comes out of his own mouth."

What comes out of CO's mouth is whatever is on the teleprompter...

McFearless said...

exactly my point CV. But no worries, he's got it all "under control"

McFearless said...

And LB,

you know you're my boy blue, I'm also a govie lover, but I love the dollar even more.

bob said...

http://www.youtube.com/watch?v=ss8LDBNcsWc

Good rerun, not for work. Was that on the teleprompter?

It does describe what CNBC does everyday very well, the phrase has found a home with me.

karen said...

ahab, oh, i am NOT a fan of Gartman!

bob said...

Iman on eur- they keep reaching for the 38.6 retrace, they can't quite get to it.

Mannwich said...

Gartman the Chartman?

I-Man said...

Garterman Chart School:

Lower left to upper right = buy

Upper left to lower right = sell

What more do you need to know?

call me ahab said...

did anyone get a chance to read this article I posted last night- from Jesse's Cafe-

Why Silver?

a bit long- but much conspiracy and intrigue to keep your attention

Mannwich said...

@I-Man: LOL. Even Mannwich could THAT!

I-Man said...

No Ahab, but I will...

I love a good mystery.

CV said...

@I-Man

"Lower left to upper right = buy

Upper left to lower right = sell"


Sounds like Gartman went to "Channeling Stocks.com" and learned from that little punk from there...

AmenRa said...

If those 3 deaths in Greece were caused by the people and not the police then they just ushered in austerity for themselves. Nothing wrong with protest but when you go to far you've weakened your stance.

AmenRa said...

CV

The Channeling Stocks guy is now a greeter at Walmart.

Leftback said...

b22, we know you ain't DL. Tweaking you..

Leftback said...

"Lower left to upper right = buy

TREND is your FRIEND. Actually it makes peep a lot of money....

call me ahab said...

alright-

gotta roll out-

all have a GREAT day! Also- what Brad Pitt said-

http://www.youtube.com/watch?v=-sagUfPp4c4

karen said...

If i have to hear about the silver conspiracy one more time !! I've only been following the metals for 10 years!

Leftback said...

"Nothing wrong with protest but when you go to far you've weakened your stance."

Different mind-set. This isn't the PTA meeting. When it goes off in Europe it all goes off.

DL said...

LB @ 11:12

More like antipodes.

Nic said...

Talking of old news ... Fitch cuts Goldman Sachs credit outlook from stable to negative

AmenRa said...

GS so far has rejected the 2.058 fibo at 144.98. May look to retest 55 SMA at 160.84.

C had a low of 4.04 today. UST better vote for a reverse split soon or it will hold those warrants for a looooooooong time.

I-Man said...

The dip buyers in SLX, KOL, JJC...

Pain await dem.

karen said...

any comments on bill gross's latest outlook?

AmenRa said...

Watching these levels:
1177.84 (the .0344 from high) and 1176.22 (the 1.764 from low).

CV said...

@Amen

"The Channeling Stocks guy is now a greeter at Walmart."

WMT hit its 52 week high on 3/16...

If he's in a company purchase plan, I hope he SOLD!

karen said...

It would be a very bullish turn of events, triggering a potential reversal of short-term down trend, if buyers can push prices back above the 1,170 level, or to be safe, above the resistance level from yesterday’s close at 1,175. That would likely trigger a ’short-covering’ rally higher.

However, 1,170 is the key price level to watch, as it still remains the 50-day EMA and is a ’round number’ level.

Watch to see if sellers step up here and trigger a ‘bear flag’ sell signal, which would be triggered if we break back under 1,165. Remember that 1,150 is the key level to watch as a major reference point, and would be the logical target if we break back under 1,160.

Keep a close watch on market internals and price as it interacts with these reference levels – 1,170 as a line, 1,175 as a bullish breakout level and 1,165 as a bearish line and 1,160 as a bearish breakout level.

Corey Rosenbloom, CMT
Afraid to Trade.com

McFearless said...

ahab,

The Jesse thing sort of reminded me of him flipping out about gold back when Andy had his site, he did the whole "neo" post if you remember.

I think it bothers gold bugs a lot that silver won't confirm golds moves and even more important, that they keep moving in concert with risk assets, that correlation remains.

when that happens and you want to stick to your call, you often come up with manipulation. My thesis can't be wrong, so the market must be, it has to be...rigged.

Could JPM being doing it...sure they could, do they control the price of silver.... that's a bunch of crap.

McFearless said...

"That would likely trigger a ’short-covering’ rally higher."


this argument should be put to rest, put buying is not spiking, and CBOE put/call ratio is sided heavier toward calls recently than at any point in the last 10 years.

This rationale for higher prices is stale.

CV said...

@karen

Bill Gross? Latest "look", or "outlook"?

Cause if it's the "look", well frankly, the STACHE makes him look like a porn star...

McFearless said...

Gross has a stache now, to go with that hair.

Bonds and 70's porn wrapped in one.

Wonder if they sell CDS on that.

karen said...

Moustaches don't work for me.. got that LB? laughing, laughing.

CV said...

@Nic

"Fitch cuts Goldman Sachs credit outlook from stable to negative"

Must have been the 3x they got "stopped out" on trying to call EUR/USD...

AmenRa said...

CV

A close below 1.2935 on the Euro brings those lower fibo numbers into play.

CV said...

@Amen (11:23)

You know... If you rub two sticks together there you might have a trade...

Look at it this way...

Both SPX & C, right now are trading at the levels that we saw on March 31st (EOQ)...

Most all of the "biggies" have reported earnings, and the next bit of juice we might see will be in the RUN UP through end of Q2 - and on through the beginning of next EARNINGS SEASON in July (where the banks report again)...

So while this EURO stuff plays out, govvies catch a bid for awhile... Then you get your classic "dumpster dive" into EOQ and through bank earnings...

They should be able to keep "stock" prices somewhere around the level they're at now (after a dip & recovery)...

They can use REPOS to do the "dumpster diving"...

SELL THE NEWS in July...

For now, I'd be looking for further weakness in C... But hell, if it gets real bad, it might be worth taking a "punt" on into EOQ...

CV said...

@karen

Corey is saying ALL THE SAME things we're saying here...

Only he does it in a "more boring" way...

CV said...

Maybe Corey could change his domain to

"Afraid to Blog.com"

Then he could be TWSWATB

Leftback said...

Where did Karen go?

New yield range: 10y: 3.49-3.60/3.64 and 30y: 4.32- 4.53/4.56

CV said...

@Amen (11:44)

"A close below 1.2935 on the Euro brings those lower fibo numbers into play."

I'll take 1.2935 DM's if you want to sell them... Not EUROS though...

Nic said...

Nickel down 13% today, managed to blow up a commodity fund ... wild

CV said...

@Nic

How's that TUNGSTEN etf doing?

Nic said...

You mean the one for fiat paper tungsten CV?

Leftback said...

"managed to blow up a commodity fund ... wild"

LOL. Excess leverage will get you every time.

mcHAPPY said...

Good times are here again! We are green. Buy the dip! I have to run for a while but if TZA gets down around $5.60-ish I'm buying.

bob said...

Is anyone else seeing the algospasm in the candles on TBT?

bob said...

Weird, it just disappeared. As you were.

karen said...

From Jim the Realtor's blog:

Hat tip to JimG for leaving this comment yesterday:

Really can’t say if this is a one day event or will be something more but LPS, who is a outsourcer of REOs for many banks just dropped 609 REOs in California today, all from Bank of America. Guess that means BAC has been sitting on foreclosed properties and who knows how many they have in their little piggy bank. About 40 of the 609 are in San Diego County today. Normal California daily assets for LPS is around 20-30 as a point of reference with 2 to 3 in San Diego County.

Mel said...

Just a wee addition to the silver "debate", for those of you who may have forgotten ;-)...

http://www.buyandhold.com/bh/en/education/history/2000/hunt_bros.html

CV said...

@Nic (12:06)

No, I was really referring to the CDS's on the soverign that bailed out the bank that underwrote the paper ETF contracts on TUNGSTEN...

That's what I was REALLY referring to...

Any data on that? :-)

bob said...

http://www.youtube.com/user/JohnCuts#p/a/u/0/u3LvwjCGKt8

Lunch music, Iman, probably up your alley.

karen said...

Let's get the party started !! No wait..

karen said...

I pray that rise over 1175 was a bull trap.. pls, pls let one of the gods hear me..

I-Man said...

Jah hear ya, Karen...

Lloyd Blankfein said...

I hear you Karen.

Lloyd (Again) But this is my last communication. said...

But I may not always give you what you wish for. That is my way.

Lloyd (Final Time) And don't call me the great Oz said...

But if you write your congressman and ask him not to call me in front of congress again, I might see fit to give you the Preakness winner in a dream. I did it for my man, CV...

DL said...

I-Man,

But you're not a god.

Blankfein, well, that's another question.

Lord Blankfiend said...

Damn, I forgot I was supposed to use a pseudonym...

I-Man said...

I-Man never claimed to be Jah, DL...

Servant.

Nic said...

Sorry CV no word on Tungsten

LB (Lloyd Youknowwho) said...

Don't question the Blank Man...Ever hear of a pillar of salt? ....Exactly. Now back to my pillaging and sacking..and stay off this channel.

DL said...

So do we get a bump up in the market after the German Parliament approves the welfare package for Greece? I would think so.

DL said...

VIX got up to 27.20 today. I'm inclined to think that 28 will be the "high water mark" for VIX during this correction.

CV said...

Zod says...

@karen

"I hear you"

karen said...

CV, did you know, "... quinoa is actually the seed of a plant that, as its scientific name Chenopodium quinoa reflects, is related to beets, chard and spinach." Also, "Not only is quinoa high in protein, but the protein it supplies is complete protein, meaning that it includes all nine essential amino acids. "

I'm shoveling it in my kisser as fast as I can.. mmm, along with some pesto covered mahi i made last night.. my arugula/spinach/shallot saute is, alas, not leftover..

Anonymous said...

@Amen, Greek PM calling, those bank employees' death in riots as "murder".

www.globeandmail.com/report-on-business/.

"A demonstation is one thing, murder is quiet another" - Greek PM.

An initial evidence deaths caused by asphyxiation. Molotov coctail.

CV said...

@karen

pronounced "KEEN-WAH"

DL said...

With all these riots and murders going on in Greece, how long, exactly, can anyone expect these "austerity measures" to remain in place? Six months? Twelve months?

Then back to socialist business as usual.

CV said...

@karen

I'm still figuring out how to "malt" it (and make beer with it)...

I'll let you know when I figure it out... :-)

CV said...

@DL

Trouble is... they killed 3 productive workers...

That's 3 less PAYING PEOPLE to pay the taxes for the "handouts" crowd...

Anonymous said...

Anyone know what's up with oil? Greece, excess inventories, rising U$D, nothing can bring down oil. QEs!?????????????????

Nic said...

I eat quinoa, its pretty good. I gave up wheat and corn a while ago and use it and spelt instead. Love it.

Nic said...

Anon 1:46
$7 in three days wasn't enough of a drop for you?

DL said...

CV,

Take a look at Ritholtz's 12:30 post from today. He's saying that our share of the IMF bailout is only $3B, and moreover, that it's a "bargain".

Anonymous said...

@Nic, a real drop for me would be in the $60s. Anything above that is speculation.

DL said...

Rice protein is another source of essential amino acids for those who are avoiding animal sources.

Nic said...

True but 8% in 3 days isn't shabby

DL said...

Anon @ 1:48

$60...? Fuggedaboudit.

CV said...

@DL

$3B "is" a bargain for a "Wall Streeter Who Blogs"...

Those dudes are "rollin in dough"... That only buys a "dinghy" for the boats they're shopping for...

The US is 17-18% of the IMF contribution...

So whatever that comes to (eventually), that's what we'll be on the hook for (supposedly)...

Bruce in Tennessee said...

@DL:

My question is: With a U3 of >20%, why does anyone now think Spain avoids being Greeked? I don't understand the reasoning that Spain finds an internal answer. Raise taxes???? Er, maybe not.

karen said...

DL, i bet you are proven effing wrong on crude.. also, you took BR's comment out of context! He said $3B was a bargain "Considering the US role in the global collapse..."

DL said...

Karen,

You're defending him?

* * * * * * * *

Regarding $60 for crude, I don't think well see it this year, or next, or the year after that.

Certainly not in the "spot" market.

DL said...

B/T @ 1:55

The debt-to-GDP ratio in Spain is much lower than in Greece. There's still hope for Spain.

CV said...

@Bruce (Spain)

Click on the chart in the thread... or click

http://3.bp.blogspot.com/_uq2KcmM6MLM/S-FghG4PNsI/AAAAAAAAA9Q/ALvX67HiY_A/s1600/europe+debt.JPG

That'll tell you something about Spain and their U-3...

What's even MORE of a laugh is that they're GETTING debt service payments from Portugal (who is next in line to default)... LOL

CV said...

Ladies & Gents...

ZOD is bustin' outta here early (as in, NOW)...

I'll catch you all in AmenRas Corner...

Leftback said...

LB is not a BR basher, either, although we don't always agree.

Let's keep in mind who the real villains are, eh?
(Blankfiend, St Jamie and pals..)

John Stain said...

Don't forget about me. I am a slime ball of the first order !!

karen said...

all this focus on a few little piggies while the elephant is ignored.

Jing the Retail King said...

CV,

No problem for Spanish real estate, Asian buyer come, make killing.

Leftback said...

Elephant?

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