Sunday Evening Post

This post was acutally penned on Friday afternoon as we are hanging out in the "last bastion of capitalism" this weekend, the Warrenton/Roundtop Festival. This is a place where anyone can open up a "shop" for two weeks for as little or as much as you want to spend. (Booths actually range between $200 and $3,000). If the public likes your goods, then you can survive. If your stuff is crap, then you fail and move on to other endeavors. There are no bailouts or handouts here.

Attached below are some brief Scribd thoughts on the S&P, DXY and Sugar.

Bottom Line: I am getting more bearish the S&P with each passing day. We are now carrying a 50% of Max Short position in the S&P futures as we have added to shorts at 1150. We will move to a 75% of Max Short at 1170. At that point, it will be white-knuckle time--a break of 1175 would cause us to reduce shorts.

We fortunately exited DXY length at 81.40 a few weeks ago. (Thus, illustrating the importance of "stop-loss" strategies). Support lies between 77.69 and 77.28 (last print 78.09). Given this support zone just below, we are re-initiating length in the DXY at 78.09, dedicating 20% of a max. long position in that Greenback.





To quote the old Dennis Miller line....

"I don't mean to go off on a rant here, but...."


We all know this is bullshit. They are actually not it any position to fully pay back the government anywhere near what it's owed. However, the MSM basically "ran" with that headline and theme.

This entire financial maneuver with AIG seems politically motivated as it makes ZERO financial sense to make these arrangements at this time. A "political move" is the only reason this is going down now. With mid-term elections nearing, the existing power structure MUST show some "wins" and promoting the idea that we have been "Paid Back" from AIG would seem to be a victory to be cheered.

Unfortunately, there has been little pushback from the "progressive mainstream" business bloggers on this area. Instead, they have just focused on the past, about how badly we handled the whole ordeal, about how we won't be paid back ever, and how deregulation caused the collapse of mankind, etc, etc, etc. It's probably time for all of us to start focusing on the here and now.

The fact is Uncle Sam provided a huge lifeline and backstop ($182bn) to this firm. That's done. That's over. Rightly or wrongly (I believe wrongly), the Government "crossed the rubicon" when they decided to bail out several major players by "saving" AIG. At this point, AIG seems to be a decently run insurance company that still has some nice assets and is currently throwing off excess free cash flow. Why not just leave them alone for a few more years? Why not just let those assets generate dividends for the major shareholder (us) until stronger bids materialize for the firm's assets? When bids arrive that properly discount the free cash flow of the various business lines, then AIG should sell them and "pay back" the loans.

Until then, why mess around with it?

We've monetized TRILLIONS of dollars of MBS in the last year, helping out the likes of Bill Gross and David Tepper. I'm sure the Fed can rollover the AIG loan for a few more years. The QE programs now in place make AIG look like chump change in comparison.

245 comments:

«Oldest   ‹Older   1 – 200 of 245   Newer›   Newest»
DL said...

Silver at highest level since 1980.

http://tinyurl.com/2cwa4fm

mcHAPPY said...

Great work as always, Andy. Thank you.

What are your thoughts on Neely going bullish?

I see a break over 1175 would certainly make it quite possible.

My thoughts are with Bucky. The markets are all looking to Bucky now.

call me ahab said...

AT-

great post- re the AIG play- the way I see it- the longer the USG are "investors" the more the current administration follows through on the "socialism" accusations- so . . .better to wash their hands of it as soon as possible- as opposed to hanging on for a better returns-

just a thought-

re Warrenton- there is a beautiful town by the name of Warrenton out here in Virginia- beautiful horse country close to the Shenandoah mountains

CV-

Ravens pulled out a tough win- congratulations

also- that hit on Vick- man that looked painful (Go Skins!)

and also again- I have come to the conclusion that Arian Foster has sabotaged my QB pick this season-

undrafted no less- the new dimension impacting my dimension (the passing game)-

although- I am sure AT probably has a different view- when you're a fan it just matters that you win-

lastly- Go Bears!

DL said...

McHappy,

"My thoughts are with Bucky"


Don't pass the buck. Which way is she going?

Andy T said...

I'm so pissed about FF right now...don't even want to discuss it.

2small2bail said...

You're pissed? Ha, with the #1 and #2 draft choice, we're about to be 2-6 and keeping Ahab company. At least AP had a bye - CJ's excuse? And Cutler was stellar too ... not. Eg, maybe next week. 'Nite.

2small2bail said...

That's 'Eh', not 'Eg'

karen said...

I want to be wrong, but I am getting really bullish the indices : ) Seriously, I don't want to be mocked !!

I hear that TX is a boom town.. the next last China, the next India.. maybe the next largest economy ahead of CA.. (which is still in stagnation mode, btw.)

karen said...

Do I dare look at futures?? OKAY, i peaked..

mcHAPPY said...

DL,

Bucky is bottoming. Happy days will soon be here again.

BinT said...

http://voices.washingtonpost.com/political-economy/2010/10/connecticut_halts_all_foreclos.html

Connecticut halts all foreclosures for all banks

...OK, I understand this partially...but if I am a bank in Cannecticut, why would I want to make any new real estate loans if my power to take my property back was halted by the government?

Anonymous said...

61.8% of trading capital markets is half mental...
Hey I love the new slogan! How long has it been up? Perhaps I haven't been paying attention... actually I haven't really been following the markets much lately - no skin in the game and all that.

Anyway my wife's exams begin soon so I should start popping in more frequently again. Happy trading, Bertie

McFearless said...

thanks AT, hope to dig into these later on today.

McFearless said...

and yes, as for fantasy, what a crap weekend, glad to see Rivers had a good game....throwing to Gates that is.

CV said...

@Bruce (7:25)

That's the entire problem with OBAMANOMICS that CV has said before day 1...

The problem with socialist and/or distribution schemes... PEOPLE... Doesn't deal with the technical issue of what needy types get a hand-out or break...

Those are find things to ASPIRE for, but they hold no real long term survival value...

---

In the animal kingdom, animals who cannot fend for themselves will eventually die... Species who cannot fens for themselves will eventually become extinct...

There are certain herds who will actually weed out the weaker animal and leave them behind on purpose because the thought is that by breeding with those, the herd would be weakened...

The problem with PEOPLE is that "success" people tend to think about with regards to money... Which is not the case... SUCCESS should be attributed to ADAPTABILITY TO ENVIRONMENT... Certain technological and engineering experts fall into the same category because they can contribute to the ADAPTABILITY mechanism...

Politics plays hardly a role at all, and only serves to fatten the body, but weaken the ADAPTABILITY...

In any case... In this first phase of the Obama experiment... Who adapts?

- The rich don't adapt because all their efforts are spent on trying to preserve what they've gotten fat on

- The middle class may adapt somewhat... Non-adaptable middle class will fall into the "hand-out" class (either by being disenfranchised - or they may SELECT to go there - after considering that the lack of economic activity that existed before no longer falls to their realm of service

- SOCIALISM DEMOTIVATES THEM to the same extent that a weaker animal may be demotivated when the abundance of the eating patch is used up... They'd rather just hang out and die instead of making the trek with the rest of the herd for thousands of miles to find more fertile grounds... If the entire herd remains to protect these particular animals, the entire herd will be put at risk...

- The weakest animals are the one, who, unfortunately, only manage to stay alive at all based on the good graces of the others during times of abundance... The only way out of this existence is to learn and execute ways to adapt... If there is food left over from THE KILL, then there will be scraps for these animals... When THE KILL gets more lean, the stronger animals will devour the entire meal, leaving nothing for these... They will NOT provide out of sympathy...

Obama has never had to provide anything for his own existence, so these are all IDEAS to him in his skittles & unicorns world where he fancies himself king...

As of yet, things have not really gotten bad at all... Not even in the slightest bit... A small group of TPTB think they can keep making policy and maneuvers to forestall BAD TIMES forever... But they are building sandcastles on a beach where a hurricane is bearing down... The birds are making odd movements in the sky, but the sun is still out, and it's only a little breezy... So they keep digging, and adding moats & fortresses to their little castle...

call me ahab said...

Cutler- what a show- outside of plain quitting and going into a fetal position- about as bad as it could be-

as I told my son- this was the week we would find out if Cutler and Vick were for real-

guess we found out

CV said...

@ahab

I guess nobody reads my NFL game write-ups because I've been saying that for 3 weeks now...

call me ahab said...

dude-

c'mon man- where do you think I get my keen insight(-:!

should have listened to you on Murphy that's for sure

anna said...

also- I am aiming for a perfect season now-

0 and 14-

lol (Arian Foster's killing me)

call me ahab said...

last post is me- (daughter is logged into her google account obviously)

CV said...

The thing is...

Talent wise (the talent to play NFL football)... I think BOTH of them have...

If Cutler perseveres and makes adjustments, he can be successful... But it's going to take some time (and there will be errors along the way)...

Vick? it's more than that... For him, it's on the field and off the field...

The main thing that was EXPOSED yesterday is something that I'd said in the pre-season... THE EAGLES OFFENSIVE LINE IS OLD... You saw it in Game 1 (which is why Kolb left vs. Green Bay with a concussion, and Vick came in in the first place)...

You DIDN'T see it ws. the Lions or Jaguars because both teams stink... The Jags have NO PASS RUSH at all... & the Lions, with all their problems, STILL sacked Vick 3 times in that game (Vick also threw 2 interceptions that were dropped)...

That stuff doesn't make the sports pages of sportswriters eager to make the whole situation into a "race" issue so they have some STORY to keep their jobs... And as we know - in this day & age - EVERYTHING in the media goes viral in an instant...

Aside from the PHYSICAL part of Vick getting injured (which I wouldn't wish on ANYONE - but hey - this is the NFL)... Vick was "lucky" & "unlucky" to get injured there...

Why?

Because the REDSKINS were on a mission (with McNabb) and were going to win that game no matter what... Vick getting injured just avoided an embarassing loss being blamed on him... He was doing only so-so in the game up until the time of the injury...

So we're looking at AVOIDANCE here... So now what's the count on Vick?

- vs. the Lions where his stats were good, but against a crappy team that still sacked him 3 times and should have picked off 2 passes

- vs. the crappy Jags (who are still crappy even though they beat the Colts - If you read my game write up yesterday I told you they ALWAYS play the Colts tight... Their entire team is assembled to match-up against the Colts... The Colts are their SuperBowl each year)... I'm going to predict already that the Jags LOSE to the winless Bills this coming Sunday...

Anyway... The Eagles have to go play the 49ers on Sunday Night football next week... The 49ers are 0-4, NOT crappy, just a little unlucky... The 49ers are going to be playing VERY HARD...

I feel sorry who is at QB for the Eagles... If it's Kolb, they'll POUND him... If it's VICK... he may be a little more mobile, but they'll pound him further...

So this situation is going to drag on and on and on, until finally enough games have happened for the idiot public to believe that Vick isn't the SECOND COMING after a year in Ft. Leavenworth, and two decent performances against two of the crappiest teams in the NFL...

call me ahab said...

the way I see it-

Vick is a comeback story-

to sportswriters- that's like nirvana-

so they gloss over the bad passes and near picks to sell the story

just like Warner- except he was for real (and a very likeable person)

Bruce in Tennessee said...

If I were Peyton Manning, I think I'd be considering asking for a trade. To a team that will play defense against the run, and that can actually run the ball and block for running backs. I don't understand the management team. If all you have is passing offense, you are SOL...

By the way, CV, I absolutely agree about you socialism comments...

call me ahab said...

but gee Bruce- we need to feed the hungry and house the homeless-

and health care should be free like in the UK-

it's perfect there- and when they get sharia law- even more perfect

72bat said...

the epicurean dealmaker makes a rare post
the relief of distance about the personae we create for online relationships (y'know, for like here, and for the other blog)
"The other significant change embedded in these new interactions is that people can cultivate relationships over virtual social networks for months and even years without ever meeting in the flesh. Stable, long-lasting, and — it is not irresponsible to imagine it — even durable relationships of the deepest kind can be established and maintained between characters or personae that individuals adopt and present to each other. Is this wise? Is it responsible? Is it fair?
"Does it matter?"

karen said...

good morning!! fascinating, bat.. I will read that post.. did anyone see how deep in the red the dow was overnight? amazing recovery..

ps.. blogspot hates me as much as my stocks! made me sign-in this morning.. what next!

AmenRa said...

Ummm WTF? Didin't futures close lower?

karen said...

This is for CV: http://www.businessinsider.com/jeff-saut-heres-the-key-reason-the-sp-will-surge-to-1300-2010-10

call me ahab said...

72b-

from times of yore- many relationships were maintained via letters-

for years

karen said...

U.S. stocks edge into black early Monday as 2-year Treasury yield hits all-time low
10/04/2010 09:52:15 AM

karen said...

http://www.businessinsider.com/there-are-5-european-airports-under-threat-of-a-mumbai-like-commando-terrorist-attack-2010-10

McFearless said...

"gridlock is good" is basically a retarded argument considering the markets hopes are almost entirely pinned on intervention.

karen said...

The fact is, the Fed/Treasury bailed out the banks. They said they would and they did.. Why didn't they non-transparently state they would creat a floor under stocks and strive to protect and inflate every asset class? Then we could have gone long, stayed long, and gotten bailed out too?

karen said...

this always means nothing: Pending U.S. home sales climb more than 4% in August 10/04/2010 10:03:35 AM

karen said...

KidDynamiteBlog

I just got an invite from my neighbor to "shoot a cow" on Wednesday. kill, drain, skin, gut, quarter. Should be educational

call me ahab said...

the markets hopes are almost entirely pinned on intervention.

as in this:

"Speculation the Fed will decide to purchase additional bonds as a way to pump money into the economy has been rising"- CNBC

you see if rates were just lower (but really how much lower can they get) and more money is pumped in-

then the economy will . . .?

ok I give up

karen said...

http://dealbook.blogs.nytimes.com/2010/10/04/the-gathering-storm-over-foreclosures/?src=twt&twt=nytimesdealbook

72bat said...

k -
it can be a lot of hard work to put a meal on the table

karen said...

U.S. factory orders decline 0.5% in August, matching economists' forecast
Right!!

karen said...

alaidi - BoJ will have to ease tonight but this may not be enough to weaken yen. Shock & Awe is UNtypical of BoJ #forex $USDJPY $$

http://www.businessinsider.com/12-trades-hedge-funds-pouring-into

McFearless said...

ahab,

a lot of people would do well to understand that a rise in nominal GDP does not mean we have a healthy economy, a lot of people would do even better to understand that the GDP measurement is flawed, biased, and hardly complete when reported.

but until then, we live in the GIB's total conviction environment.

karen said...

a bit of imagery from twitter:

http://projectworldawareness.com/wp-content/uploads/2010/09/piggybank2.jpg

Jennifer said...

I hate it when preschool interfers with the perfect trade exit. A neighbor drove my middle child to preschool for the entire '08-'09 school year...I wonder if that's why I made so much more money then.

mcHAPPY said...

Do I hear 1152?

call me ahab said...

Apple Nears $300—But Investors Still See Upside

get in now folks

short interest is still minimal- so I guess the bet is that it is going up forever

b22-

I am not altogether certain what the Fed will do- if anything-

but what is the purpose of more money pumping? The only thing I can see is to keep a bid under assets-

it's been the game all along

McFearless said...

well, at least I didn't get stopped out this morning.

@McHappy,

fwiw, Neely is not nec. "bullish" right now as he's suggested for his subscribers/clients, to go short at this time with a buy stop.

karen said...

can you even believe, XRT made an all-time hight of 45.30 in the spring of this year? check that chart on the weekly candle..

mcHAPPY said...

Ben,

thanks for clarification.

I'd imagine he is looking for a move lower to set up a third wave on the way to new highs (i.e. above April 26)

karen said...

at least XLF, even with the free $$ never managed a new high..

mcHAPPY said...

That was more of question, BTW.

karen said...

big volume sell-off in my little canadian miner NXG..

McFearless said...

ahab,

I think the goal is to keep a bid under assets but they want the end game to be credit expansion...or should I say they need it to be, this is what the Fed does. As we have seen over the last 18 months, propping up asset prices only gets the "economy" so far, we are a country, no scratch that....world, that is entirely dependent on credit expansion now, the economy itself doesn't really matter, getting people/business to go into debt is the only important thing.

Still, as we have seen we have a Fed Pres at the helm that thinks if he pulls all the right levers (make it cheap to borrow) then people will, but, that doesnt' seem to be working quite like it was planned out, hence the talk of "recovery", yet they are on stand-by 24/7.

Jaguars anyone?

karen said...

I am confused.. I thot that the CME refuted this also.. no mention of it in BR's post..

http://www.ritholtz.com/blog/2010/10/waddell-stupidity-caused-crash/

McFearless said...

McHappy,

he is, however, his count could also already be over so we just need to watch how things play out from here, dude is very confident in his counts right now it seems (Neely), of course, the EWFF this weekend seemed confident as ever as well, lol. Andy's count is close but not quite the same as GN's, they draw very similar conclusions so in the big picture who cares bout the labels, I have the short on with a stop, I'll have to grit my teeth some if AT has the right count. This is what it's all about!

McFearless said...

why are people still on the flash crash stuff? I thought the report simply revealed that there were more sellers than buyers....madness I know because who isn't only buying?

@McHappy,

the other thing about that count and the third wave is that it's almost a promise now that the wave 1 of C will be the longest wave in wave C.

Colin said...

Freshly back from a 6 week trip around Asia, and excited to see CRE showing some relevant weakness finally (not today, but recently). Rarin' to get short, might have to jump in here.

call me ahab said...

b22@ 10:33-

agree with that all the way

got to roll out- all have a good day

karen said...

Ben, pls read this! "who wants to drink at the hole?"

http://blog.themistrading.com/?p=1494

karen said...

Super-rich investors buy gold by ton

http://stock.ly/1k8gvu

reminds me of that expression, "more money than brains.." and i'm a gold bug, laughing.. sour grapes, i didn't buy more in the 400s i guess.

McFearless said...

@72,

thanks for that article from EpicurianD, interesting.

72bat said...

ben -
had another social mood citing for you over the weekend but it has totally fallen out of my consciousness here on monday a.m. sigh.

McFearless said...

Karen,

I'm skimming it quickly but a couple thoughts:

1. "“the 17 HFT firms escalated their aggressive selling more significantly than any other category of trading during the rapid price decline in the period ending 2:45pm… In general it appears that the 17 HFT firms traded with the price trend on May 6th, and removed significant buy liquidity from the public quoting markets during the downturn.”

Yeah ok, but Im' a dummy and I've stated a million times that those programs can sell just as fast as they buy. So what? This isn't exactly insight to me, we needed a report? Kind of thought the market revealed as much that day, it's not like any of us could have traded in that.

2. I never had any expectation at all that the SEC report would provide "fixes"....we'd be a bunch of complete idiots to think that some body was going to stop all market crashes moving forward. Uh....no.

3. I know nobody thinks about it anymore, but the only thing revealed to me during the flash crash is that if there ever is a decline like RP talks about then there will be a lot of shorts that never ever get paid, and they will have been right with their trade too.

4. I do agree though, it's beyond stupid that everyone is so focused on W&R.

CV said...

@karen (re: your link 9:48)

The S&P will got to 1300, or it may crash to the 800's...

In the end, people will attach some meaning to it...

- Elections
- Valuations
- QE
- Geopolitical turmoil
- Planetary movements
- Tea leaves
- Magic 8-Ball

That's all I know at this point...

Jennifer said...

Karen -- There was a lot of buzz back in late '08 early '09 about etf counterparty risk and related issues, then it all died off during the monster rally. In many respects, I think true straight short-sellers may have the best chance to profit in a decline like that because they are the only ones who actually have to buy to complete the trade. (Of course, if the trades are busted later then who knows.) But the short etfs will probably fall apart, and based on options spreads during the flash crash I don't have much confidence there, even though I love trading puts.

McFearless said...

anyone looked at a chart of MSFT lately....that's no netflix

karen said...

The titles say it all..

S&P 500 Profits Cut for First Time in Year by Analysts
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aQ5N2zflwgGo

One in 10 mortgages in 100 largest metropolitan area were seriously delinquent as of March 2010, according to a study done by the nonprofit Center for Housing Policy.
http://www.housingwire.com/2010/10/04/study-shows-one-in-10-mortgages-seriously-delinquent

video on QE2
http://www.ritholtz.com/blog/2010/10/stocks-up-volume-down/

CV said...

If the FLASH CRASH was all a fat fingered stupidity...

Why did the indices need to spend the next two months probing down to find an apparent "floor" afterwards...

It should have appeared simply as a gigantic TAKURI hammer candle... RIGHT?

karen said...

ben.. re: msft, that's a gs downgrade at work!

72bat said...

ben -
waddell & reed - part of the pledge in "the pledge, the turn and the prestige"?

McFearless said...

same with HPQ

McFearless said...

karen,

but what of the GS conviction buy list?

PFE spent a lot of time on that as I recall

McFearless said...

I get recruited by W&R all the time, everyone in my office does. Wonder if they'd let me toss around a fat stack of mini's.....doubtful, no PhD or CFA.

CV said...

QE2 will put a "floor" under stocks...

Right...

& Peyton Manning will put a FLOOR under the Jaguars ever beating the Colts...

On paper, the Jags should never beat the Colts...

karen said...

my sds about to go green.. watch that video in my 11:06..

McFearless said...

"Why did the indices need to spend the next two months probing down to find an apparent "floor" afterwards"

I think we have a winner!

Funny how the market price action helps us idiots from not wasting time on 104 pages of crap explanation when we could have simply looked at the charts.

karen said...

anyway, after seeing the futures overnight.. it makes no sense to be in the game half-time only. likewise on trading gold.. if you can't trade round the clock.. you better not be too "invested." I still think GLD could blow up one day..

karen said...

i guess 1132 will hold if we even get there..

karen said...

yes, i am negative nelly in reverse !!

karen said...

mrtopstep

hlcamp posted on IM at [10:06:00 AM]: Normal Program Trading Low = 1135.00 - fri low 1134.70 - last wk low 1127.30 could be key

karen said...

oh brother.. check epi

http://stockcharts.com/h-sc/ui?s=epi

karen said...

hey, i think the economist had an article about potential bubble in eem this week.. maybe it was buttonwood.

karen said...

amzn is a copy CAT

karen said...

smsearsBarrons

love all the stories calling bonds a bubble at same time major bank (s) calling for "liquidity rally" in stocks.
1 minute ago via web

karen said...

guess i'm all by myself today : (

karen said...

http://www.businessinsider.com/eliot-spitzer-prosecutions-following-the-financial-crisis-have-been-a-major-disappointment-2010-10

McFearless said...

I just don't have much to say today....it's a day for thinking.

karen said...

okay, i'll try to stop thinking out loud.. : )

CV said...

I'm still catching up...

Had to do an aqua class this morning...

AmenRa said...

Karen

Investors are leaving equities in droves and plowing into bonds. The banks/IB/hedge funds don't want to be the ones stuck holding equities. Especially since 2008 is still fresh in their minds.

karen said...

AR, I think this slideshow says as much:

http://www.businessinsider.com/12-trades-hedge-funds-pouring-into

72bat said...

eliot-spitzer-prosecutions-following-the-financial-crisis-have-been-a-major-disappointment-2010-10
doh. no sh*t sherlock!

McFearless said...

though there is the important distinction that investors aren't seeking safety in bonds by purchasing treasuries, they are seeking yield, so they buy the highest risk bonds they can.

72bat said...

k -
12-trades-hedge-funds-pouring-into
"They're short corporate America"
it's good to know that i'm keeping such good company

karen said...

http://www.ritholtz.com/blog/2010/10/historical-recessions-vs-sp-1870-2010/

I can't wait to get some intelligent comments on this..

72bat said...

scary picture for halloween

karen said...

jnk down today..

CV said...

You all ought to quit trading equities and just follow my NFL Weekend "unit picks"...

Off of my MYTHICAL BANKROLL (which isn't MYTHICAL to me) of $2000 per weekend (which is roughly the weekly UNIT PICK allocation)...

The portfolio is up $1,390 (off of $2,000) in 4 weeks...

a 69.5% profit... :-)

Now... Since they're UNIT PICKS, you could use any increment you want... $20,000... $200,000... $ mil... etc...

AmenRa said...

Ben

True. They are seeking yield when they need to be seeking safety. The next downturn will be even more vicious.

karen said...

Consumer Bankruptcies up 11% YTD
Just keeps getting better!

By Alistair Barr SAN FRANCISCO (MarketWatch) -- U.S. consumer bankruptcy filings rose 11% in the first nine months of this year, versus the same period in 2009, the American Bankruptcy Institute said Monday, citing data from the National Bankruptcy Research Center. Filings totaled 1,165,172 nationwide during the first nine months of 2010, compared to 1,046,449 total consumer filings during the same period a year ago. The bankruptcy filings so far in 2010 represent the highest total since 2005. "We expect that there will be nearly 1.6 million new bankruptcy filings by year end," ABI Executive Director Samuel Gerdano said in a statement. Consumer bankruptcies totalled 130,329 in September. That was 3.3% up from August 2010.

CV said...

That's 69.5% INCLUDING the losses paid out to cover the "vig"...

karen said...

here comes 1132..

Leftback said...

LB says hello and congratulations to the European Ryder Cup team.
It was a hard fought and entertaining match.

Westwood, Donald, McDowell and Poulter were immense, also was very impressed by Stricker, Cink, and Fowler for the American team. Great stuff.

Anyone notice that the long bond can't catch a bid? We are short EURUSD and short TLT for the week, too many people expecting weak data and QE infinity.

spoonman said...

I thought this on modern bureaucracy was fascinating. Written by a scientist so his examples are from the world of modern science, but applicable everywhere. It's kind of long.

karen said...

another shot at breaking 1132..

McFearless said...

no doubt Ra, if only we knew exactly when it would start. the panic out of HY bonds will probably be worse than stocks on the retail side anyway.

CV said...

THE RSI leading diagonal on 60 minute 10 week charts has finally been snapped to the downside...

after 37 days...

karen said...

CV, your forgot the effing in front of the number 37.

CV said...

I'm seeing 112.90 as possibly some support on SPY...

But it could also make a beeline for around 111 by tomorrow just as easy...

CV said...

@karen (12:09)

correct... "effing 37"

karen said...

is 1122 too much to ask for???

CV said...

Remember those FIBO extensions that I posted on Friday (where the gaps were)...

I think there is a CHART I'd put up on Friday's thread...

Hopefully, that's where we're going...

karen said...

CV, seeing similar.. 20 ema is 112.71 and 111 is ~ 50 ema..

CV said...

Yeah... Here's the chart I'd put up on Friday morning...

http://3.bp.blogspot.com/_uq2KcmM6MLM/TKVfZnnO0NI/AAAAAAAACZ0/HpjNJyW5-m4/s1600/$spx_60+min_10+week.JPG

AmenRa said...

Lowest TICK reading since the week of 7/23/10.

karen said...

AR, pls explain what you mean.. TICK??

Leftback said...

This seems like a bear trap to me. Suck in some new shorts, get Johnny into some bonds and then they drop the good jobs number.....

Sorry to be such a conspiracy theorist....

mcHAPPY said...

I am most defintely getting ahead of myself but here is what I am keeping my mind on:

1) .618 of 179 is 111. 1.618 of 179 is 289. 2.618 of 179 is 469. If we are looking at an ABC then 1046, 868, 668 are all targets. C=A at 978. If we are looking at an impulsive move down then 868 and 668 are targets.

2) Targets on the EUR/USD is .85. Gisele will be looking for greenbacks then.

3) For any move lower to be significant, 1065 is going to be major resistence. If that goes, well... I think 1065 is the new 1040.

karen said...

checked that spx chart.. yeah.. we'll see about all the air down there.. might still be a lot of hot air to keep this balloon lofty!

mcHAPPY said...

If we do not get to 1095 this week though, I do not think the move higher is finished. i.e. 1157 is not the latest top.

AmenRa said...

1149.88 is the 76.4% retrace of the monthly 3LB. It was tested four times last week. The SPX failed all four tests. Time to retest 1127.11 which is the 61.8% retrace of the monthly 3LB.

CV said...

@karen

Oh I agree... I'm just pointing out the potential scenario IF the chart loses support...

Unfortunately, it HAS NOT totally broken down yet... Just some chinks...

karen said...

okay.. i looked up the TICK indicator..

AmenRa said...

karen

NYSE TICK is the number of NYSE issues trading on an uptick/downtick.

CV said...

"Gisele will be looking for greenbacks then."

ROR

I'll sell her mine... But she'll have to come by and pick them up in person, and do a little turn on the catwalk...

karen said...

just what we need.. more paper gold trading:

http://blog.stocktwits.com/?p=3903

karen said...

a lot of tweets disparaging the SEC flash crash report..

Leftback said...

LB is looking at this through the prism of the credit markets.

Nobody is set up for even a modest break to higher rates. If that happens, there will be blood in the streets, and it will not be the long equity guys bleeding.

karen said...

let's see if the CME's new e-micro gold contracts mark a top (for now.) could take some funds out of GLD..

CV said...

@LB

Who's to say it won't all just pour into commodities?

karen said...

LB.. pls explain one more time why you there could be even a modest break to higher rates..

CV said...

Actually... I was going to add something along the lines of what karen just said...

But i was going to frame it something like...

"Who's to say there even will be a modest break to higher rates"?

Leftback said...

C and K

I actually think that we may get a stronger jobs number at some point. Whether it is this month or in the future, it will eventually happen.

That will cause a lot of dollar shorts to unwind, and will force interest rates higher at the same time. Commodities and commodity stocks will initially do poorly on the stronger dollar, and then recover. Other stocks like banks and REITs will probably gain on a steeper yield curve. So unless you see employment deterioration, don't short the banks here.

Leftback said...

The Treasury market is just loaded with risk here, and stuff like LQD is just begging to be sold. LQD is just all risk, recovery risk, default risk, spread risk, you name it...

I may be early - the Obamanauts may print an anemic jobs number, but you know I have been accurate on the bond markets in the past and I think this bond bull is in need of refreshment, at the very least.

karen said...

when foreign money buys bonds it boosts the dollar.. imo, it is impossible to see where the bond flows are coming from.. especially with the caribbean contingent.

mcHAPPY said...

@LB

To me from an EW perspective, it sounds like your 12:35 just described 1up/2down DXY and vice versa in stocks.

Worse part about blogger is you can't let someone know there is no attitude or questioning of someone else - in this case LB. God knows your history is much better than mine - in financial matters, that is :D

CV said...

I think an interesting dynamic to keep an eye on would be to watch the GOLDEN CROSS dynamics...

The 50MA has been in an uptrend last month because it was supported "days wise" by the move off of 1010... But now, 50 days basically takes you back to the 1130 level (and DOES NOT factor in the subsequent RETEST days back to 1040)...

So...

If the market doesn't start rallying significantly past 1150 soon, the 50MA is going to turn down again and start looking like it's going to FAIL doing a GOLDEN CROSS...

A lot of basic "TA" is done simply off the 50/200MA dynamics (that is - by a lot of hefty funds managers, and their exposure to equities)...

I read some numbnuts comment on another blog last week basically saying:

"What ever happened to the DEATH CROSS"?... "Whatever happened to the Hindenburg Omens"?... And, of course, there was a lot of hilarity that ensued by the blogetteers of that quaint little tribe...

Anyway - for me... I'd like to see how this ends up getting resolved (because it is still in limbo - as are other things... technically)...

Structurally & Fundamentally... we know they're all crap...

Leftback said...

K.,

HFs are involved in Treasuries on the long side, which is really somewhat unusual and subjects the market to potential volatility.

C.,

Agree completely with your comments re 50/200MA dynamics. A golden cross cancels the DEATH CROSS and ushers in more bullishness.

mcHAPPY said...

I would love to see a beat down in the SPX until mid-November and a subsequent rally. High 800's would be a great starting point for a rally with a lot of resistance being there from the fall of '08 and summer '09.

CV said...

Wait... I should say...

Structurally & Fundamentally... we know they're all crap... Unless you do as we have for the past 2 years, which is, CHANGE THE RULES & METRICS OF ACCOUNTING to make every report look good...

In that case, we're doing fine, and that ought to keep the restaurants packed in downtown Minny Mouse ville...

karen said...

I swear this article says nothing.. i read it twice.. why did they open the vault? to put more gold in it?

http://www.businessinsider.com/jpmorgan-reopens-old-gold-vault-2010-10

karen said...

haha.. another article on the gold vault(s)

http://www.minyanville.com/dailyfeed/new-gold-vaults-could-inspire/

Leftback said...

A few other Treasury traders weigh in on the state of the bond market:

Are Rates Headed Higher?

karen said...

Ben, PIMCO's Gross: A central bank will always be needed: It serves as an intermediary between Wall St and Main St, managing rates, calming the economy.

CV said...

@LB

I'd hate to say it... But I'd seriously question my bearish stance if I see a GOLDEN CROSS and backtest of it...

It wouldn't change my view on THE ECONOMY, just my view on ASSET PRICES...

And even if it happened, I wouldn't be likely to go long equities (only, perhaps, very high beta ones)...

But it would CERTAINLY give me a nod to go long commodities...

Basically what I'm saying is... If equities GOLDEN CROSS here, I'd be fairly convinced that Bernanke had totally lost control of the dollar and it would be time to rapidly start converting to hard assets...

I'd literally probably pull all my money out of the market and start buying crates of WHISKEY, FUEL, & try to corner the market on TAMPONS so I could have something to sell to the ladies out there who are too busy with their little "this & thats"...

No offense to the ladies here...

CV said...

@karen (12:51)

BWAAAAAAAAAAAAAAAAAAAAHHHHh!

karen said...

Thanks for the tip, CV.. will load up on Instead, instead. Rolling My Eyes!!

karen said...

Financials lower as American Express weighs
12:54 PM ET 10/4/10 | BOSTON (MarketWatch) -- Financial stocks followed the broader market into the red Monday afternoon, retreating in the wake of economic reports on August factory orders and U.S. pending home sales.

The Financial Select Sector SPDR Fund was down nearly 1% at last check, while the Dow Jones Industrial Average shed about 100 points, also lower by about 1%.

Shares of American Express Co. traded down 2% as Bloomberg reported the Justice Department has sued American Express as well as MasterCard Inc. and Visa Inc. in a U.S. antitrust investigation.

CV said...

@karen

You shouldn't laugh...

The sad truth is... The Average person is not equipped for survival for more than about 3 days of "shortages/outages"...

And hardly ANY possess the resourcefulness to acquire ANY goods beyond the local convenience store...

EMPHASIS on "convenience"...

Everything is convenient... Until it's NOT...

McFearless said...

I don't think the current political dynamics lend themselves to a doctored jobs report and that is the only way we get a *good* figure there, the political payoff now would be far less than the penalty paid later if things go worse again, especially since the administration has participated in a media blitz of "our policies are working" the last several weeks.

Xzihbit 1: AIG has paid back TARP money!

karen said...

BreakingNews

Calif. Supreme Court upholds Gov. Arnold Schwarzenegger's order to furlough state workers http://bit.ly/dnjCN8

CV said...

Here karen... I'll sing it to you...

http://www.youtube.com/watch?v=QXgMhnI3QOI

DL said...

Everyone should keep a few bottles of olive oil on hand.

Just in case.

karen said...

CV.. I wasn't laughing! Just wanted to bring you into the current decade..

I live in earthquake country after all..

CV said...

@DL...

Except for you... NO OLIVE OIL for you (since you're such a smart ass about it)...

You can eat peanut butter and stale bread...

Anonymous said...

@leftback:

Would it be fair to say that, in addition to HFs dabbling in Treasuries, volatility may also be a function of the low yields (creating higher duration per issue)?

@ben:

Can you elaborate on the following, given that shorts get paid up front (i.e., at the time of the short, prior to an anticipated decline)?

"if there ever is a decline like RP talks about then there will be a lot of shorts that never ever get paid"

Are you just talking about derivative "synthetic" shorts (e.g., put holders, inverse ETFs. etc.)?

karen said...

This is what we want to know!

http://247wallst.com/2010/10/04/the-dows-big-gainers-how-high-can-they-go/

CV said...

In any case...

The biggest IRONY here is this...

If equity prices do manage to make escape velocity here, the first thing Wall Street (& probably Washington) are going to do is jump for joy and declare victory)...

In reality, it's likely to be the first volley in insuring that the OTHER bad thing actually happens... That INFLATION would get out of hand...

DEFLATION is tough on jobs, and the balance sheets of the FEW RICH...

INFLATION means poor people don't eat (and - of course - eventually means that DEFLATION will ensue anyway)... People do BAD THINGS with pitchforks & torches when they get hungry...

Why Bernanke & Obama seem to think INFLATING asset prices is a good idea is beyond me...

DL said...

CV

So now you're the "olive oil Nazi"...?

karen said...

anon @ 1:18.. during the flash crash.. our trading platforms went down.. how is the short to repay the broker at his cover price and realize his gain?

Andy T said...

LB,

Did you see that Alex kick against Arsenal? That was unreal great.

McFearless said...

Anon,

"Are you just talking about derivative "synthetic" shorts (e.g., put holders, inverse ETFs. etc.)"

yes, should have clarified, that comment is more in relation to the synthetics. We should just keep a close eye on the COT reports if things start getting hairy again, bottom line; just dont' have a position that none of the commercials have taken part in.

McFearless said...

I love all the talk of higher prices still everywhere, the market is topping short term this week if it hasn't already, it's wave 2 of C or something worse....and yeah, it could turn into a huge bear trap, but we'll see.

Anonymous said...

@karen:

I'm not under the impression that RP is predicting a 5 minute vertiginous, low-liquidity decline that recovers immediately.

McFearless said...

anon,

the main point is, we shouldn't underestimate our counterparty risk if the shtf, keep most of your/our money safe as possible. all big banks in this country are entirely insolvent if housing is to have another large leg down, they have no "assets"

DL said...

"...the market is topping short term this week if it hasn't already".

That's my working hypothesis, although we could easily re-test the 1147 level (or so).

CV said...

@DL

I know you're just kidding when you say that...

But consider this...

If CV is the ONLY voice telling people that it's a "good idea" to be prepared with hard goods and food supplies... Then, one or others LIKE YOURSELF mock that idea... Then the whole idea becomes "SILLY BY COMMITTEE"

C'MON ALL EVERYONE... Let's all jump on the bandwagon and laygh at Old Noah over there building his ark...

You see...

Look... I don't give a rats ass what you do... If TSHTF, as far as I'm concerned, you can run around abandoned warehouses, catch some rats, and eat their asses for dinner (without olive oil) as far as I'm concerned...

But the point is this...

CV is trying to make an INTELLIGENT argument out of the fact that USEABLE ITEMS (items that you're going to consume at some point or another, that have an incredibly long preservation, or "shelf" life - are in fact - an intelligent way to prepare yourself with)...

Some people may find wisdom in that idea... You, instead, prefer to make it the butt of jokes...

So I now return you to your stamp collecting... I've heard there's a lot of nutrition in the gluey part of stamps...

DL said...

"If TSHTF...you can run around abandoned warehouses, catch some rats, and eat their asses for dinner (without olive oil).

* * * * * * *

As long as they're roasted over a fire.

McFearless said...

DL,

just don't want to see 1154 break to the upside. Otherwise that call you made about a 3% drop is what I'm thinking roughly, we should erase a big chunk of the September rally in wave 2 if we are to have one last run at the April highs...that's the set up.

karen said...

"But even if the Fed's failure to accomplish its official mandate becomes increasingly obvious, the Fed won't be eliminated anytime soon. This is because the Fed's official mandate isn't its actual mandate. It is clear to us that the Fed's actual mandate is to promote relentless monetary inflation, thus facilitating the expansions of the government and the banking industry." Steve Saville

http://www.safehaven.com/article/18435/can-the-fed-help-the-us-economy

DL said...

McF @ 1:38

I'd like to see a pullback of at least 3-4% before the election; if we can get that, I'd expect at least a "pop" after the election.

CV said...

@DL

The thing that you don't understand... OR HAVEN'T CONSIDERED... about being prepared in this way is the following...

NOBODY... Not even your family members (or closest relatives, circle of friends, or their circle of friends, is prepared)...

Therefore... When thinking about PREPARATION, you're not thinking about YOURSELF (you're not walking around carrying a vile of olive oil in your wallet)... You're thinking about warehousing, infrastructure, and re-vitalizing for a CIRCLE OF PEOPLE... More - a GROWING set of CONCENTRIC CIRCLES OF PEOPLE, that you can expand & expannd, based on how far you go with your preparation...

In other words... You're not being SELFISH... You're being the EXACT OPPOSITE... You're basically thinking of how many people it might be in your power to help cope and survive because they spent their lives as grasshoppers while you spent your time as an ant...

Get it? Grasshopper?

An army of ants can do a lot more than a single lazy grasshopper...

DL said...

CV,

Don't worry. Obama will bail us all out.

Leftback said...

"Did you see that Alex kick against Arsenal?"

Indeed. Awesome power.
Thanks, Andy, for not mentioning the Other Team in Red....

CV said...

The last day on Earth will be as follows...

The algos will continue to do battle against one another until the very last nuclear reactor on the planet has a core meltdown and fails to provide the last watt of energy...

DL will be standing there in the middle of some city with polluted water, with his PUT CONTRACTS, starving... He's standing in front of the abandoned carcass of the former building of his trading account company (that's now just a roost for pigeons, hawks, & falcons)... He's demanding payment for his "short" (or long) ES Mini's...

He'll need that money so he can go over to the abandoned Costco (with the shelves that were emptied out long ago) and buy a jar of peanut butter...

Meanwhile... packs of wolves will be circling in looking for THEIR next meal...

McFearless said...

AT,

EWI has this counted as a double correction within wave 2 marking the May lows as the end of an impulsive wave 1 and putting us in a w-x-y (flat, zigzag, zigzag). I just dont' see that as a viable count though, despite the form...they have some nice fibo's in their double correction and it does match the figure 1-48 from EWP almost exact as they point out but I just don't like the count much.

They do mention that there are "other counts", just that they aren't very probable....ROR.

Jennifer said...

I look at the golf course geese regularly and contemplate a Dickensian Christmas reenactment...pesticide marinade notwithstanding. I see we've had all sorts of interesting discussions while I've been driving buy the dry cleaners without stopping again. I figure if I can ever get my kids to eat fish we'll all just go visit CV when the SHTF. :-)Between food and tampons he's got all the bases covered.

CV said...

...and this comment

"Don't worry. Obama will bail us all out"

Sure, I know it was missing a [snark] tag, but consider this...

Within 48 hours after Katrina... It was complete and utter chaos in New Orleans... The people there had even taken to shooting at relief helicopters...

I know - I know... It was all BUSH's fault (by way of FEMA)...

And we all know... "Obama is BETTER than Bush", right?

But is he BETTER to the tune of about a thousand Katrina's happening all at once?

Leftback said...

A 21% discrepancy for you Americans to discuss:

http://noir.bloomberg.com/apps/news?pid=20601010&sid=abJTU0oIQdos

CV said...

@Jennifer

when it comes down to "eating fish" or eating "dirt"... I'm pretty sure they'll develop a taste...

But not until then, of course...

Too bad though... Because when the time comes, the only thing that will be in abundant supply will, in fact, be DIRT...

It's a handy thing to GROW things in though... Just ask I-Man...

DL said...

LB @ 2:21

"You Americans".

And what about "you Brits"...?

karen said...

oh, no: http://www.ritholtz.com/blog/2010/10/smart-money-gets-massively-short-ndx/

CV said...

@LB

"The study, conducted by researchers from the Center for Sexual Health Promotion at Indiana University, surveyed 5,865 people aged 14 to 94 about their sexual activities, profiling what sex acts they engaged in and what precautions they took. A similar study was published in 1994 by University of Chicago researchers. Americans have become more experimental in the 16 years between the reports, the researchers wrote."

NO WONDER Obama seems to think the WAY OUT of our problems is to INVEST more of this country's wealth into education...

So we can pack all of our universities with these research endeavors that PRODUCE things from our toil & labors...

karen said...

"Surveys like this one can help people talk to each other about sex, she said in a telephone interview." LOL

karen said...

mrtopstep

$ES_F #futures What u gonna do when the S&P comes after u? DEAD here 20 locals in the pit 5k SPZs and 1.4mil minis trade all down

DL said...

Karen @ 2:25

Those charts aren't necessarily discouraging for those in the (short term) bear camp

Jennifer said...

CV -- you couldn't be more right. This is my big motivation in all of this -- I'm a parent. While the little whippersnappers might drive me nuts some times, they are my responsibility, and I am completely confident that Obama won't take care of them. So, we've got lots of protein-fortified pasta and peanut butter in the basement in rubbermaid tubs and I've got a wilderness water purifier on my Christmas list (way better than a Snuggie!). I read that blog about the guy from Argentina a couple of years ago and tried to get the big picture messages out of it. (If you haven't read that and want the link I can find it...one good point I remember is that if you think you might want to know how to do something, like pluck a golf course goose, google it now and print it out.) I think the biggest problem in America is that we are so used to getting everything on demand that we don't even realize what we might want or need until we get it. I'm at the point where I'm considering buying home schooling materials, not because of a burning desire to be my children's sole educator, but rather to be prepared if we reach a point where I don't want them to go to school for safety's sake. It gets cold here, so I'm buying coats and boots in multiple sizes just in case. I'd like nothing more than to give the whole mess to Goodwill with the tags still on.

Blutarski said...

"Americans have become more experimental in the 16 years between the reports, the researchers wrote."

Jeez - 16 years of college down the drain...

CV said...

@Jennifer

You are the least of my worries...

There's probably not a better type more equipped (in terms of survival instinct) than a mother with small children...

That's what I meant by ADAPTABILITY in my 8:30

72bat said...

jen -
oh yeah, ferfal surviving in argentina
some pretty hairy descriptions of urban life after tshtf

CV said...

@Jennifer

Even more... You should consider it a blessing to be able to raise them in an environment like this...

It's easier, this way, to teach them NOT TO COVET...

Leftback said...

When Black Friday comes, I'll collect everything I own..
and before my friends find out I'll be on the road...

It will be a long time before we get there, but it's coming.
Vermont, baby.

Jennifer said...

CV -- that covet business is a serious problem. My 7 year old has friends with cell phones (WTF?) so she wants one too....I asked her "who would you call?" She just shrugs her shoulders.

Jennifer said...

1132 wouldn't break that time...I hope that doesn't mean we rally into the close now.

Leftback said...

"Surveys like this one can help people talk to each other about sex, she said in a telephone interview."

Or help people sext each other, Karen?

CV said...

@LB

Naw... I fancy you like Will Smith in "I Am Legend"...

Duking it out against the zombies...

72bat said...

sent the yahoo news item New survey on sex in US, biggest since 1994 to all the kids who participated in the junior high sexuality education curriculum i facilitated last year. nothing in there we did not cover. they are prepared with knowledge

Leftback said...

Trust me, CV, I can be out of Gotham in no time flat.
We will know the signs.

There is noticeably more violent crime, but rising from a low level.
It is the random daytime stuff that will kill the city, as it did in the 70s.

Once that begins I am over the hill and far away.

72bat said...

lb -
hardwick vermont is a center for craft and artesanal food producers, if you'll be wanting your chevre, etc

Leftback said...

bat -

Thanks. That might come in handy one day. Man cannot live by peanut butter and maple syrup alone, eh?

CV said...

Anyway... The HYSTERICAL thing to me...

Right now...

While everyone is sitting around mesmerized by whether the S&P will crash by 300 points (and Armageddon will be feared to be imminent)...

OR...

If we do a massive breakout to 1300+... Which... LAUGHABLY... Cv predicts will bring about Armageddon SOONER (if, only for the reason that at that moment, everyone would be euphoric, and nobody would EXPECT it)...

We're still going to face the same problems, regardless... The only thing that really remains to decide is WHO IS GOING TO AROUND TO BLAME IT ON...

It's a hot potato... Obama - the idiot - thought he was "smarter" than the hot potato when he took it from Bush...

Now he realizes that it is... INDEED... Hot!... And all of his little rats are abandoning ship on him...

The only "smart" thing left to do for him will be to see if he can pass the hot potato off to another round of PONZI entrants...

The GOP seem the only logical candidates at the moment... (until we find someone around that's wearing an oven mitt)...

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