Morning Audibles - 12.27.10

Flash Crash!

Who could have POSSIBLY predicted this? (except CV, of course, on the December 7th thread)... I even gave you the illustrated cartoon version of it...


Here's what it looked like in Europe this morning...

(ht/ZH - chart)

Europe Opens With A Mini Flash Crash

This should be my "off day" morning (but Andy couldn't do his Sunday evening post)... So - Can I go back to bed now?... I gotta shovel some snow later...

The Management

82 comments:

CV said...

Before I go back to sleep... So I'm guessing we'll get a correction that takes us 29 days in total...

Right after the Superbowl... I'm too lazy to count the "holidays" in between, so I haven't settled on a date yet...

CV said...

Let me make another wild prediction...

Gas at the pump won't go down...

BinT said...

Back in computerland! Shoveled snow last night as it snowed here for 48 straight hours..quite unusual for East Tennessee. Driveway is about 400 yards long.

People here are still paying off debt, CV. And some have been really wondering about 2011..since what we did since 2008 shifted debt to all strata of the public sector. The more I read, the more I think it may not have shifted debt, in reality just created new debt.

Hoping to have a good new year's party this year.

Bruce in Tennessee said...

http://finance.yahoo.com/news/Oil-rises-near-92-as-OPEC-apf-34009732.html?x=0&.v=1

Oil rises near $92 as OPEC signals no output hike

Bruce in Tennessee said...

Gasoline Prices Hit $3 a Gallon Nationwide

Reuters12/25/2010 05:41 AM

http://www.reuters.com/article/idUS362335257920101224

Bruce in Tennessee said...

http://www.bloomberg.com/news/2010-12-27/daimler-volkswagen-lead-decline-in-auto-stocks-after-beijing-limits-quota.html

"Bayerische Motoren Werke AG, Daimler AG and Volkswagen AG and led a decline in European automakers’ stocks after Beijing’s city government decided to limit the number of new passenger cars to ease road congestion.

BMW, the world’s leader in luxury-car making, slumped as much as 5.8 percent in Frankfurt trading, the steepest intraday decline since May 19. Daimler fell as much as 5.1 percent, the biggest drop since July 27. Preferred shares of Volkswagen, Europe’s largest carmaker, dropped as much as 5.4 percent.

Beijing, ranked as having the world’s worst traffic congestion, will issue a quota of 240,000 new vehicle license plates through a lottery system next year, with about 88 percent allocated to individual buyers, according to a Dec. 23 statement. The quota is one-third of the number of new passenger cars registered this year, said Shin Chung Kwan, an analyst at KB Investment & Securities Co."

...Well, since I cannot speak Bernankespeak, I am not sure when this is put together in a totalitarian society if I can call this a tariff. But, if it isn't a tariff, it is some sort of cousin...

Bruce in Tennessee said...

This Week:
A Fed-Induced Speculative Blowoff
Despite my extreme criticism of Fed actions in recent years, I would argue that QE2 has in fact been "successful" over the short-term, but not through any monetary mechanism. Rather, QE2 has been successful a) by creating a burst of enthusiasm that released some pent-up demand in the same way that Cash for Clunkers and the new homebuyer tax credit did, and b) by encouraging investors to believe that the Fed has provided a "backstop" for stocks and other risky assets, creating a speculative blowoff in these securities, to the detriment of what investors perceive as "safe" assets, which ironically includes Treasury securities. In short, the main effect of QE2 has not been monetary but has instead been rhetorical - and that rhetoric may very well be nearly empty.
By John P. Hussman, Ph.D.

...I don't think John is buying UPRO this week...

AmenRa said...

Market praying the machines don't take over...

Anonymous said...

Light volume today, might be wise to take stops off....

Bruce in Tennessee said...

Karen,

This is a shot from my porch of deer eating early this morning after 48 continuous hours of snow...

karen said...

Bruce, thanks for view into winter wonderland !! I thot Hussman's comments were good.

Sleep tight, CV.. and good morning, everyone else!

karen said...

excuse me, but is this the dip ??

AmenRa said...

Karen

Protecting 1250 from the looks of it.

Bruce in Tennessee said...

GM only down 1.5%...don't they do a lot of business in Maoland too??

karen said...

saw that, Bruce.

some twisted logic i came up with on the china rate hike.. if the renminbi is pegged to the USD, and the renminbi needs to rise, can't the the renminbi act as proxy for the USD and cause the dollar to rise by virtue of the peg??

Bruce in Tennessee said...

Karen,

People actually coming in the salt mine by sled dog this morning...back in a minute, and I'll give you my ideas.

AmenRa said...

Karen

I don't think the renminbi is used in carry trades that much. So moves in the renminbi shouldn't cause much dislocation in the currency markets. My .02

spoonman said...

This doesn't exactly look like the Peking action Andy was talking about...

Anonymous said...

It's hard to day trade something that is pegged... but the trade in Yuan forwards is pretty active, on the assumption that they can't hold it flat for ever. Beijing will repeat the incremental tightening until it finally takes effect in the commodity and property markets.

ben22 said...

this is not the dip.....lol.

january zombie bear.

AmenRa said...

On default and bankruptcy in the municipal bond market: https://self-evident.org/?p=877

Nice read.

ben22 said...

no worries ra, dozens of analysts have already come out to say MW is way wrong on her call.

of course, dozens of analysts said the same thing about her Citi call, we'll see if she can go 2-2 on these big ones.

AmenRa said...

ben22

According to "Bond girl" who wrote the article it's very hard to get a Chapter 9 bankruptcy for a municipality. Then there's the difference between GO and revenue bonds. Part 2 of the article deals with Chapter 9.

quote:

"To be eligible to file for Chapter 9, the municipality must meet several criteria. First, the entity must meet the definition of a municipality, which includes cities, counties, and other instrumentalities of the state, but excludes the state itself.

Second, state law must specifically authorize the municipality to file for bankruptcy under Chapter 9. Currently, 23 states do not provide the requisite statutory authorization for municipalities to file for bankruptcy. (I can list them for anyone who is keeping score.) Municipalities in these states would need to seek legislative action before they could file, which is a considerable hurdle.

Third, the municipality must meet the definition of insolvency, which means “the municipality either must not be paying its undisputed debts as they come due at the time of the filing, or must be unable to pay such debts when they become due in the future.

Fourth, the municipality has to “desire to effect a plan to adjust its debts,” which is another way of saying that the municipality has to file for bankruptcy voluntarily (as demonstrated by a resolution or ordinance that is adopted by the governing body). (It is worth noting that a municipality can be involuntarily compelled to address its financial obligations by the state or bondholders in a state court – i.e., outside the Chapter 9 process.

Finally, the municipality has to be able to demonstrate that it has attempted to negotiate in good faith with creditors, or that such negotiations are impractical (e.g., there are too many different creditors involved, or the creditors cannot be identified)."

karen said...

a contrary, contrary signal?

http://blogs.barrons.com/focusonfunds/2010/12/27/silver-surge-slv-pulls-back-on-wsj-article/

karen said...

AR, you are really over thinking things.. JBTFD and POMO tomorrow! a no brainer..

karen said...

$copper just keeps making new intra day highs.. what to make of it..

karen said...

http://www.ritholtz.com/blog/2010/12/lessons-from-the-muni-bond-market-in-2010/

"1) When Meredith Whitney talks about Munis, I turn down the sound.

Both in September and recently on 60 Minutes, Meredith Whitney – without giving any supporting numbers – predicted widespread municipal defaults. She forecasted $50-to-$100 billion in 2011.” We disagree and would like to debate her."

karen said...

http://www.fundmymutualfund.com/2010/12/did-you-buy-dip.html

"Don't say this market never gave you the chance to get in? The S&P 500 was down a full 0.4% this morning and you had an hour to join the party.


This morning's selloff (hard to use that word with a straight face) was pinned on the Chinese who raised interest rates a tad. I believe the more reasonable answer is the 'urgent buyer' (he who buys SPY futures at any price as he is not price sensitive and simply cannot wait until 9:30 AM to get into the stock market each morning) who has showed up almost daily since Obama told us in March 2009 it would be a great time to buy stocks (hint hint) between 6 AM and 9 AM to boost premarket futures by 0.3-0.4%, obviously lives on the East Coast and was not able to make it into work this morning to offer his normal gifts. Hence we did not get our normal morning mini gap up."

there is more.. he is funny : )

AmenRa said...

Karen

I'm watching the SPX as it tries to close the morning gap down.

TYX got above 4.5% (4.502 to be exact). Not what BB wants as he strolls through the Fed in his bunny slippers.

karen said...

AIG.. seeing is believing.. so the more debt you have, and the more credit available to you, means you are worth more.. real earnings to service debt doesn't matter as long as you have the means to service your debt with new debt..

ben22 said...

Ra,

Well, that's some nice information there.....

however

my observation having been alive and operating in markets the last several years (yes, they were real) is that whatever rules are in place don't really matter if the shit hits the fan, they simply get changed and we have new rules and new process.

As for all Moody's data on bonds they rated from 1970-2009.....why is it relevant? If we get what MW said it's a fat tail event in muni land, so all that talk about what has "normally" happened doesn't matter.

I don't agree or disagree with MW, I'm simply an observer on this one, I have no client money allocated toward muni's, not a dollar.

If we break above 1259 on the cash I'm closing my short and going long.

cv said...

If you all are bored and want to take the rest of the day off, I'll understand...

Here... I'll write the 5:00PM stock market wrap for CNBS and network news stations...

"Stocks were slightly down today on East Coast snowstorm, and the slight drag that the cold weather snap might put on THE ECONOMY"...

There - now you all know there's nothing to fear... You don't even need to fear "death" anymore because Obama is going to tell you how to die...

http://www.nytimes.com/2010/12/26/us/politics/26death.html?src=me&ref=general

karen said...

http://www.fundmymutualfund.com/2010/12/wsj-silver-silver-silver-said-in-voice.html

karen said...

TSLA lock up over so here is your chance to buy the dip.

cv said...

@ben22

Bo Jacksons are in need of a miracle from Roddy White...

AmenRa said...

ben22

Yeah when TSHTF all laws may become null and void.

ben22 said...

CV,

I think it's def. over man, your team played awesome this week, what else can I say, 43 points from AR, you picked him to win for you and he stepped up when it counted most.

congrats dude.

I'll be looking for revenge in 2011.

karen said...

on copper: "The LME is supposed to have rules that prevent single traders from cornering a market. Interestingly, that police effort is based upon making traders who dominate the metals maintain ample supplies at low margins for the short-term. That isn’t good enough. How the exchange even allows this is a sham."

Read more: Who Cornered the Copper Market? (JPM, JJC, COPX, SCCO, FCX) - 24/7 Wall St.

http://247wallst.com/2010/12/23/who-cornered-the-copper-market-jpm-jjc-copx-scco-fcx/#ixzz19KuDg15x

cv said...

@ben22

Rodgers was the top points getter in all of fantasy football (for the year - besides last week)...

327 points...

I predicted that at the beginning of the season...

Now... a better VALUE would have been Arian Foster, but someone would have been out of their minds taking him in the first round...

Adrian Peterson had 224 points... Jamaal Charles had 221... Chris Johnson 217... Ray Rice... Michael Turner 207... Ray Rice 202...

You see now why CV "reached" for AR with the 5th pick...

You get the guy you want on your team... That's the bottom line...

cv said...

@karen

Oh no... Nobody is "cornering" the copper market...

It's all based on supply and demand (and LIMITATIONS)...

Paul (barf) Krugman says so... And he has a nobel prize...

http://www.nytimes.com/2010/12/27/opinion/27krugman.html?_r=3&ref=opinion

karen said...

Krugman has permanently earned my total disrespect.. that article should make him a laughing stock..

cv said...

@karen

I was going to save that one up for one day that I needed a morning thread to laugh at...

But it seems that "things to laugh at" are bountiful these days...

All you have to do is shove microphones into the faces of PhD's...

and on days that they might be on vacation... There's always the trusty BR (who - in about 5 days will probably have Krugmans article up as words of wisdom...

ben22 said...

I've pretty much never agreed with anything krugman has said, which is probably not a shocker to anyone.

CV,

yeah, AR was a really good pick, if you recall I had 7th pick of 10, and I got Frank Gore in that spot, he had scored a lot of points before getting hurt this year, really though I picked up a lot of good free agents

Bironas for a while
Mike Williams TB
J. Stewart
Stevie Johnson
L.Blount
Giants D
and a nice trade for Roddy white where I got rid of Colston for him and then got colston back off waivers anyway

have to work different angles when you are the late pick.

karen said...

have we ever had volumes this low?!

ben22 said...

owen daniels played well for me this week as well.

karen said...

wow.. is slv a perfect wedge, or what?!

AmenRa said...

Krugman probably doesn't like to be reminded that it's the Nobel Memorial Prize in Economic Sciences and it is not one of the Nobel Prizes established by the will of Alfred Nobel in 1895, but is commonly identified with them. Semantics I know.

ben22 said...

we might be on our way to 1,300 here shortly

that's some decent upside from here, and I'm highly doubtful it's just going to stop there.

that aaii sentiment last week is extreme bullish, but as I've said many times before, I've not ever once seen something like that hit and then we turn right away.

all we need is a few decent days in early january in financials and we are going much higher, all the mutual funds have heavy underweights in that space.

ben22 said...

there could be a giant bear capitulation to start the year, wouldn't seem we've had that yet.

ben22 said...

interpret how you wish, thought this was interesting:

http://www.zerohedge.com/article/after-nearly-two-years-searching-trimtabs-still-cant-find-who-doing-all-buying

karen said...

did anyone pull up slv? there is not a lot of wiggle room left in that tip..

karen said...

Karl on Krugman: http://market-ticker.org/post=175910

ben22 said...

there is total conviction in the metals now karen, I'm not sure how you time that trade.

cv said...

@ben22

You did have some nice pick-ups this season...

I actually admit that I followed "you" (in some other leagues)... and picked up Blount, and SJ after seein you pick them up first)...

cv said...

You know...

The past couple of days, people have been talking about how we're at the level of the SPX when the "Lehman" news hit the airwaves...

Well... There were 25 "weekly" candles between that, and the 66 bottom...

Last week, we just completed 25 "weekly" candles from the July '10 bottom to here...

Just saying...

cv said...

Furthermore...

On "weekly" candles, there's a GAP right at 1110.88 (where the next week opened at 1113)...

Of course, gaps NEVER get closed... Especially WEEKLY ones...

That was about the time that the QE2 thing was getting rolling...

TOTAL CONVICTION

I-Man said...

Oh come on, you call that a flash crash?

Its still vacation time, no one moves weight this week, and it takes weight to cause big moves.

Thats just a low vol gap down in a lite tape...

Have some eggnog and lets watch crappy bowl games by the fire...

This week is for chillin.

ben22 said...

here is aaii in chart form, I know you all already know, people are real bullish, yadda yadda:

http://lh3.ggpht.com/_APmrYvpA45s/TRdymdIWMhI/AAAAAAAAJjk/0NSMIkBIUrg/s1600-h/20101223_aaii_chart%5B2%5D.png

Jennifer said...

Vix up big so far today...and SPX green. Looking for a nice red dawn tomorrow. Santa brought Silver Eagles and mercury dimes :-)

cv said...

I'd call a "bidless market" a FLASH CRASH...

cv said...

by definition...

I now return everyone to "The Muffler Bowl" (or, the NFL, in the case that they actually play the games, and don't postpone them on account of a few snowflakes)...

So great... Now we get to see NFL for the first time on a Tuesday Night since 1946...

Because everyone wants to see if any dogs will be killed, or if Breet Favre will actually retire during the halftime ceremony...

karen said...

finally a little profit taking in AIG..

AmenRa said...

CV

Favre will get Wooten'd on Tuesday and then retire at halftime.

cv said...

@LB

If you ever make any bad trades... You could always "slum it" by getting a stagehand job...

Average stagehand at Lincoln Center in NYC makes $290K a year

http://washingtonexaminer.com/blogs/beltway-confidential/2010/12/power-unions-average-stagehand-lincoln-center-nyc-makes-290k-year&

karen said...

yes, my question has been answered: CNBC
NYSE Floor on Pace for Lightest Volume Full Day of Trading in Over a Decade

karen said...

and this question is even more serious, does anyone have a remedy for chapped lips? Jennifer? surely you must have ideas? of course, i could just google it : )

ben22 said...

whats this, small triangle

pfft.
lol.

karen said...

last question, are we having fun yet?

I-Man said...

Coconut oil...

cv said...

@karen (3:51)

Here's your link...

justfuckinggoogleit.com

karen said...

nice rev h&s on GS.. get ready, i guess..

karen said...

traderturkey Linda Finelli
$FXI Still think the 2 yr chart looks like 3 peaks and domed house but could get one last rally before implosion. http://fsc.bz/9yX

ben22 said...

karen,

my wife found this stuff called lizard lips, stronger than regular chapstick, maybe that could help, there is also some stuff at a place called the body shop, hemp chapstick, it's really good stuff around here this time of year.

right now the main thing chapped on me is my ass, starting to wonder if January will be bearish after all, probably shouldnt' read too much into this week, but that set up might not be there.

I did nothing today

now lets see how much I lose in AC tomorrow.

I'll be at the Borgata if anyone is in the area

cv said...

Gotta go peeps...

Remember JBTFD∞

that is, AFTER you "justfuckinggoogleit"...

CV is on the SAINTS tonight for (2 units)...

Leftback's evil twin said...

Are you overusing your lips? Always comes to mind.

Anonymous said...

karen,

go w/ I-Bro's suggestion..

"Coconut Oil" will do the trick..

AAIP

Chapped Lips said...

Karen - With the weather you have been having lately it is not surprising that, you would be having chapped lips or hands.

A key point is keeping your natural moister in and while a lot of things my do the trick, if they taste kind of yummy, you may want to lick at them, which would errod the barrior.

Carmex works good and does not have a good taste to it, but I have gotten a lot of good results from plain and simple vasoline.

And no matter what you put on them, it will take a little while for them to heal, so just trying to refrain from licking or chewing on your lips for 3 to 4 days should help.

And Remember GOOOO SEAHAWKS!!!! Yup they still might make the playoffs - Now that would be a laugh.

Mangy Mutt

Bruce in Tennessee said...

http://www.bloomberg.com/video/65536926/

Bloomie on the outlook for 2011.

karen said...

thanks for the suggestions.. i have vitamin e and jojoba oil.. not coconut that i can remember.. maybe some olive oil would work.. my chapstick is doing nothing for me : (

off to rake up yard debris.. later!

AmenRa said...

There's also another lip balm....

Anonymous said...

Yellow card.

72bat said...

vit. e, etc may alleviate symptoms, but what is the cause? stress? can have you unconsciously biting or licking your lips? try some internal medication as well, relax and get more sleep.

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