Morning Audibles 8.4.10

This is the 2nd attempt at this exercise...


Back near the April 1220 highs in the S&P, I had a post which reflected how the largest "weighted" stocks (DOW weights are ranked by stock price) seemed to have been a large ingredient of the "secret sauce" that seemed to be pulling the overall indices farther than they seemed to need to go based on the overall economic environment... 


It seemed STOCK PRICES were on a mission (and both the DOW & S&P were close to 61.8% re-tracement levels of the moves from the October 2007 highs to the March '09 lows)... 


What was UNCANNY to me though was the fact that many of the largest components of the DOW seemed to be doing the lions share of the work... Many had fully recovered their 2007 highs, and some were nearing ALL TIME HIGHS...


Here's a quick look at the largest DOW components since the April 2010 highs:


IBM
Nearing FULL RE-TRACE  - Nearing ALL TIME HIGH

 MMM
Nearing FULL RE-TRACE  - Near ALL TIME HIGH

CVX
Well beyond 61.8% re-trace  - At July '08 levels (pre-China Olympics)

UTX
Past 61.8% re-trace  - At October '07 levels

MCD
HAS FULLY RE-TRACED April  - Within a buck of ALL TIME HIGH

CAT
Nearing FULL RE-TRACE  - At July '08 levels (pre-China Olympics)

BA
At 61.8% re-trace - Very close to decade long reverse H&S

---WHAT ABOUT SOME TRANSPORTS?---

UPS
Past 61.8% re-trace - Very close to reverse H&S (from '07)

---SMALL CAP INDEX---

$RUT
Small Caps have lagged the July moves in the large DOW components (yet the $RUT was "late to the party" in doing the DEATH CROSS)...

$INDU
DEATH CROSSED earlier on, but now it seems hell bent on erasing that from memory... Note that many of the above listed DOW components haven't DEATH CROSSED at all (McDonald's is hardly even close)...

There is nothing necessarily sinister about this phenomenon... In fact, it may be very close to reflecting either some economic reality and/or technical reality... 

What I noted (in looking back further), is that the same type of phenomenon occurred in the period between October 2007 - September 2008... These same stocks performed VERY WELL during that time period (while the rest of the market, namely financials, were "teetering" and/or getting cannibalized)... It's as if money that was in equities for investment tended to stay in these names for no other reason other than that were performing decently on a technical basis (not doing DEATH CROSSES or terrible things like that)... After all, we know most "Brian's" out there probably only look a a chart once every few years or so...

Perhaps, (on a relative basis), they're doing well now on certain fundamental merits such as:

- cost reductions
- halfway decent balance sheets
- decent cash flow
- better credit ratings (or access to credit)

Basically - "at least they don't SUCK"...

Maybe it's a simple matter of yields being so low on Treasuries, some money is being used to RENT OUT dividend yields for a brief period of time... Though it's hard for CV to wrap his head around that "risk-reward" phenomenon and give it green light...

But it would also seem that the comparisons to the Oct 2007 - September 2008 timeframe is undeniable... So it would also seem that sooner or later the stocks themselves will be exposed to any hiccup in the system that forced the type of mass liquidations which were brought about by the Lehman crisis...

When giants fall, the earth shakes... Or in other terms, you don't want to lose your best horses who are pulling the chariot...

250 comments:

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McFearless said...

CV,

how many times have you heard people come on and say they were getting long the large multi-nationals, strong balance sheets, exposure to emerging markets, some dividend. If you read a lot of big money managers this is where they are saying they are positioned and many of them did say the same thing heading into 2008.

In other news:

http://news.yahoo.com/s/nm/20100804/ts_nm/us_iran_president

During a speech to a conference of expatriate Iranians in Tehran on Monday, Ahmadinejad said he believed he was the target of an assassination plot by Israel. "The stupid Zionists have hired mercenaries to assassinate me," he said.

McFearless said...

Some links that caught my eye:

http://futurejacked.blogspot.com/2010/07/lawfare-can-cut-both-ways.html

http://investinginchinesestocks.blogspot.com/2010/08/update-on-housing-shark-loans-in-china.html

http://investinginchinesestocks.blogspot.com/2010/08/back-to-basics-farming.html

http://www.roottrend.com/the_root_trend/2010/08/free-speech-what-really-matters.html

CV said...

@McF (8:15)

Sure I hear them say that...

But my "point" is that this is the last line in the sand...

Pretty much everything has either rolled over or doesn't look too hot (except for a few little things here & there like AAPL or BIDU)...

P3 will occur in conjunction with the money tiptoeing then STAMPEDING to the exits in these large "multi-nationals"...

And BEING multinationals, BUCKY ought to have something to do with that...

But we all knew that already...

karen said...

thotful and perfect recap post, CV.. morning! got my coffee.. now on to Ben's links.. and, yes, long the multi-nationals and EM right?!

karen said...

CV! This is for YOU! She was right!

karen said...

JJC having a tough time holding gap up open? keep your eye on it..

Saw Bruce's post about the Mexican airline.. : )

QE or the ME conflict.. either one is good for gold and oil.. ha! and this market sees both : )

CV said...

Peggy had it right all along...

I think today is Obama's Birthday...

At least that's what it says on his FAKE birth certificate...

CV said...

JJC is pinned in real tight to an ED that's going to expire soon...

Either that, or it's the end of a 3 (which means a 4 will ensue shortly)...

CV said...

MIKKEI was down 1.6% overnight...

Then you get this silly ADP number and this is what we get? (rolls eyes)...

CV said...

I still think this may stop here though (and maybe even do a RE-TESTER of 1110 area before Friday)...

Then - good or bad, they'll make every excuse in the book to put a positive spin on NFP on Friday and take out 1131 to the upside...

JMO

McFearless said...

given the revisions we have seen in every single data series since the beginning of the year I'm still scratching my head as to why ADP is at all relevant for more than say a few hours, or a day at most.

btw, have people seen the M3 calculation that's being done at shadowstats?

Another in a long line of reports the Fed stopped publishing as it got worse and worse.

karen said...

WFMI was trading a bit rich.. no wonder earnings didn't shock and awe.. likewise, TIE.. was trading at a 99 PE, beat by a penny.. down 9% today.. your chance to buy, Johnny!

McFearless said...

C,

yep, I agree basically with what you are saying. I think this quote stuffing thing is going to get really interesting over the next few months as well. All the players will have to start doing it, it's going to blow the market up at some point and the speed at which these things move I fear thats sooner than any of us realize.

CV said...

@McD

KD had a very interesting chart on his blog this morning...

http://market-ticker.org/uploads/2010/Aug/CorporateBalanceSheets.png

There're your CREDIT thesis...

McFearless said...

I'll probably dump the little sso I picked up sub 38 yesterday this morning....small victories.

CV said...

@McF

In 2008, most of the companies that I put in the thread this morning didn't do the DEATH CROSS until the Lehman thing was right upon us all...

Then - WHAMMO...

It's as if they're in DENIAL of what's really going on simply because the chart technicals on some of the largest DOW components haven't broken down yet...

karen said...

Chinese Steel-Materials Producer Ossen Files For US IPO

Ossen Innovation Co., one of the largest producers of prestressed steel materials in China, announced plans to sell stock in the U.S. through an initial public offering in the U.S.

(party will be ending soon.. wonder if they will get in just under the wire as BX did in financials.)

Jennifer said...

@McFearless -- The Financial Ninja used to post a series called "scary Fed charts." They were the best - before M3 vanished. Now, like many of the best bear blogs, he has vanished too. I'm back from vacation to see my long term puts withered on the vine.

McFearless said...

nice chart, tangible assets uh oh, quick...buy gold!

EWI made some really good sentiment observations in the last FF, I'll see if I can bullet point a few without going overboard, they are worth sharing as a different way to consider sentiment right now.

CV said...

@McF

If we pause here, then go down and hold 1110...

I might actually go long for a rental...

McFearless said...

"I'm back from vacation to see my long term puts withered on the vine."

I've got some of that going on as well, part of the reason I keep playing the long side. I bought puts quite a ways out though, so I'm staying strong for now.

karen said...

ben.. dump it now! for heaven's sake.. we haven't even made it to yesterday's highs.. i'll give you another 30 min, Athos

McFearless said...

I find it a little satisfying that Blythe Masters is all over the news right now due to the little uh, problem in the JPM commodities unit. She was one of the early main players in getting CDS out there in a big way.

McFearless said...

my order was just hit so it's closed out, tiny gain, but a gain.

karen said...

hilarious.. the second half hour is the kicker..

Jennifer said...

@CV -- that is the roadmap projected over at Alphahorn. (down to 1110, then up to 1140-1150 area before next big leg down.)

CV said...

OK now the GAP count is up to "4" that the market has left in its trail...

But I'm sure AJC believes those will never be filled...

CV said...

@Jen

Thanks... So I have a friend...

I hope you had a nice VACA!

karen said...

well, i'm still keen on the 100 sma holding on my 6 month BB chart:

http://stockcharts.com/h-sc/ui?s=$SPX&id=p18425475819&def=N&listNum=1

but i'll live to 1133 if i have to..

McFearless said...

how about that gap up in GLD this morning, also watching UUP very close here.

CV said...

Whatever happens... This market isn't going to new highs without backtesting 1110...

karen said...

Last year, there were 1.4 million consumer bankruptcy filings in the U.S., a 32 percent increase from 2008, the institute said in March

..after rising 9 percent last month from June, [consumer bankruptcies] might exceed 1.6 million this year, according to the American Bankruptcy Institute.

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aVJsZlpxQ_SE

Naturally this is good for the credit card issuers, right??

McFearless said...

I highly doubt new highs are in the cards above April, but time will tell. Considering that we've been having distribution for months and you can still see it since the start of the July rally maybe 2-3x each week it's hard to imagine us getting back above 1220, seems people saying this are holding on to the idea of th a/d line, which RR is doing as of this week, but I saw him get burned like this in 2008 as well.

karen said...

Ben.. you can't look at gaps in GLD.. it trades basically round the clock.. like JJC.. stock market is not primary market, for those, ah, commodities.. (gold is not a commodity!)

karen said...

talk about withering on the vine.. XRT.. gap up open on ten min chart looks less bullish

karen said...

NEW YORK (MarketWatch) -- Treasury prices edged lower and the dollar added to gains on Wednesday after ISM's index on the health of the non-manufacturing sector rose to 54.3 in July from 53.8 in June. Yields on 10-year notes , which move inversely to prices, rose 2 basis points to 2.93%. The dollar index , a measure of the greenback against a basket of major currencies, rose to 80.780, compared to 80.589 late Tuesday. The euro slipped to $1.3195, from $1.3234 Tuesday.

Auric Goldfinger said...

Gold is a currency.

I love GOLD, Mr. Bond...

karen said...

ISM game changer?

EUR/USD eases as Fed puts cover on panic putton
Written by Jamie Coleman
August 4, 2010 at 14:11 GMT
With the ISM surveys coming in at 54.3 for the non-manufacturing sector and 55.5 for the manufacturing sector can the Fed possibly reach for the panic button and attempt to ease monetary policy further?
No, it can’t and it won’t. Even if employment is weak on Friday, they don’t want to be seen as panicking.
The dollar is rallying on the view that the QE option is being taken off the table, at least for this meeting.
EUR/USD is triggering stops in the 1.3175/80 area as we write and USD/JPY is rallying to 86.10.

McFearless said...

Karen,

so what do you think of it? Depending on how subjective you want to get with your trendlines on gold you could say it's trading back above it's downtrend line on this move, otoh, if you use the bottom trendline from the $680 lows we peaked just below it and are now back above, but it's got to keep moving higher in order to keep up there.

EWI had an interesting overlap in the disparity index on spot gold, % difference between gold's close and the 200 dma, the trend there is not bullish in the very near term.

Bucky the Talking Currency said...

54.3 "faster" than 53.8.... LOL....

Finally something I can rally on.

McFearless said...

while gold is certainly real money, a careful study of history has shown that in deflation such as this what is used as the common currency has the greatest tendency to rise in value, after deflation runs its course that's a different story.

lets keep in mind what all these debts are denominated in.

CV said...

"Naturally this is good for the credit card issuers, right??"

ORCHARD BANK BITCHEZ! :-)

karen said...

ben, i thot you knew i thot gold was going under $1k.. i'm completely out now except for nxg and physical..

McFearless said...

no, I must have missed that. you bear! gold denier!

karen said...

10:28 AM ET 8/4/10 LONDON (Dow Jones)--State-owned Saudi Arabian Oil Co., or Aramco, has cut its official selling prices for September term supplies of crude oil to Northwest Europe and the Mediterranean by between $1.35 and 50 cents, crude traders in Europe who have seen the OSPs said Wednesday.

Anonymous said...

bottleneck... 21, 34 weekly MA and 50% fib from 2008 high, 2009 low all within a few bucks.
somthings gonna give... soon.

still holding onto my "not going to get to 1134 this time up", but sure looks like it wants to... sigh

18

karen said...

18, it won't if the euro corrects.. guarantee ya!

karen said...

Gold heading for a parabolic rise - John Embry
"If gold is not between $1,500 and $2,000 in the next 18 months, I'm dead wrong."

http://www.mineweb.com/mineweb/view/mineweb/en/page96990?oid=109174&sn=2010+Detail&pid=92730

karen said...

fantastic DR: "Currently, the S&P 500 is a lock between 1,000 and 1,200 and we are now right at the midpoint. This range-trade pattern will break at some point and my sense is that it will be to the downside, and at that time we will see who has the cash (to put to work) and who’s left with the trash (and about to be trashed)."

McFearless said...

Great Points from EWFF, some of which we've mentioned here before:

1. "Uncertainty" is the euphemism of the day.

Me: Indeed it is, how many people have we heard cite uncertainy since the April highs as the "reason" for market volatility, you know, as opposed to those crystal clear periods we are usually in, right? No.

2. From the second half of 1998 through the present, investment advisors have been bullish 92% of the time according to the weekly Investors Intelligence survey. Yet the S&P 500 shows no gain for this 12 year period. EWI conclusion: So, realtive to reality, the optimism that is still to be eradicated by the bear market is not just extreme, it's INSANELY extreme.

Some of the quotes they provide from money managers are priceless.

also some data points to consider about how the talk about mf outlfows is overdone:

According to the Investment Co. Institute, the primary aggregator of MF activity, total mf assets (bond, stocks and money funds) are 12.3 trillion, down just $11 billion, or .09% from the all-time high in October 07, equity fund assets about half of the total are down just 8.8% over the same period.

there's a lot of good data in this issue, the stuff on IPO's of late is interesting as well as a measurement of social mood. Also, they have an awesome chart of the DOW overlapped with the number of articles with "debt" and "economy" in them on a monthly basis since 1990, that's an interesting picture to say the least, and the trend is still rising.

karen said...

This is so, so, so true! "The level of complacency over the economic outlook is palpable and so reminiscent of the fall of 2007 when everyone believed the Fed could navigate us into a soft landing in the face of a credit collapse. Now the pundits have all but abandoned the ECRI index as a leading indicator (even the architects have) of economic activity. The ISM is dipping, but still above 50, didn’t you know. Corporate earnings were stellar in the second quarter — who cares if the results were skewed more to April than June? The savings rate has spiked to 6.4% in June, and many pundits see this as a valve for the U.S. consumer to reload the spending gun as opposed to a new secular theme of frugality."

Leftback said...

A warning on junk, I know Karen has been watching this:

Bubbling Junk?

McFearless said...

as mentioned above there is a loss of momentum (big time) in the disparity index on gold, but lots of "parabolic" calls, FF also discusses this quite a bit.

i suppose these people are waiting for a "catalyst" besides the dream come true of "money printing"

Cash said...

I'm waiting on the sidelines...

Leftback said...

China prepares for the bubble to burst:

China to Stress Test Banks for 60% Drop in Housing Prices!

This is a big one, the AUD and the CAD will tank when this blows, and we aren't likely to "decouple" very successfully either. BUCKY of course is a likely beneficiary.

Helicopter Ben said...

The economy is making me QEasy again....

McFearless said...

From left's article:

“The average retail customer can’t live on 1 percent and that’s the issue,” said Jon Budish, senior vice president of high yield at Jefferies & Co. in Short Hills, New Jersey. “Until the default rate changes or you get a lot of downgrades, or until the Fed says something different, high-yield seems pretty interesting.”

Bono says: In the naaaame of yield....take risk! in the name of yield!

CV said...

@LB

"China prepares for the bubble to burst:"

http://www.bloomberg.com/news/2010-08-03/beijing-billionaire-who-grew-up-with-mao-sees-no-bubble-in-china-property.html

So it looks like it's going to be back to the sweatshop for Zhang Xin...

Maybe Obama will pay for her gas & mortgage too...

Leftback said...

JNK is a massive game of chicken.
The rooster thinks he is faster than the average chicken.

Bucky is showing signs of life.

CV said...

34 billionaires pledge to give away 50 percent of wealth

http://www.msnbc.msn.com/id/38556042/ns/us_news-giving/

"Gates and Buffett launched "The Giving Pledge" in June to convince hundreds of U.S. billionaires to give away most of their fortune during their lifetime or after their death"...

Gee - how warm & fuzzy...

Mannwich said...

Great post, cv. In the "UFB" realm.

karen said...

Until then it is really all about churn.

AmenRa said...

CV

Expect the CIA to get involved...

Traveling overseas...oops
Taking the yacht out...oops
Private jet to 10th summer home...oops

Mannwich said...

Am I crazy for thinking the old vamps FAZ and SRS will run again? Might need to back into rehab for even thinking about those two again.

CV said...

Off topic

It's going to be over 100 degrees in Moscow this weekend...

Yikes!

McFearless said...

"34 billionaires pledge to give away 50 percent of wealth"

ooh, let me translate

tax avoidance

karen said...

JNK scares the heck out of me as one of those too good to be true holdings.. yeah, park your money with no risk and earn nearly 10%? I can't quite fathom where the cash flow is coming from to payout $.31/mo per share.. "The fund normally invests at least 80% of total assets in securities that comprise its benchmark index.."

OT Police said...

PLEASE keep your comments on topic...

The(us) market participants are depending on it!

McFearless said...

nothing just pays 10% without big risk....I remember going into 08 all the preferreds out there with fatty yields like that.

ka-boom!

CV said...

@OT Police (11:10)

Sorry... let me rephrase that...

It's going to be over 100 degrees in Moscow this weekend (Bob Pisani, from CNBC thinks that might be a bullish indicator for stocks)...

karen said...

jjc.. copper at hod..

Leftback said...

100 degrees... Olga will be getting her kit off in the fountains...

The Rooster is on a hair trigger watching the charts of JNK. Even LQD may be getting rich here.

Fascinating post on fixed income at Macro Man. My question is: what is the relevance of the US market in 1993? Japan 1993 might make sense.... Currently hold very few USTs, BTW. A short term burp is likely.

CV said...

yeah, park your money with no risk and earn nearly 10%? I can't quite fathom where the cash flow is coming from to payout $.31/mo per share

---

Back in October '07 thru summer of '08 most of the DRY BULK SHIPPERS had yields up in those levels...

If you want to see how that story played out go take a look at the multi-year chart of DRYS (or any of the others)...

CV said...

DRYS went from over $131 a share down to less than $3 bucks...

CV said...

Get me in Brian!

72bat said...

Zhang Xin who left investment banking for r.e. development said:
“On Wall Street, all values seemed upside down,” she said. “People spoke crassly, treated each other badly, looked down on the poor and adored the rich.” She said investment banking reminded her of her days working in the Hong Kong garment factories. “The difference is, in Hong Kong the competition turned people into shortsighted mice, whereas on Wall Street it turns them into wolves and tigers,” she said.

...and vampires.

Anonymous said...

Now that's a GAP!

18

Leftback said...

Wall Street is a Vacuum of the Soul.
It is the Heart of Darkness.

CV said...

Can anyone remember a FRACTAL, recently, where the market "gapped up" slightly (at the open) on some silly news (like OPEX day, or ADP, or whatever)...

charged higher, then proceeded to give it all back in the first 60 minute candle?

Oh yeah... 6/21, 7/26...

Leftback said...

Macro Man today. Actually I think they are correct in the near term about the short end, the 2y is absurd here, but it will not blow out very far. We are in ZIRP.

Macro Man on Fixed Income

LB owns no 2y or 5y here, danger zone for the short term. One moderately warm jobs number and the front end is toast.

McFearless said...

10 year JGB below 1%...oh no way THAT could happen here

or could it

I'm gonna go with it could

Leftback said...

1-handle, baby. Believe it.

Keiretsu.

karen said...

as for PCLN.. there was that 10% short that needed to cover..

CV.. as for shippers.. yeah, i still have mine: DHT.. but a large shareholder became furious when they cut the div and just sat on their cash flow. He got it reinstated albeit smaller.. now.. 10 cents/quarter vs 25 cents.. so basically it is back to paying 10% at today's price..

McFearless said...

DSX also in the shipping space, that was another one with a giant yield pre-collapse.

drys was a real hedge fund favorite back in the day.

CV said...

"10 year JGB below 1%...oh no way THAT could happen here

or could it?"

That's why they're content to RENT McDonalds here with a 3.12% div yield...

Plenty of time to get into 10 year treasuries if they're going sub 1%

karen said...

everyones favorite tan man:

http://www.housingwire.com/2010/08/04/countrywide-ceo-says-sec-admits-investors-knew-about-risky-lending

CV said...

or so they think...

For all we know, it could be sub 1% by the elections...

Bruce in Tennessee said...

David Malpass running for senate? His qualifications are....?

(And CV, don't say he wasn't a community organizer...I know how you think....!)

McFearless said...

"David Malpass running for senate? His qualifications are....?"

blindsided by the credit bubble....he'd fit right in.

karen said...

NEW YORK (Dow Jones)--The total outstanding notional amount for all interest rate derivative transactions reported by the 14 major dealers including Goldman Sachs & Co, Morgan Stanley and J.P.Morgan was $449.202 trillion as of June 30.

McFearless said...

today's down move was another 3 wave correction...

McFearless said...

oh karen, no problem, the fed will monetize it all, isn't that the claim?

laughable

they've done what, 2.5 trillion so far in monetization?

it's no even a rounding error yet.

what is that 29x the size of annaul GDP in the US, and people think there's "cash" in the system.

karen said...

THIS is a lot of FUN! but I swear they have her on an erratic timer : )

http://scienceblogs.com/neurophilosophy/2007/10/the_left_brain_right_brain_myt.php

McFearless said...

@Ra,

you watching TRIN today?

McFearless said...

Karen,

I do a lot of mind puzzles like the spinning dancer to help myself with pattern recognition, with simple practice you can see that dancer spin both directions whenever you like.

Leftback said...

If you look away you can get her to change direction...

McF, the next monetization may well be more MBS plus CA munis...

CV said...

$449.202 trillion...

There are somewhere between 100-400 billion stars in the MILKY WAY galaxy...

Now assuming the "likelihood" of binary star systems, let's place the estimated number of SOLAR SYSTEMS in the entire galaxy at around $100 billion...

So - supposing there was at least 1 EARTH LIKE planet in each of those solar systems...

Do you suppose we could go to each one of those EARTHS and borrow, say, 4-5 million dollars from each one to balance out the notional interest rate derivative aggregates...

I'm just thinking of my options here...

Bruce in Tennessee said...

what would the small fry invest in, CV, it would not be a global ETF, or and international ETF.....intergalactic ETF?

Pattern Recognition said...

I'm a "coded feature" if you sign up with TD Ameritrade...

I'll "fire off the trade" automatically for you as soon as one of Lloyds HFT order stuffing bots tells me to...

karen said...

ben, i had no problem getting her to spin either direction.. it was fun, tho..

McFearless said...

lefty,

CA munis and MBS, we'd be looking at well over $10 trillion.

I laugh at the concept so I'd fully expect them to try it.

as I've said about a week ago though, the fed will ultimately choose self preservation, they won't destroy themselves to save the "system" they are private after all.

all in, the total amount to monetize everything is at least a quadrillion dollars, and growing. imo, anyone that thinks they can do is dizzy on something special.

CV said...

@Bruce

I'd keep it simple...

Just wait and see who's going to get the Olympics, and invest there - lol

AmenRa said...

Ben

TRIN holding above 1.20

McFearless said...

http://www.ritholtz.com/blog/2010/08/weekly-leading-index-still-widely-misunderstood/

you guys just don't get it

McFearless said...

I find it part of the new brand of comedy that so much time and energy is spent (wasted) on the ECRI and whether or not we could be in a double dip recession.

karen said...

fyi: NYSE Cumulative Breadth Hits New High But…

McFearless said...

and lines like this are really priceless:

"Opposing criticism comes from the super-bears, who were cheered no end by this year’s fall in the WLI, having been badly blindsided by the earlier 80% rally in stock prices since the March 2009 low. To them, the WLI’s downturn this year may have represented the promise of ultimate vindication."

yeah sorry, any super bear was bearish going into 08, so they dont' need vindication, based on the market price, a fact nobody can deny, they are still right until we break to new all time highs, otherwise a bear (someone that thinks the trend of prices will be down for a time) has been exactly correct, despite the "huge rally" which did not get us back to even.

AmenRa said...

TNX did have a lower low than yesterday by hitting 28.87. Probably why it got pushed to 29.55. It's off the high now.

CV said...

@McF (12:21)

And to think... Ritzy just reels it off with spare brain cells in between shopping for yachts, watching his horse winning at Saratoga, and taking his lear jet up to Nova Scotia to see the total eclipse of the sun...

I-Man said...

I still love yall...

Just busy as shit learning new things.

karen said...

mrtopstep

GS planning spinning out prop desk~ CNBC - i can't take credit for saying this, but what will they (GS) do with the remaining eight people?

I-Man said...

I cant wait to take money from those bitches...

GS prop traders, that is.

Leftback said...

Up up and away.... in my beautiful balloon....

Where's Manny?

I-Man said...

He's huffing helium somewhere in Minneapolis...

Leftback said...

"Much of the spilled oil is gone..."
http://news.yahoo.com/s/ap/20100804/ap_on_bi_ge/us_gulf_oil_spill

How stupid do they think we are?

CV said...

@LB (12:44)

Yes... of course that was from a WHITE HOUSE official...

I guess all those same microbes and naturally occurring bacteria are going to eat away the budget deficit too...

Leftback said...

Anyone feelin' FAZZY? Banks are laggards today.

CV said...

BIDU - UFB!

So how do you like bearish RSI divergence (on a MONTHLY chart)... When the RSI on the same monthly chart is up at 84?

A little rich?

AmenRa said...

Former Goldmanite Talks About Goldman's Trading

Former Goldmanite: "This Might Get Me Sued, But I'm Going To Lift The Veil On Goldman's Trading"

Courtney Comstock

An entreprenuer who left Goldman might now be risking getting sued by the company for disclosing proprietary information.

After working at the firm as a quant for a few years, he recently chose to reveal what Goldman's inner trading system looks like on his new tech start-up's website.

The former-quant, Antonio Garcia-Martinez who's currently launching a new tech startup, "adgrok," says off-handedly that he might be sued for writing this. After reading it, we suppose it's possible:

The Goldman Sachs risk system is called SecDB (securities database), and everything at Goldman that matters is run out of it.

The GUI itself looks like a settings screen from DOS 3.0, but no one cares about UI cosmetics on the Street. The language itself was called SLANG (securities language) and was a Python/Perl like thing, with OOP and the ORM layer baked in.

Database replication was near-instant, and pushing to production was two keystrokes. You pushed, and London and Tokyo saw the change as fast as your neighbor on the desk did (and yes, if you fucked things up, you got 4AM phone calls from some British dude telling you to fix it).

Regtests ran nightly, and no one could trade a model without thorough testing (that might sound like standard practice, but you have no idea how primitive the development culture is on the Street).

Unbeknownst to most of the non-strategists, you could see basically every position and holding across the company, whether you were supposed to or not. The whole thing was so good, I didn’t even know what an ORM really was until I started using Rails and had to wrestle with ActiveRecord. The codebase was roughly 15MM lines when I left, and growing. I suspect my retinas are still scarred by the weird color blue SecDB was by default.

CV said...

...and the PEAK RSI was when BIDU was half it's current price in '07

CV said...

@Amen (12:50)

So it's not like Rothchild getting back to London a few hours early with the News about the battle against Napoleon in his pocket...

More sophisticated now?

Leftback said...

Sounds like the Blue Screen of Death at Goldman......

The vultures are circling. Blanky better enjoy this summer at West Street, because it may be his last in charge. The knives are out.

I-Man said...

Who is "Rothchild"?
.
.
.

Thats a rhetorical question...

AmenRa said...

So is the China stress test going to force the other stress tests to be reevaluated?

Leftback said...

Goldman has dominated mainly through a culture of fear and intimidation dressed up in an Emperor's Suit of Clothes - Bankers for Public Service.

Watch what happens when some of their mystique and power is stripped away and people are no longer afraid of GS.

Got popcorn?

CV said...

@I-Man

he's the guy holding all the call tickets on the quadrillion in derivatives...

karen said...

the video clip of the Huguette Clark story if you are interested in getting a glimpse of the properties (especially bellosguardo in sb) as I was.. darling woman interviewed whose father was caretaker for 50 years.. she got to play there! http://www.bubbleinfo.com/2010/08/03/heiress-homes/

Leftback said...

Challenger's count of layoff announcements totals 41,676 in July vs. 39,358 in June. The results don't point to improvement for the July employment report.

Interesting, I mean who lays people off in July? Local governments...

CV said...

You'd think that the government would want to lay off a lot of workers in July... So that then they could report incremental INCREASES for the run-up into elections...

See voters? we're on the right track!

karen said...

SAN FRANCISCO (MarketWatch) -- General Dynamics' board on Wednesday approved a plan to buy back up to 10 million common shares in the open market. The board also declared a quarterly dividend of 42 cents a share, unchanged from the previous quarter. 1:05 PM ET 8/4/10

McFearless said...

"GS planning spinning out prop desk"

Maybe CNBC missed it but I thought I read the idea wasn't so much to unwind, but to reclassify by calling them "money managers" instead of prop traders to skirt around the FinReg rules.

too easy.

CV said...

Bucky getting feisty in the past 10 minutes...

McFearless said...

GS has an extremely dark history if one wants to study it, you'll find they were typically eyeball deep in a lot of bad deals going way way back.

Leftback said...

GS.

Darkness and deceit, especially since Blankfiend took over.

CV said...

@karen

General Dynamics...

Well that's no surprise... Our PEACE LOVING President offers his input on the subject...

http://www.youtube.com/watch?v=uCK8oSFFpgc&feature=player_embedded

karen said...

and sentiment is an indicator??

Bearish Sentiment Down Two Weeks in a Row from bespokeinvest.com
WEDNESDAY, AUGUST 4, 2010 AT 11:19AM
For the second week in a row, bearish sentiment among advisors as measured by Investors Intelligence showed a modest decline. As shown in the chart, 33.3% of advisors are now in the bearish camp. While a decline in bearish sentiment is typical when equities rise, one could make the case that it should be lower. Afterall, the current level of bearish sentiment is the same now as it was when the S&P 500 was trading at it correction lows in early July.

karen said...

TopSTep: http://www.youtube.com/watch?v=53-4oY4g1bw

karen said...

can't hear a d*mn thing..

Bearish Sentiment said...

It's August. I am away.

I-Man said...

Blanky? Search J.Aron and Company

AmenRa said...

TRIN above 1.30 now

CV said...

@karen

Bad Audio on TOPSTEP... Plus - Brian talks like he's gargling marbles...

Bottom line...

- Both Top & low estimates have been met (1128 - 1116)
- Light trading (on pause - perhaps - until Friday)
- If stops get blown out at 1116, there's support at 1112 and 1106

OVER

1131 and 1137

karen said...

CV.. LOL.. i wanted to say something about Brian, too! but you know me; and I do feel rather protective of him for some reason.. : )

CV said...

@karen

So basically there's not a lot to do and Brian can get back to practicing his marble gargling...

I-Man said...

Take him to Toastmasters next week, Karen.

McFearless said...

they shouldn't let Brian do those top step updates, probably a good guy, but he's got no energy and he's too quiet, even when there aren't audio issues.

karen said...

http://nymag.com/daily/intel/2010/08/trump_soho_sued.html

Despite its spectacular views and tasty restaurant, the Trump Soho is largely empty. This is problematic, as buyers of the condotel's suites were promised that "30, 40, 50, 60 percent or more sold," when in fact, as of May, only 15 percent of the units had been sold. So fifteen duped buyers are suing developers the Sapirs and name-lenders (slash marketers) the Trumps: Donald, Donald Jr., Eric, and Ivanka. Maybe when the tower's luxury spa opens everyone will just chill out.

McFearless said...

all I really made out was 1116.5...

Leftback said...

This is a classic for the chart-addicted deflationist, I predict that Karen will be hearting this guy in no time at all. He has some really nice macro indicators that we haven't seen before. NB: there are one or two label errors here and there.

http://www.zerohedge.com/article/gmi-describes-future-recession-ongoing-depression-must-read-report

karen said...

This day, as so many preceding it, is wearing on me.. just hope the rest of you are having more fun than I am! lots of dead $$ getting on my nerves..

Bruce in Tennessee said...

I did manage to get a picture of the governator when one of these condotel's was offered to him....

Leftback said...

Shocking to hear that there are liars and cheats in real estate. Buy now or be priced out for ever...

From what we hear, apartments in the very latest new Trump Palace in downtown Stamford (even hotter than SoHo) are selling like hot cakes, presumably to the UBS and RBS bonus babies.

Of course it was The Donald who called with The Pitch....

CV said...

Trump Soho...

Maybe if they turned the lobby into a SCORES they could drum up some business...

Leftback said...

EURIBOR creeping up to 0.90%, we will be seeing sovereign issues again in a few weeks once YOORP returns from its beach vacation and Hugh Hendry starts shorting the Vatican.

Once HFs start buying the T-bills again and we see a 3-mo bill at 8 or 9 bps, me and my rooster will be off into long T-bonds for the duration. A serious bull flattener in the Treasury curve would be the trade that would (a) screw the most people, including many on Wall St. and (b) delightfully recapitulate Japan.

Domo arigato, Mr Roboto.

Leftback said...

CV,

If you were the DJ, then they might be in business. The Schrager hotel lobbies, BTW, are like effing South Beach... try the Royalton NYC...

McFearless said...

nice link lefty, his first line was my comment above,

"chart patterns across major markets still look like distribution patterns"

I also like his call at the top of page 5, rather than focus on the big decline, it's been my take that we should see an 800's handle on the S&P before year end and I'm still sticking with that.

now I just need to figure out a way to retire in 6 years so I can really be just like him.

Mannwich said...

Manny was out for a nice walk with the wife and pooch. Back now.

The pooch needed 3 stitches on her nose last Friday. Freak accident. Pushed through our single pane window that she had previously cracked in a fit of rage at the mailman. The broken glass cut her nose a bit. She's fine but my new nickname for her "Scarface".

McFearless said...

Trump was building a giant tower in Chicago when I was there last year, wonder how that one is doing, I think it was condo's. Huge place.

McFearless said...

he also doesn't think the new ship supply issue I asked about weeks ago in relation to the BDI is of any significance.

Saint Jamie said...

I almost lost my lunch:

http://noir.bloomberg.com/apps/news?pid=20601087&sid=a54wYey7xC5I&pos=1

Leftback said...

LB likes 880 now, but if the Hedge Fund Fun Starts Again and then BRIAN's phone is ringing off the hook, anything is possible... we made a 500 call and still think we could see that in a panic.

Each subsequent major Nikkei low was lower.

McFearless said...

page 19:

"Firstly, QE is not new. It has been tried and tested by Japan and however much I dig into the data I cannot find ANY evidence at all that it works. There is next to no evidence that it worked in 2008. by all accounts it was the fiscal package that gave the bang for the buck. The idea behind QE is that it lowers the long-term financing rate thus encouraging banks to borrow money to lend out and encourage savers to spend."

bwahahaha, yep, he nails it over and over in this paper.

a little ways down:

"In fact, as a tool for fighting deflation, I am not sure it doesn't actually do the opposite"

We have a winner here!

via EWIFF from an outside financial specialist:

"If house prices and stock prices decline faster than the decline in outstanding indebtedness, then household leverage goes up, not down, and the goal of improved economic performance moves further away. for this reason, some of the egalitarian programs to keep people in houses they cannot afford have the unfortunate side effect of extending the problem and increasing the ultimate social cost. As demonstrated as recently as in the 1990's in Japan, overleveraged borrowers don't borrow and financially challenged financial intermediaries don't intermediate."

CV said...

On track, again, to make an entry into the lowest 5 volume days of the year...

Nic said...

Hello
Great post today CV,
I still love y'all too. Just getting better slowly and trying to learn new things like I-Man.
I am thinking about a prop deal, remote trading crude.

Ben Bernanke said...

I rode the short yellow bus to school...

karen said...

What he says about the UK is fascinating...

Ben, i beg you to read the first comment on this one:

http://cribchatter.com/?p=8699

karen said...

Nic, that is great! keep getting better! as a last resort, you could go on a vodka bender.. something I've been contemplating.. laughing.

McFearless said...

karen, ha!, and from someone with the PermaBear handle no less.

ok, so for me, why would I buy a place like that with a giant terrace but a smaller living area.

Uh, Chicago, in winter....not warm, so how is that a huge selling point, you can go to the top of the JH Tower and get a view of the city for free, the best view of the city in fact. and that condo is right on the lake so you'd get some nasty wind and cold temps pretty early there.

If I was going to spend that kind of money on a place I'd want more living space, and I'd love to see what is all included in the 1192/mo in assessments. (includes doorman and cable???)

cable?

McFearless said...

all that talk about the heat in russia earlier had me thinking about a cold stoli.

McFearless said...

it doesn't even include parking....

karen said...

"I love that the parking spot isn’t included." too funny.. i love chicago.. it has an ocean! that's why i have that blog bookmarked.. when you mentioned the trump in chicago, i made a beeline to that site, laughing.

karen said...

better bookmark the site, ben.. pure entertainment.

McFearless said...

I will say this though, Chicago, that's a great city. I loved it there.

CV said...

The good thing about having a large terrace is that you can have a big party with a lot of bankers and get a lot of them to

JUMP YOU FUCKERS all at once....

very convenient...

McFearless said...

been digging this song lately:

http://www.youtube.com/watch?v=2oXRR_XKKnI

it's country so some people might not be into it. he's got serious chops on the guitar.

Leftback said...

I enjoyed Chicago too...

LB was stationed there in his youth.

McFearless said...

the other thing about that tower if I remember right is that it wasn't really in the hottest part of the city as far as places to go/nightlife, it's close to the pier though, but that's more for kids from what I could tell, or tourists.

Leftback said...

I know! You can leave the Stoli on the terrace and save on a freezer.
In the winter, obviously. It's not like LB was on the short yellow bus...

CV said...

CAT within 60 cents of taking out it's CLOSING PRICE on April 26th...

Leftback said...

McF,

If KAREN was there, it would be THE hottest part of the city.

Nic said...

Oh Canada, excuse me while I chuckle ...
Vancouver homes market goes cold July sales drop 45% YOY, inventory levels up 33% YOY http://bit.ly/b56FYC

McFearless said...

karen could cause global warming in Chicago, lol.

CV,

I would love to short CAT at some point, like, real soon.

CV said...

@Nic

Hmmm... What "inning" would that be?

Jennifer said...

I live in a western suburb of Chicago. I think that Trump Tower is in a bad place too...not a residential area of the city at all.

McFearless said...

@jennifer,

So I've been wondering, have you said anything to the board at the school regarding their finances? If so, how'd that go?

CV said...

@McF

It would almost seem a foregone conclusion that it's going to take out the April 26 high at this point (which would create a nice bearish divergence on both DAILY & WEEKLY charts)...

Problem is... How many times do "foregone conclusions" ever net you any profits?

Bruce in Tennessee said...

Nic:

you mean housing can actually drop in Canada?

CV said...

The Chicago Trump isn't overlooking Mrs. O'Leary's barn or anything is it...?

Ivanka Tramp said...

Housing can drop?

CV, have you seen my panties, by the way?

Jennifer said...

@McF, thanks for asking! I tried...it seems that the situation was so dire that it could not wait for the next full board meeting (still 3 weeks away.) The finance sub-committee approved the request for additional funds from the appropriate endowment for the coming year. I think this was the right thing to do. It is much too close to the start of the school year to send families scrambling now. However, I'll have to get it together in front of the whole group at the next meeting to come up with a plan going forward. I'm fine w/ spending the money this way (especially if the rest of the group wants to) but I want the projections for the future to be realistic so we can plan appropriately. I don't really know what the current assumptions are, so I can only imagine that we're talking about 8% returns ad infinitum. I also think that it is faulty to assume that contributions will continue on pace (or worse -- grow!) when families will continue to be under stress for the forseeable future. The ideas I got here were very helpful. I've pulled a few articles and started an outline of my thoughts. So far though only a few board members know that I'm the bearish fruitcake in disguise -- I have to tread lightly but I'm feeling more optimistic that I have a chance to be persuasive.

McFearless said...

wow, tough situation, good luck to you, and the board probably doesn't realize it yet, but you'll be a beaming ray of light in the event you help them prepare for things they wouldn't have otherwise done on their own. at minimum just having them consider them is a victory on some level. could help a lot of families there.

Jennifer said...

on the whole idea of housing going up forever...I've always wondered, what planet did these people live on in the 80's? I'm dating myself here, but my parents built a house in 1986. We had to sell the old house. My parents were very tuned in to the fact that our geographic area (Northern NJ) was in a bubble. (No idea if that was local or nationwide...I was a clueless teen.) Even I knew we were racing to get the first house sold before the market imploded. We were on the backside of the peak, but still unloaded before the real downward accelleration started. It took about 7-8 years before the newly build home regained its purchase price, but they weren't in a hurry to sell. Saw the Chicago condo market go nuts from 2001-2005 and knew it wouldn't last. There was good money to be made though if you were nimble. Know of a few people who flipped condos and used profits to pay off all their student loans.

Nic said...

Good on you Jennifer.

Leftback said...

Banks have lagged, XLF trailing SPY all day.
That's supply...

DISTRIBUTION baby.

8% returns Y on Y? No problem, Mr Madoff is on line 3 for you...

Actually LB has done that for 4 years but ON AVERAGE, not metronomically, and he doesn't make any promises....

CV said...

According to AAII:

July 29th: 40% bulls, 33% bears, 27% neutral

April 22nd: 38% bulls, 34% bears, 28% neutral

karen said...

Jennifer, on the whole idea of stocks going up forever...I've always wondered, what planet did these people live on in 2000-03?

karen said...

New KOL coming October 19:

http://justjared.buzznet.com/2010/08/04/come-around-sundown-kings-of-leons-new-album/

Leftback said...

AAII Bulls is too neutral to be useful here, eh?

McFearless said...

yeah, I'm hoping they don't play all new stuff tomorrow night. I don't like seeing shows like that, would prefer to know most of the songs. Caleb said in a recent RS this album is a lot different than the others. I'll try to get some good pics tomorrow night.

karen said...

well, they got this right anyway, "For Investors' Sake, Morgan Stanley Questions Power of Home Price Indices"

http://www.housingwire.com/2010/08/04/for-investors-sake-morgan-stanley-questions-power-of-home-price-indices

In places such as San Francisco, some declines may be even reported as gains in house prices, they say. According to Case-Shiller, San Francisco is the best performer with a year-on-year gain of 18%

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