Houston saw some pretty wild temperature swings this weekend. We went from mid-80s to mid- 30s within a few hours. The result is that yours truly has been sick the last two days.
So, the commentary here will even lighter than normal but I did put together some thoughts on the SP500, Gold and the DXY.
Bottom Line: S&P 500 and Gold looked headed sideways/lower this week. The DXY is up against some Fibonacci resistance at 80.53-80.64, but I'll be buying the next dip--hopefully I get a shot at 79.40-79.50.
Hope everyone had a good Holiday.
Zombie Bears
This last week Barry Ritholtz talked about "zombie bears." These are the bearish folks who cannot accept that things gettting better, "albeit slowly." I think the 'key phrase' in the whole thread was "albeit slowly." When one falls off a building and breaks every bone in his body, his recovery time might be "slow." He's getting "better." He didn't die. But, how's he really feeling?
http://www.ritholtz.com/blog/2010/11/zombie-bears-time-to-admit-the-recession-is-over/
In that thread, he stated this reason for getting bullish into the lows:
"We already had a massive crisis and collapse, so the worst of what came before was already reflected in equity prices and trader psychology."
I cannot agree with that more.
What's interesting, though, is that one could take the exact same statement, in reverse, and say this about the current market situation:
"We already had a massive 85% rally from the lows, so the good news is already reflected in equity prices and trader psychology."
Indeed. OF COURSE the "news" is better right now!! If the news weren't more positive after an 85% rally, something would be SERIOUSLY WRONG with the market.
I suppose the reason that there is a camp of people who remain bearish is the fact that:
a) 1 out of 6 American workers are either unemployed or have given up looking for work.
http://blogs.wsj.com/economics/2010/11/05/broader-u-6-rate-at-17-the-long-term-unemployed-and-the-dark-side-of-jobs-report/
b) Food Stamp Usage is at all time high.
http://www.cbn.com/cbnnews/finance/2010/October/Americans-Use-of-Food-Stamps-at-All-Time-High-/
c) Median Home Prices are at their Lowest Levels since 2003
c) Median Home Prices are at their Lowest Levels since 2003
http://www.nuwireinvestor.com/articles/median-home-price-falls-to-lowest-level-since-2003-56127.aspx
d) Marriage Rates in the U.S. are at all time low.
d) Marriage Rates in the U.S. are at all time low.
http://www.boston.com/news/nation/articles/2010/09/29/recession_leaves_marriage_rate_at_new_low/
Anecdotally, most of the the folks I knew who lost jobs are back to work again. Several had to take pay cuts. Some took the pay cuts and then found better jobs after being employed again. I can tell you one thing for certain: After being out of work for awhile, these people are not out "spending" again. They're saving their money and repairing their balance sheets.
We also have friends who are still deeply underwater on California homes purchased a few years ago. One guy I know is renting his house out and losing $1,000/mo on the transaction. He doesn't want to sell and take the loss on the home.
Anecdotally, most of the the folks I knew who lost jobs are back to work again. Several had to take pay cuts. Some took the pay cuts and then found better jobs after being employed again. I can tell you one thing for certain: After being out of work for awhile, these people are not out "spending" again. They're saving their money and repairing their balance sheets.
We also have friends who are still deeply underwater on California homes purchased a few years ago. One guy I know is renting his house out and losing $1,000/mo on the transaction. He doesn't want to sell and take the loss on the home.
So, I suppose it all depends on where you are in the country. Some areas did witness a DEPRESSION, and not just a recession as Barry asserts in his piece. Other places never got hit that hard. For instance, in Manhattan, at the places that Barry runs around, except for that brief scary moment in 2008, things have always been OK. After all, that's the area that gets the Federal Reserve Notes FIRST..... Must be nice.
199 comments:
Irish bailout ready to hit the markets. Some participation by the Irish pension funds in the bailout, maybe 20% of the cash (!) and the rest is from a variety of countries, it all adds up to €85B, at an average interest rate of 5.8%. This is an appalling political development for the Irish people, but politics isn't my patch.
Bondholder haircuts are off the table so that means that the European bank stocks will bounce and US banks will probably follow. Treasuries will probably be sold as investors exit safety trades.
You would think that this might stabilize EURUSD for a while. But with US employment reports lurking to provide additional USD support, and Portugal and Spain next in line for the bond vigilantes, it seems unlikely that we will see more than a very brief resurgence of DGDF and the commodity trade.
Sell the rips in EURUSD and in the emerging markets is how LB sees it. There may be downside for the USD in the immediate future but it isn't going to last long. LB is watching AUDJPY as risk proxy. Both currencies have been weak lately, so to me there is no clear risk-on or risk-off signal for US equities and high yield credit for the time being. Sideways trade in the US and some frantic exit rallies in EMs?
Who you calling Zombie?
Liverpool game was brutal LB. Sorry about that.
LB et al.,
A great interview with David Rosenberg at:
http://www.wealthtrack.com/
Leslie Nielsen checks out of this world. He was part of some of the funniest movies I've ever seen.
Some clips.
Who cares what Barry thinks?
Love you guys : )
Love the dollar at 80.43 in futures.. 80.72 highs.. anecdotally, saw a 'record' number of new cars on the freeways this holiday weekend..
Hussman
,,Essentially, the problem in Ireland is exactly what Dornbusch described: First, Ireland has a banking system that like other countries around the world, including the United States, carries a mountain of bad long-term debt on the asset side, and has become increasingly dependent on funding them with short-term deposits over the past decade, thanks to the allure of "cheap" money at the short-end of the maturity curve.
Next, Ireland and other countries in the European Monetary Union have their liabilities denominated in a currency (the euro) that they cannot actually print on their own. As Ireland, Greece, Portugal and other European countries run budget deficits, they have to induce the private market to buy their government bonds, which are denominated in the common currency. This is effectively like being on a fixed exchange rate or a gold standard, so rather than being able to print money or depreciate the currency, the only adjustment variable is the interest rate. So rates have been soaring in these countries. To some extent, states and municipalities in the U.S. are in a similar situation.
Over the short run, Ireland will promise "austerity" measures like Greece did - large cuts in government spending aimed at reducing the deficit. Unfortunately, imposing austerity on a weak economy typically results in further economic weakness and a shortfall on the revenue side, meaning that Ireland will most probably face additional problems shortly anyway.
Germany's Chancellor Angela Merkel is effectively the only major leader who recognizes the correct prescription, which is - as Dornbusch advises - to grow up, restructure the debt, and clean up the banks, because bailing them out will simply make the problem worse down the road. Merkel calls this "burden sharing" - which is another phrase for "restructuring" - but she is also vilified for it, because lenders would much prefer to have the government make them whole at public expense (and mostly the German public at that). And so, predictably, Europe is now choosing to kick the can down the road....
...There does seem to be a bearish blend of coffee in the morning air. The aroma, if that is what it is, is pungent.
I hope you read this from Mish this morning..
Said ECB president Trichet in an exclusive interview...
"This is a victory for much maligned bondholders everywhere. I am pleased to announce we have effectively removed the word investing from the vocabulary of bondholders."
"Starting today, bondholders need not be concerned with who they lend money to, why, or what risks there are in doing so."
...Am I the only one who thinks this is Bizarro thinking? No risk to bondholders?????
Can you say European default? I thought you could. Risk-free investing...not for me.
A little article on one of our favourite trading vehicles, usually discussed here in the context of TLT.
http://www.bloomberg.com/news/2010-11-29/treasury-30-year-returns-as-market-bellwether-as-fed-policy-propels-trade.html
A few discussions with Euro peeps on my trip to England, Bruce, suggests the following scenarios are likely: EURO-North (Germany, Holland, Luxembourg) and EURO-South (the rest), or far simpler, Germany reverts to the Deutschmark. Much easier than tossing little countries out one by one. Britain was smart to stay out, they saw this coming, and were devaluing the £ via QE and printing like drunken sailors after the Crash.
BTW, most of the smart bond guys believe that Ireland will eventually default, as will Greece. As Krugman has outlined, austerity leads to contraction which leads to inability to service debt. The Irish "rescue" simply allows the irish bankers and developers to keep dipping their hands into Paddy and Siobhan's pockets for a while longer.
Young Irish are leaving in droves for the UK and the US.
"Thousands are sailing across the Western ocean...." or flying, as it would be these days. So buy shares in Ryan Air. Or Aer Lingus.
Karen,
You would enjoy the service on Aer Lingus....
;-)
Bruce in Tennessee:
I can't believe the ECB President said such a thing in re: bondholders. WTF?
Since when are bonds supposed to be risk free?
Live Update:
The rally in EURUSD lasted about fifteen minutes overnight. It is falling and equity markets in London, Frankfurt and Paris are falling along with it. Credit markets are slightly more stable but EURJPY is down substantially, so it's hard to see this as anything other than a risk-off day, although the stronger dollar may mitigate the damage in the US except for the Short USD:Long EMs and commodities crowd.
My guess is the bleeding in equities may continue until we get the reasonably solid US employment numbers on Wednesday (or the leak thereof on Tuesday). Not wildly bullish or bearish on the US market, but it would be a surprise if we didn't see some kind of pre-Christmas rally. Watch the news flow to see if the focus moves away from sovereign debt, although this will be a temporary cessation of hostilities.
Will be around in the early afternoon...
Andy
It will be a tough few weeks for Liverpool with Stevie G and Carra both out for a while. LB is ready to lace up his boots, though, and it's only about 5 miles from here to the ground, and I'm wearing a shirt with "3" on the back. LFC are lucky that the last two Europa games are meaningless so they can play a youth team and focus on the game with Villa.
By the way, talking with my brother and sister-in-law, the peeps who bought their house will be paying.....(drumroll).... 2k/month in property taxes...yes, that is not a misprint..Los Altos, south of SF.
Sorry, didn't read all of Mish...my fault.
Those quotes were intended as sarcasm, however with my tiny little brainpan, and what is going on in Europe, I thought this was something he might well have said. Either it shows you how simple I am (certainly possible) or it shows you how these manipulated markets can bring about scenarios that I have certainly never considered before. Were I young and Irish, I would be leaving too, before the next potato famine....
SPX futures around $9 below fair value. It's worse than futures are letting on.
Bruce.. Trichet didn't really say that, did he?? Come on.. I'm sure that was someone's idea of irony..
Andy, sorry, I still need to review your charts!
Bruce.. my property taxes are just over 2k/month.. : (
oh my.. must have had a least a dozen "cyber monday" emails.. was black friday not so hot?
oops on the aussie..
topstep global insights report:
http://docs.mrtopstep.com/gir/vol1/MrTopStepGlobalInsightsReport1-1.pdf
mrtopstep
posted [08:36:01 AM]: $ES_F Under 1179 area of sup last week's low 1175 area and 1187 area res. SB bot 200-300 100ish locals in pit
1174 might hold the spx..
I see a high of 81.03 on the DXY...
everywhere i look, h&s or rev h&s..
Karen
And to think that there are 2 POMO's today. Brian Sack has his job cut out for him. Won't help though.
did someone say pomo....lol.
I still think this has further to fall but that may be it for today.
happy trading
there is something to be said for removing yourself from markets for several days, helps bring back some clarity about the real world instead of the fantasy land I live in all other days
hussman: http://www.hussmanfunds.com/wmc/wmc101129.htm
also, file under GIB;
people already think they can count Friday's sales
Wall Street Shrinks From Credit Default Swaps Before Rules Hit, Bloomberg.
http://bit.ly/hPYDps
SPX is below its weekly S1 at 1177.89. Weekly pivot is 1188.42. It's below its weekly 3LB reversal at 1176.19 (has until Friday). Also below its monthly 3LB reversal price (tried and tried but failed).
“Optionality” Should Be Huge At 1.30
By Jamie Coleman || November 29, 2010 at 15:13 GMT
Gonna be a boatload of barriers around the 1.3000 level, to be sure…
If EUR/USD gets comfortable below this 50% fibo at 1.3080, we’ll make a run at it before long…perhaps by the end of the day.
C is not allowed to fall below 4.10 PERIOD.
They are promoting the hell out of "cyber mondays" to make up for the failed Black Friday.
GM made a new low today.. PPT sure has its hands full attempting to artificially inflate many billions of shares..
Gold not down that much compared to the rise in the dollar.
gld under 133 is weak tho.. gotta see if it can pull and stay above..
"Doesn't take a rocket scientist to see where 'the buyer' is sitting almost every day for the past 2 weeks. Bears have no game until this level can be broken. We continue to sit in a range of low 1170s at the bottom and 1200 at the top; this is now a full 2 weeks in 'the range'. It continues to look like a head and shoulders formation with the right shoulder forming but the wildcard is all the data coming later this week - much of it with the potential to surprise to the upside. "
http://www.fundmymutualfund.com/2010/11/persistent-buyer-shows-up-on-each-test.html
Is this maddening, or what?!
mrtopstep, Banks holding in on highs of day MS BAC JPM WFC
At least the XRT candle is making sense..
NickTimiraos, WSJ: Boom in debt buying fuels another boom -- in lawsuits http://on.wsj.com/gQHlHh
Karen
That's why BKX is up. Makes no sense.
crude is making no sense to me either.. unless it is the new gold : )
lol, people still talking about econ data "later this week" that could surprise to the upside
that chatter is going on like 18 months now
give it a rest already
gld on ten min chart.. now repelled twice at the overhead 50ema..
Karen!~
24k in property taxes per year!
Baby!
That is 8 years of taxes on the Ponderosa...
NFLX needs a ticker change to UFB
also, it's very sad to me that Matt Taibbi gets all the press he does, he's "reporting" on things that are so damn old it's not even funny, there are videos of him all over
"Taibbi says blame Greenspan"
really?!?
little late to the game Matty
Karen,
I have a few clients that pay that much or a little more in prop taxes, I don't know how you all stomach it.
@AT,
Back where I come from we'd probably call the coming (C) wave: a doozie, or is it doozy.
ben, it didn't feel as bad when my son was getting his undergraduate degress in the UC system.. peanuts compared to the private college my younger son is attending.
ugh.. there goes GS..
if aapl gets below 300 I'm a pretty big buyer I'm thinking.
hopefully some of you will find the "message" as interesting as I did.
http://www.ritholtz.com/blog/2010/11/goolsbee-on-gm/
ben, ben, ben.. just realize there is a neckline on aapl at 296 or so.. now clearly, the market is not allowed to fall.. thus, there is no way that perfection h & s can play out.. but do look sharp, just the same.
Karen,
I'm a zombie bear...8-), still in the "this is a time to rent stocks, not own them" crowd.
While others are carrying on about the robust Black Friday sales, I'm just looking for a December trade.
why did you subject me to that propaganda, ben.. why?
GLD at high of day.. i think the gig is up.. TBT may take off..
Karen,
I am voting right now on keeping the new avatar. Lefty may like the shoes, and I do too, but change is always good...
If the rise in inventories added 1.3% to GDP and Black Friday was not all that good then what happens to GDP when they are forced to have a huge discount to clear them?
funny how the aapl chart and uso chart look alike..
Ra,
I think GDP will be whatever the government wants it to be and I don't think it matters much for markets in the bigger picture:
http://www.elliottwave.com/freeupdates/archives/2010/01/06/Japan-s-Deflation-A-Great-Case-Study-For-The-U.S.aspx
I doubt anyone here will be shocked when they change the calculation for GDP, that would seem likely within the next 5 years, anything to mask reality.
Karen,
if you didn't like that video, maybe this one would be better, it's more on the truthy side:
http://www.ritholtz.com/blog/2010/11/david-cay-johnston-the-rich-get-richer-they-have-you-to-thank/
On the subject of ZOMBIE BEARS...
You know? That's so freaking typical of Ritholtz to think something like that...
It's the world viewed from a tight little elitist shell...
It's not my job to throw down judgement and/or wish for a day of reckoning for a person like that...
But...
All I can say is... If a person is elitist, and is fortunate enough to work within the tight confines of a system that rewards the few and punishes the many, well... I'd just prefer that that person kept his opinions on the "rightness" of the world to himself...
Happy stock buying chump!
Now is anybody interested in hearing how I REALLY feel?
Hint: It would probably get me banned from my own blog...
This looked interesting to me... (simplicity at its finest)...
new chart in thread
my neighbor just listed their home:
http://www.socalmls.com/CA/SAN-CLEMENTE/92672/homes-for-sale/4105-Calle-Isabella-55913885
know we are talking $6500-$7K/mo in property taxes.. LOL
http://www.crudewire.com/2010/11/wti-euro-divergence.html
CV, how can RSI be so weak SPY prices so high?
@karen (11:48)
No problem... Anyone with an average entry level government job should be able to pony up for that (with cash left over to give to Ritholtz to spin into gold)...
Obama To Freeze Government Salaries At All Time High
http://www.zerohedge.com/article/obama-freeze-government-salaries-all-time-high
@karen
Probably has something to do with POMO...
The REAL answer is "I don't know"... But an educated guess tells me POMO and volume may have something to do with it...
Karen
Selling already? It was built in 2006.
We're about to learn alot about this market...
That's why this whole stock market thing just isn't worth my time anymore...
I enjoy "discussing" the lateral & anecdotal aspects of the markets...
But one must have a screw loose to trade it...
I'm out... and probably am just going to buy physical meatls on dips from here forward...
"meatls"... ha! Freudian slip
Buying 1175? LB isn't yet, but notes that HYG is strong here.
AR, it was a spec house.. sold for 6.9 or 7.. they definitely have over 7 million into it.. well, laughing.. 7 million in debt at least.
LB would pay an infinite amount of property tax to be close to Karen....
LB, HYG under 89 is not strong!!! trend just turned down on HYG, btw..
http://blogs.wsj.com/financial-adviser/2010/11/29/muni-bonds-the-math-of-misery/
3. Myth: The Crisis Has Passed
In a sense, this is the most dangerous and misleading myth of all, that The Crisis has passed.
On one hand, government has the right to take credit for the economic recovery; it's totally responsible for it. I mean that. Even today, a very large percentage of global economic activity is due solely to fiscal stimulus.Unfortunately, government intervention and support of credit markets has been successful. Credit spreads have narrowed in unprecedented fashion from two years ago as credit buyers have fallen all over each other to buy corporate and government debt. Wait, what do I mean by unfortunately? Well, unfortunately, we're rapidly moving right back to the same place we were before the real issues facing us in The Crisis became apparent. In other words, all that has happened is that the doctor (the government) has been successful in treating the symptoms of the disease (failed institutions and widespread insolvency), but in doing so the disease itself (too much debt) has actually worsened.
http://www.minyanville.com/businessmarkets/articles/kevin-depew-bear-market-recession-depression/11/29/2010/id/31392
The crisis hasn't passed but it has moved. Creditcane is on the Grand Tour of European capitals. It will be back..
But for the time being, there is money to be made in the US.
We were all correct about munis, however....
JJC about to trend down, too.. everything is so crazy right now.. correlations falling apart..
Karen
HYG is forming a falling three method (continuation pattern) on the daily chart. It also has made a confirming lower close on the weekly 3LB.
http://www.bloomberg.com/news/2010-11-29/german-government-bonds-open-lower-after-european-union-ireland-bailout.html
"Spanish 10-year bonds slid by the most since the euro’s debut, leading a drop by the securities of high-deficit euro-region nations, as a bailout package for Ireland failed to damp concern the fiscal crisis is spreading.
The decline drove the extra yield investors demand to hold Spanish and Italian 10-year securities instead of benchmark German bunds to euro-era records. Irish bonds slid even after the agreement for an 85 billion-euro ($111.4 billion) rescue, and Italian and Belgian securities dropped as the nations sold debt at higher yields."
...if they would offer a free toaster for every Irish bond sold, they'd clear 'em out pretty fast...works for the banks..
Three days ago, USO was about to trend down, too..
http://www.efinancialnews.com/story/2010-11-29/france-seizes-euro-36bn-of-pension-assets?mod=mostread-capital-markets
Cvienne - You have effectivily been banned from "Survivor Capital" for stating your oppinion.
Never mind you created this blog, you dissed BR and that is a punishable offense.
In addition to being banned from your own blog, you also are being fined $57,982 and 65 cents.
Payable to Mangy Mutt.
U.S. scrambles to contain WikiLeaks fallout
http://www.msnbc.msn.com/id/40412689/ns/us_news-security/?GT1=43001
"Bristling over the unauthorized release, Obama on Monday ordered a government-wide review of how agencies safeguard sensitive information."
---
OK... so let's play this out shall we?
A) Obama wanted these leaked to cast a doubtful eye on Hilary, perhaps, challenging him in 2012...
B) This is one step in the direction of "The government needs broader censorship rights"...
C) Taxpayers will now be on the hook for a "let's get to the bottom of this" CZAR
D) All of the above
@Mutt
OK... Just let me get my zero interest loan from the Fed, and then hit the taxpayers for the bill...
The minute that happens, the check will be in the mail...
I want to see Ritholtz's famous RECOVERY happen with:
- No POMO
- No raising of debt ceiling
- repeal of the FASB changes
- Discount rate back to, oh, say, 5%
- no more bailouts
Let's see how far he gets with his pontification on that...
Seriously...
Do all those things...
The system would shut down so fast, Ritzy wouldn't even have enough time to file his SNAP application before the first hunger pangs hit...
BWAHAHAHA "Action Alerts Plus" is advertising on Bloomberg.
Cvienne - Thanks, I will drag my Lazy-Boy recliner to the post office and set up camp by my P.O. Box
This is going to be one great Christmas
Yes, Virgina there IS A Santa Claus.
Mutt
Socioeconomic Headlines?
Man dies after fall at Bears game
http://msn.foxsports.com/nfl/story/man-dies-after-fall-at-Bears-Eagles-game-112810?Gt1=39002
---
Hmmm.. Man at Bears game 'falls' & dies... Any questions?
MOVING ON TO SPAIN
29 NOVEMBER 2010
Spanish bond yields are hitting 8 year highs as markets look past Portugal and assume that Spain is soon to be on the chopping block.
http://pragcap.com/moving-spain
Homeland Security Seizes 70+ Websites for Copyright and Trademark Violations
http://news.yahoo.com/s/mashable/20101127/tc_mashable/homeland_security_seizes_70_websites_for_copyright_and_trademark_violations
The news itself was not too unusual; what struck us as out of order was that the site had been shut down without the owner being notified and without a court conviction or, to our knowledge, any other legal proceedings.
At the time, we knew that several other websites had also been seized; however, today, we are hearing reports that as many as 77 different websites have been seized and shut down, all without any notification or warning to the owners."
---
So this is the new definition of DON'T ASK DON'T TELL... Obama's government just comes in and shuts you down if it feels like it...
Badges? We don't need no stinkin badges!
try not to puke while watching this:
http://theeconomiccollapseblog.com/archives/9-shocking-examples-of-black-friday-violence-is-this-a-foretaste-of-the-economic-riots-we-can-expect-when-the-financial-system-collapses
I'm going to bitch slap the next person I hear say
"shop til you drop"
What we can't debate is that the government has a right to enforce its own laws. If copyrights are being infringed upon and goods are being counterfeited, the government does have the authority to put a stop to those activities.
But when legislators have taken great pains to construct and pass laws that create procedures for dealing with these exact issues, it does seem a bit off that none of those procedures were used.
For example, COICA would create a blacklist of censored URLs. If infringement of copyright or the trafficking of counterfeited goods is central to the operation of the website, the attorney general can ask a court to place that website on the blacklist.
The DHS is bypassing typical laws and procedures to quickly stamp out file-sharing and counterfeiting -- perhaps in time to thwart knock-off holiday shopping, we could speculate. We might also speculate that the reason for the rush job has something to do with the impending passage of COICA, which would create a longer process for closing these sites.
Speculations aside, this great haste is as confusing as it is perturbing; it doesn't sit well with the traditionally American sense of due process.
@McF
How many times has CV ranted about the behavior of Americans...
They KILL EACH OTHER shopping in good times!
Wait until SHORTAGES exist... (DL will be OK though - He'll waltz right into the store and the masses will part like the Red Sea and allow him to calmly buy his box of Apple Jacks...
Ben, i am afraid to watch that.. pls don't make me.
See? Because it'll all happen S-L-O-W-L-Y... (over, like 7 years)...
You'll hardly know anything is different...
Anybody notice the SIZE of coffee cans lately? (for the same price as the larger ones were 6 months ago)...
Just saying...
Karen,
It's disgusting, feel free to skip it, I'm worse off for having seen it.
check the $bkx candle .. it did make a lower low today..
i think the pieces of this puzzle got mixed with another.. i am clueless.
today i am a real zombie bear.. yesterday i thot i was seeing a turn in the economy..
@McF
Anyway... Those are all SIGNS OF ECONOMIC RECOVERY to Ritholtz...
Trumpet the news! The recovery is on...
As we recover more and more, the death toll should REALLY rise!
@McF
Actually... I think everyone SHOULD watch it...
Kind of give you a feeling of what it's going to be like when they eventually shut off the printing press...
from convertbond (aka, Lawrence McDonald): 90% of all Mortgage Loans now guaranteed by the US Government, only 10% of loans on balance sheets of banks.
Fannie $FNM / Freddie $FRE meltdown seen costing US taxpayer in end $450-$500 bln, 4% #GDP. Their days of portfolio mgmt are done.
Convertbond
Goldilocks Economy 2003-7? $7 Trillion of US mortgages now sit in securitized trusts globally, now that's a hangover.
Karen,
one might ask these pundits why they think what they "see" in the economy or in the "data" has anything to do with stocks....it's not an efficient market, ya know. When I got back into town on Saturday I drove right by the big mall by our house, I didn't see any open spaces in the parking lot, it looked like a mad house. I didn't think recovery, I just thought, that's how it is supposed to look toward the top.
CV,
I know this will piss some people off here, but I'll say it anyway, BR has little to say of any importance these days, imo.
What ever happened to buying an island, starting your own govt then print money 24/7?
(think it was someone on this blog)
I'd move there if you had internet access and a place for me to park my car, oh, and unemployment benefits also, apple stuff ain't cheap ya know! :)
http://motherjones.com/environment/2010/11/fiji-water-announces-shutdown-world-freaks
http://www.thereformedbroker.com/2010/11/29/ewz-a-china-etf-that-happens-to-speak-portuguese/
Peons
these numbers are so bizarre: "The number of people who shopped at stores and online between Thursday and Sunday jumped 8.7% to 212 million shoppers, according to a National Retail Federation survey of 4,306 shoppers conducted by BIGresearch. The total amount spent during the four-day weekend reached an estimated $45 billion, with the average spending rising 6.4% to $365.34, the survey showed."
http://www.minyanville.com/dailyfeed/why-black-friday-retail-data/
@McF
Ritholtz, anymore, is no different from any shill that they wheel on to the set of CNBC any day...
He's a "cheerleader"... (not in the same sense as many who are just LONG ONLY STOCKS cheerleaders)...
Ritholtz is a cheerleader for THE FINANCIAL SYSTEM... As long as the Fed, and politicians can succeed in polling policy levers that perpetuate the "illusion" of this PONZI going on for:
- a few more days
- a few more months
- a few more years
He's going to be a CHEERLEADER for that system (because it 'works for him' and his pals)...
When it gets shut down they're all begging for scraps like the 90+% of other humans around the planet...
So you're right to say he has little 'important' to offer... He's complicit is selling SNAKE OIL... (unless one thinks the system actually can be fixed)...
The truth is... It will never be fixed... Because to FIX IT, means all these people are out on their ass... Tell me now, which one of them is going to be first in line to fix anything...
just got word that ING has fired ALL of their annuity wholesalers, so there's that.
I love all this chatter about "average consumer spending"
people are so stupid about math
Karen,
regarding that article, I have the flyer for hhgregg close to my house, everything is tax free in DE, it has deals similar to what they are talking about there, here are a few:
42" Samsung Plasma HDTV for 479.99, a 50" Panasonic for 599.99 and a 60" Mitubishi for 699.99. Regular DVD Player, 46" Plasma HDTV from Panasonic $499.99. 9.99, Blue-Ray Player, 89.99 from Panasonic or 59.99 from LG. Tom Toms with speech to text for $40.
@McF
When the make the "hand crank" models of those TV's, I might get interested... :-)
ben, fyi: zerohedge
Second POMO closes
less than 10 seconds ago via TweetDeck
Yeah Baby!
I drive a Prius around (to save on carbon emissions), but I have a 10,000 foot McMansion lit up like a Christmas tree 24/7, with a 60" mitsubishi in each room, so when I walk in, it looks like Times Square...
... and I drive 5 miles each way to get my cup of Starbucks in the morning...
C'Mon Man!
I think we need an ENERGY CZAR to help us figure all this out...
20 To 50 Hedge Funds, Individuals Under Probe -Fox Business' Gasparino
2:01 PM ET 11/29/10 | Dow Jones
Regulators are investigating between 20 and 50 hedge funds and individuals as part of the ongoing insider trading probe on Wall Street, Fox Business Network's Charles Gasparino said Monday, citing regulatory sources.
"They're not just looking at the funds' own accounts, how they're trading, but they're looking at personal accounts," Gasparino said, referring to whether traders used insider information to make money for themselves.
He said charges and arrests are expected to come in the next few weeks and, at least in the near term, between 10 and 12 arrests are likely.
CV,
regarding the violent shopping link I posted, no need to worry, what you see there is natural, it's just pent up demand for items people need.
I have my Starbucks delivered...peons....
Karen,
2:01
are you like me, wondering where all the POMO Fanboys have gone? Where are all those articles giving us the "stats" on POMO like you could easily find in September and October, doubt you'll see any of those articles before Christmas now. And, as andy pointed out in his commentary, funny how the dollar has rallied at the same time this got kicked off.
POMO gets overwhelmed when the herd wants to sell, period. This isn't rocket science, it's not even as hard as.....economics (in which case a PhD is required)
I sounded like a crackpot in Sept and Oct saying this over and over again like a mental patient, now the market is just proving me right.
Thanks market
@McF
When I clicked the link, I didn't actually see any video...
Was it like this?
http://www.youtube.com/watch?v=fOshw4kIGR4
The direction that copyright has turned in the 20th century concerns me. Article I of the U.S. Constitution secures, for a limited time, exclusive rights to intellectual property. What we originally had was effectively a 28 year protection. Now, we basically have copyrights that can extend far beyond 100 years (depending on how long someone lives). That is not what I would call a "limited time" for artists and inventors and it certainly does not promote the arts and sciences when the most creative people can "one and done" their careers. I also think that it hurts our culture when nothing creative enters the public domain and fair use is effectively removed.
And if the excessive copyright extensions aren't enough, now we have the Obama administration negotiating international copyright agreements in secret (Anti-Counterfeiting Trade Agreement (ACTA)).
The "grab everything before there is nothing left" lobbying gets more feverish each year.
For the football fans here, Barca v/s Real Madrid in abt half an hour's time. Game on.
Prashant
Ben, yes, i am like you : )
Matthew, Matthew, Matthew,
You've got it all wrong you see, in the never ending feedback loop of positivity all the Wizard needs to do is a little more QE and we'll have all the intellectual property we'll need. The biggere the QE the bigger the amount of new inventions the saying goes.
More "freedom" for your rights (courtesy of Obama)...
It's Official: White House Brands Wikileaks, And All Those Associated, As "Criminals"
http://www.zerohedge.com/article/its-official-white-house-brands-wikileaks-and-all-those-associated-criminals
LB is off down the pub for El Classico.
We are getting just a tiny bit longer today in SPY. Not very bullish really, and not all together sure that the drop in EURUSD is done. We certainly might see 1.30 or 1.29 in this leg down, and we might even see DXY 82.
But this move is limited, and sooner or later the Wall Street performance anxiety crowd are going to want to pound this thing higher and they will all get long again into the end of the year.
We do think that 2011 is going to be bloody awful.
I'm thinking... Living in the USA these days must be kind of like just before Stalin (with big screens & Dancing With the Stars)...
Speaking of insider trading:
1. I saw CNBC reach a new low some time last week by finding a guest who argued that insider trading should be legal.
2. CNBC attempted to cast doubt on the clarity of the definition of insider trading in order to make the investigations resemble a witch hunt.
Amusing.
Once again, anyone notice there are two markets?
The speccy stuff, techs, banks, materials and energy stocks, and anything that is in SPX, goes up and down like a yo-yo as traders play SPY up and down. The divvy stocks, barely moving, day after day, no volume.
Gov't opens probes of Honda CR-V, Kia Optima
http://finance.yahoo.com/news/Govt-opens-probes-of-Honda-apf-4200043341.html?x=0
---
So let's see... THE GOVERNMENT... opens up an investigation into the 3 largest competitors of GOVERNMENT MOTORS...
That's pretty nifty!
@LB
...and then there are METALS... (real ones - that you can hold in your hand)...
CV,
you just sound like someone with sour grapes over GM not failing, and now because they are doing so awesome you are just pissed off about it.
GM = Greatest Company EVER!
see the goolsbee video from earlier
http://www.cnbc.com/id/40412415
Greece will have until 2021 to repay its 110 billion euro ($145.7 billion) EU/IMF bailout loan, the country's finance minister said on Monday.
In return, Greece will have to pay a higher fixed interest rate of about 5.8 percent from 5.5 percent, George Papaconstantinou told reporters.
"The repayment, which was now until 2015, will go to 2021 ... we have a grace period of four years and a repayment period of seven years," Papaconstantinou said. "The decision is very important, it opens the way to return to markets earlier than expected."
...Ponzi...I miss you from Happy Days...but I see you have moved to Greece..
@McF
Sorry... I forgot to take my red pill this morning...
The fact that any news publication still quotes Papaconstantfullofshitou should speak volumes.
pez dispensers
LB just got longer. Perhaps it was the thought of Karen's neighbor paying his property taxes, or perhaps it was the thought of Karen sunning herself by the pool. That's probably not what moved the markets though.... LOL.
Still think that the Euro debt crisis is a bit of kabuki theater by the banks in the respective nations so they can reload with govies at lower prices and enjoy the higher yields, and as far as the US market is concerned this is Wall of Worry stuff. Once everything looks rosy and JOHNNY sells munis and wants in the market again, that's when I will worry.
EXTRA EXTRA Read all about it...
http://news.yahoo.com/s/yblog_thelookout/20101129/ts_yblog_thelookout/top-ten-revelations-from-wikileaks-cables
So, I just did a financial plan for myself, mapped out the rest of my life this morning, you guys should see how awesome I'm doing, A couple minor tweaks like;
1. Extended my mortgage pay-off to: never
2. Marked my assets to their future values: Dow 36,000 will eventually happen....right?
3. Monetized my debts, hehehe!
4. Covered any retirement income gap by borrowing from my "assets" and investments
now I have enough money to last me 10 lifetimes and I can do it all without saving a dime!
I'll be holding a seminar in DE about this next year if anyone is interested, or you can buy my book that will be hitting shelves in 2011
The Audacity of McFearless Financial Planning
How to Thrive (Regardless of Your Actions)In the Modern World
BTW, LB isn't feeling very clever of late, b/c the Euro debt is putting a floor under Treasuries and so the spread compression trade isn't very comfortable... but we still like that into the end of the year.
Overall, the portfolio is fine, we are down maybe 0.5% or something in the last two weeks.
Off to the pub. Enjoy the close, everyone.
LB will be up 5 hours ahead of most of you, so will be able to report on any further Euro carnage before CV has had his Frosted Mini-Wheats and long before Karen has her oatmeal.
BinT has one question:
Forget the Irish. Why aren't the Germans rioting?
Does anyone believe the Greeks or the Irish or the Portugese or the Hungarians or the Americans or fill in the blank are ever going to pay off this funny money?
Humbug.
@ Bruce
No country in the history of the world ever has... so why now?
http://finance.yahoo.com/echarts?s=%5EFCHI+Interactive#chart3:symbol=^fchi;range=my;compare=^dji;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
...How does the average Frenchman ever get ahead? I know market timing here is everything from experience, but it looks like the Frogs have to jump whenever the wind changes direction.
"Once everything looks rosy and JOHNNY sells munis and wants in the market again, that's when I will worry"
Care to explain this out a little more for us?
From my perch the following is already going on and these are now intermediate time frame trends:
1. Economic data is getting much better, as is confidence in said data as a "forward looking" indicator which is reinforcing the idea that we are in recovery.
2. According to EPFR Global flows into equity funds have been positive and rising now for about a month. Granted, a ton of money came out of stocks prior to this, but what does retail really matter in the end when 90% of the market is owned by some 9-11% of "people".
3. Sentiment is extremely bullish, not just in an absolute sense, but even more so in relation to historicaly extreme bullish sentiment figures, we can even bring this down to things like the Divvy yield on stocks. On 11/5 I think it's fair to say there was total conviction in all of the following:
The Fed
POMO
QE2
Stocks
Assuming that these three points are true, just focusing on retail buying, what does it mean "when Johnny wants to buy stocks again"? Is it not enough that at the actual announcement of QE2 AFTER an 80% rally in stocks that retail equity flows THEN start coming back right at the 1220+ top? I couldn't think of a much better example of ringing the bell just in time to have your bell rung if we were looking to John for signs.
Poor John.
The Germans aren't rioting because they have a ton of good beer (and so does Belgium next door). It's hard to be angry when you have good beer.
BergenCapital
Looks like Credit Suisse bought 2k S&P eminis, $120MM notional value around 2:45pm or so, helped to spark this rally - fickle market
MackieFear,
the 'POMO'= (not) DOW 13, 000+ call, was a good one..
that was soo trumpeted, into the run-up to 'Nov. 3rd', one, just, had to be skeptical of that 'working out' ..
see:
http://quotes.ino.com/chart/index.html?s=INDEX_DJI&t=&a=&w=&v=d1
'Nov. 3rd' was the top-tick..
"Sold to you! John E."
AAIP
wondering if Neely's 5 of C kicked off today
http://finance.yahoo.com/focus-retirement/article/111422/could-the-government-shrink-my-401k-retirement-account?mod=fidelity-managingwealth
AR, can you keep the lid on 1088 pls?
Mark,
There is one count that still has us going to 1,300 or higher, this is a count that has a different larger cycle count, that guy trade your way out shows it on his site, and then there is a chart that Nic gave me with some harmonic patterns that pointed well above that, she gave me that chart this summer and it's playing out really well, so I still keep open this idea that we could go a lot higher, I just don't think it's a high probability.
I don't totally ignore fundies...however, I'm not pretending I know how to properly apply them in QE2/ZIRP.
and yeah, I think John E and Mary just got worked the last few weeks. They asked for it though, one needed to only glance at the COT to see the giant short positions that the commercials were putting on to maybe think twice about going nuts on the long side right there. They probably didn't have a lot of time for stock research though, what with all those shopping deals and deadlines.
CV:
Indy rushed for 24 yards last night.
...I may just have to becoming a curling fan..
Karen
I'm already pissed at the daily candle for SPX...YGBFKM
AAPL, 308 before 318 ?
guys I looked through probably 300 pictures this past week to try and find the one where I knocked myself out with the baseball bat on the back of the bike tire.
No luck but I've got Mom searching now, would really love to make this my avatar, it's hilarious.
I wouldn't mind seeing AAPL at 308, if it got there early Dec I'd look at some upside calls on it for a trade for the month.
I wouldn't go as far as to call apple cheap just because 40 something a share is what they have in cash on the books but there could def. be some upside there.
New Moon on Dec 5.
HAHA - http://tinyurl.com/24rm56h
EU Commissioner Olli Rehn Issues His First Directive As Overlord Of The Emerald Isle
quote:
Sure enough, it took all of 24 hours between the "bailout" and the first order. RTE reports that Olli Rehn "says it would not be advisable for any new government to try to renegotiate key aspects of the IMF/EU deal." In other words, the EU is promptly realizing that the new Irish government is likely to reneg in part or all of the just struck deal and is therefore interjecting itself in the process.
@LB
The only thing cv has in common with Frosted Mini Wheats is the Grrrrrrrrrrr part of "They're Grrrrrrrrrrrrrreat!"
http://singerprofitcharts.blogspot.com/
Pains me to post this chart, but the dollar just completed a perfect backtest of the neckline of a huge H&S. Hi everyone.
BTW: I'm not sure if football was discussed this weekend, but how about Buffalo? I can't be the only one to have a broken heart after that one. A two-win season hardly tells the story for that team.
what's everyone's take on the copper chart at this point?
yeah, SJ's drop in the end-zone was rough, can't hate on the guy after such a great season but that catch would have been huge. Fred Jackson is blowing up these last couple of weeks.
full disclosure:
I don't hate the Steelers but I like to see them lose, and I'm still bitter about Franco Harris' bs "catch" against Oakland back in the day
but he's an alum, so I stop short of getting all flamed over it.
Ben, laughing, I am as clueless about copper as everything else! chart after chart show it being weak.. it is definitely not as bullish looking as GLD and one of them will be right.. crude threw me for a loop today as well..
i think today is an outlier day.. looking forward to tuesday.
I've gotta go now, so I'll drop this here...
Not much interest in the Cardinals 49ers game tonight (from a betting standpoint)...
I suppose I'll take the HOME TEAM Cardinals and the 2 points for (0 units)... At the BIG TOASTER (Home of the Fighting PHONYecians)! Ironic that a school like the University of Phoenix should use that reference...
Anyway... I had a pretty good week in NFL...
Aggregate: 10-5
Unit Picks: +9
Wager (Win): +$830
(which means you should probably FADE my pick and go with the 49ers :-)
Later folks... See ya just before C'MON MAN
Maybe C'Mon Man will be Steve Johnson dropping the game winning TD in OT vs. the Steelers, then blaming GOD on Twitter... lol
http://finviz.com/futures_charts.ashx?t=HG
Copper doesn't look real strong, though the touch off ~3.60 might be 'a good thing' ..
AAIP
Karen,
the correction may have ended today, I'm not sure, so cash it is.
right now I'd be biased toward the long side for December (despite being a zombie bear) maybe I'm just feeling festive for the holidays or something.
HG weekly 3LB reversal is 370.20. It is testing its SMA(21) on the weekly chart. Also the 23.6% retrace is at 375.58.
tell you what, that 23.6% rule is ACES
Great to live in a society where nobody has to accept personal responsibility for anything...
If GOOD happens... It was all GOD
and if bad happens, well, according to SJ (it was all God's fault)...
After Obama gets done blaming Bush, maybe he'll take a cue from SJ and start blaming Allah...
"...I think John E and Mary just got worked the last few weeks. They asked for it though, one needed to only glance at the COT to see the giant short positions that the commercials were putting on to maybe think twice about going nuts on the long side right there. They probably didn't have a lot of time for stock research though, what with all those shopping deals and deadlines..."
McB,
good point about the COT, though, if we 'know' one thing about John E., it is that he's been 'congentially' put-off from Anything, even, related to 'Furures' ("They're tooo Risky!") ....
and, here:
http://finviz.com/futures_charts.ashx?t=ES
the case, certainly, could be made that the 'backing and filling' is taking place, providing a 'platform' for the next leg-up..
AAIP
http://www.irishtimes.com/newspaper/finance/2010/1126/1224284180264.html
After Ireland and Greece, cross-hairs fix on Portugal
"The private sector boom was accompanied by pro-cyclical fiscal policy and the resulting tightening of the labour market saw wages per capita increase by roughly 6 per cent a year from 1995 to 2002. The loss of competitiveness led to a dramatic loss in export market share and a decline in foreign direct investment inflows.
Large private-sector debt burdens and an increasingly uncompetitive economy saw growth slow to less than 1 per cent in the years following the launch of the euro.
Although the economy did not suffer a dramatic collapse in activity of the magnitude seen in Ireland, it remains to be seen whether a further economic contraction can be avoided in 2011, as the government attempts to reduce the budget deficit from 7.3 per cent of GDP this year to below 5 per cent.
Domestic demand is almost certain to fall next year, as higher taxes and increasing unemployment constrain household consumption, while higher borrowing costs and a poor growth outlook are likely to deter business investment. Thus, the economy is dependent on exports to do the heavy-lifting.
The export outlook, however, is far from encouraging. Portugal’s export structure is weighted towards traditional slow-growing sectors such as paper and wood products.
Comparative advantage in these segments has shifted to the developing world, which has contributed to an alarming fall in the country’s export market share since the mid-1990s.
Furthermore, roughly one-quarter of its exports go to neighbouring Spain, which is hardly a thriving economy.
The Portuguese economy faces enormous structural hurdles, from low productivity to slow growth, but its most pressing need is to convince bond investors that its fiscal austerity programme is on track.
The Portuguese government has been slow to address the problem and its plans are still based on excessively optimistic growth projections."
...What was the name of that movie? If this is Tuesday, I must be in Portugal? I forget...
'Furures', yo, was supposed to be 'Futures' ..
funny, lost in all the 'cyberMonday'/'Black Friday'-coverage/distraction...
November 29, 2010
Dear Friend of Liberty,
The FDA is craving the power to shut down small food businesses on a whim, and their allies in the Senate are pushing TODAY to make that happen.
Take action now by contacting your senators! Tell them to vote AGAINST S. 510, the War on Food bill, on every vote – including cloture.
Say no to faceless, international elites dictating what you and your family can and can't eat.
Tell your representative that the FDA needs to be held accountable for its failures, not rewarded for them.
Remind them that Big Ag is aiming to destroy competing food producers like the independent family farm, where the free market works every day to provide the public with safe, affordable food.
Please take action and contact both of your senators today! Tell them to vote AGAINST S. 510..
http://paracom.paramountcommunication.com/hostedemail/email.htm?h=2c6a6358e5c8d274f138a32a4687a745&CID=7490039038&ch=91191AC5C0275BEF3D281A0CF576FC8C
AAIP
regarding ES, check the fractals btwn April high and Now, our May flash crash could play out as Andy's (C) Wave....it's going to be a fun one
I've got a very high confidence in his and Neely's charts right now, especially because outside of leftback and a few others, how many people do you know looking for some carnage in 2011.
There Will Be Blood
and then I'll drink your milkshake!
regarding the EU mess, I really think LB was right 3-4 weeks ago when he said to watch for Spain, that's the real trouble if things break down it would seem, I think various global wizards can paper over Greece, Ireland, and Portugal,
spain.....not so much.
"They're tooo Risky!"
Sad but true, you say the word option and they are dialing your RP for you, mention Bee Doo and they'll write a check for their life savings on the spot (compliance in the industry agrees with this, btw.), and this is to say nothing of that hot penny stock they heard about from a guy they know that "knows about this stuff"
"yeah, SJ's drop in the end-zone was rough, can't hate on the guy after such a great season"
Oh, I think that ESPN is playing the clip too hard. Look, I have never seen a receiver who caught 100 percent of his passes. This guy runs crisp routes and plays hard every week. He drops an important pass and ESPN acts like the first 60 minutes of the game didn't happen.
I don't hate the Steelers OR want them to lose, generally. But, I happen to be a Bills fan. I like the Lions and the Bills. They suck every year, but what are you going to do about it?
http://finviz.com/quote.ashx?t=BIDU
funny, this thing looks like it's ready to 'fall out of bed'..
and, w/this one..
http://finance.yahoo.com/q?s=NNVC.OB
even though 3:59PM EST: 1.47 0.14 (8.53%)
a 'friend' of mine, who knows about these things, says it goes to 8 bid, by the EOQ 1 '11
been told 'they have The Cure!'
AAIP
note, not kidding re: BIDU, totally kidding about NNVC
things are brewin':
http://www.youtube.com/watch?v=2gm9q8uabTs
BTW, my read on the copper chart is that we are in a short term consolidation phase, hanging on by a thread above minor support. I'm not seeing enough conviction to enter the trade, especially given the downside risk. There is no multi-month clarity that I can see.
In general, most charts are confusing me. That's why I'm falling back on credit trades. As leftback has discussed, the risk reward for high tier IGs is not appetizing. I want to be in front of the dinosaurs as they continue to migrate to yield. I still think credit spreads will come in on high yields in three months.
Why would anyone listen to this quote:
“One investor’s two rules of investing: 1. Never Lose Money 2. Never forget rule No. 1” —Warren Buffett
In markets, losing money is a 100% certainty at one point or another, I'd rather follow a rule-book that recognizes losses occur and reminds you to limit them when they come.
others prefer pretending to reality
--All part of the Warren Buffett mythos. I would rather listen to Yogi Berra. At least he is amusing. Warren Buffett does the investor equivalent of telling all of the women at a party that he has a 14 inch cock.
Ben
Yeah no one is ever 100% (except HW)...
MackieFear,
if there was anything resembling *Justice, St. Warren would have been, literally, Pilloried by now..
http://www.thefreedictionary.com/pillory
AAIP
I just really dislike Buffett anymore, and I think part of that stems from the fact I used to think he was the man
I really hate getting played, can't ever let it go.
MackieFear,
the real bell-ringer, for me, was, back in the '90s, he was being i-viewed in, I think, "Forbes" about UST (U.S. Tobacco)--the, former, makers of SKOAL, Copenhagen, et al.--anyway, he broke out with:"if you can make for pennies, sell it for dollars, and it's addictive, to me, That's a Business!"
ever since then, I've been looking for the BS behind the "St." -- LSS: there's a Load of it..
AAIP
"Warren Buffett does the investor equivalent of telling all of the women at a party that he has a 14 inch cock."
Maybe that's why he had Liz Claman all over him back in the day.
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