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don't go chasing waterfalls.
have a good weekend everyone!
don't be suckered saik...
spot gold is setting it up.
330+ in 5 days or i eat my hat.
: )
kane, you can find me here...
http://groups.yahoo.com/group/investorsexchange/
best to the board.
adios gang. good trading and enjoyed it while it lasted.
richard russell had a scary chart a few months back...
dow target for ST cova for me is 7100.
he had 6292 as hiccup bottom in 2003. before the continues
plunge to...
Fannie titghening up cash out refi's & bumping 30 to 6.28.
the spread game derivative poster child has no "hope"
of covering bad bets in UST's. they can mitigate
losses for a few, but 50% underwater is still underwater.
and rates can't rise fast enuf for fannie to offset those
defaults.
that would be contrary to conventional wisdom, but it's true.
oh the pain of yet another rate cut or at least bubblevisions
promise of the much ballyhooed "intermeeting cut".
the giddy will be when ol green eyes tosses the 2 bits he's
been loafing around with for the past 4 months.
then we get a guy who's name ryhmes with beer.
$55.8 billion in "vapor funds" came out in cash so far into
consumers hands...
the door is closing.
dollar... technically speaking there's a house formation
on the P&F that looks pretty nasty.
the problem witt t/a in an interventionist environemnt
is short term, you know the targets, longer term you
know the trend.
what you can't chart is what comes from out of left field.
104 - 108 is the range for now. if it loses 104s it is headed
sub 100 to low 90s within the next 30 months.
that US$ has formed a intraday cup...
this outta be interesting.
108 or bust.
840 not happening, yet.
hope floats... for a few.
addin back shorts here, AZO & FITB...
FIB monthly looks as is it wants to let go and head for 44.
covered NVR +13 on 150 shares.
anything over 305 is a gift from the lord.
BXK/NXK looks ugly.
blink and you miss it rally...
this does not impress me...
longs long gone.
watch the US$ incog... 107.77.
greenspans coronation on deck and i suspect sir alan of press
will want to look hero-like.
after that, all bets are off as EOQ proppage will leave the
bagholders looking for exit.
also, december gold holds 325 level and this rally's duration
will be very short lived.
new lows on deck in early october.
imo.
end of quarter prop is ON... sclaing into some longs.
qlgc, amg, fitb, intc, msft and orcl.
nice trade on rfmd manana!
waterfall thesis (part one)
i was asked to explain my thesis for “waterfall” mode yesterday.
will refrain from my usual untempered nature and present
the structured finance pyramid for what it is and how it
continues to evolve.
derivatives square up twice a year, march & september as
counter parties either extend, dissolve or adjust their
risk profiles.
fair enuf, any good financial thesis requires a foundation
based in both fact & speculation supported by the fundamental
realities.
there is a tsunami fast approaching, one swelling up due to the
abuse of derived financial instruments from asset’s that
continue to erode in both value & confidence.
it is not complicated. it is merely confusing due to the
“opaqueness” of counter party arrangements.
there are three key variables to the a derivatives function:
duration, counter party, liquidity of the underlying asset
class.
by example; let’s assume you are a large multi-national
corporation in need of continuous cash flow to maintain
operations; both fixed & variable costs for given levels of
production from 15 to 90 days. frictional, seasonal and
structural gaps create hiccups in your cash flow.
you were able to tap the commercial paper market for funds with
durations under 90 days with money market funds acting as the
counter party. these funds are liquid and represent demand
deposits available to fund short duration obligations as the
risk are mitigated by the duration. corporation with access to
this market are unlikely to go out of business within 90 days,
thus the market remains highly liquid.
as a large multi national let’s assume your short term cost of
capital is 1.5% as the average money market is paying a little
over 1.25%. your capital division has the ability to structure
leases, loans and whatever structured finance vehicle they can
dream up at 5.5%. the spread is 4% and is pure gravy for your
lower margin products and services.
on a percentage basis the spread represents a massive gain to
your bottom line.
here’s where it gets interesting. the duration of your
structured finance vehicle is of a far longer term based on the
functional life and depreciation of the asset sold. in 90 days
your commercial paper offering has to be closed, but your
“lease obligation” is for 5 years. you have paid both fixed and
variable costs associated with producing the underlying asset
while it’s receivable is stretch out over 5 years.
this duration disconnect has sent up a number of red flags
recently. and the market to this type of financing has
essentially been closed. Inventory builds & channel stuffing
creates risks to cash flow as shipping airplanes to ensenada
does not create the flows necessary to make good on these
shorter term obligations.
more to follow... as this will be rather long winded.
see if the double bottom tosses a curve ball.
actualy like to be long for a change of pace.
don't know mng manana, but agree with gold comments.
interesting times. time is all.
volume accelrated... huge oversold condition.
nah, it wasn't kranny.
to tame.
gnite...
wouldn't be chasing trades here, offed most longs and am
gonna see what shakes loose.
they are in a lose/lose position manana.
desperate is an understatement.
no open market ops just yet... strangely silent on that front.
could it be al has $50 billion in party $'s.
hoover, i have been starinf this waterfall in the face forever.
lol.
the time is at hand, one more pop into 2:15 and 7702 lets go like buddah.
the fundas are taking over... simple as that.
one look at nfx/bxk scares the crap outta me.
derivatives settle this month, or at least get "squared".
it happens twice a year, end of march & september is my thesis
for the meltdown, so far i'm batting 1000 and closing my eyes.
jpm is coming unglued in quick order, given jpm's our 2nd largest bank,
the rest of the globe is staring down a japanese style meltdown in the dow
and will unload this mess.
any rallies should be shorted and held to 6300s.
all my opinion, of course. manana emailed my coffay.
i am kinda slow, what with these goldbars weighing me down.
be VERY careful here manana...
they will sell it all. every drop.
here's the silliness into later this week...
sidelined for now, out of longs here.
pressing miners on dip.
last of shakeouts underway.
i enjoy subsidies.
thanks saikman!
didn't realize i had mail.
Spot AU 326.20 +3.50 NM
long ned's QQQ bandit and QLGC in pre...
HUI P&F
SPX, the good, bad & downright f'ugly.
$INDU
ned “the qqq bandit” riley was bottom pumping again this morning. siting the put/call ratio & imminient short squeeze. unfortunately ned fails to understand that any rallies will be sold after a short period of time as there
are no positive divergences for this market and no bottom until we have seen capitulative sellage on a wholesale basis. market psychology has evaporated into vapors of volatile fumes wafting thru mutual & pension funds around the globe… no wonder the dollar is strong, it’s end of quarter pension fund proppage.
sir alan, you have lost control. opened the mail yesterday… new visa card with a generous limit.
i didn’t actually apply for this visa, i had two several years ago and cancelled one. the risk boyz decided “more credit” should continue to fuel their chilling growth story. i refused the card, but no sooner was i about to hang up when the operator chripped, “ i just transferred that
limit to your exsisting card… “
this type of credit priming all exsists outside of al’s funhouse, he has very little control over the one arm bandits of credit. the liquor wagon pulled up in front of the drunks house and is now soaking his house in booze.
don’t lite a smoke joe…
we have managed to reach a historic low (44 year low) on ust’s.
the june sellage in gold is now becoming a serious problem for the funds who ejected to buy equities. “sell the winners to slow bleed the losers”: typical behavior as now they want back in badly and are basically getting blank stares from goldbulls.
little humor for ya'll
http://www.analpink.com/bas/movies/MadCow.swf
and NO ! it is not pornography !
thanks again matt. : )
thanks matt.
manana, why not use a yahoo group?
topica?
been there, done that.
fools in barrell still above the Falls manana...
fell like i'm back in #at...
.03+ bummmmmmmmmmmmmmmmer.
happy Halloween...
the gloom & doom masks are out and flying off the shelves
at deep discounts.
rates have been hacked from 6% to 1.75% by jason our favorite
central banker and jamie lee's main squeeze. unfortunately
she's not digging his scene, and perhaps that's the setup.
the breakers have to move $, but they done tapped out all the
free cheese they could. we continue to grind lower.
the simple reality is any short term rally is simply a corrective
hiccup. we are going a bunch lower. 6300 - 6400 on doogie
dowser.
warnings blizzard will continue to undermine CONfidence.
watching these homies flip back n forth is almost comical.
one minute the P& L says yer +2200, 5 minutes later your
down 3100...
this type of thrashing can be described as pre crash thrashing.
there are some NASTY rumors about oil... something about US$
and settlement... gold fits in there somewhere or so goes the rumor.
shessh, silly rumors.
looking like al can only go for broke, which takes that $36
trillion extended fib for M3 to the bull's-eye.
after all our illustrious central banksters decided it was
"prudent" to explode the money supply by 62% in the year prior
to the beginning of the great depression.
foolspan has little left to do but even less impact. he cuts,
the markets sail for 2 to 4 hours... then take an even more
epic plunge.
the technicians appear to be lost, and that is usually a good sign
the game has changed (not responding to post hoc debates).
it is f'ugly out there. maria is bird chirping, but pie-sani
is tempering her squeakiness.
walmart really set the tone going forward. msft gets taken out
back on xbox concerns... hell, why now? they have been losing
$90+ on each and every one they sell net of marketing costs.
C, EK, IP, JNJ, MCD & MO, closed greenie for the dow. no
real breadth and the "flight to safeties" appear to be hanging
on by their chins.