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Pimco says sell-off driven by fears U.S. could lose AAA
Thu May 21, 2009 2:40pm EDT
By Jennifer Ablan
NEW YORK (Reuters) - Bill Gross, the co-chief investment officer of bond giant Pacific Investment Management Co., said market fears that the U.S. is at risk of losing its AAA credit rating is sending the U.S. dollar, stocks and bonds under severe selling pressure on Thursday.
Asked what is driving the market declines, Gross told Reuters via email that investors fear the U.S. is "going the way of the U.K. -- losing AAA rating which affects all financial assets and the dollar."
Thursday, Standard & Poor's lowered its outlook on Britain to "negative" from "stable," threatening the nation's top AAA rating. Britain faces a one in three chance of a ratings cut as debt approaches 100 percent of gross domestic product.
European shares fell, weighed down by banks and commodities, as S&P's potential UK credit cut added to worries sparked by news on Wednesday that Federal Reserve policy-makers had cut their U.S. growth forecasts over the next three years.
The pan-European FTSEurofirst 300 .FTEU3 index of top shares fell 2.1 percent to 857.52 points, breaking five successive sessions of gains.
U.S. equities were down as well. The Dow Jones industrial average .DJI was down 182.55 points, or 2.17 percent, at 8,239.49. The Standard & Poor's 500 Index .SPX was down 21.26 points, or 2.35 percent, at 882.21. The Nasdaq Composite Index .IXIC was down 44.89 points, or 2.60 percent, at 1,682.95.
U.S. Treasury debt prices moved in sympathy with equities.
The benchmark 10-year U.S. Treasury note fell 47/32, with the yield at 3.3625 percent. The 2-year U.S. Treasury note dropped 2/32, with the yield at 0.8587 percent. The 30-year U.S. Treasury bond plunged 91/32, with the yield at 4.3106 percent.
In currencies, the dollar was down against a basket of major trading-partner currencies, with the U.S. Dollar Index .DXY down 1.01 percent at 80.369 from a previous session close of 81.190.
The dollar extended losses against the yen on Thursday, dipping below 94 yen for the first time in two months.
(Reporting by Jennifer Ablan; Editing by Theodore d'Afflisio)
LINK: http://www.reuters.com/article/ousiv/idUSTRE54K5GC20090521
GE Capital (AKA CNBC) loaded up on Monday, Tuesday, and Wednesday - Now it's go time!!! ;-D
Did that already happen to the UK?
USD is crashing, so very likely to happen here as well...
FAZ MOMO!!! +.21 to 5.62...
Geithner says must let market forces work
On Thursday May 21, 2009, 10:21 am EDT
WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner on Thursday said that a bailout for banks was steadying the financial system but care must be taken to ensure that normal market forces are allowed to operate.
"While TARP (the Troubled Asset Relief Program) is proving effective at improving the immediate stability of the financial system, the scope of the issues this administration and this department face ... include striking the delicate balance between intervention and allowing market participants latitude to operate," he said in prepared remarks for delivery to a U.S. House of Representatives appropriations subcommittee.
Geithner laid out a tough agenda for Treasury, including devising a new and more effective regulatory structure and deciding what form government-sponsored enterprises Fannie Mae and Freddie Mac should assume in the future.
He said that, once economic recovery is under way, the government will have to move swiftly to ratchet down deficits that are swelling as the government pumps hundreds of billions of dollars of capital into banks.
"We must get our fiscal house in order or risk having government borrowing crowd out productive private investment," Geithner said.
(Reporting by Glenn Somerville; Editing by Theodore d'Afflisio)
LINK: http://finance.yahoo.com/news/Geithner-says-must-let-market-rb-15316139.html?sec=topStories&pos=7&asset=&ccode=
FAZ intraday (post-lunch) special, break-out!!! 2 higher lows, and about to make a 2nd higher high... momentum alert into the close if she goes 5.43 here (first-time was a head-fake past 5.40):
Watch closely here, 5.40 break would be considered an intraday breakout, higher low and higher high:
So far today, we may have had an A-B-C pullback, some lunch-time consolidation, then perhaps FAZ starts uptrickling again into the close?
Geithner says must let market forces work
On Thursday May 21, 2009, 10:21 am EDT
WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner on Thursday said that a bailout for banks was steadying the financial system but care must be taken to ensure that normal market forces are allowed to operate.
"While TARP (the Troubled Asset Relief Program) is proving effective at improving the immediate stability of the financial system, the scope of the issues this administration and this department face ... include striking the delicate balance between intervention and allowing market participants latitude to operate," he said in prepared remarks for delivery to a U.S. House of Representatives appropriations subcommittee.
Geithner laid out a tough agenda for Treasury, including devising a new and more effective regulatory structure and deciding what form government-sponsored enterprises Fannie Mae and Freddie Mac should assume in the future.
He said that, once economic recovery is under way, the government will have to move swiftly to ratchet down deficits that are swelling as the government pumps hundreds of billions of dollars of capital into banks.
"We must get our fiscal house in order or risk having government borrowing crowd out productive private investment," Geithner said.
(Reporting by Glenn Somerville; Editing by Theodore d'Afflisio)
LINK: http://finance.yahoo.com/news/Geithner-says-must-let-market-rb-15316139.html?sec=topStories&pos=7&asset=&ccode=
FAZ going to open up SAR positive today! Premarket- 5.69 +0.28 (+5.18%)
FAZ going SAR positive today! 5.58 +.17 (+3.14%) in pre-market:
+6.71% today and looking at going SAR positive tomorrow!
~~~~~~~COMPX 5/21/2009~~~~~~~
Previous Close 1727.84 -6.70
1692 SSKILLZ1
1671 FinancialAdvisor
FAZzzzzzz see you all in a bit ;-D
How about FAZ having a higher low and a higher high today.
SAR within reach, could be a sign of a trend upwards:
Yes, in the guise of collecting more "taxes" around the globe.
That's cute how they groom the kids, isn't it [sarcasm]
It's because the recent rally in FAS and the banking stocks is basically B-S, it's more or less strong volume today in FAZ. Someone is loading up, If you'd buy puts in a banking stock, you'd buy FAZ today. It's a must riskier bet, come option expiration time, at the very least, FAZ is still worth something.
If you can call the trend right though, like some in the past, you can get 200%(+) on the stock. The potential reward on the options maybe 5-fold that.
Smart money who like to gamble on big gains seem to be finding FAZ today for a solid short-term or daytrade.
Is GE (cough cough CNBC) buying FAZ right now, is that why it's never on the ticker?
FAZ trading above $5.00(+) threatening resistance ($5.05)
Especially if & when BAC goes red, the key for FAZ to have large% gains many consecutive days would the banks going down, 1, 2, 3% a day. Which really isn't going to be hard with the United States "Federal Reseve" dollar collapsing at such paces.
All the apparatchiks are at meetings today, the market is close to a major turning point if not at one TODAY.
Holders of BAC stock now have more collateral to hedge with, other banks can essentially destroy BAC now if they so choose and take it out for pennies on the dollar. This collapse was designed was to have the banks fail on purpose and/or get them bought out for the bigger banks by pennies on the dollar.
GS, WFC, and JPM all red, FAZ still lower by .15 at 4.92.
Broader Markets still green despite apparatchik Geithner's pitiful answers...
Dollar is tanking hard today creating inflation despite the global economic slowdown, the world is demanding more dollars for essential goods and services as they become worth less and less.
This is going to create interest rates to rise, and rise fast, this is not bullish for the banks in the light of more ARM resets coming throughout this year and next, as well as Commercial Real Estate on the verge of collapse.
FAZ will move when VIX reverses, VIX now at levels not seen since the Dow was last at 11,500 back in September before the panic set in!
That sounds about right
GS is red right now, wonder if that will mean anything today?
***VIX Charts***
*VIX is now at levels it hasn't seen since before the market started crashing last year in the first part of September:
~~~~~~~COMPX 5/20/2009~~~~~~~
Previous Close 1734.54 +2.18
1692 SSKILLZ1
1675 FinancialAdvisor
Something is definitely up (I mean down) with BAC, it lagged WFC and JPM much of the day, but is really turning on the burners A/H, some big blocks going on.
FAZ +5.19% vs +0.13 Nasdaq, Usually FAZ wins the next day when we get a close like today...
Could be the start of something major, I watch the likes of JPM and WFC all day, and something is up, or should I say down...
Intraday pennant breakout, bullish 2PM move, retest of 5, see if the Dow moving into the red can cause a selling frenzy, volume so far this week is bordering on 2009 lows in a lot of places:
FAZ +1.87%, Nasdaq +0.51% - FAZ usually is right this late in the day.
UPDATE 1-Volatility index below 30 for 1st time since Sept
Tue May 19, 2009 10:11am EDT
*Time to start fading into SHORT positions folks, bear market is NOT over yet!
CHICAGO, May 19 (Reuters) - The Chicago Board Options Exchange Volatility Index .VIX, Wall Street's favorite measure of investor concern, pierced the psychological 30 level on Tuesday for the first time in eight months, indicating the perceived need for portfolio insurance is diminishing.
The so-called VIX fell 0.73 percent to 30.02 after notching a session low of 29.95, its lowest level since Sept. 19, 2008. The index sank to 30.24 on Monday, its lowest close since Sept. 12, 2008.
"After a very volatile period in the final months of 2007 and early 2008, the broader economic outlook has stabilized, which has resulted in lower levels of volatility in the equity market," said Frederic Ruffy, options strategist at Web information site WhatsTrading.com.
"The demand for options premiums to protect portfolios is not as high because we are not seeing very large price swings in the market compared to eight months ago," he added.
The VIX, calculated from Standard & Poor's 500 index .SPX option prices, tracks the market's expectation of future volatility over the next 30-day period and often moves inversely to the S&P benchmark. (Reporting by Doris Frankel; editing by Jeffrey Benkoe)
LINK: http://www.reuters.com/article/marketsNews/idINN1941747420090519?rpc=44
Volume is strong today on the financials, will EASILY trump yesterday's dismal volume, confirming the downtrend once again!
Knocking on 5.00:
This will never be a long-term hold, it should only be used to play the trend. The problem lies in the -300% nature of it pulling off of the Russell 1000 Financial Stocks. When it falls from 6 to 5, that is a loss of 16.67%. To make that ground back up, it must then gain 20%.
~~~~~~~COMPX 5/19/2009~~~~~~~
Previous Close 1732.36 +52.22
1752 BullNBear52
1697 SSKILLZ1
1676 FinancialAdvisor
Apparently a little over 5% is all it took.
XLF going to have its lowest volume since January 2nd.
Volume extremely low on today's bank rally - WFC and JPM are just a few that may not even reach half of their average daily volume.
That's a helluva intraday breakout in the markets, charts look good but the volume on a majority of the financial stocks is lacking.