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Clinging to each other in their loneliness and alienation, George and his simple-minded friend Lennie dream, as drifters will, of a place to call their own. But after they come to work on a ranch in the Salinas Valley their hopes, like "the best laid schemes o' mice an' men," begin to go awry.
SNDK got left at alter today by Samsung which explains new low.
the vol. today was comparatively lite
Much lower volume then last plunge below 900.
Hopefully sellers will be exhausted soon.
Close is going to be ugly with more EOD mutual fund redemption orders to be filled.
I am thinking of going back into equities from bonds 10% at a time as we show more weakness going forward but not today or this month.
Not a good market timer but I know market will trend higher before economy does.
Those manufacturers from HP, Samsung or Sony would be valid. Those offered not by the store but by 3rd parties will still be as useless as they were before bankruptcy.
Those offered by the store will be most ham strung from delivering even if court releases funds to cover claims.
I assume someone will buy Firedog and the remainder of the warranty assets from Circuit City and try to offer you some real crappy on-site repairs if something goes wrong during your warranty period.
Comp USA warranties on HP computers were pretty much useless post bankruptcy since they had no HP support and spare parts and no ability to make end user whole again. Try getting DTV parts if you are not an active reseller of TVs.
Add William Sonoma/Pottery Barn to that list.
Who needs $20 items like: boxes of pancake mix, bottles to hold vinegar or melon scoopers
Journalists been making points that government bailout strikes of socialism. One economist on Bloomberg stated that socialist countries tend not to have boom and bust cycles and went as far as stating that communist Russia never had a recession since they would plan for virtually flat state spending to keep everyone employed.
As long as mutual fund redemptions continue, $65 B last week, look for EOD slides since there are no deep pocketed buyers that can pick up this type of selling wave.
Majority of volume Friday and today is program trading where house has unlimited access to more chips to raise the ante on anyone selling out.
Can you comment on possibility that if FED buys equity stocks that it got to be held in cash account which should dry up any marginable/borrowable shares to sell short.
Naz up volume is 97%.
Nothing stopping this market IMO from retracing 80% of decline if up volume is 97%.
I heard one economist talk about his proposal giving banks "script" only to be used to make loans rather then current welfare for the bankers.
My gut feeling is that we need to give every renter or real estate owner some sort of script to be used to pay rent if they rent or pay mortgage or taxes if they are real estate owner.
The next big pickle is going to be state governments. I hear CA if hitting up FED for what $7B.
NY and NJ may need close to that each by time this recession plays out.
Back in 2002, I had every regional bank calling me to to lend me money as a small business. I kept telling them that I didn't see a need to morph into real estate speculation as a side business as many other small businesses did at the time.
What easy money scheme follows stock speculation of late 90's and real estate development of early 21st century.
I got ATT wireless laptop card today and it's neat
Even in remote location I downloaded at 120 K per sec.
I plan to get 2 lb Acer netbook to use with it to replace Windows mobile PDA to view emails on the road and finally print stuff out since PDA got no printer ports and 20-30 K per sec shared with voice services download speed is useless.
Only thing Windows mobile devices seems to be very good at is replacing bar code inventory control units from Symbol.
I saw a $700 Windows mobile unit from socket mobile this week that would replace SYmbol device at 3 times the price.
Biggest problem is that more money is coming out of mutual funds then is going in due to owners of mutual fund ned to protect their retirement nesteggs.
Brokerage firm program trading worked well all day today but EOD redemptions by mutual funds sunk us in last 5 minutes of trading.
Tresuary is going to invest in bank stocks IMO to offset mutual fund redeptions.
Also, I think that they want to dry up any float of marginable shares.
If government prints money to offset mutual fund redeption, inflation will pick up and meager markets get offset by this inflation.
http://finance.yahoo.com/q/ta?s=%5ETNX&t=3m&l=on&z=m&q=l&p=&a=&c=%5EGSPC
IMO We are already at valuations for deep recession. More people realize that their funds are in peril and will walk away from market contining slow slide if new governemnt PPT program works.
Only solution is exiting from recession and pickup in hours per week worked and hourly wages increases to provide capital for new mutual fund inflows.
That is tuffest part of any gorvenrment intervention.
I think the P/E of industrials like GE and Westinghouse were in single digits to compete against double digit interest rates.
All we need is hyper inflation to "XEROX" that era. <g>
If market was near bottom and oversold and interest rates lowered close to zero, you would see many publicly traded companies making deals or at least talking about going private or increasing stock buyback plans. I don't think banks buying other banks for the real estate value of their branches counts.
We are still seeing liquidations of equity positions form funds since this big part of the mess only started from June.
The best one can expect is holding 944
I will probably join you below 975.
What is your opinion on retail sales for Christmas.
I think the upper 5% households have taken a powder on equities over last 6 months parking mostly in the safety of bonds. Their participation in retail sales will be wait and see looking for rock bottom discounts as Christmas gets closer.
For the most of the people who have to work a few extra years now because of investing in growth funds with their 401K plans, they will definitely scale back their spending plans.
If nuclear winter doesn't lift for the retailers soon, there will be a lot less retailers around come FEB.
I spent a few years in NY at Columbia Graduate School in the 80's and I was inspired by Jimmy Breslin's columns in the Daily News that I read on the subways.
http://www.brainyquote.com/quotes/authors/j/jimmy_breslin.html
Yesterday I saw $2.99 a gallon gas again.
I was once driving around Philadelphia with some Sierra Club people out of Washington 4 years ago in a get out the vote event. The topic of discussion then was how everyone at Sierra club wanted to get a Prius and the best they could afford on their non profit salaries was a Corolla with standard shift.
Breaking the ice in my indomitable but ignominious fashion, I told then my Pontiac with the pedal pressed to the floor with it's Supercharger burns one ounce of fuel every 5 seconds. The drivers response was "get out of the car".
Since he was soft hearted liberal, he didn't follow through with his edict.
RE market it looks like fear in market is over with.
However, it will be long time before any economic data like jobs report or GDP will show any positive evidence of economy coming out of recession.
Market analyst on Bloomberg said 40/1 down vs up volume only seen 5 times since 1930. Average rebound within 30 days was 8%.
Are the averages in our favor.
Euro 1.38
Copper 2.75
Shanghai market 2293
FCX 48
DRYS 37
Foreign led economic boom in trade and all commodidies that propelled us last 2 years fading fast.
Multinationals like GE et al going to deal with declining foreign earnings.
The money changers as you call them have a stronger stomach and are thinking of a longer time frame then those in DC.
Also, they need some new stock options in their comapnies at a severe discount in order to keep that fire in their belly to hype the next crappy asset class they come up with.
IMO FED going to buy a lot of crappy loans which are going to trade at a severe discount to par which some way, some how, the money changers will convince someone they are some sort of appreciable asset worth buying with cash.
Only bank in top 7 not to go "dancing with the FDIC" yet is Wells Fargo.
http://nyjobsource.com/banks.html
Wells Fargo got $76 B in MBS, CMOs, and "preferred stocks on its assets. Shareholder equity is $47 B.
https://www.wellsfargo.com/pdf/press/2q08pr.pdf (page 19)
There is not a bank out there that will not need additional capital infusions if they want to stay in the banking business.
Isn't it unreal that the mortgage insurers MTG and MBIA where the first to be declared going belly up and they still hanging in there.
WB checked out of hospice care and made trip to funeral home today. NCC & SOV took their place in the crowded hospice facility. MS & GS just about checked out of rehab facility as untreatable and could face same prospect next week.
I think they need to extend short trade prohibitions on Canadian tech companies.<g>
Futes reversing most of today's gains.
Sounds like you got a credit card billed to your address that you do not know about yet.
Thinking about government handouts
The only rational way of handing out money on this scale fairly is to give it to the people with some restrictions.
Give all taxpayers something like $1,000-2,000 ea.
Give all property owners including corporations, something like 20-30% of property taxes paid.
Caveat would be they could only
- pay down a qualifying mortgage.
- buy multi-year CD with heavy withdrawal penalty.
Money would flow directly into financials and everyone including the little people would reap the immediate benefits. Banks would get capital reserves for free and no bad debts would be written off.
I been thinking bad debt bank just another dataset to be managed with computer systems.
I think IBM, HP/EDS, or any existing government contractor with large $ amounts in highly paid IT contracts is going to love doing business with this bailout fund.
IMO prevailing wage for such government tech projects is well over $200 per hour.
If you thought oil at $140 a barrel with decifit spending @ 7% of GDP we will see $200 per barrel real soon when government decifit spending is @ 15% of GDP.
I don't think todays action will change any bond ratings.
today's action doesn't help FRE FNM especially AIG
I may be wrong but S&P SEP option SET 1238
One would have to feel that open short interest on financial stocks would figuratively drop to zero.
Most hedge funds would be getting calls from their clearing houses compliance officer.
I would think most hedge funds would reverse course and pile on long double down since that would be only game in town now.
I was thinking since naked calls look like there forbidden as well, only way of buying protection is paying the market maker for long PUTS.
You hold this things for several days waiting for time premium to decay which it doesn't because of the VIX being so high.
You sit there and watch your profits disappear in last 2hrs of tradign session because they can make more money at a higher price for the specificed time when the option expires.
For S&P that is 9:30 open
for equities EOD.
WM and WB liquidations will not generate more then $5B like BSC LEH and AIG.
It raises the question as these write offs cumulative damage the balance sheets of many other companies (regional banks and insurers) where does it stop as it looks like FED is not going to backstop many more deals.
It begs the question BAC would not be FED bailout worthy without MER and more bailout worthy with MER combined. Why would you risk approx. $50 B on acquiring MER unless you assume that either company separately only worth 1/10 of that alone liquidated.
No more naked short calls either.
Exception for Options Market Makers from Short Selling Close-Out Provisions in Reg SHO Repealed
The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(b)(3) in Regulation SHO. This rule change also becomes effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.
As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling.
they say don't fight the fed
The Federal Reserve Bank of New York said that it has delivered $50 billion to money markets via overnight repurchasing agreements, or repos, and that it "stands ready to arrange further operations later in the day, as needed." In addition, the Fed said it also will conduct its usual Tuesday morning $20 billion, 28-day single-tranche repo.
Mayor Bloomberg who knows well the City he governs stands to lose big time on ratables and income taxes on each and every financial firm that crumbles basically said today "there always be a weakest investment bank, a weakest commercial bank, a weakest S&L; what is to stop the run by short sellers on next week's weakest financial firm".
The collateral write offs from FNM and FRE now WM and AIG with WB KEY SOV and WFC on deck will cause other smaller firms to run the gauntlet of raising capital and single digit stock price.
I have to repeat my post from Aug 6th 2007 because at the time I didn't think it would play out the way it has but all of Wall St. most have considered it a possibility a year ago that the world as we know it is over.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=21834404
Bond Crisis is an economic 9/11 IMO
I have been donating platelets several times a year at a church drive in Basking Ridge NJ for several years now and know implicitly the attendance level of donors at this church as well as helping run the blood drive at our church in the next town over.
They are on one of the main commuter train lines out of lower Manhattan and Jersey City where Wall Street moved to after 9/11. 11 parishioners lost their lives on 9/11 from this parish out of 1500 families.
Today the crowd was extremely heavy for a summer Sunday. I mean there was 6 people lined up for the 6 available aphoresis machines at 12:15 PM and about 5 for whole blood donations. Usually there is 2-3 total donors at this time. I don't attend this church but I don't think they were making any special preparations to attract a larger attendance since they didn't even have coffee, donuts or fruit for the donors. Nor do I think they got a bunch of runners preparing for NYC marathon in Oct.
Since the only other time I saw this type of upswing in donor pickup at our church was after 9/11 and the start of the Iraq war. I don't think any one in Basking Ridge is going to lose their house for any increase in the teaser interest rates on their mortgage but for the fact that they may lose their well paying job in financial services with the brokerage firms in lower Manhattan or Jersey City.
I think that worrying about the losing of your job could make you want to the right things in life if you think the job cut axe may not fall on your head if you do a good deed.
I think in NE switch over is mid to late SEP from summer to winter gas blend and .
Winter gas is easier and cheaper to make as soon as they get going.
Within 2 weeks after Katrina, NY harbor was crammed with tankers from overseas containing old style MTBE gasoline and prices quickly came down.
I don't see much problems since this imported gas doesn't contain ethanol and in anhydrous and can go into any pipeline.
RE AIG
I am spending some time with AIG friend Monday. He been pretty confident(cocky) that not much job cuts will be announced. He bases that on fact they already made false alarm on shutting down NJ datacenters and moving them to cheaper labor locales but had to back off because labor staff there were not capable of taking over.
I will better feel of how painful of having $1T in debt on the books becomes.
My earliest memories of WTC was watching the pilings being pounded into the ground in 1965. I mean that building project went on for many years from early planning stages to final completion.
http://www.pbs.org/wgbh/amex/newyork/timeline/index.html
My father brought me there to show how run down neighborhood of a 100 city blocks could be reborn again. It was this sense of renewal in lower Manhattan by the financial community that impressed him the most. I just remember the sounds, the sights and the smells of the construction. It was very visceral.
My mom taking me to Bay Ridge in Brooklyn to visit my Irish aunt near the Verazano bridge site in 1960 didn't compare since it looks so tiny, quiet and sterile from a mile away
I think every generation needs something grandiose to inspire them.
http://www.artificeimages.com/buildings/World_Trade_Center_History.html
Often, whether addressing suburban luncheons or national conventions, Tobin would invoke the words of Daniel H. Burnham, the turn-of-the-century Chicago architect who built New York's first great skyscraper, the Flatiron Building. "Make no small plans," Tobin quoted Burnham. "For they have no power to stir the blood."
PS now I remember why my father took me there so often. Since city razed so many buildings at once, that part of lower MAnhatan became place for free or cheap parking before buildings were constructed. Saving a buck to invest in stock market was important to dad.
1st plane 8:46 AM
I remember well. My now 10 year old daughter had 1st day of preschool that morning. All the kids marched into school briskly, backs stiff, with hands firmly griping the straps of their heavily laden backpacks.
9/11 evokes nothing emotional for them even today. She will comment when a movie shows WTC in background "thats the building that fell down".
It is like asking adults today who sunk the Maine.
I never got to ask my mom's father who volunteering with Teddy Roosevelt's Rough Riders why he choose to fight.
He died in 1932 and only way I knew about it was the Civil War widows pension application on ancestry.com that grandmother filed after his sudden death from a stroke. It seems he was an up and coming young Republican and it was just a right of passage for anyone wanting to run for office on Republican side. He ran for county freeholder in Mercer county NJ several years later and lost but was appointed as Surrogate of Mercer County Courts later in life.
The only reason I recollect this well right now is that I took my daughter to the Federal Court House in Newark NJ on a lark last month to see the opulent WPA era courtroom as she fancies herself becoming a lawyer one day.
They had a bio on Judge Guy Fake besides the famed naked statute of Justice and his life reads similarly to my grandfather except for changing the County they resided in.
http://www.history.njd.uscourts.gov/miscFiles/2008_05_NJHISTpressrelease0425.pdf
Judicial system not much different now then 70 years ago.
http://www.time.com/time/magazine/article/0,9171,802327,00.html
The take home point is things change in dramatic moves but basically stay the same of the longer time frame and people eventually move on in life.
Only sure thing is inflation will eventually make todays debts look small and more manageable. Even sooner if we get some higher level of inflation.
PS futures starting to puke. Foreigners are starting to realize any mortgage backed bonds not worth holding at any nominally higher interest rate.
Post expiry move will be most telling. Hard to imagine market going higher as significance of Gasprom like nationalization of FRE FNM sinks in.
Imagine if your a bank under capital reserve pressure and you been donating campaign money to the other side and Bushies come a calling to say hello.
I guess we revisit 1305 again.
Barney Frank was on the record as of 8/25/08 that GSE's were not as bad as one would think. I would like to hear his thoughts.
http://money.cnn.com/2008/08/22/real_estate/barney_frank.moneymag/
Q. Your legislation will also provide support to Fannie Mae and Freddie Mac should they need it. The tab could run tens of billions of dollars. Again, why should taxpayers bear the cost?
A. I believe Fannie and Freddie are better off than the market thinks. Over the long term the market is a very rational distributor of resources, but in the short term it can fall prey to hysteria. Sometimes you need to deal with that.
PS
I was tryint to find out who this Jim lockhart is. It seems to be a another Andover classmate of Bush's
http://www.well.com/user/mmc/9907col.html