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Hey Metro, good comment...
on the total listed volume you noted versus what many newspapers publish - the regular session closing volume. Today the total was 7.4B as you wrote (a little more on the final tab), versus only 2.7B at the session close. So, do you think NYX is making out right now?
The markets really moved after the news came out today on the rescue meetings with the banks and brokers and NY state insurance regulators (and especially moved the ABK like you noted - up over 70%). There have been lots of other related rumors also floating around out there with other private names and pools including Buffett. And remember, the rating downgrade by Fitch last Friday on top of our weak markets are likely what really spooked the global markets over the long weekend. We'll just have to monitor how this shakes out.
And if anyone is looking at financials, depending on their exposure to all things related toxic or more appropriately any company's lack of exposure, then some analysts estimates can still be used, and some of them still have strong numbers for 2008. i.e. NLY (and their related new 52wk high yesterday).
Mortgage applications are up, refi's up, dramatically in the past couple of weeks. Out here in CA, we have a major foreclosure auction organized by REDC this weekend: http://www.ushomeauction.com/ Everybody will be watching and there's a lot more inventory offered out there than just these. Rates are coming down - let's see how far home prices are going to come down before buyers appear.
Last item, however, is back to the Fed. Since they blinked yesterday, now they are really going to feel pinched to act again next week. I mean, now that Bernanke has flinched and reacted again to our markets, he doesn't want to appear to be setting a pattern and looking too nervous now. Especially in the face of the 50 to 75 bps of additional cuts the Fed funds futures indicate for next week. Bernanke's taking on some heat and you can bet he's feeling it, so, here we are once again wondering what the Fed is going to do next week (because we think he could try "creative" again). The markets are likely going to stay volatile because of it.
Amazing, isn't it, how you can't get out of some things regardless of what you do (after falling behind). And that introspective may be what the Fed thinks they have to change now.
I did some buying today, but, staying nimble.
GL.
Just how late the Fed was...
at this juncture and perhaps more accurately how wrong and confused they were, will be worked out in the markets in the near term.
And it seems the current uncertainty was in some ways heightened yesterday by the Fed reacting at the very last hour to simply try to avoid our washout. That makes the sidelines the best place to stay at the moment and hopefully not too much longer.
There is no confidence out there at the moment, and it seems many are waiting for a resolution on the insurers (and it will get resolved one way or another) and a confirmation that the Fed follows through next week - to make sure they really "get it" finally. Fed funds futures have increasing odds for another 75 bps cut next week.
Separately, there are actually a few other good signs developing - more on that later. But, until this downtrend/correction/bear works out, it's very hard now to try to game it.
GL.
They finally blinked...
what do you know.
It took another second day of around-the-world sell-offs, but, they finally blinked right ahead of our selloff. A little late, but, better late than even later.
Good luck today, I have to get ready with a new game plan.
Tomorrow's plunge and a note on...
the consistency of Bernanke to date.
If you have been following this chairman for any length of time, he has been described as creative, etc. when people discuss his handling of the ongoing situation.
As the closes from around the world are studied tonight by the Fed, one could possibly expect an announcement sometime tomorrow of another inneffectual creative solution, but, even that I would guess may not come. Not yet. It wouldn't be consistent.
For whatever else this Fed has been distracted on, it seems it has been more focused on only certain aspects of the credit markets and other economic indicators and fundamentals, and seemingly hardly noticing at all any signals from Wall Street and our equity markets.
So, I would guess, after a steep sell-off tomorrow and oversold bounce, we could get another consistent reactionary announcement from the Fed similar to what we got on December 12 after their screw-up-FOMC-decision on the 11th. Possibly of another inneffectual short-term, inadequate consistent creative fix (which have turned out so far to be not really any fixes at all).
And, regardless of any creative fix, unless there is news sometime later this week of an inter-meeting rate cut of something more than 50 bps - and at this point it will have to be more than that for a sustained move up, then expect any bump up on any creative fix news to be followed by some more selling and volatility.
If one of these creative fixes comes out early tomorrow morning, that wouldn't be as consistent, and we could start out flat or only slightly lower than Friday. Then, this whoosh down might be pushed out - possibly even until Wednesday - depending on how creative and substantial it appears at first. But, the markets won't buy any more creative fixes for long. So, just wait for the selling.
On the other hand, if we start out low and plunge before any news comes out from the Fed, then we could put a low in tomorrow. I hope for this scenario - as we have already been on our own for quite awhile. Let the markets ride it out now and wait for the Fed to react on Wednesday with some follow-up consistent creative ineffectual fix.
And just beware, if that happens, then it's quite likely we get more bad news in the next couple of days or weeks from an ABK, etc. and then it could really get ugly. We will definitely roil some more on a scenario like that until at that point in time there is very real and concrete and adequate emergency action from the Fed (like a necessary full point emergency cut in the Fed funds rate) and other emergency announcements from DC. That's what it will take with problems with the monoline insurers.
http://www.afgi.org/whoweare.htm
Good luck!
The markets did close weak last Friday...
and it did not bode well for this week.
Today, while we're closed, the rest of the world plunges - down 3% to over 7%. India is down almost 10%. And our index futures which are open today are falling significantly in step.
The only thing that gave me a sliver of hope last Friday was what Paulson was saying later in the day after Bush spoke. He was mentioning that the administration was wanting to get ahead of this deepening crisis. However, there were no details on anything from him and more importantly not a peep from Bernanke all day last Friday. Obviously, nobody blinked over our long weekend. Nothing. Nada.
I didn't really expect a change from the Fed yet, but, had to hold out a sliver of hope. Even though we all know that hope doesn't take you far in the markets. At least Bernanke has been consistent - and you can make money off of consistency like that.
However, some other influential people may be getting involved and start making some noise at this point (hopefully!). Oooops, there's that word again.
I regret I covered the positions that I did on Friday. But, wanted to play it safe at this juncture. At least I kept some positions open.
Good luck this next week. We are all going to need it.
Some more related info: http://www.forbes.com/2008/01/20/financial-bond-insurance-biz-wallst-cx_lm_0121bond.html?partner=yahootix
The next sound button...
Cramer needs is of Donald Trump saying,
"Ben, You're Fired!".
Actually, Cramer said this last night on his show, that there is nothing more he would like than to sit opposite of Bernanke at the big conference table in the Trump Tower Board Room and say those three words to him.
It would only be better if he got the Donald to say it.
OT - I can't imagine more people like Trump are not making more noise at this point. At junctures like this, William O'Neil also usually puts out full page editorial ads in all the papers. But, I guess if you're still making money, you just go with it.
Yep, they should get one of those...
will have to see how it plays out.
Question this morning: Where's Bernanke?
Everyone else was with Bush a little while ago, his entire economic team and advisors spread out behind him as he spoke, but, the bearded one was missing. Maybe he's back in his office on the phone this morning with his gang.
Even though he was praised and lauded by many of the clueless House Budget committee members yesterday during his visit, I still imagine he's not been sleeping well lately, nor should he be. He may or may not be aware that he has been doing a disastrous job of late, but, he's not totally unaware of the markets.
So, if we close weak today, I may consider covering most of my positions. A weak close would not bode well for the markets next week and it would be tempting to stay short into Tuesday. However, with a nervous Fed and everyone else in DC now nervous too, I think someone could then blink.
If we close weak, the three days would allow them some time to actually do something and who knows, someone might think it would actually be a good time to get an emergency meeting done and get some news out and thoroughly digested by the markets before next week.
Thanks for the note Metro, the writing helps vent some frustration. Have a great weekend.
GL.
Yea, it's getting close...
and the VIX finally moved this afternoon and Bernanke & Co are going to be forced to act soon if some really bad news comes out for an ABK or something similar. Until then, I think they are going to try to hold out.
That said, I'm wary of a turn lasting right now. I think the markets want to see what the Fed actually ends up doing. Some damage has been done now to our economy and this market could go lower as basically a vote of no confidence on the Fed.
But, being short here is risky too. If they do act before the 30th you can get burned again by them.
Tough market.
It would be nice to take some time off now, but, want to be standing by if we get a major move here.
Good Luck Metro.
The NYX news this afternoon should add some more strength to this issue ultimately. They are getting to be a real powerhouse.
Actually, the House Budget committee questions...
this morning and comments gave me even less confidence than anything Bernanke said to answer them or during his testimony.
Many of the members of the committee congratulated the chairman for his great work to date and especially last fall for stepping in and correcting various crisis.
The highlight was when Congresswoman Marcy Kaptur from Ohio also referred to him as the ex-CEO of GS.
Yes, while she's another one championing quick action now to stimulate the economy, she's not clear on who the Fed chairman and Treasury Secretary are. It was not a casual slip, she really didn't know.
The whole thing was disheartening.
ABK is down substantially...
again today. Have to continue to watch these.
The VIX is not moving much however yet today, so we wait.
Bernanke's answers to questions again...
do not inspire confidence that the Fed (and probably other regulators) will now get a firm handle on this and get in control of the situation. At least not to me.
As we tick down, the March lows get taken out.
GL.
Bernanke's speech today will focus...
not only on a termporary fiscal package but will state strong language in some cases almost word for word what he stated last week. That they are ready to take decisive substantial action.
The markets should not act the same as last week. They should not spike up this time as much, if at all.
In fact, here they go - down.
GL.
One main reason MER is not
down more is because of their BLK holdings. One good move.
Side bar: BLK is one of the few financials out there that has managed to hang onto it's 50 so far.
A disheartening article tonight...
came up on Yahoo: http://www.msnbc.msn.com/id/22690115/
An article about Bernanke to offer his qualified support for stimulus plans proposed by Congress to support the U.S. economy.
Just disheartening, in so many ways. Mainly, because the reason stimulus plans are needed at this time is because the Fed didn't do their job correctly and act in time last year.
Disheartening because broad plans shouldn't be required, at least not at this juncture.
Disheartening just thinking about what various plans the politicians will propose, all of the bickering and posturing, how much these programs will cost, and how much of that money will be wasted ultimately.
Disheartening because it's more business as usual inside the beltway. You can be sure we will hear more from the candidates, from Bush at the State of the Union, and from Bernanke and others.
I'm not against plans themselves, many families will be helped by these plans and it is commendable and good to do so, but, it would've been better all the way around (for the entire economy) had the Fed acted correctly last year.
Lots of people created this problem and the blame can be spread far and wide, but, the Fed had the capacity to step in and solve much of it, much more painlessly, last year. And it was their function to do so.
Instead, it appears they didn't do their homework; they didn't do their job to the best of their ability. I say that because they have the knowledge, the experience, and the information, and could get access to any other market information out there from about anybody out there. But, they don't have to go the extra mile. Their positions are secure, regardless of performance. In fact, nobody really judges their performance. Why would they need to do more?
And it appears they are too late now.
GL.
Some other related problems...
not getting a lot of attention yet, but, they are there.
Municipal bonds and the effects on them from the rating agencies and insurers which are in trouble. The declining state tax coffers especially here in California and other states hardest hit - just from the large hit on property taxes (empty homes). Etc.
A economic cascading effect starting in these areas as well.
Here's some good videos to pass
the time today.
Hey, Metro, if you
photoshop in a beard on the clown photo, it could be Bernanke. Or, I'd like to see a Bernanke photo next to the clown for a closer comparison, it could be a match. :))
GL.
It's Fugly out there this am.
"The Fed has got no clue"
is what Cramer just got Queen Latifah to say on his live interview with her right after the opening. They were all together down at Times Square as the cast for the new movie Mad Money.
He was pretty funny, his reaction, when she said that.
I'd be willing to put money down that a new sound button will be on the show shortly that he can push along with the first Fed button "They know nothing!"
"The Fed has got no clue!"
INTC not helping for tomorrow either.
GL.
Not a good close for this market...
but, a good close if you're short this market and playing Bernanke d-fence.
It's bad, no doubt about it. Even the defensive names were getting sold today, so it was time to eject those too while there was still some profit.
GL.
Yea, and unfortunately, I think he spends more time
in his own academia than in our world and all the nuances and other problems in it.
Bernanke and all of the members of the Fed could be the most studied and most knowledgeable guys around, but, if it's just theory and not practical understanding and experience, than all that book knowledge is just going to get us where we are at present.
I rather side with the practical street smarts of the large market forces (not the crowd) instead of relying and waiting on the Fed any day.
Even a 50 bp cut in the fed funds rate...
on Jan 30 may likely not be enough to sustain a turnaround in the economy at this point (at least not anything anywhere near the short-term) and also likely would not be met favorably for long in the markets. The markets have been reacting correctly to the Fed for awhile and I would expect that to continue. And it's unlikely the Fed is "decisive acting" enough to go for a 75 bp cut in January.
For the big change in cuts (and a change in outlook and character of this Fed) to occur, we will have to wait for more economic problems to develop later, for them to fall further behind, and ultimately for some later emergency actions by them.
An emergency meeting at some future time in the spring would be a good signal of a turn of sentiment.
More pain for now, however.
GL.
Even though we got a good close yesterday,
the volume was light, internals were mixed, and the data coming out and the overall market action are saying we have entered a recession. Further, the market is signaling that the Fed has no credibility at this point - so, expect more of the same from them, or better, don't expect much help from them, at least not yet.
As Bernanke stated, they are prepared to act with decisive action, but, that will first require more bad news hitting the market and creating further selling before they are sufficiently motivated to act.
GL.
Those broken trend lines in the
Nasdaq, etc. and the fact that we have been chopping around underneath them really seems to indicate that the Fed is too late now for the economy near term and they are going to have to get very aggresive now in order to correct.
In fact, odds are about even now for 50bp or 75bp cut in the fed funds target rate at the January meeting and the market is still languishing somewhat this morning, even though we are still up on this gap this am. If these odds for a target rate of 3.5% would have occured even just a month ago, we would have been up huge and roaring on the outlook. But, not now. The market could end up saying Bernanke missed it and now other problems are brewing.
Have to see how we get through the day and close.
GL.
Most of the leading stocks...
as well as the indices have now broken their short-term and/or long-term lower trend lines, not to mention their 50 dma's.
What's left? Not much.
Some gold, health care, ag/chemical, etc., and only a handful of misc. growth issues.
Be careful out there until this actually turns and is confirmed.
GL.
I have to admit, months late...
that Cramer has been right all along...
They Know Nothing.
It doesn't matter what their internal research comes up with, external data, etc. In the end it's their personal filters and interpretations and quite frankly the group dynamics of the Fed that have gotten us here.
Like most people, they will hold out until the point of unbearable pain for them, and then finally capitulate.
That's when we will get the cuts and the change we needed long ago.
Careful of what Bernanke stated...
They are ready to take decisive action.
They are not going to take action right now - rather, they are ready to take it.
So, if the market, anticipating cuts, claws it's way up, do you think they will act? No.
Only if things continue to get worse, will they then take decisive action. Once again, they are likely to not only send this market down one more time before their January 30 announcement, they are going to let it. Then, and only then, are they going to take decisive action. That's the only way we get anything we need. At least that's the way I hear it.
I'm staying cautious.
I'm net long, but, going to wait with a pile of cash and see how this plays out.
I suspect they are going to let us and the economy end up like the guy in the quicksand commercial. They'll throw us a rope eventually, but, it's going to be at the very last moment and we are likely going to be all the way under first.
Be prepared, take a good breath, do what you can to protect yourself, and you will make it. And know that Bernanke will congratulate us (and the Fed) later for having made it through this.
GL.
When you listen to Bernanke...
like yesterday, he outlined all that the Fed has done and adds phrases while describing each item that state they were timely, more than sufficient, and basically on the mark while observing all components of the financial markets. He already sounds like Greenspan who in his book and his more recent comments on the economy that he helped create when he was chairman state that they also acted prudently and basically what the market determined.
I just saw that Royal Bank of Scotland commercial again - the quicksand one. Noticed at the end, the group leader congratulates all of the group while the haggard guy who was just pulled out of the quicksand is spitting out globs of the stuff still has his one arm upstretched and strung up over his head from the rope over the tree that pulled him out.
The leader then cheerfully asks "Who would like to offer a vote a thanks?"
And he looks to the guy with his hand strung up in the air, "Ah, Donovich! Well done!".
Just like the Fed!
The market is very wary of this Fed.
The initial spike up on the news release of Bernanke's speech that was put out about 45 minutes before he actually started talking was sold by the market. By the time he had droned on and wrapped it up, the market had sold off again and was right back where it was before that news release. The market was not buying his statements (literally) and it looked it could lower again.
Shortly after, it was at 14:20 that the market actually got a real bid - when the BAC - CFC news was released, sending everything up.
In any case, that's two days for this bounce where the buyers have stepped in and pushed us up into the close. The important one was Wednesday reversing off of the new low.
Good.
This talk today means that the Fed...
and more importantly this Chairman are still unsure of where they are and where they need to be. His answers to questions especially cemented this, at least to me.
Not good for us.
Not in the short-term and possibly longer term too.
GL.
Less Talk!
I like that commercial on television now, you know the RBS one they play on Bloomberg TV, where the group of directors from the corporation are out on their team building hike, and one of them steps into the quicksand.
As he sinks and sinks the "committee" starts into their standard protocol and discussions and motions and votes.
He takes his last gasp of air and goes under. And finally when at last only his fingers on his up-stretched hand are all that remains where he once stood, one in the group takes action and rescues him.
The FOMC is like this group in the commercial. But, we need action and Less Talk! Ben!
Question is: who is going go be the one who stands up and takes action as we are at our very last seconds of life?
Good question.
The speech is starting.
So far, all I can think is less talk.
Well, we did get some more pain
yesterday afternoon, followed by a bounce finally.
Let's see, Bernanke is speaking today, that should be good right? No, I doubt it.
Don't expect this market mood to change from any Fed dribble at this point, only after concrete action now. If we hear of a special announcement of a Fed conference call - have your shopping list ready. Or probably more likely, if we hear of more financial market woes, then realize any more negative news and data is going to be putting pressure on all of the Fed members to move on Jan 30. and to move at least 50 bp then and now much more the rest of the year because of how far behind they are.
Bad news should be good news again. Europe left their rates unchanged today amid their softening data. This should create more bad news - which will be good.
I don't know if they try to hold out and run this out to Jan 30 now, so be ready for a surprise announcement. I'm still wary of them, so, the bounce is ridden but treated with suspect.
GL.
Nasdaq down again, nine days...
in a row. According to Bloomberg, that has not happened since 1984, if in fact we don't get that bounce today. Thanks Bernanke & Co! At least you've helped some of us make back the money that was lost on your last FOMC debacle on 12/11 & 12/12.
Could they be setting up a conference call? Maybe even for this afternoon?
Rumors abound, but, I think we need more pain first.
Perhaps they are watching the indices as I write. And that additional pain could come today.
GL.
Did you hear Bill Poole's comments...
this morning? The Fed beat goes on. For now.
I'm not buying yet, waiting a little bit longer.
GL.
Some more wide swings today too...
in the markets and some of the leading stocks.
Good to trade on if you're aggresive, otherwise, I'm inclined to hunker down and wait. Too much uncertainty out there. I'm picking my points and waiting with some cash.
I see at least NYX didn't sell off again at the open.
GL.
Yes, one has to be careful...
in this volatile market. Yesterday's wide chop moves were indicative of that.
My short side positions are very select now and have covered most and only have a couple of remaining financials that are in trouble, etc. As always, have to get as much in your favor as possible. Am also trading the ultra-short etf's around the daily action.
Agree with that article as I tried to suggest yesterday that I have some of those big-blue-chip mega-caps with their greatly expanding multiples this year. They are also a bit more defensive, especially of late with the small-caps taking horrendous slides from the heavy selling.
The underlying tone will remain defense with this Fed - it's the only way to make money right now. And the markets should remain volatile with their (mis)handling of things including more creative operations, late cuts, possibly an unexpected cut, and their ongoing "transparency".
GL.
Good luck Metro!
I think there's more truth to your comment about Cramer talking about NYX (since announcing his growth pick of '07) than a lot of people believe. )
Nothing new from Bush who just finished his speech, let's hear what Paulson has to say later - again I don't expect much new from him either right now.
I'm still sitting with a mix bag but with a net short waiting on this market.
GL.
NYX News Release...
this morning, that I'm sure most of you have already viewed, if you get notices sent to you by email or check the news on your holdings.
http://ir.nyse.com/phoenix.zhtml?c=129145&p=irol-newsArticle&ID=1091944&highlight=
Record transaction volumes in all markets they operate in, and the stock is down and actually it's about fairly priced right now. I don't own any currently, but, we'll see as this market shakes out here.
I still prefer some of the other blue chip mega-cap deep value plays. The multiples on some of these other down right cheap names are going to be rising this year.
GL.
Let's see if we get any special...
announcements coming out from inside the beltway today.
Again, I would bet not, and then tomorrow we could start a serious flush. Then, and only then, can we expect some announcements - after some more pain for the markets. After all, this is a reactionary group we have running things.
GL.
Cox, Chenney, Bush, Paulson, and Bernanke...
are pictured on the front page of IBD's Monday edition from a meeting yesterday on our financial markets. Makes for a great photo.
Too bad the SEC, Administration, Treasury, and Fed all have to gather around and look under the hood of the markets and try to come up with some ideas of what's wrong and then some guesses on how to fix it and get it running better.
What makes for great photos doesn't make great policy. As they continue to tinker around and try different things, stay tuned for some more creative and drop-in-the-bucket government operations, interventions, and programs to be announced soon. Sadly, probably most will be ineffectual, and ultimately cost us the taxpayers.
Meanwhile we wait.
Just cut the rates meaningfully already! And lurch the markets around some more! At least we're better prepared this time.