Financial topics

[malleni]

mannfm11,
You are pretty calm I see, but if you check the article from Bloomberg - they are not so calm as you.

"The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression."
( http://www.federalreserve.gov/newsevent ... 80914a.htm )

Obviously - the FED "made loans"...
It probably "made" them because somebody desperately need this money.
Somehow - the FED has it...?
... And obviously many banks - have NOT it...


Billionaire Ted Forstmann does not seem so calm neither:
"...
``It's your money; it's not the Fed's money,'' said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. ``Of course there should be transparency.''
...
"
On the other side FED refuse to comment both these (obviously NOT "transparent") loans or the Bloomberg lawsuit.

"...
Federal Reserve spokeswoman Michelle Smith declined to comment on the loans or the Bloomberg lawsuit. Treasury spokeswoman Michele Davis didn't respond to a phone call and an e-mail seeking comment.
..."

AND there are other articles which talking about the similar things:
(For example:)
http://www.washingtonpost.com/wp-dyn/co ... id=topnews

[The Grey Badger]

Cartoon idea: Paulson shown looking, bewildered, between a donkey on one side and his saddled-up elbow on the other.

[John]

When you're watching a movie, something always happens that let's you
know that it's a movie. For example, someone refers to "World War I"
in a 1920s movie. Or, someone finishes breakfast in one scene, and
then is still eating breakfast in the next scene. There are
inconsistencies that let you know that you can't possibly be watching
real life, and you can enjoy the movie by "suspending disbelief."

As I read news stories, and see news on tv, I keep hoping that I'll
see some similar inconsistency. I keep hoping that there'll be an
earthquake in one country in one newscast, and then it'll be in a
different country in another newscast. Or that the Dow will be 9,000
at 10 am, at 12,000 at 11 am, and at 8,000 at 1 pm.

If any of those inconsistencies happened, it would be an ENORMOUS
relief to me. I would know that I'm actually insane, or at least
dreaming. I could hope that, any moment, somebody might be shaking
me, say, "John! John! Wake up! It's time for lunch!"

But it never happens. I watch the newscasts, and there are millions
of details, all consistent with one another. There are too many
details for me to be making up in a dream, so it must be real life.
Analysts, journalists and politicians all say incredibly stupid
things, but they're all consistent with one another, and I can't find
anything that would give me the relief of knowing that I was merely
insane.

More and more, as I watch the news, I'm dissociating with what's
going on. It's like I'm watching an ant farm in a big glass bowl,
and all the little ants are going about their business. I think that
if only one of the ants would stop and look out through the glass, it
would see that the glass bowl was about to fall off the table and
smash to bits. But they never do.

But then, I take a walk along the "Golden Mile," Route 9 in
Framingham where I live, and I see all the store closing
announcements, and the 50% off sale announcements, and I realize that
I'm still part of the ant farm, and even though I can look out through
the glass myself, it doesn't do any good, because all the other ants
couldn't care less.

John

[Gordo]

Well today we got the infamous "capitulation" that John loves to poke fun at. Besides an “almost too perfect to be true” textbook test and bounce off the bottoms on heavy volume (another big key reversal day), today was also notable for the shellacking in treasuries (a very good sign that the market goes higher for a while). My guess is that a powerful new counter-trend rally has begun which will probably last for 3-6 months.

[Matt1989]

Well today we got the infamous "capitulation" that John loves to poke fun at. Besides an “almost too perfect to be true” textbook test and bounce off the bottoms on heavy volume (another big key reversal day), today was also notable for the shellacking in treasuries (a very good sign that the market goes higher for a while). My guess is that a powerful new counter-trend rally has begun which will probably last for 3-6 months.

How high do you expect?

[mannfm11]

Anyone with a brain can figure out the market makers are stuffing money in their pockets using unlimited lines of credit from the federal reserve to arrest declnes. Watch the market. You can see the ticks on the Dow. Not one or 2 points, but 10, 15 and 20 points. The Dow is 8 points for every dollar of summed value. A 16 point tick is $2 of stock value. I figured that the spread, if we were using an a/d of 2 to 1 on ticks was 20 cents. Do you know how you manufacure a rally and make several billion while doing it? You pull the bids and limit the rebound by keeping the ask tight, then pull the asks out of the equation and throw in a big buy. Perfect signal, down 300 points, break 8000, Bush on TV to distract and let it go. Blow it up when the President ends his speech. I have watched this over and over again. The traders are looting the country and looting their employers and basically running this game on Federal Reserve liquidity.

We are going lower, not higher. No one but someone ignorant of markets would buy into this nonsense. MSFT broke a low that stood since the 1990's, some 500 points above the last Nasdaq bottom. There hasn't been any bad news with MSFT. Citi has collapsed. All the Dow small stocks and by small i mean stocks with low prices are being neglected because you can't move the Dow, which is a price summation market by pushing $10 stocks. Look at them. C at under $10. MSFT at about $20. AA at $10. AiG at $2, GM at $3, PFE at $16, AXP at about $20, BAC at $17 and INTC at about $13. For you that don't know, the Dow is purely price, where the prices are summed up and divided by a divisor. It is one of the great rigged indexes in history, as when the Dow first reached 8000 in the 1990's, it took $2000 to buy the entire line of stocks where it takes $1000 now. Sure there were splits, but a lot of the price was taken out at the top. IN any case, the 9 stocks I just mentioned add up to about $110. MCD and WMT count more than those 9 stocks, so you want to rally the Dow, you don't fool with $1 trillion in cap value, you fool with $400 billion or so and do the same thing.

anyone with a brain knows the volitility in this market is being created by huge trading spreads and manufactured rallies. Some of you guys say all the bad news is out. That is what they said back in the spring and there wasn't any bad news. The Gen Exer has never seen a bad economy or a normally priced stock market, only a bubble. This has been a bubble for going on 2 decades, since the early 1990's. It hasn't registered that the Fed is liquidating assets, not creating money. Without the Fed's new programs, the stock market would be about 3000 right now, gasoline about 50 cents a gallon and the emerging markets all starving. I really don't care about what they are saying in the press. I don't care if the guy has 2 cents or a billion dollars. They are all lying or they wouldn't be interviewed. I am reading that 78% of the people CNN polled thought Obama could fix the economy? How? Maybe he could have a political fund raiser and restore the financial balance, but I don't know how he creates real demand. The solution to the 1932 mess was that it had bottomed. the world bought a theory that has never been proved to work and was being employed while this thing collapsed. Money is disappearing faster than it is being made. There is no mathematical solution and I keep reading about furniture shoppers on the decks of sinking ships.

[John]

-- Market Summary, Friday morning, November 14, 2008

Announcements by Art Cashin and others that capitulation and market
bottom occurred on Thursday appear to have been premature, as market
indexes are down 3% on Wall Street, thanks to reports of disastrously
low October retail sales and weakening tech sales.

But never fear, the world is about to be saved:

There is a two-day summit of the G-20 world political leaders in
Washington. These guys (and gals) will figure everything out, and
you can be sure that we'll have capitulation and a market bottom by
Monday morning.
http://www.bloomberg.com/apps/news?pid= ... refer=home

All hail the G-20!!!!!!!!!

John

P.S.: A web site reader wrote to me and said that I'm getting so
cynical that she's making me an honorary Gen-Xer.

[John]

From a web site reader:

> Very interesting material, and I want to believe as much as
> practical. However, greed and fear seem to rule now in that
> order. Yesterday, we moved to SPX 818 on pittance volume and then
> the 20 captains of the Big Casino started massive ETF buy programs
> to squeeze overly comfortable shorts back to 910. They did not
> want to let INTC rationally lead the market to the healthy
> correction (or capitulation) that you are espousing. Plus, much
> bad news is denied and ignored. My point is that the major players
> are exercising more CONTROL over market momentum than in the past.
> It is kind of like the old USSR KGB news release as to why things
> happens. Essentially, most rallies now are pure BS reasons and
> most excruciating drawn out declines are based on a ton of bad
> reality.

> The gov's stats are plain lies used to give support to using easy
> money to solve all financial crises. Substitution, re-weighting
> of higher priced items with lower, and hedonic downward price
> adjustments have made the CPI a total joke. Greenspan was slick
> in that manipulation, but his main tack was to put off the
> inevitable for another regime (say Bernanke). Until we change our
> culture of living beyond our means, stealing, and lying, there
> will be no real improvement in our economy or country. It is a sad
> footnote that the populace has become the spitting image of a gov
> that spends like a drunken Marine on liberty. We are talking
> human nature here, and that is not easily changed. I looked for a
> better country to live in after this last farcical bailout, but I
> couldn't find one. It seems depravity has vast roots in this day
> and age. Our goal should be quite simply to become less depraved.
> John, you seem to be informationally directed with little
> manipulative sway and maximum conscience. Thank you!

Based on what mannfm11 is saying, added to this comment, what I
believe that people are saying is that market makers are creating
rallies on small volume so that they can short the rally and make
money when the rally collapses. The implication is that these market
makers are doing this purposely, to manipulate the markets for their
own benefit. This activity would be securities fraud.

Could any of you trader experts comment on this?

Sincerely,

John

[freddyv]

Well today we got the infamous "capitulation" that John loves to poke fun at. Besides an “almost too perfect to be true” textbook test and bounce off the bottoms on heavy volume (another big key reversal day), today was also notable for the shellacking in treasuries (a very good sign that the market goes higher for a while). My guess is that a powerful new counter-trend rally has begun which will probably last for 3-6 months.

If John is right and we are to see a drop of epic proportions where you are not able to get off a trade what will happen to you?

The problem that got us here is that we forgot, via a generational dynamics (wise, old folks dying off), that speculation has its price. The above comment reminds me of the post of a month or two ago where someone predicted oil would pop back up to $116 - it has gone straight down since and that guy must have lost his shirt and perhaps his wife, kids and house. I warned him and I am sure he did as you will do; ignore sound advice.

So yes, we might be in for a several months pop, or we might not but historical valuations lead us to the conclusion that this market is still way overpriced and we have much more downside to come. Speculate at your own risk.

--Fred Voetsch

[mark]

Gordo says:

Well today we got the infamous "capitulation" that John loves to poke fun at. Besides an “almost too perfect to be true” textbook test and bounce off the bottoms on heavy volume (another big key reversal day), today was also notable for the shellacking in treasuries (a very good sign that the market goes higher for a while). My guess is that a powerful new counter-trend rally has begun which will probably last for 3-6 months.

Don't blink; Look again....