Comments on: Friday’s Trading http://www.trivisonno.com/fridays-trading-8 Technical Trading Talk Thu, 11 Mar 2010 03:24:12 +0000 http://wordpress.org/?v=2.9 hourly 1 By: admin http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6060 admin Sat, 06 Sep 2008 19:14:54 +0000 http://www.trivisonno.com/?p=734#comment-6060 Yerk, Last I heard, Fan-Fred's recent bond auctions didn't go too badly. I believe that they had to pay higher-than-usual rates on the last one, but it wasn't too alarming. But if Bill Gross is going to lead a buyer's strike, then perhaps the next auction would be a disaster. This thing is like a shark that has to keep on swimming. How in the hell will they ever figure out a way to keep feeding this monster? How does the dollar survive a massive bailout? Even if Bill Gross will buy the new paper, will his investors keep their money in his agency funds? Matt Yerk,

Last I heard, Fan-Fred’s recent bond auctions didn’t go too badly. I believe that they had to pay higher-than-usual rates on the last one, but it wasn’t too alarming.

But if Bill Gross is going to lead a buyer’s strike, then perhaps the next auction would be a disaster.

This thing is like a shark that has to keep on swimming. How in the hell will they ever figure out a way to keep feeding this monster? How does the dollar survive a massive bailout? Even if Bill Gross will buy the new paper, will his investors keep their money in his agency funds?

Matt

]]> By: admin http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6059 admin Sat, 06 Sep 2008 19:04:24 +0000 http://www.trivisonno.com/?p=734#comment-6059 They are making noise now because the market crashed on Thursday, and Bill Gross blamed it on Paulson. Even if they can't get a deal done on the weekend, they will continue yapping about it to try and talk the market up. So far, the yapping has worked in Friday's after-market trading, but if there is no deal this weekend... They are making noise now because the market crashed on Thursday, and Bill Gross blamed it on Paulson. Even if they can’t get a deal done on the weekend, they will continue yapping about it to try and talk the market up. So far, the yapping has worked in Friday’s after-market trading, but if there is no deal this weekend…

]]> By: Yerk http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6058 Yerk Sat, 06 Sep 2008 19:00:44 +0000 http://www.trivisonno.com/?p=734#comment-6058 "Fannie and Freddie need to sell billions of dollars of bonds each month to pay off maturing debt. As of mid-August the companies had $223 billion of debt to refinance by the end of the quarter." http://www.bloomberg.com/apps/news?pid=20601087&sid=aeBCZUDSozyM&refer=home So they had to move now... “Fannie and Freddie need to sell billions of dollars of bonds each month to pay off maturing debt. As of mid-August the companies had $223 billion of debt to refinance by the end of the quarter.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeBCZUDSozyM&refer=home

So they had to move now…

]]> By: Pooch http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6057 Pooch Sat, 06 Sep 2008 18:45:01 +0000 http://www.trivisonno.com/?p=734#comment-6057 The New York Times said most or all of both the common and preferred shares would be worth little or nothing." http://www.bloomberg.com/apps/news?pid=2... What did Paulson say? If congress approves the 800 billion dollars it will instill investor confidence and it is highly unlikely that the money would be needed. Liar or idiot? The Treasury doesn't get the $800 Billion until 1 October so why is Paulson moving on the 2 GSE's now? Could it be because the mortgage situtation is much worse than the numbers indicate? Is it possible that Paulson and company know that the 2 GSE's will be swamped in the next few weeks? There has to be some dire reason for moving so early. Hold on to your seats ladies. The devil is in the details and my guess is when the details are released it will be the equivalent of a financial atomic bomb. The New York Times said most or all of both the common and preferred shares would be worth little or nothing.”

http://www.bloomberg.com/apps/news?pid=2...

What did Paulson say? If congress approves the 800 billion dollars it will instill investor confidence and it is highly unlikely that the money would be needed.

Liar or idiot?

The Treasury doesn’t get the $800 Billion until 1 October so why is Paulson moving on the 2 GSE’s now?

Could it be because the mortgage situtation is much worse than the numbers indicate? Is it possible that Paulson and company know that the 2 GSE’s will be swamped in the next few weeks? There has to be some dire reason for moving so early.

Hold on to your seats ladies. The devil is in the details and my guess is when the details are released it will be the equivalent of a financial atomic bomb.

]]> By: Pooch http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6056 Pooch Sat, 06 Sep 2008 18:41:30 +0000 http://www.trivisonno.com/?p=734#comment-6056 I suppose the market could bounce.2 ago weeks FRE & FAN said no intervention would be needed,now 2 weeks later the government has to jump in to bail them out at the expense of the taxpayers and common shareholders?? So the financials should go up??? Does this not show the desperation of the situation?? Buy Lehman stock so the government can bail them out to,oh but your shares are going to 0,what am I missing here? I suppose the market could bounce.2 ago weeks FRE & FAN said no intervention would be needed,now 2 weeks later the government has to jump in to bail them out at the expense of the taxpayers and common shareholders?? So the financials should go up??? Does this not show the desperation of the situation?? Buy Lehman stock so the government can bail them out to,oh but your shares are going to 0,what am I missing here?

]]> By: admin http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6055 admin Sat, 06 Sep 2008 17:42:30 +0000 http://www.trivisonno.com/?p=734#comment-6055 Yerk, Thanks for the list of ETF's. That's a good approach to discovering where the sharpest corrections may come. The XLU for example has a large, and blatant, head-and-shoulders pattern on its weekly chart, and it looks like it decisively broke the neckline last week. It was the worst sector on Friday. In my trading program, I have added a screen named "targets" with the sectors that top your list. Yes, the banks and homebuilders are a mess compared to 2002. I just think that hyper-focusing on them may cause me to miss better opportunities. Matt Yerk,

Thanks for the list of ETF’s. That’s a good approach to discovering where the sharpest corrections may come. The XLU for example has a large, and blatant, head-and-shoulders pattern on its weekly chart, and it looks like it decisively broke the neckline last week. It was the worst sector on Friday. In my trading program, I have added a screen named “targets” with the sectors that top your list.

Yes, the banks and homebuilders are a mess compared to 2002. I just think that hyper-focusing on them may cause me to miss better opportunities.

Matt

]]> By: jayJ http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6054 jayJ Sat, 06 Sep 2008 17:33:50 +0000 http://www.trivisonno.com/?p=734#comment-6054 Yes a BOD is elected by the common, yet the BOD has a fiduciary responsibilty to protect ALL holders up and down the capital structure This is done in the best interests of the Company. In the end the BOD is there to make sure the Company an as entity survives and flourish. The Gov't will go the BOD with a proposal for a capital infusion....the BOD can say no and go find a better deal---doubtful ---or they can accept the deal in the best interests of all stakeholders and the Company and if the equity get wiped out, equity will sue and 10 yrs later may or may not recover something. BTW if you subtract the "soft" assets off the balance the negative equity is insurmountable.....nuff said lets watch the action on Monday AM Yes a BOD is elected by the common, yet the BOD has a fiduciary responsibilty to protect ALL holders up and down the capital structure This is done in the best interests of the Company. In the end the BOD is there to make sure the Company an as entity survives and flourish.
The Gov’t will go the BOD with a proposal for a capital infusion….the BOD can say no and go find a better deal—doubtful —or they can accept the deal in the best interests of all stakeholders and the Company and if the equity get wiped out, equity will sue and 10 yrs later may or may not recover something.
BTW if you subtract the “soft” assets off the balance the negative equity is insurmountable…..nuff said lets watch the action on Monday AM

]]> By: Yerk http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6051 Yerk Sat, 06 Sep 2008 16:53:13 +0000 http://www.trivisonno.com/?p=734#comment-6051 The board of directors is elected by the common shareholders and I don't see them riding their stake down to zero whilst protecting the preferred stock... Issuance of a new class of stocks is to be decided upon by the board and not the government... I'm only sure that some legal action will ensue (and the market will go up) The board of directors is elected by the common shareholders and I don’t see them riding their stake down to zero whilst protecting the preferred stock… Issuance of a new class of stocks is to be decided upon by the board and not the government… I’m only sure that some legal action will ensue (and the market will go up)

]]> By: jayJ http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6049 jayJ Sat, 06 Sep 2008 15:12:21 +0000 http://www.trivisonno.com/?p=734#comment-6049 FRE & FNM---there is no way the Gov't will even haircut the PRF'D , can't banks use that as good capital..... Gov't will put in some type of Super PRF'D that will actually strengthen the banks PRF'D ...the dividends may have to accrue on the PRF'D until the Gov't is made whole or re-capped out of their stake but the old PRF'D will be live. FRE & FNM—there is no way the Gov’t will even haircut the PRF’D , can’t banks use that as good capital….. Gov’t will put in some type of Super PRF’D that will actually strengthen the banks PRF’D …the dividends may have to accrue on the PRF’D until the Gov’t is made whole or re-capped out of their stake but the old PRF’D will be live.

]]> By: Yerk http://www.trivisonno.com/fridays-trading-8/comment-page-2#comment-6048 Yerk Sat, 06 Sep 2008 14:58:25 +0000 http://www.trivisonno.com/?p=734#comment-6048 Matt, with regard to the question which sector will suffer most in the future. Here's a comparison of the gains of several etfs since the market bottom in Sept. 2002 (or Jan 03 if they bottomed later). Energy and emerging markets are on top, technology third. low 09/02 today increase xle 21,36 68,42 320% eem 11,57 36,96 319% (series starts 04/03) qqqq 20,35 43,45 214% xlb 17,55 37,22 212% iwm 34,65 71,64 207% xlu 17,46 35,39 203% xlk 11,9 21,52 181% xli 19 33,76 178% xlp 18,51 28,32 153% (low in 01/03) SPY 81,79 124,42 152% rth 65,72 96,85 147% (low in 01/03) iyr 44,69 63,46 142% (series starts 09/03) smh 18,71 26,5 142% xlv 22,67 31,85 140% (low in 07/02) xly 21,65 30,28 140% (low in 01/03) hgx 100 129,01 129% was below 02 low... (low 1/03) rkh 92,02 107,73 117% was below 02 low... xlf 19,31 21,74 113% was below 02 low... Interestingly xlf and rkh as well as hgx have bounced a bit after dropping to / below 02. If the market assumes that 02 is a likely target area for this bear, one could ask why the 02 lows should be the right valuation level for xlf and hgx given that their current situation and outlook are much worse than in 2002. Looks like a moving target to me - and will the others drag with them as well. And the complexities of turning around a financial system are far more significant than deflating a bubble in internet stocks. It will be interesting to see what kind of reimbursement the banks will get for their shares as they will have to immediately amortize their holdings. JPM led the way, but they forgot to write down the second 50% lost. From the top of my head interest payment on some bonds is linked to shares paying dividend so there are issues as well. Matt,

with regard to the question which sector will suffer most in the future. Here’s a comparison of the gains of several etfs since the market bottom in Sept. 2002 (or Jan 03 if they bottomed later). Energy and emerging markets are on top, technology third.

low 09/02 today increase
xle 21,36 68,42 320%
eem 11,57 36,96 319% (series starts 04/03)
qqqq 20,35 43,45 214%
xlb 17,55 37,22 212%
iwm 34,65 71,64 207%
xlu 17,46 35,39 203%
xlk 11,9 21,52 181%
xli 19 33,76 178%
xlp 18,51 28,32 153% (low in 01/03)
SPY 81,79 124,42 152%
rth 65,72 96,85 147% (low in 01/03)
iyr 44,69 63,46 142% (series starts 09/03)
smh 18,71 26,5 142%
xlv 22,67 31,85 140% (low in 07/02)
xly 21,65 30,28 140% (low in 01/03)
hgx 100 129,01 129% was below 02 low… (low 1/03)
rkh 92,02 107,73 117% was below 02 low…
xlf 19,31 21,74 113% was below 02 low…

Interestingly xlf and rkh as well as hgx have bounced a bit after dropping to / below 02. If the market assumes that 02 is a likely target area for this bear, one could ask why the 02 lows should be the right valuation level for xlf and hgx given that their current situation and outlook are much worse than in 2002. Looks like a moving target to me – and will the others drag with them as well.

And the complexities of turning around a financial system are far more significant than deflating a bubble in internet stocks. It will be interesting to see what kind of reimbursement the banks will get for their shares as they will have to immediately amortize their holdings. JPM led the way, but they forgot to write down the second 50% lost. From the top of my head interest payment on some bonds is linked to shares paying dividend so there are issues as well.

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