Hurricane Fuld, a.k.a Hurricane Dick, strengthened to category 5 and made landfall in New York City Saturday. Barclay’s is leading a European relief effort, but hopes of avoiding widespread damage are fading.
The scenario:
1) Bernanke and Paulson are up to their eyeballs in bad mortgage paper and don’t want any more. After the Bear Stearns and Fan-Fred deals, they are saying: “no mas.”
2) So, a Long Term Capital type of rescue is being attempted, but banks are balking at buying a slice each of Lehman’s toxic waste. The would-be rescuing banks are weak themselves, and adding to their toxic waste stockpiles would weaken them further.
3) There are banks that want to buy the good parts of Lehman, but the bids don’t seem to be high enough to keep the rest of Lehman from going down.
4) So, in addition to the rescue attempt, Lehman is preparing a bankruptcy filing, and CDS traders have been called into their offices to try and unwind their business with Lehman.
5) As the simultaneous plans of rescue, bankruptcy, and liquidation are advancing, everybody seems to be waiting for the Feds to blink and buy Lehman’s toxic waste.
Will Bernanke/Paulson blink? We will see, however the Fed has been discussing the topic of “liquidating a large i-bank” for several weeks now. And by “i-bank” we know that they meant “Lehman”. Maybe it has all been a bluff to force Wall Street to do the bailout itself. But as we are seeing, if Bernanke/Paulson don’t draw the bailout line somewhere, there will be no end to it.
I think that the Fed is prepared to liquidate Lehman.
Oil futures have opened down a couple bucks and oil is now trading under $100.
http://www.nymex.com/index.aspx
If 4.) is true I will kick my ass for selling my SKFs last week. That would mean a run on LEH and then MER and then JPM and then GS and then C and then BAC and then… until there is no one left anymore. This can happen in a very short time frame. Maybe next Sunday is much different from all the Sundays this year.
Matt,
Barcleys is out:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZvzZVTCUEKs&refer=home
I want my SKFs back!!!
Dressguard – there’s a hit song in there somewhere. Sung to the tune of “I Want My MTV” perhaps ?
Oil < 100…
can we play back the tape ? did anyone clean up on shorting oil and if so, how did they keep their stomachs in one piece ?
Bernanke and Paulson are holding the lines so far. Good for them.
any predictions as to where the s&p futes open ?
well i’ll be.
I got more SKF’s to average down but i guess I will be happy who knows high enough it might even cancel out my apple losses haha.
COME ON BABY COME ON.
Dressguard that link has no story. Hmm is this another “steve jobs obituary” style story?
DAMN YOU BLOOMBERG haha
K,
The Wall Street Journal is the only one that has the story. As far as I can tell, the other news services are doing their reporting by reading the WSJ.
Matt
I hope the fed really keeps their own here and don;t intervene.
if Lehman falls i’m sure others will try hard to keep themselves afloat seeing how the 158 year old firm was let go.
i hope this is the change we’ve been waiting for and although other financial institutions will fail i think it’s a step towards long term stability.
Ben&Paul have to intervene. Otherwise there will be no deal to be announced in a few hours when Japanese markets open. No deal will most likely mean a run on LEH and then on other banks.
Barclays as it seems needs shareholder approval in case there is no Ben&Paul support. BAC won’t do a deal too without their support. They already did the CFC deal because of pressure from Washington. Now they want a similar deal as JPM.
this just sucks. I hope the Patriots win today to make me happy.
Here is a NY Times report that Barclays has ended talks.
http://www.nytimes.com/2008/09/15/business/15lehman.html?em
If the government doesn’t intervene, it will require private banks to step up and stop relying on the government.
However, I’m not sure SKF is the way one would want to play this. Who knows what will happen when trading starts. There is a special trading session set up today as a contingency if LEH has to declare bankruptcy. But they are already so close to zero in their share price that I’m not sure it will really matter as much. It’s more how other firms handle it I would think.
Anyways, I’ve still got my call for a rally this week (based on very short term technicals) that will be a selling rally… of course, I could be wrong. Get your eggs and rocks ready to throw at me (but be nice, I’m a newbie trader…).
However, in the broader picture, more drops are coming. If things reverse on a dime I will play the short side again. Right now I’m in 100% dry powder.
Even if LEH collapses it doesn’t mean SKF will rally. The market will expect the FED to step in and cut rates as they did at the beginning of the year. I think this meme was already played last week. LEH will collapse but FED will lower rates in response. I think the FED won’t cut rates. If they did it would signal a very serious economic situation. The market would recognize that we aren’t one step further than half a year ago and still worsening despite alphabet soup, lowered rates, bailouts and so on. Also we have option expiration week which will kindle volatility. Very hard to predict the market. All I know is, if there is a chance to get back into QID/SKF at a much lower price I will short my brain into oblivion.
K,
Would you please post a link to Barry’s site instead of copying so much text? Barry does a great job and deserves links.
Matt
BAC is out, too. LEH is going down hard if Ben&Paul don’t step in the next few hours.
Breaking News: http://www.reuters.com/
ok Matt Sorry. Will keep in mind.
Hi After, I’ve been short energy companies since February and I can’t believe my own luck. But it was gut-wrenching from March to May.
To all the pundits yelling at Bernanke. From Peter Schiff to Jim Rogers to xxxx. You have been and are dead wrong.
1. He has not inflated since he took office. That is a fact and you’re losing tons of money now because of it.
2. He is not gonna bail out every Bank on Wall Street.
my two cents — Uncle Hank does nothing.
If LEH fails, and the sun still rises on Tuesday, then that would be a mild positive by showing that the greatest economy on earth can live through a bank failure.
If they bail LEH, it implies (to me) that the problems are worse than they seem, which would be much pretty awful, because to me the problems seem immense and innumerable.
Also, OT, FYI, Friday was the third day green in a row, which for the past year has had an 80+% success rate of a pullback over the next three days (13/16 occurences).
Add in the 3day MA TRIN reading.
Add in the charts posted yesterday by David that reflect the posture of the Fins.
Add in the nuetral posture of most of sentimentraders indicators.
So unpredictable market participants’ reactions aside, it looks good from the short angle.
Probably a dumb question but what time CST do futures start trading? 4:00 PM (5:00 PM EST)?
Zen,
Futures start trading at 5pm in Chicago, which is 6pm EST:
http://www.cme.com/trading/prd/equity/emini-sp500_FTH.html
I don’t trade the Dow futures, but I’m pretty sure that they start at the same time on the Chicago Board of Trade (CBOT).
Matt
Bloomberg Headline
Banks, Brokerages Get Ready for Possible Lehman Bankruptcy Before Midnight
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRc5IyxcHIbw&refer=home
(i’m learning to always post the links hehe)
Wall Street readied for a potential Lehman Brothers Holdings Inc. bankruptcy after Bank of America Corp. and Barclays Plc pulled out of talks to buy it and the government indicated it wouldn’t provide funds to prevent a collapse.
When Barry Ritholtz uses “HOLY SHIT!”
in his post you gotta know this is not going to go well with the market.
and here is a link for those of you interested. I like how he compacts articles into one post.
http://bigpicture.typepad.com/comments/2008/09/bofa-barclays-w.html
you guys,for latest news go to finviz.com and click news they are very fast on news.i don’t know if it has been reported here but B of A pulled out.
and from the link i just posted above…
Here’s a wild twist: BofA walked away from Lehman, and into the arms of Merrill Lynch: Bank of America, Merrill Lynch In Merger Talks
now that is just very interesting!
pooch lovely site. gosh my bookmarks are expanding quickly since joining The Matt-gic blog
The BAC/MER is great news for the bulls. Another chance to buy back my lovely SKFs below $100?
February feeling is back again! I can’t help it. The market is crazy!!!
LEH is history. BAC/MERger will be the talk of the day. FED cutting interest rates? What for and who cares? BAC/MERger shows that financial system is still in control of the situation. At least they can pretend it!
See you tomorrow, guys!
you going to sleep dressguard? =P
we shall see what goes. what is BAC and MER talks fall? haha then what happens
btw (taken from barry)
There is a special CNBC program on Lehman tonight, 8-10 PM New York Time.
I will try to watch some of it.
jerks had to come up with something to prop the market up. may be more BS and no deal will ever happen. what a ripoff!
Dressguard,
I’m not sure that the market will favor the BAC/Merger over the LEH news. Too be honest, the FED has established a precedent so far to bail out any “too large to fail” bank/institution so I think that many in the investment community were betting on more of the same this time. Of course, with the selling and light rallying of the markets over the past 3 sessions, most of the big boys know this, but the average retail investor does not. They are thinking the FED is going to step in any moment now to save the day (again).
If you look at the Put/Call ratio ($CPC), the bears to bulls are pretty close to even @ 1.01.
The VIX has been rising steadily even though the market has rallied from big down days over 3 sessions. I think this was as Matt put it, the big boys selling to the retail moms and pops.
Now that the cat is out of the bag and no LEH bailout is pretty done, the market is probably not going to like this one bit. I predict futures to probably open doan 200 pts in about 1/2 hr. Just my opinion though.
Former Federal Reserve Chairman Alan Greenspan said the financial crisis that began with the collapse of the subprime-mortgage market last year “is probably a once in a century event” that will lead to the failure of more firms.
WOW look who’s talking.
wait it hasnt been a century since the depression hmm wow Greenspan you made a mess now stop making more excuses.
http://bloomberg.com/apps/news?pid=20601087&sid=amVkrOCQNBQs&refer=home
Well, it’s place your bets time on how Monday unfolds.
My suggestion – take a look the strength in Yen/USD cross over the last ~10 days and the coincidence with the sharp sell-offs. More carry trade unwind?
This same pattern played-out during the sell-offs into the March low, but then became less typical as the USD rallied through recent months – predominantly a flight to safety/liquidity of cash IMO.
Anyway, as of now, Yen is rallying hard again, testing the highs during the intraday bottom of Sept 5.
Pucker up!
S&P futures opened down at 1235 and then immediately plunged to 1215. Dow futures are down 300.
Matt which site do you use? i used to check cnn but seems a bit slow
ok, assuming it sticks, Cha ching!
K,
CNN might be giving you delayed quotes. I have a futures account, so I get quotes in real time.
Matt
so Matt assuming it sticks, do you anticipate more panic selling after the open?
As I mentioned at the end of last week, I am all-in and leveraged short except for a small amount of cash for use in day-trading. So, as George would say, it’s tall cotton for me.
Since I am short in the futures, I could take some profits right now, but I’m going to let it ride at least until I see some oversold readings on my indicators.
ok i found this might be an ok link http://www.quote.com/us/futures/indices.action
Nasdaq is scary too. ahh what a day monday will be
David,
Given how overbought the market ended last week, this sort of drop was probably in the cards anyway. So yes, I would expect more selling to come.
Matt
My source for futures, but it is delayed 20 minutes. Bloomberg tv has a running ticker on it real time, I believe, as well
http://www.cme.com/trading/dta/del/globex.html
To really appreciate Mr Greenspan talking about a “once in a century event” read this quote:
“My deceased friend, Teddy Butler-Henderson, met Alan Greenspan in the 1960’s. They apparently discussed the Kondratieff Cycle. According to Teddy, Alan Greenspan confided that he hoped he could be Federal Reserve Chairman at the onset of a Kondratieff winter, because he felt he
could defeat winter by substantially increasing the money supply and reducing interest rates to near zero. He had his wish and effected those actions following the 2000 stock market peak.
Incidentally, Mr. Greenspan told Teddy during that same conversation that if he failed to thwart the Kondratieff winter, it would make what followed
1929 look like a ‘Sunday school picnic.’ “
…and for your amusement, coincident with SPX futures being down ~36 points… here’s Yahoo Finance’s headline story:
Banks said to unveil plan to restore confidence- AP
http://biz.yahoo.com/ap/080914/lehman_meeting.html
…”fair and balanced”
I guess I wasn’t off by too much
DOW down 300 pts.. I predicted 200 earlier.. lol.
I’m in some SDS calls so I guess it will be a nice day tomorrow for me.
BTW.. per the help of some folks last week… I’m using http://www.ino.com to look at the futures.
Right now DOW -299 @ 11159, Nasdaq -44.25 @ 1729.00 and SPX -38.75 @1218.50
Lehman Brothers Holdings Inc. will file for bankruptcy protection tonight, the New York Times reported on its DealBook blog, citing unidentified people briefed on the matter.
also from bloomberg.
AIG Said to Be in Talks With KKR, J.C. Flowers to Raise Additional Capital
http://bloomberg.com/apps/news?pid=20601087&sid=afDuqo7SovYI&refer=home
yah so many talks good job. i won;t hear Wamu in any deals. I guess it’ll either go bye bye or get government backed.
ok now I can set the Elliot target. It is close to the 50% retracement fib for the previous bull market and the lower channel line on SPX. I have SPY 117.81
http://tinyurl.com/68sjs8
This sudden rash of rash of deal announcements smells of panic. Right after Lehman blows up, all the other financials rush to announce that they are “in talks” to merge? I would translate that into English as: “Please don’t punish our stocks tomorrow!”
Good luck with that…
I would translate it also to mean, “We are all liars!”
1929 crash and 1987 crash both happened in october. well gentlemen call me superstitious or crazy but from all the news he have something might happen in october no?
haha i will try to stop being bearish i’m sorry
http://tinyurl.com/58xyqp
http://www.cme.com/trading/dta/del/globex.html
Be prepared for a 9/11-like meltdown, closed markets, and a bank holiday in the days, weeks, and months ahead.
Crack open your history books and read about Creditanstalt and sterling in 1931, FDR’s bank holiday in 1933 and gold confiscation in 1934, and Baring Brothers bank in the 1890s.
Get liquid and be prepared for the worst recession/depression, bank failures, and social and political upheaval since the 1930s and 1890s.
rich I agree. it is a disaster. how can people still be bullish in this market is beyone my belief.
DOW futures recovered 100 points in the last 30 minutes. Treading at -200 now.
Matt, what are the possibilities that, in the face of a significant drop in the equities market, Paulson and Bernanke weaken and commit the Treasury to buy the toxic waste? The reason they’ll give is the “maintenance of orderly markets”. And then, what will we do next weekend, and the one after that….?
EDF
Well get those rocks ready! Dang it’s lookin’ grim.
The majority of investors believe in buy and hold. Like lemmings, these folks take the past decades and project them into the future. As such, there are legions of folks waiting to pounce and make a killing by buying tomorrow. The same mentality that drove the housing market but for richer people.
The answer to the question as to if there will be a financial melt-down will be known at year end as companies prepare their books for audit. Until it’s just a big charade.
Rich,
I am not sure that tomorrow is going to bring that catastrophe. The unwinding of LEH would be incredibly complicated, but it is going to take quite a bit more to do massive upheaval like you mention. I could be wrong, of course… I just don’t see this as being the lynch pin.
K, most likely in Oct the market will be in a rally
To spin it another way, there is plenty of cash out there that will buy assets on fire sale.
See my 5:53pm post. Notice that the Yen has pulled back from highs vs USD, coincident with improvement in the futures.
Keep an eye on the Yen for guidance.
M
EDF,
I don’t think Bernanke and Paulson will back down. They had to know that the market would react like this.
Matt
No one wants to take on commitments without the Fed and Treasury guaranteeing the risk of the losses of counterparty positions, which are likely to amount to tens of billions, as so much of the “assets” are vapor and can’t be marked, let alone liquidated.
BAC is trying to insert itself into every prospective bailout because the bank is insolvent, the management knows the banking system is insolvent, and wants to be first in line to be bailed out in any event.
Glass-Steagal was enacted in the wake of the 1929 Crash to eliminate the worst abuses of investment banks, commercial banks, and brokers mingling assets and operations to lever up to the Moon, practices which exacerbated the debt bubble of the 1920s and the debt-deflationary wipeout in the 1930s, and similarly made it so difficult for the Japanese to clear the decks in the ’90s to date, i.e., cross-institutional ownership of debt and equity among brokers, banks, and insurance companies.
EW 3 of 3′s is still intact with the target zone of 1120s-80s for this week into options expiration.
We are in the early stages of a process during which, in the end, Wall St., the rentier-financier class, and the politicos who exist to serve them at the expense of everyone else will be utterly discredited and demonized, resulting in the vast majority of Americans perceiving Wall St., and the equity market in general, as an amoral den of thieves and the very last place they will want to put their capital/savings.
rich is king listen to him
“We are in the early stages of a process during which, in the end, Wall St., the rentier-financier class, and the politicos who exist to serve them at the expense of everyone else will be utterly discredited and demonized, resulting in the vast majority of Americans perceiving Wall St., and the equity market in general, as an amoral den of thieves and the very last place they will want to put their capital/savings.”
I don’t want to be a dick, but one of the things they taught in me in Fin101 was that equities are risky. What the real problem is, is that money is inextricably linked to emotion, which is what you need to toss out the window in order to do well in the market.
I share your outrage but disagree with your conclusion.
my thing is why would BAC buy Mer for $29-30/share? when its at $17/share now.
Maybe i just don;t get it
$29-30 doesn’t make sense to me either unless the fed/govt is promising something that makes the acquisition worth the premium.
all i heard from wall street journal is that the deal is done. oh well i guess we’ll see mer go up while BAC goes down?
this is just a poor attempt to sow people things are fine despite lehman going bankrupt.. AIG is also struggling and with wamu being left on the side with no news at all i would think plenty of these stocks will just tumble tomorrow.
if BAC tumbles of course SKF will go up so it’ll make me happy anyway
I think i have read too much for the night it’s all like a bad dream
Pooch, you’re kind, but I don’t want to be king, only a kingmaker who keeps his head and has time to count his coins.
Danny, your logic in the context of the past 80-200 years is not unsound, but we face a situation in which the working-class masses (80-85% of the population of which most of the money came from the top 10-20% of households) over the past 10-15 years were duped into giving their pre-tax wages and salaries to the embezzling thieves on Wall St., “mutual fraud” industry, “sludge fraud” industry”, and to the supranational corporate board rooms, people who used the savings of the American people as their personal slush funds for yachts, mega-McMansions, offshore accounts in the Caymans, Isle of Man, etc., boob jobs for their wives and mistresses, and so on.
When the rentier-financier parasite class is small as a share of the population, and their influence proportionate, they are a nuisance, like a gnat or mosquito at an outdoor party; almost an afterthought; however, when the rentier parasites’ values come to dominate the zeitgeist of society, they utterly corrupt the work ethic and the distribution of returns from productive work, encouraging speculation, gambling, flipping of real estate, and all manner of unsustainable and unproductive economic activity, which inevitably devalues significantly everything from women’s sexuality to the value of teenage labor.
Speaking of risk and devaluing returns, the risk premium implied by the SPX P/E suggests that investors need little or no premium over Treasury notes for 5- 7 years and 10-14 years or more in real terms. The historical equity risk premium coveted by buy-and-hold Main St. “invesuckers” has been consumed by mutual fraud, Wall St., and “sludge fund” fees, churning, taxes, etc.
BTW, I am not so much outraged as I am compelled to inform readers of the utterly corrupt, amoral, and criminal nature of Wall St. and the mutual fraud industry. Most Americans are naive, ill-informed, superstitious, worse-than-ignorant, tattooed, pierced, beer-slugging, ecstacy-swallowing, pork rind-chomping, NASCAR-watching, porn-consuming, low-brow Neanderthal-like, cousin-humping rubes who have absolutely no clue what is being done to them by the rentier-financier power elite.
http://www.fredoneverything.net/FOE_Frame_Column.htm
http://www.markfiore.com/deelitification_0
http://www.markfiore.com/fun_john_sarah_0
It is said that we get the gov’t (and society) we deserve, and, boy, do we deserve the likes of Obama-Biden and McCain-Palin.
http://mises.org/story/3095
The beginning of the end of bubble Imperium Americanum is nigh; act accordingly.
The price of MER is being discussed on a CNBC special tonight. You may want to tune in, if not for entertainment purposes only.
But they did give a possible reason for the enhanced price on MER for the buyout.
and Yerk thanks for the link up top
http://www.trivisonno.com/hurricane-fuld-lashes-nyc#comment-7373
I have printed it out to read. Very interesting! Wow so much to learn
Rich,
Great insight. Thanks. I second Pooch’s assessment of your thoughts. I hope you’re around all week.
Remember that the original announcement on Bear was for $20/share and ended up at $2 before excess whining got it to $10. The official announcement is at 8am EDT tomorrow.
Yet another busy weekend!
9/2: DOW futures up 100-200pts
9/8: DOW futures up 200-300pts
9/15: DOW futures down 200-300 pts
This is really turning into another September to remember….
In 50 years, we can tell those that come after us what an “investment bank” was…
BSC: bought by JPM
Lehman: soon to be bankrupt
Merril: bought by BoA (Why does too big to fail keep getting bigger? BoA didn’t get enough indigestion from Countrywide? Don’t understand the $29 tag myself. BoA better hope that their stockholders do…
Goldman???: Oil to $150!! “Turn the machines back on, TURN THE MACHINES BACK ON!!!!!!!!!!!”
Morgan Stanley: Wacko-via to the rescue?
This sounds very desperate.
We bailed out an i-bank that was “too big to fail” and bail out the GSE’s because they were “too big to fail.” Now its a good thing to allow an already large bank to get even bigger? Eventually, we will have to call Wall Streets bluff…Something is NOT right here. I’m getting tempted to dust off that tinfoil hat in the closet….
LEH filling for bankruptcy. BAC buys out MER at $29/share? Who the hell saw that one coming? Why such a high price? Just to instill confidence? Now I look like a genius for selling my MER puts…well, maybe not. Anyone think this was in the works a little longer than two days ago? What about WM? Or are they not scheduled until next weekend? This all seems so absurd…the banks have a pow-wow in NY to help out LEH and end up hanging them out to dry only to pick up MER. If these weren’t stock tickers I could swear I was watching a soap opera.
Rich,
They get mistresses? Where do I sign?
And I just ate a bag of Jays Pork Rinds so I am truly offended. LOL
So why only 250 -260ish down on Dow futures? It always seems like 250 is a “big” move and 300 is an “extreme” move, but things do not continue down. Even with more news from AIG and everything else, the futures are about the same.
There is nothing strange about that in the context of the market, but I’ve always wondered why this “cap” on movements? It always seems that daily moves operate within boundaries.
AIG turns down private equity infusion, turns to Fed: report
WOWWWWWWWWWWWW
what is next what is next!
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1nPYs2uoW9o
i would not be surprised to see the mkt up this week as crazy as this sounds.
And Rich I think you provide great TA and I don’t want to sound antagonistic here, but most if not all of the folks I know are Americans and they don’t match your characterization at all – but they still have no clue about how markets and Wall St. work. They probably don’t even know about LEH and the significance of this evening b/c CNN is covering Palin and all the political spew.
My point is I don’t think Americans are how you describe yet I do agree with your conclusions on Wall St.
OH GOD NO
Federal Reserve announces new efforts to shore up financial markets by expanding loan programs
WASHINGTON (AP) — The Federal Reserve is announcing several initiatives to expand emergency loan programs to cope with the worst credit crisis in decades.
The central bank announced late Sunday that it was broadening the types of collateral that financial institutions can use to obtain emergency loans from the Fed.
The action came as U.S. and foreign commercial banks were hashing out a plan to inoculate the global financial system against the possible failure of Lehman Brothers.
just so AP won’t be on your arse Matt here’s the link
http://biz.yahoo.com/ap/080914/fed_financial_crisis.html
David, you have a “swine” sense of humor, “high on the hog”, as it were; and you’re a real “ham” but hardly kosher.
also a recap of CNBC
http://bigpicture.typepad.com/comments/2008/09/live-blogging-c.html
Market effects:
disappearance of Lehman: priced in
liquidation of Lehman assets: reduction of asset value of similar assets held by others (very bad)
Mer acquisition: Mer price up, Bank of American down. Guess which one has a bigger index weighting?
I’m in agreement that the FED doesn’t do anything until their meeting, as a knee-jerk reaction (by the FED) will signal a loss of control (by the FED). I’m convinced that the market has priced in a FED cut. I am not sure if they’ll get it. More to the point, I don’t think that the FED has even made that decision yet, as they will want to see market reaction.
Bloomberg, Reuters, BBC, etc., are parading one guest after another on their international broadcasts saying that the LEH bankruptcy and BAC line up at the Fed to buy MER are positive/bullish, i.e., the “beginning of the end of the worst”.
Note to all: SELL!
I wonder how da boys at WaMu are doing tonight? Probably feeling like the ugly stepchild.
I’m thinking tomorrow ends up about 100 points. Seems to work that way lately.
Rich said:
“Most Americans are naive, ill-informed, superstitious, worse-than-ignorant, tattooed, pierced, beer-slugging, ecstacy-swallowing, pork rind-chomping, NASCAR-watching, porn-consuming, low-brow Neanderthal-like, cousin-humping rubes who have absolutely no clue …”
That fits uncomfortably well with what’s happening in our politics.
“BTW, I am not so much outraged as I am compelled to inform readers of the utterly corrupt, amoral, and criminal nature of Wall St. and the mutual fraud industry.”
Rich – How in the world could the things you mentioned not outrage you? I find your assessment of Americans, and frankly most of your rantings to be histrionical in nature and reflective of something you personally feel not that which is reality.
I agree with your assessment of the amoral nature of some of the participants involved, however, not every person at every firm is complicit in my opinion.
“That fits uncomfortably well with what’s happening in our politics.”
Now THAT I can agree with!
A group of global banks and securities firms announced late Sunday a $70 billion loan program that financial companies can tap to help ease a credit shortage that threatens global financial markets.
The ten banks, which include JPMorgan Chase & Co. and Goldman Sachs Group Inc., said they were committing $7 billion each for the pool. The pool would act as a signal to the marketplace that banks, brokerages, and other financial companies can lean on the fund to take care of borrowing needs.
The banks said the program will be available to participating banks which can get a cash infusion up to a maximum of one-third of the total size of the pool. The size of the loan program might increase as “other banks are permitted to join.”
http://biz.yahoo.com/ap/080914/banks_plan.html now this might raise the market. I have no idea i know Wamu and AIG might go after some of it
In the first four hours of trading, the S&P 500 futures made a perfect bear pennant pattern. If the pattern completes, we will drop another 40 points down to 1180.
Also, it was great reading the comments and links so far.
Thanks to Yerk for the “financial winter” article. Some thoughts on that: the Great Depression was an era, not an event. I expect that this will be same, drawn out over several years. Time frame is important: short for the long term, until proven otherwise, but there will be rallies, some lasting a few months.
Normally I’d say we bounce this week, but it seems each new PPT effort is met with less of a bounce than the last one.
Also, from a technical point (bad time to be objective, eh:), we will most likely break the SPX 1,200 level Monday, if the futures hold. That will either accelerate the selloff or it could be a bear trap. That will be the do or die line in the sand. The technicals call for a close below 1,200, at least in my mind.
My feeling is it will bounce around 1,200 during the day, and close there, so the market has it’s best chance of screwing both buls and bears from that point for a few days before heading south.
Guys, although there will likely be more downside in the future, I am planning to clear out most of my financial shorts today. I really don’t see us ending up today, but going down hard (400-500 pts) then recovering most of it could happen, which may be interpreted by some as capitulation and market bottom (Cramer).
The market can remain irrational longer than you can remain solvent. Repeat to yourself and take some profits. Also, know that others will also take profits, which will also drive up stocks.
if it opens at 1180, it is a cover at the open
My guessplan, which is a portmanteau of gameplan, is that the market attempts to fill the gap after the open but closes at the lows. We’ll see.
^guess and gameplan
Matt
Your futures target co-incides with the 50% fib from the last bull market at 1,170 on the SPX. I am plotting that as a possible bounce area.
Per Matt’s last remark, watch the Yen… last time, I promise.
i won’t be around in the mornin to execute trades. i wonder if i should set a sell limit for SKF at least $140? i know it’s over reaching but that’s what i want unless any of you have thoughts?