January Stock Talk Part III

Vermeer,

Bush doesnt know a stock in the market from the stock of cattle he herds on the weekends, his cronies are the ones behind this.

VERY funny post there..buying futures contracts to push the markets? I would love to see the MM behind this action..

claycourt, yeah most average folk dont get to see the full order book. On level II you only see the most current bid and offer for a firm..but more specialized systems show ALL orders for ANY firm and I am VERY positive that these same systems show the desgination of the order (meaning a stop order or limit etc)

Vermeer,

That last article about cheap money really isnt true at all..the author doesnt know the markets.

The reason for the internet bubble wasnt cheap money, in fact if you go back to the interest rates during the .COM bubble, they were much higher than today.

What nailed the little guy with the .COM bubble was GREED and MARGIN. Margin rules arent cheap money, in fact when I was a broker during the internet bubble I think margin rates were 9% and higher..thats not cheap money. Since then the markets changed the MARGIN requirements for stocks and changed the day trading requirements, the ammt of acct value you need in order to buy and sell without settlement issues.

Not that it is a big deal, but the .COM bubble has very little to do with cheap money and back then the FED hadnt opened the flood gates because Bush wasnt in office yet. The USD was trading at 1.20 to the Euro back then..I know because a German client of mine pulled his 150k and took it home because the firm I worked for didnt have currency trading back then..and he swapped ALL of his stock holdings and bought the Euro..

Bush may or may not know markets, but he knows politics, and he knows the imkport of that last paragraph, as does anyone in DC.

And in DC all economics is political.Very simple. Which is why this paragraph had better be considered by anyone:

There is little doubt that the Fed will lower its benchmark rate later this month, making it cheaper for banks to lend money to one another. But there is more doubt whether Washington can quickly agree on fiscal policy moves — that is, raising spending or cutting taxes — in an election year in which the White House and Congress are controlled by different parties.


  The "Bush is an idiot controlled by his cronies" line of thought is amusing top me.Same stuff said by Dems about Reagan. Of course, they got the dubious pleasure of saying it for two terms.

 PS:

 Rather any president be controlled by his economic advisors than by Alan Greenspan....by a mile.

  Now that the Fed has stopped issuing M3 totals, where does one get reliable figures?

Vermeer,

We cannot have reliable figures.

M3 stoppage happened during Bush's first term I believe..

Reagan had smart advisors but I see little comparision intelligence wise between he and Bush II.

I also dont think HE knows politics, not at all. He knows to shut up and listen..he is a complete puppet, probably the least intelligent president in our countries history.

 People said the same thing about Truman (the last pres with just a high school degree by the way)...and with a bow to Marcel Proust ,I concur with his sentiment:"teach day  I age t the less importance I attach to intelligence."

Rather pointless debate actually...Nixon was  a Duke Law grad, and was reasonably smart...and we both know what occurred with him.

  On to Claycourt's 100 percent cash position, it mirrors Richard Russell of the Dow Theory

"Through over half a century of experience, I've learned to respect bear markets.I don't trade them, I don't fade them, I don't short them-I stay out of them. I've learned to stay on the sidelines."

 
 

"My preference is to use moving averages and go a HAIR under them for safety..not right on any specific moving average and not on any round numbers."

  Wall, do you use  EMAs, or simple moving averages here??

Thats up to the investor. I just use simple moving averages.

I also dont use stops as often if I am building a position or if it is ultra long term (a stock like IMB and CRDC come to mind)

  CC:

 Thankls Wall I usually use on the EMA, but you are right regarding long term decisions.

CC:

 Heard it all before. Like I said, same was said of Reagan, for many many years. (Ironically, by people far stupider than he).By my count, we lost the Cold War due to Reagan's stupidity regarding the SDI, recall that bit of "wisdom?" Oh, I forgot, we didn't lose the Cold War...well never mind.

 Not a Repub or( happily) not a Democrat either.Merely an amused observer of conventional wisdom.

 By the way, if you want to see what awaits Obama from the Hillary camp, you might get some interesting insight here:

https://hillaryis44.org/

 Anwyay, according to conventional wisdom all willbe sweetness and light once Bush is gone. Whcih reminds me of a great book about markets, Popular Delusions and the Madness of Crowds.



 

 Oops, first line directed to Wall....

 Cheers!

 Now back to the Aussie Open.

 C rumored to be looking at 18-24 bn writedown and @20,000 job cuts.

 Hmmm...placing an order for C at @15...what the hell.

 

Gold at +$900, USD taking a  pounding.Financial Times opines that gold is the new international currency.

 Market already assuming 50 basis point cut.

say what you will about Greenspan, he knew when to get off the Titanic.

  Next week, Moody's will discover that there is a housing crisis looming in the United States...man these guys are the smartest guys in the room!!

The US is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody’s, the credit rating agency, said on Thursday.

The warning over the future of the triple-A rating – granted to US government debt since it was first assessed in 1917 – reflects growing concerns over the country’s ability to retain its financial and economic supremacy.

from trading listed stocks i can tell you that the intraday gap downs in certain nyse and amex stocks are done specifically by the specialists to pull the stops and get long your shares

WCG on fire..

Boiler, you holding? I would be..

MOS up to 109...

...Dryships (DRYS)

Dryships (DRYS) shares only trade for about 3.5x 2008
estimates of $18.02 per share. Analysts expect earnings to
leap over 100% next year...

Vermeer,

They are manipulating the HELL out of DRYS..they are tying the BDI drops or risings to the stock and adding a 3X beta on the stock.

Supposedly China is trying to hold off on shipping to lower the BDI (shipping prices index) to get better terms before the steel price negociations are finalized.

 Makes me wonder why people like me play with such a rigged deck Wall...do the research, waste time, get lucky or not, seems at times a masochistic enterprise at best.Irritating...things go as one rationally expects just enough to set you up for another round of fraud.

Vermeer,

Over time the real results will follow. I am pissed at several of my current holdings, but I know over time they will be fine..doesnt make me feel better in the short term though.

 I placed two orders...one at C for $27, and the one earlier for $15. That way I have already dollar averaged in case that unwieldy beemoth goes down bigger than even the direst person (except CC) think... I think it goes lower today and fills, and am only using small amounts of money I could easily lose.

  This is one falling knife I may regret l;ater, but what the hell.I have a streak of morbid curiousity about its flight.

From the Economist...


with the release of a report on January 4th showing that America's unemployment rate had spiked from 4.7% to 5% in December. The bad news made a presentation by Kenneth Rogoff, a professor at Harvard University, on the final day all the more timely. His paper*, written with Carmen Reinhart of the University of Maryland and part of a larger historical study, sets out some parallels between America's subprime mess and 18 previous banking crises in the rich world. For an audience recovering from a Saturday night on Bourbon Street, the conclusions were aptly sobering.

The authors show that, although details may vary, banking crises follow the same broad script. Each blow-up is preceded by rising home and equity prices; an acceleration in capital inflows driven by optimistic foreign investors; a rapid build-up of debt; and—immediately before the storm hits—an inverted V-shaped path for the economy, with growth first picking up and then faltering. The years just before the start of the subprime meltdown fit the Reinhart-Rogoff template remarkably well. Indeed on most criteria, the portents of trouble were more marked than in past crises. House prices rose more sharply in real terms. Equity-market gains were more persistent. Capital inflows picked up too, though they were already running at an alarmingly high level. America's current-account deficit was much larger, relative to GDP, than in a typical crisis candidate.

Given such ominous indications, what of the aftermath? Mr Rogoff was careful to say that the malign effects of the subprime mess might not be as great as those of previous crises. A great deal of uncertainty remains, not least about the scale of lending losses. Yet the precedents are worrying. In the 18 earlier crises, the average drop in output growth was two percentage points and it took two years for growth to return to normal. For the five worst crises, growth rates tumbled by five percentage points from their peak and recovery took more than three years. If America avoids a material slowdown, say the authors, “it should either be considered very lucky or even more ‘special' than most optimistic theories suggest.”

Financial-market lore has it that uttering “this time is different” is the easiest way to get laughed off a trading floor.