October Stock Talk II

CC,

Yeah Ive seen this before. The 9-11 selling was much more severe, even though it lasted shorter than this will.

Also the NAZ drop from 5k is unlike anything I have seen and trumps this.

I have capital dry but not enough of course..lol

SMN (Ultrashort basic materials) has exploded in the last two weeks.  From $37-$85+, an ETF is not suppose to make moves like that in two weeks.

It's f'n nuts

Did claycourt write this article?

That or it is a Ron Paul campaign page in disguise, click any link and be taken to the Ron Paul home page?

a hedge fund guy sent a colleague that blog a few weeks back. ive posted it here a few times

  Wall, you may wish to reserve judgment over what trumps what...methinks we  are just warming up for the real roasting to come.As usual I hope I am wrong but...

  The SKF trade remains the most consistent thing I have dealt with in a while. Buy at 100, listen to some dolt announce a new program and "the end of the crisis", and then wait. Put a stop loss in at 140, and repeat...

 

CC,

I made the comment in a nice way, that you are the resident bunker specialist and that piece was pretty damn bearish.

Not sure if you guys were trading (outside Koaj) back when the Naz went from 5k plus to 1800 in 9 months but that is the equiv of seeing the DOW go from 13k to 6k or less, so even though this is pretty broad it doesnt compare to the Naz disaster and the tech destruction it brought.

The fear in the market after they opened after 9-11 was stronger than this..fear in the general population which is nothing compared to this. I think THIS fear isnt understood yet by the general population, that it is inside economic circles versus the general population because it cannot be explained or quantified to the average joe.

I have that builder friend I reference and he keeps sending me these stupid Clinton bashing youtube clips saying it was Clinton back in 1996 who modified the housing regulations to lend more to the lower income and that magically created the subprime mess. I had to gently explain it to him that his republican POV was wrong and that it was leverage that caused this and the LOSS on a lower price range property is nothing compared to a mid to high range house..so 2-3 of those terrible low income defaulters can go bad versus one in the neighborhood he lives. It never ceases to amaze me how repubs equate lower income as the cause of social ills.

I am seeing more and more income bond funds popping up on my new lows list..NMT, MEN, VAZ, GYC, PHB, JPP, MUS all hitting lows.

JWK,

You are welcome here and with your experience and insight I hope you hang around more.

Ive made my 10 paragraph explanation of this so many times I embarrass myself..here it is in a nutshell.

Lenders were giving more loans relative to assets than they should have and banking regulators and lending regulators werent stopping this from happening..so now instead of Wamu taking a hit on some loans because of a bad RE market, they lent so much and were LEVERAGED that as bad loans started coming in, they started getting margin calls from THEIR lenders and had to bring more cash to cover not only bad mortgages but the margin calls on top of normal losses.

Investment firms were purchasing CDO's at monster margin ratios, so instead of the CDO's going down and the bank having some losses on paper, since they bought so much of the instruments relative to their assets, they were leveraged and now these instruments come down a little and they start getting margin calls, thats why C and GS and others have been raising capital for the last year..then when firms like BSC couldnt go to the window and borrow enough, the CDO trading market started to freeze since firms were trying to sell and nobody was buying..then due to accounting rules, these investments are "mark to market" or valued at the BID of the market..so as the CDO market froze, the bid started dropping and the "value" started to drop because of them being illiquid and more margin calls, a tsunami in the CDO market due to an illiquid market.

The real value of the CDOs on a lower leveraged basis probably isnt that bad but if you margin at MONSTER rates, a little drop outside their computer model caused disasterous results.

These close-ended MUNI and income funds keep rolling in lows of the day, also insurers keep hitting lows, like Travelers, ERIE etc.

Crappy slide after the bond market closed, as usual.

how are people supposed to trade this?

A 350 pt move up after 1 and a 350 point move down, nearly 700 pts in 4 hours, if his isnt cardiac arrest I dont know what is.