Hmmm. The S&P cash index closed on its 50 DMA. I'm down three pts. on my index trade.
Russia gave positive signals on a missile defense against Iran based in Azerbaijan ... very interesting. A plus.
Bill Gross got headlines saying he's changed his mind interest rates - the US note & bond yields are NOT going to 3%, but will range 4-6.5% over the next 3-5 years. He's been wrong for over a year now. One wonders if it's time for him to retire. Looking at my 100 year wall chart of interest rates, a range of 4.5-6% seems more realistic to me. So he's a recession monger who has capitulated.
W gets "sick" and leaves G-8 Summit. Hmmm. You know what I'm thinking ;-)
Yesterday's move in the 10 year UST note rates looked like a combination of recession monger capitulation and mortgage portfolio hedging. There was no significant news. Santelli on Bubblevision said the same thing based on pit trader comments. The bond markets have huge beefer players using derivatives & CDO/CBO/CLO speculation. It's unknown how many were seriously hurt.
I don't see 5.1% or 5.25% or even 5.5% UST rates as hurting any real borrower. These are incredibly cheap rates on any historical comparison. UST yields are up this AM to about 5.18%. As far as real borrower's prospects, I think it would take about 6% to seriously affect them plus some increase in corporate spreads. If medium grade bond yields got over 8%, then that could affect some expansion plans. I did a few billion $$$ in financing corporate facilities in my investment banking career so I'm basing this thinking on that experience. At 9% for medium grade bond yields, expansion plans could be curtailed. For example, an 8%, 20 year fully amortizing loan (monthly payments) has a debt service constant of 10%. So a company has to
produce over 10% return on assets to pay that off & generate free cash flow.
So far we aren't close to that level. And I don't see the economic trajectory as getting us there for a long time, if at all.
Next week we get more inflation news. That will be important. A core rate year over year flat with last month's data would be good and lead to the June Fed meeting with more data that inflation risk was lessening.
I'm going to play this move as a normal pullback in a bull market until something indicates that a real change has occured.
PS: At about 5:30 AM EDT, the beefers hit the T-note & stock futures pretty hard. I see two big red bars on the 5 minute chart. S&P futures are now down about 3 pts. vs. being up 4 pts. earlier. Heard no news. I put an order in to add to my long play at 1481 for S&P Sept. futures. That's about 20 pts below current prices and about the 50% retracement level. We could get some more panic today.
PPS: More eisegesis on Fed policy on Bubblevision. Perhaps the eisegetes should read the laws on what the Fed's legal authority & economic mandates are in "reality". It's hard to believe people get paid for that stuff.
P^3S: By the way, I was involved in financing some LBOs, too [many moons ago]. How can anyone think interest rates or spreads at these levels are going to stop them? They aren't at crazy levels or concepts by any means .... yet.
P^4S: Hey, no remodelers today !!! :-)) One day of peace & quiet. Ahhhhhhhhhhhh. Heaven.
P^5S: Good bounc-a-roo. What this market needs is ............... a big LBO announcement Monday AM to skewer the bears & shorts :-)))
Has anything changed? Rates are going up....they may be historically low....but that is my answer to your question.
ReplyDeleteInteresting articles in WSJ today on some LBO deals running into trouble. Apparently the difference between the cash flows companies generate and interest payments is tightening. Another article talkin about private equity deals may also get affected if rates rise. Buybacks/ m and a activity have kept a firm bid in this market for months now.
ReplyDeleteUh, look at the interest rate chart. Rates were going in intermediate term since May 11, 2007. Rates are still in the same range since Fall 2005. Longer term, interest rates are still in the range they're moved in since mid 2002.
ReplyDeleteMern must be excited this morning. Pat Burrell took BillyWagner deep in the 9th last nite and his team came back to win in extra innings. Here come the Phillies!!!
ReplyDeleteI saw that article. Nothing new there. It would be a miracle if a few didn't get into troble. That's why their lenders get fees & bigger spreads.
ReplyDeleteBy the way, those coverage levels mentioned in that article aren't close to "crazy" levels. When they do deals at 1:1 coverage and rely on "asset sales" [aka greater fool theory] to justify the deal, then you know they are at crazy levels.
ReplyDeleteKobi Alexander is doing the Dutch Shultz defense on a national scale. It worked for Scrushy.
ReplyDeleteUh...Scrushy was found 'innocent' by a jury. Surely a libertarian like you doesn't believe evrything a US attorney says.
ReplyDeleteIf there's one thing the US governmant is very good at .......it is prosecuting/imprisoning it's own citizens. Way too many people in jail on technicalities as prosecutors just tryin to bulk up convictions before they head to the private sector.
ReplyDeleteI don't know whether Kobi is guilty or innocent. But I will admit it gives me tremendous pleasure to watch prosecutors struggle to get an extradition. I never root for the US attorney.
ReplyDeleteGolly gee whiz, wild swings this morning ;-)
ReplyDeleteA jury found OJ "innocent" too, of criminal charges.
ReplyDeleteUh, Bud, did you root for Fitzgerald vs. Libby? :-)
Notice how I used "golly gee whiz" instead of "holy ^%$#*" or "what the $%^&" ;-)
ReplyDeleteBunkerman is trying to clean up his language.
I'm consistent. I didn't root for Walsh or that scumbag Ken Starr or Fitzgerald.
ReplyDeleteOJ was found innocent cuz thousands and thousands of innocent black males been falsley convicted ( and executed) in our racist history. So 1 black man got away. Big deal.
ReplyDeleteWatchin GS closely today. 50dma is 220.65. That will be a good tell on the market. GS needs to stop goin down for market to stop goin down.
ReplyDeleteI wonder if there is a specific time for derivative margin calls? Or does the bank just sell the collateral? I admit I don't know. I suspect it's continuous, whenver the bank wants more collateral. They're thieves, anyway.
ReplyDeleteRoflmao....thieves
ReplyDeleteIt's nice having my outer defense perimeter finished. I can take a midday nap very securely & comfortably now ;-)
ReplyDeleteYou had trouble sleeping before? Bunkerman a simple trip to a physician would have been a much cheaper way to solve your paranoia and insomnia.
ReplyDeleteNo, I didn't have trouble sleeping. But I always had to worry about my dogs getting hurt by some jerk delivery, etc. guy. No problem now - they can't get past the perimeter. :-))
ReplyDeleteDoes that COT data show that 'beefers' are short oil heavily?
ReplyDeleteMern must be hungover. Or maybe Cindy refusin to bail him out. Let him rot in jail over the weekend.
ReplyDeleteData as of May 29 shows beefers long crude & selling. We get new data this PM for numbers as of Tuesday June 5.
ReplyDeleteThe beefer net long was not a record.
BUT I don't have a breakout for oil of the index funds from normal beefers (as for grains, etc.)
Since index funds are very long most commodities, I'd guess the beefers were net short crude (possibly in serious size) & shorting more as of May 29.
Re-checked some data. Most of the commodity index funds are listed in the "commercial" catagory. The ones in the Large Trader catagory are pretty unpredictable, whether they add to longs or shorts, based on grains, livestock & softs.
ReplyDeleteSo one should assume the beefers were moderately long & covering as of last Tuesday.
I'm a bit confused. So maybe just explain to me....data is showin beefers think oil is going up?
ReplyDeletedo we count beefers as commercials or large traders? i thought they were grouped as large traders....
ReplyDeletebunkerman why 1480 and not 1450 spy, isn't that where your real buyers loaded and what provided this last push and possible blow off top? not seeing strong hands until then.
ReplyDeleteYes ....we need a clarification on 'beefer' definition. Seems to be a dynamic one. Lololol
ReplyDeletethe spy smh and xlf all have april gaps to fill even if this is just a correction....spy 1450 and the other two are obligated to the 35 hanlde.
ReplyDeleteobvious beefer fast money puking in gold and silver today...bunkerman you looking to nibble once it slows down?
ReplyDeletebeefers are "large traders".
ReplyDeleteThey WERE long but were liquidating that long position.
MOST index funds are grouped as "commercials"
But a few index funds are grouped into the "large trader" catagory. So for grains, etc. it can change the picture the COT gives by separating them out.
ReplyDeleteI went to the hardware store for some stuff - hence the delayed replies.
ReplyDeleteMy 1481 bid is on the September futures contract. That's the 50% retracement level. Sept is about 17 pts over cash now. So my bid is just over 1464 cash effectively.
I see the support at 1450-1460 cash. If we go there, my futures bid will get hit as I want it to get hit.
index funds are NOT beefers. They are "big" but not evil ;-)
ReplyDeleteBig, dumb buyers = index funds
the good guys.
wow just got back from CRACKERVILLE post office, like 20 miles north (closet place to get passport). i saw the funniest bumper sticker ever (given that i passed at least 10 bapist churches in the last 5 miles). big big truck with a bumper sticker that reads "i only have 1 problem with bapists. they dont hold thier heads underwater long enough"
ReplyDeleteLMAO, that takes big ones, to have that on your truck, down here.
heres bill gross talking his book, hes lost more money than god, this week. when did he turn bearish on the long end? today? he cud responsible for the long end selloff, by himself.
love wagners comments about burrels homer. something like, burrel can only hit the ball if its thrown in one spot, and i threw it there. (hes pretty much right, but after getting pasted like that, thats just mean)
well ive got 500 on the spurs to win it all. more than 2 to 1 odds. spurs have lost one game since stern handed them the championship. if the cavs win more than a game ill be stunned. so after this series is over, who is the best team in the NBA? suns or spurs? i still think the suns had that series if not for stern loving timmy so much.
Yes, I've been looking at adding to my gold & silver.
ReplyDeleteI'll let the dust settle. The dollar players are hurting gold, too.
Phjysical demand turns up again in the fall. So I'll wait as long as possible.
I might just buy more coins & bars later. Or might buy futures earlier on a good entry.
TLT, getting the paddles out and a stretcher. see ya, here comes 80. ill buy some silver below 13, me thinx
ReplyDeleteOn cash intraday the 50% retracement is about 1450. On Sept futures it's about 1475 intraday. I want filled if we go that low so I'm bidding a little over.
ReplyDeleteHardware store? I thought the perimeter was complete. What are you gettin prepared for? An invasion from Mars?
ReplyDeletekobi alexander ROFL!
ReplyDeletesopranos prediction
tony, carm, aj, and meadow drop a dime and dissapear into witness protection. a la , henry hill.
him dying is just too easy.
i like "the riches" way more than the sopranos. thats a must watch show. just ended for the season, so reruns start soon. its on FX tv at 10pm on mondays. "buffers" LOL
bud havent seen the x files? we r just cacuns for little green men. the virus is already here. moulder better come through or we all need a bunker
ReplyDeleteodds of kobi coming back to the usa? slim to none and slim just left the house.
ReplyDeletei seriously just cant over what he did. he was always one of the most respected ceo's in tech, and he gave it up for about 3 mil. the rest of the money he made legally
Haha, Bud. I know how to fix stuff. I'm no city-slicker. ;-)
ReplyDeleteMern I seen a couple x-files. But please don't ask bunkerman to see it. He'll prolly move to Antarctica if he sees it.
ReplyDeletebunkerman...a steady cross wind from the left of 18 mph shooting the 300 yd range, how many clicks up and down when ranged +2 at 100 yds., shotting .362 1800 at the muzzle?
ReplyDeletewell im gonna work on my video golf skills and drink lunch
ReplyDeleteword!
I prefer South Park on the Tivo.
ReplyDeleteI have to fast forward too much of the Soprano reruns of past seasons.
krypto i strongly suggest renting the X files movie. its really gud!
ReplyDeleteLOL
Uh frosty, you need the windage adjustment for wind.
ReplyDeleteFor elevation at that range, I don't know for that .362 slow bullet you're using. I'd have to look in a ballistics table. I always use a much higher velocity round for anything over 100 yds.
I've never seen X-files. Or "24".
ReplyDeleteI thought Dr. Strangelove was a great movie ;-)
Frosty's drunk!!!!
ReplyDeletesorry bunkerman...meant up and left ie windage...one reason I ask is .362 9mm and 50 cal are the true freinds of the bunker and should be owned and known. you cannot rely upon your own stash of ammo or perhaps weapons should your defense fail. imo you need to plan a level deeper within your weapons strategy. drill down and I think you find the standards a viable contingency planning addtion.
ReplyDeleteSpin to win...I will gladly pay you tuesday for a rock today.
I think he was testing me ;-)
ReplyDeleteI would use a .375 H&H if I needed a big heavy bullet at that range.
I agree Frosty. I have many layers of defense & own mostly firearms with widely available ammo. I need more practice with some calibers at long range, though. A buddy & I plan to hit the 300 yd. range a lot this summer.
ReplyDeleteThere must be lots of beefer margin calls. The grains are wild today, too.
ReplyDeleteIs this the NRA blog? sheeeeeesh
ReplyDeleteYou should learn to use a firearm, Bud. Don't depend on "the state" for your protection. Follow Jefferson's advice ;-)
ReplyDeleteLooks like beefer margin calls in crude, too.
ReplyDeletewtf r u guys talking about?
ReplyDeleteim drunk. pass out around 4, woren gets home near 7. i wake up, sober, and act like a normal human till about 1am. got a nice 90 minute eliptical run on the schedule.
gonna take the dogs for walk
smoke pot, daily
Lmao 'the state'.....It just wants my money or wants to put me in jail over a 'technicality'.
ReplyDeleteCorrect, Bud. That's why you should learn to use firearms. "They" won't protect you.
ReplyDeleteWell, that proves it. Bud is really a libertarian. He just acts like a liberal Democrat - probably to pick up young women (who are usually liberals).
ReplyDeleteFrosty, I don't have any faith in gaps for stocks. Not that I've ever tried them much. I use them in commodities a good bit, though.
ReplyDeleteI use the simple fibonacci levels or DMAs or both for entry points in stocks or stock futures. THhy work OK for me & are always there, unlike gaps.
If I hear that word, "volatility" again, I'll scream. It's just a mathematical number and means nothing real. A derivative of a derivative. Ugh!!!!!!
ReplyDeleteAaaaaaarrrrrrrrrrrrrrgggggggggggggghhhhhhhhhhhhhhhhhh!!!!!!!!!!!!!!!
ReplyDeleteCall you what you want to Bunkerman. But I only have 2 choices ...and i'd rather get into a pistol match with you than vote for the disgusting and hideous GOP. ( And i've never held a firearm in my life.)
ReplyDeleteWell, the GOP isn't what it was under Reagan. Or Lincoln.
ReplyDeleteHmm. Grant was a Republican & he crushed the KKK as President. He was from Ohio, too, that great state ;-)
The current bunch of GOP'ers sure aren't "perfect".
Dont shoot til you see the whites..of the bowling pin..lol re pistol match
ReplyDeleteLincoln, Grant, Teddy Roosevelt, Coolidge, Ike, Reagan.
ReplyDeleteThen we got the Bushes. Ugh!!!
[before you mention him, Nixon was a liberal]
Big grain crop report Monday AM and new weather maps. Could be a wild day. I'm still long December corn & December Chicago wheat. Nerves of steel ........... or stupid?
ReplyDeleteBunkerman I thought you quit short-term or day trading? It's very addictive. I knw.
ReplyDeleteCorrect Bunkerman. Many many great Republican leaders in our history. But I'm talkin about who I can vote for. I never had the chance to vote for Jefferson or TR or Lincoln.
ReplyDeletePS. Yes Dick was a liberal. One of his best qualities.
Roflmao Coolidge. He was a horrible prez. He caused the great depression.
ReplyDeletebunkerman...so you are trading stocks using technical analysis and corn/wheat based on some monthly map that a weather forecastor pumps out? your a smart sob so I know there is more to it than that but that last post sounds alot like gambling....which I have no problem with.
ReplyDeleteThose gaps on the index products I mentioned have far greater odds in the intermidate term of being filled than the odds that bud becomes anything other than a liberal rebel or would some how become capable of defending himself out side the states elution of security.
I see spinny found that sixer of rock that his warden was hiding.
ReplyDeleteUh, Bud, read Milton Friedman's Monetary History of the United States for the story about the Great Depression. The Fed did it. Bernancke admitted it.
ReplyDeleteBeside, Hoover was President in the final run-up & crash. And how could Coolidge "cause" it, since he did nothing lolol.
I've held my grains awhile.
ReplyDeleteBut watching the screens is addictive. I need to get off my butt & out of my office.
That stock futs "trade" is an exception. My brokers are wondering why I don't trade as much.
Lmaooooooooo........frosty.
ReplyDeleteBtw....tell you future son-in-law to tell Hillary to stop bein so polite. Take the gloves off and start hammering Obama.
I hardly ever "trade" anymore. I'm glad I stopped.
ReplyDeleteMy commodity plays are combos of charts & fundies incl. weather. I try to understand & catch trends. I think July will be hot & dry in the corn belt so the crop will be short. They need every kernal, so I'm looking for a huge move up. I'm long & have calls.
For wheat, the chart got good after the late freeze in the US and the Ukraine weather is way too hot & dry. They need to rebuild world stockpiles after last year's poor crops. So the setup for a big move is there, too.
I pay a lot ($12K/year) for private weather service. It helps me understand the weather trends & patterns.
OK, my stocks futs play yesterday PM is a rare "trade" - I just think the sell off got stupid and had to buy something.
But my individual stock plays are like my commodity plays: combos of charts & fundies (simple thinking, nothing fancy).
Like Rambo said, "the human mind is the best weapon". ;-)
You guys talk odd ... "sixer of rock"
ReplyDeleteThat sounds like a basketball game? or a TV show? or a Band?
Don't tell me. I want to be ignorant of modernity. An anachronism.
ReplyDeleteI'm still unfortunately sort of addicted to sitting in my office watching the flashing lights & reading & thinking about the markets. With remodelers, etc. working here for months, I've been trapped & can't go out & goof off much ... yet.
ReplyDeleteMaybe in a few weeks they will be done & I can hit the range in the PM with some buddies. Or go to the barn & work with my tools.
Once in a while I put on a trade. Habit I guess.
Hildog...lol...they have the muzzle on the pittbull until they can soften her image...you are going to have to wait until her softer side is sold to the slobbering libral masses and they get nearer the national tree hugging luv fest before she smashes him like a bug....she won't be off leash until next summer...it will be fun to watch when it happens. he can't carry her jock and trust me she needs an XXXXL.
ReplyDeleteBtw, I have to hang around my office part of the day to manage my other businesses. Some phone calls, emails from lawyers, etc. Nothing too time consuming but I have to be available some time each day to deal with "issues". That's being "semi-retired".
ReplyDeleteSo why not watch the markets? I'd be bored silly otherwise. Maybe when the remodelers are done I can read something interesting in another room.
Or watch the birds & chipmunks & dogs play. That would be relaxing.
ReplyDeleteRoflmao...'XXXXL'.
ReplyDeleteUgh Rambo.........just perpetuates a terrible role model ...the american soldier cowboy killing machine...who is unstoppable....i am sure that is the image of the american soldier we want around the world.
Correct, Bud, that's the image we want. US soldiers need to be feared, not loved.
ReplyDeleteLyndon doesn't understand that, hence the mess he's created
What this market needs is ........ a big LBO Monday AM to skewer the bears. :-)))
ReplyDeleteLater boys. Mern.....pass the bong.
ReplyDelete