Wednesday, August 15, 2007

Wednesday - What! Me Worry?

That's the line from Alfred E. Neuman, the youthful fool of Mad Magazine fame. Yes, I still subscribe and read Mad magazine once in a while ;-)

Yes, I'm still bullish. I think this is still a rich man's panic - investors in beefers are panicking as are their managers. And the mortgage lending industry nonsense is returning to the time-tested practices: 80% loan, verify income, debt service coverage, etc. Golly, how onerous!

That was the standard from the 1930s until recently when the creative finance guys and hedge funds got involved. People could borrow over 80%, but had to buy mortgage insurance or qualify under the VA or FHA.

WSJ: warehouse lines to many small mortgage bankers and brokers are going away -> their product was garbage and there's no market now. Also, "... allowing banks to grab a bigger share of the market" -> that's part of my reasoning for buying big positions in the big banks, like BAC.

WSJ: US move to expand access to data from spy satellites is likely to to ignite privacy debate. Hmmm ... living in the woods with overhead concealment seems smarter & smarter ;-)

Today's CPI number is important. The key data points are the core CPI and the year-over-year core CPI. Last month, the year-over-year core CPI was 2.2%. I'd like to see a number that is flat or a downtick.

On another topic: let's deconstruct this quote from Reuters ->
"WASHINGTON (Reuters) - The top U.S. commander in Iraq will recommend pulling U.S. troops out of some areas where commanders believe security has improved, the Los Angeles Times said on Wednesday, citing Bush administration officials"

Did you notice that word, "recommend"? Uh, the "top US Commander" will "recommend". Hmmmm. Is he the "commander" or not? Or is the "war" being run by "Bush administration officials" - aka micromanaging? I'll bet it's micromanaging.

I think that Rumsfeld, Cheney and Bush and now Gates, Cheney & Bush were micromanaging all along. And the Pentagon buttkissers, too. That explains a lot of the odd, counter-productive, silly decisions that have been made for five years. Like letting Fallujah fester & develop into a terrorist/Al Quaeda base early on. And all the concern about being "nice" to the Iraqis. And the rules of engagement that tie our troops into knots. Once again, the W Bush == Lyndon appellation works perfectly. Phooey!

More W idiocy: WSJ - "The Bush administration is moving towards blacklisting Iran's Revolutionary Guard Corps as a 'terrorist' organization, subjecting at least part of the entity to financial sanctions." Huh? What the heck were they before - an Iranian Boy Scouts????

Is all official Washington stupid or part of the problem? They seem to have a serious "enemy recognition" problem!

IF I was paranoid, I'd think they want more terrorism so they can grab more power.

PS: I guess Warren Buffet reads this blog - he took a stake in BAC, among others ;-))

PPS: Good CPI numbers - core yoy was flat with June at 2.2% Good news.

P^3S: Santelli on Babblevision confirms what I've been saying - no mortgage funding problem for the traditional home loans: 20% down, income verified, 30 years, fixed rates. The creative financing is dead, though.

P^4S: Hello Ben? Three month T-bills are at 4%. Your overnight rate is ... 5.25%. Uh ... don't you think your monetary policy is a bit tight?

63 comments:

Bud said...

I been learning about those warehouse loans too. It sure seems like the big banks will get that business now.

Bud said...

4th amendment getting shredded by Bush administration. ( search and seizure etc...) But what do you expect from W and Cheney. They are lowlife dirtbags.

Bud said...

Sorry Bman. As much as i despise W and Cheney....our armed forces should be under civilian command. I never want generals makin the final decisions. ( for obviuous reasons - military men just wanna kill and maim not caring about innocent civilians or political repurcusiions). That's the way the founding fathers wanted it ...and i agree.

PS. there are numerous examples of military run governments over the centuries...and what is common in all.....they turn on their own populace too.....democracy ensures that generals answer to the civilian leadership

Bunkerman said...

it's not the "final" decision, but the level. The civilian authorities give broad orders and let the military commanders on the grounds make the detailed decisions. That worked well in WW II and WW I.

Lincoln didn't tell Sherman what path to take. Roosevelt didn't tell Eisenhower what cities to take (except political ones like Berlin). Woodrow Wilson didn't tell Pershing what offenses to participate in or not.

But LBJ did pick out bombing targets.

Bunkerman said...

The orders for Eisenhower were rather simple, actually. Basically, invade Europe and destroy the German Army and Germany's capacity to wage war.

Bunkerman said...

Ditto in the Pacific for MacArthur and Nimitz. General campaigns were approved based on resources, and then the theater commanders made the decisions.

Bud said...

It's not that I don't wanna answer any Vick comments.....i will if there are any new developments. But it's over. Lets summarize.
The KKK has been after Vick for awhile ( if you have to ask why? then u either a lowlife bigot or an ignorant fool - you decide ) First they tried the old 'marijuana in the water bottle ' ( reminded me of banana in the tailpipe ). That didn't work so they came back with 'dogfighting'. Huh? I never even heard of dogfighting before. But very smart. While the racist pigs can stay in the back ...they let PETA do the legwork with public protests. And then roger goodell and arthur blank backed off like a couple of pussies. Add the NAACP to the pussy list too. ( one lame comment defending vick - that's all). Fuck the KKK. Screw the NAACP . And screw PETA too. I am disgusted with them all. There's only one group that truly represents me.
Long live Beefers!!!!!!!!!

PS. Only suspense left in Vick case is lynching or castration.

PPS. 'banana in a tailpipe'...what movie B'man?

Bunkerman said...

W's father made his biggest blunder in the first Gulf war in responding to TV stories in ordering Schwartzkopf to cease fire and not fulfil his orders to destroy the Iraqi army.

So Bush senior let them go to get good press & then they massacred the Shiites & Kurds. And so we had to fight them again 12 years later. A horrible blunder.

Bunkerman said...

Isn't that Beverly Hills Cop?

Bunkerman said...

Uh oh. Cleveland is behind the Yanks & Seattle for the wild card :-((

But are only 1 game back of Detroit! :-))

Bud said...

Yes Beverlyhillscop. Eddie murphy. Funny.

Bud said...

BAC and C. Long any other big banks?

Bud said...

200 dead in iraq blasts. Terrible. What a nitemare.
It's a full fledged civil war . Bring back our young kids.

Bud said...

CFC still on the road to bankruptcy.

mfl59 said...

I am calling a bottom today...a bad CPI # will lead to more selling, but the market will rally late in the day to provide a tradeable rally...there is my cents....the August 15 redemption date seems like a "sell the rumor buy the news" type of event....especially with the media's constant jabbering about the date...when do they ever get anything right? aside from the pundits at Fox News, of course...

Bunkerman said...

I have JPM, too. Waiting to buy more.

Bunkerman said...

I'd like Frosty's input on options expiration re a bottom.

But I think a good CPI number will lead to Fed ease & a bottom, too.

Spin-em said...

morning....Hang Seng chart to 21,000....shouldnt FXI fill those gaps to 115?..the May breakout?

Spin-em said...

atta boy mfl..thats a Sgt Hulka big toe call

Bud said...

Spin.....there you go again with the 'gap fills'. I thought Lzrd corrected you on that. lololol

Spin-em said...

rofl...he busted my chops didnt he?.

Spin-em said...

Mike gave me this yesterday


Since the beginning of the 2006, here are the cumulative S&P 500 returns by days of the week:



Monday 1.40%



Tuesday -0.36%



Wednesday 18.72%



Thursday 4.36%



Friday -0.61%



So what's the deal with Hump Day? It's responsible for over three-quarters of the S&P 500's return.

Bunkerman said...

Gosh, spin - that's remarkable!

Bunkerman said...

There is some support around 1400-10 S&P cash. That would complete an Eliott Wave ABC major corretion. S&P 1400 would be the fabled 10%.

So I might try another light-side shot around there for the eminis.

Bud said...

S and p has support at 1380 ish. That 'should' hold.

Frosty said...

Vick....see Bud is going with the Chewbacca defense.

ops expo often deals out punishment to both bull and bear...the bulls are running and the bears are leaning...it certainly sets us up as MLF has layed out...I going with MLF, as long as he is buying stocks and not focused upon cornering the gold market.

last firday saw huge put buying again...if they begin to hit the door together, we could see a day equal on the upside to what we saw last thursday on the downside.

Frosty said...

QQQQ pin to 47 looks like a lock....ah but to fool the most 48 would find the bull way under exposed and would shake the over exposed bear...that would be a true options shake-n-bake.

Spin-em said...

crack the TWM short whip....whip it good..go for it..move ahead...its not too late...lol

Bud said...

Where are the beefers? They not thirsty today? How about a game of ping-pong. I can't make a dime in quiet markets.

Bud said...

Frosty there is no such thing as pinning. Sheeeesh.

Bunkerman said...

Maybe the beefers are in shock from the redemption notices flooding their fax machines?

I can only hope.

It does look like they're covering some XLF and big bank shorts.

Frosty said...

perhaps not Bud, but we should be very vocal in favor of more regulation just in case beefers are attempting to pin stocks to strikes.

mfl59 said...

Beefers going to try for a lunchtime raid here?

Frosty said...

QID just put out a slug at 48.05....bears going to have second thoughts as we near firday....leaning hard short going into this weekend is bad bet, as the risk of something good happening builds.

Bud said...

True frosty. If B'man had his way ....we could only buy stox if we agreed to hold them for 6 months.

Frosty said...

MLF speaking of bear raids...check out the last few minutes of trading UNG.

Frosty said...

ASTM added some more for the hildog rally.

Frosty said...

TWM short 73.85...not going to let spinny dangle in the wind without support...he ever miss on an index trade?

Frosty said...

Bud where is that list?

Spin-em said...

atta boy wingman

Bunkerman said...

BAC over 50 sets up a small H&S bottom measures to 53.

Bullish pattern, imho.

You need some bad news to get 45 frosty.

Bud said...

No more lists for you frosty til you stop makin those stupid and racist Vick jokes. They aren't even funny.

Frosty said...

Bunkerman...just because I have my sack on the block for ops expo pop don't get me wrong, not calling a bottom, no way, no how....BAC, just needs to lower earnings from $5 to $4 and we get it at $40...no way are they over reserved or are they....where is that inside scoop, get on the horn and let's quite guessing...once agian, I won't tell anyone...:)

Bunkerman said...

At some point the bears are going to realize that there's no contagion and nothing wrong with the economy.

How long can the world be coming to an end without a little real damage outside one sector?

At that point they'll just be crushed.

For LBO loans to get in trouble ... the comapny has to get in trouble.

Frosty said...

Bunkerman....end of the world, perhaps not...but present bank earning forecasts are going to come down and prices should follow....what am' I missing?

Bud said...

CFC acts well today. lmaoooooo

Bud said...

Is CFC gonna gap down 5 tomorrow?

maverick said...

gotta hitch a ride on frosty's horse here B'man. BAC will be cheaper.

Frosty said...

CFC LMAOOOO...MER defends their buy call on firday and then comes out with a sell rating today....the street dosn't know whether to shit or go blind....that is the kind of thing helps put in the bottom Bunkerman...lol

Bud said...

Beefers back to work. Finally. It was getting boring.

PS. bring back that godamn uptick rule!!!! lmaooooo

Bunkerman said...

I don't see subprime or Alt-A business going away entirely hurting the big banks like BAC, C or JPM.

The risk to GS is loss of beefer prime broker business. I don't like it. I figure MS is better now.

High yield bonds have been thru a lot tougher markets than this. There haven't been any corporate defaults yet. This is just silly prospectively.

Bunkerman said...

Heck, I'd like to see them lower since I have more $$$ to put to work.

Having lived through many real crises, I just don't see this one lasting long since there's just so little backing it except the subprime problems.

Those who made those loans are stuck. But nothing and no one else is getting hurt.

This selloff is probably beefers getting redemptions, or options exp. or both.

Frosty said...

Bunkerman...agree today is options, push down the common and roll the puts forward to sept...not backing off my thesis....pressure should lift...unless MLF or Spinny are tossing the towel, then I will need to rethink the next two days.

Bunkerman said...

When longs back away, with no uptick rule the bears can push stocks anywhere down.

Bunkerman said...

the bears can push the stock down until they cover themselves.

Bud said...

Huh? cover themselves? what the f'k you talkin about Bman? Hit their own bids? Lmaoooooooooooooo

Bunkerman said...

I thought that comment that GNMA paper spreads were way up very odd. GNMA is as good as T-bills - full faith & credit of US.

Bunkerman said...

sure, they push it down & down & create a panic & scare everyone into selling or getting margin calls - no buyers until the beefers put in a bid to cover.

Bud said...

Well if the beefers are pushing these prices down nefariously.....wht don't the 'real' buyers step in in crush them. B'man.......what are smokin over there? And can i get some too?

Bud said...

Lmaooo ...'create a panic'....were the bulls 'creating euphoria' when the market was makin new highs? Stocks go up and stocks go down.....nuthin needs to be created. lmaoooooooooooo

mfl59 said...

somewhere mern is smiling.....

mern said...

"Stagger Lee"
Words by Robert Hunter; music by Jerry Garcia
Copyright Ice Nine Publishing; used by permission.

1940 Xmas evening with a full moon over town
Staggerlee met Billy DeLyon
and he blew that poor boy down
Do you know what he shot him for?
What do you make of that?
'Cause Billy DeLyon threw lucky dice,
won Staggelee's Stetson hat

Baio, Baio, tell me how can this be?
You arrest the girls for turning tricks
but you're scared of Staggerlee
Staggerlee is a madman and he shot my Billy dead
Baio you go get him or give the job to me


Delia DeLyon, dear sweet Delia-D
How the hell can I arrest him when he's twice as big as me?
Don't ask me to go downtown - I wouldn't come back alive
Not only is that mother big but he packs a .45


Baio Delia said just give me a gun
He shot my Billy dead now I'm gonna see him hung
She waded to DeLyon's Club through Billy DeLyon's blood
Stepped up to Staggerlee at the bar
Said Buy me a gin fizz, love


As Staggerlee lit a cigarette she shot him in the balls
Blew the smoke off her revolver, had him dragged to city hall
Baio, Baio, see you hang him high
He shot my Billy dead and now he's got to die


Delia went a walking down on Singapore Street
A three-piece band on the corner played "Nearer, My God, to Thee"
but Delia whistled a different tune...what tune could it be?


The song that woman sung was Look out Staggerlee
The song that Delia sung was Look out Staggerlee
The song that woman sung was Look out Staggerlee
The song that Delia sung was Look out Staggerlee

look out mama, oh look out mama, LOOK OUT FOR STAGGERLEE!!!!!!!!!!

oh nellieeeeeeeeeeeeeee!

phillies sux

Bunkerman said...

real buyers like me are waiting for the bears to run out of ammo, then we counterattack & drive them back to new highs. Till then, we hide in our ... bunkers.

Hmm.... I wonder what short interest numbers will show next week?