Wednesday, August 8, 2007

What Happened?

So my exegesis posted yesterday about the Fed was right, and my eisegesis was wrong. See how dangerous eisegesis can be? I'll try to be explicit if I'm being an eisegete to avoid confusion.

The Fed made a mistake - I guess having a government paycheck dulls the senses.

Yesterday afternoon we witness some professional level ping pong by the beefers. I wrote a ditty about their antics last year and posted it in another forum. hehehe, it really made some pro-beefer traders angry. And the action of the past few days in many major groups and even yesterday illustrated how accurate the caricature was. So I'll re-post it below.

Song of the times follows (based on the song, "The Grand Old Duke of York") ->

The beefer Duke of Funds
He had ten thousand stocks
He marched them up to the market top
And marched them down again.

Lolol, that ditty gave into my head yesterday afternoon. I sang it in my turret.

PS: I'm still very bullish long term, but short term I think we'll chop awhile until this Fed created mess gets sorted out. My 20% gain expectation this year for the S&P 500 is looking less probable, but still possible if the Fed wises up early this fall. Stocks are still very cheap.

PPS: Efforts to raise the FNMA and Freddie Mac loan limits won't help the low income person, but will help the high income, jumbo loan borrower. I guess DC knows where its bread is buttered. Help for the well off, none for the less well off. Sheesh!

50 comments:

Bud said...

I'm a pro-beefer trader. Angry? Nope. I find your rants hilarious. Complete nonsense but funny.

Bud said...

Lemme see if i understand you . You are calling for a rate cut to help low-income homeowners?

Bunkerman said...

I wasn't referring to you in that comments - it was others.

Bunkerman said...

Yes, re low income homeowners.

Bud said...

I think the Fed is saying we aren't gonna bail out people who lied on their income forms. Lmaooo....scrupulous lenders. Let me tell you something. Everyone knows wether they can afford a certain house or not.

maverick said...

I read many comments on a Business Week mortgage article response forum. It is clear to me brokers and borrowers knew what they were doing. So let them deal with their decisions.

mfl59 said...

Let free enterprise reign... the free mkt will sort it out...and it will..."creative destruction" as Mern puts it....

Bud said...

What a thrill it was to see barry bonds hit that home run last nite. I'm actually glad that hypocrite and slimeball bud selig wasn't there.

PS. Bonds on KKK hit list too. Grand jury goin after him. How many white ball players have a US attorney or grand jusy investigating them. Zero. What a racist country we live in.

Spin-em said...

a daily back to Nov05 in TLT...a floor in the 88 range broken.It falls to 83...and climbs back up to 88...time to fill the gaps to 83ish?

Bud said...

Memo to all black ballplayers. If you do not want to get indicted ,

Shave all facial hair
Ditch the baggy jeans and go to banana republic
Learn how to say 'yes master'
Download big n rich and montgomery gentry

If not. Hire some criminal defense lawyers. You gonna need them.

Bunkerman said...

I don't think the low income person reads Business Week.

I think many were suckered into teaser rates that were used to qualify them for a dream of homeownership. OK, I also accept some might have figured the home value increase would bail them out. Maybe they thought there income would increase, too. So some are sort of speculators.

The Alt-A no docs loans - That's another issue - I have no sympathy for that garbage.

I don't see why the Fed wants to control inflation on the backs of the lower income classes.

I don't think one should underestimate the financial gullibility of the common person.

Bud said...

Looks like spin took a writing lesson from frosty.

Bunkerman said...

Hmmm. I think whitey Ohio State quarterback Art Schlicter got sent to prison for gambling, forgery adn fraud a few years ago.

maverick said...

Bman...if a guy can sign his name then he knows whether he can afford the loan. I agree on some shady sales people but the majority of borrowers knew what they were doing. Some accountability is necessary here.

Bunkerman said...

Let me be clear: I think the Fed should cut 50 bps purely since an inflation neutral policy is correct here. Core yoy PCE is under 2%; growth is moderate; the Fed cannot control oil or food prices. So a neutral rate is correct on pure economic grounds. Neutral today is 4.75%, or 4.5% over night rate.

I think their keeping the rate higher is purely posturing and not in line with reality today, even excluding the variable rate subprime problems.

Fed policy lags, hence once 1.9% yoy core PCE is hit they should have gone to neutral. Period.

Bunkerman said...

I'm not so sure, Mav.

I once opened a stock account that was combined with a stock futures account. Once had to read very small print to find out that the futures was only allowed for day trades. That being contrary to every other futures accounts I've ever had, I didn't see it - it really was very obscurely worded.

So I found out & closed the account. I know it's not the same thing, but I mention it to explain the principal.

Unless they had to initial a box that said that in two years "Your payment will become $x,xxx.xx per month", I don't think most people would be able to do the math.

Bud said...

Exactly maverick. Do you guys remeber those stupid Ditech ads....where they used to make fun of banks that actually required paperwork to get a loan. Haven't seen those ads in a while.

Bunkerman said...

I remember when I had a variable rate mortgage loan in 1984 [my first mortgage when rates were 14%], there was really no explanation of the resets and caps and teaser rate. I knew them and figured it out myself, but the paperwork did not show it. I worked in investment banking with multiple graduate degres. Normal people wouild have had no idea of the implications for the future.

Bunkerman said...

On the other hand, I was really shocked at the low level of documentation requirements when I re-wrote our home equity loan in 2003. Practically zero.

Frosty said...

XLF bonce now 850 bips....Bunkerman, do we mount the 20 day and keep rolling? I see no reason not to put some out, virtual of course, for thur and fri fed hang over...thurday before ops expo misdirection and sell on firday patterns worth a shot.

Frosty said...

SKF...avg 79.71...a little double juice.

Bunkerman said...

well IF I was a trader and IF I ws a bear, I'd look to put out XLF just under 36 (the 50 DMA) with a stop for a close over the 200 DMA at around 36.5

Or you original trendline entry short at 35.5 the a stop on a close over the 50 MA.

On the other hand, all those entries are rather obvious as are the stops, so the beefer bulls might gun for them.

Long term reistance is around 35 from March. There's a whole lotta resistance in that 35-36 range. Maybe average in? 35-35.5-36 in thirds?

Spin-em said...

Pat Paulsen on bubbletv at 3...SOCK IT TO ME????

Frosty said...

Bud where is the list?

Spinny the bond hawk on the job...sock it to me...lol

Frosty said...

FXY covered a good portion to add more SKF to improve basis...79.37.

Bud said...

Frosty....you bt or shorted SKF at 79.70?

Bud said...

CPY makin me sick. Only a marker left now.

mfl59 said...

CPY that was a sick call Buddy....wish I listened...

Frosty said...

Spinny...bonds have been moving with stocks all year or is it the other way around?...lol...either way they have been hooked up...hope you are back tired, grumpy and just plain nasty. MLF is going hunt bros on the gold market... fyi.

Frosty said...

UTI...pre earnings squeeze to 25...report and splat...Bud is that one on the list?

Bunkerman said...

I had a power outge for any hour. Bull holding for now, eh?

Bud said...

Market at highs B'man. Maybe you owe the Fed an apology.

Bunkerman said...

Good thing I'm a long term investor now, or I'd have lost much on my thinking. As it is, my 50% position in the big fins is nicely green now :-)

The Fed was wrong. This is probably beefer short covering; Or new beefer longs tre-trying to make their year; maybe a few real buyers bought the lows a few days ago like I tried in the fins.

Bud said...

I'll work on a list tonite frosty. Charts a bit better now.

Frosty said...

upside trading curbs....what a joke...who are we protecting today...slow down we are moving way to fast...LMAO

Bud said...

Exactly frosty. F'ng joke. They must have reinstated the uptick rule today.

Lmaoooooooooooooooooooo

Bunkerman said...

Why do you guys care about trading curbs? You aren't doing program trades.

Bunkerman said...

Oh, you want wild swings as the beefers rip the lungs out of the public, yes?

mfl59 said...

beefers...lmaoooooo

Bunkerman said...

Hmmm Rut is up 3%? Beefers trying to make something happen, I guess.

XLE at 50 DMA.

Frosty said...

god bless those trading curbs...the fins haven't printed an uptick since they triggered.

mfl59 said...

beefer ping pong should be an olympic sport

Bud said...

Uh B'man. trading curbs, uptick rule, manipulation etc is a joke frosty and i make on you

PS. Lmaoooo ......i thought he may not get it!!!

Spin-em said...

HANK THE TANK..HANK THE TANK

Frosty said...

I see Spinny has yet to sober up.

Bunkerman said...

Hmmm. I guess I'm too serious. I didn't get it. D'uh.

Bunkerman said...

I think that once the beefer shorts covered, there were no buyers higher.

Spin-em said...

ohh..Im sorry..I just opined..secretary Paulson on cnbc created a transhuance from good market to bad....

Bunkerman said...

lolol spin

mern said...

bunkerman agrees with hil dog and bud doesnt.

in other news, hell just froze over, and pigs r flying over my house!

wtf?