Yesterday was the "End of the End" of the real foundation of the subprime+recession risk for the economy. "Battleship Ben" finally ended the dithering and brought his big guns to bear. The Fed rate cut to 3% in the overnight rate to bring it to the low end of the "neutral" zone, possibly even to the stimulative area as these zones aren't marked with certainty. And the statement said that the shelling will continue until risks to economic activity cease.
Fed rate cuts aren't a laser beam - continued low rates are needed over a period of time to let people obtain or save real cash from those lower rates. Refinancings and lower monthly home equity loan rates will pump huge amounts of cash into the pocket of the common man. Just like the US Navy learned in WW II on the islands, shelling of enemy positions requires extended, thorough hammering with the big 14" - 16" shells to reduce resistance. So Battleship Ben's cuts of last week and this week and the FOMC statement of continued shelling is what was needed.
That doesn't mean the beefers won't keep trying, as they did late yesterday PM. Their modus operandi is getting clearer. Short a rip and then put out rumors of more losses. They are even openly manipulating the press to create fear in operations reminscent of the 1920s. Anyone who has read that great trading book, "Reminiscences of a Stock Operator" can recognize their despicable tactics. For example, that fellow, Ackman, who runs a short pool - I'll just use the 1920s term - put out press releases to scare more people about bond insurers and to try to forestall investment in them.
These guys use double counting to get headlines. If a CDO has loans that realize losses, that's a ONE real loss. If a bond insurer insured a class of the CDO securities, there is still just ONE loss. It's just a matter of who bears it, either the actual holder of the class or the bond insurers. Press double counting is rampant - Babblevision doesn't bother checking or even asking these guys for facts before pumping our the rumors and charges. Battleship Ben mentioned the double counting in a recent speech.
If one has bothered to listen to conference calls of BAC or WB, for example, you would know that their year end marks looked through the CDO to the actual underlying loans and marked against them. Even if the bond insurance is zero , they have no significant further losses. That "fact" was both part of the company presentation and the subject of detailed analyst questions.
Also, the Fed lowering interest rates means that net interest income of these big banks is very positive and growing. That's a huge number for these banks with huge deposit bases.
So I think this is all over but the "mop up" operations. Those might take awhile and beefers might screech and more rich might panic, but the "End of the End" is here.
If the beefers knock stocks down, I'm a buyer.
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90 comments:
the end?
S and p sayin 265B more in subprime related writedowns to come
PS.....MBI good report
lmaooooooooooooo
AMZN margins shrinking
the end indeed
The goal seems to be to avoid a 2008 recession at all costs. As Larry Summers, former Treasury secretary, put it, failure to act would make Main Street pay for the sins of Wall Street.
It is easy to lose sight of the overall picture. Main Street consumers have overspent and over-borrowed and are unable to meet their obligations. The fact that households may have so behaved because they were enticed by “teaser loans” does not change the facts; it only assigns blame. Consumption has been above sustainable levels and needs to adjust down, whatever view one has about the responsibility of adults over their financial decisions . . .
What are your thoughts on this blurb Bunkerman?
uh ... Bud, the market & banks have already written down that stuff more.
hmmm seems like MBI stock has taken that hit already, too.
I don't think that much of that blurb. I don't think it considers that most people with jobs are fine. Some people overspend and are hurting. But why make the innocent lose a job over others' errors.
It's a typical economist saying others should bear pain. I think they should get fired first.
Besides, the Fed was too tight for months vs. real interest rates. All they are doing is getting to a responsible level ... finally.
By the way, as baby boomers retire and spend investment income, the "consumption" numbers are going to "seem" to overwhelm savings. That's just demographics. The same thing happened when boomers were entering the workforce and forming households - savings "seemed" way down. I remember that screeching and that was just dmographics, too.
Econmist don't seem to think about and include that factor in their pontifications.
I wonder if the bears realize that in a few months, the peak in subprime resets from 2006 will have happened and be "old news". Time is against them. That's why this Fed cut was very good news.
PCE core year over year 2.2%, fine number.
Jobless claims high 375K, made up for prior two weeks low numbers.
Spending ok.
is this a recession?
personal income was pretty good; don't forget that ADP jobs number, eithre.
But the beefers control the market ST and IT now and can make Ms. Market dance to any tune they wish, including a funeral dirge.
I will wait to buy later today or tomorrow AM.
ya we will probably be fine as long as middle america forgets how screwed thier balance sheets r.
but if income goes up and spending goes down, and people actually pay down some revolving debt, that cud get real ugly.
but this is america. we r entitled here. debt means nothing. live for the moment and the govt has your back later.
seriously crackerville is a major hot spot for this housing crisis. yet every day the malls r packed, traffic is insane. hummers everywhere.
i dont think it matters i cud take pics at major intersections that have 40 for sale signs, few on how to get out of foreclosure, a couple boats on the side for sale, or the ever increasing pan handlers.
if the fed is crazy enuff to take us below 2.5% they will likely create another bubble (as bill gross is predicting). where wud that bubble be?
well what is left? gold, silver, oil etc.
"whoa look out momma
look out
he comes STAGGERLEE!"
oops they r doing it again, britney shud run the fed!
and on que!
A police motorcade the length of a football field escorted troubled pop star Britney Spears to a Los Angeles hospital early Thursday to get her some help, a law-enforcement official told CNN.
Police motorcycles join a motorcade leaving singer Britney Spears' Los Angeles home Thursday.
more photos » This is the second hospital visit for Spears this month, coming after her psychologist called the police, according to the Los Angeles Times.
She was removed from her home for a "mental evaluation hold," according to the L.A. Times
this isnt funny anymore. this girl is insanely ill. i think she has multiple personality disorder. so when she gets really ashamed about her plight, she just turns into this british chix. she is nutz, but im sure bud wud still hit it. maybe he wud wrap it a hefty bag first, but then again bud is mans man. he wud go commando
;-)
Chicago PMI good at 51.5 -> expansion
Bunkerman...MLF59 shutty, your stupid...LMAOOOOOOO
I didn't say that, frosty - that was a good - great - question for me to comment on ... right down the middle off the plate, waist high ... and I hit it out of the park ;-)
I always take the side of the common man, speically vs. economists.
spend spend spend, its the american way!
all is clear
Holy cow, I can't believe it. We are finally getting a good setup. Cash rates are coming down, mortgage rates are going in the right direction, multiples are cheap and everyone is worried.
At last.
At last we have something to work with, a better backdrop with a worse tape! We knew, if you looked at the Bank Index and the Housing Index, that the parabolic moves couldn't hold up.
Now they will come down hard, but you won't see these stocks back to those levels we saw in the panic selloff after Martin Luther King Day. We are going to get prices where we want them.
god
Mern...how we playing GOOG?
hmmm ... who is mern calling "god" ?
I have lots of GOOG & will buy more if it gets hit. But in this market, any company that gets press gets hit, so a long play for a trade seems stupid to me.
Hence, "go short, young man, go short"
Bud must be hiding like a little girl as the prospect of facing McCain this fall certainly has him shaking like a dog crapping peach seeds.
Big John
Big Jooooohn
Big Bad John
im long 300 GOOG
big john?
hillary's gonna pull his pants down, bend him over , and stick it in.......and she ain't gonna use any lubricant
lmaooooooooooooo
first it was rudy.....then mitt.....now big john
who's next? buford t justice?
walking tall indeed Bud, another honest man...that's all you have? thought you were going to bring it...typical liberal, just like your control of congress...talk big, get the vote then do nothing...drivers of change, hardly...no more under hand tosses for you.
Dennis Gartman, author of the respected Gartman Letter, is blasting the Fed for dropping most references to inflation in its accompanying statement on Wednesday. In his newsletter this morning, Mr. Gartman took exception to paragraph three, in which the Fed said: “The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully.” “This is nonsense,” Mr. Gartman said. “Energy prices are materially higher; food prices are materially higher; clothing prices; tuition; home furnishing prices; medical care... all are high and are rising, and have been doing relentlessly. And yet the FOMC has the audacity to tell us that ‘inflation [will] moderate in the coming quarters.’ Stuff and very much nonsense!” He added that the Fed is supposed to divide its attention evenly between steady economic growth and fighting inflation, but this mandate has evidently tilted heavily in favour of stimulating the economy at the expense of fighting inflation
Evaluate this statement Bunkerman....Take Two
i see rush hates mccain.
mccain looking better by the day here.
what bothers me about obama is he thinx bigger govt can solve the problems. its the opposite.
imo, the new ceo/president shud annonce a 30% workforce reduction the first day.
privatize the jails. legalize everything. abortions and gay marriages on every corner. wars every where, thining out the muslim population. give drug test to anyone on govt assitance. raise the legal limit to .35. lower the drinking age to 8. get rid of the irs and use the consumption tax method.
there the perfect world
the fed has been expecting inflation to moderate of the coming qrts for over a yr.
ROFL
this time last yr "sub prime wud be limited to sub prime"
they know the truth, but if the ever said it, we wud lose over 1000 handles in a day.
they cant afford the recession, so its up we go, and the $ will trickle lower
Bunkerman...dennis gartman shutty...he's stupid.
Gartman is just ignorant or advocating a tight money policy. Maybe he's short lots of commodities.
1. He's wrong about the Fed's mandate. The Fed is supposed to maximixe employment consistent with stable prices. With core PCE yoy at 2.2%, that's about as stable as one can get.
2. He's screeching about inflation, yet when oil has DOUBLED last year, the flow thru to other areas is .. 2.2% Sheesh, is he just stupid or doesn't think.
3. Grain prices have been up at these levels for six months. Does he think they are going to double again ?
4. Does he think oil will double again ?
5. If not, then what is going to drive prices up further in 2008 ?
Inflation moderated a lot in 2007 per the core and as oil and grain prices level out, so will headline inflation in 2008.
So I think he's full of bs and is wrong on the facts and policy. He's fightingthe battle of 1980 again. Those clowns loved Volcker as he drove millions out of work.
Okay I'll bite....if inflation is running at 2.2% and the economy is operating at nearly full employment, what is the purpose of $150 billion stimulus package? The Treasury Secretary told America it was to help pay rising heating bills, put gas in the car, etc....Is it possible there is inflation in the things we need, but deflation in the things we want?
The principle purpose of the $150 billion is to buy votes for incumbents. The secondary purpose is to improve voters psychology by giving them a bit of sugar to spend and encourage them not cut back in the face off the doom & gloom of the pundits. An anti-fear lollipop & bribe.
GOOG...should it fill that morning gappa I will mount the darkside as if were Mern sharing a 6x8 with me at Folsom prison....oh my we have penatration.
Yup I agree 100%...a political ploy indeed...
GOOG 548.60
Here's another analogy: I suppose its purpose is more like taking some antibiotics as soon as one feels a sore throat is coming, instead of waiting for the pneumonia to hit full bore. A preventative .. to hit the gas a bit as the car is slowing before ti stops and rolls back down the hill - to get the car over the hill and rolling freely again without the negative forces caused by prior Fed tight money.
frosty really is a disgusting pig
i guess we all know now why he luvs rock hudson movies
sheeeeeeeeeeeeesh
something wrong with my swing today......not gettin my hips thru.....ugh
ok i think i found a decent job.
big question. does BSC dt for a job in there trading department?
i wud think so.
bud mail me some clean urine!
yes, mern they do and have done for years.
GOOG...second taste, avg 550.24...think I heard Mern singing billy idol...more more more...we will see if Bud is right about my status as a pussy into the bell.
I know they did for non-trading jobs about 15 years ago, so figure they still do. So I'd guess they do.
there is a convience store around here that sells clean urine for 20 bucks, and it works.
i know several people who have used it.
how long wud i have to go for cleanse my body of the sweet chebba? probably 4 to 6 weeks.
errr, can u go without oxygen that long?
i can not
d'oh
BSC....they are hiring these days?
rofl thats what i said!
lololol
bud i mailed u cds and the dye. how about some clean urine?
u havent done any blow lately?
staying away from the x, r u?
and i know u r off the GHB, after the flatline.
LMAOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
job ten minutes from my house, pays 70 to start. 3 weeks paid vacation.
id be on the phone all day process trades (ie tps reports), settling them and processing certs.
sounds not very stressful, which is exactly what i want.
surely better than working 60-80 hrs for 39k,for a firm that wont be around in a few yr.
now i did ask, if they do plan in staying in business, to the recuirter. she LOL'ed.
frankly i was stunned when she said BSC. but C is hiring as well, she says.
Bunkerman are you still bullish on India going forward sir?
Bunkerman...the market always turns after Mern finds a new job...so please fill a jar with golden showers...use fed x, we want him doing tps reports before the common man's monthly statemet arrives...unless you get a wild hair to buy another new car, the tape might have a chance...Gold Mist is trump.
Bman bullish on india? looooooooooooool
US in a monster recession and market is down 25% and Bman is bullish.......i would "yes' is his answer
clean urine? can't help ya
coke bender?
or u eat some x with a hooker on sat nite?
man u suck!
im on the wagon. its been 3 hours since my last bong hit.
i guess i just drink more and take more pills. those r legal drugs.
stupid govt. not letting me breath oxygen.
i better get this job!
we shortin BWLD on the World Series lesson learned Fri??loool
BWLD probably a gud darksider.
my last shop is loaded on that deal.
it is not legal, but if u shorted the 10 biggest position of that dump on any given day, u wud make a decent living.
here r some of there IPOS
jaz, tq and utk.
they also got a town of LOCM, CROX, DHY and some real crap
Yes, I like India LT and have the banks - HDB, IBN. Not huge positions.
back from selling more gold. I have to drive about an hour for anonymity.
who do you sell your gold bars to?
Hmmm today has a change to be the IBD followthru day. Big reversal to close up solid. Need the volume o be up solidly.
i sold some SLV today, too.
how come i'm not hearin about 1920s manipulation today? or the uptick rule?
cry-baby phonies
I sell to a dealer in metals and coins. He has always given me fair prices.
But I have to spread out the sales or I blast thru his bank account; he's not a huge operation.
I'm waiting for over $18 to sell silver.
bud this is good ole fashion mark up. nothing wrong with that. the statements go out tom, the selling starts next week.
the middle class dies
exactly mern
but some people here don't mind it when they manipulate it in their favor
but when it's against them.....they piss and moan and whine and complain
can't have it both ways
Bud, I've never had a problem taking my side for almost everything. I'm not a relativist ;-)
middle class dies?
what are you talkin about?
hmm was this morning a markdown ?
I heard Barney Frank doing a radio ad for hildog while driving to my gold dealer. Anemic arguments. Hildog must be calling in chits to counter the wave to Obama.
Bunkerman...just reviewd some prior posts...can I conclude that the fed is done lowering rates?
u rite bud
there is no middle class in the USA anymore.
just the haves, and have nots. the few left in the middle r dead, they just dont know it, yet.
so know comment on y no clean urine?
was i right? x with a hooker, last weekend?
;-)
Obama wave? loooooooooool
Hillary will win every state on super tuesday except illinois and georgia
endorsements keep pilin up for barack.......but hillary will get the votes on tuesday
obama has a much better chance of beating mccain.
hildog will get smashed by mccain
Mern...this morning we had put in a bottom...now the common man dies next week...huh?...you mean they panic, test lows and Bumkerman's real buyers show up.
most will see through hildog bs by tuesday. she just needs to keep talking, and let bill keep campaigning.
she is dead!
frosty, one more 0.25% is possible without more bad news, which I do not want.
2.75% would be moderately stimulative. I really want to see that monetary base move up - will be watching it weekly.
I think my real buyers were there this morning.
come on frosty, i can be like cramer. i dont have anything riding. i can change my mind every 20 seconds.
market goes up, help the haves.
the have nots, just rack up more revolving debt
the Fed has to rely and create bubbles or we get big time deflation, no?
Battleship Ben is saving the common man from the beefer pirahnas who tried to create a financial crisis. I hope he eviscerates them.
hehehe, who said "eviscerate" ?
that is, give me the recent one and the original one.
this recuirter just rewrote my resume for me. that was nice. i guess mine sucked.
this chick is working for me.
i bet i can clean myself out in 2 weeks. lots of water, lots of cardio. the thc stores in your fat cells.
kill 2 birds with 1 stone. get rid of that 10 lbs ive been trying to ditch for 2 yr and get to 155 and pass the DT.
a little mern coming? OH SNAP!
worden says if i get this job, we can procreate.
lol
Gernberding...head of the CDC director?
Hoover?
first "eviscerate" was Gen Peter Pace of Marines at early phase of Iraq war.
That created some controversy and was criticised a bit by Rumsfeld, so then the press found an early tape from the 1970s of Rumsfeld using the word.
GOOG...booooooooyyyyaaaaa.
I see they are hitting GOOG - no surprise.
Will be a buyer in the AM if its still down.
Bunkerman...I can't wait until the morning...I bought some at 508 :)
you were faster than me ... couldn't wait either ... got some more at 515.
holy crap nice call frosty.
im down 18k on my fictious trade.
i am costanza. fade me!
jesus christ i was lucky enuff to stop trading in 06.
u need to be smart and non emotional.
please lord, if u out there, just give me this fucking job at BSC and i will be the happiest person in the world.
ill pass on the chebba, just please give me this job.
the recuirter says its mine to fuck up.
d'oh!
can someone explain to me y weed is illegal and tobacco and alcohol is not? the latter 2 kill. the former makes u lazy and fat, is that so bad.
seriously i may go to detox or just bounce from tampa for a few weeks. work out and get this job.
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