3rd Time A Charm?

Discussion in 'Trading' started by stonedinvestor, Oct 8, 2008.

  1. Hello folks. Words cannot describe the state of my affairs so I have been quiet. You may remember the last time I checked in I called a mini bottom that was another head fake, I made great $'s on some Blackstone and CF & Goldman... and then rolled into some fabby stks... FMCN, MIDD and DRYS! Well I'm still holding FMCN as they say, I got bitch slapped and scared and ran from the others with big losses. Effectively wiping out the nice gains made in the flips.... Such is the state of me & the market.

    This morning with the Global rate cuts and and the futures flopping down I told the wife " This Is It, The Big Crash " and my wife said " I thought that was yesterday ".... Well pardon her for not grasping the seriousness of all of this but honestly yesterday I'm staring at the Nasdaq and saying well if we have 9 more days like this in a row... WE'RE AT ZERO! I'll have nothing. No job. No income, two mortgages, no stocks... When you think like that- it's real fear.

    And as I walk the streets of New York real fear is everywhere in the hollowed out gazes of folks walking around. I myself feel like a war vet I'm often gazing out at nothing in particular- I snapped out of it yesterday & I was in ABC Carpet buying a metal bird for $150. I have no idea why I did that. Recession is like a blanket draped over the city gently, the lights of fun are slowly dimmed. At lunch at Union Square at the bar 4 stools were available to my left- unheard of. I had a $80 lunch, no wine with my wife. Unheard of. And when I left, the match boxes I usually scoop so many of at the door as some sort of minor payback- were removed. Som Burger joint asked me if I wanted ketchup packets in my hamburger delivery the other day....

    Anyway I took the kid to pre school fully expecting the DOW to be down 300-500 and I even called my poor mom and told her no promises, I've been wrong twice but today feels like the real flush buyers have been waiting for.
    Then I got home and we were up 100 already... way to fast, before the AVERAGE man is even fully off the can with his coffee... surely this isn't computers talking either, I don't see at what level we are near that would of caught all the Quants attention.... could it have been stealth buying of DOW stocks by the government? Feels that way. Things are flipping around crazy.

    This is so weird with the politics happening at the same time. What do we believe?
    When they say banks are not lending yet the regional numbers show they are lending. It's really banks aren't greasing the system with their carry trades anymore, they are hoarding capital, the big ones are... but is the regional bank still making fair loans? The numbers say yes but they tell us no.

    No doubt the biggest rally will come when the Gov prices it's first batch of CDO's.... then magically all the banks balance sheets will look a hell of a lot healthier and their capital ratios will fall into line and hopefully they will start lending and writing new mortgages. How the hell do we get LIBOR down? I'm struggling with that.

    This plan by the gov surely will be examined by the business classes of the future. What the gov was faced with and how they acted.The decision to put the GSEs into conservatorship will likely end up being one of the most widely debated decisions in U.S. economic and market history.

    The argument against the gov's plan revolves around the fact that as recently as early September 2008 there was no need to! In
    early September, the GSEs were rolling over their short term debt below Libor, and as late as September 2, Freddie Mac issued a 5-year bond at only0.95% over 5-year Treasuries.

    Then Freddi and Fannie though they have cash flow are reduced to dollar stks and everyone panicked, or did they? Did things cascade so badly at the end of the month that all of this is warranted? And if so you have to admit the fed & the gov is acting in real time and have already put a lot into the system when compared to reaction times of the great depression and other long recessions past. Life feels so fragile now. A scared investor cannot make a living. And with dividends being slashed perhaps he cannot even live.

    What have we done? It seems so obvious 30% leverage should have been illegal. Where do you draw the line, I know, but when the greed has put the very system your country is based upon at risk, when Karl Marx isn't looking as stupid anymore and when Russia and Brazil have more cash than you do.... maybe 10% should of been the line in the sand.

    All of these bankers- their jobs are being saved it seems from Lehman. Who will save the job of the waiter or the boutique owner- the small businessman? They do nothing wrong and pay for all of this while the boxheads take their boxes from their office and set up in Singapore or Britain.

    Why did the Treasury do it? What is the real politics here? Who made the mark to market decision really? Who in the Gov was behind the decision to apply GAAP standards to GSEs in September 2008! The very time everything fell apart. We're not hearing much about that. Fund managers who were down a lot of course were clammering for explicit guarantees to calm the markets- but the markets have dived anyway- In hindsight one can ask whether September 2008 was the right time to provide such a guarantee, and extract such a steep price from preferred and common shareholders! What immediately followed was a shutdown in preferred stock markets and other sources of capital for now under-capitalized banks..... and from there it has only been a few short weeks of panic free fall to where we are now.

    What happens when the ban of short selling on certain banks expires? Could shorts be lured in before the Gov auction? The timing here is fascinating.

    So today with more volume on the low and more time spent there we might have had capitulation day... but does that matter even anymore? So we finally go up a thousand into the elections... it's going to happen most likely- but does anything change? We are at damn 10,000 again. Remember Maria dancing at 14,000 I do. Remember the Fast Money guys? What a joke.

    Today if the Gov was in there secretly buying this morning surely they will be there on the close.

    When will the Gov auction there first batch of bad debt? When will they establish a floor? is there a floor?

    Did the decision to let Lehman go under cause all of this or shock everyone into action? There certainly was no time to unwind bad bets because JP Morgan came knocking for collateral.
    THEY REALLY PUSHED THE ROCK OVER THE CLIFF, you don't here much about that! The savior Jamie Dimon pushed the rock. If the Gov can establish a base price by overpaying a bit for these CDO's of shaky debt- say 77 cents on the dollar, the banks balance sheets suddenly will appear a whole lot healthier. They won't need capital raises. Banks stks will go up and they will feel embolden to lend. If the Fed keeps cutting rates there will be great incentive to lend- almost a greed to lend- banks will be able to borrow cheap and lend out pretty high... Once one of the remaining big guys starts doing it, everyone else will fall into line. That's the hope anyway.

    When the first outside financing for one of our sagging banks turns positive, when some Sovereign wealth Fund makes a profit- that will indeed mark a real bottom.

    Today will be wild BOTH WAYS.... It would be healthy to close far and away at the HIGHS but who will do the investing? I'm scared. Can the retail investor summon the guts? I don't believe the Hedge Funds will. Everyone is just so worn out and tired.

    We have tried the drip by drip approach (wack-a-mole) putting out fires as they developed, then we have switched to a blanket over everything approach and along the way they had to draw the line somewhere... We did so with Lehman Bros. Has that caused all of this? Or just the the reckoning that we needed globally to end all of this?

    In two years will we be thankful for the boring old stock market of yesteryear where banks simply took deposits and made easy free reliable money off them without leveraging or competing with investment banks? Could we go back to stks going up 25cents or 50 cents or a dollar? I liked that way better.

    In two years will everything be better? Or will we just be emerging from a prolonged recession? Compared to the Depression #'s there is hope- According to BusinessWeek,
    in 1932 lower rated corporate bonds paid 5.6% MORE than high grade bonds... that is certainly not happening. Personal Income by 1933 had come down 25%! It's closer to 5% now.... True panic is not in the streets yet and all of this greasing of the system seems to me to be far ahead of Gov actions in the market in prior calamities. Output at US factories & mines fell by 54% between 1929 and 32. By comparison so far we are down 2%! A lot of this is in the mind so to speak. But when your account says what it does... it becomes real. Very real. When you can say well, nine more days like that and we are at zero... certainly the end must be in sight... The end of the free fall anyway...

    I kind of agree in the long run that someone had to go down and it couldn't be AIG. The fact that Goldman's ass was saved there and Paulson's connection there will all be analyzed for sure, but when you consider the global footprint of AIG, Goldman's ability to get out from under was probably secondary to everyone's thinking at the time... However, psychologically, the " biggest bankruptcy ever " has ruined the consumer it seems and ensured a painful few years for us all.

    All of this political confusion might be solved if we just switched the names around. If we called Wall Street Main Street and Main Street Wall Street. Right now life sucks on both.~ stoney
  2. well bro, I can't match the breadth or depth of your soulful soliloquiy, but I think there's quite a bit of that apocalyptic feeling around everywhere. I'll think good thoughts for you bro...keep your head on a swivel. At the end of it all are your family and friends. ( and hopefully some canned goods, land in the country, and seeds (wink wink). Peace
  3. Right back at ya 1Nibb. I just love my family so much more when I'm happily in the green.

    I found my first service to go along with my conspiracy thinking- MP Trader-
    Let's be aware that the e-SPZ hit a bear phase low at 963.00 this AM prior to the coordinated rate cut, which propelled the index to 1045. The pre-open swoon to 967.50 could be an intraday test of the low (so far successful), which makes me wonder if "the powers that be (PPT) will or already has defended the overnight e-SPZ low? How would it look if the markets implode after the global coordinated rate cut? If confidence in our governments and institutions is a growing problem, can "the authorities" afford not to defend 963?...

    I'm looking primarily at MOS today it's swinging between $32 & $34 with $34.75 being a break out. They have already reported earnings and are down 40%. Earnings weren't too bad. momentum Ag play favorite of hedgies sure looks to me like it wants to start going up... but will the market come through after the lunch hour? I think so... options are widening.... can I sum up the guts to take yet another stab at this money sucking market?

    The other day I bought healthcare play Perrrigo PRGO in a large block. I haven't looked at it since so don't tell me but that's another stk I really like here. APWR if I had the guts at $5 I certainly would.... MOSAIC seems like the play today... ~ stoney
  4. Well it's 12:45 and one would think that now we would rally. But isn't the real hope that we plunge? Sounds crazy but I don't know what I want anymore... I'd like the big rush up to happen into the close obviously so that we can be saved by the bell.

    I could see a big TED spread move down in the right direction tomorrow when the rate cuts settle in and we get some verbiage out about future cuts that could extend any rally. But you can't extend what won't start.

    I have MOS loaded in the dock but so far I ain't squeezed the trigger. ~ stoney
  5. 1:12 and I'm in. Long the Diamonds at down 200 or so that looks good as we are in fact starting to lift.

    Long MOS. ~ stoney
  6. It's 2:00 and we are still alive!

    It's 2:00 and Iceland still floats!

    This is important time when things could easily dive to lows... but lets not forget our potential friend today Uncle Sam will he help us along?

    fellas I'v never bought an exchange traded fund before and I'm looking at a 2 year on EWZ it's retraced everything. Brazil sits on a lot of cash a has rising middle class... Anybody like this play? It reversed up hard today.

    Solar's are driving up despite the fall in oil. That tells us two things. Oil is about to steady and whoever wins as President is going forward with solar.

    NDX 64 off low.

  7. Man, you are too depressed. You need to step away from the news for a bit. Trading does take a bit of negativity absorption during the course of a day, but you have to be able to release it.

    Realize that when everyone is screaming armageddon, it means there will be no armageddon. If a crash were to happen, it would be when no one is expecting it, usually after a huge rally. Not at the bottom of a massive hedge fund liquidation fueled sell off.

    There is opportunity everywhere. Especially in bad times. When everyone screams, "the sky is falling", there are opportunities of a lifetime to the ones who patiently watch and wait for the time to pounce.
  8. MOS has been great today folks now is when I do my usual F Up rather than take the near $4 move I will sell AND buy again on the briefest of retests for I finally found something that wants to move....

    The Brazillian ishares really looks tempting I'm hoping someone talks me out of it in the next hour.

    Lets throw a few more ideas out I don't have many.

    1> STLD absolutely smoked, down 40% management too quiet earnings coming.... but they do benefit from cheaper scrap...

    2> APWR Solar working only a matter of time for wind unless this is a comment on not in my backyard quality of wind turbines. Recently tanked when CFO left on a bad market day. Turns out he was holding two jobs without telling the company nothing to do with the numbers. Stk is $5 from $20. Chinese though.

    3> GB GreatBatch no one knows this company I think they are rather neat- battery outfit, another growth sector for the future I would think.

    4> In solar my usual buys ENER & CSIQ I'm just too scared to do it...

    5> probably a good time to put together a list of the pawn broker stocks and COINSTAR the change counting play.....

    6> Lastly Virgil's is such a good rootbear and the company REED is like $1. Surly someone will buy them. It has a pathetic market cap of $14 mil. If just half of ET's audience would pitch in ten bucks we could buy the company! ~stoney
  9. Trading does take a bit of negativity absorption during the course of a day, but you have to be able to release it. ????

    Rice I would say this underselling things quite a bit. Try day after day after day after day. I have a hedge fund letter I'm afraid to open and am completely at the mercy of a leased retail space to a big furniture company that should they go bankrupt in this mess I will be owing the board of an uptown building everything i don't have. At any moment i could get a letter from by my bank concerning my recent loan for a second home that I pulled off- a 10 years fixed then we rape you sort of set up with BankofA. They paid 80% of the place I find so dear now... The rest of my future what's left of it is tied up in a trust that won't mature until 2019. So I sit and watch ten years fly by backwards the only problem is that I keep getting older.

    Some of us are forced into buy and hold. Not every investor is closing the books flat each day. Ontop of all of that I've just screwed my trading account up royal through all of this. I know I'm not alone, plenty of folks are hurting in Iceland I know. ~stoney
  10. Look at MOS folks, did I bring you the trade of the day or not? From buying it down to $39.40 +$5.40 today !!!!

    And that Brazil ETF too I don't understand that one at all. Their currency is down, the Bovesta is down the ETF is up...

    S&P taking outy the HIGHS Weeeeeee.
    Those of you who followed along this thread are certainly doing well. All bets made down 200!!!!
    HOLD THOSE DIAMONDS FOLKS for TED SPREAD LOVE TOMORROW!!!!!! To the moon damnit, keep throwing money at her boys; like a deadbeat stripper this market is... all she wants to do is go down on you.... just keep throwing the cash at her! I need more names from you people. I started it off now lets come through with some real ideas.... ~stoney
    #10     Oct 8, 2008