What The F And Where The H Are We?

stonedinvestor · Jun 27, 2007

Well I didn't say I was #1 in the world. Just telling it like it is. If that's blowing myself up so be it. Do your reading and get back to me. Then we can toss out a few names together for the public. No sense keeping secrets. Peace. SI

michaelscott · Jun 27, 2007

Lets now let SiSePuede make a few calls versus sitting in the peanut gallery throwing tomatoes at us all. If SisePuede thinks he is so good, then he can make some calls for us all to learn and profit off of. I hit the "view messages" under his name, but I havent seen any calls out of the 1000+ messages he has racked up. Hmmmm

stock_trad3r · Jun 27, 2007

Quote from stonedinvestor:

Dear Michael-

Indeed the market does move in broad cycles but preening them into 18 year packages is dangerous game. They are cycles within cycles and times when you can make great money even with the broad averages lagging.

Where are we now? Well that's for talking heads to debate-- what is happening now? That is for me and you.

The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.

"Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and Southeast Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived", said the bank.

The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.

"Behind each set of concerns lurks the common factor of highly accommodating financial conditions. Tail events affecting the global economy might at some point have much higher costs than is commonly supposed," it said.

The BIS said China may have repeated the disastrous errors made by Japan in the 1980s when Tokyo let rip with excess liquidity.

"The Chinese economy seems to be demonstrating very similar, disquieting symptoms," it said, citing ballooning credit, an asset boom, and "massive investments" in heavy industry.

Some 40pc of China's state-owned enterprises are loss-making, exposing the banking system to likely stress in a downturn.

It said China's growth was "unstable, unbalance, uncoordinated and unsustainable", borrowing a line from Chinese premier Wen Jiabao

In a thinly-veiled rebuke to the US Federal Reserve, the BIS said central banks were starting to doubt the wisdom of letting asset bubbles build up on the assumption that they could safely be "cleaned up" afterwards - which was more or less the strategy pursued by former Fed chief Alan Greenspan after the dotcom bust.

It said this approach had failed in the US in 1930 and in Japan in 1991 because excess debt and investment build up in the boom years had suffocating effects.

While cutting interest rates in such a crisis may help, it has the effect of transferring wealth from creditors to debtors and "sowing the seeds for more serious problems further ahead."

The bank said it was far from clear whether the US would be able to shrug off the consequences of its latest imbalances, citing a current account deficit running at 6.5pc of GDP, a rise in US external liabilities by over $4 trillion from 2001 to 2005, and an unprecedented drop in the savings rate. "The dollar clearly remains vulnerable to a sudden loss of private sector confidence," it said.

The BIS said last year's record issuance of $470bn in collateralized debt obligations (CDO), and a further $524bn in "synthetic" CDOs had effectively opened the lending taps even further. "Mortgage credit has become more available and on easier terms to borrowers almost everywhere. Only in recent months has the downside become more apparent," it said.

CDO's are bond-like packages of mortgages and other forms of debt. The BIS said banks transfer the exposure to buyers of the securities, giving them little incentive to assess risk or carry out due diligence.

Mergers and takeovers reached $4.1 trillion worldwide last year.

Leveraged buy-outs touched $753bn, with an average debt/cash flow ratio hitting a record 5.4.

"Sooner or later the credit cycle will turn and default rates will begin to rise," said the bank.

"The levels of leverage employed in private equity transactions have raised questions about their longer-term sustainability. The strategy depends on the availability of cheap funding," it said.

That may not last much longer.

>> Wow what a sobering read, now these fat pansy bankers they are to blame why should this roil me or you? It shouldn't I think these damn hedge funds can go under and their stupid greedy ass brokerages can lose half their value- who cares? Look at Bear Sterns it's a mother fucking 120 dollar stock! If it goes to $60 or $65 it will only be at normalized levels of a couple years ago. I bought Goldman Sacks at $90 I know how ridiculous these prices are- to stick around and wait for the stick across the face... well that's just asking for it.

Consider these weird CDO's - Well anything that returns 40 consecutive months of 1 plus % returns should catch your attention, then when leverage is added and derivatives OBVIOUSLY used> the Hedge Fund in question was called
" Enhanced " for gods sake these banks knew just what they were getting into. Sure it feels like Mexico all over again or the Asian meltdown but it is not it's a small section of the overall debt market; it's rich bankers and their greed and they will have to deal with it. It's a ponzi scheme now for them> off load, off load, spread risk, spread risk-- until just some small entity gets burned. The talking heads on TV would like to pass this fear onto you and me it's not going to happen, especially not in earnings season.

If rates make it harder to borrow and lenders tighten their credit to only credit worthy folks sure a little bitty bitty growth comes out of the economy but as an input goes better credit worthiness so it's a wash- I'd rather have fewer better capitalized buyouts, than every brand name we know scooped up loaded with debt and offered back to us. Blackstone are a bunch of quantified idiots they bought into Sam Zells real estate empire just as it crumbled and now they are going public just at a time for heightened scrutiny of BOTH buyouts and the super rich: it's a timing fiasco. And now an IPO that's broken it's collar!

I agree Michael that this year has had the feeling all along of a " massive setback " I won't call it a crash but of a big 20% correction... no doubt..but we will have to accelerate more for that to happen- think hockey stick not humpty hump we have to rocket up and be up 15% or more for the year before we can really take a massive nosedive which will leave us limping into the new year happy to be up 5% to 7% about where we are now.

Upside before downsides, cycles within cycles, that's the beauty, the art, of this thing we call investing. ~ stoney
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Congratulations you win the elite trader 'rambling post of the year' award!

Maybe you shoudl try to actually make money rather than write paragraphs of bearish gibberish.

Landis82 · Jun 27, 2007

Quote from michaelscott:

http://www.elitetrader.com/vb/attachment.php?s=&postid=1511511

This is the chart you dont want to see...
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Oh, so now you are a TECHNICIAN???
You are a clown.

paysense · Jun 27, 2007

...now now, stoney speaks with substance and is rightly frustrated.

Any stock investor knows that understanding market trends is very key since most stocks go by way of it.

Best of luck to the daytrader's projects, but we can all feel your pain. It is currently a schizo market about to implode. The first part of that statement is true - the second is opinion...but soon enough we will all know.Ga

stonedinvestor · Jun 27, 2007

Dear Michael Thank You Thank You Thank You for saying that. There is the crack of thunder just as i said that. Intense. I want so to explain to people that it's not so easy when you are willing to say these things before they happen!

There's a risk folks, of looking like an idiot. ... Gnarles Barkley is just cranking in my house now. We're turning this bastard around folks! down 60 up 60 who loves ya big daddy!

I want to just explode FOLKS, I feel like cocaine is cursing through my veins it's this heat I just power walked 40 blocks I'm closing my business folks its weird. Yes I failed again! But did I? I don't know, the friends we made, my tax loss carry forward, was it all in vein...
2 more days and I don't pay a rent out of pocket again! it's liberating. More money for the market>> let's run hard now summer bedimmed. it's been different this time all the way through why stop now? I want that VISTA PATCH DELIVERED NOW FOLKS!

Give Cramer credit he sticks his neck out and indeed looks like a fool over and over again. Then again there's Michael and me and Topdown and Nikoh and $COSTAVERAGE and many others on Elite Trader who do the same >we stick OUR necks out too & it's scary a lot of smart people are watching & to be made a fool of in Cyberspace is just as bad if not worse than in real life-- your moniker can be mocked from country to country. I know these threads are watched by big wigs in hedge funds and by many an action desks assistant to the head trader, this is where ideas come from- an near perfect amalgamation of opposites and extremes, of hopes and dreams, fear and reality and a bucket full of shorts>>> this tasty stocktail we call Elite Trader.

Let me end with some big news The VIX has moved up above 17 at the close yesterday showing a large amount of fear creeping into the markets. At the same time, there is outside support for the market in terms of Liquidity inflows coming from the Fed? and Foreign sources. My floor sources tell me ironically as all our money is going over there smart European money starting coming into our market yesterday! This is what I've been telling you all This RUSH TO INVEST OVER THERE IS A MISTAKE here is where the action will be> catch up action. Think how many quarters over quarters we turned in the big earnings to have the market go nowhere, constrained by this damn war and housing and our own ability to foster bubble after bubble. It was noticeable yesterday afternoon when the VIX made a run up higher and liquidity inflows came in at the same time. The result was that yesterday's S&P drop on an equivalent VIX move was less than half of what it should have been. ~ stoney

madmax98 · Jun 27, 2007

Quote from patoo:

No, michael is wrong. He gotten into some bad drugs and needs to lighten up. He is on a permanent downer.

There are plenty of guys that think the year 2000 was the good ole days...not me...anyway

When we get to the bottom of your double bottomless pit, we will be very bullish again. So............

STFU, MICHAEL!

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thank you

madmax98 · Jun 27, 2007

Quote from michaelscott:

When it comes to the action of price, I am all business. There is no emotion involved, no political views, no drugs and no women.

When looking at the big picture, the market has moved up continually in a staircase formation since it first started trading over 100 years ago. It will move up in 15-20 year intervals and then there follows a consolidation stage of another 15-20 years.

If the market were to suddenly break above its all time high and move to the 2200 level, then that would be a historical first. As we have learned with price in the past, trends seem to keep repeating themselves.

In the 70s, I watched my father go through this same thing with the market. The market would move up and there was a universal good feeling in the air and then the market would retreat where all hell would break loose. This is the process of price consolidation.

Now if the market moves down from here to the 1200 level, I would not say its a bad thing. Instead, you can buy the same stocks you are buying now at reduced pricings.

You have to be honest with yourself and make a determination where the market is and where it isnt. The bull market ended in 2000 and now we are merely consolidating. The price will retreat from here and some of you will go through the same emotions that my father went through in the 70s.

Now money can be made in a consolidating market. Indeed, there were stock brokers in the 70s who drove around in Ferraris. However, you just have to know how to play it. I wouldd say right now to wait on the sidelines with your cash and be ready to buy into the market when the dip occurs. Those who bought into the market days after the 1987 crash were richly rewarded. Those who got into the market in 2003 (rather then in 2000) were richly rewarded. Wait, watch and see.
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Michael, please enough with the 15-20 year bs because most of people here don't give a flying fu/k about what happens in a 20 year period, any true trader doesn't give a shit where the market is going. all we do is make speculations one day at a time and react, not predict so AGAIN STFU.

madmax98 · Jun 27, 2007

Quote from stock_trad3r:

Congratulations you win the elite trader 'rambling post of the year' award!

Maybe you shoudl try to actually make money rather than write paragraphs of bearish gibberish.
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Now i have stock-shiter and michaelscotch on my "DUMBASSES" list

stonedinvestor · Jun 27, 2007

Wow just getting the tape back from the hedge fund what a day. Russell up 2 when I gave you the call finished up 12 that's a whole lot of difference... that's why I get big love today.

Common folks, if heads of hedge funds aren't to proud to say it you can too, give credit where credit is due... every other thread was doom and gloom today. Stoney made you $ today.