Thursday, January 22, 2009

Market mayhem

Market doesn't know which way its going day to day, its funny, I keep hearing from these guys who say we are in a "bottoming process" but really the only thing holding this market up from a MAJOR carnage down to below 5000 NOW is the HOPE that Obama and co will save it.

That's it, thats the only thing it has going for it. Otherwise it would already be down to 4000s.

Guitner should not be anything other than a garbage collector, anyone who lies that much has no ethics and supposedly thats what the new administration is about, or one of them. The guy is bad news. The idea that we need to confirm him because we're in a rush is the same total BS we were fed about the BS bailout. Please, stop the insanity and the lies already! ENOUGH IS ENOUGH! Everytime they want to put through their ridiculous agenda's, what do they say? WE MUST DO IT NOW! The world will fall apart if we don't do this NOW!

What total rubbish, its so disgusting, its blackmail, its worse then blackmail! Since when did we get so lazy as a nation that we would confirm a guy who CLEARLY is a lying tool? Since when did it become more important to put through agenda's and "look good" then it was to seek truth and justice? The guy is bad news, does anyone dispute that? Besides the fact that he's CLUELESS and been front and center in the middle of all this mess, but now its revealed the guy is ethically and morally corrupt and basically a tax cheating criminal.

It's unreal, if you or I did what he did we would be fired, or perhaps go to jail, but this guy goes it and you have people saying "we want to give the new President the tools he wants" and other total horsebleep! Man, it is just such an abuse of power, and of the system.

I got a comment here, which I appreciate, and which I posted, and which I must say I agree with much of. The new president is going to have to admit when he is wrong and he is dead wrong on this guy. This guy is bad news, very bad news, it would be much better to admit he was the wrong guy and move on then to somehow view it as a black eye on a new administration just because they made a bad choice. We all make bad choices, that's not a crime, the crime is in making a bad choice and not changing it when you have the ability to do so. I make lots of mistakes and lots of bad choices as a trader and in life, thats part of the whole deal, but the key to evolution and survival, or at least one of them, is the ability to recognize when you have made these mistakes and to take actions to correct them.

Tim Guitner is bad news, folks. Bad news usually spells bad choices and we can ill afford bad choices with the way things are. I think having a liar in that position is a VERY poor choice and shows very poor judgement on the part of our new president. Hopefully its not a warning sign, G*d help us if it is and its not being heeded.

Market I can't even discuss rationally other than to say once they announce their master plan we will probably see new lows and beyond, if not sooner. Buyer beware, you are nuts to buy this market for more than an intraday trade at this point, its a cancer and its spreading like wildfire. Bottoming process? Really? Is that what you call it when there's no way we can really rally very far?

Must be, cause thats what I see. I don't see any bottoming processes. We'll rally alright, on news and such, but we certainly are not going very far until there is something real and substantive that proves its safe to go back in the water. For now, choppy is the word and one day up, one day down is the state of mind!




mj said...

I totally agree Waxie. This guy is stain on American values and what we stand for. I have never been that successful finacially but I can always sleep at night because I always admit when I'm wrong and change it immediatley no matter what anyone else says. In fact I personally believe that it's the one human trait that makes us successful in life. I would hope that President Obama has this trait and is why I voted for him. Aside from that 8% on FAZ was nice today!! I know you'll RULE IT!!

In Debt We Trust said...

Waxie - you gotta talk about Europe.

The UK is on the brink of bankruptcy. So is 1/2 the EU. Monday and Tuesday was absolute bloodshed after the FSA shorting ban expired last Friday. Things have calmed down a bit but the pessimism overseas is palpable.

In their haste to bailout the banks, the European govts are blowing up their credit ratings.

The US (and arguably Japan) are the only countries that can pull off quantitative easing successfully...this was the message the bond and currency markets delivered to the Europeans for the past few weeks. Bernanke can pull it off (short-medium term only) b/c he can rely on the Chinese, Japanese, and Arabs to refinance our debt.

The same cannot be said for the Europeans. What economic or political stake does Beijing have in Ireland, Greece, Spain, etc?

When these countries default - and they will - watch the CDS trades blow up the banks and SKF hit $500.

mike w said...

Hey waxman,

I've been thinking and reading again... uh oh watch out!


the fed is basically telling the banks that they (the fed) will keep interest rates low for "as long as it takes." As the fed consciously (and relentlessly?) implements this policy, their goal is to allow banks to borrow cheaply short term and lend long term at a higher rate, resulting in black ink on the bottom line of the banks. Deliberately steepening the yield curve as a kind of short cut to investment.

Another goal of the accomodative fed policy is to draw mortgage rates down to 4% to energize and support the housing market resulting in a consumer base that is not out on the curb and feels rich enough to spend money.

The executive branch is pushing a program of public works; green energy infrastructure, roads and bridges and the like. This policy is their substitute for private demand.

The money for this can come from three places:
Tax increase, basically redistribution of wealth from the rich to the banks and the relevant contractors and those really in need of welfare. Ultimately this is recessionary (I think?).

Public sale of government bonds, which are very expensive now; the spread between treasuries and corporate bonds is at historically high levels. what happens to interest rates and the dollar when investors start to sell these treasuries that they're not that comfortable with anyway? Say the economy starts to look a little better and next to no return on your money doesn't look so great and there's this avalanche of gov't bond sales as money starts to look for a return, or just cause the dollar starts to look like a really crappy idea.

the third place the gov't is getting the money for all this spending is by passing treasuries to the federal reserve through a third party. ie to make it legal, a bank has to get a cut. omg.
Normally the fed has 1-2 billion on its balance sheet. Right now its 500 billion and surely to rise into the trillions (and this is mostly all this stuff that has never been on the fed balance sheet at all ever. it's this stuff that banks were slily carrying off their books to avoid massive capital requirements. Richard Nixon got the fed to accomodate a bunch of debt in the early seventies to influence the '70 congressional races and '72 congress. and pres. elections. It worked, for a short while the economy did well and so did the stock market and he got his elections. But then his price freezes phased out and inflation kicked in, the dollar tanked - among other things driving the price of energy way up and there was a siezed up economy concurrent with severe inflation.

Anyhow this is today's government's idea: spend, spend, spend our way out of this hole. Right now we are in a time of serious un-ease. ie the volatile stock market. And is the sky gonna fall tomorrow?

It's supposed to take two years for these liquidity enhancers to hit the economy and who knows where we are counting from, say last June. If that's the way it happens the economy should be patching out in the middle of 2010 cause this is a lot of liquidity. Then the blowback should start to feed in - from doing this at all, and especially from doing the same dumb butt sort of thing so many times in a row: inflation, recession, stagflation, more market bubbles, the devaluation of the dollar and its replacement as the international energy currency? $500 oil? I don't think the solar power grid will be up and running
by then for our new photovoltaic vehicles, but who knows.
The longer term effects are debatable, but the spending to support the banks and the housing market is a matter of explicitly stated public policy. The determination to continue the policy for as long as it takes is explicit too.

So whether it makes any sense or it's the best thing to do, it seems pretty assured that this is the way these guys are going to drive the boat.

Gotta figure out how and when to sell bonds short and what currency will do better than the dollar. What will the chinese do with their dollar link when the dollar tanks? What will be the new oil currency when the arabs get sick of taking it on the chin - The euro or an asian currency?

Once we have all the money, we can drive the boat, or get warren buffet to mow our lawn or maybe bill gates? rool ;-)

FACTOR R said...


what a market !! before I became a ninja member I was here every day in your blog and most of your opinion I have to say I agreed , but now I am very confuse and here my questions or my doubts when you post RIG put your comment was RIG was done because you did not see a oil up but even after the inventory report thaat show us that we are spend money in gas ! oil going up and fast banks all of then C,BAC,GS,MS....etc came back so strong but so strong that make me scare wow !! we all know that they are in bad shape but I guess it does not matter now because no matter how down we go MS and GS make a new high all day long(2 days) , GOOG , well those guys they probably cooking books I just cant believe that they went up strong in this environment well I guess I would appreciate a lot your comments what is change here ? what's is going it is MR. Obama hope effect ? market change directions ? I just get a confuse and after lost money we need to think again and then move on but before that my questions is what's is going on ? many tks

Mike said...

Hi Waxie,

I would appreciate your opinion on GLD . TA / charting indicates an imminent possible break out above $90 though not confirmed yet.

What do you think? is it a good speculative play here?


Best regards,


Nick said...

Did you hear the booyahead on GS Friday. It is breaking out. OUt of what... the floor.

FACTOR R said...

help,help,help Waxie , people getting fire like crazy from west cost to east cost CAT not just post a bad 4Q they have that letter saying so many bad things that for a moment I believed that whoever wrote that was a TF member cause was a realty check ! then because a deal PFE and WYETH and the last paragraph in CAT letter they sad that they have a hope that at the end of year thing are gonna be better , CNBC read that last words 10 times saying that really show us that everything gonna be all right ?so question is are people buying because of that ? are people have that much hope ? Jesus Waxie people still buying banks and they are making fun of us C just got a new jet but they will fire more people !!! Waxie I do not know about you but I believe we are going down and I believe will be tomorrow and not even if the FED cut interest it is not gonna save people from this mess am I wrong here ? and from now on I guess we do not be very worry about pay taxes am i right about that ? cause the new secretary dont ??

FACTOR R said...

oh crazy thing SEC after steve jobs funy he is very sick and does a great job in AAPL but someone still in his big apartament in NY after 50B !! life is not fair sometimes ...this is crazy !!