I am living on borrowed time, being long the banks and Lehman Brothers Holdings Inc. [[LEH]] . The circumstances were perfect for manipulation.
It all happened about 1 week ago….
I was becoming increasingly agitated by the lack of death and mayhem, within the banks and general indices. Then it dawned on me, like it must have dawned on Thomas Edison or that dumb Ford guy: do the opposite.
I’m sure Edison thought about making retarded candle lamps; but, instead, he decided to harness the power of Zeus to light brokerage firms across the nation.
Same with Ford. I bet he had plans to launch a new horse wagon or something; but, he eventually opted for a maniacal machine, operated by Saudi crude.
Evidentially, Ford was “addicted” to crude. Some might say he is the “Godfather of global warming,” “Mr. Diesel” himself. I just think he is the founder of a retarded car company.
Anyway, so it dawned on me, like it made sense for Genghis Khan to invade his neighbors on horseback, to get long the banks.
At first, I did it with the utmost amount of gingerly buys. Then, I got loud and boisterous. Finally, I ripped off my hedges, as if I was the Incredible Hulk, readying to punch a hole through a passing Ford SUV.
At the end of the day, I got lucky. God willing, I’ll get lucky again, just like Edison.
For now, I am addicted to oil, via [[DIG]] , [[IEO]] , Ultra Petroleum Corp. [[UPL]] and Arena Resources, Inc. [[ARD]] . Hurricane Gustav is a coming and he’s going to knock your power lines offline, effectively sending you back to the candle age.
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The Fly is made from win and awesome.
Sold TIE People are talking about it. I’ll take my money and run.
Cajun, I’m reminded of the old saying, you can lead a horse to water but you cannot make him drink. I think a lot of people just don’t want to see.
Bennet Sedacca
10:59:51 AM
No positions in stocks mentioned.
The Credit Market…
…Is not buying it. Plain and simple.
Spreads haven’t moved one iota. The Dead Men Walking are trading where they were a week ago. Like Dead Men.
So unless the credit market buys it, I won’t.
Also, I have to laugh. When ‘analysts’ ‘maintain an outperform rating’ and cut the price target from a 45 to 20. From 80 earlier.
That, sports fans, is NOT analysis. It is sickening.
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Global growth outlook
Anirvan Banerji
8/28/08 11:21 AM EDT
In his comment about the export-driven boost to the latest Q2 GDP revisions, Tony downplays concerns about future exports due to the recent dollar rally. I agree dollar strength is not a major issue, but global growth is falling apart, especially in Europe. At ECRI, we regularly monitor 19 economies including the G7 countries plus China and India. Our long leading indexes do not include stock prices because their lead times are too short for our purpose. Looking beyond the market consensus, they are painting a truly dire picture that is likely to overwhelm any help lower commodity prices can possibly provide for the global economy. And by the way, growth in our U.S. Weekly Leading Index, which fell last year to its worst reading since the 2001 recession, has now dropped to a 28-year low, the worst since the 1980 recession. Now that, not GDP, is forward looking data.
Position: none
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Observations
Helene Meisler
8/28/08 12:03 PM EDT
First, so much for the Index put/call ratio signalling a down day! Seems it’s more about oil than anything else, yet again! I thought this would be the case next week, not this week!
But I was thinking about Jim’s call on housing and went back and noted that if we consider housing a bubble and the housing stocks a bubble. One comparison we might make is in terms of time.
Nasdaq topped out in March of 2000 and bottomed three years later in March 2003. The Homies topped out in summer 2005 and this is summer 2008. Also three years.
Position: none
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And Mr. Ford sired some offspring who can’t run a damn football team let alone a car company.
Victory #2 will be oh so sweet.
Fly, can I borrow some of your meds please. Fuck me.
SKF at $119 has been good to me in the past.
Going long SKF
A must read for some perspective regarding the financials
http://www.minyanville.com/articles/BKX-topix-goat-financials-greeks-tragedy/index/a/18721
Financials Poised for Late Summer Rally?
Kevin Depew Aug 28, 2008 12:45 pm
But beware the bleating goat…
“It’s not often that you will hear a goat bleating for no apparent reason, and if you do, it most often signals that something is wrong. Act immediately!”
I took those 2 sentences directly from GoatWorld.com, and if you trade financial stocks, they’re stone-carved keepers. There are certain resources I always keep on hand. I can’t disclose them for competitive purposes, but you can bet, for reasons that will soon become clearer, Goat World.com is one of them.
The song of the goat. Most Americans have never felt it, and make no mistake: It’s not so much a sound as a feeling – the stomach-twisting churn of the bleating goat. So naturally, they have no idea what to do when it arrives. These people do not trade financial stocks, however, and so they’re on their own. I cannot help them.
The Ancient Greeks knew, and feared, the song of the goat. And they had the good sense to capitalize on that knowledge and fear by creating an entire industry around it, one that would make Hollywood’s vilest cretins and debauchers scream in horror and moral outrage. I’m talking about Dionysian satyrs, half-man, half-goat mutants, engaged in frenzied orgiastic rituals, the very foundation of which the Greeks turned into theatrical spectacles they could sell tickets to; tragôidiâ, tragedy; translated literally, the song of the goat.
For traders, the tragic spectacle du jour is in the financials. Year-to-date, the KBW Bank Index (BKX) has plunged 30% – a train wreck. But the important thing to understand about trains is this: Despite being bound by rails and lateral immobility, they’re an important mode of transportation for hoboes.
Since July 15, the BKX is up nearly 30%. In the business, they call that kind of move a hobo’s road stake, just enticing enough to keep you out of the bone orchard, but not enough to elevate you back to the main drag.
As for the BKX train, after a 30% gain, what’s the next stop? For answers let’s go back and take a look at the TOPIX Japan Banks Index from the early 1990s, a time when Japan was dealing with their own banking and credit tragedy.
From 1989 to 1991, after forming a peak that was nearly identical to the recent BKX peak, the TOPIX Banks Index fell from a high of 1477 down to 554 on a closing basis, a 38.2% retracement of the entire bull market move. What happened after that retracement level was reached? The TOPIX Banks Index proceeded to rally nearly 80% over the course of the next 14 months.
By July 15 this year, the BKX had plunged to 48.47 on a closing basis, virtually the same retracement the TOPIX saw. A similar rally over the next 14 months would take us to the low 80s on the BKX. Sure, but what about September?
I asked my friend, Minyanville contributor Jason Goepfert of Sentimentrader.com, what September typically feels like for the BKX. “It’s been pretty mixed to slightly negative,” he warned. “Using the BKX Index since ’94, it’s been up during Sept. 7 out of 14 times, but shows an average return of -0.8%. Its maximum intra-month gain has averaged 4.2% while the maximum intra-month loss has averaged -5.4%.”
Clearly, there’s a trade here. But there is more to this story, and we have much to learn much from the Ancient Greeks in this instance; namely, how to capitalize on economic doom and tragedy.
After that 80% gain, with the TOPIX back at 962, over the course of the next 10 years that index proceeded to fully collapse, eventually falling as low as 124. Now that’s a financial tragedy.
The Greeks were experts at dealing with this kind of thing, and people paid good money to watch as oracular prophets made weird, dire predictions that usually came true. Looking back at the ancients from our economic perch today, this enterprise of staging truth-telling performances in exchange for money seems almost quaint.
If I had any measure of good judgment, I would stop right now. Being “right” about economic doom is the quickest way to lose all of your friends and create more enemies than you can shake a stick at. It’s a bit like telling a man his wife is cheating on him… with his son. If you are lucky, you will merely be hated; unlucky, and you will be stoned to death by someone who will then scratch his own eyes out. But I have never been accused of having a good judgment.
A decline in the BKX of the magnitude the TOPIX saw over 10 years would see that index eventually fall to 10 or 11. Of course, at that point, such a decline would be the least of our worries. More likely, the bottom will form around the mid 20s… With many, many trades in between.
it’s not about crude, it’s about the products.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aH3uWKHJ22Pg&refer=home
The Fly is God
Who’s game for WW3?
http://www.dailymail.co.uk/news/worldnews/article-1050064/Russia-warns-US-naval-build-lead-war-accuses-America-shipping-arms-Georgia.html
http://www.russiatoday.com/news/news/29626
http://www.thisislondon.co.uk/news/article-23545668-details/Military+help+for+Georgia+is+a+%27declaration+of+war%27%2C+says+Moscow+in+extraordinary+warning+to+the+West/article.do#readerComments
http://www.timesonline.co.uk/tol/news/world/europe/article4622422.ece
http://www.independent.co.uk/news/world/europe/the-west-pledges-its-support-for-ukraine–up-to-a-point-910491.html
Grabbed Nov Puts in MBI and ABK 🙁
I’d be careful interpretting the spreads of a few illiquid bank preferreds as representative of “the credit market”. These indicies suggest an increased appetite for risk, consistent with higher equities.
CMBX spreads are tighter this week:
http://www.markit.com/information/products/category/indices/cmbx/history_graphs.html
Same with leveraged loans:
http://www.markit.com/information/products/category/indices/lcdx/analytics.html
So what, are you saying the trick is be a goat fucker?
Stevie “It’s Just the Macrobiotic Diet, I Swear” Jobs gets “prematurely obitted” by Bloomberg today.
_
As the general public’s day-trading/dot-com boom of the late 90s did away with the need for a stockbroker’s input, will the crash of all these financial firms do the same for the blowhard analysts in the media?