“The Fly” was dutifully rewarded for sticking with his gut feeling today. Gains of more than 10% were bestowed upon Senor Tropicana, much to the chagrin of egregious bearshitters. From [[EEM]] , to The Mosaic Company [[MOS]] to [[ROM]] to [[DIG]] to [[M]] to National-Oilwell Varco, Inc. [[NOV]] , I banked fucking coin today.
The bears, hell, they were busy stepping in murder holes all day, as the sharp blade of Mother Market turned on them like an bedeviled sociopath, slashing their nuts off.
They received, without a doubt, the ominous “Black Flag” of annihilation.
Mark my words: this rally will stick and stick hard, spilling over into Asia tonight, then Europe tomorrow. My guess, this was the bottom, fuckfaces.
Enjoy it and be sure to thank “The Fly” for his steady hand, during these tumultuous times.
NOTE: “The Fly” wins again.
If you enjoy the content at iBankCoin, please follow us on Twitter
THE FLY IS GOD.
Devildog is furiously photoshopping a trading screen to look like he actually holds any of the positions he claims to have.
VIVA LA MARKET!!!
Thanks Fly
I just paid for a semester of tuition today. Only in America…..
Did you add any leverage Fly?
Oh yeah, and did you really just call the bottom?
Long Live The Fly!!
Glad to hear you are calling bottom. Now I know that holding my short positions was the right call.
The Fly will join the rest of the talking heads calling the bottom. All of who have been proven wrong. We have seen this move before
Dow 11,000 here we come!
Jazzercise Baby!
I just paid for a semester worth of tuition today. Only in America….God Bless the USSA
Ditto The Zombie 🙂
Talk about knifing up through technicals.
So much panic to buy stocks.
Awesome call on those EEM etf’s yesterday Fly!
Thanks Fly
I have come for the one known as “DevilDog”. Toe tag ready.
P.S. Thank you, Fly for your insights/entertainment
Hipp Hipp Huray for The Fly!!!
Greek,
How much did you lose in the last year, or did you put all your money in “at the bottom” 3 minutes til close yesterday?
The next 900 point move up will come from 2000 points lower. Doesn’t this 900 point rally look familiar. Oh wait it is familiar. Why it was only 2 weeks back that we rallied 900 points when we were *GASP* 500 points higher. *yIKES* !
Where is that little cockroach, DevilDog? Why is he not in here defending his retarded position?
What a PUNK, PUSSY, COWARD!
Down some 36% today.
Like the great trader I am I bought puts on the S&P right before we took off. Feels like I just got punched in the stomach and am trying to suck wind.
Earnings will suck, jobless claims will rise. The Fly will get swatted along with anyone else that calls this the bottom. Remember the market giveth and the market taketh away.
Bear market rallies are most always big jumps only to be beat down later. What data supports this rally?
Sorry, CAP, couldn’t hear you. Try again when you are done chewing.
God Save the Fly!
I was green but would have been 3X green if not for holding on to SKF and SDS. I may dump ’em on the first pullback and and DOOM this BS rally.
Shit, they ended paying me $84,338.99 for that fucking hotdog.
What a rush man.
Fly…props dude…we rocked today…nice call.
A note for DevilDog from Double-Ultra-Uber-King-Bear, Tim Knight.
http://slopeofhope.com/2008/10/28/meltup.htm
“October 28, 2008 – 12:59 PM
Melt-Up
It’s going to be a few hours before I do a post, so I’ll just say this:
The 2008 bear market is over.
We Slopers are going to make a fortune on the multi-month rally ahead of us, now that we’ve entered at these fantastic prices. My accounts are up huge today.
And the bear market that’s going to start well into 2009 is going to change all of our lives.
See ya later………..”
You bulltards are so funny. Stupid rally didn’t even make it to my AAPL SHORTS @ 103. Picked up a ton of RTH today that I’m extremely happy about since it will be at 64 in short order(excuse the pun). 85% Of my SDP holdings are green and I’ll by some more tomorrow if it drops to around 75. I will win the WAR bulltards…I’m the DEVILDOG. DEVILDOGs don’t scare and they don’t retreat. They kill. You’d do well to remember that. BTW, the intermediate bottom is much lower than S&P 840. BTW, my F430 will be for in cash as of 11/10/08.
Here’s some folly from the retarded DevilDog:
“What do closing prices count for? Are your really stupider than Donny? How about LONG margin calls to start the day tomorrow. CRASH ALERT! Gee, who knew? DEVILDOG that’s who? BTW, tomorrow will not be the bottom.” ~ DEVILDOG – October 27th, 2008 at 5:01 pm
“On a happier note..the VIX closed at the year’s high today. Gonna be a BEARIFIC day tomorrow!!! … Sweet dreams bulltards. … Off to drink rich man’s whiskey…AGAIN!” ~ DEVILDOG – October 27th, 2008 at 5:42 pm
I wonder if the FuckFace chose to run away, rather than face his daddy.
LOL @ Dangerfield.
thanks fly–eem a ballsy call.
CAP,
See if the currencies follow thru. If so, they continue to squeeze the short sponge a little more from here. MAybe 980 S&P. They can’t wring it out of course…no volume and no conviction buying.
But, they want to get the poor pikers waiting to get back the 40% they already lost to chase ‘THE DOW’ over 10K….this week.
AH is crazy!
UYG +.30
FXP -4.00
DUG & SRS up big, WTF?
DEVILDOG…your wifes 34D’s just got repossessed along with the Viper. So sorry.
El, I was up 20% coming into today thanks to Fly, Gio, RC, and Alpha. I had a few lucky trades on my own. I banked coin on SIL back in September on a freak one day rally.
Fly,you da man!For today. lol Still holding uyg nov mos jaso
T MOE;
Give the FLY a break. He put his balls in Hell Fire and came out a winner. The FLY is not the type to bottom call I think he is stuck in the moment.
Try betting against the Fly. See where it gets you.
and listening to Rev Shark helps immensely as well.
you’re mine CAP.
Look at the grinning greaseballs lined up behind Maria…bet they made less than this Mick in 24 hours. Off to the gym.
Of course the banks are hoarding money Maria you stupid bitch.
The de-levering is not over
Buy my product
The irony is that DevilDog IS the Fly…
No worries Mr 185% short on a 10+% day. I assume that means you just lost 20%+ in one day. This rally may not stop till SPX 1200. You will be wiped out long before then. I’ll be waiting … patiently 😉
This video is entirely appropriate right now. Check out DEVILDOG’s reaction!
http://www.youtube.com/watch?v=WfvIstgOugc
DEVILDOG father just signed papers putting him up for adoption today.ANY TAKERS?
Not to rain on the perma-bulls gigantic parade BUT the rally today is truly one for the history books.
The DJIA Top 11 Biggest % Gains of all time:
1. March 15, 1933 … 15.34%
2. Oct. 6, 1931 ….. 14.87%
3. Oct. 30, 1929 …. 12.34%
4. Sept. 21, 1932 … 11.36%
5. Oct. 13, 2008 …. 11.08% !!!!
6. Oct. 28, 2008 …. 10.88% !!!!
7. Oct. 21, 1987 …. 10.15%
8. Aug. 3, 1932 …. 9.52%
9. Feb. 11, 1932 …. 9.47%
10.Nov. 14, 1929 …. 9.36%
11.Dec. 18, 1931 …. 9.35%
Some pretty good company there.
Speaking of Rev Shaek, I’m due to go see what he’s saying these days. Let me guess, he’s saying “wait…wait and see…be careful…wait. Once the Dow is back to 12,000 or so, that should be the signal that it is safe to leg back into the market”
These guys that are always telling you to be careful always look like geniuses when the market craters, but they look like complete idiots when it rallies. There is nothing more annoying then some “expert” being introduced as having warned of the market collapse except fail to mention that they miss multi-thousand point rallies while waiting for said collapse.
You know who’s on the ball? Carter Worth. I couldn’t believe how negative he was several months ago yet he was right. And for the past week, he’s been saying that there is no more capitulation to come, “fuck you, we’re all in”.
Good info Scorcho. All bear market rallies
http://www.youtube.com/watch?v=tXaZmY52gHM
Back in Black
Carter Worth is a balla’. I mean the name alone is so stereotypical of a Wall Street pimp.
yeah that’s right no more capitulation. Everyone is very happy now that we a fifth day in the month of October that we actually end up. No more worries, everyone now has more money to spend. Now all the people will find jobs, no more people losing their homes, hell, the dollar is strong, the carry trade is ending and the banks are looking like they are coming together and the losses are over. Everyone should get all in here.
Devildog should at least man up and admit he blew it.
No matter how you spin it, today was not the day to be 245% short.
Only 5,000 points to go
T MOE –
Also, before today – 9 out of 10 of those rallies happened during the Great Depression, with the lone one being the ’87 crash.
A lot of people have been wondering which kind of crisis we are in/most resemble: the 1930’s variety or the relatively minor (comparatively speaking) 1987 crash.
I think today provides the answer.
Correction: 8 out of 10
I believe the Fly engineered this rally in preparation for the rollout of the PPT
That was the bottom
I think yesterday was a tough day for everybody. Fly’s going down with the ship talk made me laugh and buy more stocks. After the beet down of the last few weeks, it would have sucked to missed this rally. Thanks Fly.
I held onto my NOV and MOS and AUY and RIMM
This morning I bought HPQ and MU and UYG
I am heavily weighted in only Commodities and Tech, what should I buy to diversify? Something with a fat dividend, MO perhaps?
thanks el scorch,
How long did those gains last?
Tjis whar Rev. saying now:
We’re Starting to Build a Base
By Rev Shark
RealMoney.com Contributor
10/28/2008 4:24 PM EDT
Click here for more stories by Rev Shark Try Jim Cramer’s Action Alerts PLUS
CLICK HERE NOW
The bulls finally got things running, and when we didn’t pull back like we have done so often, the “I’ll never be able to buy again” panic buying kicked in. We went out at the highs on some huge percentage moves. Volume could have been higher, and Nasdaq breadth was a surprisingly sedate 2 to 1 advancers, but when you move this big, you can’t dismiss it too easily.
Technically, we finally have very good conditions for putting in a solid low that will support some further upside. We have a little double-bottom pattern, and now, with a little backing and filling, we could actually start to build a decent base.
We still have way too much volatility. This market is all about macro news and moves, and it is impossible to focus on individual stock-picking. The market has been moving pretty much as a single monolith, and all you have been able to do is daytrade the swings.
I’m hopeful that maybe we will now hold the lows and finally have the chance to try some position trading. The intraday volatility makes for some great intraday trading, but it’s not supportive of building individual positions.
Keep in mind that this is typical bear market action. You don’t get huge days like this in a bull market. That doesn’t mean we won’t have more upside — in fact, I think we will — but it is going to take a lot more work before we can declare a major change in market character.
Days like this can be frustrating, because if you have been defensively postured, you will underperform. That is the price we pay for outperforming all the way down, and you still have plenty of flexibility to make some moves.
Tomorrow we have the Fed interest rate decision, which should give us some more volatility, but at least for now the mood has shifted, and the bulls have an edge.
I’ll see you tomorrow.
Mushroomz
If you’re smart you’ll buy SDS.
good call Fly
I think this crash looks most like the crash of ’37. IBD had a chart a week or so ago about the similar politicial situation of that period. Additionally this is the second leg of a crash that started 6-7 yrs. ago. There was sharp and long rally after that crash. The bad news, well it all ends in a conflagration of the real variety.
The Volkswagen bottom: http://finance.google.com/finance?q=OTC:VLKAY
Why is everyone so excited? We are still down about 35% this month.
Excited that we are not down 45% this month. Fucker
Thanks for the great SHORTS today bulltards. I laughed all day long. I didn’t think it could get any funnier until the slope of hope dope and fly called the bottom on the same day. ROFL. My sword is waiting to impale all bulltards and win the WAR. See you tomorrow!
It is hard to go against history… Fall/Winter Rally… I think once the Nov 4 thing pans out, it is time pick a direction.
When was the last time we had 2 up days in a row? Down 600 tomorrow.
@ everyone doggin the bears.
Wouldnt it be funny if we tanked tomoro? hahahaha I think so!
Fly calls “the” bottom. LMAO!!
I think you are right: buy the DIP, sell the RIP.
WEC to join s&p 500. Not exactly a negative sign towards the utility sector
Anyone seen DevilDog? I’m here to repo his Viper to pay his margin call.
Not to take away from the glory that is Fly, but did I call this thing last night or what?
Sweet now MOS is only down 7 points from where you started going long.
Behold the Fly in all his glory. Curtsy before him all you gay small balled cretins.
Let’s take a poll. There are a lot of good traders on this site so who thinks that this is the “bottom”?
CAP nailed the bottom.
Note: I coming for you.
Fly Swat Says:
Sweet now MOS is only down 7 points from where you started going long.
Only idiots buy at one price. I bought all the way down.
I know he isn’t talking to me.
Fly, just like I SHORTED RTH all the way up today. Odd no?
The last time we had bollatility like this was 1931, a very good year for stocks. bwa ah ah!
DevilDog-
I’m going to give you some simple fucking advice, and you better start paying attention.
When you’re up more than 50% ytd in the worst bear market of our lifetime, you don’t need to bet the fucking bank, levering up 200%. Only a fucking idiot, or a rookie would do something that stupid.
Now … here’s what I want you to do:
1) Apologize to The Fly for being an AssHat.
2) Apologize to Donny for being an AssHat.
3) As this bullshit rally evaporates, start selling your position until you have at least 50% cash. There’s no need for you to hold, stupid, undue risk.
It’s all up to the Japanese whether we continue or not. If Fukio “Housewife” Fukura doesn’t send the Yen soaring by unwinding her carry trade and emerging markets stabilize, then Joe “Dickhead” Hedge Fund won’t have to liquidate. So get some sake and toast Fukio tonight.
Face it DEVILDOG…you are NOT the Fly…so fuck off
i never trust up-900 days.
Bulltards Suck. I guess you deserve your day of joy. You are like little babies, instantly gratified. At the next drop you will be shitting yourselves and looking around for your titty. The biggest baby of all is Mr. Fly. This Bear is going to shit all over you chilluns so run for cover, and double your supply of clean nappies. your going to need them.
Canuck Visionary, DevilDog…..
What if you are wrong?
DEVILDOG, I warned you to cover with 2 hours left in the market. I hope you were just bullshitting about increasing your short positions. You’ve made some great calls lately but tend to get disrepectful to other traders when you are wrong. If you are indeed 200%+ short, you are just another bear-tard.
BTW, another hint…the bulltard 4th quarter rally has been cancelled. Write it DOWN. Odd no?
Where is DevilDog’s blog? Anyone know?
Is it PPT day yet??
http://thedevildog.blogspot.com
LOL!
Fly’s head doesn’t “talk”, it fucking roars! You best listen.
Way to go.
I sold my Apple on Monday and rolled it into the DIG. I have no cash left…
lmfao DPeezy!!
that blog is amazing!
The bears, hell, they were busy stepping in murder holes all day, as the sharp blade of Mother Market turned on them like an bedeviled sociopath, slashing their nuts off
Some fine writin there, well done.
http://biz.yahoo.com/ap/081028/financial_meltdown.html
Yeah, just what the banks need… more pressure to give out bad loans that can’t be paid back…
governments either learn nothing from history, or they learn everything from history and they simply are trying to aid the federal reserve in global domination.
CLNE (Clean Energy) stock still couldn’t turn green today off over 5%…..
Dpeezy, +10 for that link
I’ll cover my SHORTS when the intermediate bottom is in. 10/10 wasn’t it and today wasn’t it. I don’t care about this day-to-day BULLSHIT except to pick off more SHORTS. DEVILDOG’s objective is to win the WAR. Anything less is for losers.
Write it DOWN.
BTW, another hint…Obama will win in a HISTORIC landslide. nyse bullshit assholes will dump their stocks and barricade themselves in their hampton mansions waiting for the angry mob to kill them. Odd no?
CAP are you ready?
^^^ this is textbook
Hey DEVILDOG, any luck with that screenprint of your account balances, without account numbers, of course?
Maria Bartiromo looks like a freaking raccoon.
Krudlow is such a dickwad. ‘nuf said.
Everyone is congratulating the Fly, what about me? 🙂
Loraina – If you’re the female in that picture I am always ready 🙂
Where’s the dog. He’s still yapping mad.
Just woke here as I went to bed at 4.3 in the morn when the dow was a miserly 230 points up.
And now I see this carnage.
CAP: Cristina is hot.
http://outdoors.webshots.com/photo/1492764571078178056OqfUcp
my short little legs can almost touch the bottom
my useless eyes can only see green on the dam screan
my wifes says I must buy some stupid moblie company..china
mobile. they make phones people actually carry with them
like lipstick. says almost all her friends have then.
okay I’ll buy the stock so she can this old man makes phones
really i only wanted to make money but such is fashion.
and old ladies
.
http://www.youtube.com/watch?v=3erEqfFxTlE
Best damn political ad I’ve ever seen. Funny as hell:
http://www.youtube.com/watch?v=Qq8Uc5BFogE&eurl
DEVILDOUCHE, enjoy your profit diminishmenting {word?} as we melt up to sp1200, assfacedick. your cock offing rambling will not be missed as you crawl, injured, one-legged, dickless into some hole, after being ‘napalmed’, never to be heard from again (unless under another pathetic moniker). you are a perfect inverse example of morons cocking off at the 2000 peak only to blow it away on the way down. unrecognized by you, YOU called this bottom. whether you be a 12 year old playing fuck fuck on his imac or the fatigue clinging lunatic you claim to be, you will be blown out and i, for one, look forward to your de-dicking. loser.
oh i forgot, WRITE IT DOWN, nimrod.
Cap
how was the blowjob you gave yourself?
Nikkei up another 7% in early Asian market trading. Looks like the rally continues on rate cut day (obviously). Sorry, DevilDog.
I hope we do pop a little in the morning. I have some more SHORTS I want to get.
Sorry wabisabi, you lose. Hey why not show just how ignorant you are and buy stocks at the open. Retard.
No wonder your name is small fry. You think small. Pitiful. No vision…just follow along with the stupid cows soon to be slaughtered. MOOOOOOOOOOOOOOOO! You idiots are really starting to bore me. I can’t believe how many there are on this site. Fly, you need to require IQ tests to filter out those below my 157 please. TIA.
Dog
Why do you get so aggressive with people here that think the market is going up? the market is going up or down irrespective of what the people here think.
And by the way, your dad ought to fire you as his trading adviser as you’ve shown shit all discipline in all this. The fucking cometary is full of people that got the direction right and still lost money because of shitty risk management skills.
If you were on my desk I would have fired you long ago as a result, even if you were winning. I did that several times by the way.
You’re what the trade calls a flip out story, Dog. You’ve flipped out.
j, anyone working on your desk probably has there pants around their ankles and is taking it up the Wazoo. In short[pun intended] you are an ASShat. Please do not speak.
I’ve got all the discipline in the world. That’s why I’m still SHORTING and my dad’s account is 100% cash waiting for me to cover when the time is appropriate. 11/5 – 11/10 is the time. BTW, you can’t fire me because I don’t work for losers with pea brains.
ban this DEVILDOG’s ip in the interest of intelligent exchange.
+1
Tired of wasting my time here and like I said I’m bored. I’ll be SHORTING as long as the bulltards want to BUY. The higher the better. I’ll be back sometime between 11/5 – 11/10 to hear all your crying. Till then I bid you AMF.
If fly had any rules here Canuck, he ought to ban fucking Canadians from this site.
————–
Dog, if you did work for me, I would have fired your friggen arse this evening. You tore up your thesis from last week and are now making up friggen excuses as to why you’re married to your position.
There was nothing wrong with your thesis from last Thursday. It seemed reasonably well thought out if a trifle silly sounding such as trying to predict the very day of the crash. But you did have some idea about risk management then, as you said you were going to cover your bets if the crash didn’t pan out. Remember Mr. 157 IQ?
And what have we ended up with now?
You’re position is bigger than ever and you’re now groping for other excuses for not covering. You’re fucking fired son. Get out of my office, pick up your things and the final salary cheque is in the mail.
Sorry DevilDouche, you have lost all credibility. Your trading today reeks of paper trading. A couple of days ago you were trading 100 share lots of AAPL. Today you’re trading 1000 share lots of RTH with 280% margin??? Who’s your broker? What broker allows 200%+ overnight margin? I think you are full of Hershey’s choclate. Prove me wrong.
Devil Dog, I actually agree with you to the extent that I think we are going much lower. But clearly it isn’t happening tomorrow, maybe not even this week. Just because your shorts might eventually pay out doesn’t mean it isn’t stupid to be re-upping every 10 cents and buying into a rally when you are overleveraged and the indicators say the rally is likely to continue short term. Wake up.
PS stop posting your phony buys. we can see the bids and your buys are BS.
Karen Tso is looking super hot tonight.
OK DEVILDOG…lets say you are correct in your bearish ways…why not go 250% short with Daddies money? Allow me to answer…
Because you are full of shit like a Christmas goose.
jeesh…i remember the days when cramer pumping AAPL for 10min would send it up 10 in the a/h. today it only caught about 40cents.
times must really be tough.
DD – please explain this:
“.. my dad’s account is 100% cash waiting for me to cover when the time is appropriate. 11/5 – 11/10 is the time.”
Are you saying that the election results are going to turn things around ?? Seems highly implausible to me.
No matter who wins. Both define mediocrity, at best.
All, let’s give Devil Doggie a hand for taking the relentless abuse he’s received since the close today. An impressive line up of i-netters join to ambush the Dog this pm. Hilarious comments mostly. Devil Puppy, way to take the severe thrashing. Aces.
No, Zombie. There’s no giving the Dog a hand. A finger is more like it :Middle finure raised upward. The guy is a lunatic.
Don’t ban DEVILDOG, he serves us well as a reminder that there are a select few 100% authentic dumbasses out there.
DEVILDOG, just another reminder of today, and more of what is to come tomorrow:
http://www.youtube.com/watch?v=RKQ3LXHKB34&feature=related
If this rally sticks for a bit there will be no need to ban the Dog from Hell. He will disappear into the ether as he always does only to reappear when things are bad to claim how righ he’s been all along.
Actually, if past history serves as any indicator it is usually a good sign for the bulls when people start calling for Devil to be banned.
Do not ban this “Devildog” — he’s a verteran (of iBC), and he’s a mixer.
Indeed.
of course there shouldn’t be a ban on the dog. He serves as a good reminder what a flip out story looks like in trading. In fact for that reason alone he is an indispensable member of the site. Newbies can go to him and use him as a resource to learn how to avoid flip outs.
However the case to ban Canadians is unmistakably right. there shouldn’t be any Canadian skulking around this site.
J,
I hope they get South Park in Oz.
They made a show that ends with you being crowned
BIGGEST DOUCHE IN THE UNIVERSE.
Congrats…
Douche.
Hey Karl
Good idea on taking the name of the evil bastard who wrote the manual on how to murder in industrial size. If you get sick of it you could change to Adolph at some stage.
sick fuck.
Somebody’s milkshake is being drunk.
J,
You ignorant fucking wombat raper, swallow the last of that vegemite-smeared kangaroo cock you’re so obviously addicted to and get to a library at once.
Love and fellowship,
Karl “industrial axe maniac” Marx
Sorry Karl, only have sex with women.
I’ll repeat.
Taking up the the name of the author of the ” how to manual” for an ideology that killed 200 million people last century is not funny, but actually quite offensive to any reasonable person. It would be like someone taking up the name of Adolph Hitler as a moniker and thinking its funny.
It isn’t funny and no amount of bluster will change the fact that you are an offensive fool.
And yes, Karl Marx a was fat ugly evil little bastard.
Library.
Karl “the new hotness” Marx
Just another day in paradise.
Anyways back the market.
Asia had a decent day and rumor of BOJ holding up the dollar yen through strongish bids was around all day. The nikkei traded like a champ.
This seems to be carrying over into Europe and may actually mean we have another decent day in the US to prove the FLY’s prediction of an Epic rally to be right. In amongst all this someone needs to pick up the body parts rudely left behind by Moe and his faithful companion the Dog. Frankly I don’t have the stomach to be picking up arms, legs and torsos strewn all over the ground.
Hey j. How’s it hangin’?
Me? I just got a margin call.
The Goldman Sachs Headfake
Asia managed to bounce last night, with Hong Kong leading the charge — higher by 14%. Europe followed, and that helped U.S. stock index futures. Thus, the market opened about 4% higher and spiked up to better than 5% in the first half hour, when the rally was undercut by the consumer confidence survey, which was 38, an all-time low.
The fact that Goldman Sachs and Morgan Stanley were trading so poorly (down 10% and 20% respectively in the early going) also helped take the wind out of the early rally’s sails.
I suspect that today’s consumer-confidence reading is a function of folks’ fears, both about the financial system and the economy — though I’m not so sure that they don’t have their fears backwards at this point. By that I mean (and this is pure guesswork on my part), I hear a lot of chatter about the next problem in the financial food chain, as it were, yet I myself am much more concerned about jobs and the economy (as well as the future funding crisis), than I am about this phase of the financial crisis.
Next on Deck
I could be wrong, of course. But I think that this phase of the financial turmoil is probably in about the eighth inning — in that the government is not going to let any major financial entity, or almost any large entity, go bust at this juncture (i.e., no one will lose access to their green paper). I think that while folks are worried about financial institutions, their real concern ought to be about the economy.
For several years now, as regular readers know, I have discussed my view regarding how weak the economic environment would be in my “next time down” scenario — when real estate, stocks, and the economy all fed on each other to the downside. Of course, I first proposed that idea before I saw the ultimate insanity that was our real estate bubble/credit bubble.
To review the point that I made in Chapter 7 of my book and in many Raps: In the last expansion, economic growth was almost entirely about real estate. GDP growth, ex mortgage-equity extraction, was almost nonexistent. In addition, when you consider that 30-40% of all jobs were real-estate oriented, it’s clear how hollow the economy was liable to be going forward. Given the capital destruction and the credit contraction that is now under way, I have a hard time seeing where the new jobs will come from to handle all the layoffs that are going to take place. Given how wild consumer spending has been, as people finally retrench aggressively there are lots of marginal businesses that are not going to make it, on top of all the carnage in anything related to real estate or finance.
Building a Highway to Job Creation
Parenthetically, I hope that as the government goes about spreading taxpayer money everywhere, it does something intelligent like spending money to rebuild our infrastructure (roads, bridges, ports, etc.); and perhaps undertaking the task of stimulating alternative energy resources, while building plenty of nuclear power plants, so we can create jobs and eliminate our dependence on foreigners like OPEC.
I’m sure there will be other ideas about how best to help create jobs, but one “solution” that’s no solution at all is trying to put a floor under house prices. The problem is, house prices in America are still too high, relative to average income, and the average income is going down. So, trying to “stabilize” house prices is (a) impossible and (b) a complete waste of money.
Grounds for the Dollar to Be Defenestrated
The third crisis that I see coming, which is more theoretical but I suspect cannot be avoided: At some point, the U.S. will not be allowed to finance all of its debts in dollars. We have proposed better than $1 trillion worth of bailouts, and there will be more money thrown at the economy, I’m sure. I cannot see why foreigners will fund a couple trillion dollars in spending in our currency, given our recent behavior. Thus, somewhere down the road, we’ll have to borrow in foreign currencies, which will cause another set of problems. Hopefully, we’ll be far enough along in the first two crises so that this won’t be a catastrophe, should it come to pass.
To sum up in baseball metaphors: I believe the credit crisis is probably in the eighth inning. The economic crisis is still taking batting practice. As far as the funding crisis goes, I don’t think folks have realized that game has even been scheduled. That’s my view of where we are, and a bit of a road map as to where we could possibly be headed.
Obviously, there are many things that I can’t know, and there will certainly be surprises in the dark matter of the world’s financial institutions. Thus, any market rally that’s able to be pulled off is almost certain to be transitory. And, while it may be tradable (depending on the setup and the skills of individuals), it will not be something you can buy and forget about.
Back to the action, the market gave up most of its early gains and was only modestly ahead late in the morning as Goldman Sachs was trading on its worst levels. However, as that was occurring, many speculative stocks were green (particularly technology). To me, it seemed rather odd to think that Goldman Sachs’ trading was indicating another systemic financial crisis while at the same time so many tech stocks were being sought after. It almost appeared as though the trading in Goldman Sachs (which managed to close flat on the day) was setting up for a headfake to the downside.
And, that largely turned out to be the case when, in the afternoon, stocks exploded higher (aided by a collapsing yen — more about that below) and the major averages were up about 10.5%, though the Nasdaq trailed a bit. Beneath the surface, virtually everything was green, though financials were not as strong as many other areas. Whether this rally is just another one-day wonder or the start of something bigger, we’ll just have to see.
Away from stocks, once again we saw a good deal of motion. Japan’s threats from Sunday night were apparently taken to heart (especially later in the day), as the yen was pummeled vs. the dollar by roughly 5%. The dollar itself was weak as well. Whether we’re finally seeing the end of the dollar’s screamer of a rally, I’m not certain, but I think so (though I am still looking for clues). For what it’s worth, the euro/yen cross saw an enormous reversal that probably has folks quite relieved. Fixed income was fairly weak. Oil was flattish, and irrelevant.
Precious metals were quite a bit higher overnight, with gold trading up to about $755 from its Monday close in New York at $730. Gold spent most of today higher and by day’s end was trading near $750-ish. (Last night I saw a story about physical gold shortages in Dubai, so that phenomenon continues.) As for silver, it was a bit lower today, though friends of mine in the precious metals trading community seem to think that silver might potentially be setting up for an even better rally than gold. I haven’t added to my metals positions yet, though I have added to my gold-stock positions in the last couple days.
Housekeeping
For those who wish to watch, I’ll be on Fast Money tomorrow and Thursday, discussing ideas regarding the Fed and also job creation. In addition, I’ll be on Fox Business News’ election night coverage. I rarely know my TV appearances in advance, but this time I do. Lastly, there will be no Rap on Friday, as I’m going to take the trip I postponed last Friday.
Positions in stocks mentioned: None.
Ass Napkin–
Jim Cramer Blog
Feeling Regret Over Doing the Homework
By Jim Cramer
RealMoney.com Columnist
10/29/2008 6:32 AM EDT
URL: http://www.thestreet.com/p/rmoney/jimcramerblog/10444760.html
If you want to participate in the rally that went on Tuesday I have a very specific suggestion: Don’t do any homework. And don’t listen to any conference calls. And don’t pay any attention to the Q&As about credit and where it is going to come from and how quickly stretched balance sheets became because of all of the huge buybacks that were going on for so long.
Make sure you only follow Apple (AAPL) , Google (GOOG) and Verizon (VZ) as they had great quarters. Don’t listen to Occidental (OXY) , where the always honest CFO Steve Chazen lays it all out, lays out how so many oil and gas operators will be broken by this decline and the lack of financing available. Don’t listen to Whirlpool (WHR) where you would learn that the worst recession in appliances in three decades is now morphing into the worst ever, and GE (GE) is still trying to sell its appliance division.
Don’t listen to the cliff-like falloff in orders from an industrial outfit like Crane (CR) . Certainly don’t contemplate what Caterpillar’s (CAT) order book looks like or Masco’s for that matter.
If I didn’t do any homework here is what I would be thinking: 1. We are down way too much and things aren’t that bad; 2. The governments everywhere are coming to the rescue; 3. Things have to be better three to six months from now, so buy ’em.
That’s really the rationale for buying, and I respect it. It is compelling given that we are so oversold and people are so negative.
But then when I take the stuff home and listen to the calls, I get the sense that we, we the stock market people, are totally irrelevant and completely wrong about most things involving business right now. There’s the right perspective of OXY’s Chazen, which is that if you owe money you could be dead. Just dead. If you don’t, you just might make it. Way too sobering for this guy.
When I see the futures down this morning I regret that I did the homework. I want to buy ’em!
Now with the homework, it’s the other side of the equation that I want to play in.
Drats!
It’s so easy to be a bull when the market’s spirits kick up like that.
Maybe the secret is to do no homework? It never worked before, but maybe this time it is real different because everyone tells me that after Tuesday’s rally it is a whole new ballgame.
If only that were the case.
At the time of publication, Cramer was long General Electric.
Thanks Juice.
Wow was I up early this morning at about 3:30 out here on the West coast.
J- I knew that I was going to get it from all of the bulltards on this board, with yesterday’s head fake.
I am still holding on to my bear stance. The economic picture looks dreadful. Job numbers are what I will be watching. I will stay bearish until we see some improvement, and until we see a day or two long rally with some huge volume. I don’t see either in the near term. I have made some huge gains being on the bear side this year and I intend to add to them.
So is J calling the bottom along with the Mr. Fly?
J — what do you make of this huge dollar move against the yen?
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Buy UDN
T Moe — just don’t be a dope. No one here is calling for “all systems go,” or any resumption of a bull.
But be sensible — we were down some 30+% under the 200 day MA — historically bizarre and — important — elastic numbers. To bet that there won’t be at least temporary, but definitely violent snap backs at these levels is insanity.
Same goes to you DevilDog.
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Hi Jake:
Look all I was hearing today from bank trader friends is that the BOJ has been quietly but solidly sitting on the bid for dollars against yen.
They are not doing it loudly, like they used to. It’s been a very quiet affair simply working through a couple of banks and buying up the dollar yen.
The other rumor out is that the Japs will lower the o/n rate by 25 basis points on Friday’s meet, which means to me the US treasury must have had a few words to them.
Oh really,
Didn’t I hear the Fly and his sheeple call the bottom
Hi Moe:
look we’re pricing in catastrophe and if it isn’t so the market has to discount back.
my position are high end commodity plays which I will be running for a few years in the retirement account. Aussie wise, I’m looking for BHP eventually at A$80 bucks. I know it’s looks silly now but the money being thrown at this problem is I think going to cause another bubble which will be in commodities. The good thing for the big players is the credit squeeze has basically kaboshed all the junior mining stocks as they won’t get project financing for years.
McJobs are not gonna turn this mess around, neither will a 50 basis point cut, nor 75 even. 59-61 senate seats to the Dems, plus Obama, both looking likely. Capital will flee to where it’s best treated, which will likely not be the US for a while. The deflation/inflation whipsaw is gonna hurt us all, badly.
I like the BHP play.
There are some names I like long here. But very few. I’m a stock picker at heart but I’ll play the index on the bear side
On the bright side:
http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php