The pungent smell of death is in the air. All of a sudden, people are panicked about the prospects of Ford Motor Company [[F]] and General Motors Corporation [[GM]].
Shocker.
There are incoherent calls for a market crash and the banks are doing their part to support such theories.
Personally, I feel like a jackass getting long [[UYG]] . But, my National-Oilwell Varco, Inc. [[NOV]] and The Mosaic Company [[MOS]] positions, so far, have cushioned the wrongness of my banking mishap.
Aside from [[UYG]] , which I think is a must own here, I do like commodity stocks for a trade.
By the way, the dry bulk shipping rates hit another new low. On any turn, get long [[SEA]] for a little shipping fun.
Finally, I spit on people who are piling into bonds at these levels. I am very close to initiating a short position on treasuries, via [[TBT]] or [[PST]] . Yields are at historic lows. One would have to be a fucking asshole to think there is meaningful upside to bonds.
I say short them.
UPDATE: I bought 100,000 [[UYG]] @ $9.85.
UPDATE II:I bought 5,000 [[TBT]] @ $59.92
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time to re-enter SRS?
Are you buying more UYG?
I like this low volume test of yesterday’s lows… I just picked up some of your UYG in my swing account.
The downside, indeed, is limited.
-DT
Cake or death?
Sorry, we’re out of cake.
SKF is back to tearing faces off
I thought my call was mildly coherent.
better yet go with puts on TLT… stock up on the Jan 95s.
Welcome to death, it officially arrives today.
Limited to ZERO.
The global fears shall (in the short term) prevail into a Dow below 9,000 (only 50 pts away as I type) and possibly, nay – probably, into a one-day crash event where we finally receive that Viagra-laced pill of CAPITULATION!
Put a fork in this pig.
Fuck I’m so pissed that I got shaken out of SKF. That chart is doing exactly what I thought it would do.
We’re almost at the end (of this current downtrend, at least). I can buy CSCO at 14x earnings, are you shitting me? DELL at 6x operating cash flow… you have to be predicting a huge recession to be selling these names at these levels. Hopefully one more big washout will allow me to stock up my portfolio for the runup.
Another to good to be true rally. Slippage is part of risk management. It sucks. Keep trying anything and you will get it right sometime. Ask Jim Cramer.
CSCO at this valuation is a must buy. I don’t think people are going to stop using the internet anytime soon. Their cash flow is insane. I bought some yesterday at $19 and will prob buy more today.
Bought a little SKF with a tight stop, just to cushion the anvil of UYG crashing thru my aluminum foil hat. WTF was I thinking?
This whole selloff is about AIG. Their book of CDS insurance was so massive that if they were allowed to go down, they would take down both Morgan Stanley and Goldman. Both Morgan and Goldman have massive losses in their bond investments, backed up by CDS insurance underwritten by AIG. If AIG went under, the capital base of both Goldman and Morgan would be totally wiped out.
o Goldman begged Paulson to step in.
o Paulson did so without the full picture of the extent of CDS underwritten by AIG.
o The extent of the damage is just now coming to light for Paulson. It’s shocking. Behind the scenes, there is massive panic in Treasury and the Fed.
o The settlement of the Lehman CDS tomorrow is causing AIG to bump massive amounts of debt paper on the market. Hedge funds are front running these sales and causing a death spiral in debt valuations. And AIG’s need to get liquid is why Paulson is tight lipped as to the extent of the damage.
o We now run the real risk of the losses at AIG being so massive as to ensure that the US Treasury will be out of pocket $100 to $200 Billion, maybe more. And it could still go under and take a very large number of other financial firms with it.
o When the extent of this mess comes to light in the coming weeks, there will be no bottom to this market. 1987 will look like a cake walk.
The main underlying problem – lack of oversight of the CDS mkt.
We’re in real trouble.
SMH and NASDAQ says big move up by the close.
I agree wholeheartedly on TLT.
Is there a ultrashort bond etf? I should know this already!
Here comes snspper.
Make that SNAPPER.
Pharmpuck – Fantastic commentary, didn’t know what ailed MS today, thx
IShortYouNot,
If UYG does go to zero, nothing will matter anyway.
So, if you can handle a little “paper smoke” in your account for a couple of weeks while we (hopefully) carve out this bottom, you’ll (hopefully) be rewarded by the holidays.
-DT
Christmas gifts this year will be finger paintings from my 18 month old.
TBT is the ultrashort bond etf
TBT is 2x short bonds.
Here’s the real problem with what is happening with AIG. Paulson will not be able to save it and suffer a massive loss of taxpayer money. If he does this, he is injecting capital into both Goldman and Morgan Stanley via losses on AIG … and getting nothing in return. Paulson will be called a criminal and be thrown to the wolves if that were to happen. He’s going to be forced to allow AIG to go under, then pull off a rescue of both Morgan Stanley and Goldman with direct equity investments. The shareholders of both Goldman and Morgan Stanley will be wiped out.
The CDS exposure of AIG was simply far more massive than Paulson realized. And, the frontrunning of the hedge funds on AIG’s efforts to get liquid to pay Lehman’s CDS settlements tomorrow has done far too much damage to allow AIG to survive.
Buckle up, it’s going to get even more ugly.
Very nice strategic strike in UYG general Flizzy.
Boy, once you start digging your grave, you go all the way huh?
Perhaps you are the lonely type and would like to get buried with your trader servant as well?
Cheers babe…
TBT will double in a few years time
I’ve bought a few piker lotto plays with loose stops … SIRI
probably a looser, nickel stop
and two JJ retirement picks from Romanian goat villages
SWC & PAL
palladium & platinum have been given repeated homo-hammers of death, clown rapage & ape amusement .. they are played out on the downside, imo … not that SWC/PAL will work, but they’re worth a shot with a tight stop … of course there is overnight gap risk & tax-loss selling pressure
PharmPH@#!&@,
Not that I don’t doubt it, because in top of this LEH crap gets warehoused tomorrow – all $400 billion of it (-XXX%??) – but what’s your source for “Behind the scenes, there is massive panic in Treasury and the Fed.”
Minyanville Staff
10:16:00 AM
No positions in stocks mentioned.
Vibes from Minyan Tony “Snoop” Dwyer of FTN Midwest
There is evidence suggesting a sharp snapback rally should be here or near. But tread lightly until credit improves.
It is clear to me that the environment is ripe for some form of a snapback rally that could last a few days or weeks. Frankly, there is very little supporting fundamental evidence for a sustainable rally, so I would only recommend that very nimble traders attempt to participate. Credit remains very stressed despite some improvement associated with the recent global central banks and Treasury moves, and the overseas markets and economies are in serious fundamental trouble. That is made clear by the fact that LIBOR rates are unchanged today vs. yesterday despite the global coordinated rate cut. I continue to believe that no matter what kind of rally takes place – the lows will be retested as the difficult fundamental backdrop unfolds. When that retest of the current low takes place, if credit has seen significant and sustainable improvement, I will be much more positive on a longer-term basis.
There were a few points yesterday (10/08/08) where it clearly felt all was lost and the equity market was about to crash (even further) despite the unprecedented (and too small) coordinated global rate cut. We are expecting an equity market trading bounce over coming days/weeks with a particular emphasis on those areas that have seen the sharpest drop – anything associated with the decoupling global growth myth (Industrials, Energy, and Materials). Again, I expect the rally to be sharp but brief until there is a significant improvement in the credit markets, which means unless you absolutely feel the need to “catch the falling chainsaw,” you can wait for the very likely retest of the lows before becoming more aggressive buyers. I base this “snapback rally” view on:
* My trusty weekly stochastic indicator has moved closer to extreme oversold territory. While it does not appear as extreme as is historically needed, this is an intermediate-term indicator and even with meaningfully higher prices over the next week, it should statistically dip into even more oversold territory as you drop a higher range week and insert a lower range week. As a result, I now believe that anything lost from current levels should be made up quickly on a snapback rally – even if it proves temporary.
* According to my friends at Lowry’s, as of Tuesday’s close 10/07/08), less than 1% of the stocks they track (which includes the vast majority of the NYSE), were trading above their 10-day moving average. They have been tracking this since the 1930s and that reading represents a new all-time low.
* Yesterday (10/08/08) represented the 5th 1% drop in a row for the Dow Jones Industrial Average. According to our “stats dude” at http://www.sentimentrader.com, never before has the DJIA lost 1% or more for five straight sessions, totaling a loss of 15%. Disregarding that total loss, the only three times it dropped at least 1% for 5 straight days were 02/24/1898, 12/13/1920, and 04/29/1931. Talk about historically unique!
* 54% of the NYSE made a new 52-week low yesterday. Since 1960, that has only been bested by the 55% on 8/29/66 (led to sharp rally and then even sharper decline) and 58% on 05/26/70 (was the low, but was retested a month later).
PFE heading to an 8% yield…
The Beard is now rifling through his Collected Works to see how many stages of capitalism we are skipping as the running dogs embrace me at last.
One Beard to save them.
ONE BEARD TO RULE THEM ALL.
Women’s beach tennis on SUNSPORTS. Nice.
Juice,
fwiw, I saw a report last night on Bloomberg that suggested platinum was being sold and replaced w/gold in many funds.
Then Don Luskin came on and said gold goes to $2,000/oz. in 6 months. Don’t know the accuracy of Luskin’s past statements, but he’s part of the Kudlow screamfest, so I’m dubious.
Maybe Pharm is referring to the time Paulson got on one knee and begged Pelosi to pass the TARP.
Man, is it just me or did Paulson seem genuinely scared yesterday during his late afternoon comments. Things are de-leveraging and I don’t know if anyone can control it. Just watch and see where it ends.
Karl – one of my pig’s told me. He has his sources.
Think about it.
AIG does have to settle up big tomorrow. They have been selling bonds like mad men. Especially out of Europe. Hedge funds are working to phuck AIG royally by shorting the crap out of corporate debt into AIG’s selling. Pull up HIO, HIX, HYT for example and look at those charts. The NAV of these debt funds are down massively in the last week. It’s all AIG forced selling. Makes sense given we did get this announcement of a surprise $38 Billion additional loan from Paulson to AIG.
Frontrunning of AIG’s efforts to get liquid to pay Lehman CDS has done unanticipated (unanticipated only to the clueless Paulson), massive damage to AIGs financials. And, it’s now probably past the point of AIG having enough collateral to back the Treasury loans. So, Paulson either takes a loss … which represents an injection into Goldman and Morgan Stanley and getting nothing in return … or he throws up his hands and allows AIG to go under. Paulson’s only way out without taking a loss is to seize the collateral and allow the remaining company to go under. Goldman and Morgan are then phucked, but Paulson can go there and get equity for direct capital infusion. It’s the only way Paulson does not piss away taxpayer money and get nothing in return.
Don’t bet against my pig.
thx Anton
Platinum is at very long term support , if that means anything … it had come down from 2200 to under 1000 in no time … just a bounce play .. PAL is a pos in any case .. I won’t be there for long .. just an amusement play
Luskin is an asswipe of the highest order & a McCain economic advisor to boot .. he’ll be wrong on $2000 in 6 months but I do expect 1200 by spring
Juice,
Why you want to ruin your rep around here with that SWC? That’s JJ’s (RIP) dogpile.
How about those insurers today? Pure fun.
-DT
and 1200 is a 33% move , nothing to sneeze at .. that should put DGP 50-65% higher & I think the miners will move more than 50% on such a move .. energy costs are way down .. all their costs are down
DT – strictly an entertainment trade .. If I can make $50 on those trades, that will be $50 more than long lost to Romanian livestock, JJ. I’m already up a couple G’s but holding.
Insurers are death. They are screaming unforeseen catastophes to come. I wouldn’t touch BRK.A or B with your money. I’d stay out of insurers for years to come aside from the enticing dead cat/oversold bounces.
Seriously, who’s buying LM right now! Stop it! This is not the stock to pick a bottom on.
Juice,
Big move up in Aussie miners last night, to your point.
One positive sign, the Nasdaq and S&P are ‘decoupling’ from the Dow. The Dow is the weakest of the indices which is a good sign. On the way down the Dow was stronger than the Ns and S.
The funny thing…All those people trapped in Auction rate notes have a blessing in disguise! They didn’t get a chance to plow cash into this nightmare.
Thank Pharmeffer – very convincing analysis.
And now I’ve just shit my beard.
CNBC just now keying in on Lehman CDS settlement.
It’s time to buy the corporate debt pounded down by AIG forced selling for the Lehman CDS settlement tomorrow.
HIX, HIO, HYT … closed-end debt, selling 30% discount to NAV. Yielding 15 – 18%.
LM to zero.
I am selling my AAPL here, for a quick 5.
Fuck the iphone.
Sell everything Master Fly.
Try China no subprime and becoming less socialstic. it is way oversold like UYG. You can’t go wrong.
Wonder if this is the rally that never came?
If Douggie “Talking out of my Ass” Kass saying hedgies are shorting eMinis to cover their stank, if a rally does come does that mean we rip like no other on the spiders?
Looking at the volume of the minis today versus open interest is there a tell among it? Its just massive.
Anybody know who sold 3 million shares of GTI, yesterday I think?