Its probably time for a few people to introduce others to the distaff side of Abby Joe's views.
She is probably one of those people who thinks trading is like playing poker, too.
In reality, no one changes her (lol) mind as a consequence of an input that pops up in the mindst of what its nice to hear anyway.
I wanted to narrow the audience as much as possible.
So here we sit in a place that has never occurred before, except once. Then, at that time, a lot of changes were made and a lot of new things came into being.
Nation, as Colbert would say, its time for br'er rabbit to listen to the tar baby.
Lets start with where you sit.
Three things which won't let you give up you mortgage are:
poor health, marital troubles and losing your job. Neither will the fact that your home value has fallen below your mortgage value.
In California, and now other places being added to the list, 85% of home mortgages are non conforming.
So lets look at the primary lenders. Do you know what the word "fucked" means? The toilet roll of commercial paper and medium term loans evaporated. Primary lenders use secondary lenders and they, the secondary lenders, have 50% of their stuff in the form of frozen securitized instruments invented by quants in such bad shape (100% of it) that it cannot even be marked to market. Not being able to mark to market is a new and unimproved condition in the financial industry and it is not restricted to secondary instruments as we will find out when the regs kick in.
Primary lenders who have 85% of non conforming loans and no secondary market just aren't doing any business. there is no originating and selling going on in the secondary markets either.
Abby Jo needs to look over her shoulder and see where the empty desks are.
This all started in about 01JUN06 by my market records.
To reverse this we need a few things. Stop building homes. Drop the doubled present home inventory to 1/4 of what it is today. Oh drop prices of homes by around 25% of the peak that happened a while back. This drop in price didn't work however. Go further.
Housing>>>>>building materials>>>>>labor>>>>indirect and induced changes add up to about 7 times the primary functions.
When this happened once before, the executive branch proposed and the Congress approved the invention of life as we know it today. You all know the story, maybe. HUD, F and F, FHA, the Civilian Conservation Corps. In a mere 15 years and WWII helping out; only one generation took the pipe, as they said.
The financial industry really screwed this one up and we are now in a global economy. GS is working that turf. But foreign money is not gong to buy into this one as we have seen since about 3 months after 01JUN06. The US housing market, industry and secondary financing is capute. a 20% reset is required to make it work and it is running at 1% rest now.
You can skip fed rate going to 3.75. You can skip chapter 13 cram downs. You can forget RTC type funds (3, 6 and 9 mos). You can forget liquidity in the secondary markets. (All commission based stuff by the way; these people are long gone into making money somewhere else)
So how does it look for the executive branch inventing a new and improved way out of this. Bickering is not what made 1934 great. Work and sweat made it great.
Nation, we need to get ready to make money. Its not time to play poker.
Poker is not analogous to the markets. You can't bet to win on a losing hand ( A short trade so to speak). Folding is not a strategy for trading; never was. How do you get out of the long bias of playing poker once and for all?
Abby Jo and her buddies announced that they were all shook up about July and August for some reason or other. Swan poop.
From today on, we all get to play markets that are unfolding in a manner that is new. There is no fix coming into play for a while. Fanny and Freds and FHA guarantees are not going to handle it; only a new invention is.
The economy is cracked.
Since the markets are not the long biased poker game of the financial industries talking heads, how does one capture the orientation to make the money that is being put out there?
A bad market is not a down market. An up market is not a good market.
Obviously, a lot of people in a lot of sectors of the financial industry are fucked. lol. But after all a lot of the industry is a zero sum game.
We are headed for a time when the newbie population is going to disappear. Nation, this great election coming up is going to ascerbate the financial industry in a lot of ways.
A neutral bias is called for. Look at Maria on the 27th of FEB. Look at all of those talking heads.
Yesterday a feed was lost by some folks. It was "down"; I made a joke out of it elsewhere by presuming the guy was talking about a "down" market. I suggest turning the monitor upsidedown and switching buys and sells.
Thats what the current and unique situation (the only prior time was cured by inventions; this time quants invented first and now we have the problem which GS is runningaway from) represents. You are going to have to be able to turn your monitors upsidedown and lose the poker playing long bias orientation.
Why aren't there any good inventions on the horizon??? Securitization was too easy and a bad fix in the 80's.
What is coming up for people who recognize the counterintuitive nature of the markets is the greatest opportunity of a lifetime.
Question number 1!!!!!
Was February 27 the greatest day of your trading life?
Question number 2!!!!!!!
Did you trade the volatility in August that went from 30 to 40 to 50 (ES high/Low) on three consecutive days in August?
Question number 3!!!!!!
When reardon was upsidedown and Nitro was blowing out, how did you do on the 3 point range that was the am on 12DEC06? (No hedgie now reardon just stay in cash.)
Get to neutral bias ASAP. Make sure any edge you are using is neutral biased. Not short. And no longer just long. lol
