The Credit Crisis Financial Stocks Short Journal

Quote from ralph00:


As for the Volcker quote, it means nothing. The guy has no power in Washington. Also, his quote was not a call to remain at 0-.25% FF, it was for no big increases - a huge difference if you're speculating in the eurodollar or ff market.
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The guy is a big hawk, they just dont flat out say it like this but you can bet that the fact he doenst say 'extended period' is a bad idea or that 0% is too low, speaks volumes about his views
 
Effective Fed Funds 0.17% for friday, just released. I have no interest in purchasing ZQ without more info on whats the ceiling. I'm betting its around 0.20% on average but I'm not certain
 
There are talks of Janet Yellen taking over the Fed vice-chairman role, I believe she is one of the big contenders
-For one, she is a big dove, like wheelbarrel style dove
-For two, she is a woman, so the White House can come out and say she is the first female Fed vice-chair(I believe) and they get to be in the frontepage of the NYTimes and get some help in the polls. Kinda like the best director win last night, libs seem to love this
 
Stock up 15 out of last 19 sessions - about 8-9% total. Impressive move. Good thing Norris (and Abby Cohen) picks now to inform the us that things are back to normal! :p

The rest of this month is crucial - either we're back to 90s anything goes mode or the investing world has learned something from the creation and bursting of two epic bubbles.
 
I again notice that the 99.00 options are off 20% from their highs even though the underlying is just down a few ticks. This is a HUGE move compared to what is going on in the underlying. I wonder if this has something to do w/the small rise in EFF?
 
Quote from ralph00:

Obviously, if a cycle of rate hikes is upon us, then eurodollars are about to enter a bear market (they will start going way down long before the Fed hikes). As for once the hikes actually start, who knows, I suppose the contracts a year or more out could rally sharply at that point, ... or not.

Stocks are in mid-90s mode. Any news is good news. Right now, positive economic news (which makes a cycle of rate hikes more likely) is causing stocks to be bought. Negative economic news is causing stocks to be sold for about 10 minutes, whereupon they are then bought furiously because it means the Fed stays easy.

The same crew of voices who were bullish at the very top of two epic bubbles, and remained bullish through their collapse, are back again. Who could have thought we could go through the last 10 years, and these clowns would not only survive but continue to have a great deal of credibility w/the press and public.

Saw this article in the NYT over the weekend by Floyd Norris. If there is any justice in the universe, its the kind of article that gets written pretty close to market tops. He's quoting Abby Cohen for chrissakes. How in the fuck does this chick continue to have a job? Its like the last decade never happened.

http://www.nytimes.com/2010/03/06/business/economy/06charts.html

As for the Volcker quote, it means nothing. The guy has no power in Washington. Also, his quote was not a call to remain at 0-.25% FF, it was for no big increases - a huge difference if you're speculating in the eurodollar or ff market.
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Yeah, the stock market is acting like a classic bull market - climbing a wall of worry, dips on each bit of bad news then rebound back to the highs within a few weeks. Sentiment is hardly rampantly bullish, even if it's not as sceptical as earlier this year.

For it to end I'd expect to see classic top signals - hot IPOs being rushed to market (Facebook IPO would be a great potential sell signal), junky stocks in fad sectors doubling or tripling in a few days, market leaders of the last year going into parabolic mode as they become "must own" stocks, and mainstream media running bullish front pages about the stock market. We haven't seen that yet, so buy the dips seems to still be the best approach for now.
 
Quote from Ghost of Cutten:

Yeah, the stock market is acting like a classic bull market - climbing a wall of worry, dips on each bit of bad news then rebound back to the highs within a few weeks. Sentiment is hardly rampantly bullish, even if it's not as sceptical as earlier this year.

For it to end I'd expect to see classic top signals - hot IPOs being rushed to market (Facebook IPO would be a great potential sell signal), junky stocks in fad sectors doubling or tripling in a few days, market leaders of the last year going into parabolic mode as they become "must own" stocks, and mainstream media running bullish front pages about the stock market. We haven't seen that yet, so buy the dips seems to still be the best approach for now.
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I'd be careful of interpreting a Facebook IPO as a top sign. Remember the moonshot Netscape IPO? ... it occurred in 1995. It marked the start, not the end of the great bubble.
 
The forces of the 90s have the upper hand now, but I am a big believer in people/entities "getting what's coming to them" and I am of the firm belief that there still remains a great price to be paid for the excesses of the past 15 years. This isn't over yet.
 
The goverment seems to want to restrict short selling in stocks they have a stake on(C, FNM, FRE, AIG), they soared today
 
Quote from ralph00:


I am of the firm belief that there still remains a great price to be paid for the excesses of the past 15 years. This isn't over yet.
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I agree. I find it hard to believe that after the excesses prior to 2007, that everything was neatly resolved by a 2 year downturn that ended in March 2009.

Interesting to note that while the S&P 500 made new multi-month highs in late January (and strong again in late February to early March), that EUR, GBP and gold/USD finally lost their correlation with equities to varying degrees and have been declining since early December.

This is well reflected in the charts of gold/EUR and gold/GBP.
 
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