Tuesday, September 30, 2008
Technical Difficulties
Hi guys. I have having downloading issues with the videos. So i am having a friend of mine coming over this weekend to help. So please be patient. I am gonna have tons of stuff coming once i (hopefully) these technical issues resolved.
Thanks!
Thanks!
Monday, September 29, 2008
THE WORST PART
is i am afraid that we have not quite seen the capitulation you'd like to see. The selling felt a little organized and i am afraid we might expect one more real nasty drop very soon. I mean, just think about if the shorting ban was NOT in effect???? We could have seen the DOW drop probably double what it dropped today.
Friday, September 26, 2008
Tuesday, September 23, 2008
Ron Paul's Take: Please Note: I am Not Advocating Any Politician On This Blog: Interesting Read However
Ron Paul: This Bailout Won't Be the Last
Luke Mullins, The Home Front, U.S. News & World Report
I recently chatted with Rep. Ron Paul (R-Texas) about the gigantic financial bailout that the government is preparing to undertake.
Some excerpts from the interview:
What's your take on this huge financial bailout?
"It's more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country."
But don't we need to get these toxic assets off banks' balance sheets?
"Sure, they need to be removed. Somebody needs to suffer the consequences [but] not the taxpayer. Everybody knows that they have to be removed. They are priced too high. The assets don't have real value-some have zero and some have 10 cents on the dollar.
The people who had been making profits for all these years and dealing in all of this debt creation and derivatives-that now is becoming unwound-are claiming that it would be so painful if somebody went bankrupt and therefore we have to put so much burden on the taxpayer and on the dollar because the alternative is worse. But quite frankly, if they destroy the dollar and the dollar system, then they have a much bigger problem that they are going to have to deal with and it would be the collapse of the whole international monetary system-which is conceivable."
So instead of having taxpayers buy the bad debt, the market should take care of it by itself?
"Sure, prices need to go down. Bad debt needs to be eliminated. The taxpayer ought to be protected. Taxes ought to be lowered...We are following the same routine that we did in the Depression, and that is artificially try to keep prices up. People were starving in the Depression and the only thing they did was try to keep wages artificially high and keep food prices high. We are doing the same thing now-we are trying to keep housing prices high. Low prices for houses mean poor people could buy a house. This is the most important part of a free market economy and that is free market pricing. Without free market pricing, the market can't work. And this is in a way a major effort to price fix."
So you think the government should not have bailed out an y companies during this crisis?
"That would have been the best thing. It would have been painful, but housing prices would have come down sharper and faster, and it would have been over by now. But this whole idea of price fixing-that's what they are doing-has been trying to keep housing prices up and trying to stimulate home building. Well, if you have 100 percent more homes than the market really wants, you can't keep prices up and you can't stimulate home building. If the prices go down, then people will go out and buy homes again. So they should allow the liquidation of debt.
Before the Depression, [the government] generally allowed these kinds of problems to unwind. They were very severe. They would last six months or a year-a lot of liquidation of debt would be wiped off the books. And then it would go back to work again. What we've been doing now-especially since 1971-is preventing the real liquidation of the malinvestment and the excess of debt . . . If this process continues, we're going to own General Motors and Ford, then we will have to own the airlines. We are socializing our country without even a vote by the Congress. It's a horrible situation."
Will this bailout stabilize the crisis?
"I personally don't think so. It might be temporary, but no, there is much more involved. I mean, we are talking about trying to unwind trillions of dollars of derivatives . . . You have to get rid of all that stuff."
Will this bailout be the last?
"No, no. This won't be the last one. There will be something else later on. But that doesn't mean you might not have a few months of a reprieve. But it will continue."
Will we have to bail out the auto makers?
"Oh I think so. We are not going to let them fail. Our policy is such that everybody gets bailed out. It's like a drug addict, they've got to take their fix. It's too tough getting off these drugs. And the drug here is easy credit.
Luke Mullins, The Home Front, U.S. News & World Report
I recently chatted with Rep. Ron Paul (R-Texas) about the gigantic financial bailout that the government is preparing to undertake.
Some excerpts from the interview:
What's your take on this huge financial bailout?
"It's more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country."
But don't we need to get these toxic assets off banks' balance sheets?
"Sure, they need to be removed. Somebody needs to suffer the consequences [but] not the taxpayer. Everybody knows that they have to be removed. They are priced too high. The assets don't have real value-some have zero and some have 10 cents on the dollar.
The people who had been making profits for all these years and dealing in all of this debt creation and derivatives-that now is becoming unwound-are claiming that it would be so painful if somebody went bankrupt and therefore we have to put so much burden on the taxpayer and on the dollar because the alternative is worse. But quite frankly, if they destroy the dollar and the dollar system, then they have a much bigger problem that they are going to have to deal with and it would be the collapse of the whole international monetary system-which is conceivable."
So instead of having taxpayers buy the bad debt, the market should take care of it by itself?
"Sure, prices need to go down. Bad debt needs to be eliminated. The taxpayer ought to be protected. Taxes ought to be lowered...We are following the same routine that we did in the Depression, and that is artificially try to keep prices up. People were starving in the Depression and the only thing they did was try to keep wages artificially high and keep food prices high. We are doing the same thing now-we are trying to keep housing prices high. Low prices for houses mean poor people could buy a house. This is the most important part of a free market economy and that is free market pricing. Without free market pricing, the market can't work. And this is in a way a major effort to price fix."
So you think the government should not have bailed out an y companies during this crisis?
"That would have been the best thing. It would have been painful, but housing prices would have come down sharper and faster, and it would have been over by now. But this whole idea of price fixing-that's what they are doing-has been trying to keep housing prices up and trying to stimulate home building. Well, if you have 100 percent more homes than the market really wants, you can't keep prices up and you can't stimulate home building. If the prices go down, then people will go out and buy homes again. So they should allow the liquidation of debt.
Before the Depression, [the government] generally allowed these kinds of problems to unwind. They were very severe. They would last six months or a year-a lot of liquidation of debt would be wiped off the books. And then it would go back to work again. What we've been doing now-especially since 1971-is preventing the real liquidation of the malinvestment and the excess of debt . . . If this process continues, we're going to own General Motors and Ford, then we will have to own the airlines. We are socializing our country without even a vote by the Congress. It's a horrible situation."
Will this bailout stabilize the crisis?
"I personally don't think so. It might be temporary, but no, there is much more involved. I mean, we are talking about trying to unwind trillions of dollars of derivatives . . . You have to get rid of all that stuff."
Will this bailout be the last?
"No, no. This won't be the last one. There will be something else later on. But that doesn't mean you might not have a few months of a reprieve. But it will continue."
Will we have to bail out the auto makers?
"Oh I think so. We are not going to let them fail. Our policy is such that everybody gets bailed out. It's like a drug addict, they've got to take their fix. It's too tough getting off these drugs. And the drug here is easy credit.
VIX Watch
BAck to VIX watch: this time the developments taking place here are setting up
for even more interesting times. IF VIX starts to get 'comfortable' in the
30-40s then we need to expect tremendous volatility and a retest of recent
lows have to be expected. Spikes to the 50s aren't out of the question at this juncture.
Monday, September 22, 2008
Sunday, September 21, 2008
Bottom Likey In:Buying Weakness
Rules To New Game:
1. NO Over nite holds. NONE!
2. Day trading only. Close all positions by day's end.
3. No Swing trading either.
let's make some money....
Friday, September 19, 2008
Thursday, September 18, 2008
Wednesday, September 17, 2008
Tuesday, September 16, 2008
A Man Worthy Of A Shout Out and A Cigar
Fellow readers, do yourself a favor and check out my dear pal UPSIDETRADER. A man who has been around awhile and understand the trading game.
He has been spot on with those financials and is a MAN ON FIRE!
He has been spot on with those financials and is a MAN ON FIRE!
Monday, September 15, 2008
Pulling An All Nighter With All This Breaking News
just like in my college years. Truly very fascinating times and this is just incredible. Every day i learn more and more about what i don't know. The complexity of this debacle makes me think what's around the corner??????????????? So much that we do not know, can unfold and accelerate so fast that even sleep is not an option.
Sunday, September 14, 2008
The Day the Brokers Died...
An email i got from a friend: not exactly sure where he got it:
These firms survived the Great Depression, World War II, numerous
recessions and oil shocks. They survived Black Monday, LTCM, the
Russian Ruble Crisis, the bursting of the Tech & Internet bubble,
and 911.
But in the end, they couldn't survive Alan Greenspan.
Greenspan should go down in history as literally, a historic weapon
of mass economic destruction.
He was both the chief architect, and enabler of this entire crisis,
and he should be crucified.... figuratively, if not literally. And his
name should live forever in infamy.
Bear Stearns taken under.
Fannie & Freddie bailed out.
Lehman Brothers bankrupt.
Merrill Lynch shotgun married to Bank of America.
Morgan Stanley & Goldman Sachs being told to find a partner -- now.
AIG begging the Fed for help.
The Fed's entire balance sheet now at risk.
Global markets selling off.
The US Banking system looking into the abyss.
And the global derivatives market now looking like a multi-trillion dollar game
of pick up stix - being played in the dark.
Second only to Greenspan in guilt, are the executives of these firms that
sucked billions of dollars out of the system via obscene salaries, bonuses,
and stock options...while using unprecedented, and reckless levels of
leveraged risk.
At what point does the American taxpayer say -- enough?
And where will he find justice?
Why aren't Jimmy Cayne, and Dick Fuld sitting next to Dennis Kozlowski,
and Jeff Skilling in prison?
And why shouldn't Alan Greenspan be indicted as a War Criminal for unleashing
Weapons of Mass Economic destruction upon the American people?
-- how many now homeless?
-- how many now bankrupt?
-- how many now jobless?
-- how many now pensionless?
-- how many now penniless?
Concerning Greenspan... I'd agree that he's too old for jail.
I think the people of Italy had the right idea with Mussolini ....
Let him swing from a street lamp for a day, or two outside Wall & Main,
and then give the Maestro his just dues via a ticker tape parade by, of and
for the people, while being pulled through the streets of New York at
the end of a rope.
Do that... and maybe, just maybe... these greedy bastards will get the
message for another 40 years.
These firms survived the Great Depression, World War II, numerous
recessions and oil shocks. They survived Black Monday, LTCM, the
Russian Ruble Crisis, the bursting of the Tech & Internet bubble,
and 911.
But in the end, they couldn't survive Alan Greenspan.
Greenspan should go down in history as literally, a historic weapon
of mass economic destruction.
He was both the chief architect, and enabler of this entire crisis,
and he should be crucified.... figuratively, if not literally. And his
name should live forever in infamy.
Bear Stearns taken under.
Fannie & Freddie bailed out.
Lehman Brothers bankrupt.
Merrill Lynch shotgun married to Bank of America.
Morgan Stanley & Goldman Sachs being told to find a partner -- now.
AIG begging the Fed for help.
The Fed's entire balance sheet now at risk.
Global markets selling off.
The US Banking system looking into the abyss.
And the global derivatives market now looking like a multi-trillion dollar game
of pick up stix - being played in the dark.
Second only to Greenspan in guilt, are the executives of these firms that
sucked billions of dollars out of the system via obscene salaries, bonuses,
and stock options...while using unprecedented, and reckless levels of
leveraged risk.
At what point does the American taxpayer say -- enough?
And where will he find justice?
Why aren't Jimmy Cayne, and Dick Fuld sitting next to Dennis Kozlowski,
and Jeff Skilling in prison?
And why shouldn't Alan Greenspan be indicted as a War Criminal for unleashing
Weapons of Mass Economic destruction upon the American people?
-- how many now homeless?
-- how many now bankrupt?
-- how many now jobless?
-- how many now pensionless?
-- how many now penniless?
Concerning Greenspan... I'd agree that he's too old for jail.
I think the people of Italy had the right idea with Mussolini ....
Let him swing from a street lamp for a day, or two outside Wall & Main,
and then give the Maestro his just dues via a ticker tape parade by, of and
for the people, while being pulled through the streets of New York at
the end of a rope.
Do that... and maybe, just maybe... these greedy bastards will get the
message for another 40 years.
Thursday, September 11, 2008
Mini Capitulation This Morning: Felt Like It Anyway
Covered my shorts this morning and back to cash and i believe we could head higher in the days to come.
Wednesday, September 10, 2008
Tuesday, September 9, 2008
Monday, September 8, 2008
Saturday, September 6, 2008
DO NOT SHORT FINANCIALS!!!
That trade is over for now. Short financials has been a blessing for many traders this year, me included but this trade is over. The low hanging fruits have already been picked. The charts are speaking to me now. Every piece of bad news has already been factored into this group and they are ready to move on(UP). That doesn't mean that the overall market has bottomed by any means, just the financials and just for right now. Gotta be objective and start looking to get long NOW!
Friday, September 5, 2008
Thursday, September 4, 2008
BOOOOOO-Yaaaa?
Cliffs Notes version:
"This rarely observed systematic debt liquidation is what confronts the U.S. and perhaps even the global financial system at the current time. Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami. Central bankers, of course, adopting the cloak and demeanor of firefighters or perhaps lifeguards, have been hard at work over the past 12 months to contain the damage. And the private market, in its attempt to anticipate a bear market bottom and snap up “bargains,” has been constructive as well. Over $400 billion in bank- and finance-related capital has been raised during the past year, a decent amount of it, by the way, having been bought by yours truly and my associates at PIMCO. Too bad for us and for everyone else who bought too soon. There are few of these deals now priced at par or above, which is bondspeak for “they are all underwater.” We, as well as our SWF and central bank counterparts, are reluctant to make additional commitments.
Step 2 on our delevering blackboard therefore has stalled and is inevitably morphing towards Step 3. Assets are still being liquidated but there is an increasing reluctance on the part of the private market to risk any more of its own capital. Liquidity is drying up; risk appetites are anorexic; asset prices, despite a temporarily resurgent stock market, are mainly going down; now even oil and commodity prices are drowning. There may be a Jim Cramer bull market somewhere, but it's primarily a mirage unless and until we get the entrance of new balance sheets, and a new source of liquidity willing to support asset prices.
New balance sheets? Is this now some Deloitte & Touche metaphor? Hardly. What I mean, what our blackboard and our Investment Committee point out is that to ultimately stop this asset/debt deflation, a fresh and substantial new source of buying power is required. This became all too obvious as the Treasury's attempt to entice additional capital into Freddie and Fannie came up empty. Yet this same dilemma is and will continue to confront all highly levered institutions in the throes of asset liquidation. Without a new balance sheet, their only resort is to sell assets, which in many cases leads to further price declines, or ultimately debt liquidation/default.
A Depression-era bank robber named Willie Sutton once said that the reason he robbed banks was because “that's where the money is.” Illegal for sure, but close to an 800 SAT score for logic if you were in the business of stealing other people's money. And now, while some will compare current government bailouts to Slick Willie, citing moral hazard, near criminal regulatory neglect, and further bailouts for Wall Street and the rich, common sense can lead to no other conclusion: if we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury – not only to Freddie and Fannie but to Mom and Pop on Main Street U.S.A., via subsidized home loans issued by the FHA and other government institutions. A 21st century housing-related version of the RTC such as advocated by Larry Summers amongst others could be another example of the government wallet or balance sheet that is required during rare periods when the private sector is unable or unwilling to step forward.
The bill for our collective speculative profligacy, obvious in the deflating asset markets, can be paid now or it can be paid later. Those aspiring for a perfect 800 on the Wall Street policy exam would conclude that the tab will be less if paid up front, than if swept under a rug of moral umbrage intent on seeking retribution for any and all of those responsible. Now that the Fed has spent 12 months proving that it “knows something…knows something,” it is time for the Treasury to do likewise."
William H. Gross
Managing Director
"This rarely observed systematic debt liquidation is what confronts the U.S. and perhaps even the global financial system at the current time. Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami. Central bankers, of course, adopting the cloak and demeanor of firefighters or perhaps lifeguards, have been hard at work over the past 12 months to contain the damage. And the private market, in its attempt to anticipate a bear market bottom and snap up “bargains,” has been constructive as well. Over $400 billion in bank- and finance-related capital has been raised during the past year, a decent amount of it, by the way, having been bought by yours truly and my associates at PIMCO. Too bad for us and for everyone else who bought too soon. There are few of these deals now priced at par or above, which is bondspeak for “they are all underwater.” We, as well as our SWF and central bank counterparts, are reluctant to make additional commitments.
Step 2 on our delevering blackboard therefore has stalled and is inevitably morphing towards Step 3. Assets are still being liquidated but there is an increasing reluctance on the part of the private market to risk any more of its own capital. Liquidity is drying up; risk appetites are anorexic; asset prices, despite a temporarily resurgent stock market, are mainly going down; now even oil and commodity prices are drowning. There may be a Jim Cramer bull market somewhere, but it's primarily a mirage unless and until we get the entrance of new balance sheets, and a new source of liquidity willing to support asset prices.
New balance sheets? Is this now some Deloitte & Touche metaphor? Hardly. What I mean, what our blackboard and our Investment Committee point out is that to ultimately stop this asset/debt deflation, a fresh and substantial new source of buying power is required. This became all too obvious as the Treasury's attempt to entice additional capital into Freddie and Fannie came up empty. Yet this same dilemma is and will continue to confront all highly levered institutions in the throes of asset liquidation. Without a new balance sheet, their only resort is to sell assets, which in many cases leads to further price declines, or ultimately debt liquidation/default.
A Depression-era bank robber named Willie Sutton once said that the reason he robbed banks was because “that's where the money is.” Illegal for sure, but close to an 800 SAT score for logic if you were in the business of stealing other people's money. And now, while some will compare current government bailouts to Slick Willie, citing moral hazard, near criminal regulatory neglect, and further bailouts for Wall Street and the rich, common sense can lead to no other conclusion: if we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury – not only to Freddie and Fannie but to Mom and Pop on Main Street U.S.A., via subsidized home loans issued by the FHA and other government institutions. A 21st century housing-related version of the RTC such as advocated by Larry Summers amongst others could be another example of the government wallet or balance sheet that is required during rare periods when the private sector is unable or unwilling to step forward.
The bill for our collective speculative profligacy, obvious in the deflating asset markets, can be paid now or it can be paid later. Those aspiring for a perfect 800 on the Wall Street policy exam would conclude that the tab will be less if paid up front, than if swept under a rug of moral umbrage intent on seeking retribution for any and all of those responsible. Now that the Fed has spent 12 months proving that it “knows something…knows something,” it is time for the Treasury to do likewise."
William H. Gross
Managing Director
PIMCO
Chart Du Jour: NYSE Breakdown
Notice how RSI has capped off the sideways consolidation by staying at RSI readings of 50 or less. and MACD never crossed above the ZERO mark indicating very poor strength and classic bear market readings. We are going much lower in time on this index.
Wednesday, September 3, 2008
Always Ask Yourself:
Am I emotional today?
While in a trade, talk to yourself out loud:
Am i getting greedy?
Am i desperate?
Am i over trading?
Is this position too big?
Am i cheer leading a position?
Am I following the game plan?
Am i in control of the trade parameters or is this trade controlling me?
Ask yourself out loud and the smart trader will give you the answers.
While in a trade, talk to yourself out loud:
Am i getting greedy?
Am i desperate?
Am i over trading?
Is this position too big?
Am i cheer leading a position?
Am I following the game plan?
Am i in control of the trade parameters or is this trade controlling me?
Ask yourself out loud and the smart trader will give you the answers.
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