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. . . until the flowers

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Good morning all.

 

I really need for somebody to explain something to me. This morning on the enlightenment financial channel the scroll on the bottom of the screen was saying a cut in rates by the Fed was good to combat deflation.

 

Just a thought, if I was in business and now it cost less to borrow then I can lower my prices, deflation, or expand my margin, not deflation but eventually my competitor would then you have deflation.

 

Simple logic I know but what twisted insight am I missing?

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Riverboat longs for today:

 

All gapping up in the PreMarket. Leslie LaRoche will have the coat hanger jammed in her mouth for the phony smile on the opening bell.

 

NPRO, SUNW, BRCD, LEND.

 

Pay no attention to FRE and FNM. Those bombs will be deemed to be "company specific". As usual, other upside motion will be chased ad infinitum.

 

Shorts for today: QCOM

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TOTAL DESTRUCTION I LOVE IT......

 

FNM NOW DOWN 5 PRE MARKET

FRE NOW DOWN A WHOPPER 9 1/2 POINTS.....

 

Is this the cataylst we've been waiting for or what?!?!?!?!?!?!?!?!?!?!?!?!

...

1.gif

 

congrats FNM, FRE shorts. more "sells" for good measure, from briefing.com:

 

Lehman cuts ADCT, NT, SONS, and TLAB : Lehman downgrades ADCT, NT, SONS, and TLAB to Underweight from Equal-Weight, saying these stocks represent the most excessive examples of valuations extended well beyond fundamentals. Firm also reiterates their Equal-Weight rating on LU and raises their target to $2 from $1.75 due to expected interest expense savings.

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Congrats Dashley on being short FNM....we have a winner!

I need a winner to restore my confidence. I was starting to get real gun-shy. :unsure:

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more on FRE.....from Briefing

 

08:59 ET Treasury Market

Flight to quality also perhaps boosting Treasuries on news that Freddie Mac has made several top-level management changes and will begin an investigation into employee misconduct. Might be seeing some rotation out of agencies and into treasuries. Ten-year up 18 ticks to yield 3.285%.

 

 

FRE now down 10 bucks........Wipes out 3 months of gains in one morning............wish i was short this one...someday.....

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No - this is big - we are talking about derivatives here - they affect the whole system. When one type of financial instrument fails that type becomes suspect system wide. Right now the real estate market is all that is holding up the banks.

 

". . . The replacements come about five months after McLean, Virginia-based Freddie Mac said a change in accounting for derivatives recommended by its new auditor would force it to restate results for the past three years. Its regulator, the Office of Federal Housing Enterprise Oversight, said evidence has come to light of weakness in controls and personnel expertise in accounting areas and the disclosure of misconduct on the part of Freddie Mac employees it didn't identify." - article

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this is starting to look like more than "profit-taking" in S&P futures

 

more like "loss-taking" by end-of-rally-chasing longs

 

1,000 target may have been exhaustion level

 

seems like more risk of bad surprises than good surprises at these levels

 

anyway I sure hope IBM tanks today

 

good luck this week Stoolies

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"US commercial banks' derivatives holdings climbed by 9 per cent to a record $61,400bn in the first quarter as banks hedged against changes in interest rates." - article

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Houston we have a problem........Al is running to the batphone to try and stave off a derviatives disaster from FRE gapping down 10 bucks.............oooooo we are so close to a system failure I can taste it.......

 

This mornings gap down on SPOOZ confirms Fridays shooting star candle.....

 

Check that FRE still dropping now down almost 11...

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Soup,

 

I think you may have received the answer to your recent question, "Why would Greenspan be doing this?! What is he so worried about?"

 

Nightmare on Elm Street starring Freddie Mac.

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Houston we have a problem........Al is running to the batphone to try and stave off a derviatives disaster from FRE gapping down 10 bucks.............oooooo we are so close to a system failure I can taste it.......

 

This mornings gap down on SPOOZ confirms Fridays shooting star candle.....

It would be very interesting if foreigners stopped buying GSE mortage-backed bonds.

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