Tech Stocks Get A Big Fat Hickey

[DrStool]

The Up and Down Wall Street column in this week Barrooms features a story on Fred Hickey, the widely respected leading independant tech anal cyst. He is as bearish as ever. Should be good for a 20- 30 point down gap on the Nasty Monday. Intel and Dell are prominently featured along with AMT, TXN, NOK and a bunch of others.

 

There's also another article about the resurgence of massive insider selling in tech.

 

The article is here. Get the two week free trial subscription to the WSJ and Barrons and read it.

[Goldmember]

Yup, with the 8-13 day cycle tipping over to join the 4-7 week and the 10-13 week cycles, all the Santa Claus rally and year-end hoopla bull sounds emanating from analcysts and stoolies may get a surprise! I should have held on to those Queerlogic and KLaxative puts a little longer but I got other stuff still in play for the ride so that's a good thing!

 

On another note the minutes of the Nov. 6 meetingminutes where they cut the big one are out and may have contributed to Friday's slide. The minutes read like a doom and gloom report with not much lipstick on this pig! This was pointed out in John Mauldin's report which should be read. He was made aware of this by an email from Art Cashin at Crapvision, who would a thunk it! The doom and gloom stuff was interesting enough but this part at the end is what may be most pertinent to those like our good Doc, and hence ourselves, to decipher future Fed manipulations. Gotta stay a step ahead of these manipulators after all.

 

 

Use of Alternative Assets in Open Market Operations

At this meeting the Committee provided further guidance to the staff on priorities for the continuing study of alternatives to Treasury securities in the conduct of System open market operations. At its meeting in March of this year, the Committee had reaffirmed its preference for the use of Treasury securities to implement the System's monetary policy, contingent upon the continued availability of a sufficient outstanding volume of such obligations to accommodate the System's very large operations. As was already apparent at the time of the March meeting, fiscal policy developments made it clear that earlier concerns about a contracting supply of securities in the U.S. government securities market would not likely impose constraints on the System's open market operations in the near term.

 

Even so, the members expressed a consensus in favor of continuing to study alternatives to Treasury obligations for potential future use. Pursuant to the Committee's instructions in March, the staff had activated its study of the possible employment of mortgage-backed securities guaranteed by the Government National Mortgage Association (Ginnie Maes) in outright System open market operations. Such obligations were already being utilized for temporary additions to the System's portfolio through repurchase agreements. During their discussion at this meeting, the members recognized that outright purchases of Ginnie Maes for permanent additions to the System's portfolio would present a number of difficulties and would require extensive preparations for their effective integration, if deemed desirable at a later date, into the conduct of outright System open market operations. Still, in view of their possible advantages in helping to meet SOMA portfolio objectives at some point in the future, the Committee instructed the staff to continue to focus available resources on the possible use of Ginnie Maes for such operations. The Committee also decided to discontinue further consideration of the possible use of foreign sovereign debt obligations as collateral for repurchase agreements in light of the problems that were envisaged in the employment of such securities.

 

At this meeting the Committee also reviewed work that had been done on the potential use of an auction credit facility (ACF) that could serve as a partial substitute for Treasury or other securities. In addition, the Committee reviewed a study that considered whether an ACF might be adapted for use in a contingency (CACF) as a full substitute for open market operations. Many of the members commended the staff for its careful assessment of the potential for such operations. The members concluded, however, that significant resources should not be assigned at this time to the further study of these alternatives to open market operations given the prospects for an enlarged supply of Treasury obligations, the decision to focus on Ginnie Maes, and the introduction of a new discount window program, the System's primary credit facility, scheduled for implementation in early 2003. In addition, the CACF had been made unnecessary by the implementation of contingency plans and backup facilities since September 2001. The members concurred with the staff's recommendation that the staff studies prepared for the Committee in January 2001, when it discussed in detail various alternatives to holding U.S. government securities, should be released to the public after light editing was completed.

 

It was agreed that the next meeting of the Committee would be held on Tuesday, December 10, 2002.

 

EHH?

 

Is Uncle Al gonna dump fat-ass Fannie for her slimmer sexier sister Ginnie?

 

Andrea will not be pleased!

[DogBoy]

I'd be real worried about people getting too bearish too quickly.

 

We could be looking at a Bearz trap which would coincide with a year end ramp very nicely.

[SkiddMarket]

Let's see.... next week is scam week PLUS Fed gotta keep the indices up to cheer up the holiday shoppers PLUS end-of-year fund dressing. I'm sittin' this one out and going to the Bahamas. At least I can get a tan while being fleeced.

 

Off topic... Isn't it uncanny how the individual stock charts have clear lines of support and resistance AND indices do also? No matter how obscure the index, they all seem to respect support and resistance areas, and follow TA rules. I guess it must be related to Heisenberg Uncertainty. Until someone actually graphs out the combination (add, subtract, multiply or divide ANYTHING with anything else), there is no relationship- the moment it hits the paper, the new composite obeys "da rulez". I wonder if it would be possible to make up an index using a basket of stocks you KNOW are going up, add to it an "uncertain" stock, and use the combined index's chart to "force?" the uncertain stock to obey the rules. Getting too deep for me... Goodnight all!

[DrStool]

I think it's more like the Hindenburg Uncertainty.

[ThorAss]

Don't forget the Cohen Factor. Her call Friday for a better year ahead is a guaranteed death-knell. Her co-horts are at the sell window, don't get lined up behind them.

[DogBoy]

"Don't forget the Cohen Factor"

 

Gotta Love our dear Mother Superior.

 

She sure has made some very profitable market calls for us hasn't she ?

 

I'd like to see some of the more artistic among us stoolies create a Happy Holiday (or just a Thank You) card for Ms. Cohen and we can all digitally sign it and email it to her.

[Whadda I Do Whadda I Do]

With 10 billion in their pocket, you'd think Intel could be more creative instead of just a marketing company. With their flag ship PissPoor CPU a collection of software is needed for performance or your program has to be enhanced to take advantage.

 

At 3GHz or so they have hit the ceiling due to heat and size until the scheduled shrinking of the die in spring of 2003. Oh sure marketing will continue with the usual smoke and mirrors but only kids and system administrators (who haven't done their homework) will pay large sums of money for Intel systems.

 

After millions of man hours to create something so complex and have it turn into a commodity, then obsolete all in a short period of time, shame.

[Bizarro-Greenspan]

Fred Hickey is the man.Fleck used to rave about him.waay

back in '98,when I became convinced this was the biggest

bubble/carnie shew ever recorded in the anals of history.

 

By just shorting tech dreamboats,I wudda been surfing in

Fiji by now,instead,I got messed up in dis here golden magic show.

 

That's a much tougher nut to crack.

[Jorma]

This quote from the Fed had me ROFLOL.

 

"As was already apparent at the time of the March meeting, fiscal policy developments made it clear that earlier concerns about a contracting supply of securities in the U.S. government securities market would not likely impose constraints on the System's open market operations in the near term. "

 

Obviously I am a sick individual. This just slays me yet Jackass leaves me cold. I think Al might be a Jack Benny fan. Most stoolies are probably too young to know Jack, master of the pause. Al delivered the first line of this joke almost two years ago when he said he was worried about a shortage of Treasury paper.

 

There are two ways to look at Al's "worry". Either he was lying about the outlook for future buget surplus or he was dumb enough to believe the 'surplus' would contiune. Take your pick. In cases like this I always assume the lie because for some reason it is more comforting to know that someone in such a position is not dumb as a sack of rocks stupid.

 

In any case what is apparant is that back two years ago Al knew massive monetizing of debt was going to be necessary. There are a lot of ways to interpret that but I can not think of a single one that woud sound good to what used to be called conservatives. I bring politics up because the political poles have shifted 180 degrees and nobody has even metnioned it yet. The profound disconnect between word and deed does not suggest that stability is going to part of the future.

 

As far as buying Fannies paper, Doc's favorite class of criminal, the mortgage borkers have been given a hearty pat on the back for rightly thinking financial moral hazard is for suckers. If I were Al however I would send the green eyeshade staff in the basement to the task of figureing out how the Fed can buy new mortgages directly from the bokers because if the volume dries up then the whole exercise doesn't do squat for the economy and if that don't turn soon he is toast.

[Whadda I Do Whadda I Do]

In regards to penny pinching Jack Benny, old time comedian in radio that went on to have a b/w (sorry black and white) TV show, his routine would go like this:

 

Mugger(pointing gun): Alright Mister! Your money or your life?

 

After long dramatic pause.........

 

Mugger: Come on. What's it going to be!

 

Jack Benny: Don't rush me!.........I'm thinking about it.