wndysrf Posted April 9, 2003 Report Share Posted April 9, 2003 Mark?s Market Commentary ? April 9, 2003 Last night, MTV?s Real Life episode came to an end. Six 20-somethings, living in a fancy suite in the Palms Hotel and Casino in Las Vegas. Of course, there was wild partying, fights, mixed race sexual relations, and the usual cornucopia of drama during this series. All filmed in real time. Binge drinking, showering with naked roommates, bed hopping, and all the rest. Now, party time is over. Back to reality. The participants interviewed as they were packing up last night were acting like zombies. Unaware of what they were going to do with their lives after this period of all-expenses paid partying. Thanks to Viacom, for footing the bill for the expensive suite, the trendy restaurants, the limo rides, and the hip outfits. A Reunion Special might be coming, but that?s likely to create a temporary spurt only. The recent War Rally in stocks and the resulting collapse in credit spreads might have come to an end. Al Green might attempt a Reunion Special with his Emergency Economic Stimulus Plan, but that would only confuse the Arena Participants. If the ?soft patch? is really only ?temporary? and the 2nd half recovery shapes up to the Productivity Miracle promises, then why would an emergency plan be needed? If the 26-year old participant in an MTV Real Life episode experiences a ?soft patch? while in a Las Vegas stripper club, and claims that it is only ?temporary performance anxiety?, then why the sudden mainlining of Viagra? The U.S. economy?s fixation on credit continues unabated. From Banc Investment Daily: ?In labyrinth shopping malls, consumers are shooting up on credit like never before. Who is the largest drug pusher? Which institution offers the easiest consumer credit? Hands down, the winner is Circuit City, which will make over 100% of its profit in 2003 by extending credit. Not far behind is Sears, Federated, Nordstrom, and Target. Oddly, if you looked at all of the earnings coming from the S & P 500 companies, more than 40% come from finance activities. Of those, a full third of profits are from non-financial companies. Like banks in drag, retailers will continue to extend easy credit and consumers will lap it up under relatively low rates.? The Wall Struck Journal special on hedge funds continued today. Profiling a 72-year old retiree attending hedge fund conferences to Riverboat his way to quick riches so he can ?catch up? from prior investing mistakes (mutual fund investing). ?Seeking high octane profits and less of an emotional connection to the DJIA, he plowed about $1 million into hedge funds, seeking bubble-era returns.? Trust funders are also getting into the action. ?This is much more exciting than the stock market?, says Richard Behfarin, who has been investing his family?s money since receiving an MBA from USC in 1996. He got hooked on hedge funds after a $350,000 investment in one fund in 2000 climed to more than $2.4 million. He lost 80% of the profit when a Florida hedge fund dove over two years, blaming the decline in small cap stocks. ?I?m not giving up?, he says. Bruder, the 72-year old retiree, went to hedgefund.net to look for a fund. ?The choices were bewildering?. His first fund was Integral Hedging, run by a biologist. On a $200,000 investment, Bruder made 27% the first quarter and 15% the second quarter. The third quarter, when it made only 5%, he pulled out. Subsequently, Integral bombed and lost nearly 90%. Next, he went into ?funds of funds?, and so far this year, he is only up 6%. So he?s hunting for more hedge funds. Unfortunately, most of them are now losing money yet they still require $2 million minimums. ?These people have all lost money, and they are sitting up there acting like God?s gift to the world. If I make just 20% this year, I?ll be happy.? Once again, the moral hazard of the Al Green Reliquifaction Scheme cannot be underestimated. Just look at the insane risks investors are taking these days, in order to ?catch up? or ?gimme anything better than an index fund or a treasury investment?. To me, the situation is rapidly spiraling out of control. Just like those MTV Real Life episodes which take these otherwise well balanced girls from the South and Midwest, plunge them into a den of debauchery, and send them home in emotional body bags. All in an effort to ?get discovered? and avoid ?the rat race? of real life. In the meantime, the Bullhorners and Loudspeaker Operators continue to chant about the large reserves of ?sideline cash? waiting to jump into stocks: Cash rises to record 51% of market cap: Trim Tabs ($SPX) by Tomi Kilgore ?Cash on the sidelines -- cash in bank savings accounts and bond and retail money funds -- now totals $5.3 trillion, according to Trim Tabs, which is a record high 51 percent of the $10.4 trillion market capitalization of the entire U.S. stock market. Trim Tabs said the cash-to-market cap ratio was at 49.5 percent at the end of 1990, the mutual fund tracker said; in 1991, the S&P 500 Index ($SPX) rose 31 percent. At the end of 1999, cash on the sidelines ($3.8 billion) was a record-low 21 percent of the total market cap at the time ($17.7 trillion) said Trim Tabs.? The Cosmic Joke is that this is hardly real money. Most of it is hot money, created out of thin air by the Atomic Particle Accelerator, subject to immediate liquidation and vaporization once the Arena Participants realize that their ?cash? is really ?debt?, redeemable only if another sucker is willing to accept it, and only if the Paper Pyramid of promises and guarantees holds up in the greatest Confidence Ponzi Scheme of all time. Reinsurance prospects good despite weak markets-Swiss Re (SWCEF) by Greg Morcroft Swiss Re's (SWCEF) CEO John Coomber said Wednesday that the outlook for the reinsurance market remains strong despite continuing weakness in the capital markets. "The outlook for life reinsurance is positive as primary insurers continue to outsource mortality risk and seek urgent solutions to their capital needs," he said, adding that, "business fundamentals remain favorable due to mortality trends, demographics and increasing personal wealth." Regarding terrorism insurance, Jacques Dubois, Chairman of Swiss Re America Holding Corp., said it will help the industry survive if there is another large scale attack, but certain issues still need to be worked out with legislators. The company said the industry's property losses were below average in 2002, but flood losses cost the group a record $4.1 billion. Mark's Translation: Equity portfolios continue to shrink, and casualty losses continue to mount, putting extreme pressure on the insurers. Swiss Re continues to sell and trade credit insurance, by far its largest profit center, in order to "outrun" its investment and underwriting losses. Management has recently been emboldened to "double up" on this strategy, since Permanent Reliquifaction has all but guaranteed the company from catastrophic investment or credit losses. The chief portfolio managers are beta testing new Commodity Robot Momentum Trading schemes in order to boost profitability, but it is seeking regulatory approval first. The company's pro-forma equity losses for 2002 were lower than expectations, excluding $4.1 billion time bomb investments in Enron, United Airlines, Tyco, and Adelphia. After the close last night, the dollar and stock futures drifted into the red. The usual 3:00am jam job appeared, but it failed after about an hour. Then the Saddam Statute rally came in the morning, which sent another spike up in an attempt to pierce the 200-day. That failed. And of course, the gold bears, which have repeatedly slammed the gold contract in the last hour of COMEX trading, got blindsided in a mad last hour squeeze which sent it up to close above the critical 325 line. The U.S. Dollar got smoked. Once again, wild reversals are commonplace in the Commodity Robot momentum trading world. Anybody keeping up? Who is making money? I doubt that many of these leveraged spec plays in the commodity markets are working. More and more strapped speculators who are doubling down to ?make up? for last month?s mistakes are being blown out on this volatility. Any sideline cash holder watching this circus from the box seats is unlikely to stick his neck out and try his luck in the maelstrom occurring inside the Arena. If anything, they would be inclined to buy real estate or bonds, which so far, have been the steadiest investment of the Credit Bubble Era. What an ironic ?Oliver Twist? for Al Green. The more he jams the stock market, the more cash he scares away from it. And the more cash floods into asset classes which are even more prone to bubble popping. Link to comment Share on other sites More sharing options...
Guest Posted April 9, 2003 Report Share Posted April 9, 2003 Good one Mark! What a day to remember. I watched again as the Miners sat idle - on the upside nicely but with no volume.. as Da Boys watched in awe to see which way the broads were going to break. And the winner is: SELL THE NEWS!!! The miners took off like a shot and the volume rolled in nicely. I'm not saying it's going to last, but if you haven't visited the charts of a few of your favorite miners lately, tonight would be an excellent time to take a peek. They'll likely get crushed by something ridiculous again, but then again this may just be the set up we've been looking for. Plunger Link to comment Share on other sites More sharing options...
TheDeepBlueSea Posted April 9, 2003 Report Share Posted April 9, 2003 Paper Tiger, Fiery Dragon The ability to manufacture value-added goods creates real wealth. Not financial trading and speculation. Link to comment Share on other sites More sharing options...
soup Posted April 9, 2003 Report Share Posted April 9, 2003 I do not see anything from yhoo? Anyone else seen the earnings? If they are waiting, probably not a good sign. Link to comment Share on other sites More sharing options...
Slothrop Posted April 9, 2003 Report Share Posted April 9, 2003 Amazing,but true: hedge funds trade on the Irish Stock Exchange and the Luxembourg exchange. Link to comment Share on other sites More sharing options...
Drano Posted April 9, 2003 Report Share Posted April 9, 2003 I do not see anything from yhoo? Anyone else seen the earnings? If they are waiting, probably not a good sign. Depends on your point of view..... :grin: I wonder if the Mouse is going to return to the Rock Quarry? He seems to be having an awfully good time on sick leave. Link to comment Share on other sites More sharing options...
Tchaikofsky Posted April 9, 2003 Report Share Posted April 9, 2003 YHOO jumpin' all over the joint AH. Saw a print at 23.38; 23.15 right now. Link to comment Share on other sites More sharing options...
GregFokker Posted April 9, 2003 Report Share Posted April 9, 2003 YHOO just jumped .30... numbers must be out. Link to comment Share on other sites More sharing options...
Tchaikofsky Posted April 9, 2003 Report Share Posted April 9, 2003 Yahoo! Reports First Quarter 2003 Financial Results Wednesday April 9, 4:32 pm ET Company Posts First Quarter Revenues of $283 Million, a 47% year-over-year increase EPS of $0.08 Link to comment Share on other sites More sharing options...
GregFokker Posted April 9, 2003 Report Share Posted April 9, 2003 Up .60 now, dragging the Qubes up[ to 25.53. Link to comment Share on other sites More sharing options...
Drano Posted April 9, 2003 Report Share Posted April 9, 2003 Bleah. Link to comment Share on other sites More sharing options...
Pigeon Drop Posted April 9, 2003 Report Share Posted April 9, 2003 Was short EBAY, AMZN, YHOO. Put 3 orders to cover all 3, 2 mins before the close. Didn't want to risk not taking the profit. Now I see I typed one order incorrectly and inadvertently only covered 1/2 the position. Oh well, this happens when not careful. Link to comment Share on other sites More sharing options...
Tchaikofsky Posted April 9, 2003 Report Share Posted April 9, 2003 Up .60 now, dragging the Qubes up[ to 25.53. AMaZiN' at 25.50, up .44 Edit: OOPS! 25.29, up .23 Link to comment Share on other sites More sharing options...
Drano Posted April 9, 2003 Report Share Posted April 9, 2003 When do they say "pro forma" and "excluding one-time items"? XLNX at least is continuing down after hours. Link to comment Share on other sites More sharing options...
Kid Posted April 9, 2003 Report Share Posted April 9, 2003 I do not see anything from yhoo? Anyone else seen the earnings? If they are waiting, probably not a good sign. Depends on your point of view..... :grin: I wonder if the Mouse is going to return to the Rock Quarry? He seems to be having an awfully good time on sick leave. don't know, but the stock is up .45 in afterhours now at 23.2 Link to comment Share on other sites More sharing options...
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