Schwab pulling same stunt as CFC

[crazy_ate]

If countrywide has been making alot of neg-am loans they are going to have another issue. Most of the neg-am loaning banks have been booking the interest payments they haven't received yet has income now, instead of when they are actually getting the money.

 

This means that if the neg-am loans fail then they will have to restate earnings. No doubt that will add up to a few more billion in losses.

 

We still have four more years of mortgage resets to go. Those resets have barely gotten started!

 

I haven't once heard this year's Credit Suisse report on resets mentioned in the mainstream media. Guess it is just too scary to contemplate.

 

I've already read a few articles in California papers on how the mortgage market has seized up.

 

some friends of mine told me to buy a house today. They have no idea of what is happening behind the scenes. None of them could afford their homes or condos at today's prices, and with today's credit requirements and loan restrictions.

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Do you think the FED cut today will have a significant effect on the coming $Trillion + in resets? Or do you think with the relief some "on the edge" lending institutions are getting, they'll be ultra conservative on their lending practices going forward?

 

BTW, Downey Financial (DSL) which I'm short, has something like 80 or 85% of their portfolio stuffed with California neg-am loans! I don't see how they'll survive.

 

Also, do you think the FED action could provide relief for the home builders.

I don't see how they have any way out.

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Again, and I know Doc hates this line of thinking....

 

Step [1] Unlock the current credit seizure via massive liquidity injection.....discount window wide open and rates cuts are on the way....(that's why locking in some high yielding CD stuff now is key)

 

Step [2] Reconfigure Fannie and Freddie or create a new gov-ment or quasi-govment agency that will be mandated to buy all loans from lenders meeting "new" fairly strict criteria

 

Regardless, I do think that the housing market will continue to drop for years to come, but at a slower rate than a crash, the "consumer "economy will slow, but every effort will be made to keep the lights on at the casino.

 

I don't like it, but I ain't gonna fight it either......I will however look for ways to exploit it.....

[Whadda I Do Whadda I Do]

Crazy is not so crazy.

 

The cash flood gates have to open to support the markets. The consumer is tapped out so it is all on the Feds to act. If the US$ was waning in allure then today it was even less wanted. Wait until they do a real % rate cut, nobody will want it as an investment. I guess a rising jobless report will sent the tone in the future.

[FauxCaster]

Financial markets are notorious for never fixing the problem when given cash or credit to do so. It's a version of Gresham's law. Bad money drives out good. You hold your good coins, and pass your suspicious ones off in commerce. Easy credit will NOT go back into CDOs and MBS, they will take the money and put it elsewhere. The real estate market will only be made WORSE by intervention. Wall Street will figure out the next game and put its 'fix' money from the Fed to work there, not in supbrime, altA.

[Whadda I Do Whadda I Do]

My treasuries fund from USAA - UATXX - "normally at least 80% of the fund's investments will be in U.S. Treasury bills, notes and bonds, and repurchase agreements collateralized by these instruments."

Sully.... USAA has a FDIC high yield cash account on the IRA side but you have to ask and have an 'asset management' account to qualify on the brokerage side.

 

For most holdings only a phone request to take possession of stock certs. 4 to 6 weeks transaction time. ...<<<<<Referring to USAA only.

[Jetlag]

Market returns on a rate cut (the real McCoy)

 

Snippet from old 1998 article

"Since 1960, there have been 11 such first-time discount rate cuts. In the six-month period after this change in interest rate direction, the S&P 500 rose an average of 12.3% and did so 73% of the time (after 8 of the 11 cuts). That's nearly a 25% annualized rate of return, more than double the average full-year return since 1960 of about 10%. So the adage is true: The market is indeed boolish -- very boolish -- on falling interest rates."

 

http://www.businessweek.com/1998/45/b3603009.htm

 

Of course we all know the next cycle cut didn't have the historical returns purported by this article.

[Jorma]

Market returns on a rate cut (the real McCoy)

 

Snippet from old 1998 article

"Since 1960, there have been 11 such first-time discount rate cuts. In the six-month period after this change in interest rate direction, the S&P 500 rose an average of 12.3% and did so 73% of the time (after 8 of the 11 cuts). That's nearly a 25% annualized rate of return, more than double the average full-year return since 1960 of about 10%. So the adage is true: The market is indeed boolish -- very boolish -- on falling interest rates."

 

http://www.businessweek.com/1998/45/b3603009.htm

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Those were the days when the Discount Rate was the vehicle used by the Fed. When a Discount Rate cut meant Prime Rate cuts and more bank lending, presumably. Now banks are the lender of second or third or last resort and the Fed targets the Fed Funds rate, to guide it's open market activity, supposedly, in order to effect monetary policy.

 

The Discount rate cut, as Doc says, is a sham. A sort of jawboning exercise.

[Speakeasy]

According to Jimbo Krammer and the rest of the whine enthusiasts, we are in the most cataclysmic financial crisis ever in the history of the world. So we need Uncle Ben to stuff wads of dough into our pockets.

 

Yet when you look at the long-term NDX chart, the past month of fear and loathing is not even visible to the naked eye.

 

Even on the shorter-term chart showing the lazy uptrend over the past four years, not a thing has happened to indicate that the world has just fallen apart. All that you can see is that a few week's of frothy gains have been given back and the NDX is "threatening" to re-enter the lazy uptrend channel in place since 2004.

 

Is this what Krammer is screaming about?

 

"Oh, no! Save us, Unca Ben! The Nardsaq might re-enter the lazy uptrend channel again! I just lost three week's worth of frothy gains on my scrAAPLe, RIMMjob and GIGGler. Do sumthin', Bennie! I cain't takes no more of this pain!"

 

If the girlybullz like Krammer think that a minor haircut on his beloved frothmuffins is worthy of getting on his knees and praying to Lord Ben for manna from heaven, imagine what would happen if we ever actually turned bearish again?

601086[/snapback]

If the girlybullz like Krammer think that a minor haircut on his beloved frothmuffins is worthy of getting on his knees and praying to Lord Ben for manna from heaven, imagine what would happen if we ever actually turned bearish again?

Uh, well, maybe Creamer would go on a hunger strike? HOLY COW!.

 

[LeeWhee]

Market returns on a rate cut (the real McCoy)

 

Snippet from old 1998 article

"Since 1960, there have been 11 such first-time discount rate cuts. In the six-month period after this change in interest rate direction, the S&P 500 rose an average of 12.3% and did so 73% of the time (after 8 of the 11 cuts). That's nearly a 25% annualized rate of return, more than double the average full-year return since 1960 of about 10%. So the adage is true: The market is indeed boolish -- very boolish -- on falling interest rates."

 

http://www.businessweek.com/1998/45/b3603009.htm

601117[/snapback]

 

Those were the days when the Discount Rate was the vehicle used by the Fed. When a Discount Rate cut meant Prime Rate cuts and more bank lending, presumably. Now banks are the lender of second or third or last resort and the Fed targets the Fed Funds rate, to guide it's open market activity, supposedly, in order to effect monetary policy.

 

The Discount rate cut, as Doc says, is a sham. A sort of jawboning exercise.

601118[/snapback]

 

In reading that old article, I have a feeling we're not in Kansas anymore.

 

The article says that the worst-performing sectors post-cut are basic materials (gold, aluminum, copper, steel, etc) since the Fed wouldn't cut if it was worried about inflation. Hence, the inflation plays won't do well (commodes.)

 

Maybe the Materials sector ends up faring poorly, but it won't be because of inflation. The commode "boom" is purportedly based on submerging market growth as opposed to growth in the U.S. So whether or not the Fed is worried about inflation has little to do with Chindia, etc.

 

The article also says the best-performing sectors post-cut on the consumer cyclicals since "an easing in interest rates usually causes consumers to go out and spend a little on themselves."

 

Coming off a five-year period where consumers engorged themselves on consumption, it's hard to imagine a Discount cut would be a huge boon to the consumer.

[beardrech]

Well, Mad Money is fun this evening......at one point Jimbo pulled out his penis and began masturbating live on the air "I WAS RIGHT, I WAS RIGHT, BWAAAAAAAHHHHHHHHHH"  Then he ejaculated into the camera lens so they had to go to commercial......

601103[/snapback]

Crazy

But you did notice, Im sure, that so self-distrusting is he that he had a condom draping each finger on his right hand..

 

beardrech Its a disgrace about permitting legal aliens the liberty of auto-eroticizing themselves without a license

[Charmin]

This is pretty much really the only thing you need to watch for clues at this point...

 

BKX just bounced off a MAJOR support area on the daily chart, and the markets WILL NOT crash unless BKX takes out that low, and if it does take out that major support...why, thats when crashes happen, don't they?

601100[/snapback]

 

We don't need a crash to get lower lows.

 

The BKX has plenty of "room" to go lower without crashing.

 

The low so far was exactly par (100). Nice round numbah. Now it's 10% higher. That move down from 121 to 100 completes the 17.5% breakdown from the trendline off the early 2006 low. If it goes lower, it enters the chop suey from the 2004-2005 trading range b/w 93-103ish.

 

So there's lot of "support" not far below.

 

Even if the BKX simply goes back to re-test 100, that's 10% lower. It may well be that if the market has another leg to go, the banksters may simply decline with the market as opposing to outperforming on the downside as they have thus far.

 

A 10% move lower in the SPX puts it right at 1300, close to my next downside target of 1310-1315.

 

Note that the banksters were the first group to bottom in 2000. They broke down well ahead of the market and actually made an important bottom in the first leg down in Mar/Apr. That low held up for two years while the rest of the market tanked. It was finally undercut (only slightly) in July 2002 when the banks once again bottomed ahead of the broads.

 

We saw this in 2004 as well when the banksters bottomed in May while the market as a whole bottomed in August.

 

So even if the banksters have made a low at 100, it doesn't mean the market won't go lower. The finagler group has a recent history of making the first bottom. Maybe it's happening again.

601110[/snapback]

 

I'm inclined to believe that if the banks are really in a crisis mode then the BKX will hold within a trading range from the 100 to a supply line up near 114. If it really is in a bool mode one would expect to see this retest send the index way beyond the old highs of 121.

 

By the way, thanks for all your diligence and input to keep us on the right path.

 

http://www.StockSharePublishing.com/ChartL..._1187404284.png

[beardrech]

I dont know about anyone else's full opinion about what happened today but I do know a little bit about my own...

 

I feel personally insulted that men in leadership feel confident in being able to express their commanding qualities by acting as if they support the earth on their shoulders, as if either Atlas or an Elephant or both...

 

I also feel a sense of despair---not for myself-- but for the pigsters--braying like donkeys for deliverance from their self-induced financial discomfort...

 

The alligator tears shed by Krammer about innocent home-moaners groaning about their new status as "Squatters"---

 

The almost terrifying self-imposed indignities these cheat street heros undergo when pleading for Fed intervention...

 

The distorted expressions that they ornament their faces with, thus indicating a deep felt knowledge, that no matter how sufficient the saving event was, today their gargantuan commission days are over.....

 

Gone is their ability to down a jereboam of $10,000 champagne with the gusto of champions---the joyless eroticism with Marxist Hookers who feel their erotic weakness with every thrust...

 

Their dreams reduced to a vague mist---

 

That All of the nations currincies are racing headlong to the bottom at a steady pace so that noone notices they're being cheated out of their last dime..

 

That everyone still continues to talk as if we werent in the trough of a Kondratieve Winter; and that very shortly we will be talking about peak protein...

 

That legislators delude themselves and their constituent dunces about energising a decaying economy by revaluing their competitors currency while converting our own into putrescent fecal material...

 

That we inhabit a semantic jungle where ignorant armies ,one named inflationists the other deflationists battle on a "darkening plain", not realising they both are merely diffferent sides of the same coin....

 

Where ignorant braggarts posture as if they were rare combinations of Moses and pericles.....and alternate between carrying banners declaring two plus two equaling five versus the other battalion of ignoramuses asserting the answer as being six..

 

beardrech Does it ever stop----Yes Im afraid---when everyone gets so sick and tired of the dys-utopian ranting and the comical Hero enters on white horse and starts ullulating about the Rabbits

[Speakeasy]

Slight of hand all around. Following links on a PR search there appears some explanation of the current voyage.

 

 

In semiotics and postmodern philosophy, the term hyperreality characterizes the inability of consciousness to distinguish reality from fantasy, especially in technologically advanced postmodern cultures. Hyperreality is a means of characterising the way consciousness defines what is actually "real" in a world where a multitude of media can radically shape and filter the original event or experience being depicted. Some famous theorists of hyperreality include Jean Baudrillard, Albert Borgmann, Daniel Boorstin, and Umberto Eco.

 

...

 

Baudrillard in particular suggests that the world we live in has been replaced by a copy world, where we seek simulated stimuli and nothing more. Baudrillard borrows, from Jorge Luis Borges (which Borges also borrowed from Lewis Carroll), the example of a society whose cartographers create a map so detailed that it covers the very things it was designed to represent. When the empire declines, the map fades into the landscape and there is neither the representation nor the real remaining – just the hyperreal.

 

...

 

Interacting in a hyperreal place like a casino gives the subject the impression that one is walking through a fantasy world where everyone is playing along. The decor isn't authentic, everything is a copy, and the whole thing feels like a dream. What isn't a dream, of course, is that the casino takes your money, which you are more apt to give them when your consciousness doesn't really understand what's going on. In other words, although you may intellectually understand what happens at a casino, your consciousness thinks that gambling money in the casino is part of the "not real" world. It is in the interest of the decorators to emphasize that everything is fake, to make the entire experience seem fake. The casino succeeds in turning money itself to an object with no inherent value or inherent reality.

 

Actually, the casino is trading the hyperreality of fiat currency for another. In reality, the money is fancy printed paper, but we share a constantly reinforced fantasy that it has inherent value.

 

Wikiup

 

[shorty]

August 16th: Fed's Poole says no need for emergency rate cut

 

August 17th: Fed Cuts Discount Rate, Acknowledging Need to Act

[Charmin]

It's interesting, but it appears to me the XLF is closer to a short today than a buy. I did notice the spacing from 30.50 to 31.50 that this index has yet to penetrate into for over a year. Once again, one would expect that in a major bool market this backup to the support at 31.50 would send the index way beyond the old highs around 38.

 

I'm going to anticipate a failure to make new highs. First 50/200 dma crossover in some time.

 

http://www.StockSharePublishing.com/ChartL..._1187405728.png

[Charmin]

If the Yen carry trade is what's its all about then can we expect the most dramatic affects on Japan's Nikkei market?

 

N225 - Not even a recovery friday

http://finance.yahoo.com/q/bc?s=%5EN225&t=5d&l=on&z=m&q=l&c=