cwd Posted March 21, 2008 Report Share Posted March 21, 2008 Geeesh. What now? Exogenous event or bust? Fed buys Treasuries, swaps em for shit collateral so the Financials can shore up there balance sheet while the Fed weasels the dreck paper into monetization by the American public...and there is barely an eye batted by those in the financial press. Is there any way the market can go DOWN in the face of this. I am dumbfounded for the 238th time in the last 6 months (i need to work on that, i dumbfound easily). I want my mommy!!!! 653457[/snapback] UFB Link to comment Share on other sites More sharing options...
cwd Posted March 21, 2008 Report Share Posted March 21, 2008 Karl Denniger has some ideas on what the FED is up. The truth is a bit more obscure and obtuse than that; one must look into how bank capital requirements are determined in order to get to the bottom of it. Here's reality - Bank Tier Capital - the measure of whether you are "well capitalized" or "dead" as a bank - includes common stock equity. Specifically, Tier 1 Capital, the most important type for a bank, includes what is known as "Shareholder Equity" as well as retained earnings. So consider this folks - you can sink a bank if you sink its stock price. How? Simple - "Shareholder Equity" is not so simple as "stock price." However, the stock price has a major impact on it, because precipitous declines hit both intangibles (good will) and financing costs (in the other direction, raising them) which shrink Shareholder Equity from both ends of the candle at once. Now do you get it? The Fed and the rest of the fools on The Street want to pump bank stock prices because if they sink sufficiently the bank can actually be declared insolvent as a consequence! This also, however, means that our banking system is in fact 100% based on confidence and it is the clearest indication you will ever find on why we must have transparency in our financial markets, including an absolute and irrevocable ban on off-balance-sheet and other hidden crap, and forced mark-to-market. http://market-ticker.denninger.net/ Link to comment Share on other sites More sharing options...
Drano Posted March 21, 2008 Report Share Posted March 21, 2008 it is the clearest indication you will ever find on why we must have transparency in our financial markets, including an absolute and irrevocable ban on off-balance-sheet and other hidden crap, and forced mark-to-market. ...and that is also why we will never get it. Link to comment Share on other sites More sharing options...
cwd Posted March 21, 2008 Report Share Posted March 21, 2008 As I have previouly stated, The FED can and will do whatever it wants, and a few publicity seeking politians won't make any difference. REX NUTTING Fed is now the lender of first resort Commentary: New lending goes beyond what's legally allowed By Rex Nutting, MarketWatch Last update: 5:33 p.m. EDT March 20, 2008 WASHINGTON (MarketWatch) -- In a financial crisis, the Federal Reserve has an obligation to become the lender of last resort, making cash available for banks that need it right away to prevent a systemwide meltdown. But for this crisis, the Fed has become the lender of first resort to a whole new group of financial institutions that are relying on the central bank to boost their profits. Instead of lending only to firms that cannot find money elsewhere, the Fed apparently is lending to firms that can get the money elsewhere, yet at a higher cost than borrowing from the Fed. I say "apparently" because almost everything about the Fed's new primary dealer-lending facility is secret. The New York Federal Reserve Bank, which runs the program, would not comment about who is borrowing or under what conditions they are borrowing. The only information that was from the Fed came Thursday in the weekly report on reserve balances, showing that the 20 primary dealers borrowed $28.8 billion on Wednesday and about $19 billion on Monday and Tuesday. See full story. Three investment banks have announced publicly that they've borrowed from the Fed's new program, but none has provided any details about how much it has borrowed, for what purposes or under what conditions. http://www.marketwatch.com/news/story/fed-...e&dist=printTop Link to comment Share on other sites More sharing options...
roxy Posted March 21, 2008 Report Share Posted March 21, 2008 McClellan was falling all the week, not a single day up. Link to comment Share on other sites More sharing options...
cwd Posted March 21, 2008 Report Share Posted March 21, 2008 More fron Denninger, The Truth: The "powers that be" (including the media, The Fed and The Banks) are absolutely beside themselves with the possibility that stocks, especially bank stocks, might decline in value. For "why" see the top of this blog entry. If you fall for this you will be wiped out. DICK BOVE PUT A MARKET PERFORM RATING ON BEAR STEARNS STOCK ON MARCH 11th - JUST THREE DAYS BEFORE IT BLEW UP AND (THE FOLLOWING MONDAY) WENT TO $2! You have NOT and you WILL NOT see Crapvision or DICK BOVE take responsibility for the wipe out of SEVERAL BILLION DOLLARS IN SHAREHOLDER WEALTH - when he could have preserved YOUR MONEY if he had told you the truth about our financial institutions and that YOU SHOULD SELL ALL OF THEM AS THERE ARE AND WILL BE MORE EXPLOSIONS, ALTHOUGH NEITHER HE OR I HAVE NO WAY TO KNOW WHICH ONES AND NEITHER DO ANY OF THE anal cystS SINCE WE CAN'T SEE HONEST BALANCE SHEETS! The Truth: All you hear on Crapvision is "positioning for an early-cycle rebound", while in fact some $5 trillion in "value" expressed in the price of houses is permanently GONE, and that is assuming we use Freedie's and Fannie's estimates of home price decreases. If we use MY estimates the number is closer to $10 TRILLION dollars. To put this in perspective our Gross Domestic Product (GDP) is about $14 trillion annually. This will have a permanent effect on the standard of living of over 100 million households in the United States and thus our economy. It is unavoidable and as a consequence MUST have a similar impact on the earnings power of United States corporations when 70% of our economy is consumption by people just like you. Link to comment Share on other sites More sharing options...
roxy Posted March 21, 2008 Report Share Posted March 21, 2008 There is absolutely nothing bullish in basic materials topping and rolling over. It's a good indicationa that we are in the very early stages of the bear market. Maybe bear market didn't start yet. When the real bear market comes, you will turn back and look at the 15% decline of the indices like on the bull market. Link to comment Share on other sites More sharing options...
Mies van der Rump Posted March 21, 2008 Report Share Posted March 21, 2008 UFB 653473[/snapback] Forgive me on this...i erred. You know what's going to happen? The Fed is going to hold all this poopy paper until the banks can shore themselves up AND the Real Estate market firms (in whatever, 6 years). At that point, it will be declared, nay DECREED, that the Fed is not in the business of holding mortgage paper and the mortgages that are now in "recovery" mode will be handed back over to the Banks. Thank God i can't daytrade, b/c it takes me at least a week or two just to synthesize information. Link to comment Share on other sites More sharing options...
roxy Posted March 21, 2008 Report Share Posted March 21, 2008 Telecoms are frontrunners of the bear market. They indicate the reduction in infrastructural capital spending. That will trigger a chain reaction in all technology stocks later on. The same chart where telecoms are plotted against the broad technology index. Techs are peaking few months after telecoms. Link to comment Share on other sites More sharing options...
roxy Posted March 21, 2008 Report Share Posted March 21, 2008 Industrials may peak the whole year after telecoms. That's where the real bear market will come from. Industrials may easily decline 50% from where they are now and that will not even break the long-term uptrend. Link to comment Share on other sites More sharing options...
cwd Posted March 21, 2008 Report Share Posted March 21, 2008 Forgive me on this...i erred. You know what's going to happen? The Fed is going to hold all this poopy paper until the banks can shore themselves up AND the Real Estate market firms (in whatever, 6 years). At that point, it will be declared, nay DECREED, that the Fed is not in the business of holding mortgage paper and the mortgages that are now in "recovery" mode will be handed back over to the Banks. Thank God i can't daytrade, b/c it takes me at least a week or two just to synthesize information. 653480[/snapback] Or maybe ten years and half the paper is probably worthless. Link to comment Share on other sites More sharing options...
Jimbo Posted March 21, 2008 Report Share Posted March 21, 2008 MAC AND MAE ARE SET FREE AT LAST Great news- Fredie and Fannie have been liberated. They can now run gleefully laughing and happy to the CDO alt A cliff and in one joyous moment of supreme ectasy throw themselves off it. These companies must be the most obvious shorts of the milenium Thre are lots of hedgies and banks waiting to unload all their alt A crap onto these federally provided bag holders. If you have freddie and fannie paper i hope you have loaded up on the default swaps - they are still relatively cheap but the cost will sky rocket This is the greatest investment idea in the world. The cost of protecting Fannie Mae's debt with credit default swaps fell to 57.75 basis points, or $57,750 a year for five years to protect $10 million of debt, down from 66.2 basis points before the Goldman (GS.N: Quote, Profile, Research) and Lehman (LEH.N: Quote, Profile, Research) earnings and 73.4 basis points at Monday's close, Worth 4 stars - try 1000 basis points for size Bet most of the lenders havnt. Link to comment Share on other sites More sharing options...
shorty Posted March 21, 2008 Report Share Posted March 21, 2008 Industrials may easily decline 50% from where they are now and that will not even break the long-term uptrend. 653482[/snapback] aGreed butt fer now it looks like they held 12k and opened hunting season on trapped bears Link to comment Share on other sites More sharing options...
shorty Posted March 21, 2008 Report Share Posted March 21, 2008 I don't like "penny" stocks. Butt here's a company with paSSt glory days, that still does an impressive $200 million (almost) in revenue per quarter. Imagine what could happen to the stock if they ever returned to profitability. Link to comment Share on other sites More sharing options...
shorty Posted March 21, 2008 Report Share Posted March 21, 2008 While Applied Materials' core chip-equipment-making business has struggled with weak demand and the overall economic slowdown, the company has steadily been expanding into the market for tools to make panels that general solar electricity. Link to comment Share on other sites More sharing options...
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