347 replies to this topic
Posted 16 May 2003 - 05:34 PM
Nadda. Man I wish this would clear up.
NONE of what I type, should be taken as financial advice.
And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.
Posted 16 May 2003 - 05:37 PM
Friends of mine in the bond pits say a lot of the short squeezing of the junk stocks is a result of hedges blowing up on convertible bond arbitrage plays.
Yet another leveraged trade, supposedly "perfectly hedged", blowing up due to "intermarket relationship distortions" caused by Al Green's "unconventional measures."
The perfect COSMIC JOKE.
Al Green's attempt to "save" the market ends up blowing up a lot of hedge funds, causing further "maladjustments and distortions", which get the momentum players "piling on" to join the Animal Planet Herd, which only aggravates the distortions further, pushing the Program Robots to failure.
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The Weimar Run: Bullphoria!!!!
Posted 16 May 2003 - 05:40 PM
Actually it probably still does, but with considerable time delay. GE, GM, WMT, MSFT have been lagging the SPX. These stocks all have large foreign holders. One hypothesis is that foreigners have been selling these stocks as the $peso has been sliding. Generally liquidating there US equity holdings.
This may have broader implications at some point since the stock market and economy as a whole are dependent on foreign inflows.
Posted 16 May 2003 - 05:43 PM
Haven't fully backtested this, but it seems like all you need to do is pick up (buy) any supermodel at 10:30 a.m. and send her home (sell) at the close.
Doesn't require an overnight hold, or even any thought.
Might as well put the Atomic Particle Accelerator to work.
Posted 16 May 2003 - 05:59 PM
Someone (roq?) mentioned Mizuho buying of US Treasuries directed by the BOJ . . .
Excerpt: Japan Underpins U.S. Bond Market Despite Weak Dollar
Saturday, May 17, 2003
TOKYO (Nikkei)--The U.S. bond market remains strong despite a downward trend in the value of the dollar, and Japan may deserve the credit.
According to some bond market traders, the strength of the U.S. bond market is being driven by two factors, both related to Japan: the continued high level of investment in foreign bonds by Japanese investors and the fact that foreign currency reserves piled up by the Bank of Japan in recent interventions to curb yen appreciation are being put into U.S. Treasury securities.
The upshot is that the Japanese public and private sectors are helping to support the U.S. bond market even amid a move out of dollar-denominated assets by Middle Eastern investors and others.
The dollar edged up against the yen in Tokyo trading Friday, reaching the 116 yen level. The perception that the yen will head higher remains strongly rooted in the foreign exchange market here, but repeated moves by the BOJ to sell yen for dollars since May 8 appear to have checked yen appreciation for the time being.
A spike in current-account deposits kept at the BOJ suggests that the cumulative size of the interventions since May 8 has reached around 3 trillion yen, according to one major U.S. bank.
The BOJ interventions appear to have given a boost to the U.S. Treasury's quarterly refunding last week, largely because Japan is channeling foreign currency reserves obtained by the BOJ into U.S. Treasury securities. Certain major U.S. brokerages bid aggressively at the bond sales as if in anticipation of heavy buying from Japan.
Some market participants are focusing on what they see as a trend for nations other than Japan to sell U.S. Treasuries. Members of the Organization of Petroleum Exporting Nations (OPEC) sold off 5.7 billion dollars of U.S. Treasuries in February ahead of the war against Iraq. Investors from France, Canada and other countries also sold Treasuries in February.
As a result, Japan stands out as the one solid overseas pillar of the U.S. Treasuries market.
(The Nihon Keizai Shimbun Saturday morning edition)
Posted 16 May 2003 - 06:00 PM
One of the "Big 7" banks in Japan fails . . . formed by a merger between two failing banks . . .
Excerpt: Resona To File For Y2tln From Govt, Faces Nationalization
TOKYO (Nikkei)--Resona Group, anchored by Resona Holdings Inc. (8308), solidified plans Friday to file for an emergency injection of public funds totaling about 2 trillion yen, The Nihon Keizai Shimbun has learned.
The move would amount to the effective nationalization of Resona Group by the government.
Resona Group made the decision after concluding that its regulatory capital ratio had fallen below the 4% line that is considered a minimum floor for domestic banks that do not have international operations. The top executives of the group, including Resona Holdings President Yasuhisa Katsuta, are expected to resign to take responsibility for the failure.
The government will convene a financial crisis council on Saturday to approve the capital injection, and decide on deposit protection measures and other emergency steps in accordance with Article 102 of the Deposit Insurance Law.
The government and the Bank of Japan are committed to ensuring that Resona Group's capital shortfall does not turn into a wider financial system crisis.
The BOJ, for its part, is expected to cooperate by providing special loans designed to ensure that the Resona Group does not experience a crippling cash crunch.
The Resona Group filing will be the first-ever test of emergency assistance made under the Deposit Insurance Law.
According to sources familiar with the matter, Resona Group's capital ratio sank to about 3.5% as of March 31. Until now, Resona Group has maintained that its capital ratio was around 6%. But the group's independent auditors made the case that the figure should be revised downward because the group had overvalued its deferred tax assets, a key component of its shareholders' equity.
Resona Holdings' Katsuta will meet with Economics and Financial Services Minister Heizo Takenaka to discuss the situation on Saturday. The Financial Services Agency will report to Prime Minister Junichiro Koizumi the same day, after Koizumi returns to the country from an overseas trip.
Resona Group has already received around 1 trillion yen from the government in two previous rounds of fund injections. If the government were to convert its preferred Resona Group shareholdings into common stock, it would hold an ownership stake of about 40%. The additional 2 trillion yen, for which Resona Group will exchange both common and preferred shares, will give the government effective control of the banking group.
The injection is expected to boost the Resona Group's capital ratio above 10%.
Resona Group will continue to operate its ATMs normally Saturday and thereafter. Following the capital injection, it will continue to provide financial services, including consumer and corporate lending, as well as account deductions to pay utility bills.
The special BOJ loans are designed to ensure that the group does not run into any difficulty meeting depositor withdrawals.
At the same time, however, the chances are good that Resona Group will move to split off nonperforming corporate loans, transferring them to a special unit set up to hold bad loans. The shift would be aimed at repairing its balance sheet and ensuring that the group will have the resources to pay back the government.
The FSA, meanwhile, will send a team of examiners to review the management situation at the group. The agency may opt to place representatives on Resona's board.
(The Nihon Keizai Shimbun Saturday morning edition)
Posted 16 May 2003 - 06:09 PM
Hmmm SUNW, scraping the bottom of the barrel now.
Isn't this one of the 'Ameritrader fader' stocks we were warned about? It's being played by bogus "buyout" rumors while insiders distribute to the suckers. I'd wait 'till it broke and stayed above $5 (below which it last gapped down), then see how it acts. Until then, it's a failed laggard wannabe screamer.
Posted 16 May 2003 - 06:15 PM
The bulls have been right recently ... there I said it. <_<
But everything I look at says we are at ridiculous overbought levels that we haven't seen in years ... not even during the 1998-2000 parabolic move up. 100 pts down on the SP is a no-brainer.
I can't go long with such unfavorable risk/reward so I will continue to wait for the sell signal and hope that this juicy shorting opp doesn't get away from me. I am seeing cracks in the foundation but I've seen the same 2 or 3 times in the last 4 weeks.
Relative VIX is at 0.615 according to my calcs, thats a new low going back as far as mid-1997.
Posted 16 May 2003 - 06:18 PM
MMM is another one that's had some trouble staying up recently.
I fully believe the rug is being pulled from under US investors' feet as foreigners quietly cash in their blue chip holdings. The fate of the $ and the blue chips are inextricably linked.
Another angle is that the largest companies had some of the biggest runups in the bull market. To some extent I think there is some distribution going on out of the expensive behemoths and into the smaller names, many of which do not have the same exhorbitant valuations or potential derivatives exposure.
Posted 16 May 2003 - 06:19 PM
Was that tongue in cheek? 12 to 18 months minimum for currency changes to affect trade flows significantly. Besides, China and other places have such a gigantic cost advantages that to start reversing the manufacturing drain might take a 50% or more drop in the dollar. (admittedly I pulled that number out of my hat but the barriers to reestablishing industry which fled America are simply so gigantic that it will take gigantic changes to bring it back)that soft dollar policy will drvie the economic recovery..............exporters are dancing in the streets
I have no clue if the leveraged hedgehogs and other entities are blowing up as Mark suggests. I'm astounded there haven't been many so far so have no basis on which to judge if large or massive failures are closer now or just a figment of bearish imaginations.
I'll take issue with Mark's mention of Keynes. The panacea being proposed, as always by Snow, Bush, et. al, is supply side with a big side dish of financial gamesmanship. Supply side is astoundingly still being embraced as the answer, despite the fact that there is an oversupply of almost everything that is manufactured. 30 years of supply side have given us the current situation and still the true believers persist with their religion. Insane. (I'm not here to defend Keynesianism, which is a specific thing dealing mainly with managing demand, which was actually a small part of Keynes complicated if not inpenetrable ideas which in any case were not an ideology)
More and more I am comming to appreciate the concept of The Matrix in that reality is being made for huge swaths of the population thru propoganda. Crapvision being the example most apropos here but all the 'news' is essentially managed as well.
The move on detaxing dividends suggests to me that the big boys are now sick of the whole 'growth' agenda and trying to make it on capital gains. When you own 70% of everything the best idea is to forget growth and just milk what you have. The damn managements have robbed them blind over the last 20 years. It's time to take that money home on a regular basis. Less exciting perhaps but still. 70% of everything is big, really really big.
War is the last great hope of the incompetent to order the unwilling to attempt the impossible.
could burn down
We jammin still
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Posted 16 May 2003 - 06:19 PM
Hoping stoolies can help.
I'm looking for a website and/or software that will alert me to stocks that are seeing heavy volume surge on an intraday basis.
Such as ARTI today. Bounced 10% in a couple of minutes off of perfect fibonacci targets. Not on my screen, so I missed it.
Posted 16 May 2003 - 06:21 PM
I went back to 95 and the lowest reading I could find was 0.68 in July 99.
Posted 16 May 2003 - 06:24 PM
Exactly and at the same time Junk bond holders short Hedge has been exploding and are having to cover their position. It will take time before it settles down some time in June.
Short covering will take place on any significant drop and will get one more rally.
Posted 16 May 2003 - 06:24 PM
I also haven't had anything that even resembles a buy signal of any kind since March 31, 2003 and that was a pathetic one (pathetic signal that is, the trade woulda worked rather well) ... that's 7 weeks of euphoria. Time for this binge drinking market to suffer a hangover.
Posted 16 May 2003 - 06:25 PM
Uncle Buck breaks the 94 level afterhours. Astonishing that such large short positions are being put on right in front of the G7 meeting. Seems like the boys are in the know.
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