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#1 wndysrf

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Posted 26 December 2002 - 04:40 PM

Mark’s Market Commentary – December 26, 2002

Driving back from Mexico yesterday, I could not help but notice the Epicenter of Excess along the 805 Freeway in San Diego. The Del Mar/Sorrento Valley/LaJolla corridor, littered with brand new buildings with fancy signs:

Qualcomm. Intuit. Prudential Securities. Prudential California Realty. Seibel. Altera. Oracle. On and on.

Enter any building. Enter any office. The receptionists are guaranteed to be Supermodel quality.

Who is paying the sky high rent on these offices?

So many BMW 330’s.

So many yuppies on cell phones.

So much hype, hysteria, and hope.

So much excess.

So much rampant optimism in real estate, high tech, and “The New Economy”.

But I noticed a couple of “see throughs”. Peregrine Systems. Remember them? Gone.

How about Stac? Remember that disk software company? Gone. No more stock symbol.

Brand new buildings, now vacant.

And how about Elan (ELN) and Diversa (DVSA)? Two biotech bombs with spectacular headquarters buildings perched on the top of some mountain. How much longer can they pay this overhead? And the landscape maintenance. And the extravagant reception areas. And the overpaid Supermodels answering phones.

San Diego needs to be watched carefully. A perfect Bubble Barometer.

Yet again, The Wall Struck Journal reports more chicanery and skullduggery amongst our largest financial institutions. This time, it’s the use of insider information to daytrade credit default swaps, the latest financial exotica spawned by our “services economy” and Al Green’s “productivity miracle”.

As we have documented repeatedly, the foreign insurance companies, a.k.a. the Credit Bubble “bagholders”, have suffered from an inferiority complex with respect to Global Financial Supremacy. In an effort to “catch up” with the Goldmans and the Morgans and the Salomons here in the U.S., the foreign insurers bought into the tail end of the risk curve where the most “profits” appeared to be made: The credit default swap game.

Unfortunately, the foreigners are no match for local Hoods and Bosses here in the U.S., who conveniently offloaded the risk bags onto the hapless Europeans, who thought they were buying into some type of “New Age” perpetual investment banking profit stream. Now they realize that those “profits” are being quickly eaten alive by the acceleration of the “cash calls” coming from Conseco credits, aircraft leases, zero percent auto loan securitizations, and plastic surgery financing.

Now they are looking for some payback.

These poor insurance companies are claiming that U.S. bankers “are sharing confidential information about credit woes of clients, prompting the traders to place bets in the unregulated derivatives market that allow them to get the better end of positions.”

“At issue are complaints that the lending departments of some banks are telling traders at their firms of pending liquidity problems at corporate clients, allowing the traders to buy credit swaps before the information is made public, and sell them later for a quick killing.”

Of course, the U.S. bankers claim that boyfriend and girlfriend are living together, but sleep in separate bedrooms:

“Our credit derivatives desk does not have access to the loan pipeline”, says John Coffey at JPM. “That is standard procedure”.

Other bankers are claiming no responsibility, because like Los Angeles wannabe actresses, the mood volatility tends to have a mind of its own. Once the death spiral starts, there’s no stopping it.

“Because the credit default swap market is a platform where it is easy to express negative sentiments, this market often leads on the way down, and it can be misconstrued as front running”, says a chief derivative trader for Morgan Stanley.

One interesting factor to note is that MBI and ABK are also joining the insurers and some fund managers in the suit.

The Hillbilly Credit Club has been hanging together, partying with moonshine, best of brothers. But as I warned, we need to start looking for some cracks.

Eventually, one of these guys is going to start feeling the shaft.

Eventually, some of the players are going to turn and get out of the game to save their own hides.

MBI and ABK may be the first to break off from the pack, since they appear to be feeling some heat.

And of course, the foreign banks and insurers, who have been the chief consumers of risk in this whole game, may already be out. Too much overhead supply. Lots of “rights offerings” getting floated over there to “recapitalize” some of these time bombs.

I wonder why Biderman hasn’t commented on the “overhead supply” combined with this “new supply” of rights offerings over in Europe which will discourage the foreigners from “snapping up” U.S. shares as IDB reports “breakouts” from “8 month bases”, etc.

I wonder why O’Neil doesn’t flat out admit that 90% of his featured “breakouts” are just gargantuan short squeezes?

I wonder why our leading economists don’t fess up to the fact that the U.S. is a hopeless borrow and spend addict, dependent upon an increasing supply of recycled dollars from the foreigners to feed its habit?

Such are the daily illusions found here in Alice in Repo Land.

As far as today’s trading goes, the volume was pathetic, so we won’t even count today’s action as meaningful. As usual, the No. 1 rated Market Timer of all time (Al Green) noticed that once again, the Dow and S & P were again resting on the all important 90-day moving average shown in The Wall Struck Journal. Real technicians use other moving averages, but Al Green knows that the sheeple all look at those WSJ charts, and they are looking for some type of “chart failure” so they have an excuse to do some tax loss selling.

As usual, flying bids were put in the PreMarket futures to get a Santa Jam going. But in the afternoon, there appeared to be some type of intraday “accident”, as some bids were suddenly pulled. Wouldn’t it be ironic if some sort of “crash” commenced during light holiday trading, just when most participants were hoping for some Santa Rally to bail them out of those “mistake” buys made in November? Like buying QLGC at $45?

Anyway, the stocks were jammed, but poor Uncle Buck collapsed and took out the all-important 103 level.

And how about those hapless shorts who grabbed those gold stocks last week? Smoked. Lana-style, in reverse.

Poor Al Green.

Too many failures.

Too many leaks.

Too much hope.

Too much leverage.

Too many Repos.

Time is running out.

But as predicted, a short squeeze on NCEN was pulled off, as if the market is telling us that Al Green may have a new surprise trick in his bag for subprime mortgage loan applicants. What could it be? Maybe some new financial exotica like FICO Score Futures, where bagholders on NCEN’s securitizations can now “hedge” their exposures by shorting FICO Score Futures?

Posted Image

Anyway, I added a small short position on this one to add to the “Core Credit Bubble Portfolio”

As for the QQQ’s, we have an odd pattern here. What is it? A “saucer bottom”? Are the QQQ’s “walking the plank”? Could it be a pattern similar to the March – April top on the SOX, where it traded sideways for over a month, only to blow the shorts out on a last exhaustion spike?

Who knows….

…………………..

Buddha is on vacation. The Best of The Color Commentator continues:

After the May 15 top, the market worked itself lower. However, the shorts were still scared, due to some short covering on WCOM and hysteria jams on some potential “beat the street” announcements by QCOM and NVDA, which were fighting the trend and getting HeatMapped by the RiverBoaters. The usual news-driven jamming was capped by Maria’s interview of Merrill’s Komansky. Here is Buddha’s the blow by blow of the May 22 action:

WCOM

“Kathleen Tanzi just said WCOM gapped up nicely today on a good report about their cost cutting. Say What? Gapped up 5 pennies folks. Unbelievable. Until they stop this kind of outrageous reporting that gets pensioners and retirees to cling for life to a dead old Queen there is just going to be more and more disappointment. Can't believe they simply can't come out and tell the truth. "Ah folks we have crash and burn update on WCOM Death Star, if your still in it your an idiot and a sucker and have been taken badly for a big ride. The leaders of the bull become the sitting ducks of the bear folks, avoid the old populars, they are a Dead Zone of huge gravitational force. Folks this is not like buying shoes in a store on sale. These are not Guccis folks at 99% off they are selling rope to make nooses to string suckers up with. Sorry folks"

QCOM

“Have you ever known a company that changes its forecasts as often as QCOM? Its all a bunch of hype and nonsense, they don't even speak the Chinese language, traders have been speculating on that market for years now and they use it to jack around the price and create volatility, they see the gap below to $29, if they told the truth they would just say "we pumped this overvalued queen last week and now were selling it" end of subject. Watch wallet at all times, trailing stops in to cover QCOM once 'news' gets leaked that 2 billion Chinese have placed orders for their junk and are mortgaging their sampans to make the first down payment. I mean really, its insulting, these sharks should be lined up along the Statue of Liberty and allowed to contemplate their own existence for the weekend without food, shelter, water or for that matter cell phones.”

“The QCOM Queen that has been pumped the last few days is now down while techs bounce a tad. Rotation, constant rotation, yesterday's winners selloff today, today's losers rocket up, sick, sick Market, wild money just rotating thru risk/reward plays, no stability, no trust, no comprehension of warring fundamentals in all these issues, no trust of dueling brokerages constantly changing estimates, jacking price, playing with momentum creating hysterical confusion and unrest. Short stocks that are up for a couple of days, buy the ones that are down and take what you can. All of this is nonsense until it dawns on people what this junk is actually worth, by then it will be too late.”

NVDA HeatMapped to $40, the last high before the next plunge

“People waiting on NVDA guidance now, they had to reaudit and restate last 5 quarters how’s that for reliability? Probably go thru the roof PreMarket, why not? Comp loves its crack clients. If call is good I'm longing afterhours since revenue is up, if guidance is not good stock will drop like fat lady pushed out of 747 at 30,000 ft. I expect guidance will be spun and will be good. Spin management, restating last frickin 5 quarters, how’s that for insuring the Public Trust. Bunch of criminals. Remember when this was Red February stock on news that they were being investigated for misstatements by SEC? Does this never end? Guidance is whatever the company wants to lie about in effect all these companies have been lying about their guidance for the last 5 quarters in desperate attempt to avoid reality so I don't know what the big deal is, the game is tell me how fast you would like to grow and then I'll buy your stock. There needs to be some regulation of these practices. When guidance is continually and radically revised something is wrong.”

Playing a News Driven Market

“The moron from Merrill interviewed by pro ass kisser Maria on C.N.B.C. Anyone see that? A criminal who has swindled thousands and thousands of investors recommending stocks that they know to be dogs, this jerk gets congratulated by the little girl with the lisping, heavily Long Islanded accent. Is this Alice in Wonderland or what?”

“Congratulate someone for getting off easy after making away with billions out the back door? What’s wrong here? I say here and now that everyone just boycott buying MER and the other pimp House stocks. Here and now. The only way these people feel any pain is where they live, their ridiculous share price. Anyway you look at it they are going a lot lower, maybe not in short term but eventually. It’s in the chart and its in the karma. They even tried to jack the opening on Tuesday with all the settlement news and 'everything is fine now'. We actually got our gap up on that nonsense and the same idiots who were swindled by this Giant Pig were buying the company PreMarket. News rules. People staring at charts all day could have saved the time and just turned on Fox Radio for God's sake. When the Brooklyn Bridge and the Statue of Liberty are announced as terrorist targets intraday why do people bother with support and resistance? The guys working the floor are what? 2 miles away. Common sense rules. News again overwhelmed all else on Tuesday.”

“Literally its like Playing Russian Roulette with Fox News. Maybe the sad Sandra Levi exhumation takes some heat off N.Y.C. for a while, ghoulish as that sounds. Maybe one of the Bush twins runs off with a Rasta Man down in Jamaica, that would do the trick, Markets could move up then, anything to remove this constant heat from Armageddon. Can't trade it that’s for sure unless you are a premium level scalper and own a seat on the floor. Ridiculous. Tiresome. Repetitive. When does the 5-year old manic depressive get put on medication? Requesting that dosages of Lithium, Zoloft and Tricyclites be doubled in the interim for Comp patient and electric shock used in the event of shallow response, get back to me on patient's progress come Tuesday. If still no response by then I recommend putting sad child out of its misery and getting on with more constructive measures.”


Position Summary:

New quarter short on NCEN at $28

We are 42% short, 22% long, 36% cash.

Half Short:

LOW at $42
INTU at $53
C at $38
TGT at $34
MBI at $50
JPM at $25
AMGN at $52

Quarter Short:

FRE at $68
CFC at $49
KBH at $49
LEN at $56
TOL at $27
BBBY at $35
COCO at $40
KSS at $66
NCEN at $28

Full Long:

GG at $11

Half Long:

BGO at $1.31
HL at $4.10
PAAS at $5
DROOY at $3.35
GLG at $9
MDG at $16
PigMen Proprietary Trading Desk

The Weimar Run: Bullphoria!!!!

#2

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Posted 26 December 2002 - 05:21 PM

Yes folks! Gold is truly in a bull market. The dollar continued below its 80-month moving average and you would have to move back in time to January 2000 to find the euro at current levels to the dollar. At the same time, gold moved to $350! Let the trend be your friend. From now on I will hold long term and not trade as much. Buy all dips sell no rallies! This is the real thing. Special thanks to Mark for pointing out to the rest of us as we started getting antsy and doubtful of the miners' potential that this is what it feels like being in a bull market. It just keeps going and going and ...

I guess it's been so long since we enjoyed the privilege of a bull that we were all too eager to take profits. We failed to identify a raging bull! Well, this time I'm in it for the long haul. Let your profits run. I'm glad I spotted RGLD as the frontrunner and identified Bull Flags on all the rest of the miners. Most were broken to the upside today as well as some ascending triangles, too. Remember this, when you think it'll pull back - it just takes off :shocked

#3 Contrarius

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Posted 26 December 2002 - 06:06 PM

Great job Mark.
We have our own epicenters of excess near Orlando.
Maybe not on the scale of SoCal, but your post hits home.
Lucent, Charles Schwab, Verizon, AT&T. Veritas, and Seagate.
And I almost forgot....Planet Hollywood.
Schwab's current state of affairs is noteworthy.
They once occupied two 6-story buildings.
They now only need approx. 4 floors of 1 building.

And all those empty hotels rooms.
At least the lines are short at Disney and Universal.

#4 Guest_AssMaster_*

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Posted 26 December 2002 - 06:10 PM

For some reason I have this hankering to change my avatar to a picture of a hottie. :grin:

#5 torah man

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Posted 26 December 2002 - 06:50 PM

when we read the post, we visualize the avatar, even if it is a cartoon, as having something to do with the person writing.

We see age, like in doc's. we see male or female but not necessarily the truth.

It colors how we read the posts.

If someone used an avatar of an older grandmother type, they could get away with saying almost anything, no matter how rude, and we would take it.

Choosing an avatar is very important.

#6 DrStool

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Posted 26 December 2002 - 07:26 PM

How about one of a Jewish guy who looks like Santa Claus in his younger days? :lol: :lol: :lol:

We are waiting for you to get older, so we can ask for presents. :P

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Posted 26 December 2002 - 07:38 PM

when we read the post, we visualize the avatar, even if it is a cartoon, as having something to do with the person writing.

We see age, like in doc's.  we see male or female but not necessarily the truth.

It colors how we read the posts.

If someone used an avatar of an older grandmother type, they could get away with saying almost anything, no matter how rude, and we would take it.

Choosing an avatar is very important.

OOHHH SHHIIIIT! Now you tell me !!!!! :o

#8 MrHanky

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Posted 26 December 2002 - 07:46 PM

damn,...went to work around 1:00 when the markets were up around 1%...just got home to see a down session.I must say that this market is more unpredictable every day....don't ya just love those mornin gaps!!

Nothing


#9 Metamucil

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Posted 26 December 2002 - 07:46 PM

Mark’s Market Commentary – December 26, 2002

Driving back from Mexico yesterday, I could not help but notice the Epicenter of Excess along the 805 Freeway in San Diego. The Del Mar/Sorrento Valley/LaJolla corridor, littered with brand new buildings with fancy signs:

Qualcomm. Intuit. Prudential Securities. Prudential California Realty. Seibel. Altera. Oracle. On and on.

Enter any building. Enter any office. The receptionists are guaranteed to be Supermodel quality.

Who is paying the sky high rent on these offices?

So many BMW 330’s.

So many yuppies on cell phones.

So much hype, hysteria, and hope.

So much excess.

So much rampant optimism in real estate, high tech, and “The New Economy”.

But I noticed a couple of “see throughs”. Peregrine Systems. Remember them? Gone.

How about Stac? Remember that disk software company? Gone. No more stock symbol.

Brand new buildings, now vacant.

And how about Elan (ELN) and Diversa (DVSA)? Two biotech bombs with spectacular headquarters buildings perched on the top of some mountain. How much longer can they pay this overhead? And the landscape maintenance. And the extravagant reception areas. And the overpaid Supermodels answering phones.

San Diego needs to be watched carefully. A perfect Bubble Barometer.

How hilarious. That is exactly why I moved here (Carmel Valley; rented a home in the hills) in June....to watch it all crumble.

I had consulted with biotech and med institutions here, for several years. Most were seeking private financing from me and my colleagues. I outright told them (beginning in 2000) that they will not only have enormous trouble raising$ but 95% of the biotechs are headed for the dumpster. I was almost assaulted.

God help the Kodiak who walks in here with The Bearish Language. The denial is so powerful that dispensation of the truth is literally extremely dangerous......and that is an understatement. Folks are still trying to live like decadent Romans....and the conversations are totally detached from reality. It is VITAL for these bubbleonians to deny reality; they are way above their heads.

I will have a new column in the SD Biotechjournal. First article: "The Bullish Language: How Much Has It Cost You?" Time to get it all in print.

The ONLY hope left for the permabulls here is DENIAL. This bubble, when burst, is going to be a MUTHAH!!...and I am circling it....like a Great White Shark. Hmmmmmm......

This thing is toast.....and I have thrown the kitchen sink at it.










"I know the human being and fish can coexist peacefully"____George W. Bush, 7/29/2000

#10 DrStool

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Posted 26 December 2002 - 07:59 PM

So that's some kind of DNA thing, right? Like, are you a molecule?

I'm just not too sure about TM's avatar theory. Ok,TM admit the truth, are you in reality, the hcheysidowndeah? :lol:

edf100-

Doc takes it personally when people say things like that. The market may start out like it's going somewhere else, but it always ends up exactly where it's supposed to.

Right dr. meta?

Doc is in a silly mood tonight. :blink:

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#11 PileDriver

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Posted 26 December 2002 - 08:00 PM

DITTO Meta !!!

#12 MrHanky

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Posted 26 December 2002 - 08:17 PM

mark,your commentary gets better every day....your extra pissed off today though!!!

I don't know which was better:::

:Maybe some new financial exotica like FICO Score Futures, where bagholders on NCEN’s securitizations can now “hedge” their exposures by shorting FICO Score Futures?"

or this one


"if guidance is not good stock will drop like fat lady pushed out of 747 at 30,000 ft."

Nothing


#13 Metamucil

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Posted 26 December 2002 - 08:29 PM

So that's some kind of DNA thing, right? Like, are you a molecule?

That's what the Earthlings say, Doc. A......like.....inarticulate.....dubble helicks.

I'm just a bubble......which will burst....one day.....hopefully while having sex, or (while) taking a dump :grin:


HUI; ready for a golden ring through his nose.....thru ~150.
monthly


Behold........the dog:
monthly


The next San Dayglo target (I track them all and just wait for the reversals), coming quite soon (primary trend not kaput....yet).



The last one. Hey, wheredja go!!?? :grin:


"I know the human being and fish can coexist peacefully"____George W. Bush, 7/29/2000

#14 wrecked him

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Posted 26 December 2002 - 08:30 PM

First time post: Virgin Stoolie but my bear fur is well ruffled.

Whenever I read Pile Driver, I think that my long lost telepathic twin has finally been located. Can it really be you bro?


Whenever I am frustrated with the pace and course of this market, I always return to one of my simplest graphs:

http://stockcharts.com/def/servlet/SC.web?c=$NYA,uu[e,a]mbcayyay[pf][vc60][iut!Ue12,26,9!Ub14!Ud10!Ll14!Lc10!Lah12,26,9!Lo14!Lg][J8663144,Y]&pref=G
A generation which ignores history has no past -- and no future

#15 MrHanky

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Posted 26 December 2002 - 08:43 PM

test

Nothing






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