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October 10, 2008

Comments

kim

Ooh, he mentioned Sheila Bair with the big boys. Her Daddy would be so proud. Maybe he IS proud if he's still alive.
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kim

She's FDIC head just in case you didn't catch my drift. Yup, the FDIC is on the job, folks, so go to McDonald's this afternoon after work instead of the cash machine.
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Rocco

300,000,000 people in this country give or take. Divide a trillion dollars by 300 million and give it to us, we'll get the economy going!

David

"So if I buy stocks today from panicked sellers, what am I?"

Answer: Smart. If I had the spare cash, I would do exactly that.

Charlie (Colorado)

Well, it tested the last bear lows, didn't like it, came back 800 points and dropped 250 again. If the volume were higher I'd think that a bottom.

I'd say if you have spare cash it's a good time to buy, and otherwise it's a good day to listen to Bach and wait. The market will do what it will do, and we won't know what effect Paulson et al will have until they can actually start doing things. Right now, they're still trying to get going.

Jane Whitman

What would you buy?

anon

So if I buy stocks today from panicked sellers, what am I?

A premature.....injector of fundage?

I think let them sweat the weekend and do Monday.

RichatUF

Lehman settlement today

They are starting at 9.75 with 4.92 billion in open interest. The final numbers will be posted 2PM today. Bloomberg article...

Charlie (Colorado)

Hmmm. I'd be tempted to buy GE, I think. Or buy an S&P500 fund, that way you don't have to bet on a particular stock.

Charlie (Colorado)

Waiting until Tuesday wouldn't be bad, either.

matt

The issue is timing the bottom. If the market continues to drop,investing now might hurt. Very difficuit to do. I have seen some screaming opportunities in energy, but am waiting a bit longer...

David

Even if the market has a bit more to fall, the current prices make lots of stocks really good values now. So if you wait, you can get an even better deal, or you could get no deal at all if the market snaps-back to its old prices.

Of course there is risk, if the efforts being made don't free-up the credit markets, then lots of profitable going concerns could be forced to suspend operations.

Charlie (Colorado)

The issue is timing the bottom.

Oh, Bullwinkle, that trick never works.

Two things that do work is to dollar-cost average --- buy smaller amounts over time. If this is a bottom (kinda sorta looks like a parabolic reversal on the 1 day chart) that means you'll end up with an average price near the bottom, and if it's not at least your cost basis is lower than it would have been.

Charlie (Colorado)

No, I don't remember what the second one was.

Charlie (Colorado)

Oh, of course: the second one is to wait until we have a couple of up days in a row and buy then. You don't get as good a price but you've got more confidence you've got a bottom.

Charlie (Colorado)

Okay, the Washington Post just declared "the end of American capitalism." I think that's a bottom.

Cecil Turner

I admit being unqualified to evaluate this, but I don't think day-to-day trading is a very good metric. Just as the "irrational exuberance" of the bubble years had people buying when unemployment went down a tick . . . and then buying again when it went back up (with two mutually exclusive explanations on why that was a good thing™), the current irrational doomsaying highlights a bunch of folks in serial panic mode (though that can certainly be a self-fulfilling prophecy). And as we've already pulled the trigger on what the experts claimed was the best hope of fixing it, I'm not convinced "something new" is the ticket.

In other news, the Democrats continue dishonestly to make political hay on the issue; and President Carter remains almost perfectly stupid:

Carter told reporters on a stopover in Brussels that "profligate spending," massive borrowing and dramatic tax cuts since President George W. Bush took office in 2001 were behind the market turmoil and economic crisis.

kim

Google Planet Moron for 'Consensus Watch' posted on 10/9/08. Its take on the climate wars is Iowahawk grade. I should say, bgates grade.
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boqueronman

...And then? The beginning of American socialism... Fascism... Communism? The real question is: Can reporters be any stupider? My head is about to explode.

kim

Charlie, I still like, from Iceland: "We'll be fine; we'll eat what we fish."
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Charlie (Colorado)

Charlie, I still like, from Iceland: "We'll be fine; we'll eat what we fish."

Hell, I'm tempted to move to Iceland myself.

A country where everyone stays inside all the time, works out in gyms, and has sex to fill time. And it's got lots of bandwidth. It's like geek heaven.

ben

"Carter told reporters on a stopover in Brussels that "profligate spending," massive borrowing and dramatic tax cuts since President George W. Bush took office in 2001 were behind the market turmoil and economic crisis."

Thank God that during economic crisis times we have an authority like Carter to get advice from...since tax cuts caused the crisis I suppose the only way to solve it is a massive tax increase...he should have a joint press conference with Obama to announce it.

LurkingMom

The twin towers fell; now the markets fall too.
What is our distressed country to do?
Catch that conspiring Muslim, Osama,
And elect Barrack Hussein Obama?

ben

"Hmmm. I'd be tempted to buy GE, I think."

I would if I had some loose change.....

Charlie (Colorado)

A little blast from the past: CDS: the next crisis? March 17th.

Wasn't that about the same time we were hearing that Fannie and Freddie didn't need more regulation?

Charlie (Colorado)

Okay, playing technician again, this really does look like a parabolic: I'm going to predict the market closes about 8500 and may actually close up.

You should all forget my prediction that it might get back to 10K by the end of the week, of course.

ben

"And elect Barrack Hussein Obama?"

Of course!! In times of great turmoil you want a steady experienced person with a clear record of accomplishments and consensus building. A glorified community activist with a history of voting present on tough votes. Someone with a solid hope and change agenda.

clarice

I'm dusting off Catch 22. Didn't "The Corporation" own everything?Will we be selling our weapons to keep this buying up going? Our parachutes? HEH..Who knows? Heller's dead.

PDinDetroit

You can now buy Ford or GM for less than the price of a McD Happy Meal.

ben

'I'm going to predict the market closes about 8500 and may actually close up.'

Could be, there have been a few dips below 4% but each time the market resisted the temptation to panic. Some resiliency around the 8200 level.

Larry

Clarice: Buy for a dime. Sell for a nickel. Make up the difference in volume. - Milo Minderbender

Extraneus

Didn't Bush signal that he'd appoint Colin Powell as Secretary of State before the election? Considering that there's no way McCain can claim to be an economist, and seems to have a hard time even talking about economics, it might make sense for him to do something similar re: Treasury.

I'm not sure who the best person would be, but I'm positive that he or she (not Meg Whitman, doofus) would get an immediate hearing, and could take the opportunity to school the Sixpack family as to the cupability of Democrats for the current mess.

I doubt that Obama could do the same.

sbw

Milton Friedman isn't doing anything right now. He couldn't offer bad advice like many other academic economists.

jim Rhoads aka vnjagvet

The latest polls show the candidates dead even with independents. Almost exactly 1/3 BHO, 1/3 JSM, 1/3 undecided.

I think this thing is still very much in play.

Then the news that BHO is buying 30 minutes of network time on CBS and NBC, and trying to buy the same time on other networks.

Is that just because he can or because he is way ahead? Or is it because he thinks he has to do this?

Hmmmmmm.

Pofarmer

Ag commodities are locked limit down. I think bottom picking may be premature, there is a lot of air under here.

Extraneus

I'm listening to Rush read this post from Captain Ed, and I don't remember hearing him credit the Captain. Maybe I missed it.

I know he's done this with NY Post pieces, since I've read the paper while listening in the past. Sometimes he credits the author, but when he doesn't it seems a little unethical.

Cecil Turner

I suppose the only way to solve it is a massive tax increase...

I was thinking the same thing (and trying to work in a Smoot-Hawley reference), but decided it was overkill. The good news: he's rapidly destroying what little credibility he has left.

clarice

Ectraneus, he ususally does in the written credits on his website..Sometimes he misses in his commentary. Frankly, i don't know how he does this day after day--it is exhausting trying to keep up and find the best stuff and boil it down for a listening audience.


"Clarice: Buy for a dime. Sell for a nickel. Make up the difference in volume. - Milo Minderbender"

Sounds like Barney Frank's and hris Dodd's idea of a perfect mortgage system.

Pofarmer

Ya know, with this CBS thing, Obama is really pushing the Chavez envelope.

Ranger

Then the news that BHO is buying 30 minutes of network time on CBS and NBC, and trying to buy the same time on other networks.

Is that just because he can or because he is way ahead? Or is it because he thinks he has to do this?

Hmmmmmm.

Posted by: jim Rhoads aka vnjagvet | October 10, 2008 at 01:16 PM

My suspicion is that he is hedging against a bad debate. The last one is about the economy, and McCain has already shown he will go after sub-prime, FM/FM hard, and Obama has that clip of him being named as "part of the Fannie Mae faimly" out there waiting to be used in a 30 second spot against him.

If I were McCain I would buy at 30 min. block myself and then talk directly to the American people about the finanical crisis. Tell the hold story, going back to "financial affirmative action" in the late 90s, using FM/FM to buy the bad loans the government was forcing banks to make, and then making money off of selling those bad laons as safe investments back to the banks. Spend 15 minutes laying this whole thing at the feet of the Dems then spend 15 minutes talking about how we recover from it.

RichatUF

Here is the lastest from Bloomberg on the Lehman auction.

Could the word have gone out that the auction was a disaster? We'll find out soon.

Extraneus

Good idea, Ranger, and he could use a teleprompter to do it, too, just like Obama will. O made the first move, so McCain could go after he does and have the opportunity to correct any misstatements.

kim

T minus 149 and counting.
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Charlie (Colorado)

'I'm going to predict the market closes about 8500 and may actually close up.'

Or, maybe not.

kim

I predict that the market will vary.
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Ranger

Well, it looks like 8,000 is the floor at the moment. The market shot through it on openeing and then shot right back up, it just tested it again and bounced back. Of course, hope that we have hit the floor is bad for defining the capituation point.

Charlie (Colorado)

Yeah, but "Investors panic, flee market" is a good sign.

kim

I still think smart money will swoop. Panics ease over weekends and the buying opportunity may be gone by Monday. If not, then......
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kim

Hey, value is unrivaled for years. On your marks.
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Charlie (Colorado)

0.08625... Dow up to 8230. One of my predictions is going to be right, anyway.

See, this is why I didn't become a trader, after studying it for the two years I spent on Wall Street....

RichatUF

Auction results: it might redirect to a disclosure screen.

Final 8.625%

Ranger

Final 8.625%

Posted by: RichatUF | October 10, 2008 at 02:12 PM

Ok, can someone explain what the significance of the number is? I really don't get the whole CDS thing beyond the whole idea that it is a bet on a hedge(right?).

Charlie (Colorado)

It means that someone has taken these swaps off Lehmann's hands; it gives a value for them, and sets how much liability Lehmann has to settle.

PDinDetroit

Cyber Attacks at the World Bank - that does not look good at all.

LUN

M. Simon

Planet Moron - Consensus watch

Neo

This morning CNBC had up a graphic saying that the market had lost $8.2 trillion since the beginning of the year.

Let’s see $8.2 trillion X 15% (long term capital gains rate) = $1.23 trillion capital gains tax loss

RichatUF

Ranger-

It is what the arsonists thought Lehman was worth after they looked at the remaining rubble. Cash settlement on the "insurance policies" are still shaking out, but the sell off was to raise capital for around 295 billion in payoffs.

WaMu and AIG are next.

Kevin B

As a lay person watching this train wreck from the outside and hoping none of the wreckage bounces my way, I've got a question for the experts.

When news of Bailout Bill first came out, the markets plunged. When Nancy did her thing and Congress kicked it into touch, the markets recovered.

Then the Senate passed it's version of the bill and the market sank, and when Congress finally sat on Nancy long enough to pass it, the markets plummeted and have been plummeting ever since.

So my question is: If the esteemed leaders of the G7 countries were to issue a statement later today that went something like:

"Governments do not control markets. Governments cannot control markets, so we are going to do nothing new to interfere with the current situation.

"Indeed, starting Monday, we are going to start undoing what we've already done.

"So good luck ladies and gentlemen. You're on your own. Now we're off for a pint and a pie. Have a nice day."

So, would the markets go up or down?

Extraneus

"So good luck ladies and gentlemen. You're on your own. Now we're off for a pint and a pie. Have a nice day."

So, would the markets go up or down?

Good question, Kevin. :-) Too bad we'll never find out the answer.

Ranger

So 8.625% represents the pennies on the $ the bidders paid?

Don

From TODAY's FOX News poll:

There has been some discussion of Barack Obama's relationship with the former radical activist William Ayers. Because Ayers is linked to plots to bomb the Pentagon and the U.S. Capitol in the 1970s, and because Ayres recently said he wished he had done more, some people say Obama's association with Ayers calls into question his judgment. Does Obama's connection with Ayers make you less likely to vote for him for president or does it not really make a difference to your vote?

Less Likely 32%

No Difference 61%


Ha ha x 100


PDinDetroit

Don -

BO is up 6.3 Points RCP National Average. So, based upon the Fox News "unscientific" Poll, how much of that does 32% eat into?

clarice

Don--Here's a poll from Oct 5,2000:


WASHINGTON (CNN) -- Thursday's CNN/USA Today/Gallup tracking poll indicates that Vice President Al Gore may be opening a solid lead over Texas Gov. George W. Bush, after nearly two weeks of neck-and-neck competition. Today's figures -- 51 percent for Gore to 40 percent for Bush -- represents a significant margin for the vice president

clarice

Oct 10, 2004:
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Electoral Vote Predictor 2004: Kerry 270 Bush 248

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http://www.electoral-vote.com/evp2004/Pres/Maps/Oct10.html

Patrick R. Sullivan

Larry and Perry say, 'Relax, everything is under control.'

As Americans have freaked out, Uncle Sam has stepped up. He'll continue doing so until we realize the sky is not falling. The $700 billion rescue authorizes the federal government to keep doing what it has been doing for the past year to the tune of $400 billion -- buying distressed assets at bargain-basement prices and selling insurance at high premiums. ....

This financial chaos has ruined our sleep but left our physical and human capital unscathed. We have the same productive capacity today we had a year ago. And if our capital hasn't changed, we've suffered no overall capital loss.

This means that our accounting, which has focused on financial losses, is missing lots of offsetting financial gains. The offsetting gains are accruing to current or prospective purchasers of the assets whose market values have dropped. Asset buyers, whether they are young people buying their first homes, middle-aged workers contributing to their 401(k)s or billionaires such as Warren Buffett buying financial firms, can now acquire homes and stocks (claims to the same capital inside the companies) at a roughly one-third discount from a year ago. That's great for them, and lousy for the rest of us, but not a net economic tragedy.

The economic tragedy comes if we get hypnotized by the bad news, ignore the good news, fight about things we're already doing (e.g., having Uncle Sam buy and insure troubled assets) and pull our economic heads inside our shells. We Americans have lots of moxie. What we need is a strong pep talk and absolute assurance that credit will continue to flow, that insurance policies will continue to be honored, and that Uncle Sam is willing and able to invest directly in the private economy on our behalf.

So after scaring us half to death, this would be a good time for our other uncles -- Hank and Ben -- to make clear that we're heading for a safe landing and that there is no way in hell they will let this economy go down the tubes.

clarice

Larry and Perry express my feelings exactly..As I said I think the Paulson bailout funds ae like I Remember Mama's fictional bank acct which existed only to keep the kids from being scared should they learn the family's finances were precarious. Knowing it was there gave them the courage to save and earn and continue on.

Charlie (Colorado)

So, would the markets go up or down?

Yes.

Charlie (Colorado)

Less Likely 32%

Don, baby, do the math. Last number I heard was Obama at 46 percent. .46 × (1-.32) is 31 percent. 31 percent of the vote ain't gonna get him the White House.

Charlie (Colorado)

By the way, I'm standing by my prediction of 12:41.

For now.

kim

Get set.
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kim

What's the 'go buy' time? Why 3:59 of course, 21 minutes short of 4:20 which is half of 42 which is the Universal Answer to Everything.

Now, sit back and watch.
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kim

Charlie, you forgot the X100 which would make it 31, or 11 short of 42, the Universal Answer to Everything. Sadly lacking, I'm sorry to say; a bad case of premature congratulations.
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Charlie (Colorado)

Okay, I'm definitely predicting a close around 8550 on the dow.

kim

Thanks for the link, Simon, to Planet Moron. They are spot on.
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kim

Higher, Charlie, the whip is cracking.
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Charlie (Colorado)

Crude closed at 77.70. That's a preliminary close on the Dow, the tape's behind.

Charlie (Colorado)

As CNBC is saying, a bunch of folks went home long on a 3 day weekend and there was no late selloff.

Charlie (Colorado)

Um, 8450. That was a typo.

kim

Oops, I thought they still had a half hour to run. Guess I missed my opportunity, huh?
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Rick Ballard

"So 8.625% represents the pennies on the $ the bidders paid?"

Yes. It was for stuff like this though. About $330 billion initial face par worth was auctioned off. I've been looking at different issues from the deliverables list and haven't run across any MBS. I thought there was MBS involved but I appear to have been in error. This auction doesn't provide much help to Pualson and Bernanke regarding setting prices.

sam

"As CNBC is saying, a bunch of folks went home long on a 3 day weekend and there was no late selloff."

Maybe a bunch of folks will not come in on Monday, and then there will be no early sell-off either.

Charlie (Colorado)

Maybe a bunch of folks will not come in on Monday, and then there will be no early sell-off either.

Uh, I'd bet money that the NYSE won't sell off on Monday.

bgates

a bunch of folks went home long on a 3 day weekend
Because the greatest financial crisis since the Depression may require close to a trillion dollars of taxpayer backing to horribly run financial institutions, but it's no reason for anybody to miss a trip to the Hamptons for Columbus Day.

M. Simon

Oil below $80? That is going to put the big hurt on Iran.

They depend on oil for about 80% of GDP and their economy is tottering. Assume they budgeted based on $100 a bbl oil. They have just suffered a 16% drop in GDP.

That is major recession territory. If oil goes to $60 a bbl that is major depression territory.

Their internal problems should occupy them for the next year or two.

Charlie (Colorado)

bgates, it's unclear to me that having the markets open an extra day would be good for anyone.

Charlie (Colorado)
They depend on oil for about 80% of GDP and their economy is tottering. Assume they budgeted based on $100 a bbl oil. They have just suffered a 16% drop in GDP.

Sigh. I'm sympathetic to the Iranian people's plight.

Too bad it couldn't happen to the government only.

But maybe the next one will be better.

Jim Ryan

Charlie, $1.5B says the market will go up or go down Monday. You in?

DGS

I don't want to hijack the thread, but do have a question. How much do people here believe that reestablishing the short-only-on-uptick rule would prevent some of the downside sell-offs that we have seen?

DGS

I don't want to hijack the thread, but do have a question. How much do people here believe that reestablishing the short-only-on-uptick rule would prevent some of the downside sell-offs that we have seen?

DGS

I don't want to hijack the thread, but do have a question. How much do people here believe that reestablishing the short-only-on-uptick rule would prevent some of the downside sell-offs that we have seen?

DGS

I don't want to hijack the thread, but do have a question. How much do people here believe that reestablishing the short-only-on-uptick rule would prevent some of the downside sell-offs that we have seen?

DGS

I don't want to hijack the thread, but do have a question. How much do people here believe that reestablishing the short-only-on-uptick rule would prevent some of the downside sell-offs that we have seen?

DGS

I don't want to hijack the thread, but do have a question. How much do people here believe that reestablishing the short-only-on-uptick rule would prevent some of the downside sell-offs that we have seen?

boris

too late

Jane Whitman

Wow - for someone who didn't want to hijack a thread.....

Sorry DGS I couldn't resist.

MayBee

Ha ha ha--
Has Tops seen this from the WaTimes?

Democratic presidential nominee Sen. Barack Obama's campaign distanced itself Thursday from its $800,000 payment linked to the liberal ACORN organization, which is under investigation in several states where it is suspected of filing fraudulent voter registrations.

Hilarious.

clarice

Well in his latest ad today, McCain didn't miss that.

Charlie (Colorado)

Charlie, $1.5B says the market will go up or go down Monday. You in?

The NYSE? I'll take the other side of that.

MayBee

I'm having trouble watching that ad on my computer.

I feel like I'm in an upside down world today. I can't believe all the reports about how dangerous the climate of anger is that McCain/Palin are creating.
There is a demonization going on! Says Joan Walsh on Hardball.

Have none of these people been watching the way Bush has been treated the past 8 years? Are only liberals allowed to be angry?*

*In a partial answer to my question, David Corn appeared earlier to day to say how he is reminded of how the Republicans turned the recount into a circus with their protest. Ha. 12 guys in khakis and the left can't get over it.

sbw

I'll bet the Dems go after the administration for calling a bank holiday on Monday.

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