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  • How Bad Is the Dollar's Fall?
    Wow that Chief Economist Carl Weinberg is a rocket scientist for sure. To think at some point when the Fed stops cutting rates and starts to raise them that the US dollar might go up? That is absolutely Nobel prize winning intelligence there. I think I learned that in Econ 101 but then again I don't have the title Chief Economist so what do I know.

    I've been short the Euro for about two weeks now. The dollar recovery has already begun at least for the medium term. Deleveraging will continue to drive inflows into US dollars and the Fed will be up against it to cut much further in the short term. The market knows this but apparently Carl Weinberg is still skeptical/stuck in Econ 101.
    Mar 23 12:26 pm |Rating: 0 0 |Link to Comment |View article
  • Will Credit Market Flight to Safety Boost Stock Prices?
    I think the author may have the premise bassackwards. T-bill rates don't necessarily have to be an exogenous variable to the BS model. They can also be an endogenous one. In other words, smart money is selling a lot of options given volatility is so high and banking the cash.
    Mar 23 12:13 pm |Rating: 0 0 |Link to Comment |View article
  • What Visa's IPO Means for This Market
    User, you should really come up with a unique name since you are obviously a thoughtful person and it is always good to be able to recognize the comments of someone like that on here for more rapid filtering.

    In fact my comment is a serious rejoinder, as you put it. Someone is wrong. Either JPM is wrong in its underpricing or the retail investors who ran into the stock this week are wrong in bidding it up. This is a zero sum game. Someone is always wrong. Which one is it?

    If the owners need cash, what does that say about the economy? These are the guys that can get the cheapest rate going - the Fed funds rate. The little guy, i.e. the consumer, is also loaded up with debt but doesn't get the benefit of Fed funds rate. They pay whatever the banks need to charge to insure against defaults. You might have the best credit in the world but you still have to pay for every Tom, Dick, and Harry who goes bankrupt. It's like car insurance. You subsidize those with bad records because the insurer/bank has to make money off those they can count on.

    Every single consumer is going to be hit by higher lending costs. That means less disposable dollars and a decreased sense of financial wellbeing. That means going to WMT once a week instead of going to T and HD and BBY at least once per week. Why do you think BBY is off 20% in 4 months? If their revenues are falling, then what does that say about the likelihood that V will be able to sustain its transactional revenues?

    I absolutely agree that Asia will be a growth story for V. However, you are obviously familiar with the economic situation of that region. Do you honestly think that the average Chinese person with income of about $2000 dollars (2006 figure) will be racking up the same number of transactions at big box stores with debit machines at every till?

    Some day growth there will be phenomenal but whether it will be captured by V or some other entity remains to be seen. I prefer to place my bets when and where there is a higher probability of success. If you want to look into the future of how V will play out, take a look at the chart of VMW (or for that matter pretty much any IPO of 2007). But V is totally different right? Right........
    Mar 23 11:56 am |Rating: 0 0 |Link to Comment |View article
  • What Visa's IPO Means for This Market
    A company has no legal or moral (or whatever) obligation to sell its shares. There are two reasons to do an IPO. One is to get financing and the second is to lock in gains. If V is such a great business given how long it has been around and given its incredible? growth prospects, why does it need financing? Is it something more systemic that is wrong and is therefore causes JPM to seek cash at low valuations (not exactly a bullish statement)?

    That brings us to the second reason. Come on. Do you honestly believe that JPM is saying 'yes we are so incredibly philanthropic/moronic that we want to give money to the public'? In that case if I were a JPM shareholder, I would be filing suit on Monday for breach of trust. I would say hey what are you doing making the public 48% richer than you made me? And to that some smart JPM exec would say to me in a hushed tone 'don't worry we sold it for all it was worth'. I have to oppose the supposition that JPM execs are morons. Morningstar must believe they are for giving away a $72 stock for $44.

    Personally I hope all here have been long V from the get go and that we can sell V together and make a bunch of money (you locking in gains and me counting on some). The only one that doesn't want that to happen is Mr. Market because he plans to keep the money for himself.
    Mar 22 13:52 pm |Rating: 0 0 |Link to Comment |View article
  • The Liquidity Trap Cometh
    Gross Bill I'm not saying that there won't be further deterioration down the road, but, based on the way the charts are setting up right now, there will be one more down turn in the very near future. Then there will be a gradual recovery followed by some as yet undetermined correction to new lows.

    I read another article that said essentially "don't worry unemployment is so low that this recession won't be so bad". Well, the unemployment rate before the start of the Great Depression was 3.2%. (see encarta.msn.com/encnet... ) Last time I checked the US has a higher unemployment rate than that currently.

    I would love to be a bull on the market since there would be a lot less stress but it ain't in the cards right now. I'm also feeling a little more confident that having such a studied depression era historian as Bernanke will morph this market into something less catastrophic but history does have a way of repeating itself. He is also only part of the puzzle.

    The EU may not be helping matters by refusing to stimulate things with a rate cut. Similar occurrences during the depression exacerbated the problem. As an example tariff rates were increased significantly. How about the US just suspend NAFTA? Does that not sound like a similar policy? Is that history repeating itself?
    Mar 22 12:28 pm |Rating: 0 0 |Link to Comment |View article
  • What Visa's IPO Means for This Market
    Let's see: the smartest guys in the room (currently JPM) are releasing their interest in V to the market. If good times are just around the corner, why didn't they hold out for them and a higher IPO price? Why would insiders who know the true value of something be releasing a great company like V into the market at what could possibly be the bottom?

    Hmmm, how about this? Revenue for V is about to fall dramatically as the largest consumer economy in the world goes through retraction. How many purchases by other emerging markets will be required to make up for this retraction even if V does continue to drive growth outside its pre-existing markets? Will V really be able to pass along the same transaction fees into places like China?

    How's that Blackstone IPO treating those who rushed to get into the greatest opportunity of its day? The truly smart guys who are divesting a "great" and established business never sell because they are hoping to make a bunch of money for the public.
    Mar 21 16:40 pm |Rating: 0 0 |Link to Comment |View article
  • The Liquidity Trap Cometh
    I am afraid. I'm very afraid. The smart money rushed for the exits and the charts have set up for one more whoosh down. Also, part of my reasoning is that I actually felt like buying something this week which is wrong in a bear market where you don't have a confirmed bottom. The last time I felt like buying something was the best sell in the past year. Live and learn I guess.

    It was interesting that the market shrugged off the CIT news. I think that or something similar will become a catalyst sometime next week and will reveal why the smart money is in t-bills.

    Some may be interested to read the following:
    freethemarketman.wordp.../
    criticalmas.com/2008/0.../
    thewallstreetbully.blo...

    I think we will find that these guys were only slightly ahead of their time.
    Mar 21 14:13 pm |Rating: 0 0 |Link to Comment |View article
  • The Coming Crash of 2008: A Result of Overleveraging
    drmlaka I think you've nailed. it.

    This is what's going to happen today (in about 40 min). The Fed will cut 100 bps. The market will explode higher, especially crude and gold. The dollar will absolutely crater. This will look great. For a while. Then folks will wake up and see what they have done and the party will be all over but for the hangover. The Fed is going to throw the party for Wall Street and Joe Public will get to deal with the aftermath.

    Bear markets do not finish like this and its been that way since the beginning of time. Bull markets in oil, gold, and Euro do finish like this as time will shortly show.
    Mar 18 13:39 pm |Rating: 0 0 |Link to Comment |View article
  • Now Presenting: Deflation!
    Interesting points. The Fed is printing but by any measure it should look like an implosion of money supply since when you take the multiplier out they simply can't print enough to keep up. That doesn't mean less dollars aren't chasing higher priced items though, hence inflation by my definition of inflation.

    This all brings up an interesting question. Should a new term be created to capture what is going on? We are de-leveraging with pressure on the currency creating inflation and there's stagnation at the same time. What word could possibly combine all these elements. Let's see de-press-ion. I think I just coined a new term!
    Mar 18 00:05 am |Rating: 0 0 |Link to Comment |View article
  • More Questions Than Answers on Bear
    So is opening the discount window to brokers a carte blanche for those brokers to go and take the near worthless debt to the Fed to exchange for t-bills so they can go and lever up a bunch of trades which probably equate to long oil short financials (since that is what is working)?
    Mar 17 23:14 pm |Rating: 0 0 |Link to Comment |View article
  • More Thoughts on the Fed & JPM's BSC Liquidation
    I wonder what the Fed will do tomorrow. Will they shoot the last of their load in one fell swoop? If they do and the Dow isn't up by 800 points what then? Will they honestly cut interest rates to zero at some point once we actually hit bottom? Will the American dollar supplant the Mexican peso as North Amercia's most derisive currency?

    Don't bother to answer that last one as that one was just rhetorical.

    People keep saying that foreign interests will eventually come in and prop up American asset values. I would venture that the only things they'll be buying will be those which they can repatriate to their home turf. Why carry currency exposure when there is no bottom.

    SWF: 'Here's a bunch of worthless t-bills. Give me something I can leave with.' 'Oh, you want to be protectionist? Then I'll just dump my t-bills on the open market and watch you sweat US$200/bbl oil (which will be about 50 EUR).'

    The road to ruin is fraught with the best intentions.
    Mar 17 22:51 pm |Rating: 0 0 |Link to Comment |View article
  • Bad News for Bear Shareholders Is Good News for the Markets
    The Fed is doing what they think is best to keep panic from spilling into the streets. I would bet that history won't look too favorably on the prudence of their actions regardless of what they do. It's like they're fighting an unstoppable monster but keep mowing down the innocent bystanders. They are running out of bullets and they need to save one - for you know where.
    Mar 17 22:32 pm |Rating: 0 0 |Link to Comment |View article
  • What's In Store for Bear on Monday?
    Wow, makes me want to run in and buy a bunch of financials tomorrow. If BSC is worth $2 (in paper not cash), what then are the other brokers or banks worth? What then are the values on the financial instruments held by the insurance companies? Not sure about anyone else but this doesn't exactly instill confidence in me.
    Mar 16 19:39 pm |Rating: 0 0 |Link to Comment |View article
  • Is a Nikkei 225 Bottom Near?
    I agree. No one is talking up Japan and I think longer term it is a great buy once the N225 gets in the 11300 range. I'll probably put on a small position around that mark and see where it goes. Further support should be at 10300 but then 8000 so need confirmed results to want to put any more in beyond a small test.
    Mar 16 16:01 pm |Rating: 0 0 |Link to Comment |View article
  • How to Trade This 'Bear' Market - Barron's
    So Kass covered in some of his shorts - and left on his shorts for the key institutions that make up America's financing empire. A ringing endorsement for the soundness of the American banking system that is not.
    Mar 16 13:02 pm |Rating: 0 0 |Link to Comment |View article

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