A horrifically annoying 12 hours.
First, that flash ad (which I was unable to cancel at first) gummed up page loading. I pulled ALL of the blogads code, and now the page loads about 47 times faster.
Compounding the problem was connectivity issues since last night (Thanks, Cablevision — you guys are "optimum"). I could not access my blog code to make changes — which I finally managed to do this am.
Posting will resume this morning . . .
Meanwhile, talk amongst yourselves. Topic: Is this bounce for real, or merely of the dead cat variety?
Can CNBC get Dennis Kneal off the god damn air!!!! The guy is on every day and he really has no clue and is a danger to anyone investor who listens to him….
Sammy20,
Did you happen to catch him debating the economy with Joe Begliano, (I know I messed the name), on Kudlow? Joe was flashing very cognizant warning signs about the economy and this guy Dennis, was in la la land…
Moin,
Treasury Market Inflation Anxiety Renewed by Dollar
TIPS returned 10 percent this year, the most since 2002, compared with 7.3 percent for all Treasuries, according to indexes compiled by New York-based Merrill Lynch & Co. Ten-year TIPS yield 2.43 percentage points less than Treasuries, a gap that represents the rate of price increases investors expect over the life of the debt. As recently as September, the difference was 2.19 percentage points, the narrowest in almost four years.
Amen on Dennis Kneale – He is an idiot. I like his comment about earnings being at a “median” of 11% – nice touch, very purposeful. Although the real number is -2.4%, but hey – median / average – it’s all the same…you know the drill. I don’t mind if someone is a bull – at least have intelligent thought behind it. Dennis can’t put together two rational thoughts together. My guess is that he doesn’t have money in the market and CNBC needs another cheerleader… He is like the parent that says “just cause I said so.”
I actually stopped listening to CNBC – can’t stand the rhetoric. Unless of course, Mr Ritholz or Dougie Kass or any of my fav’s come on and give the real picture of what is going on right now!
Keep up the awesome work BR! Long time reader but rarely comment!
Amen, regarding the posts about Dennis. I’m sure he’s a nice guy but geez, give me a break! Don’t you love someone who has no clue about managing money telling all the lemmings to buy, buy, buy!!! Everything will be fine. To answer Barry’s question, No, I do not think this is the bottom. I think we are getting a lot closer though. As least close to a tradeable one.
The only thing I watch these days is Bloomberg’s “Open Exchange” at 11AM. One hour interview with news mixed in. Everything is great, from host, to guest to the topic of the day.
Everything else seems to be product placement, hype and uninformed opinion.
If this is really a “Minsky moment,” what comes next? Has anyone read Minsky’s Can `It’ Happen Again? Amazon has it in paperback–the book is 25 years old.
Dead cat variety I think. It seems like the news just keeps getting worse – mroe downgrades, money markets possibly losing money, rating agencies dropping their pants, er ratings, overnight. Oh, and the resets don’t even really begin to hit until next year? This looks to be a massive cluster****. For a regular Joe like me who has a 401-k and some Roths I’m trying to find something safe but there doesn’t seem to be a good option.
Maybe fundamentals don’t matter anymore. Maybe problems with the markets have miraculously evaporated. Mabe 1+1 now equals some number other than the 2 we have come to expect.
On the other hand, maybe we’re witnessing a “surge” similar to that we are desperately trying to market to the world regarding the Iraq debacle.
We are still in the bottom of the second inning, and the Poseurs have a man on first with two strikes and two outs (the score is 12 – 0, Realists.
The fat lady won’t be singing, ’cause there is no fat lady (she cashed in and moved to China).
I refuse to watch Dennis Kneale. Period!!! Now that CNBC has gone to an all Dennis Kneale all the time format, my viewing options are diminished. What is CNBC thinking? Do they believe Kneale is the next OJ or what?
And another thing, CNBC needs to pre-record everything by Nesto first, then run it by an editor to check facts and basic understanding of business concepts. The guy is an embarrassment, an incompetent. CNBC needs to regularly schedule a Corrections program just to undo Nesto’s errors.
Dead cat bounce – If Dow gains 400 pts , what has changed in the economy ? Nada !! Just hedge funds buying in to get us back in to take more of our money when they sell tomorrow. (or the next day , or Friday )
Safe to me is cash , though that is being deflated daily )Dollar index in the toilet . Minsky may be right . That Minsky Moment article was excellent . Good economics primer for newbies and old timers alike .
So next safest to me is TIPS – started getting into them about 5 months ago . They have done better YTD than any equity funds I have availiable in my 401 – the TIPS fund I am in is VIPSX – I am pleased so far .
Wasn’t the late 90’s when the bond market returned 20% annually ? Can’t recall
Great stuff – Thanx Barry
Bill
Temporary, I think. I saw something to the effect of “MacQuarie sees earnings slowing” scroll by last night on the Bloomberg ticker line, so you can expect the infrastructure industry to take another blow. Bloomberg was talking all night long about HSBC’s CDO “come to Jesus” moment and just how bad that’ll be. The bad news is still leaking out I’m afraid.
As for Dennis Kneal, he was QUITE the little sh*t last night. Next time I want to see him and Battapaglia in the same room and see how his attitude changes. He had a really condescending tone that I haven’t seen him have before and I’m thinking (at least in his mind) he’s trying to make his “hosting” bones with CNBC. He was always a guest on these things while he worked for Forbes and now he’s a CNBC commentator. I don’t mind him having differing views but for a damned journalist who hasn’t run a dollar in his life to sit there and poo-pooh a guy who runs money is just idiotic.
Justin,
I caught that, every good point he made, Dennis would make some over the top comment about him personally. Then this morning I see he is on Morning call i wanted to yack
Uh oh, everybody is starting to talk about my unloved TIPs. Time to get out! :)
Barry,
Missed your CNBC work yesterday. Did you get a chance to debate Dennis again. I know you guys had it out back in the summer?
“Hey, No problem, what’s everbody worried about?” “Nothing to see here, …keep spending…move along.” “The economy is friggen great man!”
He really reminds me of David Lie..ra from NRA.
Some inside the hype insight about WalMart’s “beat”:
“Wal-Mart has already begun advertising selected discounts to draw in holiday shoppers, equating its markdowns as comparable to what shoppers will find on the day after Thanksgiving, when retailers have doorbuster sales.”
“Third-quarter sales at stores open at least a year, not counting fuel, were up 1.5 percent in the company’s U.S. stores, same as a year ago.”
“Chief Financial Officer Tom Schoewe said, ‘Wal-Mart is reducing capital expenditures, which were down 4.6 percent for the third quarter as the company scales back its pace of domestic growth.'”
This doesn’t paint a rosey picture for the U.S. economy – but as Wall Street was looking for an excuse to have a bounce, WalMart’s profit increase is as good a reason as any.
sorry about the hacker problem – I just now got that red alert again as I entered your page (its been absent for weeks)
I’m no expert – if my page is a backdoor – you have my permission to globally remove my URL: if you think that’ll help – I’d prefer my words not be erased tho
When does this thing switch into full gear in terms of “bad news is good news” since that means a guarantee of a 50bp fed cut?
Presumably this week’s CPI and initial claims numbers will give a hint as to whether fed actually has that kind of flexibility but despite his protests, Bernanke hasn’t really differentiated himself from Easy Al.
Not to feed the shark frenzy any more but have to 3rd, or is that 30th, the collective vote on Dennis. Every sample I’ve seen he gets in a fight with everybody else, including the staff from Gasparino to Greenberg. Saw him a while back with Battapaglia who’s a reasonable, reasoned guy for a New Yorker and it was unprofessional.
In the spirit of helping out you can got to MSN Money Central, News section and select the videos and choose the CNBC cuts you want to listen to. Worthwhile because they occasionally have somebody really worthwhile; and because it’s a pretty good window into sentiment and hot buttons. Listen, at worst for outlook psychology if not substance.
Dead Cat up to the 13150-13200 level.
then down to 12900-12800 in the next few days…umn then a near term bottom…
What the hell near term is I don’t know..
5 days? till Xmas?
The R2k should lead us down on the next leg..
I guess, I’m frequently wrong.
Back on topic we’ll see how it goes. We sure bounced back in Mar and Aug while the structure and fundamentals were deteriorating. But this time while those are flashing yellow so are technicals. The question is, IMHO, will Pscyh outlook be rational or pscyho. On balance things look very weak and the NDX/Nasdaq downshift might represent a real “see” change in outlook. And we’ve not seen the last of the credit crisis. FWIW my opinion, charts and arm-wavings (sorry pun unintended) are posted here: http://tinyurl.com/23sklf
dow getting a boner from Wal-mart……
Apparently they can’t read either….
Ciao
MS
Wonder how long it will take before the markets realize that there is no demand for mortgage debt beyond the walls of gov’t or semi-gov’t in GSE’s. Can’t be very conforting to know that the prime source of wealth in this country has no takers beyond taxpayer support.
I believe that this bounce may very possibly lead us to new highs. Now, I am very bearish on the U.S. economy and long-term outlook of the market, but as an Elliott Wave technician, it appears that we may be starting the final wave to new highs before… you get the picture.
watch MS……every other pig is up..they are not.
Ciao
MS
Fear levels are clearly increasing. I view this more as a return to normalcy.
With that said, the ride up has been driven by amazing and astronomical amounts of money being pumped into the system. Even with all the write downs and losses of the last month, there is still a ton of excess money in the system.
One of the many tells? How can companies that are losing money in clearly recessed markets, be spending billions on share buy backs.
So, we may well have one more strong rally before we see the Ponzi nature of this market finally hit the wall.
The bad fundamentals have neither changed nor even been fully revealed yet – why on earth people would think this will last I have no idea.
would love to hear how Lampert’s doing w his C position, as well this english fellow who bot BSC. the market is starting its stair-step down from a big rolling top. there will be many knives to catch.
I thought the guy on Kudlow last night was going to Kill Dennis.
I think CNBC is trying to create a Caricature, for their pretend news show.
sort of the “irrational, name calling rush Limbaugh, of business news.”
Their response to Fox.
Out of all this, I’d like to see bloomburg be the winner.
I’m sure Dennis is a waist of breath, but I blame CNBC, why one would put him on… The worst people on CNBC are the ones that are “Journalists”.
Also, if the Day traders can’t get in long before the rally, like this morning, it makes the downside larger, since they have to get out of their shares earlier.But it makes an end of the day “short covering rally” more likely.
So Wall Street is giddy because Wal-Mart is up. Do most people go to Wal-Mart because of the upscale atmosphere or the broad array of high-end goods? No, they go to Wal-Mart to spend as little as possible on food, toilet paper, and Excedrin.
Given that Home Depot’s 4th Q is down over 25%, I think Wal-Mart’s situation is more likely an indication that the economy ain’t so good, but Wall Street is a bit disconnected from the facts on the ground.
This could be one of those things where sometime soon the Market starts getting convinced the Fed “has to” cut rates yet again and they start buying up through the Fed meeting. Now, if the Fed has no Dec. meeting then get the parachute out.
The next kick in the teeth I can possibly see emerging in the future is a continued luke-warm to negative reaction to this “super SIV” scam. Early warning signs of a weak Xmas would really take the wind out of the sails at this point too.
At the same time, if the rumors that the hedgies need to get some performance locked in before year end are true, they may just push the things that used to work (tech, materials, commodities) up for a final leg at year end. That works for me!
what i find amazing about our predicament: we’re relying on Wall St analysts to watch-dog the financials, like comments yday re mortgage black hole at Etrade. there are no regulators anywhere, no grown-ups left to monitor this situation.
I think Walmart is front loading a lot of holiday sales, and that by the time Jan rolls around and we all look back at the aggregate Christmas season…the crowd will be decidedly less than bullish on the health of the consumer.
Today is pile on day, maybe even tomorrow too. I think PPI and CPI will be the tear gas that stops the pile on.
“At the same time, if the rumors that the hedgies need to get some performance locked in before year end are true, they may just push the things that used to work (tech, materials, commodities) up for a final leg at year end. That works for me!”
– – – – – – –
Yep – that’s my feeling as well. We all know (around here anyways) that the next shoe will certainly drop, just as we knew the “it’s contained in subprime” drivel at the beginning of the year was BS. The CAD$60,952 question is the sequencing of events from Thanksgiving sales season through to year-end. If they can plug enough holes in the leaky boat to keep things afloat for now or become convinced of a sizable fed cut then I wouldn’t be surprised at another rally back to 14k.
I think the safe strategy is to take some profits now and load up on Apr-Jun ’08 puts if the market does rally.
I think it’s difficult to say from just one day… but from a technical perspective, today’s volume on the NASDAQ is currently running 50M shares behind yesterday’s. The NYSE is about even with yesterday’s volume.
Barry – Blogads suck. They need new servers. I tried them a year ago and they said they were upgrading and working on the problem. yea right. It slowed my site down like 20x..
Now why would MS need to buy a private bank?
LOL
Ciao
MS
@scorpio:
“what i find amazing about our predicament: we’re relying on Wall St analysts to watch-dog the financials, like comments yday re mortgage black hole at Etrade. there are no regulators anywhere, no grown-ups left to monitor this situation.”
You are so right. The grown-ups were forced out of the Village when the laissez-faire economic credo (a.k.a. “we want the US to be like Brazil/Mexico where the billionaires can do whatever they wish and buy whomever they wish”) became the mainstream political philosophy in DC.
And that meant the evisceration of anything regulatory. First, came the constant manipulation of gov stats for political purposes. Inflation ex-inflation, Birth/death modeling of the jobs reports, you name it. Then, let’s elevate to an Art form the pollinization of political appointees in charge of preventing any useful work done by the government workers and managers. Next, a steady waterboarding-like drip of spin and obfuscation ad nauseam.
This situation became much worse in the last 7 years thanks to the 12/12/2000 Supreme Court ruling and Osama criminal act of 9/11. These events “gave us” the worst political nightmare in a century.
To complete the regulatory emasculation, we got an overdose of presidential “signing statements” basically telling the Legislative branch and gov. agencies that the White House knows the power of Mind over Matter: “We don’t mind, and you don’t matter!”
In all that clusterf*ck, Democrats have essentially surrender to the lure of campaign contributions (Hedge Funds managers can be taxed at 15% on billion USD income but the waitress in NY or Sioux City is entitled to pay 32%…Se. Harry Reid find this situation gooooood for the economy) and the republicans, well…since nothing pleasant can be said, so I’ll abstain from further comments.
Just resetting the financial regulatory system to a decent level will be a titanic battle sure to last a generation, unless we get a REALLY bad recession. You know, the kind that provoke so much pain that attention MUST be focused on doing the right thing.
Quite frankly, one has to wonder why anyone in his/her right mind would want to be the next President, with all the damage to be undone.
Francois
you know what is funny is that someone will have to go look up that date to see what happened…..LOL
Ciao
MS
Well have all the problems just magically disappeared just because the indexes are oversold? No, no and no.
Eric Davis has my vote: this is not the sign of a revival of the US consumer.
Consumer confidence is dropping like a stone.
Consumption was the engine of the US economy, and credits the fuel. In absence of credit, the engine will run down.
how is GS short mortages? and can this little comment be any shadier by them “He added that a new accounting rule regarding the riskiest assets a firm holds would not hurt the company’s business”
costa-
same feeling here…..remember it IS Options expiry week….
Ciao
MS
Dead cat.
Then, let’s elevate to an Art form the pollinization of political appointees in charge of preventing any useful work done by the government workers and managers.
Let me guess, “Travelgate?” Sandy Burglar?
Next, a steady waterboarding-like drip of spin and obfuscation ad nauseam.
Normally I’d say “No sense bringing up the Clinton administration. You can’t change the past.” but given that his still more evil half is now running I’ll pass. But you forgot “triangulation” and “Bimbo eruption control squad” and “Wag the Dog” in your list.
Dead Cat Bounce.
It seems like a Bizzaro World version of the game of Monopoly where the doofus losers suppose they’re winning because they keep getting money from the bank by mortgaging properties and turning the cards over. They’re only prolonging the game, and have forgotten the fundamentals: when all the cards are face down they collect no more rent and effectively, the game is over.
Am I missing something?
That be great if GS can share with Etrade the “double secert” accounting tricks they are using for thier risky assets.
Maybe its the Halo effect of just finishing Financial Armagedon but, its starting to look more and more true.
Could be time to get long:
The US dollar has weakened substantially, and hence exports are up and the trade deficit is falling.
The FED has demonstrated that it is on your side if you are long. It will do its best to save you if the market goes against you.
The global economy is booming…I know you americans don’t like to get outof your country much, but I’d encourage a visit to Asia and South America. Wherever you go, it just feels that things are on fire.
US stocks are up just ~20% in 3 years (using SP500), clearly lagging the rest of the world. There time will come, probably once you ditch your useless president and stop blowing all those dollars on 2 pointless wars. And once financials can get their house in order and clear out all the sh*t assets they own before they kill them.
P.S. 99% of the time I am pretty much a perma-bear…
GS has something over ETrade though. They make a nice piece of change doing their own trading, for themselves. Even if they had exposure to CDOs they may have been able to (were probably able to?) get on the other side of that trade before the bottom fell out. Might have even made money off of the event. Not so for ETrade.
I realize this is mildly off-current-topic, but it’s an open thread.
I saw this over on slashdot, Wal-Mart’s $200 Linux PC is selling out extremely quickly, it appears.
http://linux.slashdot.org/article.pl?sid=07/11/12/2235200
http://www.walmart.com/catalog/allReviews.do?product_id=7754614
I just wanted to get some opinions from the crew here on this. Do you think this have a noticeable effect on MSFT’s bottom line moving forward?
Wal – Mart is loving that food inflation right about now, wait till everyone else figures out the units moving out haven’t changed much, it’s just the $$$ value that’s up.
Charles,
I think a lot of the future success of linux as an alternative to Microsoft’s OS rests in the hands of these developers who are trying to port a generic dx10 to linux:
http://www.fallingleafsystems.com/
The development of a successful generic dx10 would allow many entertainment titles and games to be run under Linux, broadly changing how Linux can be marketed.
Anyone have opinions on the incentives for holders of foreign currency to invest in US equities?
With the strength of the Canadian dollar, the Pound sterling, Euro and other global currencies and with weakness in the markets it would seem like that would provide a huge discount to previous prices for prime US stocks and provide a great entry point for foreign investment.
what’s your take on Ron Paul? aside from the war, i’d like to see his reforms implemented. however, i think going back to the gold standard would take many a moon for this economy to digest and cause serious havok on the poor and retirees he’s trying to save, but perhaps save whats left of the dollar and our run amok financial services industry. honestly, i dont know how we go back to gold without an out and out depression. i’m not well versed on how to do it, so i’m curious. no one is willing to ask him HOW he manages to do it – kudlow, last thursday kind of got there, but didn’t really get to the meat of it. How do we go back to gold? Would it cause a massive spike in the spot price, and sink the dollar further? I just think the bulk of these diggers and ron paul freaks just think you wake up one day and exchange dollars for gold down at the wachovia. I know the likely hood of him actually implementing such reforms is nil considering his long-shot election prospects – but humor me. Would this be catastrophic? I think it would, and would take well over a decade to implement if it were done soundly. Thoughts?
DOUBLE-BOTTOM? I suspect yesterday was of the fabled double-bottom phenomena but the market just didn’t go low enough. One clue might be that as the financials were getting smashed the home builders were going up. Just a thought.
I don’t think that you can conclude anything from a single day or even a single week. Selling has been extreme and a bounce was due- it could very well continue thru the week because of options expiration and perhaps into next week, but will consolidate at some point .
The real direction will be revealed in the week after Thanksgiving when things will either go to hell or we will begin a strong run into the year end. Given the needs of the main players, I would lean towards the latter, but we’ll see what happens. Either way, I suspect that we are already in recession and will be looking at a difficult winter in the market and difficult spring/summer in the Real World. The little metrics that I bother to watch in the Real World are down dramatically over the past month and are telling me to head for the bunker after December. The only comfort is that I think that the bunker is going to be full of gold bugs and oil fiends as well.
==whipsaw==