Market Observations 11/30/07
Leaking SIV... Moody's Investors Service said $72.7 billion of debt sold by Citigroup's structured investment vehicles was cut or placed on review for a downgrade as part of a review of $130 billion of SIV debt.
How do you spell relief? Federal Head Kroszner said distressed borrowers need 'timely relief' and that the solution should not be 'one-size-fits-all'.
The Nattering One sez let em drown right along with the rats at the banks and on Wall Street. We made our stance known here and here.
Florida Fund Update: Long ago, we warned about LBO's downgrades & forced liquidation for short term money market funds and pensions here, here, and here.
The investment pool's debt holdings that were downgraded below its minimum standards have a face value amounting to about 10% of the pool.
The fund's $900 million of ABCP asset backed commercial paper that was downgraded to default amounts to 6% of its assets.
Florida's State Board of Administration, manager of the Local Government Investment Pool, halted withdrawals yesterday...
at an emergency meeting after $12 billion or 40% was pulled out this month from participants, $3.5 billion was withdrawn yesterday alone.
By freezing the Florida fund, officials left local governments without ready access to cash they are accustomed to drawing upon for routine expenditures.
Today, Jefferson County was forced to take out a short term loan to cover its $850,000 payroll.
At least five other school systems were able to get last- minute bank loans to make payroll after the freeze, including districts in Leon and Hardee County.
Hal Wilson, chief financial officer of the Jefferson County:
"The unthinkable and the unimaginable have just happened here in Florida. What we just experienced here is a classic run-on-the bank meltdown."
Market Action... Last week: "NDX bouncing 4 times at 2000 support; SP500 3 times at 1415-20.
If this market sinks below 1410 and does not bounce into a rally, its going to be a long, cold and hard winter."
Wen: "Bounce off of 1988 NDX (150DMA) & 1406 SP500 (400DMA), the biggest 2 day rally in 5 years.
Resistance awaits NDX 2120, SP500 1480. Gauge the reaction at this level."
NDX gap up 2102 to 2122 (resistance), fall to 2072, close at 2089. SP500 open 1470, rise to 1488 (resistance), fall to 1470, close 1481.
Read Wen. comments again. Success at this level is necessary to continue up until Dec 11 Fed meeting. But it could be academic at this point.
The Nattering One muses... New & existing home sales, prices, foreclosures and construction spending a disaster. Durable goods, personal spending sinking, who cares?
The Fed has another dime bag of smack ready for the Wall Street junkies, and Hanks got the banks freezin their ARM's for the injection.
Does anyone seriously think this splash of Phisohex and a Band Aid can solve the easy money addiction or cure the debt and housing market hangover? We got two words for ya, sober up.
The definition of insanity is repeating the same mistake, over and over again, yet expecting a different result each time.
If the market rises till Dec 11th, the cut will already by priced in. Cut or no cut, we sense the dead man walkin, taking a slip and fall down the stairs, again.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not!
How do you spell relief? Federal Head Kroszner said distressed borrowers need 'timely relief' and that the solution should not be 'one-size-fits-all'.
The Nattering One sez let em drown right along with the rats at the banks and on Wall Street. We made our stance known here and here.
Florida Fund Update: Long ago, we warned about LBO's downgrades & forced liquidation for short term money market funds and pensions here, here, and here.
The investment pool's debt holdings that were downgraded below its minimum standards have a face value amounting to about 10% of the pool.
The fund's $900 million of ABCP asset backed commercial paper that was downgraded to default amounts to 6% of its assets.
Florida's State Board of Administration, manager of the Local Government Investment Pool, halted withdrawals yesterday...
at an emergency meeting after $12 billion or 40% was pulled out this month from participants, $3.5 billion was withdrawn yesterday alone.
By freezing the Florida fund, officials left local governments without ready access to cash they are accustomed to drawing upon for routine expenditures.
Today, Jefferson County was forced to take out a short term loan to cover its $850,000 payroll.
At least five other school systems were able to get last- minute bank loans to make payroll after the freeze, including districts in Leon and Hardee County.
Hal Wilson, chief financial officer of the Jefferson County:
"The unthinkable and the unimaginable have just happened here in Florida. What we just experienced here is a classic run-on-the bank meltdown."
Market Action... Last week: "NDX bouncing 4 times at 2000 support; SP500 3 times at 1415-20.
If this market sinks below 1410 and does not bounce into a rally, its going to be a long, cold and hard winter."
Wen: "Bounce off of 1988 NDX (150DMA) & 1406 SP500 (400DMA), the biggest 2 day rally in 5 years.
Resistance awaits NDX 2120, SP500 1480. Gauge the reaction at this level."
NDX gap up 2102 to 2122 (resistance), fall to 2072, close at 2089. SP500 open 1470, rise to 1488 (resistance), fall to 1470, close 1481.
Read Wen. comments again. Success at this level is necessary to continue up until Dec 11 Fed meeting. But it could be academic at this point.
The Nattering One muses... New & existing home sales, prices, foreclosures and construction spending a disaster. Durable goods, personal spending sinking, who cares?
The Fed has another dime bag of smack ready for the Wall Street junkies, and Hanks got the banks freezin their ARM's for the injection.
Does anyone seriously think this splash of Phisohex and a Band Aid can solve the easy money addiction or cure the debt and housing market hangover? We got two words for ya, sober up.
The definition of insanity is repeating the same mistake, over and over again, yet expecting a different result each time.
If the market rises till Dec 11th, the cut will already by priced in. Cut or no cut, we sense the dead man walkin, taking a slip and fall down the stairs, again.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not!
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