Market Soapbox & Observations 09/17/08
WEN, was that an iceberg? DJIA -449 on high volume with devastating internals. All DOWN 4%+ cept XAU.
Bonds up -13bps 10 yr 3.41, $ porked vs 1.4304€ & vs 104.475y, WTI +3% $96.95, gold +10% $868.4, TED spread EXPLODES +89bps 3.02%.
SP500 1214, gap down 1210, crash to close 1155. NDX 1724, gap down 1701, hop to 1708, crash to close 1632.
FRI: The mother of all bailouts $5 Trillion for FNMA & FHLMC.
MON: BofA bails out Merrill Lynch and Lehman files the mother of all BK's. The 6th largest DJIA decline in history.
TUE: The mother of all insurance bailouts, the Fed taking an 80% interest in AIG with an $85 billion bridge loan.
Today, Gravity and reality take over, the cat careens off an awning, as the NDX hit a 2yr low & SP500 down 57 pts, hit a 3.5 year low.
Validation of yesterday's inflation gauges: General Mills revenue +14%; net -3.6%. GE -6.7%; US Steel -11%; Homebuilders -7.6%; Banks -13%.
Gold's largest 1 day percent gain since gold prices surged 9.3% on Sept. 28 1999.
What or who next? Morgan Stanley might bailout Wachovia; perhaps WaMu shuts its doors, then bonds and perhaps even, dare we natter it, PIMCO...
Yesterday, Bill Gross's Pimco Total Return Fund, the world's largest bond fund, fell 1.4%, the biggest one day decline in more than 3 years.
The Treasury must sell more debt to enable the Federal Reserve to expand its balance sheet. More bonds, lower price, higher yields, higher interest rates...
I got your globalization, right here... Russia halted stock trading for a 2nd day and poured $44 billion into its three biggest banks.
This week, Mexico's Bolsa (-7.4%), Brazil's Bovespa (-11.1%), London's FTSE 100 (-9.3%), Germany's DAX (-6.0%), France's CAC 40 (-7.7%), Russia's RTS (-21.1%), India's Sensex (-5.3%) China's CSI 300 (-7.2%), Hong Kong's Hang Seng (-8.9%).
Since the Oct. 9 record of 1,565.15, the SP500 decline erases more than 50% of the advance between 2002 and 2007.
Demonstrating that this leveraged unwind of unprecedented proportion, has crippled the system... $3.6 Trillion in "wealth" has been erased, this week.
The 90 day yield, at its lowest since WWII; LIBOR & TED spreads have completely blown out, leaving Bank lending seized as the banks don't even trust each other.
As the vortex sucks everything in sight into the dark abyss... perhaps a bounce at NDX 1600?
The "faithful" in for the "long haul" better get their knee pads on and start praying at the nearest totem pole.
Yes, Captain Smith, that was an iceberg, and we are sinking.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not.
Bonds up -13bps 10 yr 3.41, $ porked vs 1.4304€ & vs 104.475y, WTI +3% $96.95, gold +10% $868.4, TED spread EXPLODES +89bps 3.02%.
SP500 1214, gap down 1210, crash to close 1155. NDX 1724, gap down 1701, hop to 1708, crash to close 1632.
FRI: The mother of all bailouts $5 Trillion for FNMA & FHLMC.
MON: BofA bails out Merrill Lynch and Lehman files the mother of all BK's. The 6th largest DJIA decline in history.
TUE: The mother of all insurance bailouts, the Fed taking an 80% interest in AIG with an $85 billion bridge loan.
Today, Gravity and reality take over, the cat careens off an awning, as the NDX hit a 2yr low & SP500 down 57 pts, hit a 3.5 year low.
Validation of yesterday's inflation gauges: General Mills revenue +14%; net -3.6%. GE -6.7%; US Steel -11%; Homebuilders -7.6%; Banks -13%.
Gold's largest 1 day percent gain since gold prices surged 9.3% on Sept. 28 1999.
What or who next? Morgan Stanley might bailout Wachovia; perhaps WaMu shuts its doors, then bonds and perhaps even, dare we natter it, PIMCO...
Yesterday, Bill Gross's Pimco Total Return Fund, the world's largest bond fund, fell 1.4%, the biggest one day decline in more than 3 years.
The Treasury must sell more debt to enable the Federal Reserve to expand its balance sheet. More bonds, lower price, higher yields, higher interest rates...
I got your globalization, right here... Russia halted stock trading for a 2nd day and poured $44 billion into its three biggest banks.
This week, Mexico's Bolsa (-7.4%), Brazil's Bovespa (-11.1%), London's FTSE 100 (-9.3%), Germany's DAX (-6.0%), France's CAC 40 (-7.7%), Russia's RTS (-21.1%), India's Sensex (-5.3%) China's CSI 300 (-7.2%), Hong Kong's Hang Seng (-8.9%).
Since the Oct. 9 record of 1,565.15, the SP500 decline erases more than 50% of the advance between 2002 and 2007.
Demonstrating that this leveraged unwind of unprecedented proportion, has crippled the system... $3.6 Trillion in "wealth" has been erased, this week.
The 90 day yield, at its lowest since WWII; LIBOR & TED spreads have completely blown out, leaving Bank lending seized as the banks don't even trust each other.
As the vortex sucks everything in sight into the dark abyss... perhaps a bounce at NDX 1600?
The "faithful" in for the "long haul" better get their knee pads on and start praying at the nearest totem pole.
Yes, Captain Smith, that was an iceberg, and we are sinking.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not.
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