Market Observations 10/03/08
Resistance: DJIA 10800 (1600DMA); SP500 1130 (3300DMA); NAZ 2075 (3300DMA); NDX 1625 (3300DMA)
Support: DJIA 10300 (2900DMA); SP500 1095 (3500DMA); NAZ 1935 (3700DMA); NDX 1490 (3700DMA)
New multi yr lows SP500 1114, rise to 1153, crash to close 1099. NDX 1491, gap up 1516, rise to 1551, crash to close 1470.
FRI: the largest bank failure in US history; FDIC seized WaMu.
The economy has been contracting 3 straight quarters and the true ugliness has just begun.
MON: The unwind into chaos... congress rejects the unnecessary bailout and the street panics.
Fortis on the verge of collapse is Nationalised with a $16 billion bailout. Wachovia collapses, Citigroup buys the remains for $2 billion or $1 per share.
TUE: month & quarter end short covering gets 3rd largest point gain ever. 3 month Libor widening at 4.05; overnight LIBOR spikes 431 basis points to 6.88%.
WEN: Auto sales: Toyota -32%; Honda -24%; Nissan -37%; 11th straight decline, longest in 17 years. ISM manufacturing still contracting 43.5 vs 49.5.
Truth or consequences: even GE on the ropes, selling $12 billion in stock and $3 billion preferred at 10% to Warren Buffet.
THU: The Fed reported commercial paper outstanding tumbled $94.9 billion, or 5.6%, to a 3 year low of $1.6 trillion for the week ended Oct. 1.
Dead man walking flat on the floor... continuing unemployment surging to 3.6M; factory orders -4% at a 7 yr low; VIX >40 4th straight session.
Today, non farms -159K; 9 months of negative job creation; ISM services 50.2 vs 50.6.
Wells buys Wachovia for $15 billion; Wells will issue $20 billion in stock to remain solvent... in the end they will fail as well.
The House approved the bailout 263 to 171; and the dunce in chief signed it. SEC will lift short selling ban on Oct 8th.
Essentially the worlds largest pawn shop just got bigger; and the bill does nothing to address the real problem: recapitalization of the system.
We fully expect a temporary "free lunch" market rise which will be an opportunity to sell into "strength". Do not be fooled, the largest bear is history is just starting.
Caveat emptor as the free lunch will be short lived when the unwinding of leveraged positions continues unabated...
and the capital or solvency issue arises again and again, and again.
Hank Paulson's plan allows the Treasury to buy toxic debt from FOREIGN institutions...
and delays the day of reckoning till after the election, This bailout is doomed and so is the economy.
This week... Eurozone nationalized 5 banks and the U.S. bailed out Wall Street.
Despite all this cutting and bailing... LIBOR or the cost of one-month bank loans in euros and overnight dollar loans soared to record levels.
Many corporate bank loans are linked to 90 day Libor rates. Libor also affects interest costs on credit cards, student loans and adjustable-rate mortgages.
Don't be fooled, vote for anyone but the incumbent whores; 263 in the House and 74 in the Senate that voted for this unabashed bailout of their Wall Street pimps.
From our good friend Bert... "while the House was in recess, here comes the Senate elite blessing a modified version of this hideous rape of...
Average Joe Taxpayer who works hard and saves his money so he can pay his debts and his mortgage when times get rough.
Fuck every single one of these bastards. Any incumbent who votes YES for this bullshit gets a HELL NO! vote when he or she asks me to re-elect their sorry ass.
If you're not completely pissed off by this shit you are not paying attention."
In closing, we muse... If you think this bailout for their filthy rich friends is expensive at $2300 per taxpayer...
just wait till you see the next one, Rip, time to wake up?
Often wrong, but never in doubt, this is the Nattering Naybob and you're not.
Support: DJIA 10300 (2900DMA); SP500 1095 (3500DMA); NAZ 1935 (3700DMA); NDX 1490 (3700DMA)
New multi yr lows SP500 1114, rise to 1153, crash to close 1099. NDX 1491, gap up 1516, rise to 1551, crash to close 1470.
FRI: the largest bank failure in US history; FDIC seized WaMu.
The economy has been contracting 3 straight quarters and the true ugliness has just begun.
MON: The unwind into chaos... congress rejects the unnecessary bailout and the street panics.
Fortis on the verge of collapse is Nationalised with a $16 billion bailout. Wachovia collapses, Citigroup buys the remains for $2 billion or $1 per share.
TUE: month & quarter end short covering gets 3rd largest point gain ever. 3 month Libor widening at 4.05; overnight LIBOR spikes 431 basis points to 6.88%.
WEN: Auto sales: Toyota -32%; Honda -24%; Nissan -37%; 11th straight decline, longest in 17 years. ISM manufacturing still contracting 43.5 vs 49.5.
Truth or consequences: even GE on the ropes, selling $12 billion in stock and $3 billion preferred at 10% to Warren Buffet.
THU: The Fed reported commercial paper outstanding tumbled $94.9 billion, or 5.6%, to a 3 year low of $1.6 trillion for the week ended Oct. 1.
Dead man walking flat on the floor... continuing unemployment surging to 3.6M; factory orders -4% at a 7 yr low; VIX >40 4th straight session.
Today, non farms -159K; 9 months of negative job creation; ISM services 50.2 vs 50.6.
Wells buys Wachovia for $15 billion; Wells will issue $20 billion in stock to remain solvent... in the end they will fail as well.
The House approved the bailout 263 to 171; and the dunce in chief signed it. SEC will lift short selling ban on Oct 8th.
Essentially the worlds largest pawn shop just got bigger; and the bill does nothing to address the real problem: recapitalization of the system.
We fully expect a temporary "free lunch" market rise which will be an opportunity to sell into "strength". Do not be fooled, the largest bear is history is just starting.
Caveat emptor as the free lunch will be short lived when the unwinding of leveraged positions continues unabated...
and the capital or solvency issue arises again and again, and again.
Hank Paulson's plan allows the Treasury to buy toxic debt from FOREIGN institutions...
and delays the day of reckoning till after the election, This bailout is doomed and so is the economy.
This week... Eurozone nationalized 5 banks and the U.S. bailed out Wall Street.
Despite all this cutting and bailing... LIBOR or the cost of one-month bank loans in euros and overnight dollar loans soared to record levels.
Many corporate bank loans are linked to 90 day Libor rates. Libor also affects interest costs on credit cards, student loans and adjustable-rate mortgages.
Don't be fooled, vote for anyone but the incumbent whores; 263 in the House and 74 in the Senate that voted for this unabashed bailout of their Wall Street pimps.
From our good friend Bert... "while the House was in recess, here comes the Senate elite blessing a modified version of this hideous rape of...
Average Joe Taxpayer who works hard and saves his money so he can pay his debts and his mortgage when times get rough.
Fuck every single one of these bastards. Any incumbent who votes YES for this bullshit gets a HELL NO! vote when he or she asks me to re-elect their sorry ass.
If you're not completely pissed off by this shit you are not paying attention."
In closing, we muse... If you think this bailout for their filthy rich friends is expensive at $2300 per taxpayer...
just wait till you see the next one, Rip, time to wake up?
Often wrong, but never in doubt, this is the Nattering Naybob and you're not.
Comments
Calculated Risk posted this week that we will reach 10 Trillion dollars in debt before "Dubbya" leaves office. This 700 billion dollar bailout is enough money to pay for 58 years worth of oil at our current usage.
How can our country survive this much debt? How is the average Joe (or Bob) supposed to protect what little bit of assets that I have from investing for the last 15 years?