Market Soapbox 10/07/08
TUE, panic crash continues, DJIA -508 on high volume with devastating internals. ALL CRUSHED -5%.
Bonds down 10 yr +5bps 3.50, $ down vs 1.3609 & up vs 101.63y, WTI +1% $90.06 gold +2% $882, TED spread down -23bps 3.56%.
SP500 1056, pop to 1072, drop to close 996. NDX 1411, gap up 1416, pop to 1433, dive to close 1329.
FRI: non farms -159K; 7 months of negative job creation; Wells buys Wachovia for $15 billion; The House approved the bailout.
Essentially the worlds largest pawn shop just got bigger; and the bill does nothing to address the real problem: recapitalization of the system.
MON: bail all you want... Fed announced it is planning to double the outstanding Term Auction Facilities (TAF) balances to $900 billion
Overnight Libor +37 bps to 2.37%; DJIA under 10K. At the low; the SP500 dropped 92 points = 920 DJIA pts; B of A cash strapped panhandles for $10 billion.
Can't Stop This... Today, tepid response to B of A stock offering selling at 22% discount, stock -26% on the news.
Tightening noose... Overnight Libor rate rising 157 basis points to 3.94%.
And the worlds largest pawn shop got even bigger... Fed now bailing out $1.6 Trillion CP market.
Aside from the obvious, why is the Fed getting into the commercial paper market NOW?
Get out theres a hole in da bridge... Kalifornia, the biggest borrower in the municipal-bond market, has $51 billion in general-obligation debt outstanding.
And the 6th largest global economic entity, is on the verge of bankruptcy and will need $7 billion of commericial paper swap to stay afloat after October.
Ragin Global Contagion... Iceland bails out its 2nd largest bank and Russia in talks to lend $5 billion to bailout Iceland's frozen banks. Australia cut its benchmark rate 100 bps or 1%.
Royal Bank of Scotland on the ropes; S&P cuts RBS debt rating. UK to bailout RBS & 3 largest banks with $79 billion loan.
Roll over Beethoven... SP500 new 5 yr low under 1000, now down 33% from Oct 07 all time high; the largest drop since 1937...
with all the elephants heading for the door... down -13% in the last 5 sessions; the 3rd steepest 5 day drop in history...
Search engines or tampons & toothpaste? From all time high... Google down 52%; PnG down 12%; time to pull the plug? How about aluminum? afterhours, Alcoa profit -52%.
John Q rock & rolled over... General Growth Properties, a very large mall owner, plunged 42% on concern it won't be able to repay debt; -92% in the last year.
Consumer credit -$7.9 billion in August. This marked the first month-over-month decline since 1998.
Understatement of the day: The IMF reported... "the global economy is entering a major downturn." Really?
The Titantic struck an iceberg, is sinking fast, and has rolled over, we sense a major event on the horizon.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not
Bonds down 10 yr +5bps 3.50, $ down vs 1.3609 & up vs 101.63y, WTI +1% $90.06 gold +2% $882, TED spread down -23bps 3.56%.
SP500 1056, pop to 1072, drop to close 996. NDX 1411, gap up 1416, pop to 1433, dive to close 1329.
FRI: non farms -159K; 7 months of negative job creation; Wells buys Wachovia for $15 billion; The House approved the bailout.
Essentially the worlds largest pawn shop just got bigger; and the bill does nothing to address the real problem: recapitalization of the system.
MON: bail all you want... Fed announced it is planning to double the outstanding Term Auction Facilities (TAF) balances to $900 billion
Overnight Libor +37 bps to 2.37%; DJIA under 10K. At the low; the SP500 dropped 92 points = 920 DJIA pts; B of A cash strapped panhandles for $10 billion.
Can't Stop This... Today, tepid response to B of A stock offering selling at 22% discount, stock -26% on the news.
Tightening noose... Overnight Libor rate rising 157 basis points to 3.94%.
And the worlds largest pawn shop got even bigger... Fed now bailing out $1.6 Trillion CP market.
Aside from the obvious, why is the Fed getting into the commercial paper market NOW?
Get out theres a hole in da bridge... Kalifornia, the biggest borrower in the municipal-bond market, has $51 billion in general-obligation debt outstanding.
And the 6th largest global economic entity, is on the verge of bankruptcy and will need $7 billion of commericial paper swap to stay afloat after October.
Ragin Global Contagion... Iceland bails out its 2nd largest bank and Russia in talks to lend $5 billion to bailout Iceland's frozen banks. Australia cut its benchmark rate 100 bps or 1%.
Royal Bank of Scotland on the ropes; S&P cuts RBS debt rating. UK to bailout RBS & 3 largest banks with $79 billion loan.
Roll over Beethoven... SP500 new 5 yr low under 1000, now down 33% from Oct 07 all time high; the largest drop since 1937...
with all the elephants heading for the door... down -13% in the last 5 sessions; the 3rd steepest 5 day drop in history...
Search engines or tampons & toothpaste? From all time high... Google down 52%; PnG down 12%; time to pull the plug? How about aluminum? afterhours, Alcoa profit -52%.
John Q rock & rolled over... General Growth Properties, a very large mall owner, plunged 42% on concern it won't be able to repay debt; -92% in the last year.
Consumer credit -$7.9 billion in August. This marked the first month-over-month decline since 1998.
Understatement of the day: The IMF reported... "the global economy is entering a major downturn." Really?
The Titantic struck an iceberg, is sinking fast, and has rolled over, we sense a major event on the horizon.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not
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