350zCommtech's Account Talk

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I bailed. I'm hoping for an afternoon rally. If the market ends down, the gains in the I fund should cushion the -FV. Bonds and the dollar don't agree with this sell-off.
 
350zCommTech said:
I bailed. I'm hoping for an afternoon rally. If the market ends down, the gains in the I fund should cushion the -FV. Bonds and the dollar don't agree with this sell-off.
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I'm hoping for the same thing...and you never know.

It started off very good - which reflected optimism taking control; so my hope is others will sping it back up by the end of the day.

Either way - if (and when) the Markets really TANK we'll be in safety.
 
MAN - This is one of those times I want to stand up and shout:


Take that you Bastards...:D

But I get this incredibly errie feeling that if I say it too soon
(or even think it) I'll get BURNED :worried::sick:


SO I'm trying to be super cool for both our sakes:cool:

Well I'll take a walk and come back later....GL dude
 
Steadygain said:
MAN - This is one of those times I want to stand up and shout:


Take that you Bastards...:D

But I get this incredibly errie feeling that if I say it too soon
(or even think it) I'll get BURNED :worried::sick:


SO I'm trying to be super cool for both our sakes:cool:

Well I'll take a walk and come back later....GL dude
Click to expand...

Yeah, I know the feeling. The I fund would have made a lot more if not for yesterday's BS FV. But, I shouldn't be complaining about a gain in this market.

Hopefully I can make a few pennies in the F fund before I park it in G. Next month is just around the corner. Be nimble and try to avoid those 5% down days is my goal.
 
This makes no sense.

Fed May Purchase Treasuries in Days to Ease Credit, UBS Says

By Whitney Kisling

Jan. 16 (Bloomberg) -- The Federal Reserve may purchase Treasuries within the next few days or weeks as it broadens its policy beyond interest rate cuts to ease credit conditions amid the worst recession in 25 years, according to UBS AG.
“Fed officials use every chance they get to highlight Treasury purchases as an important arrow in their quiver,” William O’Donnell, U.S. government bond strategist at UBS Securities LLC in Stamford, Connecticut, wrote in a research report today. “It now appears as if the Fed may use Treasury purchases as a blunt tool to bring loan rates down further. This makes it more likely that Treasury purchases come sooner.”
Fed Chairman Ben S. Bernanke reiterated Jan. 13 that he’s considering buying long-term Treasuries as a way to bring down borrowing rates and unfreeze private credit markets as U.S. economic data and government reports continue to show the recession is deepening.
The economy weakened in all regions during the past month, the Fed said the following day, as access to credit remains locked, forcing consumers to cut back on spending.
Lower rates could “spill over into private borrowing rates much more broadly,” Federal Reserve Bank of San Francisco President Janet Yellen said yesterday in a speech. UBS said Yellen’s comments refer to more than mortgage rates, which the Fed already started trying to lower this month by buying $500 billion of mortgage-backed securities.
‘Denominator Effects’
“By buying back Treasury debt, all loan markets should benefit via ‘denominator effects’ by further lowering base rates,” said O’Donnell of UBS, one of the 17 primary dealers that trade directly with the Fed.
Treasury purchases may help to keep yields low as President-elect Barack Obama aims to roll out an $825 billion stimulus plan that will be funded with government debt.
Yields on 10-year notes rose 7 basis points to 2.27 percent at 12:19 p.m. in New York. The yield dropped last month to the lowest level on record when investors sought government debt as a haven amid the collapse of global credit markets.
To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net
Last Updated: January 16, 2009 12:20 EST
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoz6joAbOPoA&refer=home
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I stole this quote today. "Ever notice how hardly any foreskins are in the Federal Reserve?" Now that is something to ponder. I don't think he was being anti-semitic either.
 
Burn in hell!

Barclays shares fall 25%


Shares in Barclays took a sudden plunge in late trading today, ending the day down 25% amid renewed fears of a crisis in the banking system.
Barclays shares fell to their lowest level since 1993 – down 32.4p to just 98p - and dragged other shares in the beleaguered banking sector down.
Royal Bank of Scotland lost 13% or 5.2p to 34.7p, a little over half the 65.5p at which the government bought its 58% stake.
Lloyds TSB, on its last day of trading before its merger with HBOS, dropped nearly 5% or 5.1p to 98.4p.
The government is buying Lloyds shares at 173.3p and is taking a 43% stake in the combined group.
HSBC, which analysts at Morgan Stanley believe needs up to $30bn in fresh capital, was also a faller, down 11.75p to 535.75p.
However, the Asia-focused bank Standard Chartered gained 1.5p to 768p.
Earlier in the day the banks had shared in a market-wide bounce that ended seven days of losses on the FTSE 100.
Barclays started to fall in the early afternoon but the sell-off only really gathered pace in the last hour of trading.
The company said it knew of "no justification" for the sudden collapse in the price.
Fears that next week's resumption of short-selling in financial stocks could destabilise the bank shares may have contributed to the turmoil.
Much of the bad sentiment affecting the afternoon trading emanated from the US, where Citigroup and Merrill Lynch reported heavy losses.
The FTSE 100 ended at 4147.06, up 25.95 points but still almost 500 points adrift of where it stood on Tuesday last week.
Miners figured heavily in the day's winners, with Eurasian Natural Resources Corporation (ENRC) up nearly 9% or 26.25p to 326.5p and Rio Tinto gaining 106p to £15.07.
Mobile group Vodafone added 2.95p to 134.9p as Citigroup upped its price target on the stock.
Tui Travel lost 6.25p to 213p as doubts grew over the sale of its shipping business Hapag-Lloyd, diminishing hopes that it might bought out by its parent company, the German group Tui AG.
Shares in Tomb Raider creator Eidos jumped by 23% or 2.75p to 14.75p after the troubled company revealed it had received a takeover approach.
Last week Eidos reported disappointing Christmas sales for the latest Tomb Raider game, Underworld – shifting just 1.5 million copies since its launch on November 18.
It also warned that it might have to renegotiate loan terms with its bank, Lloyds TSB.
The company said in a statement that it had "received a preliminary approach which may or may not lead to an offer being made for the company".
The international media group Dori Media almost halved after it reported a "noticeable slowdown" in sales in the last three months of the year, usually its best quarter, reflecting caution among programme-buyers and a delay in the commissioning of "telenovela" drama series in Argentina and Israel.
The shares closed down 37.5p at 45p.
It was another bad day for ITV, the UK's leading commercial broadcaster, which ended 2.75p lower at 30.75p. http://www.guardian.co.uk/business/marketforceslive/2009/jan/16/barclay-royalbankofscotlandgroup://
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I'm sure glad we have Obama.

Monetary union has left half of Europe trapped in depression

By Ambrose Evans-Pritchard
Last Updated: 6:52PM GMT 17 Jan 2009

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece's social fabric is unravelling before the pain begins, which bodes ill.

Each is a victim of ill-judged economic policies foisted upon them by elites in thrall to Europe's monetary project – either in EMU or preparing to join – and each is trapped.

As UKIP leader Nigel Farage put it in a rare voice of dissent at the euro's 10th birthday triumph in Strasbourg, EMU-land has become a Völker-Kerker – a "prison of nations", to borrow from the Austro-Hungarian Empire.

This week, Riga's cobbled streets became a war zone. Protesters armed with blocks of ice smashed up Latvia's finance ministry. Hundreds tried to force their way into the legislature, enraged by austerity cuts.

"Trust in the state's authority and officials has fallen catastrophically," said President Valdis Zatlers,
who called for the dissolution of parliament.

In Lithuania, riot police fired rubber-bullets on a trade union march. Dogs chased stragglers into the Vilnia river. A demonstration outside Bulgaria's parliament in Sofia turned violent on Wednesday.

These three states are all members of the Exchange Rate Mechanism (ERM2), the euro's pre-detention cell. They must join. It is written into their EU contracts.

The result of subjecting ex-Soviet catch-up economies to the monetary regime of the leaden West has been massive overheating. Latvia's current account deficit hit 26pc of GDP. Riga property prices surpassed Berlin.

The inevitable bust is proving epic. Latvia's property group Balsts says Riga flat prices have fallen 56pc since mid-2007. The economy contracted 18pc annualised over the last six months.

Leaked documents reveal – despite a blizzard of lies by EU and Latvian officials – that the International Monetary Fund called for devaluation as part of a €7.5bn joint rescue for Latvia. Such adjustments are crucial in IMF deals. They allow countries to claw their way back to health without suffering perma-slump.

This was blocked by Brussels – purportedly because mortgage debt in euros and Swiss francs precluded that option. IMF documents dispute this. A society is being sacrificed on the altar of the EMU project.

Latvians have company. Dublin expects Ireland's economy to contract 4pc this year. The deficit will reach 12pc of GDP by 2010 on current policies. "This is not sustainable," said the treasury. Hence the draconian wage deflation now threatened by the Taoiseach.

The Celtic Tiger has faced the test bravely. No government in Europe has been so honest. It is a tragedy that sterling's crash should have compounded their woes at this moment. To cap it all, Dell is decamping to Poland with 4pc of GDP. Irish wages crept too high during the heady years when Euroland interest rates of 2pc so beguiled the nation.
Spain lost a million jobs in 2008. Madrid is bracing for 16pc unemployment by year's end.

Private economists fear 25pc before it is over. Spain's wage inflation has priced the workforce out of Europe's markets. EMU logic is wage deflation for year after year. With Spain's high debt levels, this is impossible.

Either Mr Zapatero stops the madness, or Spanish democracy will stop him. The left wing of his PSOE party is already peeling off, just as the French left is peeling off to fight "l'euro dictature capitaliste".

Italy's treasury awaits each bond auction with dread, wondering if can offload €200bn of debt this year. Spreads reached a fresh post-EMU high of 149 last week. The debt compound noose is tightening around Rome's throat. Italian journalists have begun to talk of Europe's "Tequila Crisis" – a new twist.

They mean that capital flight from Club Med could set off an unstoppable process.
Mexico's Tequila drama in 1994 was triggered by a combination of the Chiapas uprising, a current account haemorrhage, and bond jitters. The dollar-peso peg snapped when elites began moving money to US banks. The game was up within days.
Fixed exchange systems – and EMU is just a glorified version – rupture suddenly. Things can seem eerily calm for a long time. Politicians swear by the parity. Remember John Major's "soft-option" defiance days before the ERM blew apart in 1992? Or Philip
Snowden's defence of sterling before a Royal Navy mutiny forced Britain off the Gold Standard in 1931.

Don't expect tremors before an earthquake – and there is no fault line of greater historic violence than the crunching plates where Latin Europe meets Teutonia.

Greece no longer dares sell long bonds to fund its debt. It sold €2.5bn last week at short rates, mostly 3-months and 6-months. This is a dangerous game. It stores up "roll-over risk" for later in the year. Hedge funds are circling.
Traders suspect that investors are dumping their Club Med and Irish debt immediately on the European Central Bank in "repo" actions.

In other words, the ECB is already providing a stealth bail-out for Europe's governments – though secrecy veils all.
An EU debt union is being created, in breach of EU law. Liabilities are being shifted quietly on to German taxpayers. What happens when Germany's hard-working citizens find out?http://www.telegraph.co.uk/finance/...eft-half-of-Europe-trapped-in-depression.html
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Treasury bubble about to burst? This would be bad for the F fund, which is where I'm at.

‘Time to Sell’ Treasuries, Biggest Korean Fund Says (Update1)

By Wes Goodman

Jan. 19 (Bloomberg) -- A rally that sent U.S. Treasuries to their best year since 1995 is coming to an end, South Korea’s National Pension Service, the country’s biggest investor, said.

U.S. government efforts to combat the recession will prompt the Federal Reserve to raise interest rates this year, said Kim Heeseok, who oversees $160 billion as head of global investments for the service in Seoul. The decline would snap a surge that sent the securities up 14 percent last year, according to Merrill Lynch & Co.’s U.S. Treasury Master index, as investors sought the relative safety of debt.

“It’s time to sell U.S. Treasuries,” said Kim, who took over as head of investments at the start of the year. “The stimulus plan may cause inflation. The U.S. will raise the benchmark interest rate.”

U.S. government securities headed for their first monthly loss since October after President-elect Barack Obama, who takes office tomorrow, said he will do “whatever it takes” to battle what he called the biggest economic crisis since the Great Depression. Obama is planning an $850 billion stimulus plan, on top of $700 billion approved by President George W. Bush.

Ten-year Treasury yields, used as benchmarks for corporate and government borrowing costs, will rise to 3.08 percent by year-end from 2.32 percent now, a Bloomberg survey of banks and securities companies shows. An investor who bought today would lose 3.3 percent including reinvested interest if the forecast proves accurate, according to data compiled by Bloomberg.

Two-year rates will climb to 1.43 percent from 0.73 percent, according to the survey, which gives heavier weightings to the most recent forecasts.

Higher Rates

The Fed will increase its target rate for overnight loans between banks to 0.75 percent by March 31, 2010, the poll shows. The U.S. central bank last month cut the target to a range of zero percent to 0.25 percent.

U.S. yields indicate traders are becoming more concerned about inflation.
The difference between rates on 10-year Treasury Inflation Protected Securities, or TIPS, and conventional notes, which reflects the outlook among traders for consumer prices, widened to 53 basis points from minus 8 basis points two months ago.

The spread has averaged 1.19 percentage points during the past six months.

Cutting Holdings

Investors in South Korea cut their holdings of U.S. debt to $28.6 billion in November, less than half of what they owned in 2006, based on Treasury Department data.

China, the largest foreign owner of Treasuries, increased its stake to a record $681.9 billion in November.

It may take a few months for the U.S. economy to start growing and Treasuries to fall, Kim said. Government debt has handed investors a 0.4 percent loss so far in January, according to the Merrill index.

The economy will shrink in the first half of 2009 and expand in the second, a Bloomberg survey of banks and securities companies shows.

“At the end of this year, Treasury prices will depreciate,” he said. “We are considering” selling.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.
Last Updated: January 19, 2009 04:00 EST
http://www.bloomberg.com/apps/news?pid=20601213&sid=aPxxVXsVreKQ&refer=home
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First, a happy new year to you, 350Z.
A question on the article you posted below, most quotes in it suggest there's no urgency to leaping from the F-Fund. I seems to suggest U.S. rate changes may be up to year out. I was thinking of at parking some of last week's mis-placed $ in the F-Fund, maybe today. I guess I'm a bit confused - is there some reason not to do this right now? :o
Thanks, appreciate the "heads-up though!!
350zCommTech said:
Obama is planning an $850 billion stimulus plan, on top of $700 billion approved by President George W. Bush.
Ten-year Treasury yields, used as benchmarks for corporate and government borrowing costs, will rise to 3.08 percent by year-end ...

Higher Rates
The Fed will increase its target rate for overnight loans between banks to 0.75 percent by March 31, 2010, the poll shows. The U.S. central bank last month cut the target to a range of zero percent to 0.25 percent.

Cutting Holdings
China
It may take a few months for the U.S. economy to start growing and Treasuries to fall, Kim said. Government debt has handed investors a 0.4 percent loss so far in January, according to the Merrill index.

The economy will shrink in the first half of 2009 and expand in the second, a Bloomberg survey of banks and securities companies shows.

“At the end of this year, Treasury prices will depreciate,” he said. “We are considering” selling.
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hessian said:
First, a happy new year to you, 350Z.
A question on the article you posted below, most quotes in it suggest there's no urgency to leaping from the F-Fund. I seems to suggest U.S. rate changes may be up to year out. I was thinking of at parking some of last week's mis-placed $ in the F-Fund, maybe today. I guess I'm a bit confused - is there some reason not to do this right now? :o
Thanks, appreciate the "heads-up though!!
Click to expand...

Thanks hessian,

And a happy new year to you too.

The author could very well be wrong about the 10yr going to 3.08% by the end of the year. He thinks the Feds will start raising rates in 6 months because the economy is going to turn around in 6 months? He is full of ****.

The real reason why rates could shoot up quickly is due to the fact that bonds are in a bubble, thanks to Ben jawboning about buying treasuries. With all the bailouts that have not done anything and more of it to come, along with the big players selling treasuries(see the Korean article), the bond market is setup for a crash.

My move to the F fund on Friday was done without looking at all the details. I've been away from the market. Now, I'm looking for an exit.
 
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