Corepuncher's Account Talk

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HOUSING NOT!
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http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm
 
XLF touched lower Bollinger Band today. Usually means we are going down several percent more in the coming weeks.

So far this past year, we are 4 for 4. Let's see if it will be 5 for 5...

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I don't claim to understand how all this stuff works with the rates, but I know this graph is significant. From www.markit.com. They showed a longer version of this on CNBC earlier today...and this current spread level we are at, is MUCH HIGHER than that of the panic lows in March. This graph below is for AAA rated credit, and as I understand it is the % they pay ABOVE the treasury rate.

Notice the huge spikes...and that happened over the weekend I believe. What changed? A simple article from Barrons? No...they just said what everyone already knew. Increasingly, I believe the "big boys", those supposedly "in the know", are running around like chickens with their heads cut off. We are in unprecedented times.

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Here is AA:

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Updated Tracker COB 8/19/08
----------------------------------------------------------------------
2008 YTD Return: +8.83%
Today: +0.01%
Current Allocation: 100G
Tracker Rank: 2
Tentative Next Move: Wait for < 1240 to buy after 9/1/08
----------------------------------------------------------------------
 
ATCJeff said:
Hey Core, why 1240? I'm still looking for 1214-1225 for my entry.
Click to expand...

The way I see it, we will either
A) Break the lower Bollinger band (break 1240 and retest the lows of 1200) or
B) Bounce around between the 20 SMA and the lower band, which is 1240-1270.

I guess I feel like there is a good chance we go sideways for a while...but maybe it's just wishful thinking since I can't buy for a while :-)
 
Things Really ARE Different This Time
The market continued to fall Tuesday as the monthly options cycle brought put buyers into the market to hedge against what is turning into a self-fulfilling prophecy. Put-buying causes put-writers to hedge by selling futures short, sending the market down via the magic of program trading. This is how a downward spiral starts.

An interesting factoid we learned recently via a report from Bridgewater Associates: It now costs banks more to raise long term capital than it costs the businesses they may lend to. It's the first time in history that's been true. Yes, there's always a first time and things really are different this time.

Pressure on Lehman is building up to the same kind of fever that it did in Bear Stearns earlier this year. In fact, in some respects, Lehman's condition is far worse than Bear's ever was. One difference: Lehman is an owner of the Federal Reserve. To our knowledge no owner of the Federal Reserve has ever gone belly-up. As we know, though, there's always a first time.

Ultimately, it may be the Federal Reserve Bank itself going belly-up. We can only hope for the day that happens. These perpetrators got off scot-free after causing the Great Depression. Wouldn't you love to see Ben Bernanke doing the "perp walk" on the Nightly News?

http://marketclues.blogspot.com/
 
Corepuncher said:
I don't claim to understand how all this stuff works with the rates, but I know this graph is significant. From www.markit.com. They showed a longer version of this on CNBC earlier today...and this current spread level we are at, is MUCH HIGHER than that of the panic lows in March. This graph below is for AAA rated credit, and as I understand it is the % they pay ABOVE the treasury rate.

Notice the huge spikes...and that happened over the weekend I believe. What changed? A simple article from Barrons? No...they just said what everyone already knew. Increasingly, I believe the "big boys", those supposedly "in the know", are running around like chickens with their heads cut off. We are in unprecedented times.
Click to expand...
Here's part of it:

Freddie Sells $3 Billion in Debt at Higher Spreads (Update3)
By Jody Shenn
Aug. 19 (Bloomberg) -- Freddie Mac, the second-largest U.S. mortgage-finance company, sold $3 billion of five-year reference notes at its highest yields over benchmarks in at least 10 years as demand fell from Asian investors and central banks.
The debt priced to yield 4.172 percent, or 113 basis points more than U.S. Treasuries of similar maturity, Freddie said in a statement today. The McLean, Virginia-based company sold five- year notes in May at a spread of 69 basis points. A basis point is 0.01 percentage point.
Freddie's funding costs have risen as higher mortgage delinquencies caused some analysts and investors to question whether the company needs more capital to remain solvent. Asian investors are scaling back purchases the most, failing to find comfort in U.S. Treasury Secretary Henry Paulson's commitment to rescue Freddie and larger competitor Fannie Mae, which have posted almost $15 billion in net losses in the past year. [more... http://www.bloomberg.com/apps/news?pid=20601009&sid=aAwQe_lzFOLU&refer=bond ]
Click to expand...
and here's more, housing numbers out today were bad:
Fannie, Freddie Bailout May Hinge on $223 Billion Debt Rollover
By Dawn Kopecki
Aug. 20 (Bloomberg) -- Fannie Mae and Freddie Mac's success in repaying $223 billion of bonds due by the end of the quarter may determine whether they can avoid a federal bailout.
Fannie, based in Washington, has about $120 billion of debt maturing through Sept. 30, while McLean, Virginia-based Freddie has $103 billion, according to figures provided by the government-chartered companies and data compiled by Bloomberg.
Rising borrowing costs and evidence that demand for their debt was waning last month led Treasury Secretary Henry Paulson to seek the authority to pump unlimited amounts of capital in Fannie and Freddie in an emergency. Their interest costs are again increasing amid concern that concern that credit losses are depleting the capital of the beleaguered mortgage-finance companies.
Rolling over the debt ``is the single most important factor to their ability to remain liquid,'' said Moshe Orenbuch, an analyst at Credit Suisse in New York. ``So far, they've been able to do that.''
Investors in Asia, the biggest foreign owner of Fannie's $3 trillion of bonds, are reducing their share of purchases, potentially increasing the need for Paulson to make good on his pledge to backstop the companies.
``This whole backstop mechanism was set up so the actual need for it could be avoided,'' said Mahesh Swaminathan, a mortgage strategist for Credit Suisse in New York. ``The market is testing the Treasury's resolve.'' ....


Initial optimism that Paulson's proposal would bolster confidence in the companies has vanished on concern that the deteriorating housing market may force a bailout, a move that would likely wipe out common shareholders and potentially some preferred stockholders, Miller said.
``It hasn't restored any faith, it just highlighted their problems,'' Miller said. ``The market has come to accept the fact that the government has got to do something.'' [more...]
http://www.bloomberg.com/apps/news?pid=20601087&sid=azlybEsIURmA&refer=home#
Click to expand...
Both articles give a pretty clear picture of what's driving it now. Check the links for the whole story.
 
Potential bearish flag setting up. Today was essentially a sideways day. Tech was weak despite good numbers from HPQ. I thought tech was leading. Oil showed resilience despite a huge build in crude. Could get back into the 120's soon. Money went into bonds today. That is a strong statement when you take into account inflation is high...I guess the balance of risk lies with economic weakness.

Bear flag would bring us down to 1240, near the lower Bollinger band. If we touch it, look out. Might take a while, which is good for us sitting in G with no IFT's!

On a lighter note, 3rd wedding anniversary today. :)
 
Corepuncher said:
Potential bearish flag setting up. Today was essentially a sideways day. Tech was weak despite good numbers from HPQ. I thought tech was leading. Oil showed resilience despite a huge build in crude. Could get back into the 120's soon. Money went into bonds today. That is a strong statement when you take into account inflation is high...I guess the balance of risk lies with economic weakness.

Bear flag would bring us down to 1240, near the lower Bollinger band. If we touch it, look out. Might take a while, which is good for us sitting in G with no IFT's!

On a lighter note, 3rd wedding anniversary today. :)
Click to expand...
Asians and other investors fleeing fanny/freddie into bonds.

Congrats! A toast to you both!
AnnivToast.gif
 
Three years! Good job. Lots more good ones to come, if warm wishes have anything to do with it. Congrats!
 
Nice gain for all you in F !



Updated Tracker COB 8/20/08
----------------------------------------------------------------------
2008 YTD Return: +8.84%
Today: +0.01%
Current Allocation: 100G
Tracker Rank: 2
Tentative Next Move: Wait for < 1240 to buy after 9/1/08
----------------------------------------------------------------------
 
There is solace in G. Come join us.


Updated Tracker COB 8/21/08
----------------------------------------------------------------------
2008 YTD Return: +8.85%
Today: +0.01%
Current Allocation: 100G
Tracker Rank: 2
Tentative Next Move: Wait for < 1240 to buy after 9/1/08
----------------------------------------------------------------------
 
Corepuncher said:
There is solace in G. Come join us.


Updated Tracker COB 8/21/08
----------------------------------------------------------------------
2008 YTD Return: +8.85%
Today: +0.01%
Current Allocation: 100G
Tracker Rank: 2
Tentative Next Move: Wait for < 1240 to buy after 9/1/08
----------------------------------------------------------------------
Click to expand...

Your doing so Good ! Keep it up "Morepuncher" ! ;)
 
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