Griffin Account Talk

[Show-me]

I can't pick up on the body language as I don't actually watch it. They do sound a more up beat than yesterday.

 

[Silverbird]

CNBC is feverishly spinning again. They have some politician calling for big rate cuts and for the Fed to quit messing around. Also, the normal rhetoric about committee's, transparency, blah, blah, blah.

Rate cut? The last one couldn't even bounce a live cat. As for transparency, do they really want the Fed to say, "Sorry, we can't help you anymore."?

 

[Griffin]

Rate cut? The last one couldn't even bounce a live cat. As for transparency, do they really want the Fed to say, "Sorry, we can't help you anymore."?

Benjamin is in the middle of his speech right now - I guess we should be seeing some kind of reaction before too much longer. The "Sorry, we..." that was incorporated into the fed statement in the last FOMC was what has the big boys panties in a bunch. Hopefully they are going to find their "happy place" before the end of the day.

 

[fedgolfer]

my fingers are ready to go SKF if he hints at no additional help... he's an academic after that last .25 cut... what a numbnut.

 

[Griffin]

My plan from the get go was to buy in at the 200 dma, unfortunately the market zigged when I thought it would zag, and here I am looking at 2% loss - oh well. This is where I wanted to buy in so I'm sticking.

 

[fedgolfer]

Are we overdue for a short term bounce... yes, I agree.

Bigger pic, just my 2 cents, is that I just can't see institutional buyers stepping back in until we get back to those August lows... on the major indices, we only saw little bites of accumulation in the QQQQs/nas on the last few bounces. Other than that, they didn't bite at all, it was all retail.

Thanks for your daily updates!!!

 

[Griffin]

Are we overdue for a short term bounce... yes, I agree.

Bigger pic, just my 2 cents, is that I just can't see institutional buyers stepping back in until we get back to those August lows... on the major indices, we only saw little bites of accumulation in the QQQQs/nas on the last few bounces. Other than that, they didn't bite at all, it was all retail.

Thanks for your daily updates!!!

Do you think we will end up with another kangaroo tail hanging out there?

 

[fedgolfer]

Do you think we will end up with another kangaroo tail hanging out there?

If by kangaroo tail, you're referring to the hammer candlestick in August... I don't know what the candlestick will look like that day, but I have a feeling we won't see accumulation until we tread in that range. The worden bros software shows Balance of Power buying (strong institutional buys 10,000 shares or more blocks on a consecutive basis on the SPY, DIA, QQQQs, R2k and XLF on that very candlestick and a couple days after... we haven't seen signals like those across the board since... even on the .50 basis point cut day... which is understandle since it was a suprise to the market). Since I can't post those charts, I'll yell kick and scream when those signals do get flashed.

I'm not sure if that answers your question?

 

[Griffin]

I'm not sure if that answers your question?

Are you suggesting that today's recovery was not a result of the "plumbers"? and we shouldn't expect the smart money to follow through?

 

[fedgolfer]

yes, volume doesn't suggest it in a convincing manner. Bleeding not done imho, if we bounce, it's still very temporary.

 

[Griffin]

yes, volume doesn't suggest it in a convincing manner. Bleeding not done imho, if we bounce, it's still very temporary.

With the Vix where it's at in the mid twenties - everything is subject to change at a moments notice. The indicators actually have set the stage for something of a bounce. It's definitely touchy right now, but it's reasonable to expect the channel to get well defined. There seems to be a real deliberate effort going into whipping the market into a frenzy.

 

[fedgolfer]

another pay site I belong too is also calling a short term bottom and buying the march calls to give him space if he's wrong. The gap down is ripe for buying. But while we have textbook hammer candles, another indicator... time segmented volume did not reverse as it did on the august candlestick... TSV hasn't even hit the 0 line in the QQQQs... its really just starting to roll over.

RIMM did bounce hard off yesterday's lows... so far textbook... but I feel like selling any green. I'll be interested to see how the SPY acts testing yesterday's low... we're about there.

 

[fedgolfer]

on a sidenote... skf (short financials etf) appears to be breaking out of a 3 month cup and handle. Those going long really have to ask themselves how well the market can take additional bad news/write downs. They will continue. Can the other sectors escape the financials in the mid and long term -- no, yes in the sort term... I don't think we've hit bottom there and i'm guessing that's when we'll hit the long term bottom?

 

[Griffin]

on a sidenote... skf (short financials etf) appears to be breaking out of a 3 month cup and handle. Those going long really have to ask themselves how well the market can take additional bad news/write downs. They will continue. Can the other sectors escape the financials in the mid and long term -- no, yes in the sort term... I don't think we've hit bottom there and i'm guessing that's when we'll hit the long term bottom?

The wave of write downs will continue for a little longer, but this is the time for those CEO's to air their dirty laundry, or they will pay much steeper criticism if the hold back.

This pullback was so incredible quick that there really is nothing we can do but sit back and wait - I don't see any reason for the market to move significantly lower. Again, this is not a reason to get upset, we are seeing a new channel form, and this is likely the bottom - most of the indicators are at rock bottom - athough the MACD on the S&P could get weaker - but it can do this without moving to new lows.

I've never been good at playing the bottom of these things, so I am going to be very cautious to buck the trend.

 

[fedgolfer]

The wave of write downs will continue for a little longer, but this is the time for those CEO's to air their dirty laundry, or they will pay much steeper criticism if the hold back.

This pullback was so incredible quick that there really is nothing we can do but sit back and wait - I don't see any reason for the market to move significantly lower. Again, this is not a reason to get upset, we are seeing a new channel form, and this is likely the bottom - most of the indicators are at rock bottom - athough the MACD on the S&P could get weaker - but it can do this without moving to new lows.

I've never been good at playing the bottom of these things, so I am going to be very cautious to buck the trend.

yeah, the write down issue has me puzzled. You figure they would have factored the damage in already... but they really don't know. The vast majority of resets don't happen until several quarters from now. I'm not screaming end of the world, but there will be more write downs in future quarters. On a linear time frame bad lending probably was minimal at the beginning, escalated in the middle and then probably took a parabolic rise near the end of the real estate boom. That's speculation, but if that's correct, there is no way these banks have written down all their damage.

Oh, and if the CEOs did factor in the full subprime debacle in Q3... they probably would've tanked their company's stock even more severly. So, I think they're managing their stock price while writing down... which means for some banks there is a lot more they're not telling us.

 

[fedgolfer]

on my drive in the AM, CNBC had some joker on there saying the true financial bottom will come when someone like Buffett will come in and start buying banks because they've been beaten down so hard. I can see some truth to that. But there ain't no way, Buffett would say that at this point in time not know the full impact of the credit/subprime crunch.

 

[Griffin]

On a linear time frame bad lending probably was minimal at the beginning, escalated in the middle and then probably took a parabolic rise near the end of the real estate boom. That's speculation, but if that's correct, there is no way these banks have written down all their damage..........which means for some banks there is a lot more they're not telling us.

I think your time line is very accurate - a lot of the people that took out these risky mortgages, were people who simply got priced out of a "reasonable" housing environment. Take a young family with infants and toddlers - they really didn't have a choice, they saw their first home getting smaller every month and leaped on faith. However, these are people that are going to stick out and get themselves a better mortgage on the reset. It's reallly the speculators that are going to get crushed and that could drag out the housing debacle for another year or so.

Each current CEO gets this write-down, we won't see a slew of Chuck Princes walking out the door, but we will see a few - their replacements get a write down for what the predecessor tried to hide, - beyond that is guaranteed firing. Read the interview about Chuck Prince with Prince Alweel - that is the attitude these CEO's are up against: perform or your fired.

 

[Bullitt]

Someone like Buffett will come in and start buying banks because they've been beaten down so hard.

He already did. He took up a major stake in BAC in August I think it was. I'm starting to wonder if the CEO's and board's even expected these write downs to come down the line. I also wonder how much of this SIV mess is truly panic. Maybe these investments are worth more than they are being given credit for with the widespread housing credit panic.

 

[BlueMax]

Warm off the press from MSN Money:

By the looks of things, the fraudsters have been hard at work over the past few weeks with a few financial stocks -- a group haunted by fears of the next big stock-killing write-down related to subprime mortgages gone bad.
Exhibit A: some highly suspicious trades in Lehman Bros. (LEH, news, msgs) options as rumors swirled in late October -- at a moment when fears of subprime-related write-downs were running thick because Merrill Lynch (MER, news, msgs) had just announced a whopping $7.9 billion write-down.

 

[offtrack]

Quote:
Originally Posted by Griffin
- a lot of the people that took out these risky mortgages, were people who simply got priced out of a "reasonable" housing environment. Take a young family with infants and toddlers - they really didn't have a choice, they saw their first home getting smaller every month and leaped on faith. However, these are people that are going to stick out and get themselves a better mortgage on the reset. It's reallly the speculators that are going to get crushed and that could drag out the housing debacle for another year or so.



I see that things are a bit more complicated. I don't think that the problem is limited to just sub-primes and speculators. Stupidity and greed by both borrowers and lenders --yes-- but on a far wider scale. Our society, baby-boomers and their spawn, have been consumption driven without responsibility and the problem goes way back. As they matured in the 90's they raised stock market prices by both reckless consumption and greedy investing pushing both retail prices and company p/e's well above practical value. The internet made everyone market savvy in investing but not too swift as everyone saw a market that will perptually rise. Our investment and consumption dollars were fueled by foreign investment in the strong dollar. Stock bubble burst and we should have had a longer period of market correction but Greenspan deferred this by dropping interest rates artificially low and started falling dollar. Cheap borrowed money and irresponsible lending pushed real estate prices up to artificial highs and even worse consumers propped economy through refi borrowing on their false equity. Not to be too political but this also made war financing possible. But there is always an eventual end. Real estate has burst and credit is drying. Bernanke tried to play same trick as Greenspan with an interest drop but dollar is low. His move just prompted faster dollar sell-off and big commodity pop. I kind of think American arrogance over the last few years may have the rest of the world secretly supporting our troubles. But enough of this-- where to now? Well you can think through a variety of scenarios but I can't see many more rabbits like Greenspan found. We need an acoounting. If we as a society don't panic and take some losses we should be ok. A 2 year bear and consequent 10 year flat market might be good for the nation's soul. But if it could be avoided that would be nice too. I'm hoping for government, not FED intervention that would help selective first time home buyers and those in trouble of losing their 1st home with lower cost financing and other incentives. It would be nice to see a public bond program aimed at that purpose. We need a savings incentive anyway. Otherwise interest rates should go up to prop dollar. Taxes and those especially on capital gains and dividends need to be increased. Enough damn greed. With a little responsibility we could all belt-tighten and get through this with minimal discomfort.