Griffin Account Talk

[Griffin]

You could get a sell the news reaction. I would not be surprised to see a green morning and a red afternoon.

The marked shrugged off Monday's housing report which suggests there is positive momentum building. If the market sells off and I find myself back at the retest, then I will hang in unless the retest fails.

With the exception of the housing numbers, the numbers are looking good. I'm looking for a short term rally like Tom talked about this morning. I want just a little to fill a bit of this hole - a little bit at a time. I'll bail out some where around or above 1380 - could be tomorrow. ADP Jobs numbers came in stronger then expectation so I expect the Fed jobs report to at least be netural. I'm not fearing Friday.

Let's see what hapens with this .6% GDP. That's weak and the consensus seems to be that weak numbers will lead to a .50% rate cut as they did with housing.

Let's find out!

 

[airlift]

Griffin,
Your comments seem very reasonable. The GDP numbers appear to be persuasive for at least 50 basis point cut.

On a germane subject, can you please clarify how the Chain Deflator numbers are interpreted as a measure of inflation? Thank you.

 

[Griffin]

Griffin,
Your comments seem very reasonable. The GDP numbers appear to be persuasive for at least 50 basis point cut.

On a germane subject, can you please clarify how the Chain Deflator numbers are interpreted as a measure of inflation? Thank you.

My understanding of the chain deflator is that it is supposed to be a relative measure of growth based on the value (not cost). Value is a function of production and relative pricing and adjusts with consumer spending habits. The idea is that it gives a more accurate picture of growth as opposed to just looking at an index that only measures the units of production or the total dollars of production. Here the complex answer.

http://www.bea.gov/scb/account_articles/national/0597od/maintext.htm

 

[Corepuncher]

Griffin,
Your comments seem very reasonable. The GDP numbers appear to be persuasive for at least 50 basis point cut.

Still think 0.6% +/- is within the FEDS expectations of slowing growth. The preliminarily good jobs report further bodes for a 25 pt cut.

I just think that if they do 50, that it will look irresponsible when combined with the 75 already. 1.25 in such a short period? it would be a record. French trader? Not instilling confidence (unless they hold to their forecast and go 0 or 25 pts today).

25 is my forecast and I'm sticking to it...can't wait to see what it really is!

Sure looks like a negative bias in the markets today. Glad I got rid of my 75 I holding yesterday, now just 25 I. Might sell my F into G today.

FED day = FUN

 

[Geaux4it]

True to form, the market is straight lining this morning waiting to make a big time move. IMO, if the market is planning to tank regardles of FED move, it should be tanking at this moment. Other than the dramatic, what's the rationale for waiting for the obvious? Market drama at it's best!

Geaux

 

[nnuut]

S&P is starting an up tick at this moment, it usually does this prior to a FED announcement, sometimes it blasts upward or downwaard just before the deadline. Watch the fun, scary!View attachment 3172

 

[Birchtree]

Program buys are waiting for the sign of the "Charge of the Light Brigade".

 

[Geaux4it]

Yeah, here's the PC used for program buys ....

Geaux

View attachment 3174

 

[Fivetears]

It's an orphaned file.

 

[Griffin]

I'm just getting out of a long night of meetings and it looks like it definitely would have been more entertaining to be watching the ticker. Then again, it was the type of meeting that made watching grass grow exciting.

So, we exploded up and tagged 1380 which.....suprise....suprise....was followed by some massive profit taking (or was it a flight to safety?). Given a 50 basis point cut on both funds rate and discount window really sets the economy up for the relief it needs. I think I saw something about a stimulus package getting passed by the house as well.

Clearly, the Fed, congress and the executive branch are all worried about the economy and are now stepping in full force. Given the magnitude of this rate cut, the biggest potential for a black cloud now comes from inflation and we will get a solid dose of that tomorrow. The jobs report is still relevant to some degree, especially if it counter intuitive to the ADP numbers.

Beyond that, we have to wait and see what the effect the cumulative moves make. I think I'm back in the court of staying in stocks - as long as we don't make a new low. There is a lot of speculation that this recession is going to be short lived. I don't think that what we got today was the solution, but it certainly gives business a reason to uncircle the wagons.

With any luck we just finished up the beating that was deserved for an era of irresponsible lending. Lessons learned, time to move on. Lets hope business sees it that way.

 

[alevin]

Tech bubble burst, housing bubble burst, time to create the next one...or is it already in the making...alternative energy?

Ah, but just think of the ride up. Alt energy isn't going away, it'll just get cheaper as the curve moves past the inflection point and the market shakes out and settles into most cost-effective quick replacements for oil-diversify for awhile to spread the risk, there'll be speculation for sure on which pony(ies) will get there fastest.

 

[Griffin]

Tech bubble burst, housing bubble burst, time to create the next one...or is it already in the making...alternative energy?

The next bubble will be the combination of all three - as we move to fiber optic, computer monitored high tech, super energy efficient home renovations. There is a lot of money to be saved which has the bonus of allowing greater consumer spending without inflation

A sub sector of that is the home robot ......maybe that's two bubble's away (of course that will burst when the home robot nannies start dropping kids on their head for the largest all time class action suit.) Or will it be the driverless/autopilot car?

Anywho....the eurozone is heading down and futures are slipping quickly. Bad opening?......looks like it. I'm sure the Chicago PMI will come in weak. Afterall this breakdown became recessionary when the Philly fed reported that -20 and no policy was implemented in the wake or the interim (until very recently - certainly not enough to have an effect...yet).

The market is boxed in between a support turned resistance level at 1380 and the recent bottom. Now the trouble is bond insurer's? That is a reltaively small derivitive - it's like that last bottom when you had folks trying to hit the panic button over commercial real estate.

It will pass, but we are due for some more turbulance.

 

[wwwtractor]

The Honda Accord in England can be purchased with the AutoPilot option now.

 

[dickster]

Ah, but just think of the ride up. Alt energy isn't going away, it'll just get cheaper as the curve moves past the inflection point and the market shakes out and settles into most cost-effective quick replacements for oil-diversify for awhile to spread the risk, there'll be speculation for sure on which pony(ies) will get there fastest.

Has anyone seen anything on biodiesel made from ALGAE? I have read some articles on the subject, the numbers look great and the technology exists but I don't see anyone rushing out to invest in it. Is there something I am missing???

 

[kaitlinsnana]

Consider kudzu. In the seventies there was talk of fuel from kudzu, but it fizzled when the embargo ended. As a child of the south, I can tell you that nothing grows faster. If you don't believe me, park your car near kudzu, probably be overgrown within two days.
This is my last day at work. There is a God.

I'm watching you, Griff, brilliant stuff.

Gail

 

[kar_crazy]

Consider kudzu. In the seventies there was talk of fuel from kudzu, but it fizzled when the embargo ended. As a child of the south, I can tell you that nothing grows faster. If you don't believe me, park your car near kudzu, probably be overgrown within two days.
This is my last day at work. There is a God.

I'm watching you, Griff, brilliant stuff.

Gail

you lucky enough to retire if so congrats

 

[FUTURESTRADER]

Consider kudzu. In the seventies there was talk of fuel from kudzu, but it fizzled when the embargo ended. As a child of the south, I can tell you that nothing grows faster. If you don't believe me, park your car near kudzu, probably be overgrown within two days.
This is my last day at work. There is a God.

I'm watching you, Griff, brilliant stuff.

Gail

congrats, kaitlinsnana!!!...enjoy!!!

 

[DrFaustus]

Consider kudzu. In the seventies there was talk of fuel from kudzu, but it fizzled when the embargo ended. As a child of the south, I can tell you that nothing grows faster. If you don't believe me, park your car near kudzu, probably be overgrown within two days.
This is my last day at work. There is a God.

I'm watching you, Griff, brilliant stuff.

Gail

I had a friend who swore that, at night, you could hear kudzu growing. I understand that they brought it in for cows but they didn't like it. Because its roots are so deep (75 feet, as I understand it), you can't get rid of it. I remember seeing whole fields just covered in the stuff when driving along the by-roads of upstate South Carolina.

Gail ... Congrats on the retirement ... I'm envious! Be sure to check in occasionally, k?

Dan

 

[logdoc]

Consider kudzu. In the seventies there was talk of fuel from kudzu, but it fizzled when the embargo ended. As a child of the south, I can tell you that nothing grows faster. If you don't believe me, park your car near kudzu, probably be overgrown within two days.
This is my last day at work. There is a God.

I'm watching you, Griff, brilliant stuff.

Gail

I don't know anything about kudzu, but it would have to yield ethanol with more horsepower per gallon than sugar cane to be useful. We'd be importing sugar cane from Brazil but there is a 15% import duty on it as part of farm subsidies and the ethonol from corn scam. Because there are no pipelines ethanol has to be transported by truck whose fuel use along with the production and manufacturing fuels make it a negative benefit...unless you are the manufacturer and are milking the tax benefits from this scam. Along the lines of doing something else with my money I am looking at utilites that are in or moving into more nuclear power. That is one alternative energy source that is not likely to become a bubble.
I still do want the first 5% match though from Uncle Sam so I'll be contributing that at least. Where else am I going to get a 100% return on any of my money?

 

[Silverbird]

Sugar cane is a bad idea in spite of the high energy content, as cultivation usually is slash and burn + lots of (petroleum based) fertilizer. Brazil may find it a good answer for them, but the EU, for instance is raising concerns that sugar cane biofuel may be a carbon producer (and therefore not eligible for their biofuels subsidy) due to how it's cultivated. Also, most of the U.S. has the wrong weather to grow it.

In the biofuels department, I'm hoping on methanol since it's a by-product of waste. Right now there are problems with transport, purity, and storage in the gas tank before use (it's very volatile!) and collection, so it may only be long term or just a hope. I wouldn't mind nuclear except no one seems to want to deal with securing and storing the waste in the long term and no one wants that loose or in the wrong hands.