nnuut's Account Talk

[nnuut]

Every time that last 30 minute jump or dive happens it pisses me off. Market manipulation at its finest!

 

[kar_crazy]

I like it, but I always liked Crazy Car better!:laugh:

crazy car that should have worked

 

[ATCHUNTman]

One day isn't a TREND. Going to wait until I see a turn around, if I get back in tomorrow it's WHIPSAW time, I know my luck! Lot's on the docket this week CPI, PPI etc. I'm going to be patient. Probably will know more tomorrow?:worried:

Well said, I'm with you. I hate that WHIPSAW!

 

[ATCHUNTman]

NICE BOUNCE~!!!!! Wish I was in so I could ~ GET OUT!!
Kind of reminds me of fishing. That sure is a juicy cricket on that HOOK,~~~~~ Nah, I think I'll eat off of the BOTTOM!! Darn, where is the bottom, is this it?:worried: This may be the bottom, but I've been HOOKED before.

Love the fishing analogy.:nuts:

 

[hessian]

NICE BOUNCE~!!!!! Wish I was in so I could ~ GET OUT!!
Kind of reminds me of fishing. That sure is a juicy cricket on that HOOK,~~~~~ Nah, I think I'll eat off of the BOTTOM!! Darn, where is the bottom, is this it?:worried: This may be the bottom, but I've been HOOKED before.

Hey Nnuut, its almost mid-water feeding now! That gummy bear worm is closer now, but I don't know, there's still that HOOK on it! :nuts:

But seriously, I realize corrections likely won't go straight up. And, we're also not in clear yet by any means (hence the "hook" analogy). I'll be keeping my eye on that gummy bear worm though - be watching it closely / hope to see more the closer we get - goal is to try and see if I can grab the worm without catching the hook. :laugh:

 

[nnuut]

Exactly, I want to miss the big downs and catch the ups on the way up, not to early! Even it out, nobody can predict CRAP like this!!

 

[nnuut]

More Credit Write-Downs
50% "G", 50% "F" COB Today.
S&P bouncing off of the 200DMA and can't seem to break through. Looks to be at the top of the downward trend lines. Oil going back up, Gas over $3 a gallon, Dollar back down, I'm still in the CP Mode!
But you never know about this market, may crash through the top of the chart at the end of the day?
I don't think so, but you know how that works!

 

[nnuut]

More Credit Write-Downs
50% "G", 50% "F" COB Today.
S&P bouncing off of the 200DMA and can't seem to break through. Looks to be at the top of the downward trend lines. Oil going back up, Gas over $3 a gallon, Dollar back down, I'm still in the CP Mode!
But you never know about this market, may crash through the top of the chart at the end of the day?
I don't think so, but you know how that works!

Now look at that, as soon as I make up my mind the S&P breaks through resistance!!!!!! Oh, hell with it I'm not changing now!!:nuts:

 

[kar_crazy]

sent P M out should not be too much longer to get p w for auto tracker thanks
Gary

 

[nnuut]

Good deal KC, You need to know exactly where you stand!!

 

[Geaux4it]

Dont want to keep 'beating a dead horse' View attachment 2532

but this market has me running chicken little.

Geaux

View attachment 2533

 

[nnuut]

Dont want to keep 'beating a dead horse' View attachment 2532

but this market has me running chicken little.

Geaux

View attachment 2533

And why is it that way? This guy has some very interesting ideas:
Could the FED be one of the causes for the big up or down spikes at the end of the day?

Tuesday, November 13, 2007

Idiocy On Display - "PPT"

It seems that every time the market rallies seemingly "without explanation" that people start talking about this mythical "Plunge Protection Team" (otherwise known as "The President's Working Group") - a group that does exist - as the cause.
Folks, let's dispense with the stupid first - what do you think the odds are of some mythical working group inside the government that manipulates the stock market, slings around billions of dollars to do so, and leaves nary a trace - and yet nobody ever manages to get their hands on one scintella of evidence in the form of a trade confirmation, funds trace, or other piece of evidence that would prove this, and get it to some intrepid blogger (say, for example, me)?
This group would encompass hundreds if not thousands of people with "actual knowledge" too - yet there has been no authoritative leak (with said evidence) since Ronald Reagan's term.
Oh, and this very same government can't manage to hide a cum-stained dress.
Yeah.
Ok.
I believe in Santa Claus and the Easter Bunny too.
So.
Are there times when "excess liquidity" finds itself into the market, and all of a sudden the stock market takes off like a rocket ship - sorta like today?
Yes.
But I thought I just said there was no grand conspiracy?
That's correct - I said that.
This "conspiracy" is nothing of the kind and its hidden in plain sight.
There's even a web site to make it easy for you - it pulls the data from another public web site, over at the New York Federal Reserve Bank. Its called "The Slosh Report".
To understand all this - and to make sense out of both The Petition andThe Video, you need to understand how "slosh" works, and how The Fed and interest rates actually work.
I'm going to try to educate you.
Let's hope it works.
The Federal Reserve does not set interest rates. They can't. The market sets interest rates. The Federal Reserve sets a TARGET for overnight borrowing between banks. The only direct borrowing that goes on from The Fed is done at the "Discount Window", and is at a penalty to the open market - so unless you really need to, you don't use that option.
So how does The Fed control rates?
They either add or withdraw money in exchange for securities (typically treasury bonds, but any marketable securities can and sometimes are taken in exchange.) These operations are either temporary (known as "TOMO"s) or permanent ("POMO"s).
A temporary open market operation, as the name implies, expires. That is, if The Fed "injects" $1 billion in a TOMO, it expires (has to be paid back) at some point in the future. The time period might be as short as one day or as long as several - but they are all, in effect, short-term loans, with the time set when they're made.
Now let's recall that money is a "fungible" commodity. That is, one $1 bill has the same value as any other $1 bill - they are totally interchangeable, so long as they are legitimate (not counterfeit!) $1 bills. Likewise, a $1 Federal Reserve Note (what you have in your wallet) is "fungible" in reference to $1 in credit - when you spend $1 on your debit card, an actual federal reserve note does not change hands - $1 of "credit" does. You can walk into your bank and demand that your credit (in the form of an electronic ledger entry) be handed to you in actual federal reserve notes, and it will be - and vice-versa.
So what controls the cost of money (in the form of interest rates charged)?
Simple - supply and demand.
If there is a demand for more money than there is supply, the interest rate charged will rise. If there is more supply than demand, the interest rate will fall. The rate charged will rise or fall until it is in equilibrium with supply for the duration (in this case, overnight between banks) contemplated.
Thus, The Federal Reserve twists their SINGLE knob to either inject or withdraw "slosh" - or excess liquidity - so as to cause the actual interest rate charged between banks to be, as close as they can get, to the intended (published) Federal Funds Rate. (The Treasury department has an identical knob, but they twist it rarely - The Fed twists theirs nearly on a daily basis!)
The target rate and the actual trading range (that is, actual interest charged - both high and low) for any given day is published. You can find it right here.
Now if you look at this table (open it in a new window) you will see that The Fed is not perfect. For example, on 11/6, there was actually borrowing that happened at 2-3/4%, and at 5-1/2%. The average for that day was 4.22%, which is below (by about a quarter point) the target of 4.5%.
This sometimes gives rise to the claim that The Fed has performed a "stealth ease" or a "stealth tightening" - that is, they've allowed (on purpose!) the Effective Rate to be different than the published Target Rate. That might even be true, but it doesn't matter in this particular case.
Here's the gimmick - there was, today, 11.25 Billion in "Agency" paper accepted in a 1-day "TOMO" at the NY Fed. We do not yet know what the target rate was (The Fed is typically one day behind the market in reporting this, as obviously the borrowing happens through the day) but assuming the Fed Funds trading rate was not over the target this was $11.25 billion in extra money that went "sloshing" around the system - today.
Where do you think it went?
Well it could have gone anywhere. But do you think some of it might have gone into affiliates of some of those banks - say, into Hedge Funds? And do you think some of those funds might have bought stocks with it? They might have, eh?
Before you scream "MANIPULATION!" let me point out that this is all done in plain sight and its perfectly legal.
There is no secret, and once someone has money (credit), what they do with it is their business, right? All they give up in return is a promise to pay a given interest rate (and perhaps they post some collateral to get a better rate than they otherwise would.)
But - there's more.
See, we frequently hear that "The Fed injected a record amount of liquidity...." from various people - including some blogs often cited on the forum.
These people are either naive or intentionally misrepresenting what is going on with these operations!
Twice recently such claims were made - including on 11/8 when people were screaming about a "record" $32.75 billion that was "injected."
There's one small problem with these claims.
THEY ARE FALSE.
Remember up above when I said these operations were TEMPORARY? That is, they have to be paid back?
Well guess what - on 11/8 $40 billion of those TOMOs MATURED.
So The Fed, on 11/8, did not inject $32.75 billion.
In fact they withdrew $7.25 billion worth of money from the system!
Now today, they really did add $11.25 billion, and it is reasonable to assume that some part of that money went into the equity markets. In fact, it would be silly to assume otherwise, given the tape we had today.
But here's the rub - tomorrow, all of that, plus more, matures, and unless there is more issued, liquidity will be withdrawn!Further, tomorrow we will find out if, today, the Effective Fed Funds Rate was trading somewhere near the target - in other words, whether the supply was properly balanced or if The Fed played some sort of game.
So now who's the idiot?
Did you buy this rally without knowing that The Fed threw more than $11 billion on the table to be used for "whatever", but that it had to be paid back tomorrow? [more]

http://market-ticker.denninger.net/ refresh the link when you get there!

 

[Uptrend]

So if I am reading the slosh report correctly, 40.5 billion matures tomorrow (Nov 15), and if some of that found its way to hedge funds, and if no more orders are accepted by the Fed, putting 2+2 together would mean time to fill some sell orders. Nice theory. Let's watch it over time and decide.

 

[nnuut]

Exactly!:notrust:
http://www.gmtfo.com/reporeader/OMOps.aspx

 

[RPM]

Excellent explanations! The things I don't know my government is doing!!!

As to the conspiracy theory, several (outside the government) have asked me about it, and I always tell them: "you give us too much credit for being that coherent!" :laugh:

Thank you very much for an excellent (once more please) teaching

 

[hessian]

So if I am reading the slosh report correctly, 40.5 billion matures tomorrow (Nov 15), and if some of that found its way to hedge funds, and if no more orders are accepted by the Fed, putting 2+2 together would mean time to fill some sell orders. Nice theory. Let's watch it over time and decide.

Nnuut,
Thanks I read and absorbed the whole thing. Uptrend, I think you got the dates confused! - please correct me if I'm wrong, or missing something...

Excepted from "Market Ticker" - with clarifications and final queston added as bolded & italics (as parentheticals): Tuesday, November 13, 2007; Idiocy On Display - "PPT"

"Now today [Tuesday the 13th], they really did add $11.25 billion, and it is reasonable to assume that some part of that money went into the equity markets. In fact, it would be silly to assume otherwise, given the tape we had today. [hence, Tuesday's large day-rally, in part perhaps].

But here's the rub - tomorrow [Wednesday the 14th], all of that, plus more, matures, and unless there is more issued, liquidity will be withdrawn! Further, tomorrow we will find out if, today, the Effective Fed Funds Rate was trading somewhere near the target - in other words, whether the supply was properly balanced or if The Fed played some sort of game.
...more than $11 billion on the table to be used for "whatever", but that it had to be paid back tomorrow [yesterday, Wedneday the 14th]?"

QUESTION: Could this be the reason for yesterday's (Wedneday's) late day Sell-off?? - they simply needed to recoup capital (to pay back the borrowed funds??:blink:

VR!

 

[nnuut]

"QUESTION: Could this be the reason for yesterday's (Wedneday's) late day Sell-off?? - they simply needed to recoup capital (to pay back the borrowed funds??"

That's what we are looking at. I feel it may have been a participant. Or started it and others followed like lemmings?

 

[nnuut]

Energy costs push consumer prices higher

October increase was largest in 5 months

updated 58 minutes ago
WASHINGTON - Consumer inflation posted another elevated reading in October as energy prices shot up by the fastest pace in five months.
The Labor Department reported Thursday that its Consumer Price Index rose by 0.3 percent last month, the second straight month with inflation at that level. The acceleration was occurring because of another jump in energy prices and continued increases in food costs.
Meanwhile, the government said that the number of laid off workers filing claims for unemployment benefits rose by 20,000 last week to 339,000, the highest level in four weeks. Labor Department analysts said the California wildfires boosted the number of jobless claims by about 2,000 and the writer’s strike, which has shut down production on many television programs, was also having an impact. [more]
http://www.msnbc.msn.com/id/21816416/

 

[hessian]

Nnuut,
This is really very interesting! (It was just the date, Nov 15, that did not compute).

Anyway, now, wondering if there's a way to read ahead, how to know in advance of when the FED is going to open the window for this business??

 

[nnuut]

Got to study it for a while to determine if it's part of this deal. I'm learning some, but really don't understand everything I need to make a determination. There are dips that are caused by the economy, markets etc. that have nothing to do with this. We know when it happens because it's very pronounced right at the end of the day. I need all the help I can get cause I'm not that smart Ya know.! View attachment 2537