Thread for Wednesday

http://finance.yahoo.com/intlindices

http://money.cnn.com/markets/morning_call/










http://www.kitco.com

Energy futures

Currencies/Au/Ag

http://finance.yahoo.com/intlindices?e=europe

Okay back home and turns out I had a case of iritis (inflammation of the iris) which I've never heard of but is apparently quite common.

It can occur in conjunction with serious afflictions like AIDS, TB, syphilis, Crohn's disease etc however I don't have any of those so I come in the "out of the blue" category.

Personally I think that flu bug I had a few weeks ago may have temporarily impacted my immune system. Anyway, well on the road to recovery and looking forward to resuming a normal life

Australia Increases Key Rate to 11-Year High of 6.5%

Aug. 8 (Bloomberg) -- Australia's central bank raised its benchmark interest rate a quarter point to the highest in almost 11 years. The increase may undermine Prime Minister John Howard's campaign to win a fifth term in office this year.

Governor Glenn Stevens raised the overnight cash rate target to 6.5 percent today in Sydney, the first adjustment since November, to curb an inflation rate running faster than he forecast and cool the biggest surge in lending since 1989. Bonds fell.

The increase leaves consumers facing the highest borrowing costs since Howard came to power in 1996. Already behind in opinion polls, Howard will find it harder to maintain his argument that mortgage rates will always be lower under the Liberal-National coalition government than the opposition Labor Party.

Thanks for that info FauxCaster. I left before I saw your post but I will tuck it away for future reference

Credit is ripping...IG8 (investment grade index) -12bps, HY8 (high yield) +1pt

Cash spreads coming in 10bps in the long end.

Agencies 2-5bps tighter.

Treasuries selling down and breaking support.

UFB if this is another buying opp, but we are leaning towards selling this strength in spreads.

Pre-trading irrelevant question of the day:
Do you think the imploding home values in SoCal are making people pre-occupied and TERRIBLE drivers. I had to jump-step on the hood of a car last night as it literally almost hit me (or did, if you count the soles of my shoe). The day before, driving to Target my wife and I counted and agreed, at least four people would have hit us while we were in the right away (stop light, stop sign, parking lot, etc). I haven't seen driving this bad since I lived in Philadelphia! (Sorry, Doc, but you know its true!!). The night before that, three more impatient drivers almost caused a pile up on PCH (although, this was teenagers traveling in pack formation, so they don't really count).

Breakaway gap up across the board on all indexes.

A mountain of short sellers are now stranded at the lows.

Wyndy- you need to calm down. The last you were this excitedly bullish the market was topping out. It's trading exactly like the early months of 1973 as it bounced repeatedly and the bulls kept proclaiming bottoms. But the rallies were gifts for bears. Opportunity after opportunity.

I've been peeling off profitable shorts in the WSE Pro chart picks this week to reposition when the time is right. Added just a handful of longs, but prepared to dump quickly if this fizzles. Selling all stalled rallies.

As I warned in the WSE Pro Fed report last week, a liquidity driven rally was likely this week due to the $40 billion paydown on the 40 year bond. Had you been a subscriber to the Professional Edition, that knowledge would have prepared you for this rally. Subscribe today! Click the link below to get in now.

Of course where a $28 billion net paydown on the week had been forecast by the Treasury Borrowing Advisory Committee, it turns out that the Treasury needed A LOT more moolah. So the paydown actually came in at only $13 billion. By the end of the day today, all of that cash will have been committed. Then we'll see just how strong this market is over the balance of the week.

Here's what I wrote in last Thursday's WSE Pro Fed Report:



The only wrinkle here is that the Fed OFFSET the net add of $13 billion with a $13 billion drain of reserves. The Fed has no intention of allowing the speculative fires to reignite. So it would seem that the market is running on the fumes of false expectations again.

That's a recipe for disaster.

Stay tuned to all the latest updates on how the Fed, Treasury, and FCB actions are likely to impact the market. Subscribe to the Wall Street Examiner Professional Edition's Money, Liquidity and Real Estate package.

I also believe this is a short term bounce, but one that is worth selectively playing for my risk profile. Not sure how long it will last, but I'm donging a couple of large cap banks to see what happens. Not fully in, though. If things get constructivel better, then I'll add on the way up. If I don't see a material quality improvement , I'll bail...

We're gonna have to see huge volume, and at least a 5 to 1 A/D ratio to get anything serious going...

I had a bunch of utilities come up as buys on last night's screens. That might be where to look. However, the 1 year cycle indicators still point down, so there's a good chance the rallies won't get far before getting smacked down. That's the difference between all the prior rallies and this one. The longer term indicators are no longer in gear. The waves come in from time to time but the tide is going out.

And that's all I'll have to say about the big picture. Follow the developments daily in the WSE Pro. SUBSCRIBE NOW!

Listen to a free preview of the latest Radio Free Wall Street podcast.

Subscribers get the whole thing at http://radiofreewallstreet.fm.

Whiskey Haines apparently using the bad weather in NYC as an excuse to have another shot & beer before coming in to join Erin "the shrill" Burnett

[attachmentid=87031]

Holy Crap.......anything financial that is not a POS sub-primer is getting sky hooked in the premarket.....my CIT is up 10%.......wow

Bank hints at one more rate rise

BOE said inflation was likely to miss the 2% target if interest rates remained at the current 5.75% level

http://news.bbc.co.uk/1/hi/business/6936774.stm

Just sold all of our 10yr broker exposure.

Now working on the 5yr area.

I'll be leaving early and will be away for most of the day. Will be checking in.

DJ Fed Accepts $8.75 Bln In Overnight RPs

Type of transaction: Overnight RPs
Total accepted: $8.75 Bln
Total submitted: $47 Bln

Agency Collateral Operation
Total accepted: $2.077 Bln
Total submitted: $13.2 Bln
Stop-Out Rate: 5.28%
Weighted Average: 5.29%
High-rate submitted: 5.29%
Low-rate submitted: 5.23%

Treasury Collateral Operation
Total accepted: $6.673 Bln
Total submitted: $24.8 Bln
Stop-Out Rate: 5.18%
Weighted Average: 5.18%
High-rate submitted: 5.19%
Low-rate submitted: 5.1%

Mortgage-Backed Collateral Operations
Total accepted: None
Total submitted: $9 Bln
Stop-Out Rate: N/A
Weighted Average: N/A
High-rate submitted: 5.29%
Low-rate submitted: 5.26%

(Data was provided by the New York Federal Reserve Bank).

Anyone remember the "picks and shovels" period of the dot con blow-off. First round, people admitted they were foolish for believing lightbulb.com was going to have bigger market cap than GE...BUT they still BELIEVED in the networkers, the fiber makers, the server makers...those who made the internet possible were going to moon.

Anyone see any parallel between the "subprime was foolish, we admit", but the rest of our structured credit is good.

Nice ANALogy

qqqq 3 day cycle projection still around 38.85.

spx has exceeded 3 day cycle projection of 1485. 5 day cycle projection looks 1504.

hui 3 day cycle projection 345-46

Oops! Whiskey Haines spotted outside the offices of Crapvision.

Finally, they lit a firecracker under REITs. Mark-to-Model is going to prove to be biggest swindle in financial history. They are pricing capital assets as if it they were some kind of short term securities. Incredible that the market is letting them get away with this. Private Equity is going to end up with capital assets at a fraction of what it's worth while most talk nonsense about CDOs implosion which they don't even understand.

The freaking idiots are confusing temporary negative cash flows caused by excessive leverage with CDO meltdown.

We are are in a new era in one sense, after a 3 day rally the VIX hasn't backed off much at all

I think volatility is being repriced.

Wow, that was a quick rally. At a top already?

tol up 5%

http://finance.yahoo.com/q?s=TOL

DJ Fed's Stern: Public Support Key To Low Inflation Policy
Another blow sunshine up our ass speeches!

WASHINGTON (Dow Jones)--Federal Reserve Bank of Minneapolis President Gary
Stern said Wednesday that public support for low inflation has helped
policy-makers keep price pressures contained.

U.S. inflation has been "reasonably well contained for roughly two decades
or so, and the consensus in favor of price stability has been sustained," he
said in prepared remarks to a conference on economics education.

"Although the Federal Reserve's firm commitment to a policy of long-term low
inflation was essential in this process, support from the public was critical
as well," he said.

Stern, who is not a voting member of the rate-setting Federal Open Market
Committee in 2007, didn't address the economic or policy outlook in his
prepared remarks.

Gap fill imminent:

Don't everyone get too excited about today, it's only WWW.

i posted on dakt a couple weeks ago yesterday it was up 10% today 7% already !

http://finance.yahoo.com/q?s=DAKT

my target is 35

its all about hope!

Expand Fannie Mae's and Freddie Mac's Foreclosure Prevention Efforts. Hillary would expand the goals of Fannie and Freddie, the government sponsored enterprises (GSEs) that help stabilize the mortgage markets, to include helping a larger number of at-risk homeowners avoid foreclosure. This would be consistent with Fannie's and Freddie's existing goals that promote home ownership. The GSEs already help mitigate foreclosures by enabling some borrowers to swap into less risky, lower-cost loans. Fannie also helps homeowners arrange payment forbearance, financial counseling, and loan restructurings. Hillary will expand those initiatives to make foreclosure mitigation a greater priority

Errr... which one?

its possible for an expanding mega phone on the indexes. we may get new highs across the board then new lows. it will be my WAG. then we will go even higher.

Just went long tens and bonds cash.

Both.

GS went from 177 yesterday @11am to 197 today @10:30am. Yet another freaking swindle.

UFB, silver stocks are going to go to new highs. Windy hit a bullseye with PAAS and SSRI.

The VIX chart looks the same as the SDS chart (2x inverse SPX).

I switched from SDS to SSO (2x long SPX) on that third peak in the series since that pattern usually signals s/t exhaustion.

The key to the I/T future will come when SDS comes back down and re-tests the two-month basing pattern it formed prior to the huge move up.

Translated to the Spooz, it looks like the next line of contention will be 1505ish and then our old friend SPX 1532ish.

When the SPX busted down thru 1532 last month, I mentioned that, even if the SPX was building an important top, it would likely re-test 1532ish (risk to 1540) at least once or twice more. Markets usually provide a graceful exit and tend to "return to the scene of the crime."

A fast move back up to re-test the breakdown that fails will be uber-bearish, though it will appear quite bullish while it is happening. Oftentimes, a vertical move that retraces back to a broken key level, without benefit of a basing process like we saw in Jun/Jul06 and Mar07, is not the start of a new bull move but part and parcel of a breakdown process. A panicky reflex move that, if it fails, will confirm the initial selloff impulse.

The "hook" here, if it occurs, is that a move back up in the Spooz that fails would likely indicate minor higher highs in the Sow and NDX. That would appear bullish, but it wouldn't necessarily be.

Since I have no crystal ball, I covered shorts and threw long the SSO from lower levels and will ride this move as far as it goes. But if the SPX fails to exceed 1532 (risk to 1540), then this is simply a reflex move up to "return to the scene of the crime" and bodes ill for the remainder of 2007.

I also have had higher L/T targets on the techsters (Q-ball 51+, Nazz 2875-2925). So there is certainly "room" for the Nardsaq'ers to outperform until those higher targets are tagged.

If this move proves false, I would expect the RUT to have the most downside on subsequent selloffs, as has been the case since May06 when the RUT ceased to be a leader and started becoming a laggard.

Here's a snippet from their update. It sounds like great news to me (not).
See if you're awake this am. Read the sentence I outlined (---) and see if you can figure out what is wrong.

Toll Brothers 3Q Home-Building Rev Falls 21% >TOL
Last update: 8/8/2007 5:20:46 AM
DOW JONES NEWSWIRES
Luxury home builder Toll Brothers Inc.'s (TOL) home-building revenue fell 21% in its fiscal third quarter, as contract signings continue to drop.
For the quarter ended June 30, the Horsham, Pa., firm said home-building revenue decreased to about $1.21 billion from $1.53 billion a year ago, as net signed contracts declined 31% to $727.1 million from $1.05 billion during the year-ago quarter.
Toll Brothers said the fiscal third-quarter cancellation rate was 24%, compared with 19% in the fiscal second quarter. Third-quarter cancellations were 347, the lowest in a year.
Backlog for the quarter fell to about $3.67 billion, down 34% from $5.59 billion in the year-ago period.
---Toll Brothers signed 1,457 gross contracts in the quarter, a 17% increase from 1,760 gross contracts signed a year ago. ---
"We believe significant pent-up demand is building, based on solid demographics, a decent economy and still-strong employment," Chairman and Chief Executive Robert I. Toll said in a written statement. "However, we caution that, with the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit market settles down."
"In the near term, tightening credit standards for borrowers should reduce the pool of potential buyers: liquidity and affordability issues may impede some customers from closing, while others may find it more difficult to sell their existing homes."

Check these out.

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i think MAD tipped us to this yesterday. good call mad.

OMG !!! thats crazy talk !!