All good things come to an end.

Bummer.

Yep, all the bad news was just an illusion. CFC is going to 80. All mortgages are going to be forgiven outright. And 200 basis points is is going to stimulate growth without inflation!

Well, the runaway inflation with hold up the nominal values anyway.

sheesh.

Methinks it's pre-OpEx festivities....

A temporary reversal at best. Just reshort when it's ready to go down again.

Let me know when that is.

Why do they call it a wake, anyway?

The guy's dead.

He ain't gonna be awake.

just like a trader holding onto a losing position.....we call that a hope trade

Maybe because when they started doing wakes people would sometimes wake up. It's rare but still happens nowadays in morgues.

Just a matter of time now before the headless chickens come home to die.

There I was, making my 30% off projections.....then reality hit!

[attachmentid=94492]

There are no straight lines!

Still within down channel.
We'll see where we go tomorrow.

Sow adds back less than 2/3rds(about flabbynacho 61.8%) of yesterday's
beatdown.
Woo
hoo.

Top may not be finalized until March 07 lows broken-RUT. SP Small & Mid
Trannies have, SP5,OEX, Rusty 3K, NazComp come pretty close, SOW, NY
Comp, NDX further away.

I guess every dog will have it's day.

Carl nails it at 1391 today. He's up over 20 points from that buy.

http://carlfutia.blogspot.com/

More shoes to fall. I wonder what this stuff is worth.

SIVs Must Refinance $70 Billion This Year, Merrill Lynch Says

By Neil Unmack

Jan. 9 (Bloomberg) -- Structured investment vehicles have $70 billion of medium-term debt maturing this year, according to Merrill Lynch & Co. analysts.

Dresdner Bank AG's K2 Corp., Bank of Montreal's Links Finance Corp. and nine other SIVs have to repay $21 billion of medium-term notes before April, Merrill analysts wrote in research dated yesterday. The figures are based on SIVs that haven't been bailed out by banks.

SIVs, companies that use short-term debt to buy higher- yielding assets, have been unable to borrow since August as the collapse of the subprime market caused investors to shun securities linked to mortgages. U.S. Treasury Secretary Henry Paulson initiated talks to set up a fund to avert a firesale of SIV assets further roiling credit markets. Banks abandoned the initiative after cutting SIV assets to about $282 billion from a peak of $400 billion last year, based on Standard & Poor's data.

Refinancing ``is likely to remain a concern for non-bank sponsored SIVs this year,'' wrote Merrill analysts led by Alexander Batchvarov in London. ``The influence of SIVs on the overall structured finance market is likely to remain negative.''

http://www.bloomberg.com/apps/news?pid=206...Oc&refer=canada

A fellow Stoolie, cwd, I think, originally posted a reference to this interesting assessment...

Opening two paragraphs (excepted) from:

Hussman Funds, Weekly Market Comment - Jan. 07, 2008

"Minding the Hinges on Pandora's Box"

by John P. Hussman, Ph.D.

I've used the word “warning” far more than I would like in recent months. For an investment manager who tries to maintain a fair amount of equanimity about market direction, I don't take this lightly. Importantly, our present defensive investment stance is not based on any forecast of a substantial bear market decline – we don't need to make such forecasts. The fact that market has historically lagged Treasury bills in similar environments, on average, is sufficient basis for our current defensive stance (which is not net short, just fully hedged).

Still, I am emphatic that investors should evaluate their risk exposures and tolerances now, in order to allow for substantial further market weakness. Market conditions presently feature a Pandora's Box of rich valuations, vulnerable profit margins, rising default risk, rapidly deteriorating market internals, failing support levels, and accumulating evidence of oncoming recession. As I noted in my December 17 comment, “there is one particular scenario that would be ominous in my view. That would be if we see a relatively uninterrupted series of declines that breaks cleanly through the August and November lows, followed by a one-day advance of 200-400 Dow points. That's a script that markets tend to follow pre-crash. Though it's not a strong expectation or forecast, it's something worth monitoring, because we've started to see the pattern of abrupt jumps and declines at 10-minute intervals that is often a hallmark of nervous markets.”

- - - - - - - - - - - - - - - -

I have high regard for Hussman's intellect and analysis.

What is the probability that today's 230+ point, 90 minute rally (on the DOW) IS the pre-crash spike of Hussman's "ominous" scenario above?

I believe that TPTB will use an intentionally-induced crash in the equities to "adjust" (collapse) all asset class prices (along with interest rates) lower, while boosting the $USD.

An another of the smartests guy in the room.

Bank of America's Countrywide trap
The financial behemoth's $2 billion investment in the mortgage lender is disappearing fast. Too bad its options are limited.
By Roddy Boyd, writer



Bank of America CEO Kenneth Lewis isn't looking so smart for investing $2 billion into Countrywide last year.

.
NEW YORK (Fortune) -- Late last summer, Bank of America and its deal-hungry chief Kenneth Lewis won kudos for a $2 billion investment in Countrywide Financial, the once high-flying mortgage lender hit hard by the housing slump.

In one stroke, Lewis erased his reputation as a serial over-payer with the kind of convertible preferred stock deal that arbitrage traders dream of. In exchange for its $2 billion, Bank of America secured the right to buy Countrywide (CFC, Fortune 500) stock at $18, a tidy 21 percent discount over the price at the time. Lewis, it seemed, had deftly locked in an instant $424 million profit for the bank.

Nobody's congratulating Bank of America these days. As Countrywide shares tank and speculation mounts that the company will be forced into bankruptcy, the bank's stake has plunged in value, to about $560 million. Now Bank of America faces a tough choice: It can buy Countrywide outright, pour even more money into the lender, or simply bide its time and hope for the best.

Whatever it does, Bank of America no longer appears so savvy. And Lewis, who's been criticized for paying top dollar for, among other companies, credit-card lender MBNA ($35 billion) and U.S. Trust ($3.3 billion), is once again looking like a spendthrift.

Bank of America and Countrywide declined comment.

Their deal looked so simple when it was announced in August. In return for its cash, Bank of America (BAC, Fortune 500) got a 7.25 percent yield on convertible preferred stock and the right to buy 111 million Countrywide shares, equal to a 16 percent stake. The bank also got the right of first refusal on any future Countrywide deals and stood in front of the creditors' line should the lender go bankrupt.

Lewis and Countrywide CEO Angelo Mozillo, known for his perpetual tan and wide grin, somberly proclaimed the importance of the investment in stabilizing the then-turbulent mortgage secondary markets. The markets seemed to agree.

http://money.cnn.com/2008/01/09/news/compa...sion=2008010914

I am glad to see you remembered that comment. I have no idea on the odds but if it starts to have a serious sell off in the next few days, I will committe a sizable amount since I covered some of my shorts at a nice gain today
As IAM reminds us don't be greedy..

Yea, might see a hit of the 20DMA on the NAZ, and might see 740 or so on the RUT. .....just going by previous retracements of rallys....

Let's see what you got Mr. Market...

[attachmentid=94494]

viewimages.com

The buy/sell signals I monitor are not confirming this bounce....

Don't put all your money on banking a crash. Market crash are rare. Most that try to catch one usually get reamed. If it does happen, my goal is to be on the sidelines watching it and play the bounce.

This guy I've read in passing for about a month, Franklin Sanders, a fellow gold kook, has a similar view based on the Dow's value in gold compared to the 1929 crash. Today would have been similar to the day before the crash:

...
"Now pardon me, while I parade before y'all some numbers I find fascinating. Can't imagine how I overlooked it, but the 1929 Dow top was G$381.17 (they were all gold dollars in those days). Heaven & earth are filled with more things than I understand, but I have observed that markets tend to trade back to old support. But 79 years, now that's old. Still, there was a support area about G$380 in these last months.

That so picqued my curiosity that I went back to check the 1929 Dow's activity, because today the Dow in Gold Dollars (DiG$) crossed a momentous milestone: it dropped below G$300 (14.513 oz. of gold to buy the entire Dow). What happened in 1929 when the Dow dropped thru G$300? The first day that happened was 24 October 1929, when it closed at G$299.47. Next day it closed up at G$301.22. But the next day the Dow traded, 28 October 1929, it closed at G$260.64.

Let me bring that number up to date. With gold at US$880/oz, the G$260.64 DiG$ equals a raw Dow of 11,095.44, a 1,494 point drop from today's close.

By 13 November 1929, 10 trading days later, the Dow closed at G$198.69, equal in 2007 to Dow 8,458.23, or 4,131 points lower than today's close.

Carefully note that I am not predicting these numbers, just comparing today's closes with 1929's, on the momentous occasion of the Dow closing below G$300 for the first time in its post-1999 bear market against gold."

Source

I think the fact that CFC just had their Alt A loans downgraded is a potential 'crash' trigger.

This is where the real serious problems lie.

All those folks who 'spent' their house.

Or worse the folks who used the inflated equity in their first homes to leverage themselves into the more expensive second home.

These are the Alt A loans that will make the sub prime loans look like a teddy bears picnic(or grizzly bears picnic.. )

A wild day for me. A power cut just before lunch knocked me out. I had to scramble to call my broker in London on my mobile phone to close out my (large) short positions.

Power was out for 5 hours. I could not even see how the mkt was doing. When I got back on line after the close. I was relieved to see the power cut took me out of my shorts just before the ass blast. Lady luck on my side for once.

Intel has been showing a similar pattern of 1st half selloffs followed by 2nd half recoveries. The big question is, if it will follow the same pattern this year? I do not belief that it will, because, it is at solid support and the ferocity of this selloff is happening on decreased volume as compared to previous years. Also, in this period of suspect US consumer spending, Inte'sl overseas sales account for 75%. Its CEO, just recently said that they don't see any slowdown in their markets.

[attachmentid=94495]

The idea that the rest of the world will continue on its merry way as the US heads towards a very hard landing recession is nonsense.

Companies like Intel and co who get significant offshore earnings will be slammed.

The UK is slowing down rapidly with evidence from one of their leading retailers (Marks & Spencer)that the consumer is tapped.France is close to recession,the rest of the world will fall like dominoes.

The UN is also predicting a gloomy future(although that should almost be a contrarian indicator as they are never right.. )

UN forecasts global gloom

The United Nations warned today of "clear and present dangers" of the world economy coming to a near standstill this year because of US housing and credit problems and the weak dollar.

http://www.theage.com.au/news/world/global...9554776069.html

Marks & Spencer Shares Slide on Unexpected Sales Drop

Jan. 9 (Bloomberg) -- Marks & Spencer Group Plc, the U.K.'s biggest clothing retailer, fell the most in at least 19 years in London trading after an unexpected decline in holiday sales.

The shares lost 19 percent after London-based Marks said today that revenue fell 2.2 percent at stores open at least a year in the fiscal third quarter ended Dec. 29, the first same- store sales drop in 2 1/2 years. The median estimate of eight analysts surveyed by Bloomberg was for growth of 1.1 percent.

http://www.bloomberg.com/apps/news?pid=206...lV3OsU&refer=uk

Another blog suggested by Mauldin.....

http://investmentpostcards.wordpress.com/

He seems to agree we have entered a bear market......

I have noticed in recent times a lot more 'bears' coming out of hibernation.

Blogs popping up left,right and centre.

as guys like Kunstler have alluded to in recent posts, conspicuous consumption and overt displays of wealth will be a red rag to a bull as times get tougher.

Politicians who seem to be out 'enjoying' themselves whilst people are doing it tough is never a good look.

Maybe times are changing.Maybe the party is finally over.

French shoppers want money, not love, from Sarkozy

PARIS (Reuters) - President Nicolas Sarkozy should concentrate less on flaunting his love life with ex-model Carla Bruni and more on putting money in their increasingly squeezed household budgets -- or so think many of his countrymen.

Many French had been hoping Sarkozy would use a round of New Year's speeches to announce new steps to boost falling spending power in the face of rising food, petrol and lodging costs.

http://www.reuters.com/article/lifestyleMo...930718820080109

and in OZ.


We are not bludging, says Julia Gillard

FAR from idling through the Christmas-New Year break, Julia Gillard - into her second consecutive week as Acting Prime Minister - says the Rudd Government has already hit top speed.

Deflecting questions about the new Government's work ethic, Ms Gillard said yesterday the first 38 days in power had seen "activity on all fronts", from climate change to a special meeting with state premiers to taking measures to monitor Japan's annual whale hunt.


It was the second time in three days Ms Gillard or her office had been forced to defend the Rudd Government's work ethic since it came to power on December 3.

Ms Gillard has been hard at work over the break standing in for Mr Rudd, who has managed during his holiday break to attend both cricket Tests against India and to host a New Year's Eve bash at Kirribilli House in Sydney.

http://www.news.com.au/story/0,23599,23029870-2,00.html

If a recession is looming and the four year cycle that was to bottem back in 2006, has yet to bottom, then one should be looking for a decline of size. Perhaps, as much as 30% or more. 1100 is a nice round number.

FWIW....2008 Bradley

[attachmentid=94496]

Maybe down into June??

What will the Fed's OMO do tomorrow with $22.5 B maturing? That seems to be the biggest amount maturing since the first trading day this year.

Can they risk another drain?

Any thoughts on linkage between the daily drains this year (except for the $1 B add today) and the market slide? Could the drains have contributed to the stock market decline? If so, are there any coincident factors that could be used as indicators for future market moves?

bung,

i don't even know how to read that anymore...

TE, this guy has listed 14 bear market corrections from 1929....average downdraft on the SP500 was -34%........

http://www.ttheory.com/files/asic_sp_swings080102.pdf

http://www.ttheory.com

It's probably a bunch of "bunk" anyway.. From what I recall the inflection points are possible change of direction or trend points or dates....The actual direction of the graph (up/down) may not be the same as the market...

It's just the "change dates" that may...or may not, be informational...

Is that any clearer??

Nope.

It worked very well in 2004-2005 but since, ehh.

A question regarding FXP. This is the 2x's short ETF for China. Why was it down 12% when the underlying was up 2.5%. Should'nt it only drop by 5%. WTF?

http://bigcharts.marketwatch.com/quickchar...id=0&o_symb=fxp

Thats how I read it.

These foreign ETFs are forward looking. For example, if EWH(Hong Kong) goes up by $0.40 and the underlying market actually goes down at night, the next day there is going to be a huge disparity in premium on NAV.

On FXP, there is still a premium of $0.50. It's a good idea to check prior day's NAV before buying these.

Tanks.

2faas,

Holy shit! How the hell are ya?

ACHILLES HAS A HEAL


Australian Banks have been funding their loans from offshore to tune of $400 billion.

What if the foreigners want their money back - suddenly ?????

The days of using cheap foreign money to make loans to buy overpriced real estate are over, along with their share prices

THE ANTI INCUMBENT ELECTION

Looks like all the debtors want some revenge.

Lots of angry borrowers here in OZ, trapped with huge mortgages.

Its just vastly ironic to see Hilary suddenly re-invent herself as an anti incumbent

Take it to the lestaurant. Then you has a milk.