Any time they can hold the Dow to a loss of less than 100 is a good day for the bulls any more. My how times have changed.

Does that count as an up day?

Looks like it's GMTFO time in the futures AH.

big IBM rally today

new bull market highs up ahead!

I keep looking at that quote from Kiplinger. If ever there was an advertisement for a service, that sure isn't it. Shows that they are totally clueless. The Kiplinger letter portrays itself as authoritative on everything.

It's a piece of crap.

In case you missed it, a new podcast has been posted at http://radiofreewallstreet.fm

tons of bottom callers

not just on this board

Not me.

I have posted an extended free preview of today's podcast.

http://media.libsyn.com/media/wallstreetex...fws011808pv.mp3

Music to my ears.

Doc, just do not use an "C" word. You always "create" a sharp reversal after mentioning it.

Cramer's on Hard Ball. AFter lambasting the stupidity of moneyboy's stimulus package, he said the Mortgage insurers are going to collapse and that will cause the Dow to drop 2000. The only solution is to shut them down and form a new RTC, which will happen, he says, in two weeks and no one in Washington is willing to talk about it. There you have it. If cwd is right and he is the mouthpiece for the Pigsters, I guess we better be careful with short in a couple of weeks.

Bull markets climb a wall of worry.

Bear markets slide down a slope of hope.

If you're short, and you and your fellow bears are all worried about a bottom, then I'd say you have nothing to worry about.

What, me worry? I'm having a great year. But should that info be true about a gubmint takeover of the insurers, I don't want to be short homies or banksters for a spell, do you think?

[attachmentid=94815]

Is there an S&L stockholder post-RTC out there?

I remember a couple of newsletter writers that were instructing their minions to go long at SPX 1460! I wonder how they are doing?

[attachmentid=94816]

Maybe we will get a 2000 point drop first, along with the obligatory interest rate cuts.

Great Winter Watch on the turning worm of public discourse around Fed and Wall Street excesses.

We have some ways to go. My guess is that the Fed will begin to wobble this year, and may slip into a more serious crisis after the November elections. I'd say the odds of it getting through 2009 with the same chairman, structure, sponsorship, and scope of power is well under 50%.

One of the tells that serious change is afoot may be the Fed's increasing portrayal in mainstream media as a quasi-federal entity that needs governmental restructuring in some way...in other words, that it's already part of the government.

I'm not sure this ruse will be successful. If ever there were a period when we had a crack at the public awakening to the nature of their private central bank, and when Jefferson could quit spinning in his grave, it's over the next couple years.

This may not be a period when you want to hold many unhedged dollar denominated assets.

Maxpain played out for the Giggler and I managed to hold my March puts... put, actually, all the way down from 690-something. Didn't sell it today, just to try letting my winners run for a change Will probably regret it, but what the hey.

The Fed is not a private bank. It is a Federal Agency whose powers are derived from its Congressional mandate... which can be changed by the Congress. The Chairman and the Board of Governors are Presidential appointees confirmed by the Senate. The fact that the shares of the Federal Reserve District banks are owned by the member banks does not give them control any more than shareholders in a public corporation control the corporation. Control rests in the Board of Governors, which most definitely is a US Government Agency. Member banks are required to be stockholders in their district Federal Reserve Bank. They receive a 6% annual dividend by law. The Fed returns its operating profits to the US Treasury annually.

In bull or certainly the last bear market (2000-2003) this indicator showed rally points. When it was in the 1 to 3 zone we would get a rally.....It's less than 1.0 right now!

[attachmentid=94819]

[attachmentid=94820]

Watch when it turns.....

The controls must be broken...

Fresh new lows....

(01-17) 11:06 PST SAN FRANCISCO -- As foreclosures, scarcer mortgages and general uncertainty continue to pummel the real estate market, Bay Area median home prices and sales volumes experienced significant declines in December, according to a report released Thursday.
For the nine-county area, the median home price fell 4.9 percent and sales volume plummeted 43.2 percent to a record low in December - the 35th consecutive month of decreasing sales, said DataQuick Information Systems, a La Jolla (San Diego County) research firm.

-- Price. The median price for an existing, single-family home in the region was $620,000 in December, down 4.9 percent from $652,000 a year ago, DataQuick said. The resale median dropped in every county except Santa Clara, where it was up 4.6 percent.

Including condos and new homes, the median was $587,500, also a 4.9 percent drop from a year ago, when it stood at $618,000. It has now fallen 11.7 percent from the peak of $665,000 reached in July.

For all Bay Area home sales, the price drop was the largest year-over-year decline since February 1993, when the median fell 5.5 percent, according to DataQuick analyst Andrew LePage.

source

don't wory, it's all contained, and that paltry $150 billion tax money giveaway is going to fix everything with stimulus spending.

Ok. A new bear market has started. Finally!. Any move up towards the 1360-1350 area I will try and redeem myself on the side that has cost me a lot. Sign me up doc.

TE

I rode the overnight DowDong and $caSShed it out near the top

then I shorted the Rushty breakdown and grabbed 6 pernts

then I donged the Dow again for the closing weekend greenprint, butt got shafted

it's Friday, man! what happened?

Any chess players in the house?


In 1956 13-year old Bobby Fischer played a simultaneous exhibition match that yeilded what became known as "The Game of the Century". This is the board of that game at move 11.



White has just played 11.Bf4-g5. What did Fischer play?

* 11...Bxf3
* 11...Na4
* 11...Re8

For more, you can Match wits with Bobby Fischer

* answer below...

I'm shocked!

WaMu accused of appraisal fraud

The WaMu sales manager demanded Wertz change her appraisal process to produce higher prices for the properties she was evaluating.

When Wertz refused to comply, she claims the sales manager threatened to block her from doing future appraisal work for the bank.

A month later, Wertz's suit says, a third-party appraisal request assigner told her WaMu would no longer accept her work.

Fischer played 11...Na4. This was the first move in a sequence of sacrifices that is one of the prettiest combinations played by any prodigy -- 12.Qa3 Nxc3 13.bxc3 Nxe4 14.Bxe7 Qb6 15.Bc4 Nxc3 16.Bc5 Rfe8+ 17.Kf1 Be6.

I still think the general population,including our illustrious politicians,economists and talking heads are all still rooted in the early stages of 'denial'.

It will be Katie bar the door when 'denial' gives way to full blown 'panic'.

US mortgage crisis unlikely to do damage here:

RBA governor
January 19, 2008


AS AUSTRALIA'S sharemarket plunged for a record 10th consecutive day, writing billions of dollars off share values, Reserve Bank governor Glenn Stevens told Australians the US mortgage crisis was unlikely to do significant economic damage here.

http://www.theage.com.au/news/national/rba...0620212110.html

When the authorities say 'don't panic',you know its time to GTFO.



No need to panic, says RBA head

RESERVE Bank governor Glenn Stevens has played down the effects of massive falls on the Australian and international stock markets.

The local market has endured one of its worst performances in its history this week, notching up its biggest losing streak in more than 17 years.

Asked at a business lunch in London overnight what his message would be to Australian mum and dad investors who had been hit by the market falls, Mr Stevens said: "Share markets go up and down.

http://www.news.com.au/couriermail/story/0...844-953,00.html

R.I.P. Bobby Fischer

I think a "what did we learn from 2000-2003" thread should be started.

Got GOLD?

TE,

This is nothing like 2000- 2003.

This is close to unprecedented in our history.

All recessions of the recent past will look like a teddy bears picnic compared to the utter devastation this depression inflicts on everyone.

read Marc Fabers latest ..

UNCHARTED ECONOMIC WATERS
by Dr. Marc Faber

I must confess that I have no idea whether the US stock market will be higher or lower in a year’s time. I sometimes recall these words of Lao Tzu, the sixth-century Chinese poet:

“Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

The problem that confronts investors was best summarized by Albert Einstein, who said: “Not everything that counts can be counted, and not everything that can be counted counts.” We all know about the credit crisis, the Treasury’s bailout plan, and the Fed’s determination to cut interest rates in order to support asset markets and the economy, but it is extremely difficult – if not impossible – to quantify the problem and the effectiveness of the government’s intervention in the market economy.

At the same time, we have a number of relatively reliable statistics – such as railcar loadings, the trucking index, the number of inbound containers, etc. – which indicate, if not a recession, then little economic growth. However, although all these indicators have a weakening trend and point to considerable economic slowdown, or even to a recession, they may have little or no impact on the performance of the stock market.

Peter L. Bernstein, the wise 88-year-young economist and strategist (author of five books in the last 15 years and of the excellent, but demanding, Economics & Portfolio Strategy report), explains in a piece entitled “Uncharted Territories” that “the current scene bears no resemblance to a typical economic peak or to the conditions usually preceding a slowdown in business activity. Those kinds of conditions feature excesses in the business sector, but the business sector at the present time has a relatively clean bill of health... There are no signs of the usual boom in capital spending that leads to a cyclical top and leaves an overhang of capacity. Growth of industrial capacity over the past five years has been a meager 0.8% a year. This piddling rate of expansion is a sharp contrast to the 4.2% annual growth rate in capacity during the 1990s or to the 2.7% rate from 1949 to 1969.”


But Peter Bernstein isn’t optimistic about the economy. In asking himself the questions “what is going to happen next?” and “what is the outlook?”, he explains: “[T]hese questions are never easy, but they are more difficult than usual this time around. The experience is not only inexplicable. It provides no antecedents to guide us.”

In referring to some of the unique features in the current scene – mentioned briefly above – Peter opines:

“[W]e are unable to choose which among them is most important, but we believe the key problem is not in the financial sector. Rather the basic difficulty is the impact of these financial shenanigans on households. The deflation in home prices is not only unsettling to homeowners; it has in effect removed a crucial part of the consumer’s piggy bank. Home equity is no longer a source to finance consumer spending. This development is unsettling in its own right, but it is only a reminder to homeowners that their major asset is in deep trouble and is not likely to improve any time in the foreseeable future. If we are correct in placing primary emphasis on the problem faced by households, the economic malaise will not be brief, even though its depth is uncertain. The process is going to be like water torture – drip by drip over an extended period of time until all these excesses are squeezed out of the system and new and happier horizons can open up.”

Regards,

Marc Faber
for The Daily Reckoning

http://www.dailyreckoning.com/

Leveraged speculator dynamics in concert with a Bursting Credit Bubble now places enormous stains on the stock market. Not only have faltering Credit Availability and Credit Marketplace Liquidity dramatically diminished the prospects for companies, industries and the general economy. Limited liquidity in the Credit market has also created a backdrop where those seeking to hedge (or profit from) heightened systemic risks have few places to go for relatively liquid trading outside selling stocks and equity index products. And sinking stock prices further aggravates the unfolding Corporate Credit Crisis, fostering only greater systemic stress and only greater selling pressure.

"Contemporary finance" is being exposed as a daisy-chain of interrelated risks and fragilities.





Doug Noland
The Credit Bubble Bulletin
PrudentBear.com


http://www.safehaven.com/article-9260.htm

2000-2003 was pretty bad, nonetheless.

it's all coming apart at the seams like pants leg shielding a fattening thigh:

http://www.economist.com/finance/displayst...ory_id=10553166

Bond insurers
All fall down?
Jan 18th 2008 | NEW YORK
From Economist.com

Huge new problems in the capital markets?

AMERICA’S big bond insurers, which have underwritten some $2.4 trillion of private and public-sector bonds, usually go about their business largely unnoticed. But now they are looking distinctly wobbly they have started to attract attention. If one or more of them were to topple over, there will be a huge knock-on effect on banks and other financial institutions that rely on their guarantees. This in turn will further worsen the credit crunch and cause an even bigger headache for policymakers already grappling with a sharp slowdown in the American economy.

The threat of such a financial domino effect looms large. Moody’s, a credit-rating agency, has signalled that it might downgrade the AAA-ratings of two of the biggest bond insurers, MBIA and Ambac, in the near future. On Friday January 18th, Ambac said that it had dropped a plan to raise $1 billion of new equity capital to preserve its rating—making futher downgrades even likelier. In response, Fitch, another rating firm, cut Ambac's rating.

MBIA, which recently managed to raise $1 billion of new capital on top of another billion that it received from Warburg Pincus, a private-equity firm, will almost certainly need even more money if it is to preserve its AAA-rating. ACA Financial Guaranty Corporation, another insurer, is in even direr straits. In December its single-A credit rating was cut to junk status. The firm begged its trading partners to give it more time to sort out its problems. But by Friday it had still not come up with a rescue plan. The state insurance regulator of Maryland, where ACA is incorporated, has already assumed responsibility for some of its operations.

Bond insurers in effect “lend” their top-notch ratings to lower-quality debt, raising its value in the eyes of investors. Any cut in those ratings may make it impossible for the bond insurers to take on new business and would reduce the value of the securities they have already underwritten. Such cuts are now a distinct possibility because the insurers have underwritten billions of dollars of mortgage-backed securities, including those notorious collateralised-debt obligations (CDOs) that have now gone sour. . . .

It's a global economy now. Industrial capacity in China owned by locals and by foreigners must be exploding. Developed world industry owners have spent the last 5 years either moving their factories to China or simply closing them down. Only the industries that make low value/volume products are surviving... and even those will be challenged if there is a recession and oil gets back to 10 USD.

I have a conspiracy theory to give. Not that I think it is likely, but it possible.

We know that large banks and broker-dealer reserves were depleted by SIVs and pier loans, which will likely to make the economy to struggle as long as the primary source of money is restored.

How about forgetting the moral hazard and give them some money? The gang of 20 is on CC with Feds every morning. Suppose someone said - won't we folks crash the market into Opex?

Feds can't push but they can pull. They said - how about we drain $20 billion just to make sure the market indeed tank? Good idea - let's tell our trading desks to take positions...

RIP Fats



Ernie Holmes #63 - One of the Famed "Steel Curtain" front four of the

Pittsburgh Steelers first two Super Bowl teams.

Had lunch with a very wealthy, very old man yesterday. We were discussing various other very wealthy, very old men with a view to soliciting them for charitable donations. One name came up, and my guy said,"Oh yes, he's done *very* well. His savings have savings."

That one's going to be a keeper.

The practical difference between granting an $800 immediate tax rebate for every individual and dropping $20 bills from helicopters over the mall parking lot is what?

When you read the announcements of write offs of the investment banks like Merrill, observe that the $16 or so billion of write off was mitigated by the $7 billion in profits from trading, amongst other things.

Out of whose pockets did those trading profits come, one might ask? Who was on the other side of all those trades? Hmmmmm?

"Moral hazard" has gone of the way of the Bond market vigilantes of the 80's.

They could just give everyone a rebate by forcing crude to drop since it impacts price in just about everything we buy.

Or they could do what the socialist interventionist dingbats in Canada did, writing checks to ho-moaners to "compensate" them for the rise in home heating oil prices. That one felt good as I read about it in my crummy (but heated) apartment, where I live because I felt I couldn't safely commit to the expense of a home given the anticipated rise in heat and fuel prices...

If we keep rewarding stupidity and poor planning, pretty soon stupid's all we're gonna have left.

Uncle Paul thinks we are already there apparently.


Noland

"His savings have savings."

It appears the Equity Put/Call has changed channels.

[attachmentid=94833]

NYSE summation index has already crossed down. - 1500 looks possible. Very crashy looking.

[attachmentid=94834]

Not that it means anything, but there is some +D on 10 yr yield. A fast dollar rally ahead of the FOMC 1/30 meeting might be coming.

[attachmentid=94835]

One more crayola pitcher. Vix has broken it's dtl and backtested same. We could be set for a serious 'repricing event' in markets if they start down next week.