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"Battling Brains" at PIMCO Must Be Sweating Bullets
Last weekend The Los Angeles Times featured a story about the war room discussions at PIMCO. Now with over $1 trillion under management and bonds teetering, the pressure must be huge to start chasing equities and other risk assets.
http://articles.latimes.com/2010/apr/04/business/la-fi-pimco4-2010apr04
Mohamed "Sugar High" El-Erian must be chugging down some Red Bull, trying to figure out how to maintain the Total Return Fund champion returns this year, as bonds are under pressure and the relentless march in equities continues unabated.
Imagine sitting in your office, overlooking Big Canyon golf course and Fashion Island, contemplating what could happen if fixed income tanks.
Wonder if El-Erian might have to cave in, and fire all those highly paid market strategists and install a phalanx of 19-year old trading robots who just sit all day, stare and motion on a screen, and chase whatever is going up and short whatever is going down. Sure would save a lot of time and money. And instead of leading these 3-hour strategy meetings, El-Erian could take some long lunches and enjoy a stroll at the mall and admire all the silicon Barbie figures milling around.
Same old boring story today.
Uninterrupted meltups in banks, REITs, rental car companies, etc.
Of course, the fastest movers today were the REITs with the absolute worst business prospects:
Another new closing high for the Russell 2000.
And it is still nearly impossible to try to find any shares available to borrow.

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anyone have any idea why Blackrock is in a full fledged nose dive? Is the combination of the Fed redeeming for par any bad investment ever made by any financial institution on the planet plus a raging no volume bull market in equities somehow bad for this company while simulatneously being good for every bank that was full on insolvent this time a year ago (and a reasonable number who probably still are)?
You mean our Lloyd will go on and on??? oh no, please
I thought the implication was he may be partying now, but will soon be freezing to death in the icy waters of the North Atlantic while Kate watches his rotting flesh turn white after vampire-squidding the entire universe. Art is quite subjective, though.
This photo is up there with your "Ben in the Pit". Nice.
Can anybody inject a modicum of sanity into what I'm seeing? The more I understand about markets the less this makes sense. The constant Twilight Zone references here struck me as cute little allegories until recently where it feels like I've woken up inside it.
Is it QE? The algos? Who's buying? And more importantly: Who's selling? Where's the volume??
Volume???? who needs volume...where do ya live man???
Volume?
We Don't Need no Stinkin Volume....
Volume?
Sanity? Nooooo...not here, this is about making money. A lot of money.
If things start to make sense to you anytime soon, better look the fuck out....listen for the suck zone. Stay out of the way until the bodies fall by the wayside.
Sanity??? HAHAHAHAHAHAHAHA
Try to find out what sort of toxic crap the financial industry was able to get the state and municipal pension funds to invest in, I imagine REITS were a hot sector. The funds are between $1 and $3 trillion underwater, depending on how you look at it. The Federal Government knows it will have to bail out the whole sorry lot if things don't recover. So, they are using all tricks at their disposal to boost these. I suspect this is part of the reason why so many businesses with dreadful balance sheets are rocketing.
As for who is selling, very few at the moment it seems. I have a sickening feeling in my stomach that we are setting ourselves up for a monumental black swan event, because everything is priced assuming nothing ever goes wrong, ever again.
On my radar today:
And check out these regional banks:
Pump it Benny, pump it hard!
CIEN looks interesting from the long side. thanks, i think i'll put it on my radar.
leo, why are you using a 20 year chart on KEY? my time frame for a good trade is measured in hours or days. who wants to buy and hold something? i think that 20 year chart on KEY proves it's not a good idea.
http://bittenandbound.com/wp-content/uploads/2007/09/oscar-1.jpg
Ya i was gonna add that as well. Put up some proper time frames like daily at the least so we know whats going on
I am not particularly bullish on regional banks, but they may very well be the ones that benefit the most from extend & pretend. Long time frame was just to show you where they peaked.
where has AIG been? care to post a 10 year chart?
LOL, I was looking at AIG's long-term chart this afternoon:
Interesting to see the list of their top institutional holders. I never owned AIG but it is on my radar. I just think it's dead money for a long time.
10 members. no huckleberries.
http://www.nytimes.com/2009/08/17/nyregion/17golf.html
Fat chance this ever happens:
In April, the local newspaper, The Journal News, published a letter from Tsilla Flint of Suffern, N.Y., that concluded: “ ‘Morefar’ should be turned into a public course, and generate revenue. Revenue that can be used to pay the government for the huge loans they afforded A.I.G.”
"On my Radar today"
Dude! You are like a suckerfish on Robo's boosom, stop embarrassing yourself.
What you buying, ya big swinging dick? LOL! You are the epitome of embarassing! Buy some solars while you still can, ya big El Hoser!
NEW YORK (Dow Jones)--Shares of hotel operators and lodging real-estate investment trusts jumped Thursday, with many setting new 52-week highs, as recent industry trends continue to be encouraging, leading to various investment-rating upgrades.
"Recovery is happening faster than people initially were expecting," FBR Capital Markets analyst C. Patrick Scholes said, adding U.S. revenue per available room, or revpar, has been positive since the beginning of March, a couple months sooner than expected.
Wednesday, Smith Travel Research said U.S. revpar for the week ended March 20 climbed 3.2% from a year earlier, better than many analysts had been expecting. In the previous week, revpar was up 2.6%, and it was up 0.9% in the week ended March 6.
Scholes said that in March of last year, revpar tumbled 20%.
"So to go from negative 20% in a year to positive 3% is faster than investors initially expected and has created a lot of momentum in the stocks," he said, adding he expects to continue seeing price targets and estimates raised for the various lodging stocks.
In recent trading, Marriott International Inc. (MAR) climbed 2.5% to $30.40, while Sunstone Hotel Investors Inc. (SHO) rose 4.9% to $11.25. Both stocks were upgraded Thursday by J.P.Morgan analyst Joseph Greff.
Starwood Hotels & Resorts Worldwide Inc. (HOT) increased 2.7% to $45.10, and Wyndham Worldwide Corp. (WYN) gained 2.7% to $45.10. Hyatt Hotels Corp. (H) edged up 1.6% to $38.95, Host Hotels & Resorts Inc. (HST) grew 1.8% to $14.66 and DiamondRock Hospitality Co. (DRH) increased 4.4% to $10.13. Gaylord Entertainment Co. (GET), which operates hotels and the Grand Ole Opry, climbed 4.6% to $28.29. All of the previously mentioned stocks set new 52-week highs Thursday.
LaSalle Hotel Properties (LHO) also rose, up 3% to $23.33, and casino operators gained, led by Penn National Gaming Inc. (PENN), up 6.6% at $27.51, and Ameristar Casinos Inc. (ASCA), up 4.1% at $18.87. Pinnacle Entertainment Inc. (PNK) jumped 3.8% to $9.97, and Boyd Gaming Corp. (BYD) rose 3.7% to $9.93.
Meanwhile, various stocks in the sector have seen some upgrades in recent days. Thursday, J.P.Morgan's Greff raised his revpar, Ebitda and per-share earnings estimates for 2010, 2011 and 2012 and increased price targets for several companies. He also boosted his stock-investment rating on Marriott and Sunstone Hotel to overweight from neutral.
Greff said lodging stocks will grind higher as long as there is the expected "directional, sequential improvement in revpar" and "lodging transactions take place at attractive per-key values and mid-teens Ebitda ranges."
Shares of Choice Hotels slid 3 cents to $34.40 after Greff cut his rating on the stock to underweight from neutral based on expectations for less relative revpar recovery and growth than its peers and a limited international presence.
Meanwhile, shares of FelCor Lodging Trust Inc. (FCH) took a breather, recently sliding 4.8% to $5.95, following its 20% gain Wednesday following an upgrade to outperform from market perform by FBR's Scholes.
In his note Wednesday, Scholes said he continues to see positive demand trends that will likely lead to beats and raises for lodging companies in the next few quarters. FelCor, he added, has the "greatest sensitivity to improving trends." High leverage could hurt the stock on the downside, but it will help on the upside.
Strategic Hotels & Resorts Inc. (BEE), which soared 22% Wednesday along with FelCor, also traded lower, recently down 5% at $4.42.
Many REITs have posted strong gains in recent weeks as investors increased their appetite for risk, shifting to some of the more highly leveraged stocks with more upside potential.
Other travel-related stocks that jumped included airlines. Earlier Thursday, European Union and U.S. negotiators secured a draft deal to unlock restrictions on trans-Atlantic air travel. AMR Corp. (AMR) climbed 3.1% to $9.32, and Continental Airlines Inc. (CAL) increased 2.9% to $22.87.
Online-travel sites also gained, including Priceline.com Inc. (PCLN), up 4.4% at $254.61, and Orbitz Worldwide Inc. (OWW), up 4.4% at $7.10. Earlier in the session, Priceline reached its highest point since mid-2000.
haha, love your logo mann
So like every story, the obvious conclusion is Buy Gold. LOL!!!
The only thing worse than a clueless and mindless herd animal is a one-note clueless and mindless herd animal.
Have fun running off the cliff, lemming --- I'm sure you'll maintain your smug and arrogant smirk all the way down.
I don't understand the premise of this post. Pimco runs a bond fund. They compete with other bond funds. Their mandate is to outperform other bond funds (have I said "bond fund" enough?) They can do that by employing a different mix, duration, convexity, whatever.
They might lose assets over time as investors switch to stock funds, but that is a different issue entirely
+1.....the Pimco wizards spend all their time trying to figure out the timing of the next gubmint scheme. Then try to get ahead of it. An equity long dive is not their bag. Probably looking at strategic shorts, though.
Hey, the 401(k) crowd has figured out that the stock market is "too big to fail." Plus their employers haven't added any bearish funds to the investment menu.
Meanwhile, Wall Street knows that without capital gains the pool of political contributions dries up - a rule that still applies even after the Supremes ruled that limiting 527 expenditures to the likes of George Soros and the other leftist billionaires is unconstitutional and opened up the game to corporations.
So the Fed and Treasury keep manipulating the stocks higher to give them some margin just in case the bond market chokes on new Treasury supply and they have to take stocks down in order to scare some of that stock money into T-notes and Bonds.
The Government has been driving stocks higher since the 1970s but never on such a scale and never so crudely obvious about it.
So wait for a bad auction and a turn in the averages. That will be the sell signal.
And how many 401ks actually have a bearish fund? Would love to see the 401k market reaction if you could put the Sprott Gold Fund (with physical delivery) into the mix. Give the sheeple some options and see where the bets lie -- tought to call them the "sheeple" when they have no other choices.
It's a bubble.
I gotta admit that I'm a little bit confused.
Sometimes it seems to me as if I'm just being used.
Gotta stay awake, gotta try and shake off this creeping malaise.
If I don't stand my own ground, how can I find my way out of this
maze?
http://www.youtube.com/watch?v=nlJWis5wH54
And after awhile, you can work on points for style
Like the club tie, firm handshake, a certain look in the eye and an easy smile
You have to be trusted, by the people that you lie to
So that when they turn their backs on you
You'll get the chance to put the knife in
Noice. As I have stated. No Floyd without Roger.
There's something insideously delightful about that record. I loved it as a young man. Animals is a masterpiece.
"one day we'll master the art of karate an lo we will rise up and make the buggers eyes water"...
its simple really, once upon a time monetary inflation was channeled into wages now this new wall of money is creating massively capitalized illusions of companies that produce nothing but the hope that better times are coming.
2 years ago I thought the crisis would end this monetarist nightmare - now I am not so sure , perhaps robot trader is right - this game will continue for some time until all wealth is transferred to the conjurers and goldbugs are turned into amusing anachronisms.
Parhaps - I stayed in Euro cash for nearly ten years and earned a modest sum while others around me gained and lost a fortune and in the process destroyed my country.
I am prepared to now stay in PMs for another decade if need be and collect my modest sum.
I will not be a part of such insanity.
I'm really puzzled by Tuesday's market action. Something is clearly different after Tuesday.
We are told by MSM that a resurgence of the Greece-sovereign-debt -worry problem has meant RISK OFF. If we take that as true, why was gold UP? Isn't gold thought of by the mainstream fundees and yield-chasers as a RISK play? I can see oil being down and the yen up, but why didn't gold stocks follow the metal up?
Lately, of course, REITs, retailers, bimbos, insurers and assorted financial junk hve been considered the RISK ON and RISK OFF plays! Safe havens!!!! And they did well as you say.
But I can't understand the gold action, or the sudden yen turnaround, from down, down, down to suddenly UP. And why didn't gold follow oil lower? And if gold, now at $1135, rose nicely, where were GRS, ABX, EGO, WDO and other fundamentally good gold producers?
There is all this talk of juniors having done well lately, but for the life of me I can't see it...still rangebound at best...
Sounds very much like an external geo-political worry is making the rounds. Gold does best during non-U.S. trading hours last day or so if I'm not mistaken. Is it the Iran-Israel story? Eurozone debt...they SUDDENLY realize it?? Or does someone know something we don't about sovereign solvency?
Ideas?
Yes I was watching it closely for a time today and I sensed something nasty out there in the woods - the pack may be circling but what they will feed on I do not know.
Ps. the Irish state is now the proud owner of the battersea power station.
Quite fitting really
I love me some MPG... great day trading stock!
The move in the REIT sector has really baffled me. I drive around locally and everywhere I look on every street I drive down there is an "AVAILABLE" or "FOR RENT" sign in shopping centers, strip malls, and office parks. I understand how far these stocks have fallen, but I just don't see the demand picking up and seem to be seeing more and more empty CRE?
Not sure what I am missing here? Where is the demand side of the equation? Extension of cheap money good for CRE? Okay, I think I get that but there has to be rising occupency rates...I also see the move in the regional banks linked to the REIT's since they own a lot of CRE..I should just hold my nose close my eyes and buy this crap and take the 15% gain these stocks have enjoyed the past 3-4 weeks. Stupid me investigating, those signs will all come down tomorrow and there will be new stores there....stupid me.
It's gambling, speculation, following the bottle-rocket stocks. NOT 'investing'. Fundamentals don't matter. We're in a casino now, for the simple reason there are no returns to be had anywhere else.
BTW, nobody seems to have noticed...gold is now moving up WITHthe dollar. THAT must be significant...when was the last time that happened? Wasn't it Fall 2008?
hahahhaaha ahhhhh REIT fail.
SILVER!
Chinese Solar stocks!!!!
Damn right bro, Chinese solar stocks are heating up again:
http://finance.yahoo.com/q/cq?d=v1&s=csiq,jaso,ldk,sol,solf,stp,tsl,yge
Get in while you still can.