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CIT: Last Ditch Dash To Trash
Pretty boring day overall, looked as if the entire fund complex honed in on CIT to jam that stock in the last minute Hail Mary play in order to "make the quarter". Simultaneously, bond yields plunged again, to make certain that the next container ship of U.S. Treasuries is sent overseas on schedule.
Here's the visual:
Funny how the Fed govenors come out at pre-appointed times to inform Wall Street that it is prepared to "raise interest rates as fast as we lowered them" or some such nonsense.
Everyone knows that is virtually impossible, because low rates are necessary to encourage apartment dwellers to buy a stucco "McBox" with a 30-year mortgage at a favorable 4.95% interest rate.
And encourage even more leveraging, repo trading, and margin borrowing (aka "Animal Spirits") to jam stocks, high yield bonds, etc. to higher levels.
After all, its the only way that the Fed is going to be able to offload the trillions in garbage on its balance sheet to hapless speculators.
Meanwhile, I was blowtorched today by Goldman Sachs, as I bailed out on a losing position on a managed care stock, only to see it powerjacked up 3% intraday about 5 minutes thereafter.
Such is life in the jungle battling with the PigMen.
No doubt, this 2009 rally will go down in history as the "Dash to Trash" rally, where the worst of the worst stocks were run the hardest. And the further the rally went, the speculators dug deeper into the trash bin.
That easily explains why the world's biggest company, with billions of annual cash flow, with the strongest balance sheet on the planet, and credit default swaps trading lower than most developed countries, was pretty much left for dead the entire year.
Why is that?
Because nobody, I mean, nobody, is going to "make their year" buying lumbering, boring giant like Exxon Mobil.
And certainly not the "workathome.com" daytraders hanging out at Starbucks.
Look at this chart. No gains at all. Nada, Zero, Zilch.
No fund manager is ever gong to be able to afford the $5,000 per evening escort from ThatMall.com by trading XOM.
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She is stunning...
She's too old!
Too old?
As in....
Over the age of thirteen?
Or do hot, sexy older women scare you a lot, Little Timmy?
Robo,
Someone on ZH left a comment accusing you of being one of the porn freaks at the US Science Foundation.
Say it ain't so, Robo, say it ain't so.
http://www.washingtontimes.com/news/2009/sep/29/workers-porn-surfing-rampant-at-federal-agency/?page2
Porn freak?
What is that?
Pretty funny!!
Ahhhm. You are being scientifically coralled and marginalized through rigorous catergorization.
Yous in twubble with scientific authoritah!!!
LOL
Yousa turrible turrible deviant.
Another great commentary.
"Funny how the Fed govenors come out at pre-appointed times to inform Wall Street that it is prepared to "raise interest rates as fast as we lowered them" or some such nonsense.
Everyone knows that is virtually impossible, because low rates are necessary to encourage apartment dwellers to buy a stucco "McBox" with a 30-year mortgage at a favorable 4.95% interest rate."
Yeah, we better get used to ZIRP for the forseeable future. It helped Japan so well.
As for CIT, wasn't there some asinine story about one-hit-wonder Paulson looking to combine them with the old IndyMac? I am sure that will be great for stockholders somehow?
If they merge with a more favored bank won't that give them the federal assistance they've said their entire survival is dependant upon?
Q3, good riddance!
So, Q4??
Thanks Robo. Scrolling down I started to worry you'd left out the eye candy. XOM comment ties in well with TD's Chart that axed John Mack.
Check out the wedge developed on Exxon. That's breaking soon.
Wedges or pennants only break to the upside when the price of the stock goes up......otherwise it's just NOTHING
Robo...4:00 pm is the best part of the day not because the daily circus markets are closed but because of reading your posts...The COO (female) probably knows I have a boner right now with a grin on my face...
Speaking of the dash for trash, check out DDRX, up 18% today and 100X off its 52 week low. Their single serve coffee business is going to be huge! Starbucks announced it is rolling out 3 packs and 12 packs of single serve INSTANT coffee that only costs about $.95 a serving to make at home. People are going to be lined up for this stuff in a recession/depression I tell you. And don't forget about GMCR at 100X trailing earnings.
excellent..
Robo, please have a disclosure prior to submitting links similar to mall.com , since some of us still at work :)
I disagree with the view on XOM (while x 100 agree on decent firms being left behind by the trash rally.) XOM is under pressure due to relatively low oil prices and sector rotation (former performing sectors does not necessary do well in the next business cycle, which makes RE & Financials rise rather questionable.)
p.s. OK, kidding with disclosure those of us that read ZH from work, can afford to click around, etc.
I agree. The 10 year yield was up early today but then back down again. I think it is headed to 2.5% or lower, along with a big dollar rally and stocks and commodities getting hammered. A replay of last October-November.
I just wish it would happen already.
Couldn't it be just so much liquidity out there that folks buying longer dated Treasuries are just seeking return instead of fleeing to safety? I know thanks to Mr. Krasting that the real returns on the 10-year are negative ATM, yet from all the folk I talk to it really seems to be pursuit of profits driving the 10-year higher in price. It seems that the folks who were buying shorter durations have gone longer since to them considering duraiton in Treasuries is as passe as fundamentals for equities. And money markets sans guarantee are the new purchasers of shorter durations.
Obviously no one answer but my point here is that while Billy G has a declared Treasury strategy due to risk aversion, I don't think on its face we can take the high 10-yr prices as indication the bond market being bearish on equities.
Very hard to take anything as bearish on equities lately.
Although I think the 10yr price will be a better indicator once QE is supposedly ended. At that time the correlation between it and the dollar should resume and them moving in tandem should effect the equities market.
Bonds are smarter than equities, historically.
This relationship has been highly skewed by squeezing and the endless supply of money.
Wouldn't have been trading around the Senate HC panel vote, hey?
PM miners up nicely today on strong dollar, flat metal prices, and down market. Finally a little respect.
But... I have seen the future for this country. This will be huge; get in while you can. Newspapers.
"....to make certain that the next container ship of U.S. Treasuries is sent overseas on schedule."
This must be helping the Baltic Dry Index?
Does this mean USA exports are increasing?
Speaking of the Baltic Dry Index, it and the Shanghai stock market peaked and then started down in 2008 before the rest of the world stock markets followed. Both peaked in August and are well off their highs.
I have been all over CIT for months now. Taking that little skank in every possible way, long the stock, short the puts, short the calls.....givin' it to her all at once
Making it hand-over-fist on that one
They ain't going BK
It's just a great trading stock and when you get volatility on a low priced monkey like that the options profits tend to be GINORMOUS
oh yeah....and great post!
News items tonight have the equity holders getting nothing.
Please tell me this clown is telling the truth about his holdings.
And skank it is...........
NEW YORK, Sept 29 (Reuters) - CIT Group Inc (CIT.N) is negotiating a new credit facility that could total $10 billion, which could help the finance company pay off maturing debt and stave off bankruptcy, people familiar with the situation said.
The details of the facility are still being negotiated, and its size might be substantially smaller than $10 billion, two people familiar with the matter said. The company may forgo the loan if it successfully renegotiates the terms of some of its existing credit lines, the sources said
CIT is struggling to fund itself after losing access to the unsecured corporate bond market. The company has $3 billion of debt maturing in the fourth quarter, according to a quarterly filing in August. About half of that maturing debt is unsecured and must be refinanced or repaid from the company's dwindling cash holdings.
Regulators have put CIT Bank under a cease-and-desist order, preventing the unit from accepting new deposits. That bank was supposed to be a key source of funding for the company in the future
Update from Rasputin.
All bears need to read....
"THE most important graph that all bears should view in order to fully understand what they are up against.
Here goes:
http://2.bp.blogspot.com/_pMscxxELHEg/SsJqk6QicAI/AAAAAAAAGdM/oq1eARmbHog/s1600-h/StockMarketSept29.jpg
This comes from Calculated Risk blog and shows the power of the Fed and their "Satan's little helpers" goons to re-sky markets.
Note that first "reversion to mean" that was well underway right
up until Bernanke's speech "Deflation: Making Sure it Doesn't Happen
Here" in 2002, then Greenspan and company dropped Fed Funds rates to 1%
and also flung fiat far and wide at the housing sector.
Shortly thereafter, the most miraculous move upward in the indices
began in early 2003 and continued for the four five friggin' years.
Believe me, I remember this time period vividly because I was humbled
and humiliated before all my Boomer peers whom I had been telling to
sell out their portfolios of stocks because, and I quote myself:
This is it! We're scroomed! Stocks to zero! Run! Hide!"
Luckily for me, none of my peers took my horrid advice and they
were all "made whole" by TPTB in their previously-destroyed portfolios.
Well, fast-forward to late 2008/early 2009. Once again, as the
graph shows, the stock markets were in utter collapse mode. And once
again, a not-yet-hip Rasputin made the fatal mistake of again warning
all his Boomer peers of our imminent scroomage.
And, once again, beginning in March of this year, the Fed and
Uncle Sugar kicked in the afterburners in terms of monetizations,
stimulation, and nationalization and--once again--the markets began to
re-sky.
Luckily for me, at least this time I recognized TPTB's efforts
early enough to start warning fellow bears that a massive tsunami of
liquidity was being unleashed by the Fed and to look out for the stock
markets to go screaming higher.
(Ras Conclusion): Even the most die-hard stock bear and
deflationist has to admit that the power of the Fed and Uncle Sugar to
re-sky stock markets is indeed undeniable.
And awesome.
And "a matter of national security".
This is why I am fighting with every fiber of my being against
believing that the Fed is really gonna pull out from their
"Quantitative Easing" program or ZIRP, despite all their threats and
jawboning otherwise.
So, we shall soon see if the stock markets are--for a THIRD
time--allowed to "revert to mean" (translation: crash), or if the Fed
blinks and kick starts massive monetization once again."
daneric had that same chart model up on his blog tonight with some comments.
Being in the wiffle ball league compared to some that play in the majors on this website, I would suspect that the Fed needs a controlled mini-dip at this point and juncture.
Obviously the Good Ole Boys will never end ZIRP, but they will need another green shoots factory next year sometime early in the spring when Gordon Gekko's suspenders start streching almost to the floor due to the CRE, Options, Alt-A's, and Re-Fi turds building up in the ole man's diaper.
There always has to be cause and effect.
Cause - market sags like a pair of ninety year old 48DD breasts until next spring.
Effect - Viagra induced ramp up from endless supply of magic shrooms halucinogenic effect of QE2.0.
Either that, or as Bernanke said, the economy has recovered from the recession. Yeah, right!
(As a side note, 48 Double D is not the largest you can buy.
http://www.straightdope.com/columns/read/2403/whats-the-worlds-largest-c...)
This turkey down to a buck sixty in AH. So much for 'making the numbers'
I had no idea there were actually malls like that. I had to poke around to see if any of my old flames were there. Nope. It reminds me of the joke, "Why do hookers cost $500? So they will leave."
So will CIT could become the next AIG in terms of being a back door to channel money to friends? Wouldn't want any derivatives unwinding now would we?
A "lumbering, boring giant like Exxon Mobil" isn't in talks with bonholders.
This is life Robotrader. Your sulking posts about minor stock moves in 'news' stocks are boring.
Have some balls or ovaries or something. Get an account, create an identity (it's like wearing a bag anyway, not like we know who you are), then talk trash. That way we can keep a lil' track here at Fight Club. Or at least come up with a signature for your anon. message.