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The Obsession With The Fed
Each quarter or so, we have to go through all the drama and anxiety surrounding the utterances out of the FOMC. Where thousands upon thousands of traders sit bug-eyed at the computer screens, watching the 1 min. charts of the EUR/USD, SPY, TLT, trying to get an "edge" over the other 428,584 daytrading jockeys on Wall St., all looking at the exact same thing. All with their fingers madly punching the F12 and F11 keys as if their puny keystrokes are going to make any difference 48 hours from now.
Here's a picture of one such trader from a billion dollar fund in the Grand Caymans, obviously happy that the FOMC is keeping its rates near zero indefinitely:
Note the ridiculous spasms which occur within seconds of the Fed announcement. As if the fate of modern civilization was dependent upon the proper buy/sell decision after the statement is released:
When all that is really necessary is to sample a 15-min. chart of the various and assorted junker plays, which is a truer and more accurate barometer of wild-eyed speculation:
The usual suspects like these:
I mean, people cannot wait to score another 150% gain on these stocks in a matter of week if there is any hint that the "Animal Spirits" are going to resume.
Of course, Goldman is always up to its usual tricks.
Anybody see Hartford gap up $2.50 after hours last night? How many Bottle Rocket chasers dryhumped that stock on the open today?
Oops....
Heh, you simply cannot win against Goldman if you are a decent sized fund overexposed to single stocks.
Same thing with Garmin. They had that stock gapped up good in the pre-market.
Now down 15%....
Just another day in the jungle, where Goldman continues to attack its largest clients when it sees outsized positions in specific stocks.
Then after the dust clears, Ben and Timmy simply close their briefcases, shake hands, and quietly leave the building smirking after creating all that chaos.
To retire to the Opium Den to enjoy the customary Asian Massage bankrolled by the U.S. Taxpayer:
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...have mercy.
Yester-FOMC once more
When I was young
I'd listen to Ben Bernanke
Waiting for his interest bombs.
Once he cut I'd buy along
It made me smile
Those were such happy times
And not so long ago
How I wondered where they'd gone
But it ain't work again.
Just like my FAS gamble.
All the bombs I loved so well
(*) every sha-la-la-la
Every wo-wo-wo
Still shines
Every shing-a-ling-a-ling
That they?re starting to crash
So faint
When I look at the chart
Where it's breakin' my heart
It can really make me cry
Ain't like before
Is it yester-FOMC once more?
My first smile all day !
Great post. Poor Zebra. And poor girls who have to touch Tim or Ben. Are you sure this isn't more to their liking?
http://www.asianweek.com/wp-content/uploads/2009/09/darren-domingo.jpg
Deep tissue work ...
I never ever go back to gloat. But how do you like HGSI? I am $184K to the plus side. And you??????????????????????????
U trashed me, and if you were right u rule. But you were flat dead wrong. And your comment probably "saved" 100 people from making 30+% on their money___
Bit Bucket
Bit bucket,
I answered you on the other thread (treasury minutes I think it was), gee, lets see, twice now. I never trashed you, I told you we were not here to make you money and referred you to the policy here after you told everyone you never got a money making idea from ZH.
Child, you are begining to just be annoying. I know you are a hurt thing, I am trying to be nice, but at fight club, sometimes you just gotta lay a bitch out, know what I mean?
Let see how many more times you need to post a gloat to me?
Does that even register to you that it is kind of off to need to post this to me three times? Plus the one to Cognitive Dissonance? And who knows where else if I look around?
MsC,
Noone trusts an ascendency disorder. Don't take another's inventory. Leave it at the river. If a man gives you a gift and you do not want it, is it still yours? Leave it at the river. To be a champ you have to believe in yourself when nobody else will. -- Sugar Ray Robinson
Bit of whatever you are, you might be used to talking trash to passer by else where. However, that dog won't hunt here.
http://www.youtube.com/watch?v=e933-4SPMbI
Happy trails
MsC...your deviance shines through as usual!
Wow, nice link. As they say in Manila "sarap on top". That's why I got me one of them filipino hot boys.
Told you about ABK last night. They pulled the best trick of all - they wrote down their liabilities, not because of improved fundamentals in their business, but because the market's perception of ABK counterparty risk deteriorated so much q-q that the market value of their liabilities dropped. And they take that gain through income. Crazy accounting.
And unfortunately, because that stock trades for 1.50, it is nearly impossible to locate shares. At a 1/2 B market cap, that is an easy short, if you can find shares.
I did get a short in on RDN after their big pop - as usual they announced dubiously good numbers, while the delinquencies on their book continue to skyrocket. Since 12/31 their reserves are up 13%. Their delinquencies? 37%.
The accounting in that sector rivals Enron.
Don't push me - cuz I'm close to the edge
I'm tryin not to lose my head
Uh huh ha ha ha
It's like a jungle sometimes
It makes me wonder how I keep from goin under
Qualcomm running around after hours like a meth-head cheap hooker.
All over the place....
They sold the news but this market is heading higher, that much I can guarantee you. The Fed is telling the big banks to go ahead, trade as much as you need to, make a killing in your prop trading desks, we will not stand in your way. From here, we move to the next phase of the liquidity driven rally. I predict massive short covering for the rest of the week, especially in high beta stocks.
***CISCO just beat and points to a recovery****
Not so sure. Ben indicated in spades
today that any V recovery is total bullshit
so far as he's concerned.
Leo,
What good does it do to juice the stock market to DOW 15,000 if the dollar goes to a nickel? Does Bernanke understand real returns vs. nominal, or does he not
care?
Beat what? There won't be a recovery, at least not on main street. I don't know where they get all these statistics, but they are all nonsense. We are looking at what some people call a U shaped recovery, but what I call an L that is followed by a shallow forward / about 10 years out. The banks have to find some one to come up with the money to take them out of the trade and like any corner, it will eventually collapse. This is why we see absurd moves after the Fed story. What the hell was the news anyhow? There wasn't any. In fact, an earthquake in NYC was more likely than a rate change or any surprises out of the Fed. We will be back to 666 on the SPX by tax day.
Never in the recent history of the "stock market" has it been easier to...
...make a fortune
...or lose it all
Trade Safe!
OOOOO-FAAAA
great stuff robo....
Yes HIG has been crazy lately, but so has MET and PRU. Very weak; wondering if they have CRE exposure?
Cristiano Ronaldo knows how to unwind after a rough day:
http://futbolita.com/wp-content/uploads/2009/03/cristiano-ronaldo-merche-romero.jpg
Rocky Mountain Spotted Fever I'd say.
Rocky Mountain Spotted Fever I'd say.
Pension funds and insurance companies were Marks #1 and #2 respectively for CRE/MBS.
After all, everybody knew you had to have lots of this AAA in big portfolios.
How about municipal debt and state and local pension funds? I would bet there are going to be some investigations into the 10% assumptions so many of these plans were supposed to make. Truth is this was nothing more than a plan to loot the entire pension system, ala the rating agencies and the CDO's. The stock market can only make 10% going forward if inflation is in the 7.5% range forever.
I believe the assumptions were in the 8% range. Nonetheless, they are very ambitious.
But the real investigations should involve the pension fund managers and their incestuous relationship with some very generous masters on the sell side.
About 3:30-Closing seems to have been The Big Period. SRS suddenly shot skyward. SPG junk headed the other way - Very Promptly. What gives?
Simple, the knee jerk reaction down, after the announcement, was the underlying sentiment by real people traders, then you get the reaction back up, followed by another push down once again. Then the "propsters" step in to run the market all the way back up for the 3pm ramp to entice buyers as they "see" price advancing. This cheerleading action was again greeted by the underlying sentiment, negative, and the ramp blows up. Since we had an extremely long consolidation waiting for the rubbish statement, the 3pm ramp advance was met with an equal & opposite decline. The market punishes false moves with the opposite move be it up or down. And this my friend, is why one studies TA and knows the underlying price/volume action playing out.
Robo, you're going to have to arrange a meeting between my relatives and Benny & Timmay at a suitable public arena where they can they can be disemboweled as taxpayers decide their fate with a thumbs up or down. Tasty morsels these mortals be....