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Total Spread Blowout on PIIGS, Algospasms Trigger Forced Short Covering in Consumer Stocks and REITs
Today is proof that the Algo/Igor/Robo computer trading programs have run amok. While Wall St. engages in bear raids against foreign countries, panicked algos are triggering wild squeezes everywhere, causing lots of head scratching among the pundits trying to explain these insane moves. Proof that the worse the Greece situation gets, the retail stocks simply go up faster.
Here is a sample of the moonshots today:
And, of course, the REITs remain the predominant "safe haven" plays whenever entire continents are engulfed in volcanic ash, drilling platforms sink, or when entire countries are on the brink of bankruptcy:
And during this chaos, the dollar rallies, bond yields remain pinned near 40-year lows, and our foreign debt enablers continue to lap up our bonds month in, month out.
Its all part of the well-greased Perpetual Motion "hope machine" created by Bernanke, Geithner, LLP, soon to be awarded the Nobel Prize for Physics for defying gravity.
I know, its all getting very tiring, but the "Wash, Rinse, Repeat" cycles continue and once something is in motion it tends to stay in motion.
How far does it go??? Nobody knows.
Next up after the bell:
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More intraday screamers..
Another $50 million pocketed by The Squid:
will the shorts ever learn? I find NFLX particularly funny, isn't that one of the most hated stocks out there? Fools.
RE: NFLX
I don't care for the business model too much. The bricks and mortar video stores have come and gone. The day of the universal, ultra high speed download will be upon us soon.
Having said that, I have some inside bullish information. I didn't want to drive to the post office last Thursday, April 15th with my taxes. The mail truck was just up the street so I flagged him down. I stuck my head in the door, and saw about 1,000 Nexflix mailers. I could only think...no wonder this neighborhood is so socially incohesive. There is nothing but a bunch of couch potatoes getting home at 6:30, jamming in a NetFlix, and going to bed at 2:00 AM.
I wouldn't touch Netflix either way right now. Probably an excellent short in six months.
Can someone tell me who in the hell is pushing the R2K through the roof? Isn't it small caps that have trouble accessing money etc? What gives, when does this shit end? I have relgated myself to never.
Fewer shares, easier to manipulate?
downloaded video and movies are inferior to recorded media in both sound and video quality in my humble opinion. It is most difficult to stream high definition without some degree of compression due to bandwidth restrictions which will only get more restrictive with time and adoption of the technology.
give me a good old fashioned blue ray disc to play on my home theatre setup any day!
Yea shorts are definetely idiots. they don t now who they're up against.
The Fed is the most powerful instvtution ever on the face of the earth. As long as the US retains it's militry might nothing can touch them.
You have to be an idiot to go against the Fed.
buy buy buy
Whenever I start thinking that way I always go back to this poem by Kipling. The mill of history/economics may grind slow at times, but it is ever so fine. There will be no stopping what is coming.
The Gods of the Copybook Headings
Rudyard Kipling, 1919
(Keep in mind when he's saying "Gods of the Market-Place" he's talking about politicians/leaders)
http://godscopybook.blogs.com/poem.html
* * * * *
"As it will be in the future, it was at the birth of Man --
There are only four things certain since Social Progress began --
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire --
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins
As surely as Water will wet us, as surely as Fire will burn
The Gods of the Copybook Headings with terror and slaughter return!"
How stupid can I be. When will I learn to buy the dips.
Robot how about Vornado today? Here we have a stock that t 82.00 that has an average P/E of 15 over the past 10 years that on the best year of inflated bubble earnings rents was making 4.50 EPS. On top of that they have been paying a divi half stock and being a RE broker here in Manhattan see there stores vacant frequently. For example their Broadway former Tower location has been vacant going on 3 years now.
Those rents of the olden days are not coming back anytime soon so a stock that should be trading at 60.00 under the best conditions imaginable is 82.00 under terribleconditions. Also their insiders have been selling like mad.
HUH?
As for Netflix how is it that a company with no proprietary technology who acts solely as a middle man can be valued so high? Did we all not just witness the death of BBI? It is only a matter of time before Apple turns Netflix into a dinosaur when they launch an Apple LCD.
Netflix has an extremely aggressive marketing campaign. Wireless delivery, via instant queue, is a great product. dumped my expensive satelite in favor of instantt queue. Apple may or may not turn Netflix into a dinosaur int he future. the here and now though in netflix...
During the Internet Bubble of the late 1990's, I used to look at EBay and think, "They're just a big garage sale on the internet; if a large company like Microsoft sees profit to be made in that sector, they'll step in and take away EBay's business overnight; how hard can it be to run an online garage sale?"
Yet EBay is still around, still doing well, and no big company took over their business sector. The key was name recognition -- everyone associated EBay with the online flea market. The same may be true with Netflix; they've become established in the public consciousness as the online movie rental company.
They make 120 Million a year. Lets imagine a world where the US population doubled overnight and used Netflix they would still only make 240 million a year. The moment Apple enters the rental and sales Bluray digital media business hardcore its game over. Their margins have only to go down.
Getting excited over a company that has not even netted 1 billion dollars with a 5.5 billion market cap is like assuming AOL has nowhere to go but up. I cannot agree. Their growth will only cost them money. I can stream movies for free anytime without Netflix.
Good points John, but Netflix has the momentum. Don't be surprised to see those free streaming movies stopped
<misplaced>
Speaking only as a customer, not a stockholder, I couldn't guess if they will ever hit 1B revenues. But they have been operating on thin margins for years without a serious misstep. One reason is they keep both subscribers and content suppliers happy by being as accomodating as possible within their business model. Apple, with their unpredictaable and anal-retentive control issues, will never threaten them in their own backyard.
Absolutely, from the customer perspective , they have their shit together. Setting up the wireless connection for netflix through the roku box was a breeze. well done. system works good. not a bad jumping off point to buy the stock...
Vornado is like SPG. 96% owned by institutional investors. This is a climate FLUSH with CASH. Those FIRE institutions have no need to ever sell. With 200+m shares pout there, only 2 milion trade hands a day: probably the SAME 2 million.
All we are waiting for is October 2008 again, when the unitholders and policy-holders of those institituions start needing CASH. Then maybe the selling will be forced.
Relax, 1210 was the top. And zero hedge readers throwing their tin foil hats into the ring and becoming reluctant bulls has got to be the ultimate contrary indicator!
DISCLAIMER: I am currently losing my ass shorting and may soon think 1259 is the real top!
Hahhhaha!
good point!
HAHA!! I went short way back after the market was up 40% and am still getting punished. It was only 60k so who cares but someday it will come back. That is someday this ship will sink and my shorts will rise!!!!!!! Then I can ride off into the sunset, and if not who cares everything else is in cash and won't ever see the market again.
Mr. Cramer. Please go to www.yahoo.com. On the left side, you will see "Finance." Click on that and it will take you to a page where you can enter whatever stock you want to go to. From there, you will see "Message Boards" on the left side and that will take you to the depths of idiocracy you belong in>
there is no top. there is only more upside until we hit DOW 36K...at which point the market shall consolidate for 18 minutes and 32 seconds before starting the next leg up.
isn't this obvious by now?
Yep then it's onto to DOW 56k because all is well. See look it's a bird, it's a plane, no it's the DOW GOING TO THE MOON, must mean everything is great.
The Moon isn't enough, obama said we are going to Mars now.
Well at least it isn't Jupiter, but I guess we'll get there at some point.
I needed the laughs today, thanks!
Why stop there...I hear Ben & Obama have devised a plan to send man to the sun through their ingenious DOW36k program by using the same stealth of darkness & sending them at night.
If the Dow hits 56000, gold will hit the 6000 dollar target that is so popular here. Otherwise, no dice.
As I have stated before, perpetual motion is not allowed by nature and will come to an end
(anyone remember the dot com perpetual motion machine? Remember THAT business model?)
Until then, don't fight the trend, its futile and costly...
Where are the broads?
I concur wholeheartedly with this post.
How about some more Shay Laren? Mmmmm....
Nah, the top isn't in until all Home Depots are open 24/7, proposals are made to measure time in internet "ticks", and that bank guy is back on TV losing another one to Ditech.
AXP, COF, SYNA, BUCY, DECK up big after the bell.
MSFT, AMZN disappointed.
Why? Besides it's all a con. Oh wait for Capital One it's because consumer's are spending. Oh wait they're spending but not paying the mortgage to do so, that's a sustainable business model.
"MSFT, AMZN disappointed."
CNBC seems confused on this matter:
"Microsoft Profit, Revenue Top Estimates, But Shares Fall ... Microsoft's quarterly results beat Wall Street expectations, but shares fell in after-hours trading."
BUCY has always been crazy volatile. Fun to trade but not for beginners.
BUCY got creamed after hours...down 9%
Robo, if you've run short of ancillary graphics, this is from my part of the world. You'll see what puts the starch in BRIC.
http://www.kingfishercalendar.com/2010/
That's it. I'm moving.
This quote from Marc Faber still rings in my year:
"The only way to keep that money here at home [US] is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part"
Now India wants to take that away too...
second thought, how did you get to embed that image in your post?
Ok, let me "explain" the current stock market:
1.) Cash is trash (0% interest rates)
2.) Billions in "other peoples money" is flooding the street.
3.) Where does the money go? Stocks, bonds, or commodities.
4.) You want a bond?
5.) Me either, but lots of money still flows there.
6.) That leaves plenty of money for commodities and stocks.
7.) Kind of interesting how the Euro is crashing and oil and precious metals are trending up, not falling at all?
8.) Likewise, the US stock market.
9.) It's a self-perpetuating liquidity bubble.
10.) For the last year you made a higher percentage on your money in a week in the stock market than you did in a year in the bond market.
11.) These bubbles don't end for no reason and they just don't peter out. Something has got to happen to trigger some selling. The last two bubbles ended after a couple of years when the Fed had raised interest rates to the 5-6% area.
I dream that it can't go that far.
Don't know if anyone caught today but the EU is wanting to subsidize vacations now. IT'S a "RIGHT" to vacation they claim, so if you can't afford it we'll make the taxpayer cover it!! YEAH STUPIDITY REIGNS!!!
Here's the story: http://www.nationalpost.com/news/story.html?id=2923469
Its a quid pro quo for Germans and the rest of the Northern Europeans who vacation in Spain/Portugal/Greece; in exchange for bailing those countries out, they get subsidized vacations.
But seriously, the EU is freaking insane.
EU is freaking insane?
Pot calling kettle black I'd say . Show me one iota of sanity in US policies . market antics . But agreed - Don't fight the trend - One ring to rule them all and in the darkness bind them . Its getting pretty dark lately
US are insane as well, but that does not mean the EU is the most $#@ed up place on earth. US is playing catchup on the race to the rubber room.
Agreed, and let's add
12) No grownup trusts China.
13) Japan has been in the toilet for two decades.
There are very few places to go unless you know how to bid on farm land, but this market is passing strange. A few gleanings from Danny Furman's corner on Seeking Alpha:
"This market isn't just low volume, it's low IQ"
"Every day there's a buying frenzy at the close"
"We're up 50 points on 3% of the volume."
There may be a few sentient life forms out there after all.
CNBC claptrap, Maria Bartiromo, asks where's the fraud?
Geez, Maria, your insight never ceases to amaze me!
CNBC needs new babes to distract viewers:
My Maria is looking a little Haggard these days. Don't suppose she went short do you?
Hulk,
Weren't you long CREE? Nice move lately on big volume:
Yep, long CREE. I was long MSFT back in the early 90's and I have the same feeling for CREE as I did MSFT back then. The future is LED lighting and CREE is the frontrunner, as MSFT was in early 90's with the GUI (and loads of marketing)
leo please go to your article second wave of financial crisis. maybe help me out with some questions.
Send an email to Tyler and Marla with your concerns and questions:
"Tyler Durden" <zerohedge@gmail.com>, "Tyler Durden" <tyler@zerohedge.com>, "Marla Singer" <marla@zerohedge.com>,
thanks†
gettin pretty HOT and steamy in here guyz.
HAPPY EARTH DAY, everyone, i knew you would remember me.
Here is George Carlin on Earth Day
http://www.youtube.com/watch?v=eScDfYzMEEw
Brilliant! This one is worth embedding on Earth Day:
The guys a genius. earth day pegged....
oh, that is what embedded is.
i thought i was embedden my whole life.
totally, this earth is blessed having genius comedians.
saved my ass†
Unfortunately, they all seem to die pretty young. Maybe Carlin was kind of old, but a lot of the other good ones always die young.
i personally can assure you, they surely do.
Oh man, let's not escalate a sexy graphics war we'll crash ZH's servers in a day and a half. Hi-def double D's suck up a lot of memory.
Among other things...
well played
I have a short list. It has been the same for a year, since the bottom. I have posted it before, here it is again. Other than the mining and oil sectors (energy yes, but wind and Uranium will be '11's play, with solar being '12's play), NFLX, WFMI, HOG, NKE, CAT, V...not that I do not wish all corperations a horible death, but I think there will be winners. There always are. Bastards.
I trade almost exclusively option spreads, but if this madness continues, I think the smarter corporate treasurers will issue a mountain of convertible bonds and preferred. They could lock in low rates forever and it's a cheap way to eventually increase equity.
Anyone buying straight bonds here is fourteen kinds of an idiot, but there are always people desparate for yield.
And if you're short financials, don't forget to bend over and COF (up 6% AH).
Default or no default, I am long Greece this summer. Not even volcanoes can keep me away!
market aint going down until the public buys in.
The market will go down when ZH becomes bullish.
Reminds me of Hedonism II in Jamaica, fun at first but when you are trying to eat breakfast in the morning and guys are walking by your table with their salami hanging out,bouncing around in front of your table you just want to fork it!
Not complaining, you make a decision and you take the results, for good or ill, and not that I dispute anyone on this blog, most of whom I have great admiration and respect for, but I sincerely wish to god that I had never heard of Zerohedge until sometime after 2010.
Even the RoboBABEs don't begin to compensate for the hesitancy I have had since July of last year to go all in long.
In essence I have had--- along with others I see confessing here--- great opportunity costs and I'm out my $50.00 contribution, to boot.
I would like to set this laptop up to ring me for a call back when 60% of y'all decide to give up the contrarian viewpoint, so righteously reasonable and rooted in true values, and spring for some NFLX @ $120 or C @ 7.00 or BRK.A @ $140,000.
It's been a very bumpy ride here. The remaining grey cells have been expanding like Oprah's waistline brimming day after frustrating day with information not available from any other source.
But when I think of it, I know some of very intelligent men and wimmin who are very rich, but I know even more who are rich but couldn't tell you the current Prime rate, who Lord Blankfein is, never heard of Joe Cassano, and who think a Collateral Default Swap is an obscure flea market on a side street in South Philly.
This is proof that the more you know, the less likely you are to be very rich. Unless of course you are a Friend of Ben.
Good for them. I would not want to know what a collateral default swap is either.
Will the last 'employed' American ~ the last one actually doing an economically-rationalizable JOB ~ please pay the bill on the way out?
Ah, the classic paradox. Such an individual, if he or she still exists, would have to be smart enough to understand the game, and dumb enough to think it matters;)
All these cynics and nobody seems to get it!
The Fed isn't powerful, but it can create currency. In fact, it has made a bunch over the past year and a half. Where is it?
"Reserves @ the Fed," you might say. Nope, nothing there, just entries on a ledger. The banks have parked IOU's at the Fed since they will earn interest just the same as cash. Haven't you seen the sign? "Credit, same as CASH!" at the used car dealership?
That's the Fed, a used car dealer. Bernanke is the maggot in the sports jacket.
The primary dealers hold the equity door open so real estate sellers, private equity firms, hedge funds, banks, 'business managers' (whose names end in 'ey') and other can swap their illiquid securities for currency. That is then parked in a) T bills, b) gold/precious metals, c) banks @ tax havens overseas.
It's the same as when a homebuyer takes possession of a $1mil house for $200k in cash plus the mortgage. He sells a couple of years later for $1.5mil and pays off the loan. He's laundered the $800k loan into $500k cash net. He can only do this in an 'up' market. A down market and he winds up underwater on the loan.
Ergo, the various USA markets soar like birds. They're part of a money laundering operation. This likely also includes the USA bond market. Debt, currency exchange, interest rate, option/derivative and risk/repudiation issues in this country aren't all that different from the Eurozone's. Peeps are buying high yield. Who's selling? Where's the cash going? It's all within manipulated markets and the cash is going to Barbuda/Curacao/Channel Islands/Leichtenstein.
Couple million US dollars, nice 'villa', some cigars, scotch, dope ... what more do you need?
The laundry is run by Ben(ny) Bernanke and his wiseguy pals @ Goldman- Etc. All the traders are waiting and hoping that the laundry stays open for awhile longer. They WON'T rock the boat. They will buy ALL the dips. They all have lots of illiquid crap they need to ... get rid of. At the current rate of exchange - illiquid securities for cash - the bull market will last for ... another 135 years!
Kidd'n.
Hey! Anyone out there wanna buy some nice real estate?
Of course to make that $500k out of thin air it takes a buyer for the $1.5 mil house who can afford it, who works in a productive, well-compensated job in the real economy---
Oh. HE works in the thin-air economy as well :P
It's turtles all the way down.
Don't forget about the homebuilders, who had a monster day on the back of the housing number this morning. KBH up over 5% after its CEO was convicted of mail fraud and options fixing.
I have heard a theory that the US stock market is acting as a hedge against all of the uncertainty in Europe. After all we would never not bail out Idaho....and I am beginning to accept this theory as fact. It does not matter what the fundamentals say. The price movements in the past two weeks have been nothing short of stunning and there seems to be no end in sight. Check CRM, CCL, or SBUX for other favorites. You are making a fortune here buying dips and playing momentum stocks.
NYT reports that Indiana is among the nation's five most underfunded teacher pension programs, with the assets to cover just over a third of the benefits it owes by state law, according to a report released this month by school-choice advocates.
It's all about sovereign bonds, guys.
Just ONE unspinnable, un-hideable, unembellished yield rise/failed auction will turn off the taps and then s--t will sink and metal will float
Nothing to do but wait...
You will be waiting at least six months if you are waiting for a failed US treasury auction. All the risk is in Europe right now and there has been heavy demand for US debt..just look at the price action in the TLT or any of the other numerous US treasury ETF's.
Gooooood!HahahahaHAHA!
Buy the dips, right? -0.5% is a deal. -1% is a steal. -2% is...orgasmic. -5% or -10% -- even better, right? "I'm waiting for a -20% pullback." Before you know it, the dip buyers won't be able to get out of their own way. Stopped out. Margin call. "Good time to average down." It will be like an avalanche sliding down a mountain.
Who is going to save you? The almighty Fed? They create bubbles -- not stability you can rest easy with or count on.
HFT/quants will continue to frontrun the momentum. Once they flip the script, the party is over.
What goes up -- must come down.
XLF...IYR...C...SIRI...whatever -- you think any of them are 'bigger' than the entire global financial system?
Things that really matter:
1) Unemplolyment
2) Revenue growth -- or lack thereof
3) Massive debt
4) Interest rate increases
5) Cost of living -- especially oil
6) Higher taxes
7) Foreclosures
Problems without solutions...
Use your eyes & ears. Look at the empty store fronts. The people worried about not finding a job. The people who are 1 medical bill or car repair away from disaster. This is not prosperity. There is no recovery.
I can tell you Thailand is one big bargain at this moment.
Seeking Beachfront acre, on a nice cove, safe, good fishing near Phuket.
Going Rate? In Dollars or gold.
Greece will go bankrupt very soon.