Tuesday, January 22, 2008

So Anything to Talk About?


75 bp and still 350 points down. Everything we've been talking about has been coming true. And are we being asked to comment? No, same talking heads still not getting just how different things are this time.

Tough, I'll comment here. Housing is going to see some even scarier numbers in February. In my opinion the massive investment component of so much residential housing will start acting like an investment. n plain English; stickiness is gone. This is the gap down I've hinted at previously.

15 comments:

wagga said...

Big rate cut first thing in the morning.

Funny Circus Bears said...

I am surprised bonds aren't getting hammered in anticipation of ratings downgrades. Wall Street is betting on a monolines work-out.

chickenlittle said...

must be stealth recovery

Peripheral Visionary said...

As noted elsewhere, the Fed is shooting off the last of its ammunition. What happens if the indices melt down tomorrow or later in the week? More emergency rate cuts? What happens if they melt down in February or March after rates have been cut to 1%? Helicopters dropping money on Wall Street?

But the real action at this point is overseas. The big Asian markets are well off their highs--and these are markets with huge numbers of first-time investors. American investors have been conditioned to not panic and to buy on the dips. Chinese investors have not. That's why we're down 2% and they're down 7% over the last couple of days, and it's only going to get worse.

I would love to reverse my dollar hedge position and move to a long stock position--but I'm still waiting. I think we've got at least another 10% down to go before prices start synchronizing with reality.

Jean ValJean said...

So...

How do I make money off this?

I have about 2k that I can play with, that is just losing value (due to inflation) in a 4% APR Savings account...

suggestions?

Peripheral Visionary said...

I have no suggestions, the markets right now are extremely dangerous. As pointed out in the previous thread, even "safe haven" assets like gold can get hit, because when margin calls come, the hedge funds and private investors will sell anything liquid to make the call, including assets that "should" go up in a down market.

And going short is both expensive and not a sure bet. Expensive, because there are huge premiums on puts, and not a sure bet, because bear markets are notorious for short, sharp rallies. Just like we saw this morning at 9:30-10:30 a.m. A lot of people who went short expecting a massive drop got caught in a huge updraft, and I suspect some people lost a lot of money in a very short amount of time.

Safest bets are cash (even with the dollar still falling) and Treasuries. More selling in overseas markets, and I may be looking at international funds (yes, buying), but not just yet. Even when I do start buying, I will be avoiding China like the plague, as I suspect they have severe (hidden) problems in their banking system. I'm currently leaning toward Japan and possibly India, though I need to do some more research (and wait for their respective markets to come down to reasonable levels.)

Jean ValJean said...

Thanks P.V.

Sequoia Trading Club said...

GOOG broke two support lines : 625 and 600. It tested the first expected support line @560 today and pulled back against 600. I expect it to go south now... 500 or less. I am shorting GOOG since 625.
Tech analysis on my site :
http://sequoiatradingclub.com

Buzz Saw said...

I am shorting GOOG since 625.

Slacker, I called it @ $700 weeks ago. That's okay, that sucker is headed 150 - 250 soon.

H Simpson said...

A lot of these consumer based stocks are going to get hammered in the next couple weeks when consumers take the govt money to pay a credit card bill rather than buy consumer electronics.

Well except for KC cause that boy never pays anyone back...

Apple is just the first company to get get whipped at earnings announcement. 25% in past 3 weeks is enough to upset anyone.

God, how could people be so stupi,errr I mean greedy not to see what was going to happen? Signs were there for almost a year.

I wonder how many local service industries are going to close down when folks don't have any spare change to afford that service.


h.

Rob Dawg said...

There's a very dangerous perceptual problem with Google. There are a lot more rumblings that online eyeballs are being grossly overvalued for one. On topic there is way too much share of online ads that are financial/credit/mortgage/investment in nature. That could implode. New thread to talk about Apple.

Lou Minatti said...

So Anything to Talk About?

Yes! Pizza. I like pizza you can only get in midtown Manhattan. You know the kind. A humongous thin slab of cheese pizza dripping with grease that you fold in half to eat. That's the best.

Since all other pizza is shite, including "deep dish Chicago pizza" which is really just a bunch of fatty Polish sausage and cheese dumped on some dough, my favorite toppings are hamburger and onions.

You did ask, Rob.

The_Scum said...

Any pizza you can slide under a door is a crappy pizza.

Just my opinion.

But then again I prefer the Pizza Hut deep dish super supreme loaded with crushed red peppers.

Any better local pizza similar to that in Vegas?

Sequoia Trading Club said...

Yeah Rob, about Google, I'd be curious to know what % mortgage/financials/lenders do represent on ad revenue...

Rob Dawg said...

Any better local pizza similar to that in Vegas

OMG! You don't do Pizzeria Uno? To die for. On the west side across the freeway from the strip. There are even specials not on the menu. We get a "Sea Delico." Ask, they'll know.