28JAN09:
Q1-09 DOW: 8900
Q2-09 DOW: 7250
Q3-09 DOW: 5810
Q4-09 DOW: 3960
CITI NATIONALIZED
OBAMA GETS SICK 27AUG09:
Mini Crash 21SEP09 Predicted correctly:
Bailout=Bonuses
Demise of Bear Stearns
Demise of Lehman Bros.
Demise of AIG
Subprime would cause problems
Date of 2007 crash
CRAs were to blame
G20 riots were a party
Northern Rock run
Northern Rock Nationalization
HBOS and RBS demise
UBS really was Useless
As predicted a few months ago, the current support for the Dow is 7550 and we forecast by the end of year it would touch this. However, the speed has taken us by surprise, and I guess many others too. Comparing the decline to the last 4 bear markets, the decrease has occurred in a more expedient fashion than previous modern comparisons, including the Great Depression. There maybe many reasons for this, for example more information and speedier trading, but acceleration is nothing if the wall is strong. The Dow support is a big wall and whether the index bounces off this support or crashes through will be very telling.
As I said yesterday, if it does push below, we should start building nuclear shelters. Unfortunately they are quite hard to buy but improvising is possible. The way things are going in Canary Wharf, most of the old Investment Bank buildings will be empty and suitable places to hide. Who would want to bomb some empty buildings?
The state of the penny stock banks is no laughing matter and the sane and insane are starting to believe the worst is yet to come. Friday is always a volatile day and a day traders favorite. Let us see whether I need to stock up with baked beans or a yoyo [Editor: uh?].
Today I need to go to the Doctor for it appears I have been working out too hard at Gym Box. Sitting on cash is very dull and I have to expend my energy somehow. Just as the markets are dsyfunctional, so am I.
Executives at Citigroup, faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.
The internal discussions are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said ...
Fintag says Looks like this advert I found on eFinancialcareers maybe out of date already:
A wave of job losses is about to hit the fund management industry as tumbling stock markets and departing investors knock the stuffing out of performance and profits.
This could mean that almost 4,000 jobs will have been lost by March next year as funds are forced to streamline. The cuts will hit even the highest-paid managers, whose performances can still earn bonuses in the millions.
Executive sources at leading fund managers believe that these cuts would represent 10 per cent to 15 per cent of the 25,500 employed directly in the UK asset management workforce. One industry source said: “Everyone has been very sensible about this so far, but the current round is not the end of it, by any means.”
Fintag says Yes, but the job falls will be less than those in banking. Just as hedge funds are out performing the S&P 500, even if its negative, the asset management business is the way forward. Banks have no need for prop desks as commercial banks only make money from borrowing and lending.
So yes, the dead wood will go to be replaced by stars from the Investment Banking world.
One of the interesting aspects of this unprecedented housing collapse, credit crisis, economic recession and market crash has been all the new records we keep seeing:
• Over the past year, the S&P 500 index lost ~$1 trillion more than the entire 2000-2002 bear market, according to Standard & Poor's. From the October 2007 highs of 1,565, to yesterday's close of 806.58, the S&P 500 market capitalization lost $6.69 trillion. That's almost $1 trillion more than entire 2000-03 bear market losses of $5.76 trillion....
Fintag says I am getting so tempted to start buying again... the bargains are just unreal. But just like in a deflationary period, they will cheaper tomorrow so I might as well sit on cash.
new york times says " Stocks Drop Sharply and Credit Markets Seize Up "
The UK Financial Services Authority (FSA) recently issued a report detailing how it intends to clampdown on city workers who start 'malicious rumours' that could potentially affect share prices. Hedge funds are particularly vulnerable to this, as they are often wrongly perceived as being the instigators of city rumours.
The FSA's Marketwatch 24 initially highlighted the issue for hedge fund managers. "We have wider concerns about the number of leaks across the marketplace about potentially price sensitive events. All firms have a part to play in the efforts to reduce the number of leaks leading to informed trading. HFMs must have in place policies to ensure that their staff are aware of the need to maintain the confidentiality of such information. Both culture and training have an important role to play in achieving this. We will take action in situations where we identify the deliberate leakage of information or the dissemination of rumours," it stated.
Fintag says I have no problems with this. The problem I have is, is what is a rumor? [Editor: And why do you always spell in American? Still waiting for your green card?].
Does FiNTAG spread rumors? How about this one. Vikram Pandit is rumored to be useless. He is also rumored to be leaving Citi sometime in the future. Are they rumors? Or are they speculation and conjecture?
Instead of trying to be clever, why doesn't the FSA stop the banks from collapsing? Or better still focus on why they are so badly run and regulated?
Bloody civil servants ...
DARLING THREATENS TO FORCE BANKS TO LEND TO FIRMS AND FAMILIES
Alistair Darling is so exasperated by the 'moral failure' of banks to help small firms and families that he is poised to toughen the law.
The Chancellor is studying legal options to end the 'unacceptable' behaviour of the banks towards companies struggling in the downturn.
The revelation that he is contemplating the 'nuclear option' of legal action will send a shockwave through the City and marks a major escalation in the war of words between banks and the Government.
Fintag says Lol! So how is he going to do that? Perhaps he should have one day a month where all ATM withdrawals are free loans? Idiot man. No wonder he is a lawyer and a socialist.
US INFLUENCE TO DECLINE, NIC INTELLIGENCE REPORT PREDICTS
The political, economic and military influence of the United States will substantially decline over the next two decades, according to a report by the country's leading intelligence organisation, which forecasts an unpredictable world in which the advance of western-style democracy is far from guaranteed.
Fintag says So I don't need to spell American? I think the demise of the USA is premature. Not in my lifetime anyway. [Editor: Better keep off those steroids or it maybe sooner than you think]
U.S. Treasury Secretary Henry Paulson is proposing that hedge funds and other financial institutions be required to obtain a charter allowing oversight of systemic risk.
The former Goldman Sachs chief said that the Conduct of Business Agency that he proposed earlier this year should cover hedge funds. The CBA would be empowered to grant charters, which would include clauses giving the new agency oversight powers.
“To ensure the market stability regulator can fulfill its role, large, systemically-important institutions, including hedge funds, should be required to have a charter that would permit some type of oversight,” Paulson said at the Ronald Reagan Presidential Library in Simi Valley, Calif. Hedge fund would be required to show their books to the new regulator, which would also impose net capital requirements and might force greater transparency.
Annual public borrowing is set to rocket towards £120bn over the next two years - far higher than City forecasts - forcing Alistair Darling to announce plans for deferred tax rises and public spending curbs when he presents his pre-Budget report next week.
Treasury officials say the “mammoth shock” to the economy will cause tax revenues to fall far below previous government forecasts, even before the chancellor announces what is promised to be a “decisive” temporary fiscal stimulus.
Fintag says Shame that most people will be either unemployed or working for foreign companies who pay corporation tax elsewhere. Capital gains tax will be zero and wages will be falling because of deflation and tax revenues will fall further.
Unless you are a civil servant of course. The haves and the have nots.
Hedge fund investors pulled a record $40bn out of the industry in October as poor performance prompted a flight to cash, according to data issued Thursday. Hedge funds were hit by more redemptions in October than at any time since Chicago-based Hedge Fund Research started compiling figures in 1990, and it predicted worse to come. The industry lost another $115bn through poor performance, leaving total assets down 9% at $1,560bn.
Fintag says I have no idea where HFR get their numbers from.
Of more interest is why has the new FT website been designed for people with very poor eyesight? The text is so large that you get repetitive strain injury scrolling up and down.
But I love the FT for they love me. I love all media outlets who quote me and stroke my ego.
CITIGROUP URGING SEC TO BRING BACK SHORT-SELLING BAN
Citigroup Inc., which fell 26 percent in New York trading today, is seeking to revive a prohibition on short-selling financial stocks, according to a person familiar with the matter. The Wall Street Journal said Citigroup is considering a sale of the company.
The New York-based bank has discussed with the Securities and Exchange Commission and lawmakers its proposal to reinstitute the ban on bets that stock prices will fall, said the person, who declined to be identified because the discussions weren't public. Citigroup declined $1.69 to a 15-year low of $4.71 on the New York Stock Exchange at 4:15 p.m.
Fintag says Didn't the CEO run a hedge fund and make a few hundred million when Citi shareholders bought his company? Pandit is a crook and liar of the biggest order. Somebody should write a sitcom called the Fuld and Pandit show where the audience can ask them questions and throw tomatoes at them if the answers are wrong. Which would be all of the time.
JO Hambro Capital Management, which oversees about $3.5 billion in assets, is shuttering one of its two hedge funds after slamming into the surprise surge of Volkswagenstock last month, Bloomberg News reported, citing people familiar with the situation.
The firm's $240 million Trident European Fund plummeted 25 percent in October, its worst month ever, mainly because of a bad bet on Volkswagen, the news service said.
In October, Volkswagen briefly became the world's largest company by market value, after Porsche, which has engaged in a creeping takeover of Volkswagen over several years, announced that it controlled a much larger pool of VW shares than previously disclosed, creating scarcity in the number of shares investors could buy.
The U.S. financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said.
However, veteran banking analyst Richard Bove contradicted the idea of raising tangible common equity as a measure to improve liquidity.
Fintag says The current stock price of all the world's banks will be less than USD50 billion if the falls continue like they are. Is this a rumor or anlaysis?
Bank of New York Mellon, the world's largest custodian, is planning to eliminate 1,800 jobs in anticipation of a worsening economic climate, joining a steady stream of financial sector companies cutting staff in the fourth quarter.
The cuts are expected to take effect next year, according to a source familiar with the move. The source could not identify the departments that would be affected.
Fintag says More deflation. Happy Christmas from BONY M.
60 comments
oc bear said ...
You green card is being held by Hank Paulson. You can pick it up behind the big bull.
21 Nov 08 - 07:46 gmt
I Hedge Pain said ...
US futures are very strong at the moment...asia was mostly green overnight...
today in the US it will be extra special with options expiration soup for everyone...
the options writers lost control of the market yesterday in the last hour and i believe their attempts to hedge the fall caused the final half hour death spiral...
21 Nov 08 - 07:46 gmt
I Hedge Hell said ...
the US could possibly have a 1000 point rip today...and i mean up...it wouldn't surprise me to see a close at near 8500 on the DOW...if you are planning to short the US, be forewarned that the option writers need a close above 8200 for MAX PAIN on the option contracts they have written this month...
21 Nov 08 - 07:54 gmt
anonymous said ...
Is that picture Ms R?
21 Nov 08 - 08:08 gmt
anonymous said ...
i had heard that Ms R is a "big unit"...so maybe
21 Nov 08 - 08:25 gmt
anonymous said ...
No, common you two.. its obviously a picture of Svetlana....
21 Nov 08 - 08:48 gmt
Dirty Harry said ...
B of A buying Merrill Lynch is now totally crazy!! BAC shareholders should riot and kill the deal before BAC goes the way of Citicorp!
21 Nov 08 - 09:28 gmt
anonymous said ...
Berkshire Hathaway is now in the position were there could be a panic around its' credit position. Same with GE. Both credit ratings could be lowered soon. Sign of the times.
21 Nov 08 - 09:35 gmt
Moron said ...
I hedge hell wanna bet the us indices close negative again today
21 Nov 08 - 10:03 gmt
johnny cash said ...
Berkshire is now down a stunning 43 percent for the year when the previous worst year in its 40 year record was a drop of 6.2 percent in 2001.
21 Nov 08 - 10:07 gmt
PAnta said ...
FRIDAY Rumour ... Citi to merge with Goldman Sachs, it will be called Sachs and the Citi.....
21 Nov 08 - 10:07 gmt
Grinning Pandit said ...
i know he made out like a bandit by conning citi into buying old lane, but surely a Citi stock price below $5 is enough to wipe that annyoing smile off pandit's face
21 Nov 08 - 10:27 gmt
KONG said ...
Has anyone seen the Debtors motion filing by Lehman on assignment of its in-the-money derivative contracts? Seems to try to run roughshod over counterparty rights. Implications for those who have yet to terminate their contracts with LBI (and possibly PWC's next strategy in the LBIE case).
21 Nov 08 - 10:31 gmt
anonymous said ...
no, picture of ms r is @ womanofexperience.blogspot. c o m vague resemblance....
21 Nov 08 - 10:41 gmt
anonymous said ...
Ms R is all tied up ...great a** look on the blog
21 Nov 08 - 10:44 gmt
anonymous said ...
Sachs and the Citi ... a good one
21 Nov 08 - 10:50 gmt
anonymous said ...
she's old and divorced, used goods...disappointing
21 Nov 08 - 11:20 gmt
Jaa said ...
!!
21 Nov 08 - 11:26 gmt
Tradebot said ...
FT finally wrote some sense about Brown's spend-a-thlon. Nowever, the stupid public is lapping it all up....spend now on never-never land. Vote Brown! 5 more years!
21 Nov 08 - 11:27 gmt
Jaa said ...
Spx 700 by monday..buy it moron for a couple of weeks 950..
21 Nov 08 - 11:27 gmt
Tradebot said ...
UK is truly, utterly, totally Donald Ducked. Useless central bank, horrible Government...nasty weather, bad food, worthless currency.
21 Nov 08 - 11:30 gmt
anonymous said ...
yes good idea Tradebot let's go into this recession with no policy adjustments so we can make it as deep and painful as possible. you know nothing
21 Nov 08 - 11:47 gmt
Top Cat said ...
Nasty Anon is back trying to kill Ms R. Loser
21 Nov 08 - 11:47 gmt
anonymous said ...
@Anon - you're very quick to criticise, but slow to offer any ideas of your own. Perhaps, because you have none?
21 Nov 08 - 11:51 gmt
anonymous said ...
@Top Cat. Because he can't make money perhaps??? I looked on the blog.
21 Nov 08 - 11:52 gmt
Moron said ...
Dribblee doo dribblee dum
21 Nov 08 - 12:49 gmt
ratfink said ...
I'd like to saute Warren Buffett's liver in a nice claret and eat it with some alfalfa sprouts. I wonder what Vikram Pandit's soles would taste like with a schmeer cream cheese?
21 Nov 08 - 13:07 gmt
anonymous said ...
@ratfink - you would probably die. Buffett has lived off steaks and cherry Coke the last 50 years, so his liver is probably pure poison
21 Nov 08 - 13:09 gmt
Super Mario said ...
@Jaa - Not too sure about SPX 700 by monday mate, i'm tending to agree with I hedge hell's view
21 Nov 08 - 13:30 gmt
I Hedge Vengeance said ...
@moron....you could be right of course, but my instinct tells me that at least for today the rally is real...
though i do expect volatility and i doubt it will be a straight shot higher, the odds favor a ops expiry rally...
21 Nov 08 - 13:45 gmt
Super Mario said ...
Im seeing 65-71 quoted on the SPX binary to finish +ve today
21 Nov 08 - 14:57 gmt
Jaa said ...
@Super Mario... I advise you to sell it then
21 Nov 08 - 15:29 gmt
Moron said ...
it seems the idiot was right again....us abt to go negative guys:)))
21 Nov 08 - 15:30 gmt
Super Mario said ...
dow falls below 7500 and the MIB loses over 400 points in double quick time, im going back to plumbing
21 Nov 08 - 16:07 gmt
Moron said ...
dribblee dum dum:))) u have to love this silly market!
21 Nov 08 - 16:10 gmt
Super Mario said ...
MIB recovers 200 points in around 2.5 mins before close...what a crazy f**in mkt
forza italia!!
21 Nov 08 - 16:28 gmt
I Hedged Christmas said ...
as i said moron, it wouldn't be a straight shot higher...however at the moment we are up 1% and the potential is there for a large rip upwards...
we are still net short...was just alerting you to the real potential for a rip...
21 Nov 08 - 16:38 gmt
Tradebot said ...
equities are pure gambling. Bet on sure thing : sell GBP.
21 Nov 08 - 16:42 gmt
I Hedged Spitzer said ...
TBT...ultrashort US treasury...
this is the golden ticket...entry was @48.5 yesterday in the aftermarket...yesterday it was slaughtered, and was being puked up in blocks after the close...a steal, i say...
21 Nov 08 - 16:44 gmt
Moron said ...
u may be right...too complicated for me though....i'm just going to sleep till the s and p 500 is trading sub 500....and then i cover my shorts......if there are some bear market rallies along the way...we might play them....simple:))
21 Nov 08 - 16:48 gmt
Super Mario said ...
Tip of the day - Check out CIT group ( NYSE:CIT). There applying to become a bank holding company. Should add some solidity into the share px which has been in freefall recently, also getting some +ve noises from some of the players on the street
21 Nov 08 - 16:53 gmt
FSA said ...
Super Mario, that was definitely a rimour. Please report to my office immediately.
21 Nov 08 - 17:02 gmt
Super Mario said ...
@FSA - I should have added there are no guarentees, the above comment is just my own view. Investors should not take my above comment as implying anything untoward.
21 Nov 08 - 17:14 gmt
anonymous said ...
me thinks the afternoon squeeze higher has begun...
we'll see if it gets sold...my gut still says we close back over 8000 on the dow today...
21 Nov 08 - 17:37 gmt
Super Mario said ...
looks like the SPX did finish +ve after all...im off to have a well deserved mushroom
21 Nov 08 - 20:59 gmt
anonymous said ...
So, the NY Fed governor who let Lehman Bros sink, is now due to PONDER over the weekend the fate of Citibank at the same time that he's the shadow Treasury Secretary under Obama. I know that we voted for change her in America, but I didn't know that change meant to opposite of everything that is reality.
22 Nov 08 - 00:40 gmt
AthenaDelphi said ...
Ah, young and good looking. That for me is all I need to know for me to love having Timothy, the FedHead of NY, in charge of Treasury. At least its not another Goldman Sachs guy.
22 Nov 08 - 00:42 gmt
AthenaDelphi said ...
Finbar, I hope your day at the gym went well. Was wondering if you knew of a 1906 guy who is known as Babson Charts? I've heard of candlestick but I recently saw one of these charts and I was intrigued. Also, one last post: I think that the market was oversold and was operating in a vacuum - thus O's choice of Tim and announcing Bernanke was a goner with Summers in the wings, gave a semblance that someone was at the wheel.
22 Nov 08 - 00:49 gmt
I Hedge Ignorance of Others said ...
@athenadelphi...your inexperience shows...
very weak analysis...
22 Nov 08 - 01:15 gmt
I Hedge Luck said ...
i guess my call of 8000 or higher proves we all get lucky sometimes...
22 Nov 08 - 01:17 gmt
anonymous said ...
Moron must have browned his shorts when he saw the upward rip yesterday
22 Nov 08 - 10:56 gmt
Moron said ...
Anon if u only realized how desparate u sound i feel sorry for u mate life can damage people in very cruel ways
22 Nov 08 - 14:16 gmt
Meat Eater said ...
According to this week’s Barron’s:
The Street talk is that Berkshire's counterparties, believed to include Goldman, are worried about their Berkshire financial exposure and are trying to hedge that by buying protection in the credit-default swap market.
23 Nov 08 - 08:16 gmt
anonymous said ...
Nobody who knows anything about General Electric Co. actually believes it's a AAA credit. Meanwhile, the company just landed government insurance for as much as $139 billion of debt for its lending arm, GE Capital Corp., which also is rated AAA. If GE were really that strong, it wouldn't need the help.
23 Nov 08 - 09:40 gmt
goodluck fairy said ...
I note a correlation with traders/advisors/brokers faces and the markets: when the market is up there are smiles all-round, when the market is down there are frowns.
Given the nature of cause and effect, I would like to see global transformation of traders/advisors/brokers faces to permanent smiles
24 Nov 08 - 04:30 gmt
I Have No Hedge For Polyannas said ...
@goodluck fairy....this is not a place for polyannas...this is the spot for the folks who saw ALL OF THIS coming, and are profiting handsomely because of their research and foresight...
so don't expect a postiive response to your posts hoping the problems would just magically disappear...
24 Nov 08 - 06:33 gmt
I Have No Hedge for Idiocy said ...
i think the ladies understand that the genitalia(balls included, of course) of short sellers are just 'way more super' than of those who are long only...
they be right in their asssumption...
suck it longs...
24 Nov 08 - 06:56 gmt
AthenaDelphi said ...
where are you Finbar? I'm waiting for your Monday morning take on Citi and who the heck is going to pay for this. Also, WHEN would be a good thing to know. If I were you, a holder of Lehman Bros' frozen gamish, I'd start the paperwork to sue Tim Geithner as he's the guy who decided Bear Stearns could live and Lehman was left to die. And to think this guy is O's Treasury Secretary.
24 Nov 08 - 08:09 gmt
Seven said ...
Where is Fin Today?
24 Nov 08 - 08:35 gmt
THe End!!! said ...
Due to poor performance over the past months Fin has been let go - he is currently packing up his carboard box with expensive wine and office stationary and will be seen walking curzon street swigging from the bottle by 9.30 -
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