Archive for the 'Markets' Category

The Incredible Levitation of Stock Markets

Thursday, April 30th, 2009

I am not sure that stock prices ever bear much relation to the worldline that will ultimately play out over time, but the recent rally, now aged 55 days and counting, really highlights the fantasy world that typifies equity values (as so much else, but more on that later).  Recall that market indices made their […]

Democrats are Destroyers

Thursday, March 5th, 2009

It is alarming to hear gleeful democrats say that the mistaken policies of the last 30 years are now to be jettisoned.  What policies exactly?  In a nutshell it is the reduction of state participation in the economy.  As the chart below demonstrates, it is hard to view the policies that started with Reagan as […]

Equities are Headed Lower into the Election

Monday, October 27th, 2008

UPDATE:  28 October 2008,  3PM Central.  Well That was wrong.  Stocks broke out the TOP of the wedge rather than breaking out the bottom and falling through the table.  Never fight the Fed.  The Fed is expected to set rates at or below 1% tomorrow afternoon.  Of course this in itself is nearly unprecedented; for […]

Where Will The Market Debacle Stop: Update

Monday, October 13th, 2008

Fridays trade had all the earmarks of a bottom. At the beginning of the day I felt strongly that the bottom would be seen that day. However the trade on Friday felt engineered. It had all the technical aspects one would look for; heavy volume, started strongly down, wild volatility, spike in the vix to […]

Where Will The Market Debacle Stop?

Thursday, October 9th, 2008

Two weeks ago (Sept. 26) the Dow Jones Industrial Average hit a high of 11,168.10.  As of Tonight (Thurs. Oct 9) it closed at its low of 8579.19, down 23% in nine trading sessions.  That is a crash. The S&P 500 Dropped from a high of 1215.77 on the 26th to a low of 909.19 […]

My Own Mini Crop Survey

Monday, July 21st, 2008

This weekend we drove all over Will, Grundy, Livingston and Kankakee counties in Illinois scoping out places to find Mazon Creek fossils (yes, we drove over the Mazon Creek or River several times but did not go into the town of Mazon). While we did not find many good fossil sites until I had talked […]

Crying About The Uptick Rule? How About A Downtick Rule?

Monday, July 14th, 2008

Last July, the SEC retired the Uptick Rule. The rule was promulgated in the aftermath of the Great Crash of 1929 and requires that a short position in a stock may not be established unless the stock has most recently ticked up in price. People in general do not understand what shorting is (I still […]

The Contour of the Markets: A Prognosis

Monday, June 30th, 2008

An outline of what is in store for the next 6-8 months is starting to take shape.  The major issues are the US presidential election, the end game in the Iranian crisis and what the ultimate harvested crop sizes will be.  For stocks, it seems clear that we are in a bear market.  No not […]

Ethanol Madness Continues

Thursday, June 12th, 2008

In early 2007 I wrote this entry about Bush’s State of the Union speech in which he very unwisely staked our nation’s future on corn-based Ethanol (and Congress obliged with the Energy Independence and Security Act of 2007 [loud guffaws and tears rolling down cheeks at the title]).  Well it is no secret that all […]

To Lower the Price of Oil, Raise Fed Funds Rate

Friday, June 6th, 2008

It is amazing how much nonsense is thrown around by people on CNBC.  Dennis pleading with the president of NYMEX to raise margin requirements so speculators cannot take such big positions.  Congresspeople talking about curbing speculators (see below).  Can we really so stupid as to blame the messenger rather than attacking the causes? It is […]

The Economic Function of Speculators

Friday, June 6th, 2008

I have to address some silliness we have been seeing more of recently, people like Senator Byron Dorgan, saying things like we need to clean up markets to reign in speculators and only have the hedgers have access.  Dorgan isn’t the only one with an alarming lack of understanding of how markets work sitting in […]

Please Do A Surprise 50bp Rate Hike!

Friday, June 6th, 2008

Though it seems counter intuitive, the best thing the Fed can do for the health of the American economy right now would be to announce an immediate inter-meeting 50bp rate hike, perhaps after telegraphing it for a few days first.  The immediate effect would be to inflict massive losses in oil and other commodity speculation […]

Ex-Fed President McTeer Questions Feds Timing

Friday, June 6th, 2008

This morning on CNBC, former Dallas Fed President McTeer made a very important point about the recent history of the Fed.  If you look at the fact that Crude Oil has just jumped by well over $10/bbl since yesterday mornings imprudent comments by ECB Governor Trichet, and that the Euro is now stronger against USD […]

Where are the Adults at the Fed?

Thursday, June 5th, 2008

On Tuesday morning, Chairman Bernanke made a watershed appearance in which he stated that the Fed was aware of the delterious effect of the weak dollar and promised that they were on top of it.  This is the statement everyone was looking for after the April meeting of the Monetary Policy Committee but did not […]

National Do Nothing Day: June 11th, 2008

Wednesday, May 14th, 2008

As a form of national protest at the high and rising cost of energy and food, everyone in the nation should stay home on Wednesday, June 11th.  This might help get the attention of the idiots in Washington and the ear of fellow citizens who – for whatever strange reason – are not thinking much […]

Trade Chatter

Thursday, April 24th, 2008

I hate to gloat, but gloat I shall.  Here is what I wrote Tuesday afternoon in my daily chatter with the friendly ‘quants’ with whom I chat in Greenwich: [4/22/2008 3:36:08 PM] t0mmy berg says: btw,  i believe there is a pretty high probability (like 70%) that the high in the eur/us rate was either […]

Stocks Go Up. And Then They Come Down.

Monday, March 24th, 2008

It is interesting to hear all the breathless talk about a bottom being put in, and now it is time to get long stocks again.  That the Bear Stearns blowout (which was somewhat forced) is that singular event that marks the turning point.  It marked “a” turning point to be sure.  But not “the” turning […]

CRB Index Weekly as of 29 February 2008: The Blowoff Phase

Monday, March 3rd, 2008

When you are wrong, you are either wrong or early. I have been wrong in thinking that economic weakness would take commodities down with them. Markets have not traced out so many charts like those we are seeing today since the 1970’s. I wrote a couple years ago that there was a rising probability that […]

S&P 500: 1350 Revisited

Monday, January 21st, 2008

The Spoo blew right through 1350 last week, settling at 1325 on Friday. Tonight it had a 50 handle at its low, but the 50 handle had a 12 in front of it. Scary. I told a friend on November 6th that I felt we were going to embark on a bear market that day, […]

Decoupling? Globalization for Traders

Monday, January 21st, 2008

Last week I saw Peter Thiel on CNBC say that emerging economies are in fact decoupled from the US and will carry on in the face of the slowdown here. No. The markets tonight and yesterday are telling us no with Asia and Europe down 7% in a single session. There is a great trade […]