Archive | October, 2008

October 31, 2008

Global Market Comments for October 31, 2008 The Sell in May and Go Away Season is Now Officially Over!! 1) The 'sell at any price' mentality is now broken as the steady improvement in short term liquidity salves investors' nerves. The market is now pricing in a 'U' type recession with a prolonged recovery, not […]

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October 30, 2008

Global Market Comments for October 30, 2008 1) Q3 GDP came in at -0.3%, the lowest in seven years, indicating that we are solidly in recession. Residential investment fell a gut wrenching -19.1%, while consumer spending is -2.2%, the biggest drop since 1980. Further revisions downward are expected. They don't call this the dismal science […]

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October 29, 2008

Global Market Comments for October 29, 2008 1) The Fed cut rates by 0.50% to 1%, justifying yesterday's monster stock rally. But doesn't 1% sound familiar? Isn't that the rate that Greenspan targeted that planted the seeds of the current crisis? Beware of the unintended consequences! 2) On Monday, when the commercial paper market reopened, […]

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October 28, 2008

Global Market Comments for October 28, 2008 1) All the recent trends reversed today on imminent Fed and ECB rate cuts. The Dow soared 900, crude and commodities popped, while the dollar and Treasuries sold off. The yen short I strongly recommended yesterday at Â¥92/$ fell back to Â¥97/$. The VIX fell back from 80% […]

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October 27, 2008

Global Market Comments for October 27, 2008 1) Another Asia melt down hit the markets. Hong Kong was down 12% to 11,000. Japan was down 6.4%, hitting a new 24 year low. The euro made it to $1.23. Iceland's stock market is now down 90% from its top. The Great Global Deleverage continues. Futures markets […]

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October 24, 2008

Global Market Comments for October 24, 2008 STRATEGY CALL OF THE DECADE We are building up to a textbook capitulation in global stock markets, and I believe that equities will hit multigenerational valuation lows sometime in the next ten days. The extremely rare limit down move in the S&P Index futures at the opening today, […]

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October 23, 2008

Global Market Comments for October 23, 2008 1) The blame game for the financial crisis on capitol hill continued in earnest, with everyone from the SEC's Christopher Cox, to former Fed governor Allan Greenspan pointing fingers. Greenspan was 'shocked' that his own 40 year old models blew up. Sounds like one of Claude Rains’ lines […]

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October 22, 2008

Global Market Comments for October 22, 2008 1) Today global deflation trumped the continuing decline in LIBOR, knocking the Dow down 700 at one point. There was a five cent move in the euro today down to $1.27 as global funds poured into Treasuries. It turns out that a global recession is great for the […]

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October 21, 2008

Global Market Comments for October 21, 2008 1) More light at the end of the credit tunnel. Three month T-bill yields made it back from 0.25% up to 1.27% vs., a normal range around 1.75%. LIBOR has dropped for seven consecutive days, pointing to a slow thaw of European lending. Now that most major banks […]

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October 20, 2008

Global Market Comments for October 20, 2008 1) China's third quarter GDP slowed by 12% to 9%, the slowest since 2003. Copper imports, a reliable leading indicator, have almost completely halted. Stocks rose 413 to 9,265. The November S&P 500 1,000 calls I strongly recommended at $22 last week hit $60 today. 2) US job […]

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October 17, 2008

Global Market Comments for October 17, 2008 1) September housing starts dropped by -6.3% to an annualized rate of only 817,000, the biggest drop in 17 years. This is the third consecutive monthly steep drop. Demographic demand is 1.2 million units/year, so this will help cut into the industry's 11 month inventory. More falling off […]

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October 16, 2008

Global Market Comments for October 16, 2008 1) Rumors of the country's biggest hedge funds closing down savaged the market again, knocking it down 400 at the opening, only to be followed by a 700 point rally. The volatility index (VIX) hit an all time high of 81%. If you feel depressed, go buy a […]

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October 15, 2008

Global Market Comments for October 15, 2008 1) The Dow cratered 7.9% today, the greatest one day loss since 1987. Sell programs from distressed hedge funds hammered the market right into the close. LIBOR is coming down, but not fast enough. The Treasury/Eurodollar interest rate spread (TED) is now 300 basis points, compared to 75 […]

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October 14, 2008

Global Market Comments for October 14, 2008 1) There is no doubt now that we hit the bottom in the stock market on Friday at 7,700. The question now is how long we will bounce along the bottom between 8,000 and 10,000 while the air bubble works its way through the economy. Many smaller banks […]

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October 13, 2008

Global Market Comments for October 13, 2008 Special Post Apocalypse Issue 1) I spent my weekend convincing people that we are not entering a thirties style Depression and not to sell their stocks. We are entering a recession that will be longer and deeper than previously forecast. The net decline in GDP has probably jumped […]

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