Looks like a big buy program pulled the stocks from oblivion to close pretty much flat. If you are short this market, a reversal like that shakes your resolve. Apparently the Obama administration is hammering out a program to subsidize mortgage payments for troubled homeowners (Reuters Story). Here are some notable points about today’s action.
- Bid to cover ratio for treasuries today is 2.02 to 1; yesterday it was 2.21; Not too long ago it was at 2.8. Though 2.02 is healthy, the trend is clear.
- On a positive note, China announced that it will continue to buy US Treasuries.
- John Janson mentioned that CMBS took a good drubbing today (You wouldn’t know by watching fierce reversal in SRS/IYR.
- CDS spreads on NA Corporate junk index (CDX.NA.HY) closed above 1500 at 1504, which is considered “panic zone.”
- Schweitzer noted that money flow index turned negative.
On a personal note, most of my positions were big winners through afternoon. And then things changed. The reversal in APOL is unbelievable. When I first mentioned degree seller stocks on a blog post here, I wanted to buy puts on STRA and APOL. I ended-up buying puts on DV and APOL because STRA is shceduled to release their earnings today. STRA got creamed, DV was down a bit and APOL reversed all its opening losses to close pretty much flat. Prime example of being right and not being able to profit from it.
Apparently it was this piece of… news
http://www.reuters.com/article/newsOne/idUSTRE51B6B620090212
The moment the news got out, things went up like crazy.
Random timing? Hardly.
This is not fair for people who have been working hard and staying disciplined and paying taxes and paying mortgage. Why use my tax money to pay people who screwed up on their mortgage? This is absurd!!! If Obama wants to pay them, better pay us all!
I agree but those of us that do pay on time will be the ones bailing out those that don’t. It’s not fair but I’m not sure outside of complaining to your House or Senate representatives what we can do about.
Sure there is. Stop voting and start shooting.
My Senators and Congressman are gutless weenies. I contacted them on TARP 1. The responses were canned and clueless. Shooting is not a viable option for me. I have kids. I know what happens to people who shoot at the government. Google Ruby Ridge. Google Waco.
Here’s what is a viable option:
1. Educate yourself on who your master really is. It is not the government. Google Bilderberg group, Google Bohemian Club. Google NWO, CFR and the Trilateral Commission. Educate yourself on who owns your government, and I do mean OWNS.
2. Refuse to let these rat bastards defeat you. Find a way. For me, the way was making a proactive decision to spend less. I made that decision years ago. Because I spend less, I need less cash. Because I need less cash I don’t have to work as much, or as hard, or worry about it. That makes me an enemy of these people. Being their enemy is a source of great pride.
3. If you’ve already bought stuff, unload it. Get what you can for it. Keep the proceeds out of the banking system if at all possible. Identify a country that you can export a product to, set up a company and do it. The locals will pay you in local currency which can go into local banks. For me, the country is Costa Rica for a lot of reasons. For you it may be somewhere else.
4. Recognize that as is the case with all struggles, you are going to have to sacrifice to achieve a greater good.
These people do not own me. I will never let them. I will load the Jeep up with the few possessions I have, cross the border at Laredo and be in San Jose 3 days later. Oh, and read Joe Dominguez’s book “Your Money or Your Life”. You may not like Joe’s politics. I didn’t, but Joe’s system makes perfect sense and has worked wonderfully for me.
Screw them.
RE point 3 – for those of you with strong rowing arms, you should also consider Australia – pretty cool down here…and far away from there : )
Costa Rica for sure. Tamarindo!
Austrilia is full of criminals.
agree 100% with 3min. Costa Rica is my favorite. Haha full of criminals in oz. Avoid Oz.
Google “Flight 1549″ and “Conspiracy Theory”
1. Flight 1549 — 1, then 5 minus 4 is 1, then 9. Reverse it: 911
2. No plane has ever had both engines go out as a result of a bird strike. Never happened before.
3. No plane has ever, ever had everyone survive a ditching in the water.
4. The plane went down in the most densely populated urban areas of the world and there is no video of it?
5. The ferries and other boats got there in record time. Sounds like it was planned.
6. 15% of the passengers were BAC bankers.
Its easy to create this stuff. And the more I see “sell all your stuff and move to (fill in the blank)” posts, I know we must be close to a bottom. The tech bulls had their tin foil hat crowd with the Naz run to 5K, now it appears the tin foil hat crowd is emerging from the bear camp with this year old bear market.
Times may get tough, but lets not lose our ability for rational and measured thought. And lets not lose perspective. There are hundreds of millions on this planet (read Africa) that would readily trade places with any of us in a heartbeat. There resides real doom and gloom, not the ersatz variety that we decry. Google “human development index” and guess which countries are at the bottom: Mozambique, Burundi, Ethiopia, Central African Republic, Guinea-Bissau, Chad, Mali, Burkina Faso, Sierra Leone, Niger. Even in our times of trouble, we occupy a very lucky spot on this planet. The hyperbole about our troubles rings hollow with most of our fellow humans.
Aequam memento rebus in arduis servare mentem.
Luck has nothing to do with it. Africa is a shithole because it is full of Africans.
Yes all very nice, but can you stand eating gallo pinto all year long.
There is only so much beans and rice you can eat…
It looks like the big boys took advantage of the news:
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html
SPY is at the top. I normally look at this throughout the day but did not today. I wish I knew what the numbers looked like at 3:00.
mohan,
interested in your thoughts on the points you brought up.
point 1 ….bid to cover ratio declining…do we know if any of the buying is by the fed…if so, its worse than it appears…i think all the talk about the fed buying tresuries to bring down rates was a cover for when they have to buy because its not covered fully to stop a panic
point 2 ….China can’t afford to say otherwise…if they did the our economy, their economy, and the value of dollar (which is a large part of their portfolio) would tank ..wouldn’t it…The US is lilke a farmer that owes so much to the banker (china) the banker has to keep being nice no matter how much he despises the farmer
point 3…SRS..no comment other than i think its a small enough segment to be easily manipulated
point 4…no comment
point 5…money flow indicator….how will that indicator look long term as baby boomers quit saving for retirement and start withdrawing from the system (ponzi alert), when people get frustrated enough to re do their 401 k choices to something thats just safe…(i’ve heard alot of this recently around the water cooler)….and the higher taxes to pay for all the stimulis will be a crowding out variable too. I feel this last point could be bring a big change in overall long term investing strategy
thanks
zerosum
zerosum:
If you see any more articles about the European bank situation, please post on Social.
Thanks
sure…i’m looking
MJ,,CHECK BLOG POSTED ON NUMBER ONE SECURITY THREAT
Saw it, thanks.
did anyone see the town hall meeting where Obama said to a crying lady that she could have a home rent free as long as she needed it. oh Barack Roosevelt, you are so nice. So easy to spend other peoples money to help out a homeless person. Get ready though. Your secretary will now be fielding millions of letters from citizens requesting thier own rent free home. please do give them one on everyone elses back; this will surely fix the economy.
now. is anyone doubting my call for a rally into options ex? that fing wall street and the government are one. however, im still calling for a market decline starting on the 25th. I’ve been following the Russels and i have a targeted upside. im not guaranteeing we get there and this is why im simply scaling into TWM. i have half position so far. im going to play wait and see and place another 30% of the position when the russels hit 462ish. this is just shy of my 465 upside target.
please take a look at this chart and let me know what you think now that we indeed got our rally. those sneaky buyers.
http://social.stocktock.com/photo/rut-feb-11?context=latest
remember obama made his chops by being community organizer …a grassroots activist for the down and out in chicagoland
Hey, it is all ok. We all pitch in so that needy homeowners get their mortgage reduced and don’t foreclose…that will reduce the inventory and raise the value of the home itself. Reduce the mortgage by 40%, thus increasing the value of that home by, let’s say 15% overnight because of the massive drop in supply.
Then, the homeowner turns around and sells it for a 15% profit.
I doubt this will make it through Congress. Obama just lost his filibuster proof Senate.
What do you mean??? Who left of got switched???
in the deal the homeowner signs away any profit.
eg. mortgage $400,000… home value $230,000
Government reduces mortgage to $230,000 and the homeowner forgoes any property price gain to the government if they sell.
now, they are going to try and creat inflation, that is obvious. if they can magically re-inflate the home values then they get the gains.
this is how i read the proposed policy
trading lesson 101
dont chase gaps down short selling…
cover on the gap down and short the rally that follows.
APOL ; gap down and fall… +$6.60 in a false rally up…down $3 after hours.
if you can catch these moves, anticipate them.. you’ll be rich
this kind of action so reminds me of prior to the last decline. wild wild action
in many stocks. play the game and stay strong. make your plan and stick it out.
wall street will be testing our resolve for the next 5 trading days.