Short term trades in the stock market •$$$$$•

[bombadil.360]

so $5 a gallon is cool then? what about $6? how about $20?

you can live on a beach and catch your own dinner and not give a shit about any of this but for the modern civilized world it makes a huge impact on nearly every aspect of our lives. (Trucks that bring food to cities, they run on gas usually)

Everyone is entitled to their own opinion and if you think everything is peachy and things are lookin up, more power to ya. The people that are prepared for the worst and hope for the best will end up on top.

that TP will cost ya an extra 60% though.....

you'll only see 20 dollars a gallon when the dollar looses its status; but then, thosde 20 dollars would not really be 20 dollars, but a lot less. so you'd still end up paying more or less the same; like 40 years ago, what was the price per gallon? and how much have those 40 year old dollars compare to today's dollar? if you calculate, the price would be pretty similar.

those numbers in the market are always the same too; change from here to there, but not much difference.

 

[yesum]

so any stock tips for the next week? I can use some help with the wealth

Yea, any ideas for general market direction next week? I was thinking of shorting the s & p.

 

[SpasticGramps]

Everyone is expecting a pullback and has been for a while. Equities have been on a tear. I have to think with the recent LTRO2 liquidity injection from the ECB that it keeps going up. All that money has to go somewhere and the market has been ignoring any and all negative news as of late.

Dangerous to short a market that is getting hundreds of billions of dollars of liquidity injected into it IMO.

The major macro event to watch for is whether the Greek PSI deal triggers CDS or not. So far the ISDA is saying that the "voluntary" writedown isn't a CDS event, but the market is questioning if a 53% writedown isn't a credit event then what is? And does that implicitly make CDS worthless as a hedge against default?

 

[Zen Master]

those numbers in the market are always the same too; change from here to there, but not much difference.

hmm that's odd, I haven't gotten a pay raise in a while now.

 

[Hydrosun]

hmm that's odd, I haven't gotten a pay raise in a while now.

And my real estate values have fallen over the past five years EVERY year.

Guess it is all fake and I should start drinking the kool-aid too then I wouldn't worry

 

[SpasticGramps]

Dow is really having a hard time with 13,000. It's crossed it over 70+ times in the past few days and if I think it's only closed above once. Become a pretty serious technical barrier never mind psychological.

The talking heads were creaming their pants all day on CNBC about Yelp. Another social media business that has yet to turn a profit. 80mil in revenue and the market has it valued at $1.5bil lol and no profit? Lots of these crazy tech IPO's reminds me of tech bubble bust.

I've been able to watch CNBC and Bloomberg off and on all day for the last few days. Had a terrible case of laryngitis recently. Just barely able to start talking today since loosing my voice last Sunday while in Daytona. It was worth it though.

 

[SpasticGramps]

Greece has been downgraded by S&P to SD (selective default). Moodys also downgraded Greece to Ca from C. Their lowest rating. If Greece doesn't get their PSI deal wrapped up March 8 then S&P will be able to remove the S and it will be just Default.

The Trokia needs 75% participation in the PSI to avoid a CDS trigger. Even if they are able to wrap the deal up it's success is based on Greece returning to growth by 2013. Their economy is continuing to tank so as usual the establishments assumptions are going to be wrong and all these past two years of bread and cirusues and hundreds of billions of dollars will be for naught.

Moodys' concludes that "the risk of default even after the debt exchange has been completed remains high," and any upward movements in Greece's sovereign ratings after the debt exchange are likely to be small.

 

[Nondual]

Was on the road for a week and some catching up to do. I got stopped out pretty much immediately on RIC...D'Oh! WTF happened to silver those few days?

 

[Zen Master]

WTF happened to silver those few days?

I talked about buying it

no joke last time I commented on looking into getting some phys silver was Sep 21, the day before it dropped like a rock for 2 days straight.

whenever I go to the casino, just do the opposite of what I do and you'll most likely win.

 

[SpasticGramps]

Was on the road for a week and some catching up to do. I got stopped out pretty much immediately on RIC...D'Oh! WTF happened to silver those few days?

Bernanke didn't give the market the crack (QE3) that it wanted at his bi annual congressional hearing. Metals got pounded. Equities pulled back a bit. Not sure why the market reacted so strongly. He wasn't anymore hawkish than he's been in the last few speeches.

I have been waiting for a good buying opportunity. Thanks Uncle Ben!

 

[Madrus Rose]

after BDCO popped notice LEI ROYL followed with high oil just like last spring .

 

[SpasticGramps]

Tough day for Europe indices yesterday. Greek PSI has to be done by Thursday and there is still no definite "DONE DEAL" yet. Markets are getting antsy. China lowered growth forecast to 7.5% which sounds like a lot, but really isn't for them. The US's Ministry of Truth is only surpassed by China's governmental reporting.

The "unintended consequences" of the ECB's LTRO1 and 2 are starting to poke their nasty heads up. Yes, they may have saved the EU banking system from melting down when they were launched, but now it's time for.........MARGIN CALLS due to the deteriorating collateral within the EU banking system. Come to find out banks can't pledge empty candy bar wrappers as collateral with the ECB in exchange for printed money into perpetuity.

However, in the face of a crisis I'm sure Draghi will do what all central bankers do.....change the laws on the fly. He'll probably drop the collateral requirements to nothing hoping that buys him some more time.

This is a pretty fucked up looking chart.

European Banks Now Face Huge Margin Calls As ECB Collateral Crumbles

n what could prove to be the most critical unintended consequence of the ECB's LTRO program, we note that as of last Friday the ECB has started to make very sizable margin calls on its credit-extensions to counterparties. While the hope was for any and every piece of lowly collateral to be lodged with the ECB in return for freshly printed money to spend on local government debt, perhaps the expectation of a truly virtuous circle of liquidity lifting all boats forever is crashing on the shores of reality. This 'Deposits Related to Margin Calls' line item on the ECB's balance sheet will likely now become the most-watched 'indicator' of stress as we note the dramatic acceleration from an average well under EUR200 million to well over EUR17 billion since the LTRO began. The rapid deterioration in collateral asset quality is extremely worrisome (GGBs? European financial sub debt? Papandreou's Kebab Shop unsecured 2nd lien notes?) as it forces the banks who took the collateralized loans to come up with more 'precious' cash or assets (unwind existing profitable trades such as sovereign carry, delever further by selling assets, or subordinate more of the capital structure via pledging more assets - to cover these collateral shortfalls) or pay-down the loan in part. This could very quickly become a self-fulfilling vicious circle - especially given the leverage in both the ECB and the already-insolvent banks that took LTRO loans that now back the main Italian, Spanish, and Portuguese sovereign bond markets.

This huge increase in margin calls can only further exacerbate the stigma attached to LTRO-facing banks - and as we noted this morning (somewhat presciently) both the LTRO-Stigma-trade, that we created, and the potential for MtM losses on the carry-trades that LTRO 'cash' was put to work in could indeed start a vicious circle in European financials, just as everyone thought it was safe to dip a toe back in the risk pool.

What should also start to worry the Germans is the fact a 37x levered central bank (hedge-fund) with EUR3 trillion balance sheet that has extended credit in a 'risk-managed' approach on what appears to be an ever dwindling supply of performing collateral is starting to see dramatic 'gaps' in its asset-liability exposure (but rest assured Bernanke told us that our FX Swaps are safe as houses).

One last point should be noted - the hopes of an LTRO3 or some such are surely now out of the window as clearly banks have run dry of any and all reasonable collateral or can the sovereign bonds purchased using LTRO1 and LTRO2 funds be lodged once again in a rehypothecated miasma circling the drain?

 

[woolybear]

FASCINATING THREAD, thanks gramps and all who post in here.

 

[SpasticGramps]

The biggest sovereign debt restructuring in history is now finally complete. The PSI deal results were just released. 85% of bonds under Greek Law were tendered for the "voluntary" debt swap. This means they didn't get the magic number of 95% to avoid having to use the Collective Action Clauses (CAC). 69% of bonds held under UK law were tendered (that deal was been extended to March 33). In a stroke of irony the Greek Finance Ministry Pension Fund was one of the holdouts.

CAC's being imposed means that because a certain % bond holders agreed to the terms of the debt swap the terms can be forced onto the holdouts. This should trigger CDS. The ISDA meets tomorrow to determine if this is a credit event and if CDS should trigger.

The ISDA is made up of major banking institutions. If they don't call this a credit event and CDS do not trigger then the CDS market will basically be destroyed. Why buy CDS as a hedge against defaulted bonds if when those bonds lose 75% of value your hedge against default is deemed worthless? You don't. Your only hedge at that point is to sell bonds you deem risky (ie the rest of the Eurozone). So, the most important part of all this going forward is what the ISDA says tomorrow.

If CDS is triggered........could be looking at Lehman 2.0. The counter party risk questions will start flying around again. The "firewall" will be tested. Contagion will then spread to Portugal next before Ireland and so on. As this deal will set the precedent on how to handle the rest of the insolvent PIIGS in the coming months. This deal isn't that important because of the numbers it's that it sets the blueprint for the other EU "defaults" which numbers do matter.

On another side note. The Financial Times is reporting that markets are pricing these new "fresh start" Greek bonds with an immediate 80% loss once they hit the secondary market and CDS on them is signaling a 98% chance of default within a few years. So really this is all bread and circuses and does nothing, but kick the can a little further.

Greece Issues Statement On PSI, Says €172 Billion Of Bonds Tendered In Swap, Will Enact CACs, ISDA To Meet At 1pm To Find If CDS Trigger

The biggest sovereign debt restructuring in history is now, well, history. The headlines are finally come in:

• GREECE ISSUES STATEMENT ON DEBT SWAP
• GREECE COMPLETES DEBT SWAP
• GREECE SAYS EU172 BLN OF BONDS TENDERED IN SWAP
• GREECE GETS TENDERS, CONSENTS FROM HOLDERS OF 85.8%
• GREECE SAYS 69% OF NON-GREEK LAW BONDHOLDERS PARTICIPATED

We learn that €152 of the €177 billion in Greek law bonds have tendered, which is 85.8%. This means that €25 billion in Greek law bonds have not - these are the hedge funds that could not be Steven Rattnered into participating, and will now sue Greece for par recoveries.This is also the number that ISDA will look at today to determine if, in conjunction with the CAC, means a credit event has occurred.
And yes, the CACs are coming, as is the Credit Event finding:

• GREECE SAYS WILL AMEND TERMS OF GREEK LAW BONDS FOR ALL HOLDERs

Finally, as a reminder, the ISDA vote today will be made by the following dealers and non-dealers. It will be up to them to decide if they wish to destroy the last trace of "integrity" of the CDS market and in effect commit institutional suicide. Because if they do in fact find that there has been no trigger event, then watch CDS bases go negative across the board, as any last pretense of CDS as a hedging instrument is thrown overboard, and the only "hedging" instrument left is to sell.

EMEA
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Societe Generale
UBS
Consultative Dealers
Citibank
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)


...And finally, congratulations to all Greek pensioners. You have now all been Corzined. Further instructions will be mailed in your next monthly pension statement.

 

[Madrus Rose]

Well underlying the Gold & silver drop which presented another buying op , ostensibly on the Fed withholding QE3 the fact remains that over 1/2 the 3Tril the liberated to the Fed when the debt ceiling was raised has been used to prop & bid up stock asset classes such as BofA & loans to Euro's Here you have the Fed simulating wealth again in portfolio & Ira accts as they have also used Apple , IBM & other market darlings to keep things kited up .

Oil spiked to $110 on news of Saudi pipeline explosion that presented a great short opp as later denied & quickly settled back to $104 the next 3 days into today but notice the mini market correction was the following day . This oil spike probably spooked markets as much or more as the fed's statement of no QE3 but noticed the market came springing back Of the most import is for them to keep asset classes kited up to maintain that assest wealth effect and keep people spending plus stimulate real estate . Shorts on homebuilders were good but short lived as 30yr rates are getting historically bottomed .... cheapest money is there for anyone who's credit survived .

Buying dips on CF/TNH fertilizer co's thru the 2day swoon saw CF bounce off $168's back up to $183's , this stock puts on better moves than AAPL and all the usual suspects that were bid up before came bouncing back UA MA CRM RAX V UNP FDX UNP CAT BA IBM AAPL ISRG FOSL CMG JOY CMI LNKD and any others you want to name .

Noteable shorts were over in the Coal & Mining sectors after the Airlines got taken down on higher Oil/Gas , the gold miners on the fall in POG (price of gold ) one might look to NEM for some bounce tomorrow , the bounce play in beaten down coal was WLT off $56's dip , more of a pure coal play for steel not energy .

LNG is one i mentioned here around $10 finally tagged $17 guys , also made a great short after but good to go off $10/12 with nat gas contracts coming out the yin yang.

 

[Madrus Rose]

Job #'s today give them one more reason to pop things again with eyes to take profs on longs & look to short again , much of these Gov't released data lately has been highly suspect as part of their doing anything to give the appearance of recovery but one doesn't fight it just use the charts and charts say anyone not selling into this strength certainly should consider it . IBM especially survived the swoon unscathed as they tried to pop this over $200 and just wondering if tomorrow they succede as it will take the pressure off AAPL to shoulder the load .

CAT DD MMM & IBM make up a great portion of any Dow move and did yesterday . But shorting that top resistance on CAT payed off beautifully from last week falling finally thru that lower support in the channel of $110 to $105's ...but also got the bounce back to $110 CAT is a major puppy to keep on screen . (dont get greedy /switch to longs etc ) Essentially for the last 2mos if you had shorted CAT at the $115/116 area , covered & bought long on pullbacks to $111's you were good 100% of the time , this is how channels work . The last short of top you hit the jackpot ...

 

[Madrus Rose]

GMCR a/h last night got totally hammered down as SBUX news of its own single portion coffee maker , GMCR was in a tight channel all thru the last 75days with a buy off $65 and sell short at $70 , this last short pop to $70 ...well if you had a load of $55 weekly puts you just hit the NYC lotto and made $100,000 in 1wk .


* But also 1200 shrs buy on GMCR as it got creamed off congestion Dec Lows @ $47 netted you $10,000 as it bounced back later to $55 which was former support acting as overhead R again. That's $10,000 in 20mins worth of time at the PC screen , this is why learning to chart is so important of all things you do in playing the market .

 

[SpasticGramps]

I can't believe this run up in housing stocks. Even with long term interest rates at next nothing demand is still not all that great and then there is the whole shadow inventory problem that has to be dealt with at some point in the future. That's going to turn into a good short eventually.

The WSJ released some article about the FED doing some sort of new "sterilized" monetary gimmick to bring down the 30y to alter perceptions of inflation in the future. Even Kudlow was pissed about that. Granted they aren't expanding their balance sheets, but they are still fucking with market perception of risk. But I guess that's what this MOP (manage of perception) economy is all about. Fool them until you can't.

No way Bernanke QE3 with Brent @ ~125 IMO. ECB came out and said no more LTRO. Not sure where the next balance sheet expansion is going to come from. Probably Japan first. Then the FED?

 

[SpasticGramps]

ISDA announced that the Greek bond swap is a credit event. CDS have been triggered.

The funniest thing about this Greek debt writedown is before the default Greece's total debt was $1.20 Trillion. After the "biggest sovereign debt restructuring in history" Greece's total debt is........$ 1.233 Trillion. Pretty incredible work there.

Plus, all of Greek tax revenue now goes into an escrow account first so the parasite bankers get paid their part first. If any crumbs are leftover the Greek's can use them to run their country, fund pensions, and all the other non important stuff. The Greeks, once the cradle of western democracy, are now debt serfs under a banking occupation. Former Goldman Sachs and now unelected techocrat Greek PM Puppet Papademos is pleased with these results.

 

[SpasticGramps]

In Merger News.

The American Taxpayer was merged with bankrupt PSA Peugeot Citroen via GM. If you read the whole article you see that cash is going directly to the Peugot family.

An American Auto Bailout – For France? ABC News

Attention U.S. taxpayers: You now own a piece of a French car company that is drowning in red ink.

That’s right. In a move little noticed outside of the business pages, General Motors last week bought more than $400 million in shares of PSA Peugeot Citroen – a 7 percent stake in the company.

Because U.S. taxpayers still own roughly one-quarter of GM, they now own a piece of Peugeot.

Peugeot can undoubtedly use the cash. Last year, Peugeot’s auto making division lost $123 million. And on March 1 – just a day after the deal with GM was announced – Moody’s downgraded Peugeot’s credit rating to junk status with a negative outlook, citing “severe deterioration” of its finances.

In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.

GM has said the deal is designed to give GM access to Peugeot’s expertise in small car and hybrid vehicle technology and ultimately allow both GM and Peugeot to save money by pooling their resources. But auto industry analysts find the deal mystifying.

An analysis by auto industry consultants IHS said it is “somewhat baffling that GM is willing to get involved in an alliance that it frankly does not need for size or complexity, while still avoiding any public plan to rationalise its European production, cut costs, or deal with labour rates.”

The deal will allow the Peugeot family to reduce its share of the family business. The family, which Forbes estimated to be worth more than $2 billion, still owns about 30 percent of the company. The Peugeots declined the opportunity to buy a piece of GM.

GM’s European operations have not enjoyed the same kind of rebound as its US operations. In fact, GM’s European operations, primarily the carmaker Opel, lost more than $700 million last year.