2 replies to this topic

[snorkels4]

conversed with some middle aged ladies at lunch yesterday they were a buzzin about the "dow" one of he ladies mentioned that she was in it for the long term with spx followinf mutual fund but had been holding off on new contribution and made a big add monday. she mentioned that she got greedy trying to time the market. she comes from a "long line of buy and holders". another lady mentioned that "even the white house is watching". i dont know if she meant that the white house could do something about it or that it gave her confidence. i could have sat down to gleen more info but didnt.

[tommyt]

government watching is like the following from todays SF Chronicle: "Did the stock mkt rattle your cage?" response: My family members who deal in stocks are definately rattled, a huge loss. But as I told them, stocks are a risky business...I invest in mutual funds.

[Tokyo]

conversed with some middle aged ladies at lunch yesterday

they were a buzzin about the "dow"

one of he ladies mentioned that she was in it for the long term with spx followinf mutual fund but had been holding off on new contribution and made a big add monday. she mentioned that she got greedy trying to time the market. she comes from a "long line of buy and holders".

another lady mentioned that "even the white house is watching". i dont know if she meant that the white house could do something about it or that it gave her confidence. i could have sat down to gleen more info but didnt.

This is something I have got last night from one of FX commentary company

FOREX: White House & Treasury Watching Markets
Traders note that the White House and Treasury are watching the markets after the DJIA closed over 400 pts lower. The White House spokesman stated earlier this afternoon that the US economy is fundamentally sound. Dow Jones reports that the Treasury is continuing its monitoring of the markets, as it regularly does. Traders now wonder if talk of the Plunge Protection Team will re-emerge with reports late last year that Treasury Paulson has re-assembled a market watching team that meets quite regularly. Buzz words are already circulating in Asia with traders looking for stories of margin calls and hedge fund losses to emerge. Only last week, the press reported that margin debt hi a record $285.6 bln in January and the highest since March 2000 before a two-year stock decline. This has only added to market angst.



also some commentary about yesterday's market
>>The end of Goldilocks comes by Bears winning back their house. So today brought what was expected by the doomsayers - 1) A JPY carry unwind; 2) Equity correction; 3) Spread widening. The risk reduction across all markets was notable and it came with real volatility. The trigger for today has been blamed on talk of a Chinese capital gains tax, discussion of by the IMF head economist of JPY carry risks, the continued saber rattling from the US at Iran and the bleeding of bad news about US sub-prime mortgages.

The news of a weaker durable goods from the US sealed the fate of a market ready to switch assets. US Bonds beat equities and beat lesser credits. Any port in a storm is the theory - but the practice proves that some places have shallow coves and are still dangerous - witness the drop in Gold and the drop in oil - both viewed as alternative currencies.

The other point about today is that this isn't May 2006 - but something entirely different. May 2006 was started by a 3 pronged attack on taking away liquidity from the world by BOJ, ECB and the FED. While today we have the US market pricing in more rate cuts. BOJ has been viewed as 50 bps and done and ECB is similarly expected to hike in March and go away - so its not about liquidity but something else.

That something else is the fine balance of growth and inflation - the higher US CPI and the weaker US data has a nasty mix and its been reflected in ABX and the like today and for the month - leaving open the worry that we are near the end of Goldilocks.

But is she really dead today? The arguments for keeping optimistic after a day with 98% of S&P500 down with US shares off 3-4% and EM shares down 5-10% is difficult if not delusional. We will get a lot more data ahead that could whipsaw the negative view of the US in 1Q and beyond - causing some whipsaw in rate outlooks. We could also get some real intervention from Asia to support their markets - as they have a history of not liking volatile markets it seems probable that the pain in Asian shares has some floor - albeit lower than last night.

Finally, the Greenspan put from the 90s is assumed widely to be repeated by Bernanke - and the moves today in rates support that. For the USD lower rates, higher inflation should lead to USD weakness but the most astonishing story today was that the pain for the USD came in JPY and a bit of CHF and not in EUR or GBP or in other places where growth and rates remain attractive. So as the market moves from February to March - which clearly is set to come in as a Lion - the question is whether there is a lamb anywhere to be found let alone a sleeping girl in a Bear's cabin. Seems clear that JPY 115 won't be as easy as 118 was today to break over the next few days. Further, EUR 1.3250 seems cheap in comparison as the EUR/JPY has pulled back from 159.50 to 156.30. The best anecdote for a bad carry day is going long those that have plenty of cash - following that its all about CHF and SEK as we enter the darker den of a new month with mixed metaphors and a very queasy stomach.