19 replies to this topic

[ogm]

Aug 15th is the cut of date for many Hedge Funds withdrawals. Like Goldman's Global Alpha for example. Apparently the selling pressure comes from these funds unwinding leverage and liquidating their positions in stocks , since they are most liquid assets ( if you can't seel what you want.. sell what you can thing) So we have 2 days for the last people to panic here and put liquidating pressure on the funds. After that we have OPEX. Depending on how the market holds up next 2 days, a lot of puts expire in the money. If that is the case, there may be additional pressure into opex based on delta hedging. And then there will be a massive relief in selling pressure, the internals will start repairing and preparing for the next rally. I don't think this week is critical. The damage may be done, but it will be a washout kind of damage. Overall market should be stuck in a wide range for several weeks, maybe even month here, with upward bias into the end of the year. If there will be panic type selling this week, it will be a great opportunity to pick up some nice stuff.

[eminimee]

...or we just absolutely rocket out of the gate and will be hard to even get long .....no need to raise cash if confidence is restored.... If this market gets back above 1500 and news media starts all the sweet talk again.....well....you know the story... ....

[relax]

exactly tp so many negative stories at the moment - what will shorts do when negative stories dry up

[nicolasillo]

exactly tp

so many negative stories at the moment - what will shorts do when negative stories dry up

Do you really think that negative stories will dry up so easily? It seems that you and teaparty think of the current situation as a simple one. Do you know how many funds and banks are involved? Do you know why they do not come out to say that they have problems? Because they cannot do it each one at a time.....that would be giving too much info to competitors about their accounts......Do you really think that everything will be solved so quickly and the market will head upwards again? In 1998 it was only one company....now there are so so many, and the fact that there is this uncertainty about how many banks, funds are involved and how big is the loss..this is what makes it even worse. Maybe it would be better if they all came out and said what the real situation until then I believe, yes there will be rallies, but everybody will be scared that the next minute another bad story will come out. This is not 1998 in terms of the problem this is much worse. I can t believe that you take it so lightly and you think we are over with this correction.

[ogm]

exactly tp

so many negative stories at the moment - what will shorts do when negative stories dry up

Do you really think that negative stories will dry up so easily? It seems that you and teaparty think of the current situation as a simple one. Do you know how many funds and banks are involved? Do you know why they do not come out to say that they have problems? Because they cannot do it each one at a time.....that would be giving too much info to competitors about their accounts......Do you really think that everything will be solved so quickly and the market will head upwards again? In 1998 it was only one company....now there are so so many, and the fact that there is this uncertainty about how many banks, funds are involved and how big is the loss..this is what makes it even worse. Maybe it would be better if they all came out and said what the real situation until then I believe, yes there will be rallies, but everybody will be scared that the next minute another bad story will come out. This is not 1998 in terms of the problem this is much worse. I can t believe that you take it so lightly and you think we are over with this correction.

Nope, its all just overblown speculations about who may be involved and in what numbers.

Here are some numbers for you....

"Jerry Bowyer wrote yesterday about the "sub-prime mess". He notes that of the 44 million mortgages in America, 14% are sub-prime. Of those, 13% are currently at least one payment behind, however, the large majority of the late payers are still paying and many are working with lenders to restructure payments. The bottom line is that there are about 250,000 mortgages that moving to foreclosure. The total value of these loans is about 7 Billion Dollars. If these houses are worth 30% less than what is owed, the total money lost will be in the neighborhood of 2 Billion Dollars. Americans have net worth of $53 Trillion Dollars. The "total hit" will be in the neighborhood of .003% of value. "

OMG CRISIS !!!!

Lets be realistic here, lets say the numbers will get worse, but... The point is LENDERS will work with borrowers to get payments. LENDERS don't want foreclosures. All these charts about how many ARMS are scheduled to reset aren't worth dick, because payments and terms will be renegotiated 10 times before they will be foreclosing.

The situation isn't as dramatic as it sounds.

The biggest problem are the leveraged lenders who were buying the paper. Now that the market dropped the paper in price they exploded. Otherwise this whole thing isn't that big of a deal. Almost all of those leveraged lenders have been cleaned out by now. We have 100+ mortgage lenders out of business.

Edited by ogm, 12 August 2007 - 01:51 PM.

[nicolasillo]

Fair enough. We ll just have to wait and see then.
I ll hold you on that though

exactly tp

so many negative stories at the moment - what will shorts do when negative stories dry up

Do you really think that negative stories will dry up so easily? It seems that you and teaparty think of the current situation as a simple one. Do you know how many funds and banks are involved? Do you know why they do not come out to say that they have problems? Because they cannot do it each one at a time.....that would be giving too much info to competitors about their accounts......Do you really think that everything will be solved so quickly and the market will head upwards again? In 1998 it was only one company....now there are so so many, and the fact that there is this uncertainty about how many banks, funds are involved and how big is the loss..this is what makes it even worse. Maybe it would be better if they all came out and said what the real situation until then I believe, yes there will be rallies, but everybody will be scared that the next minute another bad story will come out. This is not 1998 in terms of the problem this is much worse. I can t believe that you take it so lightly and you think we are over with this correction.

Nope, its all just overblown speculations about who may be involved and in what numbers.

Here are some numbers for you....

"Jerry Bowyer wrote yesterday about the "sub-prime mess". He notes that of the 44 million mortgages in America, 14% are sub-prime. Of those, 13% are currently at least one payment behind, however, the large majority of the late payers are still paying and many are working with lenders to restructure payments. The bottom line is that there are about 250,000 mortgages that moving to foreclosure. The total value of these loans is about 7 Billion Dollars. If these houses are worth 30% less than what is owed, the total money lost will be in the neighborhood of 2 Billion Dollars. Americans have net worth of $53 Trillion Dollars. The "total hit" will be in the neighborhood of .003% of value. "

OMG CRISIS !!!!

[eminimee]

exactly tp

so many negative stories at the moment - what will shorts do when negative stories dry up

Do you really think that negative stories will dry up so easily? It seems that you and teaparty think of the current situation as a simple one. Do you know how many funds and banks are involved? Do you know why they do not come out to say that they have problems? Because they cannot do it each one at a time.....that would be giving too much info to competitors about their accounts......Do you really think that everything will be solved so quickly and the market will head upwards again? In 1998 it was only one company....now there are so so many, and the fact that there is this uncertainty about how many banks, funds are involved and how big is the loss..this is what makes it even worse. Maybe it would be better if they all came out and said what the real situation until then I believe, yes there will be rallies, but everybody will be scared that the next minute another bad story will come out. This is not 1998 in terms of the problem this is much worse. I can t believe that you take it so lightly and you think we are over with this correction.

I trade charts. period.

[relax]

poverty, scandals, crises etc have always existed what has definitely changed is the way the media focuses on it focusing on your charts therefore seems to be only way to deal with it otherwise you are basically trading the media's lust for stories

[ogm]

poverty, scandals, crises etc have always existed

what has definitely changed is the way the media focuses on it

focusing on your charts therefore seems to be only way to deal with it

otherwise you are basically trading the media's lust for stories

"Brian Wesbury wrote a nice piece for the Wall Street Journal yesterday. In it, he pointed out that while the over whelming majority of professional forecasters see no recession soon, the majority of Americans believe we are already in a recession. Indeed, the public is fed such a rich diet of gloom and doom by the media that they hold a negative bias about the state of the world. Even a majority of the 64% who say they have personally never been better off, say that the world is falling apart."

[Frac_Man]

Bravo !

exactly tp

so many negative stories at the moment - what will shorts do when negative stories dry up

Do you really think that negative stories will dry up so easily? It seems that you and teaparty think of the current situation as a simple one. Do you know how many funds and banks are involved? Do you know why they do not come out to say that they have problems? Because they cannot do it each one at a time.....that would be giving too much info to competitors about their accounts......Do you really think that everything will be solved so quickly and the market will head upwards again? In 1998 it was only one company....now there are so so many, and the fact that there is this uncertainty about how many banks, funds are involved and how big is the loss..this is what makes it even worse. Maybe it would be better if they all came out and said what the real situation until then I believe, yes there will be rallies, but everybody will be scared that the next minute another bad story will come out. This is not 1998 in terms of the problem this is much worse. I can t believe that you take it so lightly and you think we are over with this correction.

I trade charts. period.