Wednesday, October 08, 2008

Morning Post

When I closed my post last night I closed my post with the Nikkei being down 383. Looks like there was reinvigoration.

Our blog friend, Selden, dead but wise as ever instructs:
The great cause of loss in times of panic is the failure of the investor to keep enough of his capital in liquid form. (p. 71)


What is particularly unfortunate--and you may label me a conspiratorista (I still remember a commenter calling me a recessionista)--is that much of this demise comes from the wealth of average investors. I absolutely believe that there is no more destructive advice than to buy and hold. This is a zero sum game. Someone sold and locked in profits--it is not the Average American's portfolio that participated in that preservation of capita, preservation of profits. It's the most insidious type of wealth transfer that there is. And it is something that NO one talks about.

About face in the futures with the rate cut. Another interesting day ahead.

7 comments:

nice said...

The market is pretty unstable...

In many cases bids/asks are all over the place - some lower volume ETF's can't track properly and are swinging oddly (derivative's cant be priced?)

Selling was still the 1st instinct on today's news - longer term buyers need to show up now.

However still seems to be a major flight to treasuries - I'm thinking a lot of this fear has been designed and planned - to prevent a US dollar crisis (the stock market is the least of their worries)

In hindsight Bulls got caught in a major Bull Trap on Sep 19th when the bailout was announced...

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nice said...

Well Europe has gone home...

So if they can't bounce this thing over lunch or don't have some kind of 'prop' in - then someone is selling even over lunch - which means only one thing: more downside

Hey lets look on the bright side -
at least the rate cuts prevented the 10% drop we were probably headed for today...


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Leisa said...

It will be interesting to see how this fairs. I've not feeling one way or the other. It is ugly, and I'm grateful not to have been fully invested. Oil patch getting whumped again.

ninelinebind said...

Leisa, Tough slogging all around. I too am thankful to be in almost all cash. I have been travelling and hear great despair- on the other hand, however late to the party, many people I deal with are finally actually reading their brokerage statements and asking questions. The broker for them has seemed a somewhat mystical figure but has fallen from the pedestal they put him/her on. Maybe a little silver in the lining.:) BTW your photo is lovely. Regards, Ninelinebind

nice said...

Boy that DOW is weak...

Gonna take more than an oversold market or a speech from Paulson to turn things around...

You just knew we would close down - I mean Europe was down 5% on the close - so we faired better.

Problem is too many people already bought - and even with the massive jump in the 10 yr yield today - it was not enough to move money into stocks (except gold stocks)

The Bulls probably wonder what they got themselves into...

One trick I guess they could pull would be to ban all shorting and reinstate the uptick rule - because the financials are already taken to the cleaners - but there may be shorters in the other sectors now... or they could allow short selling - and entice people to short us even lower

Non PM metals didn't respond much to the rate cuts...

If we keep falling - by the time the bounce comes - it won't even be enough for those that bought the bull trap around the Bailout to get their money back...

The move up when it comes should be 180 points or so IMO

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nice said...

Huge Volumes on SPY and SSO

I think bid money is repositiong (one way or another) for some kind of trade regarding the removal/reinstatement of short selling tomorrow -

Next week is options week - take a look at the options on the QQQQ don't think I have ever seen it so one sided...

I'd really like to see the VIX close on the daily with a nice long upper tail

And also from a psychology standpoint I'd like to see all the people on all the different blogs stop trying to pick a bottom and all throw up their hands in the air and say 'I give Up'

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Leisa said...

Nice: I still think that gold's reaction has been modest--I see cross currents fear v. deflation. IN a deflationary environment, PM is not going to be so great. The metal to have is the one that has a trigger.

Nineline...thank you for your nice comment.

Sysin---Thanks for looking at my photos. The tomatoes were from my garden (though I was not canning them while shorting stocks), and it remains one of my favorite photos. I have a decided tree fetish. I find that Spring and Fall offer the best light for outdoor photos.