Tuesday, November 18, 2008

Did you know?

Giclee Print
by Minrong Wu
item #: 11729067A

I find that Bloomberg has consistently high quality interviews. Many are thought provoking--perhaps it is because they are (1) an alternative to the opinions of the guest speakers on CNBC and (2) the length of time to express those opinions is considerable longer. I think that you'll enjoy this video by Philip Manduca at ECU Group. It's a UK interview, and I found Manduca to be very clear in his opinion. Because his fund takes debt and dominates it in different currencies, he is focused on relative valuation of currencies. If you have 15 minutes or so, I think that you'll find the interview interesting, and give you some points for consideration as you consider how to navigate the upcoming horizon. You can find it here.

New Levered ETF's. There are some new ways to both make and lose money and warp speed. It is through the Direxion ETF's that were recently launched. Below is a table with the new funds. These funds have already become very popular with BGU trading just north of 5M shares yesterday.

As you might imagine, these funds in these markets are quite volatile. Here is FAZ the Financial Bear fund:

And, if you are a Buffeteer on his money making ship, then you have been called to task in bailing the water that the ship has taken on:

The CDS spreads on Bershire debt have widened considerably. This stock has lost almost one third of its value.


nice said...

There is an inability of the bears to break the market to new lows whenever we trade NEAR new lows -

Given the dire news, the market once it breaks to a low - should just start running lower - but instead we pull back.

IMO , in effect everyone is trading for a bottom - with the shorts getting smarter and covering after every 2% drop and covering.

This kind of action is bad for long term investors because the moves down lately have been grinding type moves - slow water torture wealth destruction

Nasdaq in particular has been hard hit - down 20% since Nov 4th

XLF near 11 here is at a trend line channel... be interesting to see how this plays out from here the rest of options week.


nice said...


With C at 6 and change here - what has not been discounted into it?


Leisa said...

Would it be the "B" word?

Very dreary action. BAC hit hard too.

nice said...

Leisa here's the thing...

Paulson has gone on record publicly the past week saying multiple times - 'the financial system is saved'.

Now, either he is telling the truth - or he is lying.

I can't really imagine he would go on public record with such a definitive and important statement as this if it was not true.

The only reason he would lie would be because something very very very serious is wrong - and they are worried about civil disorder.
(recall during the '29 Crash the government and bankers essentially lied to the public - ie: kept saying the worst was over)

Bought a little UYG in the spec account..

(I do have concerns about these ultrashorts/ultralongs - given the derivative nature of a lot of them - and also the companies behind them - some of which are in capital trouble ... so I keep these leveraged positions small and only hold them for a short period of time)

Also Hedged the long term account (which is 10% long) yesterday as all trend indicators were pointing back down again...

Obviously they have been playing the market lower this options week - with the Dow down near 1000 points in 3 days...

Also noticed how they are using the Futures on the open - to pull in short coverers (by dropping them and opening the market flat)

Tomorrow should be interesting - typical play would be either a reversal up on the open - or to crash it lower and cover it in the 2nd half of the day...

Personally I'd prefer to see the money stop flooding into bonds before getting to enthusiastic about stocks...
(Recall in Japan during the 1990's lost decade... that all the traders did month after month - was to short the indices on every pop - and keep most money in government bills or the post office)

And by now of course Bill Cara & Don Coxe et al realize that back in Sept - deflation was the correct call - not reflation ...

It remains to be seen whether at some point all the money stashed away will move out into riskier assets once again and reflate things one last time before the K'Wave deflationary cycle hits us down hard in force later in 2010...

I hope that we see DOW 5000 later rather than sooner...

good luck..