We're against explaining broad market movements when we have no idea (and neither does anyone else),* which is sort of beside the point because, as cynical assholes, we're not here to give theories, we're here to shoot them down. Here are a couple that we can safely target--the alleged shortage of financial stocks to short and the idea that shorts have been massively covering.
Obviously, there has been a lot of talk that short sellers were having trouble locating stocks to short following the new emergency rule put in place by the SEC. This was allegedly causing the rates of rebates to change massively. Wrong, bitches (who thought that)! Wrong. All nineteen stocks on The List are still available and securities lending departments are having no problem borrowing.
There also doesn't seem to be a classic short-squeeze thing going on, with shorts scrambling to cover their positions. As of this morning, polled prime brokers were saying that there was virtually no covering of the Royal 19.
*That's not entirely true. There have been whispers that Jimmy Cayne promised to flash everyone if there was a sizable enough surge, but we weren't able to get confirmation and didn't want to start a rumor that would get anyone's hopes up. Believe it if you dare.
Posted by guest , Jul 17, 2008 5:15PM
Is it me or is the ass a primary focus today?
Posted by StMarc , Jul 17, 2008 5:15PM
Plunge Protection Team are GO!
M
Posted by guest , Jul 17, 2008 5:23PM
It's the quants. They are getting assfucked and it's causing this.
Posted by guest , Jul 17, 2008 5:25PM
I hate quants
Posted by Investorcluzo , Jul 17, 2008 5:25PM
it's called a dead cat bounce. beyond that, look at financials. aig, bac, jpm and c are all part of the dow. with those stocks jumping 20%, you were bound to see the market go up. seriously, they were way oversold. citi and bofa are not going away any time soon (that's right, you heard it here first). should wells fargo really have a larger market cap than citi (I think not)...and we haven't even started talking about the much maligned "short squeeze".
Posted by guest , Jul 17, 2008 5:27PM
cluzo- dead cat bounce is not an explanation.
Posted by guest , Jul 17, 2008 5:39PM
@5:27 Tell that to your mom.
Posted by guest , Jul 17, 2008 5:52PM
Look at the Russell 2000 Value vs the Russell 2000 Growth.
Posted by guest , Jul 17, 2008 6:05PM
WFC's earnings release is the most overrated, misrepresented announcement that has come out this year. I can't believe all of the financials got the benefit of their pile of crap they shoveled out there.
Take your credit losses you stupid bankers! enough already!
Posted by Investorcluzo , Jul 17, 2008 6:20PM
anyone see the price of oil lately? that tax, in the form of gasoline prices, is likely to fall with oil (or so the market hopes). as the general pop spends less filling up the suv or the soccer mom mini van, those additional dollars aren't going to the local indy mac bank - they're going to take that $hit to wal-mart.
@6:05 - agreed, let's extend the amount of days we consider "non-performing" so we don't have to take an earnings hit today. reminds me of the popeye cartoons: "for a hamburger today, I will give you..."
Posted by guest , Jul 17, 2008 6:54PM
More buyers than sellers. Full moon tomorrow, so don't get your hopes up for any normal kind of market.
Posted by guest , Jul 17, 2008 6:59PM
hedge fund regulation is on it's way.
can you imagine the average hedge fund being forced to run like a broker dealer?
lol
offshore you say? nah, even more regulation.
but you can keep investing in china. they had army tanks on the streets 20 years ago, so don't worry, your money is safe!
Posted by Joseph di Jersey City , Jul 17, 2008 10:03PM
I think it's oil going down and the typical tendency to extrapolate from the short term way into the future. Like most short term trading it's probably herd following based on noise.
Posted by onetwo , Jul 17, 2008 10:51PM
@ 605 - exactly! did you see my post?
@cluz - total bear trap. retail guys are getting fucked next week. I just want everyone to stop for a second and ask themselves "what's the BEST that can happen to the financial sector/economy?" reframe the question and the world's a lot scarier.
and im generally a bull.
Posted by NotNasser , Jul 17, 2008 10:59PM
The stock market has been taking a lot of hits, in large part because our system of corporate bankruptcies and re-organizations has become so seriously dysfunctional.
People are afraid of owning equity in businesses within finance corporations becauser those corporations so frequently and easily become the target of lawsuits by trustees or DiP on the slightest of pretexts -- consider the fall-out from Manhattan Investment Fund, or Refco, and the institutions that are targeted in such cases.
http://seclaw.blogspot.com/2008/04/bear-stearns-deloitte-sued-over-hedge.html
Anyway, the stock market swoon caused by such factors has reached its natural end. All the discounting that our dysfunctional bankruptcy courts require has been accomplished. So we've found a bottom of sorts.
That, and the imagery of the dead cat, suffice to explain recent developments. Keep the confetti in storage though.
Posted by guest , Jul 17, 2008 11:32PM
@onetwo,
Are you bullish or bearish...
http://www.investopedia.com/terms/b/beartrap.asp
Posted by guest , Jul 17, 2008 11:47PM
@notnasser -
good points.
i'd also like to add that financial companies are full of greedy savages being advised by fee hungry sharks from other financial firms and have ZERO compunction about doing a re-org dissolving all equity, and issuing all the important insiders tons of new equity in the new entity.
this is why i generally stay away from financial stocks and stick with the debt of these companies.
they usually can't hide from debt...
Posted by StMarc , Jul 18, 2008 9:32AM
First Baby Boomers born in 1946.
First Baby Boomers reach non-penalized SS retirement age of 66 in 2012. (Same year Mayan calendar ends. Coincidence? I think not. Mayan seers knew what assholes BB would be and redlined Universe in disgust.)
Until then - and for some time after until main "wave" of Boomers retires - markets can drop and correct all they want but will always start to recover (or at least regain equilibrium) because idiot Boomers keep pouring money into IRA's (mostly equity-fund MF) and 401(k)'s (mostly equity-fund MF or direct equities.) All that money has to go somewhere.
M
Posted by guest , Jul 18, 2008 1:27PM
Good news all!
Freddie only going to dilute 100%. Issue only going to be for $5 billion.
Definately well capitalized now.....or until next friday anywy.
Posted by guest , Jul 18, 2008 2:40PM
@ Not Nasser...the stock market swoon has reached its natural end? Isn't it still wildly overvalued? Wondering what you base your conclusions on.
Posted by guest , Jul 18, 2008 2:48PM
hi @9:32
babyboomers are also going to socialist democrat until their death now that they're reaching retirement age.
it's no coincidence that they all became republicans during their "peak" earning years so they could pay less taxes.
now they'll want more government cheese and free stuff so they'll vote accordingly.
Posted by NotNasser , Jul 19, 2008 12:26PM
guest @2:40
"Wondering what you base your conclusions on."
Like every great stock guru before me, like the South Sea experts before them and the 17th century tulip futures experts before them.
I guess.