***Official*** 2008 Stock Market Thread

[ponyo]

Bought additional shares of CarMax at $15.75. Now holding 4k shares and growing. I plan on adding more shares but now I'm going to pick up trading positions and trade around my core.

 

[Engineer]

RBS warns of global stock market and credit market crash.....(stagflation anyone?)

RBS issues global stock and credit crash alert

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 12:19am BST 19/06/2008

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

RBS issues global stock and credit crash alert
RBS warning: Be prepared for a 'nasty' period

Such a slide on world bourses would amount to one of the worst bear markets over the last century.
# RBS alert: Quotes from the report
# Fund managers react to RBS alert
# Support for the euro is in doubt

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.
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"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.
# Morgan Stanley warns of catastrophe
# More comment and analysis from the Telegraph

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

 

[ponyo]

Originally posted by: Engineer
RBS warns of global stock market and credit market crash.....(stagflation anyone?)

RBS issues global stock and credit crash alert

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 12:19am BST 19/06/2008

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

RBS issues global stock and credit crash alert
RBS warning: Be prepared for a 'nasty' period

Such a slide on world bourses would amount to one of the worst bear markets over the last century.
# RBS alert: Quotes from the report
# Fund managers react to RBS alert
# Support for the euro is in doubt

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.
advertisement

"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.
# Morgan Stanley warns of catastrophe
# More comment and analysis from the Telegraph

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

Yeah I've read that article and also made a note of it. I'm also disturbed by this chart.
It's the chart showing the banking index and the S&P 500. As the saying goes, "As go the piggies, so goes the poke." Either the banking index needs to rally to catch up with the S&P or S&P is going to get a major haircut to catchup with the banks. If the S&P decides to play catchup with the banks, you're looking at ~20% decline in the S&P which would put it around 1050-1080 range which is where the RBS bank research team is warning the S&P 500 index could fall to. I'm telling you all these guys look at and follow charts.

 

[Ricochet]

What a great start of the morning. The DOW dips below 12k.

 

[alphatarget1]

I'm getting ready to load up on some BAC...

 

[imported_Lothar]

Increased stake in KFT again at $29.19
KFT has surpassed UNP and is now the 4th biggest holding. I'm done purchasing shares in KFT.

 

[imported_Lothar]

Originally posted by: alphatarget1
I'm getting ready to load up on some BAC...

Hehe...Thought you wanted to load up on WB.
What changed your mind?

 

[alphatarget1]

Originally posted by: Lothar

Originally posted by: alphatarget1
I'm getting ready to load up on some BAC...

Hehe...Thought you wanted to load up on WB.
What changed your mind?

I did end up buying a little bit of WB. Bad decision, I know. Only a little bit of money though (100 shares). I bought some BAC at 35.50 and I'll try to get in at about 26.

Banks like BAC and WFC are still making money. I'm not entirely worried about their long term prospects. Even if BAC cuts their dividend it'll still be better than saving money in my HSBC online savings.

I'm thinking of loading up on some VEU (Vanguard All World Ex-US ETF) once my CD matures, what do y'all think? I'll just be sitting tight after these next 2 buys.

 

[Slew Foot]

Does anyone remember the chart that showed how the S&P lags the homebuilder confidence by 6 months or so? it seems like the S&P has held up pretty well against it for now, maybe its due for a plunge.

Told you to sell in May

edit: Here it is, kinda

 

[freegeeks]

I just sold a Turbo short position on Brent oil, took a 70% profit
I have another Turbo short running on Eurostoxx 50 index which is up 9% today

I'm getting hit big time on financials, Fortis and KBC went down big today on Euronext. I already lost 25% on Fortis

 

[imported_Lothar]

Originally posted by: alphatarget1

Originally posted by: Lothar

Originally posted by: alphatarget1
I'm getting ready to load up on some BAC...

Hehe...Thought you wanted to load up on WB.
What changed your mind?

I did end up buying a little bit of WB. Bad decision, I know. Only a little bit of money though (100 shares). I bought some BAC at 35.50 and I'll try to get in at about 26.

Banks like BAC and WFC are still making money. I'm not entirely worried about their long term prospects. Even if BAC cuts their dividend it'll still be better than saving money in my HSBC online savings.

I'm thinking of loading up on some VEU (Vanguard All World Ex-US ETF) once my CD matures, what do y'all think? I'll just be sitting tight after these next 2 buys.

Any thoughts of me purchasing BAC has been put on ice for me till July at least when they usually announce their dividend increases.
Let them announce their dividend cut first. Let them close their CFC acquisition first. Let the current shareholders get diluted first.

Though, I heard their investment banking division did one hell of a job in Q2.

Cash is king in this market.
Buying an "All world except US" fund certainly isn't going to save you.

 

[Engineer]

Market sucks ass today.

On a side note, has any president ever finished an 8 year term and left ALL of the major indicies lower than when he came into office (S&P and Nasdaq are below the day Bush took office with the Dow just over 1,000+ above his first day in office). The reason I ask is that historical data suggests that the final two years of almost every president has been far more positive for the market than the first two years of each term. For this to happen would require one hell of a rally...and I just don't see it.

 

[alphatarget1]

Originally posted by: Lothar

Originally posted by: alphatarget1

Originally posted by: Lothar

Originally posted by: alphatarget1
I'm getting ready to load up on some BAC...

Hehe...Thought you wanted to load up on WB.
What changed your mind?

I did end up buying a little bit of WB. Bad decision, I know. Only a little bit of money though (100 shares). I bought some BAC at 35.50 and I'll try to get in at about 26.

Banks like BAC and WFC are still making money. I'm not entirely worried about their long term prospects. Even if BAC cuts their dividend it'll still be better than saving money in my HSBC online savings.

I'm thinking of loading up on some VEU (Vanguard All World Ex-US ETF) once my CD matures, what do y'all think? I'll just be sitting tight after these next 2 buys.

Any thoughts of me purchasing BAC has been put on ice for me till July at least when they usually announce their dividend increases.
Let them announce their dividend cut first. Let them close their CFC acquisition first. Let the current shareholders get diluted first.

Though, I heard their investment banking division did one hell of a job in Q2.

Cash is king in this market.
Buying an "All world except US" fund certainly isn't going to save you.

BAC's chief said the big dividend is safe. I could see them cut a little bit of it but it'll still be a ridiculously high dividend. Will BAC need new capital? I just don't really know if the current downward tread is really based on fundamentals or just irrational fear. I'd think that there will be more write downs in the future, but is it really that grim?

Didn't Warren Buffet buy WFC at 30 dollars a share? well it's like 24 a share now

 

[imported_Lothar]

Originally posted by: alphatarget1

Originally posted by: Lothar

Originally posted by: alphatarget1

Originally posted by: Lothar

Originally posted by: alphatarget1
I'm getting ready to load up on some BAC...

Hehe...Thought you wanted to load up on WB.
What changed your mind?

I did end up buying a little bit of WB. Bad decision, I know. Only a little bit of money though (100 shares). I bought some BAC at 35.50 and I'll try to get in at about 26.

Banks like BAC and WFC are still making money. I'm not entirely worried about their long term prospects. Even if BAC cuts their dividend it'll still be better than saving money in my HSBC online savings.

I'm thinking of loading up on some VEU (Vanguard All World Ex-US ETF) once my CD matures, what do y'all think? I'll just be sitting tight after these next 2 buys.

Any thoughts of me purchasing BAC has been put on ice for me till July at least when they usually announce their dividend increases.
Let them announce their dividend cut first. Let them close their CFC acquisition first. Let the current shareholders get diluted first.

Though, I heard their investment banking division did one hell of a job in Q2.

Cash is king in this market.
Buying an "All world except US" fund certainly isn't going to save you.

BAC's chief said the big dividend is safe. I could see them cut a little bit of it but it'll still be a ridiculously high dividend. Will BAC need new capital? I just don't really know if the current downward tread is really based on fundamentals or just irrational fear. I'd think that there will be more write downs in the future, but is it really that grim?

Didn't Warren Buffet buy WFC at 30 dollars a share? well it's like 24 a share now

No, he didn't.
http://www.bloomberg.com/apps/...chive&sid=aNsHhuJECMUY

I don't think BAC needs capital yet. If they do, they can always sell their stake in China Construction Bank.

If you add the Countrywide write downs they might have to do after the acquisition, it *might* be grim. Hopefully this credit/housing slump won't last past 2009.
Without Countrywide, BAC is the perfect bank.

Yes, but Warren Buffett also bought WFC when it was trading at $3/share in 1991.
His cost/share basis is still a LOT lower than yours.

 

[Azurik]

You can write this one for the history books, I am shorting oil. $10k worth.

 

[Engineer]

Originally posted by: Azurik
You can write this one for the history books, I am shorting oil. $10k worth.

:shocked:

 

[OS]

Originally posted by: Azurik
You can write this one for the history books, I am shorting oil. $10k worth.

:shocked:

you got some fucking huge ass balls to try that before a fed whoring out meeting, if they cut another anything at all, that is gonna get ugly.

 

[her209]

Holy Molly

:shocked:

 

[Slew Foot]

I dont think it's a bad play if your look at it on a year or so long term basis. The fed absolutely cannot lower rates anymore, especially with Europe starting to raise. I dont think the US will raise anything, but theyll probably stay flat for a while. Id be shorting oil too right now, but I think shorting consumer discretionary is much easier.

 

[Azurik]

Originally posted by: OS

Originally posted by: Azurik
You can write this one for the history books, I am shorting oil. $10k worth.

:shocked:

you got some fucking huge ass balls to try that before a fed whoring out meeting, if they cut another anything at all, that is gonna get ugly.

They won't cut, that's a guarantee in a market with no guarentees. Wall St. actually feared that the interest rate might RISE, but this past week this notion has been pretty much squashed. The market is betting with almost a near certainity that rates will remain unchanged.

I think the fair market value of oil should be around $85-$95. The difference between FMV and the price now is speculation IMHO. Oil was $55 in January '07 - I think some of you guys don't realize what a jump it has gone through in a year and a half. Yes, a lot of it has to do with the fact that oil is pegged to the dollar and we've had a weak dollar policy lately. One could also throw in the growing demand of China/India. But there is plenty of speculative money in oil futures, and in my wild guess, we're about $30-$40 overpriced. When a correction does happen, they tend to over correct.

I don't time market specifically (case in point with my buying in GE), but I go with the information that's out there and I really believe oil is in a bubble right now. I don't mean to toot my own horn, but I called China was in a bubble well before it popped, when it was still steam rolling ahead. I didn't short China at the time - I'll short oil now though. Timing might not be exact, and we may very well see $250 oil sometime in the future... but the market is pricing oil futures like we'll see $250 oil this year rather than some significant time ahead.

The fed is stuck between a rock and a hard place. Mr. Inflation is rearing its ugly head and helicopter Bernanke will surely bring this topic up tomorrow after they announce their decision. If they need to curb inflation, which they will... one can expect rates to rise as early as October. If rates rise, dollar will strengthen. That will shave a few dollars off a barrel of oil. It only takes one minor swing in momentum before all the speculators dump and the black gold back to a more realistic level.

 

[hiromizu]

What's your stance on gold and other precious metals?

 

[ponyo]

Originally posted by: Azurik

Originally posted by: OS

Originally posted by: Azurik
You can write this one for the history books, I am shorting oil. $10k worth.

:shocked:

you got some fucking huge ass balls to try that before a fed whoring out meeting, if they cut another anything at all, that is gonna get ugly.

They won't cut, that's a guarantee in a market with no guarentees. Wall St. actually feared that the interest rate might RISE, but this past week this notion has been pretty much squashed. The market is betting with almost a near certainity that rates will remain unchanged.

I think the fair market value of oil should be around $85-$95. The difference between FMV and the price now is speculation IMHO. Oil was $55 in January '07 - I think some of you guys don't realize what a jump it has gone through in a year and a half. Yes, a lot of it has to do with the fact that oil is pegged to the dollar and we've had a weak dollar policy lately. One could also throw in the growing demand of China/India. But there is plenty of speculative money in oil futures, and in my wild guess, we're about $30-$40 overpriced. When a correction does happen, they tend to over correct.

I don't time market specifically (case in point with my buying in GE), but I go with the information that's out there and I really believe oil is in a bubble right now. I don't mean to toot my own horn, but I called China was in a bubble well before it popped, when it was still steam rolling ahead. I didn't short China at the time - I'll short oil now though. Timing might not be exact, and we may very well see $250 oil sometime in the future... but the market is pricing oil futures like we'll see $250 oil this year rather than some significant time ahead.

You think China bubble was some kind of secret? :laugh: I bet you're the only one who saw the housing bubble too. :laugh:

Bubbles usually end at 5x. Oil is 4x right now. 5x gives $200.

I think China is interesting again. I would go long China now.

What vehicle are you using to short oil?

 

[Azurik]

Originally posted by: Naustica

Originally posted by: Azurik

Originally posted by: OS

Originally posted by: Azurik
You can write this one for the history books, I am shorting oil. $10k worth.

:shocked:

you got some fucking huge ass balls to try that before a fed whoring out meeting, if they cut another anything at all, that is gonna get ugly.

They won't cut, that's a guarantee in a market with no guarentees. Wall St. actually feared that the interest rate might RISE, but this past week this notion has been pretty much squashed. The market is betting with almost a near certainity that rates will remain unchanged.

I think the fair market value of oil should be around $85-$95. The difference between FMV and the price now is speculation IMHO. Oil was $55 in January '07 - I think some of you guys don't realize what a jump it has gone through in a year and a half. Yes, a lot of it has to do with the fact that oil is pegged to the dollar and we've had a weak dollar policy lately. One could also throw in the growing demand of China/India. But there is plenty of speculative money in oil futures, and in my wild guess, we're about $30-$40 overpriced. When a correction does happen, they tend to over correct.

I don't time market specifically (case in point with my buying in GE), but I go with the information that's out there and I really believe oil is in a bubble right now. I don't mean to toot my own horn, but I called China was in a bubble well before it popped, when it was still steam rolling ahead. I didn't short China at the time - I'll short oil now though. Timing might not be exact, and we may very well see $250 oil sometime in the future... but the market is pricing oil futures like we'll see $250 oil this year rather than some significant time ahead.

You think China bubble was some kind of secret? :laugh: I bet you're the only one who saw the housing bubble too. :laugh:

Bubbles usually end at 5x. Oil is 4x right now. 5x gives $200.

I think China is interesting again. I would go long China now.

What vehicle are you using to short oil?

It wasn't some big secret, but it was one of those that I nailed well before calling China a bubble was a fashion statement. There's a thread somewhere in FW with the marked date of my posting.

I'm using the United States Oil Fund (USO) on AMEX to short it. Price was around $111 or so today.

 

[Slew Foot]

Originally posted by: Azurik


I'm using the United States Oil Fund (USO) on AMEX to short it. Price was around $111 or so today.

Some earlier posts in this thread

Originally posted by: Naustica
Tried to put an order in to short USO. Got denied. Apparently there are no shares available to short at my brokerage. Everyone must be on the short oil bandwagon.

Originally posted by: Slew Foot
hmmm, maybe a good time to look into some leap puts on USO.

 

[Azurik]

Originally posted by: Azurik

The fed is stuck between a rock and a hard place. Mr. Inflation is rearing its ugly head and helicopter Bernanke will surely bring this topic up tomorrow after they announce their decision. If they need to curb inflation, which they will... one can expect rates to rise as early as October.

From this morning's article: Fed talking tough on the threat of inflation

"The Fed is caught between a rock and a hard place," said Sung Won Sohn, an economics professor at California State University. "The economy seems to be slipping into a recession at the same time that inflation is getting worse."

See, I'm already an news reporter. They scour my post to write things the next morning

In other events, I locked in my rate on a 30-year fixed house at 6.375%. Meh, my gamble didn't pay off, could have locked at 5.875% before the surge in bond yields. Enough of hoping MBS will rally... I'm on the stock cheerleader side now that it's done and over with!