Tuesday Outlook: Commodities, Emerging Markets

<< Return to page 1 - Take a Load Off Fannie

“Take a load off, Fannie
Take a load for free
Take a load off, Fannie
And you put the load right on me”

- from 'The Weight' by The Band

Every week is interesting but this week is definitely more interesting than others. The “buy banks, sell commodities” theme is getting long in the tooth fast, to my thinking. I understand the hot money crowd [trading desks and hedge funds] need to have something to do and trade. I don’t blame them. But even the government can only take things so far.

Many investors were wiped-out yesterday and they’re ticked-off. Smaller banks and pension plans, for example, were in the unhappy camp. This article in the International Herald Tribune spells out the compensation the departing CEOs of FNM and FRE are “scheduled” to make. If that happens, expect a riot somewhere.

My usual chant “the week’s not over” used in concert with our common use of “weekly” charts takes on added significance now. Let’s see what happens.

Have a pleasant day.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: XLP, UGE, XLV, RXL, XLU, SDP, IEF, TLT, UUP, FXE, DRR, GLD, DZZ, USO, UNG, XLE, DBC, DEE, EFA, EFU, EEM, EEV and FXI.

Comments

[gabe borens...:]

Let's set the record straight.The Primary beneficiary of the Treasury's "rescue " plan was and is the "little guy".
It is because of the existance of the FRE and the FNM ,the little guy was able to obtain competitive mortgage rates.
In the current turmoil both agencies are responsible for up to 80% of the mortgage market acitivity.
The direct take over of the agencies has neutralized self serving and distorted rumors about the financial viability of both agencies clearly disseminated by the record shorts (including hedge funds).
The distortions had a turbulent effect on the rest of the financial sector as well.
With the Treasury's action both agencies have gained an implicit AAA rating .Th e speculators were put on notice that the U.S will not allow a sequential systemic failure which could result in the global economic implosion.All of this becausesome mega shorts had an ability to ferment market disturbances based on the myths and distortions.
With this action ,"bears" will have to move on and will likely try to victimize another sector.
In the period ahead the existance of the "new" agencies will inject stability into financial sector and broader economy as well.
We are in the process of consolidation on the way to a major rebound.
The Treasury's message is loud and clear- it will accomodate the necessary "tranquility".
Some will claim that the share holders are the real victims -at this price level not so.
The share holders have a one dollar call option on the success of the restructured agencies(without expiration date).
It had taken years to create this upheaval(I have warned against it as early as June of 2005).To allow another month or so to resolve the issues is not a crime .
Rebounding econmy will take care of the housing and the market issues.
I think we had enough of the paranoia.
The Treasury is wrong when it intervenes and is wrong when it does not-enough of this nonsense.

2008 Sep 09 07:06 AM

[Scared Stiff:]

Gabe:
Who says the government is wrong when it doesn't pick winners and losers in our free market? Which of the so called rumors was false? Who says the shareholders are the victims, when it was they who made the decision to buy into the company? You're suggestion that the little guy is the beneficiary here is also laughable... society in general certainly doesn't benefit from a bunch of unqualified home buyers bidding up prices with phony money, and then end up losing pretty much everything. I think you need to turn off CNBC and tune into reality.

2008 Sep 09 07:26 AM

[Internet2k4:]

A (my) less charitable view is that covering the wall of the Bernanke/Paulson "war room" is a big sign saying "IT'S THE ELECTION, STUPID!" We've had a housing bubble, and prices are still much higher than they should be. Stops will be pulled as necessary to prevent the voters from worrying too much before November 4th, after which a new game with new players. In the meantime, this administration goes out leaving its successor with more fiscal deficit, no money for national infrastructure and energy efficiency, no money to retool and recruit the sand-clogged military, and everybody in America is living in a "social housing" project under a Chinese-model as well as Chinese-backstopped market. All to keep Case-Schiller from falling to a convincing bottom. Re financials, I recall this time last year when the market was saying, "we'll have to wait for year-end accounting to get a straight story on all that paper. We still don't, and I'm not so sure we'll have the story yet by Inauguration Day. My limit order for more SKF triggered yesterday morning.

2008 Sep 09 07:45 AM

[Sidj:]

We'll see how the markets behave after the election. Or looking forward how they behave in '09. Post elections years don't have a very good track record.

2008 Sep 09 08:33 AM

[Chuck:]

Gosh, I LOVE that song...

I pulled into Nazareth, was feelin' 'bout half past dead
I just need some place where I can lay my head
"Hey, mister, can you tell me where a man might find a bed?"
He just grinned and shook my hand, and "No" was all he said

Take a load off Fanny
Take a load for free
Take a load off Fanny
And (and) (and) you can put the load right on me

Picked up my bag, went lookin' for a place to hide
When I saw Carmen and the Devil walkin' side by side
I said, "Hey, Carmen, come on, let's go downtown"
She said, "I gotta go, but m'friend can stick around"

Take a load off Fanny
Take a load for free
Take a load off Fanny
And (and) (and) you can put the load right on me

Go down, Miss Moses, there's nothin' you can say
It's just old Luke, and Luke's waitin' on the Judgement Day
"Well Luke, my friend, what about young Anna Lee?"
He said, "Do me a favour, son, won't you stay an' keep Anna Lee company?"

Take a load off Fanny
Take a load for free
Take a load off Fanny
And (and) (and) you can put the load right on me

Crazy Chester followed me, and he caught me in the fog
He said, "I will fix your rack, if you'll take Jack, my dog"
I said, "Wait a minute, Chester, I'm a peaceful man"
He said, "That's OK, just feed him when you can"

Take a load off Fanny
Take a load for free
Take a load off Fanny
And (and) (and) you can put the load right on me

Catch a cannon ball now, to take me down the line
My bag is sinking low and I do believe it's time
To get back to Miss Fanny, you know she's the only one
Who sent me here with her regards for everyone

Take a load off Fanny
Take a load for free
Take a load off Fanny
And (and) (and) you can put the load right on me

- Travis, The Weight

2008 Sep 09 08:57 AM

[David Fry:]

Yeah......Well, I'm told I got the wrong band. I Googled they lyrics which I remembered and that's what came up. I was definitely around in 1968 for the Weight but can't remember if they were a one hit wonder or not. I've had more comments about this than anything else. Anyway, the lyrics make the point.

2008 Sep 09 09:23 AM

[selene:]

The song is called "The Weight." The band is called "The Band." What's the controversy? I thought everyone over 40 knew this.

2008 Sep 09 09:47 AM

[selene:]

Wait, are you saying you don't know who The Band was? Oh man, get thee to the Google! :-)

2008 Sep 09 09:47 AM

[User 143705:]

cut the crap....talk plain to us.....we dont care that ur cute

2008 Sep 09 10:07 AM

[sacking:]

Thanks for the lyrics. Please don't tell me you thought the name of the group was The Weight. Thanks for the charts.

2008 Sep 09 11:23 AM

[pchris:]

User 143705: cut the crap....talk plain to us.....we dont care that ur cute ..

Back at you. Practice what you post. Spare us the juvenile comments.

2008 Sep 09 11:23 AM

[Internet2k4:]

The Band also did "The Night They Drove Ol' Dixie Down"

Well I don't mind choppin' wood,
and I don't care if the money's no good
Ya take what ya need and ya leave the rest
They never should have taken the very best

2008 Sep 09 11:48 AM

[OldLimey:]

Tha Band were good backing Dylan and great on their own, but Joan Baez did the best version of "The Night They Drove Ol' Dixie Down". Something about that plaintiff voice of hers just makes you think about....the markets.

2008 Sep 09 02:38 PM

[WorldWatching:]

Love the Charts and comments Dave, please keep it coming!

Just something I heard driving home yesterday from an analyst interviewed on NPR; he said Fanny and/or Freddie (one or the other... or both) handle loans of our $ coming back from China. I wonder what would have happened if we let those two fail.

2008 Sep 09 04:33 PM

[Enginir:]

Levon Helm was the drummer and lead singer for The Band. I remember when my father, Bob Evans, hired him and his sister on washtub bass to play for some of the local Miss America preliminary contests. They were from Marvel, Arkansas.

2008 Sep 09 04:49 PM