David Zanoni

Options Trader Friday Outlook: Up, Up and Away

I don't think your end of the world sentiment is reality. Many economic indicators are improving, although slowly. We're past the armegedon stage.


On Sep 11 10:45 AM Warm_Paw wrote:

> I'm of the opinion we'd be in free fall right now if the public was
> allowed to know the truth. Delinquincies are easing only because
> mortgage resets are easing. Next summer will be the next wave of
> downturn as Option ARMS reset at a pace close to the sub prime resets
> we've just worked through.
> Banks have been allowed some accounting rule changes which don't
> truly reflect where they really are.
> When mortgages were lent, the banks booked real time value on mortgage
> backed securities that weren't really of the quality the banks were
> lead to believe. With each foreclosure, banks are learning what exactly
> their mbs is really worth.The banks haven't had to show the public
> what their market value is at this point. They're still showing book
> value as if the foreclosures were a non event. Like someone soon
> will repurchase the property and pay the outstanding mortgage, giving
> value back to their mbs. Banks would like to write off losses if
> they could only realize them. As each foreclosure occurs, the bank
> truly holds less money. It would be interesting to know where the
> banks are in losses. The part that closes the bank is the fact they
> need X amount of capitalization to what they lend the public.
> If we learned what their losses were, they'd have to find cash to
> recapitalize and there's nowhere to find that cash. Everyone else
> is hurting too. The Fed won't have enough to give again.
> Fractional Reserve Banking reuses money deposited so banks usually
> actually own probably 1/5 of the actual dollars they circulate.<br/>The
> FDIC is almost broke so the depositor is going to get a 1929 feel
> to this downturn.
> America is out of gas and if manic efforts to rally this market fail
> - it's going to be a fire sale to people who have no money.
> Ironic how the whole house of cards is built on faith and the value
> of anything is only what someone else will pay for it at any given
> moment.
> If people knew the truth not only would they not invest, they'd keep
> deposits to a minnimum.
> I pick September 17 2009 as the day someone points out the emporer
> isn't wearing any clothes.
> It's the beginning of the next wave of resets.

Four Reasons We're Headed Even Higher

I believe that Jason is correct. It looks like he can "C" where things are going. All of these naysayers have been talking negative during one of the best stock market rallies of all time. If you are investing for the long term (10-20 years out) you will make money even if you get in the market right now. If you are a short term trader, then trade on technical analysis. Right now the trend is up.