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While not a worrying issue at the moment, Fitch says the broad outlook for the U.S. banking...

While not a worrying issue at the moment, Fitch says the broad outlook for the U.S. banking industry could worsen "unless the eurozone debt crisis is resolved in a timely and orderly manner." This can't be the reason for the late day selloff?
Comments (12)
  • Oceanstats
    , contributor
    Comments (65) | Send Message
     
    yep, this broke at 3:01, so Fitch f'd me....SA didn't post til 3:43.
    16 Nov 2011, 03:46 PM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (557) | Send Message
     
    It's not even news. If this was enough to shake you out of a position ... :>)
    16 Nov 2011, 03:49 PM Reply Like
  • Tack
    , contributor
    Comments (14308) | Send Message
     
    What an insipidly meaningless statement. It's like saying if it rains, you'll get wet.

     

    I'm sure, however, they're idiots hanging on every breath from these ratings boobs.
    16 Nov 2011, 03:48 PM Reply Like
  • Michael Clark
    , contributor
    Comments (10183) | Send Message
     
    Seems like there are idiots throwing their money around with both hands depending on what the news media says is coming: blind leading the blind.

     

    It's a traders market: better be damn fast on your feet to keep up with the emotional swings in this market. Clinically speaking, it's a manic-depressive market.
    17 Nov 2011, 12:47 AM Reply Like
  • Caladesi Kid
    , contributor
    Comments (186) | Send Message
     
    OK, if not an issue at the moment.......when? Seriously, people get paid for such profound findings? Where can I sign up?
    16 Nov 2011, 03:51 PM Reply Like
  • Ted Bear
    , contributor
    Comments (655) | Send Message
     
    Technicals broke the wedge.....shaking out the bulls...now we re-test, or rally up through the high side just to keep everyone honest?
    16 Nov 2011, 03:52 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3085) | Send Message
     
    Liquidity issues mean closing positions at the end of the day. Until MF Global gets worked out of the system, smaller funds will continue to deleverage and/or shuffle. Just look at some of the large block sells and purchases in major equities recently. Every day is the same, with low volume shuffle. Short term funding is hard to get, and there are worries about potential for other failures.
    16 Nov 2011, 03:57 PM Reply Like
  • rhgordon3505
    , contributor
    Comments (28) | Send Message
     
    To HerrHansa:

     

    I think you're comment is not unlike someone mixing metaphors. MF was a primary dealer in U.S. treasury securities and derivative, such as futures and options, and some foreign exchange products. The lack of liquidity in equities and many fixed income asset classes has nothing to do with MF. It's a reflection of traders/funds stepping back from the market because volatility has become unpredictable that no one has a decent view of whether the improving U.S. economy (albeit slow) can push our market up or whether rumored U.S. bank problems with European bank debt and sovereign positions will rule the day. You may think you're looking at major block sales, but the volume of trading has been significantly down in all asset classes for over a year. Liquidity means you have active bidders and sellers, which isn't the case now. And if you're worried about bank failures, don't be. Bank earnings were up over 38% last quarter and balance sheet quality from large capitalization banks down to local community banks continues to improve.
    16 Nov 2011, 04:49 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3085) | Send Message
     
    I should've expanded my comment a bit more. The liquidity issue is with commodities and futures. You can see that in the moves made be CME Group, ICE, and LCH Clearnet exchanges recently in regards to margin requirements. Those changes were in response to possible liquidity issues, and I think we are seeing the effects of that.

     

    So if you are a firm in need of short term funding, selling equities is one way to accomplish that. I'm not sure what type of realtime feeds you have available, but Factset Research and Dow Jones Newswires have been reporting a great deal of sales lately in large equities. You can also find these in 13-F filings at the SEC, if you look into the larger funds. Yes, overall volume is down, but major equities are showing greater volume disparity relative to mid and small cap equities.

     

    I'm not worried about a failure in a company larger than MF Global, though I do expect some smaller failures. Worries in the news abound, with just one example was Jeffries Group in the news last week, though I think in their case they are fine. I do not expect any major international bank to fail in the near future, but the failure of one or more small investment companies is something I consider more likely in the near future.
    16 Nov 2011, 05:05 PM Reply Like
  • thechaser
    , contributor
    Comments (619) | Send Message
     
    to herr and rh; thanx for your spirited exchange; it pointed me in a direction of research i had not looked at
    16 Nov 2011, 05:32 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4078) | Send Message
     
    I lightened some positions in oil field before this happened :). Very nice, I can buy them all back cheaper.

     

    The drop was a head fake - nothing more.
    16 Nov 2011, 08:14 PM Reply Like
  • Krcun
    , contributor
    Comments (24) | Send Message
     
    Thank you so much Fitch! I thought that everything was OK.
    17 Nov 2011, 05:20 AM Reply Like
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