korba

With stocks up more than 55% since March, is it still a "bear market" rally? "Any bears out there ready to capitulate?"

I am a bull who did not fully capitalize this rally.

I am seeing lot of bears very frustrated and some starting to capitulate. Also, I see a change in the way market moves in the last 1/2 hour. Previously on down days, market would suddenyl shoot up in last minutes and end the day positive. Now, I don't see that happening. Its another sign that retail investors are throwing in the towel and getting back in. Lastly, with nice profits to show for this year, institutions and funds will not let this year end in a sour note.

So, I think there is market will continue higher for some more time.

Bond Expert: Thursday Wrap

John....for uneducated people like me, could you please provide more meaning of tightening corporate bond? What does "tightening corporate bond" mean? And how exactly does it relate to "exit strategy"? Many thanks.

J.P. Morgan upgrades Q2 earnings estimates for Bank of America (BAC), just a week before results are due. Firm says results are likely to be "messy," with a number of one-time items, but it now sees the bank earning $0.38/share vs. a previous estimate of -$0.03.

BOA recently upgraded outlook for GS. Today, JPM upgrades BAC. Would we see GS upgrading JPM or is there a 4th player in the loop here?

The great barbecue debate: As Americans fire up their grills this Fourth of July weekend, Brendan Koerner asks, Is it better for the planet to grill with charcoal or gas?

I suspect that people blasting GW and Al Gore are motivated from something else than the reasoning behind GW. My intention is not to support Al Gore or to ignore the problem you may be going through, but I still request you to pay closer attention to global climate change.

Less hurricanes one season or temperature change in 10 years is not the correct way to look at long-term trend of global climate. Just because climate has not changed in US or wherever you live, does not meean that global climate is alright. Please think about your kids who would live until 2070 and beyond. Weather IS CHANGING for the worst close to the equator and the poles. That's where it is most visible now. By the time it is visible in your area, it will be too late.

House passes climate bill 219-212. Crossing party lines: 44 Democrats, 8 Republicans. The CBO puts the average monthly cost per household just under $15 in 2020 (at full phase-in); Nate Silver finds the average American is willing to pay $19/month. AP's Q&A about the bill. (Previously: I, II)

While I am not endorsing hasty decisions by government, I do support Obama's effort to combat global warming. People must get serious about the effect of our unrestrained consumption on climate deterioration. Almost everybody here agrees that we do not want to leave piles of debt for our children. In much the same way, we do not want to hand over a over-heated, species-less earth to our children.

Please do not be fooled by the comfort of your airconditioned homes, cars and offices. World climate is worsening. Polar bears, shrinking size of antartica, melting glaciers in himalayas, are all real. Please also realize that US has been the largest producer of greenhouse gases. So, it must take the lead in reducing it as well.

If we are not satisfied with a specific aspect of the bill, let's work to get our voices heard. But, let's not trivialize the climate problem. In this case, its really up to each one of us to contribute. For us....and more importantly for our children.

Current Rally: Are We in May 2003 or May 2008?

I was driving around NJ today looking at areas for house purchase. In addition to many "House for Sale" signs, I couldn't help but notice the number for "office space available" sign. I am wondering whether this supply of real estate has been taken into account at this time.

If you think "all" real estate issues are behind us, then you can expect consolidation this year and a new bull market next year. If not.....

Bond Expert: Friday Wrap

As "Will Trades" mentions, I have also been thinking along the same lines for some time now. It does look like Fed/Treasury can play the game to raising the stock market and then letting it drop to sell UST.

My question is: If the stock market continues to rise, does it reduce the quantity of need-to-be-sold-Treasury in some way? Or is it that the future Treasury supply is now given no matter what happens to stock market?

The other button in this whole game is occurance of geo-political issue. Do you guys think that an event in Pakistan or North Korea could be used to get around this apprarent problem with UST?

“Taxpayer, kiss your $6 billion or $8 billion goodbye. The restructuring of Chrysler will have cost you more than $12 billion. Just to make cars that nobody wanted and save jobs that couldn’t be saved.” (Deal Journal)

Giving cash directly to people is not a good idea because it increases the money supply too much (is it M1 or M3...I can't remember). And that would be inflationary. Instead, the attempt is to move it through banks so that one can take advantage of fractional-banking system and increase money supply without using too much quantitative easing.


On Apr 29 07:37 PM Teutonic Knight wrote:

> I have a better idea. Someone would do the math on the following.
>
>
> It might work out to be a better deal if we (US govt a.k.a. the taxpayer)
> would just give the ~ $16B or so to the 54,000 employees at a "discounted"
> pay rate for sitting around at home. As they are set free from daily
> chores of the workplace, they would then become innovative and entrepreneurial,
> find time to land other jobs, or start a new business.
>
> Everybody will be happy. Isn't this a better idea?

“Taxpayer, kiss your $6 billion or $8 billion goodbye. The restructuring of Chrysler will have cost you more than $12 billion. Just to make cars that nobody wanted and save jobs that couldn’t be saved.” (Deal Journal)

I see that 4 biggest Chrysler bondholders are C, JPM, GS and MS. So, they are getting <$2B CASH for letting go of <$6B debt (debt that may be worthless anyway). So, instead of showing $6B loss, they get to show only $4B loss.

Is it just me or is this another convoluted way for the government to give cash to their darling banks?

Paulson Throws Bernanke Under the Bus, Backs Ken Lewis

All,
Please keep focus here. Please do not get into Democrats vs Republicans thing. Please do not dismiss this as "what else do you expect"?

Please focus on what you can do to ensure that this case is used to emphasize the need for justice and return to honesty. For a long time, common public has lived with corruption and trickery at high levels. It is time to return to fundamentals of honesty, hard work and justice.

Corrupt people are using these turbulent times to serve their needs. Are we using these times to reinstate good values of life?

Cuomo's Revelation: Bernanke and Paulson Strongarmed BofA's Purchase of Merrill

Everybody here agrees that something wrong has been done. However, is it enough for us to write our comments on SA? What else we can do to ensure that justice is served? I am concerned that this will be a topic of discussion for few days and just die down. Let's have a discussion about what we all can do to show that common man had enough of this favoritism and corruption at high level. (1) Can a knowledgeable person here file a case against Lewis/Ben/Paulson (2) can we do anything to support Cuomo and ensure that his case does not fade into oblivion?

Enough with the outrage: "If you want to be angry about something, get pissed at a media culture that goes beserk about bonuses one week and forgets all about them the next. And be worried, quite worried, about a society for whom anger is a form of entertainment."

I think that public anger is completely justified. The disparity between compensation of top level executives and majority of employees in US companies is too much. There is an old saying "too much to anything is not good". There is no historical evidence or theoritical equation to arrive at an optimum disparity. But, the current disparity seems too much. So, it is understandable that common man is angry.

Stocks overcame early jitters about the Treasury's toxic-asset plan to surge about 7% - the biggest one-day gains since the November bear-market rally. DJIA +6.89% (+501.14) to 7,779.52. S&P +7.13% (+54.83) to 823.37. Nasdaq +6.76% (+98.50) to 1,555.77.

Lot of columinsts and bloggers, that I like, are all saying that this is just a bear market rally. Given the pessimism that existed around S&P~660 and this disbelief, I am tempted to think that indeed this is the bottom out process.

Is there no chance that Fed's quantitative easing and Geithner's plan would successfully negotiate the remaining-would-be-dow... and create a platform for upside? Its a different matter whether we think the plan is good or bad, but would it do no good to the upside?

Mark-to-Market Marches Towards Extinction

While it is nice to consider intrinsic value of assets, is it practical in this situation? Most of the assets under discussion are mortgage related. So, we are eassentially talking about price of a house. What is the instrinsic value of a house? In other words, what is the value of wood, metal, paint that goes in building the house? In my view, they are all determined by the market at any given time. The value of house itself is M2M. So, what is true for the baseline object, must be true for the assets derived from it. Otherwise, one is just breaking the logic to one's own benefit.

I am a big fan of simplicity. So, I like what besposito and TPoise say. These financials geniuses need to learn to keep things simple. If you can't handle the risks, don't dive into complicated assets. If you like the profits of capitalism, take the losses in stride as well. By marking these toxic assets to a low value, the capitalistic market is saying that these assets are not good, and wants to flush them out. It is urging us to go back to basics and find a new way to advance the finanical system.

A Reverse Stock Split Explosion Is on Its Way

Here is one reason why you don't want to do reverse stock split at this time: Say BofA does it and goes from $3 to $30. Now, the bears just got a whole new window to short this stock. Previously, the short side gain was only $3, but now it is back to $30.