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Smarty_Pants

Smarty_Pants
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  • Stock Futures Trade Limit Down [View article]
    Big drop or small drop. Either way you had to figure that the prior lows would eventually be retested.

    We're getting close to that now. The question is whether the prior lows will hold or not.

    If not, then look out below.
    Oct 24, 2008. 03:22 PM | Likes Like |Link to Comment
  • So Far, Restrained Carnage [View article]
    "So Far, Restrained Carnage"

    Whew. For a second there I thought the Wall St. fat cats might have some difficulties if the carnage should leak into their realm.

    There is only one way this will all end and that is 'badly'. 'Restraining' the carnage will only serve to prolong the time it takes to get there.
    Oct 24, 2008. 03:04 PM | Likes Like |Link to Comment
  • Currency Market: Where Are the Value Points? [View article]
    "The mentality in the currency and stock markets is sell now, ask questions later"

    It's called "Panic".
    Oct 24, 2008. 02:59 PM | Likes Like |Link to Comment
  • This Time, We'll Learn the Lesson [View article]
    Chrysler to cut 25 percent of salaried work force

    to cut about 5,000 salaried jobs

    biz.yahoo.com/ap/08102...

    Vice Chairman and President Tom LaSorda said Friday that sales projections for the rest of this year and in 2009 aren't looking good, and he indicated that more factory closures could be coming.
    Oct 24, 2008. 02:55 PM | Likes Like |Link to Comment
  • This Time, We'll Learn the Lesson [View article]
    There once was a Chairman, Greenspan,
    Who spoke of a Derivative Plan,
    After talking a week,
    In much-twisted Fedspeak,
    No one knew more than when he began.
    Oct 24, 2008. 02:42 PM | Likes Like |Link to Comment
  • This Time, We'll Learn the Lesson [View article]
    (closing eyes, clicking ruby slippers together ... )

    This time it's different ...

    This time it's different ...
    Oct 24, 2008. 02:33 PM | Likes Like |Link to Comment
  • Financial Warning to the U.S. Government [View article]
    "Ya got a mouse in your pocket? " moonbat


    An elephant is a mouse built to gub'mint specifications.
    Oct 24, 2008. 02:18 PM | Likes Like |Link to Comment
  • NYC's Fiscal Crisis [View article]
    Maybe we can convince Bloomberg to set the standard for the Wall St. executives and agree to cut he pay of his staff and re-election staff and donate the money to the city instead.

    Peter Madonia
    Mayor’s chief of staff
    $162,800

    Kevin Sheekey
    Bloomberg reelection campaign manager
    $270,842
    Oct 24, 2008. 12:15 PM | Likes Like |Link to Comment
  • Financial Warning to the U.S. Government [View article]
    First step is to reform the morals of the citizenry. There are more now who demand loot from the gub'mint than those who want the gub'mint to leave them alone.

    Until the citizens stop insisting that they have free access to a good life via government subsidies, the system will continue until it gives out.

    "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship." attributed to Sir Alex Fraser Tytler
    Oct 24, 2008. 11:47 AM | Likes Like |Link to Comment
  • Eliminating the Conflict of Interest Principle is Crucial [View article]
    Luckily for the banks the FED will print as much money as it takes for them to be able to buy influence in Washington DC.
    Oct 24, 2008. 11:39 AM | Likes Like |Link to Comment
  • Fed Rate Cut: Is it Imminent? [View article]
    The important question is whether it will matter or not. The FED is giving money away left and right and it's not helping.
    Oct 24, 2008. 11:35 AM | Likes Like |Link to Comment
  • Nothing Good Will Come of Bankers Being in Control [View article]
    expanding on derryl's comment:

    Keep in mind that the business expense called "Labor" is the paycheck that we all bring home and spend. If the business can lower prices by increasing productivity, that same labor expense will be able to buy more products in the entire economy and support more businesses.

    Alternatively, the worker-bees can buy the same products they always buy for less and save what is left over to invest in businesses of their own or others. This pool of savings is what allows businesses to purchase new equipment for productivity improvements (think of the difference between using a chain saw and an axe for how many trees a worker can cut down in a day).

    In general then: Savings are used by businesses to improve productivity, leading to lower prices and an improving standard of living for the employee, (without needeing a raise from current wages) which leads to more savings. Wash, rinse, repeat.

    moonbat's positive feedback loop works to everyone's benefit if the value of money is stable.

    What the FED does is to 'boost' that natural pool of savings with "print & lend" policies. At first it works great because there is a lot of extra 'savings' for businesses to borrow. Eventually though general prices begin to go up becasue the value of the paycheck starts falling.

    Now labor's wages MUST increase for the standard of living to stay constant, which increases the labor costs for business and lowers profits. The positive feedback above unwinds as marginally profitable businesses go under from increasing input costs (due to lower money value) while their debt remains behind as a claim on the business capital which must be liquidated at less then 100% value.
    Oct 24, 2008. 11:30 AM | Likes Like |Link to Comment
  • How To Profit From Continued Market Downturn [View article]
    Another idea for those who don't mind the risk involved:

    Sell naked Jan 2010 puts on Qwest with strike of 2.50.

    Currently bid/ask at 0.95/1.15. Q is trading at about 2.25.
    Say you receive $100/option for the sale. Margin required will be $150/option.

    Possible outcomes:

    1) If Q rebounds above 2.5 you will earn 66% on your posted margin in 15 months or less.
    2) If you are exercised, for each option you will buy 100 Q at $150 net and earn $32 dividends/yr (20+% yield) with possibility for capital gains in the future (assuming dividend holds at current levels)
    3) Worst case scenario is Q goes bankrupt after you are exercised, net loss $150/option (small probability)

    There's the kind of 'risk' to be taking if you want to try "buying the bottom". If the presumption is that Q will not go under and continue paying a reasonable dividend, then this will let you buy shares really cheap or get paid big returns for your trouble.

    First you need to have an brokerage account that will let you sell naked put options with full cash margin (TDAmeritrade recently allowed this sort of trade for those with approved 'full' option trading accounts).
    Oct 24, 2008. 11:00 AM | Likes Like |Link to Comment
  • Is It Time to Buy Yet? [View article]
    "Is It Time to Buy Yet?"

    In a word. No.
    Oct 24, 2008. 10:37 AM | Likes Like |Link to Comment
  • How to Construct a Deflation Proof Portfolio [View article]
    To be fair, there is a difference between what is feasible for managed money and personal money.

    For someone managing billions, simply moving 'everything' out of something and into something else is a big undertaking that takes time and is likely to distort prices while underway. Most fund managers have a difficult time beating the averages without being fully invested. Running up brokerage fees to change gears simply makes the hurdle a bit higher, so they are reluctant to do such things.

    For smaller personal accounts the use of inverses is a good idea as the size being moved is easily absorbed by the markets.

    It is still a good point to raise. There are options available now that weren't in prior downturns.

    I myself sold out between August and November of 2007 and have been in and out of QID since that time with nice profits currently sitting mostly in cash waiting for the dust to settle before taking any more big risks.

    As long as the FED/USTreasury are in crisis mode there is no safer place to put your money than cash. The current market whipsaws are only good for nimble, very short term traders. That's too much work for my tastes.
    Oct 24, 2008. 10:26 AM | Likes Like |Link to Comment
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