Comments on: Dow Up 890 After Ten-Times Increase in Commercial Paper Sales

By: Juan

Juan — Wed, 29 Oct 2008 18:27:00 +0000

Richard, wasn't there some funny business at the NBER during the just-a-few-years-ago recession? I vaguely recall a change in weightings with GDP becoming more prominant while metrics such as unemployment became relatively less consequential.

Anyway, the Chicago Feds _National_ Activity Index three mos moving average (CFNAI-MA3) has been negative for 29 consecutive months, falling to recession levels since November of last year.

Everybody knows the U.S. has been/is in recession,,,political and MSM denial assists to further the well earned delegitimization of those 'estates'.

By: Richard Kline

Richard Kline — Wed, 29 Oct 2008 07:22:00 +0000

Regarding when the ‘recession’ will be announced, the delay in that is profoundly influenced by the US election; as such it has everything to do with American politics in general and Republican governance in particular. It isn’t that simple, but it is that plain. We will have the recession announced soon, in mid-November, when it will be designated ‘the Democratic recession’ in some quarters.

By: Anonymous

Anonymous — Wed, 29 Oct 2008 04:41:00 +0000

Flavio and his concurring commenters have this right. There is nothing here but the Fed buying paper at below market rates. I can’t see any reason to get excited. As for the rise in the Dow today, Felix Salmon at Portfolio.com got it right when he said that nobody really knows what the price of a stock should be right now.

By: ubetchaiam

ubetchaiam — Wed, 29 Oct 2008 03:25:00 +0000

Here’s another perspective on todays stock gains; Personally this makes more sense to me than other perspectives:
“The Short View: Market power”
http://www.ft.com/cms/s/0/45eca9aa-a545-11dd-b4f5-000077b07658.html

By: Anonymous

Anonymous — Wed, 29 Oct 2008 02:52:00 +0000

“If you went to Macy’s and you saw that all the merchandise was 45% off, people would be buying like crazy. That’s what’s going on in the stock market right now.”

If im broke and deep in debt, Im not buying anything.

By: Anonymous

Anonymous — Wed, 29 Oct 2008 02:46:00 +0000

Bottom? There are many more shoes to drop. CDS, CDOs, emerging markets, etc. It would also be surprising if the decent was only so far. I suspect it’s just another Bear rally. IF you can time it right you can make money. I know I am not very good with timing. The bottom arrives when people stop looking for the bottom, when the news stop talking about the markets because nobody is interested.

By: Anonymous

Anonymous — Wed, 29 Oct 2008 01:42:00 +0000

I love this blog as much as the next person. Quite frankly though this information is much too heady for one person to work a full – time job, manage a family and community and keep up with it. Things are, most definitely, out of control…and the only thing I can think to say is that the Market has becom HAL….

to quote HAL in 2001 a Space Odyssey…

[on Dave's return to the ship, after HAL has killed the rest of the crew]
HAL: Look Dave, I can see you’re really upset about this. I honestly think you ought to sit down calmly, take a stress pill, and think things over.

By: Fred

Fred — Wed, 29 Oct 2008 01:16:00 +0000

Great posts and comments – this site will be close to the top of the list of sites I visit on a frequent basis throughout the day

Thanks

By: UrbanDigs

UrbanDigs — Wed, 29 Oct 2008 00:52:00 +0000

The Feds CP facility is a good one. Look, Im not one to say I am behind all the facilities and actions taken so far, but I dont have much to say now do I.

I wrote about this facility on the 17th and that it was being widely anticipated by the street and firms and viewed as a nice help to CP markets. I also wrote that I wanted to be long ahead of the launch of the facility.

Dont be surprised if the rally surprises a few on the upside in duration. We came down hard, and bear market rallies are fierce. If the fed cuts less than 50 bps tomorrow or if GDP is way worse than expected, the rally is likely to be short lived. Personally, I think the fed should hold off on rate cuts for a better time, if anything, saying that its not needed yet.

For now, with all these actions, and being down very hard in past 4-6 weeks, its hard to not to nibble on some longs, and cut back on shorts. If the rally lasts, the short covering will power it further and so on. There will be a nice new shorting opp soon, but Im waiting for it

By: Yves Smith

Yves Smith — Wed, 29 Oct 2008 00:32:00 +0000

Anon of 6:50 PM,

Your suggested revision, while technically correct, would confuse readers without further elaboration.

The bank representing the buyer refuses payment because the documentary requirements have not been met. Transfer of title to the shipment is conditioned on receipt of payment. Therefore, the rejection of the L/C results in the shipment being refused (unless the parties find a way to remedy the deficiency, and as mentioned, practice is all over the map as to whether that can be done and how easy that is to do).