Friday, November 14, 2008

Two Observations

Macro Man's a bit pressed for time today, so he'll confine today's effort to making two observations:

1) He's not sure exactly what explains yesterday's equity rally: Paulson's comments (yawn), hopes for groundbreaking policy initiatives at this weekend's G20 (good luck with that), or short gamma positions (possibly.)

But consider this: yesterday's intraday range of 11.6% in the SPX......
...was very nearly as much as the entire yearly range in 2005!!!!!!
While it might appear tempting to conclude that the worst is over- the SPX has once again resoundingly rejected the 800 level- Macro Man prefers to keep his options open. Yesterday's price action was rather similar to that observed on September 18, when the SPX made a new and then surged higher to close at its highs. This was the day that Paulson announced what has become the TARP. Yeah, that worked out well.
2) On a lighter note, it looks as if global central bank liquidity programs are beginning to loosen up the market for poorly-performing, illiquid assets. How else to explain the advert below?


Anonymous said...

The answer to your question is here:

Anonymous said...

Is that the same ritholtz that called for over 5 bounces in october before I stopped counting?

I think he only called for 2 in this downtrend.

Hard to keep up with his T.A.

and who can forget his Bear Stearns bottom call "Get Crazy Short"

Anonymous said...

LOL - perhaps you could get that large cabinet of yours accepted as collateral as well.

Anonymous said...

ted spreading higher along with other credit measures for 2nd straight session after paulson decided he wouldn't use tarp for the toxic debt...looking at the 1930's there were the most +7% SPX gain sessions in history, and the market was even lower by 1939, so yesterday's big gain, like the others before it this year, wasn't bullish...options expiration week next week, strikes in play early today were SPX 900 and QQQQ 30


Macro Man said...

TGIF indeed....sitting at my desk with a glass of Marques de Caceres is done for the week, and what better way to ease into the weekend than with a nice glass of red on a cold, gray November afternoon/evening...

Sean Maher said...

And I thought the ECB only accepted pristine Porsche Cayennes...they have let their standards slip. Wonder if the BOE will trade my rather tired Saab for some short dated gilts?

jeff said...


Keep up the great work.

One thing that spooked the US markets were the credit spreads that are beginning to blow out in the CMBX.

"AAA" spreads went parabolic the last few days as the TARP is being used on things other than buying this toxic garbage. Here is the link.

The credit markets are spooked.

CV said...

@ Sean ...

Well, I should think so; they need what they can get. On another front, is it just me or is that 535d a steal at <20.000 sterling? 286 worth of Bayerische diesel bhp is not to be frowned upon; perhaps Mervyn will snap it up as a company ride?

Oh, this may just be because I am Danish where an equivalent ride would rob you for 90.000 - 100.000.