Thursday, November 20, 2008

Pure, Unbridled Panic!

Here are prominent headlines from today's business news:

Auto Industry Bailout Compromise Fails in Congress

Treasuries Reach Price Levels that Equal 0% Return on Panic Fear Buying

Dow Drops Through Floor to Price Levels Lower Than Last Recession Lows

Unemployment Claims Reach Historic Levels

Citigroup: At $2 Trillion, Too Big To Bail Out

Crude Drops Below $50 Per Barrel

Even Biggest Insurance Companies Line Up at the Bailout Trough

Saudi Prince' Investment in Citi Fails to Calm Investors, Price Plunges 25% to Under $5

IAEA Announces Iran Now Has Enough Enriched Uranium for One Nuke

Treas. Secretary Paulson's Speech Fails to Reassure Markets

Dow Drops to Fresh Lows, Down 444 Points

Markets End in Tatters

Quite honestly, in my time as an investor and trader, I have never seen such levels of fear and panic as I saw today. Perhaps Rick Santelli, CNBC's reporter on the floor of the Chicago trading pits, said it best when one of his peers quoted Sec. Paulson in his speech today. Paulson said that without the government's $700 billion bailout package last month, the American People would have paid a very heavy price for a collapse in the financial markets. Rick Santelli replied that the American People are paying that price anyway!

Transitioning To Longer-Term Trades

I am in the process of transitioning to longer-term trades. This may permit me to spend more time during the day studying markets and, yes, blogging. I am also considering the possibility of starting a futures brokerage with a fellow futures trader who is an experienced broker. He trades on fundamentals and I trade on technicals, so it could be a complimentary relationship, both for me professionally and our clients.

With longer-term trades, I will be able to take more positions in different commodities and futures, including the softs, oats and rough rice, livestock (meats), interest rate futures (Eurodollars, swaps, fed funds, Euroyen Tibor) etc. This will be a way of not only spending less time trading, but also spreading and diversifying my risk.

Monday, November 17, 2008

Global Economics Headlines: Are We Headed for the Abyss?


I don't know if you had a chance to research the headlines over the weekend, but these are the ones that stood out to me:

G20 Meeting Was a Disappointment to Markets

G20 Agrees to "Stimulate", Mostly Through Big Government Infrastructure Projects (Bridges, etc.). Deficits Without End!

Government Data Showed that Europe is Now OFFICIALLY in Recession, Second Quarter of Neg Growth

Dems in Congress Determined to Bail Out Auto Sector, Protect Union Jobs

Hong Kong Data Shows Recession Now Official

Japan Government Announces Official Data Validates Recession

European Banks In Worse Shape than American Ones; Slumping Investments in Emerging Markets 6X More Than American Banks' Exposure to Mortage Mess

Citigroup to Lay Off up to 40,000!

Auto Parts Makers Now Want Piece of Bailout

Pres Elect Obama Wants Infrastructure Projects

$1 Trillion U.S. Deficit Possible in 2009

Toyota May Lose AAA Credit Rating

JP Morgan to Lay Off Early 2009

Strange, but the stock futures moved HIGHER, but only temporarily. Probably a bounce from Friday's Sell-Off. Started to move lower 1 hr ago. I expect more weakness during the day session, unless an intervention or good news surprises to the upside. But anything can happen! We may test those recent lows again soon! Morose mood!

I also found an interesting blog. It is a blog dedicated to one of my favorite investors -- Jim Rogers. He is considered to be the global guru on commodities. He even has ETFs named after him. He says the world's largest un-popped bubble is U.S. Government debt! He said when that pops, there will be a global financial collapse and inflation will skyrocket. John Mauldin expressed similar concerns in his weekend newsletter, but is less pessimistic.

It's 3:15 am, and I can't sleep! Ugh! Been awake two hours!

I just heard a very good analyst -- Kirby Daley -- on CNBC suggest that there may be a stock rally before the end of the year. Very sharp guy! He recommended holding cash and selling into it when the rally slumps again. He said it will be a typical bear market (temporary) rally.

You and Cason enjoy the Jazz game tonight. WIN, OK?


Sunday, November 16, 2008

$451 Billion and Climbing

The numbers are now official. The total interest paid on the U.S. national debt for the 2008 fiscal year (that ended Oct 31 2008) was $451 billion. Last year, it was (only) $230 billion. With an expected $1 trillion budget deficit for 2009, the interest is likely to rise to more than $500 billion.

As the deficit continues to mushroom higher, one can only wonder how much higher the figure will go, especially since the mushrooming debt is likely to push not only the interest amount, but the interest rate, higher!

Welcome to the White House, President-elect Obama!