Bear Mauls CPI - Is Our Government Flatly Lying?
Unchanged?
"Food and energy prices moderated (in February)"?
They did eh?
In the last month have your fuel (gasoline, diesel and natural gas) prices gone up, down, or remained stable?
Food? Has it gone up, down or remained stable?
Remember - in the last month.
I might buy the food argument in the last month, mostly due to discounting at WalMart. They've been running big discounts on things like sodas the last month or so, although meat and grain products have continued to go up in price - big, and so has milk, now nearing $5/gallon.
But fuel prices? Stable?
On what planet?
Diesel, to put a personal touch on this (since I own a diesel car) has gone from $3.25 to $3.80 in the last month - 17%! I had my first $50 fillup in my little Jetta this last month - in a tank that holds 15 gallons when BONE dry, which it wasn't.
Gasoline has gone from $3.10 to $3.30, a nearly 10% increase in one month.
Natural Gas? Look at XNG - 542 to 605 - a 12% increase - in one month.
Now look, you have to respect the tape, and for the last couple of days it has been a back-and-forth whipsaw up and down, with days that have made me both grin and cry.
The Street now believes we will see 75 bips come off the FFT next week - fully baked in the cake, as it were, and
NBER's former economist Feldstein is now saying (live, in a conference in Boca Raton) we are in recession and it may be severe. The market is ignoring his speech - which is fine, should it choose to do so.
The FFF (FedFunds Futures) is now at 98.21, which prices in one hundred bips next week and is looking for, basically, a 1.5% FFT or less (roughly) by May expiration!
My expectation for the FedFunds Target hasn't changed - it may go all the way to zero, but it won't matter, and no, that's not bullish - it is "pushing on a string" bearish!
Nonetheless if you fight the tape on Wall Street all you do is go broke. There is no middle ground and no argument with the tape - you trade what you get, or you get out and sit. Those are your choices.
Then we get a press release saying that "JP Morgan/Chase will provide back-to-back funding to Bear Stearns, and The Fed says it will provide non-recourse funding to JP Morgan, with both working on "permanent financing or other alternatives.""
Ok, so Bear doesn't go immediately broke, but this begs the question - were they about to? The rumors were that they were on the edge of bankruptcy, and now we get a statement that they're going to be effectively bailed out?!
This is good news?
Hmmmmm.... so it appears that the rumors were in fact true! This begs the question - how many more "Bears" are out there that we don't know about (yet)?
Now here's the best part of this - Bear's people (Schwartz) were on CNBC just the other day saying that there was nothing wrong! Yet it now appears that they were quite literally on the brink of bankruptcy - as in within the last 24 hours!
TWO DAYS AGO IT WAS ALL OK? WHERE ARE THE HANDCUFFS?
So let me see if I get this right......
Last night The Fed "finds out" that Bear Stearns is, for all intents and purposes, bankrupt. They are illiquid and "out of cash" (and that for a bank means "bankrupt", even if you have so-called "securities" that are "good" - or so you allege)
This morning we get an obviously cooked CPI print which spikes the futures 15 points in seconds, on the premise that now The Fed can cut the FFT 75 bips without fear or favor.
Then, right on the heels of that, we find out that Bear really is insolvent and JP Morgan/Chase and The Fed will step in and rescue them.
How do you like this casino folks? Did you cover shorts into that ramp job this morning? I went long into the spike, then shorted the futures as soon as that news hit the tape - the idiots ran it higher thinking this was "good news" but anyone who thinks that its good news that a major Investment bank was illiquid and had to be bailed out by JP Morgan and The Fed needs to have their head examined!
Oh, and that's another one of my predictions from months and months ago - at least one major investment bank will blow up. Welllllllll?
Heh, I trade the tape I get, but from where I sit today the tape looks pretty stinky and jumpy. Sure, you go long into a ramp job like this, but you better keep your trigger finger in the guard and ready to pull, because THERE IS NEVER ONLY ONE COCKROACH!
Now please excuse me while I go find my can of RAID so I can start spraying madly under every kitchen cabinet and especially in and around the head!
Oh, consumer confidence came in at 70.5 .vs. 70.8 (last month) - down, but not catastrophically.
Yet.
Oh, in "buried news" today is that 45% of all foreclosures are no longer subprime - they are on "prime paper" of various forms. The short form of this is that there is no way this thing is over - no way the losses are over, no way the bankruptcies are over, no way the defaults are over. Not a snowball's chance in Hell.
This is extremely significant news, but nobody is talking about it - yet - as it was buried in the Bear Cave with "All Bear, all the time" of today.
What a week.
"Food and energy prices moderated (in February)"?
They did eh?
In the last month have your fuel (gasoline, diesel and natural gas) prices gone up, down, or remained stable?
Food? Has it gone up, down or remained stable?
Remember - in the last month.
I might buy the food argument in the last month, mostly due to discounting at WalMart. They've been running big discounts on things like sodas the last month or so, although meat and grain products have continued to go up in price - big, and so has milk, now nearing $5/gallon.
But fuel prices? Stable?
On what planet?
Diesel, to put a personal touch on this (since I own a diesel car) has gone from $3.25 to $3.80 in the last month - 17%! I had my first $50 fillup in my little Jetta this last month - in a tank that holds 15 gallons when BONE dry, which it wasn't.
Gasoline has gone from $3.10 to $3.30, a nearly 10% increase in one month.
Natural Gas? Look at XNG - 542 to 605 - a 12% increase - in one month.
Now look, you have to respect the tape, and for the last couple of days it has been a back-and-forth whipsaw up and down, with days that have made me both grin and cry.
The Street now believes we will see 75 bips come off the FFT next week - fully baked in the cake, as it were, and
NBER's former economist Feldstein is now saying (live, in a conference in Boca Raton) we are in recession and it may be severe. The market is ignoring his speech - which is fine, should it choose to do so.
The FFF (FedFunds Futures) is now at 98.21, which prices in one hundred bips next week and is looking for, basically, a 1.5% FFT or less (roughly) by May expiration!
My expectation for the FedFunds Target hasn't changed - it may go all the way to zero, but it won't matter, and no, that's not bullish - it is "pushing on a string" bearish!
Nonetheless if you fight the tape on Wall Street all you do is go broke. There is no middle ground and no argument with the tape - you trade what you get, or you get out and sit. Those are your choices.
Then we get a press release saying that "JP Morgan/Chase will provide back-to-back funding to Bear Stearns, and The Fed says it will provide non-recourse funding to JP Morgan, with both working on "permanent financing or other alternatives.""
Ok, so Bear doesn't go immediately broke, but this begs the question - were they about to? The rumors were that they were on the edge of bankruptcy, and now we get a statement that they're going to be effectively bailed out?!
This is good news?
Hmmmmm.... so it appears that the rumors were in fact true! This begs the question - how many more "Bears" are out there that we don't know about (yet)?
Now here's the best part of this - Bear's people (Schwartz) were on CNBC just the other day saying that there was nothing wrong! Yet it now appears that they were quite literally on the brink of bankruptcy - as in within the last 24 hours!
TWO DAYS AGO IT WAS ALL OK? WHERE ARE THE HANDCUFFS?
So let me see if I get this right......
Last night The Fed "finds out" that Bear Stearns is, for all intents and purposes, bankrupt. They are illiquid and "out of cash" (and that for a bank means "bankrupt", even if you have so-called "securities" that are "good" - or so you allege)
This morning we get an obviously cooked CPI print which spikes the futures 15 points in seconds, on the premise that now The Fed can cut the FFT 75 bips without fear or favor.
Then, right on the heels of that, we find out that Bear really is insolvent and JP Morgan/Chase and The Fed will step in and rescue them.
How do you like this casino folks? Did you cover shorts into that ramp job this morning? I went long into the spike, then shorted the futures as soon as that news hit the tape - the idiots ran it higher thinking this was "good news" but anyone who thinks that its good news that a major Investment bank was illiquid and had to be bailed out by JP Morgan and The Fed needs to have their head examined!
Oh, and that's another one of my predictions from months and months ago - at least one major investment bank will blow up. Welllllllll?
Heh, I trade the tape I get, but from where I sit today the tape looks pretty stinky and jumpy. Sure, you go long into a ramp job like this, but you better keep your trigger finger in the guard and ready to pull, because THERE IS NEVER ONLY ONE COCKROACH!
Now please excuse me while I go find my can of RAID so I can start spraying madly under every kitchen cabinet and especially in and around the head!
Oh, consumer confidence came in at 70.5 .vs. 70.8 (last month) - down, but not catastrophically.
Yet.
Oh, in "buried news" today is that 45% of all foreclosures are no longer subprime - they are on "prime paper" of various forms. The short form of this is that there is no way this thing is over - no way the losses are over, no way the bankruptcies are over, no way the defaults are over. Not a snowball's chance in Hell.
This is extremely significant news, but nobody is talking about it - yet - as it was buried in the Bear Cave with "All Bear, all the time" of today.
What a week.
posted by Genesis | 7:52 AM
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