They Just Don't Get...
Open Question
The market sure is hanging a large part of its collective hat on marked to
marked accounting. We've rallied pretty hard up to this point on this news, yet
the market seems to be reacting to every comment made during the hearings. If
this was such an elixir, why has the government waited until 7-8 months into
this crisis to address this issue publicly?
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in FAZ
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o.k., it's time for hedging
putting some bids for inverses (SMALL POSITIONS):
FAZ @ 47
EEV @ 49
srs @ 63
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SP 740 resistance is very strong,
le's see if we can break it by the end of the day....
...interesting day...
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resistance is nearing for all those techincal traders on the SPX 740 coming up
fast. But you knew that would happen the levels were 715, 725 and then 740.
Healthcare is moving well today after getting killed XLV up over 4%
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I don't know why it took this long to get to M2M reform. See my answer below on
why I support it. However, this rally is more than M2M. Starting with the Citi
news and then followed up by today's stats there is beginning to be some balance
in the outlook. I believe stocks got way oversold onthe last down move and began
to reflect an ever worsenign economy over 2009/2010. Reality is that a lot of
things are in place to stabilize the economy. Citi reminded us of the power of
0% interest rates on the banking system. The stimulus is going to kick in, just
like the rebates, and add several hundred basis points to GDP starting in 2Q and
lasting all year. Crescenzi has done some great work on how the economy
stabilizes and then improves. For a month this concept was off the table. As
long as it is on the table we can rally a bit more. 775-800 on the S
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The question is: what's the alternative? If you don't mark to market, then you
mark to model. I wouldn't trust banks with this, because they are already
aggressive in the way they represent earnings. This gives them opportunity to
play around numbers even more and misrepresent what's on the balance sheet. The
extent depends on how they interpret their models and estimations of value since
they will no longer be held to market value. You lose transparency.
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because the average trader is now officially programmed to take profits at the
15% mark and not hold for 40%-70% gains before thinking of taking some off the
table...turning traders into momo players. question is....will the old
fundamentalist that converted to technicals ever go back to fundamentals....or
are they forever going to be techies?
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