Following up to the McClellan where are you. Uhhhhhh....Where are we? A good bull market would see the summation index stay above the zero line. Obviously the "pullback" is in play. Question is how far to pullback.
Ah! There you are. Working off a lil' of the overbought condition.All Securities
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Geithner's Put has just been transformed to Geithner's All In. Is this vaguely reminiscent of what the rating agencies were doing: excel models which would crash if one tried to assume a reduction in housing values?
So in a nutshell:
1. The government is opening up the tax money spigot for market intermediary vehicles (hedge funds and other PPIFs or public-private investment funds) to buy up virtually all toxic assets with no accounting for default risk or loss assumptions, on the bet asset prices (i.e.the market) will go nowhere but up from this point onward. This is a huge gamble as macro economic conditions indicate we are nowhere near a bottom.
2. PPIFs use taxpayer provided leverage to agree with the Treasury that this is, indeed, the market bottom.
3. If this, gasp, is not the real bottom, hedge fund losses are limited as the TALF is non-recourse and non-remargining in nature and PPIF first-loss downside is at worst roughly in the 10% ballpark (of course they get to keep the spoils if the ploy succeeds), all the while no collateral has to be posted.
4. Banks and other companies offload all their toxic assets to these leveraged vehicles.
5. In the meantime the FASB is adjusting accounting rules to make sure that whatever assets remain can take advantage of Hummer-size FAS 115 loopholes and mark them at par.
6. Also in the meantime, the FDIC is buying up non-securitized toxic products (whole loans), and providing government backstopped capital to banks via the TLGP, all the while Sheila Bair is complaining that the Deposit Insurance Fund (DIF) is at or near zero.
7. Investors, whose deposits currently have no statutorily-required insurance as per the above point, are supposed to believe that banks are healthy, the accounting opacity is the new transparency, that the soon to be $15 trillion in total new bailout-related government debt and guarantees is sustainable as China bails and the Fed is left to purchases it own treasuries, that the FDIC will restore its DIF from fees banks pay for TLGP issues (even though banks will soon be able to issue debt cheaper in the Eurodollar market, until such time as LIBOR spikes again), and are expected to buy up equities and fixed income securities
8. As more and more buy into this all is good "new-age bull market" rally, the PPIFs will suddenly decide to sell off their resecuritized toxic garbage at a profit to themselves, people will ask just what these toxic legacy assets are really worth (again) and the whole system will crash once more, this time with the implicit guarantee of tens of trillions of US debt.
This is, of course, just one perspective. What is certain is that between Bernanke's TSY actions earlier this week, and Geithner's launch into TALF 2.0 (which is essentially stopping short of outright purchasing of bonds and equities), the administration has gone all in on selling its vision for the future to the U.S. taxpayer-cum-investor. If the pitch is unsuccessful, look out below.
Paul Krugman
March 21, 2009, 7:12 am
Despair over financial policy
The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.
The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.
To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad — I mean misunderstood — assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding.
But it’s immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem.
Or to put it another way, Treasury has decided that what we have is nothing but a confidence problem, which it proposes to cure by creating massive moral hazard.
This plan will produce big gains for banks that didn’t actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear that when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work.
What an awful mess.
Seriously I feel bad for that Liddy dude...he is making a buck a year and did not even work there prior to all this mess...but yet congress crooks grill his azz like a top sirloin over 160 M when those same congress crooks have indirectly given AIG 160 B...now if congress started circulating memos like this i would call it progress
AND
http://www.stockcharts.com/charts/indices/McSumNYSE.html
Maybe after todays action we'll be closer. Various indices show pretty much the same thing. Sector spiders XLB,XLP, lesser extent XLU are "are at their marks". The XLE is way behind, so I don't think it will follow the rest. I pulled my bid for the xlbpt Apr20 for now. Will see what everything looks like for the rest of this OEX week shake and bake.
Definitely converging on "major" resistance @ the 74 area. I'm not playing the bull yet on it. Trying to get the sndk off my back. But if SPY can breakthrough then will at the very least be looking at the McClellan to reach overbought point. Regarding the McClellan for the various others (Spiders & Indices) available at decisionpoint, they seem to be very "accurate" at the high and low end. Various spiders and spazz market don't make it easy in between points. But with other confirming indicators and such they are all worthy of a play when they hit the marks.
Released on 3/6/2009 8:30:00 AM For February, 2009
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Somebody find a fork and stick me with it. A couple more days of carnage and we may be there.....
Selected Balance Sheet Information
(in thousands)
Feb 14, Feb 9, August 30,
2009 2008 2008
---------- ---------- ----------
Cash and cash equivalents $ 107,973 $ 93,465 $ 242,461
Merchandise inventories 2,190,198 2,068,483 2,150,109
Current assets 2,580,867 2,356,644 2,586,301
Property and equipment,
net 2,267,404 2,204,102 2,289,656
Total assets 5,235,085 4,938,397 5,257,112
Accounts payable 1,974,747 1,842,951 2,043,271
Current liabilities 2,468,682 2,325,222 2,519,320
Debt 2,690,755 2,095,000 2,250,000
Stockholders' equity (187,302) 282,233 229,687
Working capital 112,185 31,422 66,981
SEE THAT NICE NEGATIVE EQUITY POSITION...NOT REALLY
SOMETHING I LOOK FOR IN A 150 STOCK BUT MAYBE
THAT IS JUST ME
Selected Cash Flow Information
(in thousands)
12 Weeks 12 Weeks 24 Weeks 24 Weeks
Ended Ended Ended Ended
Feb 14, 2009 Feb 9, 2008 Feb 14, 2009 Feb 9, 2008
------------ ------------ ------------ ------------
Depreciation $ 41,811 $ 38,865 $ 81,964 $ 78,557
Capital
spending $ 47,047 $ 50,258 $ 98,146 $ 95,145
Cash flow
before share
repurchases:
Net increase
(decrease) in
cash and cash
equivalents $ 22,217 $ 13,652 $ (134,488) $ 6,811
Subtract
increase
(decrease) in
debt 422,555 (66,070) 440,755 159,382
Subtract share
repurchases (375,042) -- (647,166) (349,990)
------------ ------------ ------------ ------------
Cash flow
before share
repurchases
and changes in
debt $ (25,296)$ 79,722 $ 71,923 $ 197,419
============ ============ ============ ============
"One immediate change from yesterday’s announcement was that the value of the government’s investment fell by more than half. The government said it would convert as much as $25 billion of its preferred stock to common shares for a 36 percent stake in the bank. At yesterday’s closing price of $1.50, that investment is worth about $11.5 billion. Citigroup has a stock market value of $8.2 billion today.
‘Ripped Off’
“Taxpayers are being ripped off,” Congressman Brad Sherman, a Democrat from California who sits on the House Financial Services Committee, said in a statement. “The only thing worse than nationalizing a bank is to pay for the entire bank and only get one-third of it.”"
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American International Group is close to a deal with the U.S. government that would ease the terms of its bailout, give a further equity commitment and help it pay down debt, a person familiar with the matter said on Saturday.
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The board of the troubled insurer is due to meet on Sunday to vote on the deal, which could be announced when AIG [AIG 0.42 
-0.10 (-19.23%) 
] reports its quarterly results on Monday.
The revised agreement is expected to include an additional $30 billion equity commitment from the government, more lenient terms on an existing preferred investment, and a lower interest rate on an existing $60 billion government credit line, the source said.
AIG will also give the Federal Reserve ownership interests in its Asia-based American Life Insurance (Alico) and American International Assurance Co (AIA) units, the source said.
--------------------------Annualized 4Q 4Q 3Q 2Q 1Q 4Q 3Q
Quarterly Change- Prelim. Advance 2008 2008 2008 2007 2007
===============================================================================
Real GDP -6.2% -3.8% -0.5% 2.8% 0.9% -0.2% 4.8%
YOY percent -0.8% -0.2% 0.7% 2.1% 2.5% 2.3
By Hugh Son and Zachary R. Mider
Feb. 26 (Bloomberg) -- American International Group Inc. may get a backstop from the U.S. to protect against further losses on credit-default swaps, according to a person familiar with the matter.
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This is truly scary and really pisses me off...we have poured so much money down this shithole and now we have to back their speculative leveraged bets on the financial soundness of companies...At least paulson (who was an a-hole crook) didnt pass off the taxpayer as the ultimate bagholder...And dont even get me started on the stress test fraud...Japan scenerio is now the best we can hope for...I wont even tell you the worst...
And no one seems upset about the C deal...Govt really cornholed us on that deal...conversion of our pref shares paying a 5% coupon to common dogcrap that pays nothing...I am sick of all this crap...
I almost hope for a bond market dislocation to teach these arrogant a-holes who love to spend our money and leave us with empty rhetoric a lesson they will not forget...how this all ends i do not know...but i do know it wont end well...
