Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Dow Theory Sell Signal and The Run on the Florida State Bank - Fingers of Instability, Part 13

Stock-Markets / Credit Crunch Dec 01, 2007 - 05:32 AM GMT

By: Ty_Andros

Stock-Markets

Best Financial Markets Analysis ArticleIn This Issue – 3 Fingers of Instability

  • Breaking the Buck!
  • Look at the Actions, Not the Words!
  • Showdown at the O.K. Corral!

Dear Readers, first I must apologize for my absence the last two weeks, I have been to Europe to meet with some institutional investors who want solutions to their investing conundrums and I had to prepare for a week then do the travel. It has been heartwarming to get the emails asking for their Tedbits. This week I will be brief and give you “three” fingers, but next week we will be back to the deep insights you expect from TedBits.

Better late then never I say and the bombs are a bursting all over the street: Dow Theory sell signals, new lows below August lows in everything but the S&P 500 and the NASDAQ. Freddie Mac and Fannie Mae meltdowns of over 30%, expect government bailouts shortly. But the plunge protection team has worked overtime to keep things alive and, as this morning's GDP numbers of 4.9% suggest, the Government statisticians have kept their pencils very sharp to keep the illusions of growth and low inflation in front of the masses. The wolf wave illustrated in previous fingers of instability is becoming reality as the S&P earnings are DOWN about 7 % year over year and are headed a lot lower. You have to wonder why stocks are not joining the parade in a more emphatic manner as profits are headed lower, while stocks are a lot higher than they were a year ago.

Breaking the Buck!

In the last two weeks more than three money market funds had to be recapitalized by their banking parents as the securities they held had been downgraded to junk. If they had not injected capital they would have “broken the buck” and returned less than had been deposited in the supposedly ultra safe parking places. But today took the cake as we discovered a new area in which government has tread in search of revenue and public and civil servants demonstrated their expertise in the world of finance.

In the State of Florida a money market fund run by local and state government has had a “RUN ON THE BANK” as it has been disclosed that over 8 billion dollars, which equaled 30% of its assets, had been withdrawn by local government depositors after they learned that over 700 million dollars of the securities they had held are in default. When redemptions hit 15 billion Thursday afternoon Florida Governor, Charlie Christ, closed the doors in FAIRNESS to the depositors who had not gotten wind of the “foul” smelling investments the fund had been holding, and would not be left holding a completely empty bag.

The real finger of instability is brought to our attention by Bill King of the King Reports. This is not something we can expect to hear the end of any time soon:

More runs on the bank and government-run pools are set to begin. It's off to the races as more of these funds than you can imagine hold this BAD paper. I can hear someone yelling FIRE in a theatre. It's a race for the door. Can anyone say “qualitative due diligence?” Yields on AAA paper that are too good to be true? Can you say “Roach Motels”? Dominoes anyone?

Look at the Actions, Not the Words!

When I write Tedbits and offer insights, it's quite often just as simple as ignoring the press reports and looking at the actions. And there is only one message you can take from the Dubai PIPE deal (private investment in public equity) in the world's biggest bank. It is a walking dead man, it is too big to fail and that is the only reason anyone would pay almost $8 Billion IN EXCHANGE for this equity injection. Citigroup's balance sheet is far worse then being disclosed, they had to give an interest rate 7% above 2-year treasuries. These are rates for which the junkiest of junk corporations are currently paying funds. These are not the rates at which the biggest bank in the world should be raising money. The maximum should be 2-3% above treasuries. The amount they are paying SAYS IT ALL: Their balance sheet is in tatters and the buyers are just buying it waiting for the bail out of the bank that is “too big to fail!”

Showdown at the O.K. Corral!

After the most recent Federal Reserve open market committee meeting in October, the statement was fairly explicit: NO MORE RATE CUTS for a while. Up until about a week ago, several Federal Reserve governors were sounding fairly firm in this belief. The Market has had a .25% basis rate cut as a 100% probability and, as I write this, is pricing in a 60% chance of a .50% basis rate cut. In light of today's 4.9% GDP report how can they cut? But, Donald Kohn, aka “Greenspans” righthand man, made an about face speech several days ago so now the stage is set. Will they bow to the market or will they bend it to their will and prudent central banking. Can you say “they will print the money”?

In conclusion: It's been a wild several weeks and the “fingers” I have outlined in this series are all FINALLY unfolding. They are in their infancy after impulse waves signaled their launch. These are opportunities! HUGE ONES! Have you captured them? The credit markets of the G7 have basically turned to toast, Libor is skyrocketing again and the Junk bond markets are basically SHUT DOWN. The G7 central banks are throwing money into the money markets like sailors on shore leave after a night of drinking. 10's and 100's of Billions of them.

The Printing presses at the ECB (European Ce ntral Bank) and the Federal Reserve must be running overtime and they probably have spare computer keyboards at the ready as they have to run keystroke on top of keystroke to replace and print the cash that is VAPORIZING! Jean Claude Trichet's and Ben's helicopters then spend the night dropping them into the blast holes in the financial systems to cover them up. It's INFLATE OR DIE and I don't see them preparing a funeral yet. Volatility is opportunity for the prepared investor.

The markets are rocking: precious metals, stock indexes, commodities, raw materials, energy, interest rates, foreign currencies, the dollar and more are providing opportunities, up and down, to the prepared investor. The tsunami of money and credit creation required to underpin the asset backed economies of the G7are providing opportunities as far as the eye can see. And the massive sterilization of this same money printing by the emerging world is stoking runaway inflation to surface in every area of the globe and signaling the unfolding “Crack up Boom” (see Tedbits archives at www.TraderView.com ).

Thank you for your patience as I have been away. I will return next week with something special for you.

Ty Andros & Tedbits LIVE on web TV. Don't miss Ty interviewed live by Michael Yorba from Commodity Classics every week discussing this week's commentary and unfolding news. Catch the show every Wednesday at www.MN1.com or www.CommodityClassics.com at 4:15pm Ce ntral Standard Time . Archived video casts are available there as well.

If you enjoyed this edition of Tedbits then subscribe – it's free , and we ask you to send it to a friend and visit our archives for additional insights from previous editions, lively thoughts, and our guest commentaries. Tedbits is a weekly publication.

By Ty Andros
TraderView
Copyright © 2007 Ty Andros

Hi, my name is Ty Andros and I would like the chance to show you how to capture the opportunities discussed in this commentary. Click here and I will prepare a complimentary, no-obligation, custom-tailored set of portfolio recommendations designed to specifically meet your investment needs . Thank you. Ty can be reached at: tyandros@TraderView.com or at +1.312.338.7800

Tedbits is authored by Theodore "Ty" Andros , and is registered with TraderView, a registered CTA (Commodity Trading Advisor) and Global Asset Advisors (Introducing Broker). TraderView is a managed futures and alternative investment boutique. Mr. Andros began his commodity career in the early 1980's and became a managed futures specialist beginning in 1985. Mr. Andros duties include marketing, sales, and portfolio selection and monitoring, customer relations and all aspects required in building a successful managed futures and alternative investment brokerage service. Mr. Andros attended the University of San Di ego , and the University of Miami , majoring in Marketing, Economics and Business Administration. He began his career as a broker in 1983, and has worked his way to the creation of TraderView. Mr. Andros is active in Economic analysis and brings this information and analysis to his clients on a regular basis, creating investment portfolios designed to capture these unfolding opportunities as the emerge. Ty prides himself on his personal preparation for the markets as they unfold and his ability to take this information and build professionally managed portfolios. Developing a loyal clientele.

Disclaimer - This report may include information obtained from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made to ensure its accuracy or completeness.  Opinions expressed are subject to change without notice.  This report is not a request to engage in any transaction involving the purchase or sale of futures contracts or options on futures.  There is a substantial risk of loss associated with trading futures, foreign exchange, and options on futures. This letter is not intended as investment advice, and its use in any respect is entirely the responsibility of the user. Past performance is never a guarantee of future results.

Ty Andros Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in