Dow drops 241 points in 90 minutes

[WildspitzE]

Re: Dow drops 241 points in 90 minutes

gold's stability in today's action seems really telling. oil is now down a bit more than equities, but gold is up a bit. if this is a flight from risk, the dollar is rising against most things, but not gold. a gold ratchet?

Or perhaps it's all of the itulipers, in anticipation of the "big fall correction", that got itchy trigger fingers when the red ink started flowing?

[FRED]

Re: Dow drops 241 points in 90 minutes

gold's stability in today's action seems really telling. oil is now down a bit more than equities, but gold is up a bit. if this is a flight from risk, the dollar is rising against most things, but not gold. a gold ratchet?

This is why we increased our gold allocation but stayed out of the First Bounce of the Debt Deflation Bear Market.

The Deflationists don't get it.

Asset price deflation of dollar denominated assets is dollar negative.

Dollar negative is gold positive.

Wall Street Down 2 Percent on Bank Failure Worries

U.S. stocks sank on Tuesday on increasing worries that there could be more bank failures and concerns that equity prices may have run ahead of the economic recovery.

Who could have known?

Ready for an epidemic of bank failures?

Even if, as we expect, another 900 or so banks fail over the next two or three years, the Treasury Department can move hundreds of billions to the FDIC. The FDIC is, for all practical purposes, an account of the Treasury Department.

Catch the Wave: Nonperforming loans are rising at alarming rates for all sizes of bank, large and small

Comparing the 1990/1991 banking crisis to the one that is developing:1990/1991 Banking Crisis
1) Non-performing loans diverged by size of bank, with the biggest banks had the largest problems
2) As the crisis deepened, the four bank classifications by size experienced non-performing loans in a wide distribution from 2.7% to 5.7%
3) The rate of increase in nonperforming loans ranged from slow for smaller banks to rapid for medium sized banks

2008/2011 Banking Crisis
1) Non-performing loans do not diverge by size of bank as banks are experiencing a rapid rise in non-performing loans
2) The four bank classifications by size experienced non-performing loans in a narrow distribution clustered between 3% to 3.9% as of Q1 2009, and rising rapidly together
3) The rate of increase in nonperforming loans for all banks regardless of size is deteriorating through the depression in near lock step

What is apparent to even the most naive observer is that the management of all of these banks, regardless of size, all did the same stupid things together, such as backing retail commercial real estate loans during a consumer credit bubble when retail floor space increased at five times the population growth rate. What could possibly go wrong? Now they are all going down together.

Some day banks will have to figure out how to compete with each other for profits and customers at the top of a credit cycle without following one another into a hell of bad loans from which they can only later escape with tax payer money.

We estimate banks will continue to fail through the end of 2011, that more than 1,000 will fail representing a total asset loss of $900B, based on RBS estimates, information from contacts at the FDIC, and our own calculations.

[Mega]

Re: Dow drops 241 points in 90 minutes

Fred
Talk round the camp fire is WELLS Fargo?
Mike

[ricket]

Re: Dow drops 241 points in 90 minutes

Fred
Talk round the camp fire is WELLS Fargo?
Mike

Source...??

[Slimprofits]

Re: Dow drops 241 points in 90 minutes

Wells?

T(oo) B(ig) T(oo) F(ail).

Hiring: BofA, Wells Fargo and more
http://www.thedeal.com/dealscape/200...o_and_more.php

Wells Fargo to use internal funds to repay TARP
http://www.reuters.com/article/rbssF...50623220090901

[Mega]

Re: Dow drops 241 points in 90 minutes

http://jessescrossroadscafe.blogspot.com/
Not sure, but i heard it from 3 differant places.
Mike

[WildspitzE]

Re: Dow drops 241 points in 90 minutes

http://www.reuters.com/article/marke...BrandChannel=0

The put action was driving a lot today....

"...

WFC put-to-call ratio at 1.94, about 217,000 puts traded.
...
Aggressive put buyers stepped into Bank of America and Wells Fargo as their shares fell. On the New York Stock Exchange, Bank of America stock slid 6.4 percent to $16.46 while Wells Fargo shares dropped 4.8 percent to $26.21.

There was one big put buyer in Wells Fargo in the October $24 strike which, according to Reuters data, traded 46,390 times on the day.

...

"Bank of America and Wells Fargo are stocks that have enjoyed the fruits of the recent run-up in the market," Kinahan said. "Now there is the belief that these lofty stock prices can not support these valuations in those banks."

Another catalyst for the weakness in the financials might simply be fear of September -- a historically volatile month for the stock market, said Whatstrading.com option strategist Frederic Ruffy.
"Since the financials have been the most volatile in 2009, they are again leading the market lower," he said. "

[rabot10]

Re: Dow drops 241 points in 90 minutes

Fred
Talk round the camp fire is WELLS Fargo?
Mike

Mike THE WB has his money in Wells Fargo and my wife has a cc with them (dam) no way they go down with my interest payments

[ST]

Re: Dow drops 241 points in 90 minutes

This is why we increased our gold allocation but stayed out of the First Bounce of the Debt Deflation Bear Market.

The Deflationists don't get it.

Asset price deflation of dollar denominated assets is dollar negative.

Dollar negative is gold positive.

FRED - but that dollar action is complicated by another of your predictions related to foreign asset deflation- China's stock market bubble pops:

EJ-"The dollar will rise in flight to safety response by global investors when China's dual stock and property bubbles collapse in ... [steveaustin2006 omitted remaining- subscriber content]"

Comments?

[FRED]

Re: Dow drops 241 points in 90 minutes

FRED - but that dollar action is complicated by another of your predictions related to foreign asset deflation- China's stock market bubble pops:

EJ-"The dollar will rise in flight to safety response by global investors when China's dual stock and property bubbles collapse in ... [steveaustin2006 omitted remaining- subscriber content]"

Comments?

Look at long term trends not daily or even yearly changes in prices.

Real trends can only be seen in multi-year changes in prices.

Do not look for gold to rise and the dollar to fall day by day.

Even if there is one last rush to dollars in a China crash panic, that does not change the long term trend.

Here's the long trend: Repudiation by America's trade partners of damaging economic and political policies pursued by the American Oligarchy since WWII.

Japan is the first to repudiate.

More to follow.

[ST]

Re: Dow drops 241 points in 90 minutes

Look at long term trends not daily or even yearly changes in prices.

Real trends can only be seen in multi-year changes in prices.

Do not look for gold to rise and the dollar to fall day by day.

Even if there is one last rush to dollars in a China crash panic, that does not change the long term trend.

Here's the long trend: Repudiation by America's trade partners of damaging economic and political policies pursued by the American Oligarchy since WWII.

Japan is the first to repudiate.

More to follow.

Yes, I'm definitely on the same page there. Unfortunately, I'm a little too focused on the next 6 months for a variety of reasons.

[jk]

Re: Dow drops 241 points in 90 minutes

Look at long term trends not daily or even yearly changes in prices.

Real trends can only be seen in multi-year changes in prices.

Do not look for gold to rise and the dollar to fall day by day.

Even if there is one last rush to dollars in a China crash panic, that does not change the long term trend.

Here's the long trend: Repudiation by America's trade partners of damaging economic and political policies pursued by the American Oligarchy since WWII.

Japan is the first to repudiate.

More to follow.

do you mean china, referring to the recent news about abrogating commodities derivatives?

or do you, in fact, mean japan, referring to forthcoming policies from the new government there?

[audrey_girl]

Re: Dow drops 241 points in 90 minutes

fyi:




makes some rather shocking statements here

can anyone confirm them?

[metalman]

Re: Dow drops 241 points in 90 minutes

do you mean china, referring to the recent news about abrogating commodities derivatives?

or do you, in fact, mean japan, referring to forthcoming policies from the new government there?

remains to be seen if he can do what he promised to get elected, but the platform is sure interesting...

Hatoyama vows distance from US-style capitalism

Japan's new Premier-in-waiting Yukio Hatoyama has vowed to pursue new politics that would take Tokyo away from the 'excesses of US-style capitalism'.

Hatoyama, 62, who is expected to announce a transition team on Monday, said that he wanted 'Japan to be more independent'.

The new Japanese new prime minister is said to be a strong critic of what he calls Tokyo's 'subservient position to Washington'.

He has also insisted that his DJP party will question the role of thousands of US troops deployed throughout Japan under a post World War II security pact.

Hatoyama wrote an opinion piece for The New York Times last week, noting that US hegemony was coming to an end in different parts of the world.

"As a result of the failure of the Iraq war and the financial crisis, the era of US-led globalism is coming to an end," Hatoyama wrote.