just in case you thought the market action is normal, I give you this:
(today's action is the 1/4 of the chart on the RHS)
Monday, November 23, 2009
SPY today ... bizarre
just in case you thought the market action is normal, I give you this:
(today's action is the 1/4 of the chart on the RHS)
Friday, November 13, 2009
Beware the FHA
The FHA Is the New Subprime [Kevin D. Williamson]
An interesting piece in the New York Times today:
The Federal Housing Administration said Thursday that its cash reserves had dwindled significantly in the last year as housing prices slumped and many of its borrowers defaulted on their mortgages.
Still, government housing officials stressed that the agency, which insures loans made by private lenders, would not need a direct bailout.
“Even if we were to go below zero, if the reserves were to become negative, there is no extraordinary action that Congress or anyone else needs to take,” the secretary of Housing and Urban Development, Shaun Donovan, said at a Washington press conference.
Setting aside the metaphysical question of whether a "reserve" with a negative number in front of it still is a reserve, the most interesting words here are "direct bailout." That leaves the door wide open for all sorts of other action.
Who could have seen this coming? Oh, yeah — I did, in May:
But really, who’s backing million-dollar mortgages any more? Oddly enough, the FHA – meaning taxpayers — is getting close. W. C. Varones, a San Diego–based investment manager who blogs at agoravox.com, reports that generous FHA down-payment terms mean that an investor could pick up a $700,000 house, finance $697,000 through the FHA for 5 percent on a 30-year mortgage, and only pay a 1.75 percent FHA fee in exchange. Paying 3.5 percent down under FHA terms, rather than 20 percent down through a conventional bank mortgage, “translates into a $12,000 fee and $300/month in exchange for keeping your extra $115,000 in cash,” he writes. “Plus, you can roll the fee and the points into the loan, so it’s not cash out of pocket.” His conclusion: “FHA is the new subprime. … And the sucker is not a sleazy outfit like Countrywide. It’s the FHA. That means you, the taxpayer.”
If there’s any doubt that the FHA is staggering in Fannie and Freddie’s footsteps into the subprime woods, take a look at their default rates: One in ten FHA-backed mortgages written in the first quarter of 2008 have gone bad already, with borrowers missing at least two consecutive monthly payments, the Wall Street Journal reports. Some 12.3 percent of the 2007 FHA loans were “seriously delinquent” by February of 2009, with 4 percent going to foreclosure or bankruptcy. It gets ugly when you drill down to particular FHA lenders. Strategic Mortgage of Columbus, Mo., has a 12.1 percent FHA default rate, and the president of the firm sounds like the Rev. Jeremiah Wright when he defends his practices, explaining to the Columbus Post -Dispatch that his competitors “made FHA loans to rich, white people in the suburbs; they’re not servicing the same communities I’m servicing.” One has to wonder what sort of community Great Country Mortgage Bankers of Florida was servicing: Their default rate hit nearly 70 percent before the FHA was embarrassed enough to shut them down.
And FHA has been bringing these eccentric business practices to an ever-larger market: With default rates rising, FHA’s loan volume has grown 400 percent since 2007, and its market share is now more than 30 percent. And FHA has expanded beyond housing; in April, the agency put together a three-quarters-of-a-billion-dollar deal to build a hospital in Trenton, N.J., the largest single transaction in FHA history. They’ve also gotten into the “reverse mortgage” business, writing loans against the value of elderly people’s houses and taking the property in lieu of payment after the borrowers die. The stimulus bill cleared the way for FHA to greatly expand its portfolio of reverse mortgages of up to $625,500 in most of the country, and even higher in Hawaii, Alaska, and the Virgin Islands.
An interesting piece in the New York Times today:
The Federal Housing Administration said Thursday that its cash reserves had dwindled significantly in the last year as housing prices slumped and many of its borrowers defaulted on their mortgages.
Still, government housing officials stressed that the agency, which insures loans made by private lenders, would not need a direct bailout.
“Even if we were to go below zero, if the reserves were to become negative, there is no extraordinary action that Congress or anyone else needs to take,” the secretary of Housing and Urban Development, Shaun Donovan, said at a Washington press conference.
Setting aside the metaphysical question of whether a "reserve" with a negative number in front of it still is a reserve, the most interesting words here are "direct bailout." That leaves the door wide open for all sorts of other action.
Who could have seen this coming? Oh, yeah — I did, in May:
But really, who’s backing million-dollar mortgages any more? Oddly enough, the FHA – meaning taxpayers — is getting close. W. C. Varones, a San Diego–based investment manager who blogs at agoravox.com, reports that generous FHA down-payment terms mean that an investor could pick up a $700,000 house, finance $697,000 through the FHA for 5 percent on a 30-year mortgage, and only pay a 1.75 percent FHA fee in exchange. Paying 3.5 percent down under FHA terms, rather than 20 percent down through a conventional bank mortgage, “translates into a $12,000 fee and $300/month in exchange for keeping your extra $115,000 in cash,” he writes. “Plus, you can roll the fee and the points into the loan, so it’s not cash out of pocket.” His conclusion: “FHA is the new subprime. … And the sucker is not a sleazy outfit like Countrywide. It’s the FHA. That means you, the taxpayer.”
If there’s any doubt that the FHA is staggering in Fannie and Freddie’s footsteps into the subprime woods, take a look at their default rates: One in ten FHA-backed mortgages written in the first quarter of 2008 have gone bad already, with borrowers missing at least two consecutive monthly payments, the Wall Street Journal reports. Some 12.3 percent of the 2007 FHA loans were “seriously delinquent” by February of 2009, with 4 percent going to foreclosure or bankruptcy. It gets ugly when you drill down to particular FHA lenders. Strategic Mortgage of Columbus, Mo., has a 12.1 percent FHA default rate, and the president of the firm sounds like the Rev. Jeremiah Wright when he defends his practices, explaining to the Columbus Post -Dispatch that his competitors “made FHA loans to rich, white people in the suburbs; they’re not servicing the same communities I’m servicing.” One has to wonder what sort of community Great Country Mortgage Bankers of Florida was servicing: Their default rate hit nearly 70 percent before the FHA was embarrassed enough to shut them down.
And FHA has been bringing these eccentric business practices to an ever-larger market: With default rates rising, FHA’s loan volume has grown 400 percent since 2007, and its market share is now more than 30 percent. And FHA has expanded beyond housing; in April, the agency put together a three-quarters-of-a-billion-dollar deal to build a hospital in Trenton, N.J., the largest single transaction in FHA history. They’ve also gotten into the “reverse mortgage” business, writing loans against the value of elderly people’s houses and taking the property in lieu of payment after the borrowers die. The stimulus bill cleared the way for FHA to greatly expand its portfolio of reverse mortgages of up to $625,500 in most of the country, and even higher in Hawaii, Alaska, and the Virgin Islands.
Sunday, November 8, 2009
Matt Taibbi - Wall Street's Naked Swindle
http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle/1
Taibbi takes on Naked Short Selling; the collapse of BSC and LEH, Hank Paulson, Ben Bernanke, Timmy Geithner and more.
Taibbi takes on Naked Short Selling; the collapse of BSC and LEH, Hank Paulson, Ben Bernanke, Timmy Geithner and more.
Thursday, November 5, 2009
HK - Petrohawk - interesting observations
Actual close was around $24.55 today, right at the 50 day EMA.Interesting trade today; tested 200 day EMA support; then rallied to test 50 day EMA resistance. Still in a downtrend; but could be changing trend.
Friday, October 30, 2009
AMZN's Burgeoning Accounts Payable - Exposed
AMZN longs are playing with fire.
Good company; stupid valuation / market cap.
http://online.wsj.com/article/SB125682780621816085.html?mod=WSJ_hpp_LEFTTopStories#articleTabs%3Dcomments
Good company; stupid valuation / market cap.
http://online.wsj.com/article/SB125682780621816085.html?mod=WSJ_hpp_LEFTTopStories#articleTabs%3Dcomments
Wednesday, October 28, 2009
Tuesday, October 27, 2009
A couple of good reads for today:
Jeremy Grantham on the market's over-valuation and possibility of severe correction:
http://www.creditwritedowns.com/2009/10/jeremy-grantham-the-market-is-25-overvalued-15-correction-coming.html
Karl Denninger rants on about AIG / Fed / NY Fed / Geithner / Paulson:
http://market-ticker.denninger.net/archives/1547-More-Arrogation-Of-Power.html
I recommend that you read both as you contemplate the silliness of AMZN at $124.
http://www.creditwritedowns.com/2009/10/jeremy-grantham-the-market-is-25-overvalued-15-correction-coming.html
Karl Denninger rants on about AIG / Fed / NY Fed / Geithner / Paulson:
http://market-ticker.denninger.net/archives/1547-More-Arrogation-Of-Power.html
I recommend that you read both as you contemplate the silliness of AMZN at $124.
AMZN -- $124 = Crazy; Stupid Price
http://seekingalpha.com/article/169020-short-amazon-risky-investment-at-current-price
AMZN for some reason gets away with reporting a mythical Free Cash Flow number, that treats not paying its bills (carrying huge accounts payable for inventory) as Free Cash Flow.
This, of course, is ridiculous.
No matter how you slice it, even reporting good numbers and decent growth, AMZN has something like an 80 PE.
For a retailer !
It may be the bubble pump flavor of the day; but at $124, it is way too high.
AMZN for some reason gets away with reporting a mythical Free Cash Flow number, that treats not paying its bills (carrying huge accounts payable for inventory) as Free Cash Flow.
This, of course, is ridiculous.
No matter how you slice it, even reporting good numbers and decent growth, AMZN has something like an 80 PE.
For a retailer !
It may be the bubble pump flavor of the day; but at $124, it is way too high.
Friday, October 9, 2009
BIDU -- what to look for
Here is what I am looking at w/ BIDU which obviously is very strong on an upgrade and infested w/ momo traders.
Looking for:
1. R2 to hold (about $424); and then
2. A break below the 20 min and 50 min MAs (red and green lines).
3. Some market weakness would help !
Saturday, September 26, 2009
Wednesday, September 9, 2009
Wednesday, September 2, 2009
SWN charts -- Weekly & Daily
Support on weekly chart at 33.96Support on daily chart @ 34.65
fwiw....
Tuesday, August 4, 2009
Wednesday, July 29, 2009
Another Rangebound Day
as the AutoBot (HFT) Olympics continue ....
(another "victory for the bulls", Pisani ? -- feh)
Tuesday, July 28, 2009
DIA Today .... rangebound between PP and S2
possible afternoon short opportunity at Pivot Point (90.91 DIA)
Friday, July 24, 2009
High Frequency Trading "Autobots" Rule The Market - see chart
Just more evidence that program trading algos dominate the volume today.
Do little guys like us even matter any more ? This chart suggests not.
Wednesday, July 1, 2009
AMZN - Final for July 1
Quick follow up to earlier post on AMZN.
Weak rally attempt after 2:30 low; retraced about 45-50 cents; but retested lows for the day several times, before turning up modestly at the close.
Notice how AMZN trended downwards from 10:30 am; and only into the close did it break above the downtrend lines (weakly).
Whether this means anything for tomorrow or not I don't know. It would not surprise me to see AMZN retrace 50% of the $3 drop (high to low) tomorrow; so let's look to see if it can go to +/- 83
AMZN could just as easily keep going down.
Tuesday, June 30, 2009
Another Public Service Message .... Market Manipulation
Watching this video you can almost here Jeff Immelt yelling "Go To Commercial !"
http://zerohedge.blogspot.com/2009/06/cnbc-this-market-continues-to-be.html
http://zerohedge.blogspot.com/2009/06/cnbc-this-market-continues-to-be.html
Friday, June 26, 2009
Friday, June 12, 2009
DIA today June 12 -- Flatline Friday (for now !)
Ridiculous flatline around 87.80 since about 10 am.
Notice the support right there.
Also, look at support at 87.67.
S1 tested early at 87.43. PP 88.23.
Last hour ? 1/2 hour ? 5 minutes ? will be where all the action is today.
Wednesday, June 10, 2009
Tuesday, June 9, 2009
SPG -- June 9
SPG - being supported at 50 MA on intraday chart (green line around 53.45).
Needs to break below for further downside.
Friday, June 5, 2009
SPG -- short opportunity to 51 or lower ?
SPG like many REITs has been a good, volatile trading vehicle.
Looking at Daily and Weekly charts, daily seems to suggest failure at 200 MA, with a downside target of 51.58 the 20 MA.
The Weekly 50 MA at $61 + seems out of reach; the 5 MA at 51.26 had been touched every week since early March, but not this week. I think maybe next week we will see SPG at least re-test that area. The 20 MA at 42.82 seems out of reach for now as well.
Conclusion: A test of the low 50's; upper 40's seems likely, particularly if we get any sort of pullback in the market.
DIA -- End of Day review & comment
Recall that earlier we were looking for possible breakdown below 87.95 - see A - around noon.
Well, it took almost all day, but maybe - just maybe, we got it at the close - see B - with a close just below several trendlines at 87.89; and after hours sitting at 87.70.
We'll see what Monday Brings .... F U Stick !! LOL.
DIA .... watch the chart for breakdown ... or not
Watching to see break below 88.00 - 87.95 with some volume
Thursday, June 4, 2009
DIA - 3 pm update
Just look at this chart to see how ridiculous the Dow has been this week.
Will this roll over today ? Or will the jam it into the close ?
Watch what happens here at 87.42
AMZN update ....
Will AMZN break up or down from green trend line (85.04) ?
If down, should go to next line (84.46) support.
Wednesday, June 3, 2009
DIA & AMZN today - "Stick Save" ? or Manipulation ?
An all too uncommon occurrence in the markets these past few months has been violent, end of day, pump action of the major indexes and specific stocks. Typically without any market moving news.
Witness AMZN (post 3:30 pm)
and DIA (also post 3:30 pm).
Some refer to this violent action as a "stick save". Others call it "manipulation".
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