Friday 5 September 2008

MMMMMMMMMMMMMMMMMMMMMMMMMMM

Yo! innit! ......thats the sound o the man workin onna chainnnn gainnnnngggggg......

zooney : o no it aint dude! itta sound o the TURNERPRIZE as it hangs above the nebla watchin it do stuff ta alla suckers wotz still inna market.

halfcat : volume gone up an stocks guz dahn, innit. whadda ya say zoon?

zoon : yo! 'cat man. looks lke it jus yo an me heh now ta obsoive da workin o the neb. seems lak jus yesday that alla news woz good anna night sky shine like dymons. now alla noos is bad....alla leevs is brahnnnn.... anna skyyy be greyyyyyy........

'cat : yeh yeh so what? wotta foocha man? that wot alla cats wanna know...

zoon : allin good time youth, furst lets lookit somma the stuff folks sayin abaht that bill whotsit from yesdays piece....

mish : ... Gross desperately needs to read a book on Austrian economics. One does not cure problems by throwing money at them. The housing boom, the commercial real estate boom, and the shopping center economic model are all malinvestments that resulted from the misallocation of capital....

By asking for bailout of "mom and pop", Bill Gross appears to be asking for a bailout of Pimco.

yves : ...."The US simply does not have the resources to perform a rescue operation on the scale Gross envisions. If we were to attempt it, the amount of borrowing required would push Treasury yields up, undermining (more likely, more than completely reversing) whatever benefit there was from spread reduction. We've already seen a some interventions not producing some of the expected benefits. The Fed had clearly hoped that its pushing down of the short end of the yield curve would provide some relief to fixed mortgage rates. Instead, they've gone up...."

'cat : yeh, yeh, so now wots appnin?

ninja : ...."On the daily chart prices broke out of the Bear Wedge, and drifted sideways after finding support around the 1265 area. We can now safely say, prices have broken DOWN and OUT.

This move should take prices to the lows around 1200 before even attempting a bounce. Most likely, momentum will carry prices right through the lows…

Non-farm payrolls could make or break this move. I’m thinking make… say good bye to the ‘12’ handle and go introduce yourself to the '11's...."

baz : ..."One last data point worth noting: As the chart below shows, when employment data goes negative on a year over year basis, we get a recession 100% of the time:

>

Non Farm Payrolls, Year over Year changes (1935-2008)

Nfp_year_over_year
chart courtesy of Merrill Lynch

>And as that chart shows,we are still in the early stages of any employment downturn, as employment is a lagging indicator. Hence, hopes that the non-recession is all but over are most likely very premature.

Will today be the month when NFP crosses the 6 figure line? It certainly can be argued that but for the Birth Death adjustment, it already has. Given that layoffs are now at the highest levels since 2002, a 100k number is very possible. But any negative number will tip us into the red Y/Y -- with all the negatives associated with that." the big picture

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