Wednesday, October 15, 2008

Could have gotten lunch instead of coffee, oh well ... :)

Look at the highlighted section(s) for the leading and concurrent indicators.

You mean "staple" production chain like JNJ was NOT a good buy? Then you should have cashed the 55 Calls yesterday. :)

Empire State Manufacturing Survey for October
General Business Activity

New Orders
Prices Paid

Prices Received


Retail and Food Services Sales for September (%ch)
Retail Sales --

Ex. Autos
MV and Parts Dealers
Building Matl., Garden, Hardware
Furniture and Home Furnishings
Electronics and Appliance
General Merchandise
Clothing and Accessories
Food and Beverage Stores



Penn said...

MTG, can you give some good individual short names

MTGSPY said...

pm me at tf

M. said...

Greenie said...

Mr, Spy, Don't get too beared up with today's decline. If you look at Aug 2007 or March 2008 bottoms, the market blasted higher and then came back. The retraces get smaller on every round, and then finally the indices shoot up without any retrace. I believe that is the pattern we are going to see here until SPX reaches 50 MA.

All IMHO. You know I have been wrong more often than right.

ARAK said...

hey Greenie,

glad to see you back. how is your dad doing? are you planning to go back to india for a few weeks to take care of issues?

MTGSPY said...

You have yet to give me an earnings estimate and a multiple that you think a money-good investor would aquiesce to.

One person to not outsmart is ourselves Greenie. Don't try calling the bear market rallies.

Today the term structure of mortgage credit is inverted. Swap spread and agencys are blowing out. And at the end of the day it's just about survival as the bargaining enters narrower and narrower yet corridors.

I dont believe $30 is attainable as a flattening point for SPX earnings and it may actually be negative (not growth, level) for a 6-10 quarters.

I really care about your well being and ask that you throw the towel now before it gets completely out of hand ON your personal life. It is already out of hand at the societal level.

MTGSPY said...

And many good wishes for your Father.

ARAK said...

mr. spy,

what is uncle ben saying? is he planning to goose the slosh tomorrow by >40B? He's been doing it every opex till now.

MTGSPY said...

You should leave such frivolous claims of daily repo money delivering subprime and buying stock to the un-named forum.

Urban legend has a better grounding in reality.

ARAK said...

That is what I used to think as well Spy. But, there is too much of a correlation between slosh and major stock market swings (>40 S&P points), that I was forced to bring it back into consideration. I haven't back tested it more than one year though.

ARAK said...

I mean swings around opex time

MTGSPY said...

"I mean swings around opex time"

As I was saying, the first use of that tool was to monitor how many people are imminent to BK because they are going out and borrow a lot of money from the Fed day to day.

A couple of Michigan scientists from TF will not accept that and Arak if you want to be in that elite club, there will not be stopping you.

ARAK said...

Yeah those MI scientists ... leave me out of that group please. Am surprised they haven't blown up their account yet

ARAK said...

Since the amount borrowed as become low considering the running average, does that mean fewer folks are going to BK than before?

Crap! Starting 10/9 more of it shows under TAF.

ARAK said...

check your email btw

D said...

MI scientists...that's classic mtgspy humor!

mtg checkout manuel antonio, costa rico. That's on my list of places to look at real estate this year.

Taxes are much better than singapore or brasil.

ARAK said...


Is that south west of San Jose on the pacific coast?

D said...


Stockfarmer said...

I must say I was surprised by the giant dump. I shorted UWM and ZION about an hour before close. Nice gain right now.

It seems these bear rallies are losing there staying power.

ARAK said...


Where you bud? How are your spooz rapping?

Greenie said...


I am in India now. My dad is improving very slowly. Mr. Spy, I have no towel in this market - not until I go back to USA (and if USA exists at that time :)). All I said are just opinions, just to be clear.

MTGSPY said...

Check the real estate prices please. Maybe there's round 2 for UYM. Or not :)

D said...


MTGSPY said...

I know, but is the rocket pointed up or down? heheheheh.

I would rather stay on the ground and kept on digging shovel by shovel and go down slowly that way.

D said...

gap and run tomorrow...atilla got shaken out. as competitive as he is, he will be thinking about that one for a while.


MTGSPY said...

You are affiliated with King Abdul?


D said...

maybe King Abdul is affiliated with me?


I. M. said...

You guys are so entertaining. I spit my afternoon tea all over my monitor when some poster at Atillas blog commented that he thought "some sovereign wealth funds were monitoring X trends."

I must admit spy, that my first thought was that you were a x, jr.
He he he. Better to laugh than to cry in these turbulent times.

Enjoy your blog and thank you for sharing your thoughts.

gtt said...

So spy, now that LIBOR has calmed down a bit, is it acceptable to call a nice 1-2 week bear market rally?

MTGSPY said...

Gtt, the real treasure is in selling the strangle on indices to pay for short in non-COF credit card company. :)

MTGSPY said...

I propose a week's truce. What say you? (knife behind back) :D

MTGSPY said...

Maybe if the idea of truce is interpreted liberally, the correct thing to do is to fade the first move. If that first move is a big bear market rally then it will bring a satisfying conclusion of october.

MTGSPY said...

Scratch everything I just said and go back in sell and hold. Anything.

Cramer just said "Higher yield is your only protection. The higher the price therefore the lower your yields. I know this is a hard concept to understand but I am telling you so."

Again, dividend yield is not "yield". It is debit to the equity. It is a "signal" that the company is doing better than expected in the bull markets, but it means either a resignation or worse, scam, during a severe downturn.

gtt said...

I am uneasy. Everyone on TF etc expecting a rally. We may just flush to new lows tomorrow.

Really Lost said...


Wonder how much shit he will eat before he goes back to treasuries. Good news is, the yields will be better when he does.

MTGSPY said...

TF = Cramer? That may explain the lockdown today. Volume is not at all heavy and yet ... :D


Ok - just a few observation and possible dialogue with imaginary Buffett:

1. Mr Buffet: Not lightening up in a meaningful way in 2006 says this to me " I think in 5-10 years from 2006, things will be as frothy as it is ".

2. The bigger the bubble the bigger the mistake in being early. In the case of PTR, early by 6 months and Petrochina is just a microbubble in the eyes of the US housing bubble, 3 points back in the logarithmic scale. What do you think being "early" means when paired off to the biggest bubble since Attilla the Hun's time?

3. Then he would say: Well, that depends on where the bubble is. The Index will not do as good as my picks.

Mtgspy: O RLY? :D So now you say I AM UNQUALIFIED to evaluate the cash earning potentials of US companies?

4. Then he'd say, so what did you do so far, Mtgspy?

Well sir, I called the riots and total meltdown, which hasn't happened - yet - but it is guaranteed to happen. And I called many things that could ONLY happen if money flow is JAMMED due to lack of trust which you can find in my blog here. I did NO such thing as selling EUROPEAN puts at SPX 1400+ and then having to scramble and find a place to put it in just when the wheels are falling off.

Did you even raise the possibility of the so-called Mad Max, sir? Did you even consider the possibility of "burnt amber" scenario when all money flows in the debt market vanish and only settle by cash works? I bet you'd say my advisors operate on those that can be seen by our eyes and that's the difference with dreamers such as you, Mtgspy.

That I agree mr. Buffett, that one of us is dreaming.

MTGSPY said...

One other thing that I found very distasteful and indignant is the fact that people mix up family issues and investment.

Some would turn pretty hostile and aggravated knowing one's position that differ from them - not because of money risks alone, but because they have a vested interest in avoiding complete collapse of the system but are very lazy and corrupt they didn't want to do anything other than "buy, hold and pray".

Why not just admit you are a coward and then for the sake of your family leave the gambling parlor to the people who will not try play the "family game" when finally facing the firing squad.

D said...

Spent the week with some of my extended family...8 figures in the market and riding it out..."it always comes back." I had the same conversation with them over a year ago and as far back as 2-3 years ago, but people like "the audacity of hope."

Hope and the story of Pandora's Box comes to mind.

gtt said...

So many people didn't listen to least the only ones that really mattered did: my parents, and sold all their stocks last year.

Closed my SSO out today. Good trade. Looking for shorts now, any ideas welcome.

MTGSPY said...

I did a 2 hr trade shorting SSO at 33 and covered at the bell for coffee money at 31 and flat of all indiex plays. So that makes two of us GTT. :)

ARAK said...

make that 3 of us .. short es and long sds. All covered at close.

750 SPX next week Spy?

Where has that spoo rapper AJ gone?

MTGSPY said...

Well back to 5 or 6 posts back, I was actually right about selling strangles at crazy vol, my hunch is telling me there HAS to be at least one spot where it gets so quiet it drove both side mad for the final collapse. But if you sold option and hedge it's a good day today.

AJ said...

yo yo my mortgage fag
i got mad spoo in the bag
i drive me gypsy cab
and pick you up from rehab

after your short position is wiped
and you know all the shiz i typed
your gonna be slanging option arm
while i have punjabi farm

perhaps i give you free ride
but i got greenie at my side
we leave the country for good
after you get bent over my hood

you gonna go down in flames
calling me paki names
i will take your positions down
as i watch your face frown

get long the spoo
and tell greenie to stop hatin the jew
we drive out this US of A
my cab will float in the bay

ARAK said...

welcome back AJ rapper.

AJ said...

arak my little green friend
you like the raps i penned
i like to rap about the spoos
and i love me some cous cous

but this mortgage fag
is like some old hag
larry kudlow gonna show his ass
while don luskin takes his cash

ARAK said...


I was with you until started about that p*ssy Kudlow. He is one of the p*ssies I'd love to punch in the face.

Anyways, since you seem to rap quite well, am curious. Did you come here within the last 15 yrs or were you born/raised here? Drop a note at raja.arun at gmail if you'd like to keep that private.

AJ said...

arak i am sorry if i offend
but the raps i have penned
are just plain jokes you see
nothing meant really by me

i like to have fun and joke
and i am just a white bloke
i hope i did not offend you folks
with some of the racial jokes

you all can make fun of white guy
and i really like mortgage spy
i am not the real aj
but i like to play

that aj cat was all happy
but he might have soiled a nappy
he loved that attila guy
hope aj account no run dry

D said...

Just to clarify, "the interventions are not a government takeover."

jpick said...

mtg..."You've got mail" tf.


oh, and who is the dame in the avatar?

ARAK said...


Mtgspy and the dame in the avatar ;-)) You don't stand a chance boy.

MTGSPY said...

I was supposed to travel to chicago sunday - tuesday for business but my friend will take care of that. I, will be travelling to Detroit and do some research. Things might get a bit dicey here and where SPX on wednesday morning might be the last thing I gotta worry about :) I will be taking rest tomorrow as it may be a "long" trip.

Stockfarmer said...

That is very close to the Canada border... Looking for excape routes?

Greenie said...


ARAK said...

WHat the hell was the Greenie?

ARAK said...

Got it now ... Ryoko

MTGSPY said...

Ok, new #s on mortgages are in for MY company.

MODEL says based on the balance and average price on 10/01 vs. 9/30 the "value" should be X-4 with the "payoff book" goes up -> Y+4. So far makes sense?

Well after the fact and all #s went in, we got X-4 and Y+1.2


Greenie, since you seem to be very numerically proficient, can you explain to these guests what THAT means? Hint: not very good. :) Also, These are NOT subprime loans.

Greenie said...

Mr. Spy, I do not understand your cryptic language, but bad news is not going to matter for next few months. The market needs to digest some pending good news, such as this -

"Home sales in September jump by 65% over year ago"

Here is a joke to cheer you up.

A kangaroo walks into a bar. He orders a beer. The bartender says, "That'll be $10. You know, we don't get many kangaroos coming in here, you know." The kangaroo says, "At $10 a beer, it's not hard to understand."

Don't worry, be happy.


MTGSPY said...

Greenie, that is not BAD NEWS, in fact it's not even NEWS at all. It's a company material inside information and it's just f* bad.

Maybe Greenie and Kirk Kerkorian are the ones who need to cheer up.

D said...

It means you're seeing roughly 1/3 of the prepayments you originally estimated.

Greenie said...

Mr. Spy,

In information theory, an information is mathematically quantified as

I=-log(p), where p is the probability of what you said based on current knowledge.

For example, if you say 'sun will rise tomorrow in the east', the probability of that is anyway 1. Therefore, your statement has no information. On the other hand, if you say someday that 'sun will rise tomorrow in the west', that has infinite amount of information. Nobody expects what you said.

If you go out in the street and say 'banks are in very bad shape', what will be the reaction today? Let's present some imaginary dialog:

Mr.Spy: 'banks are in very bad shape'

Common Man: 'Yes I know'.

MS: 'one third of all banks are going to fail'

CM: 'I would have expected more. Every one was lending like crazy during the boom.'

MS: 'Warren Buffet is wrong about buying stocks here.'

CM: 'Yeah, he is a rich, old guy and does not understand, how bad things are.'


So, you see that bearish information has very little information content at this time. You need to wait for few months and let Bernanke/Paulson/Bush/Obama etc. claim victory. There will be news articles again about nominating Bernanke for Nobel prize. Only then you can come out and say:

'Nothing has been fixed. Things are worse than in October.' That will be information.

MTGSPY said...

Please don't be so formal as to call me with my family name. My name is Mortgage. And I will stick around for the next 18 years as you lose every single year in this long bear market greenie. A kinda, shoulder to cry on.

D said...

The reason I am confident that we need to go higher is dumb money keeps asking me if it is a good time to put MORE money to work...That money needs to be pulled in still.

Actually, I'm confident just because I know what large spec short-covering looks like...10/10