Equity Markets (Tradable Bottom)

While I appreciate the suggestion.
I have posted evey top bottom and top here since May for absolutely nothing.
It is a bear market (I stated this since the beginning), which walks down and up. It will likely bottom out for a new bull market four years from now, based on my current projections (subject to change).
Many will tell you you I have gone much further than that, so I would ask around, before you make statements.
I have no less than one hundred people thank me here alone. Many more elsewhere.
Four or five yesterday, I believe.
One person daily at a minimum.

Some have made triple digits and some have saved their families.
I may have one of those people post here, if they choose too.
I can live with that and I sleep very well.

Just so you know when I was a co-manager for several of the largest institutions, I had every dime of gain alocated IN WRITING, by my own design, for the poor and improverished.
If I ever decide to run such funds again, I will do the same thing and lock up my gains and eventually give it all away.
In your other statement, which you should restate and retract what you said, you are absolutely incorrect.
In fact, I have posted that CLEARLY in writing.
You just have not bothered yourself to read it.,
I have zero problem in attracting capital if I wanted it (Many have asked me here, including many people in the business both on the retail and institutional side to manage their funds). I am not interested in chasing leads. You got to be kidding.
It is the other way around, institutions and people ask me, somewhere over seventy this year, including one institutional fund of fund manager here with more money than a mid sized country.
Several of which read every post and reposition.

Further, if you are in the registered financial services business, which I suspect you are, you need to obtain approval on every post by your compliance person before you author anything in regard to finances.
In my case, I am that qualified principal, if I was going to contemplate commerce in regards to such.

What percentage of CDS world wide represent California? 32%.

 

I attempt to put critical inflection points here when I can. I do not put all of them down, especially when they are not substantiated, lack merit or foundation. I am also maintaining other required legal duties and responsibilities. As was noted, those points that I have put here have been critical turning points every time so far. There is no guarantee outside of certain U.S. Government instruments and this has been in question for quite sometime (see my prior commentary).

Anyone that casts judgment without serious inflection and regard for others will be measured by the same standard. I have had my background checked by over a dozen three to five letter agencies in addition to over one hundred financial institutions. That being said, some should consider that they do not know who is reading this.

I am considering drawing a line in the sand and if I can, I will induce the proper movement of the pieces on the chess board to get the world back on track. It is their choice and managing to get such figures to move in a proper coordinated direction has various challenges.

P.S. Again, I had zero issue allocating my tier 1 & 2 potential bonuses under contract and separately rights from another venture to the poor and impoverished. Mathew 1:16-24

On another note, I was fortunate enough to have an executive call me from General Motors in June of 2000 for the first Z06 Corvette. Order #001, year one, for a completely new model and design. I received it in 2000 with the first 185 pre-production batch, that was delivered to race team owners/magazine editors/entertainers/race car drivers. I have not driven that car for quite sometime and I dropped an additional couple hundred grand into it. I drove it less than ten thousand miles in the last five years, then generally only to SR and Monterey for ALMS to be supportive of GM and Corvette Racing which I received an invitation too every year. It was autographed by the Corvette Racing Driver’s and both Heads of GM Racing/Chief Engineers/One Circle of Twelve Member this decade. This years #001 ZR1 sold for 1mm and Jay Leno received the second one

 

Since several have asked me where I believe the $DJIA may trade short term, my “premonition,” is as follows. It should only be taken for an educated hypothesis, based on prior histories and mild substantive evidence. Thinking very near term can get you run over.

Flat to the election, sell-off on November 4th to the 13th (I would not short this) or so…followed by three week rally, followed by a sell-off to the beginning of January.

Overall, perhaps down as much, as 8% overall, in comparing October to November, month over month.

P.S. Someone took the Steponit advice and, “Stepped on him.”
In other words, it was an alter ego for another ID here to support himself thru a separate alias.

 

I wanted to give this serious consideration before putting this previous written piece and this statement, on the World Wide Web.

It is a clear misuse of the Department of Treasuries power and our money to influence an election.
This was initiated on October the 27th, 2008 over three hours at 1:00 p.m. E.S.T. to cycle the equity markets to a top at the close, for the November 4th, 2008 election.

I am hoping that our new President Elect jointly with Senator McCain cleans up the system and provides the change that is really needed across party lines.

Brent


11-01-2008, 06:24 PM
101010
Karting
Silver Subscribed Join Date: Jun 2008
Posts: 121

Re: Equity Markets (Tradable Bottom)

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Quote:
Originally Posted by Grim Reaper
Quote:
Originally Posted by Grim Reaper
Quote:
Originally Posted by 101010
Hi Brent--

How might I also be included on your PM list regarding the tradable bottom and near term top.

BTW, I took your advice, picked up a few calls yesterday when the markets opened, and am happily ahead. Today's minor dip I'm not worried about-- as I believe the market will irrationally rally when the bill passes the Senate... not sure what will happen in the House, again. (Which-- from my understanding-- is generally non-responsive to any bills that take from the public coffers originated in the Upper House.)

Thanks!
Benjamin

Ben,
You are that one other person.
I am trusting you not share this information even with your love ones.
The implications are something that should not be discussed here.

Perceive, October 31st.
The bill is irrelavent.
MF Window Dressing.
Market Cycle.
Buy the Election.

Brent

B,
I believe that it is proper etiquette to ask your permission to post this on the forum.
I want give this some serious fore thought this weekend.
B

You don't need my permission B, anything you care to share only serves the greater good of those smart enough to listen. you are helping save the retirement funds of many many people.

I who will continue to honor your request to not disseminate anything we may chat about in person, whether on the forum, or to my family or friends. I am however building up a nest egg to help them through rough times, despite my relatively modest means.

 

11/07 our President Elect met with key people.

None of the existing people that are currently running affairs with the current Executive Branch were invited, including Bernanke.
None.
This speaks volumes.

Some of the following were there.

Summers - Former T.S., Former GS CEO. He has been VERY critical and outspoken.

Volcker - Former Fed. Chairman, S30, Bilderberg's, TLC, COFR, etc.. He graded the current moves F- and I will not repeat what he has said.

Rubin - Chairmen of C, former T.S. and former CEO of GS. He has been very quiet, which would suggest thar he will be outspoken after 1/20. He has to keep the best interests of C shareholders at heart, given the control on the Federal Government this is the best move. The animosity between C an GS is very public. They are trying to take business and deposits from each other, in addition to destoying the others business.

The above will not forget and I know are more than a little disappointed. When you get to certain point in life, it no longer about just about money.

http://www.cnbc.com/id/27595157
What's wrong Goldman?
I noticed this Friday as well.

BRK cashed out on 4.85B on puts this quarter. They did not execised them for stock. Right as the CEO told everyone they were buying certain issues, abeit thru a fully protected PIPE, ROR and first position in case of default.

 

As fore mentioned above.
November 5th-13th
http://finance.yahoo.com/echarts?s=%5EDJI#symbol=%5EDJI;range=5d
Closed puts, went long with tight stops.

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Goldman Sachs urged bets against California bonds it helped sell.
http://www.latimes.com/business/la-fi-goldman11-2008nov11,0,1943014.story

GS let go of its entire forty-one member municipal staff in San Francisco this week.

The USDOJ, FBI and Attorney General(s) based on its recent investigations with the last four major firms that it settled with would beg to differ with this so called unlicensed, “experts,” opinion. I absolutely know better as I can issue such instruments. There are many CONSIDERATIONS especially for the lead underwriter. It would take me two weeks to design a complaint as there are many issues.

I am sure that we will see the House Oversight Committee and Senate Finance Committee look further into this after January 20.

None the less, when you permanently burn State and Local Government, the people, pensions, endowments, investors, etc., etc. they will never forget and will NEVER come back.

Integrity and trust are beyond paramount to create trust in the system. Therefore the beginning of a foundation.

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Yes, B, Vockler would be great. You should consider this. It will take ALL of us working together over a long period of time to build a new country. Not too far left, not too far right.

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The Federal government designed another bailout plan (subsidy) for borrowers of Fannie Mae and Freddie Mac backed paper this week. 1.8T in such mortgages are issued worldwide. The program is modification (novation) of terms (rate, payment stream, principal and shared appreciation). I will attempt to keep this in laymen’s terms. It has been equated to teaser rate with a balloon payment that cannot be paid and shared appreciation (Larry Kudlow).

The effects are many. Here is a Spartan answer.

Borrower/consumption. This essentially will trap the borrower and get the last blood out of a turnip for maximum payment stream. They are no longer potential future consumers for seven years minimum. One of five mortgages is currently under water before this plan. This does nothing for those out of work that cannot pay their mortgages and have an event coming. In the end, default occurs on 70% of such modifications.

Investors. This includes fixed income funds, all governments, pensions, banks, insurance companies, your parents, you, me, endowments, state agencies and everyone. What is the rate of return? How do we get our principal back? No manager can make recommendation for issuance of purchase of mortgage’s. Therefore the only thing that will be of interest is discounted paper at a severe discount. 5-60c depending on quality and payment stream. Rates and terms will go up, to defer risk and provide yield. Therefore, prices will further accelerate to the downside and exacerbate and extend all problems many years. Reference ABX.

Government/Taxpayer. Shared appreciation mortgage’s (SAM’s) have never worked in thirty years in any society. The premise of success of the program is based on inflation, when we have severe accelerating deflation. Several members of the press and a few key members of the government stated this would not work within hours. Federal Bailout two, had forty-six participates by last count. It was to help 400,000. All the SAM programs have failed due to marketing, participation, waste, etc..

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Attachment:
U.S Treasury Credit Default Spread (Insurance in the event of default) – I project by June of the next year that the U.S. Government will be downgraded by a major rating agency. I have said this no less than a dozen times of this venue.
Image Unavailable, Please Login

 

We cannot throw money at this problem, it will destroy us and our country.
Paper was written MANY FOLD against paper and is now used/abused Charmin.

As I said many times before, we have to start from the front side of the equation.

The below was provided by an executive at Nasdaq 100 company for my review to authenticate its accuracy.
It is a good condensed piece for the public.
One of my constant struggles it too take an extremely complex topic and deliver it into a concise, within in scope, written format that the majority can grasp.

The Size of Derivatives Bubble = $190K Per Person on Planet
By Tom Foremski - October 16, 2008

More must read financial analysis from DK Matai, Chairman of the ACTA Open.

The Invisible One Quadrillion Dollar Equation -- Asymmetric Leverage and Systemic Risk
According to various distinguished sources including the Bank for International Settlements (BIS) in Basel, Switzerland -- the central bankers' bank -- the amount of outstanding derivatives worldwide as of December 2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories of the USD 1.144 Quadrillion derivatives market were the following:

1. Listed credit derivatives stood at USD 548 trillion;

2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:

a. Interest Rate Derivatives at about USD 393+ trillion;

b. Credit Default Swaps at about USD 58+ trillion;

c. Foreign Exchange Derivatives at about USD 56+ trillion;

d. Commodity Derivatives at about USD 9 trillion;

e. Equity Linked Derivatives at about USD 8.5 trillion; and

f. Unallocated Derivatives at about USD 71+ trillion.

Quadrillion? That is a number only super computing engineers and astronomers used to use, not economists and bankers! For example, the North star is "just" a couple of quadrillion miles away, ie, a few thousand trillion miles. The new "Roadrunner" supercomputer built by IBM for the US Department of Energy's Los Alamos National Laboratory has achieved a peak performance of 1.026 Peta Flop per second -- becoming the first supercomputer ever to reach this milestone. One Quadrillion Floating Point Operations (Flops) per second is 1 Peta Flop/s, ie, 1,000 Trillion Flops per second. It is estimated that all the data found on all the websites and stored on computers across the world totals more than One Exa byte of memory, ie, 1,000 Quadrillion bytes of data.

Whilst outstanding derivatives are notional amounts until they are crystallised, actual exposure is measured by the net credit equivalent. This is normally a lower figure unless many variables plot a locus in the wrong direction simultaneously. This could be because of catastrophic unpredictable events, ie, "Black Swans", such as cascades of bankruptcies and nationalisations, when the net exposure can balloon and become considerably larger or indeed because some extremely dislocating geo-political or geo-physical events take place simultaneously. Also, the notional value becomes real value when either counterparty to the OTC derivative goes bankrupt. This means that no large OTC derivative house can be allowed to go broke without falling into the arms of another. Whatever funds within reason are required to rescue failing international investment banks, deposit banks and financial entities ought to be provided on a case by case basis. This is the asymmetric nature of derivatives and here lies the potential for systemic risk to the global economic system and financial markets if nothing is done.

Let us think about the invisible USD 1.144 quadrillion equation with black swan variables -- ie, 1,144 trillion dollars in terms of outstanding derivatives, global Gross Domestic Product (GDP), real estate, world stock and bond markets coupled with unknown unknowns or "Black Swans". What would be the relative positioning of USD 1.144 quadrillion for outstanding derivatives, ie, what is their scale:

1. The entire GDP of the US is about USD 14 trillion.

2. The entire US money supply is also about USD 15 trillion.

3. The GDP of the entire world is USD 50 trillion. USD 1,144 trillion is 22 times the GDP of the whole world.

4. The real estate of the entire world is valued at about USD 75 trillion.

5. The world stock and bond markets are valued at about USD 100 trillion.

6. The big banks alone own about USD 140 trillion in derivatives.

7. Bear Stearns had USD 13+ trillion in derivatives and went bankrupt in March. Freddie Mac, Fannie Mae, Lehman Brothers and AIG have all 'collapsed' because of complex securities and derivatives exposures in September.

8. The population of the whole planet is about 6 billion people. So the derivatives market alone represents about USD 190,000 per person on the planet.



The Impact of Derivatives

1. Derivatives are securities whose value depends on the underlying value of other basic securities and associated risks. Derivatives have exploded in use over the past two decades. We cannot even properly define many classes of derivatives because they are highly complex instruments and come in many shapes, sizes, colours and flavours and display different characteristics under different market conditions.

2. Derivatives are unregulated, not traded on any public exchange, without universal standards, dealt with by private agreement, not transparent, have no open bid/ask market, are unguaranteed, have no central clearing house, and are just not really tangible.

3. Derivatives include such well known instruments as futures and options which are actively traded on numerous exchanges as well as numerous over-the-counter instruments such as interest rate swaps, forward contracts in foreign exchange and interest rates, and various commodity and equity instruments.

4. Everyone from the large financial institutions, governments, corporations, mutual and pension funds, to hedge funds, and large and small speculators, uses derivatives. However, they have never existed in history with the overarching, exorbitant scale that they now do.

5. Derivatives are unravelling at a fast rate with the start of the "Great Unwind" of the global credit markets which began in July 2007 and particularly after the collapse of Freddie Mac and Fannie Mae in September this year.

6. When derivatives unravel significantly the entire world economy would be at peril, given the relatively smaller scale of the world economy by comparison.

7. The derivatives market collapse could make the housing and stock market collapses look incidental.

Three Historical Examples

1. The so-called rogue trader Nick Leeson who made a huge derivatives bet on the direction of the Japanese Nikkei index brought on the collapse of Barings Bank in 1995.

2. The collapse of Long Term Capital Management (LTCM), a hedge fund that had a former derivatives and bond dealer from Salomon Brothers and two Nobel Prize winners in Economics as principals, collapsed because of huge leveraged bets in currencies and bonds in 1998.

3. Finally, a lot of the problems of Enron in 2000 were brought on by leveraged derivatives and using derivatives to hide problems on the balance sheet.

The Pitfall

The single conceptual pitfall at the basis of the disorderly growth of the global derivatives market is the postulate of hedging and netting, which lies at the basis of each model and of the whole regulatory environment hyper structure. Perfect hedges and perfect netting require functioning markets. When one or more markets become dysfunctional, the whole deck of cards could collapse swiftly. To hope, as US Treasury Secretary Mr Henry Paulson does, that an accounting ruse such as transferring liabilities, however priced, from a private to a public agent will restore the functionality of markets implies a drastic jump in logic. Markets function only when:

1. There is a price level at which demand meets supply; and more importantly when

2. Both sides believe in each other's capacity to deliver.

Satisfying criterion 1. without satisfying criterion 2. which is essentially about trust, gets one nowhere in the long term, although in the short term, the markets may demonstrate momentary relief and euphoria.

Conclusion

In the context of the USD 700 billion rescue plan -- still being finalised in Washington, DC -- the following is worth considering step by step. Decision makers are rightly concerned about alleviating immediate pressure points in the global financial system, such as, the mortgage crisis, decline in consumer spending and the looming loss of confidence in financial institutions. However, whilst these problems are grave, they are acting as a catalyst to another more massive challenge which may have to be tackled across many nation states simultaneously. As money flows slow down sharply, confidence levels would decline across the globe, and trust would be broken asymmetrically, ie, the time taken to repair it would be much longer. Unless there is government action in concert, this could ignite a chain-reaction which would swiftly purge trillions and trillions of dollars in over-leveraged risky bets. Within the context of over-leverage, the biggest problem of all is to do with "Derivatives", of which CDSs are a minor subset. Warren Buffett has said the derivatives neutron bomb has the potential to destroy the entire world economy, and is a "disaster waiting to happen." He has also referred to derivatives as Weapons of Mass Destruction (WMD). Counting one dollar per second, it would take 32 million years to count to one Quadrillion. The numbers we are dealing with are absolutely astronomical and from the realms of super computing we have stepped into global economics. There is a sense of no sustainability and lack of longevity in the "Invisible One Quadrillion Dollar Equation" of the derivatives market especially with attendant Black Swan variables causing multiple implosions amongst financial institutions and counterparties! The only way out, albeit painful, is via discretionary case-by-case government intervention on an unprecedented scale. Securing the savings and assets of ordinary citizens ought to be the number one concern in directing such policy.

[ENDS]

To reflect further on this, please respond within Facebook's ATCA Open discussion board.

We welcome your thoughts, observations and views. Thank you.

Best wishes

DK Matai

Chairman, ATCA Open

-- ATCA, The Philanthropia, mi2g, HQR --

This is an "ATCA Open and Philanthropia Socratic Dialogue."

The "ATCA Open" network on Facebook is for professionals interested in ATCA's original global aims, working with ATCA step-by-step across the world, or developing tools supporting ATCA's objectives to build a better world.

The original ATCA -- Asymmetric Threats Contingency Alliance -- is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses asymmetric threats and social opportunities arising from climate chaos and the environment; radical poverty and microfinance; geo-politics and energy; organised crime & extremism; advanced technologies -- bio, info, nano, robo & AI; demographic skews and resource shortages; pandemics; financial systems and systemic risk; as well as transhumanism and ethics. Present membership of the original ATCA network is by invitation only and has over 5,000 distinguished members from over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at Academic Centres of Excellence; 500 Inventors and Original thinkers; as well as 250 Editors-in-Chief of major media.

The Philanthropia, founded in 2005, brings together over 1,000 leading individual and private philanthropists, family offices, foundations, private banks, non-governmental organisations and specialist advisors to address complex global challenges such as countering climate chaos, reducing radical poverty and developing global leadership for the younger generation through the appliance of science and technology, leveraging acumen and finance, as well as encouraging collaboration with a strong commitment to ethics. Philanthropia emphasises multi-faith spiritual values: introspection, healthy living and ecology. Philanthropia Targets: Countering climate chaos and carbon neutrality; Eliminating radical poverty -- through micro-credit schemes, empowerment of women and more responsible capitalism; Leadership for the Younger Generation; and Corporate and social responsibility.

 

TARP: A Rescue Plan or Uncertain Scramble?
http://www.cnbc.com/id/27781824

Michael Lewis, author of Liar’s Poker, calling a spade, a spade. This is the biggest robbery in history, by the same people that robbed the people on the front side and have pocketed your money. This years bonuses? How about a five year claw-back provision?

Hank, Let Me Help You Help This Great Country: Michael Lewis
http://bloomberg.com/apps/news?pid=20601039&sid=aKn.A9dgoN8k&refer=home

Let’s do some foreign buying with TARP and Federal Reserve Money. Wasn’t this suppose allow them to lend to the people of our country? Nice acquisitions by the way at very inexpensive tax payer provided financing cost. Let’s grab all the money, not lend and buy property and other institutions at a discount.

Bank of America to Double China Construction Stake (Update1)
http://www.bloomberg.com/apps/news?pid=20601110&sid=axp8jYWtvdIU
JP Morgan in Canary Wharf HQ move
http://news.bbc.co.uk/2/hi/business/7733891.stm

What’s few extra trillion between friends. It is just me? I have yet to see those trillions get lent back to U.S. taxpayers or businesses. I have yet to see one mortgage modified for the benefit of the borrower, lender, investor and taxpayer. Sixty-one have applied for the last 400B bailout. That worked so well.

ABCPMMMFLF Spells Fed Relief for JPMorgan, Citi Shadow Banking
http://bloomberg.com/apps/news?pid=20601109&sid=aAmfkLEyMPYM&refer=home

You don’t qualify and own a bank? No Problem. You can buy a bad one for 10mm with many write offs (Under new FASB last month and not pay taxes) and then borrow 3.4B from the Tarp. Too much for you, you say, we have one for 7.3mm that will allow you to borrow 3B.

Lincoln, Aegon May Buy S&Ls With `Unsafe' Practices (Update1)
http://www.bloomberg.com/apps/news?pid=20601087&sid=adQDjbNZ6UV8&refer=home

Your are credit card company and not a bank, that is cutting lines a A-borrowers, businesses and raising rates? We have Tarp for you.

Amex, Hartford, Synovus Among Companies Bidding for TARP Funds
http://www.bloomberg.com/apps/news?

You’re a foreign bank? You don’t say…Come get your Tarp, which the taxpayer has not even paid for yet.

Dutch Insurer May Buy Thrift to Get US Bailout Funds
http://www.cnbc.com/id/27780339

GS has serious issues coming it way. The anti-fraud provisions of the 34 Act (People’s Act) and taking the opposite positions of recommendations for starters. Hmm…same assets and business plan started when Paulson was CEO. Direct personal liability to officers and directors.

Goldman Targeted by Investor Complaints of Naked Short-Selling
http://bloomberg.com/apps/news?pid=20601087&sid=as3PwfEfBlhk&refer=home


People don’t ever forget, but most importantly speak your mind to your government.