Philosophy over coffee

Archive for October, 2008|Monthly archive page

Rally, rally, rally?

In Headlines, Size: Venti on October 30, 2008 at 11:15 pm

So what’s new in the market this week? Not much on the overall state of the economy but some can be picked up from the specifics relating to it. Yesterday, the Federal Reserve cut its rates by 50 basis points to 1%- simply what the market expected. If this was of any use, it simply prevented a bigger drop in the stock market that could have followed if the Fed refused to follow expectations. From a credit market standpoint, there’s not much to be gained from such a cut. Yes, perhaps it widens earnings potential for banks or prevents a deflationary environment. But it still does not quite solve the problem of liquidity. On the contrary, it potentially reduces it. As people find higher earnings from investing in bonds and stocks, particularly that a lot of the latter have been beaten heavily lately, they tend to move in that direction. That doesn’t include those who remain fearful, and thus keep their cash under their beds. I might be missing the point in not seeing the value of a rate cut, if any; so please let me know if I did.

Read the rest of this entry »

Flattening It Out

In Life Matters, Size: Grande on October 26, 2008 at 8:57 pm

Everyday, an email gets sent to my inbox from RealAge containing health tips and whatnot. What grabbed my attention two nights ago was a link called “Eat more in front of TV”, which is what I do every single night. With so much eating, and not so much exercise, yes, it’s all building up in the belly. And I need some solutions (outside of having to go to the gym and work out). Here’s what I found from the website:

You can eat up to 6 cups of certain low-fat microwave brands for about the same number of calories you’d get from just 7 or 8 chips. Plus, the popcorn also counts as two servings of whole grains.

A survey of 15,000 people found that popcorn eaters get far more whole grains than people who go popcorn-free. And that’s great news for the waistline, because high-fiber whole grains help you feel more satisfied… And whole grains may help flatten your belly, too

Read the rest of this entry »

Swaps and Spreads 101

In Interesting, Size: Grande on October 26, 2008 at 8:55 pm

When you watch the news, one that always goes with figures relating to T-bills are swap spreads. I had a slight notion of what it was but a news article from the Financial Times (Oct 24, 2008) made it clear to me. Take note of the very interesting event that happened yesterday, one that many perceived to be a “mathematical impossibility”. Bolds below are mine.

Turmoil takes its toll on swap markets as spreads turn negative

By Michael Mackenzie in New York

The turmoil in the financial markets has taken hold of the trade in long-term interest rate derivatives, pushing rates to levels once thought to be a “mathematical impossibility”.

Interest rate swaps are the most widely traded over-the-counter derivative.

Long-term swaps are particularly important for insurers and pension funds that need to fund liabilities decades into the future.

Read the rest of this entry »

Market Trading: Currencies, ETFs, and then some.

In Headlines, Size: Venti on October 22, 2008 at 10:19 pm

Monday marked the 2nd time that the week began on a positive note, after last week’s record rally of 936.42. And yesterday and today also marked the 2nd time that the rallies were followed by plunges. It was another 514-point decline to the Dow, bringing the index to its 5-year low. Intraday trading even saw the Dow fall as much as 698 points just moments before the closing. Only shows you that last week’s high was indeed a simple bear rally. The bottoming is not yet over.

Everyone’s fearsome right now of the looming recession or one that’s already begun. Demand for commodities have declined, even from China, which reported a GDP growth of just 9.0, way below the 9.7 expected. And that’s a single digit growth rate for you. BHP Billiton, Australian-based steel company, reported negative outlook on the demand from China. Read the rest of this entry »

Dawg

In Interesting, Size: Grande on October 20, 2008 at 2:45 am

I can’t remember exactly when I started adoring dogs. Having lived with one for the past 2 months certainly helped. Although it is partly offset by the fact that the dog isn’t as smart as I wanted it to be. It’s not mine; it’s my aunt’s. It is turning three. Apparently the only thing the dog knows is to pee and poop on the grass, except during those times when he can’t hold it anymore. The only words he recognizes are “food” and “go out”. Give him a command and all you get is a blank stare. Now that assures I’m not getting that breed of dog. If I were to get one, here are my options:

  • Siberian Husky- they could look evil but they could also look VERY awesome.
  • Yorkshire Terrier- their hair is hypo-allergenic.
  • Morkie (a mix between Yorkshire and Maltese and it is darn cute, but darn expensive too. One I saw in CA was at $999 and the one I saw in IL was, get this, $1500. Bloody hell.)
  • Labrador Retriever- the golden one, color-wise. lol.
  • Perhaps a miniature schnauzer would also do but it’s at the bottom of my list.

Read the rest of this entry »

Market Watch: 10/16

In Headlines, Size: Venti on October 16, 2008 at 11:44 pm

Recently, a big range of movements on the Dow has become typical. Last week saw the Dow move within a 1200-point range after the worst week ended lower by as much as 21%. Monday’s rally was easily wiped out by the two days that followed after hedge fund redemptions, lower economic figures reported and fear continue to surround the markets.

Today was another busy day. The Dow played within an 800-point range- from being down by as much as 400 points early in the day only to rally in the last hours of trading to finally settle higher by 401 points. S&P and Nasdaq expectedly followed suit with 4.25 and 5.50 percent increase, respectively. Interestingly enough, the VIX recorded another all-time high when it peaked at 81 points before settling at 67.61. It has a lot to do with the puts and calls that are being traded, and the contracts expiring within the next few days. It’s something I still have to educate myself a lot with.

Read the rest of this entry »

Long (Market) Update

In On Headlines, Size: Venti on October 16, 2008 at 2:43 am

And it’s another down day today. Surprise. Monday’s big rally, rising by 936.42- the biggest ever- almost got wiped out after yesterday’s drop of 76 points and today’s tenfold drop of 733.08 to 8,577.91. NASDAQ fell by 150.48 to settle at 1,628.33 and S&P also headed south by 9% to close at 907.84. Some facts: Monday’s rally is the biggest since the spring of 33 and last week’s more than 2000 point drop was the biggest since the summer of the same year. The volatility index, VIX, which basically reflects people’s fear of the market shoots up again to 69.25 after two days of hovering under 60.

People attribute the drop to two main things: hedge fund liquidation as well as the negative retails figured taken from the Fed’s Beige Book released earlier today. In this crisis, hedge funds are some of the biggest casualties and more of them are expected to go out of business in the coming days. As investors seek to get their money back, hedge fund managers scramble to take their positions out, in effect, creating an oversold market. Monday’s historic rise, people say, is still not the beginning of another bullish market. It was simply a bear rally.

Read the rest of this entry »