Not sure about the prospects of that happening. Do you already have a sell order in or do you plan on winging it once it hits $30?
I bought over a month ago at $29.85, rode it down to $18, and still hold my entire original position. No sell orders yet, but I just want to dump it at this point, preferably at $29.86.
Well I have to give it up to you. It takes some steel gonads to stomach a 40% loss without flinching.
Your situation illustrates why Bulls will have some serious work to do to really move the market forward from its current levels. Good luck.
Fed Statement <i> The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4%. Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further. Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters. The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2%. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Minneapolis, and San Francisco. The Board also established interest rates on required and excess reserve balances of 1/4% </i> <hr> At first glance, some are cheered because of the rate cut. After they reflect on the implications of the siuation, then things aren't very positive. <i>Weak economic conditions</i> implies that corporate earnings will be under pressure which will tend to limit upside advances in the stock market. Coupled with those who are currently in the market (at higher levels) and would like to exit at breakeven or a minimal loss, investors should be <b>extremely cautious</b> about initiating new Long positions.
AAPL getting beat up afterhours... *EDIT* : and just as I type it, CNBC reports... Jobs apparently won't be doing the keynote at MacWorld and 2009 is the last year for AAPL to attend MacWorld.
it's interesting...SRS at 52 week lows but IYR is not at 52 week highs. this is just another example of how the ultra etfs are flawed. btw SRS is not housing. it is more commercial real estate.
I think commercial real estate can still fall a bunch. I was short GGP in the 40s but covered way too early, but a lot of these companies have massive debt loads and when mall sales start dropping they will be in trouble.
I looked at the XHB chart later... back above the 50day moving average. It's breaking out of the downtrend, but that downtrend is a long and extensive one...housing stocks should bottom long before housing itself actually does, and my suspicion is that signs of a real estate bottom not far off may be helping the bottoming process (in this case, the record drops in housing starts are signs that excess inventory is finally getting a chance to move off the market). You do have a point about commercial real estate though, and while that market doesn't have as much inherent over inflation as residential real estate does, the economic downturn will certainly bring some hurt in that department.
It's not the rate cuts - it's the extent they will cut rates combined with basically saying there is nothing they won't do within the bounds of the law to help the economy. Paulson also came on CNBC and said that he foresees there being no more major financial institution failures (in other words, I don't think they'll allow it). From everything they said, the automakers are safe as well... at least for now. They also mentioned plans for a program to send money to various loans (student, mortgages, car, etc.). The most interesting thing about all this is that the Fed has promised things on a couple of occasions in recent weeks and the markets have spiked both times (mortgage rates dropped on the last big announcement) - but they actually haven't executed on those promises yet. Meaning, they jolted the market without doing anything and still can do those things to presumably jolt the market even more. I think it was more people seeing they're willing to boost housing and loan availability for consumers combined with the fact they're just going to dump money into the system and make it work instead of everyone living with the fear of another Lehman or BSC-type failure again.
As big as the rate cut/virtual ZIRP announcement was, I thought this was bigger ... Rumors say that Obama's grand economic plan includes buying up thousands of mortgages, student loans, etc. (an extension of McCain's campaign idea) to effectively put a floor under the housing and credit markets. This is in addition to the massive infrastructure and "new energy" spending projects (aka "5 million new jobs"). Also, someone pointed out that with this massive interest rate cut, the government is effectively refinancing all of the massive debt it is taking on at ridiculously low rates. One way to look at it is that they're going to inflate their way out of this mess by simply printing money until the contraction stops. Critics say that this is the same thing Japan did over a decade ago which obviously failed, but the comparison isn't so straightforward: this crisis is a global crisis, and everybody still needs US debt to survive, which was clearly not the case with Japan. Those pipe dreams the Europeans, Chinese and Russians once had of breaking free of the dollar and forcing the US into bankruptcy have long evaporated -- they are all gasping for air themselves now. So the way I see it, the US government and the Fed have decided that they really can play god with the economy and spend as much as they have to to fix the economy, while effectively paying nada for it. Put simply: they're holding up a gun to the world's head and saying, "your money or your life". And everyone has no choice but to pony up the dough and buy US debt at ridiculous prices while getting no return on it, since the alternative is in fact death. The critics think that the US will eventually default on all this debt, but that would require demand for US debt to dry up, which simply doesn't look like it will ever happen in the foreseeable future. Instead of US economic power waning, it has actually increased -- the US is reemerging as a financial superpower and putting everyone else in their places. As an analogy, one of the senior employees at my place of work was discussing with us recently how, during bull markets, all sorts of competition arises and seems to threaten our company's stake in the market. But when recessions hit (and this one is no exception), many of those competing companies fall by the wayside, and our company (which is a Fortune 500 co. with zero LT debt) is left deciding which pieces to snatch up for the future. At the end of the day, we're stronger and everyone else is weaker. It's an interesting theory to think about, and I'm sure there are plenty of arguments that can be made for or against it ... but if things do in fact play out this way, it would be bad news for those who are betting on the downfall of the American empire as a result of financial armageddon.
Madoff investors face off in Palm Beach <i> Beyond the financial fallouts in Palm Beach of the Bernie Madoff scandal, the very social fabric of The Island may find itself altered forever. Formerly rich families will be uprooted. Former friends are at each other’s throats. While Realtors are lining up to grab the expected sales of mansions whose owners lost the millions they invested with the disgraced Wall Street big, one scene at Mar-a-Lago Saturday night illustrates the tension. Several eyewitnesses at the 60th birthday party for carpet king John Stark tell me that two of the major players in this scandal came face-to-face. It wasn’t pleasant. On one side was Bob Jaffe. The philanthropist has been criticized here for directing big-deal investors to Madoff Investment Securities – the firm that, federal authorities said, lost $2 billion of its clients money in what amounted to a Ponzi scheme. Jaffe admitted to being paid for his referrals. Jaffe, who is not under investigation, and his wife, Ellen, apparently made the mistake of showing up at Stark’s birthday barbecue. Several Madoff clients, too, were among the 70-plus guests. <b>One had mortgaged two homes to maximize his investment. Another put in $20 million from a child’s trust fund.</b> “Why Bob would show his face after what happened,” said one guest, “is beyond me.” <b> So, one of the bigger losers in the Madoff collapse, Nine West shoes founder Jerome Fisher, verbalized what others were thinking. Fisher, according to published reports, may have lost $150 million. </b> He reportedly told Jaffe: “You’ve got a lot of nerve showing up here!” It went downhill from there. “They were about to go at it,” said one spywitness. “There was some pushing and yelling. I’d never seen anything like this at Mar-a-Lago. Jerome is a tough cookie. He made some really threatening comments to Bob, as he well should have. It was a wild scene.” With Mar-a-Lago owner Donald Trump standing nearby, several Stark well-wishers stepped in and separated the men. Neither Fisher, already a victim of the $200 million-collapse of the KL Group here in 2007, nor Jaffe left. They just avoided one another. Trump told Page2Live: “It was a great party, but it was one like none other. There were a lot of unhappy campers there.” Neither Jaffe nor Fisher returned calls. A Jaffe family spokeswoman, Carey O’Donnell said Jaffe denies the incident occurred. “I don’t know where you’re getting this from, but it categorically didn’t happen,” O’Donnell said. Madoff, 70, was arrested last week in what could become the biggest swindle in American history. Madoff used fresh money from some investors to cover the losses of others. He promised outrageously high interest rates, some as high as 15 percent. </i>
Isn't this how greenspan tried to fix the economy before. Try to pump a lot of cheap money into the system. I don't think it really worked out.
What I heard was the Fed thinks the economy is more in the crapper than Wall/Main Street thinks, which is really saying something. Of course, the market bounced up yesterday on this "good" news. Go figure.
