Dow

[lakedaemonian]

Just reading through and trying to understand the AIG quarterly result ... i.e. lost 61 billion in just 3 months! ... While the headline number is truely scary, there are some positives (but not too many shareholders)

1. Large non-cash write-offs
2. Paying huge claims that will benefit the recipients (lets just call them "counter-parties for now but you can call them BAC, C, etc.)
3. Govt has ploughed 170 billion into the economy through AIG
4. I'd guess the govt will need to plough in another 60-100 billion even tho AIG mgt say they won't need the new 30 bill soon.
5. Expect it to be nationalised and criminals identified (but not prosecuted)
6. Appalling risk management by AIG
7. Appalling oversight by every regulatory body wordwide!

re point 6 - if AIG had indulged in just a little bit of risk management - call it insurance 101 - then they could have broken the credit bubble very early on! Truely appalling underwriting.

This sad story of appalling risk management will run and run!

Fact of the day - AIG's loss amounts to 92 percent of the $67.4 billion that Americans spent at world's largest retailer Wal-Mart Stores Inc. in the fourth quarter, which includes the holiday season. - scary!

http://yahoo.brand.edgar-online.com/...0123-09-003740

Alas, I am intimately aware of a rather substantial underwriter about to launch a product which is horribly, horribly mispriced to the downside.

After considerable and rather robust debate where basic questions regarding underwriting profitability(and absolute certainty it will be lacking), premium investment returns(approaching absolute zero), and fast rising payout costs....no valid answers were provided.......but dissenters such as myself have been publically vilified as "not being team players".

Doomed to failure...but policy holders will save a heap on the surface.....whether they get paid out or whether this insane scheme lasts the year is a different story.

Risk Management must be a foreign language. :|

[dumbass]

it feels like sentiment is reaching an extreme which always raises the possibilty that some kind of bottom is just around the corner.
6500 has been my very long term target and now were just about there.The best fit elliot count suggests we are currently in a fifth wave, with potential for indicator divergence also price close to lower trendline.
looking at transport index it has not yet taken out bull market lows, which may be a bullish divegence from the dow index.
i think we will get clarification soon but cautiously optimistic for the trade of 2009 ,
a sharp bear market rally running many months and there normally pretty violent upswings.

[frostyboy]

i think we need the vix to hit like 70 in a month or two for a nice big sucker rally lasting 6-9 months. dumbass my opinion is we are in wave 5 but the subwave of it is still 3 and about to start subwave 4 I hardly use elliot wave only a bit for the primary trend.

[lakedaemonian]

More SP500 PEs

Thomson Reuters, which publishes similar analysis, estimates the trailing P/E ratio for the S&P 500 is around 11.

Those numbers are well below the valuations reached during the market low of the 2001 recession, when the ratio stopped at 19. They're also lower than the P/E ratio of 13 touched at the market bottom during the 1990-1991 recession, says Morgan Keegan, which used data compiled by Yale University's Robert Shiller for its historical research.

But widen out the lens, and P/E ratios have dropped even further in some earlier recessions. During the market low of the early 1980s recession, for example, stocks in the index were trading at a mere 8 times earnings.
By some measures, P/E ratios are near lows, though it depends how you slice it

But IF(and a VERY likely IF) earning continue to plunge...it will push up P/Es.

While I AM looking, very closely in some cases, all I see is a bunch of accordians falling off a roof........share prices crash......P/Es shrink.......earnings crash......P/Es expand...GOTO step 1

While I think we are closer to the bottom than the top.......I still don't see the bottom yet.

[lakedaemonian]

Just reading through and trying to understand the AIG quarterly result ... i.e. lost 61 billion in just 3 months! ... While the headline number is truely scary, there are some positives (but not too many shareholders)

1. Large non-cash write-offs
2. Paying huge claims that will benefit the recipients (lets just call them "counter-parties for now but you can call them BAC, C, etc.)
3. Govt has ploughed 170 billion into the economy through AIG
4. I'd guess the govt will need to plough in another 60-100 billion even tho AIG mgt say they won't need the new 30 bill soon.
5. Expect it to be nationalised and criminals identified (but not prosecuted)
6. Appalling risk management by AIG
7. Appalling oversight by every regulatory body wordwide!

re point 6 - if AIG had indulged in just a little bit of risk management - call it insurance 101 - then they could have broken the credit bubble very early on! Truely appalling underwriting.

This sad story of appalling risk management will run and run!

Fact of the day - AIG's loss amounts to 92 percent of the $67.4 billion that Americans spent at world's largest retailer Wal-Mart Stores Inc. in the fourth quarter, which includes the holiday season. - scary!

http://yahoo.brand.edgar-online.com/...0123-09-003740

One insane aspect of this bailout debacle is that somewhere approaching $2 trillion of bailout funds to the likes of AIGs counterparties are being kept secret.

So what are ultimately taxpayer funded/guaranteed initiatives...the taxpayers aren't allowed to know who/what/when/where/why/how is being funded.........if it wasn't so deadly serious....it would be incredibly funny.

[dumbass]

i think we need the vix to hit like 70 in a month or two for a nice big sucker rally lasting 6-9 months. dumbass my opinion is we are in wave 5 but the subwave of it is still 3 and about to start subwave 4 I hardly use elliot wave only a bit for the primary trend.

hey frosty , good to hear someone using elliot wave, not the most popular analysis on this site.
i would like to see your count , always interested to see another perspective.
heres my hourly count , im counting that we are in a fifth wave of a fifth.
divergence on indicators and a possible ending diagonal printing.

[ananda77]

After Friday's late hour rally it will be interesting what happens today.

...really interesting to be 100% in the know, but it would be extremely boring...

...considering Friday's trading: SPX500 opens with a rally but encountered strong selling pressure which intra day traded the SPX500 to a new low;

...the close was positive (something for the fairytale press to chirp about) but more stocks closed lower than higher by day's end

...consequently, the market could be in for a consolidating period (>675/725<) short term (couple of days) before trying to take out SPX500 *640; if *640 holds = multi-month bear rally possible and likely (considering quite a few positive divergences developing over the last few trading days)

Trading strategy: best option (safest): sideline until resolved (bottom in place); or short SPX500 *725;

Kind Regards

[frostyboy]

this is my count i think we have started a subwave 4 now. the divergences could still be there when i think we are at end of wave 5

at the moment im looking for some more panic like eastern europe or goldman sachs before i go long

[ananda77]

...259000 call options (US$7 m) bought on the XLI (Industrial Fund Candidates: GE, UPS, UTX, CAT) last Thursday

...rumors have it, deal is based on:

>a House Financial Services subcommittee is planning a mark-to-market meeting; current mark-to-market rules forces banks to value assets at current market prices. forces banks to report billions in write-downs; write-downs will disappear if the mark-to-market rules are eliminated or put on hold for a year

Kind Regards

[Hoop]

The indexes which saw the old bottom break (incl Dow) recently have since lost 10%.
Most new TA targets showed a new targeted bottoms of 20% below the old bottom (now resistence level) Europe TA Targets are nearer 30% lower... Frosty you assumptions confer. NZX50 only 10% lower which makes me suspect that the NZ$ will lower again as a continuing buffer on the falling NZX50 index

...it seems we could be half way there at the moment. TA Targets DOW 6000 S&P 600 AllOrds 2850 NZX50 2350.

When the new bottom is formed I will be asking the same question again.."Is this the real bottom?".... as all my non-TA indicators are positive... the latest being triggered but not confirmed yet is the reliable copper indicator.