Buzz Bits: Dow and Nasdaq Climb Higher
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Sometimes You Just Gotta Say, What the Shuck? - Todd Harrison - 3:07 PM
Oysters this, oysters that--man, it ain't easy finding pearls of wisdom in these murky waters. Lemme try...
- Not to harp... wait, does that mean play the harp? Does it have anything to do with a harp? OK, sorry - it's the A.D.D. - but Granny Goldman (GS) is funky cold medina. We know the importance of $180 but I'm not talking about that. I'm talking about the price action. It's almost like, dare I say, someone knows something.
- You know what I can't shake? No, not this. The notion of a Valentine's Day Massacre as Big Ben chimes in from the cheap seats. Actionable? Nah, hairs on the back of your neck never are. Worth putting out there for schvitz and giggles? Sure, why not.
- What I do know is that any movement will be exacerbated as a function of expiration. Tick tock on that front month paper, Minyans.
- I nibbled back oh-so-gently on the Bear Stearns (BSC) puts I punted this morning. No huge edge, just tradin' Pa.
- Raise your hand if you think the press will paint this rally with the stimulus brush. That would be, hmm, how can I say this sans acrimony... misguided.
- See ya Contra-hour. Hello closing bell!
At the request on many, an example of a failed auction... - Bennet Seddaca - 1:34 PM
Many of my sell side friends have been gracious enough to send me a list of failed auctions. I cannot share as they are somewhat confidential in nature.
But I thought I might as well share with you the recent failed auction of Missouri State Environmental Improvement and Energy Resources Authority (which was rated AAA by Fitch).
The table below says it all. They were paying 4+ % for quite a while on their ARS. As of yesterday's failed auction? 18%. That is not a typo. 18%. And they aren't alone.
Click to enlarge
Revealing Ag Reports - Ryan Krueger - 1:25 PM
There were two revealing clues in the much-anticipated U.S. Department of Agriculture report besides the headline grabbing acreage and planting numbers.
One, efficiency is up. Specifically, more bushels of corn came from the same acre. My ol' "Pa" could have only dreamed of such luck while he and his grandson did rain dances while roasting hot dogs on an open fire. The only innovation he knew was a design change in the ballcap his seed salesman would bring him each year.
Now the seed design contains the technology and Monsanto (MON) salesman don't need the hats. The numbers shined and management raised guidance yet again. Its innovation has resulted in higher yields from existing acreage. Now you know what I meant when I wrote that this is my kind of tech stock.
If the game of musical chairs continues, where farmers chase high prices by planting more of those crops and less of the others then there may be a new contender for the next winner. I think it will – farmers are capitalists, after all.
Returning from the bowels of a total IT meltdown. - Fil Zucchi - 10:36 AM
Apologies for the absence Minyans, but what started off as a bout of IT hell morphed into a total meltdown. It got to the point where I was getting teary-eyed with excitement from how well my 28.8k modem was working.
- Meanwhile, I noted the action in Goldman Sachs (GS) a few days ago, and it is worth re-noting it. If this puppy melts, it may lead the market to a truly scary whoosh bottom... or it may just melt the market for good.
- Yesterday I got a call from the broker who handles my "cash equivalent" assets, telling me not to worry about the possibility that some of the auctions on my student loan auction rate securities (ARS) might fail. I am not really worried because these are 98% guaranteed by the state and the federal government, so there is little credit risk there. Furthermore, when these auctions fail, holders get a awarded a "penalty bid" interest rate for the following period (usually 35 days) which is much higher than what one would expect at auction. Lastly, I don't need the cash anytime soon.
- Now put yourself in the shoes of those holding non-guaranteed ARS', who may need the cash ASAP, and/or who are using those instruments to prop-up margin requirements. Gulp!
- I've been as cold as the Washington DC weather in reading the path of precious metals, but for what it's worth I still think this is "toppy" action. Ditto for the Oil Services (OIH) names, only worse.
Position in precious metals, OIH, ARS
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