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Doin' It Bloggystyle: Bailouts, September, Apple and VIX


Minyanville brings together the best of what they are saying "out there" about the topics we're talking about right here.

Blogs themselves need no introduction, as they get as much publicity as pretty much anything these days, save maybe the latest Britney news. There's an expanding world of excellent financial blogs, covering just about everything, from global economics to swing trading. Minyanville's goal is to bring together the best of what they are saying "out there" about the topics we're talking about right here.

The Friday Bailout Announcement Reviews Are In.

Consensus? Somewhere between Gigli and Ishtar.
  • Barry questions the odd timing of Friday's big bailout announcement: "A very minor policy change at the margins, but one with timing that is utterly exquisite. The President's speech: Immediately diverts attention from Fed Chair Ben Bernanke's speech; Comes right before a 3-day weekend; Is on the last day of the month; (and) Is on the last day of the fiscal year for many financial firms. "
  • Gary Kaltbaum concurs: "Why did George Bush decide to make an announcement that he was bailing out...ooops, excuse me, helping out subprime borrowers the morning of a light volume, pre-holiday trading day? In fact, why is George Bush trying to bail out anyone? Why is George Bush trying to interfere with the markets? This is not his job."
  • Mish is a tad skeptical as well.
  • Similar sentiments from Financial Armageddon: "...guaranteeing loans for homeowners who can't afford the payments, encouraging mortgage-holders to hang on until they've been bled dry, and giving false hope to those who would be better off cutting their losses really only benefits one group.....The lenders."
  • Color Calculated Risk underwhelmed.
  • Accrued Interest? "I really don't like this move at all. I know what's currently being announced is limited in nature, but what they are proposing is to have FHA step in and insure timely payment of mortgage loans which are currently delinquent. I fear that Congress will move to expand programs of this sort. Now I think you are really sending the wrong signal to underwriters. To me this is exactly like threatening to send your kid to his room without dinner, then sneaking some pizza up there 10 minutes later."
  • OK. someone must think this is a good idea? Anyone? Anyone? Buehler? Kudlow? "With the help of Treasury strongman Henry Paulson, Mr. Bush is identifying ways to provide some modest help to a couple of hundred thousand homeowners to keep the ownership society dream alive."
  • Not sure that's an endorsement of the idea or Hank Paulson's manliness...

Wake Me Up When September Ends
  • Jim Kingsland lays out why it can be the cruelest month of the year.
  • Dr. Brett attacks some old saws about volume confirmations.
  • 20 Priceless Rules from some trading legends, via Options Pundit.

About That VIX

  • So here's a nickel course on the VIX.
  • It is a handy estimate for options volatility for an ATM option in the S&P with 30 days duration.
  • Volatility in the S&P itself has 2 basic factors; the volatility of the component stocks themselves and the degree to which they correlate with one another.
  • Correlate, you say? Yes, stocks moving all different directions will produce lower volatility for the obvious reason that they will offset each other and keep the index steady.
  • Conversely, high correlation causes volatility to spike.
  • So where do we stand on the correlation front? By one measure, quite high.
  • This from Bespoke.
  • "Earlier in the month, we highlighted how the frequency of all or nothing days in the market was at the highest levels since S&P reclassified its grouping system in 2001. By all or nothing, we mean days where each of the 24 industry groups in the index were either all up or all down......Over the last twenty-five trading days, there have been 12 days where either all the groups were up or all the groups were down. "
  • That's the highest confluence of such days in a 25 day stretch since calculations of this sort started in 2001.

Name Game

  • Apple (AAPL)-icious news due tomorrow. The Trading Goddess runs down the possibilities.
  • No word though on the new I-Pacemaker, the world's first device that can keep your beats regular and download 1,000 songs.
  • 10Q Detective on the death spiral convert in the (in)aptly named HepaLife (HPLF).
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