Archive for ‘stock markets’

Some Random News that the Market doesn’t seem to think is too important

By , 12 December, 2008, No Comment

The Census Bureau reports that retail sales collapsed in October:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $355.7 billion, a decrease of 1.8 percent from the previous month and 7.4 percent below November 2007.

Total sales for the September through November 2008 period were down 4.5 percent from the same period a year ago. The September to October 2008 percent change was revised from -2.8 percent to -2.9 percent. Retail trade sales were down 2.0 percent from October 2008 and were 8.5 percent below last year. Motor vehicle and parts dealers sales were down 25.2 percent from November 2007 and gasoline stations sales were down 22.0 percent from last year.

The following graph shows the year-over-year change in nominal and real retail sales since 1993. Click on graph for larger image in new window.To calculate the real change, the monthly PCE price index from the BEA was used (November PCE prices was estimated as the same as October).

Although the Census Bureau reported that nominal retail sales decreased 8.4% year-over-year (retail and food services decreased 7.4%), real retail sales declined by 10.1% (on a YoY basis). This is the largest YoY decline since the Census Bureau started keeping data.Retail sales are a key portion of consumer spending and real retail sales have fallen off a cliff.

Courtesy of Calculated Risk

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SEC Charges Bernard L. Madoff for Multi-Billion Dollar Ponzi Scheme
FOR IMMEDIATE RELEASE2008-293
Washington, D.C., Dec. 11, 2008 — The Securities and Exchange Commission today charged Bernard L. Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The SEC is seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm.
The SEC’s complaint, filed in federal court in Manhattan, alleges that Madoff yesterday informed two senior employees that his investment advisory business was a fraud. Madoff told these employees that he was “finished,” that he had “absolutely nothing,” that “it’s all just one big lie,” and that it was “basically, a giant Ponzi scheme.” The senior employees understood him to be saying that he had for years been paying returns to certain investors out of the principal received from other, different investors. Madoff admitted in this conversation that the firm was insolvent and had been for years, and that he estimated the losses from this fraud were at least $50 billion.SEC Charges Bernard L. Madoff for Multi-Billion Dollar Ponzi Scheme
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What’s going on here?

By , 11 December, 2008, No Comment

We have broken a rather dubious record for unemployment today as more people are unemployed than anytime in the last 26 years. In addition, consumer spending is slowing and, for the first time in 50 years, consumers have begun to pay down their debt. There are a number of lengthy explanations for this, but one could summarize the phenomena by saying people have become very risk averse.

Yet with all of this less-than-rosy news, the market chugs right along, ignoring all the negative news, at least for the time being. It is a vexing situation, as the market seems to be defying gravity.

As for trading, today was fairly decent, but we still have some very long bars in the market swings and the potential for getting caught in one of these monsters is ever present. I traded fairly successfully today and avoided most of the chafe, but did find myself stopped out on a long bar that formed in what seemed to be microseconds. POOF….stopped out.

I have trimmed the number of contracts I am trading to 2 to offset the inherent market volatility and that has seemed to work pretty well, along with paying close attention to the volume readings as the market nears pivots, support and resistance. Gosh I long for the old days when the market used to swing in a semi-coherent fashion….let’s hope it isn’t too long before the whole situation settles down.

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