Interdum stultus opportuna loquitur...

Friday, February 22, 2008

USRant: AMBAC Propaganda Launch-Pad...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

If you want a really good indication of what a bear squeeze looks like, take a look at an intraday Dow chart. All driven by CNBC's complicity in the information warfare shenanigans which forms such an integral part of the US crony-capitalist system.

CNBC ought to be ashamed of itself for the echo-chamber relaying of a self-interested claim by AMBAC that it can find someone stupid enough to bail it out.

That said, this was absolutely NOT bulls buying in. This was a short squeeze, pure and simple. And it was faker than the hair colour of the average 'blonde'. It was couched in all sorts of politician's double-speak - the sort of weaselly deniability that should be slapped silly. "the bond insurer may announce a bailout plan next week..."  "there is speculation that AMBAC may be bailed out next week": (with no mention that the speculation was probably all in the imaginations of CNBC). 

If AMBAC is not bailed out, or if the terms of the bailout are effectively the same (from the point of view of shareholders) as bankruptcy, will CNBC be on the hook for the losses that result subsequently? You bet your arse they won't. It is the classic dichotomy; if you or I participated in an online stock-touting scheme, we would face prosecution. But when CNBC and a few Wall Streeters do precisely the same thing (tout a piece of non-news in order to rescue their chum's positions), nothing happens.

Anyhow - anybody who was still short late on Friday afternoon when the market was so dull dull dull, really needs their heads examined.

Economic News

None that I spotted.

Fed Open Market Operations

One $5.25 billion weekend repo, with a lousy $235 million in Treasury-backed collateral.

Headline Indices

After dropping 100 points in the first hour, and bumping along the 12150-ish area for 3 hours following the noon lapse into semi-consciousness, the Dow took off like a duck shot in the bum at 3:30 p.m. NY time. 

that was a bit unwieldy; the lift off in the market was at 3:30 p.m., not the shooting of the duck. I am not sure what a duck shot in the bum at 3:30 p.m. would look like - probably not much different from a duck shot in the bum at any time or in any time zone. Indeed, perhaps any waterfowl would be able to be substituted for the duck...

Back to the point:

The Dow Jones Industrial Average rose almost exactly 250 points after 3:30 p.m.; by the close it was showing a gain  of 96.72 points (0.79%) to 12381.02 points for the day. The index high for the day was 12397.79 in the minute before the close, while the low was 12155.26 set half an hour earlier.

Major Advancers in the Dow were

  • AIG (AIG) +1.23 (2.58%) to 48.82 on volume of 12.7 million units
  • Verizon Communications (VZ) +0.78 (2.21%) to 36.14 on volume of 12.8 million units
  • United Tech (UTX) +1.42 (2%) to 72.31 on volume of 2.5 million units
  • JP Morgan Chase C (JPM) +0.80 (1.86%) to 43.87 on volume of 24.4 million units
  • At&t Inc. (T) +0.46 (1.33%) to 34.93 on volume of 30.9 million units

Major Decliners in the Dow were

  • Intel (INTC) -0.48 (2.36%) to 19.82 on volume of 128.8 million units
  • Microsoft (MSFT) -0.42 (1.49%) to 27.68 on volume of 124.2 million units
  • General Motors (GM) -0.27 (1.11%) to 24.03 on volume of 16 million units
  • Merck (MRK) -0.08 (0.17%) to 46.05 on volume of 9.1 million units

Most Traded Dow stocks were

  • Intel (INTC) -0.48 (2.36%) to 19.82 on volume of 128.8 million units
  • Microsoft (MSFT) -0.42 (1.49%) to 27.68 on volume of 124.2 million units
  • Citigroup (C) +0.11 (0.44%) to 25.16 on volume of 67.8 million units
  • AT&T. (T) +0.46 (1.33%) to 34.93 on volume of 30.9 million units
  • General Electric Co (GE) +0.01 (0.03%) to 33.7 on volume of 29.7 million units

The S&P500 Index advanced +10.58 points (0.79%) to 1353.11 points. The Nasdaq Composite advanced +3.57 points (0.16%) to 2303.35 points; the Nasdaq100 advanced +7.14 points (0.4%) to 1773.44 points.

The CBOE Volatiity Index lost 0.96 points (3.82%) to 24.16 points. The CBOE Nasdaq100 Volatility Index lost 0.36 points (1.34%) to 26.56 points.

NYSE Total Volume totalled 3.4billion units; Nasdaq Total Volume totalled 2.27billion units.

Major Market Statistics
Index Close Gain(Loss) %
Dow Jones Industrial Average 12381.02 +96.72 0.79%
S&P500 Index 1353.11 +10.58 0.79%
Nasdaq Composite 2303.35 +3.57 0.16%
Nasdaq100 1773.44 +7.14 0.4%
CBOE Volatiity Index 24.16 -0.96 -3.82%
CBOE Nasdaq100 Volatility Index 26.56 -0.36 -1.34%
NYSE Total Volume 3.4bn - -
Nasdaq Total Volume 2.27bn - -

Precious Metals

Well, the Platinum market has performed in line with our expectations so far - sadly without an overbought bounce yesterday we are not short.

Precious Metal Futures
Index Close Gain(Loss) %
Gold 946.0 -3.2 -0.34
Silver 1801.0 +6.0 0.33
Platinum 2169.7 -18.5 -0.85
Palladium 515.90 +0.40 0.08

Energy Complex

Crude has flirted wit h$100 for so long that people now see it as a natural short point. When we look at this week's CoT data we might find a slide in small spec longs and an increase in the Dumb Bull Ratio... the perfect buy signal for next week.

Energy Futures
Index Close Gain(Loss) %
Crude Oil 98.98 +0.75 0.76
Heating Oil 2.7484 +0.0311 1.14
Gasoline RBOB 2.5400 +0.0180 0.71
Natural Gas 9.179 +0.288 3.24
Ethanol 2.100 unch 0


The nine-stock group that makes up the Rant bellwethers declined on average by 0.3%. The fallout occurred as follows:

  • General Electric (GE) up $+0.01 (0.03%) to $33.70 on volume of 29.73 million units.
  • Citigroup (C) up $+0.11 (0.44%) to $25.16 on volume of 67.77 million units.
  • Wal-Mart (WMT) up $+0.20 (0.4%) to $49.99 on volume of 14.25 million units.
  • IBM (IBM) up $+1.21 (1.13%) to $108.14 on volume of 5.61 million units.
  • Intel (INTC) down $0.48 (2.36%) to $19.82 on volume of 128.84 million units.
  • Cisco Systems (CSCO) up $+0.41 (1.77%) to $23.60 on volume of 52.97 million units.
  • Google (GOOG) up $+4.94 (0.98%) to $507.80 on volume of 5.47 million units.
  • Fannie Mae (FNM) down $0.37 (1.28%) to $28.62 on volume of 15.15 million units.
  • Freddie Mac (FRE) down $1.18 (4.25%) to $26.57 on volume of 19.16 million units.

Currency Futures
Currency Futures
Index Close Gain(Loss) %
U.S. Dollar Index 75.575 -0.075 -0.1
British Pound 1.9660 +0.0072 0.37
Canadian Dollar 0.9844 -0.0042 -0.42
Japanese Yen 0.9368 +0.0040 0.43
Swiss Franc 0.9226 +0.0038 0.41
Euro FX 1.4817 +0.0008 0.05
Australian Dollar 0.9188 +0.0011 0.12
New Zealand Dollar 0.80450 +0.0075 0.94