sell! sell! sell!

[BASEHEAD]

Well Fed getting scared of a credit crunch injecting liquidity any perma bulls scared yet?

The Fed added $19 billion in liquidity to the market Friday morning, then another $16 billion and, in mid-afternoon, $3 billion.

Just inject funny money everything will be A-OK:thumbsup:

Lol.

Scared ,are you kidding? This volatility is exceptional for day traders.Even folks long in stocks that are historically performers have nothing to worry about.One way or another this subprime dilemma isnt going to trash the market.

This liquidification is only plan A.It took a while to bleed in then the market reacted well I thought.Initially this plan looked like a reaction,too little too late but after today I can see the Fed is not going to let this particular "crisis" take down Wall St/"the economy".If all this money doesnt help significantly over the next few months expect a rate cut for plan B.

Who said the Fed couldnt bail them out.

This is an amazing ride.Im getting blasted tonight, muchachos.

Remember theres always a bull market somewhere.

:toast:

 

[tiznow]

Umm...it isn't just a subprime dilemma its starting to spread into even prime and alot of big banks and their hedge funds are imploding.

anyway 6 months ago they were saying subprime would be contained and housing will rebound soon.

Now they are saying fed injections will do the trick.

next will be a possible rate cut if things get bad enough.

than what's the next means?

anyway like you said its gonna be one volitile ride but the general trend will be down for a while.

 

[tiznow]

Was wondering why europe injected so much more liquidity than the US the last few days here's the answer. Like i said before on a global scale everything is very symbiotic right now this isn't just a subprime issue its far greater than that.

-------------------------------------------------------------------------------------------------------------------

August 9, 2007 (LPAC)--A senior European banking source reports that the interbank money market closed down this morning for two to three hours, for the first time ever. Rumors had spread that the German Bundesbank was holding an emergency meeting because of a collapse of a major German bank, believed to be Westdeutsches Landesbank, one of the largest in Germany. The Bundesbank then released a statement saying that the meeting was to discuss the IKB banking crisis.

The source said that a Westdeutsches Landesbank failure would have collapsed the entire global financial system. The source underlined that this ongoing crisis is far worse then anything he has witnessed.

The next threat to the banking system in Germany, which will have obvious global ramifications, is what is called Asset Backed Commissioned Paper. Banks issue these to customers such as hedge funds and other banks, which, theoretically, can draw on them in case of emergency. The problem is that banks have been issuing far more then they should have. The deadline for the hedge funds and other customers to draw on these ABC-Ps is between August 13 and 15. If their customers rush to draw on them, this will be unsustainable for the banks.

The source said that these ABC-Ps were involved in the IKB bank crisis, because its Rhineland Funding unit had drawn on one of these, forcing IKB to cover it. Then IKB requested to draw on one of these ABC-Ps it had with Deutsche Bank, but the latter refused to honor it, and IKB collapsed.

Another senior banking source told EIR that he too had heard that the interbank money market had closed, and it had been closed under orders of the European Central Bank (ECB), so that the latter could funnel emergency credit to selected, troubled banks.

Meanwhile Bloomberg News reported that the ECB, in an "unprecedented" response to banks in desperate need of cash, loaned 94.8 billion euros to these banks. This followed a jump in overnight lending rates the banks charge each other, to the highest level in six years.

 

[Dawoofdaddy]

Morning rally fizzling out going into afternoon.

:smoker2:

 

[tiznow]

it'll be a choppy ride down with TPTB telling you all is okay we got your back. Fed and ECB did more injections again today (not as much as on friday) to sooth the markets. The injections at near all time highs tells you how dire the situation is and is only a temporary reprieve from what is to come, it takes a while for the big boyz to liquidate their positions in an orderly manner and leave the sheep holding the bag.

 

[BASEHEAD]

Is GS a big boy?

it'll be a choppy ride down with TPTB telling you all is okay we got your back. Fed and ECB did more injections again today (not as much as on friday) to sooth the markets. The injections at near all time highs tells you how dire the situation is and is only a temporary reprieve from what is to come, it takes a while for the big boyz to liquidate their positions in an orderly manner and leave the sheep holding the bag.

Goldman's GEO fund gets $3 billion injection
Wall Street bellwether's hedge fund took $1 billion hit, sparking move




By Greg Morcroft, MarketWatch
Last Update: 12:35 PM ET Aug 13, 2007




<LABEL class=StoryContent id=StoryContent_Content>
NEW YORK (MarketWatch) -- Goldman Sachs said Monday that it is pumping $2 billion of its own money, along with $1 billion from new investors, into its Global Equity Opportunities hedge fund, which lost more than $1 billion last week, or about a third of its value.
Goldman has been the focus of intense speculation in the markets recently, as investors try to figure out how much money they have lost in their hedge funds, and, how much selling they have been doing that could affect the broader markets.
Investors were mainly focused last week on the Goldman Sachs Global Alpha fund, which was reportedly selling large positions in various assets to pay off the loans it had used to acquire the money-losing positions. Goldman is not injecting any money into Global Alpha.
In essence, Goldman is predicting that the disruptions that have rattled markets this month have made the fund's investment more attractive, and its assets under valued.
Goldman (GS : Goldman Sachs Group, Inc
News , chart , profile , more
Last: 179.43-1.07-0.59%
1:44pm 08/13/2007

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<IMG class=pixelTracking height=1 width=1 border=0>GS179.43, -1.07, -0.6%) acknowledged steep losses at its Global Equity Opportunities and other funds in a news release and on a conference call. All the fresh money is coming from new investors in the fund, Goldman said.

Goldman shares rose 2.3%, to $184.76, in early action, but sold off and traded up 0.4% at $181.17 in early afternoon trade.
Global Equity Opportunities and other so-called "quant funds" use a market-neutral strategy, which aims to balance long positions with short trades, or bets against securities. Others are so-called statistical arbitrage funds, which analyze the historical relationships between related securities and trade when those relationships get out of whack.
The funds employ powerful computer programs to spot these relationships, and they put to use borrowed money to amplify the gains. However, this leverage can also result in magnified losses.
Goldman stated in a news release on Monday: "Many funds employing quantitative strategies are currently under pressure as recent conditions have resulted in significant market dislocation. Across most sectors, there has been an increase in overlapping trades, a surge in volatility and an increase in correlations. These factors have combined to challenge many of the trading algorithms used in quantitative strategies."
David Viniar, Goldman's chief financial officer, said that the Wall Street powerhouse isn't unwinding its Global Alpha and North American Equity Opportunities funds. However, both, along with Global Equity Opportunities, have all had steep losses.
He said that the three funds would have total assets of roughly $13 billion, after the new investment.
Viniar said Global Alpha has lost 27% of its value in the year to date, with half of those losses coming last week.
Viniar also said the firm is actively "delevering" the funds, reducing the debt they use to make market bets. This process is about 75% to 100% completed, he said.
New investors joining Goldman in Global Equity Opportunities include C.V. Starr & Co., Perry Capital and Las Angeles investor Eli Broad, among others.
According to Goldman, the investors are in agreement that "the current values that the market is assigning to the assets underlying various funds represent a discount that is not supported by the fundamentals."
C.V. Starr is an insurer and investment firm run by Maurice "Hank" Greenberg, the former chief executive of insurance giant American International Group.
Goldman said Global Equity Opportunities, which originally had a value of $3.6 billion, has suffered "significantly," but a dollar amount wasn't disclosed. Goldman also said it has reduced risk and leverage in the fund.
</LABEL>

 

[tiznow]

what's this supposed to prove? It's yet another bailout, of course they don't call it that and say everything is fine this is a value play yada yada. More to come.

I honestly think the recent injections by the fed were to save countrywide. They compeletely changed their lending practices over the weekend. Countrywide going under would have major repercussions.

 

[tiznow]

Angelo has been selling his countrywide stock like crazy for a while now, probably changed his tune now as i'm sure he's beginning to get scared before this is all said and done he will be testifying before congress.

---------------------------------------------------------------

COUNTRYWIDE Financial, America’s largest mortgage lender, says more borrowers with good credit are falling behind on repayments and that the housing market may not begin recovering until 2009 because of a fall in house prices that goes beyond anything experienced in decades.

The news from Countrywide, widely seen as a bellwether for the mortgage market, set off a sell-off in the sharemarket, which is at its most volatile in more than a year.

The S&P 500 Index fell 30.53 points, or 2 per cent, to 1511.04, its biggest one-day drop in nearly five months. The US dollar dropped to a new low against the euro, edging closer to $US1.40.

The housing slump has become the biggest worry for the sharemarket — which just four days ago set records — because of its potential impact on the broader economy.

Countrywide’s stark assessment signalled a critical change in the substance and tenor of how housing executives are publicly describing the market.

Two months ago, some executives were predicting a relatively quick recovery and saying that most home loans would be fine, with the exception of those made to borrowers with weak credit who were stretched too far.

Executives at Countrywide had for some time been more sceptical than others, but the bluntness of their comments yesterday surprised many on Wall Street. Countrywide chairman and chief executive Angelo Mozilo said home prices were falling “almost like never before, with the exception of the Great Depression”.

 

[BASEHEAD]

what's this supposed to prove? It's yet another bailout, of course they don't call it that and say everything is fine this is a value play yada yada. More to come.

I honestly think the recent injections by the fed were to save countrywide. They compeletely changed their lending practices over the weekend. Countrywide going under would have major repercussions.

WTF are you talking about. Theyre bailing themselves out. Doesnt seem to be the cut and running youre scaring us with.Its a cycle.The "big boyz" as you call them will be the ones to the make market rise again cuz theyll be the ones buying the stocks that theyve had a part in diminishing.

2 billion dollars is not chump change.Pretty bold move.

 

[tiznow]

The COMPANY is pumping 2 billion of this 3 billion in not individuals yes one person did pony up a billion. The "big boyz" in the mean time are selling their goldman sachs stock. What the company itself does has little meaning, that said the hedge fund they are pumping money into does have some meaning.

The fund that they are "saving" is a market neutral type fund that can have short positions so they are likely reallocating its position to the short side as they were obviously caught too heavy on the long side of things as the fund lost a 3rd of its value last week.

Global Equity Opportunities and other so-called "quant funds" use a market-neutral strategy, which aims to balance long positions with short trades, or bets against securities.

They aren't in the process of saving the alpha fund.

 

[tiznow]

bad finish gonna finish about flat. more injections tomorrow or maybe an emergency rate cut on the horizon? we shall see. Don't worry fed's got your back all is good. :smoker2:

 

[tiznow]

August 15 D-Day?

This article also talks about them expecting large withdrawals in the market neutral fund probably reason GS is adding to this type of fund so it can remain solvent etc.

----------------------------------------------------------------------------------------------------------------

Hedge fund losses prompt exits as deadline looms
Mon Aug 13, 2007 2:15PM EDT
By Svea Herbst-Bayliss

BOSTON (Reuters) - For hedge funds, August 15 may be D-Day, when investors rattled by heavy losses demand their money back from big and small portfolios alike.

"We are seeing a 'shoot first and ask questions later' mentality among many investors," said Philippe Bonnefoy, chairman of hedge fund advisory group Cedars Partners, describing how everyone from the wealthy to chief investment officers at endowments are now shunning risk.

Unnerved by heavy losses at some of the $1.75 trillion industry's most famous offerings, including AQR Capital Management, Highbridge Capital Management, D.E. Shaw and Goldman Sachs (GS.N: Quote, Profile, Research), many people want out before things get worse.

But exiting can be a difficult process in an industry where managers routinely lock up money for months, if not years, and often require 45 days' advance notice before returning it.

To pull out at the end of the third quarter, investors will have to notify their managers by August 15.

"Everyone always waits until the last second to get out, and (Wednesday) is the last second," said Mike Hennessy, managing director at hedge fund of funds Morgan Creek Capital.

Redemption notices began piling up weeks ago at hedge funds that specialize in subprime mortgages after two prominent Bear Stearns funds collapsed.

Now, what seemed like a contained problem has spread from credit-focused strategies to a broad range of funds, including one with a so-called market-neutral focus, that are not supposed to see huge losses, analysts and investors said.

Market-neutral funds, which hope to exploit market discrepancies by buying undervalued securities and taking an equal, short position in a different and overvalued security, returned nearly 6 percent during the first seven months of the year, delivering some of the industry's more robust performances. But the U.S. stock market's recent quick-paced decline, followed by a brief rally and then more losses, erased all gains and left the group with losses, according to investors who have seen weekly numbers.

"I expect there will be a lot of redemptions in market-neutral funds," said Andrew Fisch, a portfolio manager for funds of funds at SSARIS Advisors. "The reality is, you will probably see redemptions across the board."

Investors said that while the race away from risk is not limited to hedge funds, it is being felt hard in this asset class.

Because hedge funds can use leverage, or borrowed money, and sell securities short, losses can add up faster here than in mutual funds, for example.

"No chief investment officer is going to get fired for deciding to get out of hedge funds right now," Cedar Partners' Bonnefoy said. "You can always reinvest later on."

Industry sources said it is impossible to estimate how much money will leave hedge funds at the end of the third quarter, but they agree the sums will be large. Hedge funds took in $60.2 billion in new money during the first quarter, with funds specializing in distressed securities, arbitrage and event-driven strategies seeing the bulk of inflows, data from Hedge Fund Research show.

The last time hedge funds suffered net outflows was during the fourth quarter of 2005, according to HFR.

For the money coming out, there may be no better investment options, investors agreed. "When people pull out because they are scared, they go to cash," said SSARIS Advisors' Fisch.

But some industry advisors are urging people not to throw in the towel quite yet because problems in portfolios will be repaired. "While there are certainly funds that will suffer now, I think when we look back on this period it will turn out to have been a very good one for hedge funds," said Thomas Whelan, chief executive of Greenwich Alternative Investments, which tracks performance in the hedge fund industry.

(Reporting by Svea Herbst-Bayliss)

 

[BASEHEAD]

Marketwatch.com-

The COMPANY is pumping 2 billion of this 3 billion in not individuals yes one person did pony up a billion. The "big boyz" in the mean time are selling their goldman sachs stock. What the company itself does has little meaning, that said the hedge fund they are pumping money into does have some meaning.

The fund that they are "saving" is a market neutral type fund that can have short positions so they are likely reallocating its position to the short side as they were obviously caught too heavy on the long side of things as the fund lost a 3rd of its value last week.

Global Equity Opportunities and other so-called "quant funds" use a market-neutral strategy, which aims to balance long positions with short trades, or bets against securities.

They aren't in the process of saving the alpha fund.

You should at least credit the source of your assesment up there.

Ill do it.

 

[tiznow]

well fed didn't have your back today no injections and down 1.4% so far :smoking:

 

[tiznow]

Now sentinel in trouble...love how they can get permission that YOU are not allowed to withdraw YOUR money

-------------------------------------------------------------

Sentinel Management Group Seeks to Halt Redemptions (Update3)

By Jenny Strasburg and Matthew Leising

Aug. 14 (Bloomberg) -- Sentinel Management Group Inc., the Illinois-based firm that manages $1.6 billion, said it asked regulators for permission to freeze client withdrawals because credit-market turmoil made it impossible to trade.

The firm, based in the Chicago suburb of Northbrook, contacted the Commodity Futures Trading Commission for approval to halt redemptions ``until we can honor them in an orderly fashion,'' according to an Aug. 13 letter to clients.

The CFTC hadn't granted permission as of this morning, said an assistant to Eric Bloom, Sentinel's president and chief executive officer, who declined to be identified. Bloom didn't return calls for comment.

CFTC spokesman Dennis Holden declined to say whether the firm's request had been received.

``We are aware of the situation and we are monitoring it.''

The firm said it was a victim of panic by investors caused by the collapse of the subprime-mortgage market.

``Investor fear has overtaken reason and has induced a period in which most securities have simply ceased to trade,'' according to the client letter, which does not specify which funds are affected. ``We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients.''

Sentinel invests for clients such as managed-futures funds, high-net-worth individuals and hedge funds that want to be able to withdrawal their cash quickly. Its investments include short- term commercial paper, foreign currency, investment-grade bonds and Treasury notes, according to its Web site.

Multiple Regulators

The firm is regulated by the CFTC, National Futures Association and U.S. Securities and Exchange Commision, according to its Web site.

``The decision whether to halt redemptions appears to be a business decision by Sentinel pursuant their contract with their customers and not a regulatory issue,'' said Dan Driscoll, the NFA's chief operating officer, said in a telephone interview.

Sentinel's clients include so-called futures commission merchants, businesses that manage buy and sell orders for commodities futures contracts. FCMs are required by the CFTC to keep their customers' money segregated from funds they invest on their own behalf. By that measure, Sentinel is 17th in terms of customer money for U.S. FCMs, according to July 31 data from the CFTC.

FCMs make money by earning overnight interest on their customers' cash on hand.

 

[cussin'it]

The usual Winston, 1.00.

Youre one .50 point rate cut from losing the bet.If things get as bad as you guys say the chance of the cut gets even better.Stocks are cyclical like the home market,they get cheap enough demand grows.

When these big cap companies stop turning big earnings then talk to me about a recession.

My brutha, care to up the bet now to some meaningful stakes??? Now that we are about halfway?

Once the DJIA hits under the 13K floor then it's another 5+ % drop, like I've said. Spineless bastards will panic and sell their mothers.

The picture ain't lookin so good bro. :ughhh:

Let's say 20 bucks and a shiny new avatar for a month.

:youmad:

:toast:

 

[BASEHEAD]

My brutha, care to up the bet now to some meaningful stakes??? Now that we are about halfway?

Once the DJIA hits under the 13K floor then it's another 5+ % drop, like I've said. Spineless bastards will panic and sell their mothers.

The picture ain't lookin so good bro. :ughhh:

Let's say 20 bucks and a shiny new avatar for a month.

:youmad:

:toast:

20.00 it is.

At last closing bell of 2007 the DOW will be 14K+ IMO.

Is it all or nothing for me or do we play closest to actual #?

This works thru the market in around 3 mos. IMO so Im cutting close but I really dont think the fed is done chipping in here.Like it or not Bernenke is going to drop rates as the credit restrictions grow.


I also beleive we may go sub 13 but another 5 Im not buying.These swings are largely driven by emotion and irresponsible remarks from folks who should know better or just remarks taken way out of context..I mean look at today w/ WALMART.To read an MSM story today youd think they were closing up shop.But these are the things that feed hysteria and volatility and the ingredients for the bottom to drop out just arent there.Of course if revenue and profits dry up all of a sudden we'd be in big trouble as you mentioned but its not going happen.Thats what Im wagering on in fact.

 

[eek.]

Sentinel Management Group Seeks to Halt Redemptions (Update3)

By Jenny Strasburg and Matthew Leising

Aug. 14 (Bloomberg) -- Sentinel Management Group Inc., the Illinois-based firm that manages $1.6 billion, said it asked regulators for permission to freeze client withdrawals because credit-market turmoil made it impossible to trade.

They did this back around 1998 over here in the UK, and put redemption charges up to 25%...25% just to get your own fucking money back!?!?

I would never put a dime into the markets now, no matter how much money I had.
They're a bunch of 2-bit cowboys.

Modern markets are for institutions, not the bloke in the street.

 

[tiznow]

Asia's getting slapped around pretty good tonight. Looks like yen carry trade unwinding really starting to get going. US busts through 13000 tomorrow might see the real carnage begin. 14k+ by year end basehead? Good luck think you might be sweating holding 10k by years end in a few months. Writing pretty much on the wall at this point credit markets are coming to screetching halt, only question at this point how bad the fall out will be, recession in to 6 months max pretty much a given here.

 

[tiznow]

They did this back around 1998 over here in the UK, and put redemption charges up to 25%...25% just to get your own fucking money back!?!?

I would never put a dime into the markets now, no matter how much money I had.
They're a bunch of 2-bit cowboys.

Modern markets are for institutions, not the bloke in the street.

The other problem I see with the "barring the doors" strategy from these hedge funds is that it makes things much harder for the other hedge funds. As people that are invested in them are left wondering will their money be caught in a locked door and they won't be able to get out, thus creating more panic regardless if it is rational panic or not.