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bruceleh

Due to the stress and volume today, there were many street-side and institutional system meltdowns today, especially in equities market data.

Elaine Meinel Supkis

As with all market crashes, I was on a roof all day advising a friend, how to rebuild a chimney. I am always up high when the market tanks.


And what happened to equities? Any data?

cato

First, we were assured that any problems were limited to sub prime tranches. Then the whole mortgage pool became suspect. CDOs under the microscope; asset-backed too.

While mortgage securities are in public view junk bonds and the funds that hold them are collapsing. Corporates! What do they have to do with mortgages? The funds themselves are stuffed to the gills with them. Even without this the increased carrying costs, widening spreads, the carry trade sputtering - they are the harbinger of financial seizure.

Freefall -

Aegis High Yield - AHYFX
AllianceBernstein High Yield Adv - AHYYX
AllianceBernstein High Yield I - AHHIX
Bear Stearns High Yield Index - BSIX
BlackRock Corporate High Yield Fund III - CYE
BlackRock Corporate High Yield Fund VI HYT
BlackRock Corporate High Yield Fund COY
BlackRock High Yield Trust BHY
Calamos High Yield A CHYDX
Calamos High Yield B CAHBX
Calamos High Yield C CCHYX
CSFB High Yield II Index CSHY
Dreyfus High Yield Strategies Fund DHF
Excelsior High Yield UMHYX
High Yield Income Fund HYI
Janus High-Yield JAHYX
JHancock High-Yield A JHHBX
LeggMason Partners High Income-A SHIAX
Lehman US Agg TR IX AGG
MFS High Yield Municipal Trust CMU
Morgan Stanley High Yield Fund Inc. MSY
Putnam High Yield Municipal Trust PYM
Summit High Yield Bond SAPHX
The High Yield Plus Fund HYP
Vanguard High Yield Corporate/29 VWEHX

Elaine Meinel Supkis

Wow..thanks for the list, Cato. I will try to research it a tad tonight if I can. So many things are crashing here.

cato

Elaine, It might be worth speculating on the next phase of this sell off. The public watches the equity markets, the Dow particularly, for an "all is well" barometer reading. Technical studies are worth considering at this juncture because it's fair to say that something has changed. The charts become useful at turning points.

Since the Fed is intent on keeping the printing press cranked up price inflation will almost certainly find its way into equity prices. Whether the fake liquidity is sufficient (and for how long) to offset the bearish forces let loose is unknown. Market observers like Marc Faber believe it's altogether possible that this - the only real tool left to the Fed could drive the Dow, for instance, to 100,000. At what point will you need a wheelbarrow to buy a wheelbarrow at Home Depot?

I doubt we see a free fall right here. The bankers will probably get the market stabilized in a few days for a sizzling rally. That move could be the one that forms the right shoulder of the broad "head and shoulders" top formation that’s already two-thirds complete. Then, a failure and a break through the neckline and it’s really over.

W.D. Gann said time was as important as price in tracking chart potentialities. Price or distance will square with time over the long run and significant pivot points frequently coincide with Gann or Fibonacci sequences. Today we are at the 53rd month since the January 2003 low on the Dow. September marks the 55th month since that low - a Fibonacci number.

Elaine Meinel Supkis

ONLY IF CHINA LETS US! And this is why I concentrate on Asian news so much: the battle of the Japanese Super Geisha Girl, Miz Japan versus Godzilla, the Chinese Dragon From Hell. They are in a death match and we are the mat.

Elaine Meinel Supkis

And markets never crash totally in summer, the nature of Wall Street is, in October, the cold winds suddenly veer and blow with terrific force through Manhattan which is built with the short ends of blocks facing north and south but the long sides face east and west: right into the wind.

This causes shivers and fear of winter and all the grasshoppers curl up and die while the ants build bigger gold reserves.

cato

Sounds like the title of a successful manga series for unemployed Wall Streeters. "Super Geisha Girl", "Miz Japan" versus Godzilla, the "Chinese Dragon from Hell".

I wonder if Asia gets a reprieve from this mess. Their saving grace may only be the fact that they are so resourceful. But so were we prior to 1929. They know and are close to much humbler beginnings, but so were we. Most of the population is engaged in agriculture, but so were we. They hoard gold and so did we.

Who is relatively better off in a depression will be about who controls the oil fields. This is the Hail Mary gambit. I read lots of analogies comparing the US to the Roman Empire or to England after WW1. I think we look more like Spain in the 17th century forced by indebtedness to retreat from the world.

Elaine Meinel Supkis

I often harken to the fall of the Spanish Empire. The 30 Years war ravaged Germany and the Netherlands. Germany took 200 years to heal and reunite while the Netherlands wiped Spain's power out nearly totally. Spain was very deep in debt due to war costs by 1700.

JSmith

"PANIC!"

Why? Is the sky falling? (Or was that a walnut?)

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