Traffic Update (Bailout Edition)
Several of you have written asking exactly how much traffic has spiked this week, and what it might mean in terms of a rally.
Its a little complicated, but here are the details:
As noted last week, September 15th was our first 100k+ day. The rest of the week was even busier: Traffic was nearly triple its usual, culminating with a 157,899 page view day on Friday. Traffic for the week -- Sun. Sept. 14-Sat. Sept. 20 -- was 789,935 page views, also a first. At this rate, we are likely to see 2 million page views for the month (another record).
In terms of psychology, its a mixed bag. Monday and Tuesday were clearly fear driven. Whenever the market really gets whacked, people seek information about what is going on here.
Later in the week, it was some fortunate linkage. David Leonhardt's NYT column had some nice things to say about the upcoming book on Bailouts, and the NYT drove a ton of traffic Wednesday. On Thursday, the post on SEC waiver of leverage rules got picked up by boingboing, fark and a few other major traffic drivers.
In terms of the technical set up and market sentiment, there were 2 posts where we suggested a reversal was imminent:
• 50% Retracement of 2002-2007 Rally (9/16/08)
• Fear Returns to the Markets (9/18/08)
Combine the technical and sentiment factors with the government bailout, and you have the makings of a powerful -- but likely temporary -- rally.
>
Daily Statistics 9.19.08
Visitors and Pageviews, Monthly, as of 9.20.08
>~
~~~
A few caveats, however, are in order.
First, the biggest 2 day rally in the Dow since 1929 should lead to more upside -- but its likely to be temporary.
And, as the Pakastani government recently learned, you cannot mandate the markets to go higher
Sunday, September 21, 2008 | 06:30 PM | Permalink
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better than the VIX or the Citigroup Panic and Euphoria model?
same same but different?
again, WTF is the solution, or do we just need hammerlock up opens, and capitulation down closes to clean up the bullshit?
Posted by: vozworth | Sep 21, 2008 7:09:48 PM
The monthly chart is the most informative. It shows clear spikes in March, July and September 2008 -- months with important selloffs.
Correlation between TBP page views and VIX is probably north of 0.80. You can hedge a decline in page views by selling VIX futures. But I wouldn't do that this week -- LOL!
Posted by: Jim Haygood | Sep 21, 2008 7:14:47 PM
Monday could be rocky but I assume that this next week will see some stabilization. From the data point of view, durable goods on Wednesday should be pretty horrible, so we might see a pull back. Not expecting too much in the way of swings here this week, everyone seems exhausted, so you'd expect VIX and volume to decline.
From a purely technical standpoint, a 50% reversal of the decline from 1550 to 1150 takes us to about 1350. No way the market tops that level before an ensuing plunge. More realistically and immediately, 1275 and 1310 should come into play as resistance levels from here.
My guess is we see some money roll from Treasuries into stocks for a while once people think of the consequences of the bailout for bonds. TIPS were solid Friday, so that means inflation expectations remain reasonably high, and the gold market says the same thing. In time these expectations will probably rise.
Posted by: leftback | Sep 21, 2008 7:23:29 PM
What is lost in your market-up-or-down discussion is that if the market doesn't like this bailout and starts to go down, the government will keep bailing them out.
Yes, in theory it will all come crashing down when they run out of bullets, but for that scenario to happen there needs to be a cessation of foreign investment into the US.
In other words, as long as the Chinese are willing to play the fools, this will go on; not longer.
Posted by: Paul Jones | Sep 21, 2008 7:51:25 PM
Paulson's monster
Robert Peston 21 Sep 08, 12:56 PM More details have been disclosed over night about the new state-owned institution being created by Hank Paulson, the US Treasury Secretary, to purchase distressed US mortgages and securities manufactured from those mortgages.
He wants to raise $700bn for this institution, from the sale of US government bonds in tranches of $50bn. That $700bn is about 35 per cent more than the entire annual budget of the US defence department.
And to facilitate the funding, the statutory ceiling on US public debt is being raised from $10.6 trillion to $11.3 trillion a rise of 6.6 per cent - which puts this ceiling at around a fifth less than the entire annual output of the US economy.
Interesting reading at the BBC website. The article goes on to talk about how the banks are going to have reverse auctions to see who has the lowest price of their toxic waste for Paulson to buy. This is to protect the taxpayer!
Thanks a lot, Goldman Goon.
Let's all of us have a reverse auction to see who has the least debt (regardless of assets) and the winner gets Bernake's D.C. Townhouse and Paulson's beach house.
Posted by: AGG | Sep 21, 2008 8:24:56 PM
Just how much is Trillion dollars, anyways?
Assuming you could spend a dollar a second let's see how long it would take you to spend varying amounts.
OK, again, assuming you spend a dollar a second how long does your money last if you have -
A Million dollars?
11.5 days, less than two weeks.
A Billion dollars?
31.8 years, or about a generation.
A Trillion dollars?
31,710 years, or basically from now back to when Cro-Magnon man was still walking the earth and we hadn't yet invented things like the wheel, fire, language or agriculture.
Neat, huh?
We are all officially screwed.
Posted by: Matthew Camp | Sep 21, 2008 8:44:34 PM
David Sirota reports that
the Associated Press's big headline today is
"Paulson: Don't Add Households to Financial Bailout Bill."
"The story reports that Paulson is opposing efforts to add any aid for foreclosed families to the $700 billion bailout for his Wall Street cronies."
I'm shocked; shocked I tell ya.
Posted by: Al Czervic | Sep 21, 2008 8:46:19 PM
Next on tap in the ongoing "credit crisis" which is really a much needed return to sanity:
City and state governments squeezed like lemons and hedge funds going bust.
Posted by: Steve Barry | Sep 21, 2008 8:49:11 PM
Al Czervic,
Right and at the same time Paulson thinks that limits on executive salaries is "punitive". What an asshole!
And now this:
``The downdraft on the dollar from the hit to the balance sheet of the U.S. government will dwarf the short-term gains from solving the banking crisis,'' said David Woo, London-based global head of foreign-exchange strategy at Barclays, the third- biggest currency trader, according to a 2008 survey by Euromoney Institutional Investor Plc.
Posted by: AGG | Sep 21, 2008 8:52:57 PM
Congrats on the traffic... I'm one of your biggest fans, but cAn the traffic chat, Barringo... we've got bigger fish to fry.
On Paulson:
On MM Mutual Funds: He's attempting to stave off demand liquidation of commercial paper prior to its o-r-d-i-n-a-r-y maturity. In other words, such that company XYZ won't find themselves in technical insolvency due to a run on their commercial paper of short maturity. If he pulls this off, his name will register in the same paragraph in history with Keynes. Benber N. Anke and Paulson are on the same page. It's just that Anke knows Paulson has the political muscle. Hat's off to both men. They are standing tall.
On Fannie and Freddie: Paulson (again with full agreement by Anke) is attempting to put the core function of Fannie and Freddie right back where it should have been for these last 5-10 years, right where it had been for most of its sweet-spotted existence, in the business of syndicating reasonable mortgage securities that the public would hold for yield and be relatively content with marginal illiquidity. Fannie and Freddie destroyed their ability to do this by hedging their providers of equity capital, the buyers of their syndicated securities, to the b-r-i-n-k. Uncle Sam has the deep pockets to convert these securities back to their original purpose -- to be buried in quiet and p-e-a-c-e-f-u-l illiquidity for years to come.
Chances of Paulson and Anke pulling it off?...
I say 70%...
...with still a 30% chance of the financial system for credit/debit commercial exchange collapsing completely.
My guess is that if there is no collapse before Thanksgiving, we may just make it across the bridge without it collapsing.
Posted by: Eclectic | Sep 21, 2008 8:56:21 PM
forget charting and technicals. all bets are off.
I have this uneasy feeling that what we aren't being told is much worse than what we know.
Like maybe a major institution, say a Citigroup, is already insolvent. 700B is beyond the Fed's stretched balance sheet, and exceeds FDIC capabilities. Imagine the domino of C falling, and the run.
worst is yet to come.
Posted by: Why the urgency? | Sep 21, 2008 8:57:11 PM
Nice post Matthew, I'm going to take another look at that Gold chart.
Posted by: Simon | Sep 21, 2008 9:02:15 PM
>>In a counter-proposal to the Treasury plan, Frank would also put the facility under the oversight of the U.S. comptroller general, the government's main auditor, according to a document obtained by Reuters.
i can't stand barney frank but on this one at least he's got the right idea in not giving the fed and paulson dictorial powers.
Posted by: Richard | Sep 21, 2008 9:03:55 PM
bsd,
this: "approve a Paulson plan which includes the infamous Section 8", for anyone who's watched enough M*A*S*H*, should strike them as incredibly ironic.
I'd love to see the Roll Call, I wouldn't be surprised if they do it by 'voice vote'.
Who's got the odds on this thing passing w/o Roll Call tally?
~
Posted by: Paul Jones | Sep 21, 2008 7:51:25 PM
Paul, the PROC Gov't has been playing their people like Idiots for a long time. As long as they see the advantage, in it, for themselves, they'll keep on doing it. Frankly, they, and our own Gov't, have a very similiar ethos.
I've said, before, that Patrick Henry taught us all the Political Triangulation we need to know.
He was brave, then, because he was able to admit the Reality of the current scene, as he saw it.
We should be as brave, We have nothing to lose, but our chains. Failing such, we have everything to lose, and we will be remembered for it.
Posted by: Mark E Hoffer | Sep 21, 2008 9:07:37 PM
Inside sources tell me there is also a provision in Paulson's bill that will require all Americans making less than $100,000 per year to spend 2 weeks every year cleaning toilets on Wall Street. Paulson felt that some form of national service was in order since, after all, this action was really being taken for their benefit.
Some democrats reportedly balked at this provision but relented when Paulson explained how crucial it was that the bill be passed as quickly as possible without partisan bickering.
Posted by: Al Czervic | Sep 21, 2008 9:08:03 PM
of course Al, good ear, sharp eye
Posted by: Mark E Hoffer | Sep 21, 2008 9:18:13 PM
GS and MS to become bank holding companies...GREEEEAAAAAAT!!! They surely must be asking questions at ML, LB and BS now why Hankson Paul didn't love them so much. Thain lied so much for him so that his bailout would come to pass. Welcome thy new president of USSA.
Posted by: Annoyed-ni-mous | Sep 21, 2008 9:38:55 PM
Hi all, this plan will effectively buy garbage debt at purposely inflated prices.
Two comments today. Talk about a vision which was right on the money:
1) I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominent men.
Woodrow Wilson, after signing the Fed Reserve Act in 1913
2) If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.
Thomas Jefferson
All American taxpayers must voice their opinion to Congress and band together to stop this monumental fraud being perpetrated by these animals.
JO
Posted by: JO | Sep 21, 2008 9:41:35 PM
Wait til tomorrow, you ain't seen nuthin yet!
Posted by: donna | Sep 21, 2008 9:50:43 PM
My blog of course has smaller numbers than yours, and my peaks come not with major market movements, but if Amanda Drury anchors the US broadcast or if Margaret Brennan wears a particularly tight top. And oh, "sarah palin bimbo" as a search term has been particularly beneficial.
Posted by: CNBC Sucks | Sep 21, 2008 10:11:33 PM
Rumor has it Hank Pualson is recommending to Congress the temporary suspension of gravity through October 15th.
Posted by: TheGuru | Sep 21, 2008 10:28:41 PM
Enough with the fake Jefferson quote already - he never said it, some of the words in that quote didn't even exist when he was still breathing.
But we can agree on this: if you haven't called your congressman and senators yet, you don't deserve the citizenship your ancestors died to give you.
Call them.
Then call them again.
Posted by: Jim D | Sep 21, 2008 11:42:01 PM
BR: You've again made reference to "the biggest two day rally in the Dow since 1929" but several commentators to your earlier posting claimed that the statement is incorrect. Who's correct, please?
Posted by: flenerman | Sep 22, 2008 12:12:43 AM
