Credit Market is Tightening Up Again....U.S. Stocks to Fall Tomorrow

YAY!! I HOPE WE CAN CRASH SOON!! SO we can rebuild

I hope so !

The time for the fiat,illegal monetary system called the Federal Reserve is WAY PAST DUE to die.

bring it down....bring that fat bitch down

these credit swaps are sneeky.

we are just seeing the effect of Morgan stanely in the market, 6 more to go.

VIX is down though, could be a good week, but won't last for long.

Why do people with all this money willing to buy stocks at this time? Are there so many idiots out there?

I'm feeling a day or 2 of rally before the bottom falls out.

The graphs do not indicate that people are buying - rather that the broad market is being "infused".

LOL...you're such a phony. I've seen you say in many threads that the market would rally because of options this week...the reason the market rallied on Monday was because credit eased. The 2Y Swap Spread was around 155 late last week, started Monday around 145 and fell to 120, in one day. That's the reason the market rallied.

If credit tightens up again, goodbye rally.

Futures have been coming down all night.
Down from around + 200 to +60 right now.

Now dropped to +30. Tomorrow's going to be interesting.

Yes, Rock Star is an ignorant twit, but I want to clarify something important...

The credit market has not eased, the rally was based on speculation that the credit market might ease because of the guarantees of the IMF and the new "unlimited" dollars being pumped into the system. I call it ignorant optimism.

Ultimately, the plan is not going to work, and when Wall St. realizes it, the DOW will plummet below 8000.

The mass injection of liquidity (cash) is only addressing a symptom, not the root problem. The real problem is consumer debt and the insolvency of financial institutions to pay their obligations; the United States of America is bankrupt!

Hi Venerable. I see you are continuing to do a great job of staying on this thing :-) Many thanks; TPTB have no place to hide when GLP and the other blogger sites stay one step ahead of them.

For the next chapter of Southpark, it looks to me as though the U.S. bond market and the vigilantes may have something to say about what is going on very shortly. I think it's going to happen; I can almost smell it; my tummy continues to tell me there is much to play out in this saga.

The Australian market went up today (although much off its high for the day) but it felt lethargic, as though the market is playing but nobody is really that interested which is quite disimmilar to other big snap-back rally days after a crash (eg 1987). Come to think of it, the up volatility days on our market have had the same feel about them all year. "So what's new" we said; when's lunch.

I'm sure you noticed that last week when we had one of the biggest selloffs in market history on Wall Street, the interest rate (yield) on U.S. treasuries actually rose on the week.

What happened to the 'flight to quality'?

Well we all know that everything`s artifical and what they did is not a real solution. But actually the system will crash only if they stop playing the game. I mean, what can stop them from constant cheating when obviously they don`t mind at the moment?

yep-they poured gasoline on the fire-and once it flames out -credit market lockup

I'm interested in why you think America's stock market will fall tomorrow, when the rest of the world seems to be doing well for the past couple of days....

rallies in world markets usually take place after a rally in the US market, not before...

there's no way they'll be able to hide how much they fucked us much longer

Yes I agree with you mostly. I see two really big fundamental problems here. One, the Fed and Treasury are trying to solve the problem by extending more credit...the exact reason we are in this mess is because credit is already over-extended. That is to say, U.S. consumer debt as you mentioned is off the charts...the U.S. has essentially no savings. And without savings, you cannot have credit. The equivalent of an overweight person complaining about heart problems and then you give them a couple of ice cream bars to make them feel better.

The second problem is that financial institutions do not trust each other, and for good reason. They are allowed to keep their derivatives off the books for some unknown Greenspan reason, and as a result nobody knows who is at counterparty risk with regards to these contracts. One analyst on CNBC Europe summed it up well last week. He said that the situation is basically like a banker in a room full with 100 other bankers...he knows a few of them have deadly diseases and if he does business with them he will get it and die too. The rest are all fine, but he doesn't know which ones aren't so obviously he isn't going to do business with any of them. Giving him uncountable sums of money is not going to entice him to do business with the others.

Hey Bugsy. I think Fed and Treasury are more concerned with the Bond Market than anything. Everyone pays attention to the stocks but they are desperate to save the bonds because if they go down then nothing else is even worth a pretty penny.

All that said, I think a lot of people realize that T-bonds aren't safe. We should prepare for a world in which the dollar no longer has hegemony and foreign governments decide to collect the debt U.S. owes them. Everytime I hear a U.S. politician saying "this is financial terrorism" it makes me think that, behind the scenes, foreign governments are already starting to apply the pressure.

Swap Spread back up to 125...I think it'll get back into the 130's today. Credit is still frozen.

Yes Venerable, "foreign governments are starting to apply the pressure" I think they hav been for some time. All it will take is one big selloff from the top? The bonds look like such a bubble, especially with all this money printing going on.

So how about the bonds have been signalling deflation for ages as the interest rates on treasuries went lower and lower, even while the Wall Street averages were holding on and rising well above 11,000 on the Dow? Now we have the biggest money printing pump primes of all time and the bonds are starting to look a little nervous.

Talk about an accident waiting to happen. It happened once before in the 1970s when foreign creditors refused to lend the U.S. any more money. All they have to do is stop buying treasuries and it will be all over bar the shouting.

In my view they stopped buying last week and there's a good chance that U.S. treasuries are in the process of becoming the best short since 1982 in the financial markets. This is NOT financial advice, so please do not read as such; mostly for entertainment purposes only. I'm just trying to play detective and figure out the plot of the next chapter.

Best all.