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Tuesday, March 4, 2008

"Kool Aid" is Getting Popular

Posted by Mark at 3:40 PM TweetThis
Just wanted to note that I've read or heard the term Kool Aid more in the financial press/media in the past 2 weeks than the last 5 years combined. Obviously my blog readership explodes and the financial press/blogosphere is stealing my thunder. That's ok, imitation is the highest form of flattery - just remember where you read it first. ;) (unless I subconsciously stole it from someone else many years ago)

I'm honored. Really. It feels good to be a trend setter... hah.

Even Rev Shark on RealMoney.com used the term today. (p.s. for non subscribers he says the market is up on another Ambac rumor bailout - I believe the 4th rally in 2 weeks on the same news - are we pathetic or what?) I'm still in the PPT camp myself - they appear to have been very active the past 6 months...

Thanks Charlie G for providing the SAME news you've been providing for 2 weeks, and I'm sure this time your rumor really is true. It is funny your news always comes late in the trading days when the market is testing 1320 or below. Isn't it? I can't wait for this bailout to be done so we stop rallying off the same rumor. Humans really are not very advanced life forms - they seem to react like robots to the same news, over and over.... much like dogs can be easily trained.

Anyhow I'm sea sick watching this market, and a bit just "sick" of some of the things going on behind the scenes. Going to go find some Kool Aid to take the edge off... I hear it cures everything.

Posted by Mark at 3:40 PM Comments (6) | Edit This Post | Create A New Post

6 comments:

Pankaj said...

Great Stuff.. I am glad to witness first hand how trends are set :). Thanks for sharing your words of wisdom as always.

Cheers,

AJ

March 5, 2008 10:17 AM  
Pankaj said...

Mark,

Just saw this news on the wire and wonder what you make of it from trading POV -

FDIC 'Very Concerned' About Commercial Real Estate -ChairmanLast update: 3/5/2008 10:09:38 AMBy Michael R. Crittenden Of DOW JONES NEWSWIRES ORLANDO, Fla. (Dow Jones)--The Federal Deposit Insurance Corp. is increasingly wary of potential bank losses from a downturn in the U.S. commercial real estate market, Chairman Sheila Bair said Wednesday. "While I hope that the (commercial real estate) market has a soft-landing...we want our insured institutions to be ready and fully prepared to work through a sustained downturn," Bair said in a speech at the Independent Community Bankers of America conference in Orlando, Fla. Bair said the FDIC is particularly concerned about the potential for the current housing crisis to lead to broader problems in banks' loan portfolios. The worry is especially acute for community banks, which typically have highly concentrated commercial loan portfolios. "At present, we are very concerned about institutions with large concentrations in construction and development lending," Bair said. Bair urged community bank executives to closely monitor their commercial loan portfolios, keeping a close eye on local market conditions and be prudent with their lending activities. As part of this vigilance, Bair said, banks need to be prepared for an increase in loan workouts with their commercial borrowers. "If you competed fiercely for deals, turned a blind eye to the loose terms that were available in the market...you may well get hurt if we have a sustained slowdown in real estate," Bair warned. -By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com (END) Dow Jones NewswiresMarch 05, 2008 10:09 ET (15:09 GMT)


Cheers...

March 5, 2008 10:19 AM  
TraderMark said...

Par for the course. It is all interconnected. Our banking system is at risk as it is overextended and reliant on the 'shadow banking system' PIMCO's Gross calls it... all of this is deleverging slowly but surely while equity market is in denial.

I don't know the exact # but the US has like 4500 banks... we only hear about the big money center banks who make the top 10 up since they dominate the news - most are smaller and local. Now if really want to feel fear go google about how under reserved the FDIC is. I've been doing some reading about that. Also they are putting out the call to rehire retired people with experience in working with bankrupt banks - this was out in the past 2 weeks. They see what is coming; they are just lying to us all about it although Ben at least let out the possibility of some banks failing.

Remember, all this is in an environment where we just came off 4.9% GDP in Q3 2007. What would a 4-6 quarter recession do? With a flailing consumer?

Thats why despite the equity market bounces I just cannot get behind the Kool Aid trade other than for a few days.

March 5, 2008 11:24 AM  
T-Rader said...

This origin of the term "Kool-Aid" aroused my curiosity. I did some googling on it along with some business terms and found articles dating back before the FundMyMutualFund's inception. So I don't know about originator, but theres nothing wrong with establishing the trend :)

March 5, 2008 12:01 PM  
TraderMark said...

Since I've been online from the early 90s I am sure I assimilated it from somewhere :) My job now is to make it a buzz word of 2008 ;) I'll get the Tshirts printed up.

March 5, 2008 12:06 PM  
Pankaj said...

I am in for one! :)

Cheers..

March 5, 2008 12:49 PM  

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