Author: Christian

I listened to Bernanke speak live at the German Bundesbank and I REALLY liked his speech. I am going to cut Bernanke some slack.

Listening to his talk here is my guess on what Bernanke and maybe the Fed will do next.

• 25 basis point cut – 35%: If he cuts he will give a stern talking that this is not the start of a series of cuts.
• No cut – 45%: He will say that he is watching the market closely and will react if , and he will say that he is watching the market closely and will react very quickly if things go wrong.
• 50 basis point cut – 20%: I not guessing he will do this.

TraderFeed, and bzbtrader have been talking about how large orders are split into smaller orders. TraderFeed wrote:

In other words, if you were to simply look at trades and trade volume, you’d conclude that small traders were dominating the marketplace. The reality is, however, that large traders continue to hold sway, but have succeeded in disguising their presence.

This is not new, and in fact my broker supports it and calls it the iceberg order. I talked to some Investment Banking folks and they told the iceberg order is pretty run of the mill type stuff.

Dell posted earnings that seemed pretty good and yet the stock dropped. Right after the earnings report the general opinion was as follows.

Dell said the strong results in the quarter reflected strength in enterprise products and services, improved average selling prices and favorable component costs.

The company did not provide specific guidance, but did say near-term results could be hurt by a slower decline in component costs in the second half.

Tom at Neural Market Trends asked:

Nice, I was planning on using Excel to build an interface with their API as well. Was it hard to do? Do I need to learn Visual Basic?

What I want to do is address this question from a trading perspective.

Kudlow, and a few others have chimed in on how having the fed ease would be good for the economy and the strength of the dollar. Since I thought that this is an interesting thought experiment and why not do some research.

Rating: Two Thumbs Up, Required Reading, with a note of caution.

This book review is hard for me to explain. On the one hand I want to say, go, go, go buy this book. On the other hand this book is not like Fooled By Randomness. Fooled By Randomness I feel was a book written because Taleb had some interesting musings. A book to amuse. The Black Swan is when Taleb gets on his soap box, explains, teaches, and rants.

It was funny at one point in the book Taleb points out how Merton Scholes sent Taleb a seven page discussion on how Taleb was a bozo, at least that is how I interpret the comment. I have people sending me email and comments on how I am a bozo, but I have as of yet not received seven pages. When you receive seven pages you pushed on somebody’s hot button.

I find it amazing that with a 10% drop in the market reached it is now time to buy? Why? Because P/E ratios are good? Because cash flow is good? The economy is still good and strong right? And therefore there is no recession?

It’s a time to buy right? After all it seems all the professional traders are buying… (It seemed somebody was buying today)

On CNBC Europe there was this guy from Saxobank who talked about how the models of today are illustrating that computers will yet again fail. He was saying how good traders will save the day.

Today on CNBC American Squawk box I heard one of the most straight talking individuals I have listened to in a long while. The panel was Steve Forbes, and a woman called Janet Tavakoli, and they were talking about Quant funds and their models. Janet’s comment regarding quant model’s was, and I quote: Model Masturbation (more…)

Many, including myself are wondering who is responsible for this mess. Many point at Greenspan, but I think it is not so black and white.

One problem that we have is that people don’t understand the mathematics and dynamics of mortgages. I even get the feeling that mortgage lenders are pretty clueless. In particular I would like to quote the following from Housing Bubble.

“One was a waitress who made decent money at a high end restaurant, but couldn’t prove it because so much of her pay was in cash tips. Another was a young lawyer, making nearly $200,000 in the city but who didn’t have the money saved for the down payment on a $800,000 Manhattan condo.”