By Jon Markam
Satyajit Das is laughing. It appears I have said something very funny, but I have no idea what it was. My only clue is that the laugh sounds somewhat pitying. One of the world's leading experts on credit derivatives, Das is the author of a 4,200-page reference work on the subject, among a half-dozen other tomes. As a developer and marketer of the exotic instruments himself over the past 30 years. He seemed like the ideal industry insider to help us get to the bottom of the recent debt crunch -- and I expected him to defend and explain the practice.
I started by asking the Calcutta-born Australian whether the credit crisis was in what Americans would call the "third inning." This was pretty amusing, it seemed, judging from the laughter. So I tried again. "Second inning?" More laughter. "First?" Still too optimistic. Das, who knows as much about global money flows as anyone in the world, stopped chuckling long enough to suggest that we're actually still in the middle of the national anthem before a game destined to go into extra innings. And it won't end well for the global economy.
An epic bear market
Das is pretty droll for a math whiz, but his message is dead serious. He thinks we're on the verge of a bear market of epic proportions. The cause: Massive levels of debt underlying the world economy system are about to unwind in a profound and persistent way.
He's not sure if it will play out like the 13-year decline of 90% in Japan from 1990 to 2003 that followed the bursting of a credit bubble there, or like the 15-year flat spot in the U.S. market from 1960 to 1975. But either way, he foresees hard times as an optimistic era of too much liquidity, too much leverage and too much financial engineering slowly and inevitably deflates.
Like an ex-mobster turning state's witness, Das has turned his back on his old pals in the derivatives biz to warn anyone who will listen -- mostly banks and hedge funds that pay him consulting fees -- that the jig is up.
Rather than joining the crowd that blames the mess on American slobs who took on more mortgage debt than they could afford and have endangered the world by stiffing lenders, he points a finger at three parties: regulators who stood by as U.S. banks developed ingenious but dangerous ways of shifting trillions of dollars of credit risk off their balance sheets and into the hands of unsophisticated foreign investors; hedge and pension fund managers who gorged on high-yield debt instruments they didn't understand; and financial engineers who built towers of "securitized" debt with math models that were fundamentally flawed.
Investors are abuzz over the Fed?s interest-rate decision, but the Federal Reserve can?t fix everything, cautions MSN Money?s Jim Jubak. Lower interest rates alone won?t boost confidence in the debt market. "Defaulting middle-class U.S. homeowners are blamed, but they are merely a pawn in the game," he says. "Those loans were invented so that hedge funds would have high-yield debt to buy."
The liquidity factory
Das' view sounds cynical, but it makes sense if you stop thinking about mortgages as a way for people to finance houses and think about them instead as a way for lenders to generate cash flow and create collateral during an era of a flat interest-rate curve.Although subprime U.S. loans seem like small change in the context of the multitrillion-dollar debt market, it turns out these high-yield instruments were an important part of the machine that Das calls the global "liquidity factory." Just like a small amount of gasoline can power an entire truck given the right combination of spark plugs, pistons and transmission, subprime loans became the fuel that underlays derivative securities many, many times their size.
Here's how it worked: In olden days, like 10 years ago, banks wrote and funded their own loans. In the new game, Das points out, banks "originate" loans, "warehouse" them on their balance sheet for a brief time, then "distribute" them to investors by packaging them into derivatives called collateralized debt obligations, or CDOs, and similar instruments. In this scheme, banks don't need to tie up as much capital, so they can put more money out on loan. The more loans that were sold, the more they could use as collateral for more loans, so credit standards were lowered to get more paper out the door -- a task that was accelerated in recent years via fly-by-night brokers now accused of predatory lending practices. Buyers of these credit risks in CDO form were insurance companies, pension funds and hedge-fund managers from Bonn to Beijing. Because money was readily available at low interest rates in Japan and the United States, these managers leveraged up their bets by buying the CDOs with borrowed funds.
So if you follow the bouncing ball, borrowed money bought borrowed money. And then because they had the blessing of credit-ratings agencies relying on mathematical models suggesting that they would rarely default, these CDOs were in turn used as collateral to do more borrowing.
In this way, Das points out, credit risk moved from banks, where it was regulated and observable, to places where it was less regulated and difficult to identify.
Turning $1 into $20
The liquidity factory was self-perpetuating and seemingly unstoppable. As assets bought with borrowed money rose in value, players could borrow more money against them, and it thus seemed logical to borrow even more to increase returns. Bankers figured out how to strip money out of existing assets to do so, much as a homeowner might strip equity from his house to buy another house. These triple-borrowed assets were then in turn increasingly used as collateral for commercial paper -- the short-term borrowings of banks and corporations -- which was purchased by supposedly low-risk money market funds.
According to Das' figures, up to 53% of the $2.2 trillion commercial paper in the U.S. market is now asset-backed, with about 50% of that in mortgages.
When you add it all up, according to Das' research, a single dollar of "real" capital supports $20 to $30 of loans. This spiral of borrowing on an increasingly thin base of real assets, writ large and in nearly infinite variety, ultimately created a world in which derivatives outstanding earlier this year stood at $485 trillion -- or eight times total global gross domestic product of $60 trillion. Without a central governmental authority keeping tabs on these cross-border flows and ensuring a standard of record-keeping and quality, investors increasingly didn't know what they were buying or what any given security was really worth.
A painful unwinding
Now here is where the U.S. mortgage holder shows up again. As subprime loan default rates doubled, in contravention of what the models forecast, the CDOs those mortgages backed began to collapse. Because they were so hard to value, banks and funds started looking at all CDOs and other paper backed by mortgages with suspicion, and refused to accept them as collateral for the sort of short-term borrowing that underpins today's money markets. Through late last month, according to Das, as much as $300 billion in leveraged finance loans had been "orphaned," which means that they can't be sold off or used as collateral.
Investors are abuzz over the Fed?s interest-rate decision, but the Federal Reserve can?t fix everything, cautions MSN Money?s Jim Jubak. Lower interest rates alone won?t boost confidence in the debt market.
One of the wonders of leverage is that it amplifies losses on the way down just as it amplifies gains on the way up. The more an asset that is bought with borrowed money falls in value, the more you have to sell other stuff to fulfill the loan-to-value covenants. It's a vicious cycle. In this context, banks' objective was to prevent customers from selling their derivates at a discount because they would then have to mark down the value of all the other assets in the debt chain, an event that would lead to the need to make margin calls on customers already thin on cash.
Now it may seem hard to believe, but much of the past few years' advance in the stock market was underwritten by CDO-type instruments which go under the heading of "structured finance." I'm talking about private-equity takeovers, leveraged buyouts and corporate stock buybacks -- the works.
So to the extent that the structured finance market is coming undone, not only will those pillars of strength for equities be knocked away, but many recent deals that were predicated on the easy availability of money will likely also go bust, Das says. That is why he considers the current market volatility much more profound than a simple "correction" in prices. He sees it as a gigantic liquidity bubble unwinding -- a process that can take a long, long time.
While you might think that the U.S. Federal Reserve can help prevent disaster by lowering interest rates dramatically, as they did Wednesday, the evidence is not at all clear. The problem, after all, is not the amount of money in the system but the fact that buyers are in the process of rejecting the entire new risk-transfer model and its associated leverage and counterparty risks. Lower rates will not help that. "At best," Das says, "they help smooth the transition."
The fine print
Das notes that Japan in the 1990s lowered interest rates to zero and the country still suffered through a prolonged recession. His timetable for the start of the next serious phase of the unwinding is later this year or early 2008. . . . Das' most readable book for laypeople is "Traders, Guns & Money," an amusing expos? of high finance, published last year. Das occasionally writes a blog at his publisher's Web site. Also available are a boxed set of his reference books on derivatives and his book specifically on CDOs. . . . Perhaps the oddest line on the subject by a world leader was uttered by Luiz Inacio Lula da Silva, the president of Brazil. Asked if he was worried about the effects of the credit crunch in his country, he dismissively called it "an eminently American crisis" caused by people trying to make a lot of "third-class money." . . . CDOs were first widely used back in the late 1980s by Drexel Burnham Lambert junk-bond king Michael Milken to sell off damaged and previously unsellable debt in a way that was more palatable to customers.
Replies
161
Beach Fanatic
Are you watching Elizabeth Warren right now on Lou Dobbs???? She's honestly nearly in tears. Because she understands.
Beach Fanatic
I've been trading daily for about a year.
When you say daily, do you mean day trading?
What prompted you to daily trade a year ago?
Banned
When you say daily, do you mean day trading?
What prompted you to daily trade a year ago?
I haven't seen a better year to day trade since '93. Volatility and blood in the streets are the best of conditions for a day trader.
Beach Fanatic
When you say daily, do you mean day trading?
What prompted you to daily trade a year ago?
I guess day trading is relative. By definition I don't day trade, but I do make a handful of roundtrip trades each week.
By daily, I meant I have been studying and watching it intently on a daily basis for a year. That's still very newbie territory.
What prompted me was to get mine before the gettin' is done. I grew tired of swimming upstream. If that's where the money is, so be it.
Beach Fanatic
I haven't seen a better year to day trade since '93. Volatility and blood in the streets are the best of conditions for a day trader.hear hear!
I've got a handful of ultra-shorts waiting for the second blood letting.
SoWal Insider
I've been trading daily for about a year. I'm not new to math but was new to finance. I feel like I've just walked into a horror movie during the climax.
http://www.portfolio.com/news-marke...11/11/The-End-of-Wall-Streets-Boom?print=true
Here's a post by a friend of mine on a finance board who puts it...more eloquently?
"The bobble head dolls at CNBC, Bloomberg, etc. would have you believe we're on the cusp of a sustained bear run that will take the S&P north of 1100, and yet there's this enormous flight to treasuries (with negative returns in some instances), staggering unemployment numbers, constantly downward revised guidance and vastly reduced orders. WTF is going on here?
This is cognitive dissonance at its best, my friends. The MSM bull blitz/barrage is attempting to assuage investors, convincing them that despite the absolutely vicious nature of this downturn, there is a light at the end of 2009 and brother Obama will lessen the pain along the way. This is so much utter bullsh*t that one can barely fathom the depths of their depravity. If you think putting us deeper in debt to alleviate problems caused precisely by too much debt will be rectified so easily, I've got a bridge to sell you.
It would appear that the media outlets have successfully convinced us that "deficits don't matter", carpe diem and onward and upward. Irrationality is pulling this bull by the nose ring. The best thing that could happen to this country is a prolonged period of suffering. That we are trying to avoid anything resembling true repentance for our 25-year credit-based consumer rampage just proves to me that we are F'ing toast - whether now or later. That we'll make it through this latest predicament I have no doubt, but make no mistake - it will come at the price of our credit rating, our currency, our standing in the world, and much, much more. We have used our last get out of jail free card and the rest of the world has tired of us. When the IOUs come due and we debase our currency or outright default, don't expect the Arabs, Asians or even the Europeans to come riding to the rescue by propping up our sham of a tertiary/quaternary-based economy. People still want to consume things - problem is, we don't make anything of value. See GM, Ford & Chrysler. Yeah, deficits don't matter. Whatever."
While I agree with most of this sentiment, a couple comments -
Treasuries at zero yield aren't due entirely to American businesses and banks buying fed debt. The Arabs, Asians, Europeans, and everyone else for that matter are buying them too. So I wouldn't be as convinced as this guy is that the IOU's will ultimately get called.
On the sustained bear run comment, I wouldn't say "sustained" is a good call but even the big perma-bears I track are currently long for the short term. Both Ritzhold and Shedlock recently went long for a short term run. I take that to mean something. I'm not sure if that fits in with what your friend is talking about though. I'd welcome some discussion on the subject. Traderx, care to comment?
Edited
Beach Fanatic
I guess day trading is relative. By definition I don't day trade, but I do make a handful of roundtrip trades each week.
By daily, I meant I have been studying and watching it intently on a daily basis for a year. That's still very newbie territory.
What prompted me was to get mine before the gettin' is done. I grew tired of swimming upstream. If that's where the money is, so be it.
Technically, day trading is trading the tick. Too fast and furious for me.
What tools do you use?
Beach Fanatic
hear hear!
I've got a handful of ultra-shorts waiting for the second blood letting.
I don't know about day trading but 2001 and from the Nasdaq bottom in October 2002 until early 2004, you would have great difficulty finding a better time to swing trade.
Beach Fanatic
While I agree with most of this sentiment, a couple comments -
Treasuries at zero yield aren't due entirely to American businesses and banks buying fed debt. The Arabs, Asians, Europeans, and everyone else for that matter are buying them too. So I wouldn't be as convinced as this guy is that the IOU's will ultimately get called.
On the sustained bear run comment, I wouldn't say "sustained" is a good call but even the big perma-bears I track are currently long for the short term. Both Ritzhold and Shedlock recently went long for a short term run. I take that to mean something. I'm not sure if that fits in with what your friend is talking about though. I'd welcome some discussion on the subject. Traderx, care to comment?
Well, I don't follow any gurus on either side of the ledger, but I went all cash in November 2007. Some of the move was pure dumb luck but I will take it. The current climate is too volatile for me so I have taken to trading hourly charts. The trick is finding the right securities to trade.
My personal belief is that we have not seen the bottom. That's based on my thoughts about the economy moreso than technical aspects of the market.
Beach Fanatic
While I agree with most of this sentiment, a couple comments -
Treasuries at zero yield aren't due entirely to American businesses and banks buying fed debt. The Arabs, Asians, Europeans, and everyone else for that matter are buying them too. So I wouldn't be as convinced as this guy is that the IOU's will ultimately get called.
On the sustained bear run comment, I wouldn't say "sustained" is a good call but even the big perma-bears I track are currently long for the short term. Both Ritzhold and Shedlock recently went long for a short term run. I take that to mean something. I'm not sure if that fits in with what your friend is talking about though. I'd welcome some discussion on the subject. Traderx, care to comment?
This free market is too manipulated for me to guess it's volatility. Just playing the far extremes on a bear slant and ETFs can be great for that. Trying to think of them as options with no expiration. Though there is a time decay this market's swings can more than overcome that.
As far as the quote, I don't really agree with countries calling in debt. That wold be an act of war practically. But wanted to quote in full. Though, with money flowing so fast into bonds they actually went negative, it seems no loss is the new gain for banks flooded with TARP money. Right now bonds are the only safe place to park it even at 0% which says everything about our current market.
Just concentrating on the macro view and trying to work my way in so my short term guesses are just that. Everything else is just gravity.
Beach Fanatic
Technically, day trading is trading the tick. Too fast and furious for me.
What tools do you use?
Just Scottrade with a straight cash account and basic platform. I'm practically using an abacus!
Been looking at Zecco for when I make that move. I've hear good things about thinkorswim. You?
Beach Fanatic
This is all so thick with thought. Very interesting. Sad really how History repeats itself and we allow it to. It's a pyrimid scheme and some people who do the rape of the economy profit and seldom do they pay for there crime because the crime is not easily proven.
I believe it will result in terrific wars. I hope I am wrong. I have two children who I love with all of my heart. But countries with leaders who watch their citizenry becoming more disgruntled will have to do something. Desperation will result in aquisition by power. One little battle will draw in bigger guns and it will spill over into adjacent territories, bringing in more power and more players until the mightiest of leaders are drawn in. Oil and other energy resources will be at a premium. I think we've increased our reserves fairly substantially for this reason. I know Pelosi wanted Bush to tap into the reserve, but I think there were reasons we did not.
I don't want to bring politics into this, I'm just saying that the economy per se scares me less than what consequences many don't recognize. It does suck not having a high standard of living, but that will pale in comparison if the downward spiral results in crop shortages and lack of food availability worldwide and that kind of turmoil.
I have been thinking of buying real estate of late. I am still watching though. I have many thoughts and factors to weigh including those mentioned here. Great thread.
I believe it will result in terrific wars. I hope I am wrong. I have two children who I love with all of my heart. But countries with leaders who watch their citizenry becoming more disgruntled will have to do something. Desperation will result in aquisition by power. One little battle will draw in bigger guns and it will spill over into adjacent territories, bringing in more power and more players until the mightiest of leaders are drawn in. Oil and other energy resources will be at a premium. I think we've increased our reserves fairly substantially for this reason. I know Pelosi wanted Bush to tap into the reserve, but I think there were reasons we did not.
I don't want to bring politics into this, I'm just saying that the economy per se scares me less than what consequences many don't recognize. It does suck not having a high standard of living, but that will pale in comparison if the downward spiral results in crop shortages and lack of food availability worldwide and that kind of turmoil.
I have been thinking of buying real estate of late. I am still watching though. I have many thoughts and factors to weigh including those mentioned here. Great thread.
SoWal Insider
This free market is too manipulated for me to guess it's volatility. Just playing the far extremes on a bear slant and ETFs can be great for that. Trying to think of them as options with no expiration. Though there is a time decay this market's swings can more than overcome that.
As far as the quote, I don't really agree with countries calling in debt. That wold be an act of war practically. But wanted to quote in full. Though, with money flowing so fast into bonds they actually went negative, it seems no loss is the new gain for banks flooded with TARP money. Right now bonds are the only safe place to park it even at 0% which says everything about our current market.
Just concentrating on the macro view and trying to work my way in so my short term guesses are just that. Everything else is just gravity.
No doubt, that was an incredible occurence.
One of the things I've been wondering about - while a lot of folks have been harping on the TARP, we're seeing 3-month treasuries at zero thanks in part to banks parking TARP assets at the FED. So the circle goes - the FED takes on debt by selling treasuries at low rates, lends to banks at 5%/9%, banks choose not to lend and instead park TARP funds in low interest treasuries... doesn't the FED make out like a bandit assuming TARP rates are higher than the treasury rates the banks buy? Of course, it's temporary, as the banks have to pull the funds or loose money. But for now, the banks are funding the FED's lending to banks... with the FED making a nice cut on the transaction.
Edited
Beach Fanatic
No doubt, that was an incredible occurence.
One of the things I've been wondering about - while a lot of folks have been harping on the TARP, we're seeing 3-month treasuries at zero thanks in part to banks parking TARP assets at the FED. So the circle goes - the FED takes on debt by selling treasuries at low rates, lends to banks at 5%/9%, banks choose not to lend and instead park TARP funds in low interest treasuries... doesn't the FED make out like a bandit assuming TARP rates are higher than the treasury rates the banks buy? Of course, it's temporary, as the banks have to pull the funds or loose money. But for now, the banks are funding the FED's lending to banks... and making a nice cut in the mean time.
bingo. Some call it refinancing others ponzi. It hurts too much to cry.
Borrowing your way out of debt rarely works out well. I think that's what happened to Japan.
SoWal Insider
I agree mikecatadjuster. Great -- as in epic, not funn -- thread.
I totally get this. I had strep throat a couple of weeks ago, and it hurt like freaking hell. I got the diagnosis and immediately said "Oh good." The doc was surprised. It's easier, I told him, once you know what you are dealing with. I had to take ownership. It still took longer than I thought it would to get better.
This is like an adult getting strep throat on a global scale. But worse.
Robert Shiller is saying the Dow could fall by half still. I doubt it, but it's clear that we were long overdue for a hard reset.
http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/3.html
Cool.
That's my kneejerk reaction to terrible, but believable, news.
On the upside, the only thing that can really fix this whole conundrum is the realizing and taking ownership of these losses.
I totally get this. I had strep throat a couple of weeks ago, and it hurt like freaking hell. I got the diagnosis and immediately said "Oh good." The doc was surprised. It's easier, I told him, once you know what you are dealing with. I had to take ownership. It still took longer than I thought it would to get better.
This is like an adult getting strep throat on a global scale. But worse.
Robert Shiller is saying the Dow could fall by half still. I doubt it, but it's clear that we were long overdue for a hard reset.
http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/3.html
SoWal Insider
This is all so thick with thought. Very interesting. Sad really how History repeats itself and we allow it to. It's a pyrimid scheme and some people who do the rape of the economy profit and seldom do they pay for there crime because the crime is not easily proven.
I believe it will result in terrific wars. I hope I am wrong. I have two children who I love with all of my heart. But countries with leaders who watch their citizenry becoming more disgruntled will have to do something. Desperation will result in aquisition by power. One little battle will draw in bigger guns and it will spill over into adjacent territories, bringing in more power and more players until the mightiest of leaders are drawn in. Oil and other energy resources will be at a premium. I think we've increased our reserves fairly substantially for this reason. I know Pelosi wanted Bush to tap into the reserve, but I think there were reasons we did not.
I don't want to bring politics into this, I'm just saying that the economy per se scares me less than what consequences many don't recognize. It does suck not having a high standard of living, but that will pale in comparison if the downward spiral results in crop shortages and lack of food availability worldwide and that kind of turmoil.
I have been thinking of buying real estate of late. I am still watching though. I have many thoughts and factors to weigh including those mentioned here. Great thread.
This brings to mind the current riots in greece. If anything like this happens, it'll start in western or more likely, eastern europe. The emerging markets in the eastern block countries are in a complete economic meltdown. Somebody might try to take advantage of the situation. (e.g. Russia)
re: crop shortages - I'd say the bigger risk is a total devaluation of any particular vulnerable currency in an emerging market.
SoWal Insider
This brings to mind the current riots in greece. If anything like this happens, it'll start in western or more likely, eastern europe. The emerging markets in the eastern block countries are in a complete economic meltdown. Somebody might try to take advantage of the situation. (e.g. Russia)
re: crop shortages - I'd say the bigger risk is a total devaluation of any particular vulnerable currency in an emerging market.
Or peak oil, but I guess that's not happening now since supply has mysteriously increased.
Still, my 89 year old next door neighbor is growing broccoli, and I am kinda jealous.
Beach Fanatic
This is all so thick with thought. Very interesting. Sad really how History repeats itself and we allow it to. It's a pyrimid scheme and some people who do the rape of the economy profit and seldom do they pay for there crime because the crime is not easily proven.
I believe it will result in terrific wars. I hope I am wrong. I have two children who I love with all of my heart. But countries with leaders who watch their citizenry becoming more disgruntled will have to do something. Desperation will result in aquisition by power. One little battle will draw in bigger guns and it will spill over into adjacent territories, bringing in more power and more players until the mightiest of leaders are drawn in. Oil and other energy resources will be at a premium. I think we've increased our reserves fairly substantially for this reason. I know Pelosi wanted Bush to tap into the reserve, but I think there were reasons we did not.
I don't want to bring politics into this, I'm just saying that the economy per se scares me less than what consequences many don't recognize. It does suck not having a high standard of living, but that will pale in comparison if the downward spiral results in crop shortages and lack of food availability worldwide and that kind of turmoil.
I have been thinking of buying real estate of late. I am still watching though. I have many thoughts and factors to weigh including those mentioned here. Great thread.
I stopped short of going there, but I'm there. I believe in self-sustainability for philosophical reasons but the current events are compressing my timeline. I'm almost scared to talk to people about it because the real possibilities are so unimaginable for most only seeing will be believing. Having trouble myself with some of it.
Boomers will be bottlenecking the healthcare industry(several levels of trouble there), $56 trillion debt, no production, no jobs, no consumers, still at war, dollar worthless, oil priceless, food everything.
soooo, good luck with all that. ;-)
Beach Fanatic
This brings to mind the current riots in greece. If anything like this happens, it'll start in western or more likely, eastern europe. The emerging markets in the eastern block countries are in a complete economic meltdown. Somebody might try to take advantage of the situation. (e.g. Russia)
re: crop shortages - I'd say the bigger risk is a total devaluation of any particular vulnerable currency in an emerging market.
Yes, I think riots are disgruntled citizens just looking for a spark. Add to that, the philosophy of the popular Sun Tzu who says to be patient and strike when your opponent is weakest.....ugh, I'm done for night.
Here's to hoping for the best and preparing for the worst. or somewhere in between.
Banned
i thought trader x was a day trader. i've been a professional day trader since 1991. i trade 2000-4000 times a day. i have an 8 monitor setup. i use professional level 2 software and can get off 10-20 orders ever 5 seconds.this mkt is a high vol traders dream. i've had several 6 fig days this year.i have friends who've made $30 mil this year day trading. i stick all my profits in cd's and have looked at buying something on 30a for while, my concern is the high speed connections on 30a. isn't the cable modem company mediacom? i ehard they suck. is dsl available on 30 a?
SoWal ExpertAuthor
Good gravy! Kvetch much?
Yes, there are tough times ahead, but we will be just fine in the long run. The stock market goes up and down - that's why we have names like bull and bear.
Even if it goes to a 2nd Great Depression we will manage. We may be eating Spam (made in the USA and stepping up production BTW) instead of Kobe beef, but we CAN feed ourselves.
Kvetch much?Yes, there are tough times ahead, but we will be just fine in the long run. The stock market goes up and down - that's why we have names like bull and bear.
Even if it goes to a 2nd Great Depression we will manage. We may be eating Spam (made in the USA and stepping up production BTW) instead of Kobe beef, but we CAN feed ourselves.
SoWal Insider
i thought trader x was a day trader. i've been a professional day trader since 1991. i trade 2000-4000 times a day. i have an 8 monitor setup. i use professional level 2 software and can get off 10-20 orders ever 5 seconds.this mkt is a high vol traders dream. i've had several 6 fig days this year.i have friends who've made $30 mil this year day trading. i stick all my profits in cd's and have looked at buying something on 30a for while, my concern is the high speed connections on 30a. isn't the cable modem company mediacom? i ehard they suck. is dsl available on 30 a?
Well I am a 5000-8000 trade-a-day day trader. I can get off 30-40 pixie dust enhanced trades per second and have a plus five, sixteen monitor enchanted setup. I work with level five software plus a magic sorcerers vision stone. Top that, mortal.
Edited
Beach Fanatic
i thought trader x was a day trader. i've been a professional day trader since 1991. i trade 2000-4000 times a day. i have an 8 monitor setup. i use professional level 2 software and can get off 10-20 orders ever 5 seconds.this mkt is a high vol traders dream. i've had several 6 fig days this year.i have friends who've made $30 mil this year day trading. i stick all my profits in cd's and have looked at buying something on 30a for while, my concern is the high speed connections on 30a. isn't the cable modem company mediacom? i ehard they suck. is dsl available on 30 a?
No, traderx is mentally too slow to daytrade at least these days. I trade a variety of setups just to spread the risk and night tremors around. I turned more short term since Nov. 2007 and stick to hourlys until I can figure something else out. Otherwise, I would trade hourlys, dailys and weeklys using different technical approaches.
But don't let the stock trading fool you, I am really in the cigar importing business. I bought all the '59 Fords in Cuba and filled those huge trunks with cigars. I have made $2 billion this year alone. Of course, I had to move offshore because the government was threatening to tax cigars. My office is nestled between a couple of former US yacht builders who fled the country after the same government imposed a yacht tax.
Banned
30a i sense a lot of sacrcasm. you obviously know little about the world of hard core day trading. go read the book electronic day traders from the 1990's and you'll understand how the hard core guys do it
Banned
trader x do you live on 30a? is dsl on 30a? i hear the cable connection is not that good. i also have long term accounts and was scaling in stocks like x,ge,bac,wfc,drys,hd,hig,pru,mos pot the last 2 weeks. some of these stocks took 80% plus hits. the mkt looks stable for now as excitment mounts over pres obama. the masses think he's the messiah and will fix this. they're very wrong. how we got in this mess was the massive printing of money in 2001-2002 when greenspan lowered rates to 1% to head off the stock mkt crash. in turn that money inflated the real estate bubble. FOR THE LAST 30 YEARS THE GOV'T HAS PRINTED MONEY NONSTOP TO HEAD OFF THE NATURAL EBB AND FLOW OF THE BUSINESS CYCLE. i'm very pessimistic on the next 5-10 years as the gov't saving basically bankrupt companies like aig,c and now gm will backfire. it basically sets up another japan were econ growth is 0-2% for years to come as the other side of this historically printing game by the gov't comes back to haunt
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