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Monday, March 31, 2008

Financial Ninja Favs: March

In case you missed them, here are YOUR favorite Financial Ninja posts for the month of March:

1) Really Scary Fed Charts: March
2) The Fed is Almost Out of Ammo, Citigroup and UBS Too
3) Commodities Unravel, Confidence Collapses
4) Parabolic Commodities: The End is in Sight
5) Massive De-leveraging Slams Commodities

As far as the Really Scary Fed Charts post goes, it will be updated as soon as the March numbers are out. The situation clearly hasn't improved. The Fed has taken the TAF (Term Auction Facility) and added the TSLF (Term Securities Lending Facility) and the PDCF (Primary Dealers Credit Facility) to its bag of DESPERATE tricks.

In March we saw the first results of both the TSLF and the PDCF. The market really didn't know how to interpret the results, and so basically IGNORED them.

Treasuries Decline on Weaker Demand at Treasury, Fed Auctions: "At the New York Fed's $75 billion auction, through which primary dealers could borrow Treasuries for 28 days, bids totaled 1.15 times the amount offered, indicating financial firms' need for the relative safety of U.S. debt is waning. Notes declined earlier as demand at the government's $18 billion sale of five-year notes was the lowest since April 2006."

Some thought that WEAK demand was GOOD. It meant there was no DIRE NEED for additional liquidity. Others saw the WEAK demand as BAD. It meant the broker dealers didn't have any more good AND unencumbered assets. Honestly, NOBODY knows.

This month the emphasis has clearly shifted towards COMMODITIES, the last FEVERISH hope of the Bull. Cracks have appeared in the story as one commodity after another PEELED AWAY from record highs after going PARABOLIC. (If you haven't yet figured out that PARABOLIC = THE END, the market WILL land the worst kind of ninja style drop kick on your account shortly.) While it may be too early to make the call, I've already put money on it: The COMMODITY BULL IS DEAD.

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