July 2008

Marketwatch is leading with a headline this eveing saying “WaMu bucks bank trend“.? And indeed, the stock is up over 8% in after-hours trading…? but that’s hardly the whole story, despite a sensational headline…? Which one of the following details do you think is the most important for WaMu today?? The one where it “leaped” by 9% after hours, or the one where it went down over 34% earlier in the day?

Feel like you need some serious charting?? Blocks is a rather good technical analysis software tool for charting stocks and the like (sorry, no commodities or currencies, from what I can tell).? It’s got some serious features for power users, and happens to be developed locally in Durham (the parent company is based in Florida).

The great thing is, if this is a tool that interests you, is that the base package for charting is free.? Costs for real time data, fundamental data, etc. are comparable to other products, but you should be able to try out the platform before plunking down any serious coin.

FYI, Windows only.

In case you’re interested…? Wisdom Tree has released a couple of new ETFs to track more currencies.

  • CYB – Chinese Renmibi
  • ICN – Indian Rupee
  • BZF – Brazilian Real
  • JYF – Japanese Yen
  • EU – Euro

Trading the Euro and Yen via ETFs are old hat (see FXE and FXY), but the others are useful, at least for those of us who don’t go directly to the foregin exchange markets…

I just realized there is a easily accessible version of the TED Spread available online… from Bloomberg: the TED Spread.

Wikipedia explains the logic of the TED Spread:

…the TED spread is now calculated as the difference between the three month T-bill interest rate and three month LIBOR. The TED spread is a measure of liquidity and shows the degree to which banks are willing to lend money to one another.

There is a good reason that the LIBOR rate is getting pushed higher than the T-bill rate…? US Banks can go borrow in Europe without disclosing it — something they weren’t able to do in the US until the recent TAF and similar Fed sponsored bail outs programs were made available.

It’s noteworthy that the TED has started trending upward again over the last month or so.? This is an indication that more banking turmoil lies ahead…? although with IndyMac going down, Freddie and Fannie in the headlines, I’m surprised that this hasn’t spiked even higher.

From John Hussman, when talking about recent prices in the Crude Oil market:

Geek’s Rule o’ Thumb: When you have to fit a sixth-order polynomial to capture price history because exponential growth is too conservative, you’re probably close to a peak.

You’re usually in unusual territory when exponential growth is too conservative.

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