In
David Wessel’s “CAPITAL” column in the WSJ yesterday, he said that the Fed had
only loaned a total of 1.6-trillion in emergency loans at the December 2008
crisis peak.
Conversely
we have former Congressman Alan Grayson’s comment that I posted yesterday summarizing
the July 2011 GAO report on the Federal Reserve; “Page 131 - The total lending for the Fed's "broad-based emergency
programs" was $16,115,000,000,000. That's right, more than $16 trillion.”
I went to the source, the GAO report page 131. Sure enough, it was 16-trillion, but there
was a catch.
The data from Table 8 on page 131 of the GAO report
counted aggregate loans. In other words,
if (quoting from the report) “…an overnight…loan of
$10 billion that was renewed daily at the same level for 30 business days would
result in an aggregate amount borrowed of $300 billion although the
institution, in effect, borrowed only $10 billion over 30 days.” So 16-trillion is a correct number
but it covers aggregate loans that only an accountant could love.
I’ll close with Mr. Wessel’s comment regarding an earlier
Bloomberg report; “There’s plenty to argue about, without turning to inflated
numbers. The actual facts are stark
enough.”
Today,
Thursday, the S&P 500 went down about 2% to 1234 while the VIX rose about 7%.
It
looks to me like the S&P 500 is falling from the top of its channel and it may
retreat back to the lower channel line as investors worry about Europe. That would mean that a 5% drop would be
nothing to worry about - unless our indicators begin to break down.
I
heard PBS commentator Neal Conan, in a tongue in cheek comment, call the
European debt crisis the “most boring crisis ever.” Great comment!
I
continue to hope that we’ll get some good news for the Holidays out of
Europe, but perhaps not the end-all solution that the news media keeps saying
we must have. This is a complex mess involving
numerous nations so it may take another round of give and take before it is resolved.
The
NTSM analysis remains BUY, but the VIX indicator moved into neutral territory.
Both
Price and Volume are still signaling Buy while Sentiment is neutral at about 50%
Bulls.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
I
am 90% long in the trading portfolio.
Just
a reminder: 100% invested in stocks is way too much for most rational
folks. Don’t do it unless you have a
high tolerance for risk.
