Car Wreck

by Larry Levin


Global recession fears and the continued commodity stock sell-off led to a mostly lower day amid a very choppy session. In the end, traders were waiting on the Fed's Beige Book only to ignore it once it was read as fairly bearish.

This report is known as the Beige Book for the traditional color of its cover, which said Many [Fed districts] described business conditions as weak, soft, or subdued. A recent bright side of the economy and the result of a weak US dollar had been exports showed signs of slowing.

The report also said the service sector was slowing and the factory sector was weak. The real estate sector shows no sign of bottoming out and lending activity was subdued. The districts that reported on auto sales found them weak or flat at low levels, which turned out to be a whopper of an understatement.

U.S. automakers reported double-digit August sales declines today. Ford's vehicle sales were the worst since World War II. Not only were Ford's sales horribly weak, they were far worse than Wall Street had expected at -26.6% for the month. But that wasn't all: Jim Farley, vice president of Ford marketing and communications, said in a statement that the second half of 2008 will be even worse. For its current effort and apparently guaranteed worse performance later this year, Ford was rewarded with a GAIN of +1.3% today.

GM reported the best results of the Big-3 with a sales decline of 20.3%. For its stellar performance GMs stock was up 5.8%.

Chrysler, which is now a private company, out did all other carmakers including foreign models. Its sales plummeted an amazing 34% last month from the prior year.

How do you spell bailout? We'll all be spelling it, B-I-G-3 very soon.

And last of all from the file titled, Finally Someone Is Going To Jail, the AP reports two former Credit Suisse brokers were charged on Wednesday with fraud and conspiracy over deceptive sales of subprime-related auction-rate debt, government officials said, part of an industry-wide probe of the securities.

The U.S. Attorney's office in Brooklyn and the Securities and Exchange Commission accused the former brokers, Eric Butler and Julian Tzolov, of misleading customers into believing that auction-rate securities in their accounts were backed by federally guaranteed student loans and were a safe and liquid alternative to bank deposits or money market funds.

These two soon-to-be-ragdolls of Bubba were apparently more interested in commissions than telling the truth.

Real Time Trading Signals*for

Trade Date: 9/3/08

E-Mini S&P Trades*
(before fees and commissions):

1) TP buy @ 11:15am at 1266.75 = +1.00 & +.50

2) Engf sell @ 11:40am at 1268.00 = +2.00 (1 lot)

3) VA sell @ 12:45pm at 1271.50 = -.50 (1 lot)

4) VA buy @ 1:10pm at 1271.00 = -1.25 (1 lot)

5) VA sell @ 1:35pm at 1271.50 = b/e (1 lot)

6) Algorithm positions (4)...combined total...-2.00


ZB (30 Year Bond) Trades*
(before fees and commissions):


1) Sell @ 8:00am at 118.050 = -3.0*3...combined total...-9.0


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