September 29, 2008
No one ever made a dime panicing....James Cramer.
Look around. There be bargains out there.
Lar sends this link:
Ben Smith send these links:
http://www.youtube.com/watch?v=EoB4BS7CGAw
http://stockcharts.com/h-sc/ui?s=$VIX&p=D&st=1996-01-01&id=p32297436139&a=151454916
http://stockcharts.com/h-sc/ui?s=$VIX&p=D&st=1996-01-01&id=p32297436139&a=151454916
Red and White D sends these links:
The hidden implication in the above article is the problem of the President's own credibility. The House Republican leadership responded to his call for action and the House rank and file saw them as gullible. These are the same folks who got sold Iraq in a hurry, weapons of mass destruction and all, and they still have the taste in their mouths. But now that they have revolted from their own leaders, who is left to lead? And with whom do the Democrats negotiate?
September 22, 2008
Here are two links from TheStreet.Com:
'Oil Soars 20% Ahead of Expiration', by Chuck Marvin
'Cramer's 'Mad Money' Recap: Finding Refuge in Gold by Scott Rutt'
September 21, 2008
"The irony of the current conundrum is that many of the institutions in peril are the same companies that repackaged risk, engineered exotic products and built the derivative structure." .... Todd Harrison on Minyanville.Com.
Deregulation, that is what is at the heart of our current woes. It has been the mantra of many in the Republican Party (my own party) for decades now. It was the panacea, the pot at the end of rainbow. And even after deregulating Saving and Loans and the seeing resultant problems, Deregulation remained the Holy Grail of the hardcore of the party. And these people posessed extraordinary skills that allowed them to actually grasp their long-wished-for Grail.
This current administration is being visited with its own self-reported worst nightmare. This administration's unwavering pursuit of deregulation is to be the stimulus, the cause as it were, for a wave of regulation that is going to sweep Corporate America.
...............
I know that hindsight is always much better than foresight. Even so, I wonder if much of this disaster could have been avoided if the Fed/and or/Treasury could have set prices for the distressed mortgages and securities, say ten or twenty cents on the dollar; and then if the Fed/and or/Treasury could have started buying them at that rate, much of this turmoil could have been avoided.
Also, it occurs to me that the worst thing that could happen if a home is foreclosed is for the bank to be forced to put it right back on the market. Foreclosed homes should be taken out of the market for a year. Maybe the former owners could rent them reasonably and be given first crack at buying the houses back when the year is up.
September 19, 2008
The Orange Sections sent these comments along.
This is a classic story of Greed at every level. While the Corporate Managers are certainly despicable they at least have some semblance of an excuse in the sense that they would have been fired by greedy shareholders for not reaping the profits . (a systemic issue) Government Regulators have no such excuse. They did nothing either out of their own greed or utter incompetence. Either way they failed their constituents.
This bailout is just the latest example of pay it forward politics. They are going to spend massive amounts of money that they will borrow in one way or another and then pay it off over the years. It has gotten so bad that Joe Biden is out claiming that it is unpatriotic to not pay more taxes. Every member of the Boston Tea Party must have vomited in heaven when he said that. What has happened to the quality of leadership that founded this country?"
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There is only a minor change in my top ten this week. Two stocks traded positions. I have raised some cash because October is coming and the ghosts and goblins should be out early. |
September 18, 2008
Here is a link to an excellent article by Jeff Macke of Minyanville.Com that covers ground already covered by yours truely on these pages:
http://www.minyanville.com/articles/GS-MCO-LEH-Credit-aig-Moody/index/a/19056
I quote the article below.
The banks aren't trading with one another for the same reason no White Knight came in to rescue the Webvans of the world when they crumbled: The banks know exactly what kind of over-priced paper, ludicrous derivatives and questionable assets they have on their books. They can't price it, exactly -- and they may not even fully understand what it is -- but they know it's toxic and they're stuck with it.
What's seized the credit market is the fact that the lending institutions don't want to get stuck with the other guy's over-priced garbage. They're scared enough by the stuff on their own books, let alone what the other banks are trying to hide.
By itself, the above scenario would be a recipe for disaster. What's making it potentially fatal is the ratings agencies, who incorrectly priced the assorted trash in the first place, have chosen now as a good time to start downgrading the credit ratings of the institutions involved.
...What we need to do is stop the ratings agencies from throwing napalm on the Street's dirty paper. Leave the shorts alone. Figure out the hedge funds later. Forget trying to stop 'rumor mongering.' Simply muzzle Moody's, Standard & Poor's and Fitch. Suspend their operations. They've lost the right to be part of this system. They will, of course, need to eventually be replaced and/ or reconfigured. Someone has to value the paper. But not these guys and not now.
Take the flame-thrower out of the rating's agencies hands and the prospect of an inorganic wipeout like AIG is out of the equation. Going to zero becomes a less likely prospect. The market will find a price for the last financials standing and start rebuilding the world."
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I bought more of GMXR, ICE, and SLW today. |
September 15, 2008
Here is a link sent by Red and White D: 'Wall Street crisis: Is this the death knell for derivatives?', by Nils Pratley of The Guardian.
And here is a link sent by Ben Smith: 'Signs Of The Times', by Bob Hoye of 321Gold.Com.
September 14, 2008
I had been working an undercover case down on the docks, so I had not been in my usual haunts for a couple of months. Well, I got the case wrapped up, got cleaned up, and headed downtown to Tony's Bar and Grill.
"Hiya Jake," Market Marnee greeted me when I walked in. "How they hangin?"
"Pretty good doll," I told her. "Long time no see. What're you doin' in here anyway, slummin?"
"In a way, Jake," she replied. "I sold the Caddy. Now I get around on that Honda parked by the door."
"You're riding a motorcycle these days," I was astonished. "And that outfit you're wearin?" I asked.
"It's Gucci riding leathers," she explained. "It's a little something I picked up. It fits like a second skin."
"It certainly does," I agreed. The effect of wrapping that drop dead figure of hers in black leather was electrifying. All the guys in the joint were enjoying the show too, and they were none to subtle about it.
"Let me buy you a drink, Marnee," I offered. She accepted and we adjourned to a booth for a little privacy. "So, tell me about the motorcycle."
"At first, I didn't think I'd be able to get one," Marnee began. "The Caddy didn't bring me much. Seems no one wants a gas hog anymore. So I was a little short of having enough to buy the Honda. I went down to the Fast and Furious Bank to get a loan for the difference. I talked to Easy Eddie there. I didn't think there would be a problem. I've had a dozen loans there over the years. Eddie turned me down! I couldn't believe it. He told me the bank was almost completely out of money to loan. Then he said the only way I could get the loan was if I took a mortgage too. Used to be, you went into a bank, started an account or took out a loan, they gave you a toaster. Now they want to give you a mortgage on a two bedroom bungalow."
So what'd you do?" I asked her.
"I cashed in some of my bonds, Jake," Marnee continued. "Then I went back to the Fast and Furious and picked up a whole portfolio. I now own two city blocks in Hoboken."
"Then that makes you a landlady, Marnee," I commented. "You are now a substantial woman."
"Yeah," she replied wrinkling her nose. "Who'd a thunk it?"
....................
Rich Kolon writes:
"Bender,
I see where there is a HUGE difference between the physical price of silver and the futures paper market price of silver.
Again, I think this is because the COMEX allows some silver shorts to be considered in hedgers, and I doubt they have the ready-to-go silver to back that position.
Here is the actual rates 1 ounce silver American Eagles are trading on Nucleo at Bullion Direct:
http://www.bulliondirect.com/nucleo/lp/ American_Eagle_Silver_Coin_(1.00_oz).html
Now here is the bullion price at the COMEX on NYMEX.
http://quotes.ino.com/exchanges/?r=NYMEX_SI
There is a big demand for physical silver for it be valued over $3 per ounce above futures, suggesting that the futures price has been manipulated to an unreal low value.
The bankers behind the shorting of silver on the COMEX are likely desparate to make money due to the financial crisis they are in, and the COMEX appears to be allegedly letting them get away with unreal low prices to wipe out the long investors, the risk of leveraged futures.
PHYSICAL will ultimately prevail. And if the COMEX continues to allow this disconnect in pricing, this may blow up into the huge alleged scandal that I think is going on.
But be careful about SLV, the paper silver ETF. Real silver companies may have suffered too much, and could show big gains if PHYSICAL prevails.
A chance to load up on SLW?
http://stockcharts.com/h-sc/ui?s=SLW&p=D&yr=0&mn=6&dy=0&id=p91058887254
Rich"
September 7, 2008
Here is a link to: 'Washington takes over Fannie Mae, Freddie Mac', by Greg Robb & Greg Morcroft of MarketWatch.Com. I quote it below:
The Treasury said that stock in the company will continue to trade, although powers of stockholders will be suspended until government control ends.
In order to improve the availability of mortgages, Treasury will start buying Freddie and Fannie's mortgaged-backed debt in the open market. The companies will also end all lobbying of the government and eliminate dividends."
Ben Smith sent this link to: 'Fannie & Freddie Bailout? - Fast Money Recap of 9/05/08'. I quote it below.
Adami mentioned that if the backstop of Fannie and Freddie can lower mortgage rates, the entire problem could begin to unwind itself. Karen Finerman said the plan is bad for the Treasury and bad for the U.S. dollar."
Ben Smith then adds: "So, it seems that IF the above statements are accurate, this gives us some direction?
Long SKF, short the USD, long anti-dollar plays, etc.???"
Yes, Ben, that is about it. I will be gone this coming week and will not post until next weekend.
September 4, 2008
Here is a link sent in by Vegas: 'Big Three bailout may be around corner', by Chris Isidore, CNNMoney.com senior writer. I quote the article below.
The Big Three are now in the process of closing truck assembly lines and rushing to catch up with hybrid and other fuel efficient offerings from Toyota Motor (TM) and Honda Motor (HMC)."
Vegas then goes on to comment:
"What I DON'T understand is why haven't those new car prices come STRAIT down?????"
That is a great question.
Here is a link to 'Pimco's Gross Lets the Freak Out', by Kevin Depew of Minyanville.Com. It quote the article below.
Gross wrote today, "[T]he more [these leveraged assets] decline, the more frequent and frenzied the margin calls, and if the additional cash flow is not provided, not only an asset liquidation but a debt liquidation follows." Good lord, if that's not enough to let the freak out, nothing is.
The junkie's dilemma, whether we're talking about crystal meth, heroin or cheap credit, is that the spiral of addiction inevitably overwhelms any reasonable judgment about what constitutes a 'cure.' That is precisely why a junkie can never be relied upon to offer up an honest, sensible path to good health. No matter what treatment or plan is offered, the only goal is to get the supply to the beast... at all costs. Today, Gross let the freak out. And the plan is simply to open up the government's balance sheet to the beast ... at all costs."
And what Gross is really proposing fellow Benders is running the printing presses at hereto unbelievable rates with a result of inflation in the extreme. And pray tell, what is likely to happen to asset prices in extreme inflation...why they go up don't they?
August 31, 2008
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I own two oil/gas companies right now (ARD and GMXR) and Natural Gas (UNG) these are pure energy plays. SPWR is an alternative energy play. Because some financials are still going to do alright, I own two (MA and ICE). I am hanging onto SKF and SRS as longer term plays. Actually UNG is longer term also. Natural Gas is going to be a lot higher this winter. Now is the time to buy. |
August 20, 2008
Ben Smith sent links to several articles here is the first:
'M3 Contraction - The Future is Now', by Mike Mish Shedlock.
M3 was soaring because institutions and consumers were telling credit lines and parking the money in money market funds. Those screaming inflation, or hyperinflation missed the boat on this big time. Now that those credit lines have been tapped or shut off, it is perfectly logical to see M3 plunge.
M3 has proven to be a poor leading indicator. Housing has been crashing for three years, equity prices in general have been sinking for 9 months and financials have been sinking like a rock for a year. The US recession started in December of 2007 or January of 2008, some 8-9 months ago. Pray tell what about M3 is leading?"
Here is number two:
'Revisiting the M3 Contraction', by Mike Shedlock.
Ironically, what was described by many as evidence of hyperinflation was actually a flight to cash while cash was still available!"
Number three is a must read for all Benders:
'The Great Consumer Crash of 2009'
...Banks are doing what they usually do. They are closing the barn door after the pigs have escaped. As their losses have crossed the $500 billion mark, it is getting tougher for them to convince more suckers to buy their stock. They have so much toxic waste 'assets' on and off their books at inflated values that they can not or will not lend. The Federal Reserve reported that banks have tightened standards for all loans in record numbers.
...Government unemployment figures have begun to skyrocket, while the true unadjusted unemployment figures point to a major recession. If the number of people who have given up looking for a job were included, the official 5.7% unemployment rate would jump to 14%.
...J.D. Power and Associates forecasts car sales of 14.2 million units in 2008, a 12% decrease over the 16.1 million units in 2007. This would be the lowest level since 1993.
...Consumer and business confidence is shot. Consumer confidence is at multi-decade low levels. Small business confidence is also at historic lows. Small businesses do most of the hiring in the U.S. Consumers and businesses are correct in their assessment of the situation. It is our political and corporate 'leaders' that are in denial."
The first chart in the article just above indicates that the U.S. Debt Percent of National Income went from 55% in 1977 to 85% in 1997, to 123% in 2007. Wow.
August 20, 2008
My fellow Benders, here is a link to 'No Credit for Financials, Part 2', by Bennet Sedacca of Minyanville. It is a most interesting read. What I find, and hope you find, is the obviously puzzled tone of Mr. Sedacca's comments. The market is not behaving in a way that is logical or rational to him and he wonders in print why that should be. I quote from the article below.
Consider: Citi brought a 5-year corporate debt deal to market at 3 3/8% above Treasuries, the highest ever for Citi, which was nearly 1% cheaper than their outstanding bonds were trading that morning. AIG (AIG)sold $3.25 billion in 10-year notes 4.33% above Treasuries, or 8.25%, compared with $2.5 billion sold in December at 1.8% above Treasuries.
So even those who can get deals done are selling at desperate levels. Why? Because they're well aware that they must raise capital while they can.
...Earlier on, I said I believed the stock market was the riskiest I'd seen in my career - certainly an understatement, of sorts."
Equity markets, particularly U.S. equity markets are behaving quite nicely, thank you, when they really have no right to do so. Or do they have such a right? Is there something even skilled professionals like Mr. Sedacca, whom I admire and enjoy reading, miss entirely?
There is something about the equity markets that is bothering Mr. Sedacca. There is something he can not quite put his finger on. He is missing an important piece of the puzzle, one that would help him immensely if only he had it. Here is the deal.
How can stocks still be so expensive, in Mr. Sedacca's opinion? Sherlock Holmes always said that if you eliminate all other possibilities, the one that is left must be the answer, no matter how seemingly impossible it is. Here is that answer:
According to Economics 101, price rises are caused by two factors, individually or in tandem.
2. Increasing Demand - Demand for U.S. equities remains high despite the sucking sound we are hearing from financial companies.
THERE ARE STILL OCEANS OF U.S. DOLLARS OUT THERE TO CHASE EQUITIES.
How could that be?...because inflation has been much higher than most of us, and particularly the Sedaccas of the world, ever considered. There are a lot more dollars out there and they have to find a home, have to attach themselves to something, somewhere. Right now, U.S. equities are the most attractive thing in the world to buy. And so, U.S. equities are being purchased with vigor.
For generations now, your Government has been lying to you about the economy in general and inflation in particular. Inflation has been bad, really bad, and not even the mortgage losses that financial institutions all over the world are suffering are going to soak it all up, at least not right now, and not over the next year.
Foreigners and natives alike are disillusioned with bonds and with emerging markets. So what is there left for them to put their money into? Yep, good old American stocks.
That's the missing piece in Mr. Sedacca's puzzle. There's a lot more cash out there still seeking a refuge. It's a stream that is staggering in both its girth and its pressure.
So what should you do? Buy the bottom and hold some cash to put to work in the next bottom. Stop thinking short term... the next hour or next few days. Start thinking in terms of weeks, months, and seasons. This is going to get interesting.
.....................
How could there be an 'ocean' of extra dollars floating around in the world economy? How do you think the inflation in house prices occurred? Over a period of ten years in my community alone, houses that sold for $60,000 now sell for $150,000. How does this kind of inflation occur?
Well, we did it to ourselves. Our personal budgets have been unbalanced over the past three decades. So have state and national budgets. Our balance of payments has sucked for at least that long. How did Reagan, who trippled the national debt in 8 years, and Bush, who is about to beat that record, do it? They ran the printing presses. To be fair, the Democrats contributed to this, particularly Democratic Congresses. That is inflation: more dollars in circulation, more dollars that do not represent more work done nor more value created.
We unbalanced our personal budgets by using credit cards, taking on more and more personal debt. We did not do more work, or create more value to get those things we wanted. But we got them anyway, and that is inflationary because it drove more dollars into the economy without a coresponding value creation on the part of the debtors. Ah, but you argue, the people who made the t-shirt, who built the car, who produced the oil in a foreign country produced a value. Yes, but we overpaid for those things, and did it with dollars that were borrowed, not earned.
We drop kicked the balance of payments, demanding more and more energy, particularly petroleum, without creating more value with that energy. When we started buying more than a third of our oil from overseas producers, we crossed a line that will take us at least a decade more to recognize as the most dangerous thing we have ever done, as far as our national security is concerned. We have had a succession of Presidents and Congresses from both parties who stubbornly refused to see the danger of the U.S. becoming a hostage to foreigners for a critical energy supply.
So when a formerly $60,000 house sold for $150,000 where did the borrower get the money? Ultimately, he borrowed inflated dollars to pay for that house...inflated dollars...those printing press dollars, those balance of payment dollars, those 'I just gotta have it now no matter how far in debt I go' dollars. And, by paying too much for the house, he created yet more inflation.
The fact that U.S. equity prices still have not fallen far is a sure indicator of just how much hidden inflation has been created in the past thirty years. Its an ocean of dollars in which we might yet drown.
August 17, 2008
Ben Smith sent a link to this most excellent article: 'Dallas Fed chief Richard W. Fisher speaks his mind in Q&A', by Brendan M. Case of the Dallas News. I quote it below:
ANSWER: This thing I am quite concerned about. The Alt A market had an enormous amount of low-doc and no-doc to it. There is sort of a balloon period of interest rate resets that starts in 2009. If you add that to subprime, the amount of resets in a three-year period – 2010, 2011, 2012 – is greater than anything we've seen.
QUESTION: How did things spin so far out of control in the financial sector?
ANSWER: I like to say that since the Lydians invented money before Christ, the same thing has happened. When the return on money gets low, people take higher risk.
We had a period known as the Great Moderation, where interest rates were low worldwide. And the yield curve, which is the difference between long-term lending rates and short-term lending rates, was almost nil. So what did humans do? They did what they always do. ... They went out further and took higher risk. Now they're paying for that. I don't see anything abnormal about it. It's just that it was so widespread.
QUESTION: Are there inflation risks from abroad? How does globalization affect the inflation rate here?
ANSWER: ...I do expect that after the Olympics, by the way ... inflationary forces will be increasing, not decreasing, in China. And I suspect we might feel the impact of that here.
QUESTION: What risks do you see for the U.S. economy in the long term?
There is one issue I am outspoken about, and that is the unfunded liabilities of Medicare. And I have not heard any discussion of what is the largest liability ever incurred by any country in history, relative to their GDP. Just to give you the number, it is $85.6 trillion that is currently unfunded. ... That's a lot. Our total output as a country is roughly $14 trillion.
This prescription drug benefit alone – which was created 30-some odd months ago by a Republican, Harvard MBA from my state of Texas [President Bush] – is a larger liability now than all of Social Security. ..."
My own impression of prescription drug benefit is that Doctors will just keep prescribing drugs to patients until patients, and/or their insurance literally can not pay anymore. The full bore prices for the one drug I take represent nearly 40 percent of my take home pay. Of course, I shop around and buy it for less than half of what the local pharmacy would like to charge me. This simply can not go on and on and on. Something has got to give and my guess is that, as a nation, we will have to take fewer medicines than doctors would like. And drug companies will have to make less profit. Whatever the mechanism ends up being, that is what must happen.
According to the most recent Time Magazine 6 percent of all mortgages in the U.S. are now delinquent in payments. Ouch!
Here is a note from Rich Kolon.
"The Comex has been known for its policy of letting shorts hold massive positions that they never ever could possibly deliver on. My guess is that the Comex permits the investment backs that hold the shorts to be considered "hedgers" when the short investment bankers loan money to miners secured by mining assets (including the gold and silver not yet mined). They also let some investment banks be hedgers, who were loaned gold to short by the government, even though the government never demands that these banks pay back the loan IN GOLD.
The physical market represents reality. Now that gold and silver are priced cheaper, there isn't enough supply to meet demand. You can see this fact in action, as the very well-known Kitco is having supply problems.
There is not enough supply because the investors in the know are well aware of the bank credit crisis, and they are not selling. They are now buying. It's the temporary precious metal remoras that are selling the paper gold and paper silver, which suits the Comex shorts just fine.
However the tremendously huge short position on the Comex, irresponsibly permitted by the Comex, allows virtually naked short selling of gold and silver contracts by these investment backs. Gold is allegedly supplied via government loans of physical gold to these investment banks to keep the gold price suppressed (see GATA). Silver is typically a biproduct metal of mining copper, so copper miners will often sell the rights to the silver to others to get immediate money to help them mine the copper.
Because the Comex allows these shorters to be classified as "hedgers" rather than "speculators", the Comex never challenges the shorters to come up with the goods. Instead, they may allow settlement to be cash, rather than actual delivery.
So that's the problem. If they forced shorters to deliver the goods, the price of precious metals would not be so low..
Ultimately - and it may take many years - "reality" has to win. Reality is that precious metals don't grow on trees, and it takes effort to mine and refine them. Paper money grows on trees, or cotton, or whatever, and it takes about two cents to print a dollar bill.
Now is a great time to get on the precious metal bandwagon. The shorts will ultimately lose as the reality turns to true money, gold and silver.
Rich"
August 16, 2008
Ben Smith sends along this link to 'The Strong Dollar Illusion', by Peter Schiff of 321Gold.Com. I quote it below.
...As this credit goes bad, the losses are landing on the bottom lines of foreign financial firms. In other words, the global pain is not resulting from American contraction but from having financed our preceding expansion. This is a critical distinction few have been able to make, and it is vital to appreciating the decoupling that has already occurred beneath the surface."
And here is a link to a related but counter opinion: 'Panic Selling in Gold: What's Next?', by Kevin Depew of Minyanville.Com.
...I expect in the next few years for gold to retrace part of its long-term move, perhaps coming below 600 and, in the worst case, possibly even coming below 500. A 50% retracement of this major bull move would be about 458. But that doesn't change the long-term, secular bull market for gold."
August 14, 2008
I am passing on this note I got from Rich Kolon yesterday.
Ben Smith has been charting the natural gas and oil complex, and lately this sector has been very oversold on his charts. I discussed these charts with him, and suggested we wait for signs of upside life before jumping back in.
Today was big upside gains across the commodity stocks.
Accordingly, late today I bought back 4 commodity stocks that I previous sold, which includes 3 oil and natgas stocks I sold a few weeks ago. CHK, BRY, EOG, and MOS.
I suspect that China is on an Olympic Games moratorium on poluting their atmosphere, and thus the Chinese have avoided the commodity complex recently. When the games are over, I suspect them to be loading up on oil, copper, nickel, fertilizer, etc.
Plus, our SKF appears to be the right place to park some cash. James Cramer published this article on how the SEC is going to re-allow naked short selling on the banks again.
Boom, the SKF has been moved higher.
He specifically talked about Downey Financial (DSL). This is a perfect example of Richard Ney concepts in action.
Many people follow Cramer's ideas. So DSL sold off very early in the day Wednesday August 13th. The pros love to play against the public on news items. The stock dropped about 7% after the open. Even though financial stocks were big losers, this stock later came off the lows and finished 9% higher than the previous close!
The public read the Cramer article and acted on the his logic. The pros make money by punishing predictable behavior of the public. The specialist saw an opportunity to collect stock, then raise the prices later and turn it into a profitable day by going long.
Everyone should be aware of Richard Ney's concepts to understand how the pros rig the stock marke actiont to confuse the public into making bad trades in the short run.
Rich"
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I bought some UNG yesterday. I have orders in for the following: FSLR, ARD, GMXR, FMCN, SLW
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August 13, 2008
Here is a link to 'A Tale of Two Markets, Part 3', by Bennett Sedacca of Minyanville.Com. I quote it below:
"For another example, consider the case of American International Group (AIG), the once great insurance behemoth. It's now, in my opinion, been reduced to a company that is spinning out of control, unable to determine how bad its credit portfolio is and how bad its investment portfolio is. Mind you, this is a company with $1 trillion in assets, but bonds that are going down in price quickly and probably not coming back anytime soon. I have been contemplating ever since Stage 2 of the Credit Crisis began what company would be first to not be able to finance themselves.
I thought it could be Lehman Brothers (LEH) (it still could), Merill Lynch (MER) (they sold their Bloomberg stake and other assets and diluted common shareholders at 10-year lows just to stay alive), but I hadn’t considered AIG and the insurance companies. But I am now."
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Ben Smith sent this link to 'Natural Gas - Weekly Market Update', by Steve Saville on 321Energy.Com. I am taking a real interest in Natural Gas. I have orders in for the following stocks: UNG, SKF, FSLR My trigger prices are low because I am looking for bargains.
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August 8, 2008
Here is a link to 'Jobless Claims and The "L"-Shaped Recession', by Mike Mish Shedlock of Minyanville.Com. I quote below.
Rich Kolon sends along this link to 'Yes, That's $2 Trillion of Debt- Related Losses', by Robin Goldwyn Blumenthal of Barrons. I quote this article below.
...The Fed's other mistake was to believe the collapse of the housing market would have no effect on the rest of the economy, when housing accounted for a third of all job creation in the past few years. When the proverbial stuff started to hit the fan last summer, the Fed went into aggressive-easing mode. But it has always been kind of catching up.
...Many public institutions are themselves going bankrupt. The FDIC (Federal Deposit Insurance Corporation) has only $53 billion of funds, and has already committed almost 15% of it to bail out depositors of IndyMac. The FDIC's deposit-insurance premiums weren't high enough, and now it is asking Congress to raise them. Plus, the agency claims only nine institutions are on its watch list. IndyMac wasn't on the watch list until June, the month before it collapsed. Studies done by experts in banking suggest that at least 8% of U.S. banks are in big trouble. Eight percent of the roughly 8,500 that the FDIC essentially is insuring equals about 700 banks.
...This time around the S&P/Case-Shiller indices indicate home prices already have fallen 18%. The decline could be as much as 30%, because the excess supply is huge."
Rich Kolon adds these comments of his own.
The SKF cliff was scary steep, but I remain convinced that our credit situation is even more scarier. Might as well get some cheaper precious metals in the meantime, because Helicopter Ben is going to run those printing presses until the mold breaks.
When 700 banks go belly up, SKF should be closer to the moon one day than the earth is."
The Red and White D sends this link to 'Investment Outlook', by Bill Gross of PIMCO. I quote below.
The Orange Section chimes in with these comments.
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I thought last Sunday that I would get a chance to short GM, LEH or MER at higher levels. Now I am not sure that will happen. Meanwhile, I discovered that a lot of Home Builders have had their stocks rebound. Therefore I have shorted a couple of them. I have also doubled up on my SKF holding and might add more yet if it goes down.
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