You think I like shorting stocks? There was a time, not too long ago, when I’d spit on people for being bearish. This is America. I love it. There is nothing like it.
However, after 9/11, everything changed. With the country distracted and Washington panicked over the economy, Wall Street took advantage and misbehaved, sort of like when a child does something sneaky when his parents are not watching.
While brave men traveled overseas to fight for the honor of our nation, losers at home loosened credit and housing regulations, then opened floodgates of capital, in order to reinflate the ailing economy. They were very brazen, indeed.
Homes for the rich, middle class and even the poor were permissible, under any circumstances. Systems in place to protect prospective buyers, that worked fine for generations, were scrapped and replaced with zero down payment/zero document/exotic loan packages. Companies like CountryWide, Wamu, Lehman, Indymac and Bear made a fortune for themselves, enticing the little guy to grab a piece of Americana. The deal guys made so much money, the high end art galleries in NYC were running low on supply.
All of this was fueled and encouraged by the government and the Federal Reserve.
Fast forward 7 years, we see the damage of a society that acted irresponsible.
We, as a nation, dishonored the deaths of those who perished on 9/11— and those who died in combat following. Instead of building a better country, one that valued the important things in life; we got greedy and literally ruined the financial system—all in just 7 short years.
Think about it.
Now we have a new crisis, a financial one. This one cannot be rebuilt by a few dozen construction companies. In a sense, one could argue that we have caused more damage to this country, following 9/11, than the actual terrorist attack itself.
I am sure the bastards who flew planes into our buildings are pleased.
Yet, here we are, many years later, with no leadership and no good ideas. It’s just more of the same.
As for the markets:
The Lehman Brothers Holdings Inc. [[LEH]] story is not going to end well. I sense they are the sacrificial lamb for the Treasury. They will justify their Fannie/Freddie crime by saying: “look, we let Lehman fail.” The ripple effects will be staggering.
Also, the Washington Mutual, Inc. [[WM]] situation is far more serious. Once they default, the FDIC will have to pony up some serious capital to insure depositors.
Finally, I like short Legg Mason, Inc. [[LM]] , PacWest Bancorp [[PACW]] and Comerica Incorporated [[CMA]] here, in addition to may others. And, of course, [[SKF]] and [[SRS]] are still very, very cheap.
NOTE: So much for Merrill Lynch & Co., Inc. [[MER]] holding that deal price, right? Morons.
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Great rant … unusually serious for ‘The Fly’
Well said Fly. I pray we really are in the 3rd inning of this fiasco like the most bearish talking heads are saying. I don’t see this ending well.
It’s ok Fly, the market will finish in the green today…
Dougie Kass is bullish and going long SPY.
Figures. Leave it to “Big Mike” to lose focus.
Shocker.
I don’t care if we finish green today. It’s more than the stock market. Don’t you get it?
You know, people actually work at these banks that are going under. I find no pleasure in that.
Seems like today may be the day for a new round of short sell rules.
This time, however, I don’t think there will be a sunset provision to whatever new rules the socialists come up with.
btw – Phil Gramm should burn in hell.
Fly,
I don’t get it…what are you trying to say? Short high end art galleries?
WFR – 2 yr low.
NOG – found Eight New Bakken Discoveries, Ten Additional North Dakota Bakken And Three-Forks Wells Nearing Completion, 100+ Drilling Permits On Northern Acreage.
Well said Mr. Fly. I was thinking similar thoughts this morning.
All of America (including our leaders and the average Joe) looked deep into its soul and decided that the best way to heal from 9/11 was to spend money. Lots of money. Other people’s money.
It makes me sad to think that when we showed the world the true nature of America in the 21st century, that’s about all we could come up with.
On the other hand, we’re still a young country (sometimes we forget that). We’ll learn a lot from what’s happening now.
BTW:
Doug Kass is the biggest joke of a “short only manager” I have ever seen. More often than not, he wastes his time being bullish on banks, instead of finding downside plays.
I mean, really, why is he any different than Larry Kudlow?
Anyone worried about AIG?
Something is fishy there.
Todd Harrison
10:11:08 AM
position in leh
Just Trading…
I don’t know nuttin’, honey, but in the interest of full disclosure and forthright honesty, I nibbled on some Lehman Brothers (LEH) at $4.10 for a PURE TRADE.
Risk is high and NOT advice… but gun to head, they won’t let ’em crash on 9/11.
That is, if they have any ammo left in their arsenal.
AIG is indeed scary… do they have exposure to LEH somehow? They insure their shit?
And btw, “barvo” on the post. I couldn’t agree more sir.
-DT
Kass is different from Kudlow because he actually puts his money (I mean OPM) where his unstoppable mouth is, and he can see the dark side.
Kudlow is a creation of socialism/communism. All his life, he’s been spending all his energies trying to be the exact opposite, yet he turned into exactly what he was fighting.
Ain’t that the way it often goes.
The Fly ‘gets it’ about our country and the economy. This is why he is one of my favorite writers on the Internet.
Sad but true … this is the biggest, most immature screw up I’ve ever seen in our economy.
Fly-
In regards to your short position in LM, I was wondering if the below statement applies to them:
Fannie Mae and Freddie Mac were created by Congress in an effort to free up money for the mortgage market.
While they were eventually privatized, the two have always operated to some extent with the implied guarantee of the federal government backing them up. Together, they are tied to roughly half of the nation’s $12 trillion mortgage market.
Stockholders in the two companies have already seen the value of their shares fall by more than 80 percent this year.
The Federal Reserve and other federal banking regulators said in a joint statement Sunday that “a limited number of smaller institutions” have significant holdings of common or preferred stock shares in Fannie and Freddie, and that regulators were “prepared to work with these institutions to develop capital-restoration plans.”
Does that mean that LM will be getting relief in the wake of these failures (being one of those “smaller institutions”)? If so, is it still your “all-time #1 short”. Thanks in advance.
Fox
The accountants made damn sure the WM debacle would be as expensive as possible for the taxpayer by prolonging the agony.
Fox:
No.
LM is an asset manager.
They are referring to banks like SOV and KEY who had large fannie pref’ds on their books.
911 = inside job
enjoy your receivership
Juice,
I recall JDS Uniphase making a “double top” then went to 3 bucks.
Cramer. Just Dont Sell Us.
Excellent commentary…
What about FXP and EEV and EFU – I hate ’em because I haven’t owned ’em. I own UNG and DUG and SKF and SDS. VIX up and look at that 10 year “guvment” bond yield. Glad I don’t own that double gold ETF – DGP.
Good points Fly. The incredibly vile bastards from 9/11 might have gotten the best return in history (in the sickest of ways) by unraveling our $16 Trillion economy for $50,000.
Market is strangely resiliant today despite the obvious, impending problems. I wonder what the corrupt government officials in the U.S. politburo are up to.
I own both FXP and EEV, but would not buy up here.
well said!
Chuck, Cramer did reverse his JDSU call … what else are you referring to with the 2ble top?
Cover shorts my friends……..
Juice,
the artical on gold making a double top. I’m not much of a fan of technical analysis. Wall Street is such a random walk.
For now looks like everything is walking out the door.
I wish I could give you five stars for this one, pal.
Here’s to Matt Grysmalski and John Wright, two gentle souls, two exceptionally good guys.
Seven years on…
We will never forget.
_________
Matt was from my neck of the woods. I had a few friends in the NYFD too.
Okay, someone want to let me in on what’s going on with the refiners?
I’m gonna puke if they don’t let me off this roller coaster…
Chuck,
GTFO! You’re from New Hyde Park/Garden City?
He dated my sister for a while… just the most laid back, nicest guy you ever wanted to meet.
John was a little more uptight, but then, he was a banker…
Too young, man, too soon.
gas exploding to the upside, while crude dip= crack for the crack spread.
WNR is the most heavily shorted refiner.
My grandmother lived on White Hall blvd Garden City. My folks live in Williston Park. I now reside just north of KingWood Texas.
No more frozen windshields or pot holed express ways.
911 = inside job.
Bit of a “sloppy Joe” wasn’t it?
What a joy to defend American and make it safe enough so even nutcases can speak their mind.
___
Chuck, we were practically neighbors. I too escaped south. Hope you got a nice Texas babe in the bargain.
Both John and Matt were classmates at Chaminade.
_
Jake,
It’s funny to hear you call someone else a nutcase.
Just saying.
-DT
Chaminade now there’s a name I haven’t heard in 25 years. Yes just across from Mineola middle school. Down the street from Mineola cycle shop.
Texas is nice. I bought a 3300 sqft 1.25 acre ranch. Foreclosure, new never lived in. For 221k then got an $1,800 gov check.
Still 20 minutes from down town.
Dino Commie,
Don’t you have some “McCain-Palin” bumper-stickered cars to key?
Go back to your shrimp toast “blog,” you’re a boor, and boring.
___
Chuck — the only downside.. watering that foundation every summer!
I’ve done a coupla-three deals in both Dallas and Houston (not to mention “Amarilla” (sic) and Odessa-Midland) … nice “scenery” there.
Forgot all about that Mineola Middle School across the street… funny, huh?
Funny, Jake.
-DT
If we go into the Greater Depression, we’ll likely see the the gub’mint dipping into our pocketbooks in all sorts of ways. Trading for a living / profession may become much more difficult.
Fly: I believe that ALJ which I hold has a higher short ratio. Although not by much.
Shortbus:
Here is a list of refiners, with recent short % numbers:
http://www.ibankcoin.com/flyblog/index.php/2008/08/31/refiners-should-run-and-so-should-you/
Perfect post. Add it to Roubini’s and we’ve got a strong viewpoint we can all stand on and move forward from.
thank you
Fly – your post about 9/11 and how we destroyed our own country with this financial mess, well, it brought tears to my eyes. Then again, it might have been the smell of pig shit that caused me to cry.
Argghhh .. I hate it when you get numbers you just can not trust.
Here is what I have for ALJ. Short Interest (% of float)
TDAmeritrade: 32.26 %
Finviz: 32.22%
Yahoo Finance: 7.70% (12-Aug)
Aol finance: 7.7% (12-Aug)
Zacks.com: 6.01%
hoovers.com: 5.11 (25 Aug)
nasdaq.com: 8.7% (29 Aug)
shortsqueeze.com: 45% (Spetember)
schaeffersresearch.com: 7.4% (1 Sept)
SOOO, which one is fucking correct !!!!
Where do you get your data from ?
Chuck – on the nostalgia front, you must remember McGuinnis(sp?) amusement park in GCP/Mineola? I know someone who may upChuck just thinking about a ride on the T-cup.
Sadly, no longer there nor is Gus’s diner where they glady served the underage late-night, alcolholic bevvies to go along with their artery clogging ‘Boo-burgers’.
JakeGint has nothing to refute – only name calling.
Explain building 7 big boy.
http://www.wtc7.net
What about JNS and BEN while you’re at it? JNS looks like the better of the two.
Fly:
OK, some of my numbers above are mixing up “short interest %” and “short interest ratio”. However something does not add up.
finviz.com agrees with all the numbers in your list except ALJ. which appears to have a much larger short interest % than your list. 7 compared to 32 , which is too big a difference to be explained.
Anyway, Screw it, I do not care, I am long ALJ, and it appears to be holding up better than the others.
P.S finviz.com is awesome, is getting more awesome every day.
ibc > finviz, get it straight, c’mon.
Danny: iBC can not be compared to finviz.com, even though they are both top tier and equally awesome.
However, this fancy PPT machine needs some tweakin. It looks like it got the short interest % for ALJ wrong.
Since PPT is still Beta software, like Google’s Chrome, I expect minor anomalies.