iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,432 Blog Posts

What Should Happen

With the Pimco, Blackrock and the NY Fed suing BAC, the floodgates have been breached. This should open up the banks to massive lawsuits, worldwide, for selling fraudulent MBS. Again, it’s not about the home owner, who gets a stay of execution. It’s about the mortgage process not being legal, which essentially opens up a legal loophole for institutions to be “made whole” on their MBS investments. It’s not a matter of being “nit-pickers.” These institutions have no choice, whatsoever, than to sue the banks, as it is their fiduciary responsibility.

Now we know why the banks were sitting out the rally. Smart/insider traders knew about this news and positioned accordingly.

How will this affect the market?

Again, it’s only my opinion, but this lends to the idea of a pause or sell off, following such a big run. Investors will want to digest the news, evaluate the potential damage to the banks, and book profits, ahead of the elections.

What type of downside action are we looking for?

I am looking for total destruction of this entire move higher, bringing the Dow down to about 10,000, or a smidge lower. I make such predictions with a big grin on my face and pistol in my pocket.

Finally, I sold out of a bunch of rentals today; but still hold other “stuff.” I am not quick to jump in the bear cave , following a 200 point decline. Ideally, I can sell out of more longs, on a reflex bounce tomorrow morning.

UPDATE: I sold short SPG.

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49 comments

  1. jg

    fig

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  2. Prospectus

    Let this me a lesson to you pikers: Mess with the banks and they will take their trade bots and go home.

    Enjoy the exquisitely priced shares you bought last week.

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  3. Maoflaps

    Loaded up last month on black swan puts for BAC, JPM etc. and I am certainly neither smart nor an insider. We are in a slow motion train wreck that will result in many, many fortune cookies…which is itself ironic because guess who will be left with the capital to pick through the pieces?

    That’s right…

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    • riggedgame

      I SOLD BAC puts a few minutes ago – Nov 12’s at .67

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      • Jakegint

        Is it me, or does Mel seem more pensive in this new av?

        Is it the new meds?

        _______

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        • Maoflaps

          Catch me on your local PBS station soon!

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          • EasyMoney

            Damn your avatars are making me pee my pants!

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          • MX2101

            Is that Mel Gibson in the avatar?

            I think the phone recordings made by Gibson’s ex-girlfriend Oksana Grigorieva were post produced on an audio workstation. Her voice that we hear was over-dubbed later, and that is why she is so composed and “lawsuit friendly”. Odds are she was just as abusive on the phone as Mel. We are hearing coached, calculated responses from her that were added later, replacing what she actually said on the phone.

            You heard it here first.

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  4. Quint

    Might be a good time to short anyone reporting tonight – hard to see a positive reaction in this market to any earnings report…JNPR, ALTR & CREE all report tonight.

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    • Quint

      Winner, winner, chicken dinner…JNPR & CREE blow up, ALTR is ok but stock isn’t moving much…

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  5. Tim Knight

    Don’t blame the Fly for all of your fully margined, long positions. Blame yourselves.

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  6. Quint

    Apple needs to start a bank, so it could take over all of the other crooked banks, and then the bank index could go to new highs.

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  7. Mr. Cain Thaler

    Holly shit, the Fly was listening to Sanatra earlier today? Such a thing has not happened since the yester years of 2008.

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    • TraderCaddy

      And the next thing you know Fly will start crooning to Sinatra in the shoes Grandpa Fly gave him.
      Speaking of Grandpa Fly, isn’t his birthday coming up soon?

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      • The Fly

        WOW. how did you remember?

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        • TraderCaddy

          Crazy memory for details from long ago but couldn’t give you the name of somebody I met 5 minutes ago.
          I can tell you what my son scored on a particular hole during a particular round , including the weather, at a golf tournament, for example, at Sunriver, Ore. in July 2004.
          But I can’t recall half of what my wife asked me to pick up at the grocery store without it being written down.

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          • Fourty-seven years, five months, 27 days
            Fourty-seven years, five months, 27 days

            Won’t be be long, son.

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          • MX2101

            TraderCaddy- sounds like you remember what is important and the rest is optional.
            That seems just fine to me.

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  8. hank

    Scary correction needed in order to force QE2 into reality, so far QE2 is just talk

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  9. Largebill

    Okay, so all or most banks will get hammered. At what level do we see them bounce? With all time low interest rates most banks are going to make money going forward. Do they get attractive after a 10% smack down or will they drift lower than that? I wouldn’t buy any today as I expect today’s news to lead to more selling tomorrow. However, I’m looking for bargains a week from now if they get oversold.

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  10. A Dude

    Forced buying of the dollar . . . got to move out of China . . . all that debt chasing only a sniff of cash . . . forced buying leads to more forced buying, and what the fook, are we back in 2008? Nah . . . but maybe for a while.

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  11. Jakegint

    I am looking for total destruction of this entire move higher, bringing the Dow down to about 10,000, or a smidge lower. I make such predictions with a big grin on my face and pistol in my pocket.

    Unloaded, I hope.

    ________

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  12. Quint

    No one talking about CWTR – down 35%, but that doesn’t bode well for retail….they refreshed their fall fashions and no one showed up.

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  13. Jakegint

    Top 5 “Buying on Weakness” names, 10/19/10 (dollars in millions)

    SPDR S&P 500 (SPY) $354.72

    Citigroup (C) $77.51

    Microsoft (MSFT) $65.92

    AppleInc (AAPL) $ 63.97

    PetrlBra ADS (PBR) $37.25

    _______

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  14. dumbass

    everyone including dumbass knew this was coming, so let me ask ya, wouldnt that be buy on the news?

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  15. Le Fly

    Pomo indeud

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  16. Trading_Nymph

    Yep The Homo Pomo is tomorrow which could scare the Dollar Bulls….But this so makes me smile, I will see if we get a limit down on the Shanghai Futures tonight http://www.shanghaidaily.com/article/?id=452164&type=Business

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  17. in a NY minute

    Meta Financial (CASH) has been kicked down the stairs by 60% since Oct. 12th.

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  18. Jason

    About a month back i predicted a 500 point drop on oct. 21st during a message convo with Bullish (the legit one). Asked for a VXX tshirt if i called it correctly. Never thought it could be this possible.

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  19. theedge111

    “Scary correction needed in order to force QE2 into reality, so far QE2 is just talk”

    QE2 is a fantasy that is being jawboned by the Fed. It will happen but it won’t matter in the long run because the losses morph what the Fed can do.

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