BBVA is still rallying on what seems to be relief out of Europe. For the company itself, the news has been all bad:

• Spain’s govt bond curve is flattening and widening.
• Deposits are fleeing the bank.
• Mortgage default rates are rising.
• Housing prices are falling.

Even Bridgewater put out a piece a month ago on how bad Spanish collateral is.

I’m looking to short more…

Now sale announcement moved to Sep 12:

Well, now I am almost entirely short. All the longs ran up so I sold most of them.

WBK – added to short last week. Still down on the position overall but fundamentals are still deteriorating

BBVA – added to short last week as well. Spanish banks have to recapitalize which will dilute equity. No way around it.

GLD & SLV – longs finally starting to work

MAS & LEN – reloaded on Masco short near 14. Still don’t believe the rally here in LEN

MGM & BYD – looking at shorting them. Monthly nums out of Nevada are not looking good.

TM – like this short, added today. Sold out of all my long Ford.

Lots of news on IDCC while I was in London. First, they delayed the auction as the initial bids were deemed too low. Then rumors started to come out that the two main bidders were colluding in lowering the price (opposite of what happened in the Nortel case). Latest news is that Google and Apple are joining together to bid. A hedge fund is trying to stop the process as the two main bidders are now colluding. Lots of whispers on a potential agreement much nearer the valuation that the company had in mind (2+ billion). I am in the dark. I cut my position in half after a 15% gain, just don’t know what the outcome will be.

I’m back from two great weeks in London. I used to spend months there working for the evil empire down on broad st here.

Olympics – fantastic. Very well organized. The only lines I waited in were to buy souvenir stuff (my own fault, had to buy them). Went to multiple events and had great seats at all of them, including the finals.

Buy side – everyone still waiting for banks to shed assets. Lots of talk about the Bloomberg article about 70+ billion cash on sideline, waiting…and drinking pints…and waiting…

Hotels – much better than I remember. Had a great room at No 11 Cadogan for the first week, very high ceilings and lots of space. Switched to the Mandarin after they dropped their rates the second week. It’s still the best hotel in London.

My favorite part of the visit was Chartwell, the home of Churchill. The guy is just amazing, had conviction and stuck to it in the face of all odds.

BBVA – will have to raise more capital

WBK – australia finally starting to turn, loan losses rising, subprime lenders imploding

The key dates (subject to modification in the manner set forth herein) for the Bidding Process (defined below) are as follows:

July 16, 2012 at 5:00 P.M. ET	Deadline for submission of Preliminary Bid Documents (defined below)
July 30, 2012 at 5:00 P.M. ET	Bid Deadline (defined below)
August 2, 2012 at 5:00 P.M. ET	Date by which Potential Bidders will be Named as Qualified Bidders
August 8, 2012 at 10:30 A.M. ET	Auction
August 13, 2012 at 5:00 P.M. ET	Final Date for Designation of Successful Bidder(s)
August [20], 2012 at [●] [A.M./P.M.] ET6	Anticipated Date for Final Sale Hearing

Doc 1590 from bankruptcy court

Full details

I dug up an old article written by Hunter at Distressed Debt Investing. Great stuff

Mining the portfolio

Up 15% today. This is just the first in what I hope is a series of positive events for this company.

Hopefully chessNwine and the Fly were able to share in the bounty today.

I’m still long, still like it. Let’s see how the bidding in EK goes.