Unlike the heathen “Juice,” “The Fly” is a God fearing man. So, out of respect for good Friday, I will refrain from using obscenities (even though God could care less about such minor offenses).
Apparently, the ungodly folks at S&P downgraded both [[LEH]] and [[GS]] today, citing a “rough” environment.
I’ll say.
“Market volatility and the possibility of further weakening of economic activity may result in a more substantial fall in revenues,” possibly resulting in one-notch downgrades, said Paul Coughlin, S&P’s head of corporate and government ratings, on a conference call.
Actions by the central bank “alleviate much of the concerns that we have about near-term liquidity conditions,” S&P analyst Scott Sprinzen said. “However, we still view the environment as rough near-term for the five broker-dealers.”
S&P said Goldman has very strong liquidity, but that its emphasis on trading and “aggressive” risk appetite expose it to potential for “major missteps.” It also said Lehman has a stable base of funding and strong fundamentals, but could suffer “severely” if the market turns against it.
Sprinzen said Goldman, Merrill and Morgan Stanley also have a “clear advantage” over Lehman, the largest U.S. mortgage underwriter, because they are more diversified.
Let me just say this: LEH is a quadruple sell, with hot mustard on it. Anyone who knows Wall Street understands and acknowledges freely, Lehman is a 2nd rate “high end” bucket shop—with losers at the helm and in the engine room.
Anyone care for a 13 week treasury?
Wow, something unholy is afoot in the markets for sure…
-DT
**We goin down. The floods are hitting here.
Off to sand bag.
Update: Sand bagging is for type A hopeful whistle dicks.
The fed and fed gub will buy all the crap sammies there is. Fear not, all your $ are belong to us.
Fly have you heard anything about the inverse ETFs SKF SRS SMN DUG etc and how UBS is a counterparty and if anything were to happen to UBS, SKF, SRS, SMN DUG etc could technically be insolvent. I’ve been hearing stuff here and there. Just wanted your assessment.
Take your choice amongst any of them, when you’re so highly levered and booking profits based on fantasy, it’s just a matter until they all die.
“I’ll cover when they’re all 8”
Translation: Monday up 300 points in this manipulative market.
Happy Easter, Happy Purim, and Happy United Federation of Planets to all.
Cap:
The Swiss would never allow UBS to go under.
The current i month tresury yield is .37. I took a look at the historical short term treasury rates here at this link. That is the lowest level in over 20 years…
http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_main.shtml
Do you think LEH could revisit the 30’s?
Nice job by the brokers to run the stops on their stock right before the downgrade…..and on option expiry to boot.
There just are no coincidences on wall street.
Fly–
This genial post almost makes up for the non-capitalization of “Easter,” in the last post.
Repo market fails are spiking, distorting the bill rates.
But the credit crisis is over.
If you think 0.5% bill rates are obscene, how about NEGATIVE repo rates?
http://www.aleablog.com/negative-repo-rates-today/
I am willing to broker a deal to split up UBS, in exchange for some hot cocoa and Swiss cheese. Those interested should be able to assure me that the cheese comes from the milk of the finest Helvetian cows, not Romanian goats.
Any takers?
I’m feeling an urge to open a long IYF/short LEH pair next week. We’re probably going to bounce around a lot.
What the fuck? whatever happened to Merrill?
Man, we need somebody from here to go to CNBC as an “analyst” and say: “AGS/COMMODITIES BUBBLE POPPING…RUN FOR YOUR LIVES BITCH!”
Just, like DICK BOVE calling ‘once in a liftime’ opportunities on financials.
Fly, whats your target for Dow/S&P once everything is all said and done?
yeah check out open interest in the puts of LEH… and MER!!!!
Dick Bove I think you are ridin dirty with Rev Wright on your credit crisis is over shit. And for that “BEHOLD The Remix”
http://www.youtube.com/watch?v=KeNa69uyYW0
Huskies go down!
Oh!
Cash is King, look at the IRX Fly displayed or any of the other short term Treasuries. The IRX is effectively ZERO ( aprox. 0.40%). Confirmation indeed.
Anon, has it right….”translation we go up” S&P has been a mile behind this whole thing since we were rolling on wood wheels. They should have media credentials since all they do is report old news.
GS just reported a great quarter in a shit market and they need the price to go down so friends can buy more. They quote, “GS its emphasis on trading and “aggressive†risk appetite expose it to potential for “major missteps.†No shit…trading involves risk. Just so happens that GS has the best traders in the biz and they have proven it. If S&P best argument is that trading is risky… well… nothing more be said. Let’s the lemmings sell off GS next week and then step in a buy it.
I’d like to understand treasuries better. Here’s what I know, please correct me if I’m mistaken:
Treasuries are like bonds in that it is government backed debt instrument.
Unlike a bond, which pays interest, a treasury appreciates over time. When you buy a treasury you buy at a discount, and the appreciation is what you get paid.
The chart above shows the treasuries appreciation 13 weeks out, indicating they are paying 1/2% appreciation over 13 weeks.
The implication is that no one wants a treasury, hence no appreciation, and a disinterest in any debt that is government backed.
Is this correct?
Please teach me iBC.
LOL, the powers that be sucked in the crowd to unload their shares and rip the torso’s off the little guy?
LEH gap to open at 19 Monday?
Good times!
Double secret short.
(LEH, JPM)
Um, yeah Skiffles might be a good bye (sic) here…. oh, and DUG, too.
Selling on Strength to the Suckas!
Remember the last time we had a waterfall decline? Here’s one of the last big trading days in December (I’m omitting Christmas week, just not that many people home)….
Selling on strength to the suckas!
I do the work of God here.
Now go, rest and wait with your families.
Pax.
The market is loosing downside momentum, I hope LEH, GS and the Indexes trade higher on monday, just to make fun of those S&P clowns…..
I heard rumors Moodys is downgrading Bear Stern, Be careful……
Boomer:
Not sure that I fully understand your question, but the ICX shows the yield on 13 week treasuries. Treasuries are sold at a discount to par. The “yield” that you are realizing will be the difference between the price at which you purchase it, and its face or par value, which is the price at which it will be redeemed by the Govt. In this way, price and yield are inversely related. Declining yields indicate increasing prices. Declining yields in treasuries are often interpreted as an indication of increased demand “due to a flight to quality.” In other words, people get scared and rush to park their money in treasuries, thus bidding up prices and suppressing yields.
thanks
Joey says.. “LOL, the powers that be sucked in the crowd to unload their shares and rip the torso’s off the little guy?”
I would imagine the “powers that be” if they are smart money would have been SHORT not long and would not want a price run-up to unload shares.
Come on people…everybody and their grandma wants to short stocks or buy inverse ETF’s. The FED has spoken, they got the stock market’s back. GS and MS have reported…better than expected. FNM all of a sudden is not worth $20/share, it’s at $34/share…in days! Figure it out!!
Get off your short horse. If you can’t go long, be in cash and if a stock is sold down in panic…be ready to buy and cash in.
The fear mongering (the crash of 2008 ?!?!?…get a life) is getting old, time to get on the un-common side of the trade…shorts are packed in like a football team in an elevator…recipe for an explosion when the trade turns.
Be smart…try to make some money instead of just being a follower.
“Be smart…try to make some money instead of just being a follower”.
You sadly misunderstood…I could tell you my percentage gains for the year but you wouldn’t believe it anyway…
And why should you?
Joey…I’m not saying you were wrong, or shorting the market was the wrong trade for the year. I’m saying things have changed, eveyone is starting to think they are a short-genuis player, and it’s time to switch the trade up.
If you are up big this year and can’t see the logic of this argument then you have been a lucky follower and will get roasted with the rest of the Johnny-come-lately types. If you are up big this year and can see the logic…then we arguing the same point.
I hope your gains keep growing.
It’s hard to imagine, how people have guts to write comments like that. I would never write anything like this, because I would have thought what other would think of me after that. I know that it doesn’t matter who you are in Internet, you can act however you want, but anyway I would remember that a man should act nice and polite, no matter if he is online or offline