The market was looking for an excuse to rally. When [[BBT]] reaffirmed their 7% dividend, a short squeeze ensued. As you know by now, these rallies are to be sold. BBT is being reckless with capital. With demand for capital at a premium, why waste it via dividend? They can use that money to vulture around, buying quality assets on the cheap.
Something has to be said about managers who constantly focus on share price, instead of the underlying businesses. I mean, what the fuck are these guys smoking?
Time after time, these CEO’s end up looking like jackasses, via their erroneous share buybacks and lofty dividends. When will they realize, this is a fight for survival, not nice charts?
In other news, into this squeeze, I bought a block of [[WB]], as a hedge. If the market continues up, I believe it will print $20. Also, I might buy some [[MIDD]] here. The stock has been brutalized, beyond recognition.
For the most part, I am keeping my long exposure limited to a few stocks, for management purposes. I need to be able to blow out of them quickly, considering my bias is for further market weakness.
At the present, [[FTK]] is my largest position, with [[RIG]] not far behind.
My short positions are numerous, particularly in the regional banking space. Into this rally, I will look to sell more [[EWBC]], [[WTFC]], [[CSE]] and [[PACW]]. And, I may initiate short positions in [[CYN]], [[TCB]], [[SNV]] and [[FTBK]].
Be patient.
NOTE: “The Fly” is now up 50%, year to date.
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DBC short seems like a nice play for the next few months.
Thanks for the Names Fly, missed you yesterday 😛
Any rough estimate on when FTK will hit the $26 target?
While your baby FTK continues to work what’s the deal with RIG?
Today 04:15pm RIG
Transocean Inc Announces Contract Extension for GSF Development Driller II with value of up to $1.06B
thats funny, I was going to buy MIDD today but decided to wait.
Fly,
RE: WB
You know what you’re doing with WB, but alot of these internets don’t. They’re simply copying your trades.
You probably already know this, but….
WB made a “brilliant” move back in 2006 and bought Golden West to get CA exposure. Now they are sitting on $120 billion of option amortization loans, a large percentage of which are in negative amortization status. This basically cost the CEO Thompson his job.
These option am loans are the bubonic plague for WB. As you know, borrowers have three options: pay P&I like conventional loans; pay interest only; or make “minimum payments”, like with credit cards. In a growing number of cases, these “negative am loans” are now approaching 115% of the original loan amount, since most “financially wise” homeowners choose to make minimum payments.
Plus, how do these loans get valued on the books, in light of housing prices falling off a cliff?
Usually the loan agreement provides for the bank to be able to stop the “minimum payment asshattery” and convert to a conventional loan if the amount owed on the loan reaches 110% – 115% of the original principal borrowed.
DSL is going through this situaton now out in CA, and they are seeing 30% default rates because the homeowners can’t make the new monthly payments when they get bounced back to making P&I payments.
A word of warning to the readers here.
WB div cut coming also.
For those out there (like Kass) that think WB is a good long term buy, pays a nice div, etc…think again.
Fly
This is a lame and off-topic question: Any thoughts on BTU? Energy in general you were big on – but have since moved on. Did you shift from energy because you saw it as a failing theme? Fuck, I can’t even get my thoughts clear.
If you’re gonna be dumb, you gotta be tough.
Anybody confirm a final trade in IOC for a block (422,600) covered at $41.62? Traded all day around 32 and AH now 34-36. Been expecting a squeeze on new evaluation but either someone fucked up or someone covered in a hurry before news …
Hey Fly,
Can you say if the MVIS rumor by your “source” was a positive rumor or a negative rumor?
Employee8 –
BBerg shows:
2 trades
287,800 shares
134,800 shares
both @ 41.62
both timestamped 16:06:43
That’s right, Scum Bucket is back baybee!
Thanks Axeman
So what does that mean for ioc?
Fly,
CPF for another regional bank short. check it out
Alpha is right- WB will cut the dividend shortly
You have been warned
2 years from now, C, BAC, and JPM will be drilling test wells in the marcellus shale, as part of their new ‘growth’ strategy.
Rally is because oil is down $5. Think it will go down a lot more. LIke to $85…
Look dicks:
Watch me blow out of WB tomorrow for a fat profit. That will stifle you for a few hours, no?