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
22,548 Blog Posts

I’m Calling for More Blood, Right Here, Right Now

I decided to do nothing. I am content with my bank shorts, which include [[FMBI]], [[WFSL]], [[HRB]], [[TCB]] and [[PACW]]. And, I like betting against tech, via long [[REW]].

It makes me feel all warm and fuzzy inside, to be able to annihilate my neighbors 401k plans, via short sales.

If you are wondering “what the fuck is wrong with iBC now”?

Do not fear.

The site is a bit slow today, following Vincenzo’s (our IT guy) latest cold room calamity.

Apparently, he was breaking bread on top of the server, effectively using it as a plate, while he was busy watching a stupid European ‘football’ game. Finally, too many crumbs fell into the server, causing it to catch fire and rudely interrupt Vincenzo’s football game.

Over the next few days, iBC’s erroneous server issues will be resolved, God willing of course.

With my money, aside from ‘doing nothing,’ I will buy some [[RIG]], [[EEV]], [[FTK]] and [[PCZ]].

If you enjoy the content at iBankCoin, please follow us on Twitter

34 comments

  1. Juice

    http://www.minyanville.com/articles/UPS-BBY-LEH-FDX-gm-F/index/a/17826

    25 reasons why US markets are going lower

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  2. lol

    now that SKF hit your target of 160, do you sell some, all, or none?

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  3. BOOMER

    Time Masheen! Time Masheen!

    UPDATE: Who gave me negative karma? Fuckers. Know your history!

    http://flyonwallstreet.blogspot.com/2007/11/un.html

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  4. kevin

    Hi Fly,

    I would like to ask some simple questions regarding Hedge Funds,Mutual Funds or any other financial institution.

    I was wondering what method that they use to buy/sell stocks/options…are they go through the investment banks? or they’ll just open an account in a brokerage house (e.x: optionsxpress,IB,scwhab,ameritrade) and also if they invest outside country, are they accessing through the country destination’s local broker or via bank again?

    Thanks a lot

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  5. CubsRock

    Shazbot, I think I’m the only person putting in Buy orders today…

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  6. Mork

    Don’t be a Nimnu, Cubs. Beware the Necrotons! They are beautiful, but dangerous.

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  7. Big Mike

    The death of “X” is finally here….what a glorious day;
    Should we get confirmation tomorrow, I will press my steel shorts further!

    SLB looks like a buy here;

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  8. Aris

    let the fucking selling commence. s&p broke through 1270. all that’s left are the tears.

    this is glorious.

    fuck X and fuck POT. fucking piece of crap stocks.

    if i wasn’t locked up, i’d go out and celebrate with somebody.

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  9. nullpointer

    i hope you all took my stellar advice and bought SNDK at the open on monday

    fuck

    me

    running

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  10. calvino

    Yes, X does have a big x on it. Perhaps the hateful sewers of famine at MOS and POT will eat of the bitter chalice henceforth.

    If anyone followed me into the MGM short yesterday, take off some profits from the 9% slide and catch the bounce up top. Or leave it alone, if churning accounts is not your style. acpw had the 30% bounce and is back at the close to death levels. if you did not take profits, then get out now. no telling where the bottom will be found.

    Martay’s theme of destroying local commerce is fundamentally correct. I am not sure why him and Jakey do not want to destroy another California bank, pcbc, althought the latter’s predilection for UB’s demise is not without merit. MInute Maid thinks Indy Mac is bound for the pyre, and I will not argue with him there.

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  11. 1261

    Nice visiting with you guys, ya’ll come back in September now ya hear.

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  12. Aris

    kevin, re: your question about pro investors – they use a prime brokerage account. you can probably find a good summary of what that is on wikipedia.

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  13. DSB

    Anyone hearing bad things about HBC?

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  14. Mork

    Dont forget AKS, RS, ATI, AA (ok not steel, but still) and maybe PCU?

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  15. boca

    Aris, but think of the giant size commissary account you’ll have from your trades. With that leverage, pretty soon you’ll be “Mr. Aris” in charge of the jail and running some kind of racket from the inside.

    (Don’t even ask why I know this crap.)

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  16. POT To $300

    POT’s ’09 estimates have been revised from $9.56 to $19.57 in the past 90 days. X’s have been revised from $11.81 to $18.66 in the same period. What about huge upward earnings revisions makes them “crap stocks”?

    Are they crap stocks because you didn’t own them during their explosive moves?

    Or are they crap stocks because you got your faced ripped off trying to short them during their parabolic moves?

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  17. alphadawgg

    You might change your name in the interim to “POT to $200”. POT has broken down. $200 next support.

    They’re going after everything today, except for maybe the utes.

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  18. Aris

    i like the sound of that, boca. lol

    POT2300: POT and X are crap, because i never owned them.

    also, LOL @ people running up the dow because GM didn’t have a sales drop as bad as everyone expected.

    do these people even look at the newspapers? GM is basically giving away cars below cost to move inventory. dopes.

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  19. Donny

    Materials are rolling over. LoL!

    Inferior Motherfuckers are gonna be looking for new places to invest … how about CDs!

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  20. Juice

    This feels like another st trading bottom is at hand. There could be a relief rally in the works that could last a week or 3.

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  21. mrkcbill

    Null — been watching it.. holy shit that thing is sharp.
    All stocks are egregious at best. Shit talk about rolling back prices….where are the buyers?

    Egregious describes so many things in my life. Still my favorite word of all time.

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  22. CubsRock

    Right on Donny, they better lock that shit up for 4 yrs @ 4% cause if you haven’t heard, we iz in a Bear Market!

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  23. Karnal

    RIG is suckin … what’s the deal ?

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  24. Jakegint

    Calvin,

    Thanks for the heads up… I’ve been watching that PCBC bank and it’s definitely “not Scottish.*”

    I’m looking at a short entry of about $14.40 or so.

    _______

    (* “Eff’n ets naught Scottish, ets craahhhp!”)

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  25. Jakegint

    RIG is suckin … what’s the deal ?

    RIG, while good for a time, is officially “naught Scottish.”

    As are all the late boomers on the edge of the precipice.

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  26. Jakegint

    Frakkin’ Skiffles July 170’s today?

    $9.70.

    And I think they went higher than that for a minute or two.

    “Milk the egregious double naughts!”

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  27. The Contractor
    The Contractor

    Squeeze is on? Maybe my balls will make it out of this intact after all.

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  28. Jakegint

    Contractor —

    Let’s put it this way… if we get back to 1300, it will be a miracle.

    If we get to 1315, you will be immediately canonized. Cool for “the honor of it,” but the downside is living out your days in a glass box on a 15th century stone church altar in Pisa.

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  29. busla

    Someone was bullish on the banks and saying that the more writeoffs the better. They were saying that if someone owns a $1 billion mortgage, and misses payment the bank gets to write off all of this as a non performing asset. If the person doesn’t pay up,the bank keeps the property, so what do they care if they sell it for $400 million for? They were saying that the writeoffs will show up in the earnings eventually, and that all these banks that were in major trouble are actually in great shape, once they finally sell all of their inventory. He made it sound like they get to writeoff the 1 billion and then sell the property, profiting $400 million.

    Is anyone here an IRS agent, or accountant, or banker?
    This just totally seems bogus. I know certain legal entities can deduct expenses and losses from taxes, but dont they have to be earning enough to qualify for it? How much can they actually writeoff? and when they do, how much cash do they get back?
    It would seem that even if all losses were turned into “break even” or better for the banks, they still have to worry about paying the fed 2.5% back, and the real estate is too illiquid for them to do that anytime soon, but if they get to deduct the entire loss, it ccertainly seems a lot more bullish and they definately should be making money, and it would explain why some stocks announce a major writeoff and go up on the news.

    Can someone explain writeoffs, and how they would work?

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  30. Danny

    I have an accounting degree, making me fully qualified in the eyes of the law to answer your question. kinda joking but serious about the degree.

    you can dedcut business expenses from taxes to the extent you have taxable income. Otherwise you get a tax credit if you’re losing money.

    You write off an asset when it has been deemed impaired.

    the impairment process occurs I think once a year, but probably it’s for every qtrly report. It’s been a few months since I looked at this stuff.

    an impairment is when the asset you hold on the books is now deemed worth less via sale (arms length sale they call it, meaning not a firesale) than the price you say it’s worth. then it is impaired.

    If there is a market, look up the price. This is a level 1 asset.

    If there is a good idea of the price, figure it out (i.e home value. cehck neighborhood prices, get a appraisal). That’s level 2 asset.

    If there is no way to measure it besides guessing, that’s a leverl three asset. Those are sketchy.

    With the mortgages, there are credit spreads that sophisticated assholes can look at, which should give them some idea on the price, but frequently the CFOs of these companies argue that, sure, the price is lower now, but we think it will still yet be higher when we sell it. So we aren’t going to mark it down.

    That’s incorrect. Eventually they will be forced to take the loss. That’s what’s happening with the banks. They are being forced to mark down their crap, but they don’t want to jump to any conclusions so they do it slow.

    Also, they don’t want to crush their stocks.

    so a 1 bn mortgage worth 400m would require a charge off of 600m which would hit earnings. So, if you earned 400m, but had to charge 600m, in that qtr, you would lost 200m.

    If, three weeks later you sold the asset for 500m, you still already lost 600m, and would recognize a gain of 100m of the new basis of 400m.

    the reason a stock would go up on a charge is a reverse of sell the news. its buy the news for shorts.

    Or its the market reacting enthusiastically to the co finally admitting it fucked up, or that it needs to take a charge.

    usually companies are loathe to charge off assets.

    I hope that helped.

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  31. ottnott

    “He made it sound like they get to writeoff the 1 billion and then sell the property, profiting $400 million.”

    Let’s see:
    -1,000,000,000
    400,000,000
    = big profits

    I’d like to be on the other side of a few trades with that guy.

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  32. Jakegint

    Busla,

    The banks only go up on a long term basis if the market believes that the last writeoff is exactly that — the last one. In that case, all trouble is “behind” the banks, and since the market is a discounting device, it begins discounting for unimpaired future cash flows.

    Problem today — and why banks seldom if ever get much of a long term bounce off of writeoff announcements — is the market does not trust the lying bank fuckers, and is discounting a large number of them for not only future (increased) writeoffs, but even bankruptcy.

    I think Danny answered your writeoff question accurately. One important qualifier — if a bank lends one billion, it usually does so with about 100-200 mm of its equity at stake, and the rest borrowed from other sources. Therefore, if a bank “writes down” a billion dollar loan, it destroys not only the value of its loan, but the equity it invested with it, and then some. In your case, in a $600 mm loss (with your $400mm recovery assumed) on a $1bn loan, the bank has to make up from other sources the additional $400 mm it lost on top of the $200mm in equity it initially invested. Often that can mean even more equity damage, as that hit automatically impairs the bank’s ability to leverage itself, and the bank must find more equity to shore up increasingly worse portfolio loans. You can see how the spirals we’re seeing develop.

    _

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  33. Danny

    thats a great point too jake. the destruction of equity impairs future leverage, hindering their returns.

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  34. TraderRenn

    Danny, Jake,

    Great posts!

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