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
21,506 Blog Posts

Fucking Liars

I told you all along, the CDO’s on the balance sheets of our glorious banking institutions are worthless. All of the “writedowns” taken was just PR to placate the helpless employees and long term shareholders. These banks will be “writing off” their toxic paper, like [[MER]], over the next few months. Again, the underlying asset behind the paper has depreciated beyond repair. The CDO’s are worth nothing.

MER is reporting a sale of their CDO’s, but they are financing that sale! After it’s all said and done, they got 5 cents on the dollar or a punch in the nose (with brass knuckles). Rewind a few weeks to the Bloomberg sale, you will find MER financed that deal too. WTF!

What’s the point of selling shit, if you are the one giving the other guy the money to buy it? Does that make sense?

All of the banks, from [[LEH]] to [[MS]] to [[GS]] need to write off assets.

Most importantly, they (banks) are killing shareholders, via dilution.

Listen to me, don’t you understand that in order to get back to where they were, market cap wise, the stock needs to climb to ridiculous valuations, due to all the new shares in the float? Shares of WM or LEH will never get back to their all-time highs, in my estimation.

Finally, I hear all of this talk about the housing market bottoming. For those people, I ask you this:

Who is going to buy the homes?

After all, if you are interested in buying a home right now, you need to put a down payment of 30-35%, depending on your situation. If you’re lucky, you will find a local bank that will accept 20%. However, for the most part, banks are not lending.

So, if banks are not lending, due to lack of capital, how will all that inventory move?

In closing, I would not touch the banks here. Instead, I’d take advantage of any spike to sell them. In addition, if you’re short steel stocks, get out. Numbers out of [[X]] will likely buoy the sector for a few days. And, I concede, oil is broken here. [[DUG]] looks decent, up to $40.

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21 comments

  1. Donny

    FLY, OIL you “concede” … What the Fuck? What about this tirade a couple of weeks ago!

    http://www.ibankcoin.com/flyblog/index.php/2008/07/09/donny-is-a-freakin-retard/

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  2. Granpa

    Fly, does that oil is broken statement reflect poorly on CLNE as well?

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  3. BPOE

    Look the market is full of dumb money right now. Being smart may fuck you up. Anything can happen! Like I said look out for the jobs numbers! They will be fake to the good side. You saw the numbers today.

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  4. DSB

    Way to rub his face in it Donny. Now bust out with some good stock picks and you’ll be able to manage millions of $ too!

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  5. Donny

    DSB … I love The Fly and his picks. I’m just evening the score. No one is right all the time, not even a genius like The Fly.

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  6. DSB

    BPOE,

    When everybody is afraid, they depart from their “strategy” and do shit like come to ibankcoin.com in the hopes of figuring out WTF is going on (remember the chart Fly put up on web traffic). When fear goes away, “value” investors who don’t get the big picture creep back into the market, and they get big balls again. They say stupid shit to themselves like: “How could I NOT buy WFC right now, at this great value?” and whatnot.

    Egregious

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  7. CubsRock

    Nice post Fly, thanks.

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  8. DB

    Insurance co’s also have a ton of exposure to CDO’s and CDS. Look at what happened to XL last night. Insurance premiums are also very weak right now and it is hurricane season. I think there might still be a lot of downside in the insurance companies who have an aggressive investment portfolio.

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  9. The Cause

    Interesting commentary.

    What’s more alarming are these inbred notions;
    1. Some banks are too important to ‘the system’ to be allowed to fail.
    2. A 1929 type crash could not happen. The authorities are now too smart.
    3. Budgets can be financed ‘for ever ever’ on ‘the never never’.

    For 1 – what amazingly retarded bullshit thinking, for 2 – yeah, right and for 3 – consumers are already finding out otherwise the hard way and, of course, the yuan will no doubt soon drop for bozos in Washington.

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  10. Juice

    Did you expect Paulson, the PPT, the entire free & unfree world to go down without a fight ?

    They are a cornered wild animal. They will do everything legal & illegal to get this market up. They will change the illegal to legal.

    Ultimately they will fail. Maybe they can get SPX 1290-1330. That will be it. Then there will be a date with destiny of at least SPX 1050.

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  11. BPOE

    DSB

    There is never an everybody in the market. Im just not that smart. Knowing that you don’t know works better for dumb me.

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  12. TraderCaddy

    Speaking of high blood pressure, if you decide to get medication to control HBP DON’T let the MD prescribe new expensive bullcrap (which will please the pharma salesperson greatly). There are generics and non-generics that do just as good a job (beta blockers, calcium channel blockers, etc.) that cost between $10 and $40 a month. Go find the WSJ article from several years ago that says studies show the cheap stuff works just as good.

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  13. Donny

    Crude is DONE folks. Put a fuckin’ fork in that sector.

    I really can’t blame the longs for defending their position on dino shit, after all, most of them made a mint holding it for so long. However, the smart ones like The Fly, are getting the fuck out of the way.

    Take heed; the world is facing unrecognizable days ahead. Motherfuckers that don’t know what they’re doing in the markets, better get out now.

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  14. TX Slave Trader

    Juice,

    Hilarious analogy, but I think you need to concede that the Fed and Treasurer, the collective ‘wild animal’ if you will, do stand a fighting chance because they ultimately have the ability to print money and launder it into mega banks at will.

    Seems to me, that if they can print “real” money at a faster rate than shadow money is being exposed, while horribly dilutive to the underlying currency, they will keep their beloved system intact….although SPX 1050 could be a likely reality during this process.

    It’s kind of like an old fucker trying to pump himself full of viagra before his $2 hooker realizes its a lost cause and leaves the room.

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  15. Dinosaur Trader

    Fly,

    What do you tell your parents to do with their retirement accounts?

    -DT

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  16. Fly_stalker

    “It’s kind of like an old fucker trying to pump himself full of viagra before his $2 hooker realizes its a lost cause and leaves the room.”

    Thanks for the laugh…

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  17. BPOE

    DSB

    Sorry for my last statment. It was not directed to you. You made a great post. I went back and gave you a +1. One must have fun when on the FLY’s BLG.

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  18. TraderCaddy

    I shouldn’t be watching the Food Channel so early as I am now hungry and I only have tuna for lunch. I hope Fly was watching as Bobby Flay just grilled some top notch steaks.

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  19. Steve

    Fly could you answer DT’s question. My 401k is evaporating and my days as your neighbor may be limited if this continues.

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  20. DSB

    BPOE, my day is now un-ruined

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