Poof. Your stupid gasoline supplies are gone.
-Merlin
NOTE: Crack spreads are now north of $70!!!
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Joined Nov 10, 2007
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Fuck You Merlin! We’ve got larger problems to deal with next week.
Wanna know the eventual outcome of this government chicanery?
The United States will follow the USSR in the path to disintegration.
Unbelievable crack spread!
Glad I kept my TSO and NOV, even though NOV was making me want to throw up for a while there. I’m a wuss but I hung in there.
Hope Chuck and Cajun will not have too much flooding or problems, good luck.
Quick update: Geraldo Rivera is an idiot.
“boca Says:
Quick update: Geraldo Rivera is an idiot.”
welcome to 21 years ago
last time i saw geraldo, he was getting a crack spread to the face, via a chair thrown by a white supremacist.
Paulson believed that financial markets have been aware for some time of the difficulties facing Lehman and have had time to prepare and the Fed is now allowing investment banks in need of emergency loans to borrow directly from the Fed just as commercial banks can do.
Fly, nice call on the refiners
“the numbers of new millionaires grew by
21% in 2004,
11% in 2005,
8% in 2006 and
2% in 2007. ”
John Maudlin
my guess is there will be declines for the next 3 years
What’s WM, LEH, AIG, MER, GE, C Got to Do With Anything?
Preopening, our stock index futures were indicating a loss of about 0.75% (even as world markets had been stronger). I’m not sure of the proximate cause, other than that yesterday’s late-day rally seemed so spurious. Retail sales were weak, but disappointing data often gets shrugged off. Within about 30 minutes, the major indices were off about 1%. But when the University of Michigan’s consumer-confidence poll spiked from 64 to 73 (probably having to do with the decline in oil), that helped create a bounce which saw the losses cut to about 0.5%.
As for the financial arena, it was again scene of more carnage: LEH was under pressure as there continued to be talk of a shotgun marriage, on terms unfavorable to the equity holders. There was even chatter that the government would be tough and force bondholders to take some pain. If so, that would be a first, and certainly a step in the right direction, but I’ll believe that when I see it.
Take My Wamu, She’s Yours
Meanwhile, Washington Mutual was stable, as I think folks expect that over the weekend, JP Morgan will ride to its rescue; and Bank of America to Lehman’s. Whether those outcomes or those names turn out to be correct, I don’t know. But most likely, anyone who takes on either Wamu or Lehman is going to have their hands full. (It will be interesting to see how much help these white knights get from the government.)
Of course, then we’ll only have to deal with the next two potential problem children, AIG and Merrill. (MER’s September $10 puts — with one week of life left, but 50% out of the money — were very active!) AIG’s stock, in a continuation of its recent death spiral, plunged over 30% today. I don’t think folks should underestimate the complications of dealing with the far-flung guarantees it may have.
If AIG is in big enough trouble, who can say if GE or Citigroup won’t be impacted? I could go on and on, but I think you get the major issue here: It’s not any one institution. It’s all the institutions. In any case, the early going saw anything that touched a mortgage under pressure.
The early morning rally culminated with the market slightly green. Apparently, as one friend put it, folks wanted to believe that today was just another normal day in a normal September of a nothing-special year. One reason for the optimism: There’s no shortage of hope and hype about what the government may pull off this weekend, vs. various and sundry troubled financial institutions. There’s even chatter that the Fed may enter the fray and do something, like cut rates and agree to expand its balance sheet.
Endless Ribbon of Requisite Rallies
So, what we saw early on was the Friday pre-bailout rally. Then of course, the plan is that Monday we’ll get the Monday post-bailout/pre-FOMC rally. Tuesday can be followed by the post-FOMC rally. Then next Friday we can do the pre-bailout rally again, etc. And, maybe the folks hoping for a visit from the tooth fairy over the weekend will be rewarded, i.e., the government will come up with something that will make stocks go higher again. But we cannot lose sight of what the true problems are, and the fact that they’re not going away, regardless of what the government does.
In any case, the early enthusiasm wore off. By early afternoon we were back to the lows of the day, with the indices down about 0.5% From there we crawled back to near the day’s highs, then backed off a bit as everyone jockeyed for position into the close. To my eye, it looked like hopes remained high. Even with all these loose hand grenades rolling around the floor, folks’ big fear seemed to be of missing the next rally, vs. losing gobs of money.
It’s also worth noting that volume was on the light side — and a huge chunk of what traded was in LEH, MER, AIG, and WM. Without the trading in broken financials, volume would be almost nonexistent. In any case, next week promises to be a wild one, as we learn what (if anything) the government has up its sleeve for the financial system.
Away from stocks was again the scene of violence, though this time it was to the upside. The dollar was drilled. I think a case could be made that the euro and other foreign currencies are done going down, and that the dollar rally has run its course. To me, the chart pattern looks (at a minimum) like there’s going to be a pretty decent bounce in foreign currencies, especially the euro.
Motion That’s Got Meaning
In any case, the dollar’s weakness finally gave precious metals an excuse to celebrate, as gold and silver rallied about 3%. Oil was sort of quiet in front of Hurricane Ike and closed flattish, after trading under $100 briefly. Treasurys were lower. I’ve established a short position in them over the last couple days to protect my stock shorts against some sort of weekend bailout. (Plus, I’d been looking for an excuse to take a stab at shorting them anyway.)
I don’t know about you, but I think the amount of motion in all these markets is a sign that the financial system is broken. I suspect that this volatility will be a feature of daily action for a while.
Positions in stocks mentioned: None.
http://uk.reuters.com/article/oilRpt/idUKWNA376120080912
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZr03EdAhuqg
Soros Loses at Least $120 Million From Lehman Stake
The Fly & IBC’ers take money out of Soros’ pockets, much to his chagrin.
Thanks Juicenstein 🙂
” Ike’s winds smashed windows on Texas’ tallest skyscraper, the 75-story J.P. Morgan Chase Tower in downtown Houston. Nearly every window on one side of the tower’s first 30 floors was broken. ”
this was the finger of god … and has a message for YOU …
VLO to the moon baybee! Fly finally got an energy play to go his way.
So much for the refiner plays, hopefully they won’t crater too much on the open on Monday. Looks like there was little if any damage according to the news to the refiners. Top pick: Short MRO.
Gapping… have someone explain the term “crack spread” to you.
Hint: It’s not just a layout of “rocks” on a cardboard box.
_
Dave Chapelle Character: Has someone explained to you that the spread will narrow rapidly should supply not be as interrupted as first thought. Yes oil is cheaper and we are maintaining a positive spread however inflating it to $76 for 321 Gulf so quickly without assessing the damage could lead to contraction if it (the carnage) is less than was priced in. This same thing happened a week ago albeit not directly on the refining heart. I am hearing that some refiners are already resuming production in Port Arthur. Best case scenario would be if the 321 Gulf supply was busted for a month while the Westerners like WNR, HOC and TSO keep churning out supply at huge premiums, thus my theory of long WNR and short MRO. I am hearing MRO has an electrical outage and will take weeks to bring the ship back online. But wait I thought it was just some rocks on a box right?
Fuck!
http://www.cnbc.com/id/26681709
Damn this hat. I’m sick of my chair being a foot lower than my co-hosts just so they can fit this fuckgregious hat in the frame.
i respectfully disagree w/ sir gapping. the VLO play is more than just an Ike play. VLO et al are already beaten down from months of miniscule spreads. Some refiners are old, and may be shut down or sold off to the gubbermint. chavez is making noises, and they refine a bunch. Time is on the side of VLO.
For the recent FCX bulls:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLuJUfpVDrGg
Boca caught in the act.
Ditto Danny.
HAH
Sheer photo phuckery. I have brown hair and glasses like Ms. Sarah Palin.
^are you tina fey?
Cuz I liked Jake’s picture of you more.
Who order the PPT special … Sorry, we ran out of the government bacon and bologna special (had a run on them lately) you get plain cheese and btw, I only take cash – don’t want to be another LEH creditor
http://online.wsj.com/article/SB122134089502132567.html?mod=hpp_us_whats_news
I got the librarian look going on like Sarah Palin, hey I’m a book dealer what can I say. My husband pointed it out the other day … you look like Sarah Palin in that photo. Course he loves her.
“Soros Fund Management LLC, purchased 9.47 million shares, or about 1.4 percent of Lehman,
between March 31 and June 30,
The losses could be as high as $380 million,
depending on when New York-based Soros purchased the stake
and
IF he still owns the shares. ”
It’s a great headline and all but whether they still own the shares might make some slight difference, no?
Roubini:
“The light at the end of the tunnel is on oncoming train”
As much as I hate to admit it he’s been spot on for a couple years now. If home prices correct another 10% no bank will be left standing.
Poof, your synchronized dive is splattered
http://www.downside.com/bldgjump.gif
Lots’O bullish news this weekend: Hurricane Ike devastation & $5 – 6.00 gas, bad train crash in LA, all world Banks want a piece of LEH at US taxpayers expense, a run on WM, AIG the oncoming train … not to mention GM, F, C, GE … the dominoes are all lined up … can the PPT execute the “kick save and its a beauty!”?
The PPT will get no sleep. After all, they’ve had a BIG hand in creating this mess and the monster they’ve created is now beyond their control. The best they can do is to stave off a tanking market for another 1-3 days. After that, market forces will take over as the SPX seek new lows below 1200.
They will remove LEH & other dying components of the S&P and replace them with winners, so SPX put holders can’t immediately take the system down through counter party derivative risk to damaged financial institutions.
This mess is at the unstoppable stage. On any lift this week, get positioned for the BIG UGLY by quarter end & the first weeks of October as fund withdrawals exacerbate the situation.
Bruce is them your real words?
Good stuff…its refreshing when a rich fucker like you takes the time to contribute to this little shitbox.
Now go have a Republican and enjoy your Sunday. Wonder what time Skeletor will march out today?
Implications of a 10 day refinery shut down. From The Oil Drum.
http://www.theoildrum.com/node/4526
” Insight 4. It is likely that we will have product shortages for at least the next three to four weeks, because of shut in refinery capacity and reduced refinery runs.
I have said that it is likely to take a week or two to get refinery production up to pre-Ike levels. Suppose it takes 10 days. Adding 10 days to the date of the hurricane (September 12) brings us to September 22. If it takes an average of 18.5 days to get product from Texas to New Jersey by pipeline, it will take until approximately October 10 before supplies are back to normal. It could be a little shorter than this, or quite a bit longer. ”
KCBILLy – I’m not rich.
Is MS next to circle the drain?
The chart says down. I think I’ll be pricing some Oct puts come Mondays Costanza rally.