Hey, let’s raise rates (remember that?). I believe it was the Fast Money gang (Guy Adami) who was suggesting we might enjoy a massive 3rd quarter rally, spearheaded by CDO markups. Buy the banks, no?
Where are the Warren Buffett rumors? Every time the market dumps out, they pull Buffett out of a potato sack and spread scurrilous rumors about his pending “white knight” investment. It never pans out. Buffett is old and cranky. He hates bailing people out, let alone buy himself a decent suit.
Shall we ignore AIG‘s trillion dollar meltdown?
I swear, men with charts should be sent to military work camps. As soon as the vix hit 30, buyers started stepping in. If you really think about it, men with charts are pretty much the dumbest people on the face of the earth, right below spastic retards, who buy Wells Fargo & Company [[WFC]] and U.S. Bancorp [[USB]] , in florescent orange jumpsuits.
The Fed will not cut rates tomorrow. However, in the event that they do, my oil stocks will surge. Either way, I win, at least half way.
At the present, I find it acceptable to lose money in my oils, providing my bank shorts eat pavement.
The next boot to drop has to be in commerical real estate. I have contacts in the field and almost all of them think they are immune. They have a certain smugness about their business and it irritates “The Fly.” These people are mentally impaired—I’ll have you know. On this display of hubris, I want to sell short Vornado Realty Trust [[VNO]] , Boston Properties, Inc. [[BXP]] , Simon Property Group, Inc [[SPG]] and SL Green Realty Corp. [[SLG]] or just get lazy and go long [[SRS]] .
Finally, I think it’s important to note the bag holders of American International Group, Inc. [[AIG]] equity. Here are a few publicly traded companies, who have massive AIG common stock on their books:
AXA (ADR) [[AXA]] : 161 million shares
State Street Corporation [[STT]] : 96 million shares
Barclays PLC (ADR) [[BCS]] : 94 million shares
The Bank of New York Mellon Corporation [[BK]] : 31 million shares
Legg Mason, Inc. [[LM]] : 29 million shares
Northern Trust Corporation [[NTRS]] : 29 million shares
T. Rowe Price Group, Inc. [[TROW]] : 23 million shares
Janus Capital Group Inc. [[JNS]] : 19 million shares
Goldman Sachs Group, Inc. [[GS]] : 17 million shares
Morgan Stanley [[MS]] : 16 million shares
Bank of America Corporation [[BAC]] : 16 million shares.
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I think your title is the key. Say I was a rook — I would have bought the updraft last week thinking we were due for a bounce and then shorted this morning at the lows, thinking we would plunge. The uninformed retail is almost always wrong.
The VIX does play a big part, but it’s easy to be short term (as in 15 minute increments) when it’s so clear what the fundamentals are and what direction the market is headed.
Fuck AIG.
Great writing, very funny. A few spellin’ mistakes though.
insert a wrong after short term.
I really am stunned at the broader market strength as well.
I CANNOT WAIT to hear what gibberish Cramer is going to spout. Oh wait…I can.
Mdawz:
That was a typo.
Don’t you have an old lady to litigate against or something?
VIX is going to 50 at some point.
Been short SPG from just smack above a $100 and the bid has been strong on every market rally…i am holding this son of a bitch as I have been saying for awhile commercial real estate will get wacked and think i am still early…really only sector that never took part in this downturn…reason is it takes times for retail problems, unemployment, etc. to trickle down into less expansion, bankruptcies, cancelling of lease spaces etc…
Lehman holdings owns a boatload of GE.
I do believe rates will be reduced.
Remember the privately owned Federal Reserve (as federal as federal express) will be glad to print more money and put us into further receivership.
Enjoy the bondage.
fly,
Could you comment on COF and the other “credit” card lenders? How are their assets managed? Are they insanely levered too?
AIG = new lows
I do, with girls. Not the Fed. But hey, to each his own.
BTW Jeff, loving the blog lately. Can I make a special request? More youtube videos about aliens and secret labs. That shit is kickass.
Enjoy the fact that we can’t break 1225
spoke too soon re 1225.
HPOLY FUCK!! AIG is $5.70!!!! I missed that.
Something is going on with AIG…so much for the rescue plan…
Here ya go Danny –
How the Universe is Created
47 min – 05/10/2007
ConspiracyCentral – based on an old Randy Winters narration of how the universe was created according to the Meier material. quite some detail how we have all come about, how a universe is created, how many universes are there and how time works. universe answer why beginning
part 1 http://www.youtube.com/watch?v=i1ZmOyng8-s
part 2 http://www.youtube.com/watch?v=xdSRiArQodM
part 3 http://www.youtube.com/watch?v=u1cm_JfCYCM
part 4 http://www.youtube.com/watch?v=VR3TUXLRp9o
part 5 http://www.youtube.com/watch?v=xdSRiArQodM
How does JPM stay clear of this shit, unlike most banks? They must have a time machine in their back pocket also.
So, I guess Lehman completes your prediction on two big financial institutions failing this year.
Roubini has put all his money in a goat herd in Rumania – says he sells off a goat or two when he needs the Rumanian peso or Rumanian dollar or whatever.
Watch the 10-year treasury.
FUCK!!!! AIG sub $5
AIG calls keep going higher, I want in 🙁
let me tell you whats stupid … covering shorts
I covered WB this am 12.80 thinking that Cramers got the CEO on tonight & he’ll pump it up to a better price
I covered AIG 6.26 thinking the bulls will get some bailout plan going
WRONG !
Fly, Thanks for the perspective. It looks like the remainder of the day will be very interesting. Hey, any chance can I borrow the time machine to take Boo Boo back to 1987 to show him what the talking heads were saying before the crash?
“Buffett is old and cranky. He hates bailing people out, let alone buy himself a decent suit.” That is great!
Shock to the system…public is clueless as to what is going on. I was just listening to Right Wing radio and the rap is Palin and Obama…watching any of these candidates talk about the economy is hilarious and uncomfortable, like watching a comedian bomb.
Fly so sorry about Vinnny spilling chili on the server last night. New Rule: Vincenzio is not allowed to eat at his workstation.
AIG just traded as low $3.50.
This is fucking vicious!
UNG reverse again, wow!
Got in AIG (for shits and giggles)
dude reit’s are getting crushed but srs isn’t budging…what gives
oh and retail is holding up because oil is down so much that stupids think they are going to buy new air jordans and designer jeans with their savings from oil
fucktards…GES and FL I shall destroy
http://ftalphaville.ft.com/blog/2008/09/15/15903/lehman-clock-these-counterparty-risk-numbers/
Lehman – clock these counterparty risk numbers…
From JPMorgan:
1977.jpg
That’s right, Deutsche had or has €1.14 trillion of counterparty exposure with Lehman. We guess the number includes the notional value of derivatives, but still…
Rollercoasters R Us.
Merrill = 19.90
WTF was Ken “FuckFace” Lewis thinking!
BAC shareholders should rise up with torches and pitchforks.
I’m waiting for a Lehman analyst to put out a recommendation today.
I can’t keep up with these margin calls
Mr. Fly, don’t ever second guess me again. I’ve got this thing under control. We’re only down 280 on the DOW.
We will be dropping interest rates, and loaning more money to AIG in the near future.
http://www.rallymonkey.com/video/kenindex.swf
Query:
How does JPM stay clear of this shit, unlike most banks? They must have a time machine in their back pocket also.
Not exactly. In case you haven’t been paying attention, though, JPM is the Fed, for all intents and purposes.
__
Cubs I got in AIG with you on your shits and giggles move, turned out great–so far.
LOL, WTF, and many other e-mailed derived acronyms!
What the FAAAACK is retail doing “up?”
__
I am changing my price target of PACW to $54. Previous target of $50 as of 9/12/08.
Sean Udall
12:04:25 PM
No positions in stocks mentioned.
Where can the Fed go from here?
I’m hearing news that a wirehouse thinks we will see the Fed lower rates by 50 bps tomorrow.
————-
Todd Harrison
11:47:27 AM
No positions in stocks mentioned.
Dear Headlights
* The prevalent mood on the street today? Shock. As that morphs into acceptance, reality will set in.
* Social mood and risk appetite shapes financial markets. That mood–and that risk–took a historic turn today.
* I do believe that this was a healthy and necessary step but don’t confuse that with an “all clear” signal. There needs to be purging and panic and lower prices still.
* Main Street has little sympathy for Wall Street but make no mistake–what we’re seeing is tragic. Societal acrimony continues to percolate and I’m hearing a lot of “they got what they deserved.” Hogwash. Nobody deserves to be wiped out. Nobody should ever have to look in the eyes of their hungry children. Not everyone is evil just because they happened to work in a particular industry. Empathy over acrimony as we find our way, please.
* T-Minus four hours until the redemption notices hit. Just keeping it on ye radar yo.
* I’ve taken to carrying a small, gratitude rock in my pocket. Each morning and each night–and every time I reach in my pocket–I’m reminded of all my blessings. I’m not as wealthy as I once was, but I’m entirely more grateful for what I have. Net worth isn’t self worth, having fun isn’t being happy, the purpose of the journey is the journey itself.
* Deep breathes, my friends, and lucid thoughts. This too, shall pass.
============
Jeff Macke
11:30:00 AM
Position in GS, TTWO
What I’m Doing and Pondering
Greetings from New York where I’m cutting to the chase. Here’s what I’m doing:
* I stuck a toe in Goldman Sachs (GS) in the $140’s. If it closes in the 130’s (where I expect it to trade at some point today) I’m gonzo. I’d rather avoid anything financial entirely. This position is not an investment but strictly a trade. I came into today very cash-heavy and GS, while clearly “involved” in this financial horror show, didn’t do anything insane over the weekend (like buy Merrill Lynch (MER)).
* Simply because I don’t want anyone, anywhere to justify my trying a GS long as a reason for them to take on too much risk: A) my position size isn’t enough to keep me up nights (and, like Todd-O, I’m not one of nature’s “good sleepers); B) I don’t think it’s the end of the financial mess; but it is the end of the beginning; C) Goldman’s estimates have been reduced for the last 2 weeks, for the first time in GS history you can make the case that expectations are low and D) I’m simply sharing, not only don’t I think others should follow me in the thought horrifies me.
* (Thinking about the above bullet, that’s a pretty lousy risk/ reward.)
* I bought some Take Two (TTWO) down about 30%. The stock is getting treated like pretty much every character in every game TTWO makes (horribly pummeled then killed) after Electronic Arts (ERTS) finally pulled its bid. ERTS bid has remain unchanged since February. I’m not sure TTWO rallies immediately but the pre-deal price was roughly what I just paid for the TTWO. I think the stock settles somewhere between here and $22 in the intermediate term. Either way, TTWO is multiples larger than GS as a position.
* I am simply gob-smacked by the premium Bank of America (BAC) paid for Merrill Lynch. All I can think is that Ken Lewis saw Dick Fuld’s forced folding of Lehman’s (LEH) as an opening for “the most hubristic, over-reaching man in finance”. The King is Dead; Long Live the King.
* On a related point, John Thain seems like a guy who doesn’t yet realize he sold his job last night. I’d put the over/ under on Thain’s “Exit with (or without) Dignity” from the merged BAC/MER at 3 months.
* Plenty of blame for this crisis rests at the feet of the avarice of the organizations who created the assorted absurd loans now blowing up, one after the other in a sickening sequence. But without the credit ratings agencies who “set the price” for these instruments at levels which created an illusion of safety where none existed, and who were paid for doing so, it would have been impossible for this specific crisis to get started.
* I opined that Moody’s (MCO) motto: “AAA for Everyone; at the right price”, made it the most loathsome company on earth a few months ago. Suffice it to say, I stand behind that ranking even if I do feel like I may have been a bit harsh in my wording. In a just world, the politicos would be putting a halt to a system where Standard & Poors is able to effectively kill a Dow component with the simple threat of reviewing AIG’s (AIG) rating.
* The credit ratings agencies are like 3-year olds with handguns. They have no idea what they are doing. You can know what, and complain about it, but no one is taking the gun away and you’re going to be just as dead if you get shot by the kids as you would be if you got shot by Wyatt Earp. Way too much power in exactly the wrong hands.
* “Doing absolutely nothing” is almost certainly the best option for most people. Probably me included. I understand the temptation to buying into this kind of selling. I conceded up top that I couldn’t resist. But I kept it very, very small. Above all else, avoid playing at a size that could keep you up tonight. This is unlikely to be a one day event.
———-
Quint Tatro
11:22:23 AM
Positions in SRS
Eyeing ETFs…
Desperation is interesting to watch, however sad when you weigh out the risk reward. As I write the Dow has bounced over 150 points and with all that is going on, actually looks decent on the day. Money is flowing in as people believe maybe the worst is over and we can now resume a strong uptrend.
The problem is the broken technical picture which can only be repaired by a sustained move back into healthy territory, which is still many hundreds of points away. If this happens, great, we’ll all participate in a healthy uptrend, but until it does, watching a dead cat bounce on the heels of sad financial meltdowns is hard to do.
Opportunity lurks around every corner however and rather than sit idle, astute traders can start making a shopping list of shorts to be had as volume dries up and the bounce comes to an end.
An area I am watching closely is commercial real estate, looking to play the crumble through the leveraged ETF: UltraShort Real Estate ProShares (SRS). Rather than watching this hyper active name however, I am eying the underlying asset, which can be tracked by the ETF: iShares Dow Jones US Real Estate (IYR). The ETF has bounced this morning off its 50 day moving average, which also correlates with an uptrend started in July. If this market is as weak as I suspect it is, this will soon fall and when it takes out the 50 day, I will add to the SRS which I started a small tracking position to today, aggressively.
There’s your mandatory Buffett rumor.
It never fails.
thanks juice, I’ll have to watch those later
PACW is a fickle bitch.
Haven’t daytraded since 9:45 whee I sold SMH from the open. As they say in South Central LA: Churn,Baby,Churn.
churn baby churn, good one TC.
That would be the 1968 Watts rioting chant (Burn,Baby,Burn). No idea why I recall this.
I live in Australia and I heard the warren Bufett rumor. A NY buddy told me he was kicking the tires at AIG (flat tires I guess).
Fly,
Buffet wears Zegna suits buddy. Don’t dis the fucker like that behind his back especially about his suits. He always wore Zegna suits. In fact he traveled to the 5th ave store to get them made up. How do I know?
I have a couple copies of Soul on Ice by Eldridge Cleaver around somewhere.
Ah yes. The days of Angela Davis (now a college prof, of course), Stockley Carmichael, Abbie Hoffman, Tom Hayden and of course Obama’s buds.
Curtis Mayfield is pretty fucking dope.
bernanke and paulson
http://www.youtube.com/watch?v=6eE16Cdb_EU
My friend Siv Patel tells me that Warren Buffet wants to buy his corner convenience store. Pass it on.