Animal Collective, "Grass"

Have a good weekend.

The RO Report, "Recovery" Edition

After the mass "ass-mangling" that the office suffered through yesterday, traders were tentative today, but largely profitable.

Oh, and speaking of "ass-mangling," did you see that close on AIG? How about LEH? Yeah, yesterday's close was tape painting at its very finest. Well done, PPT. Oh, and MER... it's gonna be a tense weekend in Washington.

Anyway, so I took it easy. How can you trade when Ike is torturing those poor CNN anchors down in Texas. I love it. MSM shitheads getting pummeled by hurricane-force winds.

"The winds are really picking up down here... it's raining so hard that my it feels like my face is being whipped by thousands of tiny, tortuous devils."

Out of 19 traders, 13 were profitable, or 68%. Probably about average. I was number 10 of 19.

Here's the top 5:

1. Trader H, $3,815 on 5,900 shares traded.
2. Trader B, $3,542 on 467k shares traded.
3. Trader D, $2,007 on 25,400 shares traded.
4. Trader A, $1,250 on 159k shares traded.
5. Trader L, $897 on 39,800 shares traded.

And the bottom:

1. Trader N, -$3,551 on 17,600 shares traded.
2. Trader 1, -$2,841 on 31,600 shares traded.
3. Trader F, -$1,186 on 45,200 shares traded.
4. Trader V, -$418 on 35,000 shares traded.
5. Trader E, -$207 on 15,800 shares traded.

Art Cashin on CNBC

I just caught the tail end of his comments...

Traders aren't just looking at the financial companies now, but they're looking at any company run by a CEO that can even spell "finance." Even GE.

Everybody believes "there must be a LEH deal" this weekend.

Problem with AIG in addition to all the rumors, are all the storms going around. They could have a lot of claims, which will adversely effect earnings.

It's gonna be a weekend to watch, and we're going to see what happens Monday, Tuesday and listen to what the FOMC says.

The Democrats Are Spineless

I've voted for third party candidates before and I may be forced to do it yet again.

It has been easy to hate on the Republicans these last eight years since they are led by Bush and Cheney and they basically ruined our country. The Democrats though are a little more subtle. They're kind of like the guy who appears to be your friend, but then tries to sleep with your girlfriend whenever you're not around.

Expand offshore drilling to lower to price of gasoline? Really? Have they taken a peek at the price of oil in the last few weeks? Did we start fucking up ANWAR and the sandy Hamptons in order to create this drop? No.

They "reluctantly" gave in? Who the fuck cares if they gave in "reluctantly," they gave in and that's all that matters. They gave in to a party that should be in tatters and without any kind of influence for all the shit that has happened under their watch.

What If?

Listen, I'm not an economics guy. My background isn't in finance. So I'm largely confused by all the possible bank failures and brokerage house disasters.

My question is this... what if all these big houses fail? With all the derivative shit and "counterparty risk" what would it mean to regular people?

If our country basically goes bankrupt, if the FDIC doesn't have enough money to insure the deposits of just the WaMu customers, what happens?

The Pixies, "Dig For Fire"

The RO Report, "Pigs Flying In Frozen Hell" Edition

The tone in the chat room this morning was unbelievably bearish. Not one trader was considering buying stock... we all thought the "end was nigh," and that every company that has any exposure to "American dollars" was suspect and secretly on the verge of bankruptcy.

God Bless Bank Of America for once again, saving the market.

Apparently, rumors were circulating all day about a BAC buyout of LEH, but it wasn't reported until the very end of the day, so that panic short covering would paint the tape at the close most effectively, before people had time to think things through.

Just because BAC has a penchant for throwing good money after bad doesn't mean we're not doomed. Remember, they were the geniuses who threw 2 billion at CFC back when CFC was trading over $20. Remember that? ROTFLMAO!

Anyway, doom was the theme for the RO today. Out of 21 traders, 5 were gross positive, or 24%. Worse still, I, "Trader S" was the top dog. Trust me, I'd rather be top dog on a good day, so today's victory is bittersweet at best.

Here's the top 5:

1. Trader S, $1,474 on 37,000 shares traded.
2. Trader I, $744 on 18,000 shares traded.
3. Trader H, $469 on 2,700 shares traded.
4. Trader G, $463 on 220,400 shares traded.
5. Trader J, $336 on 100 shares traded.

And the bottom:

1. Trader B, -$22,043 on 1 million shares traded.
2. Trader Z, -$20,379 on 190k shares traded.
3. Trader F, -$8,600 on 258k shares traded.
4. Trader L, -$5,624 on 122k shares traded.
5. Trader O, -$5,602 on 112k shares traded.

I Call Bullshit

At 3:55 they announce BAC for LEH talks.

Maybe the PPT is real afterall... I mean, you see that move in the futures?

Hey, you know what's really funny? Remember this? That was when CFC was trading $21.82. I'm sure this LEH deal will be just as smart.

AIG Crumbling

Folks, this is getting ugly fast, but oddly enough, the Dow is only down 100 points.

Eerie again.



Meanwhile, "Trader D" made a good point earlier. If the government is going to nationalize everything, why wait until the companies are going bankrupt and suck? As he put it, "why not buy Goldman now and try to make a little cheese for the taxpayers?"

Indeed.

Lehman Crumbling

Down 44% pre-market, to about $4 a share. 158 years on Wall Street, dissolved in 2 years.

Check out the monthly, and this article from WSJ.



Also, "the Fly" has linked this guy a lot in the past, Denninger, but check out his post today about WaMu. These are scary times... to me, it feels like things are going to get a lot worse.

Here's a brief snippet, and Mr. Denninger, I couldn't agree more.

"Congratulations America; watching American Idol and now NFL Football instead of being responsible citizens and demanding that Congress do their damn job of oversight, instead screaming for bread and circuses means that you have screwed your children and grandchildren by ladling up even more debt on their shoulders - and lots of it."

Bruce Willis, "Respect Yourself"

I don't remember much about the 80s, because I was mostly a kid, but I guess irony didn't exist back then. The music videos are so painful to watch. Anyway, hattip to Dinosister for reminding me of this "gem."

The RO Report, "Smokefest" Edition

It wasn't always ugly for the RO today. At 3pm, a few traders were up over 10gs, and yours truly was comfortably up over a grand.

The problem was everyone was exposed to the long side. When the market sharply reversed, so did our fortunes, and drastically.

I'm particularly upset by my reversal, if only because I've been waiting for the bounce on these commodity and oil stocks. It's how I made my money early in the day, but once I closed those early positions, I had a hard time regaining good prices, and got chopped. Going into tomorrow, I don't have much conviction in either direction, and fear a consolidation day.

Anyway, here are the numbers. Out of 22 traders, 8 were positive, or 36%. I was number 6 of 22, gross positive, net negative.

Here's the top 5:

1. Trader N, $6,792 on 45,000 shares traded.
2. Trader B, $4,881 on 876k shares traded.
3. Trader G, $2,624 on 74,800 shares traded.
4. Trader L, $1,368 on 44,400 shares traded.
5. Trader H, $222 on 4,400 shares traded.

And the bottom:

1. Trader Z, -$19,569 on 283k shares traded.
2. Trader F, -$11,209 on 198k shares traded.
3. Trader D, -$9,589 on 217k shares traded.
4. Trader 1, -$3,788 on 27,200 shares traded.
5. Trader V, -$2,136 on 58,200 shares traded.

See you tomorrow.

The Real Pigs

The whole "lipstick on a pig" thing is Republican politics in a nutshell. 2 days of bullshit media coverage while the stock market is fucked, we're starting a new Cold War, and fighting another illegitimate war. No real issues to discuss I guess?

Thank you "liberal media."

The Republicans are smart. They confuse people with bullshit and wedge issues so they forget that the stock market has been stagnant for the last 8 years, that the economy is in the tank, that your tax dollars are doing more for Iraqi families than they're doing for American families, and that, oh yeah, now the government owns your mortgage.

The Republicans do not deserve to win. Don't let them forget about the last 8 years.

Hit the real pigs back, Obama. Not with bullshit, but with the plain truth about the last 8 years. Just keep swinging, it's a fight they cannot possibly win.

Unless the "liberal media" is on their side after all.

WAMU In Big Trouble...

Not going to be a pretty headline... two words... BANK RUN!

Black Math

Like a true Dinosaur, I used a calculator to figure out some percentage drops in the last 7 trading sessions. I wrote these down on a sheet of loose-leaf, and now share some of the more egregious drops with you.

It's ugly. With moves like this, I can only imagine this is pure unwinding of dead portfolios. Funds are fucked, redemptions will continue to soar, credit will remain tight, and the crash will come in October to leave behind the broken remains of George Bush's America.

That is, if they finally let us crash... or will they be able to forestall the inevitable until a new administration arrives?

Check out the carnage... this is just a sampling.

PCX 45.4% decline in last 7 sessions.
JRCC 42.1 %
MEE 42%
JOYG 39.5%
CHK 39%
BUCY 38.5%
EXM 36.4%
GNK 35.4%
AKS 34.3%
CLF 32.8%
SGR 31.4%
NOV 30.7%
CF 29.9%
FLR 29.8%
TRA 29.5%
MOS 28.4%
MDR 27.1%
POT 21.7%

And much, much more!!!

Eddie Murphy, "Party All The Time"

I haven't had to post bad music since August 6th, so I can't be too upset. This one is a doozy. Pure awful. But while the song is horrendous, the video is hilarious... props if you can actually get through the whole thing.

Now I know there are probably a few of you out there who are demented and like this song for it's "kitsch value" or something. To you I say this... you are broken, seek help.

The RO Report, "Insanity" Edition

When you get a group of traders together in a room, all on the same side of a losing trade, it's a lot of fun. It's hard to overstate the amount of cursing, groaning, and even sobbing that I heard today... add in thousands of gay jokes and I'm sure my brain is being irreparably damaged by this occupation.

In sum, getting long commodities near the open today was a pure "death" trade. There were some completely unreal losses today, with "Trader D" dropping 50gs at his lows. However, as you'll see shortly, the guys turned their days around, in a big way.

And it wasn't by continuing to hold the commodity longs. However, a "friend" of mine, a certain "Trader S" did hold those death longs, and got killed all day. However, even "Trader S," despite his stubbornness and stupidity, made back most of his losses.

The numbers really speak for themselves. Out of 22 traders, 18 finished gross positive, or 82%. 10 traders finished up over $3,000 gross, and 15 over $1,000 gross. The RO kicked ass.

Not me. I was number 17 of 22... gross positive, net negative. One of the hardest things about this job is not making money when it seems everyone else in the world is rolling in it... but you can't win everyday.

And again, if you're interested in joining the RO, email me. They're hiring.

Here's the top 5:

1. Trader F, $44,488 on 250k shares traded.
2. Trader B, $16, 450 on 835k shares traded.
3. Trader Z, $16,374 on 517k shares traded.
4. Trader D, $16,144 on 505k shares traded.
5. Trader A, $8,832 on 134k shares traded.

And the bottom.

1. Trader H, -$21,924 on 12,100 shares traded.
2. Trader T, -$444 on 6,100 shares traded.
3. Trader Y, -$437 on 11,800 shares traded.
4. Trader J, -$260 on 100 shares traded.
5. Trader S, $177 on 150k shares traded.

AXA getting smacked

One never really knows what the exact holdings are of any investment company as there are delays in reporting and so on.

But using data from June 30, 2008, AXA portfolios (via AllianceBernstein mutual funds and others) should be getting hurt a bit from the FNM, FRE< and LEH falls.

According to filings, AXA is:

1) The #1 holder of FNM common (134 million shares or 13% of the company)
2) The #3 holder of FRE common (41 million shares or 6% of the company)
3) The #1 holder of LEH common (66 million shares or 10% of the company)

The total losses as of right now from Friday's close on those positions are $804 million from FNM, $164 million from FRE, and $528 million from LEH for a total of $1.4 billion.

I realize AXA handles a lot of assets ($289 billion as of 6/30/08), but still.......

Also generally hurt from large exposures are Dodge & Cox, John Hancock funds, and Fidelity.

The Smiths, "Half A Person"

No good vids of this song on youtube... but a great song.



QUICK NOTE: The blog has been rather "no frills" since I returned. Life is currently very, very busy. I look forward to settling into some stories again eventually.

The RO Report, "Nursery" Edition

Today was our daughter's first day of nursery school, so I was in and out all day, unable to really focus on trading. I've said it many times before, I tend to hate days where the market gaps up or down big, because it almost always puts me in "counter-trend" mode, which isn't my favorite trading stance.

Anyway, it was a mixed day in the RO. A number of traders had solid days, but there were also a couple of large losses in the mix. Had the market not rallied strongly in the last hour it would have been a complete disaster for the bulls as the early morning gains of +350 on the Dow were almost completely wiped out at one point.

Out of 21 traders, 13 finished positive, or 62%. 10 traders finished up over $1000 gross. I was number 10 out of 21 today, so again, I had a solid day.

Here's the top 5:

1. Trader Z, $19,959 on 261k shares traded.
2. Trader D, $11,514 on 354k shares traded.
3. Trader E, $9,270 on 434k shares traded.
4. Trader N, $6,461 on 40,600 shares traded.
5. Trader L, $4,031 on 52,000 shares traded.

And the bottom:

1. Trader F, -$27,046 on 236k shares traded.
2. Trader B, -$18,105 on 1 million shares traded.
3. Trader H, -$2,167 on 10,800 shares traded.
4. Trader M, -$1,934 on 100 shares traded.
5. Trader A, -$1,032 on 88,200 shares traded.