Bob Marley, "Bad Card"
One of my favorite Marley tunes, excerpted...
Tuesday, September 16, 2008
The RO Report, "AIG Conservatorship" Edition
Well, today didn't turn out exactly how everyone planned, right? All the newspapers were talking about "panics" and "meltdowns" and then we rally. Oh, and this guy, who yesterday was nearly able to call the exact closing price of the Dow, said the world was going to end.
Apparently, the iBC machine caught a touch of "gay" overnight.
Moving forward... there were crazy rumors about AIG all day that were impossible to decipher... they're being bailed out by NY... no wait, they're only being bailed out if.... the FED is doing nothing for AIG... no wait, the FED is back at the table.
It made the day somewhat choppy. Oh, and we had an FOMC meeting to deal with.
Also, at first glance, you may look at the NYSE volume and be like, "Volume is BACK!" However, you'd be wrong. In fact, the volume was heavily concentrated in AIG... over 1 billion shares traded there. Insane.
Take a gander at CEG. That stock undressed traders and spanked them before buying them Fioravanti suits. In fact, word is that "Trader F" was down $70k in that stock alone before getting a "bailout" via a nice V bottom.
Despite the drama, it was a good day for the office minus one blow-up. Out of 22 traders, 14 finished gross positive, or 64%. 7 traders finished up over $5,000 gross and 12 finished over $1,000 gross. I was #14 of 22, but solidly in the green.
Anyway, here's the top 5:
1. Trader B, $24,217 on 882k shares traded.
2. Trader F, $17,379 on 234k shares traded.
3. Trader A, $13,057 on 120k shares traded.
4. Trader Z, $12,204 on 208k shares traded.
5. Trader E, $5,966 on 200k shares traded.
And the bottom:
1. Trader D, -$62,025 on 375k shares traded.
2. Trader N, -$6,946 on 23,000 shares traded.
3. Trader H, -$3,767 on 3,400 shares traded.
4. Trader P, -$1,841 on 157k shares traded.
5. Trader T, -$1,521 on 6,900 shares traded.
See you tomorrow. Oh, and if you enjoy reading this RO report each day, fucking link it or something... tell your friends. It's important for me to influence as many people as possible.
UPDATE: AIG may be placed under conservatorship. The shares are tanking after-hours. Here's a little Q&A on what a conservatorship is.
A Tough Hold Today For The Shorts
That was a beefy morning squeeze. Don't be surprised if/when we revisit the lows in the afternoon.
Monday, September 15, 2008
S&P Lowers AIG Credit Rating
S&P lowers their ratings on AIG and keeps them on watch negative. S&P lowered their long term counterparty rating to an A-2. Per CNBC.
Larry Fucking Kudlow just tried to spin it positively... I shit you not.
Hey Larry Kudlow... FUCK YOU!
This will increase the possibility of, and hasten the speed of an AIG bankruptcy.
They have a balance sheet of over a trillion dollars.
UPDATE: Maria just chirped in saying that over-regulation is exacerbating this problem. Note to Maria and all idiots everywhere.... had these firms been better regulated, perhaps they all wouldn't be over-leveraged. Listening to her and Larry love on each other because they agreed about over-regulation was just too much... CLICK!
The RO Report, "Monster MOCs" Edition
This is a very funny job. At 3:30, the market took traders down in my office. We were all short, naturally, into a legendary squeeze. Trader Z lost over $30 grand in that 5 minutes. Even me, your conservatively trading blogger, managed to lose a few thousand.
The bloodshed was real and widespread. People were freaked.
Who knew that only 30 minutes later, all of that money would be made back, with many thousands more tacked on? After a decade of trading, you see a lot... but I can tell you, that never have I seen stocks gap down like they did at today's close.
Check any REIT.
Anyway, I may write a post detailing the last 40 minutes of my day if I have time later this evening. I hope I do, if only so I can remember. Let me just say that at 3:30 I had lost over half my month and was feeling pretty sick about it. But by 4:15, I had tripled my month. Go figure.
Out of 22 traders today, 15 were positive, or 68%. I was #7 of 22. 12 traders finished over $1,000 gross, 10 over $5,000 gross. I had my best day of the year, by a long shot.
Meanwhile, if you're a little freaked out by the 500 point down move in the Dow, don't be. It could have been far, far worse. Indeed, the worst is still yet to come. However, ultimately, this is what needs to happen for the market to have solid footing yet again.
Here's the top 5:
1. Trader F, $95,989 on 228k shares traded.
2. Trader B, $70,782 on 1.2 million shares traded.
3. Trader D, $44,421 on 474k shares traded.
4. Trader E, $36,121 on 224k shares traded.
5. Trader P, $33,319 on 137k shares traded.
And the bottom:
1. Trader H, -$8,290 on 4,800 shares traded.
2. Trader Z, -$5,846 on 308k shares traded.
3. Trader T, -$1,894 on 9,000 shares traded.
4. Trader 1, -$1,405 on 7,200 shares traded.
5. Trader I, -$833 on 8,000 shares traded.
Art Cashin's Comments, September 15th 2008
In short, below is what Art had to say.
"This is unique. This is another fine mess they've gotten us into..."
Watch the bounce, see what kind of shelf life it has, see what kind of volume...
This rally, if it turns and it's real, should look like a cattle stampede in an old Western movie. They should be chasing price with volume."
Let me tell you in case you're not watching... this is no old Western movie. If it is, all the cowboys are gay.
Anyway, another impassioned post by Denninger to "Wake Up America!" Indeed.
"The Futures Are Off Their Session Lows"
I like Carl, but how about first saying that they're down 52 points, off a low of 55.
Your financial media at its finest.
Where Will The Dow Close Tomorrow?
(FINAL UPDATE AND BUMP: This contest is only open until 12pm Monday, Sept 15th.)
The winner receives a placement in my blog headline for a week. You know... up there where it says "Sex."
Also, if you're a fellow stock blogger, you'll get top linking placement (i.e. over "the Fly" for the next week as well, plus a daily pump). That should yield you at least 6 extra page views next week.
The closest guess wins.
NOTE: CNBC is doing some special reporting right now... they're currently talking about the $40 million that AIG is trying to raise... they're talking with Buffet. Leisman, Faber, Gasparino, Ratigan.... they're all there on a Sunday night.
NOTE II: They're showing film of employees taking their shit from Lehman Brothers' Headquarters.
NOTE III: The title of CNBC's Special Report is, "Is Your Money Safe?" Of course, if they're asking this question, you know the answer is, "no."
Steve Liesman, "You don't know that anyone tomorrow morning has a huge counter-party risk hole with Lehman... how can you make a single trade not knowing who has what exposure?" NOBODY KNOWS ANYTHING! NO ONE LIGHTENED THEIR EXPOSURE TO LEHMAN.
Memories....
Sunday, September 14, 2008
Where's JPM Morgan When You Need Him?
You know, back in 1907 when we had a little "panic" it was cool to have good ole JP around to whip lame idiots into shape and get the market up and running.
Who's that guy now? Paulson? Ken Lewis? John Thain?
Nope. Sorry... no savior for you.
I think the biggest part of this story that is missing from the "mainstream media" (MSM) is that this isn't just a "credit crisis" but also a "crisis of confidence" in the leadership.
And not just the leadership on Wall Street, but in the country. It's all linked.
BAC Buys MER for $29 A Share!
That's right.... MER, which closed at $17.05 on Friday, is being purchased by BAC for $29 a share, per the WSJ and CNBC.
Naturally, everyone right now is wondering why BAC didn't just let MER open, trade down to $9, and buy it then.
Clearly, this deal is an attempt to "restore confidence" in the system. But the fact of the matter is, you can't "restore confidence" purely by manipulation.
I wonder how this will all look 6 months from now. I can tell you, a year later, how BAC's 2 billion infusion into CFC when CFC was trading $22 a share looks... not so good.
Capitalism Is Back!
Lehman looks to end its 158 years on Wall Street in infamy. It looks very likely that Lehman will be filing for bankruptcy by midnight tonight.
The dollar is getting smoked. All US futures are indicating down close to 3% at the moment.
Most importantly, it looks like "the Fly" will once again be allowed to bless the "Internets" with vulgarity.
Friday, September 12, 2008
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.
Thursday, September 11, 2008
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?
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