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gregf
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Joined: 30 Aug 2004
Posts: 209
Location: Cary, NC
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 Posted: Wed Oct 15, 2008 9:10 pm Post subject: |
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| we must be headed to the abyss. I actually think Cramer makes some sense. That hasn't happened in years,... |
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rffrydr
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Joined: 30 Oct 2005
Posts: 7530
Location: Sunny California
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| Posted: Wed Oct 15, 2008 4:58 pm Post subject: |
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More wise words from the Madman:
| Quote: | The Feds Are Learning
By Jim Cramer
RealMoney.com Columnist
10/15/2008 9:25 AM EDT
To me, the whole plan to put money in certain banks has much less to do with them lending money and much more to do with breaking the cycle of credit-default-swap-to-bankruptcy to that felled Lehman Brothers.
What makes me think that is the rather odd handout to State Street (STT - commentary - Cramer's Take) and Bank of New York (BK - commentary - Cramer's Take). Nobody's commenting on the $10 billion either of these received. After all, they weren't "in trouble" so to speak, and they did not "need" the money to go lend, because they aren't even important lenders.
So what are they doing in the plan?
I will tell you what they are doing. They are being "saved" from the Kesselschlacht, the battle of encirclement and annihilation that has been so successfully waged by short-sellers who, of course, have every right to do it and have been blessed repeatedly by the pro-short-selling SEC, which had one small breakdown in issuing that short ban, no doubt caused by John McCain's decision to fire Chris Cox. (There is no such decision afoot with Barack Obama, as his adviser, David Axelrod, told me Monday, so we can expect the bears' friend Cox right back loving the bears in January.) After all, Cox is just a hysterically anti-regulation pol from Southern California who is anxious to let the free market destroy itself in the name of anti-intervention.
Anyway, the feds recognize that the biggest blunder they have made was in letting Lehman go, because the tab for that one is heading into the trillions.
State Street and Bank of New York have lots of Lehman qualities. They are custodians that could easily be raided through credit default swap buys and are so juicy to take down that you had to believe, judging by the stock action ahead of this plan, they may have been the next targets, They have enough amorphous assets on their balance sheets that I think plunking down $25 million on credit default swaps then shorting the stock, buying the puts, buying more credit default swaps to make things more panicky, calling the media, and then saying your money's not safe with these guys could easily have put them on the Morgan Stanley (MS - commentary - Cramer's Take) ropes pretty quickly, as the ratings agencies couldn't resist downgrading these two. It's a nefarious plan that would be so easy given the still-unregulated nature of the swaps -- as if the SEC couldn't change that tomorrow, but it is anti-regulation so that's no easy task.
So who cares? Custodians are the weak link in the system. They break down and we get a kind of Lehman Brothers account problem where nobody knows where the money is, more bucks get broken, and the world of big money just collapses. It was so easy to do this that I can't understand for the life of me what the gang of shorts was doing not operating on these two weak spots in the system.
I think the big money folks on Wall Street -- "the gangsters," as I am waiting for Sarah Palin to call them -- went to Washington and told them that after the near-destruction of Morgan Stanley, hastened by the ridiculous reviewing plan when the FDIC reviewed Wachovia's (WB - commentary - Cramer's Take) destruction in about 18 hours, these two banks were next.
You can only imagine the chaos the Kesselschlacht would have caused! Now, the beauty of the plan is that the initial tinder, the credit default swaps, seem like a sucker's bet as the bonds that you would be committing financial arson on after you bought the fire insurance on won't burn up.
I don't know what I would do if I were short all of these institutions that amounted to bank barrel-fishing. I guess I would cover them.
That's what happened yesterday. The cluelessness with which the government handled Lehman has not been unrecognized. They got these two custodians right. That will bring back money from the hedge fund mattress and make prime brokerage and storage of capital in more than T-bills happen again.
I say bravo if you are long, but darn it all if you were short, as these represented too juicy a target not to take down. |
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rffrydr
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Joined: 30 Oct 2005
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Location: Sunny California
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| Posted: Wed Oct 15, 2008 1:31 pm Post subject: |
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Wells showing 30% deposit increase in last six months; record new checking accts. in CA--the tail is feeding the head.
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rffrydr
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rffrydr
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Joined: 30 Oct 2005
Posts: 7530
Location: Sunny California
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| Posted: Thu Oct 02, 2008 8:18 am Post subject: |
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UBS turns a profit:
http://www.reuters.com/article/etfNews/idUSL231866720081002
| Quote: | | "We want to be an accepted industry leader again. And in Switzerland, our home country, we want to be a respected national champion," Kurer said. "We will work hard and with humility on these ambitious objectives." |
| Quote: | | Landsbanki analyst Dirk Becker said UBS probably only managed a profit in the third quarter due to the revaluation of its own debt, noting that the bank's credit default swap spread soared to 280 basis points in the quarter from 130 bps |
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rffrydr
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| Posted: Wed Oct 01, 2008 7:36 am Post subject: |
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Lloyd's/HBOS deal trading at a 38% discount. Normally deal fails. No arbitrage cause no shorting....but, is that what it means. No. Bianary outcome is being priced "efficently." Can you book that? No. Time will tell the book. Time, the "market's" achilles heel. Real Estate--timeless.
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rffrydr
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rffrydr
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| Posted: Mon Sep 29, 2008 10:39 am Post subject: |
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Bloomberg On The Economy|Cassidy of RBC
Of the "Texas Mesure" and bank valuation c. 1990. This interview back in april (And the Cramer C. pop contest) was key in keeping my interest in the Financials light--if only it kept me short. A good time applying for those buying now.
http://www.trumix.com/podshows/2786788
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rffrydr
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| Posted: Tue Sep 09, 2008 1:02 pm Post subject: |
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Citigroup right up there fat number one in WSJ's "selling on strength" yesterday.
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rffrydr
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rffrydr
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7642
Location: Houston, Texas & Los Angeles, California
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| Posted: Tue Aug 12, 2008 2:18 am Post subject: |
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Mitsubishi UFJ Financial Group Inc to acquire the remaining 35% of UnionBanCal Corp that it doesn't already own:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aD2zDFJk3QPY&refer=home
| Quote: | | Mitsubishi UFJ will pay $63 per share, 8.3 percent more than yesterday's closing price, for the 35 percent of the San Francisco-based bank's stock it doesn't already own, it said in a statement today. |
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rffrydr
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Location: Sunny California
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| Posted: Thu Jul 24, 2008 11:02 pm Post subject: |
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Morgan Stanley likes banks for a trade recommending the overcapitalized versions in part because of it's inflation/commodity outlook:
| Quote: | | ... This week our equity strategists closed their overweights on the oil/miners (both in Europe and US): our analysis suggests European banks (SX7P) have had a (0.85) negative correlation to the oil price in last 12 months - and UK banks a (0.65) correlation with the miners - and commodities softening will help the sector considerably. |
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rffrydr
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rffrydr
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| Posted: Tue Jul 22, 2008 11:49 am Post subject: |
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Buying into the Wachovia news bodes well for this right now. Banks trading at 3X worse 1990 default rates....bullish or bearish?
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