Next Firday visit shaping up nicely...
NEW YORK (MarketWatch) -- Shares of Los Angeles-based Vineyard Bancshares (VNBC:
vineyard natl bancorp com
2:50pm 08/12/2008
<IMG class=pixelTracking height=1 width=1 border=0>VNBC1.13, -0.79, -41.1%) fell 45% Tuesday after the company said in a regulatory filing that customers have recently withdrawn "significant" deposits. "Negative publicity relating to our financial results and the financial results of other financial institutions, together with the seizure of IndyMac Bank by federal regulators in July 2008, has caused a significant amount of customer deposit withdrawals, thus affecting our liquidity and our ability to meet our obligations as they have come due," the company said in its 10q quarterly SEC filing Monday. Vineyard said that it is seeking a waiver from the FDIC to raise new funds via brokered deposits, and if it doesn't get it, it won't be able to raise money that way
NEW YORK (MarketWatch) -- Shares of Los Angeles-based Vineyard Bancshares (VNBC:
vineyard natl bancorp com
2:50pm 08/12/2008
<IMG class=pixelTracking height=1 width=1 border=0>VNBC1.13, -0.79, -41.1%) fell 45% Tuesday after the company said in a regulatory filing that customers have recently withdrawn "significant" deposits. "Negative publicity relating to our financial results and the financial results of other financial institutions, together with the seizure of IndyMac Bank by federal regulators in July 2008, has caused a significant amount of customer deposit withdrawals, thus affecting our liquidity and our ability to meet our obligations as they have come due," the company said in its 10q quarterly SEC filing Monday. Vineyard said that it is seeking a waiver from the FDIC to raise new funds via brokered deposits, and if it doesn't get it, it won't be able to raise money that way
dubya going out with a bang
WASHINGTON -- The government says the federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks.
The Treasury Department reported Tuesday that the deficit for July totaled $102.8 billion, nearly triple the $36.4 billion deficit recorded in July 2007.
The deficit beats the $97 billion gap that Wall Street economists had been expecting for July.
------------------------------------------------
amat and nvda missed some expectations and going up for hell of it tech just don't wanna go down
--------------------------------------
WM still acting like its toast CS not soon but at some point.....GL
WASHINGTON -- The government says the federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks.
The Treasury Department reported Tuesday that the deficit for July totaled $102.8 billion, nearly triple the $36.4 billion deficit recorded in July 2007.
The deficit beats the $97 billion gap that Wall Street economists had been expecting for July.
------------------------------------------------
amat and nvda missed some expectations and going up for hell of it tech just don't wanna go down
--------------------------------------
WM still acting like its toast CS not soon but at some point.....GL
also maybe there is some truth to the "naked short" talk from SEC regarding banks or they can use it as an excuse
the naked short ban ended today and banks got taken to the cleaners
either way these banks are lieing and have alot of shit off the books and aren't coming clean so screw um
the naked short ban ended today and banks got taken to the cleaners
either way these banks are lieing and have alot of shit off the books and aren't coming clean so screw um
BAC really gonna regret the CFC purchase in the end....
something in me guesses the fed had the big guys draw straws and BAC lost....LOL
maybe survive CS but sub 3 (new lows) before you 10 target most likely
if prime mortgages start becoming a big issue really don't see how WM can make it unless the FED pulls the FNM with it...
---------------------------------------
Countrywide option ARM home loans deteriorate more
Tue Aug 12, 2008 5:55pm EDT
By Jonathan Stempel
NEW YORK, Aug 12 (Reuters) - Countrywide Financial Corp said thousands of borrowers with $25.4 billion in option adjustable-rate mortgages (ARMs) owe almost as much as their homes are worth as home prices slide and more homeowners abandon their properties.
Another sign of borrower distress: One in eight is at least 90 days late on payments.
As of June 30, the typical borrower owed 95 percent of the value of his home, up from 76 percent when the loan was made, Countrywide, the big U.S. lender, said in a regulatory filing on Monday.
Countrywide's $25.4 billion in option ARMs represents about 28 percent of total mortgage loans it holds for investment. Option ARMs offer different payment options -- such as making smaller payments or even partially skipping payments -- but the principal owed on the mortgage may actually increase.
Seventy-two percent of borrowers were making less than full interest payments, and 12.4 percent were at least 90 days delinquent. The average FICO, a widely used credit score, dropped to 680 from an original 715, but topped the 620 that some analysts deem a cutoff for "subprime." The U.S. median is 723.
The data reflect how the nation's housing crisis has hurt borrowers with good credit -- and how Bank of America Corp's (BAC.N: Quote, Profile, Research, Stock Buzz) $2.5 billion acquisition of Countrywide last month could pose hazards for Kenneth Lewis, the chief executive of the largest U.S. retail bank.
ABANDONING HOMES
Lenders industrywide have said many borrowers who owe more than the value of their homes are abandoning the properties because they don't expect to recoup their losses.
"People still don't understand what a catastrophe this is," said Christopher Whalen, senior vice president and managing director at Institutional Risk Analytics of Torrance, California. "The guys who are really on the hook are Bank of America shareholders."
Bank of America stock closed down 6.7 percent at $31.13 on Tuesday on the New York Stock Exchange, and has fallen 24.6 percent this year. The KBW Bank Index .BKX shed 6.4 percent on Tuesday, and is down 25.6 percent in 2008.
Sinking home prices and relaxed underwriting standards have left many people with negative equity in their homes, leading to a surge in foreclosures.
In a July 21 conference call, Bank of America Chief Financial Officer Joe Price said the bank estimated write-downs and adjustments of $14.3 billion to Countrywide's loan book, including the option ARMs.
"Under purchase accounting rules, these adjustments go through the capital account and do not affect current or future earnings," spokesman Scott Silvestri said on Tuesday. "These write-downs are based on estimates of the inherent losses in the portfolios over the life of the loans."
Price said the forecast reflected a projected drop in home prices of 25 percent to 30 percent, with declines in California and Florida nearer to 40 percent.
BORROWERS FALL BEHIND
Bank of America is not the only big lender with option ARM headaches.
Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) said borrowers in its $122 billion "Pick-a-Pay" option ARM portfolio owed 85 percent of what their homes were worth on June 30, up from 71 percent. In California's Central Valley, the average was 109 percent, meaning that borrowers, on average, were underwater.
The average overall FICO score was down to 661 from 675. Wachovia took a second-quarter write-down of $3.3 billion on option ARMs.
Countrywide said borrowers holding 83 percent of its option ARMs received loans with little or no documentation of income. About 66 percent of the option ARMs went to California and Florida borrowers, Bank of America said.
Through May, U.S. single-family home prices fell 18.4 percent from a July 2006 peak, according to the S&P/Case-Shiller index of 20 metropolitan areas.
In that period, prices fell 27.5 percent in Los Angeles, 28.5 percent in San Diego, 25.2 percent in San Francisco, 30.6 percent in Miami and 25.6 percent in Tampa.
This year, Bank of America agreed to modify or work out $40 billion in troubled mortgage loans over two years in an effort to keep 265,000 customers in their homes.
The bank expects the acquisition of Countrywide to add to profit this year. But Institutional Risk Analytics' Whalen said losses on Countrywide might be higher than the bank expects.
something in me guesses the fed had the big guys draw straws and BAC lost....LOL
maybe survive CS but sub 3 (new lows) before you 10 target most likely
if prime mortgages start becoming a big issue really don't see how WM can make it unless the FED pulls the FNM with it...
---------------------------------------
Countrywide option ARM home loans deteriorate more
Tue Aug 12, 2008 5:55pm EDT
By Jonathan Stempel
NEW YORK, Aug 12 (Reuters) - Countrywide Financial Corp said thousands of borrowers with $25.4 billion in option adjustable-rate mortgages (ARMs) owe almost as much as their homes are worth as home prices slide and more homeowners abandon their properties.
Another sign of borrower distress: One in eight is at least 90 days late on payments.
As of June 30, the typical borrower owed 95 percent of the value of his home, up from 76 percent when the loan was made, Countrywide, the big U.S. lender, said in a regulatory filing on Monday.
Countrywide's $25.4 billion in option ARMs represents about 28 percent of total mortgage loans it holds for investment. Option ARMs offer different payment options -- such as making smaller payments or even partially skipping payments -- but the principal owed on the mortgage may actually increase.
Seventy-two percent of borrowers were making less than full interest payments, and 12.4 percent were at least 90 days delinquent. The average FICO, a widely used credit score, dropped to 680 from an original 715, but topped the 620 that some analysts deem a cutoff for "subprime." The U.S. median is 723.
The data reflect how the nation's housing crisis has hurt borrowers with good credit -- and how Bank of America Corp's (BAC.N: Quote, Profile, Research, Stock Buzz) $2.5 billion acquisition of Countrywide last month could pose hazards for Kenneth Lewis, the chief executive of the largest U.S. retail bank.
ABANDONING HOMES
Lenders industrywide have said many borrowers who owe more than the value of their homes are abandoning the properties because they don't expect to recoup their losses.
"People still don't understand what a catastrophe this is," said Christopher Whalen, senior vice president and managing director at Institutional Risk Analytics of Torrance, California. "The guys who are really on the hook are Bank of America shareholders."
Bank of America stock closed down 6.7 percent at $31.13 on Tuesday on the New York Stock Exchange, and has fallen 24.6 percent this year. The KBW Bank Index .BKX shed 6.4 percent on Tuesday, and is down 25.6 percent in 2008.
Sinking home prices and relaxed underwriting standards have left many people with negative equity in their homes, leading to a surge in foreclosures.
In a July 21 conference call, Bank of America Chief Financial Officer Joe Price said the bank estimated write-downs and adjustments of $14.3 billion to Countrywide's loan book, including the option ARMs.
"Under purchase accounting rules, these adjustments go through the capital account and do not affect current or future earnings," spokesman Scott Silvestri said on Tuesday. "These write-downs are based on estimates of the inherent losses in the portfolios over the life of the loans."
Price said the forecast reflected a projected drop in home prices of 25 percent to 30 percent, with declines in California and Florida nearer to 40 percent.
BORROWERS FALL BEHIND
Bank of America is not the only big lender with option ARM headaches.
Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) said borrowers in its $122 billion "Pick-a-Pay" option ARM portfolio owed 85 percent of what their homes were worth on June 30, up from 71 percent. In California's Central Valley, the average was 109 percent, meaning that borrowers, on average, were underwater.
The average overall FICO score was down to 661 from 675. Wachovia took a second-quarter write-down of $3.3 billion on option ARMs.
Countrywide said borrowers holding 83 percent of its option ARMs received loans with little or no documentation of income. About 66 percent of the option ARMs went to California and Florida borrowers, Bank of America said.
Through May, U.S. single-family home prices fell 18.4 percent from a July 2006 peak, according to the S&P/Case-Shiller index of 20 metropolitan areas.
In that period, prices fell 27.5 percent in Los Angeles, 28.5 percent in San Diego, 25.2 percent in San Francisco, 30.6 percent in Miami and 25.6 percent in Tampa.
This year, Bank of America agreed to modify or work out $40 billion in troubled mortgage loans over two years in an effort to keep 265,000 customers in their homes.
The bank expects the acquisition of Countrywide to add to profit this year. But Institutional Risk Analytics' Whalen said losses on Countrywide might be higher than the bank expects.
doesn't matter if it was free
if its gonna create negative earnings for them at a time they trying to avert losses
maybe long term its a good deal we'll have to see...but chances are near term their "The bank expects the acquisition of Countrywide to add to profit this year."
is likely full of hot air like so many other positive spins from banks we've seen not come to fruition along the journey
if its gonna create negative earnings for them at a time they trying to avert losses
maybe long term its a good deal we'll have to see...but chances are near term their "The bank expects the acquisition of Countrywide to add to profit this year."
is likely full of hot air like so many other positive spins from banks we've seen not come to fruition along the journey
Fannie, Freddie Common Stock Is Now A Call Option
John Hussman had some interesting comments on Fannie Mae's last earnings statement in Nervous Bunny.
With regard to Fannie Mae's report, the most interesting figure wasn't the reported $2.3 billion loss, but rather the much larger deterioration in the reported fair value of Fannie's balance sheet. We can observe what's going on by comparing Table 32 of Fannie Mae's Q2 2008 10Q filing with the same table in Fannie Mae's Q1 2008 10Q filing.
As of June 30, 2008, the fair value of Fannie Mae's common equity (that is, the book value available to common shareholders) was -$5.39 billion, compared with a March 31 fair value of -$2.07 billion. What's notable here is that this deterioration (-$3.32 billion) was even larger than the -$2.30 billion loss that Fannie reported to investors, which was itself about four times higher than the loss analysts had estimated. Note that balance sheet losses are excluded from earnings. Financial stocks tend to be reasonably valued when they trade at tangible book value, but simply put, Fannie Mae has no tangible book value. The common stock is now a call option.
Even if we include the fair value of preferred equity, we find that on a fair value basis, Fannie Mae is operating at a gross leverage multiple of 72.7 (total assets comprised primarily of mortgage loans, divided by shareholder equity). In other words, a slight 1.4% deterioration in the value of Fannie's book of assets will wipe out all of the remaining shareholder equity. This makes Long Term Capital Management look like a conservative strategy.
Another Take On Fannie and Freddie Options
Minyanville Professor Bennett Sedacca was also talking about Fannie Mae and Freddie Mac options in a A Tale of Two Markets, Part 1.
Freddie was supposed to raise $5.5 billion according to its earnings announcement back in June 2008. The problem is that it decided to wait for a better time in the market to raise this capital. However, in the meantime, its common stock price plummeted from $25 at the time of their announcement to a recent $5. While they only have 750 million shares outstanding, issuing 1.5 billion new shares really wasn’t an option as this would dilute the current shareholders beyond recognition.
Now Treasury Secretary Paulsen is cooking up a bailout of Fannie and Freddie, which I imagine will eventually end up as full-fledged nationalization as I have been talking about for some time. After many discussions with informed traders and bankers, the plan that I envision (as revolting as it may sound) goes like this:
The Treasury would issue a ‘super-senior’ preferred stock offering that gives them effective control of Fannie and Freddie. At the same time, though, the equity shareholders who have ridden the stocks down 95% will get little if anything. I would also imagine (and the market seems to be pricing this in now) that the dividends on the $50 billion or so of outstanding preferred shares (mostly owned by institutional investors) will be suspended. Keep in mind that these issues are non-cumulative, non-mandatory preferred shares.
This means that if/when they stop paying dividends, they don’t get to accrue future dividends, they just simply resume at some point in the future if this all works out. So what is the value of a preferred equity that doesn’t pay a dividend...? Very little. Effectively what you own is an option on a future uncertain stream of dividend income that may start again in the future.
What sickens me is that Hank Paulson & Co. are rather aware that Fannie and Freddie must be able to function normally to avoid global, financial systemic risk. And they will do anything to support them that they have to, including ‘throwing taxpayers under the bus.’
While I am fairly confident my view will play out, I openly wonder if this model won’t be used for other troubled institutions (like overleveraged financial concerns like Lehman (LEH), Merrill (MER), Citigroup (C) and AIG). They are important to the system as well. The Fed and Treasury know this, of course, and the while many important entities will probably be saved, there may be many others that are too small to care about and so poorly run that no one wants them -- you can throw National City (NCC), Zions (ZION), Regions Financial (RF), KeyCorp (KEY), into this category -- not to mention countless privately controlled community banks.
Financial Intervention
Paulson and the SEC acted to initiate a short squeeze in Fannie Mae, Freddie Mac and financial in general. Please see Panic By The Fed: Anatomy of a Short-Squeeze and Selective Enforcement of Regulation SHO for more details.
The squeeze "worked" until the juice dried up. Fannie rose from $6.68 to $18.48 in one week flat. In two weeks flat it was back at $8.40. Freddie Mac rose from $3.89 to $11.60 only to fall back to $5.43.
Now it appears that the common stock of both is likely to drift towards zero, especially if the situation plays out as describe above by professor Sedacca.
One of the purposes of of Paulson's and the SEC's manipulation was to force the price of Fannie and Freddie up so that new capital can be raised. The above charts show the manipulation failed spectacularly. Yes, some financials held their gains but some like Washington Mutual (WM) did not. Did the squeeze partially work then? The answer is no, not really.
As we have seen many times in the past, every time sentiment gets extremely bearish there is a rally. Sentiment against financials was nearly off the scale a few weeks ago. What Paulson and the SEC did was goose the initial bounce, no more, no less, and it appeared to "work" only because financials were poised to rally anyway. Careful scrutiny will show that financials, like the dollar, rallied because they were damn good and ready to rally.
For more on this idea, please see Currency Intervention And Other Conspiracies.
Sadly, many otherwise extremely bright people make the mistake of equating correlation with causation, time and time again. Sadder still is some of the acrimonious debate over this point.
But the fact of the matter is the dollar was poised to rally. Sentiment was as bearish as I have seen it in spite of the fact that fundamentals on the dollar (expected movements in interest rate differentials, declining oil, and improving balance of trade prospects) were rapidly changing for the better.
So along comes a minuscule (to the forex markets) intervention, and it was supposed to have caused this dollar rally. Sorry folks, it did not cause a damn thing. If the dollar was not poised to rally, intervention would have failed as it did 13 consecutive times before that. Still another chart shows that over $300 billion in currency intervention by Japan did no good.
The key point is that intervention does not work although at times it may appear to work. And this is what leads otherwise bright people to confuse correlation with causation. In the micro-sense, if one is trading very short timeframes, then I suppose from that perspective these manipulations could have meaning. In longer timeframes, attempts to manipulate the market fail every time.
China put curbs on shorting stocks. The Shanghai index fell 52% anyway. The TAF, the TSLF, and the PDCF were all supposed to prevent a collapse like we saw with Bear Stearns. Bear Stearns collapsed anyway.
And I cannot count the number of times in this downturn that people blamed the PPT for propping up homebuilders, or Ambac (ABK) or MBIA (MBI). If the PPT was acting, it sure failed miserably.
Ambac fell to as low as $1.04. So why did Ambac rally? Ambac rallied because pessimism was excessive, Ambac had enough cash to survive for at least a while, and for some, a $1-$3 share price was tantamount to being a rather cheap call option on the possibility it surviced longer. For others, shorts have to cover sometime anyway. Why not start at $1-$3?
So if you think manipulations caused, the rally in Amback (or any other financial) to stick then you are not thinking clearly.
Yes, the Fed, and the SEC, and the Treasury have been openly intervening. Yet, there is no evidence if one looks closely (avoiding the trap of equating correlation with causation), that any of this manipulation caused anything other than a small blip on a screen in a very short timeframe.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
John Hussman had some interesting comments on Fannie Mae's last earnings statement in Nervous Bunny.
With regard to Fannie Mae's report, the most interesting figure wasn't the reported $2.3 billion loss, but rather the much larger deterioration in the reported fair value of Fannie's balance sheet. We can observe what's going on by comparing Table 32 of Fannie Mae's Q2 2008 10Q filing with the same table in Fannie Mae's Q1 2008 10Q filing.
As of June 30, 2008, the fair value of Fannie Mae's common equity (that is, the book value available to common shareholders) was -$5.39 billion, compared with a March 31 fair value of -$2.07 billion. What's notable here is that this deterioration (-$3.32 billion) was even larger than the -$2.30 billion loss that Fannie reported to investors, which was itself about four times higher than the loss analysts had estimated. Note that balance sheet losses are excluded from earnings. Financial stocks tend to be reasonably valued when they trade at tangible book value, but simply put, Fannie Mae has no tangible book value. The common stock is now a call option.
Even if we include the fair value of preferred equity, we find that on a fair value basis, Fannie Mae is operating at a gross leverage multiple of 72.7 (total assets comprised primarily of mortgage loans, divided by shareholder equity). In other words, a slight 1.4% deterioration in the value of Fannie's book of assets will wipe out all of the remaining shareholder equity. This makes Long Term Capital Management look like a conservative strategy.
Another Take On Fannie and Freddie Options
Minyanville Professor Bennett Sedacca was also talking about Fannie Mae and Freddie Mac options in a A Tale of Two Markets, Part 1.
Freddie was supposed to raise $5.5 billion according to its earnings announcement back in June 2008. The problem is that it decided to wait for a better time in the market to raise this capital. However, in the meantime, its common stock price plummeted from $25 at the time of their announcement to a recent $5. While they only have 750 million shares outstanding, issuing 1.5 billion new shares really wasn’t an option as this would dilute the current shareholders beyond recognition.
Now Treasury Secretary Paulsen is cooking up a bailout of Fannie and Freddie, which I imagine will eventually end up as full-fledged nationalization as I have been talking about for some time. After many discussions with informed traders and bankers, the plan that I envision (as revolting as it may sound) goes like this:
The Treasury would issue a ‘super-senior’ preferred stock offering that gives them effective control of Fannie and Freddie. At the same time, though, the equity shareholders who have ridden the stocks down 95% will get little if anything. I would also imagine (and the market seems to be pricing this in now) that the dividends on the $50 billion or so of outstanding preferred shares (mostly owned by institutional investors) will be suspended. Keep in mind that these issues are non-cumulative, non-mandatory preferred shares.
This means that if/when they stop paying dividends, they don’t get to accrue future dividends, they just simply resume at some point in the future if this all works out. So what is the value of a preferred equity that doesn’t pay a dividend...? Very little. Effectively what you own is an option on a future uncertain stream of dividend income that may start again in the future.
What sickens me is that Hank Paulson & Co. are rather aware that Fannie and Freddie must be able to function normally to avoid global, financial systemic risk. And they will do anything to support them that they have to, including ‘throwing taxpayers under the bus.’
While I am fairly confident my view will play out, I openly wonder if this model won’t be used for other troubled institutions (like overleveraged financial concerns like Lehman (LEH), Merrill (MER), Citigroup (C) and AIG). They are important to the system as well. The Fed and Treasury know this, of course, and the while many important entities will probably be saved, there may be many others that are too small to care about and so poorly run that no one wants them -- you can throw National City (NCC), Zions (ZION), Regions Financial (RF), KeyCorp (KEY), into this category -- not to mention countless privately controlled community banks.
Financial Intervention
Paulson and the SEC acted to initiate a short squeeze in Fannie Mae, Freddie Mac and financial in general. Please see Panic By The Fed: Anatomy of a Short-Squeeze and Selective Enforcement of Regulation SHO for more details.
The squeeze "worked" until the juice dried up. Fannie rose from $6.68 to $18.48 in one week flat. In two weeks flat it was back at $8.40. Freddie Mac rose from $3.89 to $11.60 only to fall back to $5.43.
Now it appears that the common stock of both is likely to drift towards zero, especially if the situation plays out as describe above by professor Sedacca.
One of the purposes of of Paulson's and the SEC's manipulation was to force the price of Fannie and Freddie up so that new capital can be raised. The above charts show the manipulation failed spectacularly. Yes, some financials held their gains but some like Washington Mutual (WM) did not. Did the squeeze partially work then? The answer is no, not really.
As we have seen many times in the past, every time sentiment gets extremely bearish there is a rally. Sentiment against financials was nearly off the scale a few weeks ago. What Paulson and the SEC did was goose the initial bounce, no more, no less, and it appeared to "work" only because financials were poised to rally anyway. Careful scrutiny will show that financials, like the dollar, rallied because they were damn good and ready to rally.
For more on this idea, please see Currency Intervention And Other Conspiracies.
Sadly, many otherwise extremely bright people make the mistake of equating correlation with causation, time and time again. Sadder still is some of the acrimonious debate over this point.
But the fact of the matter is the dollar was poised to rally. Sentiment was as bearish as I have seen it in spite of the fact that fundamentals on the dollar (expected movements in interest rate differentials, declining oil, and improving balance of trade prospects) were rapidly changing for the better.
So along comes a minuscule (to the forex markets) intervention, and it was supposed to have caused this dollar rally. Sorry folks, it did not cause a damn thing. If the dollar was not poised to rally, intervention would have failed as it did 13 consecutive times before that. Still another chart shows that over $300 billion in currency intervention by Japan did no good.
The key point is that intervention does not work although at times it may appear to work. And this is what leads otherwise bright people to confuse correlation with causation. In the micro-sense, if one is trading very short timeframes, then I suppose from that perspective these manipulations could have meaning. In longer timeframes, attempts to manipulate the market fail every time.
China put curbs on shorting stocks. The Shanghai index fell 52% anyway. The TAF, the TSLF, and the PDCF were all supposed to prevent a collapse like we saw with Bear Stearns. Bear Stearns collapsed anyway.
And I cannot count the number of times in this downturn that people blamed the PPT for propping up homebuilders, or Ambac (ABK) or MBIA (MBI). If the PPT was acting, it sure failed miserably.
Ambac fell to as low as $1.04. So why did Ambac rally? Ambac rallied because pessimism was excessive, Ambac had enough cash to survive for at least a while, and for some, a $1-$3 share price was tantamount to being a rather cheap call option on the possibility it surviced longer. For others, shorts have to cover sometime anyway. Why not start at $1-$3?
So if you think manipulations caused, the rally in Amback (or any other financial) to stick then you are not thinking clearly.
Yes, the Fed, and the SEC, and the Treasury have been openly intervening. Yet, there is no evidence if one looks closely (avoiding the trap of equating correlation with causation), that any of this manipulation caused anything other than a small blip on a screen in a very short timeframe.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
short boat getting heavy on WM....light on the tech side....interpret it how you will
typically i see low short interest meaning there will be less bid....but also in this case heavy boat when already beaten to a pulp could meana WM screwed to no end
who knows
--------------------------------
Shorts sellers suffered from a lack of conviction on the direction of financial stocks in the period that ended July 31. They were clear that betting against tech was no longer a good idea.
While the short interest in Washington Mutual (WM) rose 25% to 341.1 million shares and Wachovia (WB) and Wells Fargo (WFC) were both up about 7%, the short position in Bank of America (BAC) dropped 9% to 125 million. Shares short in Merrill Lynch (MER) fell 14% to 54.9 million and dropped 8 million to 48.9 million in JP Morgan (JPM).
typically i see low short interest meaning there will be less bid....but also in this case heavy boat when already beaten to a pulp could meana WM screwed to no end
who knows
--------------------------------
Shorts sellers suffered from a lack of conviction on the direction of financial stocks in the period that ended July 31. They were clear that betting against tech was no longer a good idea.
While the short interest in Washington Mutual (WM) rose 25% to 341.1 million shares and Wachovia (WB) and Wells Fargo (WFC) were both up about 7%, the short position in Bank of America (BAC) dropped 9% to 125 million. Shares short in Merrill Lynch (MER) fell 14% to 54.9 million and dropped 8 million to 48.9 million in JP Morgan (JPM).
no clue joe
tech the one sector in my short portfolio that has underperformed
think its time will come eventually as the gloom and doom spreads into everything
obviously tech immune to issues such as banking and such (also they aren't as indebted as most corporations as well which is a plus if deflation coming) and they are very internationally exposed in most cases
if we have a worldwide recession on our hands their time will come eventually
------------------
CS with that many shorts involved WM will blast off in a big way eventually if the all clear sirens sound amongst the short community
tech the one sector in my short portfolio that has underperformed
think its time will come eventually as the gloom and doom spreads into everything
obviously tech immune to issues such as banking and such (also they aren't as indebted as most corporations as well which is a plus if deflation coming) and they are very internationally exposed in most cases
if we have a worldwide recession on our hands their time will come eventually
------------------
CS with that many shorts involved WM will blast off in a big way eventually if the all clear sirens sound amongst the short community
also qid is heavily weighted in aapl and like i said before i've been to dead malls and walk pass the apple store and amazed how busy it still is
top 10 holdings of nasdaq 100 and percent weight
Top 10 Index Companies1
Weight
Apple Inc.
13.17%
Microsoft Corp.
5.64%
Qualcomm Inc.
5.54%
Google Inc.-Cl A
4.89%
Research In Motion Ltd.
4.22%
Cisco Systems Inc.
3.14%
Gilead Sciences Inc.
3.08%
Oracle Corp.
2.89%
Intel Corp.
2.76%
Teva Pharmaceutical-SP ADR
1.85
top 10 holdings of nasdaq 100 and percent weight
Top 10 Index Companies1
Weight
Apple Inc.
13.17%
Microsoft Corp.
5.64%
Qualcomm Inc.
5.54%
Google Inc.-Cl A
4.89%
Research In Motion Ltd.
4.22%
Cisco Systems Inc.
3.14%
Gilead Sciences Inc.
3.08%
Oracle Corp.
2.89%
Intel Corp.
2.76%
Teva Pharmaceutical-SP ADR
1.85
gas price fall not helping consumer confidence much just staying flat near the lows....like i say either way tough environment for J6P regardless if gas is 3 or 4 a gallon as his credit line getting shut off
although some optimism survey had a spike from 37.4 to 42.8 with the gas price fall
amazed how slow gas prices are to catch up to oil....falling every day averaging about a cent drop every day....but still at 3.799 nationwide
was 3.66 here on sunday
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NEW YORK (Reuters) - American consumers' confidence fell in the latest week to just one point away from its all-time low, helped by a historical low in positive views on the buying climate, a survey showed on Tuesday.
The ABC News Consumer Comfort Index fell to -50 in the week to August 10 from -49 in the previous week. Its all-time low was -51, reached in May.
The index components were mixed, with positive views on personal finances down 1 percentage point to 47 percent and those on the buying climate down 1 percentage point to a record 18 percent. Views on the national economy were unchanged at 10 percent.
Earlier on Tuesday, Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP Economic Optimism Index climbed to 42.8 in August from July's 37.4, which was the lowest reading in the seven-year-old survey's history.
Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy. However, economists note that consumers do not always act in accordance with their statements to surveys.
The ABC News consumer confidence survey was based on a sample of about 1,000 interviews conducted in the four weeks ending August 10 and has a margin of error of plus or minus 3 percentage points.
(Reporting by Rodrigo Campos; Editing by Dan Grebler)
although some optimism survey had a spike from 37.4 to 42.8 with the gas price fall
amazed how slow gas prices are to catch up to oil....falling every day averaging about a cent drop every day....but still at 3.799 nationwide
was 3.66 here on sunday
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NEW YORK (Reuters) - American consumers' confidence fell in the latest week to just one point away from its all-time low, helped by a historical low in positive views on the buying climate, a survey showed on Tuesday.
The ABC News Consumer Comfort Index fell to -50 in the week to August 10 from -49 in the previous week. Its all-time low was -51, reached in May.
The index components were mixed, with positive views on personal finances down 1 percentage point to 47 percent and those on the buying climate down 1 percentage point to a record 18 percent. Views on the national economy were unchanged at 10 percent.
Earlier on Tuesday, Investor's Business Daily and TechnoMetrica Market Intelligence said their IBD/TIPP Economic Optimism Index climbed to 42.8 in August from July's 37.4, which was the lowest reading in the seven-year-old survey's history.
Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy. However, economists note that consumers do not always act in accordance with their statements to surveys.
The ABC News consumer confidence survey was based on a sample of about 1,000 interviews conducted in the four weeks ending August 10 and has a margin of error of plus or minus 3 percentage points.
(Reporting by Rodrigo Campos; Editing by Dan Grebler)
-.1% retail sales....+.4% ex auto
futures red
as for CPI tomorrow probably another pretty hefty number as in july prices were still going up/peaking
plus i'm sure there is gonna be some cat and mouse games between the producers and the consumers.....as the producers raise prices near the end of the commodity inflation trying to suck as much outta J6P that they can as the deflation starts to set in
futures red
as for CPI tomorrow probably another pretty hefty number as in july prices were still going up/peaking
plus i'm sure there is gonna be some cat and mouse games between the producers and the consumers.....as the producers raise prices near the end of the commodity inflation trying to suck as much outta J6P that they can as the deflation starts to set in
and gasoline peaking helped retail sales as well
Much of what little strength there was in July came from a big jump in sales at gasoline stations, which were up 0.8 percent. That increase reflected surging prices rather than increased demand, however.
Gasoline pump prices hit an all-time high during the month at $4.11 per gallon. Without the big rise in gasoline station sales, retail sales would have fallen by 0.2 percent in July.
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y service industry getting hit hard and people who depend on tips for a living
For July, the retail sales report showed that sales at department stores and other general merchandise stores rose by 0.3 percent, just half the 0.6 percent June increase. Sales at restaurants and bars, which have been hit hard by the current slowdown, dipped by 0.2 percent in July after a modest 0.3 percent June gain.
Much of what little strength there was in July came from a big jump in sales at gasoline stations, which were up 0.8 percent. That increase reflected surging prices rather than increased demand, however.
Gasoline pump prices hit an all-time high during the month at $4.11 per gallon. Without the big rise in gasoline station sales, retail sales would have fallen by 0.2 percent in July.
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y service industry getting hit hard and people who depend on tips for a living
For July, the retail sales report showed that sales at department stores and other general merchandise stores rose by 0.3 percent, just half the 0.6 percent June increase. Sales at restaurants and bars, which have been hit hard by the current slowdown, dipped by 0.2 percent in July after a modest 0.3 percent June gain.
man my hqs totally getting mauled near term due to rising costs of labor and input prices and lag in passing it along to the consumer...part of the overall chinese malaise i suppose
hopefully nobody jumped in up near the top....got buying opportunity now IMO
its gonna be a wild ride and a 10+ year hold for me just brutal killing though.....yesterday near end news leaked and getting routed like a big dog today as well
hopefully nobody jumped in up near the top....got buying opportunity now IMO
its gonna be a wild ride and a 10+ year hold for me just brutal killing though.....yesterday near end news leaked and getting routed like a big dog today as well
