Capital One: Negative on Economic Outlook
Submitted by
CalculatedRisk on Thu, 07/17/2008 - 2:00pm (80 comments)
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Boo, number one
Oh boy, thats gonna hurt GM and Ford and Honda and Toyota. I think its gonna leave a mark.
Maybe CapOne will be humbled enough to advertise to adults instead of the pre-teen-oriented ads they run on teevee. Actually, I can't think of a credit card issuer that I'd prefer to see run out of that biz altogether. They are not just sleezzzzzzy (lots of z's) but a sleezy predator on working families.
Cramer says now is the time to acculate good stocks for the long run.
Thank You, Thank You, Thank You
does anyone know about the leading indicators at ECRI?
How are they doing?
A BIG BOOOOOOYAAAAAAAA!
What are they saying about securitizing their receivables ?
First!
Is it unethical to take a COF signature loan to short COF stock?
Or just good business?
Of course, when they get on SHO, it will be much more expensive to short them.
I have begun to think the SHO enforcement is designed to prop up an otherwise unsustainable market.
Nahhhh, couldn't be that.
So we get inflation and contracting credit. Sounds like the 70's show to me! Remember folks, this could just as easily be 1974! Not 1980- invest accordingly!
Someday this war's gonna end...
And the faster we can shrink our business, the better off we will be!
Growth is out. Value is out.
Shrinkage is in.
"Cramer says now is the time to acculate good stocks for the long run."
LMFAO
He said stay away from financials which are now up BIG.
He said buy O&G which are now down big..
This guy is an idiot!
"We expect auto loan originations for the full year of 2008 to be at least 40% lower than 2007 originations"
That is going to really hurt.
I have a CD at Capitol One...WELL under FDIC limits. I have been checking out CD's at EVERBANK that invest in Foreign Currency (Aust$, Canada$ and EURO) This seems better, but it is only for 3 sor 6 months. If you take it out it is paid in US $$ right? Anyone familiar with EVERBANK?
Add'em to the no naked shorting list would be my recommendation. Any one that has a bad Q your on the list. Repeal Sarb-ox can't be far off.
girlbear, your risk with everbank is currency based.
When you take it out you get paid in USD, but you owe tax on the currency profits (or take losses) that go on schedule d instead of b.
Warning: Currency based investing is hard. Folks have made immense amounts of money, and lost immense amounts of money.
If the dollar rallies for some strange reason when you want your money, you can lose more than the interest you made, and lose on the principle too.
Read the prospectus, it is really important in understanding that risk.
Everbank is very upfront about it.
Someday this war's gonna end...
"Cramer says now is the time to acculate good stocks for the long run."
In China maybe, don't think their market is as manipulated and if it is at least they let you know straight up.
girlbear: Yes, you get it back in USD.
Dryfly:
'shortgasming'
This is from the other thread, but this term made me crack up. If it's your creation, I love it!
And I was shortgasming earlier in the week, but after shedding risk yesterday I'm only down to some way OTM SPY puts and a round lot of SRS.
Which, given the earnings news today, my dumping puts sounds like a case of premature evacuation...
According to the way this market is moving, I can't wait until WaMu fails. Their stock should realy go up then.
The market does not make any sence, The PTB run gold down and WaMu stock up when they are investigated..... What is going on????
I wonder, do high gas prices do us a favor? I haven't seen so much activity in the energy innovation field in 10 years as i ve seen in the last 6 month....
I know, how ridiculous it might sound, however if the prices were low, would we just postpone the issue to be addressed in the future?
BUY!!!! BUY WITH BOTH HANDS!!!
BUY EVERYTHING!
BUY ANYTHING!!!!
BUY!
I'm telling YOU to buy!
I'm telling GRANDMA to buy!
I'm telling your sister to buy!
I'm telling YOUR DOG to buy!
Because...
I need somebody to sell to....
Cap1 gave me a $250-limit card in 1992. "Thanks guys", I thought. In 2006 they raised it to $5000, but I ignored it. Late last year they closed the account for lack of activity.
"I wonder, do high gas prices do us a favor? I haven't seen so much activity in the energy innovation field in 10 years as i ve seen in the last 6 month...."
Apparently they do. Caught Amory Lovins from the Rocky Mountain Institute on the tube yesterday, and he was nearly ecstatic. He said the fields of alternative/renewable energy and efficient design (of factories, buildings, etc.) are going mad,with alt/renewable capacity coming online faster and faster.
shortgasming
in my defense I got the proceeds of two years of max 401K contributions that had been earning 2% in MMs dumped into an IRA late May, plus a lot of free time, right at the start of a REALLY great market downstroke!
Talk about honey for a bear . . .
two days ago i questioned (not being all that knowledgeable about trading equities) whether or not amending the sho regulation regarding short sales would have a positive or desired effect,
i asked if there wasn't away around the rule using options trading.
here's the answer....or one answer from marketwatch
"The limits (on naked short sales) are part of an emergency order that will expire in a month, but Cox may want to reconsider this ban on short selling, even if he is only targeting "naked" shorts, the kind in which the short sellers don't borrow their shares. See full story.
Mainly, there are too many ways for investors to skirt rules against short selling. The easiest one, of course, is to go to the options market. Jon Najarian, co-founder of OptionMonster, said puts will become more expensive but will still be available. "It ratchets up the ante," he said."
http://www.marketwatch.com/news/story/can-wall-street-survive-summer/story.aspx?guid=%7BE55F5FF7%2DFD71%2D4699%2D863E%2DB3034F6CD41D%7D
the article includes additional pertinent informatio
Bob Dobbs:
Prepare to receive the coming Saviour Bubble!
If she blows, we're going to need a new Wright model.
Schwab's LizAnn Sonders was on Bloomberg today, and when asked if the economy is in a recession replied, 'Yes, I think so. No one believes the economy is doing well.'
She's absolutely wrong. I thought of a person. His handle is S...
Sorry, I can't bring myself to do it.
Shrub?
Bad Dawg Bobby writes:
According to the way this market is moving, I can't wait until WaMu fails. Their stock should realy go up then.
you may not have long to wait
in their infinite wisdom the plunge protection team has decided to end naked short sales for 19 institution's,,,IBs and Broker Dealers...the protected list,
But WaMu aint on that list!!!
so guess its open season on the mavericks in the herd that have been cut out.
intentionally or not the PPT is saying the wolves may have their way.
"Bob Dobbs writes:
"I wonder, do high gas prices do us a favor? I haven't seen so much activity in the energy innovation field in 10 years as i ve seen in the last 6 month...."
Apparently they do. Caught Amory Lovins from the Rocky Mountain Institute on the tube yesterday, and he was nearly ecstatic. He said the fields of alternative/renewable energy and efficient design (of factories, buildings, etc.) are going mad,with alt/renewable capacity coming online faster and faster."
After the second oil spike (1979 or so), the feeling was that oil prices would never, ever fall. If you read what people were saying then now, pretty much sounds like today.
But the problem with micro-analysis that is focussed on technology and internal market trends and not economics, is that supply and demand trends change in response to price signals. The oil bulls got blindsided after the second oil spike, and history could easily repeat. I hope that it will be the result of alternatives, and not just new supply coming on line.
Returning back to the thread, this sort of news is going to help blow a big hole in auto prices. Auto prices are still pretty big relative to the annual cost of gasoline (for most drivers, I would guess - too lazy to check the numbers out). There are definite risks to the call for higher inflation.
Two good rally days = The Windup and The Pitch.
Merrill and Capital One = Knocking It Out Of the Ballpark.
"Shrub?"
Currently Smoking Cannabis, are you currently smoking cannabis?
And Google disappointing = Priceless.
Mock Turtle:
There was a nutjob on early morning cnbc the other day talking about this as well -- "Dr." Doug Dachille. If you can find the video online it's well worth the watch.
FPCM | First Principles Capital Management, LLC : Executive Bios
DH -
From the July 11th release:
The ECRI Weekly Leading Index (WLI) increased to 132.5 for the week ending July 4 from an unrevised 131.2. The smoothed, annualized growth rate rose to -6.1% from an unrevised -6.3%.
In other words, it's still basically sucking.
"He said the fields of alternative/renewable energy and efficient design (of factories, buildings, etc.) are going mad"
It would be good for MTV instead of cribs, simple crap, Etc - make a show: "Daily life of innovator, or something."
It is about time we make innovation sexy.
Yes. Yes I am. And I still think I could beat losing $9.75 Billion in a quarter.
Herb still at $350/ounce. Hasn't moved in years. Where's your price stability?
Currently Smoking:
YouTube
- Monty Python & The Holy Grail Knights who Say NI!
Uncle Billy
thanks for vid link re short sales
Sacramento prices (per DQ) back to 2002:
Median prices for new and existing homes combined slipped to $220,000 in the county. That level was last seen in August 2002.
Ni!
Stockton back to early 2002 (per DQ):
"San Joaquin County for the fifth consecutive month while the median sales price slipped to the lowest level since spring 2002"
Holy shit! I dont think the IB write downs reflect this level of preice depreciatio
I know, how ridiculous it might sound, however if the prices were low, would we just postpone the issue to be addressed in the future?
Wasn't that what the Reagan revolution was about?
AllenM - Thanks,
what if I just keep rolling it over and not cash out in US$?
Why even have a list? If they want to curb naked shorting, why not have it apply to all financials? Or at least all of a certain size and/or vulnerability? Weird.
"But the problem with micro-analysis that is focussed on technology and internal market trends and not economics, is that supply and demand trends change in response to price signals."
Also those several years in the late 70's gave huge push into better energy efficiency and related technologies.
Anyone else think that the Fed's raid on WB's office today is an implicit "wink" that they won't be saving them in the future either ?
If they fail the OTS better say that the Fed caused a bank-run and Wachovia failure since $15B deposits were withdrawn over a 10 day period...
tranches of lunacy writes:
Why even have a list? If they want to curb naked shorting, why not have it apply to all financials?
T of L, hey i'm gonna cross reference the list of 17 + 2 against the fed list of primary broker dealers.
my guess is that's who they intended to protect, PBDs... and them alone.. plus our 5 trillion dollar mortgage friends F and F
"Sacramento prices (per DQ) back to 2002"
Median income in Sacramento is around $50,000. Houses need to drop down to $150,000 before we see a bottom.
"It would be good for MTV instead of cribs, simple crap, Etc - make a show: "Daily life of innovator, or something."
It is about time we make innovation sexy."
I'm hearing that more and more lately. Back 100 years ago, being an inventor was the thing. For a while there Tesla was almost a rock star, not to mention Edison and the rest.
There were new technologies to play with, new materials, new power sources and anybody with some skill and ingenuity might just come up with the next big thing. Like two bike mechanics from Dayton.
I'd like to think we could come around to that again.
"Anyone else think that the Fed's raid on WB's office today is an implicit "wink" "
- don't think so, WB has stronger positions then their peers. However their Wealth Management unit, just sacks. It is not as bad as UBS which had Advisors saying to their Customers, "what are you a cry baby, common it is not like you have background in finance, etc."
I had to hold my tongue last night when my FIL told me it doesn't matter what you buy in this market because when this turns around it is all going up. Oh, and the banks are just crying wolf to get government money for their losses. I hope he doesn't lose his retirement.
here;s the fed reserves list of primary dealers, from their site
BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Bear, Stearns & Co., Inc.*
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Deutsche Bank Securities Inc.
Dresdner Kleinwort Securities LLC
Goldman, Sachs & Co.
Greenwich Capital Markets, Inc.
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.*
Lehman Brothers Inc.
Merrill Lynch Government Securities Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
UBS Securities LLC.
here's the list of 19 as reported by reuters news agengy that are protected from naked puts
The agency identified the following securities affected by its order:
Can someone please post a list of banks protected from naked shorts?
Thanks mock, for doing the research I should've done! Interesting.
"I'd like to think we could come around to that again."
- we could, back into my QC days I had an interview with Alfred Mann Foundation; they were developing miniature video camera with microprocessor implants for certain blindness diseases, unfortunately those people are not given their well deserved publicity.
so
canter fitzgerald
dresdner kleinwort
greenwich capital
are primary broker dealers not protected by the revised regulation SHO order
hmmmm
might suggest that these are the guilt edged, stalwart primary dealers who have no need for protection???
kinda the opposite of what i was saying above about WaMu.
i gotta lot to lear
tranches of lunacy
no problem...you are welcome
i come here to learn and when i can contribute a little here or there i appreciate the chance to pay my dues.
thanks, MLM
w: I experienced almost the same thing.
2 months ago, Pop tells me he went "all in" after dumping his metals.
"They say buy low and sell high. And I've never heard so much bad news...so we must be pretty low."
I come from good stock.
mock...
they might also be private
I come from good stock.
My dad is still trying to break even on the silver he bought in 1979. I should check in with him; maybe he's finally there.
Speed
your request about banks protected from the naked short rule...
i gotta tel ya i'm not real clear on whats a bank and whats an investment firm anymore
used to be REAL banks had the lender of last resort clause attached...now thru the taf pdcf tslf windows...it seems like everybody wants to get in to the act.
by the first def
bank of america
deutsche
Royal
and JP Morgan
i think (guess)
the rest are brokerage firms or IBs (investment Banks...which before recently did not have the right to fed lender of last resort nor did they labor under the higher regulatory standards.
but hey dont take my word for this...i gotta give it some reserch
"here;s the fed reserves list of primary dealers"
I might assume that they have all, or most, visited the window to park paper, get Ts and invest in ops offshore...
"Anonymous writes:
"here;s the fed reserves list of primary dealers"
I might assume that they have all, or most, visited the window to park paper, get Ts and invest in ops offshore..."
Primary dealers are the dealers who have to bid in Treasury auctions, and deal directly with the Fed in the repo market.
Their job is to ensure the smooth functioning of government bond auctions, so that things in the National Interest can get financed at terms better than the private sector.
They help out the government, the government helps them out in return. None of this is surprising.
With both Merrill and Capital One, you are seeing the Incredible Shrinking American Company. Both of these companies will probably become very lean and competitive again, but at one-half to one-third of their formerly bloated size.
It's not just large-caps like these two. Smaller companies also are having to downsize in a hurry, and they are more vulnerable of just becoming so small that they disappear.
This is what I was writing about earlier today in regard to telecom equip. being a leading indicator of capX equip. spending. If you are MER and you are cutting bodies left and right, do you give Joe Schmoe employee the hottest, newest high-tech upgrade gismo?
Of course not. You just hand him the leftover PC from the guy who got axed in the cube down the hall. Companies that are downsizing have no need for upgrades, because they already have more tech crap than they can ever use.
At some point, the stock market will wake up and realize how many companies of all sizes are downsizing. Then, it will soon dawn on them how much less a smaller co. is worth than bigger co.
I know...it's a mental stretch. But it will happen.
girlbear writes:
I have a CD at Capitol One...WELL under FDIC limits. I have been checking out CD's at EVERBANK that invest in Foreign Currency (Aust$, Canada$ and EURO) This seems better, but it is only for 3 sor 6 months. If you take it out it is paid in US $$ right? Anyone familiar with EVERBANK?
girlbear | 07.17.08 - 6:32 pm | #
I was going to use Everbank some months ago but had to use the money elsewhere. Life intruded and teeth protruded.
It was middlin' in terms of bank quality per Bankrate, for what's it worth, and is FDIC approved.
The money comes back to you in dollars and you do take a risk in terms of currency.
I've been fiddlin' with the idea again. The whole dollar thing has me twiddlin' and here I sit, jest a piddlin'.
Poo-ooo-ar little ol' me.
Anyway, I'm going to look at it again once I get this Bluegrass thang out o' my head.
girlbear -- I considered Everbank, but they seemed a bit flaky to me.
Instead, I bought an ETF that invests in non-US sovereign debt, symbol BWX. I'm up about 6% plus dividends since July 07, so it's been a nice investment.
Sometimes the BWX country allocation seems a bit wacky to me (for a while they were way overweight in Mexico, IMO).
Don't know if the good performance will continue, would love to hear from others.
Doggy Dog World writes:
Dryfly:
'shortgasming'
This is from the other thread, but this term made me crack up. If it's your creation, I love it!
I don't know if I made it up or heard it somewhere & can't remember where - my point wasn't to knock shorts - it was that a few days ago shorts were winning big (fine) but sounding like Cramer BOOOYA's!! (not fine)...
Whenever that happens - long or short - you just gotta feel a 'teachable moment' isn't too far off. And it wasn't. Thank goodness for our short friends it wasn't too nasty a lesson.
This is one dangerous market right now. Be careful out there.
I'm hearing that more and more lately. Back 100 years ago, being an inventor was the thing. For a while there Tesla was almost a rock star, not to mention Edison and the rest.
Pimp My Oscillator.
Word up. And now for the pants worn really, really low around the navel.
Peace out.
Fricka fricka word.
in their infinite wisdom the plunge protection team has decided to end naked short sales for 19 institution's,,,IBs and Broker Dealers...the protected list,
But WaMu aint on that list!!!
so guess its open season on the mavericks in the herd that have been cut out.
intentionally or not the PPT is saying the wolves may have their way.
Maybe I'm just being a worrier, but...
Suppose I short a stock that is not on the magic list of 19 NOW, but gets added to the list afterwards. Would I then be caught in the mother of all squeezes?
Maybe the powers that be have stumbled on a threat whose effect will extend far beyond the 19.
Billy Hill
that play had not occurred to me
yeah the threat is out there
although the PPT did give a seven day warning
AND they claim the action is for 7 to 30 days...but whatever,,,
the PPT giveth and the PPT taketh away
some of you geniuses should check out what those bastards are doing to the metals market, spec. silver, and the silver etf
Its only naked shorts. Why do people keep repeating they are getting rid of straight shorts?
Is there more than 5-10% action in Naked Shorting? For all we know these big financial institutions were naked shorting each other. Sorry I know this is a family blog.
Expecting downgrades galore for COF in the AM. MER already got a hit to their debt ratings by Fitch. THey are the only ones paying attention, because they are paid by debt consumers.
C in the AM. Will it be a trifecta?
I think what they meant was: We ain't lending on no more SUVs or UAV (Urban Assault Vehicles).
everbank is HQd in Fla. and has a significant exposure to the miami cre market. do your own due diligence. comments on this blog are going downhill in a hurry.
Congenital Warts: Saw that was headquartered in FLA but missed the part about CRE.
Thanks.
I'll just go and stuff my money behind the toilet.
couldn't have happened to a more deserving company. i hate those bastards.