"SKF is starting to look like a printing press that even Bernanke would envy."
Eh well. I sold it at 130 (after a second ride up from 101). I was hoping for another buy opportunity near 100. My first ride with SKF rode me from 82 to 130.
BTW in the past when we've had days where both stocks and commodities going down, that's been a time of reckoning that's been met with rapid intervention from everybody's favorite Fed Chairman/Chief Wall Street Bailout Engineer.
Weather Helm, don't beat yourself up too badly. I got in SKF about where you did and sold have my shares @ 145 or so. Thinking of selling the rest today - just not sure what to go into next. I still think there's a real possibility for a "financials are way oversold" CNBC snapback.
On April 24, 2008, we received a letter from the Director of the Office of Supervision of the Finance Board (OS Director) denying our request to redeem capital stock totaling $8 million in connection with seven membership withdrawals or other terminations.
How about $4 bln in short term notes being priced at their stop out rates being the cause? If FRE and FNM start running in to short term financing issues ala Bear Stearns, what are the likely scenarios?
The participation of FHLBs in other mortgage purchase programs may have
implications on the MPF Program. Specifically, the competition for mortgage
loans between these programs may impact the amount of mortgage loans acquired
and the purchase price for such loans. In this regard, we face risk that the
pool of eligible mortgage loans available for purchase will be reduced, as well
as profit margin risk.
Even I'm looking at BoA and thinking, what if the Fed has backstopped the CW purchase to the point they don't even have to cut their dividend... 12% yield is looking pretty nice...
Someone put out something on fas 140 - that's what has killed them today. Everything else was last week's news. It's amazing how few people are aware that fas 140 is going to shut down the industry, and fasb and the sec could care less what industry participants have to say about it.
Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, tumbled on speculation banks were unloading more mortgage bonds.
Just spoke to our General Council. He says that if IMB actually failed, a statement would be released and trading would be stopped. Otherwise the Board would be susceptible to numerous shareholder lawsuite for failing to disclose material information from investors.
Things might be in the works, but if the decision was final then we'd already know about it....
Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, tumbled on speculation banks were unloading more mortgage bonds.
Bunch of big talkers, but who held on to their short positions? Anyone? Glad I didn't go long (use stops!)
My sense was that with all the bears talking about an upcoming bounce and covering their positions and going long there was less of a chance of it actually happening.
Still, I worry when the count here starts cranking up too much...
July 7, 2008- The top story in Bloomberg this morning, analysts at Deutsche Bank, Lehman Brothers, and UBS predict the S&P 500 index will have the best performance since 1982 during this year's second half.
The banks unloading mortgage bonds was actually circulating last week - bbg's slow to the party, cnbc wasn't invited.
FAS 140 is the one that effectively eliminates the entire securitization market, forces junior bond holders to consolidate entire deals on their books, etc. A quick google search on FAS 140 will return you plenty of reading material.
Hey, I'm happy to be only partially right. I don't expect to be 100% right. At least I had the sense to buy in at 101. I doubt we'll see that level for a while.
fed'd clown-in-chief speaks tomorrow before the bell. unless he comes up with some fantastic bailout scheme, stocks are set to crash. fear is in the air. "ze investas" are ready to capitulate.
Warren is on oxygen and no one is talking, all I see is lots of wet spots in a lot of pants (skirts too), they said a bubble in bonds and future value conundrum, i.e, there is no future value and they said watch the 30 yr bonds and mortgage rates will go to 7%
Gavshire Hathaway, I think the FDIC takes action on Fridays - not Mondays. More likley IMB will close down some of their retail or wholesale lending - that is the rumor that is flying around.
I sold out of SKF on general principle. My question was, at what point can it hit a theoretical maximum amount - short of the death of the financial industry.
Remember that night over a weekend when we reached about 1000 visitors?
We thought that could be IT. It will be IT when Seb and O-Joe wave their white flags. As long as suckers like them continue to exist, we're not done going down.
Jason, I feel your "pain". I sold a ton of SKF at 140, then got back into a small position at 155, and sold today at 173. But like you said, that pretty much guarantees another big rise. Im happy with the table scraps though. I keep my SRS intact and ride the roller coaster, so other short stuff can get sold now and again.
CR -- you are likely correct about the Friday FDIC action. I'm just saying that if the rumor of action over the weekend was true, the Board has a fiduciary responsibility to immediately inform shareholders and halt trading.
Yields on agency mortgage securities relative to U.S. Treasuries rose to the highest since March 13 amid new concerns that banks may need to sell off the debt.
The difference between yields on the Bloomberg index for Fannie Mae's current-coupon, 30-year fixed-rate mortgage bonds and 10-year government notes widened 7 basis points, to 204 basis points. The spread has climbed 18 basis points since June 18.
Investors are speculating that Bank of America Corp., the second-largest U.S. bank, may need to sell assets after buying Countrywide Financial Corp., Kenneth Hackel, the managing director of fixed-income strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut, said in note to clients. Other financial firms may also be shunning the debt as they look to bolster capital ratios, Hackel said in a telephone interview.
Pure mortgage exposure at 50X leverage (Assets/Equity). YIKES!
Fannie and Freddie may not be allowed to fail due to the "implied GSE guarentee, but they can dilute their existing shareholders by greater than 2/3rds.
There is a market rumor tonight that IndyMac Bancorp Inc. (IMB) will make an announcement on Monday. The rumor is that regulators have stepped in and are in the process of doing the paperwork for a shutdown of this institution. Only a rumor at this point.
Another possibility is a partial bailout, with the Gov covering part of an Agency bond default, but not all of it.
I guess my simple way of looking at it is either the government absorbs the losses or somebody else does. Seems like there'd be the temptation on their part to let the FCBs or whomever holds that stuff take the hit and then may be use treasury debt to buy future mortgage debt if nobody's willing to buy them.
You can either get out of excessive obligations through inflation or default or some combination of the two.
There's really no other option, so I expect to see some creativity, especially given the recent criticism about inflation.
Where is charlie Gasparino, we need some fucking shill to interview McCain's allegedly preserved vampire wife.... BAC Div cut, oil to $175 by end of week
Where is charlie Gasparino, we need some fucking shill to interview McCain's allegedly preserved vampire wife.... BAC Div cut, oil to $175 by end of week
Lehman Brothers Holdings Inc. analysts said in a report today that an accounting change may force Fannie Mae to add $46 billion of capital and Freddie Mac to add $29 billion. Speculation that the companies may need to make further writedowns also weighed on the stock, said John Tierney, a credit strategist at Deutsche Bank AG in New York.
Zack - heh, yeah, I'm waiting on that SMN to pay off too! I'm growing a tad skeptical - that is a purely speculative bet - since the predicted growth of inventories isn't happening.
Bringing off-balance-sheets entities onto the balance sheets by FASB 140 doesn't kill securitization. It just makes it more difficult to lie about your exposure to it.
Of course, any financial institution that was propped up by insufficient capital might be in trouble. But I'm sure that Lehman, Citi, and Merrill are all fine in that department.
You might want to update that %fall link dynamically. It keeps getting worse.
Oh, oh. Trouble.
skf moved from -2 to +10. pretty volatile, could reverse in seconds.
We might need to discuss the "implied guarantee" issue, everyone get out their checkbooks
Somethings up.....triple the volume already.
My latest article on seeking alpha is up. A bearish take on a REIT:
Crystal River’s Q2 Write-Downs Could Bankrupt the Company -- Seeking Alpha
I'm on my way to withdraw my over-limit deposits at Indymac Bank.
D'oh! Shnatz Nabbit Taggit Dab!
(Not like people weren't warned, with oh-shits from Schumer and CRL asking "what went wrong at Indymac?")
"something really bad about both GSE's had been leaked!"
Gubmint insolvency?
Without taxes, our treasury can't back up the dollar very well. And with a dying economy, we don't have increasing tax collections.
Do you see a problem here?
The best line I heard today was, "Fannie and Freddie are already gov't owned, the shareholders just don't know it yet."
Interesting Times writes:
New Thread.
Thanks. USD is slowly coming towards reality again, the traders woke up and said, waittaminit ECB actually did raise rates.
Look at gold see-saw
SKF is starting to look like a printing press that even Bernanke would envy.
I wonder when's too much of a good thing.
Tripleplay writes:
Somethings up.....triple the volume already.
Is someone else from the FED speaking?
Ambac up 14% tho
"SKF is starting to look like a printing press that even Bernanke would envy."
Eh well. I sold it at 130 (after a second ride up from 101). I was hoping for another buy opportunity near 100. My first ride with SKF rode me from 82 to 130.
I guess I sold early. On to the next opportunity!
Things can't be that bad: "223 Visitors Online"
Things are bad when visitor count gets 350+.
Seriously, who needs summer blockbusters when you have a market like this ?
Federal Funds Rate Predictions: Current ::
Federal Reserve Bank of Cleveland
:: fed funds,federal funds rate,prediction
So much for that line of BS.
BTW in the past when we've had days where both stocks and commodities going down, that's been a time of reckoning that's been met with rapid intervention from everybody's favorite Fed Chairman/Chief Wall Street Bailout Engineer.
Weather Helm, don't beat yourself up too badly. I got in SKF about where you did and sold have my shares @ 145 or so. Thinking of selling the rest today - just not sure what to go into next. I still think there's a real possibility for a "financials are way oversold" CNBC snapback.
-Jaso
Heard Saudi Aramco is selling crude a few bucks cheaper to some of their clients..anyone can verify this?
Thanks.
Things are bad when visitor count gets 350+.
I have a "scripted stop" set up with my broker that automatically covers all my short positions when the visitor count here hits 500.
Rumor is that demand for Freddie's preferred was "tepid" based on a DJ headline - and all hell broke loose!
Best to all.
I had to double check to believe these were declines today! ouch!
Hate to repost but this is good!!
Federal Home Loan Bank of Chicago · 10-Q · For 3/31/08
SEC Info - Federal Home Loan Bank of Chicago - 10-Q - For 3/31/08
On April 24, 2008, we received a letter from the Director of the Office of Supervision of the Finance Board (OS Director) denying our request to redeem capital stock totaling $8 million in connection with seven membership withdrawals or other terminations.
The bounce at 12:30 in my S&P500 chart is funny, like Wile E. hitting a ledge or something.
Calculated Risk writes:
Rumor is that demand for Freddie's preferred was "tepid" based on a DJ headline - and all hell broke loose!
Thank you CR.
Jason, I ain't worried about it. I make all my money by selling too early.
IMHO it's a good idea to sell stuff like SKF into a nice panic. There seems to be a panic building today. FWIW, I am still in SRS and SCC.
Hmm..Citi at new low, below 16 now.
How about $4 bln in short term notes being priced at their stop out rates being the cause? If FRE and FNM start running in to short term financing issues ala Bear Stearns, what are the likely scenarios?
When do i start a prayer to collar my 401k?
Agency debt may be implicitly protected by the government, but I don't think that extends to the common stock of the agencies.
Short FNM, long FNM bonds!
watch the Dow dive!!
I dunno, getting there. Count is at 295.
Federal Home Loan Bank of Chicago
FEDERAL HOME LOAN BANK OF CHICAGO - Annual Report (10-K) Item 1. Business.
The participation of FHLBs in other mortgage purchase programs may have
implications on the MPF Program. Specifically, the competition for mortgage
loans between these programs may impact the amount of mortgage loans acquired
and the purchase price for such loans. In this regard, we face risk that the
pool of eligible mortgage loans available for purchase will be reduced, as well
as profit margin risk.
Even I'm looking at BoA and thinking, what if the Fed has backstopped the CW purchase to the point they don't even have to cut their dividend... 12% yield is looking pretty nice...
-Jaso
id sell skf now and buy back in at 165 in about 30 minutes
Weather Helm writes:
I dunno, getting there. Count is at 295.
301 now.
Today could be the day?
Rumor says PPT is on a donut break
Rumor says PPT is on a donut break
LOL....
I think they've just realized its rather hopeless.... too many holes in the dam...
Someone put out something on fas 140 - that's what has killed them today. Everything else was last week's news. It's amazing how few people are aware that fas 140 is going to shut down the industry, and fasb and the sec could care less what industry participants have to say about it.
They are working on the dollar, one hole at a time,
Agency debt may be implicitly protected by the government, but I don't think that extends to the common stock of the agencies.
It seems like we keep getting government officials denying that claim of implicit protection so I don't know how much faith I'd put in it.
In grade school they always taught us to stick with the ginnies if you really wanted to be safe.
Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, tumbled on speculation banks were unloading more mortgage bonds.
Charlatan,
This is the one that removes all securitized products from the level 3 assets etc right?
Do you have a link?
TIA!
Bunch of big talkers, but who held on to their short positions? Anyone? Glad I didn't go long (use stops!)
PPT was just summoned from their Hamptons estates...rally to resume shortly
Canadian watching with popcorn writes:
They are working on the dollar, one hole at a time
It;s not working
visitors just went up about 40 in the last 60 seconds!
but who held on to their short positions?
http://img383.imageshack.us/img383/8453/picture4yo4.png
Citi is looking like a great by at $15.
Any takers ?
PPT will be rolling in soon just like a thunderstorm.
Interesting Times writes:
Citi is looking like a great by at $15.
Any takers ?
You incorrigible optimist.
Stocks down, commodities down, treasuries shooting up.
When have we seen this before?
Whoever's manning the bailout button today must have fallen asleep.
Just spoke to our General Council. He says that if IMB actually failed, a statement would be released and trading would be stopped. Otherwise the Board would be susceptible to numerous shareholder lawsuite for failing to disclose material information from investors.
Things might be in the works, but if the decision was final then we'd already know about it....
Bloomberg:
Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, tumbled on speculation banks were unloading more mortgage bonds.
Best to all.
Bonds, 10 year Treasuries, gasp, gads, I just called fucking Warren, and he dropped the fucking phone, this is horrific, just no fucking words...
Bunch of big talkers, but who held on to their short positions? Anyone? Glad I didn't go long (use stops!)
My sense was that with all the bears talking about an upcoming bounce and covering their positions and going long there was less of a chance of it actually happening.
Still, I worry when the count here starts cranking up too much...
407 visitors? Seriously? Nothing to see here folks. Move along. Get back to work.
but who held on to their short positions?
Just unloaded the second half of my SKF @172.78, pretty much guaranteeing a rise into the 200s soon.
-Jaso
Ooooops. Count is 407.
"Hey honey, the bunker's stocked up with food and ammo, right?"
420, actually.
Weather Helm writes:
Ooooops. Count is 407.
420 now.
Powered by Minyanville: S&P 1650?
July 7, 2008- The top story in Bloomberg this morning, analysts at Deutsche Bank, Lehman Brothers, and UBS predict the S&P 500 index will have the best performance since 1982 during this year's second half.
Why, why did I sell SKF?
420... Any of you newbies wanna by some citi shares - for you good deal!
529 users now ?
anything crazy goin on ?>
pretty much guaranteeing a rise into the 200s soon.
thanks for taking one for the team!
The banks unloading mortgage bonds was actually circulating last week - bbg's slow to the party, cnbc wasn't invited.
FAS 140 is the one that effectively eliminates the entire securitization market, forces junior bond holders to consolidate entire deals on their books, etc. A quick google search on FAS 140 will return you plenty of reading material.
"I make all my money by selling too early. :)"
Hard to go broke taking a profit.
"but who held on to their short positions?"
Hey, I'm happy to be only partially right. I don't expect to be 100% right. At least I had the sense to buy in at 101. I doubt we'll see that level for a while.
fed'd clown-in-chief speaks tomorrow before the bell. unless he comes up with some fantastic bailout scheme, stocks are set to crash. fear is in the air. "ze investas" are ready to capitulate.
Warren is on oxygen and no one is talking, all I see is lots of wet spots in a lot of pants (skirts too), they said a bubble in bonds and future value conundrum, i.e, there is no future value and they said watch the 30 yr bonds and mortgage rates will go to 7%
Gavshire Hathaway, I think the FDIC takes action on Fridays - not Mondays. More likley IMB will close down some of their retail or wholesale lending - that is the rumor that is flying around.
Best Wishes.
will probably see some shortcovering before the close today too.
I sold out of SKF on general principle. My question was, at what point can it hit a theoretical maximum amount - short of the death of the financial industry.
I'm still working RWM/TWM though.
Hard to go broke taking a profit.
Kenny Rogers
for yah
Remember that night over a weekend when we reached about 1000 visitors?
We thought that could be IT. It will be IT when Seb and O-Joe wave their white flags. As long as suckers like them continue to exist, we're not done going down.
Jason, I feel your "pain". I sold a ton of SKF at 140, then got back into a small position at 155, and sold today at 173. But like you said, that pretty much guarantees another big rise. Im happy with the table scraps though. I keep my SRS intact and ride the roller coaster, so other short stuff can get sold now and again.
DIdn't that Arab Prince ALwaheed buy into C at about $1.50 in 1991?
AC:
Maybe we need to add the Ginnie/Fannie bond spread to the TED spread?
Another possibility is a partial bailout, with the Gov covering part of an Agency bond default, but not all of it.
CR -- you are likely correct about the Friday FDIC action. I'm just saying that if the rumor of action over the weekend was true, the Board has a fiduciary responsibility to immediately inform shareholders and halt trading.
CUTTING EDGE:
Agency Mortgage-Bond Yield Spreads Rise on Potential Bank Sales
Agency Mortgage-Bond Yield Spreads Rise on Potential Bank Sales - Bloomberg.com
Yields on agency mortgage securities relative to U.S. Treasuries rose to the highest since March 13 amid new concerns that banks may need to sell off the debt.
The difference between yields on the Bloomberg index for Fannie Mae's current-coupon, 30-year fixed-rate mortgage bonds and 10-year government notes widened 7 basis points, to 204 basis points. The spread has climbed 18 basis points since June 18.
Investors are speculating that Bank of America Corp., the second-largest U.S. bank, may need to sell assets after buying Countrywide Financial Corp., Kenneth Hackel, the managing director of fixed-income strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut, said in note to clients. Other financial firms may also be shunning the debt as they look to bolster capital ratios, Hackel said in a telephone interview.
FXE just turned green. That's just plain rude.
A need for $75B of new capital is new news...
Pure mortgage exposure at 50X leverage (Assets/Equity). YIKES!
Fannie and Freddie may not be allowed to fail due to the "implied GSE guarentee, but they can dilute their existing shareholders by greater than 2/3rds.
What is your target price to sell SRS ?
I am shooting for $135, is that too low?
GSE's have been the only buyers of mortages this year...it looks like that plan has backfired!
"fiduciary duty." Didn't that used to be Eliot Spitzer's favorite saying?
BAC will have to cut div!!!
Rick Wagoner spotted looking rather pale on the court house steps in lower manhattan, talking to judge drain....
anonymous paparazzi source.
jk
UPDATE
There is a market rumor tonight that IndyMac Bancorp Inc. (IMB) will make an announcement on Monday. The rumor is that regulators have stepped in and are in the process of doing the paperwork for a shutdown of this institution. Only a rumor at this point.
Q: why has America gone to hell in hand basket ?
A: Bush admin, the Fed, the MSM does Newspeak ad nauseum
some of you people must be Russian roulette players
otherwise you'd already have your do-re-mi parked in metals
Another possibility is a partial bailout, with the Gov covering part of an Agency bond default, but not all of it.
I guess my simple way of looking at it is either the government absorbs the losses or somebody else does. Seems like there'd be the temptation on their part to let the FCBs or whomever holds that stuff take the hit and then may be use treasury debt to buy future mortgage debt if nobody's willing to buy them.
You can either get out of excessive obligations through inflation or default or some combination of the two.
There's really no other option, so I expect to see some creativity, especially given the recent criticism about inflation.
Where is charlie Gasparino, we need some fucking shill to interview McCain's allegedly preserved vampire wife.... BAC Div cut, oil to $175 by end of week
Well I guess today takes care of the March 17 SPX lows.
anon writes:
otherwise you'd already have your do-re-mi parked in metals
Last i checked metals weren't doing too well either.
CR is a censor and steal material!
Where is charlie Gasparino, we need some fucking shill to interview McCain's allegedly preserved vampire wife.... BAC Div cut, oil to $175 by end of week
These clowns are zeros unfortunately when the American taxpayers get the bill it will be a rather large number followed by several zeros.
Freddie Mac, Fannie Mae Plunge on Capital Concerns
Freddie Mac, Fannie Mae Plunge on Capital Concerns (Update4) - Bloomberg.com
Lehman Brothers Holdings Inc. analysts said in a report today that an accounting change may force Fannie Mae to add $46 billion of capital and Freddie Mac to add $29 billion. Speculation that the companies may need to make further writedowns also weighed on the stock, said John Tierney, a credit strategist at Deutsche Bank AG in New York.
Bubblevision has its " screaming buys for gen Y' list on. Sound is off.
It's a good thing we have a bit of a cushion b4 the weak earnings start tomorrow......Oh wait.....
I think Ken Lewis might be regretting the CFC purchase..
Canadian watching with popcorn writes:
It's a good thing we have a bit of a cushion b4 the weak earnings start tomorrow......Oh wait.....
Yeah, rub it in. Sure.
SDS started life at $74 apparently.
It's back in the 70s again, first time since Aug 06
BB writes:
anon writes:
otherwise you'd already have your do-re-mi parked in metals
Last i checked metals weren't doing too well either.
I said 'parked'.
you guys can swap trading cards all day, in the end it's paper with scroll work exchanged for paper with scroll work
All, I stated a new thread with the Bloomberg story on capital concerns.
Best to all.
I think I will open an annex at Broad and Wall, next to the buttonwood tree.
449 visitors. Its officially big news.
ac, you better check to see if your script is ready, willing and able.
To sleazebags and cracker crumbs:
Don't waste our time.
Try NaziLuv.poo
"Bunch of big talkers, but who held on to their short positions? Anyone?"
Nope. Sold my DXD, FXP last week.
Still have on SMN.
Lowball limit order trying to get some GSK on the long side, noting that island bottom.
you guys can swap trading cards all day, in the end it's paper with scroll work exchanged for paper with scroll work
Actually I'm moving into an ownership of a currency position of a country that has 1.7 trillion barrels of bitumen laying about.
At $100 per barrel economic profit, do the math.
correction: there not barrels of bitumen, there bucket's. Big ,Big difference
Zack - heh, yeah, I'm waiting on that SMN to pay off too! I'm growing a tad skeptical - that is a purely speculative bet - since the predicted growth of inventories isn't happening.
EEV hasn't been what I'd hoped either.
We'll see.
Lefty's Liquors, is that going to be next to the peep show or the porn theater?
OK, so one of the big FRE holders are dumping their shares. That's the rumor.
Troy, How are you buying currencies? I heard some negative things about Everbank on this board.
Bringing off-balance-sheets entities onto the balance sheets by FASB 140 doesn't kill securitization. It just makes it more difficult to lie about your exposure to it.
Of course, any financial institution that was propped up by insufficient capital might be in trouble. But I'm sure that Lehman, Citi, and Merrill are all fine in that department.
I just received a bill from DHBO, US Dept of Homeland Bail-Out. My tax rate will have to increase 10% to share the burden of securitizing our economy.