Capitulation

Quote from optioncoach:

The markets are down for a reason. Cannot understand how people are looking at these drops like momentary dips. Cannot believe people are not taking it seriously that this year, Bear Stearns, Freddie Mac, Fannie Mae, Lehman and now Merrill were pretty much on the brink of bankruptcy.

I mean I am not calling a Depression here but this is @#$%ing serious and the markets are going to be in trouble for quite some time. Wall Street is losing some big names who are getting bought out and sliced to nothing. Wall Street as a whole will emerge stronger from this purge but right now this is pretty serious.
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Shoulda sold those calls coach :D
I don't think too many are treating these as momentary drops. There is a survivorship bias going on. Those who are left here are either good or lucky. Either way, we can slowly pick through the rubble. With the series of banks each providing $7B liquidity in tomorrow, thats a good thing, and far better than a gov fix. The market will fix itself. And you are right the street will eventually emerge stronger. BAC will be printing money in a couple years.
 
Not even close. Markets are still being manipulated by the powers that be trying to avoid an all out crash. Six months out are the hard times. Double digit unemployment, housing market in total collapse, DOW maybe around 9700...at best.
 
Quote from CONR:

You're right. Like every other industry, it's consolidation. But why not take advantage?
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Consolidation and recovery does not take place in a few months. Do not forget, all of these losing positions have to be unwound eventually and I can bet that we have not seen the last of the losses filtering into the economy. Lot of people in the financial sector will be losing jobs a few months before the holidays. It has to get even worse than this before it gets better. The panic is truly just beginning as it usually comes in waves and though I agree this might be the biggest wave, I still think it aint over.
 
Quote from BeatingtheSP500:

Shoulda sold those calls coach :D
I don't think too many are treating these as momentary drops. There is a survivorship bias going on. Those who are left here are either good or lucky. Either way, we can slowly pick through the rubble. With the series of banks each providing $7B in tomorrow, thats a good thing, and far better than a gov fix. The market will fix itself. And you are right the street will eventually emerge stronger. BAC will be printing money in a couple years.
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I think the mistake some may make is jumping in the banking sector now on this news. The value play is to jump in on those stocks getting taken down WITH the financial sector but which truly do not have the same loss or risk exposures. Once this settles down those stocks will certainly emerge stronger.

I have not researched this yet so for discussion purposes off the top of my head I would say companies like ICE, LUK or even GS might fare well when the dust settles but I am just grabbing some examples. Wachovia and Bank of New York Mellon as well might have a good 6-9 months going forward (assuming Wachovia is not another mummy in waiting lol). (P.S. I dont own these nor do I intent do but a good discussion point is which stocks were hurt unnecessarily by simply being taken down for no good reason).

Anyway, be careful out there....
 
Quote from optioncoach:

I think the mistake some may make is jumping in the banking sector now on this news. The value play is to jump in on those stocks getting taken down WITH the financial sector but which truly do not have the same loss or risk exposures. Once this settles down those stocks will certainly emerge stronger.

I have not researched this yet so for discussion purposes off the top of my head I would say companies like ICE, LUK or even GS might fare well when the dust settles but I am just grabbing some examples. Wachovia and Bank of New York Mellon as well might have a good 6-9 months going forward (assuming Wachovia is not another mummy in waiting lol). (P.S. I dont own these nor do I intent do but a good discussion point is which stocks were hurt unnecessarily by simply being taken down for no good reason).

Anyway, be careful out there....
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This should flush out the weak hands and pave the road for some credit spreads! ;)
 
Quote from CaptainObvious:

Not even close. Markets are still being manipulated by the powers that be trying to avoid an all out crash. Six months out are the hard times. Double digit unemployment, housing market in total collapse, DOW maybe around 9700...at best.
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Thanks for the observation CaptainObvious. I'm with you.

Unbelievable, just watching Mark Mobius of Templeton Asset Management on Bloomberg just now this evening, if I've got this right, that he thinks this may be near the bottom.

As of Friday afternoon luckily I'm mostly cashed out.

It's a toss up at this point. Go ride the motorcycle for a few months until the DOW cracks further or look for some scraps tomorrow or midweek?
 
09-14-08 09:57 PM

Just a heads up to look at your exposure. IB are obviously concerned that risks are higher again - fasten your seatbelts.

IMPORTANT NOTICE regarding Intraday Margin

In light of the market volatility and the continuing turmoil in
financial services stocks, IB will eliminate intraday margin
reductions. Commencing at 10:30 P.M. EST today, contracts which
utilize value-at-risk margin models such as SPAN, Eurex, or TIMS in
the commodity sub-account. Traders may consult the account window in
the Trader Work Station to see what the overnight margin will be. We
expect that intraday margin reductions will remain suspended for
subsequent trading sessions and we will make further announcements as
market conditions develop.

Regardless of the likelihood of large, rapid changes in market
conditions, we recommend that traders examine their portfolios to
consider their exposure under extreme-move scenarios.

Interactive Brokers Risk Management


And there you have it.
 
Quote from CONR:

09-14-08 09:57 PM

Just a heads up to look at your exposure. IB are obviously concerned that risks are higher again - fasten your seatbelts.

IMPORTANT NOTICE regarding Intraday Margin

In light of the market volatility and the continuing turmoil in
financial services stocks, IB will eliminate intraday margin
reductions. Commencing at 10:30 P.M. EST today, contracts which
utilize value-at-risk margin models such as SPAN, Eurex, or TIMS in
the commodity sub-account. Traders may consult the account window in
the Trader Work Station to see what the overnight margin will be. We
expect that intraday margin reductions will remain suspended for
subsequent trading sessions and we will make further announcements as
market conditions develop.

Regardless of the likelihood of large, rapid changes in market
conditions, we recommend that traders examine their portfolios to
consider their exposure under extreme-move scenarios.

Interactive Brokers Risk Management


And there you have it.
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For credit purposes, the above was posted by Kiwi
 
Quote from Bigpipn:

This should flush out the weak hands and pave the road for some credit spreads! ;)
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LOL... for indexes, OTM calendars or bearish directional plays for the next wave of selling! Anyone selling put spreads or naked puts for OCT is gonna start feeling some heat pretty soon, I hope it only singes and no one takes any significant losses.
 
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