Global Macro Trading Journal

Quote from Daal:

The rumors are talking about Paulson level 'large', not just a big fund
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Consider though that there are dozens of value mutual funds that (combined) are probably as big as Paulson, Tepper etc. and are loaded with the same exact crap (AIG, BAC, C, etc.)

The difference being that the mututal funds are 98% net long vs. Paulson et al's 60%. Plus mutual funds have daily redemptions, I believe Paulson's funds have a 6 month redemption schedule.

Berkowitz's Fairholme is down 30% from his 02/11 highs and probably forced to liquidate for out-flows all the way down. If you look at his top 10 holdings you see the infamous Acapulco cliff dive more often than not.
 
Quote from Debaser82:

Europe is creeping into the green...Maybe today will be that of a huge snap back.
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agree, but at 1135, ES are already 58 points off the overnight low of 1077. So that's over 5% of snapback already.
 
Here's a lower-risk rebound play - buy platinum (PL), sell gold (GC), 2:1 contract ratio (equal dollar ratio).

Platinum is now at a slight discount to gold, and the latter has had a 2 day parabolic spike up after a big rally, driven by this rising fear & panic. Even if the S&P falls another 10%, platinum is unlikely to fall to 10% relative to gold. Whereas in a rebound, it could easily go back to the 15-20% premium it was earlier this year.
 
Quote from Ghost of Cutten:

Here's a lower-risk rebound play - buy platinum (PL), sell gold (GC), 2:1 contract ratio (equal dollar ratio).

Platinum is now at a slight discount to gold, and the latter has had a 2 day parabolic spike up after a big rally, driven by this rising fear & panic. Even if the S&P falls another 10%, platinum is unlikely to fall to 10% relative to gold. Whereas in a rebound, it could easily go back to the 15-20% premium it was earlier this year.
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Thanks for this GoC. I like it
 
Quote from Ghost of Cutten:

Here's a lower-risk rebound play - buy platinum (PL), sell gold (GC), 2:1 contract ratio (equal dollar ratio).

Platinum is now at a slight discount to gold, and the latter has had a 2 day parabolic spike up after a big rally, driven by this rising fear & panic. Even if the S&P falls another 10%, platinum is unlikely to fall to 10% relative to gold. Whereas in a rebound, it could easily go back to the 15-20% premium it was earlier this year.
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good trading idea - thanks GoC
 
Haven't heard much rah-rah'ing from the Germans over how horribly bankrupt the UK is recently, wonder why (from FT Alphaville)

UK-vs-Germany-CDS.jpg
 
How about BAC? Trading at half tangible book value, that is a valuation closer to the depths of the 2009 lows, yet there is no question of the book value being under a cloud like there was back then. On the chart, there's been panic liquidation at huge daily volume too. Even a rebound to the level of 3 days ago would be a 40% return on capital.

Obviously selling could continue, so you need to be able to hold on and maybe average down again if it pukes even lower. But I don't think BAC is going bust, and it's trading like it has a serious risk of doing so.

Any thoughts?
 
Quote from Ghost of Cutten:

How about BAC? Trading at half tangible book value, that is a valuation closer to the depths of the 2009 lows, yet there is no question of the book value being under a cloud like there was back then. On the chart, there's been panic liquidation at huge daily volume too. Even a rebound to the level of 3 days ago would be a 40% return on capital.

Obviously selling could continue, so you need to be able to hold on and maybe average down again if it pukes even lower. But I don't think BAC is going bust, and it's trading like it has a serious risk of doing so.

Any thoughts?
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You could be right on it not going bust, but Chris Whalen (whose opinion I respect) thinks BAC needs capital.

A bounce would be reasonable, but I don't think it will go as far as stronger financials that aren't in such bad shape.
 
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