m22au's list of companies to short if shorting wasn't deemed evil

Quote from m22au:

Even though KRE has been incredibly strong since mid July (especially when compared to BKX and XBD), some regional banks are noticeably weak today.

I think people are realising that the FDIC is willing to move quickly to force resolutions for the weaker banks.

Some candidates for further research:

SOV (already on my list)
KEY RF FITB
FHN
CNB
CRBC is smaller but thankfully bigger than the likes of CORS / DSL / FED / BKUNA / VNBC
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Nice list - collectively they are down about 30% on *average* today. Shame the puts are so illiquid.
 
NCC putting itself up for sale.

Unless some stupid bank like BAC wants to pay a ridiculous premium, I would think that NCC might be taken over by the FDIC by Friday evening.

If you have uninsured deposits at NCC, you should be worried that the bank is looking for a buyer
 
REITs are a mixed bag, but if banks aren't willing to lend, then they are toast - see GGP and CBL as an example.

GS is the strongest investment bank, however they don't have a banking deposit base (like JPM and BAC), so if MS goes, then people will think that GS is next.

LYG is stronger than HBOS and RBS, but if it weren't for recent UK government guarantees then I'd still be watching it like a hawk. HSBC looks like the only big UK bank without major problems.

Quote from Cutten:

There seems to be a huge difference in the quality of shorts on your list. For example LYG has an enormous customer deposit base and has just done a massive takeover with government approval, giving it an anti-competitive level of market share in the domestic UK market. It's like if BAC had 1/3 of the entire US deposit base on its books. The stock may be actually be a buy (not that I'm long, but I can see a case for it). At the very best this is a marginal short with a lower than normal probability of success. I also don't see how it qualifies as a "poor quality company". Neither does Morgan Stanley, especially after converting to a bank and getting access to Fed funding, and potential customer deposits, long-term - as well as having a Japanese suitor willing to fund them.

The REITs are also a mixed bag. Short-term funding will always be available for companies whose assets are worth more than their debt, and readily saleable at near to intrinsic value. Some mortgage "REITs" that have over-leveraged are in dire situations and there's a case to short them. But conventional REITs have a pretty low bankruptcy risk, simply because they tend to only borrow up to about 60% of the value of their real estate, and their debt is well-covered by rental income. Even a 50% fall in real estate would not bankrupt them unless rental income also fell by a similar amount.

GS is a pretty poor short IMO - they just got implicit solvency backing and cash from Buffett. Is this really one of the 5 or 6 weakest financials?? I would rather be long than short GS.

You should never short stocks that have any kind of bullish argument going for it. There are enough stocks out there, especially in this environment, that have NO bull points, a raft of bear points, and whose balance sheets make them insolvent. To place even a single dollar into shorts outside this space is extremely questionable. Shorting companies with entrenched business positions, access to serious funding ability, and large corporate/government backing just doesn't seem to make any sense.
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some random thoughts:

ES +7.7% but XLF +2% only.

The market knows that the financials will be diluted by capital injections, be it from private investors or from the government.

Some standouts:

GE -1.5%
AIB -10%
IRE -7%

RF -7%, down over 20% from intraday peak. Possible high short interest already in this company.

KEY and FITB well off earlier highs

STI -6%
ZION -7%

MI -2%
CMA -2%
HBAN -2%

SOV -1% and might be Spanish very soon

CIT -3%

FBC -8%

CORS -4%
DSL -14%
 
The equity injections into the bigger banks should help, however
(1) they may not be enough if/when asset prices continue to decline and
(2) they can't force the banks to lend [there was a Bloomberg article about this today]
(3) they can't force individuals / corporations to borrow.

Some stocks that I'm watching for short opportunities:

Boo hoo I don't want to be downgraded or else I'll have to raise a huge amount of capital:
ABK

Poor quality banks:
NCC, AIB, IRE,

Autos and silly SIRI:
GM, F, SIRI

Companies with dodgy assets:
(yes they might have received equity recently but they may need more)
MS, GS, C, RBS, LYG/HBOS, BCS

Poor quality companies that need access to wholesale funding:
CIT, SFI

REITs may find it hard to refinance debt
GGP, CBL, PLD, AMB, NCT, CMO, MFA, KFN, AHT, NLY

Regional banks:
KEY, ZION, RF, FITB, FHN, CNB, CRBC,

HBAN, STI, CMA, MI, FBC

Insurers:
PRU, MET, HIG, XL

Some more financials that need access to short-term funding:
UBS, CS, DB

Some 'trust banks' that need people to trust money market funds after the Reserve Fund debacle:
STT, BK, LM, NTRS

Some smaller stuff:
CORS, DSL, FED, BKUNA, VNBC

I am watching but not as bearish about:
ETFC, MBI, MTG
 
some short ideas for 2009, and some examples of how to play the ideas:

GM, GM and GM

other autos and auto related, especially F

insurers who rely upon positive returns from stocks:
HIG, LNC, GNW

retail
M, TLB

homebuilders:
HOV, BZH

monoline insurers
ABK, MBI, XL, MTG, PMI, RDN

REITs
GGP, PLD, DDR

have been bailed out but still could have some downside:
FRE, FNM, AIG, C

credit cards
AXP, DFS, COF (and BAC, WFC, JPM)

various stocks that might be burning cash and/or need to refinance debt:
S, MOT, AMD, MU

casinos
LVS

drybulk shippers
DRYS
 
m22au: like your bear market list of stocks that still suck.

I wonder if anything will save GM and F. If they file bankruptcy will it affect all the huge shorts?

GM seems like free money here... almost too good to be true for shorting. Which makes me wonder if it's too good to be true for short selling.
 
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