Financials are up? How does that make sense? It doesnt seem like there have been enough write downs. Think of ALL the 2nds and HELOCS that lehman and wells closed...not to mention the pay option arms closed by Deutsche bank. These 2nds and piggyback almost always went up to 100% LTV. If home prices have dropped precipitously then those loans aren't secured by any equity...there just hasnt been enough write downs to cover all these home equity loans. IMHO
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What?
- Thread starter jonbig04
- Start date
really though....who is buying? who woke up this morning and thought to themselves "hey I'm gonna go long some Lehman today"...so lehman sells some preferred and all of the sudden there books are sound? everyone else is buying to it must be the right thing to do...who thinks like that?
You know, it doesn't make any fucking difference at all what you think about the market. When a girl flops on her back and pulls her skirt up and her panties down do you second-guess her? You probably do.
Quote from jonbig04:
the market's smoking crack.
No the market is setting up for some nasty shit. Once this little rally is over and another shoe drops we will break those Jan lows and all the bulls that got trapped up here are gonna cause even more downside.
There are still about 100 bill in hidden write downs out there. Next shoe to drop is European financials then Asian.
Financials are hiding some shit but it will all come out in the wash:
Financials: Heard on the Street looks at the de-leveraging process by investment banks - WSJ
- WSJ notes that Wall Street banks are trying to reassure investors that they are reducing the amount of borrowed money.
- Notes that the amount of borrowing remains high as the amount of assets held by some of these firms is 30x more than their shareholder equity.
- Merrill's assets were 27.8x its equity in mid-2007 v 17.9x at the end of 2003.
- Goldman's total assets at the end of its fiscal first quarter were 28.2x total shareholder equity v 26.2x as of November.
- After Lehman recently raised $4B in capital its leverage ratio fell to 27.3x from 31.7x at the end of Q1.
- Notes that some Wall Street banks use an adjusted measure in order to determine their leverage levels and this may understate actual leverage levels.
It's the fed. No risk anymore. At least that's the mindset. The gov won't let us fail. Personally, my short plays have been struggling lately. I got to thinking about all the CNBC whining about the shorts and the uptick rule recently. Then it dawned on me. The shorts still have the system stacked against them. Even with the uptick rule gone, the shorts still have to contend with Uncle Sam. Not an easy thing to do. The real story will be known if and when interest rates go to or near zero. For now, I will have to join the "don't short the fed" crowd. Be interesting to see earnings, too. For now, I think longs have the "edge". He flies around in a helicopter (and I don't mean Roger from Scottrade). In the end, doesn't matter...long or short, as long as it's moving, the game is on.
Quote from jonbig04:
where do they get the cash to be leveraged X25? thats like getting a $625,000 loan secured by a mid-size SUV. Who puts up that kind of money?
Money!??! LMFAO.... there is no money... just a ponzi scheme about to get busted wide open. These perma bulls have their heads in the sand hoping everything is gonna be ok.
You may enjoy these articles... banks are letting people live in homes for free.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aOluOO8Vy0gc&refer=exclusive
http://www.bloomberg.com/apps/news?pid=20601109&sid=a8p51DTC.Pzk&refer=exclusive
Don't think the big boys aren't aware of this... they are just trying to make more money by jacking up the market and trapping more bulls... they may get their biggest payday ever.