Bradford Giaimo

AIG's Bold Move and Why I'm Shorting the Long Bond

I dont disagree with your premise but I think you are being a little harsh with your rehtoric. As you can see from my post I exited my bond trade 2 days ago I was early but covered quickly when it was obvious that it did not want to go down just yet. However I would consider trying it again if this parabolic move continues.


On Dec 04 08:30 PM TL22 wrote:

> AIG has spit in the face of the taxpayer one too many times. The
> $450,000 excursion the executives took 1 week after the first $85
> billion was committed was wrong. This cash bonus thing was also wrong.
> Period. If there was ever a year that an exec. shouldn't get their
> bonus, this is it. And if that means they leave, so be it, good luck
> finding another job.
>
> The short bond trade looks interesting here. Many have been early
> on this trade, I'd be a seller if we get a blow off top type move.

AIG's Bold Move and Why I'm Shorting the Long Bond

I understand your point, but those kinds of things must be done with sensitvity; understanding the unprecedented financial crisis situation we are ALL in right now. In times like these the perception of an act is much stronger than reality of it. And thank you for the apology. It was much appreciated. I hope you will continue to read and comment on any articles I may post in the future.


On Dec 03 09:10 AM AIG IS A GREAT AMERICAN COMPANY. wrote:

> I apologize for the "joke" comment. It is just very upsetting to
> constantly hear the media and pundits bashing AIG for seminars that
> are a necessary part of AIG's or blaming them for giving out bonuses
> to prevent a mass exodus of talent. these companies will not be worth
> anything if the talent leaves. Insurance is built on relationships.
> If the media would stay out of this matter AIG would still be thriving.

AIG's Bold Move and Why I'm Shorting the Long Bond

Update: On Monday morning I stated... "from November 13th through November 28th, the long-bond ETF (TLT) has risen 13.3% while the S&P 500 has fallen 1.7%. There has been an excessive flight to safety that has not been reflected in equities. I would argue that those considering buying stocks at current levels might instead look at selling bonds. OR, one might consider selling BOTH the bonds and the stocks, looking for a reversion to mean" (Unfortunantly SA left this part out of the articles title.)

Mo matter, as of the close Tuesday it makes sense to close the trade. With the outright short bond being a marginal loser and despite the fact that a short S&P 500/short long-bond trade was profitable, it's time to move on. Let's face it, like you correctly point out, since Mr. Bernanke let it be known yesterday that the Fed may buy treasuries in "subtantial quantities" to aid the U.S. economy, it's safe to say that there will be some nervous "shorts" going forward. For Monday/Tuesday the bonds (TLT) rallied 3.8% and the stocks (SPX) fell 5.3%.



On Dec 01 06:13 PM the author wrote:

> I appreciate your point of view. Its refreshing to hear an opposite
> point of view in a respectful way. Thank you. While it may look that
> way (selling the bonds at these unpreccedented levels) I am not looking
> to be a hero and pick tops or bottoms. right now this trade falls
> within my concepts and stratgies as I explained in the article. In
> accordance with that I will take it. If it dosent work I will get
> out, take the loss and look for another opportunity to sell until
> that view changes. However you have certainly given me food for thought.
> Good luck.

AIG's Bold Move and Why I'm Shorting the Long Bond

Who ever you are, did you even bother to read any of my replies to the other comments that disagreed with me? I said people should be paid for performance, not non- performance. Thats what a "bonus" means. I also stated that under the old guard (Mr Greenberg) this kind of stuff wouldnt go on. He would have had the good sense to understand the indignation caused by these 'in your face' acts AFTER they had to get billions from us to stay afloat and cancelled them. Same as the CEOs of the car companies taking their jets to DC. Very stupid PR in this voiltile environment. Lastly I dont understand your immature need to call me a "joke." All I did was express my opinion. I dont believe I used a pajoritive to discribe anyone personally.


On Dec 02 02:17 PM AIG IS A GREAT AMERICAN COMPANY. wrote:

> By the way, what does "lavish retreat" mean, putting on a seminar
> attended by 2 AIG employees at a cost of $186 per independent broker?
> Way to cite Brian Ross, he certaintly had all of his facts straight
> when he aired that amatuer video of his. It is a joke that AIG has
> to apologize for every marketing event they sponsor. How are they
> supposed to retain business?

AIG's Bold Move and Why I'm Shorting the Long Bond

I appreciate your point of view. Its refreshing to hear an opposite point of view in a respectful way. Thank you. While it may look that way (selling the bonds at these unpreccedented levels) I am not looking to be a hero and pick tops or bottoms. right now this trade falls within my concepts and stratgies as I explained in the article. In accordance with that I will take it. If it dosent work I will get out, take the loss and look for another opportunity to sell until that view changes. However you have certainly given me food for thought. Good luck.


On Dec 01 03:53 AM Aly-Khan Satchu wrote:

> I would take the other side of your Trade. I feel we live in simply
> unprecedented times and the reversion to the mean idea is a mistaken
> one in this context. We are asphyxiating asset prices via the withdrawal
> of credit. This is not a small one time thing but a major long term
> one.
>
> I would urge you to look at Japan post bubble as the precursor to
> what will eventually play out. Moreover, the only real tool in the
> tool box for resuscitating the Banking sector is going to be via
> a steepish yield curve, a positive carry environment [and the carry
> will get a lot juicier when Fails are punished which I am sure is
> imminent] and ultimately via a Bernanke put. By that I mean Bernanke
> will have to underwrite the yield curve via outsize buying [as and
> when required].
>
> I think the tectonic plates have shifted in this regard and very
> little can jolt this trend.
>
> Aly-Khan Satchu
> rich.co.ke/

AIG's Bold Move and Why I'm Shorting the Long Bond

While I take full responsibility for the outright inv bd suggestion (still within my risk parameters and only a portion of my clients portfolios) if you will notice I also say in the last sentence that you could short the stocks as well. in doing that, so far the SPX is dn 9% and the inv bd down 3.7%. i would say thats not too bad. it would be appreciated if you are going to bash me for one you might at least acknowledge the other. also, i would be happy to send you or anyone else who requests, my programs performance numbers. just fill out the request form on the site.


On Dec 01 12:30 PM raytayzmd wrote:

> ...if the people getting the bonuses accomplished things that made
> the company money then, by all means, give them bonuses...your analysis
> of bonds might carry more weight if you published your track record
> on your website...as it is your website is just a meaningless billboard
> offering services...and I see as I'm typing this you're losing money
> on your RJYUX trade.

AIG's Bold Move and Why I'm Shorting the Long Bond

lets talk about "talent" on 1-03-08 AIG was trading 56.30. today it settled at 1.65. please tell me what kind of "talent" that takes? my argument isnt that someone shouldnt be paid for performance. its that they shouldnt be paid for "non" performance. moreover they said one thing (would not pay bonuses) and did another. if mr greenberg was still in control this would have been a very different situation. Its when the old guard was thrown out and the young guns took over that all this happened and not just at AIG.


On Dec 01 08:24 AM jbde wrote:

> Bashing companies for recognizing their top talent based on industry
> standards is ludicrous. Just because AIG is getting public funds
> does not mean they should not pay their personnel and reps as is
> custom. So you would rahter see them lose their top producres to
> competitors and insure that the public does not get its money back?????
>
>
> Perhaps you should be a congressman - they seem excellent at grandstanding
> petty things - even the use of corporate jets. CEO's time is valuable;
> and, flexibility and the use of a mobile working environment is just
> and proper.