Financial Select Sector SPDR (XLF)
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XLF Forum Topics
- All Comments on XLF
- General Discussion on XLF
- Where Is the Global Economy Headed Now? [view article]
- Where We Go from Here: Best and Worst Cases [view article]
- Credit Default Swaps: A Blind Date Gone Wild [view article]
- The Bottomless Money Pit [view article]
- Stop the Week, We Want to Get Off [view article]
- October 9, 2008: Remember the Date - This is Huge [view article]
- Friday Options Update: MS, XLF, WFC, GS, ZION, XRAY, FDRY, HA, GM [view article]
- Amity Shlaes: Paulson Plan Bring On Accounting Deja Vu [view article]
- Market Strategy: Sector vs. Style [view article]
- The Credit Bubble: Deregulation Gone Wild [view article]
- Weapons of Financial Mass Destruction [view article]
- Financial Short Interest and the SEC [view article]
loading ...Recent XLF Articles
- Where Is the Global Economy Headed Now?
- Do Profit Margins Tell the Whole Story?
- Credit Default Swaps: A Blind Date Gone Wild
- The Bottomless Money Pit
- Where We Go from Here: Best and Worst Cases
- Deposit Insurance: Variation Across Countries
- Friday Options Update: MS, XLF, WFC, GS, ZION, XRAY, FDRY, HA, GM
- How Bad Will It Get?
- Stop the Week, We Want to Get Off
- Financial Short Interest and the SEC
- Full List of Articles »
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It's the Capital, Not Liquidity, Stupid [view article]
The Fed should butt out and let the market contract so we can get on with a new unbubbled expansion. Recovery, true recovery can only come once the bad stock is cleaned out. Let new banks replace the old ones that fail and give a little prayer to those dumb enough to finance their dumb bets by buying their stock or bonds or buy CDS insurance from them. Otherwise, the US will look like Iceland and I doubt the Russians will bail us out too.Right now it looks like they're opting for the 30 year recession Japan is experiencing except we may have it with inflation thrown in because unlike Japan we are a massive debtor nation. Reply
It's the Capital, Not Liquidity, Stupid [view article]
The author is correct. Banks have no reserves except those they have borrowed from the FED. FED data supports this:research.stlouisfed.or...
Technically the banks are bankrupt. If not for borrowing from the FED they would have negative reserves. Term Auction Facilities and the like are nothing more than life support for the banks, hoping that a solution can be found before it's "too late".
Further, until housing prices firm up and stop falling, the capital position of banks with illiquid level 3 MBS will continue to erode as prices fall. Expect more FED borrowing just to keep banks' heads above the water line.
Sadly, recent business models seem to rely a great deal on the use of borrowed money to fund day-to-day operations. This combined with the capital positions of the banks has resulted in everyone being in the same boat, begging for funds to keep the store open.
Expect a considerable shift back to prudent management practices where operations are funded from actual revenues, once short term obligations can be covered. Until then it will be rough going. Reply
CDS Market: It's Crunch Time [view article]
senior lehmans bonds trading at about 10cents to the dollar but huge spreads between the dealers ReplyCDS Market: It's Crunch Time [view article]
Good point re Fannie and Feddie, see latest blog post re closing my short positions (the one above was actually posted on the blog on 5th October, SeekingAlpha are a bit slow these days!) ReplyLathrop
Why I'm Not Buying the Financials [view article]
I suppose that the cash rich oil companies would count as being in the safe category. Hedge fund investors - KEEP REDEEMING! Your loss is our gain. ReplyKnights
Why I'm Not Buying the Financials [view article]
Good thinking (as usual). It appears as though there were some sophisticated bottom-fishers for AAPL yesterday. During the hour of the market's last down-leg below 9600, AAPL held its ground, which I marveled at. Then, in the last 90 minutes, it rocketed up 10 points, to 98. Its strong relative strength then impressed me. And there is rumored to be good news (relative to the consensus) in the pipeline regarding the company's sales performance and new products. (Disclosure--I have no position in AAPL.) ReplySmells Like a Bottom, But Confirmation Will Be Required Today [view article]
UYG is 2X IYG, not XLF. XLF contains insurance companies (AIG, MET, PRU, HIG...) that IYG does not. ReplyCDS Market: It's Crunch Time [view article]
The Fannie/Freddie auction has been and gone and heaven did not fall. ReplyCDS Market: It's Crunch Time [view article]
Interesting to note that the Royal Bank of Scotland is down 45% this morning, Barclays 24% on a rumour that the three biggest banks have asked the Treasury for massive cash infusions. ReplyCDS Market: It's Crunch Time [view article]
Very good article. Right on the money Replyn
Added Liquidity Part of the Problem, Not the Solution [view article]
No, Fanny and Freddie were not clean from subprime crime. I don't want to divert this thread into a postmortem of GSE's (many) ills. My point is, subprime and Alt-A were only a small portion of their asset pool. If things hadn't gotten ugly in prime, the conservatorship would not have been necessary. ReplyAdded Liquidity Part of the Problem, Not the Solution [view article]
Sorry, but I think Fannie and Freddie were far more intimately involved in subprime than you think:online.wsj.com/article...
A good point, though, that this has been spreading to prime for some time. Reply
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Added Liquidity Part of the Problem, Not the Solution [view article]
Update: Fed is apparently getting ready to lend directly to lower rings of the money supply chain. It's a de facto admission of failure of the blind liquidity injection to the banks, exactly as I said above. I'm very tempted to suggest Fed start lending mortgages directly -- it would've been funny if it weren't so sad.Banks are flooded with cash. But such short-term liquidity cash is of no use to most of them. What they need is capital injection. How many will fail before Paulson gets around implementing the bailout plan? It would've been so much faster if the government would follow Buffet's GS model. Reply
cannot
compete!
Added Liquidity Part of the Problem, Not the Solution [view article]
It's just not working. Search "Fannie Freddie subprime", choose the marketwatch dot com link to the article titled "Fannie, Freddie seen facing subprime losses", dated July 27, 2007.Here's the first few paras:
[quote]
SAN FRANCISCO (MarketWatch) -- Fannie Mae and Freddie Mac could have $4.7 billion in unrealized losses from the deterioration in subprime mortgages, Citigroup's fixed-income strategy team estimated on Friday.
The bank's strategists said that probably won't be a big problem and argued that recent moves in the credit-derivatives market suggesting Fannie (FNM) and Freddie (FRE) are more risky have been overdone.
The estimated $4.7 billion in losses represent about 6% of the equity capital of the government-sponsored mortgage-finance giants, the strategists noted, adding that Fannie and Freddie's retained portfolios contain roughly $182 billion of subprime bonds, most of which are rated AAA.
By contrast, their total mortgages exposure is pegged at more than $3 trillion. Most of this is related to prime mortgages, which is supported by the fact that delinquencies in their guarantee portfolios have not increased so far this year, Citigroup said.
[end quote]
Note that this is over a year ago, and losses have mounted steeply since then, ending with the bailout of Fannie and Freddie.
No subprime at F&F???
Reply
cannot
compete!
Added Liquidity Part of the Problem, Not the Solution [view article]
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