Uncle Bill

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    • Mon Aug 27th 21:16 PM | Rating: 0 0
      Commented on:
      Bill Gross Wants A PIMCO Bailout
      What's wrong with the government setting up a fund to turn non-prime loan homes into prime-loan homes? The fund would take the hit on the reduced value of the homes, spreading the loss out over the rest of the economy. The key would be that the fund would provide a floor to the losses that could help stem panic selling. As it stands now, the government has cut off all credit to anyone who might have been willing to buy a non-prime loan home. Shades of '29, I'd say. Banks, which can't hold these homes, can turn them over to private entities that have borrowed from the funds. Come on, you guys are the smart ones. What's wrong with this idea? Isn't this the way the Fed should work? It doesn't bail out the fools who agreed to these toxic terms, but it might prevent their foolery from killing the economy.
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    • Thu Aug 9th 21:46 PM | Rating: 0 0
      Commented on:
      Selling Bank of America Puts Is As Safe As It Gets
      Five months to make $1.30 on a $40 stock? Look at it the other way. If you bought the stock at $40 and had to sell it at $41.30, would you think you made a good trade? So far, BAC has held in pretty nicely. don't you understand that if there is more selling, these stocks that still have value will be the ones to go? As bad as it was today, the homebuilders (HGX) and the REITs (DJR) fared better the other sectors. At a 25 implied volatility like today, the expected six-standard deviation trading range for BAC over the next 90 days is 15 points. Right now, BAC is within 1/2 standard deviation of its 90-day mean. In other words, you've traded about 6 points of possible risk for 1.3 points of possible gain. You need to wait until the stock realizes as mich of its risk as possible before selling puts on an issue. This stock doesn't qualify.

      Bill Yates
      impliedriskreport.blog...
      View article »
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