ILongyou

Real Estate Lending Growth, 2003-2008

This IShortyou 'investor' seems to be hurting much from the Wachovia stock collapse.... I have seen this exact same post cut-pasted on dozens of websites, forums and discussion boards. Its almost like he is trying to spam his way back to profitability :) Its really funny... the desperation and denial that the game is almost over... and its not him that won. Pseudo-psychoanalysis: He probably also finds it VERY difficult to deal with losing in real life... and probably looks for everyone else to blame for his own failure.. hehehe

Countrywide: Potential Short Squeeze in the Offing

So I guess the author of the article (as well as his ponies named Marol and Always Elevate) got an expensive lesson :) BTW, good luck with that BAC long position now...

Countrywide: Potential Short Squeeze in the Offing

** oh... one more thing... also note that Lewis first paid $2B for about 16% of CFC and then only five months later promised $4B (which is now closer to $3B) for the 100% :) So he is not as smart as y'all think.... here is what happened to the other "smart" CEO with almost the exact same scenario...

www.clusterstock.com/2...
www.nypost.com/seven/0...

kinda like someone paid $100 for a stock, which is now $25 and the long, always scared to fess a mistake and thinking greatest bargain of his life, throws more good money after bad... only to see it drop to $0.25 :)

Countrywide: Potential Short Squeeze in the Offing

** So lets see the new arguments:

-- If shorts see other shorts getting squeezed, ... it’s very possible.

** So now you are reverting to the old "shorts spooking one another" for your long CFC bet profits? Yes, a lot of things are very possible, if longs see other longs getting margin-called, .... :)

-- Add in the recent rumors of a Wachovia acquisition by JPM

** aah... the rumors...


-- With BAC, no analyst I am aware of is forecasting the company goes out of business

** Don't always need the "going out of business" to make profits on shorts

-- As such, your potential gains are capped at some point and your potential liability is extremely high as the stock has the ability to appreciate a great deal form its current levels.

** Well, yes, ... shorts KNOW that the profits are capped and the losses are unbounded... not any new information... but thanks.

-- It does not help that at current prices, shorts are facing a ~ 6% squeeze immediately upon the transfer of the position.

** That is certainly a VERY valid point.. and I agree that if shorts DID want to move from CFC to BAC, its more prudent to cover CFC now and sell BAC... but as the lack of the big arbs taking positions here indicates, significant risk lies in this deal not going through... or at least not as exactly promised!

** I am glad you mentioned the Wachovia rumor.... here is a short snippet from a VERY recent history...

"We feel like we are merging with a crown jewel,” Thompson said during an interview Monday. “This is a transformative deal for us.”

ring any bells???

www.msnbc.msn.com/id/1.../

Here is more...

"We believe this combination of our two companies, both known for exceptional customer service and pristine credit quality, will generate superior long-term growth in earnings per share," said Ken Thompson, Wachovia chairman and chief executive officer, who noted that Golden West’s World Savings Bank is the nation’s only standalone savings and loan with a "AA" debt rating.

So how did THAT turn out?

Countrywide: Potential Short Squeeze in the Offing

"Disclosure: At the time of this writing, the author is LONG shares of CFC and BAC, and is LONG on CFC Calls, although positions may change at any time."

I hope no one overlooks the author's inherent interest in actually making this squeeze happen through his "article", even if the squeeze is not necessary. As justintime indicated above, all CFC stock positions (long and short) will convert to the corresponding BAC ones. Smart money is betting that the CFC books are soooo bad that either BAC will still wiggle out, or try to play games with the acquisition conditions to avoid paying the full price. *IF* the acquisition does go through as proposed, then the bad books *DO* move onto the BAC books and then BAC must take the corresponding haircut now or later (6%? anyone :)) and becomes a good short!. So smart CFC shorts will be happy to move to be the BAC shorts *IF* BAC still decides to move the CFC books to its own! In summary, the smart money bet is on the horrible CFC books... and will happily follow it to BAC if Lewis is dumb enough to keep to his original plans!

Not ignoring my own name "cfcshort" :), this article is no different than the stock pumping spam I receive all the time where the "author" is already heavily on the long side and is trying to make money through his articles/spam!! Beware!