helplessobserver

20 Option Ideas to Protect and Profit: Financials

Very interesting, but why not buy FCS and sell an at the money strangle on FCX out to Jan10. Collect about 8 on the call and 8 on the put. If called you make about 28% in six months. Your down side protection is 15%. You can also use part of the $16 premium collected to buy put protection several points below your break even price. You need 2 puts per position first to protect your first 100 shares and another to protect against an assignment of 100 FCX stock in case of a market meltdown.

Stress Tests: Where Do CDS Fit In?

One thing we must keep in mind is the purpose of banks holding all these CDS's. Regulators allow the upgrade of a loan say from tier II to tier l capital if it is insured by a CDS. European banks began massive CDS purchases, mostly from AIG, when they realized how low the credit value was on US issued CDOs they held as capital reserves. This is why the US taxpayer paid so much money to UK and other European banks. It made the $11 billion Marshall plan outlays look like chump change.

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

I suspect BBT will cut its dividend to about 0.25 per share. This will inject a massive amount of capital into an already strong capital structure. On the earnings CC CEO King noted things are unusual in the banking sector and the bank has troubled assets in Washington DC, Atlanta and Florida they are focusing on. He is less worried about his builders as they are required to have "skin" in the game to qualify for construction loans. His larger worry is a higher unemployment rate and resulting larger losses in its credit card and other consumer loans books. BBT is hunkered down in a strong bunker and doing what good business is available.

Banks Stressing the System vs. Potential Winners of the TARP Repayment Race

Mr. Market says BBT will have to pare its dividend, now 10% to the 5-6% range. This will free up several hundred millions of dollars that can be added to bank capital and make a strong bank even stronger. CEO King is most worried about unemployment >10% and its damage to his credit card loan book. He is least worried about his builders as they have to put up significant personal collateral to get a loan package.

Deploying Paulson’s Capital: The Strong and Weak of It

As a shareholder I know BBT very well. I hope the government does not stink up BBT with some plan to have them inject their excess capital into their sacred New York banks. Bloomberg is already reporting big chunks of federal money lent to AIG has been transferred to GS, MS and New York Banks.

Reality Bites As Stocks Continue To Collapse

Seems like the hedge funds, the so called "smart money", are exiting the market at exactly the wrong time and calls in question their competence. Sure back in their ivy league MBA classes they mastered non-correlated markets. If oil is going up, buy oil/energy assets and short transportation assets. Any rube on the street can find that out from listening to Cramer, plus Cramer does not charge $400 per semester for his correlation tutorial.

Next Week Is a Big One for Bank Reports

Great post and a real service. Go BB&T, wow over 7% dividend and it is safe.

More Pain for Petrohawk - Cramer's Lightning Round (7/7/08)

All this commodity boom is unsustainable. Rewind to the 1980s when PhiBro Brothers and Englehard Mineral dominated the markets. Englehard took everything from Bunker Hunt, PhiBro took over Solomon Brokerage. Diamond Shamrock Drilling surged on exploratory wells on the North Slope. All are gone now except Englehard. Economies thrive on industrial production, not on commodities bubbles. Such wll be the case this time.