Frogman

Citigroup's Horrible Conference Call

VOTE with your money....if that isn't a reason to pull money out of a bank I don't know what is....perhaps a run would teach them all a lesson on BOVINE SCATOLOGY....

Berkshire Hathaway: Proof That the CDS Market Is Irrational

If we continue on our "lost decade theme" which we have so far repeated and look at our Japanese counterparts who made the same stupid mistakes...(enabling the banks) one can absolutely ascertain that BRK.A's put was foolish and the CDS market is approriately priced...this will be an L shaped recovery...also look at what happened during the great depression....market didn't go anywhere for 15 plus years....Warren will be long gone by then and not see that bet blow up anyway....

Bill Introduced to Reinstate the Uptick Rule

History repeats itself once again....

During the "Great Crash of 29" there was no uptick rule...THAT WAS NOT THE REASON IT CRASHED....It happened over several weeks when bankers CALLED ALL MARGINS IN!!!! This is WELL documented....The uptick rule would have made NO DIFFERENCE back then and it didn't due squat when they banned "short selling" on the bank last year!!! Pull up the bank charts there is your evidence if you still don't believe ....so ignorance once again takes firm hold of the novice and slaps them around....

The real crime is naked short selling...there are rules in place!!!! THEY HAVE THEM!!! But the SEC like every other regulatory body is 'captured'...not a conpiracy theorist but a realist...they need to enforce the current laws....there is just nobody with enough balls to do it....

The banks were sold short because the people who study them and do their homework realized they were insolvent....the 'buy and holders' were taught a lesson....DO YOUR HOMEWORK because if you don't ---the people who aren't mindless putting their money into the market will sell it for you.....enough already on blaming the shorts.....

8 Important Facts About the Federal Reserve

Jeff, GREAT ARTICLE...most people do not appreciate history and are ignorant to the concept of fractional reserve banking to include the ownership interests involved in the federal reserve.

If you are in the financial arena and you "think" you know something about the federal reserve and have not seen the following video.....you are only fooling yourself....

video.google.com/video...

Well done Jeff

No Good Reason to Invest in Banks Right Now

Wow great call!! The market only dropped 5% today led by the garbage that you were pumping above...keep up the good work!

The Upcoming G-20 Meeting (Bretton Woods II)

This recent bear market will be short lived...especially for those who fail to study economic collapses.....Double Down TBT!

October Finale: Trick or Treat?

Art Cashin has been looking for the Woossh which we never got in October...somehow "this is different"...ha right! There is more pain to come.

Take for example, In California many areas are experiencing 40% drop in home values from last year to this year. (See data from National Association of Realtors by zipcode) .>>YES 40%

People can't sell (to upside down), nobody will buy (because it isn't the bottom) and who the hell will be left (even after it bottoms) to pick up the great deals? Anyone who bought in the past 5 years has bought! So with tighter lending standards to boot the problem is that very few will qualify.

Next Quarters GDP will make history and this slide will continue in a bad bad cycle that will build on itself. (Roubini is right BTW) JPMC just came out with a 'mortgage plan' and so did the FDIC after taking over WAMU and how do you save some? That is like having two children drowning but you only have time to save one who are you going to save...?>! Either way you won't be able to live with yourself after the fact. In many cases (read the article) the FDIC couldn't negotiate until a homeowner is behind on their payments so there is a total incentive to not pay! Truly troubling!

Those who stepped into the market this past week will feel some real pain because this is by no means is over. Those of us who patiently wait will be rewarded for nothing has changed relative to transparency and information flow from these banks and mortgage market. In summary, THE CONSUMER IS AGAINST THE ROPES AND THERE IS NOBODY TO CALL THE FIGHT! Already we have heard of politicians allowing people access to their 401k's...which they do have the ability to draw from now but there are no more home equities to draw from, no credit cards to max out (see AMX call -highest delinquencies, and charge off's expected to get worse) so where will the consumer go to get cash? (The only place is the market if they have anything left)

So what catalysts do the bulls see on the horizon? "its cheap" I hear...yea relative to what ?!? An over leveraged consumer!!! If the market is forward looking (6months+) do you really think that we will be outta this in 6 months? Or even 9? Most economist (even the conservative ones) have said that we are in for a SERIOUS recession and yet we ignore the flashing red lights...take for instance our currecny?!? RECORD appreciation after the FED swelling its balance sheet in 30 days by 1 TRILLION dollars?!?! Is this stable? Hardly... perhaps the parallel can be drawn from an interview with an fellow Navy SEAL when he was asked, "How are the SEAL's so good?" He responds intuitively, " its not that the SEAL's are that good its just everyone else sucks!" Perhaps his wisdom applies here to the dollar.....either way keep your powder dry and don't be a hero. Live to fight another day...

CDS: The Less You Know, the Worse They Look

Well the "notional value" is a headline grabber no question yet most people don't realize that once the price is locked between the two counterparties it is zero-sum and then each party pays respectfullly based on the move from that said baseline price so it appears far worse to the uninformed.

What I do have a problem with is that there is no "Vetting" or regulation as to the creditworthyness of either counter party and that no reserves are kept to or regulated to pay-off these hedges or "bets" that have now blown up....i.e. Lehman, AIG, etc..... To thee extent that they are good instruments (which I agree to in principle) but the financial orgy that ensued along with the TOTAL disregard for risk management is absolutely ridiculous! That is why CDS gets a bad name....if you feel that the CDS market is being unjustly blamed perhaps someone from "Market it " should have grown a pair and rasied some concerns.

Walking Away: The Next Mortgage Crisis

JJ I am a landlord to...This should make you feel secure because the renter now has 'no other options' than to rent...they will certainly pay you because the next stop is the streets...also my rent is half of what thier mortgage was ....so they are automatically beginning to save. You are now the hero... People will always screw you in the business, part of it, if you haven't been screwed yet you haven't been doing it long enough. Avoiding it takes experience but even then it is managed risk like anything else...also people make a vow in marriage and now most are divorced...over 50% ...do you fault them the same way? Isn't that a more serious morality issue (if we are really chosing to play morality or contract police!?!?! ) Hardly...I think I made my point...so fast forward...home prices will continue to be slammed till 2009 and 50/50 chance they stabilize with no "cataylst" to rise ESPECIALLY WITH THE BANKS TIGHTENING CREDIT!!! They won't lend you five dollares now!!..As a result we will flatline like the 8o's for 5-10 years just to be teed up for the Social Security and Health Care crisis which is like a hurricane forming off of the coast of Africa but it is already a CAT 5 ....we will be forced once again to print a ton of dollars making it totally worthless but I am hoping that our manufacturing will go crazy and we will be at the cusp of a secondary industrial revolution because of our worthless dollar..BTW which is why Buffet bought BNI he trades ahead 5 years....that is the only positive that I can draw at this point....

Walking Away: The Next Mortgage Crisis

FINALLY SOMEONE ELSE WHO GETS IT!!! I have been POUNDING THE TABLE ON THIS VERY ISSUE BUT NOBODY WILL LISTEN!! 70% of our economy is proped up by the homeowner who mortgaged thier house to buy a hummer, max out thier credit cards and then walk away. I know PRIME BORROWERS (MAKING 250k /year!) with 700+ credit who rented before they walked away so their credit won't get nailed before they were foreclosed on....that is how they are doing it (To the person who asked) ..don't believe me or the article???....listen to Wachovia's and BOFA's conference call last quarter...WE HAVE JUST BEGUN the PRIME MESS!!!!!!!!!!!
RECOVERY ABSOLUTE BS!!!! This is a trading market that started on APRIL fools..."suckers rally" we will get some relief but nothing in the economic cards or otherwise suggest that we are headed to an or even stabilizing.... People just don't get what is happening....GREAT ARTICLE!!

Eurozone Inflation Likely a Record 3.4% in March

The Economist talks about this last week...in a round about way...the ECB should cut rates to avoid inflation ( know this is counter intuitive but stay with me here).. Oil and Commodities have been flooded because of the plunging dollar...the ECB's refusal to cut rates (which is certainly justified considering the rising credit risk) will bring the Euro back to earth and strenghten the dollar..this will should cause people to move out of the commodities...This will give some relief to oil and food in the short run...there is evidence of this "safety" trade in commodiites with the recent deleveraging that was implemented last week...why? The ECB has a chance to lead us out but I am afraid they don't understand this either....my two cents...

Are REIT's Fairly Valued?

Huge insider selling on these REITS (days/weeks ago)...HORRIBLE balance sheets..ex: check out GGP ...further dilutive activity because of the freeze in credit markets...REITS issuing more stock (article WSJ yesterday) they have not taken any impairments (inevitable) (check out the MIT Index of Commercial RE Index)
....lending has not come back and count on tighter restriction more equity........I have not seen an opportunity like this in a long time....risk/reward is there....pay more attention to ROA...

I own SRS and adding to position here...

Citigroup Bottoming - Plus Some Free Advice for Meredith Whitney

TO THE WOODSHED !!!!!!!

The Fed Won't Save Us, But Here's How to Make Money - Barron's Interview with Jeremy Grantham

On Bears:
We have a bunch of bears coming out of the woods...its like telling us that we are in a recession....really!?!... Wow good job! Did the housing market for the last year tip you off? I love the prophets....Now don't get me wrong I am not getting my bull saddle ready and I still think that there is pain but the gloom and doomers are really getting on my nerves...if you keep saying the same thing (that we are collapsing) for 20 years then you know what?? you are probably going to be right (at some point in the cycle)....the market does correct...hell even a broken clock is right twice a day!!..CNBC and the others should start covering (how we get out of this mess) not tell us what we already know...

Monoline Tsunami Aimed at European Banks

Look no further than the credit spread increase on the creditex.com...itraxx 5 Yr Crossover...up over 21% this WEEK!! Parabolic move...The ECB's typical "clueless" response to this tsunami that you have pointed to is like when the US was bombing Iraq and that "war minister" said that 'he had America right where he wanted them' as his building was being targeted by a US made Tomahawk...:o) I love it!!...I am short the FXB (British Pound) because of impending rate cuts by "Tricky" the frenchman....but looking for another "surfboard" like play to ride this wave any suggestions?