gobbleknoll

Looking for Hope

The slighest reversals cause people in this country to run around like headless chickens.

Another 12 months and we will actually be tied with the 2000-02 bear market...

If You Think the Dow Did Well Today, You're Wrong

Kedrosky is a moron and Ricard is right...almost every market cited in this chart was DOWN (1 year) far more than the US. The US market is down less than almost every other major market in the world in 1 year.

A Resolution Trust Corp. 'Solution'?

Catnip for the market. It does nothing to solve the fundamental problem: housing prices need to fall to historical income ratios while current defaults must be written off.

The taxpayer may turn a profit on RTC 2 over the years-- but of course he didn't ask to invest in this investment. Is that a free market? And what message does it send to banks? You can get away with it and someone else will handle your really bad bets.

I would be mailing these clowns in Washington sacks full of manure if I were an ex-Barclays (Lehman) employee right now.

Lehman, Fannie, Freddie: This Must Be Groundhog Day

"The fact our market is even near to being "flat" when we are on the trail to losing a GSE (or as I believe both) is beyond amusing. People are obviously numb and in denial of just how bad things are."

Excellent observation-- and why this market is such a bargain for the shorts (SKF, etc.) right now. People simply do not want to believe that 2 Pillars of Society like FRE and FNM can fail, when in fact they have already failed and the only question now is: dilution or receivership?

Why I Finally Bought Fannie Mae

Remember, only senior bondholders and to some degree preferred holders matter at this point. The common shareholder will just be thrown over the side. After all, no one made him buy anything.

Why I Finally Bought Fannie Mae

I did too went long in July, but now I think you're just throwing your money away. Paulson's talk is the tip-off. It is meant to keep the preferred holders from panicking until Washington figures out how much to give them. It is already over; the 2 agencies will be nationalized.

There will be a receiver weekend in mid-Sept. A pair of new federal agencies will be created-- effectively, the Mortgage Bureau of the Treasury Dept. If no one is tipped off Friday afternoon, FRE and FNM will appear Monday morning, after a huge pre-market plunge to penny level, as tickers for defunct firms holding only bad debt. Some short covering rallies follow before they settle down to the sub-$0.25 range.

Position: Short FRE and FNM.

The Fed: On the Cusp of Moral Hazard

Agree with syndicat...with the Fed/JPM backstop, and maybe access to the new window too, Bear will recover within 12 months. JPM will own 40% of it. Imagine all the lawsuits to come. It appears that JPM's lawyers screwed up the contract.