Short, Short, Short

USO: Black Gold Waiting to Erupt

From most of the blogs and posts that I read including this one folks appear to be overly pessimistic about oil and the economy, which is in bad shape but markets tend to over correct or over shoot in the short term which i think is happening and even more so with a whole new administration that no-one knows what to expect. One thing I do know is we will get through these time sof uncertainty and Americans will continue to drive and more as nicer weather rolls in. I see no lack of cars or trucks on the roads in the NYC metro area (ny, nj, ct) it seems business as ususal to be honest.

Oil represents a very good buy here, unlike housing or other really big purchase items, we use it every day as does most of the rest of the modern world which means we will work through the excess inventory whicle opec is cutting, I fear we will have a dramatic spike in oil prices in the not too distant future 12 months, 24 months etc because these cuts and because everyone did not stop driving or flying or heating there homes in the older cities where oil burners are prevalent.

Mostly we need higher oil prices to make green initiatives more attractive, after all most of us think with our pockets and secondly with our social or environmental concerns, just the truth.

Citi Gets a Good Deal; Ken Lewis Overpaid

We will look back in a couple of years and kick ourselves in the keister for not loading up with som eof these companies. There will be 4 main banking and financial institutions in the US, BAC, C, JPM and WFC all being dominant and all being able to absorba dn or buy what they did because of market turmoil, no way in hell would regulators let many of these deals happen if it were not for the chaos!!

Gotta say BAC got an absolute steal with countrywide it's accretive right now and if you read in to it further the goverment has given BAC 5 billion in tax breaks if they did the deal, so essentially they did it for nada!! As for Merril Lynch, this is a premier asset bought at a 50% discount and being bought with an all staock transaction, whats better than that, short term dilution but you pick up 1.5 trillion in assets, trading systems worth billions. This will be looked at as a very good deal, and the strong get stronger!!

Bank of America: Smarter Than We Think?

I do not like the Countrywide deal at all right now, I think it would make sense to walk away from it and pick up the pieces before bankruptcy auction as far as Countrywide deal is concerned.

As a contrarian, I believe the company will be fine long term but it seems they are trying to sweep too much under the rug as if we the public are stupid, better to come clean, cut the dividend, drop the countrywide deal as an equity purchase (pick up bonds and debt of the company, and take over the skeleton or bones from bankruptcy or pre-bankruptcy deal), get all skeletons out such as write downs as we know there are more bombs to drop with many of these companies.

The contrarian view is at some point BAC and other major banks will be realizing gains from their totally written off portfolio, and they will be substantial as most companies are doing complete write-offs of assets that have a value thay are just unloved or illiquid at the moment.

Not that I am bullish on the sector or BAC for the short term (there is just too much negative sentiment) but ussually when you have all the little guys are so negative on a company and everyone is bearish, buying puts, going short, it usually means that much of the unheard news or stuff that is expected to come out of the closet is already reflected in the price of the stock and the big guys want to drive it lower so they an A) Buy and B) Cover short positions at an even juiceier profit

My 2 cents!