Alex Sebastian

Options Trader: 9/11 Redux

Anyone have any opinions on why Merrill is getting shitk*cked so badly? I mean I have puts so I'm happy, but I'm still a little confused why it has lost around $10 in 3 days...?

Lehman Brothers on Sale?

If Lehman makes a deal like Merrill's (including financing considerations) on it's $40B of real estate assets - admittedly much higher quality than what Merrill sold - there will be no equity left. And I think to many the Lehman name has lost almost all of its value. You said yourself that they no longer have any goodwill, isn't that what the value of a "name" is?

Also, there haven't been any rumours since July, when the SEC targeted rumour-mongering short sellers. Goldman, Morgan Stanley, Citi and others were all very well behaved yesterday after hours when their spokesmen said that they all continue to trade with Lehman.

Lehman: Delevering Risk High, and Growing

Looks as if the rally in financials is over today. The market sang the familiar tune of financials leading the whole market downwards. Not even a $3.5 drop in oil could keep this market afloat...

Is the U.S. Banking System Safe?

The recent spike in financial stock after earnings is similar to all the previous spikes, except of a greater magnitude. Everyone thinks "oh wow they really threw in the kitchen sink this quarter" in relation to the banks' writedowns, and then as things continue to grow worse, everyone realizes the banks are going to have to take bigger and bigger writedowns and the whole sector gets s***kicked for the rest of the quarter. Buy some September or October puts, that's my advice.

Rant Anniversary - Cramer's Mad Money (8/1/08)

I am not nearly convinced that the Fed cutting when Cramer wanted it would have done anything. Refinancing a mortgage involves a substantial upfront fee. How do these owners of NINJA loans afford that fee? They had no assets to pay for that financing. And think of where the USD would be. Cramer would have potentially stuck his finger in one of the holes in the dyke, but I wonder how the US economy would be reacting to $5 a gallon oil..?

I used to listen to Cramer, now for the most part I feel he is a rambling idiot. I definitely did not like his bottom call last week...