CIK

Banks to Gain from Sub-Prime Rally

- bank exposure typically to the worst tranches, no upside potential

- while overall rate of decline in housing and mortgage markets slowed via govt stimulus things are still deteriorating and the stimulus is starting to come-off, does not bode well

- 700 Alt-A and Jumbo RMBS deals recently down at S&P, contagion is a process that will continue some time

Would like to see banks and world economies on solid footing, but it certainly will not come from slight improvements in sub-prime assets and will take years.

Option Selection for Covered Call Writing

If you have sold a covered call there is no stop loss you can place on the call. You have sold someone else the right to purchase shares from you at the strike price.

If you put a stop loss on the stock that was being used to "cover" you may end up with a naked call. This occurs when the shares are sold in a stop loss prior to the expiration of the call. The call is now naked (i.e. you do not have the shares on hand to cover) and is a riskier position than a covered call. If the share price stays depressed after the stop loss sale the call will expire worthless, however if the price rebounds you may be forced to purchase shares at a new higher price to cover the naked call.


On Mar 10 09:07 AM oldman wrote:

> I believe you cannot sell a stock before the call, so you must sell
> the call first, correct?

Jeremy Siegel's Silly P/E

The reason you need to look at more than just the simple sum of earnings across an index is the ability of the members of the index to distribute earnings. That said I am not sure that market cap weighting is the right answer either.

Take the simple example of an index of 2 (Companies A & B) with equal market caps. If A has earnings of $1 and B has a loss of $1 and assuming you can only distribute earnings the ability of the index to distribute earnings is $1 not $0.

Why Nationalize in 2016?

depends on when you cover, whiplash coming soon, cover now if you have not already


On Feb 25 06:44 PM Stewie wrote:

> "Everyone bets in the market and you bet wrong."
>
> I think it's safe to say, if he is short he didn't bet wrong.

Markets Plunge Following Geithner's Plan - And That's Not a Bad Thing

The problem is not the expectations of investors. Given the fragile state of the economy and the US financial system the timing and lack of transparency of the Treasuries statements were simply irresponsible. The markets reaction yesterday is a reflection of the cost of uncertainty. We cannot afford to have chicken little (aka President Obama) running around for a week telling us what we already know (i.e. the dark clouds out there are not going away) only to be followed by Geithner not revealing what we should know (i.e. what's the plan?).


On Feb 11 07:44 AM Tradememe wrote:

> The problem is the expectations of investors. They all think that
> somehow the new Treasury secretary will open his mouth and say some
> magic words and everything will go back to where it was before. I
> guess it takes time for reality to sink in.

Bank Nationalization: Inevitable in Some Cases

There is no benefit for the US Govt, the American people, the market to officially declaring the banks nationalized. The govt has all the control it needs (and more than it can manage) and has continually reiterated that it will continue to support these "to big to fail" institutions. While Geithner yesterday did not "use those words" they know they can't afford any other option.

Geithner Plan: Something in Writing, Please

Author your article leaves me feeling much the same way I did today after listening to Geithner ... wishing my time had not been wasted.

On a separate note, watching Bernanke today was amazing. Not due to Bernanke, who did not have much new to say although he was at least well spoken. Our congressional leaders on the other hand...wow! Their collective lack of understanding of financial topics and the Fed's role and responsibilities was astonishing!

Everything You Wanted to Know About Credit Default Swaps

I am a CDS novice, but I can certainly see the logic in requiring CDS issuers to maintain appropriate reserves. How do you come to your 1-2% figure Constructe? I do not have a better estimate, but based on my understanding of insurance (greater than my understanding of CDS, but still no expert) this figure sounds extremely light.

Separately, it is amazing to me that the CDS investors/speculators do not require the banks / writers to hold reserves. If you / others have no faith in the ability of the issuer to pay what is it worth?

What 8 Bailout CEOs Need to Explain

Author, glad you are not handing out my tax dollars.

However, if you are giving out some of your own money I would be happy to spend it. I will even give you an esimtate of how I will spend it, if I am off by more than 10% on my forecast I will surely give it back.

The Final Market Bubble

Disclosure - I do not own GLD or any milk cows

The Final Market Bubble

typo...tune of a few trillion

The Final Market Bubble

Recovery not the problem. US Govt balance sheet expansion largely asset backed. In recovery those assets are sold back to private sector and proceeds used to buy back US debt issuance, as needed. While in the current environment would not rule out the US Govt need/interest in rolling the printing presses, think that you overestimate the problem to the tune of a trillion.

Separately, in the potential chaos you predict where exactly do you intend to utliize your gold coins? You may be better off buying a milk cows with the funds you were going to invest in gold coins in that scenarios. One word, barter.

Forget GE, These Are the Industrials Investors Should Consider Owning

- Div risk priced in
- Tangible equity a limited metric
- Agree, would like to see the ST debt come down a but seems manageble as we begin to see a thawing in credit markets
- Relative to your screened selections, I prefer GE brand, prod diversity, geo diversity
- Would not underestimate the advantages cash position
- Would not underestimate the advantages of ability to acquire (and integrate) in this environment (its another form of leverage and I don't feel dirty using that word)

I own GE

The Next American Revolution: Main Street vs. Wall Street

It remains apparent from the comments here that paranoia and fear continue to grip many of you.