Investing Adventures » Alerts

SEC Intends to Temporarily Ban Short-Selling

Jorge — Fri, 19 Sep 2008 00:02:03 +0000

More to come…

Lehman Brothers Filing For Bankruptcy; Bank of America Purchases Merrill Lynch

Jorge — Mon, 15 Sep 2008 01:25:51 +0000

Oh boy.. could the past week get any wilder? First, Lehman Brothers reportedly will be filing bankruptcy sometime in the next 12 hours due to failed talks between LEH and suitors. The Fed tried to broker a deal between LEH and Bank of America / Barclays, but talks fell through at the end due to the Fed not wanting to bank some of LEH’s toxic paper as was done with JPMorgan and the Bear Stearns mess.

Lehman Brothers, R.I.P.

On the flip side, Bank of America has offered to buy Merrill Lynch for $29 / share, or close to a 75% premium over Friday’s close. Talking heads are saying MER was the firewall holding up the rest of the financial system and with BAC’s purchase, the transaction has helped to offset some of the instability from the LEH mess. BAC’s on a takeover tear. First Countrywide and now Merrill. Anyone worried BAC may end up turning into another Citigroup?

Futures right now are pointing toward a 300 point lower open tomorrow. Asian markets are closed due to holiday (Autumn holiday?). Personally, my portfolio is split evenly: 6 calls and 6 puts. Hopefully my puts actually fall because I know sure as hell my calls are going downhill tomorrow!

Keep your battle gear by your bedside because tomorrow bulls and bears alike will fight the epic battle.

Treasury and Fed Engineering Lehman Sale

Jorge — Thu, 11 Sep 2008 21:35:05 +0000

Well whatdya know? Seems like another one bites the dust. As of 17:30 today, the Treasury Department and the Fed are brokering a deal to have Lehman taken private by Sunday. Here’s the article from the Washington Post. At least it’s another shot in the arm. Let’s see how long this rally lasts? 4 hours perhaps?

Washington Mutual CEO Ousted: WSJ Report

Jorge — Mon, 08 Sep 2008 02:27:45 +0000

Another one bites the dust! Reports from the Wall Street Journal indicate that Washington Mutual (WM) are ousting their CEO, Kerry Killinger, this evening. Seems like as the government is doing some housekeeping, some of the other financial instituions are as well. Tomorrow’s going to be extremely interesting in terms of market action. Now I’m thinking we will see a 300-400 point rally tomorrow and it may actually stick. How long this governement induced rally sticks is anyone’s guess. I don’t think more than a couple of days but you never know.

For those of you who went long at the close Friday, congrats! Next time, share that inside info with the rest of us

Fannie Mae, Freddie Mac Taken over by Regulators

Jorge — Sun, 07 Sep 2008 15:04:24 +0000

Ooooh boy. Let the fun begin. I’m watching the 11am news conference by Hank Paulson. More info once its released.

Update: Here’s the shortened version of the story as I see it. The government’s taking over Fannie and Freddie, removing the CEOs of both companies, and eliminating both preferred and common dividend. By eliminating the dividends, I don’t think there’s any interest in holding the stock. Does that mean that FRE and FNM are headed to zero Monday? My guess would be yes but you never know.

The fallout from the takeover may result in a nice little pop come Monday. But I’d have to agree with everyone else out in the blogging financial world. The rally will give great opportunities to short the market and stocks in general, but I can’t see it lasting. What the government’s done is effectively made the public foot the bill. On top of everything else, I don’t see how the public can afford any more debt. Just wish the public would assume my student loans…

Tomorrow should be a fun day. Dow +300 tomorrow? Nah. I think the bears squash the rally tomorrow. I’d even be inclined to say we fall hard the latter half of the trading day tomorrow. But in a bear market, anything goes.

Personal update: PhD qualifiers are Sept. 20th. Once the 20th comes and goes, I’ll be back full time. Hopefully in good spirits.