the bond and mortgate insurors and rating agencies -- shorting opportunity?

[grapejelly]

I don't really "do" shorts anymore but it strikes me that these babies are a shorting opportunity if one does do shorts.

The "insurors" have wafer thin margins and are heavily into "structured finance" (and lots of "quotations"). The rating agencies seem to be headed for the same fall as the real estate appraisers at some point.

What is your opinion about this idea?

[lb]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

http://www.bloomberg.com/apps/news?p...Vtg&refer=home

[Tet]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

http://www.bloomberg.com/apps/news?p...Vtg&refer=home

You'd think by now maybe Warren would have learned how to buy puts or short his own shares. I don't believe you can be worth $40 billion buying calls and being long 100% of the time.

I wouldn't short a stock that since May 30th has already dropped 12.4%, I seriously doubt I'd ever short a stock Bloomberg was hyping, that looks like a good way to get your ass handed to you.

http://stockcharts.com/h-sc/ui?s=mco
Moody's, shorts are best placed on the other side of the 50-day moving average.

[EJ]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

You'd think by now maybe Warren would have learned how to buy puts or short his own shares. I don't believe you can be worth $40 billion buying calls and being long 100% of the time.

I wouldn't short a stock that since May 30th has already dropped 12.4%, I seriously doubt I'd ever short a stock Bloomberg was hyping, that looks like a good way to get your ass handed to you.

http://stockcharts.com/h-sc/ui?s=mco
Moody's, shorts are best placed on the other side of the 50-day moving average.

We should have listened to Jim Finkel. He told us back in March that the rating agencies that would take a big hit. How are his other key predictions holding up?

1. Buy-back obligations will lead to more bankruptcies
2. Major risks lurking in speculative and second homes
3. Efficient market theory will win: lenders who make bad loans will go bankrupt
4. Financial engineering will create problems when mark-to-model becomes marked to market
5. If housing declines 15% to 20% nation-wide, the mortgage securities market will be in dangerous, uncharted territory
6. Holders of distressed mortgage securities will find themselves competing for a very small group of buyers
7. Between 45% and 60% of all bank loans are going into PE deals
8. Private equity bubble is even bigger than mortgage bubble, and serious macro-economic fallout is more likely

Still waiting for the PE shoe to drop.

[jk]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

We should have listened to Jim Finkel. He told us back in March that the rating agencies that would take a big hit. How are his other key predictions holding up?

1. Buy-back obligations will lead to more bankruptcies
2. Major risks lurking in speculative and second homes
3. Efficient market theory will win: lenders who make bad loans will go bankrupt
4. Financial engineering will create problems when mark-to-model becomes marked to market
5. If housing declines 15% to 20% nation-wide, the mortgage securities market will be in dangerous, uncharted territory
6. Holders of distressed mortgage securities will find themselves competing for a very small group of buyers
7. Between 45% and 60% of all bank loans are going into PE deals
8. Private equity bubble is even bigger than mortgage bubble, and serious macro-economic fallout is more likely

Still waiting for the PE shoe to drop.

i gather that pe loans are the new raw material for more cdo's. those loans are "covenant-lite" these days, so it will take a full fledged bankruptcy by some lbo'd company to light the fuse. maybe freescale, if the tech bust foreseen by fred hickey comes to pass.

[Tet]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

We should have listened to Jim Finkel. He told us back in March that the rating agencies that would take a big hit. How are his other key predictions holding up?

The guy I'd be looking for is the one who told me to short Moody's on February 8th back when it was selling for $76 about to drop to $59 on March 13th. Tips involving 22% moves in 24 trading days are few and far between. Looks like the short covering on Moody's could already lead to a green finish, hard to tell how high this can go with a short covering bounce.

[metalman]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

You'd think by now maybe Warren would have learned how to buy puts or short his own shares. I don't believe you can be worth $40 billion buying calls and being long 100% of the time.

I wouldn't short a stock that since May 30th has already dropped 12.4%, I seriously doubt I'd ever short a stock Bloomberg was hyping, that looks like a good way to get your ass handed to you.

http://stockcharts.com/h-sc/ui?s=mco
Moody's, shorts are best placed on the other side of the 50-day moving average.

so i should go long gold? feels like i oughta go short. i smell a big rush to cash coming.

"Gold is a short," reckons one futures trader speaking to Bloomberg from New Jersey. http://goldnews.bullionvault.com/node/902

[Tet]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

so i should go long gold? feels like i oughta go short. i smell a big rush to cash coming.

"Gold is a short," reckons one futures trader speaking to Bloomberg from New Jersey. http://goldnews.bullionvault.com/node/902

I'm long two tech stocks and have about 25% sitting in cash, I would think it's very important for the banksters to take the market over 1560 on the S&P, hate to see the market get so close to a new high and then not make one. Market breaks down here and they'll never get it over this level again, I think we go higher before lower, at least to 1560, maybe it continues we'll see when we get there.

[Jim Nickerson]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

I'm long two tech stocks and have about 25% sitting in cash, I would think it's very important for the banksters to take the market over 1560 on the S&P, hate to see the market get so close to a new high and then not make one. Market breaks down here and they'll never get it over this level again, I think we go higher before lower, at least to 1560, maybe it continues we'll see when we get there.

Among other things, are you saying 75% of what you have to invest is in two tech stocks? That would be AAPL and ?

[Tet]

Re: the bond and mortgate insurors and rating agencies -- shorting opportunity?

Among other things, are you saying 75% of what you have to invest is in two tech stocks? That would be AAPL and ?

AAPL??? I said Apple looked like a good short, I'm long Qualcomm since the end of July and just picked up some Motorola. TWT, we'll see what happens, AAPL rolls out their phone the 29th, exactly at the end of the quarter, just in case there were any surprises to the down side I guess the funds holding AAPL wouldn't get creamed by the announcement this quarter. Interesting day to pick, Friday the 29th, not even during market hours but after, very telling.