When will the Penny drop?

[Mega]

Fanny & Freddie should leave NO ONE WITH ANYTHING BETWEEN THEIR EARS that the "Game" is up.
Mike

[jdv]

Re: When will the Penny drop?

Is there some news here I am missing?

[metalman]

Re: When will the Penny drop?

Is there some news here I am missing?

no. mega is angling to lose news forum posting priv.

[Supercilious]

Re: When will the Penny drop?

Fanny & Freddie should leave NO ONE WITH ANYTHING BETWEEN THEIR EARS that the "Game" is up.
Mike

Not so fast Mega. Read here:

http://www.nytimes.com/2008/09/07/bu...in&oref=slogin

Then, last week, advisers from Morgan Stanley hired by the Treasury Department to scrutinize the companies came to a troubling conclusion: Freddie Mac’s capital position was worse than initially imagined, according to people briefed on those findings. The company had made decisions that, while not necessarily in violation of accounting rules, had the effect of overstating the companies’ capital resources and financial stability.

It's always a great idea to use and trust foxes as health inspectors for taxpayer's chickens.

Am I the only one who smells a Bear (style Wall Street free lunch feast) here?

[Jim Nickerson]

Re: When will the Penny drop?

Not so fast Mega. Read here:

http://www.nytimes.com/2008/09/07/bu...in&oref=slogin



It's always a great idea to use and trust foxes as health inspectors for taxpayer's chickens.

Am I the only one who smells a Bear (style Wall Street free lunch feast) here?

Symbols, was it you who posted that you hold a short position equal to 30% of your portfolio on one of FRE or FNM?

It is amazing there there has not been more discussion on iTulip (or I missed it) about what might be the effect to the bailout for FRE and FNM, the detailis of which are supposed to be released before the Asian markets open Monday. I guess the lack of geopolitical fallout or conspiracy implications make it hardly worth comments.

As to what effects the fuzzy-detailed bailout may have, I have no idea. I do know that the financials (look at BKX, XLF, SKF's intraday action Friday) had a big turnaround beginning midday. Whether this continues Monday remains to be seen.

If I am correct that you are the 30% short guy, then I guess you believe financials will reverse, or at least the single one you have picked--not much portfolio diversification if 30% is short on one issue.

[Supercilious]

Re: When will the Penny drop?

Symbols, was it you who posted that you hold a short position equal to 30% of your portfolio on one of FRE or FNM?

About 31% short on FNM and nothing on FRE. There is a big difference between Phonnie and Fraudie

It is amazing there there has not been more discussion on iTulip (or I missed it) about what might be the effect to the bailout for FRE and FNM, the detailis of which are supposed to be released before the Asian markets open Monday. I guess the lack of geopolitical fallout or conspiracy implications make it hardly worth comments.

Most likely the agency debt would be virtually safe while the common shares will be virtually wiped out. Only the little guys will be completely screwed as Wall Street does it again and again. Nothing new and unexpected here :mad:

As to what effects the fuzzy-detailed bailout may have, I have no idea. I do know that the financials (look at BKX, XLF, SKF's intraday action Friday) had a big turnaround beginning midday. Whether this continues Monday remains to be seen.

That is a very good question. We may have an initial rally (gee all the mortgage problems are over ) some of the chickens will still come home to roost ( let's keep the parable going). Some of the financials will pop (good short opportunities) and other will continue to survive at an underevaluated stock (very good long opportunities later, when things start to pick up).

Usually my portfolio old fashioned: stocks only. I rarely go into options (only when I'm itching for a high risk hunch or a small pet project). I don't go at all in any kind of black box index investment (no ETF/ETN's whatsoever) because I don't like to offer charity donations to Wall Street

It is my humble uninformed, unqualified and completely baseless personal opinion that index investment is inherently rigged by design against the small investor.:mad:

If I am correct that you are the 30% short guy, then I guess you believe financials will reverse, or at least the single one you have picked--not much portfolio diversification if 30% is short on one issue.

Not really. It's just basic Friday-hump/Monday-dump weekend conversion. I have three collapse targets for shorting and every Friday I do the conversion keeping a small amount of cash (about 10%) and every Monday I go back to my normal working day portfolio structure. There is no significant risk and usually no loss over time. Yeah I know that is a lot of fees but even with the fees for the past two months I made in average about 1.2% clean profit from every weekend conversion. Not much, but it's a gain not a loss.

With one target down (F&F) next weekend I'll be shorting the two remaining financial houses of cards in a 45%-45% spread. That has nothing to do with diversification.