Posts tagged AIG
March 23, 2009
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, dow closed at, ESLR, Evergreen Solar, GE, Geithner, General Electric, PBW, Schwab, SWOBX, toxic assets, URBN, WFMI
It’s been a while. Since the last time I wrote, I got through Calculus in a few pieces, picked up the pieces and glued them back together, decided to take the next semester- this semester- off from graduate school, and met the most wonderful guy I’ve ever met, let alone dated. I got an integral permanently tattooed on my ankle to remember that yes, I can do it, work is going as ok as it ever goes, and I opened a Roth IRA where I can buy into this mutual fund “SWOBX”. The Schwab lady told me it was a good one. What do I have against her?
I wanted to wait to write again until my first $1,000 day since the market completely shit the bed, but I decided to settle for my first day over $900. The Dow gained 497 points today to end at $7775, which is 1,300 points up from a low it hit earlier this month. If someone told me in the summer that by the spring the Dow would fall below 7,000, I’d have laughed in their face. Actually, people did tell me and I did laugh in their faces. But I definitely wasn’t laughing earlier this month when my portfolio was down 73%. However, I still dream of an early retirement or a big down payment on a loft in a city someplace warm, so I tried to stay optimistic. I’ve continued to average down on my financial stocks and bought into General Electric (GE), United Steel (X), and back into Evergreen Solar (ESLR) just to get more “diversified”. They say diversity is good. They say a lot of things, some are true.
After today’s rally, I’m down “just” 53%. And to be honest, I’m starting to actually feel optimistic again instead of just pretending. I didn’t think I’d ever see that red percentage turn greater than -60%, and my portfolio gained 20 percentage points in about 2 weeks.
Oil was trading at $53.93 when I wrote this, and it’s the first time this year that a barrel of oil has been above $50. Home sales took an unexpected jump in February and Timothy Geithner, the US Secretary of Treasury, spoke today about taking the “toxic” assets off banks’ books. Back in the summer, this was the only thing being talked about; now it’s just an appendage to an already humungous financial bailout.
There are a few stocks I have my eye on in the near future (ie: when I get paid next): Powershares WilderHill Clean Energy (PBW), Urban Outfitters (URBN), and Whole Foods (WFMI). Though I may hold off. There’s no telling if the market will take another dip and hit the 3,800, or whatever the doomsdayers are saying, mark. I suppose anything is possible.
October 10, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AAPL, AIG, Apple, dow, Great Depression, National Debt Clock, November 9, oil, SmartMoney, St. Regis Spa & Resort, wall street
And so ends the worst week in Wall Street history. The Dow is now trading comfortably under $9,000 and every opening bell has become the signal at the gate of a downhill skiing competition. My 403b statement came in the mail today; I won’t look at it. In the envelope it will stay until times are good again and I can look back on this time and laugh.
One year ago yesterday, the Dow hit its highest trade ever at $14,164. As of today, we’re rapidly closing in on half that number. $6,000 is beginning to look like a fair estimate of the bottom. Could it go lower? If this week was an indicator, yes it could go lower.
The National Debt Clock in Times Square ran out of number placements this week because back when it was erected, no one ever predicted our national debt would soar to over $10 trillion. Well it did, and now we need a new clock. If our current debt was divided by the number of people living in the US, we’d currently all owe over $33,000. I wonder if the cost of the new clock, which will be able to track debt up to a quadrillion dollars, will be tacked onto the national debt.
If there is a silver lining to this story it’s torn and tattered but definitely intact in a few areas. For one, strong stocks are being thrown away with the rest of them, making it clear that people are somewhat overreacting. This week, Apple (AAPL) hit a low of $85, yet as we all know, everyone has at least one ipod. I have two. One doesn’t work anymore because it was the second generation mini that wasn’t covered under the bunk battery warranty, and even if it had been covered, the application for refund or repair was too involved. Genius, Apple, genius. So, Apple’s got money- our money.
The second good thing this week brought was lower and lower oil prices. My cheap landlord, after provoking me to tell him I was moving out (“You want to leave? I can get $1,200 for that apartment no problem! You tell me right now! You tell me right now if you want to leave and I’ll get someone else in there! You tell me right now!!) finally put the heat on, which is fueled by oil. So my cold is lifting. OPEC wants to meet soon to talk about the dropping oil prices and whether they should decrease production, but with gas prices still up over $3 a gallon, and people losing their jobs, my suspicion is that oil will continue to fall. And my apartment will continue to be warm.
The third good thing is that lobster prices are way down. Mmmmm….
The last good thing I can see from this mess we’re in is that once it’s over, there are going to be some serious undervalued stocks to scoop up. The fact that Apple is being tossed out with the garbage screams undervaluation. My plan now, since I’ve taken a big hit with the rest of the world, is to wait for the white flag and average down. By then I should be in a good position to pick up a bunch more shares on the super cheap.
But that time isn’t yet. Henry Paulson says he’ll get the plan in place “soon”. How subjective. How soon is soon? That’s as hard a question to answer as “where is the bottom?” I doubt even Paulson knows.
One story that I forgot to write about, but which deserves attention, is the one about the AIG executives on the days following their taxpayer bailout. Just one day after we showered them with $85 billion of our hard-earned tax dollars, a whole bunch of these bald bankers were showering in luxury at the St. Regis Spa & Resort in Monarch Beach, California. For an entire week while we were all trekking to work, they were being treated to facials and manicures, free food and wine. The spa trip cost the company, and in turn you and me, hundreds of thousands of dollars and has caused some AIG big-wigs, and I use that term loosely, to be called to Congress’s carpet.
But the thing that bothers me most about the whole AIG spa trip thing is not the free pampering or even the gross sense of entitlement these guys still have despite f*cking up all of our lives. What bothers me most about this story is the thought of a few dozen or so pasty white bankers wrapped in only slightly whiter terry towels, sitting around pools and steam room benches talking about whatever it is bankers talk about when they’re not at the office. By God, please tell me the towels stayed on. It’s enough to shift one’s reoccurring nightmare from piles of 401k statements on milk crates within cardboard residences up and down Main Street to dark steam rooms and sweaty, liver-spotted heads. I’m going to be sick.
On a lighter note, the Dow lost a modest 128 points today to settle the week at $8,451. Crude oil closed at a 13-month low of $77.70 today. I’ve likely lost half of my investment, and am doing an OK job at staying positive. My landlord is a drunk who talks big and who won’t really make me leave, my job is secure, and any waken moment that I’m not working or preparing lessons, I’m working on my calculus homework. First test this coming Wednesday- a little nervous. So I’ve been staying occupied. And I know the ship will eventually right, just as it always has throughout time, and out of this crash will emerge some seriously rich folk who took advantage of some seriously good stock deals. I hope to be one of them.
SmartMoney Magazine published a letter I wrote to them one early morning about their September article “10 Things Millionaires Won’t Tell You”. I think it’s pretty hilarious I got published in a money magazine considering that a year ago I didn’t know how to open a brokerage account. Oh how the tides do change.
September 21, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged ABK, AIG, ambac, banks, banned, Barclays, Ben Bernanke, Charles Schumer, economy, financials, Henry Paulson, investing, LEH, Lehman Brothers, LEHMQ, MBI, MBIA, Moody's, Moody's Ratings, short selling, stocks
Whoa mama. I was definitely wrong about the profit-taking. The US market rallied harder in the last two days than it has in 38 years- longer than I’ve been alive! Lehman Brothers, now on the OTC board as LEHMQ, gained 313% on rumors that it would sell parts of itself to foreign banks. Barclays is back in the running. In just the last two days of trading, I made up almost all of what I had lost in the last week and a half.
The SEC banned ALL short selling- regular and naked alike- of 799 financials for the next 10 days. The United Kingdom temporarily halted short selling yesterday, and the US did the same. This is a huge step from just banning naked shorting; this is a total ban on betting that stocks will lose value, essentially disqualifying half of the game. Hillary Clinton and Charles Schumer, both New York Senators, proposed the ban. Critics say this ban will warp the market, making it seem as if the financial stocks are worth more than they are. But when naked shorting was banned in July, the effect lasted long after the ban was lifted. In fact, it lasted right up until last week when AIG teetered and fell and dragged the entire sector along with it. So in a market that is so emotionally driven, a little banning may do the trick to snap the depression (no pun intended).
Henry Paulson, our Treasury Secretary, and Federal Reserve Chairman Ben Bernanke proposed the idea to spin all bad parts of financial institutions into its own entity- a black hole of badness. This idea reminds me of that story I had to read in high school about the utopian society that was only a utopia because of the little girl who lived in a cage in the basement of someone’s house. Remember that one? I was never big on reading, so titles slip my mind. I just remember the girl in the cage and the annual field trip every schoolkid would take to see the girl in the dirty dark cage dungeon as a reminder of why they lived as perfectly as they did. I wonder if part of the Paulson and Bernanke plan will have the American people visiting the dark entity once a year. Oh wait, now I get it. We will be visiting once a year- at tax time. Seems these two guys kept up on their high school reading.
Meanwhile in Ratings Land, Moody’s threatened to downgrade Ambac (ABK) and MBIA (MBI), which dropped ABK 42% and another 27% in afterhours, and MBI 8% and another 8% in afterhours. The ABK message boards caught fire, and it seems Moody’s may catch some of it by Monday, if not sooner.
Do you know the name of that book yet? Maybe it was a short story.
September 18, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, American International Group, bailout, banks, dow, economy, financials, first marblehead, FMB, naked short selling, rally, RDN, uptick rule, WaMu, Washington Mutual, WM
Since it had become a matter of market confidence, or really a lack thereof, confidence was bolstered today with the Fed’s announcement it would pump $180 billion into the world’s banking system and the implementation of the naked short ban. I read the news of the naked short selling ban wrong; I thought the ban went into place yesterday. So when yesterday’s market was a total sinker, I figured it was too late for the ban to do anything and that my experiment would soon go bust. I was very wrong. The ban actually went into effect TODAY, not yesterday, and it had a definite effect:
Centerline Holding (CHC): Up 3% to $1.72
Syncora Holdings (SCA): Up 13% to $2.25
Thornburg Mortgage (TMA): Up 13% to 34 cents
Merrill Lynch (MER): Up 14% to $22.06
Ambac (ABK): Up 15% to $6.67
Citigroup (C): Up 18% to $16.65
MBIA (MBI): Up 19% to $11.64
PMI Group (PMI): Up 22% to $2.57
National City(NCC): Up 24% to $4.40
Regions Financial (RF): Up 34% to $14.60
Radian Group (RDN): Up 35% to $5.00
Washington Mutual (WM): Up 48% to $2.99
First Marblehead (FMD): Up 67% to $4.75
MGIC Investment (MTG): Up 74% to $9.50
To be fair, most of the gains made today were only enough to erase just Wednesday’s huge losses, and the last week and a half of loss before today’s rally is still “on the books”. And, there will likely be a fair amount of profit-taking tomorrow. But who am I to complain? I made [up] $2,600 today, and most of that came in just the last hour of trading.
Even American International Group (AIG) had a double digit percentage gain today: up 31% to close at $2.69. The Dow closed up 410 points to $11,019. Oil gained 72 cents to close at $97.88. Today was Wall Street’s best day in six years.
September 17, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, banks, dow, economy, GLD, gold, naked short selling, offshore drilling, oil, oil futures, oil speculation, oil speculators, speculators, StreetTRACKS Gold, wall street, WaMu, Washington Mutual
The entire market was on a downward run the entire day. The impending restrictions on naked short selling did nothing to break the financials’ falls, and the bailout of AIG seemed to deepen the “crisis of confidence” in our economy. The dollar was down and oil and gold were suddenly trading way up.
A friend of mine brought up an interesting point yesterday: now that the banks are failing, the price of oil is also failing. In his email to me, he wrote:
“BTW, have you noticed the rapid decline in crude oil now that the banks have to focus on their books and capital? Could the banks have been speculating the price of crude??? Only the shadow knows. WAMU after hours trading closed at $2.55.”
As if the market heard his words directly, a CNNMoney.com article hit this morning titled “Oil rallies as Wall Street gets a lifeline: Crude futures rebound as the Fed steps in to lend insurer AIG much-needed capital, and ahead of the government’s weekly supply report”
Now that the big banks are being shored up, will oil bounce?
My Calculus 2 class starts tonight. Any free time I’ve had will now be absorbed into homework, studying, and stress. If it was possible to do so, I’d buy a few puts on my weight with a January 2009 expiration date so that I could rake in some money in time to buy myself a nice Valentine’s day gift. Calculus stresses me out. Anyway, it may put a damper on my writing. But I guess I said the same thing for when I went back to work, and that didn’t stick, so maybe I have no idea what I’m talking about.
The Dow almost had another -500 point day: it tumbled 449 to close the day at $10,609. Oil rose $6.01 to close at $97.16. The Associated Press chalked up the rise in oil to “an easing of worries that the insurance giant and other financial firms would liquidate commodities holdings to raise cash”. The dollar lost value because of the AIG bailout, too. Typing in “dollar” into Google News returned articles with titles like: “US dollar falls amid wary credit markets”, “Dollar falls vs. euro, yen despite AIG bailout”, “India’s rupee firms against dollar”, “Bonds soar, dollar sinks”, and Oil rallies as dollar weakens”. Seems my friend was right; the oil speculators are back. Time to get back into oil? God was way up, too. The ETF StreetTRACKS Gold (GLD) climbed 11% today.
The House of Representatives, with a democrat majority, passed a bill last night to lift the 26-year old ban on offshore drilling. But because the bill also added on tax credits for clean energy companies, President Bush’s advisors are asking that he veto the bill in its current form.
The ban on naked short selling will take effect tomorrow. We’ll see what happens.
September 16, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged $85 billion, AIG, bailout, bankruptcy, banks, Barclays, Christopher Cox, crude oil, economy, Enron, gasoline prices, Goldman Sachs, government bailout, GS, Hank Greenberg, interest rate, investing, Lehman, Lehman Brothers, MER, Merrill Lynch, Morgan Stanley, MS, naked short selling, real estate, SEC, uptick rule, WaMu, Washington Mutual, WM, WorldCom
Where to start? All these stories are unfolding all at the same time. Most people alive have never seen such things.
AIG no doubt drove the market today. Lehman was six times as big as Enron and WorldCom, and AIG is 50% bigger than Lehman. Yesterday when it became clear that Goldman Sachs (GS) and Morgan Stanley (MS) were last two independent investment banks left standing, the government asked the two giants to inject capital into AIG to keep it alive. When that didn’t go over so well, the fed went back to the drawing board and came up with a new idea, which was later captured in a Bloomberg article titled “Fed Said to Reverse Stance, Consider AIG Loan Package”. Originally the government said that it would absolutely not help AIG, but throughout the day AIG’s tentacles were measured and realized to stretch much further than previously thought. The news stories about AIG threw the stock all over the place today. As an example of just how turbulent the ride was, at 2:30PM the stock was trading at $2.76. At 3PM, the stock was trading at $5. That’s an 81% increase in 30 minutes. AIG is the world’s largest insurer, and unless it’s shored up, many institutions (including regional banks, as exposed by CNNMoney.com) will likely get knocked out.
Reuters released an odd article today about former chief executive of AIG Hank Greenberg leading a hoard of investors in a bid to take over AIG. I think I’ll let that one rest.
The Federal Reserve, against what everyone predicted, left interests rates alone today. The rate will stay at 2%.
When the market broke in 1937 signaling the Great Depression, the US Securities and Exchange Commission (SEC) created the “uptick” rule, which essentially stopped people from betting against failing stocks. “Naked short selling” is what it’s called now, and is when a trader buys a put for an underlying amount of stock he or she would not be able to deliver. The SEC did not eliminate the uptick rule until July 6, 2007.
Our government tried to being back a sort of uptick rule this past July and it did, in fact, help the financials rebound. You can still see the ban reflected in most stock charts, not only the financials, from July 15 until the beginning weeks of August.
Now that banks are acting more like houses made of cards than they are the good old impenetrable banks we all grew up with, the government and some analysts have began buzzing about a possible reinstatement of the uptick rule. Back in August when the ban on naked short selling was lifted off the 19 financials it protected, the plan was to create “within a few months” a sweeping rule would eliminate excessive short selling. Some, like Alan Greenspan, think this is eliminating an important side of the market, but when a bet is sure, much like oil was six months ago, people will take and take advantage of it.
The head of the SEC, Christopher Cox, announced today that the “within a few months” will probably be this week (TheStreet.com) in light of what happened yesterday and the free lunch frenzy it caused among the traders who know how to sell short naked.
I’m not going to lie; In this economy, with oil going down yet gasoline refusing to budge, the price of food through the roof, the cost of electricity forcing me to cram foods into my toaster oven instead of firing up my electric stove, and clothing being so expensive I’m at least 3 seasons behind (if not many more), I’d naked short sell a few of the stocks I own if I knew how to. But just a few, not all day and not to the point I felt sick with guilt. I wonder if anyone feels guilty. Doubt it.
I bought long into Merrill Lynch (MER) today, and added to my positions of Citigroup (C) and Washington Mutual (WM). Washington Mutual is a real gamble, but MER should be one stock I won’t have to worry about.
The Dow crossed from red to green and back again 15 times today and really rallied in the last two hours of trading to close up 141 points to $11,059. My stocks that gained today included C, MBI, MER, MTG, RDN, RF, and WM, but it wasn’t enough to have me end the day in the green, and in fact, I’m now overall up just $2.08. But I’m keeping the faith that regulations will come this week and we’ll look back on this time as another bottom.
When the top stories are no longer about the banks, people are going to start asking questions about the price of gasoline. Crude oil slipped another $4.56 today to close at $91.15, so why is gas still over $3.50 a gallon? I smell “pissed off” coming.
In late-breaking news tonight, Barclays announced it put a bid in to buy Lehman Brothers for $2 billion, and the government decided to loan AIG $85 billion.
Also in tonight’s late-breaking news, an SEC spokesman told Reuters that “The American Bankers Association said many of its members have seen precipitous declines in their stock, high trading volumes and huge spikes in so-called failures to deliver [due to naked short sellers], leading them to conclude that their stock is being manipulated. The U.S. Securities and Exchange Commission expects to issue new rules against abusive short selling within 24 hours.”
Within 24 hours. This is great news.
September 15, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged ABK, AIG, American International Group, BAC, Bank of America, bankruptcy, banks, CHC, fmd, Great Depression, Lehman Brothers, lending window, PMI, RDN, reform, short sellers, TMA, wall street, WaMu, Washington Mututal, WM
Exactly two months from the widely-believed bottom, “the biggest shakeup since the Great Depression” is what it’s being called. Today was the largest 1-day loss to the Dow in seven years. What a total mess. All this time, I’ve been sure no one knew what they were talking about the financials and that the bottom was already hit. Slowly though, I’m coming to ask myself, “what were you thinking??” Analysts had said the worst wasn’t over, but of course I didn’t believe them; I’m stubborn and always have been. Late last night and early this morning, former employees streamed out of Boston’s Lehman building, and all other Lehman locations, with boxes and resumes in hand. After last night’s negotiations failed, it was certain death for their jobs, and their stock, which was at 70 cents by 6:30AM, 45 cents by 7:30AM, and 18 cents at day’s close. In less than 24 hours, the 158 year old mainstay lost 94% of its value. Not only was the bankruptcy of Lehman Brothers the largest bankruptcy in United States history, it dwarfed all other bankruptcies in our country’s history. Along for the hellevator ride from par to the bottomless abyss went all the financials today. Even Merrill Lynch, which was up 30% in premarket trading because of being bought out last night for nearly twice its current value, closed the day up just 0.6% from its sorry close on Friday.
Articles and blog titles that ht today had some pretty colorful titles: “Jaw-dropping day for financial markets”, “A day of reckoning”, “Meltdown in US finance system pummels stock market”, “AIG fights for survival”, “Street’s nasty surprises keep experts guessing”, “Giants fall on judgment day”, “Stocks plummet on financial meltdown”, “It’s a morose Monday for Street’s employees”, “Goodbye to easy money”, and “Broken brothers” were just a sampling. The articles spanned all languages as today hit the entire world like a million tons of bricks.
So many questions arose out of today. What will happen to WaMu? What will happen to the mortgage insurers now that one of the banks they insured has evaporated? What will happen to AIG’s stock value now that the bank plans to head to the lending window? AIG had asked for $40 billion, but word on the street is that they’ll “only” get $20 billion. Following suit of its sibling ratings companies, Standard & Poor cut Washington Mutual’s rating to “junk” today.
Of the stocks I watch, here are today’s nearly unbelievable numbers:
Regions Financial (RF): Down 4% to $11.12
Community Bancorp (CBON): Down 4% to $4.53
Syncora Holdings (SCA): Down 6% to $2.39
Thornburg Mortgage (TMA): Down 7% to 35 cents
Triad Guarantee (TGIC): Down 9% to $2.1549
Financial Select Sector ETF (XLF): Down 9% to $19.15
MBIA (MBI): Down 11% to $11.45
National City (NCC): Down 11% to $4.28
First Marblehead (FMD): Down 14% to $2.67
Centerline Holding (CHC): Down 14% to $2.05
Radian Group (RDN): Down 14% to $3.90
Citigroup (C): Down 15% to $15.24
Ambac (ABK): Down 16% to $6.24
PMI Group (PMI): Down 17% to $2.57
Deerfield Capital (DFR): Down 18% to 60 cents
Bank of America (BAC): Down 21% to $26.55
MGIC Investment (MTG): Down 21% to $5.35
Washington Mutual (WM): Down 26% to $2.00
American International Group (AIG): Down 60% to $4.76
My friend works for AIG. I hope that if he loses his job it’ll be the kick in the pants he needs to get his ass to Hollywood.
The Dow plunged 504 points today to close below $11,000 to $10,917. A few days ago, an analyst on TV said that “it is possible we may see $100 oil within six months”. Within six months, buddy, how about within six days? Crude oil fell to a 7-month low today, losing $5.47 to close at $95.71 a barrel.
This experiment is going to be much longer-term than I previously thought. Luckily I have time to wait. I took another advance on my credit card to possibly take advantage of some of the week’s bargains, and will pay it back on Friday when my paycheck hits.
Later in the day, an article titled “Wall Street Losses Seen Spurring Regulatory Reform” hit CNNMoney.com. Some are calling for another ban on short-sellers. Alan Greenspan, in his interview this weekend, said that short-sellers are necessary to keep prices as a closer reflection of company values. But if Washington Mutual, for example is really trading at [now less than] 17% of its book value (MarketWatch, September 11), how real are the shorties really keeping things?
September 15, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, American International Group, Bank of America, Barclays, black Monday, Dexter, economy, Lehman Brothers, MER, Merrill Lynch
This weekend was one wild ride, and it’s going to be a bloody Monday. Barclays walked away from talks to buy Lehman Brothers today because our government wouldn’t back up the deal, and a bankruptcy filing could come by midnight. Lehman Brothers has $128 billion in long-term debt. Ouch.
Still in the running for the bad bank, although with rapidly-fading interest, are European bank HSBC Holdings (on the New York Stock Exchange as HBC), Bank of America (BAC), and Goldman Sachs (GS). None seems interested in Lehman’s total assets, and for some unknown reason, GS seems interested in just the part of Lehman that holds real estate.
At 10PM I came home to a story out of nowhere, or at least from a place I had no idea existed, that Bank of America would acquire Merrill Lynch (MER) for $44 billion, offering $29 a share for the bank whose stock closed Friday at less than $18 a share. Meanwhile talks stalled on Lehman, an orderly wind down of its assets is seen as the only viable solution, and AIG declared it would go to the Federal lending window to ask for its own $40 billion. “Merrill Lynch gets $40 billion, why can’t I get $40 billion?” Bankers are such babies.
I stayed up passed midnight tonight, even though it’s a school night, just to see what if anything would magically happen to Lehman Brothers, and probably subconsciously to avoid a jar tomorrow morning. Like I said, I have no stake in Lehman, and hopefully BAC’s purchase of MER will cause some stability in the market tomorrow. But somehow I seriously doubt it. By 11PM, Dow futures were down 300 points, pointing to another black Monday. Washington Mutual message boarders were sweating themselves.
I’m sweating a bit too, maybe. Earlier in the summer I set off on an experiment that soon took me over and trapped me into a world that was completely foreign to me three months earlier. I still find it foreign, but more like Brazil after your first cop shakedown than Paris when first stepping under the Eiffel Tower foreign. As a side, I’ve never been to either Brazil or Paris, and as good as my imagination is I know it’s not a fair substitute for the real thing, but I can imagine that looking up through the Eiffel Tower is much more pleasant than being forcefully robbed by the Brazilian police, which is the type of foreign this experiment has turned into. And even though I know all this, and even though I sometimes can’t sleep at night in anticipation of what news will hit the next day, and despite how badly I sometimes want to nap before 4PM, I can’t seem to step away. I’m invested, both literally and figuratively, as well as emotionally and psychologically, and sometimes even physically through a churning stomach, in the largest clusterfuck this country has ever seen. My only solace is the thought that even if I lose it all, at least I can say that I watched it all happen.
But it may not be all bad. Alan Greenspan said that the crisis our financial institutions are facing is a “once in a century event” and is by far the worst he has seen. If he’s right, and he probably is, this is a real bottom where some serious bargains can be found and some serious money can be made- if only some pull through.
By midnight no new news hit about Lehman Brothers, so I finished up another episode of Dexter and went to bed. It seems the death day of a 158 year old bank will in fact come tomorrow.
September 15, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, American International Group, Bank of America to buy Merrill, Barclays, Lehman Brothers, MER, Merrill Lynch, WaMu, Washington Mututal
Yesterday’s talk of the Lehman’s sale to Bank of America caused the financial sector to rally, both here and in Europe, but now that the BAC deal seems to be fading away, analysts are predicting a “bloodbath” on Monday.
United Kingdom bank Barclays now says that they may buy Lehman, but only the good parts. No one wants to touch the bad parts, namely Lehman’s real estate assets. A meeting was held today in New York about the fate of the bank and how to go about with an orderly sale, but no deal has been struck yet.
Because these days it seems that the strength of the entire banking sector is so dependent on its weakest link, one option that came up in today’s New York meeting was the possibility that other Wall Street firms will inject capital into Lehman Brothers to keep it alive and therefore restore the confidence that was washed away this past week. But with everyone hanging on by a thread, no one seems too open to this idea. It seems at this point, liquidation is a very possible option. But unless whatever happens is done orderly, chaos on Monday is a fair guarantee.
Also on Friday, Washington Mutual came out swinging at Moody’s Investors Service for downgrading the bank, stating that “the downgrade was based on instability in the sector and not an in-depth analysis of Washington Mutual’s actual standing.” Amen WM. WaMu’s new CEO Alan Fishman reportedly got a $7.5 million bonus on top of a $1 million salary, and starting in 2009, Fishman will get a bonus of 365% of his base salary, which basically has the guy pulling in at least $4.65 million a year after this year’s $8.5 million. I sure hope all that money will persuade him to work overtime to get this ship turned right! Or at least guilt him into working really, really hard. Right now, Washington Mutual seems to be thought of as next in line to fail, or at least in a dead heat with American International Group (AIG), and Merrill Lynch (MER), so it’s going to be important for Lehman to come out soon with a plan that will stabilize the sector’s emotions.
After yet another extremely volatile day yesterday, the Dow closed down 11 points to $11,422. Crude oil closed up 31 cents to $101.18 after briefly dipping below the $100 mark for the first time in five months. President Bush warned gas station owners against price gouging because of Hurricane Ike. It’s still not clear how many people were stranded in the hardest hit Texan coastal towns of Galveston and Lake Charles, but many of the people being rescued are elderly and sick.
August 7, 2008
· Filed under money, stock market · Tagged AIG, Centerline Holding, CHC, Citigroup, dow closed at, Dow falls, money, oil, oil closed at, stock market, trading, wall street
Crash! Bam! Boom! Down goes the Dow (and everything else except oil)! Today reminded me of a typical day we would have seen a couple months ago, and would have been a great day to increase positions, but I’m all out of funds- both unsettled and settled. Tomorrow’s pay day, and it may take a day for the funds to come into Etrade from Citizens. Fingers crossed it doesn’t! Tomorrow should be another great buy day. There were tornado warnings for New England all over the news today, which was a nice distraction for people (like me) flabbergasted by Wall Street!
This morning I bought into CHC and increased my position in PMI later on. Before the bell, CHC came out with positive earnings and PMI not so much, but in the long run I still think PMI is a decent investment. At one point today, CHC hit 50%+above opening, then settled back to 25% up. PMI fell more than 20%.
Mbia (MBI) comes out with earnings before the opening bell tomorrow, and RDN reports after the bell on Monday. SCA reports before the bell Tuesday. The Yahoo finance earnings calendar is a great resource to find earnings dates.
I have a lot of analyzing to do tonight to figure out the best next moves. I’ll wait until earnings next week to get more RDN and SCA, but as for picking up more shares of stocks that have already reported on their second quarter, I’m going to have to give it some serious thought. ABK, C, CHC, MBI, NCC, RF, and TMA are all possibilities, although there was a story about Citigroup (C) having to buy back some junk they sold to people, so maybe staying away from C right now is a good idea. Other tickers that may be good next moved are: KFS, CORS, MF, AMFI, CBON, SSBX, but I wouldn’t yet recognize these banks’ names, let alone their stories. I’ll have to look into them all tonight. One of my stock friends said his next move will be CBON, so that may be the best move of the lot.
The Dow freefell 224 points today to $11,431, which may have been due to the bear market benchmark oil passed yesterday. People like to buy when things go bear, and oil did in fact close up $1.44 to just above $120 a barrel today. Bloomberg reported that today’s stock pullback was
led by American International Group’s (AIG) reported losses. A friend of mine has a big stake in AIG; I feel bad for him. I closed down enough today to just about wipe out this week’s profits, but I’m not sweating yet: this was bound to happen. Tomorrow will be interesting and a great day to buy.
