Posts tagged FRE
September 25, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged bailout plan, congress, FDIC, FRE, freddie mac, IDMC, indymac, JP Morgan, tender offering, Thornburg Mortgage, TMA, WaMu, Washington Mutual, WM
This week has totally sucked. Congress is dragging its feet with the bailout plan and Washington Mutual (WM) was seized tonight by the FDIC and sold to JP Morgan. What does that mean for WM shareholders? I haven’t a clue. Message boarders think it means terrible things. This afternoon, WaMu closed the trading day at $1.69, then fell in afterhours trading to 45 cents. What I do know is that, right now, it looks like I made a big mistake on investing in this one.
Thornburg Mortgage has been extending and extending and extending an offer to its preferred shareholders to tender their preferred stock and receive a few shares worth of common stock for each of those shares. Tomorrow is the latest extension’s deadline. If the tender offering goes through, the loss I incurred with WaMu will be erased. If it gets extended again, or does not go through, I will seriously consider pulling out of this whole experiment altogether, paying off my car, and taking a nice trip somewhere.
The fact is, there aren’t enough hours in the day to keep a finger on the economy’s pulse, be in graduate school, and hold down a full-time non-desk job. My head is spinning from the amount of information I’ve missed this week. I have no idea why Freddie Mac (FRE) has been making consistent daily gains of 50%. I have no idea why the OTC IndyMac (IDMC) made a 300% gain today. What are the changes Congress made to the bailout plan? No idea. Is cosine or negative cosine the antiderivative of sine? Not sure. The only thing I do know is, that when push comes to shove, I’d rather be in a classroom of 9th graders for 80 minutes than in a room with slimy bankers for 5 minutes. So all’s not lost.
The Dow gained 196 to close the day at $11,022. Oil made gains today to close at $108.02 per barrel.
Go TMA!
August 29, 2008
· Filed under money, stock market · Tagged banks, dollar best montly gain in 16 years, financial sector, financials, FRE, Gustav, investing, McCain, money, Palin, PMI, TMA, trading
Exactly three years since Katrina, President Bush declared a state of emergency for Louisiana. Gustav, now at hurricane status and predicted to morph into a category 3, is on its way. John McCain chose Governor Sarah Palin of Alaska as his running mate, which pretty much nailed his coffin shut. Maybe the thinking is that he’ll lasso in all the Hilary supporters who feel abandoned by their party, but I think the big companies already know Obama’s slated to win. Ford and Chrysler applied for, and will likely receive in January, $25 billion in government loans to transform their outdated factories into ones that can build alternatively fueled vehicles. This tells me that these two giants are already hedging the tax increases they know a Democrat will bring. Hey, if you know you’re going to have to pay more taxes, why not ask for some of the money back under the guise “green energy”? Democrats love everything green!
I’m too cheap to buy cable (and I’d end up watching The Hills reruns all day) so I never get to see Bloomberg on television. But today I spent some time at my Dad’s, who has every station imaginable, so I got to see the channel for the first time. Quotes stream along the bottom of the screen, as anyone who watches the station would know, and whereas yesterday would have been a stream of green speckled with red, today it was just the opposite. And the green speckles, with the exception of UnitedHealth Group (UNH), were all the financials. Although a far cry from yesterday, the financial sector held up today and the profit grabbing wasn’t nearly as rampant as I assumed it would be after yesterday’s major gains and right before a holiday weekend. The PMI Group (PMI) and Thornburg Mortgage (TMA) grew the most, while the tide finally caught up to Freddie Mac (FRE), which fell 13%.
The Dow lost 171 points today to close the week at $11,543, and oil also lost, closing down 13 cents to $115.46. The dollar reportedly had its best monthly gain since October 1992, which is an entire decade before its value began falling against other world currencies. The dollar is on its way back.
Because I go back to work on Tuesday, this may be my last entry for a while. It’s going to be hard making the transition from watching the market continuously to not at all, but work calls and I’m hardly in a position to quit. I like my job teaching math, and in fact, our math MCAS scores improved exponentially from two years ago to this past year. Fifteen percent of our students scored advanced or proficient in 2007 on the math portion of the exam, and this past year that percentage jumped to 45. Eighty percent of our students passed the math section, which is pretty good for an urban high school. Yeah, I’m looking forward to going back, and maybe even teaching my algebra kids a thing or two about the stock market. Who knows? Maybe one of them will be the next Warren Buffett!
August 25, 2008
· Filed under money, stock market · Tagged Alexei Kudrin, Biden, bonds, Columbian Bank and Trust, Denver, FRE, freddie mac, investing, money, russia, stocks, Thornburg, TMA, trading
Barack Obama announced over the weekend that his running mate will be Joe Biden. The Democratic National Convention begins tonight in Denver, Colorado.
Columbian Bank and Trust Co. of Topeka, Kansas collapsed, bringing the death toll to nine, and Korea Development Bank is having second thoughts about buying Lehman.
My stocks were split in the morning: PMI, FMD, FRE, RDN, TMA, ABK, MBI, and C all saw green while SSBX, SCA, WM, CHC, RF, NCC, and MTG were in the red. Freddie Mac has seen this same pattern day in and day out: big daily swings, which have no doubt has been making some big people some big money. Russia’s Finance Minister Alexei Kudrin reported that his country has made over one billion dollars (670 million euros at today’s exchange) on Freddie Mac bonds in the last six months, and Reuters has reported that demand is up for their 3-month and 6-month bills, so maybe today’s gain has some backbone to it. Warren Buffett says it’s “game over” for Freddie and Fannie, so it could be the run on bonds is an anticipation of a government bailout. Bonds get paid first. Time will tell. The stock has lost 2/3 of its value since I bought in, so at this point my 50 shares aren’t really worth worrying about.
Oil was up in the morning but went red by around 11AM. Resales of homes previously owned rose in July from the 10-year hit in June, and were the highest since February, which beat the Street’s forecast. The median home price has dropped 7% in a month, making is seem as if home prices may finally be meeting buyers’ expectations. Still, the amount of homes for sale in July was the highest ever, according to TradeTheNews.com.
Once the lunch bell rang, oil went green again, and the Dow really started to nosedive. Citigroup (C) clicked into red, and FMD followed once the brokers got back from lunch, but FRE, RDN, and TMA really started to take off. I’d think it was the bond insurers shining again after the news about Russia’s take on FRE bonds, but SCA wasn’t following suit. I take the fact that any stocks are up on a day the Dow is down over 200 points as a good sign of things to come, but the market these days is anyone’s interpret.
Meanwhile, as a throwback to my greener days, America’s Wind Energy (AWNE), the last slug standing, continues to drop. By now, much like with FRE, I’ve lost so much on the thing it’s not even worth thinking about, except for the fact that AWNE was supposed to be bought out by a larger wind company at some point and I continually wonder when that day will be. I’m not really even sure if that day has passed or has yet to come, or if it will ever come to fruition, or if that fruition will be fruition at all. All I do know is that “AWNE” may not even front an actual company and its presence in my portfolio serves as a constant reminder that day and swing trading OTCs on good news may be ok, but trying to invest in one of these small non-companies with low trading volumes is never ever ever a good idea. Ever.
After some flip flopping between red and green, my stocks eked out a modest $80 gain with TMA and FRE as the day’s big gainers and WM and MTG as the day’s big losers. The Dow lost 241 points to close the day at $11,386, and oil gained 52 cents to close the day at $115.11.
All eyes on Denver.
August 22, 2008
· Filed under money, stock market · Tagged Bernanke, dow closed at, FRE, freddie mac, Korea Development Bank, Lehman, money, oil closed at, Thornburg Mortgage, TMA, trading
It seems like a dream come true, but raisin bran that is exactly one-half raisins is kind of disgusting. Is wheat really that expensive? Maybe there was a sale on grapes.
After an extremely red week, it was certainly a breath of fresh air waking up this morning to large percentage gains in before hours trading. When the market opened, it was a wash of green- even Freddie Mac. Whew! The dollar gained and oil fell overnight as worries eased about Russia holding our oil hostage.
Warren Buffet came out today saying that there’s no way the government won’t have to intervene in the Freddie and Fannie situation but that the two giants are too big to fail (Freddie Mac owns half of the bad mortgages out there), that it will be until at least 2009 before the economy really starts to turn north, and that he’s supporting Barack Obama for president. In the August issue of Smart Money magazine, Buffet discloses that he believes the dollar will weaken over time and is investing his money oversees. When Warren Buffet talks, people listen. I just hope he’s not right about the dollar.
Analysts seem to think that a hostile takeover of Lehman brothers (LEH) is imminent, so its shares rose $2, or about 14%, overnight. An oversees bank, Korea Development Bank, also helped bump LEH by announcing their consideration of an investment in the beaten up investment bank. Lehman Brothers has a 52-week high of $67 and a current trade of $15.
By 10:30AM, the main points of Ben Bernanke’s speech at the annual Fed meeting hit Bloomberg. Bernanke threatened that lawmakers would step in if the rise consumer prices didn’t begin to slow and stated that he believes inflation will begin to ease by 2009. He also thinks that the financials need stricter oversight. Analysts are betting that interest rates will increase by year’s end. Within an hour of Ben’s speech, with the Dow still up almost 200 points, one-third of my financials blinked into the red. By lunchtime, most were. I know that I still have a lot to learn about how all this stuff works and what it all means, but it seems to me that if the head of the Federal Reserve has people running for cover, something isn’t right.
Oil lost $6.59 to close the week at $114.59. The Dow closed the week at $11,628, up 198 points from yesterday.
August 13, 2008
· Filed under money, stock market · Tagged bank stocks, brian williams, dow, dow close, FRE, money, oil close, oil inventory, petroleum, stock market, Syncora, trading
No better days yet! I slept in till 11AM, got up, turned the computer on, clicked on the internet, and immediately fought going straight back to bed. Google finance is set as my homepage, so the economy slaps me right in the face every morning. Energy was up, the Dow was down, and a quick check of http://www.advfn.com/p.php confirmed half of the story: oil was already up $2 a barrel. Yikes! The government today reported a decline in our petroleum inventories, which caused a feeding frenzy in the energy sector. With any luck today’s surge in price was completely media driven and oil’s decline will be back soon. Brian Williams reported last night that the US demand for oil has actually been falling by 800,000 barrels a day. Is that even possible?
The other half of today’s big gloomy story was the one about retail sales falling between June and July, which was the first time that has happened in five months. The decline was just 0.1%, which seems like a drop of sweat in an Olympic swimming pool, but apparently it was enough to draw attention. Bloomberg cited the drop in automobile sales as the culprit. The dollar was up in the morning against the Euro, but then eventually lost ground later in the day. And amid it all, somehow my stocks didn’t completely implode. Syncora Holdings (SCA) actually gained 16% to close the day at $1.93. Even Freddie Mac (FRE) closed up. Tomorrow I’ll be able to buy into UCBH; its shares fell 5% today.
Today was the first time it didn’t rain in Boston for what feels like forever, so I packed it in early and went outside to get my monthly dose of vitamin D. I came back to find the Dow closed down 109 to $11,532 and oil up $3.27 to $116.28, but both of these closings were up from today’s lows. Could it be a sign of better times tomorrow?
Another blogger, Eric at http://ericstrades.blogspot.com added me to his blog today. That made me feel important.
August 11, 2008
· Filed under money, stock market · Tagged banks, CHC, dollar, dow closed, economy, FRE, freddie mac, investing, legg mason, michael phelps, money, naked short, oil closed, phelps, Radian, RDN, SCA, SSBX, stock market, stocks, Syncora, trading
The Financial Times called this week “crucial” for determining if the six-year downward trend of the dollar will finally end. One Euro now costs $1.4904, down almost 10 cents from about a month ago. If it does break free, economists are expecting a quick economic rebound. Fingers crossed.
Etrade pushed my funds through this morning so I was clear to buy. I picked up more shares of MBI and CHC, and then bought into ACA Capital Holdings (ACAH) before reading the news that hit Friday about the company writing no new business. So about 15 minutes later I sold ACAH at a loss. I also sold off TGIC today at a loss and for the same reason. No new business can never be a good thing, and I should have read up first before buying. Haven’t I learned this lesson already? Yes I have; the reason I sold TGIC the first time was due to a “no new business” declaration. I should have read up on ACAH before jumping in. I’ll never learn!
With the rest of my available funds, I was only able to buy 40 shares of Silver State Bancorp (SSBX), which I should have bought into first, and had written a note to myself to buy into first, but for whatever reason didn’t. It has a relatively low trading volume, but the tiny fraction created by dividing its 52-week high into where it’s currently trading was just too good to pass up. I’ll pick up more SSBX later in the week.
By 1PM I set up a plan for what to buy into next. UCBH Holdings (UCBH), MF Global (MF), AMCORE Financial (AMFI), and Corus Bankshares (CORS) all create tiny fractions when dividing the current price by the 52-week high, and UCBH and MF both reported some sort of second quarter gains. CORS and AMFI had unusual upward movement today, which could be a red flag, and also have much lower trading volumes than UCBH and MF. Because of all this, I decided my next two moves would be into UCHB and MF, as soon as Etrade clears the funds created from selling off TGIC and ACAH.
I’d like to take a second to scream how dope Michael Phelps is. MICHAEL PHELPS, YOU ROCK!! He doesn’t represent every boy whose dad was an ass; he represents what every person can be. Why Channel 7 shows soap operas over the Olympics I’ll never understand. Ok, back to stocks.
Radian Group (RDN) reported a loss of $392.50 million ($4.91 per share) this morning as opposed to a profit of $21.1 million ($0.26 per share) this time last year, causing its share value to drop in the morning, but the news was quickly forgotten RDN closed up 8% on the day. Reporting a profit these days is the anomaly, and even when a financial posts a profit, such as ABK last week, a stock can still fall. There seems to be little rhyme or reason to financial stock prices in this environment, except that the announcement of “no new business” slaughters a stock price. All other news is fair game.
The Dow was completely driven by oil today: when oil fell in the morning, the Dow made gains, and when oil had a change of heart around 2PM, so did the Dow. http://www.advfn.com/p.php is a great site to watch the Dow, Nasdaq, and the S&P 500, and their connection to crude oil prices. The Dow closed the day up 48 points to $11,782. Oil closed the day down 75 cents to
$114.45, the lowest it’s been since May 1, and fell below the benchmark $113 a barrel at one point during today’s trading session.
After the closing bell, Syncora Holdings (SCA) reported a second quarter loss of $492.9 million ($7.67 per share). It should move up or down (who knows?) in the morning. Naked short sellers return tomorrow, and I’m starting to have serious doubts about the fate of Freddie Mac (FRE). By the end of the week if the news that big wig Legg Mason bought millions more shares doesn’t send FRE into the green, I may need to cut it loose. Manny needs mental peace, I need mental peace. Sinkers don’t bring the peace, just the pain!
August 6, 2008
· Filed under stock market · Tagged ABK, ambac, bear market, dollar value, dow, financials, FRE, freddie, money, oil, oil closed, stock market, stocks
Freddie Mac reported its fourth straight loss, which is a loss three times as great as analysts predicted, and is planning to cut its shareholder dividend payout by at least 80%. FRE opened down over 20%, made up some ground throughout the day, then took another nosedive after lunch to end the day down 19%. On the other hand, Ambac Financial (ABK) reported second quarter net earnings of $823.1 million ($2.80 per share), $650 million more than this time last year. ABK’s premarket hit a new 3-month high, and it closed the day up 23%.
FRE was no doubt the market mover today, but by 12:30PM the shock on some of the other stocks seemed to have worn off and NCC, RDN, RF, SCA, and WM all joined ABK on team green. I passed out on the couch for a couple hours and woke up to find the Dow, MBI, MTG, and PMI also on team green but C back in the red. Trader.
PMI reports earnings tomorrow, and so does Centerline Holding Company (CHC), a stock I have hesitated on getting into because of its low trading volume but nonetheless has been doing well. It gained nearly 19% today to $1.76 per share with a 52-week high of $16.
The Dow closed up 40 points to end this strange rollercoaster ride of a day at $11,656. Oil officially slipped into bear country today closing down another 59 cents to $118.58, over 20% off its all-time high just one month ago. The dollar hit a seven month peak! I closed up $150.
