Posts tagged freddie mac

Thursday September 25, 2008: WaMu fails, IDMC makes a 300% gain. Why?

September 25, 2008 · Filed under business, economy, investing, money, politics, stock market · Tagged , , , , , , , , , , , , ,

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!       

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Tuesday September 9, 2008: Lehman Bros. (LEH) Ruled the Day

September 9, 2008 · Filed under economy, investing, money, politics, stock market · Tagged , , , , , , , , , , , , , , , , , , , , , , , ,

My God, what have I done?  All across the country, investors in all sectors and companies must be asking themselves the same thing.  I know my friends are.  After yesterday’s huge [emotional] rally in all sectors but one (energy), today seemed completely irrational.  Everything fell.  This was more than profit-taking.  All of yesterday’s gains, 280 points, were shaved off the Dow as the index slipped all day to close down to $11,230, as investors in the financials asked themselves one extra question: “will any financial survive?” 

 

Lehman Brothers (LEH), Washington Mutual (WM), Radian Group (RDN), PMI Group (PMI), Ambac Financial (ABK), First Marblehead (FMH), MBIA, Inc. (MBI), MGIC Investment (MTG), Triad Guarantee (TGIC), and Thornburg Mortgage (TMA) are just some of the financial institutions that had double-digit percentage losses today, and those are just the ones with losses greater than 10%.  Citigroup (C), Bank of America (BAC), JP Morgan (JPM), SunTrust (STI), American Express (AXP), and even Visa (V) and MasterCard (MA) lost today.  Lehman Brothers (LEH) is reporting their third quarter earnings tomorrow- a week early- after their Korea Development Bank deal fell through and its stock price lost 45% of its value today.  LEH stock did bump up 7% in afterhours trading, so maybe there’s good news on the horizon.  But no doubt, this bad news cast even more doubt into the financial sector today and helped push share values down.  Today was very, very painful.  Luckily I was so busy at work, with teaching, duties, and meetings, that I had no time to sit down and digest what was happening. 

 

But my friends did.  One of my stock friends, who has made a small fortune day-trading these financials, sent me an article that eased my mind a bit.  It definitely crossed my mind a few times in the last couple days that my experiment may not work out after all, but the article he sent gave me some hope.  It was titled “S&P Picks and Pans: Wells Fargo, Washington Mutual, TW Telecom, JC Penney, Avery Denison”, and was an article in BusinessWeek online.  After all the upgrades and downgrades and rating cuts by people with questionable credentials and too much power, it was nice to read an article from a reputable source deeming one of my stocks, WM, a “hold”.  If Washington Mutual is a hold and its going through some actual concrete, documented troubles, then my thinking (and hope) is that yesterday and today’s major sell-offs were out of pure fear.  But I still hope the sell-off doesn’t continue! 

 

A Reuters article from yesterday titled “Ambac’s planned muni insurer may be hit by changes” shed some light on what the common sentiment towards the mortgage and bond insurers might be.  “In another even more fundamental change, agencies are mulling a shift in how they rate muni debt, using the same scale used for corporate debt. That would result in widespread rating upgrades for municipal bonds, which have a much smaller risk of default than corporate bonds. Higher ratings would in turn reduce the need for insurance.”  If there’s less risk of default, then there’s less need for insurance.

 

One last article I’ll quote, this one from MarketWatch.com titled “Community building ire MarketWatch readers kindle own outrage over Fannie, Freddie takeover” quoted ArthurDental, who is a member of the MarketWatch Community.  “”Everyone gets upset about financial aid to the poor,” ArthurDental wrote, “but where’s the outrage when taxpayers foot the bill because some ‘investments’ went sour? So stockholders would be largely wiped out; why then aren’t bondholders made to pay for their mistakes, too?”

 

It’s telling that this article didn’t hit yesterday when the market soared, but ArthurDental is right.  When SSBX failed, I lost my investment.  But when Freddie and Fannie exposed themselves to trillions of dollars in bad mortgages and therefore didn’t have the capital to pay the bonds it issued to China, the two lending giants got a slap on the wrist and trillions of our taxpayer dollars.  Hey, I made a mistake investing in a company run by a McCain, where’s my money?  It ain’t coming and I have to deal.  And that’s the way it should be. 

 

That Hurricane Ike took a turn south, and the Organization of the Petroleum Exporting Countries (OPEC) will likely maintain its oil production even though demand is down, caused the price of crude oil to fall to a 5-month low.  Crude oil lost $3.08 to close the day at $103.26 a barrel.  I lost $1700 today, or in my brother’s terminology, “seventeen hundo”.  Ouch. 

 

So what is going to happen now that the rules of the game have completely changed?  I don’t dare speculate.  But whatever it is that eventually happens seems as if it won’t make itself known for a while.  For now, I’ll keep the faith.  I took a gamble and put in a limit order for 25 more shares of WM today, and you can imagine my surprise when I signed on later, saw the stock price was at $3.30, and that my order executed at $3.60.  When I put the order in, I assumed it was so low that it would expire unexecuted. 

 

And more than anything, tomorrow’s a new day when anything can happen. 

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Monday September 8, 2008: 11th Bank Failure (thanks McCain), and a day of profit-grabbing??

September 8, 2008 · Filed under money, politics, stock market · Tagged , , , , , , , , , , , , , , , , , , , , , , , , , ,

“Never count your chickens before they’ve hatched” goes the saying, but I didn’t follow this advice.  This morning during the premarket, I busted out my calculator to crunch just how much I was set to make based on the premarket numbers, and it was a lot.  So you can imagine my surprise when I signed back into Etrade at 11AM to see most of my stocks in the red and Freddie trading at $1 (which actually was better than I expected).  Indeed, the financials all opened up big- real big- and I’m sure today’s blip will be seen for years to come.  But then things happened.  I’m still not sure exactly what, but maybe it was a composite of a bunch of things:

 

Washington Mutual (WM) gave their CEO Kerry Killinger the boot, instated veteran Alan Fishman, and was told by the Office of Thrift Supervision to provide “an updated, multi-year business plan and forecast for its earnings, asset quality, capital and business segment performance” (SmartMoney.com).  Sure sounds like micromanagement to me.  WM closed the day down 5.62% after being down 20% during some of the session. 

 

Syncora’s (SCA) rating was withdrawn by Fitch Ratings, who had just in August changed SCA’s rating from “evolving” to “positive”.  Who are these Fitch Ratings people anyway, and why does their word mean so much?  SCA closed the day down 4% after being down by double digit percentages various times during today’s session. 

 

Radian Group (RDN) opened the day at $5.50, which was up from Friday’s close of $4.79, steadily fell throughout the day like its siblings, then fell off in the last few minutes of trading to close the day down 17%.   Google message boarders think someone knows something, although no news has yet hit. 

 

Silver State Bancorp (SSBX), driven into the ground by John McCain’s son Andrew McCain, failed on Friday, making US bank casualty number eleven.  I held just 125 shares of them, worth just over $100, so the hit wasn’t so hard.  But that with Freddie had me reeling.  I contemplated selling WM and SCA, or buying more WM, or buying Deerfield Capital (DFR), or not buying them, or waiting it out, or putting a 60-day limit order in, but in the end I did nothing.  I sold SSBX at market for a gain less than the commission and held on to FRE.  I decided that once the smoke clears, which stock is which and where each is going will become much clearer.  But I sure do wish those pre- and early-market numbers held!  And most of all, I hope today isn’t a sign that the US banking industry is going the way of Wal-Mart (who coincidentally closed the day up 2%), and headed to put all the little guys out of business.  One analyst, Steve Stelmach of Friedman, Billings, Ramsey & Co. said that “mortgage insurance could become an obsolete form of credit enhancement” in the long-term because of the bailout.  He was loosely referring to the drop in RDN’s share price and how the company, and ones like it, could be phased out.      

 

The Dow ironically traced a smiley face, opening way up, dipping a bit, then closing the day up 289 to $11,510.  Because of Hurricane Ike barreling towards the Gulf of Mexico, oil closed the day up as well, but just by 11 cents to $106.34.  The dollar is at its highest value in nearly a year!  It would now take just $1.41 to get one euro.  Including the hit from SSBX, I closed the day down $323, $211 of which was from FRE. 

 

You win some, you lose some; I just wish I had won today.  The market rallied and I was left in its dust.  With any luck, much of today’s activity in the financial sector was just profit-taking and the days to come will reveal the real reaction to this past weekend’s news.  Next time I won’t count my chickens before they’ve hatched and started laying eggs of their own!

 

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Sunday September 7, 2008: Tomorrow’s premarket trading suspended for FRE and FNM, US futures Way up, China Way Happy, Financial crisis over?

September 7, 2008 · Filed under money, politics, stock market · Tagged , , , , , , , , , , , , , ,

All day, Google message boarders feverishly defended their claims that their FRE or FNM stock value will pop or that others’ stock will be worthless because of the Freddie/Fannie takeover.  Despite what happens with these two companies, US futures were already up 240 points by 8:00PM (Bloomberg.com), even with the price of oil up $2, so it was pretty obvious that the overall market was happy about the takeover.  Before its open, Japan’s Nikkei futures pointed down 80 points, but opened up 147 and shot straight to the stratosphere.  Is it possible that government bailouts of two American companies will heal all the world’s markets?  Time will tell on that one, but one thing’s for sure: tomorrow morning will be interesting.

 

An excerpt from an article in the New York Times entitled “A Sigh of Relief, but Hard Questions Remain on U.S. Economy” by Vikas Bajaj and Keith Bradsher explains why we need to keep China happy.  In addition to us needing their money for Iraq, China owns a large stake in our economy:

 

“Asian central banks, particularly the People’s Bank of China, have emerged over the last several years as important buyers of bonds from the two American government-sponsored enterprises [Fannie and Freddie]. Standard & Poor’s estimates that the People’s Bank of China held $340 billion of these agency securities at the end of June, but has been unable to estimate Asian holdings over all because the data is too unclear.

 

While central banks around the world have historically accounted for a quarter of purchases of Freddie Mac debt, their share rose to 37 percent for debt issued since 2006, according to an analysis of the latest available data by CreditSights that was released on Wednesday. The bulk of those purchases appear to have been by Asian central banks, which have been buying dollar-denominated securities at a record pace to slow their currencies’ rise against the dollar and thus preserve the competitiveness of their exports.

 

Still, Asian central banks are likely to remain major buyers of mortgage securities. That is because they must reinvest dollars earned from exports to the United States, said Daniel Alpert, a managing director at Westwood Capital, an investment bank in New York. The Treasury backing of the debt will serve to make the bonds more attractive, he said.

 

“The money that they have been giving us as basically a gift will come back to them,” Mr. Alpert said, referring to the Asian investments in the securities. “They should be quite pleased.””

 

The New York Stock Exchange halted premarket trading of both Freddie Mac and Fannie Mae for tomorrow morning.  It’s going to be one wild ride once 9:30AM hits!

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Saturday September 6, 2008: Freddie and Fannie get bailed out, other financials take a jump

September 6, 2008 · Filed under money, politics, stock market · Tagged , , , , , , , , , , , , , , , , , , ,

Is this the end of the financial crisis?

 

This summer, I successfully worked to build a portfolio of financial stocks that has the potential to be worth $100,000 if all the stocks again reach their 52-week highs, and so far I’ve gotten a 42% return.  Some stocks have been higher in recent times than their 52-week highs, but I didn’t want to get too crazy.  I multiplied the number of shares I have of all my stocks by their year-highs and added up all the numbers. 

 

Thankfully just 50 shares of Freddie Mac were included in this calculation because as of tomorrow, my $225 worth of FRE, which is down 50% from when I bought in anyway, will be worth $0.  Where’s the money going and why now?  Forbes.com cites the timing to “grumblings oversees” from China.  After all, China is funding our war with Iraq so we better keep them happy, right?  And the Asian markets open tomorrow. 

 

So Freddie and Fannie Mae will be bailed out by the American taxpayers (and shareholders) to keep China happy so that we can still get money from them to stay in Iraq.  Our tax dollars will go to help bail out bad mortgages (hey, the US is already trillions of dollars in debt, what’s another few billion?), to keep China happy, and to fund Iraq’s occupation.  Forget Christmas; Christmas for me has always been tax time.  Penciling in all those numbers into all those little boxes, looking up what a line means in the newspaper print tax book, licking the envelope and sending it to the office that handles the returns, watching my bank account for when the refunds are credited, and knowing that I did it all on my own has always been my kind of fun.  But you can bet this year I’ll be going to H&R Block.   

 

In afterhours trading on Friday, FRE fell 20% from $5.10 to $4.04, and I’m sure more people would have bailed given the chance.  Freddie Mac’s common share price will be all but entirely wiped out and some people stand to lose a whole lot of money.  One person on the Google message boards claimed to be in 7000 shares at a cost average of $5.51.  That’s a lot of money to lose over a weekend. 

 

For reasons I don’t yet understand, beside the fact that Freddie Mac often buys mortgages from other smaller banks, almost all of the other financials took a jump in Friday’s afterhours trading.  So I might not feel the loss of my $225 at all.  Still, I’d like to replace the stock with something else, and I’m very thankful that I never decided pick up more shares of Freddie Mac.  It was tempting, especially after the rally the stock has seen in the last week or two, but it would have added to the loss I’ll feel (or slightly feel) Monday morning.       

 

So now what?  Now I will need to find a stock that can potentially, based on its 52-week high and the number of shares I buy, return the $3,350 that I’ll lose on my 50 shares of FRE.  I’ve had my eye on Deerfield Capital (DFR), Community Bancorp (CBON), and yes, maybe even Triad Guarantee (TGIC) again.  Freddie Mac was a bet I lost, but so goes the game!

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Tuesday August 26, 2008: Hurricane Gustav, Interest rates will increase

August 26, 2008 · Filed under money, stock market · Tagged , , , , , , , , , , , ,

Happy Birthday, Mom! 

 

Back to work in the UK.  Yesterday was a bank holiday over there for some reason. 

 

The dollar has gained and lost value against other world currencies since trends like these began being recorded in the 1970s, and usually, as the Wall Street Journal reported yesterday, the tide takes about a half decade to come in and another half decade to go back out again.  The most recent downtrend triggered in 2002 is now six years strong, and with the bounce the dollar has seen in the past few weeks, some analysts are predicting that the dollar is in fact beginning an uptrend.  It may all be due less to a better domestic economy and more to a weakening economy oversees, but oil’s recent falls are real, and in the last month and a half the dollar has gained a significant 8% on the euro and 5% on the Japanese yen.  The dollar closed the day up 0.68% against the euro today, decreasing the cost of one to $1.4648.  News is that the Fed’s next interest rate adjustment will be an increase, but no timetable has yet been set.  Consumer confidence in July was said to be up more than expected. 

 

Thornburg Mortgage (TMA) closed yesterday at $0.40, then jumped over 50% in afterhours last night.  A friend of mine says he saw 80 cents in premarket trading this morning, but I was sleeping when it happened.  The stock opened today up 25%, climbed to 50% above opening, then slowly slid to close up 22%.  Google message boarders are predicting TMA to reach anywhere between $1.20 to $5 by week’s end.  I’m not holding my breath on $5 by Friday, but it’s starting to look like $1 may be possible.  A year ago, TMA was trading at $14/share, which was down from $27 just one month before.  One thousand shares of this stock could really pay off if TMA reaches even a quarter of its 52-week high.

 

Freddie had another up day: 20%.  The morning made it look like a great day was about to unfold for just about all the financials, but by the afternoon things had changed.  Other than TMA and FRE, most were down except for a few that just squeaked into the green.  One financial, Michigan Heritage Bancorp (MHBC) did something I’ve only ever seen OTCs do: it closed up 100%.  But the trading volume on MHBC is so low I’m not touching it. 

 

The Dow had a sideways day that ended up 26 points to $11,412, and on anticipation of Hurricane Gustav disrupting production and refining in the Gulf of Mexico region, oil climbed $1.16 to $116.27 a barrel.  However, that was down from an earlier increase of over $2, so it may be that Gustav is changing course.

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Monday August 25, 2008: Russia made a killing on Freddie Mac bonds

August 25, 2008 · Filed under money, stock market · Tagged , , , , , , , , , , , , ,

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.

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Friday August 23, 2008: Oil lost all its gains from Yesterday, and then some

August 22, 2008 · Filed under money, stock market · Tagged , , , , , , , , , ,

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. 

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Monday August 11, 2008: Oil ruled, RDN posts loss yet gained, will the dollar break free?

August 11, 2008 · Filed under money, stock market · Tagged , , , , , , , , , , , , , , , , , , , , ,

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!

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