I swear I could just short all the banking index right here right now. I don't care for fundamentals, but any bank that has exposure to subprime mortgages is insolvent in my modest opinion. You might think that my opinion does not count sense I have never seen the books and could not possibly know the likely exposure to mortgage back assets and the associated risk. Well neither does any one else and that includes the credit rating agencies who co conspired in the fraud by giving the most toxic waste the highest ratings.
The banks are insolvent just like a chicken running around with it's head cut off is dead.
All these maneuvers are just buying time. Citi getting funded by Abu Dhabi, the Slush Fund(my name for it) or so-called Superfund that has been in the works since September and bleeding out bad news in small increments like this with Bear Sterns. From Bloomberg
"The cuts are in addition to the 300 announced on Oct. 29, said the person, who declined to be identified because people at the securities firm are being told today. Bear Stearns will shed at least 20 positions in London and make further reductions at its U.K. Rooftop Mortgage Ltd. unit, "
Subscribe to:
Post Comments (Atom)
10 comments:
I do not know if your opinion counts or not for the public, but I do agree with you. Your comment on the rating agencies is especially enlightening.
Wait a minute... that what I have been doing for 4 months. Stop stealing my idea ;-)
GREAT BLOG. Keep it real and free.
thx
pl
I certainly hope you're right and that we're on the cusp of a financial collapse. What this country needs is a good Depression. As long as people are driving SUV's, drinking bottled water and spending $40 to "build a bear", we're gong down the wrong road. We need to stop spending like drunken sailors.
Can you short the bank index via an ETF? And if so, which one?
Can you short the bank index via an ETF? And if so, which one?
I am actually tired to hear these comments about SUVs, bottled water and bears. Kids love building bears, SUVs are totally ridiculous when owned by single people - it is quite sickening to see these single girls driving them - but they can be very helpful to families with several kids. Bottled water is healthier -- do you know how much chlorine we drink on a daily basis? There is so much waste around and attachment to really useless things, there is no need to repeat the same old, generalized examples over and over again. But I do agree that a depression would be great - we'll get rid of almost ALL SUVs, CO2 production will decrease, and global warming may slow down.
This is to some of you anonymous( anonymouss) out there. There are two banking ETFs, BKX and XLF. take a look at their charts. If you remove all labels form the charts you can't tell them apart. If you put the prices back on the charts then you could see that the XLF is roughly 1/3 of the BKX. This blog is less than a month old, but I have been short the BKX in and out from about 108 though not with my eyes closed. Reason is that the Plungers and specialists lurk. I was short Bear Sterns when the rumor came out that Buffet was taking major shares. I think BSC was @ 130ish. And ditto with Countrywide when it was around 17. Technically they were screaming shorts at time, but the charts don't tell the whole story. They show the pattern and technicals, but not the scam. So I have learned to step in slowly and/or hedge.
SKF is the ETF to short the banking sector.
If you want to short the banks, purchase SKF, it is an ETF that shorts banks.
Good for people to know.
Post a Comment