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Latest Comments63 Comments
Ugly
1) reinstate the uptick rule
(it worked as intended since 1929, but some well-lobbied SEC knuckleheads erased it last year).
2) aggressively enforce the prohibition of "naked" short selling
(you should never be allowed to short stocks that don't exist - can you say "fraud"?)
3) disallow the purchase of CDS/credit default swaps by investors who do NOT have an insurable interest in the company
(I can't purchase hazard insurance on your home; that's illegal, so why should it be okay to buy default insurance in a company of which I have NO insurance interest? It shouldn't!)
If the current market was a bucking bronco, hedge funds would be the rider, and they'd be well past 8-second bell....with no grips....holding a trophy in one hand and a big bag-o-money in the other....just hoping this "ride" will go on forever!
Is Citigroup Failing?
Citi's losses, for the most part, are paper...not cash. The securities on their books are not worthless, but rather not tradable in the current environment (on that note, what is?! Basically, nothing that doesn't start with "T"). So FASB makes them write the assets down on their books.....but the true intrinsic value hasn't dropped that much.
I could be wrong, and only time will tell, but I don't believe for a second that the true book value of Citigroup is reflected in its current stock price. I think it has been tremendously oversold. [Yes, I am long Citi....currently VERY LONG].
You want to solve the ills of the stock market? Here's a few starters:
1) reinstate the uptick rule
(it worked as intended since 1929, but some well-lobbied SEC knuckleheads erased it last year).
2) aggressively enforce the prohibition of "naked" short selling
(you should never be allowed to short stocks that don't exist - can you say "fraud"?)
3) disallow the purchase of CDS/credit default swaps by investors who do NOT have an insurable interest in the company
(I can't purchase hazard insurance on your home; that's illegal, so why should it be okay to buy default insurance in a company of which I have NO insurance interest? It shouldn't!)
Of Guarantees and Printing Presses
Stick to the facts and you'll find value, but follow the "spin" and you'll come up empty-handed. (hint: you're currently in the latter category)
MBIA Sues Countrywide: Part of the Solution to Clean Up the Lies
If this gets legs, I think it could "right" a "wrong" and be a big benefit to the bond insurer's balance sheets and capitalization structures.
Mark-to-market has required them to write down assets to near zero without any regard for future income streams (premiums) generated by existing contracts. Those premium streams have been relatively unaffected by today's market turmoil, so the PV of those income streams should be relatively unaffected as well, yes? Unfortunately, no. They've had to book large write-downs (and obtain LOTS of additional capital as a result) to adhere to existing m-to-m standards...and adhere to the seemingly subjective demands of the rating agencies. Hopefully, this will right a wrong with regard to mark-to-market, and the bond insurers will find themselves not just "over-capitalized... but EXTREMELY over-capitalized. The spotlight will then turn to the rating agencies to see how they react - will they maintain their current positions? Last week, Moody's indicated it would be conducting follow-up reviews of the monolines over the coming weeks and implied that further downgrades were likely. We'll see.
Ambac, MBIA: Moody's strikes again
I continue to be suprised at the blatant subjectivity of the rating agencies, particularly as it relates to manipulation and/impact to the marketplace. The rating agencies wield a very powerful sword...with impunity....unaccounta... unregulated. One could naively assume, as I've done in the past, that said agencies would utilize the tool of ratings in a fair, objective, consistent and honest manner, but such is clearly not the case. They continue to act irresponsibly and with very harmful outcomes, and yet they are allowed to continue.
I don't understand.
Ambac Collapse: Anticlimax of the Week
Ambac Collapse: Anticlimax of the Week
Again, just a theory...
Ambac Collapse: Anticlimax of the Week
I've never been a conspiracy theorist, but....
Moral Hazard: A Danger to Our Financial System
Restoring Credibility to Ambac and MBIA
MBIA's Momentous 2Q: Need More Evidence That the Turn Has Arrived?
Who's Buying Financials?
I'm sorry, but going forward, I think I'll just skip over your blogs. They're just not worth the read.
MBIA Turns Thuggish
True, Ackman may be able to rangle himself out of this potential jam by slipping through some legal loopholes, but his actions, as well as those of his cronies, should land him behind bars or, at a minimum, result in some very hefty, very punitive fines. That guy is bad news; bad with a capital "B".
I said many months ago on SA that Ackman and his posse deserve some time in Club Fed, and I stand by my original contention.
A 'Buy the Loser' Rally
Selling the Short Sellers Short: Another Sign of Trouble
I understand the other has a right to his opinion, but it's complete bunk! And the fact that such skewed nonsense is posted on SA is not only reflective (in part) of what's wrong with the sytem, but makes me wonder why I keep coming back to reading SA -- I guess it's because the folks of E*Trade haven't provided a better, less-biased, source.
*sigh* Moving on now...