Tuesday, May 20, 2008

Watching Lehman Bros.

The chart of Lehman (above) is struggling to keep its head above water. I have no axe to grind with Lehman as I am an equal opportunity despiser(is that a word) of any and all originators/facilitators of toxic waste. Are they headed the way of Bear Stearns? I should think so given their Alt-A pay option arm exposure, not to mention the egregious degree of leverage on their balance sheet. Not far behind will be the pending investor, client, shareholder litigation which will no doubt, will include the phrase "settlement while neither admitting or denying wrongdoing."
I wish Lehman well, they will need it.
A break of $41.45 will compel me to get further short adding a 3rd unit to my existing short position.
I wanted to share with all of you a quote from Meredith Whitney from Oppenheimer, one of the few on Wall St. who actually has a clue as to what is going on and supports here argument with facts and not a rosary and a few hail Marys

"The real harrowing days of the credit crisis are still in front of us and will prove more widespread in effect than anything yet seen,'' analysts including Meredith Whitney wrote in a research note."

I realise many would rather listen to Paulson, Mack, Dimon, Doll & Co., but I will stick with Meredith and others like her, who weren't afraid to tell it like it is.

Energy is making everyone breathless on pom pom TV, and as usual speculation calls run rampant. Boone Pickens cleared the air with the supply demand facts

demand: 87million bbls/day

supply: 85 million bbls/day


supply deficit 2 million bbls/day

Yup sure looks like a bubble, to me... NOT ! Ya gotta love critical, cutting edge, insightful analysis

Garmin... not a bubble.
Crocs.... not a bubble.
RIMM.... not a bubble.
Dot coms... not a bubble.

Oil.... definitely a bubble.

Maybe just maybe it's a bubble when your not a participant in said bubble and is not when you're long the bubble. Just a thought.

As I have said in a previous post The Old Playbook, these so called pundits are using the old "buy the dips, markets always go up" playbook. Ignore what is happening to the consumers income and balance sheet and the pressure he/she is under at your own peril.

Good speculating to you all !

Open Positions:

Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 1 unit Allis-Chalmers ticker ALY @ $14.45 stop at $16.64
Long 3 units Ultrashort Dow ticker DXD @ $50.12 stop 2/1 at DIA $132.68/$130.26
Long 2 units Ultrashort Financials ticker SKF @ $103.90 stop at XLF $26.72
Long 1 unit Currencyshares Swiss Franc ticker FXF @ $96.25 stop at $93.82
Short 1 units Daimler AG ticker DAI @ $86.20 stop at $82.48
Short 1 unit Brinker Int'al ticker EAT @ $21.25 stop at $24.14
Short 3 units Retail Holders ticker RTH @ $96.72 stop at $98.56
Short 2 units Goldman Sachs ticker GS @ $191.53 stops at $197.68/$193.58
Short 2 units Darden ticker DRI @ $36.35 stop at $40.27/$38.34
Short 2 units Lehman ticker LEH @ $43.70 stop at $47.46
Short 1 unit Deutsche Bank ticker DB @ $117.80 stop at $120.18

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