Wednesday, August 27, 2008

Bits and Pieces

So Thornburg Mortgage had yet another margin call, this time in the amount of 219 millions. Not even news anymore, at least to the main steam financial gurus. Well, it is news to this trader as Thornburg didn't do subprime, they did jumbo paper and most of it was prime or close to it. Yet another tell as to what is going on in the credit arena.

Thornburg CEO Larry Goldstone's quote sums things up succinctly, “Whoever thinks [mortgage securitization] is being fixed or getting better out there, it’s not.”

Gee, ya think ?

I see Roger Mudd, errr excuse me, I meant his son Dan, the CEO at Fannie Mae is doing the time honored ritual of Seppuku and is falling on his sword and taking his medicine. Oops, who am I kidding. That would take honor, courage, and moral character, he instead is having his underlings fall on their sword for him.

We ridicule and mock the Asians when they screw up, realise it, resign, go out for a night on the town and commit this act. You need look no further than who is running corporate America and it is easy, frankly, blatantly obvious as to why we are in the pickle we find ourselves in.

I also see the SEC wants to let U.S. companies switch to international accounting rules. Another nail in the coffin of our capital markets. As it should be, at least then the player steps up to the table knowing the game is rigged, the dice are loaded and the cards are marked. At least then the charade would be over and we could then all call a spade a spade.

You disagree okay. Then read the article about Lehman wanting to create a new entity in which to dump the toxic paper they hold. I have some advice for Dick Fuld over at Lehman. Don't bother, save yourself the assorted set up fee associated with a move like this and just dump them on the Feds lap. Who cares? You got nothing to lose and if it doesn't work out you walk with a deca-million dollar severance package and can round out the join Jimmy Cayne, Stan O'Neal, and Chuck Prince golfing foursome.

Lots of laughs and giggles on the best golf courses the country has to offer. As you hack your way in the annals of business humiliation as you become case studies in the new mandatory MBA course , How To Implode a Venerable Iconic Financial Name and Get Outlandishly Wealthy in the Process. As my grandmother (god rest her soul) would say, "you should be ashamed of yourself young man".

You may think I am kidding but I would be wholeheartedly in support of such a program of study. Sour, bitter, too harsh you say. Well facts are facts and I myself look at past trading errors and try to learn from them. The phrase from Santayana of "those who don't learn from history are doomed to repeat it" comes to mind. An old coach of mine used to say "when you've learned what not to do, then you have learned what to do." I guess we can safely surmise that they didn't learn from Enron. Lets hope we learn from this. That's obvious you say! To which I would reply, based on current goings on, obviously not !

Good speculating to you all and never ever forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 2 units of Powershare Agriculture ticker DBA @ $35.35 stop $34.79
Long 2 units of XTO Energy ticker XTO @ $45.40 stop at $44.48
Long 1 unit Currencyshare SwissFranc ticker FXF @ $92.70 stop at $90.68
Long 2 units Ultra Oil & Gas ticker DIG @ $84.65 stop at XLE $71.93
Long 1 unit U.S. Oil Fund ticker USO @ $96.95 stop at $91.38
Long 2 units Ultrashort S&P500 ticker SDS @ $64.65 stop at SPY $130.58
Long 1 unit Oil Service Holdrs ticker OIH @ $186.05 stop at $177.64
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $128.56
Short 3 units FedEx ticker FDX @ $87.10 stop at $88.16
Short 2 units of Apple ticker AAPL @ $178.05 stop at $182.76
Short 1 unit Blackrock ticker BLK @ $218.50 stop at $218.16
Short 1 unit Salesforce.com ticker CRM @ $57.05 stop at $60.62

1 comment:

VoiceFromTheWilderness said...

But they have learned from history, and from Enron, as you point out: The key issue is seperating personal cost/benefit from the cost/benefit of the corporation one controls. The other key issue is to have a few fall guys around. Works like a champ, and somehow one thinks their rejoinder to you (quite accurate, and IMHO quite correct analysis) is 'sticks and stones will break my bones but names will never hurt me'.

Don't get me wrong, I agree with your analysis, and share your opinion, I'm just saying it's going to take more than calling them immoral scum.

The ones who haven't learned from history, or rather forgot it, are the American public who allowed, ne cheered, as their government was taken over by a bunch of lying manipulative, self serving, corporatist fools.