Sunday, September 14, 2008

Late Night Sunday Fireworks

There is quite a bit going on this Sunday evening.

I got to watch my beloved Detroit Lions tease me yet again, only to break my heart in the end. But tonight we have more important things going on, things like the Fed expanding the window to accept equities. Things like Lehman going belly up. Things like AIG turning down private equity infusions only to turn to the Fed for help. And then for me the coup de grace, Merrill being acquired by Bank America for, get this, a 70% premium to Fridays close. The deal is to be done in stock. Ya smell a Fed arranged shotgun marriage?

I have a suggestion for Merrill Lynch stockholders who will be getting BAC stock, PROTECT YOURSELF !! This is a gift of unbelievable magnitude. You should thank your lucky stars and get out ! As a Bank of America shareholder, to say I would be outraged would be an enormous understatement. My guess is that the majority of those shareholders will too busy watching American Idol, America's Got Talent or the yet to be released but coming soon American Taxpayers getting the Shaft, courtesy of unelected officials like Bernanke and Paulson. Yet Bill Siedman claims we are lucky having Bernanke and Paulson at the helm? Are you kidding me? Thats a joke, right? Bernanke and Paulson have have been exceeding successful in taking a major problem and most assuredly turning it into a GARGANTUAN one. This government inference only prolongs the healing.

The Merrill/Bank America deal is the one I smell a rat with. This is the same Ken Lewis of Bank America that orchestrated the Countrywide purchase and we all know how that went. I would suggest his abilities as an appraiser of corporate assets is somewhat suspect.

But what would I know or better yet what would Nouriel Roubini know. Besides being all over this from day 1, the financial media continue to treat the man like a leaper. Begrudgingly inviting him on their show when the sky looks to be falling and even then only to focus on the bullish prognosticators he is paired up with. Mr. Roubini states that he expects over 150 banks to fail and in the face of this they have nothing to offer in response, no questions, no comments, no nothing. Quality financial journalism at its finest !

I have been watching the cheerleading network and their coverage of tonight's events and I must say this about Vince Farrell. You poor, poor soul. This is a man who seems to have never met a market, stock or global event that wasn't a buying opportunity everywhere and always. I truly feel sorry for this clients over at Scotsman, oh excuse me Soleil Securities, leaning on his advice, if you can call it that. I am not trying to pick on Mr. Farrell but enough already. The fact that CNBC will continue to haul him out in front of the camera is beyond bizarre and quite frankly is shameful.

We have a market situation that has not cropped up over night, rather, this has been going on for months and months and yet here is a man who will continue to pound the table on stocks. Shameless, either that or absolutely insane. He continues to maintain it is contained to the markets and will not affect the economy. Absolutely stunning.

Are you shocked these market executives think the Merrill/Bank America deal is good for the market? Kinda like asking a realtor if its a good time to buy a house. Or a car salesman if its a good to buy a car. Is this lost on people or what?

But hey the economy is resilient, the fundamentals of the economy are strong. Enough with the BULLSHIT. I am sick of it.


You are also not wrong, not a criminal, nor unpatriotic to sell short a piece of garbage, over leveraged, book cooking, financial stock. No matter what any of these unpatriotic, lying, obfuscating, politicians, brokerage execs, and financial anchors say to the contrary.

What I do know is the underlying problem of this market, HOUSING, has not changed one iota. It has not impoved and until it does all the rest is window dressing. Wait till the commerical real estate dominoes start falling. It will not be pretty.

I see the head of the Keystone Cops Christopher Cox says the SEC with be doing all it can to ensure smooth functioning markets. I wonder if he has a copy of the Pakistani stock market regulators playbooks. He may need one.

I remember my grandfather asking me why people lept to their death from building in the aftermath of the stock market crash of 29', to which I replied "because they lost all their money." To which his answer was,"no, they jumped not because they lost what they had, but they jumped because they lost what they didn't have".

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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $98.41
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units ticker CRM @ $56.05 stop at $60.62

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