Ba_cfc

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Bank of America (BAC) is reportedly in advanced talks to by Countrywide Financial (CFC).

This is in direct contradiction to Dennis Gartman‘s #1 rule of trading:

1. Never, Ever, Ever, Under Any Circumstance, Add to
a Losing Position
not ever, not never! Adding to losing positions is
trading’s carcinogen; it is trading’s driving while intoxicated. It will lead to
ruin

After that initial disastrous buy in at $18-20, BoA is doubling up — at $6 . . .

Category: Corporate Management, M&A, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

84 Responses to “BoA in Talks to Buy CountryWide Financial”

  1. Mike M says:

    All BofA does is buy companies. Why stop now?

  2. v says:

    Hmmm. Could this have been the reason for yesterday’s late day rally, and not Ben’s speech?

    This is pure speculation on my part. But very interesting nonetheless.

    (MS, ED, and others, your thoughts?)

  3. x-man says:

    PUMP AND DUMP.

    DEAL WON’T MAKE.

  4. CaptiousNut says:

    I would hope that BAC shareholders reject this monumentally asinine and arrogant buyout. I don’t know why they just don’t let CFC go belly up, then swoop in and cherry pick their loan portfolio. It’s not like any other large banks have the capital to outbid them now.

    Ken Lewis has apparently been too busy making sure his employees watch An Inconvenient Truth (at work!) to do any sober financial analysis these days.

  5. michael schumacher says:

    The last two days have seen a script better than any writer (on strike no less) could come up with.

    The rally yesterday started at the August lows with a 3m share block (that’s $840 million to you and me) and that greased the skids that caused shorts (weak ones at that)to fuel the rise of yesterday.

    No coincidence that yesterday was ,in fact, the start of earnings season and the powers that be had already seen the retail numbers.
    Fast forward to today and you have (surprise!!) bad retail numbers and another warning (COF) that sends the market down about a hundred points. Bernancke bails it out with yet another “speech”. Now you have another 100 pt rally that fizzles and we get the BofA/CFC deal.

    If this deal was even being talked about there would have been some leakage (especially in this day and age) and after we have yet another rally attempt (artificially created IMO) gone and these rumors surface.

    Why not just say that Buffet is going to buy the whole market……or may be that one is just a bit overused.

    BTW the ONLY thing bofA wants with CFC is the servicing biz. It will not be a buyout…it’ll be some other convoluted deal but not an LBO……

    Oh and we had another one of those “mystery blocks” of (yes you guessed it) 3million shares right before this rumor came out. Only one place in the world that is outfitted with that type of cash that can be used……..

    Total desperation (that is becoming increasingly obvious) and nothing more.

    Ciao
    MS

  6. GregorSamsa says:

    This schmells like a “sweetheart” deal with the Feds.. BofA will take the cream and the taxpayer will take the toxic waste of CFC and will eat it just like the Sin Eater in the movie the Green Mile. Disgusting..

  7. michael schumacher says:

    Add in that CDS payouts would have been the other shoe to drop if CFC declared insolvency.

    So you saved another “non-impacted” business from having further payouts that they can’t make.

    That would have broken the market.

    No comment today from CFC but they had to halt it’s stock to discredit the filing talks from the other day.

    This is total fucking bullshit and should be investigated fully (like that will ever happen) I can say it though..

    TOTAL CRAP…..

    Ciao
    MS

  8. craig says:

    this whipsawing the market -1% to +1% on rumors of a buyout of one company, a $4b company, is IMO a sign of a rather unhealthy overall market that is not able to make SUSTAINABLE gains. the gruel being served by the bulls gets thinner and thinner each faux-rally.

  9. m3 says:

    *uses market rally to sell into strength*

    *goes to cash*

    *e-mails thank you letter to BofA*

  10. Eric Davis says:

    I’m too pissed off right now, to do anything but throw shit. and figure out how to make money in this market without day-trading my ass off.

    I hate day trading…

    That Reversal was a crazy move, That is a rare occurrence.

    Technical bounce, followed by some manipulation similar to what MS is talking about, fueling a short covering rally. I’m going to look for a new opportunity to go short lightly into the close

    But I expect for the crazy market moves to continue, it’s part of the nature of a Bear, that it pummels the hell out of every one.

    hard to complain since I’m killing it so far this year, but It hasn’t been easy.

    Hope that answers your question… I’m betting a continued short covering rally into the close….

    Actually I just changed my mind, I’m just going to play it safe…

    See if I can catch intraday moves.

    500 point 2 day run. Insane.

    Last thing you want to do is start over-trading….. or get into behavior more akin to a pinball, than a human being.

  11. Vermont Trader.. says:

    if you guys are looking for something to short try oil… it didn’t even move on the bernanke speech which means there are big sellers out there. Energy stocks are down in an up tape.

    The big money in commodities is controlled by the trend followers. Once they start to roll over… look out below.

    Now that’s a real contrarian play..

  12. michael schumacher says:

    I did that yesterday M3…..but I can still be pissed that yet again we get rally’s that are manufactured (and totally blatant) from the current administration.

    Desperation at it’s FINEST…….

    And the beauty of it is that it still won’t work…

    BTW all that does is buy CFC a little more time…they are still insolvent

    Ciao
    MS

  13. BDG says:

    MS

    3 million shares of what ? who sold it ( why do you only speak of the “side” who manipulates the trade , not the contra-side? )….. SPY trades 270 million shares today…. that’s $38 Billion …. what’s $840million in that?????? nothing …. your Tin-Foil Hat is a bit too tight

  14. Eric Davis says:

    People are using oil(and oil service) during the down trends, and moving to other equities in the uptrend.

    at least that is what I suspect.

    Only thing we can count on is that we will trade from the downtrend to new lows. and lows to downtrend.

    1440 into the close?

  15. michael schumacher says:

    nevermind what a 60% RISE in SP does to your capital ratio….that I’m pretty sure was the entire reason for this rumor.

    and right on cue the news reads:

    “CFC CDS no longer trading at distressed levels”

    Which now wins the captain effing obvious award of the day.

    Ciao
    MS

  16. michael schumacher says:

    Sorry BDG but when that “nothing” amount of $840 million gets shoved at the SPY at the AUGUST lows you get to see what a truly manipulated market looks like

    Apparently you do not pay much attention to the I-day sales…but that was obvious to me based on your caps lock button.

    Nice try though…..

    Ciao
    MS

  17. Eric Davis says:

    I’m starting to get the impression from this message board that tin foil hats are bad…

    Did they get out of style or something?

    I like mine.

  18. bucky katt says:

    I double up all the time. Even triple down if the opp occurs.

    Gives you some latitude if your first buy is wrong but you still like the idea.

  19. zell says:

    MS: Thanks for the play by play.
    This is a very dangerous market for anyone who understands the rot in the foundation of our economy. I can see the economy dropping right out from under the market, yet the market staying elevated for a long time. It will go down, but only after every trick in the book has been used. Down and dirty is the only way it will go down. It will have to be in tatters, when the Fed. has used all its ammo- and “don’t fight the Fed” is again discreditted.
    The whole ball of wax is in play now so don’t expect this market to go quietly into the night. This market is no place for Bulls or Bears.

  20. BDG says:

    MS

    3,000,000 times 142 is not $840Million…it’s only $426Million , but why quibble with numbers when you know it all ?
    and there have only been 10 trades of 1,000,000 or more shares today , only one above 2.55 million ( that was 3,553,000 at 3:34)
    and btw , I’ve managed 4 trading desks and now run a Long/Short fund for a hedgie …I don’t sit in the San Diego sun and take shots at everyone in the world all day , trading 1000 share lots with some discount broker

  21. v says:

    Yeah same here, ED, better to play it safe for now. Though, as MS (and BR, I think) mentions, this reeks of desperation. But, I echo it as well, this BS really pisses me off.

    I’m really curious what the terms are going to be. But in any case, this changes very little, this is light years from a panacea.

    Always a bright side, more short opportunities to come.

    Thanks for your thoughts guys (MS, ED); really appreciate it.

  22. BDG says:

    Eric ,

    at least you’re a gentleman , I’ve never seen you take a swipe at anyone on this board …. and yes , your Hat fits very well

  23. michael schumacher says:

    >>and btw , I’ve managed 4 trading desks and now run a Long/Short fund for a hedgie …I don’t sit in the San Diego sun and take shots at everyone in the world all day>>

    Do you feel better now???

    Oh and BTW I don’t give a shit what you have DONE. And I certainly don’t try to make myself feel better by touting my experience to others.

    Good luck with that attitude……it’s most likely the main reason that you’ve managed to work yourself out those jobs too. Because you could’nt come up with the numbers that were used to arrive at that amount tells me all I need to know about you and your “experience”.

    Ciao
    MS

  24. Eric Davis says:

    It’s obvious that for 20 years most of our economy has been propped up the Lie of low inflation. But the Charm of us realizing, like the Japanese, that that shell game stops when the rate hits 1%.

    And the Economists throw up their hands and go… “how come it’s not working!!!” and start pointing fingers.

    What a continued embarrassment.

    If Ben stayed Put, you know Washington, and wall street would have his ass. They are probably going to have his ass anyways.

    and we have to learn the hard way.

  25. Stuart says:

    AMEX nearly half a billion dollar writedown…

  26. michael schumacher says:

    from your own post:

    ( that was 3,553,000 at 3:34)

    Correct me but that is still above 3 million?? Thanks for contradicting your own post.

    Put away the caps key and you might get somewhere here.

    And I have lumped the two blocks in with my original post. So sue me.

    Ciao
    MS

  27. When two drowning men cling to each other the outcome is usually the same.

    HOWEVER, if BOA and Countrywide become so big together they can’t be allowed to fail, then they’ll get bailed out. So what’s not to like?

  28. Alex Khenkin says:

    Hm… I went long IVE this morning… We’ll see.

  29. Eric Davis says:

    Ya, I’m not a petty little boy, And try and Treat people with as much respect and regard as I can. Especially if I disagree with them.

    Operative word “Try”.

  30. Bob A says:

    Seems like a good fit for BA even if they paid too much for the initial position.

    Next WaMu. Will it become ChiMu or AbuMu or HSBMu or just NoMu?

  31. Brian B. says:

    MS,

    I dont know why you are so angry at the market “manipulation”? Who cares if its so easy to see it, just ride with it. You can make some real nice coin jumping aboard. I have my opinions about the near future of this market and its not good. But I dont let that interfere with my trading.

    BDG,

    good comments, but whats wrong with us little people who trade 15 cars on mini ES with my discount broker? I will get to 100 lots soon. (I know 100 lots are still small time). :)

  32. Brian B. says:

    MS,

    I dont know why you are so angry at the market “manipulation”? Who cares if its so easy to see it, just ride with it. You can make some real nice coin jumping aboard. I have my opinions about the near future of this market and its not good. But I dont let that interfere with my trading.

    BDG,

    good comments, but whats wrong with us little people who trade 15 cars on mini ES with my discount broker? I will get to 100 lots soon. (I know 100 lots are still small time). :)

  33. Lyon says:

    I believe Kenny Lewis HAS to be a graduate of this great institution…

    http://millionaireuniversity.com/

  34. Innocent Bystander says:

    Hey, you two guys aren’t going to start throwing furniture are you?

  35. jock says:

    BoA buys CFC – they’re all playing with OPM = OURS! They don’t care about their real biz. They’ll get their bonuses, and we’ll just try like crazy not to get skewered in the market. Plus ca change …

  36. rickrude says:

    with Bernake backing you up, you can
    always double up on a losing position.

    Big Ben will always come to the rescue of Big banks. No risk at all.
    BAC can do what ever it wants to do unlike
    me, no one will help me if I make dumb bets

  37. v says:

    Maybe MS is angry (as are others, myself included) because one of the core principles of the free market (i.e. a market for umm, let’s say, stocks) is that manipulation is strongly restricted and defended against. To see such blatant cherry picking (like today and yesterday) is an insult to every US citizen. Whether they know it or not.

    /end rant.

    PS – What Stuart said. ;)

  38. Rubens says:

    Dennis Gartman’s advice is on short-term trading; BofA is investing long term. Many value investors like Lampert, Pabrai, Buffett tend to buy early but make a lot of money later by adding to losing positions when the stock drops.

    Financial companies can go under either because they are illiquid or insolvent. Insolvent is when the value of assets is smaller than liabilities, so the company is worth less than zero. In the recent credit crunch, companies (New Century, Delta Financial, etc.) have been going bankrupt because they were illiquid. They were financing long-term assets with short-term debt. When the debt became due, the market lost confidence and they weren’t able to roll. Countrywide, SO FAR, has a liquidity problem. I would bet BofA will make a very good purchase.

  39. D H says:

    More evidence the consumer is tired. The debt trader I interviewed (http://smartguystocks.com/?p=192) warned of this:

    While rich people are still doing fine, American Express said the slumping housing market has begun to take its toll on the American consumer. Charges on the company’s roughly 84.7 million cards began to tail off in December, American Express said, and more clients failed to repay their debts.

  40. Don says:

    This is going to sound like a stupid, asinine, f–ed up question, but what gives w/ gold? Why now? I know Alan and Ben have been printing lots of dollars, but is that all there is? Is it purely momentum? Does anyone buying the stuff at nearly $900/oz realize that its been, oh, about 35 years since gold and the dollar had any official linkage?

    I know the goldbug arguments that it’s a hedge against inflation, but why? Since all the currencies now are essentially backed by nothing, what good is gold, except as jewelry and a minor component of some electronics? Unless you figure folks will be abandoning fiat currencies in the near future, I don’t see the gold rally as supportable as a function of supply and demand. Why am I wrong?

    And I agree w/ BR–B of A doubling down a bad bet is just stupid. It only helps them by delaying having to eat the $2b they’ve already mostly lost.

  41. jag says:

    Dennis Gartman is an idiot if he truly believes that it never makes sense to average down your cost of purchase.

    And let’s not forget, Gartman is a trader, not a large financial institution investing in a potentially fruitful subsidiary business. Applying short-term “trader wisdom” to an investment like this is ridiculous. I’m disappointed, Barry

  42. Stuart says:

    Gold is smelling ALOT of public money coming, at least part of the rise. Public money in the US, Europe, everywhere..and coming soon. Nothing wrong with its nose.

  43. Stuart says:

    from calc risk. Interesting reading indeed.

    Herb Greenberg writes: The Real Story on Countrywide…

    We’ll know it soon enough, but … several things would appear apparent …:

    1. The Fed is behind the deal.
    2. The Fed is behind the deal because the rumors yesterday of a near bankruptcy were probably true.
    3. As part of the deal, the Fed likely agrees to guarantee BofA against Countrywide-related losses.
    Read his eight points. Interesting speculation.

  44. Mike says:

    From Jim Sinclair:

    Let us assume one of the largest mortgage entities, Countrywide, who would have certainly been a significant player in the credit derivative market, has a very major credit derivative position with Bank of America. Lets’ assume that Countrywide was the entity that had the obligation to perform, but now clearly can’t. If Bank of America was to buy the non-performing other side of the many transactions and Countrywide become one entity with Bank of America, as they would, would the transactions between them not evaporate in the merge? It absolutely would. What would you then have to mark down on those specific transactions? I believe NOTHING would have to be marked down any further as two sides of the transaction became one.

    That would qualify the already invested $2 billion, plus whatever else needs now to be paid to Countrywide’ stockholders. This would more than likely be paid in paper.

    It might explain the inexplicable “why” of Bank of America putting $2 billion into Countrywide recently when Mickey Mouse could see that as a sketchy investment at best.

  45. barley says:

    “what good is gold” – It gives value to everything and assigns value to nothing. It is portable and movable (sort of) and is tracked by nobody.

    I once had an offer to sell a house in “gold”, yup the real stuff.

  46. zell says:

    It’s a chess game. On one side is the real economy of producers and consumers. On the other side is the financial community, the Fed, and the rest of the gov’t.
    The Main Street economy has been sold two consecutive bubbles. Bubble #2 is leaking liquidity as the financial/ gov’t side is doing what it can to delay the process of asset deflation – real actions and head fakes. Problem is that we have entered the end game as the Bubblers are put in check repeatedly. Finally there is checkmate. End game. None of us will enjoy that as it will tear at the fabric of our society.
    The next game is pick up sticks.

  47. barley says:

    oopps

    in=for

    my English get screwwwy when I’m yaking in German all day

  48. RichardN says:

    Very well said jag.
    Schumacher, seriously, conspiracy and manipulation theories get really old really fast and yours have flooded the comments for so long that I would bet traffic is down. If you have interesting observations to make, please do, but a 3m spy block at the lows isn’t interesting and it’s definitely not manipulation.
    Also, there is a difference between CAPS and bold

  49. Rex says:

    Barry-

    may not be a bad deal for BOA- besides now that the Fed is in charge and will cut and cut cut cut cut, the economy will be great!! Infact, everyone should go and buy tech!!– The market is way oversold- stocks are cheaP!!!—- Im kidding!- but I bet all the viewers of CNBC believe that!!

  50. Micahel schumacher says:

    Call them like I see them…….

    And Yes I DO think that a 3m share block placed squarely on the August Lows( on the second test of them no less) when the earnings season begins on the very day is worth mentioning. Sorry that you are unwilling to see anything wrong with that. Many others do (and not on this blog either).

    CFC got a pass because they were going to file and there debt covenants would have been breached. Thus payouts would have had to have been made to those holders. CDS insurance writers gorged at this trough as much as the banks did (it’s all available to the ones who actually read) increasing the amount that they insured against. Small problem: they do not have the cash to even begin making these payoffs so if a covenant is breached… now you are still getting in a VERY long line to even realize any return.
    (see what capping interest rate resets does to those holders for a likewise example)

    Someone made sure that neither of those eventualities happened today or by Monday for that matter.

    Other reason stock drops below 5 and two things happen:

    Fund managers can’t buy it
    De-listing begins to be talked about

    Not allowing CFC to default was the main reason for this today since the default is set by it’s share price. Do you think it was a coincidence that the stock was halted after is went below 5 yesterday??????

    Some of you really need to take the blinders off…this one is so obvious.

    Ciao
    MS

  51. John Borchers says:

    If banks have to charge less interest in general because the rates are falling how do they make more money?

    I would think it’s the other way around. You want to own banks brokers when rates are climbing.

  52. Micahel schumacher says:

    Brian-

    Wayyyyy passed that……;-0)

    having the best start of any year…ever and that includes yesterday AND today.

    Seriously… I go after people who offer up the size of there wallet or resume when they have nothing else to say…..because in most cases that is ALL they can say.

    “DickN”

    I do agree with Jag however you are not the only person here….think about that before you characterize my comments.

    Ciao
    MS

  53. tabasco jenkins says:

    Enron was going to be bought out, too

  54. Brian B. says:

    MS,

    ok fair enough… this quarter is a traders paradise!!! good fortune to you. P.S. not to make this about me, however, i was a cop in L.A., before during and after O.J., riots, etc… and I heard about all of the “conspircies”. funny in 10 years and 7 different divisions and basically all over LAPD, I never saw one…just a thought.

  55. patfla says:

    I assumed from the original investment (BAC into CFC) that it was as much a defensive move as anything else. Not to put too fine a point on it but. Defensive on BAC’s part. Meaning if CFC went bust, there’d be an explosion somewhere in BAC’s balance sheet.

    Or maybe in some BAC off-balance sheet ‘entity’. N’est-ce pas?

    All things considered though, my impression is that among the big money-center banks BAC is coming out noticeably better than most of their peers. Some of whom may well fail (and then BAC would be in place to pick up some of the more valuable pieces).

    pat

  56. techy says:

    MS..

    if you know the market is manipulated, why not go with the flow and make some money.

    you know that PPT is going to come to rescue at the lows, why not go long?

    i wish i had that knowledge, i would have been swimming in money by evening.

  57. mhm says:

    From all the noise in this board today I like what Michael Donnelly said: they together may be too big to fail. If BofA is to go broke, why not take a last shot and see what happens… CFC going down will hurt BofA anyway.

    We’ll not be through until at least one large bank fails.

    http://www.economist.com/agenda/displaystory.cfm?story_id=10499251&fsrc=RSS

  58. Pat Gorup says:

    “I know the goldbug arguments that it’s a hedge against inflation, but why?”

    Simply pute its a “store of value”. Since its 12-28-07 closing price, gold has appreciated by 7%. Silver which is also a “store of value” has appreciated by 10% during that same time. The last time gold was at this price, silver was $32 higher than it currently is. I think its pretty obvious that due to FED interventions and rate cuts we will see inflation get much worse in the next six to 12 months. Why would anyone want to deal with stocks when you can’t trust the CEO’s who run these companies or the FED/government and allow their profits (assuming you can make them in this market) to be eroded by inflation in the process? I bought more silver today and I’d strongly suggest that if you want to rest easy at night, you do the same.

  59. Eclectic says:

    Herb Greenberg,

    You’re wrong.

    New subject:

    Two peckerheads (PHs) standing together taking a leak in a stadium pee trough. One PH accidently drops a $10 bill in the pee… then reaches in his pocket and tosses another $10 in behind it, only to finally reach into the pee and take both $10s out.

    Other PH: “What’d you do that for?”

    The dropping PH: “You didn’t think I was gonna reach in there for just a $10, did you?”

    Next new subject:

    Barringo, I’m very impressed with the accuracy of the market calls you made for end-of-year Aught-Siete, but only puzzled by your concerns for inflation, back then, in the face of the rate call component of your predictions. My Sweet Bondie asked me “WTF with Bwana?”

    Last new subject:

    Within minutes of Bernanke’s speech release (why was it not embargoed to the start time?), it had already been erroneously characterized as being a promise to reduce rates. Maybe they will reduce rates and maybe not, but it was no such promise.

    Much of what they’ve already done separate from their rate changes are at least unconventional if not unprecedented to begin with, already “substantive” in scope by any definition, and all that Bernanke said was that they would continue to take substantive actions if needed.

    I will say finally that today made me want to throw up. I’m not talking about market moves, but rather the whole nature of the day and the absurdity of everything that’s led us to this pathetic day. It’s provided a pitiful example of profound incompetence at almost every level imaginable.

  60. Stormrunner says:

    Brian B

    Your thoughts on the victims of the Rampart Scandal

    Curious no conspiracies in LA they tried for ever to hide that one.

    I was booted from jury duty for suggesting police are viewed as professional witnesses, this case was cited as an example by the judge.

    In the context of how many were falsely imprisoned by these clowns, I believe he proved my point rather than supporting his own.

  61. Freakalex says:

    Don’t forget, there were two sides to that trade…

    someone sold that block. I wonder if they are on some chatboard whinning tonight? After all they got screwed more than anyone today.

  62. Stuart says:

    re: Mike | Jan 10, 2008 5:46:31 PM J. Sinclair comments/theory…

    yes, IMO that is in there somewhere at the heart of the transaction’s rationale.

  63. Winston Munn says:

    Bernanke’s speech made me want to puke. In fact, this whole system makes me sick to my stomach.

    It is time to storm the Bastille.

  64. barley says:

    Forgive me. I have lurked here for quite some time. Posted maybe 2 times. always appreciated educated thoughts and opinions. Tonights thread is different. I will now use discourse and anger on this thread as a proxy of VIX.

    Intellectual banter is good. Debate is good. Referencing stuff is good. This in my humble opinion: this is becoming school yard stuff.

    Put it away, zip up, rear your real head and take a deep breath and type with civil demeanor.

    Sorry just my thoughts and sense.

    I will now add my piss and vinegar – if ya are so good why the cushy protection of a hedgie. If ya so good why challenge the value of experience.

    So, onto something more meaningful. Will C take the Red option for K infusion? Oh ggeezze I almost forgot to add my real point…retired at 40, play 2-3 hours a day through a discount broker, since 09/07 up 729%, have 16M+ of my own in play.

  65. Al Czervik says:

    How nice for BoA and CountryWide.

    I’m

    In Talks to Buy Some Gas and Groceries.

  66. Dr N says:

    Eclectic,

    what do you mean “It’s provided a pitiful example of profound incompetence at almost every level imaginable.”?

  67. code2Much says:

    You guys are missing it all. This is an underhanded move by the corrupt Fed. Under normal circumstances, BAC would have just waited till CFC went down to zero and pick up the pieces since their notes are senior. They would have gotten CFC at really cheap. Or if another bank tries to buy CFC, they would have joined the bid.

    But no, that’s not what happened. The fed probably begged BAC to take CFC without having to take on their downside debt. Why? Because CFC is so huge it would take the whole financial market with it.

    You would think that if it was such a dumb move (which it would be under normal circumstances), that BAC stock price would have tanked. There is something more to this.

    After it is all done, I think the shares will be worthless. Unfortunately that spike forced me to cover my short right at the high. (Ouch :()

  68. Bloated Jeff Macke says:

    a huge block set off at the august lows sounds to me like option related covering/defending the strike, but for those that like the easy way out, sure, it was the PPT (i saw bernanke in the pits incognito)

  69. Brian B. says:

    Stormrunner,

    actually valid point, and I already thought of that point after my post. Dont get me wrong I am wasn’t trying to infer something so stupid as there are never no wrongs, but not as many conspiricies as everyone thinks, which goes back to my original point with MS.

    BTW, your opinions of those “clowns” is interesting since what you and everyone else dont know is the real story behind all of that. However, sorry I was not trying to make this about me.

  70. D says:

    that large block never traded at the August low ….. it traded 2 hours after MS mentioned it , and at a level 15 points higher ….. but why argue with facts when you can make them up

    MS —- makes up stuff all day long …. the bigger the lie , the more people will believe him

  71. D H says:

    Here come the next wave of write-downs. Funny how even with charts showing the monthly ARM resets, people forget for about 2-2.5 weeks a month:

    13. There Is Never Just One Cockroach: The lesson of bad news on most stocks is that more shall follow… usually hard upon and always with detrimental effect upon price, until such time as panic prevails and the weakest hands finally exit their positions. ~Dennis Gartman

  72. michael schumacher says:

    D

    Yes I lie about everything…..think what you want I could care less.

    15 pts higher????? Now talk about a lie. The SPY has’nt even moved 5pts let alone 15.

    But keep drinking that kool aid.

    Ciao
    MS

  73. michael schumacher says:

    When the Fed released it’s text of the speech yesterday it was over a half hour before the actual speech. How many times have they done that??? I can recall ah…never….

    The Fed is openly and actively gaming it’s activities to suit the need of the banks..and that need is up at any and all costs to the detriment of our country and (what remains of) our financial system.

    Ciao
    MS

  74. Stuart says:

    From Russ Winter.

    Before the open Bankamerica announced a stock swap deal that based on current BAC price values CFC at about $7. It is expected to close in the third quarter. In effect BAC paid $4 billion to assume $194 billion in liabilities, and $209 billion in fictitious capital. I do not expect the rubber to ever meet the road on this deal. I would guess CFC true value as this plays out at negative $50 billion. How much will $52 billion in HELOCs be recovered? Here is a brief summary of the assets CFC holds, read ‘em and weep.

    $27 billion Pay option ARMS with $1.2 billion in insurance against it. 3.0% are currently 90 days delinquent, but readers already know my opinion (Crazy Aunt in the Attic) on these.

    $20 billion in HELOC 1st liens, and $32 billion in HELOC 2nd liens.

    $27 billion portfolio of non=agency MBS

    $30.8 billion MBS warehouse-non GSE ARMS

  75. John says:

    Actually I think the BOE deal could be a steal. They are buying a company for 17% of what it was worth a year ago with paper! There are a ton of legal downsides but the courts are going to lean in the direction of keeping the biggest financial institution in the country afloat. This is going to be a rough ride for two years but if it comes off then it’s one of the steals of the century.

    As for Helicopter Ben. He’s starting to worry me. Basically he’s just told the world we will do anything to keep the economy from edging into recession during the last year of the Bush presidency and to hell with the dollar and inflation. And it’s going to do nada to get housing or consumer spending moving again.

  76. v says:

    Also check out the time frame just before the BoA/CFC rumor/news yesterday. There was an obvious spike just before the rumor/news hit the airwaves.

    I’m no expert, but it seems highly likely that somebody cashed in and then out before the close, and more importantly, before today’s open.

    It’s funny that those who claim to challenge MS’s (and other similarly minded folks’) comments do so without any evidence. While MS always states to look up what he talks about for oneself.

    ————————

    For the LA Cop braggart: Good one there buddy. First you said there were no LAPD conspiracies, then someone easily corrected you with with Rampart. After which you change your tune, but weaselly CYA by saying people “don’t know the true story” — lol. Who’s claiming conspiracies know? And thanks for linking to or mentioning any reliable source to back up your claim, lol. Rampart has been widely reported upon, there’s even an incisive FRONTLINE doc about a related LAPD detective and his connection to Suge Knight (coincidentally, a frequent poster here at TBP, lol) moonlighting as a bodyguard which quickly lead to illegal, authority abusive activities. But, yeah, I’m sure the so-called “real story” you’re talking about is so much more different. Lol.

  77. michael schumacher says:

    Total 100% Money Quote of the entire “sub-Prime issue:

    Mozilo, 69, will stay until the sale is completed, said the 60-year-old Lewis, who plans to meet with Mozilo next week. Mozilo probably will “want to have some fun” after the deal closes, Lewis said.

    Since I lie about everything (according to D) here’s the link

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aqKE9kRcKDEw&refer=home

    Ciao
    MS

  78. Stormrunner says:

    Its all about perception, one man’s conspiracy is simply another man’s environment. This was readily evident in the condescention of the candidates toward Ron Paul on policy issues. Rather than accept that a $1K bag (face Value) of circa 1964 coins is worth over $10K by weight in ’08, they accuse him of reading the Ahmedinijad manifesto, then monetary experts like Huckleberry attribute inflation to soaring oil prices rather than monetary debasement, imagine the dramatic increase in housing, heath care, tuitions etc. all because of oil. I quess if we add in the price to protect the oil and how the funds were siphoned in that context, he is largely correct. But every one here knows he was just referring to the barrel price. The American people better get a grip because prosperity is fast slipping from our grasp, including our intellectual grasp.
    And no crap about going back to gradpa’s gold standard, Paul refers to a free market float where gold is just an alternate currency the nominal appreciation of which can not be taxed. A refuge from taxes on the coin bag mentioned earlier. If I have a bag of coins that was once government isued at a pegged price level and the monetary poicy is such that the raw material is worth 10 fold why should I pay a 30% tax when the silver is just a reflection of the back door theft that has occured in the currency. Paul is no idiot but the no conspiracy MSM will do there very best to make it look so.

  79. bdg says:

    MS

    there were no blocks above 1,500,000 of SPY anytime during the “conspiracy” time period that you spoke of … you commented at 2:57 ……40 minutes later — 3,553,000 @ 140.77 traded ( maybe you knew about that before it occured… you know so much about these things ) and that certainly doesn’t equal the $840million you mentioned… on a day when 305 million SPY shares traded , even that does nothing

    your opinions are fine , though many commentators on this blog don’t agree with your conspiracy theories , but get the facts correct

  80. mw says:

    I say Countrywide is going to turn into Country-siv. But that isn’t a good sounding name— something like Blue Butterflake or Kestral Hobbage Rumpus III, Stupid names for stupid investment vehicles.

  81. Brian B. says:

    V,

    An undercover officer working narcotics shot and killed another officer who was off-duty officer himself. The officer who was killed was connected to the main players of Rampart scandal(ex-gang menmbers) who then attempted to set up the orginal officer, which led to their downfall. You are right though, I shouldnt of mentioned anything about this, for idiots like you who take their information from television get what you deserve. Wont mention anything again and wont post again. Wasnt trying to brag, really nothing to brag about I was just a cop and was trying to relate an analogy, obviously a bad one.

  82. v says:

    Watch who you call an idiot you retard. You’ve just admitted your initial claim was false. Thanks for proving my point (and those of others who called out your delusions). And thinking that FRONTLINE is not a reliable source further displays your lack of intelligence, information, and wisdom.

    It’s funny I even checked back at this topic; thinking you were probably not this shameless. Guess I was wrong, lol.

    And my apologies to others here and, especially, BR, for the tone of this comment. But I feel I have incisively made my point and find it beyond egregious that someone has to stoop to name calling *after* admitting they were wrong. Simply hilarious.

  83. Brian B. says:

    V,

    yes you are correct i admitted that i was wrong. i thought that would sruvice but i guess not. I have been at over 250 homicide scenes and been shot at, almost stabbed, spit at, and called every name in the book so you can watch TV.I worked the worse part of LA. but that ok. you keep beliveing in TV. BTW, 99% of coppers are really, really good people!!! heres a fun fact, i was among the first La cops on “Cops” and several other cop reality shows.. but thats ok.. you caught me in a mistake.. so you are right…good luck to your future investments…