14 replies to this topic

[ogm]

I'm really tempted to go long brokers for some sort of a bounce. GS and BSC. Think about this.... Weak jobs > recession > half of all corporate bonds are now rate junk > defaults skyrocket across the board > World financial system collapses .... scary stuff. EPC is pushing 1.5 on my screen. Scary.

[hiker]

200 week sma just about picked the SNDK swing low in the 30's mos ago BSC today..first test of 200week sma in 4 years I have on my chart...I am long...risk to 260week ema..see SNDK weekly for example

Edited by hiker, 03 August 2007 - 09:22 AM.

[ogm]

200 week sma just about picked the SNDK swing low in the 30's mos ago

BSC today..first test of 200week sma in 4 years I have on my chart...I am long...risk to 260week ema..see SNDK weekly for example

Yes, I'm picking some up here too.... only 16 bil market cap. Easy takeover target for the bigger guys.


Besides, we already know that not a single human beeing will ever again make a single mortgage payment. Ever. So what do we have to loose.

[greenie]

Staying short BSC from around 155 (late March) in my 'short and hold' portfolio. No point playing for pennies, when you can go for $$$$. Countertrend is counterproductive. Also remaining short BZH, LEH (opened late March), RTH (opened in May), CTX, KIM, DDR (opened in July) and long SRS, QID (opened in April). All early positions, except QID, have over 20% profit. All entries with price were posted realtime in TW board.

[ogm]

wow. Volume weighted put call is 2.05 already. I always said that the opposite of 0.5 is 2 but this rarely happens. Looks like its there.

Edited by ogm, 03 August 2007 - 09:41 AM.

[traderpaul]

So what you are saying bad new is good news....The chart is saying they can't get out fast enough.....

[ogm]

Staying short BSC from around 155 (late March) in my 'short and hold' portfolio. No point playing for pennies, when you can go for $$$$. Countertrend is counterproductive.

Also remaining short BZH, LEH (opened late March), RTH (opened in May), CTX, KIM, DDR (opened in July) and long SRS, QID (opened in April). All early positions, except QID, have over 20% profit. All entries with price were posted realtime in TW board.

The attitude right now is that no one will ever make mortgage payements again, and ALL mortgages are junk.
I mean AAA rated stuff. Its all being thrown out the window.

At the same time there is recovery rate, ever through foreclosures. Yes maybe half of subrime will default. But still certain % of the money will be recovered.

I'm not even talking about AAA rated stuff.

There is tremendous fear in mortgage land. What isn't priced into it yet, tell me ?

When I start thinking the end of the world, I look for buying something. I may be wrong, but BSC doesn't look too bad here. Yes, their business is shot, but the stock took a big beating too.

Edited by ogm, 03 August 2007 - 09:51 AM.

[greenie]

The attitude right now is that no one will ever make mortgage payements again, and ALL mortgages are junk.
I mean AAA rated stuff. Its all being thrown out the window.

I cannot rule out few days of rally in BSC, GS etc., but regarding your bigger point, I do not think you understand the ABS market well. Those ratings schemes AAA etc. for mortgages are not equivalent to AAA rating on companies, as you can find out by going to the websites of Moody, S&P and Fitch. The bond market is trying to find out what the mortgage scale really matches with, and yes, those AAAs for mortgage may be equivalent to A or BBB for companies. That does not assume that nobody will not pay mortgages. Rating models assume that house price will continue to go up for ever, and any change in such assumption, can dramatically alter the ratings.

Following comments from Mish's website may be helpful:


"What follows are excerpts from Absence of Fear, an excellent article written by Robert L. Rodriguez at First Pacific Advisors.

We were on the March 22 call with Fitch regarding the sub-prime securitization market’s difficulties. In their talk, they were highly confident regarding their models and their ratings. My associate asked several questions.

FPA: “What are the key drivers of your rating model?”
Fitch: They responded, FICO scores and home price appreciation (HPA) of low single digit (LSD) or mid single digit (MSD), as HPA has been for the past 50 years.

FPA: “What if HPA was flat for an extended period of time?”
Fitch: They responded that their model would start to break down.

FPA: “What if HPA were to decline 1% to 2% for an extended period of time?”
Fitch: They responded that their models would break down completely.

FPA: “With 2% depreciation, how far up the rating’s scale would it harm?”
Fitch: They responded that it might go as high as the AA or AAA tranches."

[NAV]

Staying short BSC from around 155 (late March) in my 'short and hold' portfolio. No point playing for pennies, when you can go for $$$$. Countertrend is counterproductive.

Countertrend is counterproductive - Isn't that funny and ironical, given that when you opened your BSC, QID et al, they were uptrending, and by definition, your trades were countertrend to start with ?

BTW, good trading on all those positions you mentioned. Credit where it is deserved.

[arbman]

It is a higher low on most of the indices and looking at the CBOE volumes, people are jumping out of the windows... NAV, repeat after me, finacials suck today again