Comments on: Fannie/Freddie Chatter – Something Big is Brewing

By: jstanley01

jstanley01 — Mon, 01 Sep 2008 19:59:45 +0000

Scene: Wall Street, Tuesday September 2, 2008, 9:30am EDT:

Let the bloodbath begin.

By: 5755hsa

5755hsa — Sat, 30 Aug 2008 03:38:19 +0000

Benny;
Good observation on Gold. Now we have these sleezy adds on TV…Send in your scrap gold for cash! Hey, I got news for ya. When something is trading for 850.00 per ounce I don’t consider it scrap! This to me says Gold…and probably Silver are headed much higher and these people buying up the “scrap” are going to get fat off of this…opportunity knocks! I think I’ll hang on to my scrap for a while.

By: 5755hsa

5755hsa — Sat, 30 Aug 2008 00:26:30 +0000

Marc A. I get where you are going. From my own perspective, I don’t think I’m that brave to have bought puts or add to what I have here, as I have to place my bets on what I truely believe and what I am observing and how I interpret all of it. I think the emotional state of the market is still in the denial stage,(although I think that is changing rapidly) and as I mentioned its due to the lack of truth being brought forward. The media seems to take any type of negative event and spin it into gold. IMO we will exhaust this deal soon, and the panic stage will be upon us. I just cannot see how this whole thing won’t end up going very bad, as the FED is out of bullets. Bailing out FRE and FME cannot fix very much and trying to string it out until the elections will likely intensify the issues across the board for financials. I don’t think its possible to carry it much further as the clock is running out. Just my humble $.02.

By: Benny

Benny — Fri, 29 Aug 2008 12:37:16 +0000

I like what 5755hsa had to say.
You should see how they are manipulating gold price with paper while buying up all the physical at reduced prices coinciding with forced redemptions!
They got it made for the winners in the world.
Futures are the new method of manipulation for the infamous PPT.
Look, if you see the big picture, it comes down to the government racking up massive debt bailing out like crazy, and then 2009 or perhaps 2010 will come
‘FEAT MAJORI’
and some kind of IMF bailout plan.
Is this not Argentina!? Sure smells like Argentina.

Btw, Maxwell House Columbian coffee is not a bad tasting coffee for the price. Not as good as Brown Gold, but nevertheless a decent tolerable Columbian as columbians go.

PS. you know the fix is in when the feddies come out and say ‘Yawl can’t short financials no mo”

Pffft. ‘Free market’

By: PatMcGroin

PatMcGroin — Fri, 29 Aug 2008 10:48:42 +0000

“**NOTE: a large majority of those CALLS were SOLD not PURCHASED. ”

First, all options that were bought, were sold. And second, the chunky orders were lifts, taken at the offered price.

There was a 33.5K Hit as part of a spread, 100K bust, and a lot of buys.

14:52:49 621 .60 X ET 41.41 21.34
14:52:49 1711 .60 I ET 41.41 21.34
14:06:27 33.50K .52 A SP 39.47 21.24
13:54:13 9994 .54 I ET 40.37 21.24
11:39:52 930 .52 I ET 40.99 21.15
11:38:25 1000 .50 O SP 39.79 21.16
11:35:33 500 .50 I ET 39.60 21.17
11:35:03 510 .51 I ET 40.10 21.17
11:32:36 500 .51 P ET 39.16 21.22
11:30:08 917 .51 I ET 39.15 21.22
11:28:12 4990 .51 A 39.53 21.20
11:20:16 554 .51 O SP 40.09 21.17
10:31:48 96.05K .45 A LO 40.10 21.00
10:04:57 847 .45 O 42.41 20.87
10:03:51 500 .48 I SP 43.65 20.89
09:42:05 3000 .41 A SP 40.58 20.85
09:41:34 602 .44 O 42.38 20.84
09:41:34 602 .44 I ET 42.38 20.84
09:41:32 1264 .44 O 42.38 20.84
09:40:25 100.00K .45 A *X 42.57 20.86
09:31:01 75.00K .39 I ET 40.85 20.77
09:30:46 1671 .39 I ET 40.68 20.78
09:25:48 10.00K .42 A SP 42.33 20.78
09:07:42 721 .40 X ET 42.42 20.71
09:07:01 39.64K .44 I LO 44.28 20.73
09:06:54 500 .40 I ET 41.90 20.74
09:06:24 500 .40 O 42.07 20.73
09:02:41 547 .41 I ET 42.45 20.74
08:50:14 54.00K .44 I *X 43.40 20.78
08:48:07 678 .43 O 42.68 20.79
08:48:07 585 .43 I ET 42.68 20.79
08:48:07 500 .43 P ET 42.68 20.79
08:46:25 796 .42 I ET 42.65 20.76
08:46:25 888 .42 O 42.65 20.76
08:46:25 739 .42 P ET 42.65 20.76
08:45:47 536 .41 O 41.94 20.77

By: Marc Authier

Marc Authier — Fri, 29 Aug 2008 08:19:50 +0000

Taxation is indeed serfdoom. Ludvig Von Misses was right.
Taxpayers end up slaves to the bankers. And it’s the politicians from every stripes that do the job.
Indeed Operation “Pump and dump” and “Pimp and dumb” YOu are courageous to buy some puts. I noticed. How can you not notice. All the banking crap in Europe and the USA is going up. The problem is that people and markets don’t care about balance sheets. Do the morons care about the balance sheet of the US federal government ? or the states ? Yeah it’s funny farm time ! The hogs are back, at least until the elections.

By: 5755hsa

5755hsa — Fri, 29 Aug 2008 05:02:10 +0000

High guys, great discussion here on the options plays. I believe this is a sucker play to get people on the bullish side to buy options here. Seen it before and to me it is a clear attempt at a pump and dump. I’m currently short (hold put options)finacials, a bunch of regional banks and some homebuilders. If finacials have a short rally I’m going to add to my positions, especially names like WFC, WM, and Citi. I think the balloon has to burst here sooner than later as the balance sheets are total crap. As mentioned earlier the fundamentals and technicals are out the window. The market is trading on pure hype and B.S. from the wall street controled main stream media. Good luck going ahead.

By: Kip

Kip — Fri, 29 Aug 2008 04:45:51 +0000

Sorry, last post for a while….

Thank you Mr Mortgage for the Reuter’s Post. The headline of that article is EXACTLY the main point I was trying to make. Just reading the headline only – as quite a few people will – gives the wrong impression.

REUTERS:

Call option volume in Financial ETF swells

By: Kip

Kip — Fri, 29 Aug 2008 04:40:31 +0000

Just some additional info summary (most of it you can find here on Mr Mortgage’s site) to place with how the media will spin buying financials….

The FDIC just increased the amount of troubled banks on their list from 90 to 117. Loan delinquencies rose for the 9th straight quarter. The FDIC also stated they will need to increase FDIC amounts they hold. The Wall Street Journal ran a story stating the FDIC may need to borrow from the Fed. Wow! Who else needs a loan from the Fed? Why would the FDIC need to increase the amount of money they hold for emergencies? Yet, despite this, everyone thinks the financials are a buy? Add in the XLF call buying that will be spun so everyone thinks is a bullish move and the markets head up. Exactly what fundamentals changed indicating things are better? Is unemployment getting better? Home prices rising? Defaults slowing down?

I am sure everyone noticed the additional round of Prime and Alt-A mortgage downgrades to the credit standings? Could this be because these mortgages have accelerated in their rate of defaults? These mortgages are defaulting at a faster pace than subprime did when that started. By the way, the write downs have not been taken for these loans – yet. Nor for the crumbling commercial real estate market and loan losses which have increased 128%. Have we really started touching on the credit card losses yet?

Financials MUST raise capital to survive. Banks are barely lending to each other and what was seen as the “smart money” months ago buying into financials, turns out to be “not so smart”. These companies are stuck. If they raise money by issuing more shares, further dilution of share price occurs. Let’s keep in mind that a lot of heavy investing (Sovereign Weal Funds as an example) is saying, “No Thank You” right now. Just look at Lehman trying to get money from Korea.

Recent large investors in financials have started using a clause to get paid the difference between any buy ins, vs. future stock issuances to raise capital should that price be LESS than they originally paid. Most new issuances of stock to raise money drive the stock price down. What else can they do to raise money? Well, if you’re Lehman, you can sell what’s left of your business that actually makes money. Thus, future earnings will be impacted. Hmmm…. Didn’t a rash of the statements just come out today – and the majority of news coverage happened AFTER the closing bell – stating future earnings of investment banks and other financials are being cut?

The FDIC also reported (this week) that net income from insured banks and institutions DECLINED in Q2 of 2008 over Q2 2007. The net income was $5 billion which is an 86.5% decline.

Yet, despite all this, we are hit with “most” headlines stating what a bullish move the XLF Call buying was today, and that this buying indicates sentiment has changed on the financials to….. BULLISH?

Just be careful in the market folks. Keep reading the Mr Mortgage posts for the truth.

By: Kip

Kip — Fri, 29 Aug 2008 04:28:01 +0000

Tony,

Gee, thanks for the education and I’m glad I’m one of the 5%. What is an option? I’m fully aware of how to trade options and didn’t appreciate the attitude. Besides, you took my opportunity to win $20.
Did the discussion move from the XLF (my post) to volatility on the GSE’s? Those are two different securities and implied volatility on the GSE’s affects the option prices of the GSEs.

Anyway, back to the XLF. Read a little closer to my post. I did say the majority of those options were done as sales – a way to make money. That can be done by yes…. taking advantage of theta and also …. maybe… just maybe…. a bet that the XLF is going to tank with the rest of the market very soon – so sell some options to collect premium.
Bottom line, most people are going to read/hear the XLF headlines and pundit news reports spun as Large Call Buying only. They’ll believe the news since most will only focus on how bullish this is. Next, more people will lose money thinking it’s time to buy – and especially if they pile on and buy the options. It will add to the amount of people who lose money trading options.
My post was to hopefully bring awareness to some people – without an I know more than you attitude – that the buying as reported is not necessarily a bullish move.
So, read it a little closer before you jump at what you think is a chance to showboat with terms and figures. Also, don’t just assume that I don’t have access to determine if the activity was selling or for that matter even buying on the bid or the ask. Yes, it does make a difference and that information is helpful as an edge when trading options.