In the past seven months, defying all reality, the stock market has rallied over 50% from its nadir.
But by no means has the insanity been contained. Bond markets have also exploded.
A family friend of mine bought some Boeing corporate bonds in the spring at par, $100 apiece.
He was recently giggling to me that they were now up to $107.
"Why don't you sell them?", I badgered.
Of course he ain't going to sell them.
I couldn't help but think of all the smug giggles I had to endure over people's *housing investments* in recent years.
I'm afraid the party is over. Unfortunately I don't have enough bullets to get back what I lost on this bounce.
Though I did buy some more WFC puts last week - April 24s at an average price of 1.50.
4 comments:
What will this mean to Ken Lewis...
http://www.charlotteobserver.com/408/story/1011637.html
Kfell
The fed appears to devoting the entirety of its finance efforts to propping up the big banks...so you are betting against the profits they get from:
1. government funded interest rate differential on revolving credit
2. government funded interest rate differential on borrowed treasury debt
3. government purchases of bad mortgage/CRE debt via the fed
You may be a math genius, but I would humbly suggest that your probability assessments of market opportunities need some re-work.
More precisely, I am betting against the *equity* of the banks, i.e. the lowest tier of ownership.
How did propping up work for Fannie Mae, Freddie Mac?
How about for Citibank?
Bank of America might need a $trillion before its over (should Treasuries collapse).
I know full well the Feds are printing cash and literally handing it over to the banks.
But I also know how bankrupt the big banks are, how incompentent and bloated they are, how leveraged they are, etc.
Before broadbrushing me, please go back and read the body of my historical predictions.
For sure I got hammered on this bounce. But I also shorted FNM at 36, BAC above 40, First Federal at 28, Lehman, HSBC, Captial One, etc.
Kfell,
It will mean nothing.
The guy is gone and will go into hiding.
And if the (new) powers-at-be ever start really bashing him, I'm sure he's got some mud/dirt he can sling back. The whole thing was a clusterf*ck; and the outright incompetence of Ken Lewis will forever be obscured by all the government interference.
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