Prosper $50 Bonus

Why buy issues offering less than 1% when Prosper will give you $50 to invest in notes offering 7 to 13%. Even if the lender defaults after one payment you still receive $5 to $10.

FXCM Mirco $25

Open a FXCM Mirco account and receive $25 to trade. There is a charge to withdraw the money, so I recommend trading with the money and seeing how much you can make. Trading currencies is not like trading stocks because the leverage is usually 1:100. For every $1 you control 100 units of currency and sometimes even 1000 units. Making $100 in one day is not unusual but you could lose the $25 within minutes. If you are interested in currency hedges read my 30 yr trade post.

Capital Structure

Here is another video courtesy of Marketplace.

Capital structure from Marketplace on Vimeo.

Land Mines

Like many investors, I turn on the computer or television and see stocks that jump up 100% and say dang why I'm I in XXXX instead of that pharma stock that found the cure to balding. Recently, there have been many pseudo GSEs that have seen values double or triple within weeks. However, while I missed most of these names, I am still very cautious. I am long FNM and have sold calls against the position. But I think the government should wind down both FNM and FRE for various reason, but will save that for another post. But I cannot predict the future so for INVESTING there should be a margin of safety. That means a moderate dividend yield, sizeable amount of cash and book value and market value are at a reasonable proportion. I have experienced trying to catch the tail of a rally only having it turn and bite my position to in half. While my experience differs from others I cannot advocate holding positions that lack fundamental reason.

Marking to Market

While the argument for mark to market has been less audible than in September. There are still proponents in the accounting, real estate and banking sector that feel it should be banned permanently. Some feel that mark to market caused a housing slump to spread into other sectors causing the Great Repression. While the arguments have reason they lack fundamentals and the conservatism US GAAP accounting is known for. Ironically this argument was only presented when prices were falling sharply. Land developers who used the increase in property values to expand lines of credits had no problem when values were skyrocketing but when the free fall started marking properties to market was absurd. The reason mark to market was enacted was for stakeholder transparency. FASB allows some assets to be marked at historical cost and an impairment test conducted annually. However, other assets are marked to the market or fair value to reflect true value. Marking to market saves money and time and avoids the subjectivity of an appraisal. Removing mark to market will overstate bookvalues for some companies that have no going concern. Companies that write up financial assets when there is economy expansion will be the same companies the write down financial assets when there is economy retrenchment.

Debt Sold to Widows

I read an article a couple days ago about Incapital which underwrote millions of bond offerings for: GMAC, CIT, Lehman and many other companies. Incapital sells Internotes, Incapital says InterNotes, managed by a joint venture with Banc of America Securities, are sold through 600 broker-dealers, including Fidelity Investments and Edward Jones & Co. Incapital CEO, Tom Ricketts said, “We’ve always stuck to investment-grade and we’ve always put our faith that that was a good line in the sand,” Ricketts said. “To the extent that we have investors that may not get their money back, that doesn’t make me happy. CIT is in distress. We would never have put something up on our screens if we had a thought that they would ever end up in a situation like this.” Earlier in the year there was a great deal of criticism about how credit rating agencies handled subprime debt and CDOs. Lehman Brothers, CIT and AIG were investment grade issues until late 2009, consequently Incapital assumed they were providing retail customers safe liquid securities. however, the bigger issues is even thought criticism for the credit rating agencies is well deserved what alternative is there. The reason there are financial intermediaries is because of the large asymmetry of information and knowledge between retail investors and institutional players. On August 24, 2007 CIT was trading at $37.85 and $61.00 a month earlier. As we speak, there is no other viable alternative, but hopefully these companies can be more forward looking and more introspective about off balance sheet risk and innovative exposure stealth.

Sheeple

There truth is no one wants to be alone. Who wants to be the only money manager at a social not buying tech stocks in 2000. Who wants to be the only member of a California neighborhood without an investment property. In the short term the market is a voting machine, but in the long term the market is a weighing machine. In the investment community there is a great deal of group think, which is reaffirmed by rising prices. Fannie and Freddie were more than 90% institutional owned and lets not forget AIG also. There is even an emphasis on what institutional managers are buying so the home gamers can follow. Let me expand on a point I heard from Accrued Interest blog. Leverage was not the problem, the problem was bad investments. Being leveraged 25 to 1 and buying Google or Apple 5 years ago would have been brilliant. Being leveraged 25 to 1 and buying WAMU or Indymac would have been a disaster. Below is another video courtesy of American Public Media's Marketplace detailing the rise of toxic assets.

Toxic assets from Marketplace on Vimeo.

Training for a Marathon

Any competitive sport requires participants to consistently train and practice. For marathons the key is endurance because there are no TV timeouts, 2 minute warnings or out of bound whistles to stop play. Investing has been compared to a marathon, however there is one major difference, the race never ends. Because of this continuity investors can hang on to poor performers because nobody stops the race. You could have purchased GM in 1990 and lost the race due to their filing Chapter 11. My goal is not to discourage you but to emphasize practice and training. Investors must study the past, the present and human nature. These seem to have more bearing than valuations. One young reader encouraged me to explain aspects of the market using more media, therefore starting today I will have videos courtesy of Marketplace(one of my favorite radio shows)that explain market activities from CDOs to Dark pools. Also, remember in the marathon you are trying to beat time, if you focus on your peers speeding by you, you may run out of steam trying to catch up or even find yourself in the hospital. Focus on your pace and continue to train for a never ending race.

Crisis explainer: Uncorking CDOs from Marketplace on Vimeo.

In the Dollar Store

It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.- Warren Buffet
Again with the Warren Buffet words of wisdom. Again Mr. Omaha is right, for some strange reason individuals think when a stock is at a dollar it is a sale and they are getting a bargain. While the upside is infinite and the downside is $1, that is a logical fallacy. You are foregoing the opportunity to make money by buying a dud that will not make money or even lose money. I believe the fascination is the ability to buy many shares example 1000 shares for $1 instead of 20 for $50 a share. These days it is hard to find the wonderful company trading for a low dollar price, maybe a low multiple, but that is also rare. The real money is made in private equity and venture capital. Buying into a little known company before it is followed by big Wall Street firms. My new goal is to file a 13G or 13D within 3 years.

Uncle Warren

I am no fan of Warren Buffet. Maybe it is pure jealousy or maybe because he simplicity shows the inferiority in my bad trades. However, I have begun to read the book "Snowball" about the life of Warren Buffet. This has lead me to begin reading books about sports handicapping. Ironically, I have heard some investors compare investing to horse racing. One rule is that the gambler does not have to win it back the same way you lost it. I have bought a stock at the opening, seen it fall quickly and attempted to make it back by buying or shorting another stock immediately. The reason I think Buffet's style agitates me is that I am impatient. Telling individuals that you can make them a guaranteed 18% in two years does not seem to get their attention. However, I can make you 18% in 30 days, stops them in their tracks. That is why Ponzi schemes are so successful. But while investing and gambling are different there is a great deal of overlap. Consequently to be successful in either you need discipline.

Making Money with Options

This is a simple strategy that does not necessarily involve stock picking. For my example I will the SPY( an ETF that tracks the S&P 500), this tracks 500 of the largest publicly traded companies. First I need a brokerage account that allows me to trade stocks and options. I recommend Option Express which has higher commissions than some brokers but is perfect for novice investors. Next, I buy 100 shares of SPY, lets say at $100. Next, I sell some call options at a strike price for 103.00. I will receive as of today $67. That is an automatic .67% gain. Some reader may say less than one percent I can get that from a bank CD. However, .68% in 30% days translates to 2.04% in 90 days. I do not know the future but SPY goes to $100 by the option expiration date. You made no money on the stock but still made $67. If the stock goes to $103 and is exercised, you made ($68+300) $368. Not bad for a month gain, this can be repeated until kingdom comes. The downside is if SPY goes to $130 you lose $2700 because you HAVE to sell the stock at $103. An option gives someone the option to buy or sell but anyone in there right mind will buy something at 103 if they can sell it for 130 the same hour. This is one way to use options, as my options knowledge expands so will my post regarding options.

How to Earn Money on a Credit Card

Thanks to Hustler Money Blog for the wonderful idea.

We all know that you can’t just get cash out of your credit card for free. There is a hefty credit card fee for doing any cash advance. However, you can order coins with up to $500 per president out of five, making a total of $2500 worth of coins, and get it deliver for free. Order this through the Charles Schwab 2% Cash back and deposit the coins back into your bank. Also, there is no limit to the Native American Agriculture coins, hence order as many as you like. Buying these coins is considered a purchase. Hence, it’s no different than buying a coffee latte from Starburcks.

Info from fatwallet:

1. Coins come in $250 boxes (ten rolls of $25). You can order two boxes of each design ($500) for the presidents; there is currently no apparent limit for the Sacajawea dollars. Shipping disappears once you complete the order.This is charged as a purchase, not a cash advance. The Mint will initially authorize the entire amount. The final charge is usually made the day after the coins ship. A few folks have noted receiving partial orders; the amount may not be charged until the order ships complete.The Mint appears to be back to matching order information. Keeping orders small (<$1000) seems to to be helpful in avoiding order matching, allowing one to order more than the item limits over time. To guarantee mismatched orders of the same item, the billing and shipping addresses, and credit card numbers must be different.

   All orders from the Mint of $300 or more will ship expedited (UPS Next Day Air or Priority Mail), signature required. Bellyaching about the signature requirement in the thread is verboten.

   Many have reported long (sometimes extreme) hold periods for orders. Coins also sometimes get back ordered (the website usually notes an expected ship date). Do not order with any expectation as to shipment and delivery dates. If you are planning on getting a large number of boxes, consider making separate orders of $500 or $1000. Orders appear to be filled on a rolling basis, one design at a time. Also, remember that there may be a hold for your order amount on your credit card for some time.

   Due to the vagueries of the Internet, shipping notices are sometimes received the day of or after delivery. The tracking number is the third in the block on the shipping notices. The first two lines have no obvious meaning.

   To check the status of your order over the phone, call 1-800-USA-MINT and select option 2. The system will ask you to input your order # and billing zip code. The order number is in both the subject line and body of the order receipt e-mail.

   If you do not know your bank or credit union’s policy on deposits of large amounts of coins, contact them before going. Most do not require that the coins be unrolled; however, you do need to remove them from their shipping box. Larger banks that handle commercial deposits have coin bags to place unrolled coins in. One poster reported adverse action from Chase after making coin deposits.

Adams, Jefferson, Madison, Washington, and Monroe available and you can buy 2 boxes each. Choose standard shipping during the order process and the shipping charge will revert to free.

Store Cash and Sleep Well

With the Federal Funds rate at 0%, investors are looking for short term vehicles to earn interest and provide liquidity. Interest rates have no where to go but up so certificates of deposit are a bad idea. Your money is locked in from 3 months to 4 years, without access to the money and as interest rates rise the purchasing power is decreased. Below are a few accounts the provide both reasonable returns and liquidity.

Earn 2% or More With These Money-Market Savings Accounts

Bank	APY (%)	Minimum Balance
ShoreBank Direct online savings account	2.15	$1
First Trade Union Bank savings account	2.06	2,500
Bank of Internet USA Advantage savings account	2.02	100
UFBDirect savings account	2.01	500
Discover Bank online savings account	2.00	500
Sources: Bankrate.com, Money-rates.com, bank web sites. All yields are non-promotional, but are subject to change at any time. Yields valid as of August 4, 2009.

Earn 4% or More With These Interest Checking Accounts

Bank	APY	Requirements
Community National Bank of Lakeway Area	4.51% on balances up to $25,000	* Minimum of 12 debit card purchases (excluding ATM usage) * 1 automatic payment or direct deposit transfer * Receive your monthly account statement electronically
First Arkansas Bank & Trust Online	4.44% on balances up to $50,000	*Minimum of 10 debit card purchases (excluding ATM usage) * 1 automatic payment, bill pay transfer, or direct deposit transfer * Receive your monthly account statement electronically * Sign in to your online banking account at least once
Royal Banks of Missouri	4.3% on balances up to $25,000	* Minimum of 10 debit card purchases (excluding ATM usage) * 1 automatic payment or direct deposit transfer * Receive your monthly account statement electronically
Liberty Bank	4.25% on balances up to $25,000	* Minimum of 15 debit card purchases (excluding ATM usage) * 1 automatic payment or direct deposit transfer, and 1 bill pay transfer * Receive your monthly account statement electronically
Connexus Credit Union	4.15% on balances up to $25,000	* Minimum of 15 signature-based check card purchases (excluding ATM usage) * 1 bill pay transfer and 1 direct deposit transfer * Receive your monthly account statement electronically
Ouachita Independent Bank	4.01% on balances up to $25,000	* Minimum of 12 debit card purchases (excluding ATM usage) * 1 automatic payment or direct deposit transfer * Receive your monthly account statement electronically
Source: www.checkingfinder.com, bank web sites. Yields as of August 4, 2009.

$50 Lending Club Bonus

Good news! Lending Club’s bonus is back up to $50 for new lenders until August 15th. New Investors Get $50 to Invest in Lending Club notes. With average net annualized returns of 9.61% it’s a great time to join Lending Club and they will give you $50 to get started. To get the bonus type in trug49 in the referral code box. I think Lending Club notes are an asset class that could give your portfolio additional return, however these notes are unsecured so there is a large amount of default risk. In a portfolio of $10000, the maximum allocation would be $1000. Anything less would not make a significant impact but again there is little recourse to make borrowers repay.

The House that Greenberg Built

Yesterday, 134 million shares of AIG were traded when the average volume is 13 million. While I can draw some conclusions on why this happens, the truth is I really do not know why Firm A put an order for 30 millions shares, maybe light track, good breakfast, school is about to start who knows. Many investors saw the better than expected results from Radian and might have speculated the AIG would correspond likewise. However, investors are only paying for ownership in 21 percent of those earnings. However, given that I cannot predict the future I will watch from the sidelines and jump on the bandwagon of the winning side.

Reader are Leaders

Usually when I say "Readers are Leaders" I say it in jest. But on a serious note, those who decide to watch television and listen to their friends to decide their financial future need to pick up some books. It is difficult but not impossible to be sensational in print as opposed to television and seminars. I am amazed when people tell me a fact based upon hearsay or secondary sources. Not every book is the truth or word of God, but I feel more confident in a book that someone took time to write than a 30 minute TV script or a speech that motivates the audience to spend thousands on books and audiotapes. My solution is that the public start to get informed and read. No one is going to throw jewels and pearls to the public for free and without work. The truth is you are going to have to work, read, have plenty of money or resources to get the gains that those Google Ads show.

Everybody wants Energy Efficient Vehicles

I hate to accentuate the negative again, but everyone is excited about car sales. Here are the facts:

July auto sales rose to 11.2 million when converted to an annual rate. That's the first month this year that sales rose above the depressed 10 million level. As recently as 2007, car and light truck sales topped 16 million vehicles, but a drop in consumer confidence sent sales plunging late last year. Ford Motor Co., which has steadily been gaining sales since GM and Chrysler took government aid and went through bankruptcy proceedings, reported a year-over-year sales increase, up 2.4 percent for the first year-over-year sales jump since November of 2007.

Here is another fact:

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion. Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

I mentioned earlier the government cannot continue to subsidize growth. Therefore, my strategy is to purchase a basket of international SOVEREIGN bonds. Most people will mention currency risk, geopolitical risk and a history of default risk, but the US is in debt, USD are in danger of devaluation and the US is relatively young compared to Italy, France, China and India. I mentioned I wanted to short Treasuries but I saw an error in my strategy. This is an asymmetrical position, there is not much to gain by going short unless you "juice" the investment. By that I mean leveraging the position to see a larger return.

HURN

Here is another symbol to watch closely. These are the facts from the companies SEC filings.

a) On July 31, 2009, the Company issued a press release announcing that it will restate its financial statements for the fiscal years 2006, 2007 and 2008 and the first quarter of 2009, to correct the Company’s accounting for certain acquisition-related payments received by the sellers in connection with the sale of certain acquired businesses that were subsequently redistributed among themselves and to other select Huron employees.
b) On July 31, 2009, the Company announced that Gary E. Holdren, Chairman of the Board and the Company’s Chief Executive Officer has resigned as Chairman of the Board and Chief Executive Officer effective immediately and will leave the Company as of August 31, 2009, that Gary L. Burge has stepped down as the Company’s Chief Financial Officer effective immediately, but will continue with the Company until the end of the year and that Wayne Lipski has stepped down as the Company’s Chief Accounting Officer effective immediately and will be leaving the Company. No severance expenses are expected to be incurred by the Company as a result of these management changes.

I will leave these facts to interpretation. I plan to go long or short tomorrow and will let my result known. As mentioned earlier I will use options as a hedge in case my assessment is misdirected.

From CIT to Sallie Mae

As Debtwire reports, several correlations desks made a killing over the recent CDS blow up: most notably Natixis and the omnipresent Goldman Sachs. According to Debtwire's Nicoletta Kotsianas:

"Correlation trading desks at a few firms, including Natixis and Goldman Sachs, have been buying up CIT protection on the cheap since January to hedge risk in the instruments they structure and trade...CIT stood out to some traders, both because of its exposure to the credit crunch and its ubiquitous placement in the bespokes, said two correlation traders. Just six months ago, jump to default exposure to the name averaged roughly €50MM for many correlation desks, estimated two of the trader sources... One correlation trader who runs a mid-sized bespoke book said that he bought $85MM in short dated protection at an average price of 12 pts up in January and throughout the spring. Five-year protection on the name was quoted at 34 on 9 July but ballooned to the high 50s by 20 July when it became clear the government would not bail out the asset-based lender. Much of that price movement originated from other correlation desks rushing to hedge their jump risk."

So whose CDS will Goldman's correlated tentacles blow up next? According to Debtwire, it is Sallie Mae's turn:

"Sallie Mae is the next name in correlation traders' crosshairs, said two correlation traders, an analyst at a boutique brokerage and a sellside desk analyst. Five-year protection on Sallie Mae trades at 20 pts upfront, reflecting relatively low risk of default in post-credit crunch terms. Though not as widely held in bespokes as CIT, nor as distressed, Sallie Mae caught attention in recent weeks as correlation desks braced for the company to be downgraded to junk, all the sources said. Standard & Poor's last week placed the ratings on credit watch following a vote by the House Of Representatives Education and Labor Committee to pass a bill that would eliminate the origination of federal student loans by private lenders after July 2010... Offers to sell protection from dealers grew scarce this week and several dealers have faded offers, in a sign that not all desks are covered for Sallie Mae jump risk, aid three traders. Some bids did get picked up this week but the market is now 18/20 upfront on the contracts as opposed to 691 bps on July 19, according to a broker and data from Markit." Again watching CDS spreads and purchases can show who firms think are weak.

This post is courtesy of Zero Hedge( shoutouts on the new site) and Debtwire.

Accentuate the Positive

In bull markets participants discount the negative and put a premium on positive news. In bear markets participants do the opposite. I have long positions and have profited greatly but I still doubt this rally. It is hard to know when you are being patient or stubborn as I cover my short positions. On Friday, my assessment was given a sound thrashing. The Commerce Department reported second quarter GDP fell by ONLY 1.0%. This news gave investors cheer as they pushed up stocks. However, the better than expected results was from the Federal Reserve holding down rates and the Obama administration spending. The spending is not indefinite, the government must pay back the debt and holding rates down for so long creates its own problems. Again this might be my stubbornness so take my assessment with a grain of salt.

Money in Options

To most people the word derivatives is just as bad as terrorism. However, when used efficiently derivatives can hedge risk and increase profits. But you can lose money on derivatives even if you assess the situation correctly. My strategy is to sell out of the money call options on stocks that have already made me a substantial gain. I want the option contracts to expire worthless but even if they are exercised I have locked in a profit and could buy the stock back at the same level if necessary. For options trading I highly recommend Option Express. Their platform is easy to use and they offer a vast library of strategies and coaching for new comers.

RIP Yahoo

First let me say that Yahoo Finance is one of the best resources for individual retail investors. Also, Jerry Yang should have taken the deal last year but founder bias played a major role. Okay with that out of the way Yahoo has sold there earning generator and might eventually be bought whole for pennies on the dollar. Yahoo has very little upside and plenty of downside in this deal. They were better off trying to partner with a web browser like Safari or Mozilla than selling the soul to Microsoft. But while it seems like shorting is common sense, I would wait. I have been repeatedly shocked on how Radio Shack is a going concern, so consenus may be wrong. They just might pull a Lazarus.

Citi's $100 Million Man

Not that I care, but CNBC subjected its viewers to three different segments in regards to Citi not paying one of its energy traders. Well, the argument seems to be because the government has a percentage stake in Citi and taxpayer money should not used to pay bonuses. Of course I disagree with this thinking. Shareholders large or small do not make compensation decisions. Even Warren Buffet cannot tell GE who should or should not receive bonuses. Also, this is a contractual obligation. Contract law must not be undermined by anyone other than the parties involved. Let the man get his millions, he earned it.

Disadvantaged Masses

Yesterday, I listened to one of my favorite television shows, Wealth Track. Yale's Endowmment Manager David Swenesen was interviewed and shared some words of wisdom. The individual investor is at a disadvantage. Many investors do not know what their IRA, 401k or ESA owns. The truth is most mutual fund managers underperform index funds. The other truth is that mutual funds want large amount of assets under management to increase the fee income they generate. The problem is that the financial service institutions who receive your weekly payments or lump sum deposits do not have your best interest at heart. The stock broker wants you to make money but he/she needs you to trade and make as many transaction as possible. The mutual fund manager needs to increase assets to make more money for themselves and the firm. Your bank wants to give your money and forget about so they can make loans without worrying about withdrawing deposits. Even thought your 401k gives you a large basket of funds to choose from, they all will underperform the index benchmark. Investors must read and educate themselves. The expert on television makes $1o million annually because you pay him to perform his job in a mediocre way. Investors must take their future into their own hands because most firms do not have their interests aligned with their non-high net worth clients. The masses are deluded if they believe that their financial institution gives them the same attention that a millionaire client recieves.

IRS Arbitrage

I have been asked this questions many times, Should I write 5 exemptions so I can keep all my money and pay the taxes back in April? While this is a great way to make a small return it is very difficult.

In theory:
1) You could take numerous exemptions
2) Multiply your weekly pay by your tax bracket
3) Put that amount in a ING Direct account or high yield savings account
4) In April pay your taxes with the balance in the savings account
5) You should have a small profit that could be compounded over the years

In practice:
1) Get more money in pay, spend more money

The problem is individuals are not discplined enough to put the money in the high yield savings account. Some feel that making $200 not enough compesnation for there effort, but $200 can get you closer to that new Coach purse or set of golf clubs.

Forget Equities, Buy Debt

Our Congressional representatives only seem to worry about reckless speculation when markets fall not when they rise. But I must stress that if investors are going to take time evaluate individual stocks and companies, they must evaluate fixed income securities. I try to read at least one book a week and in my trips to Barnes and Noble, the library and Amazon.com I rarely find books discussing bonds. But I see numerous books about stocks, which is the breeding ground for speculation. Going forward investors must purchase foreign debt and foreign government debt. I found a Moody's study which discusses sovereign debt default. In the last 30 years most defaults have been in Latin American countries, but that trend may shift to Eastern Europe countries. Diversification protects investors when they diversify among asset classes. Buying 20 different US stocks is not diversification because in crisis correlation goes to one and all stocks fall. Take time to read the study or talk to a financial advisor about international investing.



Moody Sovereign Debt Study -

30 Year Trade Recap

I am making headway in my attempt to buy individual sovereign bonds throughout the world. I am going through the process of buying bonds from the Reserve Bank of Australia. First, I will open a HSBC account in the United State then open an account in Australia. I will keep readers informed as the process continues.

Morgan Stanley 2nd Quarter

Morgan's losses were mostly attributed to paying back TARP and purchasing a majority stake in wealth management firm, Smith Barney. The latter will be a major revenue center going forward and adversely Citi will not have the extra revenue. Regional banks seem not to have the same glass half full outlook I think because they did not have the same opportunity to underwrite debt and equity like the major financial centers.

Capitalism is Back?

This weekend CIT negotiated with its bondholders to avoid bankruptcy. The negotiations were rushed due to the Treasury office and FDIC refusal to aid the small business lender. CIT may still fail because the money is enough to pay down interest and outstanding debt but the firm still needs capital to continue to earn money. This was a trade I had on but closed because the government was an uncertain wild card. Whether CIT was too little to save or not a threat of systematic risk the government must allow failure. While some argue for drastic situations call for drastic measures, this view is wrong. For capitalism to work there must be destruction and creation. The government allowing small firms to fail and rescuing large firms is the systematic problem. If capital is tied up in large failing firms, small efficient firms do not have access to capital to grow and expand. This is my stance but I still plan to buy BAC, as a trader buy the winners that will take taxpayer money and increase earnings.

Stop Wasting Money!

Great article I found on Yahoo.

Banks to Save the Day

Today the banks report better than expected earnings. I still do not believe the hype. However, I need time to evaluate my thinking. I am not sure whether I am being patient based on the facts or being stubborn based on my bias. I give the negative news a premium and discount positive stories. So, I will return on Monday with some insight. Enjoy the weekend and checkout Hustler Money Blog for some astute investments.

Everybody is an Expert but Nobody Knows Anything

I will be first to admit I have been wrong. The last three weeks my positions have lost more than they have made. In a market operation, the only way to know if you are right or wrong is to make money. Tables and charts mean nothing if your positions are bleeding. As I wait to see where CIT will open, I will probably closing some positions to satisfy my margin call and reevaluate the portfolio as a whole. Happy hunting!

The Media is Not Your Friend

While there is coverage on the soon to be Supreme court justice, I do not understand why is on Yahoo Finance. Will her one vote change the financial landscape, who knows. But the optimism in GMGMQ seems to be dying as the OTC stock fell 59.2 cents, or 51 percent, to 55.8 cents in morning trading Wednesday. My thought for the day is the news is entertainment. Many Americans watch the news thinking they are going to more informed than the guy down the street but they leave with very little. The news can help you learn about what roads not to take in the morning, major issues on the Capitol and what restaurants failed their inspection. But after 3 hours are you smarter or more informed. The news like every other non public show needs advertising revenue. If they were really there to help why do they wait until after the commercial to tell you the life threatening product lurking in your kitchen. You have to separate the useful information from the noise and this includes my favorite channel CNBC.

More Dominoes?

Impending doom , not sure but here is a list of companies that were or are on the brink. Many have declared and will declare bankruptcy. This is a starter some of this companies will bounce back and you do not want to be on the short side.

Moody's Bottom Rung List Q1 2009 -

Sorry, right click and hit full screen for better viewing.

My New Market Indicator

Unemployment, GDP, Consumer Confidence those are great because economist get paid to calculate those numbers. But pay attention to railroad transports, Baltic Dry Index and especially oil, oil refiners and oil drillers. When there is buying and spending these groups will have good news to report. When the recovery starts you will know is you pay attention. The easiest way to make money is to sell in a bear market and buy in a bull market. Why try to find the winners when the market is free falling, just short the whole list and wait for a turn.

The Insanity

When a company is in bankruptcy or retains bankruptcy counsel, that is not the time to go buy thousands of cheap shares. Stocks are never too cheap to short or too expensive to buy. I am more likely to short a stock getting kicked down than rising exponential. There was more profit in shorting old GM at $34 but when the stock was at $5 and there was talk of bankruptcy thats was a good time to short as much as you can carry. But investors lose billions of dollars seeing a large pull back in a bad stock and buying thinking, "This stock was trading at $50 a share 8 months ago, it is bound to go to at least $25 from $2". While I have seen marvelous rebounds, I have seen more cases of investors pushing a stock down because there is a problem. But there is always money to be made in the market.

Laughing to the Bank

Last month, I mentioned investors should look for short positions in public traded banks by looking at FDIC reports. On July 1, Habersham Bank received a “cease and desist” order. Unlike many cease and desist orders, this one came from Georgia Department of Banking and Finance instead of the FDIC. The order states that the bank must come up with a plan to maintain adequate capitalization. However, bank management claims they have more than sufficient liquidity. We shall see.

Disclosure: I am short HABC.

CIT

This is a great trade, this stock will make money, either long or short.

Bond Market Watch

After seeing billions of corporate bonds (mostly high yield) come to market and garner a large amount of subscription, the trend seems to be trending down. Borrowers issued at least $11.5 billion of debt this week, a 39 percent decline from the five-year average for the second week of July, and compares with $20.4 billion last week, according to data compiled by Bloomberg. Following the record pace of investment-grade bond sales during the first half of 2009, issuance may fall as borrowers cut back on capital expenditures. Yields over benchmark rates on speculative-grade debt widened 27 basis points this week to 1,079 basis points, or 10.79 percent, as of yesterday, according to Merrill Lynch’s U.S. High Yield Master II index. Yields rose 16 basis points to 13.14 percent.
Regal Entertainment Group’s Regal Cinemas Corp., the only junk-rated company to issue debt this week, sold $400 million of 10-year, 8.625 percent notes that paid a 560 basis-point spread, Bloomberg data show. The company is based in Knoxville, Tennessee. High-yield companies issued $4.26 billion the previous week. Rather than watching the Dow daily pay attention to the high yield market and whether new issue spreads are widening or tightening. In my opinion that is a better leading indicator. The link is available for the full Bloomberg article.

The 30 yr Trade

Over the last 30 years, if an investor had put their money in the S&P 500, they would have made 1.70% less than their bond (10yr treasury) counterpart. The table below shows how the 10 year has performed versus the S&P index. I do not believe this trend will continue. My solution is to invest in a basket a sovereign debt throughout the world. I would include the BRIC countries, Germany, Australia, South Africa, Thailand, one or two Middle Eastern countries and of course the United States. While I can think of many other nations that should have tremendous GDP growth, this is not a trade to call and brag about to your neighbor. The key is return OF capital. The other important issue I want readers to take away is, you could have paid no commission and slept soundly for 30 years and still beat most of the money managers on the Street. But there are no shows on CNBC about buy treasuries. Great article from WSJ discusses the misconception of long term investing.


Treasuries Outperform

zzzzzzzz10 yr TreasurieszzzzzzS&P 500zzzzzzzzAnnual Diff.

30 yrszzzzzzz9.40%zzzzzzzzzzzzz7.70%zzzzzzzzzzzzzz1.70%

10yrszzzzzzzzz6.80%zzzzzzzzzzz-3%zzzzzzzzzzzzzzzzz9.80%

5 yrszzzzzzzzzz6.20%zzzzzzzzzzz-4.80%zzzzzzzzzzzzz11%

1 yrzzzzzzzzzzzz9.70%zzzzzzzzzzz-38.30%zzzzzzzzzz 48%

Source The Leuthold Group

Blowing Bubbles

The government and regulators want to protect the consumer. As oil raised passed $140 politicians and regulators wanted to cap the price of oil because hedge funds and speculators were driving up prices. But as oil dropped off a cliff, no one stepped forward to stop the sharp drop. There is a bias to any active the impacts the masses negatively. By trying to cap oil from rising, a fictitious price will be held until the bubble breaks causing the true price to be revealed. I am opposed to cheating and unfair play, but allowing individuals to put their capital at risk is the basis of capitalism. But an outcry rises when employees lose 401k money or soccer moms pay $4 at the pump. Capping prices is a failed policy, America needs to tighten up!

One Day

JWM Partners LLC is closing its main Relative Value Opportunity II fund after losing 44 percent from September 2007 to February 2009. Meriwether, credited with generating billions of dollars of revenue at the former Salomon Brothers in the 1980s through so-called relative value trades, returned an average of 1.46 percent a year with his new fund since opening in 1999, compared with 2.4 percent for the Credit Suisse/Tremont Hedge Fixed-Income Arbitrage Index.

JWM Partners was created in 1999 by John Meriwether more famously known for his earlier hedge fund creation Long Term Capital Management. To learn more about LTCM read "When Genius Failed", LTCM lost $3billion dollars in 3 months.

No More Sitting on the Fence

I do not have a crystal ball, but the market as a whole is heading down. The green shoot argument is dead. In an Op-Ed section of The New York Times by staff writer Bob Herbert. “No Recovery in Sight” was the heading and his opening sentence asked, “How do you put together a consumer economy that works when the consumers are out of work?” While many argued that the labor market numbers were lagging indicators and a sharp rise is a sign of the ending of a recessionary cycle. But today the American Bankers Association released data showing a rise in home equity and credit card delinquencies. Delinquencies on home-equity loans climbed to 3.52 percent of all accounts from 3.03 percent in the fourth quarter, and late payments on home-equity lines of credit climbed to a record 1.89 percent, the group reported today. An index of eight types of loans rose for a fourth straight quarter, to 3.23 percent from 3.22 percent in October through December, the group said. Delinquent bank-card accounts jumped to a record 6.60 percent of outstanding card debt in the first quarter from 5.52 percent in the previous period, a signal unemployed borrowers are relying on cards as falling prices erode the equity in their homes. More borrowers are using cards to meet daily expenses after losing their jobs, the ABA said. Lets not forget that the "Stress Test" parameters might be breached by early August when GDP comes in lower than expected and unemployment rockets pass 10%. Already politicians and advisers are calling for more stimulus. Well, I will sleep more easily at night having short positions than waking up hoping the futures are higher. Hope never made anyone money!

What happened to the Toxic Assets?

From September to December of 2008, everybody was an expert on toxic asset clean up. Recently, everybody has been an expert on cultivating green shoots. This is the folly of the media, they are able to distract the masses while causing amnesia. I know the jobs number was worst than expected and the economy is not showing the signs of growth I am looking for. But I was told (correctly or incorrectly) that the problem was housing and toxic assets. Well, foreclosures are rising, home prices are falling and the market is ignoring the PPIP. But maybe I am ignorant of the real facts, if that is the case my 5 long positions will be short positions as soon as Timmy lets us know who is participating in the PPIP.

Change of Plan

I mentioned in a earlier post about changing your positions as facts and circumstances change. But let me differentiate between changing facts and changing your mind. As the economy picks ups or continues to decline traders should adjust. But when your positions starts to lose money do not change a trade into an investment. Also, if the movement (earnings, acquisition, dividend,etc) takes place or does not come to fruition move on to something else. Traders enter the market optimistically and when fortunes turn, they become Warren Buffet reading annual reports and dissecting financial statements to reaffirm their position. I believe in proper fundamental analysis and long term investing. However, the trader must know themselves and there trade or investment. Also, the trader should establish a limit sell or stop loss BEFORE you buy or short. Establishing a sell or stop after can be a costly error if the trader lacks discipline.

Short Sellers (Part of the Axis of Evil)

The Demons of the Street intent on destroying shareholder value, causing panic and starting unfounded rumors to drive down prices. They are portrayed as Un-American, but is it unwise to bet that the roller will shoot a 2, 3 or 12 or bet on the do not pass line. Why is it unwise to not profit when you see a faulty strategy or execution in a business plan? I am fully aware that short selling is in asymmetrical and loses can be infinite but it has and can be extremely profitable. I have 5 stocks, courtesy of Barron's Short Alerts:

JCOM
MIDD
CMP
LRN
PTV

I am not short and do not own any of the positions above. However, the only position I am considering is Pactiv. The company has $1.35B in debt and $152M in cash. In what I believe will continue to be a credit retraction, PTV will have problems rolling over debt and issuing new debt. However, there are many companies with similar balance sheets that have seen rising equity prices. My recommendation is a starting point not a definite trade. Also, if the market ramps up and begins to rise, I would cover whether I am right or wrong. Short selling is profitable and you should keep an eye out for failing companies.

End of Recession?

As California plans to send out I.O.Us and add to days employee furloughs, there seems to be more pain ahead for the entire nation. There are 48 out 50 states with budget gaps, ranging from $140 million to $13 billion. While the United States Treasury can hold Treasury auctions every week, states must balance their budgets. With dropping personal incomes, reduced sales tax and falling home prices the problems keep compounding. The question is to tax or cut spending? Either option will cause constituents to spend less or receive less state add. Why do economist see GDP growth when there is going to be retrenchment within individual states?

TABLE 3: SIZE OF TOTAL FY2009 BUDGET GAPS
	Gap before budget was adopted	Additional mid-year gap	Total	Total Gap as Percent of FY2009 General Fund
Alabama	$784 million	$1.1 billion	$1.8 billion	22.2%
Alaska		$360 million	$360 million	6.8%
Arizona1	$1.9 billion	$1.8 billion	$3.7 billion	36.8%
Arkansas	$107 million		$107 million	2.4%
California	$22.2 billion	$13.7 billion	$35.9 billion	35.5%
Colorado		$1.1 billion	$1.1 billion	14.2%
Connecticut	$150 million	$1.9 billion	$2.1 billion	12.2%
Delaware	$217 million	$226 million	$443 million	12.2%
District of Columbia	$96 million	$583 million	$679 million	10.8%
Florida	$3.4 billion	$2.3 billion	$5.7 billion	22.2%
Georgia1	$245 million	$2.2 billion	$2.4 billion	11.5%
Hawaii		$417 million	$417 million	7.3%
Idaho		$452 million	$452 million	15.3%
Illinois	$1.8 billion	$4.3 billion	$6.1 billion	21.4%
Indiana		$1.2 billion	$1.2 billion	9.1%
Iowa	$350 million	$134 million	$484 million	7.6%
Kansas		$186 million	$186 million	2.9%
Kentucky	$266 million	$456 million	$722 million	7.8%
Louisiana		$341 million	$341 million	3.7%
Maine	$124 million	$140 million	$265 million	8.6%
Maryland	$808 million	$691 million	$1.5 billion	10.0%
Massachusetts	$1.2 billion	$4.0 billion	$5.2 billion	18.5%
Michigan	$472 million	$1.5 billion	$2.0 billion	8.5%
Minnesota	$935 million	$654 million	$ 1.6 billion	9.2%
Mississippi1	$90 million	$363 million	$453 million	8.9%
Missouri		$542 million	$542 million	6.0%
Nevada	$898 million	$561 million	$1.6 billion	19.9%
New Hampshire	$200 million	$50 million	$250 million	8.0%
New Jersey1	$2.5 billion	$3.6 billion	$6.1 billion	18.8%
New Mexico		$454 million	$454 million	7.5%
New York	$4.9 billion	$2.5 billion	$7.4 billion	13.2%
North Carolina		$3.2 billion	$3.2 billion	14.9%
Ohio1	$733 million	$1.9 billion	$2.6 billion	9.4%
Oklahoma	$114 million		$114 million	1.7%
Oregon		$442 million	$442 million	6.6%
Pennsylvania		$3.2 billion	$3.2 billion	11.3%
Rhode Island	$430 million	$442 million	$872 million	26.6%
South Carolina	$250 million	$871 million	$1.1 billion	16.3%
South Dakota		$27 million	$27 million	2.2%
Tennessee1	$468 million	$1.0 billion	$1.5 billion	13.4%
Utah		$620 million	$620 million	10.4%
Vermont	$59 million	$82 million	$141 million	11.6%
Virginia	$1.2 billion	$1.1 billion	$2.3 billion	13.8%
Washington		$1.3 billion	$1.3 billion	8.5%
Wisconsin	$652 million	$1.0 billion	$1.7 billion	11.7%
Wyoming		$119 million	$119 million	6.8%
TOTAL	$47.6 billion	$63.2 billion	$110.8 billion	15.3%
1 Only the low end of the estimated FY09 gap for these states — ones that provided a range of estimates — is shown in this table. For more detail see 29 States Faced Total Budget Shortfall of At Least $48 billion in 2009 available at http://www.cbpp.org/1-15-08sfp.htm. Note: In some cases all or part of these shortfalls have already been addressed.

Express Yourself

Before I express my opinion let me say that I have absolutely no idea when the recession l will end and really I do not care. I will take long and short positions based on my analysis and experience. But calling the recession is pointless if one does not profit. So if Dennis Kneale believes his claim he should go buy the SPY, SPY calls and any instrument that will benefit when the recession ends. Rather than attack the data I will take a different approach because data can be subjective based on an individual's beliefs and bias. I believe that the market is biased towards optimism. As the markets crashed from late December 2007 until May 2009, guest came on CNBC and recommended buying stocks on a scale of 10 o 1. Rarely, you saw a guest continue to doubt a rebound and even less likely to recommend short positions. I do not know why the market is obsessed with owning stocks, my feeling is that a large portion of money in the game is on the long side. Other large players make money on transactions so they only care about volume and trading activity. Short sellers are despised and even threatened with jail when a poorly run institution fails. But while I do want people back in work, food on tables, care to the sick and other benefits of life, it would be foolish to allow my optimism or desire of a better life for others to influence my trading and blind me to objective facts. Bottom Line: Everyone should leave the belief of the American people and hope for a better future at 9:30 am and pick it back up at 4 pm (of course Monday through Friday).

Value Added

Enough with Bernie Madoff and Michael Jackson. All this sensationalism and in depth news and no value added to your life. Yesterday, I got a lesson in technical analysis that was insightful and I plan to use along with my fundamental knowledge and experience. But while individuals look for 1000% return on some unnamed pharma stock or penny stock, there should be a focus on dividends. A steady return can help one be optimistic in a bear market. For example, I own GME (Gamestop), I like their business model, there in a niche market and have a fortress balance sheet. However, they pay no dividends, so even if the stock doubles within a year, my annualized return would be 50%. Also, the opportunity cost would be greater, because I did not purchase another security paying a 4% dividend so I do not get to compound my returns. I am aware growing and technology firms reinvest free cash but make sure you provide room in your portfolio for dividend paying securities.

How to always win in Texas Hold'em

Very interesting story courtesy of 60 Minutes.
Watch CBS Videos Online

Just Stopped the Madness Already!

This is a great post, courtesy of Phil's Stock World. There is a tendency for individuals to marry a position and overestimate the accuracy of their beliefs or measurements. People tends to be bullish because they own stocks and bearish because they are short. But to increase profitable you have to be willing to contradict yourself and change as facts change. Society looks down upon those individuals who change their mind. Politicians and elected officials are criticized for changing their minds regarding laws and policies. But why must one be concretely faithful to their opinions and beliefs even when facts change. This post is very informative and should be approached with an open mind. Stay flexible and cut losses!

Friday Bank Closure Report

Every Friday this year, the FDIC has seized the assets of least one bank or thrift and June 27th was no exception. The FDIC seized the assets of 5 banks (2 in Georgia). Currently, I have a short position on a Georgian bank, which to my regret has not been closed. But below is the list of banks closed yesterday.

41st Bank Failure of 2009 (8th in GA)

* FDIC Press Release
* Closed Bank: Community Bank of West Georgia
* Location: Villa Rica, GA
* Size: 1 office, $199.4 million in assets, $182.5 million deposits
* Possible Uninsured Deposits: $1.1 million
* Acquiring Bank: None
* Estimated Cost to Deposit Insurance Fund: $85 million
* Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

42nd Bank Failure of 2009 (9th in GA)

* FDIC Press Release
* Closed Bank: Neighborhood Community Bank
* Location: Newnan, GA
* Size: 4 offices, $221.6 million assets, $191.3 million deposits
* Possible Uninsured Deposits: All deposits transferred
* Acquiring Bank: CharterBank, West Point, GA
* Estimated Cost to Deposit Insurance Fund: $66.7 million
* Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

43rd Bank Failure of 2009 (1st in MN)

* FDIC Press Release
* Closed Bank: Horizon Bank
* Location: Pine City, MN
* Size: 2 offices, $87.6 million assets, $69.4 million deposits
* Possible Uninsured Deposits: All deposits transferred, except some brokered deposits
* Acquiring Bank: Stearns Bank, N.A., St. Cloud, MN
* Estimated Cost to Deposit Insurance Fund: $33.5 million
* Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

44th Bank Failure of 2009 (5th in CA)

* FDIC Press Release
* Closed Bank: MetroPacific Bank
* Location: Irvine, CA
* Size: 1 office, $80 million assets, $73 million deposits
* Possible Uninsured Deposits: All deposits transferred, except brokered deposits
* Acquiring Bank: Sunwest Bank, Tustin, CA
* Estimated Cost to Deposit Insurance Fund: $29 million
* Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

45th Bank Failure of 2009 (6th in CA)

* FDIC Press Release
* Closed Bank: Mirae Bank
* Location: Los Angeles, CA
* Size: 5 offices, $456 million assets, $362 million deposits
* Possible Uninsured Deposits: All deposits transferred
* Acquiring Bank: Wilshire State Bank, Los Angeles, CA
* Estimated Cost to Deposit Insurance Fund: $50 million
* Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

ING Direct $25 Bonus

ING Direct is offering a savings account bonus of $25 for opening an Orange Savings Account by August 3, 2009. The promotion page is located at ingdirect.com/save, and the reference code is VE222. Bonus is only available for new customers, and it's limited to one bonus per household.
Opening the account takes less than 10 minutes and requires a minimum deposit of $1, so there should be no excuse not to open an account that pays twice the interest than many brick and mortar banks

Flagstar $100 Bonus

This bonus is only available to residents of: GA, MI, IN Only .
Flagstar is offering two checking account promotions. One offers $100 for opening a checking account and establishing direct deposit of at least $250/month. Here's the online promo page . The website makes it look like you can apply online; however, I called, and the CSR said that a branch visit is required. Some of the important details in the small print include:

* New checking account customers only
* Minimum opening deposit of $50
* Direct deposit of income of at least $250 per month
* Direct deposit must be established within first 60 days of account opening
* $100 will be deposited into your account within 30 days after first direct deposit
* Account must remain open and active for a minimum of 6 months
* Bonus will be reported in your 1099


The other checking account promotion guarantees 2% APY for 12 months from account opening for all balances up to $100,000. It requires opening an interest-bearing checking account (I was told the eChecking doesn't qualify). Like the $100 bonus, direct deposit is required. If it's not established within 60 days, the rate may be reduced. Like the $100 bonus, this also requires a branch visit.

This 2% promo doesn't seem to be listed at Flagstar's website. It was advertised in yesterday's Fort Wayne Newspaper (6/13/09). The ad is available online here. A reader also saw it advertised in a Michigan newspaper.

According to the ad, there's a limit of one promotion per customer. So it appears you can't do both promotions.

Readers have reported a hard credit inquiry when applying for new Flagstar checking or savings accounts.

Branches are located in Michigan, Indiana and Georgia. The bank is a member FDIC (FDIC Certificate # 32541).

Gazprom and Nigeria create "Nigaz"

Russia's energy giant Gazprom has signed a $2.5bn (£1.53bn) deal with Nigeria's state operated NNPC, to invest in a new joint venture. The new firm, to be called Nigaz, is set to build refineries, pipelines and gas power stations in Nigeria.

Analysts say the move could further strengthen Russia's role in supplying natural gas to Europe. Sergei Novikov, a spokesman for Rosatom, Russia's state-run civil nuclear energy agency, said the Nigaz deal would lay the foundations for building nuclear power reactors in Nigeria.

Nigeria has previously said it would like to develop a nuclear power plant to address its energy shortages.

Hopefully, this joint venture will benefit both partners equally, however that is usually never the case. Here is the link link to the BBC article. With $2.5 billion you think someone involved would mention the implications of the name of the joint venture.

Sideways Market

I am looking through my positions to reevaluate my strategy. My long term view is weak dollar (which should stimulate exports), short treasuries (because of increased yields) and a rise in inflation. However, until markets feel confidence in banks and employment increases inflation is no where to be found. While the stock market receives 90% of all media attention, investors can better gauge sentiment by which bond indices like: IG, HVOL, XO and HY. Credit expansion will be the sign of a true recovery not over exuberant optimism. Enjoy the weekend!

Jim Cramer

I have no doubt in my mind that Jim Cramer is a great financial mind. However, I would not recommend watching his show for stock picks. 3 picks a day with 3 more in the lighting round. That is 30 picks a weeks and 120 a month. Investor might as well buy the SPY if they plan to purchase that many equities. If Jim Cramer is your pro bono financial adviser, stop trading and put you money if government debt. I would recommend reading his books but the television show is for entertainment. Viewers flock to CNBC because it is more entertaining and avoid Bloomberg which in my opinion is less exciting but more informative. Trading or investing for excitement is gambling, the market has no regards to your hopes, feelings or wants.
Therefore, cut losses short and run winners regardless of how you feel and watch Jessie James Must Die instead.

Bank of America Merrill Lynch REIT

Here is Merrill's List of their REIT Recommendations. Let this be a starting point not your decision maker. Personally, I like depressed property areas like: LA, Las Vegas and Florida. I would also avoid stock dividends unless there is a discount. Printing new equity every quarter will slowly dilute shareholders' equity but will save the company cash. Thanks to Zero Hedge for the chart, and I would recommend reading his post and also,Goldman engineers Financial Crisis.

Next Bank Closure?

There is no better short position than a bank that the FDIC takes over, equity is wiped out but usually the bonds of the parent company hold some value. So my new favorite website is FDIC Institution Directory, keep in mind that many of the seized banks where not traded on public exchanges, but you might have been lucky to have shorted IndyMac or WAMU. But I am focused banks chartered in Georgia, Illinois and California. Happy Hunting!

The Face of Terror: The Persian Empire

I hate to diverge from my money making thoughts into an area I have no expertise in, but I need to vent. Oil has remained higher than I expected maybe due to geopolitical issues, whatever the reason weakening demand should push down oil service providers I can go purchase some particularly PBR and SLB. But I am very upset at the media's coverage of the aftermath of the Iranian elections. I have seen protest pictures and in no way do I condone violence against peaceful protesters. When the results were announced, I was not shocked to hear that the incumbent president won. Listening to NPR, I heard Iranians who supported him and felt that falling oil and the United States were the culprits of the weakened economy. however, my outrage comes as politicians voice there disgust and anger about how protesters are being attacked by government forces. I can recall other countries where government forces attacked their citizens peacefully protesting. To keep my post shorter I will focus on the United States. Throughout the Civil Rights movement, African Americans were hosed, beaten, attacked by dogs and jailed for peacefully protesting. So, while I hear journalist and politicians scream they have never seen any human rights violations this egregious, they quickly forget that for more than a decade the same violence was taking place in their backyard.