Thinking short term topping action

REASONS:

1. bond market has been rallying while equity rallying too (one or the other is usually lying and i tend to favor the veracity of the bond market)

2. McClellan at overbought levels

3. Put call ratio very very low

only one of my indicators not to fire on sell is my vix indicator but that has not fired sell since may...

needless to say my opinion is that we got a low volume holiday pump but come next week when more folks are back at work a bit of reality will set in...not sure of the catalyst but all signs point to a short to mid term overbought and complacent equity market

More DEFLATION

heads up to cttosjump on tickerforum for this video

more hookers + less demand = price deflation

SHITLOCKERDOJI

Of course much rests on what becomes of C but this chart says as much about the financials being short to mid term oversold as i could

Tiny Vulvas and Deflation

Roubini on Bloomy this morning

RANDOM SPECULATION

I noticed yesterday that our friends Paulson and Kashkarri announced that they will not seek the other half of that lovely and protective TARP...Now I think this is good development, and I have been for some time worried about a dislocation in the US treasury market and interest rates moving up...especially since we have spent so massively so early and continue not to learn from the mistakes that Japan made...For now the flight to safety has overpowered any problem that the US could have funding these massive budget shortfalls...next year however it is estimated that the US will have 1 trillion dollar shortfall

Well i find it interesting to note that this announcment comes the day after my main hommies kicked it at the G20...also a very interesting article about japan wanting the US to issue Treasuries in JPY...

Could hank have gotten a couple of whispers instead of the usual wink and nods he gets

Meanwhile back on the homefront every douchebag and their brother want a piece of the tarp

banks
insurers
automakers
conglomerates
now cities and counties

really really sad...and we not even in a recession yet right????

also my other to hommies freddie and fannie continue to be a blackhole

when does it end???

OH and PS ben is lying to ya about the FFR...we already are at effectively zirp

for those that dont know about the term LIQUIDITY TRAP that is one you might want to check into...this is how you still get insane delationary pressures despite the bald and the beard ramping money supply

THANK ERR #%$@ you HANK paulson

I reserve the right to edit this post to update it with articles i have been accumulating...suffice to say I think this guy is a huge crook and is not acting in the best interests of the US...this picture summarizes my general view of the prick

short summary is here...
okay I am well pissed and gonna do serious write up later

but will you at least take a look at this chit and tell me that you still trust this guy...

1. AIG bullchit

The $150 billion in government aid consists of a $60 billion loan, a $40 billion preferred-stock investment and $50 billion in capital largely to purchase distressed assets which are to be placed into two separate financing entities.

on the assets
The first such vehicle is to be capitalized with $30 billion from the government and $5 billion from AIG. That money will be used to acquire the underlying securities with a face value of $70 billion that AIG agreed to insure with the credit default swaps. These securities, known as collateralized debt obligations, are thinly traded investments that include pools of loans. The vehicle will seek to acquire the securities from their trading partners on the CDS contracts for about 50 cents on the dollar.

SO YOU THINK IF THOSE CDO'S GO BAD GOV'T WILL FORCE AIG TO PAY OUT ON CDS----LMFAO

I HAVE A SUSPICION THAT MS JPM AND GS OWN SOME OF THOSE CDO'S

2. TAX CODE BULLCHIT

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

The story of the obscure provision underscores what critics in Congress, academia and the legal profession warn are the dangers of the broad authority being exercised by Treasury Secretary Henry M. Paulson Jr. in addressing the financial crisis. Lawmakers are now looking at whether the new notice was introduced to benefit specific banks, as well as whether it inappropriately accelerated bank takeovers.

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155_pf.html

3. OH AND THESE GUYS WONT LET BLOOMY KNOW WHAT TYPE OF FUCKING COLLATERAL THEY HOLD
http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=home

so when do i get TARP...I WANT THREE YEAR EQUITY MONEY AT 500bps...I WANT THE RIGHT TO BECOME TOO BIG TO FAIL

THANK ERR>>>>&@#% YOU HANK PAULSON

I want all you folks to know that I am die hard capitalist but in order for capitalism to thrive the douche of recession must wash away the excess...kill off the smelly bacteria if you will...the playing field must be level and the smart folks must be allowed to prosper...you cant have capitalism with cheap money for some and not others

Forget this crony capitalism...these selective bailouts...long live free market and Darwinian economics

OH AN NOTE TO HANK...DIE IN YOUR SLEEP YA PRICK

Praying for a RALLY!!!!

Okay now that I have a good decent cash position I for one am praying for a rally and judging by the action in the spoos we may get one

Just in case the bulls out there need some reasons to rally the NYSE and NAZ casino I will provide updated list for them:

1. Oboma unveils plan BIG BANG (no you sick bastards)

2. Chinese Stimulus Package (proof Asians have smaller packages)

3. My main Nigga G20 gonna hook everybody up

4. Bottom is in!!!!!!!! (Me providing smackdown to T brown...see comments by seabassbanker)


so I am making a list and checking it twice...and a note to bulls don't shoot your wad in one or two days like the last couple of weeks...let this go for a week or more so that the vix can get down to reasonable levels and put skew get back to parity...gracias

EDIT: 8.15 am PT

DAMN you bullz...I wanted a good rally to sell into and all you give me is a weak gap and crap...geeesh...where is bill miller and tom brown when you need them...someone call abby joseph cohen STAT

Fargo Pig

This is just a rehash of the logic in maintaining my short position in the FARGO PIG one of my favorite piggies...I first started building a position in this pig when shorting was banned and have been trading around it a bit since then

1. changed the way the recognize NPA from 120-180 last Q...180 is the absolute max they can extend...mighty fishy in this environment + they raised divi (smart???? i think not)

2. have some dodgy CRE loans and that stuff is just starting to crack

3. they have the BUFFETT halo + they say they never did subprime...well check this
my man (notice that many of theses other companies are ZEROS now)...yes their UW standard is arguably better but that is like sayin big mac is better for ya than large fry

--------------------------

Exhibit 8: Top 10 Alt-A Lenders, 2006

Rank Company 2006 YTD MarketShare% Total Orig Vol Alt-A Share%
1 IndyMac $49,620 16.5% $64,000 77.5%
2 Countrywide 47,000 15.7% 333,740 14.1%
3 Wells Fargo 30,050 10.0% 310,890 9.7%
4 Res Funding Corp 29,730 9.9% 66,100 45.0%
5 WMC Mortgage 19,300 6.4% 24,140 80.0%
6 Washington Mutual 19,050 6.4% 153,630 12.4%
7 GreenPoint 12,310 4.1% 27,120 45.4%
8 Aurora Loan Svcs 11,000 3.7% 25,300 43.5%
9 Homecomings 9,980 3.3% 21,660 46.1%
10 First Magnus 9,900 3.3% 22,030 44.9%
Total Top 10 $237,940 79.3% $1,048,610 22.7%
I note that WFC prudently had the lowest Alt-A as a percentage of its total origination.

Exhibit 14: Top Subprime Lenders, 2006

Rank Lender 2006 Market Share (%)
1 Wells Fargo $ 83,221 13.0%
2 HSBC Finance 52,800 8.3%
3 New Century 51,600 8.1%
4 Countrywide Financial 40,596 6.3%
5 CitiMortgage 38,040 5.9%
6 WMC Mortgage 33,157 5.2%
7 Fremont Investment 32,300 5.0%
8 Ameriquest 29,500 4.6%
9 Option One 28,792 4.5%
10 First Franklin 27,666 4.3%
11 Washington Mutual 26,600 4.2%
12 Residential Funding 21,869 3.4%
13 Aegis Mortgage 17,000 2.7%
14 American General 15,070 2.4%
15 Accredited Lenders 15,000 2.3%
Top 15 $ 515,217 80.5%
------------------------------

4. they have 80 bil in HELOC exposure in CA NV that will take big hit
SO TO SUMMARIZE, DO I THINK THEY ARE ZERO, NO DEFINITELY NOT...ARE THEY OVERVALUED...YOU BETCHA
---------------

okay so when i originally wrote this Shorting was banned in financials and WFC was north of 35 I believe...anyway since they took a well deserved move back to reality I have taken all front month exposure off and a modest amount of my jan and april options too...Still have decent exposure but when stock goes from 35-28 in a couple of days profit taking is prudent...I am hoping for a move back over 30.5 to start building positions...also looking for vol to get back to slightly more reasonable levels before building another position in expectation of another equity offering...Word is 10 bil but also hearing rumors of 20 bil...Also rumors going around that perhaps a dividend cut might be in order...anyway again these are just rumors but based on the deteriorating economic fundimentals (especially in WFC stomping grounds) I suspect their is more truth to them than WFC would like to admit

City Natl Bank

Overview:

City National Corporation is a bank holding company and a financial holding company. The Company provides a range of banking, investing and trust services to its clients through its wholly owned banking subsidiary, City National Bank (the Bank). The Bank operates through 62 offices, including 15 full-service regional centers, in Southern California, the San Francisco Bay area, Nevada and New York City. The Company operates in three segments: Commercial and Private Banking, Wealth Management, and Other. All investment advisory affiliates and the Bank's wealth management services are included in the Wealth Management segment. All other subsidiaries, the unallocated portion of corporate departments and inter-segment eliminations are included in the Other segment. The Bank's principal client base comprises small to mid-sized businesses, entrepreneurs, professionals, and affluent individuals.

Loan Portfolio:

total 12.2 bil loans
4.7 bil in Commercial loans to small and med biz (particularly large in So Cal and area I know is struggling but has yet to reflect in NPA)
2bil in Com Mortgages (echo the commercial loan comments)
3.3 bil Resi 1st's (ironically their best performing assets)
1.4 bil in real estate construction (almost 10% are NPA)



funding loan book with 11 bil in deposits but also 2.5 bil in fed funds and other deposit purchases

Fed fund purchases are up a whopping 100% YOY (from 672 mil in q3 07 to 1.357 bil in q3 08)

Time deposits over 100k total 1.2 bil which could pose a problem once they come up for renewal and warry depositers might seek to diversify FDIC insurance

This company is heavily levered to So. Cal small and medium sized biz activity...I believe that commercial & construction loans will continue to be a problem for this bank. I do not expect them to meet current analyst projections for the upcoming year or two due to an increase in small and medium sized biz going BK.

mean analyst projections have CYN earning 3.05 per share in next year...this would have CYN forward P/E at 16...TTM P/E is 16.5

East West Bank Corp

Overview:

East West Bancorp, Inc. (East West) is a bank holding company that offers a range of banking services to individuals and small to mid-size businesses through its subsidiary bank, East West Bank (the Bank) and its subsidiaries. The Bank provides loans for commercial, construction and residential real estate projects. The Company has four principal operating segments: retail banking, commercial lending, treasury and residential lending. The Bank markets its services in the Los Angeles metropolitan area, Orange County, the San Francisco Bay area, including San Mateo County, the Silicon Valley area in Santa Clara County and Alameda County. As of December 31, 2007, the Bank had three wholly owned subsidiaries: E-W Services, Inc., East-West Investments, Inc., and East West Mortgage Securities, LLC. On August 17, 2007, East West completed the acquisition of Desert Community Bank.

Portfolio highlights (approximation rounded):

6.8 billion in real estate loans
---of which---
4.1 bil in com & ind real estate loans (47.1% of portfolio)
1.5 bil construction loans
1 bil in residential (742 mil in multi family 474 mil in single family)

1.1 bil in commercial biz loans

total loans outstanding is 8.6 bil (5.6 bil are in the yet to hit areas of com and construction loans and total LL reserves are only 168 mil for the entire book of 8.6 bil) While total NPA was 193.1 mil at end of june 30

Now as to capital base

3.1 bil are in timed deposits (CD's)
1.5 bil are in FHLB advances
equity is leveraged at slightly below 10x

Currently EWBC forward earnings estimate for 4q's are ---(.07 .08 .13 .22=.50)

forward p/e on this pig is 30x (with share price of 15)

TTM p/e is negative though due to impairment on pref stock's and pref trust pools (much having to due with FRE FNM)...so while i do not expect this pig to repeat its dismal performance of the past two q's i do not even expect them to meet analysts expectaions if CA economy continues its current path...and even if they do meet expectations this pig still has a sky high valuation, is dependant on CD deposits and FHLB advances to carry assets, and has a realtivly undiversified loan book in a pretty hard hit area of the economy

Paulsson says "I Be The Man Motha Farking biatches"

Interesting comments on behind the scene high profile bank failure...Anyway I for one was surprised by TPG's initial investment and WM's longevity, surprised by the death spiral financing clause associated with it, and then surprised by WM's strange and rapid downfall. Interesting to note that the initial 19 on the naked short list were only PD's...now I am not conspiracy minded too much but it is also interesting to note that WM took the big dirt nap on a THURSDAY while congress was mulling over the PACKAGE...

Treasury's Paulson warned WaMu CEO to sell before it failed

Two months before Washington Mutual failed, Treasury Secretary Henry Paulson warned then-CEO Kerry Killinger that he ought to sell the Seattle-based thrift before it deteriorated further.

By Seattle Times business staff

Rami Grunbaum, deputy business editor, and Seattle Times Business staff

Two months before Washington Mutual failed, Treasury Secretary Henry Paulson warned then-CEO Kerry Killinger that he ought to sell the Seattle-based thrift before it deteriorated further.

"Paulson said, 'You should have sold to JPMorgan Chase in the spring, and you should do so now. Things could get a lot more difficult for you,' " said one of several current and former high-ranking WaMu executives familiar with details of the call.

Paulson's July comment, which has not been previously reported, caught Killinger and his top brass off-guard, executives said. Bank officials had recently raised $7.2 billion in capital from investors led by private-equity fund TPG, and they thought that was enough money to weather the worsening mortgage crisis.

Killinger declined to comment for this article, and WaMu executives close to him spoke only on condition of anonymity. A Treasury spokeswoman said it does not comment on Paulson's private conversations.

Last spring, JPMorgan offered up to $8 a share for WaMu, with the final price depending on how its loans performed. Instead, WaMu sold a partial stake to TPG. When WaMu was seized by federal regulators Sept. 25, most of its banking operations were sold to JPMorgan for $1.9 billion — and the company's stock was rendered worthless.

Killinger called Paulson in July to ask that the Treasury secretary use his influence with the Securities and Exchange Commission to add WaMu to a list of 19 financial institutions that were temporarily protected from a form of trading called "naked short selling" that can drive share prices artificially low.

Paulson refused to help Killinger get WaMu on the list.

WaMu did get on a subsequent list: In mid-September, panic in the stock market prompted the SEC to ban all short selling on 799 financial-institution stocks.

That ban came too late for the Seattle thrift, which failed the next week after a run on the bank that was precipitated by credit-rating agencies reducing WaMu's debt to junk-bond status. Its declining ratings were due partly to its falling stock price, which had been harmed by short selling.

The WaMu executives did not accuse Paulson of pushing WaMu to fail. Although the thrift's primary regulator, the Office of Thrift Supervision is a bureau of the Treasury, the head of the OTS reports to the president rather than to Paulson.