Increasingly illiquid market had huge rally but remains below yesterday's two intraday peaks on both rally attempts today.

Wazzitmean?

hey uh, what is "shport"?

Massive meaningless jerkoff with extreme volatility in a limited band range.

It probably means the institutions need to pick up the ball and take it up after all this short covering.

We have the volatility and Dover Sole short and medium term indicators that during a normal bull market would suggest maybe opening some long positions.

But on the other hand, we have credit, financial and economic stress conditions still deteriorating and at levels not only not seen during the bull market, but not even seen in the previous bear markets.

That's the most effed up situation I've seen in years. Anything could happen here. A Mars Mission Moonshot or a Thermonuclear Dump.

I have no clue and can provide no insights here.

Just funny cat pics.

I wouldn't be surprised if most shorts cover at least 50% of their profit to lock in gains.

FRE halted.

How tight can they get this?

We done that yestidy.

I don't see it in any headines, but CNBsers were saying C decision not to put SIVs on balance sheet is disturbing.

I will take option B - a Thermonuclear Dump

This is like trying to contain the 'Blob'....


Absolute chaos as credit crisis forces fund into administration


SYDNEY hedge fund Absolute Capital has been put into administration, the latest domestic victim of a credit squeeze that shows no signs of easing.

McGrathNicol was appointed by the board as administrators to the group. The administrators blamed the "prolonged illiquidity in global and local credit markets" for a reduction in fees from the group's investment products.

http://business.theage.com.au/absolute-cha...71127-1d7o.html

Maybe it has something to do with their sale of more stock.


By Jennifer Ablan and Al Yoon

NEW YORK, Nov 27 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research), the second largest provider of financing for U.S. residential loans, is preparing to sell $5 billion to $6 billion in perpetual preferred stock in coming days to bolster its capital base, sources close to the issue said on Tuesday.

The issue, led by Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research) and Goldman Sachs Group Inc (GS.N: Quote, Profile, Research), is preliminary and being marketed to investors with a coupon fixed at 8.25 percent for five years, the sources said. If the issue is not redeemed after five years, the coupon would float at London interbank offered rates plus 300 basis points, they said.

Sharon McHale, a Freddie Mac spokeswoman, would not confirm the issue. The company would make an announcement once any sale is finalized, she said.

A Goldman Sachs spokesman declined to comment. A Lehman Brothers spokeswoman had no immediate comment.

McLean, Virginia-based Freddie Mac last week told investors to expect a large offering as it sought to replace depleted capital and build a cushion for the coming year. After losing $2 billion in the third quarter on soaring credit expenses, the government-chartered company last week said it may also halve its dividend and further pare its investment portfolio. Rooters

Yep "undercapitalized"....See how them stockholders like that decision...

In stock charting, the feature formerly known as "support". Of course, there's no such thing as "support" in a bear market.

MoMo darlings are at or near another decision point. I suspect the market needs these to go up, and perhaps even the Big Earls.

What's going to happen when they find out that finaglers profits are as real as Enron's ?

I guess Da boyz can sell it to the public pension funds so the taxpayers can pick it up if things go bad.

try as they might, they just can't manage to put a positive spin on this rapidly approaching storm.

Is it a sign of the times that we need everything to be just 'peachy' all of the time.

Are we that soft and fragile that we can't possibly endure anything other than 'good' times.

Who is more dangerous to your financial health,we doom and gloomers or these 'everything is peachy keen' types.

http://www.bloomberg.com/avp/avp.htm?clipS...gAFdmrPMXIs.asf

Speak

Could you please do me favvor and repost my last Imean intraday post-notM@M --post ,and with your comments please..Inasmuch as you were a former pilot you might add to or debunk my theory about todays market

beardrech

Your result from Zillow.com
2xxx Star Ct Save as Favorite in My Zillow | View comparable homes | Map this home
--
$520,008 3 2.0 1,704

This house sold for 360k last week. so much for zillow estimates

That is roughly 190-210 million shares of FRE. Who's going to want to buy all these shares? Middle East to the rescue again?

FRE cut their divvy in half...did we know that already?...i can't keep the nasty news straight, there's been so much of it.

6 Billion preferred offered

So you finally have discovered the hardest currency of all.

Nukes & 2M army & marine infantrymen.

Boatload of economic numbers tomorrow...all biggies...could get ugly either way, but i bet they spin 'em (or just lie) and it is a blowout up.

BD, I'm not sure what theory you are extracting from pilot induced oscillations that applies to markets. The phenom your referring to is like chasing the aircraft's movement being too late rather than anticipatory. In trading, it would be like being on the wrong side of the wave, where you get shaken out at tops and sell in dispair at bottoms.

The vivid image that comes to mind for me was on my first formation flying training flight. The instructor in the back seat, rendevoused with our lead with a 50 knot closure rate and popped right into place on his wing using speed breaks and a power cut to idle, nearly scaring me to death. I'd never been near another plane in the air until that moment. When he handed me controls, I began chasing the displacements I myself was causing and only succeeded in increasing the displacements or oscillations until the instructor took control and reset me on the wing.

The idea in flying is to make constant small corrections, the smaller the better, until you have a smooth anticipatory control that you can null out by trimming the control surfaces to zero out all pressures. I suspect pilot induced oscillations belongs to an earlier era of aviation where training was much less, and much less was known about flying skills. Plus, aircraft, particularly jets make it much easier and automatically trim the rudder with a yaw dampener gizmo.

The action in markets we are referring to here does seem to getting out of control. Doc explains it with a lack of liquidity. Perhaps you can elucidate your understanding of this and how it applies to markets, Brer Bear.

"Spiders - December S&P E-mini Futures: Today I shall be a buyer of the e-mini’s at 1396 using a 25 point stop. I think the drop from the October 11 top is just about over. There are significant bullish divergences in the daily advances moving averages and at 1395 the drop will be as long as the July-August decline."

http://carlfutia.blogspot.com/

If we take off from here, is he going to chase? Oh carl! Don't quite your day job.

*DJ Wells Fargo Won't Originate Lns Through Wholesalers When Combined Ln-To-Val Ratio Is 90%, Higher

JPM estimates 260 Billion in CDO losses (edit: total for all banks...not JPM alone). I find the following quote very telling:

"In upcoming months, the focus will be the extent of mortgage-related losses and who owns these losses,"

The National Bar and Corporate legal teams have got to be doing some serious gearing up for this. Can you imagine how long it is going to take them to unwind all this crap that has been collateralized, repackaged, derivative squared, repackaged, etc...

This is going to be unbelieveable.

I read somewhere that the vast majority of gains were from a few days before the first of the month to a few days after the first of the month.....Also we may start to see the ramp up to Dec 11 and a possible rate cut for Burnanke....I'm seeing the put/call ratio start to drop as well....I went long today at the close and will monitor the position closely.....

The Voice of San Diego. “In one of the first local cases in a national crackdown on mortgage and real estate fraud, four people connected with a San Marcos realty office have pleaded guilty to charges that they went to great and illegal lengths to secure mortgages for financially unqualified consumers, thereby pocketing more than $1 million in fraudulent commissions.”

“Alejandro and Emilio Lopez, two owners of Century 21 Eldorado in San Marcos, headed the ‘Lopez Team’ of loan officers, loan processors and real estate agents. Ravinderjit Singh Sekhon was a loan officer there and Linda Velasquez was the office manager, acting as translator for Sekhon with Spanish-speaking clients. All four pleaded guilty earlier this month to charges related to the scheme.”

“Obtaining financing from subprime lenders using so-called stated income or ‘no-doc’ loans, the group fudged employment, rental, bank and even citizenship status information for more than 200 unqualified clients, brokering first and second mortgages for an average of $400,000 each, according to court documents.”

source

You gotta be kidding me! The minute I throw long I got Carl hangin on my back! UFB.....maybe I'll close my position tomorrow morning....I've got to add Carl to my list of things to check before entering a position....

[attachmentid=93023]

If you DESPERATELY need to raise cash, why in the world would you still pay a dividend?

Answer:

1. You are stupid.
2. You are really stupid.
OR
3.You are worried about the stock price falling and your stock options going to ZERO.

I vote for number three.

Stocks Rally After Citi Secures Capital



* quote not exactly as it appears in article

Wasn't it "Big Bill" Thompson that said "Vote early and vote often!"?

What is a Carl Futia and why should anybody care anyway?

TIA

looks like he is one o dem hippie types

B.A in economics from Yale University in 1970, a Masters degree in Mathematics from the University of California at Berkeley in 1974, and a Ph.D. in Mathematical Economics from Berkeley in 1974

http://www.blogger.com/profile/8523106

NEW YORK (AP) -- Freddie Mac halved its dividend and unveiled plans to sell $6 billion in preferred stock to bolster the mortgage investor's finances in anticipation of more losses, the company said Tuesday.

Dividend cut. Share dilution.

sell!

From the GATA guys. These numbers look about right for a non accountant

From Dave in Denver:

Based on the implied cost of capital to Citicorp of the $7.5 billion dollar investment by Abu Dhabi, the implication is that Citicorp may be on the verge of insolvency. The deal is structured as a passive, subordinated convertible security with an 11% dividend and is convertible into 4.9% of the Company, based on a price conversion scale that ranges from $31.83 to $37.24 and the conversion expires in Sept 2011. Without further details on the conversion feature, and keeping the analysis "plain vanilla" for these purposes ( i.e. we don't have all the terms of the deal and there's some theoretical "nuances" to consider) I'm assuming the average conversion price would be $34.53. And assume Citicorp stock performs such that it is worthwhile for Abu Dhabi to convert into common ( i.e. the stock rises above the conversion range by 2011 and I doubt Abu Dhabi would do this if they didn't believe in that event). Based on yesterday's closing price of $30.70, th e implied cost of capital to Citicorp on the conversion feature is 12.5%, plus they've paid out an 11% dividend. That's an all-in cost of capital of 23.5%.

Now, just on the surface, the 11% dividend is similar to the yield that a mid-quality junk bond issuer would have to pay to get bond deal done. But the 23.5% implied cost of capital embedded in this deal reflects the kind of return that would be required for a "vulture" investor to invest in a highly distressed company. In other words, the cost of capital to Citicorp's shareholders of this deal implies that the rate of return required to induce investment capital into the Company reflects an assessment by the market that Citi is on the verge of insolvency. I would be interested to know if the good folks in Abu Dhabi were allowed to see the real "insider" financials at Citi, including ALL of the off-balance-sheet financing structures AND all of the derivatives. Somehow I doubt it....

***

The facts:

- Lost a CEO
- Paid an ROIC of 23.5% for a $7.5 B investment
- Refuses to come clean on bringing SIVs onto balance sheet, as opposed to HSBC
- Still trying to desperately organize a Master SIV bailout fund with no enthusiasm from foreign banks or smaller US banks that doesn't seem to benefit anyone but Citi.
- Sellers still hammer the stock after the initial pop


The hoopla:

- Another set of rich Arabs will ensure its survival.
- Bob Rubin is Superman.

More BS from the fumble managers. The lower dollar has nothing to do with this as they are using dollars they received for oil sales.

Poor Freddie.


If they're pitching the sale to the public, that means they didn't get a single decent private bid like CFC and C did.

The markets version of Douglas "Wrong Way" Corrigan..

[attachmentid=93024]

LW used to refer to him as "wrong-way blogger Carl Futile"... a fairly reliable contrarian signal.

Good news for Libertarians! The Nevada Bunny Ranch Brothel has endorsed Ron Paul. The owner has put RP for Prez donation buckets outside the door.

OK. I've been too busy to look at the details of the Citi deal. But this figure just doesn't smell right to me. So, I do some digging and I read at WSJ:


Linky-Winky

OK. So, note the discrepancy. GATAdude assumes that ADIA will convert if it's advantageous. If that were the deal, then he might be barking down an appropriate path for calculating the deal's implied cost of capital.

Note, however, that according to the WSJ, he's got the assumption dead wrong. The conversion is not subject to ADIA's choice, but instead, is mandatory. That means that if, instead, C fails to clear the conversion price, then ADIA is going to be stuck purchasing common at a price above market.

Thus, in essence to my eye, the convertibility involves two different sets of options: Citi selling ADIA a call on C, and ADIA selling Citi a put on C.

Dude needs to back out the value to Citi of the put.

Assume, for the moment, that the convertibility was set to be value-neutral: that is, the call value equals the put value.

Then, you are back to a deal cost of the 11% coupon.

Note that with C trading ~$30/share, the puts that Citi owns closed in the money, given the future "conversion price of between $31.83 and $37.24 a share."

That fact suggests to me without additional analysis that the conversion feature arguably favors Citi at the outset, ceteris paribus.

Which instead lowers the implied cost of capital to Citi of the deal below the 11% coupon.

It's clear to me that under the terms of this agreement, there is no optionality involved for either party.

The only way of knowing what the cost is to Citi or its shareholders is to wait and see where the stock is trading on conversion date.

But given that they've timed the conversion with the bottom in the housing market, Citi probably make out like bandits.

http://www.citigroup.com/citigroup/press/2...ata/071126j.pdf

I'm pretty sure the Citi press release thingie accurately reflects my interpretation, but I am open to correction.

And if ADIA is smart, they can hedge their position by buying puts along the way

jickiss is back!



jickiss is back!

and

the C cost of capital may be debated, but your jickiss thinks that C is really a "play or a participation" on the Velocity of Money in the system, for C is a big part of the whole.

if you thought that the Velocity of Money would increase over the period of your investment of new funds into C, then your jickiss suspects that you will do well, other things being equal.

but remember, if Velocity of Money goes to either zero or infinity, Gold and Silver benefit the most.

so, if you want to play the velocity of money moving either waaay up or waayyy down, then your jickiss, who really likes the CDE chart, wants you to study the CDE chart below, so that you can make giant capital gains, no???????

why can't CDE go back to $ 10? Silver will be the Poor Man's Gold. Then, if you are afraid of CDE, (why you are afraid to take a Bath in an Empty Tub is your business), then just take another look at CEF, Central Fund.

CEF, which your jickiss bot back today at $10.66, (poor Harold notwithstanding) holds in its portfolio Bullion of 52% gold and 48% Silver now, with only a very small cash position.....

jickiss!!!!!!!