an educated man is unfit to be a slave
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Intraday Double-top in tech? I see bearish divergence here, keep an eye out, obviously financials are leading the way right now, but if tech falters, it's going to pull the financials down with it.
FAZ@5.29
Bidding 5.33 to match original entry.
more like in the bazzz
Fitch Ratings Downgrades Bank of America (BAC) Ratings
May 18, 2009 9:22 AM EDT
Fitch Ratings has downgraded various ratings of Bank of America Corporation (NYSE: BAC) and subsidiaries, reflecting concerns surrounding the headwinds that the company is facing over the near- to intermediate-term, both with regard to asset quality and capital needs.
Fitch notes that BofA is required to raise an additional $33.9 billion in common equity by early November 2009 as a result of the government stress tests. The say this is a "daunting task in any environment."
Fitch said, "Considering the meaningful uncertainty which surrounds both near-term credit costs and market conditions, Fitch believes there is a heightened level of execution risk in meeting the capital requirement, which, in turn, indicates a heightened level of performance risk for the various classes of hybrid capital securities. Management has outlined a plan to raise the mandated amount of common equity and has recently sold part of its stake in China Construction Bank as part of its efforts to accomplish this. However, success in reaching the goal requires market access, ability to arrange sales of other units at a sufficient price, and maintenance of earnings above SCAP projections. Fitch believes that near-term earnings may be the most difficult of these three factors."
LINK: http://www.streetinsider.com/Downgrades/Fitch+Ratings+Downgrades+Bank+of+America+%28BAC%29+Ratings/4661735.html
Fitch Ratings Downgrades Bank of America (BAC) Ratings
May 18, 2009 9:22 AM EDT
Fitch Ratings has downgraded various ratings of Bank of America Corporation (NYSE: BAC) and subsidiaries, reflecting concerns surrounding the headwinds that the company is facing over the near- to intermediate-term, both with regard to asset quality and capital needs.
Fitch notes that BofA is required to raise an additional $33.9 billion in common equity by early November 2009 as a result of the government stress tests. The say this is a "daunting task in any environment."
Fitch said, "Considering the meaningful uncertainty which surrounds both near-term credit costs and market conditions, Fitch believes there is a heightened level of execution risk in meeting the capital requirement, which, in turn, indicates a heightened level of performance risk for the various classes of hybrid capital securities. Management has outlined a plan to raise the mandated amount of common equity and has recently sold part of its stake in China Construction Bank as part of its efforts to accomplish this. However, success in reaching the goal requires market access, ability to arrange sales of other units at a sufficient price, and maintenance of earnings above SCAP projections. Fitch believes that near-term earnings may be the most difficult of these three factors."
LINK: http://www.streetinsider.com/Downgrades/Fitch+Ratings+Downgrades+Bank+of+America+%28BAC%29+Ratings/4661735.html
Pre-Market: 5.57 -.33 (-5.59%)
Market Futures Point Much Lower:
DJIA INDEX -70.00
S&P 500 -6.40
NASDAQ 100 -10.25
In other news, the annual Bilderberg meeting concluded today in Greece, the rumor is that they have opted for a sharp and quick market deterioration rather then long and drawn out.
Smaller US banks need additional $24bn
By Saskia Scholtes, Julie MacIntosh and Francesco Guerrera in New York
Published: May 17 2009 22:57 | Last updated: May 17 2009 22:57
Small and medium-sized US banks must raise some $24bn to meet the capital standards set by the government in its stress tests of large institutions, research for the Financial Times shows.
News of the potential capital shortfall could increase pressure on many of the 7,900 US banks that form the backbone of the US financial system.
As many as 500 more banks could close, according to investment bank Sandler O’Neill, which carried out the research.
Since this month’s release of the tests for the 19 largest banks, regulators and investors have increased their focus on the next tier of lenders, amid concerns some of them might struggle to survive if the economy worsens.
The government’s stress-case would result in capital shortfalls for 38 per cent of the 200 banks below the 19 largest financial institutions, leading to a deficit of around $16.2bn in common equity, according to Sandler O’Neill.
Applying similar criteria to the remaining 7,700 banks in the US would result in a further $7.8bn capital deficit.
The banks have to repay a combined $27bn in aid from the Troubled Asset Relief Programme (Tarp) but they could do that from internal resources rather than raising more funds.
The US Treasury has said that it does not intend to extend the stress tests beyond the 19 top institutions it examined. But analysts say that the public release of the government’s test methodology and capital adequacy philosophy means that the tests’ standards will become a model for the rest of the US banking system. “This will ultimately migrate down the banking industry no matter what Treasury says,” said Robert Albertson, chief strategist at Sandler O’Neill. “It’s like telling bank examiners to close their eyes and not to think of a chicken.”
The government found 10 of the largest 19 US financial institutions in need of additional capital earlier this month, identifying a $74.6bn combined shortfall.
The application of the large bank stress tests could make some smaller banks vulnerable, say analysts. Some smaller banks may either struggle to raise capital or have less flexibility to do so. That, in turn, could lead to a flurry of takeovers.
“At some point there’s going to be massive consolidation,” said one industry banker. ”But for now, a lot of banks are going to raise as much capital as they can.”
LINK >>> http://www.ft.com/cms/s/0/79c47ffa-4306-11de-b793-00144feabdc0.html?nclick_check=1
Smaller US banks need additional $24bn
By Saskia Scholtes, Julie MacIntosh and Francesco Guerrera in New York
Published: May 17 2009 22:57 | Last updated: May 17 2009 22:57
Small and medium-sized US banks must raise some $24bn to meet the capital standards set by the government in its stress tests of large institutions, research for the Financial Times shows.
News of the potential capital shortfall could increase pressure on many of the 7,900 US banks that form the backbone of the US financial system.
As many as 500 more banks could close, according to investment bank Sandler O’Neill, which carried out the research.
Since this month’s release of the tests for the 19 largest banks, regulators and investors have increased their focus on the next tier of lenders, amid concerns some of them might struggle to survive if the economy worsens.
The government’s stress-case would result in capital shortfalls for 38 per cent of the 200 banks below the 19 largest financial institutions, leading to a deficit of around $16.2bn in common equity, according to Sandler O’Neill.
Applying similar criteria to the remaining 7,700 banks in the US would result in a further $7.8bn capital deficit.
The banks have to repay a combined $27bn in aid from the Troubled Asset Relief Programme (Tarp) but they could do that from internal resources rather than raising more funds.
The US Treasury has said that it does not intend to extend the stress tests beyond the 19 top institutions it examined. But analysts say that the public release of the government’s test methodology and capital adequacy philosophy means that the tests’ standards will become a model for the rest of the US banking system. “This will ultimately migrate down the banking industry no matter what Treasury says,” said Robert Albertson, chief strategist at Sandler O’Neill. “It’s like telling bank examiners to close their eyes and not to think of a chicken.”
The government found 10 of the largest 19 US financial institutions in need of additional capital earlier this month, identifying a $74.6bn combined shortfall.
The application of the large bank stress tests could make some smaller banks vulnerable, say analysts. Some smaller banks may either struggle to raise capital or have less flexibility to do so. That, in turn, could lead to a flurry of takeovers.
“At some point there’s going to be massive consolidation,” said one industry banker. ”But for now, a lot of banks are going to raise as much capital as they can.”
LINK >>> http://www.ft.com/cms/s/0/79c47ffa-4306-11de-b793-00144feabdc0.html?nclick_check=1
Market Futures heading lower:
DJIA Index -32.00
S&P 500 -3.40
NASDAQ 100 -4.50
~~~~~~~COMPX 5/18/2009~~~~~~~
Previous Close 1680.14 -9.07
1642 SSKILLZ1
1621 FinancialAdvisor
Market Futures:
DJIA Index -24
S&P 500 -2.80
NASDAQ 100 -4.00
Fitch says may cut 9 U.S. banks ratings
Fitch says may cut 9 U.S. banks ratings
Fri May 15, 2009 2:20pm EDT
NEW YORK, May 15 (Reuters) - Fitch Ratings said on Friday it may cut the ratings of nine U.S. banking groups including Wells Fargo because they are increasingly vulnerable to deteriorating loans.
Fitch, in a release, placed on review for possible downgrade the ratings of; BB&T Corp (BBT.N), Discover Financial Services (DFS.N), Fifth Third Bancorp (FITB.O), KeyCorp (KEY.N), M&T Bank Corp, Popular, Inc, Regions Financial Corp (RF.N), SunTrust Banks Inc (STI.N) and Wells Fargo & Co (WFC.N).
"Today's actions reflect Fitch's view that these institutions show an incrementally higher level of vulnerability to the credit deterioration which Fitch expects to continue across virtually all loan categories," the rating agency said. (Reporting by John Parry and Caryn Trokie; Editing by James Dalgleish)
LINK: http://www.reuters.com/article/marketsNews/idUSN1528264320090515
Fitch says may cut 9 U.S. banks ratings
Fitch says may cut 9 U.S. banks ratings
Fri May 15, 2009 2:20pm EDT
NEW YORK, May 15 (Reuters) - Fitch Ratings said on Friday it may cut the ratings of nine U.S. banking groups including Wells Fargo because they are increasingly vulnerable to deteriorating loans.
Fitch, in a release, placed on review for possible downgrade the ratings of; BB&T Corp (BBT.N), Discover Financial Services (DFS.N), Fifth Third Bancorp (FITB.O), KeyCorp (KEY.N), M&T Bank Corp, Popular, Inc, Regions Financial Corp (RF.N), SunTrust Banks Inc (STI.N) and Wells Fargo & Co (WFC.N).
"Today's actions reflect Fitch's view that these institutions show an incrementally higher level of vulnerability to the credit deterioration which Fitch expects to continue across virtually all loan categories," the rating agency said. (Reporting by John Parry and Caryn Trokie; Editing by James Dalgleish)
LINK: http://www.reuters.com/article/marketsNews/idUSN1528264320090515
FAZ will hit the top of the cloud soon:
Textbook intraday breakout ready to occur here at the tail-end of the lunch-hour:
***5-day chart of Russell 1000 Financials vs -300% counter of FAZ***
People got fills at .05 on the $6 calls that expire today, that's a crazy gain if this pushes past $6 today, the volume on those is screaming today.
Not saying it's going to happen, but if I could've got a fill on the .05, I would've just for the gamble. They'll likely try and cap this at $6, but the great thing about it, it's not a stock and it pulls off the NAV of the ETF and is that is based off of a number of things, including the value of actual stocks such as JPM or BAC.
I'm watching JPM as a leader, it's basically the closest thing we can look at next to the privately-owned Federal Reserve Bank that is publicly-traded. And the chart doesn't look to pretty, headed back down to $25-$27 it looks like.
Giddy up, today will be a good day for FAZ, watch the battle that will take place at $6.00!
Bilderberg Group Meets In Athens Amid Tight Security
Bilderberg Group Meets In Athens Amid Tight Security
ATHENS (AFP)--Some of the world's top business and political leaders started annual secret talks with the Bilderberg group Thursday in a suburb of Athens, under tight security control.
The surroundings of the Astir Palace, a luxury hotel in the suburban resort of Vouliagmeni, where the group is holding its annual meeting, were protected by dozens of policemen, who were keeping the press and public at bay, an AFP journalist said.
A Greek navy launch and boats carrying elite divers could be seen a few meters off the coast of the peninsula where the hotel stands. Greek newspapers said the group had also asked for the protection of two F-16 warplanes and a police helicopter.
Reports say U.S. State Department number two James Steinberg, U.S. Treasury Secretary Timothy Geithner, World Bank President Robert Zoellick, European Commission head Jose Manuel Barroso, Queen Sofia of Spain and Queen Beatrix of the Netherlands are among those attending the Bilderberg meeting.
The group, which has been holding annual off-the record talks open to guests only since 1954, feeds conspiracy theories and speculation about its intentions, with critics accusing it of plotting world domination.
Several sources say Polish political adviser Joseph Retinger, former Belgian prime minister Paul van Zeeland and former Unilever chief executive Paul Rijkens organized the first meeting at the Hotel Bilderberg in the Netherlands to unite European and U.S. elites amid growing transatlantic tensions a half-century ago.
Its success spawned similar talks at posh hotels and palaces in Europe, the U.S. and Canada each year since.
(END) Dow Jones Newswires
05-14-090722ET
Copyright (c) 2009 Dow Jones & Company, Inc.
LINK>>> http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200905140722dowjonesdjonline000365&title=bilderberg-group-meets-in-athens-amid-tight-security
Watch AXL, it will shed light on GM pending bankruptcy, quite the pump and dump lately, eh? $2 flat seems very pivotal, break below would almost nearly guarantee GM is about to file for bankruptcy protection, I'm not sure how much longer they'd be able to prolong GM filing?
Stocks still face deflationary collapse: Prechter
*Another perspective
Stocks still face deflationary collapse: Prechter
Thu May 14, 2009 6:09pm EDT
NEW YORK (Reuters) - Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that U.S. equities may plunge to half their lows hit in March as a deflationary depression bites.
Oil and U.S. Treasury bonds are also locked in long term bear markets, while corporate bond prices will plunge precipitously by next year as broad economy, banking system and company earnings sustain more damage from a financial crisis that's akin to the Great Depression, he said.
The U.S. S&P 500 stock index's rebound by nearly 40 percent since it sagged to a 12-year closing low of 676 points on March 9 is not sustainable, Prechter said in an interview with Reuters.
"It's not the start of a new bull market," said Prechter, chief executive at research company Elliott Wave International in Gainesville, Georgia. "Our models are (showing) right now that it is a much bigger bear market than most people realize, something along the lines of 1929-1932," he told Reuters in a wide ranging interview. "It's a very rare event," he added.
"I think the next leg down will be at least as severe if not more severe than what we just experienced. So you want to stay on the side of safety," he said.
As in his 2002 book "Conquer the Crash," which warned of the dangers of a U.S. debt bubble and deflationary depression, Prechter continues to advocate safer cash proxies such as Treasury bills.
SEVEN MORE YEARS?
Riskier assets such as commodities, corporate bonds, and stocks which are currently anticipating that the severe global economic downturn may be bottoming, are likely to have short lived intense rallies, but within an inexorable long-term decline that may last another seven years, he said.
As banks continue to accumulate losses and corporate earnings fall, "the difficulties will probably last through about 2016," he said. "There will be plenty of rallies along the way."
Oil may rally further from current levels just below $60 per barrel but the upside will be capped at about $80 per barrel as the commodity is locked in a long-term bear market, he said.
In July, U.S. crude oil hit a record peak above $147 per barrel and was just above $57 per barrel around noon on Thursday.
"Deflation is coming, it's going to lead to a depression. We're not at the bottom yet," Prechter said. "I think we are going to have bouts of deflation separated by recoveries."
Prechter also painted a bleak picture for commodities like silver and is largely unenthusiastic about gold, believing the precious metal made a major peak when it rose above $1,000 last year.
While gold may have already topped at above $1,000 an ounce in March 2008, Treasury bond prices are likely to fall in a long term bear market, with huge government debt issuance being the main catalyst.
The benchmark U.S. 10-year Treasury note yield, which moves inversely to its price, hit a five-decade low of 2.04 percent in mid-December.
"People got very enamored with bonds and very enamored with gold and I don't like to be invested in markets that are over subscribed," Prechter said.
"The Treasury (Department) has taken on so much bad debt" at a time tax receipts are falling, that "there will be a slow, but very steady change in the way people will view the U.S. government," said Prechter. As a result, investors in Treasury notes and bonds will ultimately demand higher yields, he said.
The U.S. central bank will not be able to control the government bond market and prevent yields from rising, regardless of how much money the Fed uses to buy Treasuries, he added.
Next year, U.S. corporate bond prices will probably fall below their extreme price lows of December during the market panic of 2008 when investors fled riskier assets, he said.
"Corporates in terms of price have the big wave down coming. This has been a prequel," Prechter said.
"Many corporations who (now) say we can borrow more money and take more risks: those are the ones who will get in trouble," he said. "Many municipalities will default," he added.
(Reporting by John Parry, Haitham Haddadin and Ellis Mnyandu.)
LINK: http://www.reuters.com/article/newsOne/idUSTRE54D4IL20090514
Recent insider sales, transactions totaling millions, someone a bit concerned about the price going below $30 (exercising those options): http://finance.yahoo.com/q/it?s=JPM
Gap at 27.83 will be filled soon, matter of when?
Makes sense with BAC at 10, GS at 125, etc. etc.
I'm bullish on .FAYFG at .75 - the June $7 calls. Join me if you'd like, I think these offer great potential.
.FAYFG at .75 is a steal !!! ($7 June calls)
Easy double, triple, etc.
Strong support in the lower end of the 5.60's here (5.60), lunch time lull now, see what happens after.
FAZ - $7 is possible today gentlemen, and if we're really lucky, could even cross over the share price of FAS...
Some guy is all fired up on the yahoo board, said he had a stop in at 5.83 and they sold his shares at 5.91 (FAZ never even went below 5.91 this morning!)
Libor Has Biggest Drop in Eight Weeks as Credit Thaws (Update1)
Libor Has Biggest Drop in Eight Weeks as Credit Thaws (Update1)
By Anna Rascouet
May 14 (Bloomberg) -- The cost of borrowing in dollars for three months between banks dropped the most in eight weeks as government and central bank efforts to unlock credit markets showed signs of bearing fruit.
The London interbank offered rate, or Libor, for such loans fell almost three basis points to 0.85 percent today, according to the British Bankers’ Association. The Libor-OIS spread, a gauge of the reluctance of banks to offer each other cash, narrowed three basis points to 65 basis points, the lowest level since June 16.
Libor, a benchmark gauge for about $360 trillion of financial products around the world from student loans to mortgages, has tumbled as the U.S. government and the Federal Reserve pledged $12.8 trillion to drag the economy out of its longest recession since the 1930s.
“I wouldn’t say that nothing can stop Libor’s fall, but there isn’t enough out there to cause any big panic,” said Padhraic Garvey, head of investment-grade debt strategy at ING Groep NV in Amsterdam. “So far so good.”
Libor hasn’t fallen so much since March 19, the day after the Fed said it would buy as much as $300 billion of U.S. government bonds and step up purchases of mortgage and agency bonds to revive growth.
To contact the reporter on this story: Anna Rascouet in London at arascouet@bloomberg.net
Last Updated: May 14, 2009 07:05 EDT
LINK: http://www.bloomberg.com/apps/news?pid=20601087&sid=alENGPbYEIsE&refer=home
Breaking News: Imminent Big Bank Failure on Overnight Bank Loan Failure
*Figured I'd throw this out there, it seems to be spreading pretty fast, take it for what it's worth, meditate and see if you can become a fly in the wall at the Bilderberg meetings running today through the 17th (note-read several reports that Geithner will be in attendance)...
Breaking News: Imminent Big Bank Failure on Overnight Bank Loan Failure
Stock-Markets / Credit Crisis 2009
May 13, 2009 - 10:19 AM
By: Nadeem_Walayat
Jim Willie of the Hat trick Newsletter has just sent an urgent message of a potential imminent big bank failure that would be expected to hit the financial markets hard - message as follows -
just got word from a reliable source with an excellent track record
he calls me every several weeks when he has something very critical to share
he wants me to put the word out and to see what comes back to confirm or add to the story
an extremely large overnight bank transaction loan failed last night, gathering major attention
it started in US west coast, went to Hong Kong, then Singapore, then London
it failed in London, by that is meant no return was given on the overnight loan
he guessed the size was something like $10 to $30 billion
he suspected (without much direct evidence) that it was Citigroup
he believes the failing bank is a London subsidiary for a giant US-based bank
he likened it to a plumbing blockage with extreme backup consequences
he expects a ripple effect to cause shock waves, or a flood of sewage
we wondered if it could have Commercial Paper consequences, since often used in overnights
he has five expert friends watching for specific market reactions, like LIBOR
so be on the lookout
in February, this source said that in May June timeframe, foreign creditors
will put the screws to the US bankers, who are recognized as totally corrupt
foreigner big bankers want to remove some power levers from US control
QUOTE ME IF YOU WISH
my source remains anonymous
/ jim
By Nadeem Walayat
http://www.marketoracle.co.uk
LINK >>> http://marketoracle.co.uk/Article10639.html
Well let me simplify this for you, being that the goal of this ETF is to pull -300% of the Russell 1000 Financials...
Here's the 3 major previous runs that this stock has had,
11/6 - 60.22 to 201.86 - 11/21
1/6 - 32.57 to 88.67 - 1/20
2/9 - 37.82 to 115.5 - 3/6
The percentage gains respectively of these 3 major runs are 235, 172, and 205%.
Of course, we could be in the midst of the climactic wave lower here as far as the banks go, especially if the rumors about the banks right now circulating are true, but if history is any guide, to expect a run over 600% at this point is ridiculous.
It's very easy to throw off a compounded gain on this ETF, 2 days of the markets going up 3%, and all of a sudden this ETF has a loss around 25%, keep that in mind.
Given the 3 biggest gains this stock has had since its 11/6 inception, I'm thinking $10 is possible and a bit more realistic then $30. Eventually I'd imagine a split would be done to increase the cost of the ETF, that's just how this vehicle works, it's going to be constantly eroded in value since it's a -300% ETF, same goes for +300% ETF, they're best designed as trend-traders.
The way the market is going and the economy is looking, I wouldn't be surprised if we don't see the real bottom until October!
At that point, wouldn't be surprised to see the Dow under 4,000, could even see 2,500!
By my estimations - BAC, C, AXP, GE, JPM and GM are basically bankrupt, that's 6 out of the 30 components! Things are going to get really bloody...
So if all the banks fail, how do you reap the rewards of your prediction?
frenchee, how you doing brother, was surprised to see your name drop off the mod here...
First you need to pass me what you are smoking (seriously), just a gain of over 600% from the bottom, how is that possible, pull up a chart of the Russell 1000 Financial Services.
Knowing that this moves -300%, how many -1% days in a row would one need, and I emphasize in a row, for this to shoot up over 600% from the 4.43 low, please advise my friend, and I'm being serious.
What justifies a run of 600%, this is a -300% ETF of the Russell 100 Financials, to run this to $30 would be nearly impossible. And to anyone putting out these wild predictions and price targets, tone it down a bit, this moves 3x the inverse of the financials, how can it possibly gain that much percentage wise?
Look at past runs from bottom to top from a percentage basis, $30 is nothing but a pipe dream!
~~~~~~~COMPX 5/14/2009~~~~~~~
Previous Close 1664.19 -51.73
1642 SSKILLZ1
1611 FinancialAdvisor
Way to steal my thunder ;-D (nice wag!)
Margin call hell is coming, long FAZ is the right side of the trade to be on. It's the most volatile leveraged trade I can find, therefore the most gains to be had on the trend...