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WOW! CTIC looks sweet!
Thanks for the chart BIGZ!
'Fast Money' Recap: The Big Bad Bank Is Coming
David Tong
01/27/09 - 07:34 PM EST
http://www.thestreet.com/story/10460245/1/fast-money-recap-the-big-bad-bank-is-coming.html?cm_ven=GOOGLEN
The prospects of a government "bad" bank to handle toxic assets finally taking shape drove up bank stocks in after-hours trading on Tuesday.
The news came on a day when the markets were up for the second day in a row. The Dow Jones Industrial Average jumped 57.70, or 0.72%, to 8,174.73, while the S&P 500 rose 9.14, or 1.09%, to 845.71. The Nasdaq added 15.44, or 1.04%, to 1,504.90.
Dylan Ratigan, the moderator of CNBC's "Fast Money" TV show, asked Steve Liesman, CNBC senior economics reporter, to comment on reports that Obama administration is closing in on a plan to purchase bad bank assets.
Liesman said some industry lobbyists were meeting with the Treasury Department to discuss the "bad bank" alternative. He said the bank could handle as much as $1 trillion in bad bank assets, and that the plan could be announced as early as next week.
Liesman said his sources say the key issue in the talks is the pricing mechanism. He noted two keys to understanding of how the mechanism would work: The government would hold on to the toxic assets to maturity, and it has cheap funding that will allow it to pay more for the assets than their book worth.
In some cases, he explained, the government will offer less than the carrying costs, with the bank issuing common equity to make up for the difference. He said the plan would do away with the previous use of preferred stock.
Liesman said the important thing to remember is that the government doesn't want to put taxpayers in a position of overpaying for the assets in the effort to remove the bad assets from the banks' books.
Karen Finerman said she was concerned about how the government would price the assets. Joe Terranova said the news should cause a pop in bank stocks, but advised investors "not to be married" to these positions.
Ratigan also reminded Liesman that the bailout plan is not going to solve the public confidence problem until the executive compensation clawback issue is also dealt with.
Bill Siedman, former chairman of the FDIC, offered a tougher approach to handling the toxic assets. He alluded to his own experience during the S&L crisis when the Resolution Trust Corp., in effect, nationalized the banks for a short time to take out their bad assets before shifting them back to the private sector.
Terranova endorsed the idea of an "ultimate liquidator," saying that's the approach that should be adopted now.
Ratigan shifted the discussion to some of the major market movers today. Seymour said the financial stocks were a big boost. "It looks like we are starting to some movement from the beaten-down names," he said.
Those yahoo boards are NUTZ!
There are a bunch of yahoos over there.
BAC up HUGE after hours!
This was already locked loaded and redy to pop. Imagine what it will do now?
What do you guys think this will run to based on this good bank/bad bank news?
AH it's already over $7.15
BAC going through the roof A/H on news of BAD BANK coming!
Cover what? I'm LONG!
Obama advisor: The "bad bank" is coming!
Among Mr Geithner's first tasks will be to finalise details of what to do with the second-half of the $700bn bank bail-out fund, working with Larry Summers, President Obama's senior economic adviser, on plans for not only the banks, but also the increasing housing foreclosure problem.
Speaking at the weekend, Mr Summers said the Obama approach to the banking sector would be "very different" from that adopted by Hank Paulson, President George W. Bush's Treasury Secretary.
One of the key facets of the rescue is set to be a giant "bad bank" to remove distressed assets from the balance sheets of major banks. "The priority is to get credit flowing again," Mr Summers told NBC's "Meet the Press."
Full article: http://www.telegraph.co.uk/finance/financetopics/recession/4352850/Tim-Geithner-vows-to-get-US-economy-back-on-track.html
Yeah. today's good news was peppered with bad, so it will be interesting to see how the market reacts.
Thanks! Very nice!
True. It's shaping up to be quite a pincher.
Thanks!
I guess any positive news will send it soaring while more negative news may send it down further.
Question for the experts...RE: BAC's chart
Look at this chart:
Is this what's going on here?
A symmetrical triangle pattern?
If so, these triangles can break up or down- Any thoughts?
Question for the experts...RE: BAC
Look at this chart and compare it to the example below it:
Is this what's going on here?
A symmetrical triangle pattern?
These triangles can break up or down- Any thoughts?
Hard to say.. The company released bad news along with this announcement and the stock started trading sideways.
Do you guys think this will rise in the next few days?
As I predicted earlier, it had to go down today... Look at the pattern and where we're headed:
Look at this chart and compare it to the example below it:
http://i40.tinypic.com/r85s7d.jpg
http://www.stock-investing-for-beginners.com/images/symmetricaltriangle2.JPG
Yes.. These triangles can break up or down- but the breakout to the upside happens when the stock price penetrates the upper trendline. The breakout to the downside happens when the stock price penetrates the lower trendline. Looks like an UPPER to me!
It's not magic or something you have to believe in. It just IS!
Get ready, boys and girls!
Check out this scorecard for BAC...
http://www.nasdaq.com/asp/stock_consultant.asp?symbol=BAC&selected=BAC
Geithner could announce Bank saving plan as soon as tonight!!
http://www.bloomberg.com/apps/news?pid=20601103&sid=aa9CZ110AKYg&refer=news
Is BAC trading in a symmetrical triangle pattern?
If so, this could be headed towards the $12 mark!
Geithner to Press Mortgage, Bank Relief in Growing Rescue Plan
Jan. 26 (Bloomberg) -- President Barack Obama's financial rescue plan will be unveiled soon and is likely to be larger and more ambitious than originally planned as the economy and banking system worsen.
http://www.bloomberg.com/apps/news?pid=20601087&sid=atCNAejnqzJA&refer=home
WSJ: BofA Woes Put Pressure on Lewis
By DAN FITZPATRICK and JOANN S. LUBLIN
Bank of America Corp.'s handling of its acquisition of troubled Merrill Lynch & Co. has put Chairman and Chief Executive Kenneth Lewis on the hot seat with irate shareholders. Among those disappointed in the steep decline in the bank's stock are two veterans who helped Mr. Lewis rise to the top.
Hugh McColl Jr., Bank of America's buccaneering former chairman and chief executive, who picked Mr. Lewis as his successor, and James Hance, the bank's former chief financial officer, privately have expressed disappointment in certain decisions made by Bank of America during this financial crisis, according to people close to the men.
http://online.wsj.com/article/SB123292661964113805.html?mod=googlenews_wsj
CNN: Bigger bank bailouts coming?
Obama economic adviser Lawrence Summers leaves the door open to more money being allocated to the rescue of U.S. banks. House Speaker Nancy Pelosi indicates additional funds may be needed.
http://money.cnn.com/2009/01/25/news/economy/summers_stimulus_taxcuts.reut/index.htm?postversion=2009012511
So sorry.. There is another contest that I am getting the rules mixed up with. My second pick is HERO
(first was GTCB)
Thanks for your patience.
Geithner vote looms on Capitol Hill
The Democratic-controlled Senate is likely to confirm President Obama's choice for Treasury Secretary on Monday.
http://money.cnn.com/2009/01/23/news/geithner.senate.vote/index.htm?postversion=2009012517
He said he did, but that was the only one he bought up on the screen during the class.
Yup. No mention of it.
SSPT.PK can replace GTCB.. Sorry
Sorry here is one to replace it: SSPT.PK
Contest PICKS
GTCB
ACTC
Contest PICKS
GTCB
ACTC
Incredible trade analysis of BAC
See next post- this chart didn't show up
Agreed. It's a bit speculative, but looking much better.
Case study: Charter Communications
http://www.fool.com/investing/small-cap/2009/01/25/danger-horror-get-out.aspx
In our active online community, a Motley Fool Hidden Gems member asked us a few years ago what we thought of Charter Communications, a broadband cable company whose chairman and largest shareholder is Microsoft co-founder Paul Allen. The business is also substantially owned by Wally Weitz, a Nebraska-based investor admired by Warren Buffett fans, and someone who found great returns in stocks like UnitedHealth Group and WellPoint (NYSE: WLP).
Charter stock had fallen from $25 to $4.50, and our member wanted to know whether it was a good time to get in for a turnaround.
We'll start by saying that in Hidden Gems, we absolutely love the broken small cap that's poised for a turnaround. Show us a company whose stock has fallen 90% from its highs, whose chairman is a billionaire, and whose largest institutional owner is a close friend of Warren Buffett, and we'll sign up to do very careful research. That's exactly what we did with Charter Communications at $4.50.
But we did not like what we found. Here's why we warned against investing in this business:
Massive debt. Net debt (debt minus cash) was more than $18 billion.
Net debt was 28 times the company's market cap of $640 million.
Charter was unprofitable, with $1.5 billion in yearly interest costs.
Debt covenants posed a serious threat to the company's survival.
The SEC had launched an investigation into Charter's accounting practices.
Heavy spending for cable infrastructure hadn't yielded high enough returns.
Near the end of June 2003, Tom Gardner wrote negatively about this stock when it was trading at more than $4. It's tough to go contrary to Paul Allen and Wally Weitz. But there was no turnaround in sight, and the company's balance sheet was cratering. Charter itself cratered, dropping to less than $1 per share. The stock has been on a roller coaster since then, and it now sits around $0.09.
What we do and don't fear
Oddly enough, our Hidden Gems team does not fear -- in and of itself -- high debt. Our recommendation Middleby carried more than $100 million in debt after buying a competitor and repurchasing founder shares. But the stock has risen over 145% since the original recommendation, and we remain very optimistic about its future. The company's operations are plenty strong to repay those obligations.
Nor do we fear companies that have fallen well off their all-time highs. Indeed, each of these scary factors individually could make for a compelling investment as the stock price drops into the real value range.
So, what was the problem with Charter Communications? The answer is the scale of its debt, running north of $18 billion, alongside harsh payment terms and emerging accounting problems.
To find out which stocks we do love, simply take a free trial to Motley Fool Hidden Gems. Read about all the many small companies that have thus far produced outsized returns. If you don't like it, you can cancel within 30 days without paying a dime.
Obama details stimulus plan!!
http://www.nytimes.com/2009/01/25/us/politics/25obama.html?hp
I'd be curious to hear everyone's trade ideas after some of these new details.
Yeah.. I may have written it down on my class notes. I'll look it up and post it.
Obama details Stimulus package!!!
full breaking story:
http://www.nytimes.com/2009/01/25/us/politics/25obama.html?hp
I just attended an E-Signal Advanced Get seminar and the "successful trader" who taught the seminar scared the hec out of me when it comes to BAC. He said it's going to ZERO, no matter what anyone says. He says the company's common stock is done- but does not believe the company will fold. "It may be broken up into pieces, but it will still operate and the common share stock holders will be left at zero."
Some people in the audience fought him on it and then he pointed to some blog entries he had posted months ago regarding many different bank stocks and said. "If you guys don't think I have any credibility, look at these articles. I've been right about all of these and as much as I hate to say it, I think BAC is headed to zero."
He was also quite bearish on the market short term. He said that the bottom has not happened and that the market could see another 500 point drop this coming week.
Aside from those two points, I pretty much loved the class and really felt the guy knew what he was talking about.
Any thoughts or comments?
Last few "tax and spend" democrats have left us with more money than the last few "fiscal conservative" republicans.
I'll place my bet on Obama and answer with a resounding "HELL YES!" when asked... Were you better off before Bush was in office?