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FRGY share structure is very favorable with these low prices
Promoter selloff created the downward pressure - aheadofthebulls.com was compensated 20 million free trading shares - and a few others.
Selloff should be done - or near done.
With news - this will go strong! Great time for accumulation - IMO!
I don't need anymore - LOL - but I will keep adding if I can get some .0004's
This is nothing more then a PREMARKET sucker rally - or at least I HOPE - LOL!
All the financials are running HARD this morning. --- But the opening for the rest of us who are not able to manipulate - is 8 minutes away.
I will text him if it hits $5.00
I will double down if it hits $4.00
FUTURES ARE ALL UP - FAZ is dropping in price quick - THIS SUCKS and DOEsn't make sense.
LOL!
I'd rather have 6 bikini clad woman!
$10.00 will work!
http://money.cnn.com/2009/05/05/real_estate/underwater_homeowners/index.htm?section=money_realestate
20% of homeowners 'underwater'
Study finds more than 20% of U.S. homeowners - about 20 million residences - owe more than their homes are worth.
By Les Christie, CNNMoney.com staff writer
Last Updated: May 6, 2009: 9:51 AM ET
NEW YORK (CNNMoney.com) -- More than 20% of American homeowners owe more on their mortgage debt than they can sell their homes for, according to an industry report released Wednesday.
The real estate Web site Zillow.com reported that 21.8% of all U.S. homes, representing more than 20 million residences, were in a "negative equity" or "underwater" position after prices dropped more than 14% nationally in the year ended March 31.
"A combination of falling prices and low down payments has left many borrowers underwater," said Stan Humphries, Zillow's vice president in charge of data and analytics. "In some markets, more than half of all homes are in negative equity."
Those markets include Las Vegas, where a whopping 67.2% of homeowners would have to bring cash to the table if they sold their homes. Other markets are Stockton, Calif., where 51.1% of homes are underwater, and Modesto, Calif., where 50.8% of homes are in that position.
"That's really important, because homeowners in negative equity have fewer options if they take financial shocks such as divorce, job loss or medical bills, making foreclosure more likely," said Humphries.
Zillow.com based its estimate of negative equity using its own home price estimates. It obtains these by collecting sales records and applying the price trends it finds to other homes in the community. It then compares its home price estimates to the initial loan balances to determine if borrowers have fallen underwater.
The analysis is based on the mortgage balance at the time of purchase and the price changes that have occurred since. It does not take into account that some homeowners may have paid down principal along the way.
Humphries believes it's a conservative approach because the trend has been for people to strip value from their homes in the form of home equity loans and lines of credit, than to add value by paying down their mortgages.
"I think our number is either right on or negative equity may be even a little worse," he said.
Some dispute: Not all industry insiders back these findings.
"Zillow's negative equity estimates strike me as a little high," said Richard DeKaser, a real sate analyst and founder of Woodley Park Research in Washington D.C. He pointed out that other estimates of negative equity from Moody's Economy.com, for example, and First American (FAF, Fortune 500) CoreLogic, have not been that elevated.
The last CoreLogic report was for data through the end of 2008 and it estimated that 8.3 million homes were underwater.
Moody's Economy.com chief economist Mark Zandi estimated that 14.8 million were underwater at the end of March.
Foreclosure risk: Underwater homeowners are much more likely to lose their homes to foreclosure than borrowers with value remaining. That negative equity contributes to foreclosures is supported by Zillow's statistics on foreclosure sales.
In Los Angeles, 20.3% of owners are underwater and foreclosures accounted for 34% of all sales. In the New York metropolitan area, by contrast, only 7.8% of homeowners are underwater and a mere 4.5% of all home sales during the past 12 months were foreclosures.
Negative equity makes it harder for housing markets to revive.
"It puts increased downward pressure on housing prices as defaults increase and add supply to markets," said DeKaser.
It also makes homes more difficult to sell. Underwater owners either have to bring cash to the table in order to pay off the balances of their debts not covered by the sale prices of their homes, or they have to get their lenders to agree to "short sales," for less than what they owe, and have their lenders forgive the unpaid debts.
The problem may be easing a bit. Zillow did report that price drops seem to be moderating in some hard-hit cites, indicating that they might be approaching a bottom, according to Humphries.
"Places like Modesto, Calif. have recorded a couple of quarters of flat or diminishing year-over-year declines," he said. "That's what constitutes the good news in this report."
First Published: May 6, 2009: 6:10 AM ET
Find mortgage rates in your area
I would prefer a FAZ open at $7.17
http://money.cnn.com/2009/05/15/news/economy/Obama_mortgage/index.htm
http://247wallst.com/2009/02/27/citigroup-c-a-lifeline-and-dilution/
Citigroup (C): A Lifeline And Dilution
Posted: February 27, 2009 at 7:23 am
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Citigroup (C) may not have picked up much in its deal with the federal government. It shareholders will get crammed down. Tax payers will own more of Citi, about 36%, which is not necessarily a win.
And, most of the board will lose their jobs, but less-than-competent CEO Vikram Pandit gets to stay.
Citi announced it will issue common stock in exchange for preferred securities, which will substantially increase its tangible common equity (TCE) without any additional U.S. government investment. The transaction is intended to build Citi’s TCE to a level that removes uncertainty and restores investor confidence in the company.
Citi will offer to exchange common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share. The U.S. government will match this exchange up to a maximum of $25 billion face value of its preferred stock at the same conversion price
This transaction could increase the TCE of the company from the fourth quarter level of $29.7 billion to as much as $81 billion, which assumes the exchange of $27.5 billion of preferred securities, the maximum eligible under this transaction. Citi’s Tier 1 capital ratio is 11.9 percent as of December 31, 2008, and is among the highest of major banks.
Based on the maximum eligible conversion, the U.S. government would own approximately 36 percent of Citi’s outstanding common stock and existing shareholders would own approximately 26 percent of the outstanding shares. All investors’ new stakes will be determined following the exchange.
Dick Parson’s, Citi’s Chairman, made the following statememnt: “On January 16, 2009, I announced on behalf of the Board of Directors that we had determined to ‘reconstitute the board… as quickly as possible.’ I am pleased to announce today the next step in reconstituting the Board: the Board unanimously decided to have a majority of new independent directors as soon as feasible. The Board presently has 15 directors, three of whom have announced that they will not be standing for election at the April Annual Meeting and two of whom will reach retirement age by the time of the Meeting. We are actively conducting a search and expect to announce several new directors shortly.”
The US, for all practical purposes, now owns the bank
Douglas A. McIntyre
Bank Of America: The Dilution Solution
By David Spurr on May 7, 2009 | More Posts By David Spurr | Author's Website
The results of the stress tests are due to be released today and no doubt, bank stocks have had a great run off of the bottom. The banks have rebounded as that has been the primary goal of the FED and the Treasury. Their desire has been to re-instill confidence in the banking sector. In my mind that creates another question - How should a rational investor that relies on fundamentals define confidence.
Should confidence be defined by the change in the stock price ?
Should confidence be defined by improvements in the valuation ?
Often times longer term stock price movement is a reflection of improving valuations. A cheap valuation is a catalyst for buyers to step in and bring price to reasonable levels. If the valuation does not keep pace with the price, then the stock could be considered “over valued or rich”. It’s at the point of “over-valuation” that the price starts to move down - heading back down to keep pace with its’ fundamental valuation level.
If you look closely at the chart of BAC over the last several years….You can see that Bank of America (BAC: 10.67 -0.64 -5.66%) stock has been in a state of decline. If you look at the earnings per share (triangles), you see that earnings have also been declining along with share price. After numerous rule changes - and accounting trickery, BAC has now suddenly converted to profitability and the stock price has moved up off the floor. The question is CAN THIS PRICE IMPROVEMENT CONTINUE ?
There are several factors that determine earning per share of financial institutions - Cost of Funds and Shares Outstanding. All large banks are constrained by competition and therefore each bank individually has very little pricing power. They must offer loans at rates that are competitive with other banks- failure to do this will result in those banks not getting the “deals” done.
If we look at BAC’s earnings and Shares outstanding we get an interesting picture. We see a declining overall level of earnings and a rapidly expanding share base.
You can see from above that the shares outstanding has increased dramatically since 2004.
As of today there are approximately 6,400,950,000 shares outstanding (based on the information that I’m able to uncover via SEC filings and Fidelity’s website.
If the Stress test today reveal that additional capital is needed by BAC, then this will result in serious further dilution to existing holders of common stock. If BAC needs in the vicinity of $34billion and this capital comes as a result of a conversion of prior TARP monies that were granted to BAC , simple math would suggest that the share base will increase further from current levels
$34Billion divided by $12.00 share price = 2.8 billion MORE SHARES
Potentially this type of Conversion would mean that BAC’s share base is now approaching 10bb shares of common stock. The bank must earn at least $10bb to earn $1.00 per share. In 2007 the bank was able to earn $14bb. In 2008 the bank earned a paltry $2bn. If the bank does not show significant improvement in earnings over the next couple of quarters then you could expect the price of the stock to decline ;
Also any improvement in the share price will now also be affected by the US Government OVERHANG. When and if the share price shows improvement - holders of BAC will be trying to get out of their position along with Uncle Sam. I think that owning the bank stocks entail many different risks. We’ve heard that there is more bad news to come on the employment, commercial r/e and credit card front. Negative news and earnings will continue to reduce the potential for the banks to significantly grow earnings over the next several quarters. I”m not sure that we’re completely out of the woods with regards to the bank stocks.
A bleak economic environment is certainly not a beacon for wary stockholders.
Markets are going to realize - this was all a pump to get investors money invested in banks (Capitalize the Banks) ---- It was a MEDIA PUMP!
FAZ going to have a ROCKING WEEK - Possible Gappa By 8:00!
Always - Foreclosures are back on the rise. This time - not just because of subprime lending - but for the following reasons:
1.) 20% of homeowners are upside down on their home.
2.) Unemployment is a large problem, but underemployment, a number not reflected, is a MUCH LARGER issue.
3.) Credit Cards have increased the minimum payment due - which is causing a struggle for many people. People are now choosing between keeping current on the mortgage - or the credit cards.
Add to the foreclosure problem that banks have been instructed by the STRESS TEST, to raise capital. Instead of using more TARP money and giving the Government more control - They are diluting the common shares.
BEARS VS. BULLS
I also like EMMS - in US row 5.
Watching MNI like a hawk too!
Looks like she could go!
Will watch on Monday!
$18.35
BEAT ran in After Hours Friday - should be a gapper Monday!
I disagree with D K - sorry. - of course I could make a squiggly line chart going up - but I don't have the time to right now.
If the banks begin to go down - FAZ will reflect it - the faster and longer they go - the quicker the price will reflect it.
Look at this example:
$6.00 Faz goes up 10% = $6.60
$6.60 Faz goes up 10% = $7.26
Continue this for multiple days - and 10% becomes more and more money.
If FAZ reached $40.00 - 10% = $44.00 - a $4.00 gain instead of $0.60 in the $6.00 example.
The reason for deterioration is that the banks have all rallied.
FAS went down to $2.98 and people were all saying it would go to pennies - it has increased almost 3x in a very short time. Not 1 bank has increased 3 x's in that same period. That's a 3 bagger in my book! Only way it would be a 3 bagger - is by holding it! Flip all you want - as for me - I will ride this sucker until the DOW is 6,500 and the banks stop diluting there common shares.
That chart has many - many - squiggly lines!
Your not scaring me out of my shares - LOL
ETF's represent a sector. They are made up of holdings in that sector.
http://finance.yahoo.com/etf/education
With an ETF you are not gambling on one particular company, you are gambling on one particular sector of our economy.
If you feel that real estate is oversold, and you feel bullish on the sector, you would buy the Real Estate ETF 2X Long and your money will double the performance in that entire sector.
If you feel that real estate is still going to decrease with the foreclosure boom that is on the rise, the increase in unemployment, and the ineffectiveness and the Governments modification plan, you would buy the Real Estate ETF 2x Short and your money will go up if that sector goes down.
The ETFs in the IBOX are mostly 2X leverage. FAS and FAZ are 3x leverage. When you are correct - you gain more then a 2x ETF, When you are incorrect - you lose more.
Hope that helps.
It amazes me that they admitted they were going to dilute the stock to raise capital - and the prices are still going up. That makes ZERO sense.
Only good thing - the more investors believe it - the less future taxes increases we will have to live with - LOL.
Its a win win!
Thats a GREAT Plan!
I feal very BEARISH about next week - my feelings are usually 100% incorrect - LOL
I should of loaded on FAS
FAZ will be up NICELy and Biggley next week - all week!
I am holding for the HUGE selloff next week - should be a gapper Monday morning - quarterly reporting week next week - should scare the hell out of these bulls in a bear market!
Glad you made a profit.
Another Article to add to the Symphony of Destruction:
Europe experiences worst quarterly GDP fall
Story Highlights
Europe experiences worst quarterly drop in GDP in first three months of 2009
German economy dives more than 3.8 percent since last quarter of 2008
French GDP also slipped by 1.2 percent compared to the previous quarter
(CNN) -- Europe experienced its worst quarterly drop in GDP in the first three months of the year, shedding 2.5 percent as German exports tumbled and investment plummeted across the 27-country bloc.
European Union statistics released Friday showed German GDP fell more than any quarter since the country's 1990 reunification, falling 3.8 percent from the last quarter of 2008.
French GDP also slipped by 1.2 percent compared to the previous quarter, while Italian GDP fell 2.4 percent, the country's heaviest decline since 1980.
Economists had forecast an ugly but less dramatic fall of 2.0 percent in euro zone GDP, after a drop of 1.6 percent in the previous quarter.
Europe's major sharemarkets all dipped on the news, the London FTSE 100, CAC 40 in Paris and Frankfurt's DAX 30 down around a percent.
However, analysts said there was some bright news among the gloom.
"Although we are nowhere near the peak in unemployment, we can safely assume that the first quarter was the worst in terms of the pace of decline," Martin van Vliet, an economist at ING bank, told Reuters.com.
Alexander Koch, an economist at UniCredit bank, added: "The latest ugly GDP figures should, however, mark the trough of the current 'Great Recession.'"
Europe's plight is mimicked the world over, with the International Monetary Fund predicting the global economy will contract by 1.3 percent in 2009.
It has predicted a modest recovery in 2010, with growth of 1.9 percent
TY!
Gonna hold for awhile.
IN CPST at .65
CPST - Big Board Stock at .65 - looks VERY GOOD!
I just went IN - NICE CHART!
cool - let me know what's going on.
I knew it was a matter of time - glad I was accumulating during the selloff!
With news - it goes hard! News coming?
The reason for the Market Turn Around - some honest reporting:
"The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention
Posted May 15, 2009 09:31am EDT by Aaron Task in Investing, Recession, Banking, Autos, Housing
Related: ^DJI, ^GSPC, DDR, XLF, GM, RWR
The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates.
"We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."
Davidowitz, who is nothing if not opinionated (and colorful), paints a very grim picture: "The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same."
This outlook is based on the following main points:
With the unemployment rate rising into double digits - and that's not counting the millions of "underemployed" Americans - consumers are hitting the breaks, which is having a huge impact, given consumer spending accounts for about 70% of economic activity.
Rising unemployment and the $8 trillion negative wealth effect of housing mean more Americans will default on not just mortgages but student loans and auto loans and credit card debt.
More consumer loan defaults will hit banks, which are also threatened by what Davidowitz calls a "depression" in commercial real estate, noting the recent bankruptcy of General Growth Properties and distressed sales by Developers Diversified and other REITs.
As for all the hullabaloo about the stress tests, he says they were a sham and part of a "con game to get private money to finance these institutions because [Treasury] can't get more money from Congress. It's the ‘greater fool' theory."
"We're now in Barack Obama's world where money goes into the most inefficient parts of the economy and we're bailing everyone out," says Daviowitz, who opposes bailouts for financials and automakers alike. "The bailout money is in the sewer and gone."
Except for FAZ - LOL
This helps:
Before the bell: Futures edge lower ahead of data
Posted May 15th 2009 7:33AM by Melly Alazraki
Filed under: Before the bell, International markets, Market matters, Economic data
U.S. stock futures edged lower Friday morning, ahead of several key economic reports to be released before the bell, including inflation, manufacturing and capacity utilization data. Meanwhile, investors keep following the auto industry and the economic situation around the globe, as well as insurers now getting access to TARP funds.
If in the last few weeks, potential green shoots and better-than-expected corporate results led the rally, this week, jobs, consumer spending, high interest rate and energy prices, as well as some disappointing corporate results took some steam out of the rally. Although some still think it has room to grow.
But today, starting at 8:30 AM, an avalanche of data will be scrutinized by Wall Street:
April CPI at 8:30 AM, which follows a surprisingly higher PPI
May Empire Manufacturing also at 8:30 AM
Net Long-Term TIC Flows at 9:00 AM
April Capacity Utilization and Industrial Production at 9:15 AM
May Univ. of Michigan Consumer Sentiment at 9:55 AM
Meanwhile, in Europe, the economy of the 16 Euro zone countries shrank by a massive 2.5% in the first quarter as the recession deepened in the continent with key export engine Germany losing traction. This has been the fourth consecutive quarter the euro zone has seen output decline. Despite that, European markets were higher. Stocks in Asia also finished the session with gains.
Going to be a good week - next week - me thinks!
If the rest of the TARP goes to insurance - it will screw financials out of the money - LOL!
http://www.bloggingstocks.com/2009/04/16/there-is-no-silver-lining-home-foreclosures-on-the-rise-again/
I couldn't of forgot about - this is the first I have heard of it - LOL!