Skip to main content

First Presidential Debate and Bailout

Looks like McCain is chickening out from facing American public, Obama and debate moderator. Otherwise why would be pull his typical maverick style trick to postpone the debate where he has chance to explain his plan on how he as president would get us out of this mess - he does not have a plan and everyone knows that his party and Wall Street got us into this mess. So on the premise of economic crisis, he is cancelling his participation in debate.

Obama should go ahead with his appearance in the debate and take this opportunity to explain his policies including how to get USA out of this mess created by current administration and Wall Street. I hope Obama go on attack mode and really gain momentum and seal the victory in next couple of weeks

FRE, FNM continue to climb and make another 30% gains (third in a row). Would this continue - don't know. Now only these stocks are trading at about 20% of what they were trading before Government took over 80% of stake. So technically they have reached their pre-Gov-takeover levels. However if we assume that their intrinsic value is about $20-25, then they can still go up by about 100% in next 12 months.

If bailout package does not get approved by Sunday, we will have another Black Monday with Dow plunging below 10000. If bailout package gets approved over weekend, we will see Dow above 11500. Since we don't know how congress would act, I would recommend keeping some cash at hand and given opportunity, taking positions at following banks at prices listed:
  • Citibank (less than 15)
  • Wachovia (less than 11)
  • Goldman (less than 100)
  • Morgan Stanley (less than 20)
  • Bank of America (less than 25)
  • And if you want to go little more aggressive, go for AIG when it falls below $2.50
Good luck and good night !

/Shyam

Comments

Anonymous said…
DID you buy your wacky bank today???

WB???

have you even looked at their balance sheet???

Do you want top discuss it with the one here who told you to short that pig when it was 30 or to short WM???

PS one question if you will

Do you think this 700 bil bailout will be the catalyst needed for new bull market...i am a bit confused as I have been bearish and right now I dont know what to think

Thanks
6:28 PM
Post a Comment

Popular posts from this blog

2025 = Is it going to be 1997 or 2000?

Happy Holidays... After 5 months of hibernation with no real reason than writing block, I decided to use quiet morning of Christmas day to start writing again. Lot has happened in last 5 months - in particular release of Animal Spirits with Fed starting interest rate reduction cycle and historic victory of President Trump for 2nd term. As the year turns into 2025 and stock markets at all time high, one would wonder, what's next?  To answer this, one needs to look back at 1920s and 1990s to give us some context on where markets may be headed. 1920s saw invention of televisions, radio, wider adoption of cars, vacuums, penicillin and many other which we consider household items now. These inventions created roaring 20s with markets going up by 500% eventually leading to crash of 1929. However during mid-20s, markets keep going up due to excitement of these inventions and end of World War-1 and Spanish Flu Pandemic. 1990s also saw many inventions - the key being launch of Netscape in 1...
Post a Comment
Read more

Elections and Rotations!

2024 will be known as an important year in terms of elections (97 nations covering half the population) across the major countries in the world. We are only halfway thru the year and already some key nations have gone thru elections and voters have indicated their preference for change (in a way). Let's take a look at few. India - Modi's BJP started with lots of enthusiasm with slogans of "Modi ki Guarantee" and "400 paar" (more than 400) seats (out of 543). Indian voters (which I considered one of the most smartest) gave reality check to Modi and BJP by reducing BJP count to 240 (from 303 in previous parliament) forcing it to form coalition government. I have lot more detailed hypothesis on these results (but not here). Almost everyone (including me) got their predictions wrong and lost some friendly bets. Indians want balance between "Strong, Prosperous, Proud" India with "Inclusive, Employment and Harmony". Modi and BJP are quick learn...
Post a Comment
Read more

And the Oscar goes to...

It's Oscar Sunday and time for predictions for few categories - before I digress into talking about drama in DC or markets.  First of all, I want to recognize the damage LA fires have done to the beloved areas of Los Angeles and impacted families across all spectrums. My heart goes out to them and wish them recovery and rebuilding of their lives... This year's Oscar nominees and post nomination period had been interesting to say the least. Due to this, the field is wide open in almost all categories and that's what makes prediction game so interesting. Just to set expectations, I would consider a win if I get even 50% predictions correct given the dynamics of nominees this year. So here are my predictions - "And the Oscar goes to..." Best Picture - Anora (surprise could be "The Brutalist") Best Director - Sean Baker for "Anora" (Surprise could be Brady Corbet for "The Brutalist") Best Actor - Adrien Brody for "The Brutalist"...
Post a Comment
Read more