JULY STOCK TALK V

 What do you all think of this?

The broker/dealer business model is "inherently unstable" and the four remaining major firms will not be independent in a few years, says Nouriel Roubini, economics professor at NYU's Stern School and chairman of RGE Monitor.

Embattled Lehman Brothers is likely to seek a buyer "within months," Roubini says. Lehman Brothers ceasing to be independent is not such a shocking outcome, but Roubini ultimately sees a similar outcome for Goldman, Merrill Lynch, and Morgan Stanley.

The problem, he says, is that broker/dealers use the same model as banks -- borrow short and lend long -- only they borrow on even shorter timeframes, use more leverage,  and don't have the kind of government backstop banks enjoy.

Vermeer,

That makes good sense. Although I cannot see GS going down, these brokers do more than borrow and lend. Maybe LEH does that but GS does a TON of investment banking and sales stuff, so I would say that is 40/60 as to good content in that article.

 Got you WSC...that was a ctually a very small excerpt so obviously not a detailed explanation of his thinking.

  I tend to pay close attention to GS,  almost exclusively....

 

 

 PS

 The video of the interview is on yahoo finance...

It might explain the drop in those names.

Check out the numbers on MER-

LINK

Selling at a discount to book and sales, I dont see how they go under.

Interesting how all the brokers are selling at a big discount, MER, MS, LEH etc etc.

Selling short SPY................

This market is hit and run, no other way to trade it and that has been the case for two plus years.

My MISSES have been longer term holds for the most part, outside core holdings like CRDC and DRYS.

Thanks Vermeer, i've picked some winners lately. 

speaking of shitty shoes, i wish that DECK options had more volume.  I'd love to load up on puts before they report.  that thing should be $5, just like CROX.  but there is no activity on any of the options. 

I picked up an 80 sept drys, overpaid a bit at 6.80 but okay since i sold the 2 90's.  Also overpaid for a wynn 85 put at 4.80 but should be okay and not lose too much.  Crazy with crox, ntflx earnings coming up tomorrow.  Might be iteresting....

forensic analysis blog

this guy has been short financials since last august...very smart, very details

ccl - this should be right up your alley

Two more national banks fail, number will rise sharply

Posted Jul 26th 2008 6:50AM by Douglas McIntyre
Filed under: Forecasts, Bad news, Industry, Housing

The FDIC took over two more banks. According to The Wall Street Journal, "The Office of the Comptroller of the Currency, a division of the Treasury Department, revoked the charters of First National Bank of Nevada, based in Reno, Nev., and First Heritage Bank of Newport Beach, Calif. The FDIC was appointed receiver of both banks." The Nevada bank had over $3 billion in deposits.

Current estimates are that less than 100 banks will fail during the current credit crisis, a much smaller number than closed during the saving and loan debacle of the late 1980s.

But, those estimates may be low. Bill Gross, an extremely prominent investor and head of Pimco, recently wrote that total losses related to the housing market will hit $1 trillion. About $450 billion of those write-downs have made it through the system. That leaves a potentially massive burden on the banking system going forward.

Good stuff, Koaj.  Reggie's smart, allright.  I remember last year about this time when I first started posting in this room.  I was all gung-ho looking for some financial shorts right before September.  You were rightly bearish as well.  I hope you were able to seriously capitalize on that assertion.  Like the true dumb-f--k that I am, I chickened out and was way, way too conservative because I was terrified of bailout packages that were going to come (I got obliterated back in later 90s during Asian Tiger bailouts and it still gives me the shakes thinking about it).

This gdmf-ing country deserves to go right down the drain with its horrendous policies put down by its lying leaders.  I am angry as hell about the future, but more sad than angry when you really get down to it.

I am all about capitalism and "free markets" where people live, die, thrive, crash, fail, survive, burn, etc.........

WITH NO GD BAILOUTS

 Ah good old Richmond VA...land of the bigoted and home of the benighted...

The Richmond area showed the sharpest increase in foreclosure filings among 100 cities tracked by a foreclosure researcher.

Filings here jumped nearly 805 percent in the second quarter from the year-earlier period, according to a report released yesterday by RealtyTrac Inc. The next-highest increase was 587 percent in Greenville, S.C.

The dead cat bounce on the Dow ended with a fall below 11500, completing a doji star candlestick reversal. Volume is light, after strong resistance at [R], and we can expect another test of support at 11000.

Long Term: Failure of support at 11000 would signal another down-swing, with a target of 10700 (the June 2006 low). Declining Twiggs Money Flow signals continued selling pressure. If 10700 was to fail, the next major support band would be 10000/9700.

Vermeer,

I agree we have a retest, one way or the other. Either we retest before Labor Day, or after it.

I hope they do take down the financials again, I have my list made and I would like another chance on some decent names.