March Stock Talk I

Self-interested commentators abound, particularly among Wall Street and hedge fund denizens, who are itching for the Federal Reserve and Congress to bail them out (or to provide the means by which they can make the U.S. taxpayer, kind of like those opportunists around the S&L bailout two decades ago). And all too many economists are making the same pronouncements, encouraging the continued reduction in short-term rates to "unlock" the credit markets.

Further, we continue to witness a U.S. citizenry who has little tolerance for pain, U.S. legislators who have little tolerance for declines in their popularity ratings, and an Executive branch that refuses to make the hard, long-term decisions that may be unpopular but get the U.S. on the road to fiscal prudence. It is a sickening game to be watching from the sidelines and one which I am sure my fellow pragmatists can relate to.

If unlocking the credit markets were the only thing we had to worry about. There is plenty of liquidity out there; it is only that few are willing to part with it while market conditions are so uncertain. When can we expect to see the last of the portfolio write-downs (CDOs, CBOs, leveraged loans and loan commitments, residential and commercial real estate loans, and so on) held by our banks, investment banks and insurance companies? It was once $100 billion, then $200 billion, now $400-$600 billion. Let's call it a trillion. And the problem is that as these losses are announced quarter after quarter, it casts a pall over the entire market, delaying the healing process.

Whitman, who has spent more than 50 years profiting from undervalued stocks, said his flagship mutual fund at Third Avenue Management LLC bought 10.6 million MBIA common shares at $12.15 each in February, according to a letter to shareholders.

The 83-year-old investor said MBIA is being ``victimized'' by short seller William Ackman and called the ratings companies' assessments of bond insurers ``arbitrary and capricious.'' The $2.6 billion in capital MBIA has raised in stock and note sales since December means the company deserves to keep its AAA rating and talks of a bailout are misplaced, Whitman said.

i couldn't resist selling some of my LEH puts this morning.  52 week low was too tempting.  I made 188%. 

I sold some SKF above $130 as well, just too tempting.

It's a bloodbath out there this morning.