Updates on Market, Washington Mutual, Freddie Mac (4:00pm Market Close)
Market Close: Quite the quick little dump there into the close. The financials took a beating today and some other stocks are looking weaker now. The Dow managed to to close above 11,000, but only by 51 points. All in all a tame sell off. The Banking Index ($BKX) and XLF are going into the toilet. There’s talk that Lehman’s (LEH) is thinking of going private. Yep, we have confidence. I’ll have a fuller market wrap up a little later, need to look at some charts to post for you. Hope everyone had a profitable day!
Update: It’s a good thing the Fed’s injected confidence into the market today, otherwise who knows what it would have looked like. Washington Mutual (WM) is getting crushed today. It does surprise me (Ok, just a little) that the TRIN and VIX are not higher. Oil is hanging out in the $145 area, no let up in sight.
Update: All I can say here is that a lack of confidence in our government’s handling of this latest situation is evident in the markets today. When you lose the trust in a relationship, any relationship, it takes a long time to get it back. Bernanke, Paulson, et al, have screwed up. All we can do is see how this plays out. It ain’t lookin’ pretty so far.
Update: White House says FNM/FRE have not used new government credit lines, and that the GSE proposals were made simply to calm a nervous market. (Strike one, it’s not working very well)
FRE COMPLETES $3B BILL AUCTION RESULTS; $2B OF 3-MONTH SOLD AT 2.309%, AND $1B OF 6-MONTH AT 2.496%
- 3 month Spread over Treasury 69bps v 51bps average spread
- 6 month Spread over Treasury 43bps v 42bps average spread
- 3 month bid to cover ratio 4.16x v 2.98 prior
- 6 month bid to cover ratio 3.73x v 2.74 prior
Currency pairs are lower after these results, showing risk aversion coming back into the market. It’s going to be a wild ride today, people. Bernanke is said to putting together more new rules concerning mortgage lending, and President Bush is pushing for off-shore drilling. Oil futures above $145 right now.
Headline of the Day:
“Fitch: Indymac Bancorp on Watch Negative”
Gee, you think?
LOL Thanks for posting that, we all need a giggle this morning.
I wonder how many arms were twisted and chips cashed in to make this auction a “success”. Seems the market is not over impressed with the FRE/FNM solution. I’m not sure if they (Bernanke, Paulson, etc.) get it. If you keep saying is ok over and over again and things are falling apart around you. You might start to lose just a little credibility.
You know what this reminds me of? A skit where a used car salesman is trying to sell a old broken down jalopy. He says its in perfect shape and will last you for years to come but when he kicks the tire the wheel falls off. Then he tries to open the door and the handle rips off…..etc…..
Since most of the future drilling activity throughout the world will be offshore and since there are only a handful of qualified companies, I taking a position in FTI and Oii. As a short term hedge, I am buying DUG which will increase rapidly if oil prices drop.
I’m starting to feel like I’m on the Cyclone at Coney Island (famous wooden rollercoaster).
Personally, I’m having the time of my life. Epitapth for Fannie and Freddie http://www.youtube.com/watch?v=MINENnavlXM
I’m not so sure offshore drilling is going to fly. Think if all the opposition from the businesses at the beach. An oil spill would be devastating to to the Jersey Shore, Delaware, and countless other beaches on the East and West coast. The opposition would be huge and I don’t think it would pass. If it did it would take a long time before any actual drilling actually happened IMO.
The sharks are just begging the homegamers to keep running FNM and FRE up so they can keep selling into the stupidity of the CNBC brain dead.
Check out WM (Washington Mutual). It is closing in on very significant support levels……..zero. Your downside risk on this stock is only about $4.
Almost like buying an option now. 
“Think if all the opposition from the businesses at the beach. An oil spill would be devastating to to the Jersey Shore, Delaware, and countless other beaches on the East and West coast.”
But JohnK who’s gonna go to the beaches with gas at $7/gal? Not many. So who’ll really care?
I say drill.
JIM ROGERS SAYS:—“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.”— “These companies were going to go bankrupt if they hadn’t stepped in to do something, and they should’ve gone bankrupt with all of the mistakes they’ve made,” Rogers said. “What’s going to happen when you Band-Aid and put some Band-Aids on it for another year or two or three? What’s going to happen three years from now when the situation’s much, much, much worse?”— “They’re ruining what has been one of the greatest economies in the world,” Rogers said. Bernanke and Paulson “are bailing out their friends on Wall Street but there are 300 million Americans that are going to have to pay for this.” (Source:Bloomberg.com)
Good point. I have to say I was at the Jersey Shore this Sat and it was packed but $7 gas may put a dent their business. Anyway if price reached that high everything will be hurting and not just shore business. Whatever the case I’m not a big fan of drilling for more oil since its just a band aid for problem that should have been tackled long ago. I guess what I’m saying is…. we’ll have $7 gas, if it happens, with or without drilling offshore. Its not THE solution we need.
But investing in drilling companies is probably a good idea since they’ll be scouring the earth for oil whether its off US shores or not.
Relative to offshore drilling. First of all, I was referencing world wide most of new large activity is offshore drilling controlled by “host countries”. These host countries do not have the expertise to handle complex offshore projects e.g. Mexico.
As some point, the USA will start to aggressively drill offshore. It may be 3 or 5 years but the day will come when you can’t warm your home, get gas for your car, or find food in the store, the public will demand a crash program.
Again there are only a few Companies that have this technology. About one year ago, GE bought Vetco-Gray (one of the best in this area). GE saw the future was in offshore drilling, not consumer related financials.
I’m looking for weakness into the close. The regional banks are getting crushed today ala MTB. I should have keep my MTB puts a few weeks back. woda been a 2 or 3 bagger. Oh well….
NEW YORK, July 14 (Reuters) – The fair value of the Standard & Poor’s 500 .SPX, the broadest gauge of major U.S. stocks, is at 1,400, based on a 6 month to 12 month view, Abby Joseph Cohen, Goldman Sachs’ senior investment strategist, said on Monday.
Based on this I’m sure your’e all ready to dive right in on the long side. What a permabull clown.
Yes, had a nice day with various puts and large GLD/SLV positions. We’ll see after tomorrow where I suspect Intel earnings will be an important one. Tech in general has been fairly resilient thus far in this downdraft. If they miss or provide light guidance, the tech shoe may drop in earnest. I suspect the latter but I’m not sure Intel is a good gauge for tech in general either way.