Friday, April 4, 2008

All Talk

A lot of chatter, but not much action....Paulson's plan, like word of a stong dollar, is lipservice. Housing reform may happen, but not overnight. Growth estimates remain way overinflated despite a small acknowledgement from Bernanke that hey, we may be in a recession. The testimony on the Bear bailout was terribly unimpressive. Several execs were trotted out to say a complete bankruptcy would have melted down the financial system and permeated the entire world's markets, but no concrete evidence other than perceived pessimism was offered. We have a precedent of major banks failing without it ruining our economy. As a matter of fact, the S&L clearance paved way for the biggest bull market of all-time.

Sucked. In a word, that sums up the jobs report that showed a mere 33% more lost jobs than predicted. Unemployment is now over 5%. As auto loan, credit card, and home delinquencies spread and people continue to lose their jobs, how can analysts continue to be so optimistic about the second half of the year?

I put a strangle on NCC. Rumors continue to circulate about a buyout from Key and now 5th 3rd. However, analysts predict the company may have to sell some of its ugly assets first to become takeover worthy. Again, my thought was they will either get a nice offer and shares will get a short-term pop, or things will fall through and NCC will plunge Thornburg style into oblivion. I bought Oct. 11 calls and Oct. 8 puts, you can join my strangle today probably at better prices. Continue to watch COF as a long-term put. The stock was over $54 recently and is just waiting to tank....XHB has been soaring on the Frank-Dodd rumor bill so I have not found a good entry point to go long, let's wait to see if there's a 2-day dump from the jobs report.

IOD: NCC strangle, COF puts, XHB Jan 10' calls
TOD: Rate No Country for Old Men


Tiger Coach said...

I like the strangle on NCC. Let's just hope for big movement one way or the other.I do agree with your possibility of making money on both, although I see a pop...then dump.
NCC 2.00 by August. I think this is a very fluid situation. My question is if the Fed has anything to do with this sale? The last thing anyone wants is to send up another warning flare.


P.S. I'll be more patient next time.

AX said...

Let's hope so on that $2 call! Just in time for a buyout at $14 before October expiration would be real nice. It's a steep learning curve TC, and if you watch the "pros," you'll see they miss a ton. Makes you wonder a little bit....but stick with your bets, how else will yoy know if you're right?