I Love This Guy

Finkle is Einhorn, Einhorn is.....oh wait, that's another master of his domain. This Einhorn is founder of Greenlight Capital, a hedge fund that has been taunting the elite of Lehman for a year now. Even after raising $6 billion yesterday, he was resolute in his assessment that their books smell like home cookin'. "Lehman is raising $6 billion that they said they didn't need to replace losses that they said they didn't have," Einhorn said. "Since the credit markets actually improved this quarter, such losses primarily reflect losses that might have been taken in prior quarters." A "preliminary" analysis of the firm's pre-announced results and conference call suggests there are still unrecognized losses on Lehman's balance sheet, Einhorn explained." Exactly. Sounds suspiciously like Bear, doesn't it? We're well capitalized and have no liquidity problems. However, we're going to give away $4 billion in shares at a 12% discount to raise money. Yeah, that's consistent.



What's driving me nuts is the pricing on the LEH puts. Had I bought the 1/09' 30s, I'd be up about 20-25% in less than a week. My way out of the money puts have showed dead volatility this week, fluctuating less than the day I bought them and the stock merely went down $1, not $5. But we're holding out for a crash and burn scenario. More Lehman bashing below, including Dick "after the fact" Bove, who said that LEH has had to sell their best assets to raise cash, and deleverage out of those. This only leaves illiquid assets and less leverage. How are they going to make money going forward? LEH got downgraded by every other major yesterday. They all still have price targets well above current levels. One analyst even changed his tune from sell to outperform in a matter of 3 days.



My other financial shorts are making quite a run these days. COF briefly dipped into the $43s today, and I'm holding on for bigger profits. We'll talk again when it finds the mid $30s.



NCC has been all over the news today. After plummeting into the low $4s yesterday, it is back near $5 on the admission that they've had to sign supersecret govt. agreements to stop acting like idiots. My strangle was in the money yesterday, but I'm again holding on for bigger returns. I've already proved to myself and hopefully to you that my theory was correct on my first strangle play, now we're going for a decent return. Homerun is unlikely with the call probably being finished.



Let's not forget diesel. While Cummins has been treading water, Eaton has been soaring. More importantly, Bloomberg ran an article yesterday that said diesel futures were at a 15 year high. Furthermore, Conoco (homerun) has said that it will make more from diesel in North America than gas for the first time ever this year. Ditto Valero.

Don't forget my other recent reco, FCX. Up $7 (6%) since I mentioned it, calls up quite a bit more....
http://www.marketwatch.com/news/story/lehman-may-still-have-unrecognized/story.aspx?guid=%7BA6B789D8%2DB6F0%2D44D6%2D9DA1%2D67B6956D5FB2%7D&dist=hplatest

http://www.cnbc.com/id/25060628

http://www.marketwatch.com/news/story/national-city-wants-keep-public/story.aspx?guid=%7B047C1BB0%2DF9BC%2D4600%2DB803%2D032FB21D4E32%7D

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNHgN9bJ.jLg&refer=home