***Official*** 2009 Stock Market Thread

[abovewood]

Some people are saying that BAC would need 34 billion if they didn't take the 45 billion government money.

I sold some BAC Jan 2011 $35 covered calls at $0.90 this morning.

 

[Ricochet]

Originally posted by: Azurik

Originally posted by: ricochet
Do you guys think this run-up is going to lose steam this week because of the stress test? I jumped on the bandwagon with HUN when it was $2.50. It is now near $6 and earning report is coming up this Fri before the market opens. Still debating whether to jump out before then or stay for the long haul.

No.

Bad news is good.
Good news is good.

Sell in a few weeks.

That seems to be the mantra this last month or so. There have been news that I thought would send the Market plummeting but to my surprise it reacted as if they were speed bumps. Bad news were treated as "not as bad as expected" and "not so good news" were treated as great news. How long this will last is anybody's guess, but I'll ride it for awhile.

 

[LegendKiller]

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper
This market is so funny. BAC needs 34 billion (announced) more and it is up to 12+ in pre-market? Wow....

That $34bn is from one source IIRC, not from the stress test. That is also forgetting that NI - Divs = capital, which was a main point behind WFC's statements. If it's going to take 2 more years to realize these losses, how much in retained earnings comes in?

From Bloomberg

- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America rose 9 percent in early New York trading.

CNBC is saying this is non-event...... i find that funny.

WFC really bent the numbers on their last quarterly.

I hadn't seen that before, I saw the analyst estimate and thought it was the same.

"bent" their numbers? More or less than any other company out there?

Obviously they weren't too bent, otherwise the auditors wouldn't have approved. If you disagree with the changes, back it out and let me know what you think the real number should be.

 

[GTKeeper]

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper
This market is so funny. BAC needs 34 billion (announced) more and it is up to 12+ in pre-market? Wow....

That $34bn is from one source IIRC, not from the stress test. That is also forgetting that NI - Divs = capital, which was a main point behind WFC's statements. If it's going to take 2 more years to realize these losses, how much in retained earnings comes in?

From Bloomberg

- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America rose 9 percent in early New York trading.

CNBC is saying this is non-event...... i find that funny.

WFC really bent the numbers on their last quarterly.

I hadn't seen that before, I saw the analyst estimate and thought it was the same.

"bent" their numbers? More or less than any other company out there?

Obviously they weren't too bent, otherwise the auditors wouldn't have approved. If you disagree with the changes, back it out and let me know what you think the real number should be.

What WFC did is they changed their terms of what is a delinquent loan from 60 to 120 days, so they marked down as little as possible. What is down the pipe in Q2 is quite scarry.

2 other things today on WFC

They might need 15 billion.

They stopped their pension contributions today.

Funny for a company that reported a massive 4 billion profit.

Why would they be so strapped for cash? Oh right the impending losses that they will realize sooner or later.

 

[Cal166]

WFC up $3+, this is scary.

 

[hiromizu]

this rally..i am not comfortable.

 

[Slew Foot]

Not sure whats going on with the banks but the rmbs may call options took a nice drop today, i bought some as a spec play on the friday ruling, we'll see.

I actually bought aug calls earlier, i thought they were may, lol.

 

[Azurik]

Originally posted by: Slew Foot
Not sure whats going on with the banks but the rmbs may call options took a nice drop today, i bought some as a spec play on the friday ruling, we'll see.

I actually bought aug calls earlier, i thought they were may, lol.

Leaked news that American Express, JPMorgan, etc. don't need additional capital on stress tests results.

 

[LegendKiller]

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper
This market is so funny. BAC needs 34 billion (announced) more and it is up to 12+ in pre-market? Wow....

That $34bn is from one source IIRC, not from the stress test. That is also forgetting that NI - Divs = capital, which was a main point behind WFC's statements. If it's going to take 2 more years to realize these losses, how much in retained earnings comes in?

From Bloomberg

- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America rose 9 percent in early New York trading.

CNBC is saying this is non-event...... i find that funny.

WFC really bent the numbers on their last quarterly.

I hadn't seen that before, I saw the analyst estimate and thought it was the same.

"bent" their numbers? More or less than any other company out there?

Obviously they weren't too bent, otherwise the auditors wouldn't have approved. If you disagree with the changes, back it out and let me know what you think the real number should be.

What WFC did is they changed their terms of what is a delinquent loan from 60 to 120 days, so they marked down as little as possible. What is down the pipe in Q2 is quite scarry.

2 other things today on WFC

They might need 15 billion.

They stopped their pension contributions today.

Funny for a company that reported a massive 4 billion profit.

Why would they be so strapped for cash? Oh right the impending losses that they will realize sooner or later.

Where in their 10Q did they report changing the definition of delinquency? I need a specific 10K/Q section.

So what if they "need" 15? Will that come from new capital or retained earnings? Is that based upon current capital + future losses, or current + future RI + future losses?

Many companies have constrained 401k/pension programs.

 

[MrYogi]

Originally posted by: hiromizu
this rally..i am not comfortable.

Why not? Did you short financials ?

 

[richardycc]

Originally posted by: MrYogi

Originally posted by: hiromizu
this rally..i am not comfortable.

Why not? Did you short financials ?

BAC has no reason to go up today...other than shorts trying to set it up for a big drop tomorrow...we will see.

 

[hiromizu]

Originally posted by: MrYogi

Originally posted by: hiromizu
this rally..i am not comfortable.

Why not? Did you short financials ?

That would be suicide..

 

[Slew Foot]

Originally posted by: richardycc

Originally posted by: MrYogi

Originally posted by: hiromizu
this rally..i am not comfortable.

Why not? Did you short financials ?

BAC has no reason to go up today...other than shorts trying to set it up for a big drop tomorrow...we will see.

20% gain because they only needed $34 billion in capital? Im long on BAC but that move strikes me as kinda odd.

 

[richardycc]

Originally posted by: Slew Foot

Originally posted by: richardycc

Originally posted by: MrYogi

Originally posted by: hiromizu
this rally..i am not comfortable.

Why not? Did you short financials ?

BAC has no reason to go up today...other than shorts trying to set it up for a big drop tomorrow...we will see.

20% gain because they only needed $34 billion in capital? Im long on BAC but that move strikes me as kinda odd.

just remember the stock market is a game for the riches, us, small potatoes are just tagging along for the ride, and hopefully the one you got on is not Titanic. Anyway, the news leak, the stock is up, and the fact Cramer is pumping are because someone wanted that to happen...why? we don't know, but we will find out soon enough.

 

[IHateMyJob2004]

Originally posted by: richardycc

Originally posted by: MrYogi

Originally posted by: hiromizu
this rally..i am not comfortable.

Why not? Did you short financials ?

BAC has no reason to go up today...other than shorts trying to set it up for a big drop tomorrow...we will see.

Pure stupidity. Anyone that shorts or longs BAC is gambling. There is no reason to think that BAC will not go to either $20+ ($50 in 5 years?) or $3. The thing is, it's becoming pretty apparent over the past few days is that it will not be going to $3.

I bought WFC at $14.19. Back then it was a no brainer. Wonderful company trading at a price that I expect to yield well over 12% annually for 10 years. I pretty much expect a gain of 500% in 10 years with that WFC buy. This is the only move I have made over the past 6 months.

The only thing that made sense was buying WFC at any price under $18. Buffet admitted to buying some for his personal holdings at just over $21. I got in for $14! And at the recent BRK annual meeting (well not during the meeting) he was aksed if he had to put all his money in one stock, what would it be. His answer was WFC.

For what it was worth, he was also extremely optimistic over USBs future. At 1/3rd the market cap of WFC ... that is another no brainer.

 

[iGas]

My portfolio went down just over 50% last year on the DJIA & Nasdaq. I called it a lost and moved back to the Canadian TSX this year, and so far I have recovered most of my position. I still need to recover 6.8% to break even.

 

[KentState]

All I know is that since the market bottomed out in March, I've made a good amount of money. Some stocks like SIRI was a gamble, but 80,000 shares a 7c has provided a nice gain. I also went in on the major US financial like AIG, C, BAC, and WFC and have made out nicely. I'm slowly going cashing in and going long with company's that should have a solid future, but those are even hard to discern with so many changes happening daily.

 

[imported_Lothar]

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper
This market is so funny. BAC needs 34 billion (announced) more and it is up to 12+ in pre-market? Wow....

That $34bn is from one source IIRC, not from the stress test. That is also forgetting that NI - Divs = capital, which was a main point behind WFC's statements. If it's going to take 2 more years to realize these losses, how much in retained earnings comes in?

From Bloomberg

- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America rose 9 percent in early New York trading.

CNBC is saying this is non-event...... i find that funny.

WFC really bent the numbers on their last quarterly.

I hadn't seen that before, I saw the analyst estimate and thought it was the same.

"bent" their numbers? More or less than any other company out there?

Obviously they weren't too bent, otherwise the auditors wouldn't have approved. If you disagree with the changes, back it out and let me know what you think the real number should be.

What WFC did is they changed their terms of what is a delinquent loan from 60 to 120 days, so they marked down as little as possible. What is down the pipe in Q2 is quite scarry.

2 other things today on WFC

They might need 15 billion.

They stopped their pension contributions today.

Funny for a company that reported a massive 4 billion profit.

Why would they be so strapped for cash? Oh right the impending losses that they will realize sooner or later.

Where in their 10Q did they report changing the definition of delinquency? I need a specific 10K/Q section.

So what if they "need" 15? Will that come from new capital or retained earnings? Is that based upon current capital + future losses, or current + future RI + future losses?

Many companies have constrained 401k/pension programs.

They changed that almost a year ago (at least 10-15 months ago).
It wasn't like they just changed it recently last quarter or a few months ago like GTKeeper seems to be implying here.

 

[imported_Lothar]

Originally posted by: Azurik

Originally posted by: Slew Foot
Not sure whats going on with the banks but the rmbs may call options took a nice drop today, i bought some as a spec play on the friday ruling, we'll see.

I actually bought aug calls earlier, i thought they were may, lol.

Leaked news that American Express, JPMorgan, etc. don't need additional capital on stress tests results.

That's good to hear. :thumbsup:
Charge!!!

 

[iGas]

.

 

[LegendKiller]

Originally posted by: Lothar

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper
This market is so funny. BAC needs 34 billion (announced) more and it is up to 12+ in pre-market? Wow....

That $34bn is from one source IIRC, not from the stress test. That is also forgetting that NI - Divs = capital, which was a main point behind WFC's statements. If it's going to take 2 more years to realize these losses, how much in retained earnings comes in?

From Bloomberg

- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America rose 9 percent in early New York trading.

CNBC is saying this is non-event...... i find that funny.

WFC really bent the numbers on their last quarterly.

I hadn't seen that before, I saw the analyst estimate and thought it was the same.

"bent" their numbers? More or less than any other company out there?

Obviously they weren't too bent, otherwise the auditors wouldn't have approved. If you disagree with the changes, back it out and let me know what you think the real number should be.

What WFC did is they changed their terms of what is a delinquent loan from 60 to 120 days, so they marked down as little as possible. What is down the pipe in Q2 is quite scarry.

2 other things today on WFC

They might need 15 billion.

They stopped their pension contributions today.

Funny for a company that reported a massive 4 billion profit.

Why would they be so strapped for cash? Oh right the impending losses that they will realize sooner or later.

Where in their 10Q did they report changing the definition of delinquency? I need a specific 10K/Q section.

So what if they "need" 15? Will that come from new capital or retained earnings? Is that based upon current capital + future losses, or current + future RI + future losses?

Many companies have constrained 401k/pension programs.

They changed that almost a year ago (at least 10-15 months ago).
It wasn't like they just changed it recently last quarter or a few months ago like GTKeeper seems to be implying here.

Again, I would like to see the specific passage.

First off, industry standard for a charge-off is 90 or 120 days. For any loans in a securitization or used for modeling purposes, "delinquent" loans are at 30+ days. A bank would be very hard pressed to be able to move past that metric and going so late as 90+ would infer that their roll rates are low into the 120+ and their cure rates are very high.

I don't see accountants letting them change such items, which, in any case, would give them only 30 days of difference in on a 1-month basis. Since it is default/C-O rates that really matter (and not really delinquency) I still fail to see a difference.

Ultimately, reserves on the portfolio aren't driven by delinquency rates either, but on historical defaults. That ldeads to the question of what the default definition is.

Seems to me somebody mis-interpreted something in a public report. Which is why I am asking for the specific section.

You see, I see things like this...

http://bigpicture.typepad.com/...10/is-wells-fargo.html

Which makes me wonder at people's logic. Why would it matter if it were 300 days delinquent for charged-off/default, if the roll rates are the same and cure rates suck? It is a one-time benefit. If 100% of loans roll from 120+ ->300, it doesn't matter if it is one or another, at the end of the day they all make it there. Changing it from 120->180 is a 60-day effect whereby you get a small blip in the overall default definition but nothing material beyond that.

I can tell you from past servicing analysis, roll rates in the 90+ bucket are very high, normally 80%. If you're exactly 120 you're about 100% certain of defaulting at 121. All WFC did was to give themselves an ongoing 180 days to try and cure a loan, fat chance, but worth it in many cases. However, considering the restructuring of the loans in this situation, it is most likely even more worthwhile for them.

 

[AznMthr]

Originally posted by: GTKeeper

Originally posted by: Azurik
BTW, I'm loading up on financials. You can feel the pressure mounting and I think we'll see a massive rally next week once the stress tests are revealed and the doom and gloom is not seen.

C, WFC, BAC... it'll be broadbase. I'm loading up on additional June 5 C's @ .17 in a bit.

I am not 100% sure on C/BAC ..... Treasury just said they need to raise more capital... hence why they are down today. I don't see what news would rally them up.

azurik, you sir, are a genius. i've made$25,000 on your predictions in the past 3 months. been trading s&p etfs, shorting faz, bought some rmbs, dndn, tsra shares. i went with you on your citi and bac options and i'm up 500% so far.

i'm curious, do u do this for a living?

 

[GTKeeper]

Originally posted by: Lothar

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper

Originally posted by: LegendKiller

Originally posted by: GTKeeper
This market is so funny. BAC needs 34 billion (announced) more and it is up to 12+ in pre-market? Wow....

That $34bn is from one source IIRC, not from the stress test. That is also forgetting that NI - Divs = capital, which was a main point behind WFC's statements. If it's going to take 2 more years to realize these losses, how much in retained earnings comes in?

From Bloomberg

- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America rose 9 percent in early New York trading.

CNBC is saying this is non-event...... i find that funny.

WFC really bent the numbers on their last quarterly.

I hadn't seen that before, I saw the analyst estimate and thought it was the same.

"bent" their numbers? More or less than any other company out there?

Obviously they weren't too bent, otherwise the auditors wouldn't have approved. If you disagree with the changes, back it out and let me know what you think the real number should be.

What WFC did is they changed their terms of what is a delinquent loan from 60 to 120 days, so they marked down as little as possible. What is down the pipe in Q2 is quite scarry.

2 other things today on WFC

They might need 15 billion.

They stopped their pension contributions today.

Funny for a company that reported a massive 4 billion profit.

Why would they be so strapped for cash? Oh right the impending losses that they will realize sooner or later.

Where in their 10Q did they report changing the definition of delinquency? I need a specific 10K/Q section.

So what if they "need" 15? Will that come from new capital or retained earnings? Is that based upon current capital + future losses, or current + future RI + future losses?

Many companies have constrained 401k/pension programs.

They changed that almost a year ago (at least 10-15 months ago).
It wasn't like they just changed it recently last quarter or a few months ago like GTKeeper seems to be implying here.

Lothar, you are right, typo on my end. They changed it from 120 to 180 days to give home owners 'more time to pay'.

 

[GTKeeper]

TNX is up a point this morning.... Ben needs to buy more treasuries.

 

[jessieqwert]

Check out Vanda (VNDA)

Sitting on thirty shares debating what to do.