Mind on Money

Sometimes I think our collective memory is suffering Alzheimer’s Disease.

Can it be that we have already forgotten the multiplier effect of subprime mortgage CDS?  Can it be that we don’t know that AIG’s derivative book could have been the lynchpin of a cascading avalanche of defaults that would have sent us back to the 18th century financially?

A friend sent this along this morning.  Color me stunned.

Continue reading How Crazy Is This?…

There are some new developments in ECRIs latest press release today. For two weeks in a row WLI, the influential weekly leading economic indicator, has gone down and WLI Growth has now dropped to its lowest reading in a year and a half.

Lakshman Achuthan, the Managing Director, just by the act of mentioning that a double dip is unlikely, introduces the idea that such a decline is actually now a realistic possibility. This is his venue and he has made the decision to introduce the issue of the double dip recession.

Continue reading Latest ECRI Report – Analyzing the Analyst…

And they’re all in the room with us.

This evening I saw an interview I didn’t expect with David Stockman, probably best known for his role as Director of the Office of Management and Budget under Ronald Reagan, youngest Cabinet level officer in our modern history.

Maybe some will know him for coming up with the bumper sticker description of the “starve the beast” strategy of shrinking government by cutting its revenues (taxes).

Continue reading A Herd of Elephants…

Or is it?

This is the title of Chapter 25 of my manuscript called Mortgage Market Mayhem, written in early 2008.  The quintessential example proffered is the day employment numbers come out.

Strangely, though, after 25 years of being true, today’s employment numbers weren’t following the pattern.

I’ll just share an extract from the manuscript to frame the issue, and then take a guess at why the old bond market truth is no longer reliable.

Continue reading Bad News is Good News…

Do you still have your commemorative baseball cap?

Seeing the Dow Industrials closing almost exactly at 10,000 today reminded me of a raging debate more than ten years ago.

As some of my buds from the Colorado Longwaves group (George Ure, Rick Ackerman and Tom Drake to name a few) may recall,  Peter Eliades pointed out during the first run-up to to Dow 10,000 that the new digit Dow levels had historically proven to be powerful attractors that later turned into nearly insurmountable resting points.

Continue reading The Power of 10…

Don’t try this at home.

Hopefully my temerity will be enough for the action junkies in the crowd to enjoy watching without risking their own money.

I’ve been watching the IOC drama for a couple of months now, and I was feeling a sense of withdrawal (and satisfaction) at being out of the name, except for the negative cost basis vertical call option spread I mentioned the other day.

Continue reading Fast Forward on IOC…

A number of privately offered distressed mortgage opportunity funds are shutting down these days, years before they were supposed to return money to their investors.

Like investing in financial stocks last March, the funds that were lucky enough to begin their purchase programs at the right time have produced spectacular results, albeit for less than two years rather than the five years the marketing materials supposed.

Of course, there were a few that came to the party too early (check Chimera, symbol CIM) and its performance in its first year after IPO.

Continue reading Dearth of Opportunity…

While not as pessimistic as my cyber-bud Patrick about the prospects for Annaly, today’s review of the fourth quarter of last year and conference call did give the stock a boost.

When NLY hit $18, I unloaded the shares I bought over the past couple of weeks.  It kept running.

Do I get to take credit for it running on up to $18.15?  Not with that one.  Millions of shares trade daily, so even my personal trading timer gremlin can’t affect that one.

Still, having put on some shares when it dipped below $17.25 last week, getting out with a few bucks works for me.

Today I face the eternal conundrum I have with stocks priced like options.

When I buy one of these stocks for a couple of bucks a share, it seems like more often than not, the stock goes down.  Take my little speculation on Citicorp from the 26th (last Tuesday).  As usual, my $3.24 purchase price was too high within a couple of hours of making it.

The stock closed that day at $3.15, for an immediate loss of of several percentage points.

Continue reading Small Numbers – Big Percentages…

They think their stock is trading too cheap, as well.

After the market closed today, Anworth announced a share buy-back of up to 5% (5.85 million) of their shares of common.

The third quarter’s report showed a book value around $7.30 a share (adjusted for dividend), and the prices for their MBS went up over the quarter.  Say $7.40 as a guess, with some potential upside.

Continue reading ANH’s Management Agrees…