I hear the Monday interview on CNBC is a must watch. He's going to cry "uncle". No matter who you are, you will taste the cold steel of the baddies. I hear it's over. I heard yesterday Doug Kass was saying that there was an emergency SEC meeting to reinstate the uptick rule. It was not in print. If I was in the admnistration, I'd resign. But first, I'd leak that to the shorts..... But my thinking was , the rich are bitching to Buffett, Obama can't finance the "Great Giveaway " if everyone is broke, so I got long the FAS, suffered three hours, and it looks like I may be right. The whole Street is leaning short. A spark in the woods burns down that forest. This whole mess is so twisted........ I think Buffett is a detestable prick, letting us all suffer like this for three years so he could look down Becky Quick's blouse. He should die broke, and he just might. But if he steps up, does the right thing on Monday.......... let's just say it's the right thing to do. Late, but still timely.
he wrote puts instead of buying them. thus his position is leveraged alot to the long side instead of hedging the downside, this could be good or bad and is more or less a gamble
I dont think we see a bottom until someone in the Administration resigns or at the Fed. Bernanke, Geithner, Summers, Obama? the market is going down, because what people though they got on Jan 20th and what we really got has come to light. Government is in the driver seat. Economic Fundementals don't matter any more.
What you say is 100% correct. I understand its unlikely buffett will lose in his puts but if you think about it back in 2007 it made all the sense in the world to buy 'black swan' puts in the US indices since his correlation to the US economy is HUGE and volatility was absurdly cheap. He would have very little to lose and it would have helped him to cut off some of his tail risk in his stock and private equity portfolio, yet he did just the opposite(altough in decent terms by getting paid upfront)
Buffy has the same problem that Barry has. It is a crisis in confidence. Do you try to talk the market and the economy up, when it could only hurt your credibilty and in the case of both, their credibilities are coming more into question every day? For the sake of his holdings Buffy needs this downturn to end. For the sake of his eroding political capital Barry needs the same thing. So far the Gubmint just been pissing money they do not have down a rathole. Buffy cheered the Gubmint and its bailout. Barry tells us the stimulus package is something other than it is, and that is a Gubmint bailout. Barry's press conference yesterday revealed a truth, the stimulus may have saved some Gubmint jobs. So far I see no commentary offered up by Buffy or Barry, that indicates that private sector money will mobilized and put into business of investment and job creation. To Buffy's credit he does know that P/E stands for price earnings ratio, whereas Barry is clueless to all that is of the capitalist system, and seems to think there is something called the profit/earnings ratio. Whether he misspoke because he read it from his sacred teleprompter or it was spoken off the cuff, is of little import. He is a MSM creation and they will continue to serve him up as an idol as sure as there are sheeple. Buffy can take the CNBC microphone that it offers to any and all begging billionaires. But the problem for Buffy is that, he may have been embarrassed just like Wizard of Oz when Toto pulled back the curtain. In this case, the curtain pulling occured when the assets listed as CDO's went from highly desired to toxic. Americans have bought the lie offered to them by its business and political leaders time and time again, and they may well continue to do so. But whether Buffy and Barry be the men who can sell the lie at this time in history is very much in doubt.
Buffett wrote Euro-style binary puts struck at ~1400 SPX. Last I heard he was marked to a $10B loss on those. Unfortunately, that was at SPX ~1000. I sent a question into CNBC regarding the marks on those puts.
Didn't know that. The $10 billion loss was at SPX 1000. Buffett will get out of it somehow. He still believes the market will recover before the long expiration date arrives.
It is my understanding that the expiration date on those puts is 10 or 15 years out, so I don't know why anyone is wasting time on this subject. I also don't believe he wrote puts on any stock that he was not glad to own more of. We shall see.