The Credit Crisis Financial Stocks Short Journal

People tend to overestimate these things in times of panic, you are capturing an historical premium
The HAL puts might be even better though $15 2011 puts closed at $0.99 yesterday, balance sheet is cleaner and they might not endup paying anything. The 4 horseman are rallying this morning unfortunately

 

i'm wondering what the next 5 years will do to the water table where their drinking water comes from

 

I found Lockhart speech wasn't all hawkish, had some dove statements
http://blogs.wsj.com/economics/2010...-rates-before-jobless-rate-returns-to-normal/

“The conditions that require a change of policy are not yet at hand,” and “I continue to support the current stance of interest rate policy,” Federal Reserve Bank of Atlanta President Dennis Lockhart said.

He also said “I am still comfortable with the extended period language” contained in the Fed’s policy statements, and will be so for “foreseeable future.”

 

I shorted a bit of HAL 17.5 2011 puts. My max loss is just 2% of my netwoth if the stock is worthless by then, I can't refuse cheap money

 

Looks like Soros might have celebrated too soon
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ag9dseFh4tOY

 

Doesn't sound like much, potential gain is around 0.1%. But 15 opportunities like this in a year, and we are talking about an addition of 1-1.5% returns a year, and thats because I dont use this strategy much. If I become more confident(or happen to have high cash levels) the returns could double. Then compounded over 10years its a nice return booster. If the markets crash again, I believe I will short BRKB puts, or maybe just buy outright

 

I asked IB if they would increase margin requirements on a short put position to a level above the maximum loss. The answer
'Please be advised that IB reserves right to increase margin requirement in light of the increased market volatility. Unfortunately whether we will or will not increase the margin requirement to/above the maximum losses amount for short put position cannot be predicted at this time. I hope this helps to clarify.'

Thats weird to say the least

 

CNBC Europe interview w/someone named Philippa Malmgreen. She refuses to follow the CNBC cheerleading routine and it leaves the interviewers nearly speechless. Then they hit her w/the "Well Dick Bove just called Citi a buy" and she has to control herself from just coming out and saying "Dick Bove is a clueless tool who is bought and paid for by the banks he 'covers'." Good stuff.

http://pragcap.com/sovereign-defaults-are-coming

 

From Bernanke speech
"For example, some potential borrowers have been turned down because lending terms and conditions remain tighter than before the financial crisis, perhaps reflecting banks' concerns about the effects of the recession on borrowers' economic prospects and balance sheets. From the potential borrower's point of view, particularly a borrower who has been able to obtain loans in the past, these changes may feel like a reduction in the supply of credit; from the lender's point of view, the problem appears to be a lack of demand from creditworthy borrowers."

This explains a lot of this 'lack of demand' for credit

 

John Taylor who was very critical of the Fed for not hiking more and faster and for fueling bubbles said yesterday that rates are "where they should be I think". Hoenig is in another planet