Augustus

97 Comments

    • Interested in Bank of America? Consider the Preferred Shares [view article]
      Yield is the same on the preferred as on the common - but a bit safer.
      Premium for the preferred over the conversion price is about 50% or so. That seems darned steep to me, particularly when there is no cumulative div with the preferred. Buying $837 of the common would seem to be a better idea, IMHO.       Aug 20 10:47 AM
    • Options as a 'Gold'en Opportunity [view article]
      The complaints are so much noise. The complainers simply don't understand the suggested trade. Look at this chart from StockCharts:
      stockcharts.com/h-sc/u...=$GOLD:$XAU&p=D&am...

      The miners $XAU are about as cheap as they ever have been related to the price of gold. A few days ago they were cheaper - now still pretty cheap.

      The trade is not a Gold direction trade - although a gold price pop would probably help the trade as it would probably pop the miners even more than the Gold.. It is a convergence trade on the narrowing of the relationship in prices. Using the several months out and the ITM contracts should help with little time value decay.       Aug 19 11:50 AM
    • Auction Rate Securities: Who's To Blame? [view article]
      The real kicker in these deals was the provision for the lock in at very low rates in the event of a series of failed auctions. If the rates had been allowed to continue to increase, the borrowers would have had to payoff these bonds and get other financing. The lenders would not have suffered from the crunch. Aug 10 01:23 PM
    • Reuters: Who's Buying Distressed Debt - And Why [view article]
      BTW, how is Jeremy Grantham buying into this stuff? Aug 08 01:51 PM
    • Reuters: Who's Buying Distressed Debt - And Why [view article]
      If the individual mortgages can have a "due on sale" clause, preventing the homeowner from letting someone assume them,
      There should also be a clause giving the borrower the right to purchase the loan.       Aug 08 01:50 PM
    • 5 Favorite Investment Techniques - Mad Money (8/6/08) [view article]
      Isn't it great to get advice from Cramer? Wonder about the SIRI trade. Aug 07 10:28 AM
    • Gold and the Demise of the American Dream [view article]
      Lord Byron was a HE not a She. Caroline Lamb was a lover.
      englishhistory.net/byr...
      Aug 07 10:24 AM
    • Why Big Mortgage Losses Are Here To Stay [view article]
      mark mchugh makes a very good point. An honest Someone buying a huse in the last year or two of the bubble HAD to pay an inflated price to buy. The last ten houses sold in the neighborhood went for XXXX, maybe based on 5 sales being with very subprime borrowers. You want in, you will have to pay something near what those sales were. Now, even that honest Someone is hung with a 30% loss on the purchase, and has to really stretch to keep up the payment. Aug 07 10:11 AM
    • Too Many Reillys, Too Many Issues: Time to Short Lamar Advertising [view article]
      Great call on this one as a short. I read it a little too late. Whether it was fine analysis or good fortune, the call sure was right on. Congrats on the good trade. Aug 06 03:45 PM
    • Cuomo Takes Action Against Citigroup, as ABCP Buyers Wait in Vain [view article]
      In Re: charging managers for crimes

      The charges against the two Bear Sterns guys are just as bogus as the Martha Stewart charges. The guys were funning funds investing in mortgage securities. They were hoping things would get better. They reported what the values were - bad declines - we think they are oversold. Then exchange some emails complaining about market action devaluing their assets. Who knows what the ultimate payouts on their particular holding would have been - maybe they had valid complaints. If anyone should be charged it is Thain. He was telling the same story for nine months. the Bear guys were on the beginning before the full effects were evident.       Aug 03 11:01 PM
    • Cuomo Takes Action Against Citigroup, as ABCP Buyers Wait in Vain [view article]
      keen observer,
      Your comments on the Martha Stewart affair are very correct. I'm not a fan of Martha. The charges and conviction were a real sham. I'll never talk to any law enforcement official, ever.

      traffic stop:
      Policeman: "Do you know why I stopped you?"
      Me: "No"
      I get double charged because the spedometer was correct in showing 75 in a 55 zone and I knew it.

      Aug 03 10:55 PM
    • Are Cars Loans Our Next Problem? [view article]
      Sure, all of the auto finance / lease operations will see the effects of a weaker consumer. However, the real reason for Chrysler getting out is the crash of the residual values of the vehicles comming back off of lease. A three or four year old vehicle that gets 15 mpg has really taken a beating. The lease is a put option at lease end. Chrysler and the other auto lease providers will really take a beating as these vechicles come back to them over the next couple of years. Jul 27 09:25 AM
    • Alesco Financial: REIT Selling For Less Than Cash On Hand [view article]
      Pretty good explanation. It would be good to know more about the leverage ratio from the report.
      Thanks.       Jul 11 09:13 AM
    • Setting the Record Straight: Taxpayers Not Funding JP Morgan's Bear Buyout [view article]
      Pretty artful way of explaining how the taxpayes will never miss getting the $2 Billion a year that they may otherwise get. I can agree that there has been little if any cost yet. And there may end up being a profit. The portfolio should be generating yields greater than the Fed Funds rate in any event so there could actually be a net income from holding these investments. However, trying to say that the taxpayer will not have any costs because any losses will just become "money not paid to the govt. and that is not a real cost" is simply deceptive logic. Jul 11 09:06 AM
    • Three Ways to Cash In on Record Meat and Dairy Prices [view article]
      It only takes a few months to bring a chicken to market. A few more for hogs. Cattle are different - maybe 18 mos.

      A chicken producer who lost money feeding the last batch will not be too eager to put more on feed. Look for chicken prices to rise first. Then hogs. Finally cattle.

      Dairy and beef producers can use the grain output from the ethanol production about the same as using whole shell corn. The ones who are properly located will make quite a bit of money here. This will add to ethanol producers incomes - not sure how to invest in it through the stock market.       Jul 05 10:36 AM
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