About the week
1.Highlight of the week is definitely F related. On friday (omg F!!!), we have fannie and freddie plunged some 40% during pre-market trading. Just to give you some background knowledge, Fannie and Freddie own or guarantee $5 trillion of debt, close to half of all U.S. mortgages (alternatively, you can read on cnbc.com). I will just throw you the number.
5 trillion. Yes that's 5,000,000,000,000. Imagine a 1% default. 50 billion.
But Fannie closed 22.5% in the end and Freddie was down some 3% on friday.
2. Highlight no.2 has to go to the o-word. Oil. Well, oil was down some $9 in two days and it reversed the loss and made a record price before settling at $144.
3. So how bad did the market do? Dow ended down -188 for the week. Seriously, with oil making record price, possible collapse of the two biggest US home-mortgage financing companies, we are only down near 2% for the week. Blessing in disguise? Bottom? or an impending doom? You know my stand.
Some thoughts on the Fed
I was watching cnbc and actually heard an interesting thing about the Fed. Apparently they added a new mandate to the Fed and that is to help in financials' stability. In regard to Fannie and Freddie, what should the Fed do actually?
Personally, I don't think the Fed has that much money to salvage the situation. They can start switching on their money printing machine again of course to save them but believe me, it will be disastrous in the future if they continue printing more money. When it comes to a point where they are printing more money to print money (it's a joke among my friends, just means if dollar weakens really badly and inflation is horrible), you don't wish to know what will happen.
Looking Forward
1. I think the Fed will do something over the weekend just like what they did with Bear Sterns. I covered my Fannie Mae actually because I dont know what will happen.
2. Earnings wise, we have the following.
Among the financials Charles Schwab, State Street and US Bancorp report Tuesday. Northern Trust and Wells Fargo report Wednesday. BlackRock, JPMorgan Chase, Merrill Lynch, PNC, Bank of New York Mellon and CIT Group report Thursday. On Friday, Citigroup reports.
Big techs reporting include Intel on Tuesday. EBay reports Wednesday and Google, IBM and Microsoft report Thursday. AMR and Delta Airlines report Wednesday and Continental reports Thursday.
3. Actually, I think the financials are pretty quiet these few days. Calm before the storm? I doubled my shorts of all the financials.4. For the locals, there is a hotshot warrant competition over here. Worth a try to actually aim for the top prize. I will probably keep my mouth shut on what I am going to do. LOL hope I can win it.
5. We have about three more weeks to the next Fed meeting. I'm waiting for that day.
6. Buy gold. Period.
7. I'm pretty unsatisfied with the quality of recent posts. Quite busy these few days actually doing some research and getting myself prepared for the warrant competition. Next week posts will be good and I can assure you that. Mid week will be about back on charting on the Dow and how low I think Dow can go. On the weekend, it's a huge project that I have been working on with the mailman in particular - THE DEMISE OF THE GREAT USA NATION.
Performance to date
| Name | Price shorted ($) | Current price ($) | % Change |
| Lehman Bro | 24.15 | 14.43 | -40.25 |
| General Motors | 13.99 | 9.92 | -29.09 |
| AMR | 6.22 | 4.75 | -23.63 |
| Citigroup Inc | 19.40 | 16.19 | -16.55 |
| Fannie Mae* | 21.51 | 8.30 | -62.4 |
| AIG | 27.82 | 23.08 | -17.04 |
| Capitaland | 5.85 | 5.82 | Pathetic |
| CityDev | 10.20 | 11.22 | HOLY +10 |
| SGX | 7.16 | 6.97 | -3.5 |
| Commodities | Price bought ($) | Current price ($) | Profit/loss ($) |
| Gold | 884.80 | 965.9 | 81.10 |
| Oil | 135.15 | 144.55 | 9.60 |
Alright, I can't fix the table problem. Btw, 1 contract on gold will yield you a 100% return by now.
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