Don’t touch the equity

My view is that it’s not over yet. Whatever things are happening (Brown bailout of UK banks, US bailout of US banks, EU bailout of EU banks), it’s not the ninth inning yet. The crisis is moving from wall street into main street. Consumers are stretched, a lot of corporates are doomed to fail or suffer severely, starting from retailers and house builders. There is a lot of uncertainty, and the house...

Meltdown Monday

It was another black Monday for Wall Street after the Congress hasn’t passed the mother of all bailouts. I will skip the details, as the whole press world is doing already a very good job at covering what’s happening. Just one quick point. The Dow closed at the very bottom, lacking the support of the short sellers that (guess what?) would have been around to cover the short positions mitigating a very...

The 1.8 trillion dollars bailout

CNBC has made an interesting analysis on the US government bailout of the financial crisis. It’s not just 700bn$, more like 1.8trn$. Quick laundry list: 700bn$ recently announced plan to buy assets from bank 150bn$ MBS purchase by Fannie and Freddie 85bn$ for AIG 90bn$ in repayment to JPM for Lehman 200bn$ for Freddie and Fannie 300bn$ for FHA 200bn$ of currently outstanding loans Fed’s issued to...