SHORT USDJPY
current price : 104.80
target price : 103.80
Tuesday, September 30, 2008
dumb & dumber
NO BANK = NO ECONOMY = NO FOOD ON THE TABLE!!! DUMB ASSES
rejecting the bailout plan, what is wrong with you? these politicians in capitol hill do not even know the most basic about economic. all businesses need some forms of credit and the banks provide them. banks are the pulses of any economy. if you do not save your banks, there will be no economy, and there will be no businesses, and there will be no jobs, and there will be no food.
i think the americans should note who are the politicians voting against the plan. if they cannot understand the simple equation above, i doubt they can do much for you as politicians. time to send them packing in the next election!!!!
as mentioned in my earlier blogs, i do not think this bailout plan will end the whole crisis but it is a necessary step towards recovery. the republicans need to use their brains sometimes and i think this is political suicide for the coming election.
Monday, September 29, 2008
citi and fargo to buy wachovia
PROTECTIONISM IN FULL GEAR
there is rumour that citibank and wells fargo are in a bidding war for wachovia. what i find interesting is that just last week wachovia was in talk to buy over morgan stanley and now a few days later, wachovia itself is going to be bought over. as for citibank, what financial position are they in to buy another bank when they are struggling themselves to stay a float.
in my opinion, this exercise is meant for the following:
1. the us government forcing the american banks to merge to prevent more american banks from been sold to foreigners
2. i think one of the two banks mentioned will buy over wachovia. there will be share swap because neither of the two banks will have enough cash to pay for the deal
3. once the bail out plan is approved, the government will buy over the rubbish loans from the purchasing bank and help it recapitalize itself, leaving the bank with a healthier balance sheet
finally, i think the us government is doing all its best to stabilize the financial market and there will be a joint effort by most central banks to do the same. we are too global to see any major economy especially the us from free falling. so stay long on equities and indices and we should see some usd strength for the time being.
Thursday, September 25, 2008
buffett is king
NOW THIS IS A GOOD DEAL
the legendary man has done it again. he has just bought US$5b of goldman preferred shares which pay 10% annual dividend, and come with warrants allowing him to buy another US$5b of goldman common stocks at anytime for a five year period at a strike price of US$115 per share. on top of that, as a preferred stock holder, he gets a piece of goldman way ahead of the common shareholders if anything happens to the firm.
just 3 points to ponder:
1. why is goldman, the most arrogant bank on wall street, selling themselves so cheaply
2. the americans should invite buffett to be in the bailout team, he sure knows how to buy companies looking at his past records
3. when buying distressed assets, buffett has demonstrated that you should always use "fire sale" price and not "market" price as indicated by some. regardless bailout or no bailout, purchase prices should be look upon purely on a commercial basis. there is no other way to it.
Wednesday, September 24, 2008
deal or no deal???
IT IS A SURE THING!!!
despite all the arguments and displeasure expressed by the senators last night on the bail out plan, i think the us congress will approve the plan eventually. there is a necessity for the authority to stop this hemorrhaging in the us financial system immediately and personally i think setting up of the bailout fund is the only option available. however, i hope they will address some of the issues i have highlighted on my earlier post dated 22 Sep 2008 before signing the blank cheque:
1. buy into the financial companies and not their toxic assets
2. sit on their boards to prevent the management fools from robbing the taxpayers further
3. set up a committee to determine what assets to buy and their valuations
4. publicly update the us taxpayers on the types and prices of asset bought by the fund
5. make sure whoever that are involved in the buying decision are liable to prevent abuse
6. make sure all those responsible for the mess are make accountable
so for those who have bought shares, index futures or call options last thursday, hold on, the deal will go through and the market will rebound for a while.
Monday, September 22, 2008
what is wrong with the fed
THE BANKING TIME BOMB!!!
just when you think the fed is finally doing something right with the introduction of a recue fund, they shoot themselves by approving goldman sachs and morgan stanley to become retail banks. i think it is a bad bad idea to merge these two types of business together.
a retail bank caters to the general public, a bank where average joes like myself deposit our paychecks, keep our savings for rainy days and have a checking account to pay for our expenses. a place where we go for small loans to pay for our homes, credit cards spending and short term personal usage. investment banks on the other hand are meant for customers with excess funds to invest, money they can afford to lose without having to jeopardize their daily living. if you put the two together, it will be difficult for the customers to differentiate between saving and investing. this will lead to their financial health been highly correlated to the market, a no no situation to be in. in my opinion, investment banks and retail banks should always be separated so that no bank is deemed too big to fail and the investment banks which are more risky in nature can be better regulated.
so it is a bad idea for bank of america to buy over merrill lynch and a bad idea for goldman sachs and morgan stanley to collect deposits from the general public. although this might help in the short term with the liduidity crunch but in the long term we will all pay if we fail to segregate them clearly.
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