Monday, March 17, 2008

Fascinating Times

So what's an appropriate quote for today ?

These are times that try men's souls.
--Thomas Paine, Dec. 23, 1776

Fasten your seatbelts, it's going to be a bumpy night"
--Bette Davis as Margo Channing in "All About Eve"

JPMorgan buys Bear for $2/share and assumes all the liabilities. JPM also gets a $30 billion put to the Fed for Bear's most risky securites. Obviously this is a great deal for JPM.

The Fed opens the discount window to all primary dealers under a special power for "unusual and exigent" circumstances. Good, finally Battleship Ben must realize that these clever but not fully charged Fed actions just weren't hitting the target. I suspect at tomorrow's open market commitee statement will announce the Fed will make outright purchases of mortgage securities, too.

As the paragon of finance and banking, J. P. Morgan, Sr. reportedly said in the Panic of 1907 when banks were griping about using their reserves, "use your reserves, this is what they are for." [paraphrasing]

Over three decades I've read many books describing financial panics and crises beginning with the 17th century Tulip Bubble, the 18the century South Sea Bubble, the Panic of 1819 [interesting, a land speculation bubble !], all the other 19th century panics, the Panic of 1907, the 1929-1932 Great Depression and the 1960s era Penn central collapse. I lived through the collapse of numerous brokerage firms (E. F. Hutton, Drexel), Penn Square and Continental Bank, Drysdale Securites, the Crash of 1987, the S&L collapse, and LTCM and Russia defaults.

This one is not different. The risky and excessively leveraged firms collapse. I read today that in addition to its excessive exposure to structured securities, that Bear, Stearns had a heavily concentration of hedge fund prmie brokerage. That's a risky client base. And we see it relied excessively on overnight funding. Sheesh, short term overmight funding is really risky in troubled times. I wrote about that firm's leadership culture over the weekend. So this collapse was never beyond possible.

So what to do ? There's blood in the Street. The Fed is doing the right thing ... liquidity ceases to be an issue.

Survive. Protect Yourself at All times. And if you have cash, buy slowly.

I am still selling gold & silver and buying stocks. One good thing about owning physical gold & silver is that it takes weeks to sell a lot. So I get many bites of the apple and the time diversification is wonderful. I will be selling more tomorrow, as I need to give my metals dealer a breather. I posted some Krypto Fund exchanges yesterday.

If you are on margin, protect your best postions. I've sent some more cash to my Alpha Fund accounts ... just in case. Don't get a margin call ... sell a bit of positions that might profit less from the turnaround. Frankly, I'm considering selling my last oil stocks [DVN and CVX]. I wonder how much higher they can go as oil is now at $110. No decision yet but the fact they are stalled not too far from highs is tempting.

Word of the Day

Eidetic - adjective [$10 ! sheesh, I would have guessed at least $100]
Eidetic means (of a mental image) having unusual vividness and detail, as if actually visible.
Sentence: Bunkerman is having eidetic memories from his investment banking and investing career of prior brokerage collapses and financial panics.

77 comments:

mern said...

2 bucks?

"i want my 2 dollars!" name that movie?

this is so whack i cant believe it. im beyond depressed and cant stop laffing.

i think mary thompson said this was little overlap in the global client services division, so thay mite be gud for me, but im assuming i go in today and get canned.

Bunkerman said...

That building might be mortgaged.

Also, JPM posted $6 Billion in pretax reserves against the firms book value for litigation.

I really suspect JPM will give warrants to keep the employees.

It wil be interesting to hear BSC's earnings today.

This proves again that having one's live savings in employee stock is sooo dumb. One can lose two things .. job & savings.

Bud said...

is this armegeddon?

Bud said...

LEH down 7


lmaooooooooooooooooooooo



PS.......WM and JPM shareholders seem destined for annihalation

Bud said...

john adams on hbo last night was good..............especially for students of the american revolution like me

Bud said...

Dear Sal,

Throughout this campaign, one of the things that has touched me the most has been the incredible show of support I've seen from the people I meet every day.

I'm energized by the crowds of thousands cheering on my campaign. I'm moved by the mother who takes my arm and tells me to fight to make sure the insurance companies don't deny her son coverage.

And I am inspired by all you have done for my campaign. You've made calls, you've volunteered, you've voted, you've given -- and I'm so grateful for all you've done.

My campaign has put together an album of some recent photos from the campaign trail in Texas, Ohio, and Pennsylvania. I hope you'll take a look and enjoy!

Thank you for everything,


Hillary Rodham Clinton

mern said...

no BSC earnings today.

agree, y wud u put your line in your stock, where u get paid.

do i work for JPM now?

lol

mern said...

still trying to fathom how the CPI showed no headline inflation.

they must have a double top secret shopping mall they buy from, becuase no one else is seeing that.

mern said...

is this stagflation or deflation or a soft landing?

mern said...

1 2 3 4 T
SEA (16-51) 29 29 27 31 116
DEN (40-26) 48 36 43 41 168


168 yowza

Bud said...

did lumberg move over to JPM?


PS......2 dollars?? what movie....i can't figure it out

Bunkerman said...

I wonder where the "hedge funds provide liquidity" crowd is ?

Or the "no regulation" crowd is ?

Or the "derivatives are good" crowd is ?

Bunkerman said...

I'll have to write about that later this week.

Bunkerman said...

LEH is a much stronger, better firm than BSC.

Bunkerman said...

soft landing in the still ongoing "rich man's panic", but I guess a bit of the land speculation bubble in the panic of 1819, too.

Bud said...

LEH down 12



lmaoooooooooooooooooooooooooooooo

mern said...

better off dead with john cusack.

the news paper boy that wanted his 2 bucks the whole movie. "i want my 2 dollars"

rofl

i wonder what the morale is gonna be like in the office today? i wonder if i get shit canned?

mern said...

this is a soft landing?

fed pulling depression era manuevers: oil at 110: gold 1025: dollar 71 hanlde:

can the bears kill LEH, too?

Bud said...

i loved the headline for alan abelson's column on Barrons cover

' Bailout Ben Goes For Broke '

mfl59 said...

how must Joseph Lewis feel this morning?

Bunkerman said...

nahhh, now LEH can go to the Fed directly

And LEH has lots of friends while BSC had few.

The "soft landing" refers to the real economy, not the Street.

Bunkerman said...

Joseph Lewis must feel like the idiot he was and is.

mfl59 said...

and Jimmy Cayne...whose stake was over $175 million...now worth $10 million....holy crap

mern said...

happy wifey mcbeatys day!

"what do u say to a few drinks for happy hour, frosty?"

frosty:"looks like the wife is gonna another black eye to explain to the neighbors, in the morning"

have a nice day

mfl59 said...

Bunkerman is Jamie Dimon the JP Morgan of this generation?

mfl59 said...

Ben was just spotted drinking an Irish car bomb at McClatchy's Tavern in Washington DC, on leg 2 of his 15 leg pub crawl today...

Bud said...

looooooooooool jp morgan


jamie pressley gonna be richer than jamie dimon when it's all over..........JPM goin to zero

Bunkerman said...

it's not quite analogous, mfl, between Dimon and JPM, Sr.

Well, the history remains to be written.

Bunkerman said...

Cramer manic now ... sheesh

Bud said...

does art cashin read this blog?

he just called this reminiscint of panic of 1907

Bunkerman said...

lol perhaps.

Spin-em said...

love is never having to say I'm sorry?.....loool

Spin-em said...

Dont worry guys...W has a plan.............O M G!!!!!

Frosty said...

Bunkerman...no farm animal play date today?

maverick said...

crackerville alive and well ....now let's make some money

Bunkerman said...

no herding and no mg range :-((

But I'm sure not going to sit here on my butt and watch babblevision or blabberg all day.

Maybe I'll take the K9 unit on a LRP patrol beyond the kill zone.

Frosty said...

Bunkerman...between 2:30-3:00?

Bunkerman said...

yes, frosty. that's the time. More like between 2:30 and 4 ... this is a LRP, remember, not just checking the tree line. Deep into Indian country ;-)

I'd better load some extra mags.

Bud said...

beefer ping pong is back???


i sure hope so


PS......did they reinstate the uptick rule???

Frosty said...

Dear Sal,

we need a cliton to clean up this mess...mo money mo money mo money.

Bud said...

Bman confuses me

all his beefer predictions are comin true.............and as cnbc and bloomberg report them

he's whinin and cryin and sobbin and moanin like a lil'baby

Bud said...

the Bush recession

vs


"it's the economy stupid"


no contest

Bunkerman said...

Where are you getting this crying & whining business ? I state the facts and my take on what's going on and how I react to them.

I was over 200% long going into this AM and had to protect myself if there was or might be a crash. That's not whining.

Some/many of my readers didn't live through the crashes that I did, so I'm trying to explain what I do to protect myself.

uh ... more eloquently, stop traducing me ;-)

Bunkerman said...

I'm just pissed at myself for that major case of "buck fever" I got last August and fall in buying some banks too early.

Also sell most TIPS too early last August.

Bud said...

no more contributions unless

Hillary is down in the PA polls a week before the primary

or

or if she wins PA by 10% at least

Bud said...

uh Bman.......unless you lived thru the great depression of the 1930s

you haven't lived thru what is about to happen

"armageddon"

Frosty said...

Bunkerman...once again sparing the rod spoiling the child...sir, please control your children.

Bud said...

does steve liesman read this blog?

he just said "armageddon scenario"

mfl59 said...

Bud, Bunkerman...meet me on the banks of the Hudson in Weehawken...Burr-Hamilton part 2

Spin-em said...

Hildog 4 visits
Chelsea 2
Bama 0(tonight he speaks to the Irish..pfffttt)
Big John...0


WE WANT BILLDOG!!!

Bud said...

i think i saw spin on cnn saturday

he had a green top hat on......he was huggin hillary at the st patty's parade

maverick said...

Reverend Wright calling Billdog out? Obama in the audience? McCain now leadership?

Spin-em said...

I was on the suicide hotline while you and Bunk chatted about 1.49/lb chicken....loool cold mf's...merns dead....hey whats for dinner?.......life goes on....lmaooooooo

Bud said...

'suicide hotline'

'reverend wright'



LMAOOOOOOOOOOOOOOOOOOOOOOOOOO

Frosty said...

someone check Spin's bat...it must be corked...LMAOOOOOOOOO

Frosty said...

Irish diplomacy ineed sir...is the ability to tell a man to go to hell in a manner that allows him to enjoy the tirp.

Spin-em said...

My brothers and I have an unwritten rule......

If were drinkin and somebody does or says something jackassish($10)..the next day...you better get over to the others house or on the phone and shake hands or say "Im sorry"...once thats done..its over and never to be brought up again.....until then your a shithead(Im jus sayin)loool

mfl59 said...

jackassish...$10....i thought maybe $100

Bud said...

does frosty have a man-crush on spin???


not that there's anythin wrong with that

Bud said...

is this armageddon?

Frosty said...

LEH...bidding $1.73

Spin-em said...

whats not to love Bud????

Bud said...

Dear Sal,

There is nothing I like better than throwing a party for a good friend. Will you come out to support my friend Hillary Clinton at a special, one-night-only solo concert in New York? I promise this will be one night that you won't want to miss.

Click here for more details and to be notified when tickets go on sale.

Sincerely,

Elton John

Frosty said...

heads Jameson's, tails Bushmills.

Bunkerman said...

Tullamore Dew is good Irish, too.

mfl59 said...

Abby Joesph Cohen demoted at Goldman....she is a perma bull beyond belief...I find that a bullish piece of the puzzle, bunkerman

Bunkerman said...

lolol Abby is the anti-particle to Byron Wien / Stephen Roach / Alan Abelson

Bunkerman said...

Have my helmet & vest & boots, weapon & ammo ... heading out to Indian country with the K9 unit.

Good luck

Bunkerman said...

hmmm ... back from K9 patrol ... it worked, frosty !

Frosty said...

:)

mern said...

well that was fun!

seems like most will keep thier jobs becuase JPM has virtually no global client services support.

i got a gud chance of making it becuase i make the least in my area, but i need about 5 guys to train me. today they wudnt show me anything. if they were scared of me before, they r really scared now. i still have the 24, 7 and 65 which is great, they dont have that stuff, but i dont understand the platforms and they do.

guess ill find out in about 2 weeks to 2 months.

did i hear right, cramer said he wasnt saying to stay in BSC stock at 62 but your account wud be fine? what a lying crook!

mern said...

http://www.igotcramered.com/

thats my voice!

ROFL!!!!!!!!!!!

Bud said...

so all thcat cryin and whinin and sobbin and moanin and cussin and puffin was for nought???


pffffffffffffffffffft

suicide hotline...........how much was that chicken again ? 1.49 a lb????


lmaooooooooooooooooo

mern said...

be nice bud. its been clearly established that if i take myself out, im going on a snipe hunt first.

u r not on the list, but dont tempt me! ( i know where u live, remember?)

already got 1 guy in s beach on the list, lauderdale aint far!

i read nacchio is not in jail so he is definitely on the list.

rush limbaugh, david duke, cramer, best friend from college, and a few others.

the wheels r in motion, lets just see where we stop.

hey if my great grandfather can t a guy to death with his bar hands, y cant i go on a snipe hunt?

mern said...

although he had the chance to jump the first boat out of italy, to america.

after my snipe hunt is over (if that what it comes to), im thinking figi!

;-)

Spin-em said...

just say your sorry or from now on your Delta House Bunker name will beeee......"shithead"...loool.....there may not be an I in mern but there sure is a "me"...as in all about
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.LMAOOOOOOOOOOOOOO(come on...that was pretty good)

mern said...

i prefer shithead!

sorry

although im not too far from a complete meltdown.

the darkside runs within my veins.