Stormy Weak end

[Trader Joe]

I was busy all week, so I didn't follow it as closely as I might have wanted to.

 

But your invocation of "real or otherwise" inadvertently suggests what I am trying to get at.? Something that is "real or otherwise" shouldn't really be the "trigger" that precipitates the wholesale takeover of these two mammoth obligations.

 

The question I am really trying to answer is, "Why did Paulson move last weekend? Why couldn't he wait?"

 

The post-acquisition discussion that I've seen largely says, "Well, this was sort of inevitable. But Paulson's plan is a good one. And this needed to be done."

 

That's all generalization that provides no insight into the specific timing.

 

"Why last weekend?"

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The answer to your question is and will remain a closely held secret by those in the know. Additionally, I wouldn't put too much focus on when the action was taken. Paulson & Co. obviously had this thing in the works well in advance of the actual date it was executed. Then once the plan was finalized, the following footprints were left.

 

Please consider:

 

[1] Paulson's plead to CONgress for a bazooka for Christmas that he wouldn't use

 

[2] Morgan Stanley "hired" to evaluate F&F (this merely provided ground cover and is no different then getting a qualified third party opinion when doing M&A in the corporate world)

 

[3] PimpCo's pleading for intervention or they would stage a buyers strike (again, just laying down ground cover, and for their assistance they were allowed to front run the bailout by loading up on GSE paper -- you can also be sure as **** that Goldman and other friends of Hank were doing the same although you won't be hearing them talk about it)

 

[4] The final footprint was Wall Street's relentless hammering of F&F shares in the open market, again, to provide more ground cover, as in, "Oh no!!! We need to act now!!!"

 

More examples of the fact that this was all done well in advance of the "trigger date" can be found at www.treas.gov. There is no way all the supporting documents were just cobbled together in a few days -- if you read through all those docs, it will become clearer as to the fact that this plan was in the works well in advance of when the "bailout" actually was executed.

[DrStool]

I have a very basic question that I cannot answer.

 

What was the specific trigger that precipitated Treasury's take-over of the GSEs?

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In my mind it was unquestionably the 8 week FCB buyers strike that I have been chronicling in the Wall Street Examiner Professional Edition Fed report. It's direct cause and effect. I have been warning for years, in fact using the same boilerplate week in and week out, that when the FCBs finally stopped subsidizing this market the effect would be catastrophic.

 

The fact that the US government has now assumed the risk changes ABSOLUTELY NOTHING. In fact it may be hastening the endgame because it is becoming clear to the entire world that the emperor has no clothes.

 

Strictly gut feeling, but I can see a doubling of Treasury yields within 6 months and more after that.

 

Gross Gross will not have the last laugh.

[lineup32]

I was busy all week, so I didn't follow it as closely as I might have wanted to.

 

But your invocation of "real or otherwise" inadvertently suggests what I am trying to get at.? Something that is "real or otherwise" shouldn't really be the "trigger" that precipitates the wholesale takeover of these two mammoth obligations.

 

The question I am really trying to answer is, "Why did Paulson move last weekend? Why couldn't he wait?"

 

The post-acquisition discussion that I've seen largely says, "Well, this was sort of inevitable. But Paulson's plan is a good one. And this needed to be done."

 

That's all generalization that provides no insight into the specific timing.

 

"Why last weekend?"

688078[/snapback]

 

I don't think you can view the decision in only financial term. It is a very critical election for both parties with lots of money, contacts, contracts, moles you name it on the line.

The media did a good job of making all the right words talking about lower interest rates, stable the RE market etc, while financial considerations can be discussed forever without the election as a backdrop events would have unfolded differently.

[Trader Joe]

Watching MSNBC coverage of the hurricane is insufferable....they are just praying for a dead body to wash up somewhere so they can document the human tragedy. Based on their coverage, Galveston looks a little banged up, but all in all not too bad.

[DrStool]

Just repeating what I warned about the other night.

 

I am deleting any and all posts that use obscenities in any form immediately and without further warning. If you use an obscenity in any form in a post, the whole post is going to disappear. I cannot allow the revenue that supports this service and pays my bills to be jeopardized by the penchant of some people toward serial posting of gross obscenities.

 

It's really a shame because the couple of you who persist in this behavior also have important ideas to share with us and I hate to have to delete the good with the bad, but I don't have time to edit every post.

 

I ask for your consideration. If you care about this board, then please respect this request. There's a way to be humorous without being obscene.

[4shzl]

Strictly gut feeling, but I can see a doubling of Treasury yields within 6 months and more after that.

From your lips to the market gods' ears -- go, Doc, go!

 

Totally agree with your comments on Gross above as well. He's a shameless pigman afflicted by diarrhea of the mouth -- or keyboard.

[DrStool]

I don't think you can view the decision  in only financial term.  It is a very critical election for both parties with lots of money, contacts, contracts, moles you name it on the line.

The media did a good job of making all the right words talking about lower interest rates, stable the RE market etc, while financial considerations can be discussed forever without the election as a backdrop events would have unfolded differently.

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I don't agree. The GSEs are facing the rollover of nearly $300 billion in debt over the next couple of months. The 8 week buyers strike threatened the immediate and total collapse of the mortgage market. The Administration felt it had to act. Once that they saw that the FCBs had stopped buying GSEs, the wheels were set in motion for this. It took a few weeks to put it together, but the die was cast in mid-July.

 

But they are kidding themselves. It won't work. In fact it will backfire because it now shifts the risk to the Federal Gummit itself, which will find itself nearly the lone bidder as holders seek to dump their risk off to the Gummit.

[Trader Joe]

I don't agree. The GSEs are facing the rollover of nearly $300 billion in debt over the next couple of months. The 8 week buyers strike threatened the immediate and total collapse of the mortgage market. The Administration felt it had to act. Once that they saw that the FCBs had stopped buying GSEs, the wheels were set in motion for this. It took a few weeks to put it together, but the die was cast in mid-July.

 

But they are kidding themselves. It won't work. In fact it will backfire because it now shifts the risk to the Federal Gummit itself, which will find itself nearly the lone bidder as holders seek to dump their risk off to the Gummit.

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Another footprint...Barron's

 

Meanwhile, the Treasury has been urging Japanese investors to continue to buy GSE debt, according to a Nikkei story relayed by Crapvision. The need for persuasion is evident in the latest Fed numbers, which showed that federal agency securities held in custody at the New York Fed for foreign official accounts plunged by $10.2 billion in the week ended Wednesday. Presumably, the bleeding was stanched after the weekend bailout, so it would be reasonable to infer the selling was intense beforehand. Since mid-July, custody holdings of agencies are down $28.2 billion.

[4shzl]

Another footprint...Barron's

 

Meanwhile, the Treasury has been urging Japanese investors to continue to buy GSE debt, according to a Nikkei story relayed by Crapvision. The need for persuasion is evident in the latest Fed numbers, which showed that federal agency securities held in custody at the New York Fed for foreign official accounts plunged by $10.2 billion in the week ended Wednesday. Presumably, the bleeding was stanched after the weekend bailout, so it would be reasonable to infer the selling was intense beforehand. Since mid-July, custody holdings of agencies are down $28.2 billion.

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Next week's custodial report may turn out to be the biggest story of the quarter.

[Jetlag]

I don't agree. The GSEs are facing the rollover of nearly $300 billion in debt over the next couple of months. The 8 week buyers strike threatened the immediate and total collapse of the mortgage market. The Administration felt it had to act. Once that they saw that the FCBs had stopped buying GSEs, the wheels were set in motion for this. It took a few weeks to put it together, but the die was cast in mid-July.

 

But they are kidding themselves. It won't work. In fact it will backfire because it now shifts the risk to the Federal Gummit itself, which will find itself nearly the lone bidder as holders seek to dump their risk off to the Gummit.

688089[/snapback]

 

I always thought the FCB's holding GSEs would be bagholders in all of this (the GSE debt would be defaulted on). They still might end up being bagholders of GSE AND trashuries in the end and won't have enough money/guts to buy more trashuries when the yields reach double digit (which could be a good deal unless the EOTWAWKI is upon us).

[Trader Joe]

There has been a fair amount of chatter regarding whether or not it is a good time to buy preferreds as they have really sold off since Hammerin' Hank's big hail Mary play.

 

While I would never buy a preferred on an individual issue -- too much "name" risk for me, I do think that taking a look at the closed-end funds that do this may be worth a flyer.

 

www.etfconnect.com provides and easy way to search for what's available and sure enuff all the fund in this area are now yielding, on average 12.5%.

 

In particular I am keeing my eye on ticker PSY as it invests primarily in preferred vs the common/preferred approach that others use.

[DrStool]

There has been a fair amount of chatter regarding whether or not it is a good time to buy preferreds as they have really sold off since Hammerin' Hank's big hail Mary play.

 

While I would never buy a preferred on an individual issue -- too much "name" risk for me, I do think that taking a look at the closed-end funds that do this may be worth a flyer.

 

www.etfconnect.com provides and easy way to search for what's available and sure enuff all the fund in this area are now yielding, on average 12.5%.

 

In particular I am keeing my eye on ticker PSY as it invests primarily in preferred vs the common/preferred approach that others use.

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Russ Winter, in his Actionable reports has addressed this strategy and is researching individual names he feels will pay off. Click here for information and instant access.

 

Russ has posted a . sample Actionable report on his blog today.

[lineup32]

I don't agree. The GSEs are facing the rollover of nearly $300 billion in debt over the next couple of months. The 8 week buyers strike threatened the immediate and total collapse of the mortgage market. The Administration felt it had to act. Once that they saw that the FCBs had stopped buying GSEs, the wheels were set in motion for this. It took a few weeks to put it together, but the die was cast in mid-July.

 

But they are kidding themselves. It won't work. In fact it will backfire because it now shifts the risk to the Federal Gummit itself, which will find itself nearly the lone bidder as holders seek to dump their risk off to the Gummit.

688089[/snapback]

 

My only point is that these decisions are not done in some kind of high-tech financial clean room free of political implications, given the players.

 

[DrStool]

Dollar and Treasury yields - http://wallstreetexaminer.com/?p=3137

[jickiss]

jickiss is back!

 

 

 

jickiss is back!

 

 

with a modest chart of DGP

called or named "Double Gold is Perfect" (Lately, of course, Imperfect)....

 

ABC correction or 1 2 3 4 surprise (not really) extended 5th move Down.

 

the bottom is in or it is being put in.

 

Buy DGP FOR THE REASON THAT THE MINERS HAVE AN ENERGY COST ISSUE THAT WILL NOT GO AWAY UNTIL IT IS CLEAR THAT GOLD WILL NEVER AGAIN IN YOUR LIFETIMES DROP BELOW 1,000.

 

clearly, the caps above section is not believed, the specs in the miners got Killed on Margin.

 

DGP could be your logical buy item, versus selling Miners for the purpose of booking tax losses in 2008.

 

Hold Fast!

 

dont let the Media do your thinking for you

Thimk!

 

ps Doc is right, lets all make this our Finest Hour. The stress gets to everybody, so lets Look Up, not down.....

 

jickiss!!!!!!!