Well, January could have been worse. The month started as an absolute bloodbath and finished with some roses.
How? I'm not sure how.
MBIA CFO pulled off a dozy. The company announced huge quarterly loss, announced that they did not think they would lose their AAA rating (which is still in doubt), and even if they did they would stand to lose $100-200 million. And the market rallied on this news.
Not that the math made sense. The company wrote off $2.3 billion in losses. It also announced that it was getting a $500 million injection from private equity firm Warburg Pincus,
Somehow, it sounds like swing hard and hope type of ideas.
The also saw a lot of the Fed this month.
We are starting to see a fledging refinance boom recently. Actually, a lot of people are hoping to be able to refinance and just aren't seeing the rates low enough right now. Most are thinking that rates will be down in the next couple of weeks. I really don't know. We are definitely going to see what shakes out with employment and get a better read on how aggressive the Fed is going to be.
I have seen reports of possibly just one more .25% cut in March or April and then backing off. I have seen an analyst report stating that the Fed will have to cut rates back down to the 1% level seen with the Greenspan Fed. I do not believe the Fed can afford to drop rates to that level with inflation still there. The Fed says that inflation should moderate over the coming months, but give no reason why. What is going to cause the moderation? I don't see a catalyst to that side.
When Greenspan cut the rates to that level there was no major threats to inflation. Remember, they were concerned about deflation at that time. This is a totally different world picture. We see other economies such as Europe, China, and Brazil raising rates fighting the raise of inflation.
I look to see another .50% to 1% cut off the current rate.
Thursday, January 31, 2008
Well, January could have been worse. The month started as an absolute bloodbath and finished with some roses.
Monday, January 28, 2008
McDonald's (MCD), one of my portfolio holdings, was smacked today losing 6% today. The stock has been sliding since news came out two weeks ago that the company would post weak same store sales. It was the first non-growth sales report in 56 months.
Well, I think that Jim Skinner said it best, "We're recession-resistant, not recession-proof."
But some good news. Only 35% of McDonald's earnings are U.S. based. It was 58% in 1991. If the rest of the world can keep trucking along, which they all publicly say (but their markets say something totally different), then MCD should be just fine.
The stock is off it's 52 week high and is a solid stock to hold and hold for a long, long time. If my portfolio allowed for adding to a position, this would be a good time for me to do it and let it sit.
I do not see this one month flat sales or even a couple of slow months at the Golden Arches as a red flag of a sinking ship. Other fast food companies are struggling, including Wendy's. This is a strong company that has stated they are not going to get into a pricing war for burgers. They had innovated and changed their product offerings and that is why we have seen fantastic sales numbers over the last few years.
The company has also stated that they are going to start paying dividends on a quarterly basis.
There is just too much good in this company to turn away. The long term potential of this stock far outweighs any short term pressures the stock may face.
Two bits of information caught my attention today. 1) That new home prices declined over 26% year over year. Marking the largest drop in four decades. 2) Angelo Mozilo is forgoing both his severance, consulting fees, and plane rights that we was granted by Bank America when they bought out Countrywide.
The first bit of news is not a new piece of information. We all have known that prices were sagging and that year over year numbers would decline. What I do think is a surprise is that December numbers showed an annualized amount of 604,000 sales. Over 40,000 homes less than anticipated annualized amount of 645,000. Prices also feel 10% in December alone year over year.
At the current pace of sales there is STILL an inventory of over 9.6 month supply of new homes on the market. Wow. Being in the market and seeing how much builders have cut back on new homes, that 9.6 month supply is staggering.
2008 is still new, but don't expect any substantial change in these numbers. Many analysts are forecasting further price declines in home prices, though not nearly as severe as 2007. Even with rates dropping, activity is not increasing. The issue is twofold. Tighter guidelines for mortgage qualification and fear on buyer's behalf concerned that the home they purchase today will be worth $10,000 or $20,000 less in six months.
As for our friend Mr. Angelo Mozilo...good for you. It is one of the only good, humane, and decent things that you have done within the last 2 years. Though this is only a small gesture for a man that has seen his company's stock falling over 80% in less than one year. At the start of last year Countrywide account for 1 out of every 6 mortgages completed in the country. Today, the company was bailed out by Bank America and is considered the dirty word of the mortgage industry. He sold out huge portions of his stock holdings while shareholders were left waiting to be delivered with a grip on the bag.
By turning down his GIVEN severance, consulting fees, and place rights was a just and needed move. It probably wasn't his idea. In fact, I'm sure that he didn't give up his money easily. His quote about his move,
Yep...no one can fold like Countrywide...no one. But don't feel too sorry for Mr. Mozilo if you think I am being too harsh on the man. He does get to keep his deferred compensation and his retirement benefits. It will total into the millions, even with the price of his stocks company under $6 per stock. He won't be hurting for money.
Saturday, January 26, 2008
This was one wild week as I detailed before. It was so wild in interest rates, that a flurry of refinancing calls kept me on my toes.
The good news is that it brought some much needed business in this, the traditionally slow time of the year.
The bad news was, rates this Friday were the EXACT same as what they were last Friday.
The rates are still very good, still the best that we have seen in the last couple of years. But they are now about a half percentage point higher than what they were on Wednesday. If only for a very small window of time.
If you tried to lock on Wednesday on your mortgage rate, you had roughly three hours window to hit the best rates. Most borrowers decided to wait because of the Fed's "promise" to cut rates next week. And that is the most common mistake I have seen when trying to time interest rates. Too many hopes are pinned to the Fed, when long term mortgage rates are indirectly influenced by what they say.
But the title of this post says, "Mortgage Rates Have Bottomed". I have 3 reasons why.
1) The treasury markets over-reacted to the emergency rate cut and futures markets that started to price in another .50% rate cut next week. Combine this with the rush for a financial stimulus package by the government sent traders looking for quality as if the sky was falling. To some extent, this has now reversed itself as the treasury markets have had a little time to digest the news and happenings. And finally came to their senses.
2) The European Central Bank kept rates steady. No one seems to really be talking about this, but I feel this is a big deal. If the ECB is standing pat trying to stave off inflation while the world's largest economy is slashing rates like it was a knife manufacturer doesn't hold some weight, you're nuts. A slowdown here will have a global impact, no matter what the ECB thinks. So either things aren't as bad as they seem or inflation is really a major, major factor. In reality, I think it is a healthy dose of both.
3) The result of these rate cuts and the government stimulus package will equal one thing and one thing only....inflation. Higher prices for goods and services. We all know it's there. Go to the pump, the grocery store, your cable bill, health care, and whatever else you want to name. Inflation, even though the Fed says it's not, is a major player right now. And inflation is the mortal enemy of treasuries. With the good job numbers we have seen and are forecast to be seen next week, treasuries will continue to sell off and push mortgage rates higher.
And here is my own personal take based on what I have seen in the past. When the "boom" was happening in the first part of this decade there were multiple "refinance booms" within it, driven by falling rates. Each of these refinance booms had a bottom rate which borrowers tried to gamble and predict. They all had similar characteristics at the bottom. One, was a swift drop in rates over a period of a couple days based on news, mostly from the Fed. Two, rates declined to a point where everyone's guess, even those who know how rates are effected predicted that they would fall further. Three, the real bottom for rates were market by an extremely low rate that was offered for a only a few hours time. Four, once the rates hit this short-term bottom they would rise as swiftly as they had fallen as the treasury markets reversed themselves.
This is exactly the action we saw this week. It was eerie. I thought to myself, "I have seen this before." And I had. I predict that if or more likely when the Fed's cut the rate next week, you will see a muted or negative response in the treasury market. Rates are going up for the time being. Don't be surprised.
Thursday, January 24, 2008
If you are interested in doing a mortgage, this week has been one for tracking interest rates. We started the week closed for Martin Luther King Day and the global markets were hammered due to concerns regarding a slow down and possible recession in the US. Tuesday, the Fed rushed in before the markets opened and slashed the rates by .75% trying to stave off a market decline in the markets. It helped, if only marginally. Wednesday, it seems like things would continue to weaken until late in the day when news that bond insurers (much in the news these days) were hopefully going to be bailed out. Today, more news that our government was going to put rebate checks out to most Americans in the coming months made everyone happy for the most part.
All this has had a major impact on mortgage interest rates and all have had a very different effect.
Basically, if you are into treasuries, this market has left you motion sick.
When the Fed cut the rates, there already was a concentrated flight to quality and away from equities. Also the Fed statement made it clear that it was likely to cut rates again at it's normally scheduled meeting next week. With these comments, many traders felt that the Fed was acknowledging that the economy was slowing much, much faster than they had anticipated. This caused even more flight to quality.
The result, a major drop in mortgage interest rates. While the rates had been good leading up to this week, rates late Tuesday and into early Wednesday were fantastic. We had not seen rates this good in the last couple of years. But as news about bond insurers leaked out and that market started to turn (a 600 point swing for the Dow) traders started to get out of treasuries....fast.
In fact the action was so fast that the rates at start of business Thursday were HIGHER than the rates at the start of Tuesday. This was amazing considering how unexpected the Fed move and statement had been before the open on Tuesday.
Here is my take. These rates we are seeing are a fleeting thing. My prediction, along with the place that I work prediction is that this is a bottom for interest rates. We feel that the Fed, if they do cut rates next week are going to wait and see what happens and not be as quick on the trigger in the future. They are going to want to see what effect this has on the market. The other aspect with the Fed rate going this low is that inflation is going to start to show itself more firmly in the next couple of months. Inflation is definitely the enemy of treasuries.
As inflation rears up, treasuries will sell off and raise long term lending rates. If you really are serious on purchasing and/or refinancing, you better get on board now. I foresee rates climbing back up in the next 6 to 8 weeks. This is a small window of time to find a home and get locked in. I could be wrong, I've been doing this long enough to know that the market is a fickle thing. But I think I have this one pegged.
Posted by Mike Carpenter at 5:39 PM
Wednesday, January 23, 2008
Oh, by the way, I have started a new blog site for those of you interested.
Deals That Matter
I've started to see some limited success with this blog, but it's goals and focus are pretty set in stone. I write about stocks, market news, and mortgages. There is so much more than just that in the big financial picture!
So I started Deals That Matter as a way to give a bigger picture and reflect a truer day to day way of life for most of us middle Americans. While I talk about the stock market and have a pretend portfolio that I like to also pretend is very important...I don't have nearly enough money on a daily basis to make a significant impact.
Deals will be about saving money. It will detail mine and my families struggles to save money. But it will give plans on just how I plan to accomplish a savings pattern. I am also going to give some of my favorite deal websites and plan on featuring a "Deal of the Weekend". If interested come along! You can sign up for email delivery of Deals directly on the site.
Thanks for your support!
Posted by Mike Carpenter at 4:32 PM
I told you we would see a bounce in the stock market today...I told you.
And I watched the market tank all day long. I was thinking about the post I was going to write. I was going to appologize and say things like, "Don't listen to me," and "I frankly don't have any idea what I am talking about."
It only took a 600 point swing in the Dow to prove me right. Shares of financial companies soared. But what I think what really put the rally into high gear is that the Financial Times was reporting that New York insurance regulators were calling big banks to pony up about $15 Billion to shore up bond insurers.
Bond insurers have been in the news recently, basically called the next shoe to drop in financials. With some new money flowing in maybe the can actually avoid the pain the rest of the sector has seen.
I can tell you one thing. I have been getting plenty of refinance calls being that I do mortgages for a living. Rates are as good as they have been in the last couple of years. Trick is, can you qualify for those good rates.
If you are doing short term financing such as a 15 year fixed, no problem. But if you want to go longer and have less than 30% equity in your home, you better have good credit. I have detailed what is going on with Fannie and Freddie before.
By the way, I'm not writing for Nesteggr anymore. The link above is my last posting over there. I didn't get what I wanted out of the experience/site. I wish there had been better communication with those who started the community and just a better community. All the bloggers only seemed to care about themselves for the most part and didn't participate on anyone else's blogs. It was sad. But I did meet Zach Stocks and Curious Investor and I continue to read their sites. I have noticed that both Zach and Curious have both either cut back on or stop posting on Nesteggr. So I guess I'm not alone.
So I have gotten a lot of phone calls from the rates dropping, but not a lot of business. Who knows what the heck is going to happen. I do think that you are going to see rates for mortgage creep up a bit the remaining portion of this week. What will be really interesting is to see what the Fed has to say next week. If they cut again, what will the statement say? Since they would have cut 1% off in two weeks, I cannot imagine them stating they were going to stay aggressive.
If they signal a pause, which I think they have to, these rates we see today will not last.
Posted by Mike Carpenter at 4:09 PM
Tuesday, January 22, 2008
Wow. Say it again. Wow. That was something to watch wasn't it?
The markets were poised to plunge, PLUNGE, based on future numbers and the global sell off we had seen Monday and into Tuesday.
And then....Ben attacked.
Cutting rates by .75% and making it kinda sorta clear that we can expect another .25% cut next week.
Futures recovered, then thought about what this move meant, i.e. the market is heading down fast, and back the futures market plunged.
Blood was on the wires as all the major indices started the day with major downers. But then things started to change.
A rally (kinda) ensued. Bargain hunters started to lurk around. Financials led by BAC (a 95% decline in earnings reported today) and Wachovia (earnings down 98% reported today), consumer discretionary, and even home builders helped bring the market back.
The market is showing that it is still hopefully that Ben can make this alright.
I'm not drinking the juice. I have for too long. This was just a show. The Fed is trying to show the markets and the world that it will stand for growth and growth only. But, uh, rate cuts aren't really felt for another 6 months down the road.
It will all end up looking silly when this doesn't help. It will make mortgage rates better, indirectly of course, and will try to stimulate borrowing with businesses and individuals by getting better rates on cars, etc.
But rates were already good. Banks have tightened the reins and are buckling down and trying to return to more traditional, tried and true, risk assessment. The Fed is trying to make them remember the good times that have turned so sour.
It's not going to work. My opinion.
Anyway, adding my two short EFTs looked great in the morning and just mildly ok by close. I was a little disappointed. Fine, I am really disappointed as I think you are going to see a bounce in the next couple of days in the markets. That new Fed smell is all over everything. But I am standing firm.
But I won't be adding another short EFT to the mix. After thinking about it, two is more than enough to balance the risk of my portfolio overall. Another toe in the water could lead to falling in.
I'm going to keep the pick in my back pocket and just see how it goes over the next 2 or 3 weeks. Then we will have some time for the Fed wave to subside and then we can get a better picture of what the markets really want to do.
Posted by Mike Carpenter at 4:09 PM
Monday, January 21, 2008
Global markets were hammered today. Look for this to carry over big time into our markets tomorrow.
Today I introduced that I was adding two shorts to my portfolio. I actually think I am going to add a third but will at least save that for tomorrow and see really what is going to happen in our markets before I rush all into the short side of things.
Couple of good articles I came across while not working on Martin Luther King Day.
The first one is from CNN Money called, "Will the Cure Be Worse Than the Disease?" which pretty much echoes what I had said before this current rate cutting campaign started by the Fed. You may be able to skirt a recession now, or at the very least shorten it's duration, but the flip side is that you create a bigger mess later on.
But here is my main issue with this article....isn't it at the very least three and soon to be four cuts to late? I was all for standing firm and riding out the storm but now standing firm makes little sense. The Fed has already eased the rates, significantly. You have to continue down this road to it's fruition. You can't change the game plan now. The decision has been made. The time to stand up and not change the rates was back in September, not now. So while it is a good article, it's a few months too late.
And my friend Zach from Zach Stocks posted, "2008 - How to Profit by Sticking to the Plan". You have to love Zach's writing style, while at times a bit verbose for my taste, it is not so much filled will insider talk that it is inapproachable. His ideas are always well researched, fair, and balanced. And this little three point post is fantastic and really got me thinking. I understand perfectly well about staying involved with investing and not just looking at the numbers and panicking when the shares drop. But his first point, which probably should be the most obvious of all of his points really send me into thought.
Just what the hell am I trying to do? I went back to the start of this blog and read what I said that I was planning on accomplishing. Basically, it was to beat the S&P on a weekly, monthly, and yearly basis. But thinking about this and how this blog has evolved and how I have taken to looking at the markets through this blog.
I think that basically it has boiled down to 2 major areas.
1) I want to pick big companies that can are stable and positioned to take advantage of their current markets. My goal is to leave these names alone unless something truly changes in the fundamentals of the company.
Stocks that currently fit into that mold are PEP, PG, KO, and MCD. All these names you should know, Pepsi, Proctor & Gamble, Coke, and McDonalds.
My big miss here, Ford.
2) Stocks and EFTs that can take advantage of an immediate market condition. I have really focused recently on EFTs in this space, however, I have made plenty stock choices that have fallen into this category.
Stocks that fit into this category is Las Vegas Sands, Gilead Sciences, Bank of America. Yes, I include BAC here because I was hoping for a bottom and when I realized that it just wasn't there I sold out of the stock. I also chose QQQQ as an EFT to take advantage of the tech resilience at the end of 2007.
I took both Transocean (RIG) and Barrick Gold (ABX) really to balance out the portfolio. But come to think of it, I really liked the continued out-performance of oil (RIG) and believed that gold (ABX) would be a good hedge for some of the problems that I saw coming ahead.
I added two shorts (DOG & SDS) today based on my feeling that the markets are poised to see another 10% drop in the coming months based on the markets reactions to the president's bail out plan and the wording of Bernanke's comments on the economy.
My misses, DaVita.
So what does that leave? AGN. I picked Allergen wanting to have some kind of pharma company in the portfolio. The stock has performed well, showing a gain of 12% since I added the stock. But the basic question now becomes, do I hold onto it because I believe that the stock will perform well going forward or was I just lucky and get rid of it since I have no plan for the stock?
I remember doing the research when I picked AGN but ultimately I have forgotten what I really am looking for from the company.
I am going to go back and see what I really want from this stock. If I want to hold it, which category am I placing it in? My buy to hold or my take advantage stocks? If it falls into the second category, what will trigger me to sell the stock?
These are the things I need to know going forward. And as you saw in my picks earlier today, I am going to give a reason and a true time frame of what I am looking for in my picks.
Posted by Mike Carpenter at 3:48 PM
Just take a look at this headline found on Market Watch:
Dow Jones Industrial Average futures down nearly 500 points
Looks like Tuesday is going to be awesome when the market opens back up. Foreign stocks are taking a beating rubbing their hands together worrying about a US economic slow down. And I guess that they should be worried. The market looks lost and there just aren't enough breadcrumbs to find our way home.
Northern Rock looks like it finally has a plan to get out from it's pickle. Want to see what would have happened if Countrywide hadn't been thrown a lifeline by Bank of America? Here it is. But I think it would have been even worse due to the size of the servicing portfolio Countrywide holds. And if you don't think our government wasn't propping CFC up you're nuts. Want to guess who was one of the biggest window tappers and money bidders in the last few months...that is right, Countrywide.
With so much sunshine these days it is hard to find really good companies that you look at and say, "I want to buy this today." Everything is going down. It is fairly orderly and consistent. At least it's that.
But I am tired of seeing red numbers in my pretend portfolio. I don't think there is anyone that likes red numbers, except those who profit when the numbers go red. That's right, shorting.
Now shorting individual stocks is well, something that should really be left to those who know just what the heck they are doing. It is not for the faint of heart. The gains can be glorious. The losses can be devastating.
So, I'm not going to short individual stocks. I am going with two EFT's that I mentioned previously, DOG & SDS.
Short Dow30 Proshares (DOG) Want to talk about risk? Here is a pick for you. This is a new EFT that has a very small market cap (126 Million) and volume runs about 500,000. Compare that to QQQQ with market cap of 20 billion and a volume that runs 273 million. What that means is that it is hard to determine what the real value of DOG is. When you go to sell this position (when the market stops heading south) you might have trouble finding a buyer at a price that you want. DOG has been doing well recently, of course, up over 8% since the start of the year and 15% from the October lows. I foresee this being in my portfolio anywhere for the next 6-12 months.
UltraShort S&P500 Proshares (SDS) This EFT reacts to twice the performance of the S&P. As you can imagine, it has been doing quite well lately. And I also fully believe that the turmoil in the financial markets is not nearly over. The S&P is roughly 20% financial companies. Believing that the market will continue to head lower and that financials will lead the way down as they have, SDS is a perfect pick for me. Let's see how it performs. Since the start of the year this EFT is up over 22% and over 35% since October. Again, I'm seeing a 6-12 month timeframe.
Both of these EFT's will require close watching for any sign that the market is going to turn. These are not the buy and let set type of purchases.
Saturday, January 19, 2008
Big news for me. I have decided to spring for my own domain name and you should be seeing the change here in the next few days.
That is right, I'm dropping both the "the" and the "blogspot" from my url. The new site is:
This will make the site easier more accessable. One, the "the" is kinda stupid to begin with. What is this site? A rock band? Not so much. Also the blogspot part of the address, while free and a GREAT way of really seeing if this blogging thing was for me, is a stigma of cheapness to all serious bloggers out there. If I'm serious about doing this, which at this point, I really am, it is time to get into the big leagues and pop for my own domain.
But don't worry. If you still use the old site address you will be redirected to right here.
I am planning some other updates to the site and really trying to make 2008 great. I appreciate all my readers.
Posted by Mike Carpenter at 4:27 PM
The markets didn't take too kindly to Mr. Bernanke and Mr. Bush talks this week, that is pretty much a gigantic understatement. The markets hated it...with a passion.
Bernanke, in his talks with Congress, basically admitted that it is time to push the panic button. He said that the markets need a boost and they needed it now and it needed to be a temporary boost. Rate cuts just won't hack it, they take too long to really float through the system. Normally a cut's full effect are not felt for 6 months.
President Bush then made his plea to Congress on Friday that the economy needed a stimulus package of 1% of GDP, roughly $140-$150 billion that would go to individuals and businesses to try to jump start the economy.
The markets absolutely plunged after Bernanke spoke. Basically it was an admission that all the rosy talk of avoiding a recession was just that, rosy. So, if Bernanke is saying the ship is sinking fast, there is no reason to hold onto risky investments such as equities.
So what can you expect short term? A lot of hand wringing by Congress, canindates, companies, and individual stock holders. If a correction is defined by a 10% drop in stocks, a recession is marked by at least a 20% drop right? So that means we are about half way there.
It is hard on everyone right now. And I don't think it is getting any prettier. Take a look at what MSN Jim Jubak has to say about the next financial crisis that is on the way. And not only is this a major concern. We saw yesterday the first of the downgrades on an insurer yesterday.
Bottom line, is that no matter how attractive some of these financial stocks look, such as Bank of America, which is weird, of Merrill Lynch or Citi, that are trying to clear their books and may be overdoing it. But if the insurers start to lose, then banks will have another big leg down. Stay away.
Basically, stay defensive. Gold is still good. Large companies will not feel the blows so much. Treasuries are safe. And EFT shorts such as DOG and SDS will perform well in the short term. But this can be a lot of work. If the market bottoms, things can turn quickly. If you are on a short, you have to keep your nose to the grindstone. But I think these are a good bet for right now.
Posted by Mike Carpenter at 8:50 AM
Wednesday, January 16, 2008
You know recently I have seen a number of articles posted that mentioned that the stock markets tend to be down, more specifically during the 2000-2002 bear market, during rate cutting campaingns. These posts make it seem that rate cutting campaigns should boost the stock market and everything should be positive because the rate cut is a good thing.
Well, short term, yeah. For the most part the markets celebrate a cut and more so if they think more are coming. But these are short term bounces. Why?
The Fed was able to cut rates because the economy is struggling and needs a boost to get moving. Rates are cut to encourage businesses to borrow money, which stimulates job growth, with stimulates profits, and moves the world forward. It also helped fuel consumer spending by lowering borrowing costs on credit cards, installment loans such as cars, and homes.
Normally the economy has to kind suck, or show definite signs of sucking before the Fed cuts rates. SO if the economy sucks, or shows signs of sucking, equities will suffer. It's natural for it to be that way.
People that argue that equities of falling value shows that rate cuts don't work are just giving you what they want you to hear.
But it is an empty argument. The best response to a comment such as that is....DUH.
Posted by Mike Carpenter at 3:49 PM
Thursday, January 10, 2008
In August Bank of America "infused" our good friend Countrywide with $2 billion in cash to help the sinking home lender. Today, news came out that Bank America is in talks that it may buy Countrywide altogether.
Uh, it kinda had to. Countrywide, even though they would deny it, was virtually bankrupt. The lender's servicing portfolio was struggling with foreclosures. It's origination business had dried up to the point that it was simply happy that December's originations exceeded November's numbers...even if they were down over 40% year over year. Nobody was buying their offerings. They had abandoned sub-prime lending for the most part. And only Fannie & Freddie would purchase their loans.
It was going under...fast.
Back in August when it was suggested that Bank America would eventually buy out Countrywide our good ambassador Angelo Mozilo said there was no possible way.
So much for that.
Countrywide's stock gain 50% today to close at $7.75. Which is a far, far, far cry from the value the stock traded at in Febuary of last year, $45. When Bank America infused their funds, they had an option to get stock at $18 a share. Got a ways to go for that money to make sense.
Countrywide's portfolio is gigantic portfolio of loans, somewhere around $1.4 trillion, is too precious to be sold off to a low bidder. Bank America had to make this move. They just had to.
Posted by Mike Carpenter at 3:26 PM
Thursday, January 3, 2008
And it has already been hell. Go back to where you came from 2008! The market has started the year as a definite bear, which includes $100 a barrel oil and gold at all time highs.
Ron Paul likes the sound of that!
Speaking of Mr. Paul, the Iowa Caucus' have started this evening. The race for the next president has started. I hope whoever inherits the chair has a good seatbelt attached. It will be an ugly ride.
Mr. Bush has left a good little bit of garbage to clean up...just like Mr. Clinton left for Bush.
It will be interesting over the next few months going into November.
Change or Experience?
Southern Baptist, or Mormon, or thrice divorced, or war hero, or television star?
What a crowd.
No, I'm not giving who I support. Why? It is too early for me to tell you exactly who I support.
This has time to play itself out. I think after Super Tuesday we will all know who the candidates will be and what they stand for.
But in the mean time. Barrick Gold (ABX) has packed on 11% in the last few days.
Ford, my recent sell, conceded the #2 car maker crown to Toyota.
Posted by Mike Carpenter at 5:39 PM