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OK ... (thanks for playing) ... and why doesn't BAC do this on their own today? Why will it take the imminent collapse of a trillion dollar bank and the end of the world before change will occur?
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
My thoughts exactly. This should be done immediately. I'm sure there's shareholder pressure or whatever but at some point pre-packaged BK is the only sensible (key word) way out of this mess.
As far as I know, the Swedes only took over Nordbanken (now Nordea). They created Securum to transfer its bad assets to. In Norway, after private attempts of rescue had failed, we created bank funds and wiped out stockholders.
What I don't get is why government should subsidize private enterprise. If the government has to (temporarily) be involved, I would prefer it to act as a "ruthless" PE fund. Why shouldn't the government act as capitalistic as private corporations? That makes more sense to me. Thomas Jefferson wrote about "The Natural Aristocracy", and that would probably be the optimal way of governing. I don't see it happening, though.
The way the last crisis transpired, makes it the greatest robbery in (modern) history. It seems the worst is still to come...
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
I was able to locate BofA's 3rd quarter 10Q filing and as I mentioned earlier, a majority of the derivatives it holds are comprised of the lower levered FX and Interest Rate Swaps. But there is one big problem and that's the CDS holdings which accounts for $4,138,400,000,000 +/- a few bucks. That ought to be enough to take down the farm. Also, should there be a blow on the CDS side, look for the other derivatives to be in trouble as counter parties will want to collect or exit their positions with BofA or better put, one big margin call.
I just doubt this $4,138,400,000,000 exposure is a directional one: this should rather be the sum of various long and short positions that are aggregated. Very few people in a bank can take a directional bet, only prop desks can do that. 90% of an investment bank revenues are generated through fees and bid-ask spreads.
Futhermore if I had to short financials, I'd rather look to the good old europe that have tons of irresponsibly leveraged banks.
Have a look at this blog from a French economist, these are really interesting times !
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
You're welcome. From what I understand a majority of these derivatives were from Merrill Lynch so, who knows what crazy trades they have on there. They were obviously bad enough to make BofA keep them in a separate entity since they acquired Merrill.
Yeah I bet there are some great short opportunities with the EU banks. I think most of the fun with shorting BofA has be taken care of but it could get interesting if they end of failing or go bankrupt. Merci beaucoup for the link, I'll check that out.
interesting thread.Ive been scaling out of the 401k for the last few weeks, and was hoping the dow could break above 12k, to take the last 25%, and put it on the sidelines.The announcement on wednesday, i fear, could generate a huge selloff.Tomorrow, i will call the wife at work, at state my case.I think its hilarious, that while the european nations are trying to figure out how to help Greece, the Greeks are rioting in the streets.Comical!There are some tough decisions for the greeks, no doubt, and i feel for them, but, thats just the wrong answer.When they go down, watch some others follow.Hey, look at what the usa did, when it came to the debt ceiling vote.Talk about a cluster f#$%!!.If the usa cant get it done, all on its own, then haow are 17 nations supposed to get it done??I live in NYC, but i read the news...we have big problems here...still.Just because we have some decent earnings, big deal.Half of the states cant even pay their overnight debt...the thing that amazes me, is that the dow would even consider to go up.I must say, i learned alot this year, and how the daily chart on the dow can just blow thru good signals.
On another matter, BAC.Are you fn kidding me??That stock came very close to the $5 mark, just recently.What happens if the european mess collapses, like it should?BAC , look out below....they could make a run on that bank, and MS is next!!We got serious issues, besides a 15 trillion dollar debt, and 10%unemployment!!With cnbc blairing all day, asking every bonehead out there if weve seen a bottom yet, its no wonder!!someone whispers default, and the dow drops 200 points.
So, i , for one, think this is just an empty rally.....but, i also wouldnt be surprised if we hit the highs of this summer.Does this make me sound confused?? youre damn right!!Thankfully, i daytrade, technically.One thing i do know, however, is if i can flatten the 401k, at above 12k, i dont care how high it goes!!Dont forget, the bottom was around 6700 for the dow, so, lets not be greedy now!!
Thanks for the rant, its been on my mind for a while...and by the way, if BAC gets to $2, i will be a buyer, because if Geithner and Bernanke let that one fail , the usa will really be in the can!!
thanks Mike!! BAC was real close to$5 this month, and if europe really unravels, BAC , imo, as well as MS, will be targeted.I , for one, dont think it too far fetched, for this to happen.The US is not in a great situation, either, far from it.I get a kick out of the cnbc people, telling europe to get this taken care, and blaming the dows woes on europe.Watch, when the crap hits the fan, they will have Cramer on the floor of the stock exchange, like hes gonna help!!