Luv2Read's Account Talk

[luv2read]

nothing to post...yet. Holding and waiting.

[pattidiva1]

Holding and waiting in G? I'm 100% in I but I'm not sure what end of the day will bring. At the moment it's looking real good for profit taking...

[luv2read]

way overbought, probably see a pullback today, maybe tomorrow.

[Buster]

It's about time you got your own thread...:toung:

Holding in F yet...

[luv2read]

LOL! Yes, it is...3+ years on the board and posting everywhere else but my own.

Yeah, I saw that you are still holding F. Don't worry, it's up and will stay there probably through the end of the month. If you're tired of it, why not dip your toes tomorrow? I think the pullback will happen after testing resistance today. Looks like it broke through to 1424. Doesn't make sense that CSI and F all went higher. Last time that happened, big pullback in equities. It's time to get back down to support before the end of May for the summer doldrums. Then again, that may not happen this year. 1) election year; 2) usual Nov-April "good" time seems to be reversed..maybe this year April-Oct is the good time.

[nasa1974]

Two good articles on CNNMoney.com about the dollar and bonds. Both articles to long to post.

[luv2read]

Two good articles on CNNMoney.com about the dollar and bonds. Both articles to long to post.

thanks!

[nasa1974]

luv2read, Thank you. Some nice numbers today.


FUND G F C S I May 15, 2008 close$12.44$12.19$16.18$19.59$24.42Daily Change:$0.00$0.08$0.17$0.19$0.39

[luv2read]

from The Bear Cave.
http://www.tsptalk.com/mb/showpost.p...postcount=1523

Note that we have $142 billion worth of exposure "off prime" with 21% of it delinquent 60 days or more yet it was all rated "AAA" at origination.

Most 60+ delinquencies will foreclose. The 2nds and HELOCs are essentially total wipeouts in an environment where home prices are declining as foreclosure nets you nothing since the balance exceeds equity.

Now take a look at the real losses likely to be seen here. Assume we're talking that most of the 21% delinquent on the $142 billion goes "boom", we have $30 billion in exposure. Being nice and allowing a recovery of 50 (hopelessly optimistic) we have $15 billion in losses.

The problem is that MBI, Radian and Ambac's market cap combined is less than $4 billion.

So we have $11 billion in "forward, unrecognized and uncovered" losses but Freddie is going to raise $6 billion? Yes, I know, they have some capital cushion, but is it really wise to invade that when the problem is nowhere near over?

We also haven't accounted for losses in the prime book - at all. And how much of that "prime" is really prime and not "Fast and Sleazy" paper that was sold to them as prime but in fact is Alt-A?

See, this is at today's home prices and loss experience - but both Freddie and Fannie are predicting further home price declines, which will feed into more delinquencies.

The bottom line is that the claimed "credit guarantees" are crap and this is only Freddie, which has less exposure than Fannie (they were nice enough to publish a pretty table that made this pretty easy to put out there for 'ya.)

You can extend this problem to both the investment and commercial banks; the basic problem remains the same - the so-called "guarantees" represented by these OTC swaps and other "derivative devices" are worth nothing as the money simply is not there to make the payments.

Once the first blowup bankrupts the guarantors everyone else is immediately running uncovered.

There is no way out of this box. We have had a nearly-10-year run where all this paper was written in a mispriced environment under the premise that the music would never end.

Bernanke has admitted that he knows this in that the banks are "hunkered down" and unwilling to put more exposure out in the market because they know what is coming.

But Bernanke is compounding the error by not forcing institutions to take down their leverage.

You force them to take down leverage by demanding that they either prove their swap and "insurance" counterparties can pay against the most pessimistic assumptions in the current environment or those policies must be declared "worthless" and your assets then have to trade on their underlying credit quality.

If he was to do so then we would find out who is swimming naked (and there would be plenty of people who are) but the bleeding would stop in the banking system because once the trash paper is sold it's not your problem any more - it is now owned by whoever bought it.

Remember folks - if hedge funds want to bet on recovery of this paper and buy it for 80 cents on the dollar on alleged "money good" paper, and they're wrong, we do not get a systemic failure. People who are risking their own capital get to either make or lose money.

But if the banks continue to hold this paper trying to get "par" for it rather than take the losses now and they are wrong we all get screwed because Bernanke has literally loaded over $400 billion dollars of this trash on The Fed's balance sheet, and to bail that out, if it becomes necessary, will require transferring that bad debt to the United States Treasury with catastrophic results.

Worse, if this blows up in our faces you'll find that you suddenly need 50% down to buy a house, because nobody in their right mind will loan on more than half of the underlying collateral value.

This happened during The Depression for this exact reason - what do you think a development like that will do to house prices?

Bernanke is gambling with our future by refusing to act to force the deleveraging to take place now through recognition that these swaps and "insurance" policies are, in aggregate, worthless.

Congress, for its part, is sitting back and fiddling instead of insisting that the truth of these firm's financial positions be recognized and the underlying credit quality be the basis upon which they trade.

It's time for you to either stand up and raise hell or shut up, because come the July Recess, which is only about a month and change away, there will be no further Congressional action of consequence until after the Inauguration in January of 2009.

We don't have that long.

http://market-ticker.denninger.net/

Think about Barclays. But it's our TSP money...the guaranteed inflow from our payroll contributions...keeping them afloat and from having to raise capital. And it's our funds they're risking.

http://www.tsptalk.com/mb/showpost.p...96&postcount=3

[XL-entLady]

What a depressing article, Luv2read!

Maybe the answer to my questions about S Fund are contained in your last post. I'm not trying to decide whether to go all in or not; I'm trying to make my mind up whether to stay at 10% S or go to 14%. It's my 4% play money again.

But after reading that last article, maybe my 4% play money should go to G!

Thanks for the article!

Lady

[luv2read]

Sorry for depressing you Lady! I just saw some truth in it and thought it was worth sharing.

This is just like the S&L bailout where they created RTC to sell off the foreclosed properties. The difference this time is the government doesn't want to be in the real estate business, so the debt will get transferred to the treasury, the banks get to write it off, and the government will just sell more debt to sovereign wealth funds and print more money. Oh, and raise taxes, eventually. Our future will be mortgaged instead of the real property that was covered by junk paper.

You might want to check this thread too. Straight from tsp.gov.

http://www.tsptalk.com/mb/showpost.p...21&postcount=9

[XL-entLady]

You might want to check this thread too. Straight from tsp.gov.

http://www.tsptalk.com/mb/showpost.p...21&postcount=9

Yes, thank you, I saw that post. And I think your analysis is spot on! I'm not sure there is anything we can do about it except try not to burst a blood vessel from raised blood pressure while thinking about it though.

I'm off to do some yoga stress relief poses.

Lady