Show-me Account Talk

[Braveheart]

EXPECT THE FED TO CUT INTEREST RATES BY .50 MAYBE AS EARLY AS MONDAY 9/8/08 with a BAILOUT of Freddie & Fannie. Either way the cut will be this month and prevent a housing market crash with a stock market crash. Home values will drop either way.

 

[Show-me]

BH,
Is that your call or you read that some where? I see the headline that the gov. is set to take over FRE and FNM.

 

[Show-me]

Also, which bank will fail today? Friday is FDIC bank take over day.

 

[Braveheart]

BH,
Is that your call or you read that some where? I see the headline that the gov. is set to take over FRE and FNM.

Bloomberg and Wall Street Journal

 

[Show-me]

Wow, I think this is the weekend that it will happen. They have to to save face with all the nations that hold our notes.

 

[Braveheart]

U.S. Near Deal on Fannie, Freddie

Management Shakeup Coming
By DEBORAH SOLOMON and DAMIAN PALETTA
September 6, 2008

WASHINGTON—The Treasury Department is putting the finishing touches to a plan designed to shore up Fannie Mae and Freddie Mac, according to people familiar with the matter, a move that would essentially amount to a government takeover of the mortgage giants.

The plan is expected to involve putting the two companies into the conservatorship of their regulator, the Federal Housing Finance Agency, said several people familiar with the matter. That would mean the government would take the reins of the companies, at least temporarily.
It is also expected to involve the government injecting capital into Fannie and Freddie. That could happen gradually on a quarter-by-quarter basis, rather than in a single move, one person familiar with the matter said.
In addition, Treasury's plan includes a top-level management shakeup at both companies, according to people familiar with the plans. Daniel H. Mudd, chief executive of Fannie Mae, and Richard Syron, his counterpart at Freddie Mac, are expected to step down from their posts eventually.
An announcement could come as early as this weekend. Some details are still being worked out, which means terms of the arrangement could change.

More... http://online.wsj.com/article/SB122064650145404781.html?mod=hpp_us_whats_news

 

[Braveheart]

I have been told over and over if they do this The Fed must cut rates at the same time. .50 basis points is the only way to hold down the impact and .75 would be possible. This is why at 11:00 AM EST the Bond markets changed all the smart money wasn't moving to stocks they were moving out. How this impacts the F Fund I have no idea but home values will drop and selling a home would be almost impossible right away.

 

[luv2read]

This is why the AGG dropped at 11AM. IMO. The timing is right. Also look for the Fed to get BlackRock involved in the Fan/Fred bailout, just as they did with BSC..BlackRock has let it be known they have $3B to churn.

http://www.tsptalk.com/mb/showpost.php?p=178786&postcount=4

 

[tsptalk]

This is why the AGG dropped at 11AM. IMO. The timing is right. Also look for the Fed to get BlackRock involved in the Fan/Fred bailout, just as they did with BSC..BlackRock has let it be known they have $3B to churn.

http://www.tsptalk.com/mb/showpost.php?p=178786&postcount=4

I would think the AGG would rally on that news. Rates down, bonds up. I hear that the bonds have been dropping as the European markets close because they are the ones "flying to quality" - so the buying slows down after they close.

 

[tsptalk]

Speaking of bonds, their unusual strength recently must have been trying to tell us that something was in the air. Maybe the Fannie / Freddie deal was what it was seeing.

I was getting killed trying to short bonds last week, as they just kept going higher.

 

[airlift]

AGG hit the top of the Bollinger bands and closed down on Friday. If this deal goes through and the FED cuts .50 basis points at the same time, wouldn't this move the smart money into stocks? Second question, wouldn't it be better to stay invested in the US markets short term, rather than overseas?

I have been told over and over if they do this The Fed must cut rates at the same time. .50 basis points is the only way to hold down the impact and .75 would be possible. This is why at 11:00 AM EST the Bond markets changed all the smart money wasn't moving to stocks they were moving out. How this impacts the F Fund I have no idea but home values will drop and selling a home would be almost impossible right away.

 

[Show-me]

Also, which bank will fail today? Friday is FDIC bank take over day.

AP
Silver State Bank in Nevada is shut
Saturday September 6, 1:29 am ET
By Marcy Gordon, AP Business Writer Regulators shut failed Silver State Bank in Nevada; 11th bank failure this year

WASHINGTON (AP) -- Regulators on Friday shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development.

It was the 11th failure this year of a federally insured bank. [SIZE=-2]ADVERTISEMENT[/SIZE]

Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.

http://biz.yahoo.com/ap/080906/bank_closure_silver_state.html

 

[Braveheart]

AGG hit the top of the Bollinger bands and closed down on Friday. If this deal goes through and the FED cuts .50 basis points at the same time, wouldn't this move the smart money into stocks? Second question, wouldn't it be better to stay invested in the US markets short term, rather than overseas?

There are many reasons why the Fed will have to cut rates.

1. Home Loans on the 15 & 30 year will spike

2. There will be a housing market crash where no one will be able to buy a home therefore no one will be selling or if they do it will be at an even higher loss.

3. The Stock Market won't like this knowing the Fed is now taking on just about everything and there will be more fear so I see this at first as a sell across the board.

4. The dollar will drop again which would look like a good move for the I Fund investors but the World markets will not like this either.

5. The Bond market somehow can take a hit on this. Many thought the big boys were moving to stocks today and that was why the Market turned. It was a head fake they weren't leaving the Bonds they were packing their bags and sitting this out and the Bond volume was still not that high.

6. Usually on a Rate cut the Bond Market will do fine but I don't see that here at first.

7. What happens next ?

 

[Braveheart]

AP
Silver State Bank in Nevada is shut
Saturday September 6, 1:29 am ET
By Marcy Gordon, AP Business Writer Regulators shut failed Silver State Bank in Nevada; 11th bank failure this year

WASHINGTON (AP) -- Regulators on Friday shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development.

It was the 11th failure this year of a federally insured bank. [SIZE=-2]ADVERTISEMENT[/SIZE]

Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.

http://biz.yahoo.com/ap/080906/bank_closure_silver_state.html

Right on schedule the FDIC Friday. This is why I don't like leaving so much on the table at the close on Fridays last week I posted to Steadgain that something was wrong and I smelled a rat. All this low volume even on 350 point down days or 200 point up days. There are so few in this market since June it's as if Oil was their rock and now that is lower but on a lower dollar and demand with the next Hurricane Oil will be on the move again.

We saw a sell off in Gold etc the past 2 weeks it appears there is less money invested here than ever. I could be wrong but the big boys are well positioned to move in and apparently they think we have a long way down before they do.

 

[Show-me]

Hey, look the early birds are out.

Morning, Braveheart.

Nice summary. I absolutely do not understand the bond markets or the F fund. It is completely alien to me. The only bits I get are from Rick Santelli on CNBC and I mainly watch him to see him slam Steve Leisman. lol

 

[Show-me]

Right on schedule the FDIC Friday. This is why I don't like leaving so much on the table at the close on Fridays last week I posted to Steadgain that something was wrong and I smelled a rat. All this low volume even on 350 point down days or 200 point up days. There are so few in this market since June it's as if Oil was their rock and now that is lower but on a lower dollar and demand with the next Hurricane Oil will be on the move again.

We saw a sell off in Gold etc the past 2 weeks it appears there is less money invested here than ever. I could be wrong but the big boys are well positioned to move in and apparently they think we have a long way down before they do.

I have gotten my ass handed to me in the silver and oil market. I'm almost to the point of capitulation. The dollar rally has thrown a real wrench into my planning.

The rate cut will be a huge news maker. Will they applaud or boo is the question. Bailing out more lender that will not lend money to fuel the economy. The lenders are too broken to throw credit around and that is going to ruin the economy. Christmas is going to be the show to watch this year.

 

[Braveheart]

I have gotten my ass handed to me in the silver and oil market. I'm almost to the point of capitulation. The dollar rally has thrown a real wrench into my planning.

The rate cut will be a huge news maker. Will they applaud or boo is the question. Bailing out more lender that will not lend money to fuel the economy. The lenders are too broken to throw credit around and that is going to ruin the economy. Christmas is going to be the show to watch this year.

I would think Oil will now move since the dollar will take a hit. Crisis is when Silver & Gold have real value. Stocks and Money are paper Silver/Gold etc will always be around but a Company or Bank may not. I remember a few weeks back someone bought all the Gold Coins from the Treasury. To me thinking back who could afford that you or me no way but another Country could maybe a Country that has plenty to spend since they made Billions on Oil. Just thinking out loud !!

I just wonder why did the Fed jump in this weekend does that mean there is something worse next weekend. We are Friggin screwed

 

[Braveheart]

I have gotten my ass handed to me in the silver and oil market. I'm almost to the point of capitulation. The dollar rally has thrown a real wrench into my planning.

The rate cut will be a huge news maker. Will they applaud or boo is the question. Bailing out more lender that will not lend money to fuel the economy. The lenders are too broken to throw credit around and that is going to ruin the economy. Christmas is going to be the show to watch this year.

Gold is dropping on Deflation......China owns $340 Billion of Fannie and Freddie mortgage-backed securities. So they are a part of this as well. Monday is going to be a horrible day. This is a get the hell out of the Market fast day.

 

[Corepuncher]

Monday is going to be a horrible day. This is a get the hell out of the Market fast day.

Braveheart, what are you basing this on? Because all the after hours action I see are up significantly, signaling a big rally on Monday.

Interesting read from Cramer:

http://www.thestreet.com/story/10436132/1/cramer-fannie-freddie-takeover-changes-the-game.html

He basically says yeah Fannie and Freddie will go under, but the Govt. backstopping mortgages can then change terms and help people not go under, if I am reading that right. Bonds may deteriorate rapidly...and rates will rise rapidly as well. Not good for Car loans, NEW home loans, etc. Bad for dollar??? Oil back up ??? Goldman correct??????

 

[airlift]

CP,
I read the Cramer article and I see your point. Perhaps Cramer is right but the exact timing is unknown. Meaning, that the insecurity of the event could create a deep temporary drop in the stock market and later we could see a comeback. I don't know...!!??