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Trade #2—The Corner Bank:A new Secretary of the Treasury is going to stick it to Wall Street under powers they already have in place under the Troubled Asset Relief Program (TARP). In 2009, the purchase price for toxic assets and more-preferred shares bought by Treasury under TARP is going to penalize existing shareholders, big time. Even if the Treasury buys above current market value, which is roughly 25 cents on the dollar, it is going to be far less than par value ($1), and the banks will have to take massive write-offs. By far, the worst of the big banks is Citigroup (C) -- the company is seen to have marked its lousy assets down less than others on Wall Street, and in reality, I believe it is worth no more than $6 to $8 a share, maybe. They also have growing problems with credit cards, and these will get worse next year, so pick up some puts on Citigroup. Recommendation: Bet against Citigroup (C). |
What are the five rules for constructing great short-side positions? Read on to find out.
10 Reasons to Use ETFs When Trading Options
How do investors and traders cope with a market that has fallen more than 40% in just one year and survive until greener pastures return?
The Bad News Victims of 2008 are the
New Victors of 2009
There were a lot of losing trades last year, but there were also winners for those willing to bet against conventional wisdom -- and this will be the case in 2009, too.
The 10 Dumbest Analyst Calls of 2008
This collection of calls has been easier to write than See Spot Run. My only difficulty has been restraining myself in order to not be sued, punched out or have my tires slashed.
Don't Stop 'Banking' on a Bailout
The Titanic is only just approaching the iceberg. And there aren't enough lifeboats handy for everyone who's going to need one.
