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All You Need To Know About The Market
The following excerpt from a commentary from Reuters/LoanConnector discussing the trading in Citadel Broadcasting loans is all you need to know about (i) market dynamics and (ii) why you probably have to be a schizophrenic to be trading in this market. Not much commentary needed, as no commentary is needed to explain the irrational exuberance that is driving the market parabolically higher as such logical dominates.
(NY) Citadel's loan climbs amid missed payment, market demand
September 16, 2009 - Citadel Broadcasting Corp's term loan has moved up approximately seven points on the week, sources said. The loan was quoted today at 65-67, up from 58-60 a week ago. The company missed a convertible bond payment due yesterday.
Citadel is driving higher as a result of credit quality and market dynamics, said a trader. Any credits nearing events that could trigger a restructuring or that are heading into bankruptcy are going up, aided by investors chasing low dollar names, he said.
Summary - bankruptcy is now a positive catalyst. As we have been saying for a long time, with the Federal Reserve now officially having made a mockery out of the investing process, trade at your own peril.
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This is fucking obscene.
I lol'd
Let these idiots lose their money. It's fun to watch from the sidelines!
Doesn't bother me in the least.
Of course, I now get all my market insight from watching shares of DRN trade.
Up 3X since July! Knowledge is a financial liability in this market.
My capital went into hiding a long time ago, and it will stay there until companies tell the truth, markets run on sanity, fundamentals hold sway, and currency debasement ceases. Thank goodness for the Bank of Gaea and the National Park System.
On another note, it is interesting to ponder the future of any continuation of obsession about credit rating by individuals, when it so obviously means nothing at all to anyone or anything above them on the food chain.
Your capital will be in hiding forever.
For the rest of my lifetime anyway.
Not sure how to break it to my five year-old daughter that her economic future has likely been mortgaged away.
apes on horses, it's a madhouse. A madhouse.
I am not sure I can agree with you on this.... I think I would like to see an objective point of view. Ben Dover's analysis would be refreshing..
The ultimate Buy list came out yesterday. It was titled something like "Top 20 BK Candidates." Don't worry about that, just start chasing. Be warned - the stocks are no longer at their lows. GS, JPM, et al have frontrun this positive news release by already upgrading them to Gluttonous Buy.
In trying to impart negativity to EVERYTHING, you are diluting your own message. For the senior secured term loan, a restructuring or bankruptcy could INDEED be a positive - cash flow to junior debt is shut off preserving cash at the company, the term loan could get a higher interest rate, fees and/or in a bankruptcy own equity in the company (with the junior debt wiped out). ALL of the above would be big positives.
I don't have the details of Citadel, but you would be well served from not trying to negatively spin every damn story out there.
I appreciate your site and insights, but more and more I am ignoring your negative rants and come to this site for the data that you collect and post.
You can rest assured that if and when an investment decision in today's market is driven by fundamentals, we would be the first to point it out.
I completely agree with the fact that bankruptcy can be a positive catalyst for cheap debt, but for an industry like broadcasting and media, it is unlikely that a liquidation of such a heavily indebted company would lead to a significant pay out, certainly not enough to justify paying over 50 cents on the dollar for even senior debt. A restructuring is usually useful when there are multiple businesses that are nonsynergistic where splitting them up and using a sum of parts of those business would generate a higher market value. Not much to split up, since it is just a radio station, and you would assume they have economies of scale with advertisers.
I also dont know the full story, but it seems hard to fathom that it is a no brainer at 60 cents on the dollar.
You want the truth. You cannot take it!
How soon we forget the lessons of history.
Does anyone remember the bankruptcy of GM?
Does anyone remember if anyone got shanked on that deal?
Rumpelstiltskin had nothing over these guys, imagine trying to spin flax into gold, who couda' thunk it.
Schizophrenic or desperate....
What is really funny is that some people still dont recognize that there is a bubble in EVERY asset class!! Bonds due to artifically low yields, stocks with soaring P/E's, commodities with no supply demand proposition to justify prices. The only thing that doesnt have a bubble is the USD.
Wake me up when the spin cycle stops.
...that go for the Fluff cycle, too?
Whatever comes out of these gates, we've got a better chance of survival if we work together. Do you understand? If we stay together we survive... so when logging in to my Fido account this morning, I get this:
How the recovery might unfold
FIDELITY VIEWPOINTS
History tells us that an economic recovery is often as sharp as the recession that preceded it. With most experts expecting a tepid near-term rebound, there's a good chance these expectations are too low.
"may", "might" "if", "could", "should" the whole purpose of the coining of these words is to convey to the reader that
Fidelity doesn't know any more than a homeless neurotic on
his second bottle of Mogen David.
I am thinking that this market still has a lesson to teach people. If Goldman Sachs and the Fed can push FAZ down to $5, the financials should be able to be pushed up 25%. That should punish all the really un-American smart people who know banks are insolvent.
Now for the really selfish part, can uncle Ben and all the Goldman Sachs'rs please get this done before I go to Hawaii next month?
I can't help but thank bernanke. Since I've been keeping my money on the sidelines due to the insanity, I've managed to pay off all my plastic and pay off two student loans. Within the year I'll have paid of two more. I'm set on making good decisions now, not running back into the casino.
nice moves. suze orman just wet herself...
Opie & Anthony talk about how "lucky" they were to get in on the Citadel IPO:)
http://www.youtube.com/watch?v=tiggFtvs1tI&feature=related
It is this quote which I will keep from CNBS...
September 17, 2009:
"All the reports provided more evidence that a solid economic recovery was underway."
I'll be anxious to see if that will still seem like the case as we get close to or into the 4th quarter of this year. I like how CNBS has jumped from recovery might be forming, recession might be over, to it's over and it's solid all in the span of 3 data points and one week.
Hold Your Nose and Buy
By JIM CRAMER
About this article:
Nothing's more difficult than stepping up and buying some Marshall & Ilsley or Huntington Bancshares or Fifth Third or Regions when we read that it is precisely their kind of commercial real estate portfolios that are in the cross hairs of both the regulators and the defaulters. But these companies look to me like Hartford at $12 or Principal Financial at $10 or Genworth at $4. The capital markets were open and receptive to those three annuity/insurers, and I don't even think they are as good as the banks I listed because they don't benefit from the yield curve, which is bountiful and apparently will stay bountiful for now. And yes, these can grow their way out of their holes. The reluctance to buy these stocks is simply because they are crummy, but crummy's king here, which is nauseating to...
I'd like to point out, as an interested bystander to the fall of Rome, that investing has historically not taken place in stock markets, but by financing start-ups and funding mercantile/mercenary ventures. So for those of you with a stack of Au and Pb under a rock somewhere, the true market will turn around.
Not to contradict the above -meaningful daytrading/swing trading/investing LT may well be done in our lifetime.
Moral Hazard is the new Black Swan. It is kind of like being inside the picture frame and not realizing you are part of the picture. Once this realization begins to take place, i am afraid of how scary the market will become. With many small time and big time investors getting crushed again, the market will not come back for alot longer.
They found BEE today. Time to get ready to move on to the next one.
A couple thousand shares of SRS later, I watch as I lose points every day. Commercial RE was supposed to be the next big shoe to drop. Sine I already lost a small fortune, am I the delusional one or with the eventually trade in my favor?
Trading SRS is gambling, not investing. Unless you are a professional, this is not an appropriate strategy.