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BAC Stock Up On Various Rumors (Or For No Reason At All), CDS Wider For The Day
Bank of America stock up 2% at last check, while CDS is 5 bps wider at 170/180 bps. Someone please explain that one to us.
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Banks only go up
2 days ago it was announced that John Paulson hedge fund has bought 168 million shares of BAC last quarter.
As he is the guy who got $ 3 billion by speculating on the bank problems due to subprime, a lot of people might follow him now. That has already given John Paulson a nice profit on paper...
he's already out
Link please?
link provided after he closes his new short position
In related news:
* Housing may present a problem for US
* Black man elected president
* Goldman rapes world
* Man walks on moon
* Japanese planes bomb US military base in Hawaii
sorry, but you deserved that. you think 2 day old news that was WIDELY reported in REAL-TIME is hockey-sticking a a stock up at 2pm two days later?
FYI::
http://www.thedeal.com/dealscape/2008/07/john_paul_starting_fund_to_inv.php
He's actually been in since July of 2008. So uhh... he probably hasn't made out too well. Cost averaging maybe.
Heavy Capital Structure Arbing
BAC sell off after hours, surrendering most of its gains..
GS is getting ready to debase bofa...
Tyler -
As per your reuquest.
The stock is up because there are more buyers than sellers.
Impossible concept :)
Buyers are less price discriminate than the sellers.
That's why you are a pizza delivery man. How do you know there are more buyers?
Just go deliver your pizza, please.
How do I know?
It's up 2% thats how I know. I could care less if it's a computer program or Tim Geithner or whoever.
Stocks go up when there are more buyers than sellers. Stocks go down when there are more sellers than buyers.
Someone/Something is buying it at this price. Whether it lasts is anyones guess.
Hope this helps.
goldman automated buying program in overdrive
Until we have guys like Black back as regulators nothing will
change. We just
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target="_blank">good articles 4 slow news day ..http://www..
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It does not help because you haven't said anything.
You must work for the Fed.
No, I am a Pizza Delivery Man. I thought my Moniker/Avatar made that abundantly clear.
I appologize if no one on ZH likes my response but it is what it is, and thats all it is, and all it will ever be.
Chuky, calm down, saying "there are more buyers than sellers" is a funny way of saying, "no f*cking clue". relax.
as for Pauslon, he is pulling a fast one on the money-followers. if he wasnt out of most of his stock already, he definitely was selling into the 13-F idiots.
> .. clue
Some days, the buyers like the stock so much, they pay more for it.
WOW, because you say "IT IS WHAT IT IS" than we should all accept it, right? Very nice way of describing your point.
I guess you brought the machines back from vacation, let them breathe for moment come'on "pizza man"! They will overheat...
And because the market was down some 160 points at some point, you gave them an extra hour, going to work at 2pm instead of the usual 3pm. Here is the chart http://finance.yahoo.com/echarts?s=jpm#chart2:symbol=jpm;range=1d;compar...(14);charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
And BAC moves 3% in 30 min, from -1% to +2% from 2pm to 2:30pm, but your story goes that at that 30 min "a lot of buyers just showed up" and snapped that little jewel, BAC.
I never said anything about when buyers showed up or at what price BAC was trading at any specific time.
All I said was BAC is up because there are more buyers than sellers. I hate to tell you but thats why BAC is up.
And you shouldn't accept anything I say or trade based on any comment or post by anyone anywhere. Do your own due dilligence.
*And the only machine I turned on was the pizza oven*
this is dumb since a huge sway either way short term in a price can 'convince' a new price regardless if there were more buyers or sellers for the whole day
U are wrong there is more money looking to buy BAC, it could all be one traders or ten traders as opposed to 1M sellers. Pizza man
More shares were bought at a higher price than shares sold at a lower price.
Jeez.
I figured people here would understand what I was saying. I guess specificity is required down to the ABC's on any comment posted here huh?
another dumb message - are these stocks growing on trees somewhere? buyers and sellers equal 1 to 1 unless you got some naked shorts in the mix
Please ask Tyler to explain VWAP to you.
You're equating price with volume.
obviously , pizza here is talking about on a very short time horizon there is more buying than selling hence price goes up. whether these represent actual entity 'buyers' or 'sellers' on various other time horizons has not been defined in the comment. yes, every tick is a buyer and a seller of some nature, obviously
You can't have more buyers than sellers.....for every BUY, someone is SELLING. There are equal amount of buyers and sellers. The buyers are more aggressive on pricing the stock.
Sure you can. You can have one buyer for every 32,000 sellers. You know, like GS/Fed vs. the rest of us.
The number of shares bought and sold are what have to be equal.
TD,
You are a victim of you own success. Comments like these are just scary. Time to separate the wheat from the chaff. And to traderin please be careful what you type because it may, or in this case will, prove to be an embarrassment.
> a computer program
Also when there are more computer programs, they buy more. And the price goes up. Not to sound like a dick or nothin, but the computer programs are so nice.
You'd make a great scientist.
theres the same number of buyers as sellers always (otherwise no trade).. just the buyers willing to lift higher offers.
wrong. there are the same number of buying transactions vs selling transactions, but the imbalance of buyers vs sellers is what causes stocks to move one way or the other. which ever side is more indiscriminate in terms of their entry or exit prices determines which way the market goes.
Sort of.
Price movements are a function of the demand/supply imbalance not buyer/seller imbalance. You can have only one buyer (e.g. GS/Fed) trying to buy more shares than there is available supply at a given price. When the number of shares in demand exceeds the number offered, the price moves up and vice versa.
you could have one joker buyer ruining the price for the rest by trying to fill large market orders with no discretion... this can cause panic
same can happen on sell side
Nice work Papa John, hows your shop running, do you see people ordering more pizza's? Pls update and tip us if you get any news from BAC Wifes....and Geithners Mistress in DC
Shops running great, pizzas shooting out the door.
If I receive any news on BAC Wifes/Geithner I will immediate inform ZH so curious readers like yourself can stay well informed.
how do u explian that shoot up when there is no buyers or seller (no volume ) u dumb biacth
I would guess magic.
No buyers or sellers? Never seen that.
Reminds me vaguely of the Meredith Whitney comments on GS that sparked the July rally. Could be the front for next week major up leg?
Master Trust data released at 2pm. Citi, BAC, etc showed improvement. Improvement being a very relative term.
Take the profits, give the losses to Uncle Sam. Sounds like a good business model to me.
They are probably going to fire Ken Lewis!
Yeah - Its really weird that CDS and stocks don't trade with a 100% correlation every single tick on every single day.
It must be a conspiracy!!!
No one used the 'c' word. It indicates a stock up on speculation while on the other side you have people more bearish. So investing is becoming as polarized as everything else in the West.
BAC is up 2% -- Big hairy bush.
almost guaranteed that paulson is already selling. since he bought in Q2, he probably paid $10-11, so he's up 50%+ right now. sallie krawcheck is a dumbass - anyone willing to follow some chick pcs banker into this pig deserves to get his face ripped off.
Tyler at least you could call them by their prober name, that be Burden on Americans.
Well, the real answer is the stock market is for suckers, while the CDS market is for pros (wall street gang). Plus while they are selling it's better for the market to be high, while they move their money from BAC stock to betting against it on the CDS market.
CNBC needs to earn their money and pump it higher for higher return for the ones who are currently selling.
It's because I shorted BAC yesterday.
When Chenault got on tv and talked upthe delinquency rates ticking down -- this mem has become the sell side mantra. Let's see how long the shills run with this...banks will need this to jsutify the reseve releases into the 2H to offset the lower trading profits so sequentials don;t look so hrorible. WFC took pole position whenthe short ban acame on. The C upgrade by ML this morning is a proxy upgrade based on the chenault meme
Paulson & Co. is buying BAC stock not BAC bond.
Whats 5 bps wider when the bid offer is 10bps? Anyway do you seriously believe any CDS guys are still at their desk on an August friday afternoon ?
higher Risk - higher Return...
Andy's absolutely right, I was long puts on BAC and Paulson's 13F came out and obliterated my position... now the banks are utilizing that momentum to push BAC up... which gives strength to the rest of the dumdum financials. Funniest thing is that BAC was the weakest financial, immediately selling off when any support was broken and then being ramped back up.... with the way it looks now though we got a bull flag on it.... *shrug* Time is on my side.
Correct, same situation here.
18.50 in Oct. Just under 18 in Dec. No real technical level at work there.
Speaking of time - Decay is our friend over this weekend. That is partially the reason for some of the option activity...
Wait 'til Paulson discovers that GLD has no Gold and BAC has no Green. Hahahaha!
its becuase Paulson is buying/bot a metric ton of the CDS, outside of the equity "kicker" haha
abnormal market, rogue robots and overexcited teen traders gunning for infinity and beyond. I found the best explanation over here - http://www.psyfitec.com/2009/07/bacteria-boids-and-market-instability.html
I read this blog every time I feel the brown noise might effect my decisions or just generally trigger happy. It helps!
welcome to squeeze city. bring your juicer
Yup my point exactly it "moved" half of the size of the bid offer so its only the quotes that moved .. 10bps on a 100ish name is kinda wide, now you know where GS profits come from..
Guessing one will catch up with the other. BAC getting their way with whatever pipsqueak in court coupled with duplicitous commentary from a hedgie of all people= common going up. A quick look under the hood by people who really have some skin in the game= CDS wider.
2:30pm.....up, up and away we go! How predictable.
No one will explain it to you TD, or to any of us. Then we poor prolees would be on the inside making money. TPTB would never allow it.
We've always been at war with Eastasia...
But I thought we were at war with Oceania, and Eastasia were our allies?
buying program firing on all cylinders
Until we have guys like Black back as regulators nothing will
change. We just
good articles;
target="_blank">good articles 4 slow news day ..http://www..
hat tip:
href="http://www.iamned.com" target="_blank">finance news & finance opinions
I could tell you, but then how would you ever learn for yourself?
Because if things get too shaky China will put the market on limit down for 3 days straight..
yep... good point. they could do it with the flick of a switch too.
it also possible that one of the underdogs rolled a new "deep thought" online:
http://en.wikipedia.org/wiki/Minor_characters_from_The_Hitchhiker%27s_Gu...
it will provide the ultimate answer to reward, risk and cake. Will ensure you could max your reward, ignore any potential risk & eat your cake.
Just as a side note.... this sets up for a murderous decline next week.... gonna be volatile :)
Did the VWAP robot show up today?
this is fucking insane...wow
everythign going vertical
Until we have guys like Black back as regulators nothing will
change. We just
good articles;
target="_blank">good articles 4 slow news day ..http://www..
hat tip:
href="http://www.iamned.com" target="_blank">finance news & finance opinions
How in god's name is the VIX down?
Rumor mongering that GS looking to acquire BAC...
Yeah, I laughed when I read that too.
ROFL
pussy shorts covering before the bell.
this is why the market keeps going up - shorts don't want to wear too much risk over the weekend.
brave longs hoping to get the money out of the pussy shorts
Paulson loaded CDS's to 2x his BAC common to hedge, red herring?
I expect BAC to start reporting losses again next quarter, as there will not be sufficient cash flow to absorb even the slowed pace of writeoffs. What that triggers in markets, as well as in the discussion on the success of the measures that have been taken, remains to be seen. Might depend on whether it appears as a new contagion or an isolated failure on the horizon. Not a prediction of same, but if we have now reached the point where "too big to fail" has been taken out of the equation, and BAC can be allowed to sink without taking the rest of the system down with it, Bernanke will be due a Nobel Prize.
Come on guys...Am I the only one who knows what's going on....
one word: WOPR
The WORP called me at home today regarding the BAC trade:
Greetings Professor Falkin.
Do you want to play a game?
I called the eod rally but the gutless morons here killed the post, just because I said TD would hang himself
You are being deprived of world class market calls
If you quit posing as Anon. your postings won't get killed.
Only a fool would post under his real name. You have not been paying attention. I have seen the power of my government. There is no way I am posting anything anywhere without hiding my identity and my IP address.
Wow, poor us.
Errr.... you're forgetting the fact that they want the banks to fail so they can print more money (in otherwords, produce more debt)
BREAKING NEWS!!!
Apple introducing its own payment system.
Trade Apples instead of Dollar...Apple Researve Of the US of A.
OIL, GOLD EVEN REAL APPLES WILL BE DENOMINATE IN APPLE NOTES
JOBS PHOTOS on the note....:)
OH! no surprise, they have more cash than FED...
It's funny until hyperinflation hits, then we'll see what really has value. I guarantee you it's not a piece of paper that clearly identifies itself as debt top and center.
I'm confused why gold should still have value under inflation. I don't doubt that it will, based on nothing more than people's expectations. But what is the intrinsic worth of big hunks of soft metal?
What is the intrinsic worth of pieces of paper featuring pictures of dead bearded men?
At a minimum, gold cannot be replicated ad infinitum.
You've all missed the other news - BOA got a judge to freeze 1 billion of assets held by Colonial as assets owed to BOA. Since the FDIC just took over Colonial, BOA just got funded a cool 1 billion courtesy of the Chinese via the US taxpayers.
That was covered in this morning's comments on the Colonial/BBT post.
The 2pm pop was the comments on the Master Trust data released by Citi (as stated by earlier comment). Details in the doc.
http://www.thebankinggroup.com/citireports/recentreading/Credit%20Suisse.July%20Master%20Trust%20Data.pdf
this is old one 2008 data NOT 2009
Wow, nice catch - and my miss. Ran a little too fast with that top Google search that looked like it had the story that I saw earlier on the RAN Squawk headlines. Probably should have caught the fact it says August 15th and not 14th also.
mean reversion and any sense of 'normalcy' only work within certain odds... now especially (banking crisis), but perhaps it truly has always been this way. BAC and credit spreads definately included...
BB&T, RF, and other assorted garbage was ramped today.
Simple rotation out of commodity stocks and into financials.
Next week, they will run the financials, then sell, and pile back into oil, fertilizer, steel stocks, etc.
Just money moving from one Keno Table to another.
deleted
could be due to 13F's flying in. we mentioned on our twitter earlier that there were a shitload of hedge funds that picked up BAC in size over past quarter.
Im off to fabulous Less Vegas...Have a great weekend my faithful warriors...
About to ask for more bail out funds.
TD is just funny
Why would anyone purchase a CDS on BAC anyway? There's no chance of default, I thought Timmy & Ben made that abundantly clear?
Given as backdrop that nobody gets everything right forever, and eventually the market discredits everyone, I still cannot figure out why John Paulson, Louis Bacon and now George Soros are loading up on BAC and other bank stocks. Clearly they see something that I do not see. RF is even a greater mystery, as by all accounts it has substantial negative equity. If negative equity in a bank does not matter, nobody told me, nor can I find any exceptions in the FDIC charter. Apparently, though, deposit-taking institutions now have a degree of flexibility and forgiveness never before imagined.
It is possible that these hedge funds are already out of their positions, having been in merely for the July ramp. If so, congratulations to them (from a nobody) for their courage.
I cannot accept that they are playing this as a long CDS/long stock-as-hedge play. All of these traders are smart enough to know that "next time" none of the CDS will be paid off if things come to that. Nobody will survive the next downdraft if it in fact arrives on the scene.
Indeed, CDS on major institutions are like the proverbial Nuclear Trade (What do you do if news comes that the Russians launched a nuclear attack against the US? Buy. What the heck.) Thus, there is virtually no risk writing AIG-levels of CDS on BAC and other major banks (okay, maybe we can survive the loss of C): either nothing happens and you get to keep the premium, or all hell breaks lose and everybody---including the CDS writer---is vaporized.
What I am left to assume is that Paulson et al not only expect BAC and the others to survive, but even to prosper. Maybe they believe TG and BB will stop at nothing to ensure the survival of these banks, so a trader can merely piggyback off the taxpayers' unlimited largesse. Maybe they just like the yield curve and overdraft fees.
Perhaps they actually do believe the worst is over, though I am at a loss to understand that myself. I cannot see them joining the likes of the market cheerleaders, hoping against hope or hoping on a hunch that all will return to that fictional land of 'normal'. Rather, I see eminent practicality mixed with a dose of cynicism. Personally, I do not know the math that adds up and results in an ongoing concern in the form of RF or BAC or for that matter a spending consumer or a recovering housing market or a stabilized CRE market or even the survival of the CP in China when the latest waterfall of loans goes rancid. I remind myself, however, that these traders are definitely not Goldman Sachs in-house traders, who not only are possessed of TBTF'ness, but also can rape and pillage and front run GS' customer order flow or its capital markets desk. No, the likes of Paulson and Bacon and Soros have real talent, not locational talent that would flail helplessly if forced to work on the outside of that undeserved privileged address at 85 Broad.
I am left, I suppose, with the realization that Paulson, Bacon and Soros are who they are, and I am who I am, and that is why they understand and I do not and probably never will. It is humbling. Still, I don't mind missing the bank run, as I continue to believe---no doubt foolishly---that a bank run of another sort is in all of our futures. In the meantime, I await enlightenment if and when word leaks out of what these traders are doing and why (other than making a heck of a profit).
There is a dwindling cadre of still sane folks who come to ZH or Market Ticker or similar sites for information they believe in. The rest of the market has either joined the cult of eternal recovery or died trying to force what they think is reality on to a market that has grown weary of admitting its own sins.
what you're totally missing is they bought 4-5 months ago dude!!!!!!!
paulson bought most of his bac at 10 bucks in the secondary offering and I suspect the same thing in RF. they don't move the market if they can buy the secondary. now they're dumping at least 20-50% the past few weeks IMO and the sheep will learn that a few months from now
Realistically, what's the worst that can happen to BAC?
They will lost 50B on bad loans? Guess what's going to happen? They will get a check for 120B. People who realized that have been buying it since about 6 (crazy run since $3 level, but it looked like it was there to stay)
What's the best thing that can happen? They make some cash, cheat some more on their balance sheet and no one will raise an eyebrow?