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Frontrunning: November 3

Tyler Durden's picture





 
  • Wall Street cries "Feed Me" or the world will end (Bloomberg)
  • RBS, Lloyds get $51 billion in second bailout (Bloomberg)
  • Even as Europe raises 2010 growth forecast (AP)
  • Mort Zuckerman: Forget inflation, deflation is a bigger danger (USNews)
  • States are pondering fraud suits against banks (NYT)
  • Retailers "dodge bullet" with CIT November bankruptcy filing (Bloomberg)
  • Preparing for another EPS beat: Johnson & Johnson cutting up to 7% of workforce (AP)
  • GMAC, CIT provide more reasons to roll up TARP (Reuters)
  • Australia increases benchmark interest rate to 3.5% (Bloomberg)
  • Monthly bankruptcy filings increase 7% in October (WSJ)
  • Buffett buys Burlington Northern for $100/share (Bloomberg)
  • Floyd Norris on Fannie and Goldman: Worst idea of 2009 (NYT)
  • ADM profit falls 53% as prices and demand fall (WSJ)
  • Bernanke housing gamble may bring pressure to extend Fed aid (Bloomberg)
  • India buys 200 tons of IMF gold for $6.7 billion, lifts holdings to 557.7 tons (MarketWatch)
  • Slide in fees crunches Och-Ziff (WSJ)

 

 


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Tue, 11/03/2009 - 10:00 | Link to Comment Sardonicus
Sardonicus's picture

Buffett has officially lost it paying a 25% premium for BNI which has over $10 Billion in debt.

BNI is a big coal mover.  Cap and Trade will crush them if the economy does not.

This is worse than the bet he made on Irish banks in my opinion.

Tue, 11/03/2009 - 10:06 | Link to Comment AN0NYM0US
AN0NYM0US's picture

Buffett has lots of coal intensive energy interests which C&C will devastate unless he has an offset = Railroads

Tue, 11/03/2009 - 10:07 | Link to Comment Anonymous
Tue, 11/03/2009 - 13:29 | Link to Comment Careless Whisper
Careless Whisper's picture

BRK.A has a p/e of 52. Seems rather high but I'm not about to argue with the market.

Just when you thought bankstas couldn't do any more damage by destroying neighborhoods and families by foreclosing and refusing to do workouts... they have a new, better plan for even more destruction. It's called WALKAWAYS:

(these foreclosers: WFC, GS, and USB are all Warren Buffet holdings)

http://www.daytondailynews.com/news/dayton-news/a-new-crisis-lenders-abandon-properties-352642.html

 

 

 

Tue, 11/03/2009 - 10:00 | Link to Comment AN0NYM0US
AN0NYM0US's picture

Bloomberg to Matt Rose CEO of  BNSF on Buffett's aquisition of his company

Is $100/share a fair price?

yes

Who were your investment advisors?

Goldman Sachs & and Evercore

 

Tue, 11/03/2009 - 10:07 | Link to Comment deadhead
deadhead's picture

Preparing for another EPS beat: Johnson & Johnson cutting up to 7% of workforce

 

Oh, that's good.  Very, very good!

Tue, 11/03/2009 - 11:04 | Link to Comment spekulatn
spekulatn's picture

+100

 

"MARK IT ZERO, DUDE"

Tue, 11/03/2009 - 10:15 | Link to Comment JackTheTrader
JackTheTrader's picture

I like Buffett's comment this morning on CNBS that this was as much of a bet on America returning to prosperiety as it was on railroads.  Hummmm...

Tue, 11/03/2009 - 10:25 | Link to Comment Rainman
Rainman's picture

I suppose that once you've reached the age of the Oracle, you can make such a bet with full knowledge that you likely won't be above ground to get paid anyway.

Tue, 11/03/2009 - 10:25 | Link to Comment nhsadika
nhsadika's picture

Buffet the ever Patriot - more like AMERICA SUPPORTING BUFFET'S BETS.   WFC and AXP and GE are 3 of his holdings which ALL RECEIVED TAXPAYER BAILOUTS -- TARP.

GE notably would be bankrupt / out of business if it wasn't a "bank" and didn't receive TARP.

Corporate socialism / Fascism and Buffet has the nerve to suggest his undying support for America.

Tue, 11/03/2009 - 10:52 | Link to Comment Jim B
Jim B's picture

+1

  He makes investments in several "Tarp recipients to be" last fall and then goes out flacks for the bailout bill.  At that point, I lost any respect I had for Buffet.  Hey taxpayer, make my bets golden!

Tue, 11/03/2009 - 13:16 | Link to Comment Careless Whisper
Careless Whisper's picture

make that 5 of his holdings. don't forget US Bank and GoldmanSachs.

Tue, 11/03/2009 - 10:26 | Link to Comment heatbarrier
heatbarrier's picture

Gas pipelines, railroads, it seems to me Buffett is really going after right-of-way for fiber optics. US is behind broadband penetration,

http://news.bbc.co.uk/2/hi/technology/8255695.stm

Tue, 11/03/2009 - 10:34 | Link to Comment rhinotrader
rhinotrader's picture

One more trick (Buffett) the market pulls from it's sleeve.

Tue, 11/03/2009 - 10:42 | Link to Comment chinaguy
chinaguy's picture

both SPX and FX down WTF?

Tue, 11/03/2009 - 10:47 | Link to Comment rhinotrader
rhinotrader's picture

Futures were down 12(S&P). Always something coming in to prop mkt up.

Tue, 11/03/2009 - 10:53 | Link to Comment Edna R. Rider
Edna R. Rider's picture

I'm going to place a large bet on America too.  Sometime in the fall of 2010 when the SPX is closer to 500.  I'm not as smart or as patient as Buffett so I have to time it a little better.  With a PE of around 50 BRK.A seems like a decent short though, which I hadn't noticed until he got himself on TV this morning.

Tue, 11/03/2009 - 10:54 | Link to Comment Anonymous
Tue, 11/03/2009 - 10:54 | Link to Comment Anonymous
Tue, 11/03/2009 - 10:57 | Link to Comment lizzy36
lizzy36's picture

wtf - who/what is jamming SPY?

Tue, 11/03/2009 - 11:10 | Link to Comment deadhead
deadhead's picture

my contact says jpm....locals in the pit are short.

 

Tue, 11/03/2009 - 11:13 | Link to Comment deadhead
deadhead's picture

i hear now at 10:10 eastern time that gs is trying to move market down as well as another player...we shall see

Tue, 11/03/2009 - 11:15 | Link to Comment Bearish Spirits
Bearish Spirits's picture

Your contact is a liar and a traitor.  JPM are the bestest commercial bankers in the country and would never stoop to jamming the markets.  The market is looking ahead "5, 10, 20 years from now," as Buffett said.  :-)

Tue, 11/03/2009 - 11:29 | Link to Comment heatbarrier
heatbarrier's picture

Absolutely. Efficient Market Theory still rules.

http://online.wsj.com/article/SB125720159912223873.html?mod=WSJ_hps_MIDD...

Tue, 11/03/2009 - 11:31 | Link to Comment Edna R. Rider
Edna R. Rider's picture

OK, that was seriously funny.

Tue, 11/03/2009 - 11:43 | Link to Comment Gilgamesh
Gilgamesh's picture

Yes.  JPM is also short Gold.  This must just be a headfake!  1074 and green shooting up.

Tue, 11/03/2009 - 11:53 | Link to Comment Hephasteus
Hephasteus's picture

Nothing evokes absolute unshakable faith and response-ability like Goldman Sachs. This is total defamation of character and bearing false witness and an afront to our pride evoking American symbol!!!

Tue, 11/03/2009 - 11:12 | Link to Comment Bearish Spirits
Bearish Spirits's picture

Better not be too inquisitive.  We're not supposed to question why the market would shoot up after JNJ announces layoffs and Buffett buys a railroad. 

Most likely some weird algorithm that magically got switched on today which correlates SPY with the Transports.

Tue, 11/03/2009 - 11:41 | Link to Comment Anonymous
Tue, 11/03/2009 - 11:42 | Link to Comment Anonymous
Tue, 11/03/2009 - 11:00 | Link to Comment Edna R. Rider
Edna R. Rider's picture

Not me.  I'm jamming Potash.

Tue, 11/03/2009 - 11:27 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

re: Bernanke and MBS:

"“When the Federal Reserve stops buying mortgages, is there private capital to substitute?” Laurence Fink, chairman and chief executive officer of New York-based asset-management firm BlackRock Inc., said in an interview with the Financial Times’ Martin Wolf broadcast on Bloomberg Television Oct. 28. “At the moment, it is not certain.”"

That is a polite way of saying NO!!!

Fink would know, it is his cronies who are doing the buying for the Fed.

Tue, 11/03/2009 - 11:30 | Link to Comment lizzy36
lizzy36's picture

ghost, saw that and thought of you immediately.  linked to the whole bloomberg article in FOMC post. 

thanks for all your color on this issue.

Tue, 11/03/2009 - 11:51 | Link to Comment McGriffen
McGriffen's picture

if risk-adjusted yields hit 10%, i bet even Bill Gross couldn't turn that down (!)

Tue, 11/03/2009 - 12:55 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Oh, there are buyers of Fannie/Freddie MBS at a price.

Just not today's price.

Tue, 11/03/2009 - 11:49 | Link to Comment McGriffen
McGriffen's picture

The NYT article on state attorney generals' plans to sue the banks for mortgage lending misses a key element.  How will they sue mortgage firms that went bankrupt?  For every WM absorbed by JPM (and Countrywide by BAC),  there were many more Ameriquest and New Century outlets running their issuance machinery from home base in Southern Cali.

It's the non-bank mortgage finance firms who provided the greater collective volume on crappy sub-prime and AltA mortgages.  Which of course were sold onward (then sold again) and servicing released to a 3rd party firm. Nearly 0% risk, what could be better in a lightly-regulated segment.

Tue, 11/03/2009 - 12:24 | Link to Comment cymro33
cymro33's picture

Would you play Reggie Jackson in this World Series?.  Buffett has been striking out for a long time and has to rely on Govt bailouts to save his as_. I guess he likes bubble TV and the young girls who interview him. Shareholders still believes in him and that's what counts. It's his marbles.

Tue, 11/03/2009 - 12:29 | Link to Comment Mark Beck
Mark Beck's picture

Buffett and a RR. Hmmm.

This move was predictable and it is a bet against recovery. Buffett is betting on very high transportation costs (oil) and wants to own channels for food distribution and raw materials, and he gets both with BNI. With high transportation costs trucking will be at a premium.

Buffett's only problem, which my guess has already been solved, is using somebody elses money to pay for RR repair, upgrades and infrastructure, stimulus 2 perhaps, or a new infrastructure revitalization legislation. He must have this one already in the bag.

Now he needs to link up with a cross provincial Canadian RR, and bingo, hello weak dollar. Once he controls the transportation channels he will use this leverage to buy coal interests, mining interests and food production. His approach is straight from the Rockefeller play book.

Warren is a chip off the old block.

Tue, 11/03/2009 - 20:32 | Link to Comment Rainman
Rainman's picture

Excellent analysis, MB. RR and oil were how the old boyz made the bigggg greens.

TARP II is the big moneymaker and the boyz see....ahem, KNOW.. it's coming. RR upgrades, bridges, transportation corridor spending. Just like the Hoover Dam and TVA projects.....put the sheeple to work with government jobs, picks and shovels, and they won't bitch so much and unemployment goes down before the '10 election guts the Dems.

It's in the playbook . A crisis opportunity. Thank you for this insight.

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