Icahn's Freeport McMoran Is Not Buying The Bounce
With Freeport McMoran at the top of the list of entities due to be downgraded to junk (in fact trading in credit markets with a 79% chance of default), it is perhaps not entirely surprising that yesterday's dead-cat-bounce is fading fast this morning as Carl Icahn's big bet turns sour-er.
it seems FCX stockholders are getting the joke...
Freeport-McMoRan Inc
(1739bps; Av BBB; Imp CCC)
The US copper and gold producer has seen its 5-yr CDS spread trading
at implied junk levels for the last six months. Troubles have
intensified over the past month and credit spreads now imply a 79% chance of default within the next five years. Moody’s placed the $6bn company on review for a possible downgrade just last week.
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Commodity companies Junk. Japan...junk. Italy Junk. Greece...Junk. USA...junk.
The next bubble burst is going to make Japan's 30 years struggle a walk in the park. Thank you comrade Obama for doubling our debt....without a peep from those neutral WAPO, NYT, etc. Has Obama announced his lifetime advisory role at Goldman, yet? I think he already opened his Obama Slush Fund!
And thank you Republican Establishment for being a wonderful and loyal accomplice.
Wormer! Junk! Marmalard! Junk! Niedermeyer! J...
Marmalard. That's funny. "Do you mind if we dance wif yo dates?"
Moar of Soweto’s “Legacy”: One of the biggest USA miners in the world getting downgraded to junk.
“Change you can believe in!”
Warm Regards,
Brack Soweto Hussein
The real problem with derivatives is that the same people who write the paper decide on whether there's a default or not. In other words, the stupid finance officers think they're making insurance payments, but when they're damaged, it doesn't pay. The banksters only collect the premiums, they don't pay out. Think of it as life insurance that never pays upon your death. You paid the premiums all your life, and they used your money for their own purposes. I know this is exaggerated, but it's damn close.
You know, instead of playing the Powerball lottery, I think I will just buy shares of FCX. If FCX has a 1 in 100 chance of NOT going bankrupt, still much better odds than Powerball.
FCX, It's like an call option that never expires, unless they go bankrupt of course......
I worked at Freeport from '08 to '10 through the market crash and many out there in Arizona couldn't believe little Freeport bought up the massive household name of Phelps Dodge.
Many years later after grad school and moving on to other jobs, I was curious again and checked out their 10k. I was astounded to find they got into oil drilling! Such utter lunacy - what the he'll kind of business does a gold mining company have speculating in oil fields?
Also wasn't surprised to see them ramping up production in Morenci just in time for the bottom to fall out like all corporations always do to try and squeeze every last done they can during the good times.
Margin calls must be rolling in early today.
I bought another 2000 fcx this morning. This price is a once every 8 years gift. They have plenty of free cash flow and assets to weather this temporary storm. Remember when the world was going to end in 2009?
uh... careful with those falling knives, my man...
Oh no they are the biggest miner. CDS's exploding not good. This could be a huge buying oportunity and sometimes things repeat themselves but sometime thing only rhyme.