As we get closer to that point where economic reality and financial fact override/overpower politics & concerted central financial planning that attempts to outlaw insitutional failure, we need to employ fact based strategies backed by research based in realism to not only capitalize, but even last through the coming storm.
Research in Motion has been one of the most successful tech shorts of BoomBustBlog's history (thus far). We first recommended a short last year and reiterated it in the fist quarter of this year and the stock has dropped 50% since, with more room to run?!
You know, it's downright frightening how clearly this was able to be anticipated well over a year ago, yet it appears as if the EU politicking behind the bailout bonanza STILL leads down the road to perdition.
A European Bank Run: Step-by-Step. I outline the problems of a single bank that, unfortunately, is shared by many. This time next year, never let anybody tell you that this couldn't be seen coming as I illustrate how it will happen, and in detail!
Recent history shows us what happens when you borrow short and lend long against assets that have been halved in value, hasn't it? Guess who hasn't been to (very recent) history class...
Apple reported blowout numbers and a record quarter yesterday. Not one, that's right, not one Wall Street analyst got it right! As a matter of fact, not only did no one get it right, they were all wrong to the downside - every single one! Doesn't that sound fishy after 11 previous quarters of analysts missing the mark to the downside?
OTM Google calls purchased a couple of weeks before earnings returned roughly 10-20x the original investment. How did practically the entire Sell Side of Wall Street miss this opportunity while we screamed on the undervaluation of Google since last quarter? Well, you just can't plan or measure the domination of mobile computing 3 months at a time (and of course, front running clients make for more profitable trades)!
We finally agree Greece will default. Why can't we all agree on the turmoil likely as a result? European CRE will get C-R-U-S-H-E-D in a volatile rate storm.
It is simply a damn shame that it has come to this. What the political powers that be in Europe have done in their grasp to disseminate obvious mis/disinformation is to sow the seeds for history's first Pan-European bank run! It is more than obvious to the entire world that 18% of the EU is Literally Junk, Carried As Risk Free Assets at Par Using 30x+ Leverage. What is the purpose of attempting to conceal facts hidden in plain site?
I have found what looks like the next TWO (That's right! Two as in number 2) Lehman Brothers and Bear Stearns sitting right there smack in the middle of plain site in Europe. The meltdown should occur just as it did here in the US, save the world 2nd largest hedge fund probably will not have the resources to pull that funny little, furry financial creature from the family Leporidae out of their hat like the world's largest hedge fund did in 2008.
Economou said there isn’t enough investor interest in the assets for sale as “credit default swaps and spreads are the kinds of thing they have their eyes on.” Concrete assets are “riskier,” he said. Methinks Mr. Economou (what irony is there in a name???) may be missing the forest for the trees!
Deustche Bank's forensics/technicals looked downright ugly. We opined on both about two weeks ago, along with parsing the CEO's warning that all should essentially start running for the hills. Many participants in mother market missed this. Well, DB got crushed in European trading, making both the forensic research and technical trade setup shine like the sun. There's much more to come! Will those triple digit short returns of 2008 come again?
Now it could be time to look at charts on the EUR again. the natural fundamental trade is not EUR against USD or JPY, but to find a currency in a country will little or no debt. despite their own real estate bubble, from what i read, CAD or much better AUD and NZD might be candidates. CHF despite UBS and CSFB should be as well. notice how the Swiss authorities have tightened the management of these 2 institutions, pressing them to recapitalize as much as possible and targetting higher capital ratios than Basel III.
Italy has clearly recently broken the 5% support, and if on a tech point of view, a quick 40bp is guaranteed, to 5.4% (the previous range was 4.6%-5% so 40bp wide), given the context, and given that German yields are going DOWN, this is the sign of something much much bigger, like what happened to Spain and perhaps Portugal. You've seen the info as well on the recent volatility in Italian banks, and headlines shifting to Italy, I now believe the big move is happening right now.
