DOW 11,621.71 +191.50
NASDAQ 2,414.25 +33.87
S&P 500 1,291.57 +13.85
Markets up on light volume.
DGP 17.48 -.67. Monday had sold the gold short and went long DGP (double long ETF).
ZYXI 4.8 -.05. Bought this earlier in the week. Low priced, like a call. Had good earnings and looking to move from bulletin board to AMEX, which may move the price up if it happens.
FNM 5 +.15.
Friday, August 22, 2008
Monday, August 18, 2008
FNM FRE: Which Is Weakest?
If you must short one of these, which would be the better short?
FNM 7.91
FRE 5.85
The Endgame Nears For Fannie and Freddie
By Barrons
Last update: 7:08 a.m. EDT Aug. 16, 2008
IT MAY BE CURTAINS SOON FOR THE MANAGEMENTS and shareholders of beleaguered housing giants (FNM:
Fannie Mae Last: 7.91-0.32-3.89% 4:02pm 08/15/2008 FNM 7.91, -0.32, -3.9%) and (FRE: Freddie Mac Last: 5.85-0.09-1.52% 4:05pm 08/15/2008 FRE 5.85, -0.09, -1.5%). It is growing increasingly likely that the Treasury will recapitalize Fannie and Freddie in the months ahead on the taxpayer's dime, availing itself of powers granted it under the new housing bill signed into law last month. Such a move almost certainly would wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses.
...
FNM 7.91
FRE 5.85
The Endgame Nears For Fannie and Freddie
By Barrons
Last update: 7:08 a.m. EDT Aug. 16, 2008
IT MAY BE CURTAINS SOON FOR THE MANAGEMENTS and shareholders of beleaguered housing giants (FNM:
Fannie Mae Last: 7.91-0.32-3.89% 4:02pm 08/15/2008 FNM 7.91, -0.32, -3.9%) and (FRE: Freddie Mac Last: 5.85-0.09-1.52% 4:05pm 08/15/2008 FRE 5.85, -0.09, -1.5%). It is growing increasingly likely that the Treasury will recapitalize Fannie and Freddie in the months ahead on the taxpayer's dime, availing itself of powers granted it under the new housing bill signed into law last month. Such a move almost certainly would wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses.
...
Grain Elevator Operator
Interesting article describing "basis" and how it is used by grain elevator operators.
THE LAST CONTANGO IN WASHINGTON
by Antal E. Fekete,
Professor Emeritus, Memorial University of Newfoundland
June 4, 2006
One paragraph:
Rationing warehouse space
Moreover, the basis also helps the grain elevator operator to decide what type of cash grain to buy and store. Other things being the same he will buy the grain with the higher basis, and sell the one with the lower. In this way he can maximize his profit derived from the shrinking basis. If the basis is higher for wheat than for corn, then he will keep buying cash wheat in preference to corn until the basis for corn catches up. Or, suppose, the news is that corn blight has hit the growing regions. The astute grain elevator operator will respond by accelerating his sales of cash wheat, in order to make room for more corn in his elevators.
The best way to think about the business of the grain elevator operator is to assume that he is marketing warehousing services, including the rationing of warehouse space between competing uses. His guiding star is the basis. High and rising basis tells him for which purposes the demand for scarce public warehouse capacity is the most urgent. Low and falling basis tells him for which purposes the demand is slack, as people prefer non-public solutions for their storage problem, e.g., by keeping supplies closer to home, as often happens in troubled times. Including digging holes in one’s own backyard.
The idiosyncrasies of the basis with regard to monetary commodities, since they can be buried in holes, are quite different from those with regard to non-monetary commodities, which cannot. This will be the subject of the last of this 3-part series on the basis.
THE LAST CONTANGO IN WASHINGTON
by Antal E. Fekete,
Professor Emeritus, Memorial University of Newfoundland
June 4, 2006
One paragraph:
Rationing warehouse space
Moreover, the basis also helps the grain elevator operator to decide what type of cash grain to buy and store. Other things being the same he will buy the grain with the higher basis, and sell the one with the lower. In this way he can maximize his profit derived from the shrinking basis. If the basis is higher for wheat than for corn, then he will keep buying cash wheat in preference to corn until the basis for corn catches up. Or, suppose, the news is that corn blight has hit the growing regions. The astute grain elevator operator will respond by accelerating his sales of cash wheat, in order to make room for more corn in his elevators.
The best way to think about the business of the grain elevator operator is to assume that he is marketing warehousing services, including the rationing of warehouse space between competing uses. His guiding star is the basis. High and rising basis tells him for which purposes the demand for scarce public warehouse capacity is the most urgent. Low and falling basis tells him for which purposes the demand is slack, as people prefer non-public solutions for their storage problem, e.g., by keeping supplies closer to home, as often happens in troubled times. Including digging holes in one’s own backyard.
The idiosyncrasies of the basis with regard to monetary commodities, since they can be buried in holes, are quite different from those with regard to non-monetary commodities, which cannot. This will be the subject of the last of this 3-part series on the basis.
Friday, August 08, 2008
20080808 1522
Indexes up 2+%.
Gold 856.
DXD 59.53 -2.89. Short.
GDI 45.92 +.07. Covered.
DZZ 31.19. Staying long this gold short.
Gold 856.
DXD 59.53 -2.89. Short.
GDI 45.92 +.07. Covered.
DZZ 31.19. Staying long this gold short.
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