Another fun discussion with Henry. As you can see, I have trouble forming an opinion . . .
Note: I have a great deal of respect for Tom Brown — like Dick Bove, another smart guy I hate being on the opposite side of a trade from — but he has simply been way too early in his bottom calls.
Street Fight: Analysts Battle Over the Bottom in Financials
Yahoo, August 12, 2008
RBS slumps to one of biggest losses in UK banking history
Telegraph, 10:35am BST 08/08/20081
Wachovia boosts loss to $9.11 bln, cuts more jobs
Reuters Aug 11, 2008 7:02pm EDT
Michael Price Shorts Citigroup, Sees Few Banks to Buy
Bloomberg, Aug. 12 2008
So any thoughts on what to buy puts on here?
KBE or KRE? I looked at calls on the SKF but I guess I dont have the brass for that trade.
This would seem to capture the market analysis skills of those who have been trading the financials from the long side – Enjoy!:
Churning under resistance now – NAZ is getting close to 2500 which is a really firm ceiling. Not too much more of this BS left.
Well stated, Barry… although perhaps not forcefully enough. GS traded at sub $60 in 2002. Factoring in monetary inflation, 110 is a probable target. Going forward, these guys need a new business model, and not one based on fictitious capital. The cash cow has been milked dry.
I think this onion cover says it all.
Since you refer to Tom Brown and early bottom calls, I’d like to present this exact quote: “I now agree with Tom Brown that the worst is over in the group and we are beginning to see survivors as the money pours into this sector from non-traditional sources.” — from a piece entitled, “What’s Turning Subprime Around”, by James Cramer……..March 8, 2007. They know nothing indeed.
I still can’t believe Blodget has been fully forgiven. He wasn’t a child. He knew what he was doing. Everyone deserves a second chance, but not everyone deserves to be treated with this level of respect.
Josh, you raise a very valid point. And yet Blodget’s willingness to essentially call Cramer a dangerous, overrated creep makes it difficult to remain angry at the guy.
This just in – KeyCorp bribes deposit base with free IPOD nano!! Keep it under 100k and you can’t lose!!!
Speaking of the financials and the ne’er do-wells in the financials, guess who’s back on CNBC right now? None other than David Malpass, discussing inflation. More proof that having any shred of credibility is not even a baseline requirement to appear on CNBC as a “guest expert”. Good grief.
Barry is being awfully gracious in his comments here about Tom Brown. He has blown up his fund and been on the wrong side of the trade for 2 years, yet he still shows up with that ” hey….the markets got it all wrong” attitude. What a joke!
Tom Brown’s fund is a joke. He started the mess with LEND and bought all the way down. He continues to make bad calls. In the words of George Bush, “You’re doing a good job Brownie”.
I think market will bottom when people stopped picking bottoms.
But I agree with Barry, Dow will see below 10,000 and S&P below 1000
“Looking for a Bottom in Financials” has a different, though possibly more realistic meaning if interpreted as homoerotic jargon.
Maria B has the best bottom of all in the financials. dc.
The old “Bottom is in” argument makes me crazy.
It’s funny, most of my friends that work for big banks (Lehman, GS, UBS) are either all drinking the Kool-Aid, or they’ve adopted some form of “Big Brother is Monitoring Me” thought-process which bypasses any form of critical thought.
To this day, they still label me as a tinfoil hat guy — when I’ve been consistently right for the past 12 months, and they’ve been consistently wrong. (And I’ve made decent trades, and they’re hemorrhaging).
More to the point: My banker buddies believe that the bottom is in. Or at least they ‘claim’ to believe that.
It’s endlessly entertaining to walk them through the parallel arguments of debt ratios, tightening credit standards, retreating liquidity and the washed-up consumer. At which point they usually squeeze-off a smirk and something like: “Dude, where are you getting your information? Lighten up and quit reading those kooky blogs of yours”
All in good time my friends, all in good time.
I thought your interest was female feet!
Everyone likes female feet. What’s your point?
I echo the comments on Tom Brown here. He was “backing up the truck” on subprime 17 months ago and he has repeatedly argued that the downside in the financials was overdone. Yet the fixed income spreads are all near highs for the cycle.
There has been an odd phenomenon in this cycle where the guys closest to the financials, who have followed them for a long time (and I’m talking buy side guys not sell side) just completely missed the magnitude of what was going on. I haven’t found a good explanation for it, but Brown is definitely in this camp. His credibility is blown in my book.
Barry your ‘generational buy’ quip made me laugh out loud—- a rare occurrence in these markets! Keep it up.
someone should mention tom browns picks of first marblehead and compucredit. both down 90%. he should stop mentiong david tice and meridith whitney. they are not talking about him.