The Federal Reserve today delivered a speech that to our analysis, was not enough to get the economy moving. Even if the Fed does cut the interest rates, the cut will not have any effect on the housing sector. A 25 basis point cut or even a 50 basis point cut is not going to aid a consumer whose ARM is resetting from 2% to 8%.
We think the market's reaction to the announcement was symbolic and orchestrated to appear as if all is calm. However, several major players are holding defaulted subprime paper, and until their identity is revealed, the financial sector is a ticking time bomb and the general market will experience increased volatility.
Friday, August 31, 2007
GOIH Capital Market: AAPL position exited @ $137.94 for 100,000 shares
GOIH Capital Market: AAPL position exited @ $137.94 for 100,000 shares
GOIH Capital Markets: Financial Sector Analysis
We are doing a indepth analysis of the financial sector of the economy and the effect the subprime mortgage crisis has had on the market. We believe there are several major players in serious trouble but are able to shield their wound via various market instruments.
GOIH Economic Analysis: Fed Speech
The Fed today we think disappointed Wall St. The Fed did not announce the expected "bailout" by committing to an interest rate cut. However, The Fed said it was on the job and would move if necessary.
We have noticed that the trading in GS and CFC has not resumed since the end of the speech.
We have noticed that the trading in GS and CFC has not resumed since the end of the speech.
GOIH Capital Markets: Subprime Mortgage Solution.
We believe that the political establish has prepared a solution for the subprime mortgage problem and the solution will be announced today by the President at 11:15 Est. Wall St. seems to know something and the stocks are moving in premarket.
We reported here earlier in the week that we thought there would be an early morning bear raid, and we reported here that the sell off on Tues. was a setup for today. It appears that the Fed along with its partners is bear hunting and the market has already gapped up on the expectation of bear traps being sprung today.
CFC is trading higher in premarket on strong vol. of 426,400 shares up at $20.99.
We saw Thornburg Mortgage sell $500 million in preferred stock at a 10% yield on Thurs. How can a company borrow at 10% and lend at 7%, so clearly something is "funny" about this transaction.
We are hearing that Fannie Mae and Freddie Macs limits will be increased from $417,000 to some higher number. This makes perfect sense for Thornburg to sell the stock since they make jumbo loans and the Fannie Mac and Freddie Mac limit increases would directly benefit a jumbo mortgage lender such as Thornburg.
Otherwise the transaction makes no economic sense.
Something is going to happen today in the markets.
GOIH Capital Markets: CFC & GS looking very strong in premarket
Both Goldman Sachs and Countrywide as trading considerable higher in premarket trading. GS closed down flat and has gapped in premarket indicating that something is in the mix for the trading today. On Thurs. we saw a trading pattern indicating the market makers were from running the order flow in GS and we closed out our positions. After closing flat on Thurs and no change in the fundamentals of the business, GS is prepared to open strong. GS is trading at on small volume $175 premarket after closing at $171.38.
CFC closed at $19.64 and is trading at $21.19 in premarket. Several weeks ago we reported here that we saw a pattern in the trading of CFC and GS and today there appears to be a link between GS and CFC.
AAPL closed at $136.25 and is trading higher in premarket at $138.30 look for a strong opening. We reentered our position in AAPL for 100,000 @ $135.52 on late Thurs.
All of the major Wall St. brokers are trading higher after closing down on Thurs after a down grade on Thurs so clearly someone knows that something big is in the mix for today.
GOIH Capital Markets: Market Overview
GOIH Capital Markets Analysis:
Our indicators predict something big is in the works for today. The Dow and Nasdaq future are indicating a very strong opening of the market. Overnight the Yen weaken further against the Dollar to 116.34/$. Our Yen position has increased substantially.
CFC is looking higher premarket as well as GS. We believe that the speech to be given today by the political establishment will position the economy for growth and fix the subprime market crisis.
Wall St. is betting that they get what they want today from the political sector.
Our indicators predict something big is in the works for today. The Dow and Nasdaq future are indicating a very strong opening of the market. Overnight the Yen weaken further against the Dollar to 116.34/$. Our Yen position has increased substantially.
CFC is looking higher premarket as well as GS. We believe that the speech to be given today by the political establishment will position the economy for growth and fix the subprime market crisis.
Wall St. is betting that they get what they want today from the political sector.
Thursday, August 30, 2007
GOIH Capital Markets: Reenters AAPL @ $135.52 for 100,000 shares.
GOIH Capital Markets: Reenters AAPL @ $135.52 for 100,000 shares
FAQ: If the Federal Reserve cuts interest rates will consumers receive a check in the mail?
Answer:
No, if the Fed cuts interest rates, the consumer will not receive a check in the mail. Nor will their subprime mortgage payments be paid by the Fed.
GOIH.
No, if the Fed cuts interest rates, the consumer will not receive a check in the mail. Nor will their subprime mortgage payments be paid by the Fed.
GOIH.
GOIH Capital Markets: Trading in Goldman Sachs (GS)
We closed our positions in GS due to what we see as trading against the order flow. The market makers in GS appear to be day trading GS against order flow evidenced by the volatility in the price on small volume.
We will monitor the situation and choose entry points where a short term profit can be made.
We will monitor the situation and choose entry points where a short term profit can be made.
Litigation Update: ETFC, AMTD
Litigation Update:We have consulted with several attorneys concerning a proposed merger between two of the large retail discount brokers. See the following link.
GOIH Capital Markets: Biogen (BIIB) watched for arbitrage position.
GOIH Capital Markets: Biogen (BIIB) watched for arbitrage position. Icahn rumored has taken a position for a buyout.
AAPL Ipod rumored available by Christmas---AAPL trading higher @ $136.75
AAPL Ipod rumored available by Christmas---AAPL trading higher @ $136.75. Sell stop entered @ $137.00 on 150,000 shares. Sell stop entered @ $136.65 on 150,000 shares.
GOIH Capital Markets: GS all long positions closed @$173.12---Short positions closed @ $171.50
GOIH Capital Markets: GS all positions closed @$173.12
GS P&L
Short Positions:
Net $70,000 loss
Long Positions:
Net Profit: $175,250
Net P&l: $105,250......all positions exited.
GS P&L
Short Positions:
Net $70,000 loss
Long Positions:
Net Profit: $175,250
Net P&l: $105,250......all positions exited.
GOIH Capital Markets: Goldman Sachs---200,000 short position entered @ $170.00
GOIH Capital Markets: Goldman Sachs---200,000 short position entered @ $170.00 on open. Covered at $170.25.....Another 100,000 shorted @ $171.30...These trades are paired against our long position of 75,000 @ $172.35...Another 75,000 long @ $171.55 paired with long position
GOIH Capital Markets: Wal-mart (WMT) Downgraded by Merrill Lynch
WMT was downgraded today by Merrill Lynch to a sell. As we had posted here earlier this week, we saw a slow down in consumer spending in the low end consumer retail sector.
Apparently Merrill Lynch saw the same analysis and down graded WMT before the market opens.
We will open a trading position in WMT.
Apparently Merrill Lynch saw the same analysis and down graded WMT before the market opens.
We will open a trading position in WMT.
GOIH Capital Markets: 08-30-07----Market Overview
Our indicators indicate the market will open flat to lower today. We see the market trading sideways pending the Fed's speech on Friday. Investment banks were down graded today as an indicator of slowing earnings in this sector.
In premarket trading we see activity in AAPL.
We will monitor activity in the market for opportunities for short term trading profits.
In premarket trading we see activity in AAPL.
We will monitor activity in the market for opportunities for short term trading profits.
Wednesday, August 29, 2007
GOIH Capital Markets---Subprime Mortgage Acquisition Vehicle
We have designed a vehicle to acquire subprime distressed mortgages or securities composed of subprime mortgages. We feel we can acquire the paper at substantial discounts and perform workouts to realize value and repackage the new loans into new financial instruments.
GOIH Capital Markets-----Fed Meeting on Friday
We are designing several trades we will post on late Thurs in anticipation of the Fed meeting on Friday in WY.
GOIH Marked to Market---08-29-07
Positions:
GS----75,000 shares @$172.35
closed at $173.72
Profit: $102,750
AAPL----300,000 shares @ $129.00
closed at $134.08
Profit: $5.08 x 300,000 = 1,524,000
Yen Position will be posted later.
GS----75,000 shares @$172.35
closed at $173.72
Profit: $102,750
AAPL----300,000 shares @ $129.00
closed at $134.08
Profit: $5.08 x 300,000 = 1,524,000
Yen Position will be posted later.
GOIH Capital Markets: Countrywide Financial (NYSE:CFC)---Trading to $18.00
As we predicted CFC is headed toward $18.00 the conversion price on the $2.0 billion investment by BAC. Seems BAC is shorting against the box, i.e., the convertible preferred it extracted from CFC to probably cover its portion of the $11.5 billion line of credit.
We see the Fed favoring Wall St. on Sept. 18.
We see the Fed favoring Wall St. on Sept. 18.
GOIH Premarket----Goldman Sachs----75,000 shares @ $172.35
GOIH Premarket----Goldman Sachs----75,000 shares @ $172.35 for short term trading profits.
GOIH Capitlal Markets---Apple Inc. (APPL)---premarket---300,000 shares @129.00
It's being rumored that AAPL will introduce a new Ipod next week with the Iphone's touch screen.....we are buying for our hypothetical hedge fund on the rumor.
GOIH Capital Markets: Market Overview--08-29-07
We see the market opening higher after the sell off on Tues. Our indicators and algorithms see strength in the Dow and the NASDAQ. We are monitoring the QQQQ, DIA and SPY.
The Yen Trading Dynamics:
We reported here on Monday that we thought the Japanese government would intervene to weaken the Yen against the dollar and that is just what has happened. As we prepare this report the Yen has weaken to 114.89/$ from 113.63/$ on Tues. We monitor the trading in the global currencies and it is obvious to our research staff that the Yen is financing the US stock market: the Yen weakens the market strengthens, the Yen stronger, the market lower.
Sectorized Recession:
Our financial economics research division sees a recession in the housing and consumer retail sectors. The overall economy has not entered into a general recession, but the warning signs are present. Employment is reported to be strong; however, consumer purchasing power has not increased due to the structure of the employment base.
New Job Creation:
Most of the new job creation has been in low wage sectors with a very small percentage of the wealth allocated to extremely high income producers in the financial services industry. The multiplier effect of the housing employment structure trickles down across all consumer sectors. A slow down in consumer consumption leads to a slow down in business capital expenditures which will lead to a general recession.
Federal Reserve Actions:
Volatility returned to the market on Tuesday after the release of the FOMC minutes indicating fear has returned and the future is uncertain for the financial markets. Our analysis and research indicates that even with a cut in the Fed Funds rate, the result will be minimal on the economy due to the structure of the global linked production infrastructure and the movement of capital.
Japan and China have the most Dollar reserves in the global capital markets due to the trade deficits run by the US via the import of Japanese and Chinese goods. Japan is a high-end product exporter where China is a low-end product exporter. The Dollars are recycled back by investment in the equity market and the treasury debt securities purchase which has a direct effect on interest rates in the markets.
If either Japan or China decreased their purchase of Treasury debt, the supply would exceed demand and interest rates would have to be raised to sell the amount necessary to finance the budget deficit. The rise in interest rates would decrease demand across the economy independent of a Fed action.
A cut in the Fed Funds rate will have little if any effect on secondary market liquidity. The secondary market is necessary for bank and mortgage lenders to move the new originated loan off their balance sheet freeing up the capital to be recycled to make new loans. The cut in interest rates will not affect the supply and demand for the instruments the loans and mortgages converted into causing a continued jam in the distribution system.
It is being reported that many of the subprime mortgages were bought by foreign banks and hedge funds in the last cycle who have now realized losses on their portfolios. It is unlikely the same buyers will get burned again; causing a decrease in demand for the debt instruments causing large banks to hold the paper on their balance sheets further clogging the distribution pipeline.
GOIH Strategies:
Our strategy is for short term trading profits in the current environment. Volatility is increasing causing a dislocation of capital into sectors as a defensive measure.
We feel the consumer discretionary sectors will remain weak as well as weakness in the housing sectors. We see the Yen continuing to weaken against the Dollar which will help Japanese exporters. An ETF with exposure to Japanese exporters for a focused approach to the Asian market for speculators in foreign currency plays.
We see weakness in the financial services sectors until the consumer returns to the consumption levels before the housing bust. Less consumer consumption indicates less business investment implying less capital raising and less underwriting for the large banks and brokers. Entry points for short term trading opportunities.
The Yen Trading Dynamics:
We reported here on Monday that we thought the Japanese government would intervene to weaken the Yen against the dollar and that is just what has happened. As we prepare this report the Yen has weaken to 114.89/$ from 113.63/$ on Tues. We monitor the trading in the global currencies and it is obvious to our research staff that the Yen is financing the US stock market: the Yen weakens the market strengthens, the Yen stronger, the market lower.
Sectorized Recession:
Our financial economics research division sees a recession in the housing and consumer retail sectors. The overall economy has not entered into a general recession, but the warning signs are present. Employment is reported to be strong; however, consumer purchasing power has not increased due to the structure of the employment base.
New Job Creation:
Most of the new job creation has been in low wage sectors with a very small percentage of the wealth allocated to extremely high income producers in the financial services industry. The multiplier effect of the housing employment structure trickles down across all consumer sectors. A slow down in consumer consumption leads to a slow down in business capital expenditures which will lead to a general recession.
Federal Reserve Actions:
Volatility returned to the market on Tuesday after the release of the FOMC minutes indicating fear has returned and the future is uncertain for the financial markets. Our analysis and research indicates that even with a cut in the Fed Funds rate, the result will be minimal on the economy due to the structure of the global linked production infrastructure and the movement of capital.
Japan and China have the most Dollar reserves in the global capital markets due to the trade deficits run by the US via the import of Japanese and Chinese goods. Japan is a high-end product exporter where China is a low-end product exporter. The Dollars are recycled back by investment in the equity market and the treasury debt securities purchase which has a direct effect on interest rates in the markets.
If either Japan or China decreased their purchase of Treasury debt, the supply would exceed demand and interest rates would have to be raised to sell the amount necessary to finance the budget deficit. The rise in interest rates would decrease demand across the economy independent of a Fed action.
A cut in the Fed Funds rate will have little if any effect on secondary market liquidity. The secondary market is necessary for bank and mortgage lenders to move the new originated loan off their balance sheet freeing up the capital to be recycled to make new loans. The cut in interest rates will not affect the supply and demand for the instruments the loans and mortgages converted into causing a continued jam in the distribution system.
It is being reported that many of the subprime mortgages were bought by foreign banks and hedge funds in the last cycle who have now realized losses on their portfolios. It is unlikely the same buyers will get burned again; causing a decrease in demand for the debt instruments causing large banks to hold the paper on their balance sheets further clogging the distribution pipeline.
GOIH Strategies:
Our strategy is for short term trading profits in the current environment. Volatility is increasing causing a dislocation of capital into sectors as a defensive measure.
We feel the consumer discretionary sectors will remain weak as well as weakness in the housing sectors. We see the Yen continuing to weaken against the Dollar which will help Japanese exporters. An ETF with exposure to Japanese exporters for a focused approach to the Asian market for speculators in foreign currency plays.
We see weakness in the financial services sectors until the consumer returns to the consumption levels before the housing bust. Less consumer consumption indicates less business investment implying less capital raising and less underwriting for the large banks and brokers. Entry points for short term trading opportunities.
GOIH Capital Markets: Mark to Market-08-28-07
We exited our position in AAPL @$131.50.
Entry $125.05
Exit $131.25
100,000 @ $6.20= $620,000 profit.
Entry $125.05
Exit $131.25
100,000 @ $6.20= $620,000 profit.
Tuesday, August 28, 2007
GOIH Capital Markets---Market Summary
The market tanked today after the FOMC minutes were released.
We see today's sell off as a "set-up" for those foolish enough to go hunting with the Fed. Don't be surprised to see an early morning bear raid by the Fed where the Fed Funds Rate is lowered before the market opens and all who are "naked short" will pay the price.
We will post a more economically rigorous analysis on why none of the Fed's actions will have any effect on the "economy", but only on the "financial markets".
Why?
The global financial markets are linked as well as the economies. Money is merely recycled from Asia back to the US via the financing of the budget deficient by the purchase of US Treasury debt.
Will the time ever come where the government sells an equity derivative rather than debt to finance the budget deficit?
FAQ: GOIH Capital Markets: Market Analysis
What companies should be watched to determine the trend in the market?
Goldman Sachs (NYSE:GS)
Why?
GS is the bellwhether and preeminent investment bank in the world and the former CEO is the Sec. of the Tresury.
Bank of America (NYSE:BAC)
Why?
BAC is the largest consumer/retail bank and its activity is a monitor of the consumer activities in the economy
Wal-mart (NYSE:WMT)
The obvious reason is that WMT is the largest discount retailer in the world.
JP Morgan-Chase (NYSE:JPM)
JPM is the largest money center bank catering to a business client, i.e., Fortune 500 company. Compared to BAC, JPM is an entirely different bank making its fees from underwritings and corporate advisory. Where BAC makes most of its fees from ATMs and other retail banking operations. JPM is as different from BAC as Ameritrade is from Goldman Sachs.
There are other compnaies which we will list in a later post.
Goldman Sachs (NYSE:GS)
Why?
GS is the bellwhether and preeminent investment bank in the world and the former CEO is the Sec. of the Tresury.
Bank of America (NYSE:BAC)
Why?
BAC is the largest consumer/retail bank and its activity is a monitor of the consumer activities in the economy
Wal-mart (NYSE:WMT)
The obvious reason is that WMT is the largest discount retailer in the world.
JP Morgan-Chase (NYSE:JPM)
JPM is the largest money center bank catering to a business client, i.e., Fortune 500 company. Compared to BAC, JPM is an entirely different bank making its fees from underwritings and corporate advisory. Where BAC makes most of its fees from ATMs and other retail banking operations. JPM is as different from BAC as Ameritrade is from Goldman Sachs.
There are other compnaies which we will list in a later post.
GOIH Economic Analysis Interest Rates: Inflation or Support the Dollar.
The market is in a tug of war between the Dollar and inflation. Will the Fed support the Dollar and not cut the Fed Funds rate or will the Fed cut interest rates, support the Market, and crash the Dollar?
Which thought process will prevail?
What are the trading opportunities given the conditions being currently set up in the market?
We see opportunities to make huge returns in the short term if the correct trading strategies are used.
We will post some of our strategies that we think will generate short term profits.
Which thought process will prevail?
What are the trading opportunities given the conditions being currently set up in the market?
We see opportunities to make huge returns in the short term if the correct trading strategies are used.
We will post some of our strategies that we think will generate short term profits.
FAQ:GOIH LItigation Update
What can an investor do who purchased stock of an OTCBB company, and the company was placed on the restricted purchase list by either AmeriTrade or E-Trade, do to be compensated for their loss?
Answer:
The investor should request a copy of their account statement be sent via the U.S. mail detailing all activity in their account.
Contact your broker and confirm that a "purchase" of your buy order was executed each time you bought shares in the restricted company.
Confirm that on each buy order the "actual" shares were placed into your account rather than merely being "credited" to your account.
Once the account statement is received confirm with your account representative that all activity in your account is reflected on your account statement, be sure to get the name and record the date and time the contact was made.
Document each attempt that was made to purchase shares in the restricted company.
Contact us at investor_relations@mindspring.com with details of your account to be added to the list of shareholders for our litigation team.
Answer:
The investor should request a copy of their account statement be sent via the U.S. mail detailing all activity in their account.
Contact your broker and confirm that a "purchase" of your buy order was executed each time you bought shares in the restricted company.
Confirm that on each buy order the "actual" shares were placed into your account rather than merely being "credited" to your account.
Once the account statement is received confirm with your account representative that all activity in your account is reflected on your account statement, be sure to get the name and record the date and time the contact was made.
Document each attempt that was made to purchase shares in the restricted company.
Contact us at investor_relations@mindspring.com with details of your account to be added to the list of shareholders for our litigation team.
Global 1 (OTCBB:GOIH)---Litigation Update
Litigation Update:We have consulted with several attorneys concerning a proposed merger between two of the large retail discount brokers. See the following link.
GOIH Capital Markets: Market Turmoil
GOIH Capital Markets earlier in a post predicted the market would be down today. The Dow and Nasdaq are both down as well as the Dollar against the Yen. The Yen is trading at 114.63/$, a good point to enter a carry trade since we earlier posted that Japanese exporters have priced in profits with the Yen at 115/$.
Borrow Yen at huge levels and invest in high yield assets, the Yen is sure to correct since the Japanese central bank will intervene to support their exporters the same way the Fed intervened last week to help the large banks.
Volatility has returned and we see an increase in volatility in the global market. Our strategy would be to short the market and go long on volatility in various sectors until the Fed meets on Sept. 18, 2007.
Borrow Yen at huge levels and invest in high yield assets, the Yen is sure to correct since the Japanese central bank will intervene to support their exporters the same way the Fed intervened last week to help the large banks.
Volatility has returned and we see an increase in volatility in the global market. Our strategy would be to short the market and go long on volatility in various sectors until the Fed meets on Sept. 18, 2007.
GOIH Capital Markets: AT&T: Iphone Unlocked---We see weakness in T
We see weakness in AT&T (NYSE:T) shares now that the Iphone has been unlocked. T was the exclusive network provider of the Iphone and was counting on the revenue from that exclusivity to boost its earnings.
We see a decrease in revenue growth now the Iphone is unlocked allowing a consumer to use other network providers.
The exact effect on T's revenues has not been calculated, but we are working on the calculation and will make a trading decision based on the calculation.
We see a decrease in revenue growth now the Iphone is unlocked allowing a consumer to use other network providers.
The exact effect on T's revenues has not been calculated, but we are working on the calculation and will make a trading decision based on the calculation.
Global 1 (OTCBB:GOIH)-----Seeking to Purchase Mortgage Portfolios
We are seeking to purchase mortgage portfolios as asset exchanges for publicly traded equity and debt.
Mortgage REITs and other mortgage asset sellers wishing to sell their portfolio of distressed mortgage loans or securities we will exchange the assets for free trading public equity and debt.
We have $500 million in preferred stock for acquisitions of distressed assets.
Mortgage REITs and other mortgage asset sellers wishing to sell their portfolio of distressed mortgage loans or securities we will exchange the assets for free trading public equity and debt.
We have $500 million in preferred stock for acquisitions of distressed assets.
Global 1 Proprietary Trading System, Offering Prospectus, Real Estate Acquisition Vehicle, Litigation Update.
Global 1 Proprietary Trading System, Offering Prospectus, Real Estate Acquisition Vehicle, Litigation Update.
Atlanta, GA August 28, 2007 (Business Wire) Global 1 Investment Holdings Corporation (OTCBB:GOIH), discusses strategic initiatives, acquisition, funding and growth plans. Our blog is located at http://global1invest.blogspot.com/ and is available via email subscription and via the Google, (NASDAQ:GOOG) reader at www.google.com/reader/view. More information is available by clicking on the links in the PR.
Proprietary Trading System:
We have developed a proprietary trading system and have posted the testing of the system at our blog. The trading results and analysis are the results of our internally developed algorithms. The results have been posted in real time to track the performance of the systems we have developed using probability, statistics and numerical analysis of global financial data.
Value Creation for Shareholders:
We feel our company is currently undervalued by the market resulting in a depressed share price. However, the trading systems we have developed and will now fund via the international market will give us the funding and platform to grow the company raapidly. We previously announced a share exchange for the current shares of GOIH in shares of a new company valued at $8.8 cents per share.
Share Exchange:
Now that our Proprietary Trading system has been tested, we will shortly begin the exchange for the shares of GOIH in the new company and fund our asset management company to execute our trading opportunities
Litigation Update:
We have consulted with several attorneys concerning a proposed merger between two of the large retail discount brokers. See the following link.
Summary:
Our blog should be consulted daily to be informed of our activities. We will post information daily regarding our business. We feel this quarter we will achieve the goals we have established for the company and begin a sustained growth cycle.
Disclaimer: This disclaimer is incorporated by reference as if fully set forth herein in this as well as all media releases on GOIH behalf. The statements contained in this released are forward looking and may or may not occur due to forces beyond the company's control. The risk factors contained in our public filings are incorporated by reference into this media release. An investment in GOIH is speculative and market forces beyond the company’s control can have an adverse effect on an investment in GOIH.
Contact:Global 1 Investment Holdings Corporation.
Barry Thomas, 404-222-7344
investor_relations@mindspring.com
Atlanta, GA August 28, 2007 (Business Wire) Global 1 Investment Holdings Corporation (OTCBB:GOIH), discusses strategic initiatives, acquisition, funding and growth plans. Our blog is located at http://global1invest.blogspot.com/ and is available via email subscription and via the Google, (NASDAQ:GOOG) reader at www.google.com/reader/view. More information is available by clicking on the links in the PR.
Proprietary Trading System:
We have developed a proprietary trading system and have posted the testing of the system at our blog. The trading results and analysis are the results of our internally developed algorithms. The results have been posted in real time to track the performance of the systems we have developed using probability, statistics and numerical analysis of global financial data.
Value Creation for Shareholders:
We feel our company is currently undervalued by the market resulting in a depressed share price. However, the trading systems we have developed and will now fund via the international market will give us the funding and platform to grow the company raapidly. We previously announced a share exchange for the current shares of GOIH in shares of a new company valued at $8.8 cents per share.
Share Exchange:
Now that our Proprietary Trading system has been tested, we will shortly begin the exchange for the shares of GOIH in the new company and fund our asset management company to execute our trading opportunities
Litigation Update:
We have consulted with several attorneys concerning a proposed merger between two of the large retail discount brokers. See the following link.
Summary:
Our blog should be consulted daily to be informed of our activities. We will post information daily regarding our business. We feel this quarter we will achieve the goals we have established for the company and begin a sustained growth cycle.
Disclaimer: This disclaimer is incorporated by reference as if fully set forth herein in this as well as all media releases on GOIH behalf. The statements contained in this released are forward looking and may or may not occur due to forces beyond the company's control. The risk factors contained in our public filings are incorporated by reference into this media release. An investment in GOIH is speculative and market forces beyond the company’s control can have an adverse effect on an investment in GOIH.
Contact:Global 1 Investment Holdings Corporation.
Barry Thomas, 404-222-7344
investor_relations@mindspring.com
Etrade and Ameritrade Proposed Merger: Federal Trade Commission Complaint
We have been informed the merger would have to be approved by the Federal Trade Commission. OTCBB companies who have had their shares placed on a restricted list by either of the brokers would have the right to file a petition to oppose the merger as a further restraint of trade in the OTCBB trading environment.
Our legal team is preparing a letter that we will post on this blog.
Any shareholder of a company who has had their investment negatively affected by the actions of a broker who placed the shares of a small company you invested in on a restricted list as soon as the shares rose can file a Federal Trade Commission complaint opposing the merger.
The market restrain of trade created an imbalance in supply and demand and market manipulation causing a decrease in the value of your investment.
GOIH Capital Markets: Relative Arbitrage Trading Opportunities in a flat volatility environment
GOIH Capital Markets sees the market opening lower today and trading down suggesting a short in the QQQs or in an ETF that tracks the Nasdaq or Dow for a short term trading opportunity.
We are looking to exit our AAPL position at a sell stop of $131.00
We are monitoring BIIB, CFC, BAC, GS, C for trading opportunities.
ETFs for Dow: iShares Dow Jones U.S. Industrials Index Fund.
We have numerous arbitrage trading opportunities we have developed and are in continuous R&D for the profitable trading opportunities.
Arbitrage Opportunities:
ishare Dow Jones Financial Sector Index Fund contains 293 securities and tracks this sector as an index.
A relative arbitrage opportunity can be created by the following:
1. Our arbitrage trading unit will recreate a synthetic index, G1 Financial Sector Index, with a 1:1 correlation to the ishare index that isolates the securities that create the majority of the movement in the ishare index either up or down.
2. To take a long or short view relative to the ishare index the volatility is calculated for the ishares index and normalized for 3 standard deviations about the mean for the trading price of the ishare index.
3. The G1 synthetic index components are then weighted to mirror the volatility of the ishare index compared to the Vix volatility index.
4. The G1 index is traded against the ishare and the Vix either long or short via counterparty.
We are looking to exit our AAPL position at a sell stop of $131.00
We are monitoring BIIB, CFC, BAC, GS, C for trading opportunities.
ETFs for Dow: iShares Dow Jones U.S. Industrials Index Fund.
We have numerous arbitrage trading opportunities we have developed and are in continuous R&D for the profitable trading opportunities.
Arbitrage Opportunities:
ishare Dow Jones Financial Sector Index Fund contains 293 securities and tracks this sector as an index.
A relative arbitrage opportunity can be created by the following:
1. Our arbitrage trading unit will recreate a synthetic index, G1 Financial Sector Index, with a 1:1 correlation to the ishare index that isolates the securities that create the majority of the movement in the ishare index either up or down.
2. To take a long or short view relative to the ishare index the volatility is calculated for the ishares index and normalized for 3 standard deviations about the mean for the trading price of the ishare index.
3. The G1 synthetic index components are then weighted to mirror the volatility of the ishare index compared to the Vix volatility index.
4. The G1 index is traded against the ishare and the Vix either long or short via counterparty.
GOIH Capital Markets: Market Overview
The market traded down on Monday due to the housing data reported. The data indicated that existing housing sales were flat and declined over the same period last year.
We see continued weaken in the market today resulting from the housing date. As we have reported here the consumer's weakness is a one to one correlation with the weakness in housing.
The market is in a tug of war with the trend of the consumer data and the credit crisis created by the implosion of subprime mortgage instruments.
Stocks finished lower on Monday, as evidence of continued weakness in housing and mortgages put a damper on markets.
The Dow industrials fell 56.74 points to 13322.13. The Standard & Poor's 500-stock index shed 12.58 to 1466.79, and the Nasdaq Composite Index declined 15.44 to 2561.25.
Merrill Lynch cut the ratings on Lehman Brothers, Bear Stearns and Citigroup, all to "neutral" from "buy," citing the impact of debt market exposure.
We see continued weaken in the market today resulting from the housing date. As we have reported here the consumer's weakness is a one to one correlation with the weakness in housing.
The market is in a tug of war with the trend of the consumer data and the credit crisis created by the implosion of subprime mortgage instruments.
Stocks finished lower on Monday, as evidence of continued weakness in housing and mortgages put a damper on markets.
The Dow industrials fell 56.74 points to 13322.13. The Standard & Poor's 500-stock index shed 12.58 to 1466.79, and the Nasdaq Composite Index declined 15.44 to 2561.25.
Merrill Lynch cut the ratings on Lehman Brothers, Bear Stearns and Citigroup, all to "neutral" from "buy," citing the impact of debt market exposure.
Monday, August 27, 2007
GOIH Capital Markets: Mark to Market-08-27-07
Positions:
CFC
100,000 @ $20.00 short
100,000 @ $19.75 cover
Profit $25,000
Biogen (BIIB)
150,000 @ $62.75
150,000 @ $63.25
Profit $75,000
BAC
200,000 @ $52.70 long
200,000 @ $51.10 sold
Loss $310,000
Yen Carry Trade MTM will be posted later.
CFC
100,000 @ $20.00 short
100,000 @ $19.75 cover
Profit $25,000
Biogen (BIIB)
150,000 @ $62.75
150,000 @ $63.25
Profit $75,000
BAC
200,000 @ $52.70 long
200,000 @ $51.10 sold
Loss $310,000
Yen Carry Trade MTM will be posted later.
BIIB position exited @ $63.25---short term profit
We exited our position in BIIB @$63.25 for a small profit. We won't fight the market in this stock. We will add to a new position at the appropriate point.
We see the market as a trading market until the Fed meets on Sept. 18, 2007. Our strategy will be to enter positions for small term profits.
Volatility is flat indicating no major moves other than on news.
We see the market as a trading market until the Fed meets on Sept. 18, 2007. Our strategy will be to enter positions for small term profits.
Volatility is flat indicating no major moves other than on news.
GOIH Capital Markets: Bank of Am. (BAC)--Sell stop entered at $51.10
GOIH Capital Markets: Bank of Am. (BAC)--Sell stop entered at $51.10
GOIH Asset Management: Hypo Hedge Fund: Global Political Events Portfolio
Our Asset Management Group G1 Asset Management is designing a Global Political Events Portfolio that will trade the funds realized ($200 million) from the second Yen carry trade. The portfolio will trade across all markets based on relevant political events and the economic consequences of the political decisions.
GOIH Capital Markets:Hypo Hedge Fund: Relative Value Volatility trade
Our Capital Markets Group has been monitoring the VIX Index for volatility. We see volatility increasing over the next 30 days and have designed a two legged relative value volatility trade against the S&P 500 Index against the Yen and the Yen against the Euro.
We will post the trade here once the parameters are finalized.
We see a short term profit of 4% leveraged 10:1 for a 40% ROI.
We will post the trade here once the parameters are finalized.
We see a short term profit of 4% leveraged 10:1 for a 40% ROI.
GOIH Capital Markets: Hypo Hedge Fund:Biogen (BIIB)--150,000 position opened @62.75---Takeover Arbitrage
Our Biogen (BIIB) position is rapidly increasing. We will add to our position by another 200,000 shares.
We see BIIB going to $70.00 based on our research at GOIH Capital Markets.
We have added a sell stop at $63.25 on BIIB
We see BIIB going to $70.00 based on our research at GOIH Capital Markets.
We have added a sell stop at $63.25 on BIIB
GOIH Capital Markets: CFC: short position 100,000 share entered at $19.80..buy stop @ $ 19.60
GOIH Capital Markets: CFC: short position 100,000 share entered at $20.00..buy stop @ $ 19.75. We see BAC shorting CFC down to $18.00 to recoup their loan on the credit line of $11.5 billion.
GOIH Capital Markets: Countrywide Financial (NYSE:CFC)
We see CFC trading down to the conversion price of $18.00 on BAC's investment of $2.0 billion. As reported here we believe BAC is shorting as a hedge against the position.
GOIH Economic Analysis: Credit Bubble
Our economics team has performed an analysis of the current events surrounding the crisis in the credit markets and has concluded the following:
1. The powers that be—Federal Reserve are not going to allow a deposit taking institution to fail, i.e., Countrywide Financial, Etrade, other large money center banks, JP Morgan, etc.
If the steps taken by the Fed over the last two weeks are analyzed for their effect and who are the beneficiaries, the obvious is clear. The financial sector which comprises 20% of the S&P 500 Index is the life blood of the economy. And the sector will be saved at all costs. Free market economics are not at play in this sector; otherwise Countrywide would have died a quick death last week.
Last week we reported on the changes in the bankruptcy laws two years ago before the home equity spending spree was called off by Wall St. The laws were changed to almost prevent a consumer from a “fresh start” chapter 7 filing. Who benefits from this change in the laws? The credit card companies benefit now that a debtor must repay a portion of their credit card debt rather than charging off the entire amount.
So why were the laws changed just before the biggest housing boom in history?
Because, the housing bubble was manufactured for the purpose of tapping out the consumer and transferring wealth. The bubble was designed to increase the supply of housing and the supply of money via the subprime mortgage market enabling a flood of demand for housing and an increase in property values creating the home equity spending spree.
Now that home equity is tapped out, the consumer is again returning to the credit card to finance the spending spree, but this time the consumer will not be able to go to the bankruptcy court and get relief. The creditors have that door blocked.
What effect will this have on the economy?
With the consumer tapped out in the home equity and credit card spending spree, consumer consumption will show a marked decrease. First in the low end, i.e., Wal-mart and work its way up the ladder until the medium income person is affected.
The consumer economy differs from the business economy now the laws have been changed to protect business profits via the bankruptcy code, and the foreclosure laws. In Georgia, a person can be foreclosed on in as little as 90 days from start to finish.
1. The powers that be—Federal Reserve are not going to allow a deposit taking institution to fail, i.e., Countrywide Financial, Etrade, other large money center banks, JP Morgan, etc.
If the steps taken by the Fed over the last two weeks are analyzed for their effect and who are the beneficiaries, the obvious is clear. The financial sector which comprises 20% of the S&P 500 Index is the life blood of the economy. And the sector will be saved at all costs. Free market economics are not at play in this sector; otherwise Countrywide would have died a quick death last week.
Last week we reported on the changes in the bankruptcy laws two years ago before the home equity spending spree was called off by Wall St. The laws were changed to almost prevent a consumer from a “fresh start” chapter 7 filing. Who benefits from this change in the laws? The credit card companies benefit now that a debtor must repay a portion of their credit card debt rather than charging off the entire amount.
So why were the laws changed just before the biggest housing boom in history?
Because, the housing bubble was manufactured for the purpose of tapping out the consumer and transferring wealth. The bubble was designed to increase the supply of housing and the supply of money via the subprime mortgage market enabling a flood of demand for housing and an increase in property values creating the home equity spending spree.
Now that home equity is tapped out, the consumer is again returning to the credit card to finance the spending spree, but this time the consumer will not be able to go to the bankruptcy court and get relief. The creditors have that door blocked.
What effect will this have on the economy?
With the consumer tapped out in the home equity and credit card spending spree, consumer consumption will show a marked decrease. First in the low end, i.e., Wal-mart and work its way up the ladder until the medium income person is affected.
The consumer economy differs from the business economy now the laws have been changed to protect business profits via the bankruptcy code, and the foreclosure laws. In Georgia, a person can be foreclosed on in as little as 90 days from start to finish.
GOIH Capital Markets: Biogen (BIIB)--150,000 position opened @62.75---Takeover Arbitrage
We have entered a 150,000 share position in Biogen (BIIB) @$62.75 for a takeover arbitrage trade. We will hold for short term profits. We will enter a sell stop at $63.25.
Sunday, August 26, 2007
GOIH Capital Markets: Week's Strategy--08-26-07
- We see:
Biogen, (NASDAQ:BIIB) is showing positive signals for a risk arbitrage position. Carl Icahn purchased a 1% stake in the company and we see BIIB underpriced trading at 35x earnings. Biotechs traditionally trade at 60-70x earnings. We see upside in (BIIB). We will enter an arbitrage position for a takeout expectation.
Japanese Yen:
Our Capital Markets Group have conducted an internal analysis of the major Japanese exporters and have determined, for profitability estimates, the Yen is priced at 115/$. Accordingly, we see continued weakness in the Yen to improve the profitability of the Japanese exporters exporting to the USA and Europe as the yen weakens against the Euro also a carry trade possibility.
The Japanese economy's growth rate is estimated at 1% against a 3-4% growth rate for the US economy. Therefore the Dollar should strengthen against the Yen, however, with the recent credit market seize up, the Fed is likely to cut the Fed Funds rate creating downward pressure on the Dollar against the major currencies of the world.
Dow and Nasdaq:
We see the Dow and Nasdaq moving higher this week as a one to one correlation with the weaken Yen. The Yen carry trade is financing the increase in equities in the US market. We see improvement in the Dow components with a large percentage of earnings outside the US.
We see US consumer spending moving away from mortgage equity to credit cards increasing the profitability of Visa and Mastercard. We are monitoring for taking a position in both. - Dell Computers (DELL) we expect Dell to show higher sales on improved marketing now that Michael Dell has retaken the CEO post.
- The S&P financials should do better as the largest component in the S&P 500 Index. If the market moves higher as we expect we will take positions in Goldman Sachs (GS), and increase our position in Bank of America (BAC).
Trades for the Week:
We will take a 100,000 share position in BIIB for short term trading profits.
- We see the Yen continuing to weaken against the Dollar and will add to our position by another $200 million.
- We see improvement in the QQQs and Dow futures. We will take positions in both indices.
Visa and Mastercard positions will be opened during the week depending on trading patterns. - We see taking a position in Dell during the week for a short term trade.
Friday, August 24, 2007
GOIH Capital Markets: Mark to Market--08-23-07
Positions:
Apple Inc. (AAPL) 100,000 shares
Entry: $125.05
Current $135.35
Profit: $1,030,000
Bank of America (BAC) 200,000
Entry: $52.70
Current: $51.87
Loss: $166,000
Day Trades:
CFC Trade (1) $70,000 profit
CFC Trade (2) $30,000 profit
GS Trade (1) $122,000 profit
Apple Inc. (AAPL) 100,000 shares
Entry: $125.05
Current $135.35
Profit: $1,030,000
Bank of America (BAC) 200,000
Entry: $52.70
Current: $51.87
Loss: $166,000
Day Trades:
CFC Trade (1) $70,000 profit
CFC Trade (2) $30,000 profit
GS Trade (1) $122,000 profit
GOIH Capital Markets: BAC upgraded by Citigroup
Bank of America (BAC) was upgraded by Citigroup to a buy with a target of $63.00.
See article here. Our capital markets group predicted on Wed the coming upgrades after taking a 200,000 share position in BAC.
See article here. Our capital markets group predicted on Wed the coming upgrades after taking a 200,000 share position in BAC.
TD AMERITRADE, the online broker, could sell to rival E*TRADE Financial in a stock-for-stock consideration
TD AMERITRADE, the online broker, could sell to rival E*TRADE Financial in a stock-for-stock consideration, two sources familiar with the situation agreed.
Reported in the Financial Times, However, the talks between the two parties have not gained any momentum in recent weeks and were said to be between investment bankers and TD AMERITRADE, who were discussing the changing economic environment and the future of the broker as an independent company.
One of the sources who has been briefed on the situation but not working directly on the deal, said Goldman Sachs was consulting TD AMERITRADE on potential M&A strategy in the deteriorating trading environment.
Goldman Sachs has not been officially hired to advise on the merger with E*TRADE, the source said. Goldman did not respond to requests for comment.
The possible sale of Omaha, Nebraska-based TD AMERITRADE, which is partially owned by Toronto Dominion Bank, has been the subject of recent media reports regarding talks of a business combination with E*TRADE. Because there was no recent breakthrough in the process both sources said they were surprised to see evidence of the discussions leaked to the media. While they agreed that the two companies have been exploring this combination for sometime, an imminent deal was not being contemplated they said. One of the sources suggested negotiations were leaked as an effort to communicate with the hedge funds that have been agitating for the sale of TD AMERITRADE. JANA Partners and SAC Capital wrote to TD AMERITRADE’s board of directors on 29 May urging them to explore a merger or an acquisition.
The same source said discussions between TD AMERITRADE and E*TRADE were not occurring on a daily basis and that antitrust issues have yet to be analyzed. One of the issues under discussion has been the relationship between the brokerages and their bank counterparts. In the case of TD AMERITRADE it, is affiliated with a bank while E*TRADE owns a bank.
Toronto Dominion Bank, which owns approximately 40% of TD AMERITRADE has yet to give its blessing to an E*TRADE/TD AMERITRADE combination, the source not directly involved said.
However, the first step on the way to a potential merger has already been made with the Canadian bank and TD AMERITRADE holding a meeting to discuss the future of the online broker in the challenging trading environment.
The same source said TD AMERITRADE and E*TRADE Financial had considered combining businesses since Ameritrade was purchased by TD Waterhouse in 2006 forming the TD AMERITRADE entity. He said recent pressure from first-tier banks who are now offering similar services, and day traders waiting for market volatility and uncertainty to subside, meant a lower numbers of trades per day which translated into lower revenues for online brokers. Hence, all online brokers, including Schwab, are contemplating mergers to cut costs and increase profit margins.
He added if the economy were to go into a recession or slowed down, all three online brokers would be forced to think of how to reduce trading capacity, one of the ways of doing so was through consolidation.
To that end, in “very recent days” Schwab, another online broker, has had a “serious change in attitude” about a potential deal and decided it was “not going to sit on sidelines,” and watch a deal form between TD AMERITRADE and E*TRADE, according to the source briefed on the deal. Schwab, up to this point has not been interested in consolidation, however, bankers are said to be stepping up efforts to get mandates to do deals in the online brokerage area as profit margins continue to tighten.
Reported in the Financial Times, However, the talks between the two parties have not gained any momentum in recent weeks and were said to be between investment bankers and TD AMERITRADE, who were discussing the changing economic environment and the future of the broker as an independent company.
One of the sources who has been briefed on the situation but not working directly on the deal, said Goldman Sachs was consulting TD AMERITRADE on potential M&A strategy in the deteriorating trading environment.
Goldman Sachs has not been officially hired to advise on the merger with E*TRADE, the source said. Goldman did not respond to requests for comment.
The possible sale of Omaha, Nebraska-based TD AMERITRADE, which is partially owned by Toronto Dominion Bank, has been the subject of recent media reports regarding talks of a business combination with E*TRADE. Because there was no recent breakthrough in the process both sources said they were surprised to see evidence of the discussions leaked to the media. While they agreed that the two companies have been exploring this combination for sometime, an imminent deal was not being contemplated they said. One of the sources suggested negotiations were leaked as an effort to communicate with the hedge funds that have been agitating for the sale of TD AMERITRADE. JANA Partners and SAC Capital wrote to TD AMERITRADE’s board of directors on 29 May urging them to explore a merger or an acquisition.
The same source said discussions between TD AMERITRADE and E*TRADE were not occurring on a daily basis and that antitrust issues have yet to be analyzed. One of the issues under discussion has been the relationship between the brokerages and their bank counterparts. In the case of TD AMERITRADE it, is affiliated with a bank while E*TRADE owns a bank.
Toronto Dominion Bank, which owns approximately 40% of TD AMERITRADE has yet to give its blessing to an E*TRADE/TD AMERITRADE combination, the source not directly involved said.
However, the first step on the way to a potential merger has already been made with the Canadian bank and TD AMERITRADE holding a meeting to discuss the future of the online broker in the challenging trading environment.
The same source said TD AMERITRADE and E*TRADE Financial had considered combining businesses since Ameritrade was purchased by TD Waterhouse in 2006 forming the TD AMERITRADE entity. He said recent pressure from first-tier banks who are now offering similar services, and day traders waiting for market volatility and uncertainty to subside, meant a lower numbers of trades per day which translated into lower revenues for online brokers. Hence, all online brokers, including Schwab, are contemplating mergers to cut costs and increase profit margins.
He added if the economy were to go into a recession or slowed down, all three online brokers would be forced to think of how to reduce trading capacity, one of the ways of doing so was through consolidation.
To that end, in “very recent days” Schwab, another online broker, has had a “serious change in attitude” about a potential deal and decided it was “not going to sit on sidelines,” and watch a deal form between TD AMERITRADE and E*TRADE, according to the source briefed on the deal. Schwab, up to this point has not been interested in consolidation, however, bankers are said to be stepping up efforts to get mandates to do deals in the online brokerage area as profit margins continue to tighten.
GOIH Capital Markets: GS position exited @$179.21
We exited our Goldman Sachs position at $179.21 from an entry point of $176.77.
We have a profit of $2.44 x 50,000 shares = $122,000 on the trade.
We have a profit of $2.44 x 50,000 shares = $122,000 on the trade.
Global 1 Capital Markets: Mortgage Industry Restructuring
We are preparing a report on the mortgage industry and how we see the industry restructuring itself. We see the industry reallocating resources into product lines and services. We at GOIH are structuring our business model to take advantage of what we think will be a major industrial shift in a huge industry, where we see huge profits to be made.
GOIH Management Consulting Group
GOIH Management Consulting Group
Global 1 Investment Holding Corp.--Blog
Due to the tremendous response we have received from our blog, we are developing a series of courses on the market, how to trade the market, and how to perform economic and financial analysis for investment profits. The courses and materials will be available online for a monthly subscription fee.
GOIH Economic Analysis: Unemployment Numbers are troubling?
GOIH Economic Analysis: Unemployment Numbers are troubling?
We are analyzing the current reported unemployment numbers and we have several questions regarding the publicly announced numbers that unemployment has not increased in the past two quarters.
Our analysis indicates that the unemployment numbers should have substantially increased due to the decrease in housing starts and the trickle down effect of the home building industry.
The home building industry is a mini economy in itself. A new home creates demand from the following industries:
Consumer electronics---TVs, DVDs, cds, plasma TVs, etc.
Durable goods---frigs, stoves, micro waves, etc.
Linens, towels, furniture
building supplies
landscaping
construction labor
real estate commissions
interest payments
permit fees
Wal-mart reported lower profits on increased sales, i.e., they lowered the price to move the goods.
Home Depot (HD) reported lower sales in their product lines, home improvement projects are not selling.
We see Wal-mart if sales continue to drop, starting layoffs.
We see a decrease in consumer consumption due to the lack of increase in home equity and the inability to refinance into a higher line of credit to support continued consumer purchases.
Home starts have decreased 500,000 per year from the peak of 2005. With an average home price of $250,000 the effect on GDP is tremendous and multiplying by the trickle down effect a factor of 4x from the effect on additional industries affected, demand has definitely decreased causing a decrease in demand from the consumer, causing consumer retail to decrease as evidenced by the numbers reported by Wal-mart and Home Depot.
We are analyzing the current reported unemployment numbers and we have several questions regarding the publicly announced numbers that unemployment has not increased in the past two quarters.
Our analysis indicates that the unemployment numbers should have substantially increased due to the decrease in housing starts and the trickle down effect of the home building industry.
The home building industry is a mini economy in itself. A new home creates demand from the following industries:
Consumer electronics---TVs, DVDs, cds, plasma TVs, etc.
Durable goods---frigs, stoves, micro waves, etc.
Linens, towels, furniture
building supplies
landscaping
construction labor
real estate commissions
interest payments
permit fees
Wal-mart reported lower profits on increased sales, i.e., they lowered the price to move the goods.
Home Depot (HD) reported lower sales in their product lines, home improvement projects are not selling.
We see Wal-mart if sales continue to drop, starting layoffs.
We see a decrease in consumer consumption due to the lack of increase in home equity and the inability to refinance into a higher line of credit to support continued consumer purchases.
Home starts have decreased 500,000 per year from the peak of 2005. With an average home price of $250,000 the effect on GDP is tremendous and multiplying by the trickle down effect a factor of 4x from the effect on additional industries affected, demand has definitely decreased causing a decrease in demand from the consumer, causing consumer retail to decrease as evidenced by the numbers reported by Wal-mart and Home Depot.
Global 1 Capital Markets: Market Update:Is Bank of America (BAC) shorting Countrywide (CFC)?
Our contacts on Wall St. seem to think that BAC is shorting CFC after they made the convertible preferred investment for $2.0 billion on Wed. BAC has the option to convert the convertible preferred stock into common stock at $18.00 per share.
BAC could and is probably locking in a sure profit on the trade and will convert if there is another party seeking to take over CFC.
CFC has experienced down side pressure since the announcement was made and has not traded up in intra day trading.
BAC could and is probably locking in a sure profit on the trade and will convert if there is another party seeking to take over CFC.
CFC has experienced down side pressure since the announcement was made and has not traded up in intra day trading.
CFC short $21.20 position covered @ $20.90:
CFC short $21.20 position covered @ $20.90: Profit $30,000
We see continued short term trading profits to be gained from CFC.
We see continued short term trading profits to be gained from CFC.
GOIH Capital Markets: CFC postion covered @ $20.96
CFC position covered at $21.96 for a short term trading profit of $70,000.
GOIH Capital Markets: Hypothetical Hedge Fund: CFC short position 100,000 @ $21.66....buy stop at $20.96
We see this position earning a short term trading profit of $70,000 in the market today or early next week.
GOIH Capital Markets: Hypothetical Hedge Fund: CFC short position 100,000 @ $21.66....buy stop at $20.96.
GOIH Capital Markets: Hypothetical Hedge Fund: CFC short position 100,000 @ $21.66....buy stop at $20.96.
Global 1 Capital Markets: Market Update.
Goldman Sachs (GS):
We entered a 50,000 share position at $176.77 on the the open. We feel GS is a long term bull and we will add to our position on dips. We will hold for a short term trading profit.
We entered a short position on CFC on the open at $21.66 for 100,000 shares we will hold the position for a short term trading profit.
Because the market has stabilized after the Fed cut the discount rate, the volatility has decreased considerably. The Vix index has traded down in the 25 range from a high of 40 last week reducing the trading range of the market.
We are developing an option strategy to take advantage of the volatility levels. We feel volatility is under priced in the options models and we feel we can develop a trading strategy to take advantage of the under pricing.
We entered a 50,000 share position at $176.77 on the the open. We feel GS is a long term bull and we will add to our position on dips. We will hold for a short term trading profit.
We entered a short position on CFC on the open at $21.66 for 100,000 shares we will hold the position for a short term trading profit.
Because the market has stabilized after the Fed cut the discount rate, the volatility has decreased considerably. The Vix index has traded down in the 25 range from a high of 40 last week reducing the trading range of the market.
We are developing an option strategy to take advantage of the volatility levels. We feel volatility is under priced in the options models and we feel we can develop a trading strategy to take advantage of the under pricing.
Thursday, August 23, 2007
GOIH Capital Markets: Mark to Market Positions--08-23-07
Positions Exited:
CFC: $319,000 loss
BCSI: $191,00 gain
Goldman Sachs: $27,000 gain
Current Positions:
BAC: Entry $ 52.70 x 200,000 shares-----Current $51.83 x 200,000 shares: $0.87 x 200,000 shares: 174,000 loss.
Apple Inc.: Entry $125.05 x 100,000 shares
Current: 100,000 shares x $131.07= $602,500 profit.
Yen Carry Trade:
$200,000,000 USD @114.63 Yen= 22.926 billion Yen
Yen currently: 116.63 Y/$
Profit: $3.489 million
Gains:
602,500
191,000
27,000
=======
820,500
Yen Carry Trade: $3.489 million
Losses:
319,000---CFC
174,000---BAC
CFC: $319,000 loss
BCSI: $191,00 gain
Goldman Sachs: $27,000 gain
Current Positions:
BAC: Entry $ 52.70 x 200,000 shares-----Current $51.83 x 200,000 shares: $0.87 x 200,000 shares: 174,000 loss.
Apple Inc.: Entry $125.05 x 100,000 shares
Current: 100,000 shares x $131.07= $602,500 profit.
Yen Carry Trade:
$200,000,000 USD @114.63 Yen= 22.926 billion Yen
Yen currently: 116.63 Y/$
Profit: $3.489 million
Gains:
602,500
191,000
27,000
=======
820,500
Yen Carry Trade: $3.489 million
Losses:
319,000---CFC
174,000---BAC
GOIH Capital Markets: Exits CFC 100,000 shares @ $22.50
We exited CFC 100,000 shares @ $22.50.
Buy--------$25.69
Sold-------$22.50
-----------
$3.19 per share x 100,000= $319,000 loss
Buy--------$25.69
Sold-------$22.50
-----------
$3.19 per share x 100,000= $319,000 loss
GOIH Capital Markets: Hypothetical Hedge Fund Position:CFC Position sell stop entered at $22.50
GOIH Capital Markets: Hypothetical Hedge Fund Position:CFC Position sell stop entered at $22.50.
GOIH CAoital Markets: GS exited 100,000 @$178.02
GS exited 100,000 shares @ $178.02---profit of $0.27x 100,000= $27,000
GOIH Capital Markets: Hypothetical Hedge Fund: GS---100,000 @ $177.75
Bought 100,000 of GS @ $177.75 for a day trade. Sell stop entered at $177.75
GOIH Capital MArkets: AAPL---sell stop entered at $130.00
We have entered a sell stop on our position in AAPL at $130.00 at which time we will exit our position and take our profits.
GOIH Capital Market: BSCI Position exited at $78.00
We exited our position in BSCI at $78.00 for a profit of:
78.00
76.10
----
$1.90
$190,000 profit in two days
78.00
76.10
----
$1.90
$190,000 profit in two days
GOIH:Market Update
The market opened flat and is trading up, 26.17 points on the Dow. We entered positions on CFC and BAC in the aftermarket and take the investments for long term growth. We see BAC as the major player in mortgage originations and CFC has liquidity to originate some new loans and hold on its balance sheet.
We are looking at risk arbitrage positions in the gaming industry and if the risk/return profile is attractive we will enter positions in this private equity deals. We are reviewing HET, STN private equity deals.
Our Yen carry trade position is positive where the Yen is trading at 116.31/$, giving us a profit on our carry trade position.
Bank of America (BAC) we expect several upgrades in the short term now that BAC essentially owns CFC. We will probably add to our position in BAC after the mutual fund adjust their holdings for the quarter.
We expect to see M&A activity in CFC now the short term liquidity crisis has subsided.
We see short term volatility decreasing until the next shock to the market, at which we expect to see an increase in volatility.
Given the decrease in volatility, see are reviewing option trading strategies seeking to take advantage of the Delta in volatility.
We have entered a sell stop on BCSI at $78.00 at which time we will take our profits on the position.
We are looking at risk arbitrage positions in the gaming industry and if the risk/return profile is attractive we will enter positions in this private equity deals. We are reviewing HET, STN private equity deals.
Our Yen carry trade position is positive where the Yen is trading at 116.31/$, giving us a profit on our carry trade position.
Bank of America (BAC) we expect several upgrades in the short term now that BAC essentially owns CFC. We will probably add to our position in BAC after the mutual fund adjust their holdings for the quarter.
We expect to see M&A activity in CFC now the short term liquidity crisis has subsided.
We see short term volatility decreasing until the next shock to the market, at which we expect to see an increase in volatility.
Given the decrease in volatility, see are reviewing option trading strategies seeking to take advantage of the Delta in volatility.
We have entered a sell stop on BCSI at $78.00 at which time we will take our profits on the position.
Wednesday, August 22, 2007
GOIH Capital Markets: G1 Alternative Investments--Risk Arbitrage--
Our alternative investment group is reviewing taking a position in the proposed private equity transactions of Harrah's Casinos, (NYSE:HET) and Stations Casinos, (NYSE:STN). We see a risk arbitrage positive carry in the position of these deals.
GOIH Capital Markets: BAC--200,000 shares in aftermarket @ $52.70
Our hypothetical hedge fund, bought 200,000 shares of BAC in the aftermarket @ $52.70 per share. We see BAC now as the largest mortgage originator after the CFC investment.
With BAC's large balance sheet CFC can now begin to originate new loans and sell them to BAC, with BAC carrying the paper on its balance sheet as assets.
Expect to see a small pop in the homebuilders. We are monitoring for a good point to enter a position.
With BAC's large balance sheet CFC can now begin to originate new loans and sell them to BAC, with BAC carrying the paper on its balance sheet as assets.
Expect to see a small pop in the homebuilders. We are monitoring for a good point to enter a position.
GOIH Capital Markets: CFC--100,000 shares in after market--$25.69
Our Hypothetical Hedge Fund bought 100,000 shares of CFC in the aftermarket at $25.69 per share. We bought the shares for a short term trade. It appears the Fed is going to let CFC live to trade another day.
GOIH Capital Markets: CFC in play....Bank of America, $2.0 billion investment in CFC.
Just crossing the wires is the announcement that BAC is investing $2.0 billion in CFC. The investment, gives BAC the right to convert its investment of preferred stock into common stock at $18.00 per share. Given CFC market cap of $12 billion, BAC just purchased a 16.6% interest in CFC. Moreover any other buyer comes forth, BAC has at least $8.00 profit per share based on where CFC was trading in the aftermarket today.
Profit calculation for BAC:
$2,000,000,000/$18.00 per share= 111,111,111 shares x $8.00 per share profit=$1.0 billion profit.
We are willing to bet the $1.0 billion profit is BAC's portion of the $11.5 billion CFC borrowed last week in the emergency line of credit from the 40 banks. Expect to see other banks announcing investments in CFC.
Remember Buffet just invested in BAC. Probably just a cover for Buffet to invest in CFC.....two for the price of one. BAC up as well as CFC.
Four Major Banks Borrow From Fed Wednesday August 22, 6:22 pm ET By Adam Schreck, AP Business Writer.
Citi, JPMorgan Chase, Bank of America and Wachovia Say They Borrowed $500M Each From Fed
Article from Yahoo Finance:
NEW YORK (AP) -- Four major banks said Wednesday they each borrowed $500 million from the Federal Reserve's discount window, lending weight to the central bank's efforts to restore liquidity to tight markets.
In going public with the moves, Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. each stressed they have "substantial liquidity" and the ability to borrow money elsewhere. The borrowings, at least in part, seemed meant to reassure investors' jitters about the credit crunch rattling Wall Street. In a joint statement, the latter three banks said they decided to borrow the money to demonstrate "the potential value of the Fed's primary credit facility" and encourage its use by other banks.
Not bad for one days work.
Good work if you can get it.
The only remaining question is who is buying CFC?
Prepared by GOIH Analytics, a unit of GOIH Capital Markets.
6.33 pm 08-22-07
Profit calculation for BAC:
$2,000,000,000/$18.00 per share= 111,111,111 shares x $8.00 per share profit=$1.0 billion profit.
We are willing to bet the $1.0 billion profit is BAC's portion of the $11.5 billion CFC borrowed last week in the emergency line of credit from the 40 banks. Expect to see other banks announcing investments in CFC.
Remember Buffet just invested in BAC. Probably just a cover for Buffet to invest in CFC.....two for the price of one. BAC up as well as CFC.
Four Major Banks Borrow From Fed Wednesday August 22, 6:22 pm ET By Adam Schreck, AP Business Writer.
Citi, JPMorgan Chase, Bank of America and Wachovia Say They Borrowed $500M Each From Fed
Article from Yahoo Finance:
NEW YORK (AP) -- Four major banks said Wednesday they each borrowed $500 million from the Federal Reserve's discount window, lending weight to the central bank's efforts to restore liquidity to tight markets.
In going public with the moves, Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. each stressed they have "substantial liquidity" and the ability to borrow money elsewhere. The borrowings, at least in part, seemed meant to reassure investors' jitters about the credit crunch rattling Wall Street. In a joint statement, the latter three banks said they decided to borrow the money to demonstrate "the potential value of the Fed's primary credit facility" and encourage its use by other banks.
Not bad for one days work.
Good work if you can get it.
The only remaining question is who is buying CFC?
Prepared by GOIH Analytics, a unit of GOIH Capital Markets.
6.33 pm 08-22-07
GOIH Capital Markets:Bank of America to Invest$2 Billion in Countrywide
Bank of America to Invest$2 Billion in Countrywide
By VALERIE BAUERLEINAugust 22, 2007 5:47 p.m.
Bank of America Corp. is making a $2 billion equity investment in Countrywide Financial Corp., the embattled mortgage giant, according to people familiar with the situation.
Bank of America will purchase $2 billion worth of preferred Countrywide stock yielding 7.25%, and that can be converted into common stock at $18 a share, those people said.
Write to Valerie Bauerlein at valerie.bauerlein@wsj.com
We reported here that we thought CFC was being sustained to prepare for a sale. The investment by BAC of $2.0 billion in preferred stock says that BAC feels its investment is safe in the short term, and they can convert the investment at $18 a share.
Trading is heavy in the after market, CFC closed at $21.82 now trading at $25.65.
By VALERIE BAUERLEINAugust 22, 2007 5:47 p.m.
Bank of America Corp. is making a $2 billion equity investment in Countrywide Financial Corp., the embattled mortgage giant, according to people familiar with the situation.
Bank of America will purchase $2 billion worth of preferred Countrywide stock yielding 7.25%, and that can be converted into common stock at $18 a share, those people said.
Write to Valerie Bauerlein at valerie.bauerlein@wsj.com
We reported here that we thought CFC was being sustained to prepare for a sale. The investment by BAC of $2.0 billion in preferred stock says that BAC feels its investment is safe in the short term, and they can convert the investment at $18 a share.
Trading is heavy in the after market, CFC closed at $21.82 now trading at $25.65.
GOIH Economic Analysis: Global Relative Economic Arbitrage: Yen Carry Trade.
The Japanese carry trade is alive and doing well. We saw the Yen (¥) weaken to 115.14/$ today in active trading. The Dollar was up 0.71 today. The Dow closed up 132.36 to 13,236.13 about 1% in step with the Dollar strengthening against the Yen.
We entered a position of $200 million in USD against the Yen today at 114.63/$. We will keep the trade on until the Yen strengthens against the Dollar, which we do not see anytime soon with the talk of a Fed Funds rate cut.
The relative economic arbitrage is positive in the Yen carry trade. We see other trades where a positive relative arbitrage can be made.
What will be our strategy with the additional capital? We will post our strategies for the investment of the additional capital.
We entered a position of $200 million in USD against the Yen today at 114.63/$. We will keep the trade on until the Yen strengthens against the Dollar, which we do not see anytime soon with the talk of a Fed Funds rate cut.
The relative economic arbitrage is positive in the Yen carry trade. We see other trades where a positive relative arbitrage can be made.
What will be our strategy with the additional capital? We will post our strategies for the investment of the additional capital.
GOIH Capital Markets: Mark to Market Positions--AAPL, BCSI
Apple (AAPL) closed at $132.51, entered position at $125.05-----$646,000 profit. We see AAPL moving higher Thurs. on strong vol.
Blue Coat Systems (BCSI) closed at $77.31, entered position at $ $76.10----$121,000 profit in 17 minutes. BCSI is trading in the after market at $77.48. We see BSCI moving higher on strong volume on Thurs.
Blue Coat Systems (BCSI) closed at $77.31, entered position at $ $76.10----$121,000 profit in 17 minutes. BCSI is trading in the after market at $77.48. We see BSCI moving higher on strong volume on Thurs.
GOIH: Hypothetical Hedge Fund Investment: Blue Coat Systems (NASDAQ:BCSI)--100,000 shares at $76.10
We bought 100,000 shares of BCSI at $76.10...we will have coverage on BCSI on Thurs.
GOIH Capital MArkets: Yen weakening against the Dollar, Dow rallies
The Japanese Yen has weakened to 115.05/$ causing the Dow to rally 124 points up today. We entered into a carry trade where we borrowed $200 million in Yen at 114.63/$. Giving our Hypothetical Special Situation Fund an additional $200 million in capital to invest.
GOIH Capital Markets: Lehman Bros. (NYSE:LEH) Shuts down Subprime Mortgage Unit: Lays off 1,200.
Lehman Bros. the giant Wall St. broker just announced that it is shutting down its subprime mortgage unit. LEH was one of the largest players in the fixed income mortgage space.
What does this mean for the market?
We think it means that there will be less mortgage activity in the immediate future and companies such as CFC, and other mortgage originators will not have a previous source to securitize the loans originated, forcing the lenders to hold the loans on its balance sheet that are not agency paper, i.e., Fannie Mae and Freddie Mac conforming loans.
Lehman will now probably take a charge against earnings and trade down in the near term.
We see the opportunity to make short term trading profits by shorting or selling puts against LEH.
We see pressure on CFC, ETFC, BSC and other players in the subprime space.
What does this mean for the market?
We think it means that there will be less mortgage activity in the immediate future and companies such as CFC, and other mortgage originators will not have a previous source to securitize the loans originated, forcing the lenders to hold the loans on its balance sheet that are not agency paper, i.e., Fannie Mae and Freddie Mac conforming loans.
Lehman will now probably take a charge against earnings and trade down in the near term.
We see the opportunity to make short term trading profits by shorting or selling puts against LEH.
We see pressure on CFC, ETFC, BSC and other players in the subprime space.
Global 1 Capital Markets: Market Update: Goldman Sachs breaks below $177.50
GS broke below support of $177.5o its opening today...the traders appear to know something about GS in the market and are selling the stock off. GS has broken below the 5 day MA of $177.16.
Technical analysis of GS:
GS at the open had the following technical indicators:
5 day MA--$178.94
15 day MA--$175.50
60 day MA--$174.50
Technical analysis of GS:
GS at the open had the following technical indicators:
5 day MA--$178.94
15 day MA--$175.50
60 day MA--$174.50
GOIH Capital Markets: Etrade Financial (NASDAQ:ETFC) and Amerirade (NASDAQ:AMTD) runored in merger talks
The WSJ reported today that Etrade and Ameritrade are in merger talks. The WSJ reported:
By SUSANNE CRAIG and DENNIS K. BERMANAugust 22, 2007; Page A1
The online brokerage industry, which underwent a wave of consolidation after the bursting of the dot-com bubble, may be headed for another shakeout, with giants TD Ameritrade Holding Corp. and E*Trade Financial Corp. holding merger discussions.
A merger of the two online brokers would create a dominant player in what has been a highly fragmented industry, with dozens of smaller companies battling for market share. As a result, it could reduce some of the fierce competition that has benefited consumers by driving down the cost of online trading but has squeezed the industry by chipping away at its profit margins.
As of the end of June, E*Trade had 4.7 million brokerage and banking accounts, TD Ameritrade had 6.3 million such accounts, and Charles Schwab Corp., now the largest online broker, had about 6.9 million. Merrill Lynch & Co., in contrast, has more than 7 million customer accounts.
A spokeswoman for E*Trade said the firm's management team has consistently stated it believes there is "tremendous value in consolidation that aligns business strategy and operational synergies and will do what is in the best interest of its customers." A TD Ameritrade spokeswoman said, "We have talked and continue to talk to peers in the industry."
E*Trade and TD Ameritrade have been in serious discussions for weeks but aren't yet close to a deal, according to people familiar with the matter. They have discussed an alliance several times in previous years but have never managed to make it to the altar. This time, however, they may feel more pressure to reach a deal. Two hedge funds with big stakes in TD Ameritrade have publicly urged the two companies to talk.
Still, sources close to the negotiations say the quality of E*Trade's mortgage portfolio is an issue TD Ameritrade is watching closely.
See complete article at, http://online.wsj.com/article_print/SB118774911334904929.html
By SUSANNE CRAIG and DENNIS K. BERMANAugust 22, 2007; Page A1
The online brokerage industry, which underwent a wave of consolidation after the bursting of the dot-com bubble, may be headed for another shakeout, with giants TD Ameritrade Holding Corp. and E*Trade Financial Corp. holding merger discussions.
A merger of the two online brokers would create a dominant player in what has been a highly fragmented industry, with dozens of smaller companies battling for market share. As a result, it could reduce some of the fierce competition that has benefited consumers by driving down the cost of online trading but has squeezed the industry by chipping away at its profit margins.
As of the end of June, E*Trade had 4.7 million brokerage and banking accounts, TD Ameritrade had 6.3 million such accounts, and Charles Schwab Corp., now the largest online broker, had about 6.9 million. Merrill Lynch & Co., in contrast, has more than 7 million customer accounts.
A spokeswoman for E*Trade said the firm's management team has consistently stated it believes there is "tremendous value in consolidation that aligns business strategy and operational synergies and will do what is in the best interest of its customers." A TD Ameritrade spokeswoman said, "We have talked and continue to talk to peers in the industry."
E*Trade and TD Ameritrade have been in serious discussions for weeks but aren't yet close to a deal, according to people familiar with the matter. They have discussed an alliance several times in previous years but have never managed to make it to the altar. This time, however, they may feel more pressure to reach a deal. Two hedge funds with big stakes in TD Ameritrade have publicly urged the two companies to talk.
Still, sources close to the negotiations say the quality of E*Trade's mortgage portfolio is an issue TD Ameritrade is watching closely.
See complete article at, http://online.wsj.com/article_print/SB118774911334904929.html
Global 1 Capital Markets: Market Update.
The market opened strongly with both the Dow and NASDAQ up sharply. We see Countrywide, CFC, continued in its recovery and there appears to be some strength in the rumors that CFC is being accumulated for a possible buyout by a large investor.
Apple, Inc., (NASDAQ:AAPL) was up strongly in the open trading as high as $132.61 on strong volume.
Today Lowe’s was upgraded twice. The home improvement retailer opened up at $29.64 and has traded as high as $29.84.
We see the Yen weakening and we are designing a carry trade in the Yen/$ market. We will post the trade later today.
GOIH Capital Markets
Apple, Inc., (NASDAQ:AAPL) was up strongly in the open trading as high as $132.61 on strong volume.
Today Lowe’s was upgraded twice. The home improvement retailer opened up at $29.64 and has traded as high as $29.84.
We see the Yen weakening and we are designing a carry trade in the Yen/$ market. We will post the trade later today.
GOIH Capital Markets
GOIH Hedge Fund: Apple Inc Investment: Premarket trading: $130.68
Apple, Inc., (NASDAQ:AAPL) closed at $127.57 and in premarket trading is trading at $130.68 up $3.10 from the close.
Our hypothetical hedge fund bought APPL at $125.05 on Tues.
Our hypothetical hedge fund bought APPL at $125.05 on Tues.
GOIH Capital Markets: Hedge Fund: Stock Watch List: TGT, LOW, TOL (short), EFTC, AMTD (merger talk)
Our stock list for Aug. 22, 2007:
TGT, LOW, TOL, AMTD, EFTC, AAPL, GS, BSC, CFC
TGT, LOW, TOL, AMTD, EFTC, AAPL, GS, BSC, CFC
Tuesday, August 21, 2007
GOIH Capital Markets: Hypothetical Hedge Fund: AAPL Investment---Up $301,000
As we reported here earlier we will mark to market each day our positions in our portfolios.
Today at 10:38 am EST we purchased 100,000 shares of Apple, Inc., (NASDAQ:AAPL) at $125.05 for an investment of $12,505,000 net of commissions.
The position has a market value of $12,806,000.00.
The portfolio is up $301,000 for the day.
Today at 10:38 am EST we purchased 100,000 shares of Apple, Inc., (NASDAQ:AAPL) at $125.05 for an investment of $12,505,000 net of commissions.
The position has a market value of $12,806,000.00.
The portfolio is up $301,000 for the day.
Global 1 Capital Markets: Countrywide Financial: Is Buffet buying CFC?
Is Countrywide Financial (NYSE:CFC) going to be bought by Warren Buffet's investment vehicle?
Our sources on Wall St. tell us that rumors are circling that Buffet is accumulating a position in CFC which would indicate an acquisition is on the horizon. Buffet is known for buying undervalued assets, but it is hard to see what is undervalued at CFC.
CFC has a portfolio of mortgages whose value is uncertain due to the underwriting standards used to originate the loans. We believe that these loans would only have value to a "value investor" such as Buffet if they were substantially discounted to compensate for the risk of default.
If there is value in CFC it's the franschise value and the value that CFC would have once the mortgage crisis is completed and the housing market returns to normal.
For a long term value play, we see CFC as at best a hold and see. Buffet disclosed that he has taken a large stake in Wells Fargo, and it is conceivable that Buffet sees merging CFC operations into Wells' business model.
We are instructing our portfolio manager in our Hypothetical Hedge Fund to begin accumulation of a position in CFC and Wells Fargo.
Our sources on Wall St. tell us that rumors are circling that Buffet is accumulating a position in CFC which would indicate an acquisition is on the horizon. Buffet is known for buying undervalued assets, but it is hard to see what is undervalued at CFC.
CFC has a portfolio of mortgages whose value is uncertain due to the underwriting standards used to originate the loans. We believe that these loans would only have value to a "value investor" such as Buffet if they were substantially discounted to compensate for the risk of default.
If there is value in CFC it's the franschise value and the value that CFC would have once the mortgage crisis is completed and the housing market returns to normal.
For a long term value play, we see CFC as at best a hold and see. Buffet disclosed that he has taken a large stake in Wells Fargo, and it is conceivable that Buffet sees merging CFC operations into Wells' business model.
We are instructing our portfolio manager in our Hypothetical Hedge Fund to begin accumulation of a position in CFC and Wells Fargo.
GOIH Capital Markets: Hedge Fund: Goldman Sachs Investment
Our portfolio managers are reviewing Goldman Sachs (NYSE:GS) for an investment. GS is trading under its 15 MA which has a price of $173.25. We will use the 5 day MA cross over 15 day MA as a buy signal and enter a position on GS. GS bounced off the 60 day MA strongly and make a move to the upside now trading at $176.40
GOIH Capital Markets: Hedge Fund: Yen Carry Trade
Our Hedge Fund trading desk is monitoring the Japanese Yen/US dollar exchange rate for an investment in the Yen for implementation of a carry trade transaction. We see the Yen weakening against the dollar after a rapid rise, probably due to the Japanese Central Bank intervening in the currency market to support the Yen. The Yen has strengthen from 124/$ to last week of 113/$ unwinding the carry trade due to exchange rate risk.
At the current rate at 11:38 am EST the Yen is quoted at 114.37/$. We will monitor the Yen/$ rate for a carry trade transaction which we will invest the funds realized from the carry trade in high yielding assets.
G1 Structured Credit Corp. will act as our counterparty on the transaction.
At the current rate at 11:38 am EST the Yen is quoted at 114.37/$. We will monitor the Yen/$ rate for a carry trade transaction which we will invest the funds realized from the carry trade in high yielding assets.
G1 Structured Credit Corp. will act as our counterparty on the transaction.
GOIH Hedge Fund: Apple Inc Investment
We have taken a position in Apple, (NASDAQ:AAPL) at 10:38 am on Aug. 21, 2007 for 100,000 shares at a price of $125.05 per share. For a total investment of $12.50 million in our G1 Aggressive Growth Fund. We see a strong market for Apple's products.
GOIH Capital Markets: Luxury Suites REIT Investment.
We an analyzing an investment in the luxury suite rental and management space. We see opportunity to acquire high end properties on the cheap due to the over building and covert these properties to high end luxury rentals operated as a multi-city luxury suite boutique hotel.
We will post our analysis of this potential business opportunity and the potential profitability to GOIH and the shareholder value the venture will create.
We will post our analysis of this potential business opportunity and the potential profitability to GOIH and the shareholder value the venture will create.
G1 Global Asset Mangement: Hypothetical Hedge Fund Structure.
We will begin trading of the Hedge Fund this week and post the trades we are making as well as the P&L of each portfolio's performance.
G1 Asset Management
Portfolios:
G1 Aggressive Growth $500 million
G1 Fixed Income $300 million
G1 Alternative Investments $500 million
G1 Capital Appreciation $500 million
G1 Global Equities $500 million
G1 Structured Credit Corp.—Prime Broker/Counter party
$200 Million Equity
$800 Line of Credit.
G1 Trading & Clearance
G1 Asset Management—2% of Assets under management----$62.5 million fee paid to GOIH.
G1 Asset Management—20% Carried interest in portfolio.
G1 has five portfolio managers that oversee each portfolio and make investments subject to the approval of the executive risk control committee.
Trader’s positions are limited to 5% of assets in any one position, unless approved by the risk management controls committee.
Each portfolio manager has two traders, three analysts, and 3 administrative personnel.
G1 Asset Management
Portfolios:
G1 Aggressive Growth $500 million
G1 Fixed Income $300 million
G1 Alternative Investments $500 million
G1 Capital Appreciation $500 million
G1 Global Equities $500 million
G1 Structured Credit Corp.—Prime Broker/Counter party
$200 Million Equity
$800 Line of Credit.
G1 Trading & Clearance
G1 Asset Management—2% of Assets under management----$62.5 million fee paid to GOIH.
G1 Asset Management—20% Carried interest in portfolio.
G1 has five portfolio managers that oversee each portfolio and make investments subject to the approval of the executive risk control committee.
Trader’s positions are limited to 5% of assets in any one position, unless approved by the risk management controls committee.
Each portfolio manager has two traders, three analysts, and 3 administrative personnel.
GOIH Economic Analysis" Fed Funds Rate 200 Basis Points above T-Bills.
The Fed Funds Rate today is priced more than 200 basis points above the 90 day T-bill rate.
What does this tell us?
It tell us that large banks with excess reserves would rather invest the excess in cash rather than loan the money in the Fed Fund Market, i.e., interbank lending.
So why would a bank rather hold cash than loan money to another bank?
A bank would rather hold cash than lend, for the obvious reason, it feels the risk reward does not justify the lending. Fundamentally if a bank will not loan to another bank, then what chance does a consumer have in getting a loan from that bank, little if any.
What will be the effect on the economy if this continues?
The Fed can lower the Fed Funds rate which the market thinks it will to spur investment or do nothing and let the economy sink further into a hold.
Change in Bankruptcy Law.
About two years ago the consumer bankruptcy law was changed to almost prevent a consumer from changing off all of their debts. A consumer now must enter into chapter 13, repayment rather than a chapter 7 liquidation for consumer bills. This legislation foresaw the coming consumer crisis in foreclosures and the coming credit card crunch.
Now a consumer must hang on to their house even if they cannot afford to pay for it, where in the past they could walk away and start over.
Even if the Fed cuts the Fed Fund rate, what effect will this have on the consumer?
We see no effect on the consumer if the Fed cut the Fed Funds rate.
Why, because the consumer is tapped out of their main source of cash, their home equity and with wages increase flat, there is no new money to spend at the consumer level.
Case in point, see Wal-Mart, (NYSE:WMT), who has reported lower sales the last two quarters. Looking at a chart of WMT, on June 4, 2007 WMT closed at $51, on Aug. 20, 2007 WMT closed at $43, down more than 20% in two months, reflecting less spending by the low income sector of the economy.
The homebuilder sector was down graded today with loses in all of the publicly traded homebuilder stocks. This says there is no relieve in the short term for an increase in homebuilding.
GOIH's Economic Forecasting Unit is preparing an economic analysis of the effect of a slow down in homebuilding on the overall economy.
We feel we have identified a fundamental flaw in the mainstream economic analysis on where the economy is and where it is headed based on economic activity in the building sector.
GOIH Capital Markets prepared this article.
What does this tell us?
It tell us that large banks with excess reserves would rather invest the excess in cash rather than loan the money in the Fed Fund Market, i.e., interbank lending.
So why would a bank rather hold cash than loan money to another bank?
A bank would rather hold cash than lend, for the obvious reason, it feels the risk reward does not justify the lending. Fundamentally if a bank will not loan to another bank, then what chance does a consumer have in getting a loan from that bank, little if any.
What will be the effect on the economy if this continues?
The Fed can lower the Fed Funds rate which the market thinks it will to spur investment or do nothing and let the economy sink further into a hold.
Change in Bankruptcy Law.
About two years ago the consumer bankruptcy law was changed to almost prevent a consumer from changing off all of their debts. A consumer now must enter into chapter 13, repayment rather than a chapter 7 liquidation for consumer bills. This legislation foresaw the coming consumer crisis in foreclosures and the coming credit card crunch.
Now a consumer must hang on to their house even if they cannot afford to pay for it, where in the past they could walk away and start over.
Even if the Fed cuts the Fed Fund rate, what effect will this have on the consumer?
We see no effect on the consumer if the Fed cut the Fed Funds rate.
Why, because the consumer is tapped out of their main source of cash, their home equity and with wages increase flat, there is no new money to spend at the consumer level.
Case in point, see Wal-Mart, (NYSE:WMT), who has reported lower sales the last two quarters. Looking at a chart of WMT, on June 4, 2007 WMT closed at $51, on Aug. 20, 2007 WMT closed at $43, down more than 20% in two months, reflecting less spending by the low income sector of the economy.
The homebuilder sector was down graded today with loses in all of the publicly traded homebuilder stocks. This says there is no relieve in the short term for an increase in homebuilding.
GOIH's Economic Forecasting Unit is preparing an economic analysis of the effect of a slow down in homebuilding on the overall economy.
We feel we have identified a fundamental flaw in the mainstream economic analysis on where the economy is and where it is headed based on economic activity in the building sector.
GOIH Capital Markets prepared this article.
Monday, August 20, 2007
GOIH Capital Markets: Etrade Financial (NASDAQ:ETFC) Money Market Accounts
GOIH's Capital Markets Unit is undertaking a detailed analysis into the publicly filed financial statements of Etrade. We are reviewing the Form 10Q and the Form 10K to make a determination of the credit quality of the assets in Etrade's Money Market Fund.
We suspect that Etrade used AAA rated mortgage backed securities as collateral in its money market fund and depending on the value, i.e., marked to market, the collateral may be worth substantially less than that claimed.
Much of E*Trade's profit in recent years has come from home loans, which make up about half of its assets.
"People look at E*Trade's mortgage business, and say, 'They built up that business rapidly,' and so people are thinking there could be problems in that portfolio and assets could be written down," said Peter Kovalski, analyst covering financial stocks at Alpine Woods Capital Investors, which has $12 billion under management and owns E*Trade shares.
Its mortgage portfolio of about $30 billion mostly consists of third-party loans bought from lenders or brokers. E*Trade only originated $1 billion of the loans, Chief Executive Mitch Caplan told investors during a second-quarter earnings call recently.
E*Trade also said at the time it was tripling its provision for loan losses to $30 million from the year-ago quarter -- a sign it expects loan losses to increase.
We suspect that Etrade used AAA rated mortgage backed securities as collateral in its money market fund and depending on the value, i.e., marked to market, the collateral may be worth substantially less than that claimed.
Much of E*Trade's profit in recent years has come from home loans, which make up about half of its assets.
"People look at E*Trade's mortgage business, and say, 'They built up that business rapidly,' and so people are thinking there could be problems in that portfolio and assets could be written down," said Peter Kovalski, analyst covering financial stocks at Alpine Woods Capital Investors, which has $12 billion under management and owns E*Trade shares.
Its mortgage portfolio of about $30 billion mostly consists of third-party loans bought from lenders or brokers. E*Trade only originated $1 billion of the loans, Chief Executive Mitch Caplan told investors during a second-quarter earnings call recently.
E*Trade also said at the time it was tripling its provision for loan losses to $30 million from the year-ago quarter -- a sign it expects loan losses to increase.
Capital One to Close Mortgage Unit
Capital One Financial (NYSE:COF) shuts down wholesale mortgage unit and expects a charge of $2.00 plus against earnings. At this rate there won’t be any mortgage originators other than the large banks that can originate and hold onto the loans as assets on their balance. COF has traded as low as $64.6 in after hours trading.
We see the large money center banks, JPM, C, BAC, Wells Fargo to surge once the subprime capital contraction is resolved.
Article on Capital One, http://biz.yahoo.com/ap/070820/capital_one_financial_wholesale_mortgages.html?.v=2
We see the large money center banks, JPM, C, BAC, Wells Fargo to surge once the subprime capital contraction is resolved.
Article on Capital One, http://biz.yahoo.com/ap/070820/capital_one_financial_wholesale_mortgages.html?.v=2
Why $70 Million Wasn't Enough
Why $70 MillionWasn't Enough
With Wall Street Rules Changing,A Goldman Star Felt Underpaid;Throat Lozenges for 100 Days
By MONICA LANGLEYAugust 18, 2007; Page A1
New York
Mark McGoldrick earned about $70 million in pay last year -- nearly $200,000 a day -- placing bets using Goldman Sachs Group Inc.'s money. He was one of Goldman's highest-paid employees.
Turns out it wasn't enough.
Internally dubbed "Goldfinger" for running one of Goldman's most-profitable units, Mr. McGoldrick delivered a big chunk of the firm's 2006 profits, people familiar with the matter say. He co-founded and built the firm's secretive "special-situations group," Goldman's elite but opaque money-making machine that buys and sells eclectic assets including British power plants, Japanese golf courses and Thai auto loans.
See the entire article here, http://online.wsj.com/article_print/SB118740076313301636.htmlhttp://
With Wall Street Rules Changing,A Goldman Star Felt Underpaid;Throat Lozenges for 100 Days
By MONICA LANGLEYAugust 18, 2007; Page A1
New York
Mark McGoldrick earned about $70 million in pay last year -- nearly $200,000 a day -- placing bets using Goldman Sachs Group Inc.'s money. He was one of Goldman's highest-paid employees.
Turns out it wasn't enough.
Internally dubbed "Goldfinger" for running one of Goldman's most-profitable units, Mr. McGoldrick delivered a big chunk of the firm's 2006 profits, people familiar with the matter say. He co-founded and built the firm's secretive "special-situations group," Goldman's elite but opaque money-making machine that buys and sells eclectic assets including British power plants, Japanese golf courses and Thai auto loans.
See the entire article here, http://online.wsj.com/article_print/SB118740076313301636.htmlhttp://
Thornburg Sells $20.5 Billion in Mortgage-Backed Securities
Thornburg Mortgage, which forced to stop taking home-loan applications earlier this month because of a cash crunch, said it sold $20.5 billion of mortgage-backed securities as part of a plan to return to “business as usual.”
The sales will result in a “capital loss” of about $930 million this quarter, the Santa Fe, N.M.-based company said Monday in a statement. Thornburg also made about $40 million by terminating “interest rate hedging instruments.”
Home lenders are finding new sources of capital after investors stopped buying their mortgages and bankers cut off credit. Luminent Mortgage Capital, an investor in home-loan securities, lined up about $125 million on Monday from Arco Capital. Delta Financial, a subprime residential lender, found investors last week to provide $70 million.
And KKR Financial earlier Monday said that it would seek up to $500 million via a private placement and a public rights offering.
The sales will result in a “capital loss” of about $930 million this quarter, the Santa Fe, N.M.-based company said Monday in a statement. Thornburg also made about $40 million by terminating “interest rate hedging instruments.”
Home lenders are finding new sources of capital after investors stopped buying their mortgages and bankers cut off credit. Luminent Mortgage Capital, an investor in home-loan securities, lined up about $125 million on Monday from Arco Capital. Delta Financial, a subprime residential lender, found investors last week to provide $70 million.
And KKR Financial earlier Monday said that it would seek up to $500 million via a private placement and a public rights offering.
GOIH Capital Markets: Countrywide Financial (NYSE:CFC)
Countrywide Financial (NYSE:CFC) opened for trading at $21.71 and has traded as low as $19.74 on heavy volume of 35.4 million shares. The cut in the Discount Rate is only a short term fix to stave off bankruptcy. The commercial paper market was inaccessible to CFC after Thurs of last week and CFC had tapped out its credit lines of $11.5 billion unsecured to the banks that funded the LOC. We see CFC trading lower until the housing market makes a drastic turn around which we do not foresee within the next 12 months.
Lowes (NYSE:LOW) reported earning today and has traded between $28.20 and $28.90, we see Low as a potential out performer in the short term given hurricane season is upon us. We see Lowes benefiting from any building supplies purchases resulting from hurricane damage.
Lowes (NYSE:LOW) reported earning today and has traded between $28.20 and $28.90, we see Low as a potential out performer in the short term given hurricane season is upon us. We see Lowes benefiting from any building supplies purchases resulting from hurricane damage.
Global 1 Investment Holding Corp: Investor Update
Global 1 Investment Holding Corp: Investor Update
Atlanta, GA August 20, 2007 (Business Wire) Global 1 Investment Holdings Corporation (OTCBB:GOIHE), http://finance.yahoo.com/q?ei=utf-8&fr=slv3-hptb2&d=v1&s=goih.ob discusses strategic initiatives, acquisition plans, funding and growth ideas.
Symbol Change:
Our symbol, GOIH, was inadvertently changed to GOIHE today due to a filing miscommunication. We filed our Form 10QSB on August 10, 2007 and it was accepted for filing by the SEC. The filing was inadvertently accepted for filing under Silver Screen Studios, rather than Global 1 Investment Holding Corp.
We have contacted the NASDAQ and they have confirmed that our symbol will return to GOIH on Tuesday morning for the beginning of trading and the company will not be penalized for the miscommunication.
Culture of Excellence:
We have instituted a new standard for the company, a culture of excellence in our operations and the business of the company. This new standard will be reflected in how we communicate with our shareholders and in the processes and procedures we instituted to address all issues regarding the company. The new culture will create shareholder value and advance our business model to its profitability.
Hedge Fund Operations:
We posted on Friday at our blog, we are creating a synthetic hedge fund with a trading desk and asset manager that will operate as a fully functioning Hedge Fund. See our blog this week for details of how the company will operate.
Financial Investment Blog:
We have been receiving hundred of questions from the information we post on our blog for our investors and to post our strategic plans, and market information we deem relevant. The blog is located at http://global1invest.blogspot.com/ and is available via email subscription and via the Google, (NASDAQ:GOOG) reader at www.google.com/reader/view.
Atlanta, GA August 20, 2007 (Business Wire) Global 1 Investment Holdings Corporation (OTCBB:GOIHE), http://finance.yahoo.com/q?ei=utf-8&fr=slv3-hptb2&d=v1&s=goih.ob discusses strategic initiatives, acquisition plans, funding and growth ideas.
Symbol Change:
Our symbol, GOIH, was inadvertently changed to GOIHE today due to a filing miscommunication. We filed our Form 10QSB on August 10, 2007 and it was accepted for filing by the SEC. The filing was inadvertently accepted for filing under Silver Screen Studios, rather than Global 1 Investment Holding Corp.
We have contacted the NASDAQ and they have confirmed that our symbol will return to GOIH on Tuesday morning for the beginning of trading and the company will not be penalized for the miscommunication.
Culture of Excellence:
We have instituted a new standard for the company, a culture of excellence in our operations and the business of the company. This new standard will be reflected in how we communicate with our shareholders and in the processes and procedures we instituted to address all issues regarding the company. The new culture will create shareholder value and advance our business model to its profitability.
Hedge Fund Operations:
We posted on Friday at our blog, we are creating a synthetic hedge fund with a trading desk and asset manager that will operate as a fully functioning Hedge Fund. See our blog this week for details of how the company will operate.
Financial Investment Blog:
We have been receiving hundred of questions from the information we post on our blog for our investors and to post our strategic plans, and market information we deem relevant. The blog is located at http://global1invest.blogspot.com/ and is available via email subscription and via the Google, (NASDAQ:GOOG) reader at www.google.com/reader/view.
GOIH: Aug. 20, 2007---Market Overview
Last week the market gyrated widely due to trouble with Countrywide Financial (CFC) and other financial institutions. Volatility created tremendous trading opportunities in shares of the financial sector.
The Fed on Friday lowered the Discount Rate by 50 basis point to easy the liquidity problem of CFC and Thornburg Mortgage (TMA) who could not get financing in the commercial paper market to fund its originations. Both stocks rebounded Friday after the rate cut was announced.
However we see continued weakness in CFC. The cut in the Discount Rate is only a short term fix, allowing CFC to continue in business until a sale can be arranged. Without the rate cut, CFC was headed to bankruptcy court.
Moreover, since CFC has a bank and accepted deposits, any deposit over $100,000 the FDIC limit would have been wiped out along with the $11.5 billion of unsecured line of credit that CFC tapped on Thurs. to keep afloat.Last week we saw Etrade (NYSE:ETFC) gyrate widely on rumors that ETFC was freezing customers accounts and had problem in its mortgage portfolio. Etrade also has a bank with FDIC insured accounts subject to the $100,000 limit.
We reviewed ETFC latest 10Q and see where ETFC has a money market fund where customers deposits are placed until invested.We are doing an analysis of the financials of ETFC to determined whether the MM fund has the mortgage backed securities as investments supporting the yield the MM fund pays to customers.
The Fed on Friday lowered the Discount Rate by 50 basis point to easy the liquidity problem of CFC and Thornburg Mortgage (TMA) who could not get financing in the commercial paper market to fund its originations. Both stocks rebounded Friday after the rate cut was announced.
However we see continued weakness in CFC. The cut in the Discount Rate is only a short term fix, allowing CFC to continue in business until a sale can be arranged. Without the rate cut, CFC was headed to bankruptcy court.
Moreover, since CFC has a bank and accepted deposits, any deposit over $100,000 the FDIC limit would have been wiped out along with the $11.5 billion of unsecured line of credit that CFC tapped on Thurs. to keep afloat.Last week we saw Etrade (NYSE:ETFC) gyrate widely on rumors that ETFC was freezing customers accounts and had problem in its mortgage portfolio. Etrade also has a bank with FDIC insured accounts subject to the $100,000 limit.
We reviewed ETFC latest 10Q and see where ETFC has a money market fund where customers deposits are placed until invested.We are doing an analysis of the financials of ETFC to determined whether the MM fund has the mortgage backed securities as investments supporting the yield the MM fund pays to customers.
Friday, August 17, 2007
Wall Street Brokers rally on Fed Rate cut.
The Wall St. brokers are rallying today after the Fed rode to the rescue by lowering the discount rate by 50 basis points today before the market opened. We see Bear Sterns, (NYSE:BSC) up $2.61 on strong vol. of 17.45 million shares. BSC is strong in fixed income along with Lehman Bros., (NYSE:LEH) also up $3.42 on vol. of 24.7 million shares. LEH also strong in fixed income.
Goldman Sachs, (NYSE:GS) up $4.38 on strong vol. 24.05 million shares. GS has traded as high as $180.86 in intra day trading.
Morgan Stanley (NYSE:MS) up strong by $3.33 on strong vol. of 21.6 million shares.
Merril Lynch (NYSE:MER) up $5.23 on vol. of 24.55 million shares.
The dollar was weaker today as the Yen rose to 114.43 in trading today. What this means is that it now takes 114.43 Yen to buy a dollar where over the past weeks it took as many as 124 Yen to buy a dollar.
GOIH Commentary:
Now that the Fed has lowered the discount rate what is the big brokers next move to make money?
We expect to see trading profits higher for all of the big brokers due to the volatility in the market. The big brokers are on both sides of the same trade and make money up and down as well as loan to hedge funds in the prime broker capacity.
We see gold increasing as a hedge against the inflation that is implied in the easing of interest rates implying a decrease in the dollar.
Goldman Sachs, (NYSE:GS) up $4.38 on strong vol. 24.05 million shares. GS has traded as high as $180.86 in intra day trading.
Morgan Stanley (NYSE:MS) up strong by $3.33 on strong vol. of 21.6 million shares.
Merril Lynch (NYSE:MER) up $5.23 on vol. of 24.55 million shares.
The dollar was weaker today as the Yen rose to 114.43 in trading today. What this means is that it now takes 114.43 Yen to buy a dollar where over the past weeks it took as many as 124 Yen to buy a dollar.
GOIH Commentary:
Now that the Fed has lowered the discount rate what is the big brokers next move to make money?
We expect to see trading profits higher for all of the big brokers due to the volatility in the market. The big brokers are on both sides of the same trade and make money up and down as well as loan to hedge funds in the prime broker capacity.
We see gold increasing as a hedge against the inflation that is implied in the easing of interest rates implying a decrease in the dollar.
Global 1 Capital Markets: What will CFC do now the discount rate is lowered?
CFC was saved today by the actions of the Fed lowering the discount rate by 50 basis points. However, this is just a short term fix for CFC and the bank mortgage lenders. The lowering of the discount rate allows CFC to finance its originations with the Fed and not use the commercial paper market. It was reported that the commercial paper market was charging CFC 12% for 30 day paper, which we reported here questioned how long could CFC survive at that rate. Although CFC can originate, they cannot securitize in the secondary market and must hold the new loans that are not agency paper on its books.
So if CFC must hold the new loans on its books, you will see a expansion of assets on CFC balance sheet, offset by a liability of the value of the new loan. the question still remains how big will the Fed let CFC's balance sheet get and who will buy the securitized new loans?
Well it now seems CFC has friends in high places and the Fed went Bear hunting on Friday morning.
The move was timed by the Fed to take place before the market opened to wipe out speculators that had shorted GS and CFC. At exactly 9:30 am EST the speculators that had shorted GS and CFC positions were marked to market, liquidated and forced margin calls were exercised against their collateral forcing them out of business for good.
We guess if there is a moral in this story it is that don't go bear hunting with the Fed.
So if CFC must hold the new loans on its books, you will see a expansion of assets on CFC balance sheet, offset by a liability of the value of the new loan. the question still remains how big will the Fed let CFC's balance sheet get and who will buy the securitized new loans?
Well it now seems CFC has friends in high places and the Fed went Bear hunting on Friday morning.
The move was timed by the Fed to take place before the market opened to wipe out speculators that had shorted GS and CFC. At exactly 9:30 am EST the speculators that had shorted GS and CFC positions were marked to market, liquidated and forced margin calls were exercised against their collateral forcing them out of business for good.
We guess if there is a moral in this story it is that don't go bear hunting with the Fed.
Global 1 Capital Markets: Hypothetical Hedge Fund Manager
GOIH Capital Markets is creating a hypothetical trading desk to act as the trading arm of a hypothetical hedge fund manager of the hypothetical hedge fund G1 Global Capital. The fund will have several portfolios which we are now constructing and will post on next week.
The hedge fund will be seeded with $2.5 billion and will go long and short in global assets, i.e., stocks, bonds, currencies, deals, commodities, derivatives and other assets and instruments.
We will post to this blog once the portfolios are created and we invite the public to follow our investing performance. We will post our portfolios performance on a daily basis, i.e., mark to market daily on our positions.
The hedge fund will be seeded with $2.5 billion and will go long and short in global assets, i.e., stocks, bonds, currencies, deals, commodities, derivatives and other assets and instruments.
We will post to this blog once the portfolios are created and we invite the public to follow our investing performance. We will post our portfolios performance on a daily basis, i.e., mark to market daily on our positions.
GOIH Capital Markets: Actors' studio cruises past finance worries
Actors' studio cruises past finance worries
Limited role … MGM will market and distribute the United Artists films.
August 18, 2007
FOR the actor Tom Cruise and his partners, getting $US500 million ($640 million) to finance films during the credit crunch may seem like Mission: Impossible.
But they got their money. United Artists, the storied film label that Cruise, his producing partner Paula Wagner and Metro-Goldwyn-Mayer are reviving, said on Thursday that it had secured the $US500 million it had been seeking through Merrill Lynch to finance between 15 and 18 films over the next five years.
Although the deal was widely expected, the financing from investors in the US, Europe, Asia and Africa comes amid a tightening credit market on Wall Street that has made some deals appear shaky. That has raised concerns that the crunch could affect Hollywood studios and production companies, which have relied heavily on financing from investment banks, private equity companies and hedge funds.
Nine months ago the MGM chairman, Harry Sloan, struck a deal with Cruise and Ms Wagner to return UA to its roots as an artist-driven production company.
MGM owns 65 per cent of the unit; the remainder is owned by Cruise and Ms Wagner. "The closing of this financing is an important milestone for the new United Artists," said Ms Wagner, who is UA's chief executive. "It leaves us perfectly poised to realise our vision of making movies that are both important and commercial."
Mr Sloan has said that he wants UA to stand apart from MGM as an autonomous production unit, with its own film financing and bank credit lines. UA's business plan calls for MGM to market and distribute at least four of its films a year.
The silent-film stars Charlie Chaplin, Douglas Fairbanks and Mary Pickford and the director D.W. Griffith formed the studio in 1919 as a way to give artists creative freedom and ownership in their films.
The Merrill Lynch financing takes effect immediately and will cover two UA projects already under way, including the Robert Redford-directed Lions for Lambs, a political drama starring Cruise and Meryl Streep, set in Afghanistan and due for release in November. The second film is Valkyrie, a World War II thriller directed by Bryan Singer and also starring Cruise.
Separately, MGM disputed a news report that Goldman Sachs had withdrawn a commitment to underwrite a deal that would raise up to $US1 billion to finance the studio's films.
A company spokesman, Jeff Pryor, said MGM was still having discussions with Goldman Sachs and other banks but chose not to do a deal now, in part to focus on the UA deal. A spokesman at Goldman Sachs declined to comment.
Los Angeles Times
Limited role … MGM will market and distribute the United Artists films.
August 18, 2007
FOR the actor Tom Cruise and his partners, getting $US500 million ($640 million) to finance films during the credit crunch may seem like Mission: Impossible.
But they got their money. United Artists, the storied film label that Cruise, his producing partner Paula Wagner and Metro-Goldwyn-Mayer are reviving, said on Thursday that it had secured the $US500 million it had been seeking through Merrill Lynch to finance between 15 and 18 films over the next five years.
Although the deal was widely expected, the financing from investors in the US, Europe, Asia and Africa comes amid a tightening credit market on Wall Street that has made some deals appear shaky. That has raised concerns that the crunch could affect Hollywood studios and production companies, which have relied heavily on financing from investment banks, private equity companies and hedge funds.
Nine months ago the MGM chairman, Harry Sloan, struck a deal with Cruise and Ms Wagner to return UA to its roots as an artist-driven production company.
MGM owns 65 per cent of the unit; the remainder is owned by Cruise and Ms Wagner. "The closing of this financing is an important milestone for the new United Artists," said Ms Wagner, who is UA's chief executive. "It leaves us perfectly poised to realise our vision of making movies that are both important and commercial."
Mr Sloan has said that he wants UA to stand apart from MGM as an autonomous production unit, with its own film financing and bank credit lines. UA's business plan calls for MGM to market and distribute at least four of its films a year.
The silent-film stars Charlie Chaplin, Douglas Fairbanks and Mary Pickford and the director D.W. Griffith formed the studio in 1919 as a way to give artists creative freedom and ownership in their films.
The Merrill Lynch financing takes effect immediately and will cover two UA projects already under way, including the Robert Redford-directed Lions for Lambs, a political drama starring Cruise and Meryl Streep, set in Afghanistan and due for release in November. The second film is Valkyrie, a World War II thriller directed by Bryan Singer and also starring Cruise.
Separately, MGM disputed a news report that Goldman Sachs had withdrawn a commitment to underwrite a deal that would raise up to $US1 billion to finance the studio's films.
A company spokesman, Jeff Pryor, said MGM was still having discussions with Goldman Sachs and other banks but chose not to do a deal now, in part to focus on the UA deal. A spokesman at Goldman Sachs declined to comment.
Los Angeles Times
Global 1 Capital Markets: Will Countrywide be bought out by private equity?
Is Countrywide Financial (NYSE:CFC) in play to be bought out by private equity?
We at GOIH Capital Markets think that CFC will now be bought out by a private equity group financed by Goldman Sachs and JP Morgan or Citigroup. If the charts of GS and CFC are overlayed for the last week, you will see that these two companies' stocks have traded lockstep up and down for the past week, indicating that there was a positive correlation in the companies trading.
We think the lowering of the discount rate by the Fed, give CFC time and the financiers time to raise the money to buy CFC. We are guessing that the financial team will be lead by Goldman Sachs and a large private equity fund, the Blackstone Group, (NYSE:BX) and a hedge fund, GS Global Alpha Fund.
The transaction will save the operations of CFC, raise the shares of Blackstone Group which has been down since its IPO, and give the recent investors in GS Hedge Funds an immediate returns.
Why do you think billionaires invested in the GS Hedge Funds unless something was in the mix for an immediate profit.
We at GOIH Capital Markets think that CFC will now be bought out by a private equity group financed by Goldman Sachs and JP Morgan or Citigroup. If the charts of GS and CFC are overlayed for the last week, you will see that these two companies' stocks have traded lockstep up and down for the past week, indicating that there was a positive correlation in the companies trading.
We think the lowering of the discount rate by the Fed, give CFC time and the financiers time to raise the money to buy CFC. We are guessing that the financial team will be lead by Goldman Sachs and a large private equity fund, the Blackstone Group, (NYSE:BX) and a hedge fund, GS Global Alpha Fund.
The transaction will save the operations of CFC, raise the shares of Blackstone Group which has been down since its IPO, and give the recent investors in GS Hedge Funds an immediate returns.
Why do you think billionaires invested in the GS Hedge Funds unless something was in the mix for an immediate profit.
Global 1.tv----Global Financial News--Aug. 17, 2007
|  | Bloomberg-Clip - (BLOOM-Clip) Aug. 17, 2007. 10:00 AM EST Analysis and Discussion with Ralph Acampora of Knight Capital Group |
GOIH Capital Markets----Global1.tv: Etrade Financial (NASDAQ:ETFC)
See the following video feed on Etrade Financials
Dear global,
You have been sent the following web page link as a courtesy of TheStreet.com.
Click on the link below for the video:
Etrade Financial
Dear global,
You have been sent the following web page link as a courtesy of TheStreet.com.
Click on the link below for the video:
Etrade Financial
GOIH Capital Markets: Etrade Financial (NASDAQ:ETFC)
Today Etrade Financial (NASDAQ:ETFC) opened for trading at $15.65 and in trading is down $1.60 from the open on vol. of 13.7 million shares. Etrade according to S&P is the second worst stock in the S&P 500 down 47% since the market made its high of 14,000 on July 19, 2007.
Etrade has a portfolio of mortgage carried on its books at $25 billion and the portfolio was the cause for the panic at Etrade on Thurs. Etrade in attempting to calm the market on Thurs. issued a new release stating its portfolio is of prime grade and there is no problems in the portfolio.
There was a rumor in the market that Etrade was freezing accounts.
Below is a PR from Etrade:
SAN FRANCISCO (MarketWatch) -- E-Trade Financial Corp. (ETFC:
e trade financial corp com
News, chart, profile, more
Last: 13.81+0.26+1.92%11:09am 08/17/2007Delayed quote data
ETFC13.81, +0.26, +1.9%) disclosed more information on its mortgage holdings late Thursday to try to calm investor concerns. The discount broker also said that it's so far seen no material changes in the availability, pricing or margin on its wholesale funding sources, including repurchase agreements. "Management maintains that it does not believe that the current market capitalization accurately reflects the financial strength and performance of the business," E-Trade said in a statement. The company's $15.7 billion first-lien mortgage portfolio contains home loans with high credit scores and low loan-to-value ratios, plus private mortgage insurance, E-Trade explained. The company noted that $9.2 billion, or 74%, of its home equity portfolio is tied to loan to borrowers with credit scores of at least 700. E-Trade also disclosed that $12.6 billion, or 99%, of its mortgage-backed securities are rated AAA.
Another Etrade PR:
E*Trade Financial (ETFC - Cramer's Take - Stockpickr) bounced back from a steep selloff Thursday after the online broker said its "financial health ... is sound."
Shares of the online broker closed down 3% after earlier dropping as much as 22% amid worries about a possible writedown. Ratings agency Egan-Jones downgraded E*Trade debt to to B+ from BB-, saying the value of E*Trade's $46.1 billion of mortgages and loans receivable "probably needs to be marked down."
An E*Trade spokeswoman said in a statement that the company has not seen any "material changes to date with respect to wholesale funding availability, pricing or margin, including repurchase agreements."
She also denied a rumor that the brokerage firm was freezing accounts.
Etrade has a portfolio of mortgage carried on its books at $25 billion and the portfolio was the cause for the panic at Etrade on Thurs. Etrade in attempting to calm the market on Thurs. issued a new release stating its portfolio is of prime grade and there is no problems in the portfolio.
There was a rumor in the market that Etrade was freezing accounts.
Below is a PR from Etrade:
SAN FRANCISCO (MarketWatch) -- E-Trade Financial Corp. (ETFC:
e trade financial corp com
News, chart, profile, more
Last: 13.81+0.26+1.92%11:09am 08/17/2007Delayed quote data
ETFC13.81, +0.26, +1.9%) disclosed more information on its mortgage holdings late Thursday to try to calm investor concerns. The discount broker also said that it's so far seen no material changes in the availability, pricing or margin on its wholesale funding sources, including repurchase agreements. "Management maintains that it does not believe that the current market capitalization accurately reflects the financial strength and performance of the business," E-Trade said in a statement. The company's $15.7 billion first-lien mortgage portfolio contains home loans with high credit scores and low loan-to-value ratios, plus private mortgage insurance, E-Trade explained. The company noted that $9.2 billion, or 74%, of its home equity portfolio is tied to loan to borrowers with credit scores of at least 700. E-Trade also disclosed that $12.6 billion, or 99%, of its mortgage-backed securities are rated AAA.
Another Etrade PR:
E*Trade Financial (ETFC - Cramer's Take - Stockpickr) bounced back from a steep selloff Thursday after the online broker said its "financial health ... is sound."
Shares of the online broker closed down 3% after earlier dropping as much as 22% amid worries about a possible writedown. Ratings agency Egan-Jones downgraded E*Trade debt to to B+ from BB-, saying the value of E*Trade's $46.1 billion of mortgages and loans receivable "probably needs to be marked down."
An E*Trade spokeswoman said in a statement that the company has not seen any "material changes to date with respect to wholesale funding availability, pricing or margin, including repurchase agreements."
She also denied a rumor that the brokerage firm was freezing accounts.
Did the Fed move to save Countrywide and Goldman Sachs?
Did the Fed by lowering the discount rate move to save Countrywide Financial, (NYSE:CFC)? Well let's see.
CFC was on credit watch and its credit rating had been lowered by both Moody's and S&P and CFC could not borrow in the commercial paper market.
On Thurs. CFC had to tap out its credit lines for its last $11.5 billion arranged by 40 "banks".
In essence CFC had a 30 day death notice.
Also because CFC has a bank with "deposits" the LA times reported that customers had jammed the phone lines at CFC branches to withdraw their money.
Because CFC could not fund other than agency loans, the residential mortgage market was about to shut down.
For some unexplained reason as reported here Goldman Sachs and CFC were trading in lockstep point by point up and down.
The $11.5 billion line of credit arranged by the 40 "banks" was unsecured, i.e., the banks that arranged the line of credit had no security and would have been wiped out had CFC gone under.
So we can possibly conclude that the move was arranged to save CFC which in turned saved GS and the 40 "banks" that arranged the line of credit were spared $11.5 billion in loses for the time being.
However, GOIH Global Economics section have concluded that further action will be necessary by the Fed. This is only a short term fix for CFC. CFC still cannot package and securitize the new loans it originates and must hold them on its books.
We see opportunities in the mortgage lending sector for an investor wishing to make over size returns.
CFC was on credit watch and its credit rating had been lowered by both Moody's and S&P and CFC could not borrow in the commercial paper market.
On Thurs. CFC had to tap out its credit lines for its last $11.5 billion arranged by 40 "banks".
In essence CFC had a 30 day death notice.
Also because CFC has a bank with "deposits" the LA times reported that customers had jammed the phone lines at CFC branches to withdraw their money.
Because CFC could not fund other than agency loans, the residential mortgage market was about to shut down.
For some unexplained reason as reported here Goldman Sachs and CFC were trading in lockstep point by point up and down.
The $11.5 billion line of credit arranged by the 40 "banks" was unsecured, i.e., the banks that arranged the line of credit had no security and would have been wiped out had CFC gone under.
So we can possibly conclude that the move was arranged to save CFC which in turned saved GS and the 40 "banks" that arranged the line of credit were spared $11.5 billion in loses for the time being.
However, GOIH Global Economics section have concluded that further action will be necessary by the Fed. This is only a short term fix for CFC. CFC still cannot package and securitize the new loans it originates and must hold them on its books.
We see opportunities in the mortgage lending sector for an investor wishing to make over size returns.
Aug. 17, 2007 Pre-market Activity
Looking at the pre-market trading now that the Fed has lowered the discount rate we see the following stocks trading:
CFC closed at $18.95, trading at $22.28 on 3.3 million shares.
GS closed at $169.85 trading at $178.09 on 666,000 shares.
BSC closed at $116.44 trading $123.80 on 353,400 shares.
LEH closed at $54.75 trading at $57.98 on 475,000 shares.
C closed at 447.55 trading at $49.90 on 578,900 shares.
What can we concluded from this action, the shorts are getting clobbered today. They were lured into a trap, and the trap sprung shut overnight by the lowering of the discount rate.
Guess we can get the jet now after the money we made this week in the market.
CFC closed at $18.95, trading at $22.28 on 3.3 million shares.
GS closed at $169.85 trading at $178.09 on 666,000 shares.
BSC closed at $116.44 trading $123.80 on 353,400 shares.
LEH closed at $54.75 trading at $57.98 on 475,000 shares.
C closed at 447.55 trading at $49.90 on 578,900 shares.
What can we concluded from this action, the shorts are getting clobbered today. They were lured into a trap, and the trap sprung shut overnight by the lowering of the discount rate.
Guess we can get the jet now after the money we made this week in the market.
Who knew about the Fed Discount Rate cut on Thurs?
At exactly 3:00 pm on Thurs. the Dow had been down 343 point and begin a massive run to the upside ending with only a 15 point drop for the day. All the financial stocks in the S&P 500 Financial Index started a strong move to the upside, see charts for GS, LEH, BSC, MER, C, JPM and other large New York banks.
We reported earlier in the day that Goldman Sachs had crashed through 158 and appeared to be going lower, Countrywide, CFC which was trading lock step with GS spiked up dramatically at the same time as GS recovered by $12 per share.
So the question is who knew, what did they know and when did they know it? It appears that at 3:00 pm on Thurs. the major trading desks on Wall Street knew about the coming rate cut on Friday morning.
We reported earlier in the day that Goldman Sachs had crashed through 158 and appeared to be going lower, Countrywide, CFC which was trading lock step with GS spiked up dramatically at the same time as GS recovered by $12 per share.
So the question is who knew, what did they know and when did they know it? It appears that at 3:00 pm on Thurs. the major trading desks on Wall Street knew about the coming rate cut on Friday morning.
GOIH Global Economic Strategy: Federal Reserve Lower Discount Rate
The federal Reserve today lowered the discount rate by 50 basis points, i.e., 0.5%.
What does this mean?
It means that banks can now borrow money from the Fed at a lower rate and thereby lend at a lower rate to fund mortgages. Other consumer financing rates will be lowered as a result. As we predicted in an earlier post on: Aug. 13, 2007---GOIH Global Economic Strategy Federal Reserve Open Market Operations: Part 1 GOIH Global Economic Strategy Federal Reserve Open Market Operations: Part 1, prediction of a lower rate.
What does this mean for the mortgage market?
The discount window financing allows a bank to bring any asset to the window for financing creating liquidity for the market.
What does this mean?
It means that banks can now borrow money from the Fed at a lower rate and thereby lend at a lower rate to fund mortgages. Other consumer financing rates will be lowered as a result. As we predicted in an earlier post on: Aug. 13, 2007---GOIH Global Economic Strategy Federal Reserve Open Market Operations: Part 1 GOIH Global Economic Strategy Federal Reserve Open Market Operations: Part 1, prediction of a lower rate.
What does this mean for the mortgage market?
The discount window financing allows a bank to bring any asset to the window for financing creating liquidity for the market.
Thursday, August 16, 2007
GOIH Capital Markets: Chap. 11 Lender Acquisition Strategy
HomeBanc files for bankruptcy, closes offices
New York-based JP Morgan Chase Bank is threatening to foreclose on beleaguered mortgage lender HomeBanc Corp., which filed for Chapter 11 bankruptcy Thursday and fired 1,100 of its employees on Friday. JP Morgan Chase is the lead lender on $68 million worth of HomeBanc's loans.
The Atlanta-based HomeBanc on Friday also shut down 22 of its branches, including the Athens office on West Hancock Ave. in downtown Athens. The closing took Athens HomeBanc employees by surprise, said one mortgage originator who didn't want to be identified.
"We were told one thing on Tuesday and then something different on Friday," the former employee said. "(Friday) was a very sad day and very disappointing."
Some of the Athens Homebanc employees already have gotten jobs with other mortgage companies, the employee said.
Court papers filed Sunday in a Delaware bankruptcy court say JP Morgan Chase, as agent for the syndicate of banks that funded HomeBanc's operations, is demanding assurances it won't get stuck for the money.
JP Morgan Chase wants an emergency hearing today on its bid for guarantees that HomeBanc will be able to cover its secured debt. The bank wants to be able to foreclose on its collateral if no assurances are forthcoming.
HomeBanc said in court papers that it will fight the pressure from JP Morgan Chase, and that it still has a valuable loan-servicing business that continues to generate cash.
Usually, secured lenders don't have to wait long to cash out their holdings in a bankrupt company. Most failing companies try to have deals for Chapter 11 loans and, often, asset sales in hand before they file bankruptcy petitions, to reassure top-ranking creditors.
HomeBanc filed its Chapter 11 petition in Delaware close to midnight Thursday, with little notice to the secured lenders it needs to have on its side, no financing and, so far, only a plan to close the last $2 million of a series of sales to Countrywide Financial Corp.
Troubled companies aren't allowed to use the collateral securing their top loans to fund a controlled Chapter 11 shutdown unless the lenders agree to let them.
JP Morgan Chase says HomeBanc's lenders won't make such an agreement unless they get extra protection for their loans. In court papers filed Sunday, the lead bank says it had "little warning" of HomeBanc's bankruptcy, and the company didn't discuss its bankruptcy-finance plans with lenders until after the filing.
Without Chapter 11 funding or a stand-still agreement with secured lenders, HomeBanc could be thrown into "free fall" liquidation mode, with its assets - including a huge leveraged portfolio of mortgage loans and mortgage-backed securities - up for grabs.
As of Dec. 31, HomeBanc's portfolio was valued at $5.7 billion. Since then, the market for such securities has almost seized, as retreating lenders struggle to dump paper tainted by rising defaults.
GOIH Commentary:
We feel the above situation will fit perfectly with our business model since the company is located here in Atlanta, GA and has a business generating some cash according to the article.
New York-based JP Morgan Chase Bank is threatening to foreclose on beleaguered mortgage lender HomeBanc Corp., which filed for Chapter 11 bankruptcy Thursday and fired 1,100 of its employees on Friday. JP Morgan Chase is the lead lender on $68 million worth of HomeBanc's loans.
The Atlanta-based HomeBanc on Friday also shut down 22 of its branches, including the Athens office on West Hancock Ave. in downtown Athens. The closing took Athens HomeBanc employees by surprise, said one mortgage originator who didn't want to be identified.
"We were told one thing on Tuesday and then something different on Friday," the former employee said. "(Friday) was a very sad day and very disappointing."
Some of the Athens Homebanc employees already have gotten jobs with other mortgage companies, the employee said.
Court papers filed Sunday in a Delaware bankruptcy court say JP Morgan Chase, as agent for the syndicate of banks that funded HomeBanc's operations, is demanding assurances it won't get stuck for the money.
JP Morgan Chase wants an emergency hearing today on its bid for guarantees that HomeBanc will be able to cover its secured debt. The bank wants to be able to foreclose on its collateral if no assurances are forthcoming.
HomeBanc said in court papers that it will fight the pressure from JP Morgan Chase, and that it still has a valuable loan-servicing business that continues to generate cash.
Usually, secured lenders don't have to wait long to cash out their holdings in a bankrupt company. Most failing companies try to have deals for Chapter 11 loans and, often, asset sales in hand before they file bankruptcy petitions, to reassure top-ranking creditors.
HomeBanc filed its Chapter 11 petition in Delaware close to midnight Thursday, with little notice to the secured lenders it needs to have on its side, no financing and, so far, only a plan to close the last $2 million of a series of sales to Countrywide Financial Corp.
Troubled companies aren't allowed to use the collateral securing their top loans to fund a controlled Chapter 11 shutdown unless the lenders agree to let them.
JP Morgan Chase says HomeBanc's lenders won't make such an agreement unless they get extra protection for their loans. In court papers filed Sunday, the lead bank says it had "little warning" of HomeBanc's bankruptcy, and the company didn't discuss its bankruptcy-finance plans with lenders until after the filing.
Without Chapter 11 funding or a stand-still agreement with secured lenders, HomeBanc could be thrown into "free fall" liquidation mode, with its assets - including a huge leveraged portfolio of mortgage loans and mortgage-backed securities - up for grabs.
As of Dec. 31, HomeBanc's portfolio was valued at $5.7 billion. Since then, the market for such securities has almost seized, as retreating lenders struggle to dump paper tainted by rising defaults.
GOIH Commentary:
We feel the above situation will fit perfectly with our business model since the company is located here in Atlanta, GA and has a business generating some cash according to the article.
GOIH Capital Markets: GOIH seeks to purchase mortgage lender.
GOIH is seeking to acquire a mortgage lender seeking to exit the mortgage market. We are seeking a platform to merge our financial service business model in to. We will offer the shareholders of a company seeking to exit the market more than they would receive in a Chapter 11 bankruptcy filing.
The company we seek needs to trade on the NASDAQ or NYSE, or will acquire the assets of the company and apply for a listing on the NASDAQ or NYSE and AIM.
The company we seek needs to trade on the NASDAQ or NYSE, or will acquire the assets of the company and apply for a listing on the NASDAQ or NYSE and AIM.
GOIH Capital Markets: Brief market recovery--S&P Financial Index finds support...1370
The S&P 500 Financial Index found technical support at the 1370 level around 1:00 pm and the market rallied off the support base of the financials. ETFC, AMTD, CFC, and GS all rallied off the support base at 1:00 pm EST.
In our earlier post regarding Global Relative Economic Arbitrage, our trading position is based on the relative correlation between various economic trends in the market. We have determined certain relationships exists between certain sectors and the relationships modeled and traded for tremendous profit.
The current market can be modeled on the Yen/Dollar ratio against the S&P 500 Financial Index.
In our earlier post regarding Global Relative Economic Arbitrage, our trading position is based on the relative correlation between various economic trends in the market. We have determined certain relationships exists between certain sectors and the relationships modeled and traded for tremendous profit.
The current market can be modeled on the Yen/Dollar ratio against the S&P 500 Financial Index.
Swaps say 25 percent chance of Countrywide default
NEW YORK, Aug 16 (Reuters) - The credit derivative market is pricing in a 25 percent chance of Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) defaulting on its debt in the next 12 months, based on the price of one-year credit default swaps, said research firm Credit Derivatives Research.
The cost to insure the debt of Countrywide for one year with credit default swaps surged to around 1450 basis points on Thursday, or $1.45 million to insure $10 million in debt, said Tim Backshall, chief derivatives strategist at the independent research firm. This compares to the cost to insure the debt for five years, at around 750 basis points per year.
The cost to insure the debt of Countrywide for one year with credit default swaps surged to around 1450 basis points on Thursday, or $1.45 million to insure $10 million in debt, said Tim Backshall, chief derivatives strategist at the independent research firm. This compares to the cost to insure the debt for five years, at around 750 basis points per year.
GOIH Capital Markets: Debtor in Possession Financing
We at GOIH Capital Markets see an opportunity in the residential mortgage market. Virtually each day another lender goes bankrupt. We see opportunities to reorganize a lender with debtor in possession financing and originate high quality mortgage products and purchase excess inventory from the publicly traded homebuilders.
We are developing a plan to take advantage of the opportunity in debtor in possession financing and reorganize a bankrupt lender. GOIH was founded out of the ashes of a bankrupt company GPMT, and we have the expertise to complete the transaction.
We are developing a plan to take advantage of the opportunity in debtor in possession financing and reorganize a bankrupt lender. GOIH was founded out of the ashes of a bankrupt company GPMT, and we have the expertise to complete the transaction.
GOIH Capital Markets----Major Wall Street firm rumored to be in trouble.
We are hearing rumors that a major Wall Street broker is in trouble and could face funding issues. Our sources indicate that CFC, Countrywide, which is down another 18% today and its financial backers, ?, are facing a showdown with other professional traders who are moving the market against the positions. The rumors are that a hedge fund holds a major portion of CFC's debt and cannot get out.
We will update as we hear news from our Wall Street sources.
We will update as we hear news from our Wall Street sources.
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