What's the most funny even the CDS on the 10 year US treasury bonds is exploding in price. No sacred cow, specially the bums in Washington.A part from going short on the banks, and buying puts (not ideal this week), what is the best strategy to profit from the coming worldwide crisis ?

It's a little bit perplexing. Why does the market doesn't see such an incredible risk ? In sum what is the OPTIMAL strategy to prevail and thrive ? What would be the best business to lauch for profiting against those scumbags ?

No I am not in love with bankers and their buddies the politicians. I would also like to get even while making a lot of money. It's not evident that there is a fail safe way of making money on the back of these ponzi schemes operators and financial pyramid speculators. They always find a way of blowing bubbles, like this week ?

Strange all the others say they had "good" numbers. Who is the liar ?

Don't think it's Merrill Lynch. That's what scares me about bankers. Most of them are sociaopaths and psychopaths. The lying has been going on for so long that I don't see when it will stop. It will stop when it's too late. You know. You can be right and still lose your shirt. I experienced this during the internet bubble. I think that the banks are exactly in the same state as the internet stocks in 2000. You have to be conscious that you fighting against people that will do anything to stay in business and they have the means to desinform for many years to come.

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Merrill Lynch hit by $9.4bn writedownMerrill Lynch spoiled investors? appetite for financial stocks yesterday with larger-than-expected writedowns of $9.4bn that underlined the bank?s continuing struggles to emerge from the credit crunch. Merrill?s results, which were announced after the market closed, sent shares in other Wall Street banks lower in after-hours trading. Merrill?s shares, which had closed almost 9% higher, gave up most of those gains. Shares in Citigroup, which reports results today, also fell amid fears the US financial group could suffer big mortgage-related writedowns. Merrill?s performance brings the bank?s losses for the past four quarters to about $19bn, making it one of the biggest casualties of the financial turmoil. John Thain, Merrill?s chairman and CEO, who was hired to stem the tide of losses, said that he continues to see no end to the credit crisis. In contrast to Thain?s bleak outlook, Josef Ackermann, Deutsche Bank?s chief executive, told the FT that the crisis was ?at the beginning of the end? because banks and regulators had taken decisive action.

This entry was posted by James Fontanella on Friday, July 18th, 2008 at 6:02 and is filed under Capital markets. Tagged with citigroup, john thain, josef akermann, merrill lynch. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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I look at the numbers and I don't understand the numbers. How in the hell can you understand or even comprehend all this type of stuff ? The markets seem completely unfazed and oblivious by all of this. It's like the risks didn't even exist. Well do they really or they don't ? A lot of people are aware of this but the morons don't care. These numbers are crazy. Are they real ?

The only financial type person I would listen to would be Jamie Dimon from JPM. Listen very carefully to what he says in order to get a sense of reality. All the different techniques banks employ to carry liabilities (tier1,2,3 etc.) make it very difficult to get to the truth. Remember these guys are all financial engineers. It looks like the revolving consumer debt is just starting to show is ugly head. The government just put in another backstop with the Fannie and Freddie bailout. The short restrictions on those plus the broker/dealers caused a massive short squeeze on all the Financials.

http://www.investinginbonds.co...Derivs.pdf

sorry it got cut off..........

http://www.investinginbonds.com/assets/files/LehmanExoticCredDerivs.pdf

Now that Merrill has "sold" it's CDO's for 5 cents on the dollar, I am extremely curious about the amount of CDOs (CDSs) on other financials balance sheets? Any pointers on where to look?

Excellent point Casino. Also let's not forget that the market for CDOs has completely dried up. Wall Street was cheering today because everybody believes that Merill's transaction creates an 'observable' price point for this garbage. There are no guarantees that Citi or MS might be able to fetch the same price for their garbage - there aren't too many well-capitalized buyers left. Expect the banks to move more assets from LII to LIII rather than taking the marks.

I wouldn't be surprised to see Maiden Lane LLC as the only company interested in buying this garbage.

I doubt there will be a lot of other buyers out there lining up to buy this toxic waste. In recognition of this, the FASB rolled back the date for enforcing FAS 140 and FIN 46R. Now the financials can hide this stuff in Level II or Level III assets until 2010. That's probably why the financials are up today. More bad debt swept under the rug, only to blow-up later in 2010. By then all the puts will have expired. Wall St has now got the FASB working in concert with them to steal investor's money. IMO.