Tuesday, January 22, 2008 1 comments ++[ CLICK TO COMMENT ]++

Wild Day

Wild day and not sure what to say... A lot of stuff happening all over the world... Most of Asia has been clobbered over the last two days. Some markets, like Hong Kong, Japan, and India are down quite a bit (Indian market supposedly hit circuit breakers and trading was halted for one hour)... Europe isn't doing so well either... commodities are also down. The key commodity to watch is Dr. Copper. Copper corrections are thought to be a good indicator of economic weakness...

Having said all that, the US market is stabilizing and showing strength. Not sure if these gains will hold in the afternoon...

The Federal Reserve rate emergency cut, which takes at least 6 months to work its way through the economy, won't save equity prices if the underlying economy is indeed weak. However, it will mitigate the economic slowdown and should help consumers, particularly the stretched homeowner whose ARM is resetting. I think this is what is giving some push to the financials.

Bank of America announced a bunch of stuff but I think it was drowned out by all the other news floating around...

The big news for me is the Ambac conference call. I will post thoughts later tonight but key things that stick out are... Ambac plans to retain its AAA rating. I thought this was gone but maybe not. The question is how dilutive any method will be for Ambac shareholders. Ambac says it has some interested parties but what is the cost to shareholders? A possibility is for Ambac to unload a chunk of their municipal bond assets... Ambac also indicated that it is not pursuing run-off. Management didn't spend any serious time on this possibility...

All the monolines are up sharply... Ambac and MBIA are up around 30%, but were up as much as 40%... The rest of the sector is on fire as well...


(source: finance.yahoo.com)

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1 Response to Wild Day

cak
January 22, 2008 at 7:43 PM

Wilbur Ross telephone interview this morning

WROSS

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