Where's Andy? Questions on Credit and Airlines

[Andy]

Cramer actually wants this thing to pass. this andy dude hope the 700b investment fails. I hope to god it will pass.

Then you're hoping that this country will default on our debt. And from reading your posts here, it's quite obvious that you have no idea of what the implications of a default will be. I'd try to explain it to you, but it sounds like you've already made up your mind. ... ignore the 200 leading US economists that have stated that this bailout is a bad idea.

 

[~~~^~~~]

Andy:

I have to agree with others in commenting that your actions contributed to the problem, at least inasmuch as you contributed to AIG's collapse.

AIG was an easy short call. Those who took these massive, leveraged, short positions shot that sucka dead like a drive by shooting on a little old lady. The shorts were wrong on the fundamentals and still it crashed to zero just because every smartest guy in the room-Johnny come lately piled on with not a care for the outcome of their actions.

Just about anyone can make money in a bear market also, but credit goes to those who create, not those who destroy. Buffet's "problem," if you want to call it that, is his morality. If the World has truly changed and terrorists now control the floor, then yes, your analysis is spot on.

Meanwhile, AIG's thousands of subsidiaries still go about their work, making money facilitating the operation of schools' risk management programs, enabling the launching of satellites that relay our text messages, leasing the airplanes we fly and settling claims with their adequate reserves built up and saved over nearly a century of operations. Many of the contracts written to sell American products across the World are underwritten by AIG policies….If you can destroy the underwriter and the leasing company, who’s next, GE, BA, ROK? Of course! More easy short calls as long as the mood is dismal and like minded individuals play along.

Ethically, I do have a problem with naked shorts. (I'm not accusing you in that practice) Maybe you can explain to one of us quiet guys in the corner why allowing traders to sell something they don’t hold (and have no intention of holding) is a good idea. Just seems like a tool to manipulate the market, destroying the concept of “trade.”

By the way, what is our nation to do with all these baby boomers who's retirements are getting wiped out?

Nothing personal, you just were willing to stand up and discuss the issues. You write a very interesting post. I sure hope you are wrong, but like you, I moved half out of the market and paid everything off a year and a half ago. I sold some AIG the minute I heard about Mr. Greenburg's departure, but I did think it was right to go short on it.

Companies do best when everyone is scared out of their wits and focused on winning. My long view is that the government will do everything in its power to effect a controlled devaluation of the dollar to increase housing prices (not value) and Companies will adapt, adjust and as you point out those who provide essentials are probably long term value plays which will offset inflation. Selling into short term deflation while long term inflation lies right around the corner could be a rash move. Selling into a panic like folks are doing today? I'm going to turn off the computer, trim the bushes around the house, and enjoy a good glass of wine tonight. Looking at property in Asia next month.

Enjoyed your post.

~~~^~~~

 

[Mr.B]

Dude you started a hedge fund, you are one of the reasons we are in this mess. I think I will listen to warren buffet and hope this bill will pass.

The guy has a point....

 

[Dizel8]

Not sure the hedge funds are the problem, certainly not the entire problem, the underlying fundamentals of the companies are. You could short stocks all day long, but if the companies are strong, then you will not make much of profit, nor really cause any harm.

Bigger problem was the fact that many of the failed and failing companies had very little disclosure, and every day, they released just a little more bad news.
Kind of like the bandaid analogy, which is better to get ift off, one sharp pull or ten little tugs? In this case, the tugs brought the stocks lower and lower , untill it became worthless.

Not to worry though, there will be plenty of money made in this market, just not for the average joe.

 

[B-J-J Fighter]

Andy has been wrong on many of his predictions in the past. I honestly think of him as like many of the "barracks lawyers". They talk a good game but in reality they don't know what they are talking about at all.

 

[~~~^~~~]

Andy's got a better than average grasp of the fundamentals and objectivity.

Panic selling, or buying, it rarely a good move. This market is so volitile that there is not time for most traders to do anything other than run along towards the back of the herd.

We all saw how a old and irrelevant news article sent UAUA into a tailspin. Things need to slow down.

 

[lowecur]

My guess is Andy is a follower of Martin (the sky is falling) Weiss. He and his have been predicting what is going to happen for years. His is one of many newsletters I subscribe to, and I use his rating service to check on the banks where I keep my $$$$.

If only half the stuff he is talking about comes true, we are on the cusp of a depression. There will probably be a run on the banks in the next 6 months (only $300B cash in US, so it will go fast, till they print more), so keep at least 5 grand in cash in a safety deposit box or a home safe ($50's & $20's - no $100's.) You will be limited to weekly withdrawals of probably no more than $500 from ATM's. Put your $$$ in large institutions (as the little guys, even Wealth Management A+Banks are losing large depositors to Treasuries). Use at least 4 or 5 banks, if it's necessary to withdraw more than $500 in any one week....US Bancorp, Wells & Fargo, JP Morgan Chase, Bank of America, Citi, ....in that order of strength. Hold off on Goldman and Morgan till we see what they buy and how many depositors stay.

It will be tough for a while, but Asia/IndoChina will be the catalyst for a new growth period. Watch the money flows to those equities for a key to when to invest. Whatever you do, don't invest now...wait until the dust settles from this deal.

imp:​

 

[SkiFishFly]

How does all this affect money in credit unions?

Are they still safe?

 

[bravodude]

Yes. I started a hedge fund in Aug 2008 with $600K of seed capital, so I'm the problem. Let's ignore the real causes of where we're at and blame it on hedge funds. You don't have the slightest clue what a hedge fund is and how they work.
Warren Buffett? You have NO IDEA how much trouble Warren's in. Any idiot can make money in a bull market. It requires brains to adjust to a bear market and make money. Before we get out the other side of this mess, I expect 'ol Warren to have sold off most of his assets. Warren is NOT making those statements because he wants the country to do well; he's doing it to save his own skin. Just like Bill Gross of PIMCO. Next time you listen to an 'authority,' you'd better ask yourself what's in it for them.

If you're going to jump into a thread, at least have a basic understanding of the subject matter.

Even a broken clock is right twice a day!

 

[~~~^~~~]

How does all this affect money in credit unions?

Are they still safe?

I've been wondering and the answer is, it depends.

My money in the Delta Community Credit Union appears safe, although you do not more than $100,000 in any one institution. They are FDIC insured to $100,000 and $250,000 on some retirement accounts.

Delta Community Credit Union is leveraged 6.6 to 1.

 

[~~~^~~~]

It will be tough for a while, but Asia/IndoChina will be the catalyst for a new growth period.

imp:​

Lowcur, the problem there is the Muslim populations. Hard to make money when your employees are fleeing for their lives.

That is a little too dramatic, but my CFO Bro. in Law is currently under a death threat. Neighbor who just came back from running operations in the Philippines got tired of living under 24/7 security detail and armed motorcades so his wife could go to the mall. "Acquisitions" have a whole different meaning in the Muslim World.

Wonder what is going to happen to the Vegas of the Middle East without girls, gambling and booze? That whole deck of cards is stacked on credit. Can Dubai still play?

 

[bravodude]

Not sure the hedge funds are the problem, certainly not the entire problem, the underlying fundamentals of the companies are. You could short stocks all day long, but if the companies are strong, then you will not make much of profit, nor really cause any harm.

Bigger problem was the fact that many of the failed and failing companies had very little disclosure, and every day, they released just a little more bad news.
Kind of like the bandaid analogy, which is better to get ift off, one sharp pull or ten little tugs? In this case, the tugs brought the stocks lower and lower , untill it became worthless.

Not to worry though, there will be plenty of money made in this market, just not for the average joe.

I agree wit you! I find it funny that people like andy are on this forum preaching doom and gloom all the while they start a hedge fund and profit from the fear they impose on the average joe.

 

[cybourg10]

Looks like the bailout plan will not pass.......so what is plan b?

 

[Andy]

Looks like the bailout plan will not pass.......so what is plan b?

1. Force all off-balance sheet "assets" back onto the balance sheet, and force the valuation models and identification of individual assets out of Level 3 and into 10Qs and 10Ks. Do it now.
2. Force all OTC derivatives onto a regulated exchange similar to that used by listed options in the equity markets. This permanently defuses the derivatives time bomb. Give market participants 90 days; any that are not listed in 90 days are declared void; let the participants sue each other if they can't prove capital adequacy.
3. Force leverage by all institutions to no more than 12:1. The SEC intentionally dropped broker/dealer leverage limits in 2004; prior to that date 12:1 was the limit. Every firm that has failed had double or more the leverage of that former 12:1 limit. Enact this with a six month time limit and require 1/6th of the excess taken down monthly.

 

[lowecur]

Lowcur, the problem there is the Muslim populations. Hard to make money when your employees are fleeing for their lives.

That is a little too dramatic, but my CFO Bro. in Law is currently under a death threat. Neighbor who just came back from running operations in the Philippines got tired of living under 24/7 security detail and armed motorcades so his wife could go to the mall. "Acquisitions" have a whole different meaning in the Muslim World.

Wonder what is going to happen to the Vegas of the Middle East without girls, gambling and booze? That whole deck of cards is stacked on credit. Can Dubai still play?

My bad. Need a Geo lesson. Let's just go with India, China, and much of the Far East Region......including NZ, & Australia (China luvs both of them).

imp:​