The Mono-line Bailout

[aiki14]

Whipsawed the market late today, and is alleged by CNBC's Gasparino to be taking place this weekend.
I have been short the mono-lines for a while and covered as soon as he made his announcement (The benefit of having CNBC on in the background). I will start taking short positions back when the market opens, if the price is still over 12, and I like my chances going forward.
Here is what I think will happen if this bailout occurs:
MBI and ABK will get killed. Why? Because the only way to really bail them out is to separate the Muni from the CDO/CMO portions of their portfolio's and the shareholders will be left holding the bag with the subprime crap.
The Market will have the best day of the year on monday with the financials being the biggest winners, as they will be free of the sword of Damocles that has been hanging over the market for months.

If it doesn't occur we continue downward, and potentially quite dramatically after the run up into todays close.

Definitely going to be interesting.

[kerahc]

Originally Posted by aiki14

Whipsawed the market late today, and is alleged by CNBC's Gasparino to be taking place this weekend.
I have been short the mono-lines for a while and covered as soon as he made his announcement (The benefit of having CNBC on in the background). I will start taking short positions back when the market opens, if the price is still over 12, and I like my chances going forward.
Here is what I think will happen if this bailout occurs:
MBI and ABK will get killed. Why? Because the only way to really bail them out is to separate the Muni from the CDO/CMO portions of their portfolio's and the shareholders will be left holding the bag with the subprime crap.
The Market will have the best day of the year on monday with the financials being the biggest winners, as they will be free of the sword of Damocles that has been hanging over the market for months.

If it doesn't occur we continue downward, and potentially quite dramatically after the run up into todays close.

Definitely going to be interesting.

Well said, if you didn't have CNBC on this afternoon you got left in the dust on the run. I still feel strongly that gold is going to $1,000 because everyone wants to see it just like any other stock heads towards $100 when it gets close. With that being said if the bailout doesn't happen then gold will rocket higher as people bail out of stocks on Monday. People can pay attention and jump into GLD on Monday because you have alot more upside if it doesn't happen compared to not much downside if it does happen. Just my thoughts...

[Leth]

Im actually looking forward to seeing what happens...

keep us posted my friends.

[Soverus Khan]

Nothing like shorting the hell out of everything all day and then running 6 long positions into the close. Glad I didn't close up early. Good analysis Aiki....time will tell.

[kerahc]

Originally Posted by kerahc

Well said, if you didn't have CNBC on this afternoon you got left in the dust on the run. I still feel strongly that gold is going to $1,000 because everyone wants to see it just like any other stock heads towards $100 when it gets close. With that being said if the bailout doesn't happen then gold will rocket higher as people bail out of stocks on Monday. People can pay attention and jump into GLD on Monday because you have alot more upside if it doesn't happen compared to not much downside if it does happen. Just my thoughts...

This turned out to be a pretty nice trade this week. I bought it on Monday the 25th at 10:00am, again because I don't trade in the first half hour of of the day, and purchased it at $92.31 and will be selling at the market at 3:30pm today. It's trading at $96.05 right now so that's a $3.74 gain or a 4% gain over the week. I still like the trade but this is in a short term account and I don't sit in trades over the weekend in this particular account because of my trading plan. Again it really doesn't matter what the market does there are always places to make money.