On Thursday, Moody’s downgraded 15 banks. On the surface it seems counterintuitive, but the downgrade is positive for JP Morgan (JPM), Morgan Stanley (MS) and Bank of America (BAC) . My 30 years in markets have taught me that it is always positive when an overhang is lifted. Back in
I have a bad habit of regularly studying a wide variety of boring documents ranging from central bank reports to obscure economic indicators. Lately, it has been difficult to find anything positive about Europe. Since media is full of negative information about Europe, there is no point in regurgitating the
It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has
It turns out that Mario Draghi is Super Mario. Mario Draghi is an ex-central bank governor of Italy who just took over from Jean-Claude Trichet the presidency of the European Central Bank (ECB). In a surprise bold move, Draghi announced that the ECB is lowering its main rate from 1.5%
We have been short banks. UK government is investing $10B in RBS and $3B in BCS. We do not know how the stock prices will react. Should the prices begin to rally, we recommend covering in London. If the prices fall precipitously, again the right action will be buy to
We hit bulls eye by informing you before it was generally known that the bailouut will not cover non US institutions and providing you with the oppotunity to exit BCS position with over 30% profit in three days. Following is the text of the Treasury plan: September 20, 2008, 1:05