Saturday, September 13, 2008

Bank Of Lehamericawide

If Bank of America buys all or part of Lehman, while still digesting the toxic waste of Counrtywide, it will certainly be interesting to see how the street will view the stock going forward. The common stock currently yields almost 8%, a tempting carrot for many institutional investors. I would have to believe that the dividend would have to be cut to pull this one off. Interesting times for sure. It seems like the street has accepted the fate of many of these names, no one seems shocked or surprised anymore as they just "let them go." Merrill and AIG both look like they could go another 30 to 40% lower, yet the only thing the media seemed to focus on was LEH last week. The complacency to me is unreal. This really has been a slow motion train wreck and will definitly be one for the history books.


Stewie said...

upside: your inner knowledge of the banking crisis is unparalleled. why do you think AIG and MER could fall another 30% from here? would any deal with the help of JPM or Black Rock help AIG this weekend?

upsidetrader said...

hey stewie
as always you're too kind-unparalleled, i am far from it,but thanks.
i think all this "stuff" that's going on with the financials is just a band-aid on cancer. It's all part of the final flushout because we need to see outright bankrupcies and government intervention-in my opinion the easy money has been made BUT there are still names that just might not make it-and I mean big names.
If you own a restaurant and things get tough, if you sell the kitchen equipment to raise money, you take care of the creditors-but no one is coming back to eat--because there is nothing left.
MER and AIG lok horrible-MER is trading down because they won't get the scraps from LEH because institutions want to go to strong hands like a GS, and MER is now perceived as weak-they have huge problems-i don't think anything that AIG,WM or LEH do on Monday changes anything-just passing the torch of toxicity to a stronger hand--until the next shoe drops.

About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.