The market agrees with me today:
gs $124.28 3.61
trv $42.41 1.49
bk $26.05 1.12
jpm $33.83 1.04
ms $22.12 1.04
wfc $20.47 0.99
usb $18.36 0.68
FAS $8.13 0.68
bac $8.7199 0.57
TMF $51.35 0.56
TYO $63.39 0.41
XLF $10.80 0.37
TYD $56.40 0.00
TMV $68.67 -0.77
FAZ $8.41 -0.85
The fact that Visa's plan is a benefit to EVERY bank on the pricing of the restricted Visa Class C shares they hold, whether they petition to sell them or not. Yeah! Thank you Visa and Mark to market! [more]
Knowledge is key. Knowing how it is all linked ... and how other pieces can help, or hurt, or keep the dominoes from falling ... priceless!
WARNING! This news article, from VISA (V) itself, is being generally ignored by the short sellers and bears, yet it shouldn't be:
"SAN FRANCISCO (AP) - Credit card processor and payments network provider Visa Inc. said Monday it approved a program to allow certain shareholders to liquidate stock early.
Holders of class C shares will be able to sell up to 30 percent of their holdings anytime after July 1. The remaining class C shares will have trading restrictions until March 25, 2011.
Any class C shares sold after July 1 will be converted to class A shares. The sale of the class C shares does not increase the number of outstanding shares of Visa stock, nor is there any dilutive effect of the stock from the sale.
Shareholders looking to sell a portion of the class C stock will need to apply to Visa's transfer agent between July 1 and Sept. 30 to be approved to sell the stakes."
Check out the Visa Class B and C link:
Why is that important? Because the restricted stock is owned by member banks, the banks would have had to hold onto 'till 2011, can be transferred into common stock immediately resaleable in the market, after July 1, and some if not all of the "additional capital needed" infusion solved.
FAS includes V, WFC, JPM, GS, MS, BAC ... look at who the Shareowner Online website is for V: WFC, yep, Wells Fargo ...
Soooo, Visa, all by itself, can help out it's member banks with the additional capital they need .... do the banks get it? Well look at VISA's stock price TODAY: $60.71 +$1.84 (+3.13%) with volume at 10.5 million shares traded, and after hours $61.20 +$0.49 (+0.81%) ...
For the banks, whether they "may" need capital or not, keep in mind, this attaches a market price, for mark to market purposes, to all the C shares, for ALL the participant banks, even those NOT selling. I suspect the banks needing capital will exchange the restricted C shares for the A shares and HOLD them as a capital ASSET and not sell the shares to avoid the tax hit. Yeah, the banks get it, and they're going to keep pumping cash into Visa stock, which makes their Class C shares worth MORE. [more]
I have been watching USU and I am pleased with today's action. Especially, I have been watching the short interest in this stock. [more]
The US National Debt $11,046,247,657,049.48 (According to US Treasury Direct, 3/26/09) would seem impossiby HUGE ... [more]
I track FAZ as point, and counterpoint, to FAS, XLF, etc ... to keep me honest, as well as other shorts and ultrashorts ... Hint: I like to watch the "On Balance Volume" as one of your leading indicators of the market direction in these stocks. Keep in mind the speed these tigers change direction at, is hyperfast ... and can be right one minute and buried the next. Ouch.
However, while FAS (the Bull 3x) holds stock and derivatives, FAZ is primarily derivatives to get the (- 300%) "BEAR" which makes it a lot harder to calculate fundamentals and value. I can do my fundamentals, chart and backtest: XLF, FAS, JPM, WFC, GS, BAC, BK, USB, V, TRV and I made a layout specifically for that ... so, I have a real good idea of the FAS pieces of the puzzle, how they fit, and what the overall picture is shaping up to look like.
Here is the FAZ link: http://www.direxionshares.com/etf/fbe_3x_shares.html
I recommend going to the FAZ link. There you'll find a brief summary explanation of the FAZ objective and it's basis on the Russell 1000 Financial Services Index. Look at the blue box to the right. You can download the Fact Sheet and the second line says you can get the daily holdings (csv) - csv stands for comma separated values. This is what it says:
Account Ticker,Stock Ticker,Cusip,Security Description,Shares,Price,Market Value
FAZ,,RGUSFL,RUSSELL 1000 FINANCIAL INDEX SWAP,-4673700.00,595.63,-2783795931
FAZ,,S9999021C,AIM S/T INVEST. TRUST TREASURY,665816980.05,1.00,665816980.1
FAZ,,S99990210,AIM S/T INVEST. TRUST TREASURY,238904697.46,1.00,238904697.5
Soooo, with FAZ you are investing in derivatives and swaps. Possibly, the very products that everyone is so angry with for causing the global meltdown .... but, mine is not to judge,
I haven't been able to get a handle on the pieces, "derivatives", within FAZ ... that means no facts, no facts = NO educated guess ... just a "gut feel", or 100% gamble. I'm not comfortable with that. Some people are.
Here's what I do know about FAZ. Hot off the chart:
Relative strenght: 33.2010 and trending DOWN
MACD : -9.16237 yep, minus 9.16237 using a 9 day EMA (exponential moving average)
Stochastic Oscillator: 8.01830 ( on a scale of 0 - 100 )
... but, like the tv commercial says, there's more ...
For 4/17/2009 the closing price was 8.9000.
Overall, the bias in prices is: Downwards.
Short term: Prices are moving. (down)
Intermediate term: Prices are trending. (down)
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 34.63.
The projected upper bound is: 34.56.
The projected lower bound is: -18.58.
The projected closing price is: 7.99.
Note: these price projections are for reference only, and can be easily exceeded by the market.
As you can see, there is a possibility, in the math, for a possible correction to 34.56 - 34.63, I calculate that to determine a risk reward/reward ratio ... and, as I said, to keep me honest. [more]
Report April 17, 2009 [more]
( FAS ) After Hours: 8.86 -0.18 / -1.99% Vol. 2.34 Mil
Top holdings as of 3/31/2009
Symbl Company name % Net assets After Hours
JPM J.P. Morgan Chase & Co. 8.56% 33.15 -0.09 / -0.27% Vol. 617,655
WFC Wells Fargo Company 5.22% 19.39 -0.06 / -0.31% Vol. 404,487
GS Goldman Sachs Group, Inc. 4.07% 120.86 -0.33 / -0.27% Vol. 111,141
BAC Bank of America Corporation 3.75% 10.40 +0.06 / +0.58% Vol. 580,326
BK Bank of New York Mellon Corp 2.81% 30.91 -0.30 / -0.96% Vol. 59,343
USB US Bancorp 2.21% 17.97 -0.09 / -0.50% Vol. 201,128
V Visa, Inc. 2.16% 58.05 -0.02 / -0.03% Vol. 20,831
TRV The Travelers Companies, Inc. 2.14% 43.19 unch / unch Vol. 21,924
Percentage of holdings 30.92%
I did pay attention in my education in Physics, Chemistry, and ... oh, yeah, Geology.
The Bakken shale formation interested me because it presented numerous divergences from traditional oil fields. First the is no pool to tap into and drain. Second, you can't inject heated steam as shale reacts with water and swells, which could render a well useless. New drilling techniques being used in horizontal drilling hold promise in fracturing the shale and creating a "pool" location around the drill hole for the crude to pool and be withdrawn. [more]
Take for example the SPR. The USA gov't SHOULD use the SPR to control the price of crude like the Fed seeks to control interest rates, and SHOULD make use of UNREALIZED profits to generate income to the USA Treasury, and to DRASTICALLY reduce our dependance on FOREIGN crude . [more]
The USA currency is backed by the USA TAXPAYERS, the USA Gov't, and all the Assets the USA gov't owns. The failure of those critical of the debt load is in that they are stuck thinking "in the box" and failing to consider (1) all the assets the gov't (WE, the people) owns, (2) all the yet to be discovered (potential assets) assets, and (3) assets that are just plain overlooked 'cuz NO one thinks of them as assets. [more]
When the FASB issued M2M it included various scenarios for valuing assets held for differing time periods, such as "held to maturity" - with models such as "cash flow." Everyone has erroneously applied the worst case model scenario, including the auditors, and the FASB director TESTIFIED before the hearing it was (1) because they didn't have expertise to do the "cash flow" model or (2) they didn't have the people to do the cash flow model and (3) the auditors, who are suppose to know better, went with the worst case scenario -- excuse: concerns over litigation.
That's why the global meltdown.
What the best outcome would be ... would be for all financial companies to keep M2M and require more info on the holdings and timeframe in the quarterly and annual reports; and the USA gov't to ensure that the financials, the auditors, the FDIC, the FASB, and the SEC are using the correct model scenarios per holdings types and time frames. This means, if they need to use the cash flow model, they get their people trained on the cash flow model and USE the cash flow model. The same for the other scenarios.
It's not unrealistic to expect that many financials will have assets that will require ALL the models, that "conspicuous asset segregation" would be the transparency everyone wants. That it will require more reading and comprehension, seems to be the common sense argument many of the debaters (especially the shorts) don't want to hear. They don't want to do their own homework. They want it all lumped in a single "simple" category, even if that results in WRONG valuations. [more]