ERICOPOLY

67.4m share volume!

Customer ratings for BAC will drop slightly because they acquired a new customer with a $500m credit line and dis-satisfaction is a near certainty.

"Son, I've made a life, out of readin' people's faces And knowin' what their cards were by the way they held their eyes" KENNY ROGERS - THE GAMBLER LYRICS

No, I didn't like the premiums -- too high. Today I've been writing puts as well as far out of the money covered calls because I believe the volatility premiums are going south very quickly with the settlement in the rear window. Gather ye rosebuds while ye may.

It's five o'clock somewhere!

This will be nice if true. I have 28% in MBI now. (added on Thursday, Friday, and another 10% this morning around $10.20) Are you kidding me? What are you, psychic? ;D No, I just listen to smart people like you. Here is what I did this morning in my wife's Roth IRA: mbi.tiff

This will be nice if true. I have 28% in MBI now. (added on Thursday, Friday, and another 10% this morning around $10.20)

It's not a 20% gain. It's a 32% gain if the shares trade above $10 at expiry in August. You are risking $7.71 of your own money ($10.17 - $2.47). You stand to gain a maximum total of $2.47. $2.47 is 32% of $7.71 (apologies for the nit picking)

You don't really need margin calls. You just need a lot of other relatively more appetizing bargains. I'm sure if WFC is at $8 again, AXP is at $10 again, etc.. etc... a given number of shareholders will once again dump their FFH. Given the hedges, there will always be people who hold it as a "defensive" position, an "alternative to cash". Those people will be gone when huge bargains arise. Anyone buying their FFH shares will have to ask if the price for FFH is low enough to make them choose FFH over the rest of the bargains out there. Thus the price will come down.

That's funny, but no :)

quoting: Limiting tax-favored retirement assets of people who have saved all their lives to about half of what taxpayers will give Obama for eight years in office is just wrong. End of story.

I was evaluating this too, but haven't pulled the trigger. The fact that MBI is trading at 40% of adjusted book value makes me feel like it is too expensive. AGO is trading at the same discount but most of the legal uncertainty has been removed. If MBI trades at a much higher discount, I would be more interested. If you invest in MBI just for the event, do you think call options would be better? I didn't want to purchase the MBI calls. Rather, I have been writing MBI $17 strike covered calls and BAC $17 strike covered calls as a means of financing my puts. Either stock could be higher at expiry, so be it.

I find the argument relatively compelling for a settlement based on their silence as well as the other points regarding impending rehabilitation. The silence doesn't fit the pattern of the usual mudslinging as pointed out. So I bought back most of my peak MBI position (expressed in # of shares, not percentage of portfolio) -- trading in some BAC.

I think at a 28% tax rate the drop in BV would be 14%. Not sure what the right tax rate is but it's just an example..

There hasn't been any reason to drag it out for years now! It does feel a little different now. No response by either side is kind of strange given how this is a schoolyard brawl at this point with each side claiming ultimate victory each time they shove the other guy. Without going back and doing an exhaustive search, it does seem as if each time one of the decisions comes out there are press releases or interviews or something by one or both sides. Nothing yet might mean they are talking. Or, it just might mean they are crafting the absolute perfect nail the other guy to the wall with clever words press release......... Back in Q4 I think it was, I remember one of the major guys at BAC (Thompson I think) commented on how they are settling a major case every quarter. I've been wondering if the reason BAC is dragging this out is so they can sprinkle the charges across multiple quarters to avoid a huge headline loss quarter. Not sure how bright that strategy is, but they do seem to be settling these things at a somewhat measured pace.

It's too bad Berkshire subs can't market their goods as "40+% of profits go to the Bill & Melinda Gates Foundation". They basically do, indirectly through Buffett's pledge.

The "what ifs" are not relevant to whether or not BAC is liable. You are right -- whether or not MBI's was headed for the dirt doesn't matter with respect to BAC's liability as the new owner of Countrywide. However, the "what if's" do help in the assessment of management's ability to run a company for the long term -- did they run MBIA straight into the ground at Mach 1 speed?

Only a few days after I buy my Fairfax shares I read this "Inflation Out, Deflation In" article. Then I found another round of articles this weekend talking about the slumping materials prices, gold selloff, decline in government bonds, rise in USD, weakness in "growth" stocks relative to the rest of the market. And a weak recent auction for TIPS. http://blogs.wsj.com/moneybeat/2013/04/19/inflation-out-deflation-in-bad-news-for-euro/ So perhaps the Fairfax deflation hedges starting to regain some value already this quarter?

Decided to go 30% unhedged long BAC common late today. Not the best price of the week, but it accomplishes what my original goal was which is to make a best effort to eliminate the taxable short term capital gain this year. I decided to write 2015 covered puts. I kept the January 2014 $12 strike put and wrote January 2015 $12 strike put. Later this year I can purchase 2016 puts in November (to replace the 2014 puts) and then dump the 2014 puts at the end of December. Now, if things go as I expect the stock will be over $12 towards the end of December when I dump the 2014 puts. Thus I will get my tax loss for 2013. My tax bill for 2013 would otherwise be roughly 10% of the current value of the account! I mean, this is well worth doing even if it sounds like I'm trying too hard to reduce my taxes. Next step, I might purchase $10 2015 puts. That would leave me with: common stock asset 2014 $12 put asset at $1.14 average cost 2015 $10 put asset at $1.14 average cost (that's the current "ask" price) 2015 $12 put liability at $2.05 average cost There should be 3 cents of dividend paid on the common before the end of the year. So, only 20 cents total cost to be 100% hedged at-the-money for the rest of the year ;) Yet retaining all of the upside! :) And a possible huge tax loss for 2013 to offset those short term capital gains from selling the warrants. :)

Decided to go 30% unhedged long BAC common late today. Not the best price of the week, but it accomplishes what my original goal was which is to make a best effort to eliminate the taxable short term capital gain this year. I decided to write 2015 covered puts. I kept the January 2014 $12 strike put and wrote January 2015 $12 strike put. Later this year I can purchase 2016 puts in November (to replace the 2014 puts) and then dump the 2014 puts at the end of December. Now, if things go as I expect the stock will be over $12 towards the end of December when I dump the 2014 puts. Thus I will get my tax loss for 2013. My tax bill for 2013 would otherwise be roughly 10% of the current value of the account! I mean, this is well worth doing even if it sounds like I'm trying too hard to reduce my taxes.

The swimming pool costs more to heat in the winter than I ever spent on my home in Puget Sound. Of course, the difference is the lifestyle: keeping an outdoor pool heated to 90f is luxurious :D In summer the solar heating for the pool takes care of keeping it at 90f. The heating bill is just for the winter. We spent most of the Christmas school holidays outside in the pool. We don't want snow in the neighborhood, it would kill the avocado trees (which are laden with fruit all the time). Here, you get winter on demand. Just get in the car and drive 5.5 hours to the town of June Lake or Mammoth Lakes. Awesome downhill skiing whenever it's convenient -- but you don't have to shovel snow at your house or "winterize" the RV. March in Death Valley was 100 -- you can camp here year round if you aren't a skier. I don't know, I grew up in California and I just think it has everything. Highest elevation in the lower 48 (Mt. Whitney which I've been to the top of). Lowest elevation (Death Valley). Beaches. Desert. Redwood forests. Cities. Country. But, the taxes! It's just crazy and I was "okay" with the bargain coming in to the place knowing 1/2 of the money is in the RothIRA. Take that away though... I don't know, that drives the cost of living here way up.

Interesting point: Would public employees face the same upper limit on their pensions? If they already have reached the $205,000 limit, could we stop making contributions for them? Or could they stop getting pension raises? What if you have a pension and other tax-deferred accounts? Who is responsible for aggregating the information? Who will pay that administrative cost? http://blogs.wsj.com/totalreturn/2013/04/15/the-ira-cap-devil-is-in-details/?KEYWORDS=IRA

So far only Florida is a reasonable trade for somebody who likes to be warm, lightly dressed, and outdoors. Here in Santa Barbara, it was 75 yesterday, will be 76 today, 75 tomorrow, and 70 on Sunday. Girls playing volleyball at the beach and they're not dressed like Canadians. You've probably forgotten what a tennis skirt looks like.

Miles better in Canada. Oh my gosh! You guys pay 25% on a short term capital gain, right? I mean, the tax treatment is the same for all capital gains -- there is no "short" or "long" term. 52% is the top rate in California for short term capital gains! I mean, we're talking more than twice as much!

The stock compensation is expensed so it hurts Moynihan's chances of hitting the ROA target in the same manner as cash compensation. There is really no incentive there to pay with stock vs cash. I mean, he still has to watch the expense levels either way. The only annoying thing is that the stock might have a lot of upside left. A few years from now the stock awards won't matter as when the stock is fully valued there won't be any negative valuation pain from issuing stock one year only to buy it back the next. So this isn't a perpetual problem.