ERICOPOLY

After I left they started offering a self-directed 401k, although I'm not sure if they allow options trades. However I did benefit from the Roth conversion.

Gretzky. Kareem Abdul-Jabbar.

"I was thinking more along the second one, the Spanish government using Santander to navigate its own issues by pushing them to buy Spanish treasuries or distressed banks. Santander may be required to increase capital, but it has the capacity to increase it with its foreign assets. But the moment they are required to use their leverage, any action can jeopardize the whole group." Can the Spanish government force the non-Spanish subsidiaries to purchase Spanish debt? I have been working off the assumption that the foreign subsidiaries are completely safe from Spanish influence. This is why I suggested they could recapitalize the Spanish subsidiary via an IPO instead of using other assets -- why continue to throw their walled-off assets into the Spanish subsidiary if that's where all the risk of Spanish government coercion lies?

Observation: Spanish subsidiary represents 15% of STD earnings. Concern: Spanish subsidiary may be forced to raise equity Worst case: They IPO shares in the Spanish subsidary, thus diluting their ownership of those 15% of earnings. Potentially the dilution is so severe as to effectively write off 15% of STD's earnings. STD escapes like a lizard that drops it's tail. Am I understating the risk to STD shareholders that the Spanish subsidiary poses?

I'm also considering that: Europe depends on the US more than vice versa. For example, US purchases about 8.8% of Germany's exports, but Germany purchases about 4.1% of US exports. Exports are more than 40% of Germany's GDP whereas they're only 13% or so of US GDP. So no, I don't think looking at how US subprime spilled over to Europe is a terrific analogy. The US GDP falling off a cliff in 2008 and 2009 was much more painful to them.

So is this your position: The US banks today are loaded up with European risk the same way that European banks were loaded up with US subprime?

I'm still up 40% YTD. There, I jinxed it and you can take that as a sign to sell everything tomorrow.

This is how I would treat some of the posters bordering on hysterical: Just kidding. Everyone has a right to their opinion. And for those who as despairing over not having sold -- and are now feeling the tight collar:

Aside from the plummeting real estate that had lots of room left to fall, you had: Bear Stears Countrywide IndyMac Wamu Wachovia Merrill AIG Lehman GM Fannie Freddie Citigroup and on and on and on You had real estate prices falling off the cliff and everybody losing their jobs en masse. Then you had short selling bans. TARP. Money market funds breaking the buck. There is nothing that I see in this Europe quagmire that is uniquely terrifying for America this time around. We don't export much to them as a % of GDP. Yes, it will not be a positive for America, but grounds to completely freak out???? And what do you mean that equity prices haven't reacted yet? WFC trades at the same price today as what it did at the end of 2008. There never was a recovery! There once was a time (not too long ago) when "rising recession risks" didn't mean the large banks should trade at 5x-7x multiples at a time when they are well capitalized -- in fact the best ever.

Let me introduce the $2 strike option to my argument and see if that makes an impression. It costs 20 cents extra premium to go from $2 strike to $3 strike. So it costs 20% to borrow $1 extra. It costs 20 cents extra premium to go from $3 strike to $4 strike. So it costs 20% to borrow $1 extra. It costs 32 cents extra premium to go from $4 strike to $5 strike. So it costs 32% to borrow $1 extra. Now do you see my point? The market has implied some sort of significance in how it prices the leverage once the strike travels from $4 to $5. The marginal cost of added leverage suddenly jumps by 60% from 20% to 32%. It remains steady at 20% all the way up to the $4 strike, then suddenly BOOM! Why bother with either of them? The implied financing rates are high on both. Jan '14 5 strike = .97/5 * 12/19 months = 12.2% Jan '14 4 strike = .65/4 * 12/19 months = 10.3% Implied financing rates rise during times of high volatility, high volatility tends to come when people are scared and thus stock prices are low, and when stock prices are low it is precisely the time when it's best to invest. Financing rates could be: 5% when a stock is priced at 10x earnings (during times of low fear/volatility) 10% when a stock is priced at 5x earnings (during times of elevated fear/volatility) Now, if the fear lifts and the stock goes back to 10x earnings, then you've got a 100% capital gain -- if the stock merely climbs with earnings, at least your 20% earnings yield is vastly larger than the 10% financing rate -- you have a 10% spread, instead of the paltry 5% spread that you earn on your 10x earnings stock financed at 5%. Anyhow, that's why I'm okay with paying up a bit for the leverage when a stock is compressed in value. It's just that I don't understand why the leverage for that marginal $1 gets so much more expensive between $4 and $5 strikes.

Let me introduce the $2 strike option to my argument and see if that makes an impression. It costs 20 cents extra premium to go from $2 strike to $3 strike. So it costs 20% to borrow $1 extra. It costs 20 cents extra premium to go from $3 strike to $4 strike. So it costs 20% to borrow $1 extra. It costs 32 cents extra premium to go from $4 strike to $5 strike. So it costs 32% to borrow $1 extra. Now do you see my point? The market has implied some sort of significance in how it prices the leverage once the strike travels from $4 to $5. The marginal cost of added leverage suddenly jumps by 60% from 20% to 32%. It remains steady at 20% all the way up to the $4 strike, then suddenly BOOM!

I know, but the difference between the break even point of the $3 calls and the $4 calls is only 20 cents, or 20% of the additional $1 that you are "borrowing". The "marginal lending rate" jumps from 20% to 32% as you move past $4 strike and head to $5 strike. It's like 60% more expensive for that incremental dollar of leverage! Yes, if u at the face value. But 4 -> 3 is 25% the other way around, 5 -> 4 is 20%, 25%... In plain English, I'm looking at the marginal cost for that extra $1 of added leverage. If held to maturity, the stock has to have appreciated in excess of 32% at expiration before that additional $1 of leverage makes a positive contribution to your returns. What is your calculation trying to measure (in plain English)? I totally don't understand what you are driving at.

It looks like Citi is trading at the Sept 2011 low if you assign credit for the retained earnings. It is now lower risk given that it's better capitalized and further progress has been made in reducing CitiHoldings. Page 12 shows the shifting composition of the earnings contributions: http://www.citigroup.com/citi/investor/data/p120516a.pdf Over two years the "global consumer banking" unit has gone from 14% of earnings to 45% of earnings, while the "securities and banking" unit has gone from 61% of earnings to 27% of earnings.

I know, but the difference between the break even point of the $3 calls and the $4 calls is only 20 cents, or 20% of the additional $1 that you are "borrowing". The "marginal lending rate" jumps from 20% to 32% as you move past $4 strike and head to $5 strike. It's like 60% more expensive for that incremental dollar of leverage!

Now, if Berkshire were to purchase Morton Salt they could preserve The Great One forever.

The $5 strike 2014 call is $2.97 "ask" -- breakeven stock price of $7.97 The $4 strike 2014 call is $3.65 "ask" -- breakeven stock price of $7.65. Difference of 32 cents on the breakeven price, but the difference in strikes is only $1. So the market is charging a 32 cent premium for protection of the stock dropping from $5 down to $4? Or alternatively, the extra $1 of leverage costs about 32% to "borrow". Doesn't really make sense, does it?

Imagine you have $100m that you want to save. What are your alternatives? You don't have FDIC protection (and there is no reasons why bank accounts can't have negative rates), and you can't put that in a safe under your bed. Sure, regular Joe's with $5,000 don't have to accept negative rates, but they aren't the majority of deposits. Not arguing that we will see those rates, but I'm just saying that there is some reason for why T-Bill yields sometimes go negative. It could happen for longer dated issues too. Ben To protect $100m you only need to purchase 400 certificates of deposit -- each one from a different bank. The $250,000 in FDIC protection is only the limit of protection that you have from each individual bank. Untrue...time to do a refresher on FDIC insurance limits and the flexibility of using beneficiaries on accounts...or even easier instead of buying a negative bond put it in a non-interest bearing account which is fully secured with no limit on FDIC insurance. http://www.fdic.gov/deposit/deposits/index.html Thanks for pointing that out.

Imagine you have $100m that you want to save. What are your alternatives? You don't have FDIC protection (and there is no reasons why bank accounts can't have negative rates), and you can't put that in a safe under your bed. Sure, regular Joe's with $5,000 don't have to accept negative rates, but they aren't the majority of deposits. Not arguing that we will see those rates, but I'm just saying that there is some reason for why T-Bill yields sometimes go negative. It could happen for longer dated issues too. Ben To protect $100m you only need to purchase 400 certificates of deposit -- each one from a different bank. The $250,000 in FDIC protection is only the limit of protection that you have from each individual bank.

Both of those banks are seeing share price gains today.

Complete nonsense.. only people with no understanding of geology or mining would even consider asteroid mining anymore than a pipe dream... Nonsense???? Oh, and I suppose you have your doubts for their other articles too??? Seems like legit reporting to me: http://aceflashman.wordpress.com/category/people/

A black swan for the gold bugs ;) http://aceflashman.wordpress.com/2009/10/27/solid-gold-asteroid-head-for-earth-world-economy-in-peril/

Long term: Productive assets the winner (gold and cash losers) Short term: Gold can dramatically underperform cash in a global meltdown -- just look at October 2008 if you deny this My conclusion: Hold cash if you are interested in buying at bottom of global meltdown over a short-term horizon. Otherwise hold productive assets. That leaves no room for gold. I believe that's what Buffett's position on this is.

That's a 10% gain over April's number. We'll be adding over 500k jobs per month a year from now given this month-over-month pace of improvement.

;) LOL This thread is a riot. Hey, this site isn't just about making money, but how to spend it and live your life too! We seem to have one of these threads every year. I remember last year's was on groceries and people's buying habits! I believe that was the thread where Ericopoly said his wife had just choked the chicken...literally! She had broken the neck of a hen bare-handed, and that was that night's dinner! ;D Cheers! Yeah, that brings back memories.

$30b of principal forgiveness is something like: 1) 240% of the settlement amount 2) 94% of their entire loan loss reserve They must have already written down most of these loans -- probably as part of that requirement to mark non-performing loans to value after a period of time (including the costs of throwing the person out, cleanup, realtors, etc...)