I'm just in an exhausted rant after trading the shit out of the Regionals today.... Basicly my thesis is that for the most part everything is over owned.... There is nothing I would own with $150 oil.
Oil traded 135 down to 127 then retrace 50%.... The Euro is in a continueing and repeatitly confirmed Downtrend... My Currency trading in the cnbc porfolio that I never have time to make changes to... is up 5-10%...... The reason I do so well is that I can trade it intraday, and I can really trade it.... Damn maybe I should give up on Equities and switch to Currency trading... at least the market is open most the time, instead of silly overnight moves you can't react to....
it's actually nice, Reasonably slow moves.
You can't have it both ways for long, as reported today by our fed charman, they are responsible for 30% of the commodites bubble(this isn't what he said, but it's what he proved(which was math Liesman couldn't do)). and with 10-20% of it being speculation. a 30-40% correction would be good to see.
$800 gold, $90 oil.
Now..... What will be interesting to see is that as the year wears on, and statistics deteriorate.... What will happen ... Will they let the market crash... or will they keep filling the punch bowl?
I pointed out that as usually happens I capitulate at the bottom, and instead of being 75% full on regionals, I get conservative and move it to 50%....
but I have no worries and am willing to trade my way out .....
Wednesday, May 28, 2008
Exhausted Rant
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A friend I have who works writing commercial loans at a local regional bank (Fifth Third) recently told me to buy a basket of regionals (IAT, which is similar to KRE) and don't look at it for three years. he "guaranteed" it would be higher and would beat the overall market.
I agreed with him 100%. Looking at the chart of KRE, it does look very bottomish and I am tempted to test the waters. My bias, however, is to take a (very) small position and wait for a an upswing and then a pullback, ie, see if it has any support anywhere. My guess is that it does and it is very close to it-- maybe $30 is support.
I hate--hate-- trying to catch the falling knife. Almost every time I try, I regret it.
On the other hand, KRE has a 5.6% dividend and some payment while waiting for the turn-around would be warm and fuzzy. (Not really a trader sentiment.)
They could keep pushing them down... I'm hoping for a rally in the regionals and maybe a pull back in the ibanks.
some of them are at 8 year lows... with inflation adjustments, that is a 20-30 year low.
it's just a bear run....
The regionals with construction loan exposure:
Regional Bank Construction Loans
as % of Total Loans
Zions Bancorporation (ZION) 21%
Marshall & Ilsley (MI) 14%
KeyCorp (KEY) 11%
Comerica (CMA) 9%
PNC Financial (PNC) 9%
National City (NCC) 8%
Fifth Third Bancorp (FITB) 7%
U.S. Bancorp (USB) 6%
Huntington Bancshares (HBAN) 5%
Wells Fargo (WFC) 5%
SOURCE: Source: SNL Data and Sandler O'Neill
With the CDO buisness done... it's the regionals that are going to take back all the market share they lost in the last 10 years to the money centers.
I'd say that offsets the exposure to construction and home loans.
and they are trading like they have CDOs
and cds's and cds^4
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