About 6 months ago I wrote a post arguing that copper giant Freeport McMoran (FCX) was overvalued (“Freeport Valuation Bloated Here”, Top Gun FP, April 23, 2008). At the time, Freeport was trading at $118 a share and my call…
The CPFF [Commercial Paper Funding Facility] will provide a liquidity backstop to U.S. issuers of commercial paper through a special purpose vehicle (SPV) that will purchase three-month unsecured and asset backed commercial paper directly from eligible issuers. – FOMC Statement on…
This is capitulation: “Whatever money you may need for the next five years, please take it out of the stock market right now, this week” – Popular financial guru Jim Cramer on the Today Show this morning. The S&P dropped…
News just broke that Warren Buffett will purchase $3 billion of perpetual preferred stock with a 10% yield from General Electric (GE). As part of the deal, he will also receive warrants to buy $3 billion in GE common stock at…
Lehman’s bankruptcy filing in the early hours of Monday, Sept. 15, sparked a chain reaction that sent credit markets into disarray. It accelerated the downward spiral of giant U.S. insurer American International Group Inc. and precipitated losses for everyone from…
In the wake of the failure of The US House of Representatives to pass the bailout bill, stock markets are crashing: The Dow is down about 470 points and the S&P about 66 as I write this. The Fear Index…
I will be out of town early this week on business and I don’t know if I’ll be able to get any posts up. So I’ve decided to post this week’s Client Note. Every week I write a Client Note…
Some of the best trades come when everyone gets very panicky. The crowd can often act very stupidly in the markets. You can picture price fluctuations around an equilibrium level as a rubber band being stretched – if it gets…
The Federal Reserve Board on Tuesday, with the full support of the Treasury Department, authorized the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG) under section 13(3) of the Federal Reserve…
In retrospect, the Fed’s decision to hold interest rates steady seems obvious. They can’t give in to every little fear and panic in the markets and print money just to make everybody feel good. They have to show some backbone,…