[stansd]

I’m not blaming the Chinese at all. I actually think they are brilliant both in terms of moving their country up the economic ladder, and potentially cementing themselves as the world’s only superpower 30 years from now.

My blame is squarely laid at the foot of the irrational American consumer. The chinese are simply supplying what we want…It’s our demand for cheap crap that we can’t pay for because we don’t produce what others want (outside of their claims on our own financial vapor paper) that is to blame.

Stan

[stansd]

I’m not blaming the Chinese at all. I actually think they are brilliant both in terms of moving their country up the economic ladder, and potentially cementing themselves as the world’s only superpower 30 years from now.

My blame is squarely laid at the foot of the irrational American consumer. The chinese are simply supplying what we want…It’s our demand for cheap crap that we can’t pay for because we don’t produce what others want (outside of their claims on our own financial vapor paper) that is to blame.

Stan

[stansd]

Last night it hit home for me…we were at a friends house, and he started going through a basket of toys from his son..

1. Made in China
2. Made in China
3. Made in China
.
11. Made in China
12. Made in Mexico (a musical shaker from tijuana:)
13. Made in China.
.
.
20. Made in China

Those toys (Current Deficit) were effectively the financing that propped up the U.S. housing market, that created the private equity boom, and that finance the crazy credit card spending habits of American Consumers(capital surplus), .

What are we offering them? One thing: An IOU on Our Future and the future of our kids. I’m by no means anti free trade, but I am reminded of some of the writings of Adam Smith-sensibility is critical to the success of capitalism.

Creative destruction does exist and should exist. My hope is that the current meltdown continues just long enough to bring some sanity back to this country, but not so long that it leads to its demise.

Stan

[stansd]

Last night it hit home for me…we were at a friends house, and he started going through a basket of toys from his son..

1. Made in China
2. Made in China
3. Made in China
.
11. Made in China
12. Made in Mexico (a musical shaker from tijuana:)
13. Made in China.
.
.
20. Made in China

Those toys (Current Deficit) were effectively the financing that propped up the U.S. housing market, that created the private equity boom, and that finance the crazy credit card spending habits of American Consumers(capital surplus), .

What are we offering them? One thing: An IOU on Our Future and the future of our kids. I’m by no means anti free trade, but I am reminded of some of the writings of Adam Smith-sensibility is critical to the success of capitalism.

Creative destruction does exist and should exist. My hope is that the current meltdown continues just long enough to bring some sanity back to this country, but not so long that it leads to its demise.

Stan

[stansd]

Last night it hit home for me…we were at a friends house, and he started going through a basket of toys from his son..

1. Made in China
2. Made in China
3. Made in China
.
11. Made in China
12. Made in Mexico (a musical shaker from tijuana:)
13. Made in China.
.
.
20. Made in China

Those toys (Current Deficit) were effectively the financing that propped up the U.S. housing market, that created the private equity boom, and that finance the crazy credit card spending habits of American Consumers(capital surplus), .

What are we offering them? One thing: An IOU on Our Future and the future of our kids. I’m by no means anti free trade, but I am reminded of some of the writings of Adam Smith-sensibility is critical to the success of capitalism.

Creative destruction does exist and should exist. My hope is that the current meltdown continues just long enough to bring some sanity back to this country, but not so long that it leads to its demise.

Stan

[stansd]

I don’t have handy access to default swap quotes…Jan ’09 put options quotes below. Notice the price on the $5 puts (Up a huge amount today, no doubt). Expensive, yes, but nowhere near what you would see if Bankruptcy was imminent.

I’m too far gone from this type of analysis to pin it well, but looks to me like the odds of bankruptcy implied in the quotes are in the 30% range (up from maybe 10% yesterday). Keep in mind this is on a day when the market was in an absolute panic.

Not to say that they don’t have big issues, and those percentages are something to take note of, but they don’t imply bankruptcy is around the corner.

Stan

PUT OPTIONS Expire at close Fri, Jan 16, 2009

Strike Symbol Last Chg Bid Ask Vol Open Int
5.00 OZFMA.X 1.50 1.05 1.30 1.70 200 70
7.50 OZFMR.X 2.10 0.60 2.20 2.85 124 2,213
10.00 OZFMB.X 3.10 0.40 3.10 3.90 424 2,950
12.50 OZFMS.X 4.40 0.60 3.90 4.90 100 1,778
15.00 OZFMC.X 5.10 0.40 5.10 5.70 199 640
17.50 OZFMT.X 7.00 1.00 6.10 7.10 807 148
20.00 OZFMD.X 7.50 0.20 7.30 7.70 558 8,239
22.50 OZFMX.X 9.40 1.60 8.60 9.70 111 335
25.00 OZFME.X 10.30 0.00 9.90 11.00 385 6,064
30.00 OZFMF.X 13.00 0.30 12.90 13.50 177 5,925
35.00 OZFMG.X 17.20 0.30 16.20 17.30 134 4,247
37.50 OZFMU.X 21.60 3.50 17.90 19.10 60 908
40.00 OZFMH.X 21.30 1.50 19.70 21.10 149 7,757
45.00 OZFMI.X 24.80 0.00 24.30 25.90 22 274
50.00 OZFMJ.X 31.00 5.60 28.60 31.10 1 481
55.00 OZFMK.X 37.00 12.00 34.10 36.00 1 49

[stansd]

I don’t have handy access to default swap quotes…Jan ’09 put options quotes below. Notice the price on the $5 puts (Up a huge amount today, no doubt). Expensive, yes, but nowhere near what you would see if Bankruptcy was imminent.

I’m too far gone from this type of analysis to pin it well, but looks to me like the odds of bankruptcy implied in the quotes are in the 30% range (up from maybe 10% yesterday). Keep in mind this is on a day when the market was in an absolute panic.

Not to say that they don’t have big issues, and those percentages are something to take note of, but they don’t imply bankruptcy is around the corner.

Stan

PUT OPTIONS Expire at close Fri, Jan 16, 2009

Strike Symbol Last Chg Bid Ask Vol Open Int
5.00 OZFMA.X 1.50 1.05 1.30 1.70 200 70
7.50 OZFMR.X 2.10 0.60 2.20 2.85 124 2,213
10.00 OZFMB.X 3.10 0.40 3.10 3.90 424 2,950
12.50 OZFMS.X 4.40 0.60 3.90 4.90 100 1,778
15.00 OZFMC.X 5.10 0.40 5.10 5.70 199 640
17.50 OZFMT.X 7.00 1.00 6.10 7.10 807 148
20.00 OZFMD.X 7.50 0.20 7.30 7.70 558 8,239
22.50 OZFMX.X 9.40 1.60 8.60 9.70 111 335
25.00 OZFME.X 10.30 0.00 9.90 11.00 385 6,064
30.00 OZFMF.X 13.00 0.30 12.90 13.50 177 5,925
35.00 OZFMG.X 17.20 0.30 16.20 17.30 134 4,247
37.50 OZFMU.X 21.60 3.50 17.90 19.10 60 908
40.00 OZFMH.X 21.30 1.50 19.70 21.10 149 7,757
45.00 OZFMI.X 24.80 0.00 24.30 25.90 22 274
50.00 OZFMJ.X 31.00 5.60 28.60 31.10 1 481
55.00 OZFMK.X 37.00 12.00 34.10 36.00 1 49

[stansd]

I don’t have handy access to default swap quotes…Jan ’09 put options quotes below. Notice the price on the $5 puts (Up a huge amount today, no doubt). Expensive, yes, but nowhere near what you would see if Bankruptcy was imminent.

I’m too far gone from this type of analysis to pin it well, but looks to me like the odds of bankruptcy implied in the quotes are in the 30% range (up from maybe 10% yesterday). Keep in mind this is on a day when the market was in an absolute panic.

Not to say that they don’t have big issues, and those percentages are something to take note of, but they don’t imply bankruptcy is around the corner.

Stan

PUT OPTIONS Expire at close Fri, Jan 16, 2009

Strike Symbol Last Chg Bid Ask Vol Open Int
5.00 OZFMA.X 1.50 1.05 1.30 1.70 200 70
7.50 OZFMR.X 2.10 0.60 2.20 2.85 124 2,213
10.00 OZFMB.X 3.10 0.40 3.10 3.90 424 2,950
12.50 OZFMS.X 4.40 0.60 3.90 4.90 100 1,778
15.00 OZFMC.X 5.10 0.40 5.10 5.70 199 640
17.50 OZFMT.X 7.00 1.00 6.10 7.10 807 148
20.00 OZFMD.X 7.50 0.20 7.30 7.70 558 8,239
22.50 OZFMX.X 9.40 1.60 8.60 9.70 111 335
25.00 OZFME.X 10.30 0.00 9.90 11.00 385 6,064
30.00 OZFMF.X 13.00 0.30 12.90 13.50 177 5,925
35.00 OZFMG.X 17.20 0.30 16.20 17.30 134 4,247
37.50 OZFMU.X 21.60 3.50 17.90 19.10 60 908
40.00 OZFMH.X 21.30 1.50 19.70 21.10 149 7,757
45.00 OZFMI.X 24.80 0.00 24.30 25.90 22 274
50.00 OZFMJ.X 31.00 5.60 28.60 31.10 1 481
55.00 OZFMK.X 37.00 12.00 34.10 36.00 1 49

[stansd]

JES,

This is hilarious. As an STJ who is married to an NFP, it gives me much food for thought….only catch, is that she’d get overwhelmed with all the possibilities.

Stan

[stansd]

JES,

This is hilarious. As an STJ who is married to an NFP, it gives me much food for thought….only catch, is that she’d get overwhelmed with all the possibilities.

Stan

[stansd]

JES,

This is hilarious. As an STJ who is married to an NFP, it gives me much food for thought….only catch, is that she’d get overwhelmed with all the possibilities.

Stan

[stansd]

Deadzone,

You might consider being a bit more circumspect in your assessments. You may be right, but your judgment is at odds with a market that is still putting the probability of bankruptcy as quite remote.

Stan

[stansd]

Deadzone,

You might consider being a bit more circumspect in your assessments. You may be right, but your judgment is at odds with a market that is still putting the probability of bankruptcy as quite remote.

Stan

[stansd]

Deadzone,

You might consider being a bit more circumspect in your assessments. You may be right, but your judgment is at odds with a market that is still putting the probability of bankruptcy as quite remote.

Stan

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[Author]

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