Friday, March 14, 2008

A BSC Market

We're going on a BSC hunt
Going to catch a big one
I'm not afraid
'Cause I'm not long

Here's a big problem
Can't go over it
Can't go under it
We'll have to bail it out!

BANG!

(In steps Mr. Market with a smoking shotgun in each hand)

The chart below does not do BSC justice, thanks to Bloomberg's 30 minute delay. At the time of writing, BSC is trading at $29 on what Macro Man can only presume is massive volume.
Suffice to say that anyone who is long BSC and hasn't sold probably has that horrible feeling in the pit of their stomachs that you only get when there's been a death in the family or a colossal F*** up of massive proportions.

This bear is badly wounded....perhaps mortally.

13 comments:

vlade said...

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

Anonymous said...

MM,

What does this mean for the dollar ?

Has the 75 bps cut next week been factored in ?

Anonymous said...

Joseph Lewis must have lost a bundle by now, at least on paper anyway. The billionaire first started snapping up shares in September, forking over $100/share. Ouch...

Anonymous said...

Jimmy Cayne back at the bridge tables this week at the NABC in Detroit. Not that he could have helped anything, but still....

http://online.wsj.com/article/SB120550108028136579.html

Anonymous said...

There is always more then one cockroach.

postmaster said...

MM/anyone know what type of collateral will be posted by Bear and what is the haircut?

Everything I read is curiously silent on this. According to wsj the bailout decision itself was made only overnight, beginning with a call by Schwartz @ 4:30pm Thur to Dimon, setting things in motion and culminating in the Fed announcement next morning.

This seems very unusual but then I don't know what is usual.

postmaster said...

Similarly, I didn't see any mention of Fed haircut on the non-agency debt anywhere in the newer 200B TSLF facility which will take non-agency AAA debt as collateral.

Anonymous said...

can anyone spell moral hazard--i spell it ben b

Gregor said...

Moral hazard spelled Ben B? Sure. No question. But let's acknowledge the moral hazard in US markets has been extant for a long time. I started fretting about the fate of the USD in 2003. A number of us started making well reasoned argument--not of the perma-bear or doomer variety--that this would end very badly. I spell moral hazard "Alan Greenspan" and the culture of my country, which has wanted a free ride (and recieved it) for a long time. Many decades.

vlade said...

MM, it seems like the EUR/GBP boat might have sailed by the time you get to your new shiny office... :(

Macro Man said...

vlade, I am going grayer by the day....all my favourite trades seem to be coming to pass while I sit here at home! It's going to ber very difficult to, say, sell USD/JPY at 97 or go short SPX at 1260 as fresh positions.....

Macro Man said...

Oh, and with respect to moral hazard....as I suggest in today's post, eventually the devil will come to collect his debts....

used car donation said...

something happen, but we don't what will the next??