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Wednesday, July 2, 2008

FinancialNinja Favs: June

In case you missed them, here are YOUR favorite Financial Ninja posts for the month of June:

1) Three Hindenburg Omens Since June
2) Lehman Put Open Interest: Just Like Bear Stearns
3) MBIA and Ambac are Dead, Fannie and Freddie Mac are Next
4) Public and Private Debt vs GDP: The Illusion of Prosperity
5) Lehman: Death Spiral?

The appearance of a Hindenburg Omen cluster as the S&P 500 put in an impressive Bear Market rally has been a hot topic this month. I’ve followed up on the original post Three Hindenburg Omens Since June with two more; Hindenburg Omens: I am Bear, Hear Me Roar and Hindenburg Omens + Oversold = Crash?.

Before Lehman Brothers (LEH) went into this most recent dive, I posted Lehman Put Open Interest: Just Like Bear Stearns. This post attracted a lot of interest and even made it into the Wall Street Journal: Following the Bear’s Tracks.

I’ve been saying that MBIA (MBA) and Ambac (ABK) are dead since the first tremors of the credit crunch. I’ve also be said the same about Fannie Mae (FNM) and Freddie Mac (FRE). The monolines have quietly faded from the headlines now… left to die on their own. The next big thing will be the GSE’s. I argued that Using Fannie Mae and Freddie Mac as Disaster (Update1) would be cheap and easy. I say it again: MBIA and Ambac are Dead, Fannie and Freddie Mac are Next.

Public and Private Debt vs GDP: The Illusion of Prosperity sparked a lively debate in the comments section. While I used the data and charts from the Federal Reserve Bank of St. Louis, others have done some more detailed research. For example, Hellasious over at Sudden Debt has explored the debt and GDP relationship more closely in Real GDP – Part V: Goose Eggs.

A new month brings a new quarter. I’m expecting Oversold Bounce Time after One More Rinse… but it is from the deepest oversold conditions that markets have crashed as I’ve addressed in Hindenburg Omens + Oversold = Crash?

Yes, things really are worse than you’ve been told…


Anonymous said...

with all the bad news....i think all (banks) are staring at eachother, while they all know the ship is going down. No one wants to be the first to jump.

Fed plugged the hole with Sterns...but now small banks are 'leaking' ...bad construction loans, HELOC's that are falling behind, few new (decent) mortgages.

Local banks made a run in the mortgage/lending market...but will soon revert to ONLY cash, checking and CD's!

Fed can't possibly make money cheaper... $150/barrel is almost here.

Time to get back to old school labor/jobs/working...and put some sweat equity into the US Economy.

Anonymous said...


I'm really liking your Canada Rolls Over/Commodity Demand destruction post from Monday. I'm up >10% in a few days on your SMN bottoming call with stops in to guarantee 8%. Not bad!

-Mike J

Ben Bittrolff said...



Thats nothing. Wait until commodities actually break down. SMN, DUG, HOD.TO, HED.TO and HXD.TO are going to go parabolic...

Anonymous said...

I am starting to see the signs of impending stagnation. While oil keeps going up....I know that it is equity driven there is no other solution...and my food prices ( I own a resturant) have been going lower in the last month or so...the only price increase of note is due to fuel surcharges there is no way oil can stay where it is. It is the only commodity not following the economic pattern in the last 3 months. I can now say without a doubt that Goldman Sachs called oil at $150 a barrel because they were going to push it there ( along with others ) with investor money to find a safe haven. It is definately not supply and demand.

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