Talk about a bearish market ... at least they beat estimates and yet GS is down $7. The silver lining there is that they took only $500m in mortgage-related losses, so that pretty much confirms that they don't have exposure to bad paper on their books. There are doomsday predictions everywhere. Banks are hoarding money, apparently the overnight funds rate spiked to like 6% before the Fed decided to start injecting emergency cash. My guess though, is that the AIG situation will see resolution sometime today and the Fed will do the rate cut, and then we'll see a bounce. Futures are pointing to $SPX seeking support at 1175 which is pretty much exactly where I expected it to go. Personally, I'm selling into that bounce when it happens. It's time to exit to the sidelines and watch this one play out.
yeah they don't care about a goldman beat. they need a merger with a big bank. people have speculated a bank like a wells fargo would be a great fit. morgan stanley has also contacted goldman about a merger but goldman pretty much said piss off. oh baby it's getting crazy out here........
GS seems adamant about going it solo, i wonder if they will continue share buybacks since it's much cheaper today....
Actually it kind of does ... brings GS valuation down to size given market conditions. GS is probably a good value play at these levels too ... but it's obviously not smart to bottom fish in financials, at least not yet.
It would be better if they were near book value. If they earn 8 bucks a year they should be trading at 80.
man that aig rumor saved me some money (until the market goes up more and i wish i had held on longer). i got ridiculously lucky twice today and still lost money. maybe i should stop investing.
and does anyone know what the AIG situation really is. i keep hearing they just need time, not money. how true is that? and how bad would it be for the fed if they just helped them out on the time and it didn't really put them on the hook for any money. the fact they are so reluctant tells me it must be about money as well b/c just letting AIG fail b/c of time would seem to be a bad idea.
if you want to make a trade on aig's solvency trade preferreds avf aff...aig-a is also preferred but it is convertible
^ and "I don't understand economics" John McCain calls for AIG's failure, blathering useless platitudes about moral hazard. I am sure lots of people in texas with homeowners insurance will LOVE this well-timed call. What a complete idiot.
so what is the expected reaction to the fed rate announcement? does no cut send the market down quickly or does it indicate the fed doesn't think the situation is that dire? is .25% already priced in or does it still help the market? would .5% send it up sharply? would any gains even last the day?
