Even as Six Flags’ OCC (Official Credit Committee) was being formed in Delaware last Friday, with naive participants such as BoNY, HSBC, Esopus Creek Capital, Schottenfeld Associates, John Gorman, Whirley Drink Works and Coca-Cola (the last two must be royally pissed as all their advance profits on $9.95 small cups of soda have just become General Unsecured Claims) all hoping for some meager recoveries, and financial advisors (Broadpoint, Chanin, Moelis, Mesirow, BDO and Peter J Solomon, all of which are now overnight specialists in the amusement park business) trying to bedazzle the committee with their pretty charts and glass beads (and in the case of some, expansive dinners at Tao, where engagement letters were hoped to be signed on the naked backs of blonde, barely legal, Ukranian imports), the ad hocs were preparing for war according to Debtwire.
As Zero Hedge noted previously, the Six Flags prepackaged plan envisioned a massive cram down of virtually everyone who was not a secured lender. This ended up pissing off one Marc Lasry and his Avenue Capital to no end. Alas, Clinton-clan scion Chelsea is no longer around to have some heated discussions (presumably with the ever-convincing wingman Steve Rattner on the line) with Mark Shapiro over what is best for the economy and for the Avenue Credit Fund. As a result, Avenue, which holds approximately 40-50% of the Six Flags 12.25% OpCo notes, and 10% of the bank debt, has hired Akin Gump and Barclays as legal and financial advisors, and basically instructed them to go to town on the Six Flags valuation. As existing lenders are currently envisioned receiving 92% of the pro forma equity, pretty much everyone below them is rightfully pissed.
However, Avenue and straggler Fidelity will likely have their work cut out for them: good luck proving to a judge that in the biggest depression ever (sorry 1930′s, you were just demoted), a bankrupt amusement park can fetch anything even remotely close to a 7x valuation, especially when you nearest comp Cedar Fair is already trading inside of that.
Then again, if the government is really set on determining a FMV for the S&P of a Abby
The drum beat against Goldman Sachs is growing louder. As the global economy collapsed last year and U.S. citizens sank under crushing house prices and job losses Goldman appeared to be flourishing (also see here). Despite doing more than just about any other firm to help create the housing bubble Goldman is now one of the greatest beneficiaries. But what was once nothing more than a conspiracy theory has now turned into a full blown public debate about manipulation and Goldman’s use of taxpayer bailout dollars.
It’s widely believed that the firm would not have survived the financial crisis without bailout cash and a few interesting moves in the AIG portfolio, but now as the market gyrates in odd fashion on a daily basis the U.S. taxpayer appears to be the one losing. Goldman’s close ties to the U.S. government have also raised some eyebrows lately. The routinely high program trading correlated with market ramps are odd as well:
Meanwhile, job losses continue to mount, wages remain flat and the stock market is 40% off its all-time highs. But Goldman Sachs is rumored to be having their best year ever. And they’re rewarding their employees for it. I’m not generally one for conspiracy theories, but something isn’t right when millions of Americans seem to be in so much pain while the firm that helped create much of this crisis is flourishing.
As always, Martin Armstrong has an opinion and some entertaining reading here on the Goldman Sachs conspiracy…If you missed Matt Taibbi’s piece in Rolling Stone you can find it here.
Everyone speaking about inflation these days. Many seeing it mostly in commodity prices and the insane printing of money. Yet with oil heading steadily back to the range from last summer, there is no bottom anywhere for home prices. Also, banks can hoard up all the cash they want: nobody wants it. Consumer are firmly retrenching into thrift mode, and cutting up credit cards or simply maxing out and not paying them. To say inflation is guaranteed in light of trillions and trillions of consumer wealth destroyed, is very shortsighted.
As America entered the horse latitudes of summer, befogged in a muffling stillness on deceptively calm seas, we were distracted for a while by visions of a pale death angel moonwalking across the deck of collective consciousness. Eerie parallels resound between the sordid demise of pop singer Michael Jackson and the fate of the nation.
Like the United States, Michael Jackson was spectacularly bankrupt, reportedly in the range of $800-million, which is rather a lot for an individual. Had he lived on a few more years, he might have qualified for his own TARP program — another piece of expensive dead-weight down in the economy’s bilges — since it is our established policy now to throw immense sums of so-called "money" at gigantic failing enterprises (while millions of ordinary citizens wash overboard, without so much as a life-preserver). Anyway, Michael Jackson was on the receiving end of one huge bank loan after another long after his pattern of profligacy was set and obvious. They threw money at him for the same reason that the federal government throws money at entities like CitiBank: the desperate hope that some miracle will allow debt servicing to resume. Michael could burn through $50-million in half a year. It didn’t seem to affect his credibility as a borrower. When his heart stopped last week, he was living in a Hollywood mansion that rented for several hundred thousand dollars a month. You wonder how the landlord cashed those checks.
Like the USA, Michael Jackson was a has-been. He hadn’t recorded a song worth listening to in over two decades. He had done almost nothing but spin his wheels, hop around the globe from one place to another at enormous expense, and make himself available for award ceremonies to stoke his ego (and give advertisers a reason to promote some televised award show). He existed strictly on image, an anorectic figure nourished by moonbeams of attention, famous for saying that he loved his worshippers when the truth was he merely sucked the life out of them. In his last years, he even looked a bit like Nosferatu, the personification of the un-dead, and his fascination with ghouls was the basis for his biggest hit way back in…
As expected last week, the tide in credit is turning. The average loan was 5 bps wider, while toxic bonds, just like that scene in Indiana Jones and the Temple of Doom, are starting their descent back into hell, wider by 78 bps on average, and just 23 bps away from the critical 1,000 bps threshold (after being at 895 bps last week).
Also, to see what a schizophrenic yoyo game even credits have become compare the Neiman Marcus and TRW bond spreads (wider by about 500 and 850 bps, respectively). Compare the TRW action from the current week with that from May 28. Lunacy.
While everyone now knows that the equity market is a manipulated, East Setauket fat-fingered joke (Dow going vertical on more bad news today? enough already), seeing credits act as irrationally should bring many a tear to the eyes of any seasoned credit trader.
Amusing to see the biggest propaganda voice for the administration and General Electric let this one slip. At 2:22 in the video below, Larry Levin discloses the truth about ongoing flagrant market manipulation. hat tip JR
There was very little news of note and, despite a nervous sell-off in early Asian trading, the markets are back to their usual pre-market positions of UP. The Dow is up 100 points since 2:30 am, the Nas is up 2.5% as is the S&P and the Russell. Oil has been jammed all the way back to $70 after falling below $68.50 in early morning trading and the dollar has been pressed back down to 95 Yen while it once again costs more than $1.405 to buy a Euro and $1.66 to buy a pound. It’s no wonder we have such success playing the middle – "THEY" don’t allow the market to go anywhere else!
I really thought this morning they’d have trouble holding oil up as the IEA cut its 5-yer oil forecast for EVERY year through 2012 by 3 Million barrels a day (3.5%). In fact, according to the IEA, oil will not return to 2008′s consumption level of 85.6Mbd UNTIL 2012. “The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand,” the IEA said in the report, updating estimates made in December. “This marks a break after several years of strong oil demand growth.” In its “lower GDP scenario,” which assumes that a rebound in the global economy will be 3 percent a year, the IEA said global oil demand could fail to reach last year’s levels by 2014, standing at 84.92 million barrels a day, 6.34 million barrels less than predicted in December.
Bloomberg led off this morning with the headline "Commodity Rally May End as Supply Rises, Speculators Sell Bets" but not all speculators seem to have gotten the message as speculation proceeds apace. “Commodities have gotten a little ahead of themselves,” said Walter “Bucky” Hellwig, who helps oversee $30 billion at Morgan Asset Management in Birmingham, Alabama. “As long as there’s uncertainty about growth, that’s going to be headwind commodities won’t be able to overcome.” The World Bank forecast for this year’s economic contraction to be 2.9 percent, rather than the 1.7 percent decline previously anticipated, may curb sales just as producers expand output in anticipation that the worst is over.
Hedge funds and other large speculators are holding a net 653,915 contracts betting on higher prices, according to an index of combined positions in 20 commodities tracked by the U.S. Commodity Futures Trading Commission.…
I could not help noticing that China’s imports from Japan fell 16.2pc in December. Imports from Taiwan fell 6.2pc. The strong yen strikes again: Honda decides to build a high-performance hybrid Acura in Ohio – instead of its home nation of Japan. The firm’s continued shift in p...
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In an effort to reach the angry mob, CNBC's Rick Santelli goes all Sesame Street on the numbers behind the US Debt Ceiling Rise. Focusing for two minutes on what this practically means for every man, woman, child, and politician, the shouting Chicagoan points out that when the US breaches this new limit then the world's entire population will be on the hook for $2,346 each (and $52,409 per US person).
The Weekly Leading Index (WLI) growth indicator of the Economic Cycle Research Institute (ECRI) posted -6.5 in its latest reading, data through January 20. The latest public data point is a reduced contraction from last week's -7.6 (a slight downward revision from -7.5). This is the highest level (i.e., least negative) since early September. However, the underlying WLI declined fractionally from an adjusted 123.3 to 122.8 (see the third chart below).
Early last December Lakshman Achuthan, the Co-founder of ECRI, spoke with Tom Keene on Bloomberg Television's Surveillance Midday. You can watch the video on the ECRI website here, with bold heading Recession Update. The eight-minute video is well worth watching in its...
Some combination of better made cars, and less Americans able to pay new car prices has conspired to push up the average age of U.S. vehicles to a new record high. Reflecting this sea change, one of the best investment g...
Shares of battered tech company Research in Motion (NASDAQ: RIMM) are seeing much strength during Friday's trading session.
Fairfax Financial Holdings released a 13G filing with the SEC this morning, in which they disclosed a 5.12% stake in Research in Motion.
Currently, shares of Research in motion are up over 4% at $16.85. Over the last year, Research in Motion is down over 72%.
Research In Motion Limited is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. RIM provides platforms and solutions for access to information, including e-mail, voice, instant messaging, short message service.
Top 5 RisersStockRatingAnalysisASBCBUYMany analysts are expecting higher than previously expected long term growth from Associated Bancorp, and its near-term earnings outlook is also improving.CZZSTRONGBUYThe recent earnings history for Cosan Ltd shows significant improvement while projected valuation continues to rise.STLDBUYProjected value continues to rise for Steel Dynamics while long term increases in earnings growth are also becoming more widely expected.PSESTRONGBUYAn increasingly attractive expected long term growth rate and a significantly higher projected valuation from just a fe...
Major markets and major index ETFs corrected slightly today after the stock market’s euphoric party yesterday
Major markets suffered a slight hangover today, as the S&P 500 dropped .57%, the Dow Jones Industrial Average dropped .18%, the NASDAQ dropped .46% and the Russell 2000 Index dropped .34%, after yesterday’s crazy Fed and Tech Sector induced Wall Street Party. The NASDAQ, in particular, partied very hard, so hard in fact that the NASDAQ reached its 11 year record high.
The major market index ETFs were hungover too as the SPDR S&P 500 ETF lowered .51%, the SPDR Dow Jones Industrial ...
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This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
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Here is the virtual portfolio weekend update. Basically a recap of the positions and some notes about the trades. As usual, I'll post the previous week's P&L for comparison. Not the greatest of week in general!
AA Money
Only transaction last week as we bought back the AA Feb 9 puts on Tuesday for close to a 70% profit. The idea is to sell another set of put as soon as we get a chance.
Previous week P&L - $400.00
We lost some ground this week, but we'll keep on selling premium!
FAS Money
We also lost some ground in this virtual portfolio, but we have sold plenty of premium for the coming week. A little correction would go a long way to help! On Wednesday we sold the FAS Feb 72 puts (already good for 50%), on Thursday we added the Jan4 78 calls and on Friday we had to roll the Jan 78 puts to the Jan 80 puts. We were hoping for these ones to expire worthless on Friday, but a late stick killed that hope.
Previous week P&L - $4372.00...
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Here's the latest Stock World Weekly. We discuss the Fed's next move, and it's new policy for more QE-cating. Brief review of Sabrient's trade ideas for 2012 (already doing well) and a few new buy-writes from Phil and Pharmboy. Enjoy! (Feedback appreciated - give some life to the comment section below.)
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Finding new and exciting Biotech companies that target novel mechanisms is like trying to find a needle in a haystack. Sure there are many companies working on cutting edge science, but investing in those companies to reap the rewards of their work is a very dangerous game. More often than not, companies fail because the mechanism does not pan out, the compound(s) do not have pharmacokinetics (get into the body or last very long in the body), or an adverse event happens that knocks years off a development timeline. In addition, the stock can be manipulated by market makers so investors don't know which way is up. I approach investing in biotechs as a long term prospect. I continue to like our current portfolio of biotech companies (join in chat for many of those plays), and we continually add/subtract shares and sell/buy options on ...
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What a nice, quiet weekend.
I really thought this morning they’d have trouble holding oil up as the 
Hedge funds and other large speculators are holding a net 653,915 contracts betting on higher prices, according to an index of combined positions in 20 commodities tracked by the U.S. Commodity Futures Trading Commission.…
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(