All middle market lenders are being taken down today
something is happening that may have nothing to do with CSE. Look at these numbers, all are down: ACAS (2.56); ALD (5.94) MMA (5.19); CSE (5.0) the market knows something about this sector that we dont know. Any one out there have any info about this sector sell-off might be?
>> the market knows something about this sector that we dont know. <<
Since the dawn of markets, the players have overreacted to both good news and bad. Markets are driven by fear and greed. When fear sets is, the crowd panics and heads for the exits without bothering to look close to see if there is a fire. Similarly, when the market start rising, everyone gets greedy and jumps in, driving it up faster.
Right now we are experiencing over-reaction to fear of a gut-wrenching recession.
Understand, there is a legitimate element of reasonable fear present. The whole world could plunge into recession, and numerous big corps, including CSE, could end up cutting or eliminating their dividends. It is the very real fear that is pushing the market down, as well it should. Just not this much. We are seeing irrational panic set in.
Unless you desperately need to preserve capital, you should hang on. This, too, will pass. Maybe tomorrow, maybe in five years. But it will pass. CSE is a very high quality company.
Might be the risk being priced in to the agencies that insure/back mortgages and bonds. They is a lot of fear that one or more of these will go under which will cause the ratings on the instruments they insure to go down which will cause more writedowns. Also, nobody trusts the massive dividend, I wish they would issue some pr about it to clarify the situation.
Leapnliz, you are right on! Until the insurers situation is "fixed" all lenders will be under pressure. Some feel that the government should step in and buy the insurers i.e. ambac, mgic, etc. and a lot of the "credit problems" would work themselves out!!! IMHO!
The markets are not as smart as we think they are when in a fear or greed mode. All the CMReits, BDC's and equity reits that declared their dividends last quarter in early december did so without a cut. We are in a theater and someone has yelled fire. Don't expect intelligent behavior at this point. It's a herd mentality and the herd will run for a while longer. There is no place to hide just gut it out and be patient. Good luck. I hate bear markets.
Yeah I do. GE today reported very good earnings from their comeercial and healcare lending operations and projected a 5% increase in profits in this division for 2008. Also ACAS reafirmed their dividend for 2008, upped guidance for the 4th quarter and announced a huge share buy back. Also insiders have been buying ACAS. Finally Farallon who sits on the board bought over $70 million shares of CSE a few weeks ago. The market apparantly hates this news.