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New York Community Bancorp Inc. Message Board

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    • I need to keep an eye on the markets just
      now, but the reference given in this msg.
      might be of use:

      I mean Hussman. Steve Dalachinsky and Matthew
      Ship are in the "for fanciers' only"

    • The flight to safety is really starting to rev up. The ten year treasury this morning dipped below 3%, it's lowest since April 2009. If you remember, it was late March 2009 that Helicoptor Ben flew in and started buying treasuries. One major hiccup and I wouldn't be surprised to see it below 2.85%, which I believe is the all-time low. Maybe the crappy jobs report that comes out later this week will be the impetus.

    • Do be a little careful if prices approach about
      the level of the orange horizontal line on
      this chart:

      Thing is, one contingent looks at the whole
      pattern development and sees a violation of
      that approximate level as a completed top
      with a downwards minimum measuring implication
      around SPY 88, while another looks at the
      series of bottoms just above 104 as
      established support for prices, (Note the
      series of lower highs in VXZ, as successive
      SPY declines were arrested at about that

      Volatility's volatile, even the "medium
      term" VXZ. I keep a log of percent chge
      in various securities per trading week.
      Some recent values for VXZ:

      5/28: (6.29)
      6/4: 2.76
      6/11: (1.60)
      6/18: (6.95)

      If it was a stand-alone trade, might be
      best just to buy values at or below the
      lower Bollinger band and sell every spike:

      Relatively new thing for us, too, so I'm still
      learning it. Obviously, the very heavily
      traded volatility securities move much
      more sharply, but you're then into the
      "black box" problem that bothers me
      so much these days: (trade determined
      by key buying and selling at speeds
      impossible for you to follow in
      the retail version of "real time.")

      We've never had such a large allocation
      to cash. Too many situations in the
      "too hard" pile, imo.

    • <<really big volatility and price spikes are seen when the market's selling off.>>

      Good observation!!!

      That is a great observation. I bought VXN at just over $83. I owe him a beer.

      The FED report was less than rosy, extended unemployment benefits end July 1, most states start new fiscal years on July 1 and we know they're mostly in tough places, May retail reports sucked, the most recent housing reports sucked.

      Even if algos don't go crazy again, there is going to be instability going forward.

    • Again, you might do yourself a very big favor
      by staying away from that stuff.

      If you feel compelled to compete with the
      machines, then you might consider that the
      really big volatility and price spikes
      are seen when the market's selling off.

      I do think it will blow over in time but
      don't know what may happen first.

      It's kind of like the FNM/FRE investment
      issue: black box situation, where you
      stand outside and guess about the contents.

      Sure narrows things down, as you can see
      by the very limited non-HFT participation
      in this market. What's in it for most?

    • First, regarding the TARP, there's a reason
      for all the secrecy regarding audits and
      full disclosures:

      Having put the program in place, as an
      emergency measure, I'm sure they want to
      give it a chance to work; so they emphasize
      its success with the big trading banks, who
      can "earn" on the government carry trade,
      and de-emphasize the problems with smaller,
      more conventional banks who're more limited
      to traditional lending.

      That suggests an answer to your good question
      about why FNM/FRE returned paper not meeting
      origination standards to the very banks they're
      apparently in business to "bail out."

      It's tempting to assume that the financial
      bureaucrats love the big banks and offer
      them unqualified support, but I don't think
      that's really the case here.

      F & F were "absorbed" by government as part
      of an ambitious attempt to gain and enforce
      control of the domestic financial system.
      Yes, they want to keep it going, but they
      also want to improve industry standards
      on lending, securitizations, capitalization,
      and so forth. Basically to put the whole
      thing on a higher, more responsible, and
      less fallible plane.

      Yes, the regulatory community missed the
      boat completely--on lending error and
      leverage (e.g. the off-balance sheet
      problem); but that's now history: the
      industry, and the society, basically
      punted to the same government that made
      these errors of oversight; and they
      are now trying to do it "their way"--
      the way of the State economy.

      I think people just assume that the
      Fed and Treasury are in the banks'
      pocket, but that's probably not true.
      They support the banking system NOT
      banks A, B, and C, so it's maybe not
      so strange that they'll find a way to
      assume even problem bank debt that meets
      their standards, while rejecting inadequate
      documentation, fraud, etc.

      You know, I didn't like the idea of
      investing in FNM or FRE, mainly because
      we don't like to be "junior partners"
      of governments, who can literally make
      up the rules as they go along with
      respect to capital structure, etc.

      But I was glad to see them step in
      to "bail out" two clearly insolvent
      issuers of paper at the heart of the
      financial system--for instance, the
      FNM or FRE securities to be found in
      so many brokerage mm sweeps.

      I just don't know where this is all
      going, though I suspect the solution
      will be much more drawn out than the
      markets were thinking, until recently
      at least. We probably don't go back to
      "more of the same," though it's tempting
      to make the mistake of assuming that's
      what government has in mind.

      It may be that the greatest danger is
      political: "people" and their elected
      officials run out of patience without
      necessarily understanding the severity
      of the problem. For instance, I see
      the "liquidationist" argument gaining
      ground again--for instance, by one
      Michael Pento on Yahoo's "Tech Ticker"
      this morning. What we really need is
      a "short deflationary depression" to
      clear up this little mess and move on.

      I'm not so sure that it would be so
      very little or so very short.

    • sell bac buy nyb

    • "Point is, there are no rules in this situation now and no good basis to anticipate any particular outcome, (including the one projected by Hussman.)"

      THAT'S why I sold! I always knew the political risk was high but so was the reward.

      I find it amazing that everyone speaks of a banana republic and Chicago style politics, yet no one feels strong enough to question Bernanke or Geithner's motives. No one knows the ultimate plan.

      I watched Turbo Tax Timmy in the question box with the Congressional Oversight Panel. There were no updates on the $700 billion Troubled Asset Relief Program (TARP) funds. He is very good at twisting questions without providing substance in his answer -- yet, touting that the Administration is doing a bang up job with what they inherited.

    • "

      Haven't confirmed his figures or thought
      through his logic yet, but it's all consistent
      with John Hussman's careful analysis of the
      thinking behind the Federal "takeover"
      of FNM and FRE."

      If you would be so kind, what was the gist of Hussman's analysis? I saw the takeover as a ways of enforcing public policy. It was also a way to provide liquidity to the mortgage market, artificially keeping interest rates low, as well as being a part of the overall exit strategy.

      The bad stuff on the GSE's books is suppose to be the oh-not-so-vintage years of 2005 through 2007. 2008 and forward are showing themselves to be superior loans, with lower default rates and LTVs at origination.

      Ginnie Mae is a different story. They took on a lot of crap but that's always been there charter. There portfolio grew to a trillion dollars. Can't find the article on the % of 1 payment or no payment before going into delinquency, which is out-an-out fraud.

      The Russell index / delisting imbroglio suggests there is a master plan. The Russell thing apparently forced someone's hand. What I wouldn't give to know the "real" story on this one.

      • 1 Reply to newjerichoman
      • That the Federal takeover of Fannie and Freddie
        was a means to transfer bad debt--delinquent
        or defaulted--from the private to the public
        balance sheet. The scheme is quite complicated, and I never would have figured
        it out on my own.

        The best thing for you to do would be to
        look at steps 4-7, and then the "outcome."
        of this key article:

        I'm quite certain that he's right in general.
        What nobody knows is whether the Society can
        possibly support such public indebtedness
        without resorting to policies that essentially
        "institutionalize" recession or depression.

        There are two things one has to understand

        1. That Bernanke, Paulson, and Geithner
        clearly felt that the banking system, and
        subsequently the economy, were going to
        "collapse" if the owners of the mountain of
        bad debt were compelled to write it down
        within any reasonable amount of time.
        Bear in mind that the 19 "stress test"
        banks held ~50% of all domestic deposits.
        One's account might have indeed have been
        "insured," but what would that matter if
        one was repaid in dollars with vastly reduced
        purchasing power: say, 200 to buy a hamburger?

        2. I'm told by an economist, with whom I
        sometimes correspond, that neither Bernanke
        nor Geithner ever believed for one minute
        in "free enterprise" and that they are
        acting upon their rooted belief in a
        State "control" economy.

        As Hussman frequently points out, things
        might have been different if a "resolution"
        procedure existed to close down a Bank
        of America or Citibank, write down the
        bad debt against the interests of the stock
        and bondholders, and sell the perfroming
        assets to some better company. But no
        such procedure has ever existed on the
        scale involved in this latest debacle,
        and shareholders' equity plus bondholders'
        capital were probably way too small
        in the light of the huge sums of bad
        debt variously held off-balance sheet.

        So, we're kicking that can down the road
        again, I guess, which is not to say that
        the architects of the policy--or anybody
        else--actually know where that road leads.

        BTW, I think the scale of the mortgage
        problem--and the consequent overvaluation
        of property--has been vastly unestimated
        by both government and the general public.

        This article contains some interesting
        thoughts on the sheer volume of origination

        Maybe now some of you will see why NYB's
        move into Florida, Arizona, and Ohio
        markets concerns me so. If this whole
        show isn't going much of anywhere very
        soon, might they not have been better
        off to stick to their knitting?

    • Getting back to the GSEs and such, I found
      this kind of disturbing:

      Haven't confirmed his figures or thought
      through his logic yet, but it's all consistent
      with John Hussman's careful analysis of the
      thinking behind the Federal "takeover"
      of FNM and FRE.

      I'm not sure how any of this is supposed to
      work down the line, unless the U.S. can manage
      terrific "organic" growth to support the
      debt created to fund these asset transfer
      and writedown schemes.

      Absent that, you have only "austerities,"
      higher taxes, and such and the failure of
      a weak recovery.

      (BTW, I'd never assume these authors actually
      know what they're talking about, but just
      take such articles as a starting point and
      think the thing through for yourself.)

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14.77+0.13(+0.89%)Jul 22 4:02 PMEDT