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Cool Videos! Minyanville’s Todd Harrison interviewed by Aaron Task

Longtime Bear Todd Harrison Turns Bullish — for a Trade

Hedge Fund Carnage: ‘Invisible Catalyst’ Causing Big Market Moves

Fear Stalks the Street: Does Paulson Have Any More Tricks Up His Sleeve?

Bloomberg: Subprime Collapse to Global Financial Meltdown: Timeline

Where were you on…

Subprime Collapse to Global Financial Meltdown: Timeline
2008-10-13 14:08:40.950 GMT

By Chris Dolmetsch
Oct. 13 (Bloomberg) — The following is a timeline of events
that led to the current global financial crisis.

March 5, 2007: HSBC Holdings Plc, Europe’s biggest bank by
market value, says the U.S. subprime market is “unstable” and
now in a “downturn,” making it the main drag on company
earnings.

March 29, 2007: HSBC Chairman Stephen Green says the U.S.
subprime mortgage services division will be “run down
significantly” as the bank tries to recover from loan losses.

April 2, 2007: New Century Financial Corp., which
specialized in loans to people with poor credit, files
for bankruptcy protection after being overwhelmed by customer
defaults.

July 17, 2007: Investors in two Bear Stearns Cos. hedge
funds that invested in collateralized debt obligations backed by
subprime mortgage loans are told there is no value left in the
funds, wiping out $1.6 billion originally invested.

July 19, 2007: Federal Reserve Chairman Ben S. Bernanke
tells the U.S. Senate’s Banking Committee that there may be as
much as $100 billion in losses associated with subprime mortgage
products.

Aug. 9, 2007: BNP Paribas SA, France’s biggest bank,
halts withdrawals from three investment funds because it can’t
“fairly” value their holdings, as concern over U.S. subprime
mortgage losses roils credit markets.

Aug. 22, 2007: Countrywide Financial Corp., the biggest U.S.
mortgage lender, sells $2 billion of preferred stock to Bank of
America Corp., the biggest U.S. bank by market value, to bolster
its finances.

Sept. 14, 2007: Northern Rock Plc says the Bank of England
agreed to provide emergency funds to ease a “severe liquidity
squeeze” sparked by U.S. subprime mortgage defaults following
the first run on a British bank in more than a century.

Oct. 9, 2007: U.S. stock indexes rally to records for the
second time in a month after minutes from the Fed allayed
investor concern that the U.S. economy is heading for a
recession. The Dow Jones Industrial Average and the Standard &
Poor’s 500 Index set all-time highs, with the Dow closing at
14,164.53.

Oct. 30, 2007: Merrill Lynch & Co. ousts Stan O’Neal as
chairman and chief executive officer after reporting a $2.24
billion loss, six times bigger than a forecast the firm offered
just three weeks earlier.

Nov. 4, 2007: Citigroup Inc. CEO Charles “Chuck” Prince,
who took over in 2003, steps down after the largest U.S. bank by
assets increased its estimate for mortgage-related writedowns.

Jan. 11, 2008: Bank of America, the biggest U.S. bank by
market value, agrees to buy Countrywide for about $4 billion.

March 14, 2008: Bear Stearns Cos. gets emergency funding
from the U.S. Federal Reserve and JPMorgan Chase & Co. as a run
on the bank depletes its cash reserves in three days.

March 16, 2008: JPMorgan Chase agrees to buy Bear Stearns
for 7 percent of its market value in a sale brokered by the Fed
and the U.S. Treasury.

April 1, 2008: Lehman Brothers Holdings Inc., the fourth-
largest U.S. securities firm, raises $4 billion from a stock sale
to quell speculation it’s short of capital.

April 9, 2008: Washington Mutual Inc. rejected an offer from
JPMorgan Chase to buy it for as much as $8 a share, or $7
billion, before announcing it received a $7 billion capital
infusion from a group led by TPG Inc., the Wall Street Journal
reports, citing people familiar with the situation.

April 28, 2008: The U.S. Internal Revenue Service starts
distributing tax rebates electronically as part of a $168 billion
economic stimulus plan.

May 31, 2008: Bear Stearns ceases to exist as the
acquisition by JPMorgan is completed.

June 20, 2008: The Dow closes below 12,000.

July 11, 2008: IndyMac Bancorp Inc., the second-biggest
independent U.S. mortgage lender, is seized by federal regulators
after a run by depositors depleted its cash.

July 31, 2008: Nationwide Building Society, Britain’s
fourth-biggest mortgage lender, says U.K. house prices declined
the most in almost two decades in July and consumer confidence
fell to a record low as the economy edged closer to a recession.

Aug. 31, 2008: Commerzbank AG agrees to buy Allianz SE’s
Dresdner Bank for 9.8 billion euros in Germany’s biggest banking
takeover in three years.

Sept. 7, 2008: The U.S. government seizes control of Fannie
Mae and Freddie Mac, the largest U.S. mortgage-finance companies.

Sept. 15, 2008: Lehman Brothers Holdings Inc. files the
largest bankruptcy in history, and Bank of America agrees to
acquire Merrill Lynch for about $50 billion.

Sept. 16, 2008: American International Group Inc. accepts an
$85 billion loan from the Fed to avert the worst financial
collapse in history, and the government takes over the company.

Sept. 18, 2008: Lloyds TSB Group Plc, the U.K.’s biggest
provider of checking accounts, agrees to buy HBOS Plc, Britain’s
largest mortgage lender, for 10.4 billion pounds.

Sept. 21, 2008: Goldman Sachs Group Inc. and Morgan Stanley
receive approval to become commercial banks regulated by the Fed
as tight credit markets forced Wall Street’s two remaining
independent investment banks to widen their sources of funding.

Sept. 23, 2008: Goldman Sachs says it will raise at least
$7.5 billion from Warren Buffett’s Berkshire Hathaway Inc. and
public investors in a bid to quell concerns that pushed up the
Wall Street firm’s borrowing costs and hurt its stock.

Sept. 26, 2008: The U.S. Securities and Exchange Commission
ends a program that monitored securities firms’ capital after
Morgan Stanley and Goldman Sachs, the only companies remaining
under its jurisdiction, became banks overseen by the Fed.

Sept. 26, 2008: The SEC’s inspector general releases a
report asserting that the agency failed in overseeing Bear
Stearns because it knew the firm had “high leverage” and was
too concentrated in mortgage securities before its forced sale to
JPMorgan Chase & Co.

Sept. 26, 2008: Washington Mutual Inc. is seized by
government regulators and its branches and assets sold to
JPMorgan Chase in the biggest U.S. bank failure in history.

Sept. 27, 2008: Washington Mutual files for bankruptcy
protection.

Sept. 28, 2008: Fortis, the largest Belgian financial-
services firm, receives an 11.2 billion-euro ($16.3 billion)
rescue from Belgium, the Netherlands and Luxembourg after
investor confidence in the bank evaporates.

Sept. 29, 2008: The House of Representatives rejects a $700
billion plan to rescue the U.S. financial system, sending the Dow
Jones Industrial Average down 778 points, its biggest point drop
ever. Citigroup agrees to acquire the banking operations of
Wachovia Corp. for about $2.16 billion after shares of the North
Carolina lender collapsed under the weight of overdue mortgages.
Bradford & Bingley Plc, the U.K.’s biggest lender to landlords,
is seized by the government. The Dow closes below 11,000.

Sept. 30, 2008: Dexia SA, the world’s biggest lender to
local governments, gets a 6.4 billion-euro state-backed rescue as
a worsening financial crisis forces policy makers across Europe
to aid ailing banks. Ireland says it will guarantee its banks’
deposits and debts for two years.

Oct. 1, 2008: The U.S. Senate approves a revised version of
the rescue plan that was refashioned to entice enough votes for
passage.

Oct. 3, 2008: The House passes the revised version of the
rescue plan. Wells Fargo & Co., the biggest U.S. bank on the West
Coast, agrees to buy all of Wachovia for about $15.1 billion,
trumping Citigroup’s government-assisted offer. U.S. President
George W. Bush signs the rescue plan into law.

Oct. 5, 2008: BNP Paribas SA, France’s biggest bank, will
take control of Fortis’s units in Belgium and Luxembourg after an
earlier government rescue failed to ensure the company’s
stability as the global credit crisis worsened.

Oct. 6, 2008: The Fed says it will double its auctions of
cash to banks to as much as $900 billion and is considering
further steps to unfreeze short-term lending markets as the
credit crunch deepens. The German government and the country’s
banks and insurers agreed on a 50 billion euro ($68 billion)
rescue package for commercial property lender Hypo Real Estate
Holding AG after an earlier bailout faltered. The Dow Jones
Industrial Average falls below 10,000 for the first time in four
years.

Oct. 9, 2008: Citigroup walks away from its attempt to buy
Wachovia, handing victory to Wells Fargo. The Dow Jones falls
below 9,000 for the first time in five years and briefly dips
below 8,000.

For Related News:
For more on the economy: ECO <GO>.
For top stories on the financial crisis EXTRA <GO>

–Editors: Steve Dickson, Mark Schoifet.

To contact the reporter on this story:
Chris Dolmetsch in New York at +1-212-617-8969 or
cdolmetsch@bloomberg.net.

To contact the editor responsible for this story:
Mark Schoifet at +1-212-617-4691 or
mschoifet@bloomberg.net.

** Disclosure: no positions in the stocks mentioned. **

UpStart Trader Provides Some Historical Perspective on Bear Market Bottomings

This post was written back in January by UpStart Trader, but it’s probably more relevant now than at the beginning of the year.  We’re obviously in the center of a critical moment in history.  Few if any of us can honestly say we’ve been in situations like this and know what to expect…but the next best thing is knowing your history. While the situation is unique, human behavior doesn’t change all that much.

History of US Bear Markets

Purchasing.com Price & Supply Alert – 9/18/08

In a market that’s been 90% panic and cannibalism, it’s hard to think any fundamentals matter anymore. I’m not sure when and how fundies will come back into play as the shockwaves of the financial collapse around the world has very very real effects in the real world. Still, I like keeping an eye on this stuff.

Sorry haven’t been posting much exactly because of the madness.  Just been making tiny “bunts” or “single hits” day trades and posting these throughout the day on my Twitter feed- follow me on Twitter! or check my Twitter feed here on the top left column.  Other than that, I like hiding in my foxhole, eating some marshmellows, listening to some She & Him (I didn’t know actress Zooey Deschanel was such a good singer!), watching Erin Burnett on CNBC, and waiting for the world to implode.  Hmm…Erin and Zooey do look kinda alike.  Nice.

Oh, prepping for my trip to NYC on Monday for the Merrill Lynch (MER) (well Bank of America (BAC) now I guess) Power & Gas leaders conference…except I dunno how many people will actually be there now as companies keep disappearing. Constellation (CEG) was supposed to be there…but Buffet just ate them today.  Kinda disappointed- I had done the homework on all these Utils.  Oh well, maybe Buffet will go instead for CEG….now that’d be uber awesome…and uber not happening.

Ok, back into my foxhole.

** Disclosure: No positions in the stocks mentioned **

Rolling with the Transports: Rails and…Truckers?!?

Financials.  Oil.  Financials.  Oil.  Financials.  Dollar.  Oil.  Anyone look at the transports (IYT) lately?  Rails and truckers specifically? It’s as if fund managers have classified all stocks as financial trades or oil/dollar trades, and the media piles on and that’s all we ever hear about.  Doesn’t the individual industries and business fundamentals matter?  It doesn’t seem like it matters for a lot of sectors, but anyone look at the transports lately?  Rails and truckers specifically?  (Just these two because we have lost the airlines and autos to “the dark side” and its futile to try to mount a rescue mission anytime soon)

Union Pacific chart from StockCharts.com But rails!  One of the strongest, if not the strongest, old industrials sector charging ahead all year.  First riding the ag and coal momentum on the back of rising energy prices (which was sometimes weird because higher oil prices hurt the rails’ fuel input costs too).  Then, even as the ags and coal got kneecapped when energy rolled over in July, the rails kept going, probably on the idea that lower energy would boost the economy, or lower energy would lower the rails’ fuel costs.  It’s hard to make a correlation with any of these factors, and rarely do they work to trade off of in the stock price anyway.  Either way, the rails have been one of the few sectors constantly fighting back this bear market.  And look at the likes of Union Pacific (UNP)!  Tagging all time highs after a minor pullback that people thought meant the rails have finally given up the ghost and was about to roll over.

YRCW Stockcharts ChartMore impressive is what appears to be a bottom in the truckers and the likes of YRC Worldwide (YRCW).  Looks like an inverse head and shoulders bottom, or the Kilroy bottom as the editor of Technical Analysis of Stock Trends by Edwards and Magee likes to call it.  Left shoulder: tried a bottom on January 4th, 2008.  Stock dived again, with the actual “head” bottom the week of March 18th.  Since then, it’s been making the right shoulder, i.e. higher lows.  And, finally in July, higher highs as oil broke down in these months, breaking through that $18-$20 resistance, where you see the high volume (committed capital at this price) to the left of the chart.  Interesting to note, though, that while YRCW seemed to have bottomed in March, it’s been able to make higher highs and higher lows in the face of that big runup of oil to that record $149 in this period!  A possible explanation might be retailers stocking inventory during this time to meet the demand from the rebate checks.  I’m not too sure that’s a good explanation as retailers have been going lean with their inventories all year.  If truckers’ stocks can rally in the face of rising oil, i.e. rise in the face of bad news, the bottom’s likely in?  If YRCW can pierce this $20 level to the upside with conviction, I’d hop on this puppy, along with UNP mentioned above as UNP breaks to a new range above its all time high.

Yesterday’s strong GDP showed that away from the financials’ damage epicenter, the U.S. economy is still chugging along great.  Which is probably what the Rails and Truckers have been telling us since March.  However, the Rails have been driven mostly from exports, whether it be large industrial machinery or coal and fertilizers.  That’s my area of concern as the global economy has obviously slowed, and the impact of Europe in a worse economic condition that the U.S. might bring.  The other leg of this transport trio I’d like to see support from is the shippers.  They’ve been weak most of the summer, and the analysis from the Imarex Report on Capital Link Shipping continues to show weakness in the shippers.  I’m having trouble seeing how the rails’ support from exports can continue if the shippers aren’t shipping the exports to the likes of China.  As I’ve said before, I think China just took a breather as it clamped down hard on its industrial activity for the olympics.  But it’s yet to be seen where the world supply/demand of goods and commodities evens out when China’s fully back online.  Did 2 weeks of Olympics slow China too much to recover, or will things come back as strong as ever?

I think the transports have been muddling up the Dow Theory of needing trend confirmation between the Dow Jones Industrial Average (DIA) and the Dow Jones Transportation Index (IYT).  I believe that’s because the autos and airlines so much problems internally within their industry: union problems, factories fitted for too many SUV’s, airline mergers and bankrupcies.  However, with the autos and airlines near all time lows and basically flailing around as trading vehicles to play oil, I’d think you can sort of ex-out the effect of the autos and airlines.  So, moving forward, with the rails and truckers leading the transports…if the IYT can get above $98 and Dow Jones Industrial Average above 11,800 we might be looking at a confirmation rally?  Don’t want to anticipate anything in this market, but just thinking of things to look out for…

Related SuckingLess.com Research Tools:

** Disclosure: No positions in the stocks mentioned. **

The Plot Thickens for the Mining Giants

Sure why wouldn’t Australia approve of Chinalco’s stake in Rio Tinto. Australia’s wealth has grown like a weed thanks to it’s biggest customer, China, and China’s buying of Australia’s commodities. So why not play buddy buddy with you’re biggest customer? Sure, other “developing countries” are growing too…and while this might sound awkward referring to a commie country like China…China’s actually good for it’s money. You don’t just want a customer that pays, but pays steadily and that you know they’re good for it. Some of the politically unstable countries? I dunno. Countries (well country- U.S.A.) with debt growing like a tumor? Not too sure either. But China, a country that’s growing fast and steadily, and strategizing around the world, such as with African nations, to secure it’s future growth, and with national reserves growing up the wazoo- just on interest alone. Yeah, I’d play buddy buddy with China too. It’s like in the old days how a king would send over his sister or daughter to marry another country’s royalty. In this case, I guess the princess’ name is Rio Tinto. But then eventually (well after a year or so) the two kingdom’s would be at war again and the sacrificial princess be killed. Let’s see how this modern remake plays out!

Australia approves Chinalco stake in Rio Tinto

SYDNEY (Reuters) – Australia has approved Chinese aluminum giant Chinalco’s recent purchase of a minority stake in Anglo-Australian miner Rio Tinto (RIO.AX: Quote, Profile, Research, Stock Buzz) (RIO.L: Quote, Profile, Research, Stock Buzz), but warned the Chinese firm against buying more shares without prior approval.

State-owned Aluminum Corp of China (Chinalco), backed by U.S. peer Alcoa Inc (AA.N: Quote, Profile, Research, Stock Buzz), began amassing shares this year with the aim of taking up to 14.9 percent of Rio, the target of a $127 billion takeover bid from rival BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz)

Full Article: Australia approves Chinalco stake in Rio Tinto

Related SuckingLess.com Research Tools:

Tracking this Oil Energy Commodity Bounce

As they say, when something goes up on bearish news, it’s probably time to buy. When they weren’t able to push oil lower today on that ridiculously huge build in crude inventories of 9M barrels, and oil actually ended higher, we might’ve found a short term bottom for oil and have begun the bounceback rally. Since oil’s the commodities General, all the commodities from energy to agriculture to metals bounced with vigor today. The commodities (and the companies fund managers treat like commodities- including my beloved McDermott, now in a wheelchair after having is legs cut out from under it) have dropped basically in a straight line since end of June/early July that a bounce was inevitable. Moreover, the commodities and the collateral damage of related names have fallen so far so fast, all so far below their 50 day moving average, 200 day moving average, you name it, that this countertrend rally would likely have some umph and last for a while. (Nucor closed at $52.5 and it’s 50 day moving average is nearly 20% higher around $63!) I’m ready to add to these sectors to ride the relief rally, but keeping in mind the magnificent commodities uptrend of the first half of the year has been broken. Unless there’s reason to believe otherwise, I shall treat this rally as what it is, a countertrend rally in a downtrending market, and sell into this rally.

However, I think there’s a good chance the commodities and their friends can re-take the uptrend. My calendar has just alerted me that Joe Terranova of CNBC’s Fast Money had called for natural gas to bottom this very week and to resume the uptrend began earlier this year. I mentioned this call Joe made in a previous post, where Joe alerted viewers to the natural gas rule of thumb “June highs July lows” at the end of June, telling people to take profits in natural gas right when natural gas looks like it could go up forever, but subsequently took a death dive from above $13 to below $8 in just a month or less. With the brunt of the hurricane season still to come in September and early October, and heating oil demand to drive oil demand in the winter, the coming months are usually bullish for energy. Now we just have to see how the price reacts to this bullish environment. If energy can’t re-take the uptrend in a bullish environment, it’s probably time to get out our parachutes and bail.

Anyway, yesterday was an interesting stabilization and reversal day. Even more impressive given the dollar didn’t fall (i.e move inversely to crude), thus possibly breaking the correlation between the dollar and oil. Looking forward to seeing how this develops!

Referenced SuckingLess.com Research Tools:

** Disclosure: I own shares of MDR as of this post **

Evidence there’s always a Bull Market somewhere, even debacles like housing

Even as RealtyTrac reported a 121% increase in foreclosures year-over-year to 739,714 properties, not all in the residential real estate market is bad. AvalonBay Communities Inc. (AVB) and Sam Zell’s Equity Residential (EQR) both reported strong quarterly results with AvalonBay raising full year guidance. This reminds us that there’s always a bull market somewhere, even in implosions like the U.S. housing market. This time it’s in the apartment owner space in certain locations.

Referenced Article: Reuters-Location key as apartment owners post strong results

Recommended SuckingLess.com Research Tools:

Smokin’ Earnings Headlines

After first reading this headline this morning: Philip Morris second-quarter profit rises

This headline became amusing: Pfizer profit doubles, but anti-smoking drug lags

I guess all the laid-off people are depressed and smoking more, and don’t need anti-smoking drugs to recover for a job…because there are none.

**Disclosure: Long PM**

Chesapeake Launches Shale.tv for Programming on the Barnett Shale and Other Shales

Thanks to today’s CNBC Fast Money show for pointing this out (at least to me). As if shows like Extreme Engineering’s Sahkalin Oil & Gas Complex on the Discovery Channel or the site GoHaynesvilleShale wasn’t enough, we get to go deep into the shale action along with Aubrey McClendon! Is it really possible for me to become a oil wildcatter roughneck just sitting at home watching Shale.tv? I hope so! Here’s Shale.tv’s self-introduction:

Shale.tv is a unique, online video channel designed to provide a platform for in-depth information, discussion and analyses about the Barnett Shale and other shale natural gas plays in the US. Through a combination of live talk/interview shows and interactive and archived content, we hope to provide thorough, accurate and independent information about the complex issues and opportunities of developing natural gas domestically. We seek participation from all the stakeholders in these shale plays.

For now, I’m still using the following SuckingLess.com research sites for my natural gas holdings:

**Disclosure: I own shares of CHK as of this post**