Monday, July 14, 2008

The south will rise again?



I don't think so. I am talking about Synovus (SNV), the Goldman Sach of the South? If you say so, heheheh.

Haven't fallen that much when you account for the huge dividend payment early this year. Just for diversification if GGP, ZION, RF, and $2.50 puts on NCC and FED isn't exactly your cup of tea.

After cashing out what they can through that dividend, you should treat what's not cash-able VERY similarly to you would on LEVEL 3 ASSETS. Construction, real estate, and commercial loans for subprime heavy GA and busted FL. Recently, I heard (FDIC?) said something about GA banks being really heavy on their list. Gettysburg?

8 comments:

Penn said...

ZION broke 18 today, are you planning to re-enter the trade?

gtt said...

I entered ZION Jan 15's yesterday. Maybe a bit early. Any way they stick around that long?

MTGSPY said...

still on dry powder after stopped out yesterday. This appears to be a bear trap.

First they gonna flush out the MER short with "kitchen sink", this is too much writedown than necessary.

Second, they move to show ZION, a regional bank, fared pretty well despite insane challenges - they beat adjusted earnings.

Then they showed how cool IBM is and try break the previous high of $130.

C, may be pumped by saying they are going to sell one of the units at premium, etc, etc. This idea is "new" and will gain traction for a while to fight the bears.

Finally they moved on to pooh pooh the GOOG shorts.

Of course, none of that may happen at all, I don't know. What I know is it could be a nasty bear trap because we've seen this many times after big reversals, some hope for bears, and then market reacted positively to bad news and small volumes continued to take the market up no matter what.

I must say the ZION campaign was pretty succesful though. And I think post earnings, the implied vol should come down a bit and I am interested to buy puts at the right price.

MTGSPY said...

i must remind the bears of caution in Opex day. And also the final leg of gov't meddling still havent kicked (about naked short selling) and still have a few days to run through especially in the most heavily shorted names (?). I dunno the details that's all I heard from someone who works in a brokerage.

gtt said...

goog, zion, msft, mer all flushed. so c is the only tell. c sticksave in the morning, rally into the weekend? improbable? yes. impossible? dunno.

ARAK said...

What is your take on ZION? Is it truly a FED/DSL style stock that is waiting to implode? Unlike FED/DSL it is hard to see ZION NPAs on a monthly basis to extrapolate where they would end up eventually

MTGSPY said...

if the bulls want to establish a "bottom" for low $ pump to 1320, here is their LAST opportunity to generate that confidence.

ZION has a lot of potentials for short. The # may not look like it's there, but I have worked long enough in this business to sense something is wrong. Don't fight the tape though.

Look also the option premium. Let's say tomorrow the stock opened at

a) $28, the volatility premium collapsed plus whatever delta there is in the option.

b) $26, the volatility premium collapsed, and with it, the $2,3,5 puts may get cut in HALF despite the right direction. I sold $17.5 puts for $5. My reaction was WTF? $12.50 exercise for $19.89 priced stock then? That was a red alert that what was wrong was that the put was bid to a crash level and it simply didn't happen. If you are long term short, none of these concerns apply to you. I think you're okay for now.

Why only for options? Let's say u guessed the direction right and it stabilized at $24-25 for the day, then like Marcello Wallace said, "Now What"? Then the collapse happens.

From supply and demand perspective, it's easy to look at these prices and you can say for that amount of price you can buy instead of Zion, bank XYZ, which is VERY correlated with zion anyway, but you can get 2-3x as many puts. U see? We need to see stabilization first, then we have analysis next.

Da Bear Man Cometh said...

Where are you MTGSPY?

Da Bear Man Cometh, I show up and tank the markets. Remember that. ALWAYS REMEMBER THE BEAR MAN COMETH!

I move the markets, I will take the DOW down to 5,000 in September!