Wang’s Happy Trading

Submitted By Optiondragon

AC/DC - Thunder Struck

From briefing.com

UBS downgrades brokers and fiduciaries to Neutral: cuts Bank of New York (NYSE: BK), Lehman (NYSE: LEH), Goldman Sachs (NYSE: GS), InVesco (NYSE: IVZ), State Street (NYSE: STT).

Wynn Resorts (NASDAQ: WYNN) raised to Outperform at Bear Stearns.

According to Reuters, the Fed is opening up its own balance sheet to poisonous securities it may get from banks in exchange for cash.

Reuters writes that JP Morgan (JPM) bought Bear Stearns (BSC) for $2 as the Fed opened up lending to primary dealers.

Reuters reports that Credit Suisee kept its estimates on JP Morgan constant.

The New York Times reports that there is a fear that markets could sell off on concerns that the problems at Bear Stearns might spread.

The FT writes that many investors are betting that oil will remain above $100 until 2016.

Bloomberg reports that the dollar dropped to a 12-year low.

C expects the Fed to cut by 1% tomorrow and there is some talk of the Fed cutting rates down to 1%!

Greenspan talk- According to Alan Greenspan, the financial crisis in the U.S. will eventually end as the value of equity in homes supporting mortgage securities and home prices stabilize, which is likely to reduce “much-needed clarity” to the marketplace. Additionally, the former chairman of the Federal Reserve contends that as new-home construction continues to fall, the pace of liquidation will increase. He believes that the financial risk-valuation system will be particularly hard hit, but hopes one casualty will not be financial self-regulation, or specifically, reliance on counterparty surveillance. Greenspan says we cannot anticipate the specifics of future crises “with any degree of confidence” because policy in the future will be informed by what is learned in the current crisis.

U.S. stocks will open sharply lower as global markets around the world continue to weaken, lead by the financial sector. Treasury Secretary Paulson said the Bush Administration will do what it takes to help stabilize the chaotic markets and minimize economic damage.

LEH says liquidity position ’strong’ - Bloomberg
The company said that liquidity ‘continues to be very strong’ and that its ‘liquidity framework’ is a ‘competitive advantage.’ ANDUBS had earlier downgraded the name pegging the company as the “next on the list” for a crisis of confidence.

Brokers: Financial stocks can drop as much as 50% more@OPCO
After JPMorgan (JPM) agreed to buy Bear Stearns (BSC) for $2 per share, Oppenheimer believes banks are expensive on the basis of their tangible book value. Oppenheimer predicts that banks will begin to have goodwill writedowns in 1H08, leading investors to focus more on tangible book value in 1H08

JPM: Most of Bear deal risk eliminated by Fed@OPCO
After the Fed set up a special $30B lending facility and JPMorgan agreed to acquire Bear Stearns (BSC) for $2 per share, Oppenheimer believes JPMorgan will be exposed to little real risk over time, and Oppenheimer maintained their Market Perform rating on JPMorgan. Oppenheimer believes JPMorgan will continue to be one of the better capitalized investment banks.

BIDU: Believe BIDU is maintaining search share in China@PIPR
Piper believes there has been a normal rebound in BIDU’s business after the seasonal Chinese New Year slowdown and that the company is maintaining its high percentage search market share in China. Shares remain Buy rated.

Toll Brothers, KB Home and Lennar miss interest payments on joint ventures-WSJ
Two Las Vegas housing developments that involve large home builders have received default notices on about $765M in debt, reports the Wall Street Journal. John Ritter, CEO of Focus Property Group, said that two joint ventures, including his firm, Toll Brothers (TOL), KB Home (KBH) and Lennar Corp. (LEN, and others, have each recently missed an interest payment, and are in negotiations with lenders.

So the next couple weeks are going to be a doozy. Volatility will reign, taking advantage of it will be key.
I don’t need to rehash what you already know.

Long ideas- FXY, FXA, FXC, FXE, FXB, USO, GLD, GOX, XAU, UDN (bearish dollar), eye on PCU with the Chilean power problems, DBA, TLT, TIP, FXP, AEM
Short Ideas- EEM, FXI, AMZN, B/D’s- LEH, UBS, IYR, banks

Keep focused, stay on gameplan and focus on the goal. keep positive and seek the zone and stay in the zone.
Good Luck and great trading.