Sunday, January 4, 2009
Good Bye National City... Stock Moves... Our Buckeyes...
Good Bye National City
It's not every day that you get to split a $49.5 million dollar golden parachute. However, fourteen executives from National City Bank will "share" a pot that would average approximately $3.25 million a piece. We all know that the top guys will get more, and the low man on the totem pole will get the least... but hey even a million dollars is pretty good for watching your company get run right into the ground. Sure these men will not get the stock options anymore... and have undoubtedly watched their net worth dwindle over the past two years. Let it be known that one of Cleveland's oldest institutions... 163 years old to be exact... folded up on the watch of these 14 executives. In Cleveland's history, National City Bank was critical in helping John D. Rockefeller get Standard Oil financed... and now, it is no more. Like Bear Sterns, Lehman, and Washington Mutual I have a soft spot in my heart for the trusted employees who will undoubtedly be cleaning out their desks, and saying good bye to fellow employees with whom they were almost like family. Approximate payouts include:
Peter Raskind $8.1 million
Daniel Frate $4.2 million
Jon Gorney $3.96 million
Aside from TARP funds, National City really had no other option than to sell itself. While I do not like it, National City went down the way a troubled financial institution is supposed to... either through failure or sale. Interestingly enough, banks larger and smaller than National City received TARP monies. I know Congressmen Kucinich and LaTourette gave it their best!
I have watched 10% of my 2008 net profits ebb away over the past week. A thinly veiled rally was picked up on New Year's Eve... and continued on January 2nd. While the manufacturing report showed a continued bleeding of jobs, and a slow down in manufacturing... Wall Street rallied... Expect a violent move to the downside this week. Here are the latest moves I am considering:
XRU puts... Russia needs oil to double its current price...or Putin and friends could well lose their political clout.
FXB puts... Great Britain as well as Europe cannot get a handle on their credit crisis. The BOE has responded strongly by lowering rates... but readers know that rates are not the problem as much as it is credit worthiness...and things are much worse their than it is here.
FXE puts... while Great Britain has been moving aggressively to lower rates... the Euro is well behind the curve. Expect a major slow-down that will have a devastating effect on Europe. Unlike sovereign currencies, the Euro is a currency by committee...meaning members have to agree on the best policies...and at the end of the day, Europe has a storied history of not seeing eye to eye.
FXI puts... I increased my position here knowing that even a GDP of 5% really means a -5 to -6. While pundits would have us invest every red cent into China, beware... This country has ridden a wave of prosperity, and it could well be in for a hard landing should the R word surface.
Latin America plays... ILF, BZF, EEB, EWW, EWZ are under consideration...
Looking for a way to short T-Bills... as this over-bloated haven will not last especially if the curve is negative... I am open to suggestions!
While WYNN and MCRI have rallied, be sure the casino industry is a house of cards... and not much of the next stimulus checks will make it to the slot machines.
MLHR puts... just watching the wheels fall off here....
RYL...MDC...puts... let's face it... the housing crisis is approximately 3-5 years away from playing out... these companies are cash poor... and credit as noted is for good companies not bad ones.
SRS... looking to double down here...
SIVB and TOL are interesting plays as well. Researched by fellow blogger DC North, SIVB who once stood as the "conservative" lending institution is showing a few cracks...and could well be on the verge of a "price adjustment" to the downside. TOLL are high end houses... good for those who have a lot of money. However, this economy is not discriminating and could well be hitting the luxury home buyers as well.
The #3 ranked Texas Longhorns are -8.5 to #10 Ohio State. We know that Texas is a great team. After USC trounced Ohio State back in October... then lost again to Penn State, a #10 ranking could well have been a gift. That being said, Ohio State has been decimated...dec-im-a-ted... in their last two bowl appearances. The National title blowouts against Florida and LSU respectively have not just hurt the team's chances of getting another national title shot in the future, but it also demonstrated an inherent weakness in the Big 10 schedule. There is too much of a lull between the big Michigan game (played Thanksgiving weekend) and a bowl game. It is almost a guarantee that a Big 10 team will come in a bit flat, having nothing but practice for over an entire month... hopefully, that will be addressed not just by Ohio State, but by the Big 10 conference as well. On a positive note, Ohio State has played Texas twice in the past three years... and I am looking forward to another great game. Let's hope the Buckeyes show up to play!!!