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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ChanceIs who wrote (190850)	3/15/2009 10:07:17 PM
From: geode00	Read Replies (1) \| Respond to of 306849

Sorry, that was confusing. Here is the article: abcnews.go.com I don't know if this is correct but I believe that under bankruptcy those employee contracts would be stuck fighting for what is left of the company. Since the US government stepped in to purchase 80% of AIG, most people would be correct to suppose that management (and anyone making, say, $6m in a year) would have taken a massive haircut in order to keep what is left of their stock and of their jobs. It appears that we prevented bankruptcy, pulled their bacon out of the fire and they are turning around and demanding bonuses for a job poorly done. Talk about biting the hand that feeds. Since AIG is currently a ward of the state it is fair for us to see the contracts, see where all of the money has gone and see what the heck the company is doing today. It is like pulling teeth. What do we get for $170 billion? Don't we get the keys to the front door and the combination to the safe in the basement? Ethically speaking though, it seems to me that the non-moral-hazard way to go was to let all of these capitalists go down with their ships. Jamie Dimon wouldn't be around to complain that his industry is being vilified...he'd probably be out of a job during an all out financial fiasco and he's one of the better managers out there. Given the tone deafness of the financial industry, I suspect we are done with bailouts and even stimulus plans now. Unless we have a DOW plunge of, say, 2000 points in a day...then all bets are off. Sorry about Calpine. Did they get stuck in the fallout over Enron?

To: ChanceIs who wrote (190850)	3/15/2009 10:43:47 PM
From: Bank Holding Company	Respond to of 306849

damn good advice!

To: ChanceIs who wrote (190850)	3/16/2009 12:09:55 AM
From: ChanceIs	Respond to of 306849

Forget Companies -- Traders Track the Lawmakers >>>Hmmm. If I didn't make my point already. Very sad, but my experience tends to support this op-ed. Turns my stomach. See the highlights.<<< By TENNILLE TRACY As Washington lawmakers prove capable of driving big moves in stocks, options traders have started to prepare for such swings by taking positions in funds that track certain industries. This type of activity reached a crescendo Wednesday, when investors flocked to exchange-traded funds that follow everything from homebuilders and utilities to financial companies and industrial stocks. In most cases, traders scooped up call options that allow them to buy the fund shares at a fixed price. In the Utilities Select Sector SPDR Fund, for example, traders showed up to buy huge batches of September calls that convey the right to buy the fund shares for $26. Some traders could have been looking to speculate on future moves, while others could have been looking to hedge short positions in the fund. The fund -- which tracks the performance of various utility companies, including Exelon Corp., Southern Co. and Dominion Resources Inc. -- closed Wednesday's session at $23, losing a fraction of one percentage point. There was considerable activity in the SPDR S&P Homebuilder ETF as well, with investors picking up 125,000 calls and 6,000 puts, according to Trade Alert. Puts convey the right to sell a company's stock. Traders made a beeline for June $12 calls throughout the session, paying 45 cents for positions that make money if the homebuilder fund climbs above $12.45. The shares closed at $9.28, rising 1.5%. The day's activity appeared to reflect a growing awareness that Washington can play a big role in the stock market as it rolls out new initiatives or legislation, said OptionMonster co-founder Jon Najarian. "I think the market is as much about policy as it is about profit," Mr. Najarian said. "One committee meeting and, bang, those things move 25% in a day." Elsewhere, there was robust trading in the Financial Select Sector SPDR Fund, which tracks J.P. Morgan Chase & Co., Wells Fargo & Co., Bank of America Corp. and other financial companies. Traders flocked mostly toward June $10 calls, which are priced at 45 cents and make money if the financials fund trades above $10.45 -- about 42% above Wednesday's close of $7.38, up 2.6%. Other traders, however, pursued one-by-two "put spreads" in the fund's April contracts -- buying April $7 puts and selling twice as many April $6 puts. And while activity slowed in the Industrial Select Sector SPDR Fund -- which tracks General Electric Co., 3M Co. and United Parcel Service Inc., among others -- traders took big positions in the fund over the past several days. On Tuesday, for example, traders picked up 111,000 calls and 2,000 puts, and showed particular interest in April $17 calls and April $18 calls. Last Thursday, traders scooped up 290,000 calls and 9,000 puts, making it one of the most active sessions for the ETF. The industrials fund closed at $16.68, up 1%.