The Dean’s Trades: Black Monday 9/15/2008
September 15th, 2008 at 10:32 am Posted by The Dean
What I can’t believe today is how little the market is down – only 25 S&P points on a day when two investment banks cease to be independent entities and we find out that the nation’s largest insurer is desperate for cash.
This is actually good for those of us who are net short because it means people are still stupidly bullish even in the face of a financials meltdown.
In fact, the financial system is so troubled that the Fed is now going to “let Wall Street firms post as collateral much riskier assets — including equities, junk bonds, subprime mortgage-backed securities and even whole mortgages — in exchange for emergency loans through the Primary Dealer Credit Facility.”
What am I doing today? Not buying any puts – that would be unwise on a day like today. I covered my LEH short (average price $17, bought back for $0.20). I remain heavily long SKF call spreads that are now showing a healthy profit. Also I am looking to increase my HOG and PIR shorts and buy more HGT.
