onyx1

Statements like this make me appreciate, once again, that there is a constitution in place that protects against those in power who would act, or are tempted to act, without restriction.

Yes, everything you said here is what keeps me away from Apple. ^^

Spot on. I wish they had public securities.

Developments like these typically have annual dues and maintenance fees of $5,000 to $25,000 as well as a mandatory upfront fee for the golf club. In a downturn the fees can be so burdonsome that property values hit floor. I have seen lots in some of these golf communities originally sold for $200k offered for $1.

Really? I don't think this is a big deal. Most boards will usually have one or two people who bring significant political connections which can be pretty helpful, especially if you have to do anything abroad. Political capital can be valuable. Tariq, it just offends my sensibilities. A 31-year old graduate student is now going to be giving her business insights to Michael Eisner, Edgar Bronfman Jr., and Don Keough? Sure she has a political background, but is there anyone (besides her family) who really believes that she is the most qualified individual to represent shareholders? Directors were all paid $300,000 last year!! This is a nothing more than a political payoff. I wonder what committee she will be on...the Audit Committee, the Compensation Committee, or maybe...geesh...the Executive Committee! If youth was the objective, I'd choose Tariq as a director over Chelsea Clinton any day of the week.

http://www.bloomberg.com/news/2011-09-26/chelsea-clinton-joins-board-of-directors-at-iac-interactivecorp-.html Glad I am not a shareholder. If I was, I would sell.

Rail shipments aren't narrow at all, but don't take my word for it: "Warren Buffett was asked to identify the single most important economic statistic he would choose if he was stranded on a desert island for a month and could only get one set of economic numbers. Buffett reported that his favorite “desert island indicator” would be freight car loadings. The likely reason that Buffett is so fond of rail traffic as his “desert island indicator” is that it measures the amount of raw materials, inputs, and supplies moving around the country every week, and this should accurately predict the future direction of the overall economy. After all, the inputs transported by rail eventually get processed into inventory, final output, and goods for sale. " http://seekingalpha.com/article/213814-rail-traffic-warren-buffett-s-favorite-economic-indicator

http://www.bloomberg.com/news/2011-09-23/no-sign-of-recession-with-rising-rail-shipments-showing-trend-to-expansion.html Omaha, Nebraska-based Union Pacific had its strongest weekly volume so far this year -- almost 187,000 carloads -- prior to Labor Day, Chief Financial Officer Robert Knight said at a Sept. 21 conference hosted by Citigroup Inc. It continues to see “solid demand” across most business segments, including shipments of industrial products, up 8 percent annually as of Sept. 15 for the quarter ending Sept. 30, he said. Norfolk Southern, based in Norfolk, Virginia, maintains an outlook “which is still upbeat despite some of the macro indicators,” Chief Financial Officer James Squires said at the Citigroup conference on the same date. Total railcar shipments are up about 3 percent on an annual basis so far for the three- month period ending Sept. 30, he said. Industrial volumes for Jacksonville, Florida-based CSX have increased about 5 percent since last year through August for the quarter ending Sept. 30, Vice President Fredrik Eliasson said yesterday at the Citigroup conference. Even amid recent “moderating,” the economy continues to grow and the company is “doing okay from a volume perspective,” he said. Didn't they get the memo that the economy is crumbling? ;)

This video caused my jaw to drop. Enjoy! http://www.youtube.com/watch?v=ZboxMsSz5Aw

Hahahaha!! Not even in the right country, of the right state, of the right city, of the parking lot of the ballpark!!

Sardar lays out some legitimate issues with reporting and board incentives, but the investment case is nowhere near the slam dunk of SNS. So far, Sardar is dwelling on CBRL's second order issues that when solved will not immediately enhance intrinsic value. When making the case for SNS, Sardar correctly made the case that SNS's already gushing cash simply needed to be re-directed away from unprofitable expansion. Further, SNS had plenty of downside protection in the form of real estate assets that where obfuscated by capital leases listed as debt on the balance sheet. Unless Sardar has better reasons than he has so far given for this effort, it looks to me like would be better off finding a target with long-hanging fruit.

Oec2000, here is your answer! http://www.youtube.com/watch?v=lOyaJ2UI7Ss

Loved this Packer! Martin is a long term thinker and a geniune talent. Midway through this administration, the Forgotten Men organized. And when they began to speak up, the reaction from the Washington establishment was dismissal and ridicule. Now they are being labeled as obstructionist, racist and wished to "Go to hell". They deserve credit for forcing the topics of spending, deficits, and debt into the political discussion. If Washington wasn't so short term orientated, they would appreciate the contribution.

This came to my mind too. GSE Preferred is available at cents on the dollar so it fits with the 'modest amount of capital commitment' part. Right now, the GSE's control 90% of the US mortgage market. If they were to go away (and presumably the value of the preferreds go to zero), the big banks would gladly take their place and benefit from a windfall of new business. The latest SEC filings show 12% of Ackmans fund is in Citigroup. Maybe this is what he means by 'significant hedging benefits'. Just a guess. Having made good money three times since the beginning of the financial crisis on the F&F prefs, am by no means a bear, but realization of their relative exceptional value compared to the common is entirely a prediction exercise with politics at the forefront. Don't expect clarity until the 2012 national election results are in. I agree with you Twacowfca. And likely not until a good amount of time after 2012 too. But between now and then I think it is a safe bet that the GSE portfolios will continue to improve and with that the heated political dialogue around them will moderate too. And then at some point, when given a opportunity to payback the taxpayer advances, I think the politicians will do it.

Thanks for posting this Dcollon. The fact that he asked the question tells me that the GSE preferred was on his radar. Even though Rose answered that his duty is toward the conservator, the conservation agreement says that their responsibility is to maintain the value of the GSE assets in order to protect the governments’ senior preferred, so the junior preferred benefit indirectly. I may be deluding myself here (as I am long the preferred) but I believe the massive upside (10-15x investment) here gives Ackman an incentive to spend some effort as an activist in favor of keeping some government involvement in the housing market. He will have some have some strong facts in his favor, such as: (1) The GSE's underwriting has been very good as shown by significantly lower default experience vs. private label, (2) The GSEs operated very well for decades but ran into trouble when they started buying private label AAA's with poor underwriting. This killed them and they would be alive today if they stayed with their original charter, (3) Govt. involvement in the housing finance market can provide a critical shock absorber during times of stress (like today) when big banks might retrench. Its a long and complicated story, but that is why Ackman would be ideally positioned to separate the truth from the political spin. My hunch is that he is waiting until FNMA's default experience improves to where FMCC is today which should be within a year.

This came to my mind too. GSE Preferred is available at cents on the dollar so it fits with the 'modest amount of capital commitment' part. Right now, the GSE's control 90% of the US mortgage market. If they were to go away (and presumably the value of the preferreds go to zero), the big banks would gladly take their place and benefit from a windfall of new business. The latest SEC filings show 12% of Ackmans fund is in Citigroup. Maybe this is what he means by 'significant hedging benefits'. Just a guess.

Freddie is leading Fannie on the way to eventual profitability but they haven’t been able to get over the huge 10% Govt preferred coupon hurdle. Like last quarter, they are like a dog eating its own tail. They were forced to borrow $1.5bln from the Treasury, so they can turn right around and pay the Treasury a quarterly coupon of $1.6bln. Crazy. At some point, the politicians will see the GSEs as a money pot and will allow them to cut the preferred dividend and raise guarantee fees. Cash will poor in, the allowance for tax deferred assets will be eliminated, and the taxpayer will get their money back in full with an IPO like GM/AIG. Everyone wins, and the holders of the private preferred make a fortune!

The Crack Spread formula says that after refining you get (2 units of heating oil + 1 unit of gasoline) from (1 unit of texas light sweet). This would imply that you get 1/3 a barrel of gasoline from a domestic barrel of oil. http://www.ibankcoin.com/peanut_gallery/index.php/2008/09/14/calculating-the-crack-spread/

Opened positions in WFC, BRK.A Added to WRB, RJET, GKK

I think the stock will be at least as high as $17 by expiration of those 2013 calls. Nearly 7x returns. I didn't go "all in" on the calls, if it blow up 100% I've only destroyed 5% of my fingers -- which I would expect to recover from the warrants. I have the same number of warrants in AIG as I do in BAC. I hope AIG gets their $10b back! That gain in book value alone would repay me for the cost of my BAC warrants. I follow your price objective and your desire for leverage with limited downside. But with the chance of sustaining the current panic levels of implied volatility for the next 500 days being almost zero, you are assured a better entry point in the future. For example, with the underlying at $8.5 and volatility equal to historical levels, the Jan 2013 10X LEAP would be $1.06 (roughly the same price as today). My rule of thumb is to sell volatility on days like these and buy it when waters are calm.

You mentioned several ways to play this one... do you mind me asking which option(s) you ultimately went with? I went with AIG & BAC warrants. I also got BAC 2013 $10 strike calls. No AIG. But bought the same calls on BAC that you did. Eric/Txlaw/others, Wondering why you bought the BAC call options today, rather than the underlying? On a day of panic where implied vol. has spiked to 62%, the option price is over two times the price at a normalized vol. of say 42%.

Can you guys please explain to me how the VXX termination clause works?

Unlike Moodys, S&P's rating criteria has always been based on the probability of the first $1 of default. How can the US ever default unless the government runs of out of paper for the printing press? Can't happen. I don't understand how S&P can downgrade and maintain internal consistency with their rating process. Now, if S&P were to offer ratings based on the dollars ability to maintain purchasing power, that would make more sense; but on that score the US is a junk credit.

3 cheers to Plan! :D

I try to make a habit of confirming at the end of any call with management that nothing discussed was material, non-public information. Probably won't indemnify you, but may reduce some of your risk.