Warren Buffett Interview With Charlie Rose 11/13/2009 (Video/Script)

Here is a recent interview with Warren Buffett on Charlie Rose on 11/13/2009. On CharlieRose.com there isn't a direct url to the video or embed feature, so you are on your own at charlierose.com. He talks about his railroad investment, the financial crisis, regulation, investments etc.

"WARREN BUFFETT: Well, it was-- it really was an extraordinary time in this country. We came closer to a financial meltdown than certainly any time I have ever seen, and probably in certain respects even -- there was even more panic than the Great Depression, because it came on so fast and so unexpected.

And the whole country wanted to deleverage, corporations, individuals, and fortunately we had a government that responded. It was -- when we talked last, it was a little question of whether Congress would respond like they should. They finally did, and I -- I felt they would in the end.  I mean, in the end, they come together for things that are this vital to the country. But we had the right people in Washington. If we’d had a group that behaved like a deer in the headlines, that deer would have gotten run over."

Transcript: http://www.charlierose.com/download/transcript/10711

Tim Geithner Testimony, Q&A Video/Script at Pittsburgh G-20 (11/17/09)

Here is Treasury Secretary Timothy Geithner testifying before congress and answering questions at the Pittsburgh G-20 on 11/17/2009. Hat tip CSPAN embed feature.

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BDI Futures Curve in Backwardation (IMAREX Freight Futures, Options, OTC Forwards)

FYI: You can find BDI Futures closing prices at exchange.imarex.com. TheBusinessInsider pointed this out in the story below or here.

"At Imarex you can trade Freight Futures, Freight Options and OTC Freight Forwards (FFAs) as well as Index Futures on the Baltic Dry Index (BDI). (Imarex)"

Source: Freight Forwards Curve Warns Of Baltic Dry Index Collapse (EGLE, DRYS, GNK) (Business Insider)

$DRYS Suspense Continues: Options Active, Implied Volatility 75/HV 63, Broke Below 50dma

They raised the offering to $400 Million.

ATHENS, GREECE--(Marketwire - 11/19/09) - DryShips Inc. (NASDAQ:DRYS - News) (the "Company" or "Dryships"), a global provider of marine transportation services for drybulk cargoes and off-shore contract drilling oil services, today announced the pricing of its previously announced public offering of convertible senior notes. The offering size was increased from $300 million to $400 million. The sale of the convertible notes is expected to close on November 25, 2009, subject to customary closing conditions.

The convertible notes, which are being issued at a price equal to 100% of their face value, will have an interest rate of 5%. The convertible notes will be senior unsecured obligations of the Company. The initial conversion price for the convertible notes will be $7.19 per share. Continued...

DRYS options are gearing up for November expiration tomorrow.  On the ISE, DRYS options traded 2.87x average volume.  ISE Calls 12,941 v. ISE Puts 4,868.  Total Call/Put volume was 1.79.  It closed below the 50dma (6.73) at $6.53 and Implied volatility stood at 75.43 w/ historical volatility at 63.25.  At some point vol will sell on an underlying move, imo.  As of 11/18, from Schaeffers Research, the put/call open interest Ratio is at 0.29, around the 1 year low.  Live monthly chart below with symmetrical triangle inflection point. This is a risky stock, use protection.

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$XHB, $XLF, $IWM Back Below 50DMA, Nikkei Testing 200DMA [Charts]

XHB, XLF and IWM are under their respective 50dma's and the Nikkei ($NIKK) broke support and is about to test the 200dma. Will housing, financials and small caps drag SPY to the 50dma?   Futures unchanged, we'll see.

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Pontiac Silverdome Sells For $583,000, 1% of $55M Purchase | Videos, History Of Silverdome

Source: http://www.williamsauction.com/silverdome/img/Large/4.jpg

In a distressed sale, the City of Pontiac, MI sold the Pontiac Silverdome to a Toronto developer for $583,000, 1% of the original purchase price . It was built for $55 Million in 1975. Pontiac paid out $1.5 million a year for upkeep. Did Apostolopoulos take on any debt? The developer said the dome will be used to hold sporting events and Major League Soccer.   Look at the history of this place!  Shouldn't there be a "historical landmark" premium? Watch the history of the Pontiac Silverdome in the video below. The Detroit Lions and Pistons played there, Hulk Hogan body slammed and pinned Andre the Giant there, Pope John Paul II celebrated Mass there and Elvis Presley, Michael Jackson, Led Zeppelin, Pink Floyd and The Who all performed there. "Silverdome Assets:  A high bid delivers an array of assets...127.5 acres of land, 3 storage buildings, practice field, restaurant, private suite; and more". Watch the auction videos at Williams&Williams.  Nice scoop?

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Paulson & Co. 3Q Letter, 13F Holdings [GLD, BAC, WYE, AU, SGP, C]

Paulson & Co. [DV's Hedge Fund 2007-08 MVP, run by John Paulson] released their 3Q letter and updated holdings (13F filing). John Paulson has been killing it on $GLD and DV's been actively watching GLD since May.  $GLD is up 21% since 9/1/09 while $SPY is only up 9%.  The set up was as follows..

Paulson Buys GLD, GDX. Laidi Long Gold/Oil Pair Trade (5/20/09)
Gold Spot Eyeing $1,000, GLD at Inflection Point (2 Year Chart)(8/6/09)
John Paulson Keeps GLD Investment, Watching Symmetrical Triangle (8/13/09)
GLD Call Options Active at Dec, March $100 Strike (8/28/09)
GLD Breaks Out, December $100 Call Up 49% (Charts: GLD, Comex Gold Futures) (9/3/09)

*FYI, this is all very backward looking data.  For the quarter ended 9/30/09, Paulson's top 6 holdings via GuruFocus were:

GLD (Gold Spider), $3.1 Billion, 15.2% of portfolio
BAC (Bank of America), $2.7 Billion, 13.21% [took some profits]
WYE (Wyeth), $2.5 Billion, 12.27%
AU (AngloGold), $1.7 Billion, 8.54%
SGP (ScheringPlough), $1.6 Billion, 7.95%
C (Citigroup), $1.4 Billion, 7.1% [initiated]

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DryShips: 117 Mln Debt Waiver, 300M Convertible Notes ($DRYS Financials/Technical Charts 11/18)

Big day for DryShips today ($DRYS). I knew something was about to happen given the monster call volume during the past week (link). They announced a $117 Million debt waiver and a $300 Million convertible senior note offering for working capital, vessel acquisitions and general corporate purposes. The capital raise could weigh on the stock as it is dilutive if converted. In May they raised $475 million in equity and they've been getting debt covenant waivers since February.  This is also interesting:  "The Company also intends to enter into an equity underwriting agreement with Deutsche Bank Securities Inc. pursuant to which Deutsche Bank AG or its affiliates intend to sell shares of the Company’s common stock that they will be entitled to borrow from the Company under the share lending agreement".   DRYS is down 0.34 (-4.81%) to $6.74 in after hours trade. We will see how investors/traders react. The massive call volume lately has been very peculiar... Connecting it with the chart, are people playing a breakout, hedging or selling? Even today, DRYS calls were active vs. puts on the ISE. The ISEE widget to the right shows Calls: 5,798, Puts: 243, ISEE 2,386. Also, the Baltic Dry Index/$BDI is on fire. It doubled from 2200 to 4400 in less than a month.

I provided two live charts below, one looking at the massive 11 month symmetrical triangle formation and one looking short term. IMO, the ultimate catalyst is coming and will bank coin once the triangle is broken w/ volume. I also added a few fundamental charts from Wikinvest.com including current assets vs. liabilities trend, current ratio trend, cash & equivalents, income statement snapshot and Price/Book ratio trend. I'd provide more data but there is too much data for one post, technically and fundamentally. You can find great financial data and interactive charts at Wikinvest.

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Meredith Whitney Hasn't Been This Bearish In a Year, XLF (11/16, Video)

Meredith Whitney, like Whitney Tilson, is bearish on residential real estate and banks. She sees no fundamental root to this rally. XLF closed RIGHT at the 50 day moving average today and is brushing up against the 3 year downtrend. Live real-time chart below, watch it.

"I think you have to wait for a leg down in valuations, everything is expensive right now".  "I think the banks go back to tangible book value".

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Snoop Dogg on CNBC, Midnight Love Video (1997) | DV Entertainment

Big Snoop Dogg was on CNBC yesterday...

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Soros Invests $52 Million In Ford During 3rd Quarter (13F Filed 11/16/09), Mitch Albom CBS Interview On Detroit 11/10/09

Is positive reflexivity hitting the auto industry and possibly Detroit? We will see. Soros Fund Management, a $6 billion hedge fund run by George Soros, filed a 13F for his holdings ending on September 30, 2009. It shows he invested $53 Million in Ford or 7.3 million shares.  It's not up there with his $340 Million Petroleo Brasileiro (PBR), $277 Million Hess (HES), $266 Million Potash (POT), $250 Million LSI Corp (LSI), $242 Million SPDR Gold Trust (GLD), $228 Million Linear Technology (LLTC), $340 Million or $138 Million Verizon (VZ) investments, but it still deserves attention for the D.  Maybe Soros can purchase some Detroit GO bonds while he's at it.

Source:  http://www.sec.gov/Archives/edgar/data/1029160/000101143809000622/form_13f-soros.txt

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T2's Tilson: Shifting Into Low Beta Stocks, Ramping Up Short Book (Homebuilders, $XHB)

Value fund manager and T2 Partners founder, Whitney Tilson, was on BloombergTV (full video link) a few days ago talking housing and fund allocation. He thinks we are "much closer" to a bottom in housing and there will be "one more leg down" with "5-10% downside from here". He said there are no more sudden shocks to the system but "years of elevated losses ahead of us". Regarding CRE, he said the $250-500 billion estimate in commercial real estate losses will create a "headwind for the financial system that will keep it weak". Smaller banks will be hurt.  After his quotes I added a chart of XHB with trends.

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Obama Holds Town Hall With Students In China (Video: Shanghai 11/16/2009)

Obama was in Shanghai, China on 11/16/2009 holding a town hall meeting with Chinese youth. Video via Whitehouse.gov.

Henry Blodget on News Corp's Threat to Remove Content From Google

 From: Murdoch's Just Trying To Bludgeon Google Into Throwing Him A Bone (Link: BusinessInsider).

Bernanke Speech at Economic Club of New York (Text, 11/16/2009)

Speech
Chairman Ben S. Bernanke
At the Economic Club of New York, New York, New York
November 16, 2009

On the Outlook for the Economy and Policy

When I last spoke at the Economic Club of New York a little more than a year ago, the financial crisis had just taken a much more virulent turn. In my remarks at that time, I described the extraordinary actions that policymakers around the globe were taking to address the crisis, and I expressed optimism that we had the tools necessary to stabilize the system.

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JP Morgan's Thomas Lee: S&P 500 To Hit High 1100s By Year End, Sees Payroll Surprises

JP Morgan's Chief Equity Strategist Thomas Lee has been right on 2009 so far. The Tom Lee trend is your friend until it hits a bend. He thinks we will see upside payroll surprises and a ramp up into year end. He favors small caps and high beta cyclicals to play the payroll, labor and cyclical recovery. This includes the steels, home builders, paper stocks, casinos and specialty retail.  He sees a domestic growth story as well. "I think we're going to comfortably close above 1100 by year end.  It is pointing to high 1100s as a more reasonable target by year end, not 1100 itself".  By the way, the 50% retracement level on the S&P hits 1121.

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First Decade Of 21st Century Summed Up In 7 Minutes (Newsweek Video)

Wow, this was a really sh**ty decade. At least the Ipod and social networking sites were invented.



"The Decade in 7 Minutes: NEWSWEEK rewinds the first 10 years of the new century, reminding you of the best, worst, and unforgettable moments. (Source: NewsweekVideo)

Roubini Is Back: The Worst Is Yet To Come, Damage Will Be Extensive

Deflation whale coming?  Well there are plenty of US Dollars and Treasuries to buy.  Roubini has been bearish on gold and believes the USD carry trade unwind is inevitable.  We'll see who gets knocked out here going forward, should be interesting.

The worst is yet to come: Unemployed Americans should hunker down for more job losses (NYDailyNews.com)

Read more: http://www.nydailynews.com/opinions/2009/11/15/2009-11-15_the_worst_is_yet_to_come_unemployed_americans_should_hunker_down_for_more_job_lo.html

Bill Gross: High Yield Corporate Bonds Overvalued, Watch HYG JNK Rising Wedge + Credit Spreads (IEF, LQD, HYG) If Re-Pricing Of Risk Occurs

This market and low volatility is making Dvol repeat posts because nothing is moving. This post is about high yield corporate bonds, continued from:

HYG, High Yield Bonds Selling Off With Risk, Leveraged Loan Index Testing '08 Resistance. Does Someones Yield Have To Give? (Blog post: 10/28/2009)

Bill Gross (largest bond fund manager in the world?) has been on the scene lately talking about high yield debt and risk in general.

Bill Gross Says Value Diminishing in Credit Markets (Bloomberg: 11/13/2009) 
Bill Gross: Six-Month Rally in Risk Assets at Pinnacle -Investment Outlook November 2009 (Midnight Candles) (Blog post: 11/2/2009)

After reading Gross's comments and looking at the charts of HYG and JNK (high yield corporate bond ETFs from iShares and SPDR series) there appears to be an inflection point building via a rising wedge.  Meaning bulls need a speed injection to get over the hump (administered free of charge by you know who).  I provided charts of $HYG and $JNK as well as a live $HYG chart.  Most recent yields based on distribution are:  HYG 9.77%, LQD 5.45%, 10Y Treasury 3.43%.  ALSO look below at the performance spread between HYG, LQD and IEF.

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