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421 posts
msg #54326
8/24/2007 5:31:05 PM

Anyone else saw this?

Sometimes—just sometimes—
Wall Street gives you a gift.
Today that gift is


Here is what you must do—immediately

A bailout with a twist!

Last week, we saw a run on the bank. Of course, that is NOT what the media told you.

Last week—within 24 hours of the run—the Federal Reserve stepped in and bailed out Countrywide Financial to the tune of $50 billion.

That will NEVER be what you’ll hear or see or read, of course.

WHAT Happened?

WHY Did It Happen?

AND HOW Can We Cash In?

Richard Band here, and I love bailouts. They make me and my subscribers obscenely rich.

THIS bailout has a surprise twist, as you’ll see. But it’ll still hand you legacy-sized profits, if you’re nimble.

What we have here, my friends, is such a GORGEOUS bailout of Countrywide Financial that it practically throws diamonds at our feet.

Love Them Bailouts!
--you will, too

1981: The Chrysler Bailout. Richard Band said “Buy!” His subscribers collected 420% profit in just a little over one year.

1984: Barron’s asked, Do Utilities Have A Future? Richard Band said “Yes! Utilities are no more obsolete than light bulbs.” That call handed his subscribers profits of up to 700%.

1987: Richard Band warns, “Wall Street Deep In Hock.” His subscribers doubled their money in bonds over the 2 years following the Crash.

1994: The Argentine Bailout. The press called Argentina The Titanic. Richard Band predicted it was buoyant, and his subscribers tripled their money in Argentinean banks in less than 3 years.

1998: Asia crisis triggers bond bailout. Richard Band’s subscribers almost quadrupled their money.

2007: Richard Band forecasts the bottom of the housing market burst in August, 2007: “Pessimism spells opportunity” he predicts in January that year.

Listen up and take note:

If you didn’t buy Chrysler at $3 in 1981 when they bailed it out, don’t let the Countrywide bailout slip by you.

My subscribers pocketed a 420% gain from the Chrysler bailout—in just a little over a year.

If you didn’t buy Argentine banks in 1994 and 1995, when the World Bank bailed them out, well, my subscribers did—and tripled their money in less than three years.

During the Asia crisis of 1998, I smelled a bailout coming in emerging-markets bonds. My subscribers bought a truckload. And we’re still holding them today, after turning a $10,000 investment into more than $37,000!

In all these cases (and more), one quick move could have set you up for life.

What This Crisis Is NOT About

Let me be clear. The title of the movie you are watching is NOT: “When Hedge Funds Run Wild.”

The title of this sit com is NOT: “Iowa Family Loses Home.”

The title of this hit IS: “Bailout!”

And because no one is telling you this, you have an opportunity to double your money in the next year or two, with most of your profits piling up in the next 60 - 90 days.

But you must act quickly.

Here’s how it all REALLY happened.

Goldman, Bear Stearns, the hedge fund geeks—none of them matter to Ben Bernanke, and he has said as much repeatedly.

But Countrywide was different. It is a bank, and it is big. It is a bank that is too big to be…let me put the word in capital letters…ALLOWED…by The Federal Reserve to fail.

The entire financial system of the USA swayed for a few hours on Thursday afternoon, like a gossamer thread in the breeze. The casino went suddenly quiet and traders held their breath.

Then, BANG, the fix was in, Ben dropped the discount window rate 50 basis points and $50 billion was injected into the system.

Yep, it was a bailout all right. And the $50 billion used now could have saved $100 billion, $200 billion, in FDIC money later. Indeed, if a run on THIS bank had turned in to a run on ALL banks, the blood in the streets would have been hip deep today. We were, make no mistake, saved by The Ben.

But Here’s The Thing

Countrywide is not some kind of Rogue Bank. Sure, it has—had, I should say—subprime loans. But it is a BANK. Most mortgage lenders are not.

As a BANK, Countrywide runs a pretty tight ship. That’s why I own it, personally. The subprime piece of its business has been hastily hacked off and 6,700 employees in their mortgage originator offices were fired by email, no less, last week.

Which leaves, as I say, a BANK with an impressive portfolio of AAA bonds and super-safe prime mortgages.

A bank selling at 34% discount to the value it was assigned by Wall Street just 10 days previously.

It’s a gift, my friend.

But it’s not a gift for you.

It is a gift for Warren Buffett and…

Oracle of Omaha

Warren Buffett has made his intentions clear. He’s Captain Ahab with a $50 billion harpoon and a taste for whale.

“Buy when everyone else is selling. This is the very essence of successful investing.”

--J. Paul Getty, last century

So when rumors surfaced last week that Buffett might scoop up Countrywide, no one was less surprised than me.

After all, this is the guy behind the Salomon Brothers bailout in 1991. He almost bailed out Long Term Capital, too, in 1998. Even Wells Fargo was a bit dicey until Warren showed up with his aw-shucks smile and his iron handshake.

But don’t mistake Buffett for a white knight. Given half a chance, he’ll pick Countrywide clean—leaving ordinary Countrywide shareholders like me with the leftovers. A carcass, not a coffer.

So what IS the gift that the Countrywide Bailout Act of 2008 bestows upon investors?

Across town from Warren’s offices sits a man, Wally, with similar values and, some say, similar investing acumen. He, like Warren, has an extraordinary record of beating the market.

"When there’s a certain amount of chaos, the fallout offers some real opportunity.”

--Warren Buffett, last week

And Wally, like Warren, has a deep involvement with the mortgage market and with Countrywide in particular.

And one day…let’s say just for argument’s sake, last Thursday…maybe Wally receives a call from Warren, his old buddy, suggesting lunch. On the menu: carving up the $11 trillion mortgage market.

Do you doubt that this has happened? I bet it has happened, or it is happening right now, under our very noses.

Two of the most astute investors in the world, sitting a $3 cab ride across Omaha from each other, are plotting to help Warren Buffett grab control of the mortgage universe.

And when that happens, it’s…

“…To The Moon, Alice!”
--Jackie Gleason

I want you to buy shares in the Trust favored by The Other Oracle of Omaha, and I want you to buy them today.

Three months ago, shares in this Trust would have cost you close to $54. Then came the run on Countrywide and any stock with mortgage exposure was tossed out. You can pick up those very same shares today for around $38.

“Buy into distress. Sell into prosperity.”

--Richard Band, just before the real estate boom of 1996. In 16 months, subscribers were up 126%

But when the dust settles and Warren (with Wally whispering in his ear) emerges as the dominant player in the $11 trillion mortgage business, this Trust will be worth TWO OR THREE TIMES what it is today.

Count on it!

I’ll show you exactly how to buy Wally’s remarkable Trust in today’s special issue of Profitable Investing.

Get it here.

If you like picking up two-carat diamonds off the sidewalk, consider Profitable Investing your Dyson’s vacuum. It never gets clogged with irrelevancies—and for 18 years and 9 months it has just worked.

And times like this, when cast-aside diamonds are thick on the trading room floor, are wonderful for Profitable Investing. We’re grabbing fistfuls of doublers, triplers and quadruplers right now.

Join us, won’t you?

6,981 posts
msg #54332
Ignore karennma
8/25/2007 7:39:31 AM

wantonellis 8/24/2007 5:35:58 AM
Barron’s last week issue had a good story on Asia buying sub prime loan packages from US banks. These CMO’s or Collateralized Mortgage Obligations are bundled debt with BBB and lower grade debt bundled with AAA debt. Essentially once buyers in the US began avoiding these time bombs due to high risk the marketing campaign went into full swing to sell to Asia.
The Asian banks are going to get whacked in a big way.
OR ...
By 20011, Asia will "OWN" the U.S.

283 posts
msg #54333
Ignore heypa
8/25/2007 12:15:11 PM

Ain't it freaking wonderful that we(you and I paid for it) saved Chrysler so that it could be sold to Mercedes?
Any sovereign nation that allows its assets to be sold to a non citizen entity is foolish.
Any sovereign nation that allows its balance of payments to become unbalanced negatively is stupid.
Any sovereign nation that allows its assets to be sold to another sovereign country is being led by traitors.
WE ARE FREAKIN DOOMED!!!!! My opinion.

2,824 posts
msg #54340
Ignore nikoschopen
8/25/2007 3:52:43 PM

Heypa, you need to mellow out. LOL

In the meantime, think about other countries and their companies and their human resources and their natural resources and (fill in the blank) that America has raided and pillaged. No wonder you have the Chavezes, Ahmadinejads and the Mugabes springing up everywhere like weeds.

2,824 posts
msg #54342
Ignore nikoschopen
8/25/2007 4:19:30 PM

It's only been a month since this thread was created, but it feels more like eons with all the gut-wrenching turbulence that came and went. I hope everyone weathered the storm well and came out alive. I went back and reread msummer's "challenge" at the outset of this thread, which reads:

I am offering a challenge to anyone who can come up with a system which is decently profitable during the backtest period of 1-1-02 to 1-1-03. The system is to be traded from the long side. Keep the default settings for the backtesting. So far finding this system has evaded me. I believe if you can construct a system( from the long side) during this period, you have a system which is worth gold. Good Luck

I guess the recent market plunge can be seen as a minuscule reflection of the 2002-2003 bear market. Has any of you backtest wizard come up with a profitable system, let alone actually made money from the long side of the market, for the previous month?

2,824 posts
msg #54343
Ignore nikoschopen
8/25/2007 5:02:57 PM

Here's an interesting aricle on CFC in today's NYT.

Inside the Countrywide Lending Spree

ON its way to becoming the nation’s largest mortgage lender, the Countrywide Financial Corporation encouraged its sales force to court customers over the telephone with a seductive pitch that seldom varied. “I want to be sure you are getting the best loan possible,” the sales representatives would say.

But providing “the best loan possible” to customers wasn’t always the bank’s main goal, say some former employees. Instead, potential borrowers were often led to high-cost and sometimes unfavorable loans that resulted in richer commissions for Countrywide’s smooth-talking sales force, outsize fees to company affiliates providing services on the loans, and a roaring stock price that made Countrywide executives among the highest paid in America.

Homeowners, meanwhile, drawn in by Countrywide sales scripts assuring “the best loan possible,” are behind on their mortgages in record numbers. As of June 30, almost one in four subprime loans that Countrywide services was delinquent, up from 15 percent in the same period last year, according to company filings. Almost 10 percent were delinquent by 90 days or more, compared with last year’s rate of 5.35 percent.

Many of these loans had interest rates that recently reset from low teaser levels to double digits; others carry prohibitive prepayment penalties that have made refinancing impossibly expensive, even before this month’s upheaval in the mortgage markets.

“In terms of being unresponsive to what was happening, to sticking it out the longest, and continuing to justify the garbage they were selling, Countrywide was the worst lender,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “And anytime states tried to pass responsible lending laws, Countrywide was fighting it tooth and nail.”

Click on the picture to read the full article

129 posts
msg #54345
Ignore msummer2007
8/25/2007 6:32:25 PM

Niko there have been a lot of great posts on this thread. I remember the original post. All my systems have been thrown out of whack. Recently they have been coming back into line, but I am skeptical to trade them in this environment. I wonder how many others feel the way I do? There is the urgent need to remove a trade immediately, whether this feeling is real or a sixth sense, I don't know. Even going long recently, seems to be fraught with risk. I usually don't day trade as frequently as I have been, I like to let the trade work for awhile. I too hope everyone came out of this OK.

283 posts
msg #54347
Ignore heypa
8/25/2007 8:32:45 PM

Yes Niko all the worlds problems are this countrys doing. Therefore let us make sure that it pays for these percieved transgretions. Yes I sometimes get too intense,but was what I said in error?The final result of this drive toward globalization is ONE WORLD GOVERNMENT.Picture it as one run under the strict rules of the Koran. It is within the probable and desireabe to a fast growing segment of the growing population.

283 posts
msg #54348
Ignore heypa
8/25/2007 8:37:36 PM

Back to the original. It is extremely difficult to trade successfully against the grain. Most retail traders are probably swing traders.Only accomplished day traders such as youself have much chance of success.

2,824 posts
msg #54349
Ignore nikoschopen
8/25/2007 10:37:48 PM

msummer, this thread began just prior to the subprime fiasco, which eventually pushed the market off the cliff. If anything, this thread should serve as a chronicle of those wild gyrations that have plagued us all and, above all, the bone-chilling pleasure I had of thumbing my nose at the badass big players. However, I agree that the current environment is fraught with perils, especially for day traders whose tight stops are the favorite targets for these same big players. I got shot down in flames on so many occasions I feel like a lost puppy these days.

Heypa, you obviously understated my ability as a daytrader. I'm perhaps one of the most obnoxiously retarded daytraders there is. I keep making the same mistake of giving back my hard earned profits and yet I can't help indulging myself in thinking that I can surpass Mary4Money's wealth in due time, whatever that means.

One world government? From Europe to Asia, and from Africa to perhaps Antarctica, Coca-Cola and Madonna practically dominate the scene. What more can you ask? If there would be such a silly thing as a one world government, it would mostly be under the control of America with her agenda at the very top of the list. No wonder other countries laugh at our democratic double-standards.

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