Vinny’s Blog

Yesterday the market ran up 391 points. Wow..that is great news…and then I am looking like crazy everywhere on each news portal that I go to..and I am lookingand..lookingI just can’t find it. So what is it that I am looking for ? I am looking for a solid proof of news that can tell me why the hell this market is up 391 points.

I don’t see a single piece of evidence that confirms this 391 points rally. Just a day before Polson was proposing reforms by giving central banks more power to control banking. Two days before that there were plans made to avoid THE NEXT MELTDOWN (read my post from yesterday). A day to two before that when I pumped my own gas while returning from DC the price at the pump was 3.39 so nothing has changed. But the market rallies 391 points.

I am still looking for a good solid news article that can explain to me why the hell market is up 391 points and if it’s going to stay there that would be nice. And damn it - Instead of finding a proof that I am looking for …I find another devastating article banking industry is going to loose 200,000 jobs. http://money.cnn.com/2008/04/01/news/companies/banking_jobs.ap/index.htm

That’s an absolute moral booster to any banking sector employee, of course I am sarcastic and it’s going to remain this way through out this article please try to keep up with it. If you need a change I suggest you quit reading now and look for the jokes I sent you earlier. Because it is definitely not going to get any better…not in this article.

Then I find even more incredible news UBS out of all companies has declared additional $19 billions in write down.

With Tuesday’s $19 billion writedown, UBS (UBS) has taken a total of $37 billion in charge-offs on real estate-related securities and structured products. If you’re keeping score at home, UBS has now vaulted ahead of Citi (C, Fortune 500) to the top of the mortgage writedown chart.

Here is the article http://money.cnn.com/2008/04/01/news/companies/boyd_ubs.fortune/index.htm?postversion=2008040116

Let me remind you of what you just read - losses here are more than Citi’s. Citi is worlds largest bank. Apples to apples UBS taking more losses this company should be collecting dust. But no the good times are rollingwhat UBS has declared is nothing. Let this not damage the market rally and I had even more surprises waiting for me in that article. UBS stock actually went up.

Its shares surged 14% as a hugely oversubscribed preferred share issue at Lehman Brothers (LEH, Fortune 500) suggested the market is still willing to stand by hard-hit financial firms.

No kidding - A company just lost $19 billion and the stock went up 14% excellent.I think every company from now on should declare losses. What is the point in working so hard to increase earning. Declaring losses push up stock just fine - 14% in this case.

In case you did not have enough of this crap by nowthe article goes on.

The rally came even as UBS announced a $15 billion rights offering designed to restore its depleted capital base, about a third of which was wiped out with the latest charge.

You see people are buying this stock hand over fist because this is buy of the century specially on the day when 1/3^rd of companies capital has already been blown away even before you have completed your trade. This is a killer deal.

And then my eyes are sort of jumping out of socket because what I read next in the article is even more amazing

In an era of excessive leverage, UBS has been no exception - which is why, even after the latest round of writedowns and asset sales, shareholders may be facing still more pain. And by-the-way happens to be the same day when bank announced the departure of Chairman Marcel Ospel,

What ??? “ Company just blew up $19 billion, CEO is leaving, even better there is more share holder pain waiting to happen. But - new stock offering is over subscribed. Stock went up 14%.

And just take a chill pill here, because if you thought that after these massive write downs a companies balance sheet will start to look healthy here comes another blow to your otherwise IQ challenged brain.

Its trading desks and asset management portfolios held almost $61 billion in U.S. residential mortgage assets as of Dec. 31 - even after $19 billion in earlier writedowns and asset sales. As of year-end, the bank had $27.6 billion in subprime bonds, after having written down $14 billion, according to a CreditSights report. At the end of the year, UBS also held $11.4 billion in leveraged loans and $7.7 billion in commercial real estate interests.

My friend - do you realize what my problem is “ I just can’t see anything positive now, can I ?

Instead, my mind is forcing me to think logically and it’s sort of hung up on this one conclusion. That this company is just another Bear, this was just going to blow up and create even bigger mess so this rally is not real.

You see my problem is - I just don’t know how to have a good time. And then, there are these 100s of incredibly smart people who are rushing to buy this stock like there is no tomorrow and loved it so much that the stock actually went up by 14%. Me on the other hand I just don’t get it I am trying to look for a proof something that can confirm this is a good buy. I am stuck in this logical thinking whatever that means.

Logical thinking………do you really want to know what it means. I suggest you check medical dictionary for it. Chances are it has probably gone missing from American Dictionary.

Even better Wall Street Journal writes stocks go up as turn around planned…nothing has happened yet. It’s just a plan..and Wow….there you go…..391 points. Imagine if they ever turnaround markets would go up….5000 points ? now there is an investing for ya!

http://online.wsj.com/article/SB120702674576879869.html?mod=hps_us_whats_news