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Stocks ready to go lower BLK, LEH, MTG and MBI

The bear market looks to be rocking and rolling!!                             January 8th 2008

 I like a short entry into MTG.  The company offers mortgage insurance to homeowners that purchased borrowing a hi debt to equity ratio in some cases going over 100% of than the homes originally worth.  Home values have since declined, and defaults have risen substantially.  The government is offering no help to the company or home owners.  Warren Buffet just entered the business with a top of the line tripple A credit rating insurance agency for home purchases and should grab much of the new business.  MTG has hoped new business would help it’s business offset losses.  With home sales declining and new competition the company is likely going to zero.

LEH presents an opportunity to short  sell it as they were behind alot of packaging of bond sales in municipal bonds and mortgage bonds (two funds recently defaulted). The mortgage packaging business has dried up and may never return.  The company is being investigated for not disclosing the risks of the mortgages they sold as hi quality after problems were likely all ready known.  Charlie Gasparino a CNBC contributer has reported, “No wallstreet corportation has ever survived an indicment.”  CNBC’s  Fast money reported the stock as a good short tonight.  Fast money is a great source of accurate trading information.  

BLK  a public hedge fund had two of it’s money market funds declared junk over the holidays by S&P ratings agency.  Then asked the ratings agency to remove the company from it’s rating system. The company has since frozen the funds and not honered withdrawal requests by investors.

MBI a bond insurer should also go to Zero as defaults on bonds rise in all area’s of business.

All suggestions should be taken as that of entertainment value, and opinions to further investigate.  Not investment advice or an endorsement to make any trading decisions.

January 9, 2008 - Posted by | Uncategorized | , , , ,

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