Blue Horseshoe LOVES Anacot Steel

by Larry Levin


"Blue Horseshoe loves Anacot Steel" was a stock tip from the 1987 film "Wall Street." I thought of this memorable line during today's massive reversal from the 2% sell-off because the rally was again started by a non-event "news flash" on television. For a second time Charlie Gasparino broke into regular programming to tell us nothing new: Ambac is working on a bailout and it's almost a done deal. Well, we've heard that before...many times.

Who is feeding this information to Charlie? Everyone knows how desperate the market is for good news, so those feeding him the same old story could be profiting handsomely, like Michael Douglas in Wall Street with "Blue Horseshoe loves Anacot Steel." Maybe it's a banker in the consortium? Maybe it's someone in Ambac management? Maybe it is nobody at all, but I still wonder why no-news is now "breaking news." Where is the SEC?

Today's blue-chip decliners were led by Citigroup, down more than 4% after Merrill Lynch cut the bank's earnings estimates. Best Buy was also downgraded today. In the Nasdaq, Google and Oracle were both hammered -2.7% lower while Intel closed nearly unchanged. Intel shares had fallen about 1% after the company lowered its gross-margin outlook for the first fiscal quarter due to lower-than-expected prices for flash-memory chips. It's lowering its gross-margin forecast for the quarter to roughly 54% from 56%.

Ben Bernanke gave a speech today to community bankers in Orlando Florida that included the silliest "mortgage cure" to date. "Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping but more can, and should, be done," he said. More - Like what? Wait for it... He went on to say delinquencies and foreclosures will continue to rise for a while longer. This will likely add to the inventory of vacant unsold homes, already at more than 2 million units at the end of 2007.

"This situation calls for a vigorous response," Bernanke said. And his "vigorous response" idea is unbelievable...wait for it...

(Many individuals have little or no equity in their homes) "In this environment, principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure," Bernanke said.

WHAT?! ARE YOU KIDDING ME? Now the Fed wants local banks to waive a magic wand and REDUCE the principal of the mortgage; a reengineering of the sale price (lower) if you like!

What kind of precedent is this going to set? If you are responsible, like me, can I ask my banker to reduce my mortgage too? Or do I have to stop making payments first - because that can be arranged. Good grief, what happened to personal responsibility? The game of musical chairs ended and somebody lost - it sucks - but that's life. Nobody, including the Fed, Government, et al...owes anybody a house. And if these mortgage defaults drag the price of my home lower - so what! We are not guaranteed an ever-increasing home value either, even if we own a home we can afford.

Real Time Trading Signals*for

Trade Date: 3/4/08

E-Mini S&P Trades*
(before fees and commissions):

1) V-A sell @ 8:55am at 1326.00 = +1.25 (1 lot)

2) V-A sell @ 9:20am at 1325.25 = -1.50 & -1.50

3) PP buy @ 10:05am at 1313.00 = -1.25 (1 lot)

4) FT sell @ 10:35am at 1317.25 = +1.25 & +2.50

5) Engf sell @ 10:50am at 1316.00 = +3.00 (1 lot)

6) IDVA buy @ 11:55am at 1315.25 = b/e & -1.75

7) Engf sell @ 12:30pm at 1315.50 = +4.00 (1 lot)

8) Momo sell @ 12:45pm at 1315.00 = +1.50 (1 lot)

9) FT sell @ 1:25pm at 1312.00 = +1.00 & -1.75

10) OTF sell @ 1:45pm at 1313.00 = -2.00 & -2.00…thanks Gasparino!

11) V-A buy @ 2:45pm at 1315.50 = +1.00 & +1.00...+4.75 points

E-Mini Russell Trades*
(before fees and commissions):


1) Sell @ 8:49am at 676.8 = +.5 & b/e

2) Sell @ 10:47am at 673.7 = +.5 & +1.7

3) Sell @ 11:03am at 673.4 = -1.0 (1 lot)

4) Sell @ 11:11am at 675.3 = b/e (1 lot)

5) Buy @ 11:47am at 675.3 = -1.0 (1 lot)

6) Sell @ 12:10pm at 674.0 = -1.0 (1 lot)

7) Sell @ 1:40pm at 672.8 = -1.3 (1 lot)...-$160


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