Tuesday, July 29, 2008

Merrill's writedown

MER unloaded $31 billion face of senior CDO's for .22 cents on the dollar. Does anybody think that this transaction was done in a vacuum?

Stock prices indicate that it wasn't.

So the financials should rally on this news.

Meredith Whitney says that this is a good thing. That must make the bears cringe.

And it will also make other holders of the same securities to take a long hard look at their marks. Citigroup valued the same at .53 cents on the dollar.

And the biggest winner of all of this is .53 cent stock SCA! (The stock that Goldman Sachs said had a value of zero).

SCA will be given a long hard look at today, as the assumptions made by the shorts and bears are wrong, judging by the value of the contracts written up, and the payments/settlements made, prodded by and at the behest of the Insurance Commissioner of NY.
http://online.wsj.com/article/SB121729687755992121.html?mod=hps_us_whats_news

This number could move 500%.

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