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Today's Taipan Daily
A Shining Light in the Gloom
Justice Litle, Editorial Director, Taipan Publishing Group - 7/15/2008
So much for yesterday morning's rescue rally. With financial stocks going down in flames -- and the broad market not faring much better -- bearish traders are making hay on their short positions.
My friend Cash McDash, who has shared a number of short ideas in these pages, is absolutely cleaning up, too. For two off-the-cuff examples, just check out the charts of VMWare (VMW), Chipotle Mexican Grill (CMG), and Verso Paper (VRS), all traded on the NYSE.
Any reader who acted on those short plays could be sitting on some hefty gains by now. There are more ideas where those came from, too... including a strong long or two to balance out the shorts. Speaking of which, let's check in with Cash now.
JL: So, Cash. Another week, another fire-and-brimstone, banks-in-peril mini-crisis. The mortgage giants are falling down under their own weight. Now the rumor is that stockholders in Freddie Mack (FRE) and Fannie Mae (FNM) could be wiped out.
CASH: Hmm... That sounds pretty familiar, no? When was the last time a major financial institution almost went belly up and the government had to bail it out (or arrange for someone else to do it)?
JL: I can only assume you're talking about the Bear Stearns fiasco from back in March. What a mess that was... And yet here we are back in the same kind of trouble.
CASH: Exactly. I'm sure you've heard the phrase that history doesn't repeat, but it rhymes.
JL: Yep. In that light, this certainly looks like "same song, second verse." Does investor fear have the new-issues market locked up pretty tight?