Hi Jim and Dan,

Did you guys discuss how just before the takeover announcement yesterday thousands of October 20th calls traded in PER when there is zero volume and open interest otherwise (in all months and strikes I might add). I am almost sure nothing will be done about this.

The craziness doesn’t end with that: Now the FDIC might borrow from the same banks it is suppose to regulate!?!

I am seriously thinking about moving out of the city and buying some farmland, but where?

CIGA PAUL

FDIC considers borrowing from banks to replenish dwindling insurance fund

WASHINGTON (AP) — Regulators have approached big banks about borrowing billions to shore up the dwindling fund that insures regular deposit accounts.

The loans would go to the fund maintained by the Federal Deposit Insurance Corp. that insure depositors when banks fail, said two industry officials familiar with the conversations, who requested anonymity because the plans are still evolving.

Regulators also are considering levying a special emergency fee on all banks, charging regular fees early or tapping a $100 billion credit line with the U.S. Treasury, the officials said.

FDIC spokesman Andrew Gray said that while borrowing from the banks "is an option, it’s not being given serious consideration." The board meeting where the plans will be discussed is scheduled for next week.

But a government official familiar with the FDIC board’s thinking said earlier Tuesday that the plan was being considered. He requested anonymity because he was not authorized to discuss the matter.

The fund, which insures deposit accounts up to $250,000, is at its lowest point since 1992, at the height of the savings-and-loan crisis. Ongoing losses on commercial real estate and other loans continue to cause multiple bank failures each week.

More…. ^[1]

Jim,

Now why would they be preparing for something like a run on money markets? Could it be because this is it?

CIGA BJS

Fidelity, Vanguard Said to Plan Emergency Bank for Money Market 
By Christopher Condon

Sept. 19 (Bloomberg) — Fidelity Investments and Vanguard Group Inc. are among firms planning to set up an emergency pool of cash aimed at preventing a repeat of the run on money-market funds a year ago, said two people familiar with the plan.

Funds would pay a fee to an entity called the Liquidity Exchange Bank, building a cash reserve that would help them handle investor withdrawals during a crisis like the one last September, said the people, who asked not to be named because the information wasn’t public. The bank, which would buy securities at face value from the funds, could also apply for emergency support from the Federal Reserve discount window.

Asset managers are preparing the plan as the Obama administration considers forcing funds to abandon their stable price of $1 a share, a change the firms believe could undermine the attractiveness of money market funds, which currently hold $3.45 trillion. A Treasury Department program insuring money funds against losses from defaulted securities expired yesterday.

More… ^[2]

Jimmy,

I told you that we should have had a cash for new refrigerators followed by a cash for new LCD TV’s, and a grand finale of a cash for new off-road 4 wheelers…

The question is "Now what?"

Trader Dan

Dear Dan,

"Cash for Codgers" to reduce health costs. Triple cash for old conservative couples.

Remember Soylent Green?

Regards,
Jim

Car showrooms quiet after clunkers clamor ends
Dealers add other incentives in bid to entice buyers
By Megan Woolhouse
Globe Staff / September 19, 2009

It has been nearly a month since the car-buying frenzy of the Cash for Clunkers program ended, and many area auto dealers are longing for the good old days of July and August.

Like consumers nationwide, Massachusetts residents rushed to take advantage of the federal voucher program, which offered them up to $4,500 on old gas-guzzlers to be put toward the purchase of new, more fuel-efficient vehicles. About $65 million worth of vouchers were handed out statewide during the monthlong program that ended Aug. 24.

But once the federal money dried up, so did the sales rally. Now, customers at dealerships like Silko Honda in Raynham are few and far between, and inventory is once again accumulating.

More… ^[3]