The Parable of the Troubled Assets Relief Program

Then went the CNBC executive producers, and took counsel how they might entangle him in his talk.

And they sent out unto him the Money Honey saying, Master, we know that thou art true, and teachest the way of God in truth, neither carest thou for any man: for thou regardest not the person of men.

Tell us therefore, What thinkest thou? Should Congress extend the Troubled Assets Relief Program to Paulson?

But Jesus perceived their wickedness, and said, Why tempt ye me, Maria Bartiromo?

Shew me a dollar bill. And a CNBC network intern brought unto him a dollar bill.

And he saith unto them, Whose signature is this on the bill?

She said unto him, The Secretary of the Treasury, Henry Paulson's.

Then saith he unto them, Render therefore unto Paulson the things which are Paulson's; and unto God the things that are God's.

When they had heard these words, they marvelled, and left him for a commercial break.

Uptick Rule Is Not the Problem

Look, an "uptick rule" is irrelevant.

Here's the fact pattern:
A. Massive credit bubble followed by real estate and asset price crash. Dishonesty from financial institutions. Constant manipulation of prices by central planners leading to market confusion.
B. You are "allowed" to sell stock that you possess even when the price just went down by a whole penny.

Which one is the reason that the market is crashing? A or B?

St. Joe Buyer Backs Out

Interesting news from St. Joe:

One of the recent mysteries at St. Joe is: What happened to this $130-million land deal earlier this fall for 67,365 acres of conservation land in Liberty, Jefferson, Gulf and Franklin counties? St. Joe terminated the sale but never identified the buyer or why the contract soured. Now the land is back on the market.

Today's enterprise value is 2.27 billion. On September 30, 2008, JOE owned approximately 607,000 acres, concentrated primarily in Northwest Florida. So that values the land at $3740/acre.

But they just lost a deal to sell 11% of their land for $1930/acre (about half of the EV/acre amount). Apparently they also have around 40k paper lots. But lots are a residual function of builder profit margins, which are practically nonexistent right now.

I maintain a small short position in JOE.

“I didn’t know that you weren’t supposed to put a sell rating on companies."

Great quote:

"The second company for which Eisman was given sole responsibility was Lomas Financial, which had just emerged from bankruptcy. 'I put a sell rating on the thing because it was a piece of shit,' Eisman says. 'I didn’t know that you weren’t supposed to put a sell rating on companies. I thought there were three boxes—buy, hold, sell—and you could pick the one you thought you should.'"