Today's Politico reports that the House opposition to the bailout looks insufficient to stop the bill's passage. I can't think of anyone in the Senate who can filibuster this thing. We're screwed.
As such, I've decided to buy out my uncovered call on Bank of America at a loss. I don't like that, but it beats having to unwind it after the bailout bill is signed into law. The bailout will artificially propell BAC's price to a new unsustainable high. After this turkey is signed into law, I'll think about re-opening my short call on BAC.
I'm keeping my uncovered call open on Merrill Lynch, in the assumption that BofA's buyout will be done by January.
Just remember this: No matter how hard the financial class tries to change the rules in the short run, Mr. Market always wins in the long run.
As such, I've decided to buy out my uncovered call on Bank of America at a loss. I don't like that, but it beats having to unwind it after the bailout bill is signed into law. The bailout will artificially propell BAC's price to a new unsustainable high. After this turkey is signed into law, I'll think about re-opening my short call on BAC.
I'm keeping my uncovered call open on Merrill Lynch, in the assumption that BofA's buyout will be done by January.
Just remember this: No matter how hard the financial class tries to change the rules in the short run, Mr. Market always wins in the long run.
