Charlie Gasparino Flexes His Muscle

by StockJockey

Thursday, January 31, 2008 - 5:40 pm

With very few exceptions bloggers and journalists have been behind the curve on the implications of a blow up in the monoline insurers.

But they are making up for it; you can’t escape the discussion, it is now everywhere. Where were they 20 points higher in MBIA?

When Connell McShane asked Barry Ritholtz today on FBN if the monolines “are the scariest thing in this market?” he replied “I don’t think so”; I would have to respectfully disagree. I believe the situation with the monolines is holding us back big time. It is a complicated situation, and intelligent discourse is in short supply, given that only a few hundred people on the street really understand the issue, none of which are bloggers, including this one.

And everytime Charlie Gasparino comes on the air the S&P futures pit in Chicago comes alive:

On Wednesday, the three major U.S. benchmark indexes had each been up by more than 1 percent after the Federal Reserve cut the fed funds rate by a half percentage point at 2:15 p.m.

Then, shares of Ambac and MBI tumbled abruptly at around 3:10 p.m. when CNBC On-Air-Editor Charles Gasparino made his comments about the companies. Major indexes quickly followed suit.

“My gut is telling me Moody’s and S&P are going to downgrade either one or both,” Gasparino said on air. CNBC later posted a report on its Web site saying the network had learned that the downgrade could come as early as Wednesday. The report cited no sources for the information.

Traders attributed the market’s about face to the Gasparino report, noting the S&P 500 slid rapidly from its session high, reached at about 3:08 p.m.

“Once he started talking, we got the sell-off,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. “Any time (Ambac and MBIA) go down, they take the entire market with them.” Reuters

Bill Ackman has been building his case for years now, but it remains to be seen if regulators can plug the hole in the dike.

For the moment we are being held hostage to this headline risk, but you might want to ignore it and look for stocks on a case by case basis.

To some extent, it is a wrinkle without precedent. The confusion certainly is making for some spirited trading.

Media report sends market for a late-day loop
Reuters
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Comments:

I would like also to add to the Gasparino back and forth, If Charles says it about Wall Street and some of its scumbags......believe it. He has no agenda.....just trying to help a few of us grow our IRA’s. Thanks for all the stuff on the business world Jockey, I am now proud to say I am a fan of Fox Business (FBN). Once a regular on CNBC but, NO MORE. Maybe that’s the fall they are showing in the ratings.

Posted by on 02/05/2008 at 01:52 PM