$15700

Cover 10 XHB @ 2.55 a piece- net $90 or so... whoop-de-do

AIG is oversold + the upgrade from Morgan's analyst helped boost its stock price. AIG was up over 4% on pre-market. Only to see half of the gains vanished by the close of the day. I'm breakeven on the AIG trade and down a bit on LEH.

Hurricane season starts officially on June 1st. Let see how we holding out this year. Never before do I think the insurers would be in trouble- especially the Big Dog like AIG. But stupid people do stupid things- one of their subsidiary is short massive amount of Credit Default Swaps- which caused losses of $9 billion last quarter. With more loan defaults and downgrade of mortgage back securities products, I think AIG has to take more pain next quarter. They are already tight on capital without any natural disaster. One major hurricane is all it take to tip them over at the brink of disaster. Maybe the Federal Reserve will consider open its discount window to the insurer then?