Dr. Doom Responds on Wells Fargo

In a comment on Seeking Alpha Nouriel Roubini says that, contrary to my assertion, he did not screw up his loss estimate for Wells Fargo. Here’s what he has to say, in full:

Sir, your attack it totally misplaced. I never made any prediction about credit losses in individual US banks. I only used macro variable to forecast average losses on tranches of different types of loans and securities for the AGGREGATE of US banks; this is the same approach used by the IMF and Goldman Sachs to derive estimate of aggregate expected credit losses for all US banks, not for individual institutions. It was Time magazine that used my macro estimates of average losses to then make inferences and estimates about individual US banks. When you go to the individual bank level you of course need to take into account individual bank's provisioning and other details to infer capital losses. So you may or may not be right about what is happening at Well Fargo; but the comments you make have NOTHING to do with what I have written. So you should correct the record on this. I never wrote that Well Fargo has an additional $117 billion of losses. I have provided an estimate of aggregate credit losses for all US financial institutions based on standard estimated of average losses from macro assumptions.

This is the opposite of convincing. First, I don’t recall seeing Roubini’s letter to Time urging it to “correct the record” on the $117 billion loss estimate for Wells it published based on his macro projections. I assume Stephen Gandel ran his loss numbers on individual banks by Roubini before he posted them on February 19, and would be shocked if he didn’t. I may be wrong. Perhaps Roubini might clarify this point. Regardless, if Roubini is suddenly so hopped up about a $117 billion loss estimate for Wells that he’s associated with, I don’t get why he’s only getting around to disowning it now, since it’s been out there for over a week. Actually, I do get why. I think Roubini is being disingenuous.

And Roubini is definitely being disingenuous when he writes that I “may or may not be right about what’s happening at Wells Fargo.” Less than a week ago, recall, he was unequivocal that the company was a goner. Here is what he told the Wall Street Journal in an interview published on Saturday:

Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing.

So six days ago, Wells Fargo was a “zombie bank.” Now, Roubini only deals in “macro variables.”

Meanwhile, Roubini fails to address my main objection to his antics, that he insists on blabbing publicly on the solvency of individual federally guaranteed institutions, a topic he now admits he knows nothing about. Unfortunately, prophecies about highly levered institutions sometimes become self-fulfilling, especially when they come from “sagelike” commentators like Nouriel Roubini. Now that Roubini has come clean that, when it comes to individual banks, he’s basically full of it, one would hope he’d have the good sense to keep his lip buttoned.

There’s no doubt Nourel Roubini has gotten the macro picture exactly right so far. That’s to his credit. My suggestion to him is that he stick with the macro calls.

Disclosure: No position in WFC

Comments

[Skj:]

dont piss in the wind tom.. You have been so wrong over the past year or so and if someone was actually following your 'investment advice', their portfolio has been slashed by two thirds. On the other hand, Roubini has been right on the dot. These attempts by a shill like you to ridicule an academic like Roubini just show how incapable you are of realizing the truth even if it poked you in the eyeball.

Feb 28 01:15 PM

[boats.j:]

Me thinks thou doth protesteth to much!

Feb 28 01:21 PM

[dlaw:]

You forget how mainstream journalism work! The Time magazine people have no fear of an Internet smart-guy suddenly calling them on their mistakes. All they have are "editors".

It think Roublini's reputation is a little overblown and I think his analysis of the causes of the crisis are incomplete, but it's pretty clear to me that what he did was give Time a macro loss estimate and they simply spread it across the big banks evenly, which, of course, is not the way the losses will spread.

But the scary thing is that if we agree with Roubini's macro estimate (and they have been good) and Wells is going to take fewer losses, who will take more than their balance sheets are telling us?

Feb 28 01:30 PM

[MattZN:]

By the way, there was another article a few weeks ago, I forget by whom... someone was talking about Wells wanting to book the tax losses from Wachovia due to a new government rule designed to help banks take over other banks. Apparently Citi was also eying that.

Well, look at the 10-K, folks. They did it. They went from 4.7 billion in deferred tax LIABILITY to the government in 2007 to something like 12 billion in tax ASSETS (that is, loss carryovers) in 2008. Looks like they reaped 16-17 billion in tax advantage and a lot of that has to be coming from Wachovia.

-Matt

Feb 28 01:36 PM

[user225084-...:]

If Roubini had to send a letter to the editor each time someone misapplied his work, then he would be a very busy man.

But when people misapply his work, and then attribute the errant conclusions to him, I suppose he has to take the time to speak up.

Case in point.

Feb 28 01:37 PM

[MattZN:]

Wells looks to have inherited 3-4 trillion in derivatives from Wachovia. In contrast BofA has 31+ trillion in derivatives. After netting Wells is listing around 30 billion in derivative assets and 11 billion in derivative liabilities. If that holds up, the derivative story is over, and Wells has won.

The only real question mark for Wells now is the mortgage portfolio it inherited from Wachovia (a large chunk of which they've already written off). Wells has high exposure in California and Florida. Everything Wells is doing now seems to be directed at controlling the portfolio.

-Matt

Feb 28 01:42 PM

[themackattack:]

I'm going to have to agree with SKJ on this one...

and, if Nouriel want's to stray from the Macro to the micro in his calls, good for him...he's got more right and a better basis and track record to do so than you and a lot of others.

His explanation to you seems reasonable to me, while your counterpoints don't make a lot of sense. You point out that he says he "may or may not be right about Wells...", and then hold up his previous statement about Wells being a zombie bank as some sort of evidence that he is being contradictory. Well, sorry to tell you, those two statements are in no way contradictory, and adding qualifiers to his statements about individual banks doesn't make him disingenuous, it just means he is less certain of those assessments than he is of macro assessments made (which seems imminently reasonable, to me).

Feb 28 01:52 PM

[ronbeasley:]

Berkshire Hathaway has several bank investments. Wells Fargo is by far the biggest. Warren Buffet reduced his investment in BankAmerica and US Bancorp, but not in Wells. I think it makes more sense to pay attention to the actions of people like Buffett than to the hyperbolic dialogue of an academic.

Wells Fago is quite simply one of the best managed, most conservative banks and, unless we are facing a total collapse here, presents a compelling investment opportunity. It has the earnings power to earn its way out of the current mess, and appears to have adequate reserves to cover the next year or so of individual and commercial credit losses.

Feb 28 02:05 PM

[GoldMoney:]

Hmmm...let's look at some of Tom Brown's predictions:

seekingalpha.com/artic...

He was pushing XLF, the financials ETF, last august. Let's see how that has done:

finance.yahoo.com/echa...;range=20080811,200902...

A loss of about 60% - 70%. Nice call. And you are trying to call out Nouriel Roubini? Good luck with that.

Feb 28 02:40 PM

[Dave Wrixon:]

Compared with ordinary mortals Roubini is a Hero straight out of a Greek Tragedy, except for the fact that he is Turkish. Most Hero's are flawed but Roubini will be talked about along side Keynes and Freidman long after the rest of us have been forgotten.

Feb 28 02:42 PM

[the ilster:]

Say what you want about the man. He understands the ecomomy and his forecasts are dead on. Too many people just don't understand. The entire global economy was one big bubble and its bursting as we speak. Yet Bernake says nothing about it. who are you going to follow? Roubini is the MAN.

Feb 28 03:41 PM

[mennoman:]

Tommy,
You obviously have something against Routini. His quote, "Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing." That doesn't mean he says Wells is "a goner" as you say. You're in over your head. I'm reporting this to Seeking Alpha.

Feb 28 03:42 PM

[abcde_98:]

Hello Tom Brown, so you were in First Marblehead in the $50's, $40's, 30's, accentuating its value, etc. How long did you/Second Curve Capital keep the position in FMD?

Roubini should stick to macro items, as you suggest, and sounds like he has done so.

But what should Tom Brown stick to? How are your stock positions in the past 3-6 months? I tuned you out because of FMD but will reconsider based on recent performance should you have positive returns on Long stock positions.

Feb 28 03:55 PM

[pelican:]

Boy, this reeks of professional jealousy. I don't see Roubini's comments as being disingenous at all. And I don't think individual banks are "a topic he now admits he knows nothing about." That's not what he said. He gives his opinion and later says he may or may not be right. So what? I think everyone understands that. Sir, you have made some terrible calls over the past year even though your atttitude has often been "I'm right and those who disagree wtih me are wrong". I recall clearly, for example, your table pounding declaration that the financials bottomed last July. And so now it's come to this. Since your own predictions have been way off the mark, I suppose you feel compelled to attack someone who has been failry spot on. Given your track record, it makes me wonder what you should stick to talking about.

Feb 28 04:21 PM

[vvvvviking:]

I looked at Wells' 10K that came out on Friday, and they looked adequately reserved for the WB option arms. There is 120BB or so of principal balance on those loans, and they have them marked at 95BB, or in other words, a 20% loss estimate. That is consistent with most analysts assumptions on losses for similar vintage loans, and I think the Wachovia stuff will perform better than average - it was mostly retail, which performs about 30-40% better than Wholesale, and they were notorious for being pricky on appraisals (ask any broker who had to deal with them).

On their Home Equity portfolio, I think they are being a bit light in their loss estimates, but no more light on those then I think they are heavy on the Option Arms. No doubt they marked the OAs down a lot since they aren't as familiar with them.

BTW, Wells mark on the OAs is consistent with JPM's mark on WM's OAs when they were purchased, and WM was a MUCH worse underwriter than Wachovia. The majority of WM's OAs were Wholesale, and of course WM had all those appraisal issues. So even on a relative basis, WFC's mark is more conservative.

Of course, I actually work in the mortgage industry, so can evaluate the appropriateness of these things, whereas Roubini is in the entertainment business, so has very little credibility in my mind.

Feb 28 05:13 PM

[vvvvviking:]

See my post below, based on a high level view I think WFC has marked the mortgage portfolio pretty conservatively. Of course, they still need to "work" the portfolio well by doing appropriate modifications, refinancing some of these borrowers into FHA/GSE products, etc., but any performance around their 20% mark is within their control. I would feel pretty comfortable that they will do a good job working down the problems in that pool.


On Feb 28 01:42 PM MattZN wrote:

> Wells looks to have inherited 3-4 trillion in derivatives from Wachovia.
> In contrast BofA has 31+ trillion in derivatives. After netting
> Wells is listing around 30 billion in derivative assets and 11 billion
> in derivative liabilities. If that holds up, the derivative story
> is over, and Wells has won.
>
> The only real question mark for Wells now is the mortgage portfolio
> it inherited from Wachovia (a large chunk of which they've already
> written off). Wells has high exposure in California and Florida.
> Everything Wells is doing now seems to be directed at controlling
> the portfolio.
>
> -Matt

Feb 28 05:17 PM

[PROXIMO:]

"Unfortunately, prophecies about highly leveraged institutions sometimes become self-fulfilling, especially when they come from "sagelike commentators like Nouriel Roubini". Prophecies from "sagelike commentators are not what corrupted the balance sheets of the big banks with derivatives. Or levered the banks 50 to 1. And prophecies most assuredly are not responsible for vaporizing 90% + of many major financial institutions. Embarrassing attempt to share the stage with Roubini.

Feb 28 05:54 PM

[Augustus:]

First, Roubini just explained to you that HE is NOT associated with a particular loss estimate for Wells Fargo. It is nonsense for you to continue to claim that he is.
Second, why would you expect to see any letter that Roubini wrote to Time? Do you expect to be on the cc: list for everything he writes? If so, you have some serious rethinking to do.
Third, What the heck difference does it make if Roubini referred to Wells as a zombie bank, or a combination of two zombie banks? You want to try to pick some argument about numbers which Roubini did not generate. Then you attack the man because he holds the opinion that Wells is a zombie bank. You offer nothing to support a position that Wells is anything other than a zombie bank.
The article is little more than a pointless rant, possibly motivated by jealousy.

Feb 28 06:00 PM

[toddforthree:]

matt. nice catch on the tax credit on the balance sheet.

wfc has around 20 billion in income a year from the OLD wfc before provisioning. they have 400b or so in loans. thats quite a bit of income to use to write off bad loans.

Feb 28 06:28 PM

[Urbane Gori...:]

I don't see your statement regarding Roubini as comparable to his actual quote. I suspect you read into his statement more than is actually there. If you read his statement, he says that Wells/Wachovia has major problems.How does that equate to Wells being a goner?

jegan

Your quote :" Less than a week ago, recall, he was unequivocal that the company was a goner."

Roubini quote :"Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing."

Feb 28 06:59 PM

[DSB:]

Tom,

How much wealth (other people's money) have you destroyed? How much has Roubini saved?

You are an ass.

Feb 28 08:14 PM

[oceansmike:]

Lets compare my Job to - all these experts on the economy,Roubini ,Brown,,why are they arguing over who was right or wrong on predictions. Its like calling the path of a Hurrcane.
ok , I'm a ship Captain(its true)
Everyday I watch the weather(part of job responsibilities,plus I enjoy making predictions)
In certain jobs we perform for Clients they expect me to predict the approaching weather systems that will influence the job going foreward. Remember in the charter business time is money. So they want to work right up to the last minute. ok I'll use my 30 Years as an experienced Ship Captain.
One such area which can generate Storm status very quickly is South Africa - Capetow to Durban area.
To predict those areas I use a umber of tools to predict dirction of these Cold Fronts which when moving are highly predictable ,but can also change direction at will. The weathersystems that are easiest to predict are the most prominent ,large in size and speed with a fast dropping baraometer. next page

Feb 28 08:31 PM

[oceansmike:]

continued.
I try to to get better at this, The client onboard depends on my predictions to be as accurate as possible,,safety wise and money wise. I stayed on the contract 3 years because of how valuable they felt I was ,, my bonus was a thank you ,, What I hope to see from all these naysayers ,doom n gloom experts ,, is predicting is deflationary ,down cycle , econmic tsunami ,,what ever , before it hits the general public and that the population would be better prepared,,that the devastation in portfolios and ,Foreclosure s could have been stopped,, Let s get the economy moving again and stop this back n forth Tit for tat bashing ,,thats not helping,,lend a hand to the needy,,,,good night for m the Far east,,,

Feb 28 08:37 PM

[oceansmike:]

Last part,
Moral of the story , we need storm prdeiction s before they make land fall or strike the area ,,BEFORE , not during a storm - hell thats for the Bar when your all drunk on self righteous ness and rage. When the storm passes it will pass , this storm will have left its devastation, the ships and crew that left early(sold out early ) could afford to at that time. But most will have been unprotected for many reasons, Buffet has such huge holdings ,even if he wanted to in his gut ,,just his selling would have caused a major interruption,,many eyes watching his moves,,ask Miss Quick. I predict ,after winter ,slow start up on Spring ,,picking up by Summer ,,should have a hot summer ,, Fire Watch will be bad ,, will top Austalias Fire Season ,, California Nevada will be burning.(this based on this years storms) ..oceans

Feb 28 08:51 PM

[DSB:]

Roubini should write a rebuttal entitled "Dr. Douche vs. Dr. Doom"

Feb 28 08:59 PM

[bt310:]

Tom, In October 2007 you wrote an article claiming that subprime losses, at most, would total $75 billion to $150 billion, not the several trillion Krugman suggested. You called Krugman's research too negative.

seekingalpha.com/artic...

In January 2008, you cited sources and opined that Bill Gross was "grossly overstating" potential CDS losses. His projection: $250 billion.
You called Gross' research too negative.

seekingalpha.com/artic...

Now with Roubini, you continue a pattern of calling other people's research faulty. Maybe you should cover another sector as you have not forseen anything accurately thus far.

Feb 28 09:10 PM

[Mad Hedge F...:]

There is some fascinating action going on the options market right now. There is some massive buying of short dated puts in Wells Fargo (WFC) and JP Morgan (JPM), while buying of longer dated puts has weirdly almost vaporized. These are the only two high priced big bank stocks left. It is not happening in Citibank (C) or Bank of America (BAC) where there is so little meat left on the bone that buyers don’t want to feel like they are the last man at an all you can eat buffet. Brace yourself. This is good news. It means that traders expect to see some short term volatility in these names. After that Obama’s bank bailout, stimulus program, and new budget will start to kick in and come to the rescue of the sector. Call me the “options whisperer.” I stroke these things, and they speak to me.

Feb 28 10:11 PM

[Kevin A:]

A quick "tip of the hat" to those who have responded to Tom Brown's articles, the overwhelming majority of whom are well informed enough to understand just how big of a fraud he is. Time to think of a new career, guy. Try a paper route; that way, you'll be delivering a medium that is dying almost as fast as your credibility.

Feb 28 10:53 PM

[Gary A:]

As my website has said, Roubini should win the Nobel Prize for economics for his practical application of the dismall science. But it is just good for web traffic to debate him online.

In the end Roubini has proven traditional economists to be fools.

Feb 28 11:07 PM

[2jack:]

It takes balls to call out Dr. Doom. Well done.

Feb 28 11:20 PM

[Investor411:]

I think Roubini's fear-mongering is more of a cause than an observation of the banking crisis. The fact that he was an early prophet of doom for weakness in the industry doesn't mean people should panic out of every bank he sets his site on. Buffett is a major holder of Wells and I would note to Hedge Fund Trader that I know over at Phil's Stock World that they were selling the front month puts on Friday afternoon - aren't there 2 sides to these massive volumes?

Mar 01 12:48 AM

[jpeak:]

Yo tom.. If you've made it to the bottom of this list I congratulate you on your fortitude. Regardless, and although I've never heard of you before, the evidence from this list is overwhelming that you are dipshit. Seriously what are you thinking? SA generally has good information on it so please don't pollute. You should ask Cramer for a job. He is always looking for cheerleaders that wind-up losing disproportionate amounts for the foolish willing to listen to him.

Mar 01 12:54 AM

[DiscerningWord:]

Roubini, Roubini, where for art thou Roubini.

You've gotta know a guy like this looks in the mirror everyday thriving on his general assertions, lacking specifics, and only dressing up political garbage. They make this guy sound like he adds something new to finance of for that matter basic budgeting. Also, is this guy even a citizen of this country. If not....his nationalization statements are even more less credible. He comes to the US where freedome reigns and wasnt the government to limit freedom like the limits in the country he came from....and every otehr country outside our nation. Nothing new here.

Mar 01 02:30 AM

[zermux:]

Tom - I actually agreed with you a while ago. I thought the market was stupid and could not understand why everything kept going down. It was really frustratiing.

Last October I started reading a lot (Prechter, Harry Schultz, Roubini, etc) and I figured out what was going on. It was a very scary moment of clarity.

Since then I have accepted the fact that we are in a very long-term bear market and have been genrally short. In the last several monhs I have made enough money to make up for my losses from Oct 2007.

I would reccomend that people spend some time trying to figure out what is actually going on before considering investing in the market. The latest book I read on the subject was: Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse by Thomas E. Woods Jr. (Author), Ron Paul (Foreword).

As for my thoughts on our current banking crisis and the markets view on Citi, BAC, etc - I recall a couple of lines from the Wizard of Oz:

Scarecrow: Come along Dorothy. You don't want any of those apples.
Apple Tree: Are you hinting my apples aren't what they ought to be?
Scarecrow: Oh, no! It's just that she doesn't like little green worms!

I am looking forward to the "stress" tests when, if they are real, the little green worms will be found everywhere.

Mar 01 02:49 AM

[dondon:]

To think that Time Magazine would not print something without first verifying the facts is ridiculous. The fact that anybody would use information from that rag shows a lack of understanding of how journalism works today. In short it doesn't work. Journalists today take every shortcut possible and never look back and almost never recant even when proven wrong.

I don't know who is right in this debate, but Tom Brown should check his sources before he starts printing what he read in someone else's magazine. Next time he should contact the author of the Time piece and ask a few questions. As the old saying goes, never believe what you read.

Mar 01 03:58 AM

[joshuaodonnell:]

I dont know what Tom is talking about. I stand up fine when Im drunk.

Mar 01 04:01 AM

[nextpillart...:]

Tom, Tom, Tom...time for 3rd Curve Capital. You have been completely wrong in assessing the banking industry as well as individual banks for the last few years. what a waste of your talent & website. You have led many investors to huge capital losses. You have rebutted every correct assessment of whats going on in the banks. You have lost incredible amounts of capital for investors of your funds & outsiders who followed your advice or stock selection. Your protest against Roubini is not only wrongheaded but stupid too...he's been right you have been wrong. Pointing to some miniscule piece of information that he has either stated incorrectly or been misquoted on is quite trivial & frankly even more stupid. For a point of reference, how did your fund perform in 2008? Any chance you would post your top 10 holdings & YTD performance so readers could see if you are even worth considering listening to?

Mar 01 08:29 AM

[oriocookie9:]

sigh ... yup unfortunately loads of clueless "prophets" out there .. wonder who is who though ... can you actually read a bank financial report?


On Feb 28 01:15 PM Skj wrote:

> dont piss in the wind tom.. You have been so wrong over the past
> year or so and if someone was actually following your 'investment
> advice', their portfolio has been slashed by two thirds. On the other
> hand, Roubini has been right on the dot. These attempts by a shill
> like you to ridicule an academic like Roubini just show how incapable
> you are of realizing the truth even if it poked you in the eyeball.

Mar 01 08:38 AM

[oriocookie9:]

i guess mr roubini is a prophet of sorts .... wonder why he isnt already the richest man in the world predicting (even the long term) market movements. ... .sigh wake up


On Feb 28 01:37 PM user225084-justme wrote:

> If Roubini had to send a letter to the editor each time someone misapplied
> his work, then he would be a very busy man.
>
> But when people misapply his work, and then attribute the errant
> conclusions to him, I suppose he has to take the time to speak up.
>
>
> Case in point.

Mar 01 08:40 AM

[JC:]

Ready, fire, aim. You attack Roubini without any attempt to verify the underlying numbers in the TIME article and then you attack Roubini again for not obtaining a published clarification from TIME before your initial attack - and giving him only a week to do it!

Roubini, may or may not, be right about Wells and Wachovia being two zombie banks, but he's at least half right and if you look at what BAC's acquistions have done then he's probably completely right. Give him more than a week to be right or wrong!

Mar 01 08:41 AM

[oriocookie9:]

i wonder sometimes how those doom and gloom guys make their money because they arent making enough from the market thats for certain .... maybe from books read by us ... and we then go out and create the fabled self fulfilling prophecies .... i admit i am just under break even from trying to guess the market whims but reality is the same ... the banks i got my money in are doing quite well for thise who can read balance sheets that is ....


On Mar 01 02:49 AM zermux wrote:

> Tom - I actually agreed with you a while ago. I thought the market
> was stupid and could not understand why everything kept going down.
> It was really frustratiing.
>
> Last October I started reading a lot (Prechter, Harry Schultz, Roubini,
> etc) and I figured out what was going on. It was a very scary moment
> of clarity.
>
> Since then I have accepted the fact that we are in a very long-term
> bear market and have been genrally short. In the last several monhs
> I have made enough money to make up for my losses from Oct 2007.
>
>
> I would reccomend that people spend some time trying to figure out
> what is actually going on before considering investing in the market.
> The latest book I read on the subject was: Meltdown: A Free-Market
> Look at Why the Stock Market Collapsed, the Economy Tanked, and Government
> Bailouts Will Make Things Worse by Thomas E. Woods Jr. (Author),
> Ron Paul (Foreword).
>
> As for my thoughts on our current banking crisis and the markets
> view on Citi, BAC, etc - I recall a couple of lines from the Wizard
> of Oz:
>
> Scarecrow: Come along Dorothy. You don't want any of those apples.
>
> Apple Tree: Are you hinting my apples aren't what they ought to be?
>
> Scarecrow: Oh, no! It's just that she doesn't like little green worms!
>
>
> I am looking forward to the "stress" tests when, if they are real,
> the little green worms will be found everywhere.

Mar 01 08:45 AM

[Lilguy:]

On any given day, I'll stick with Roubini. His record from before this nasty recession to the present is absolutely the best among economists of all ilks.

Mar 01 09:55 AM

[NWA10000:]

Mr. Roubini is backpedaling. He trys to defend his reference to Wells as a "zombie bank" by his "models" and "averages" about banks in general.
What has that got to do with Wells or the actual balance sheet of any specific institution? By that reasoning, all banks could be called zombie banks The models are part of the problem!

Mar 01 10:45 AM

[Douglas S:]

Roubini is a schmuck. God Bless you for calling him out; I pray that more and more people will finally someday wake up and realize that these losers are not the soothsayers they are made out to be. They are no different than an arsenist who sets fire to something, only to hang around and get off on the fear and panic they have created. WAKE UP PEOPLE....The likes of Gary Shilling, Peter Schiff, and Roubini only make headlines when their lifelong predictions FINALLY come true. You say it long enough, and guess what...it will come around at some point. Ever wonder why they dissappear when things correct? Shillings and Schiffs clients are down just as far as everyone else and in most cases are worse off because they have missed some of the greatest run ups in stock market history over the last several years just google it and see what past customers are saying! The only thing that saves Roubini, is that he hides under the umbrella of "economist" and not a stock market guru. I hope the loyalists of these fear mongering losers enjoy your paultry earnings from your .01% money market fund. Someday, when the sun comes up and you're sitting on a stack of $50 gold that you paid $1000 for, you'll probably hang yourself. But guess what, Schiff, Roubini and Shilling won't be attending your funeral because they will be off duping some other poor sucker into thinking the world is coming to an end!! Make your own decisions and create your own wealth, it's much more rewarding!!

Mar 01 11:02 AM

[nova:]

The replies to Tom Brown are excellent. Tom Brown is entitled to his opinion even it is a very shitty one.

However, some poster went as far "as reporting" him to Seeking Alpha. However, the least of all we need is some censorship on this Board.

PS
As for Roubini’s predictions, they were good. But he was not alone predicting the present world financial (and soon geopolitical) catastrophe.

What we are observing now is a natural process based on economic, political and geopolitical realignments. The "second colonial age" when Asia paid for a good portion of the West (the USA and EU) prosperity is over.

It is well known that EU countries are in "the same boat" with the USA due to their easy money policies and unrealistic geopolitical expectations.

American problems have much more serious roots. It was not only "easy money" responsible for the present situation.

American political system became terribly corrupt, and does not represent American national interests. As for American legal system, it does not function any more. Remember that Mandoff and his gang, Stanford, Enron executives, etc., are free and enjoying their loot.

Mar 01 11:42 AM

[EAH:]

The misunderstanding of Roubini's comment is even more significant than Mennoman stated. Here is the entire sentence that I copied and pasted from the online article referencing the statement (online.wsj.com/article...):

"we started with banks that were too big to fail, but what has happened, in the process, is that these banks have become even-bigger-to-fail. J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide and then Merrill. Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing."

So you notice that Roubini was talking about the whole phenomenon that occurred around Q3 2008: Large banks taking over failing or about to fail banks. He cited JP Morgan and Bank of America in addition to Wells Fargo. He just happen to mention Wells last, right before the 'Zombie' part of the statement. Why Wells was singled out in the interpretations of Roubini's comment? I have no idea. Maybe that is what happens when you read only a part of a statement, purposefully or not... So Roubini is correct in stating that his comments are Macro and not focused on any one company.


On Feb 28 03:42 PM mennoman wrote:

> Tommy,
> You obviously have something against Routini. His quote, "Wells Fargo
> took over Wachovia. It doesn't work! You can't take two zombie banks,
> put them together, and make a strong bank. It's like having two drunks
> trying to keep each other standing." That doesn't mean he says Wells
> is "a goner" as you say. You're in over your head. I'm reporting
> this to Seeking Alpha.

Mar 01 11:48 AM

[User 366992:]

tom,

this looks to be another "great" analysis like First Marblehead where you lead your lemmings off the cliff

People, you need to research past calls made by Tom and form your own conclusions

I point you to First Marblehead just off a cursory review

Mar 01 12:12 PM

[Douglas S:]

This looks to be another "great" comment from an SA "user" who has nothing valid to add. I have not read your suggestion about First Marblehead but I think I can safely assume that the author made a bad call.....WHAT? Somebody made a bad call? Wow user, I'm stunned, that has never happened before in the stock market whatever shall I do? Look numbskull, there are about 300 analysts on Bloomberg, CNBC and Fox everyday that make calls that end up bad, does that mean I quit watching? NO. If you have such low opinions of this author, why do you read anything he writes? You know it does state the authors name right near the title of every story on SA. I would suggest that in the future you look to see who that author may be and if you don't like them don't click on the link. That way, those of us who preferto read thoughtful intelligent comments can do so without your stupid drivel on things past. BEAT IT USER!


On Mar 01 12:12 PM User 366992 wrote:

> tom,
>
> this looks to be another "great" analysis like First Marblehead where
> you lead your lemmings off the cliff
>
> People, you need to research past calls made by Tom and form your
> own conclusions
>
> I point you to First Marblehead just off a cursory review

Mar 01 12:45 PM

[Lilguy:]

Thank you for providing context and perspective on Roubini's comment.


On Mar 01 11:48 AM EAH wrote:

> The misunderstanding of Roubini's comment is even more significant
> than Mennoman stated. Here is the entire sentence that I copied
> and pasted from the online article referencing the statement (online.wsj.com/article...):
>
>
> "we started with banks that were too big to fail, but what has happened,
> in the process, is that these banks have become even-bigger-to-fail.
> J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide
> and then Merrill. Wells Fargo took over Wachovia. It doesn't work!
> You can't take two zombie banks, put them together, and make a strong
> bank. It's like having two drunks trying to keep each other standing."
>
>
> So you notice that Roubini was talking about the whole phenomenon
> that occurred around Q3 2008: Large banks taking over failing or
> about to fail banks. He cited JP Morgan and Bank of America in addition
> to Wells Fargo. He just happen to mention Wells last, right before
> the 'Zombie' part of the statement. Why Wells was singled out in
> the interpretations of Roubini's comment? I have no idea. Maybe
> that is what happens when you read only a part of a statement, purposefully
> or not... So Roubini is correct in stating that his comments are
> Macro and not focused on any one company.

Mar 01 01:09 PM

[Lilguy:]

Thank you for providing context and perspective on Roubini's comment.


On Mar 01 11:48 AM EAH wrote:

> The misunderstanding of Roubini's comment is even more significant
> than Mennoman stated. Here is the entire sentence that I copied
> and pasted from the online article referencing the statement (online.wsj.com/article...):
>
>
> "we started with banks that were too big to fail, but what has happened,
> in the process, is that these banks have become even-bigger-to-fail.
> J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide
> and then Merrill. Wells Fargo took over Wachovia. It doesn't work!
> You can't take two zombie banks, put them together, and make a strong
> bank. It's like having two drunks trying to keep each other standing."
>
>
> So you notice that Roubini was talking about the whole phenomenon
> that occurred around Q3 2008: Large banks taking over failing or
> about to fail banks. He cited JP Morgan and Bank of America in addition
> to Wells Fargo. He just happen to mention Wells last, right before
> the 'Zombie' part of the statement. Why Wells was singled out in
> the interpretations of Roubini's comment? I have no idea. Maybe
> that is what happens when you read only a part of a statement, purposefully
> or not... So Roubini is correct in stating that his comments are
> Macro and not focused on any one company.

Mar 01 01:09 PM

[Oyp:]

Wow, I guess somebody lost a ton of money in bank stocks. I had never heard of Tom Brown, so personally I'm grateful that other comments illuminated his track record and bias. Not that I believe any amount of wishful thinking is going to take BAC or C back to $50, in inflation-adjusted terms at least, for the rest of my life.

This article was not "thoughtful and intelligent" but just a grudge piece. Ad your attack on user was more of the same. Don't get so angry - it's just money - and you won't be able to think clearly or position yourself properly for the future if you remain consumed by your fury. And jeez, if you're looking to Fox or CNBC for financial information, we soon won't have to listen to your rants as you'll be too broke to afford a computer.

On Mar 01 12:45 PM Douglas wrote:

> This looks to be another "great" comment from an SA "user" who has
> nothing valid to add. I have not read your suggestion about First
> Marblehead but I think I can safely assume that the author made a
> bad call.....WHAT? Somebody made a bad call? Wow user, I'm stunned,
> that has never happened before in the stock market whatever shall
> I do? Look numbskull, there are about 300 analysts on Bloomberg,
> CNBC and Fox everyday that make calls that end up bad, does that
> mean I quit watching? NO. If you have such low opinions of this author,
> why do you read anything he writes? You know it does state the authors
> name right near the title of every story on SA. I would suggest that
> in the future you look to see who that author may be and if you don't
> like them don't click on the link. That way, those of us who preferto
> read thoughtful intelligent comments can do so without your stupid
> drivel on things past. BEAT IT USER!

Mar 01 02:06 PM

[Archman Inv...:]

Tom Brown has zero credibility.

Tom Brown called the "bottom" in financial stocks at least 4 or 5 times since the early summer of 2008.

He has been DEAD WRONG, and there is no excusing him.

He is just another in a long line of useless Wall Street types who only know how to make money in bull markets and lose a fortune in bear markets. People such as Mr. Brown survive because there remains no accountability for their calls, and because they are in complete collusion with the financial media and are still touted as "experts" to the general public.

Mar 01 02:24 PM

[EMS:]

Most of us will be investing ahead and alongside you "when the sun comes up"- dingbat.


On Mar 01 11:02 AM Douglas wrote:

> Roubini is a schmuck. God Bless you for calling him out; I pray that
> more and more people will finally someday wake up and realize that
> these losers are not the soothsayers they are made out to be. They
> are no different than an arsenist who sets fire to something, only
> to hang around and get off on the fear and panic they have created.
> WAKE UP PEOPLE....The likes of Gary Shilling, Peter Schiff, and Roubini
> only make headlines when their lifelong predictions FINALLY come
> true. You say it long enough, and guess what...it will come around
> at some point. Ever wonder why they dissappear when things correct?
> Shillings and Schiffs clients are down just as far as everyone else
> and in most cases are worse off because they have missed some of
> the greatest run ups in stock market history over the last several
> years just google it and see what past customers are saying! The
> only thing that saves Roubini, is that he hides under the umbrella
> of "economist" and not a stock market guru. I hope the loyalists
> of these fear mongering losers enjoy your paultry earnings from your
> .01% money market fund. Someday, when the sun comes up and you're
> sitting on a stack of $50 gold that you paid $1000 for, you'll probably
> hang yourself. But guess what, Schiff, Roubini and Shilling won't
> be attending your funeral because they will be off duping some other
> poor sucker into thinking the world is coming to an end!! Make your
> own decisions and create your own wealth, it's much more rewarding!!
>
>
>

Mar 01 03:14 PM

[Douglas S:]

Wow, I guess you have no clue as to how a serious investor researches or studies his investments do you? It's a little thing called homework of which I'm sure you know nothing about or you wouldn't be relying on "commenters" on SA to "illuminate" anyones track record or bias. The only thing I've gleened from your stupid comment is that if you can compound your earnings as fast as you can compound your ignornace there might be hope for you yet. Where exactly did you get that I use either newstation as a source for my investments? The point was that analysts make calls every single day and some are bad...some are good; to come on here and bash a guy who has written 133 articles for a bad call is just plain ignorant. Buffett just made a mistake on COP, do you think people will stop hanging by his coattails for any glimpse of what he's doing? If you don't like the story, read another book. Roubini is a clown and so are you.....and your pal "user"!

On Mar 01 02:06 PM Oyp wrote:

> Wow, I guess somebody lost a ton of money in bank stocks. I had never
> heard of Tom Brown, so personally I'm grateful that other comments
> illuminated his track record and bias. Not that I believe any amount
> of wishful thinking is going to take BAC or C back to $50, in inflation-adjusted
> terms at least, for the rest of my life.
>
> This article was not "thoughtful and intelligent" but just a grudge
> piece. Ad your attack on user was more of the same. Don't get so
> angry - it's just money - and you won't be able to think clearly
> or position yourself properly for the future if you remain consumed
> by your fury. And jeez, if you're looking to Fox or CNBC for financial
> information, we soon won't have to listen to your rants as you'll
> be too broke to afford a computer.
>
> On Mar 01 12:45 PM Douglas wrote:

Mar 01 03:25 PM

[Douglas S:]

No you won't...you'll be hunkered down, living in your bomb shelter trying to sell your gold at a neighborhood garage sale so you can eat. With any luck, you might be able to use your mentor's strategy and persuade some other yuck yuck that it's "gonna get bad fella, real bad"!!!! Good luck to ya!


On Mar 01 03:14 PM EMS wrote:

> Most of us will be investing ahead and alongside you "when the sun
> comes up"- dingbat.

Mar 01 03:32 PM

[stocks2051:]

Tom you are out of your league! Can't blame you for trying to put your name next to his: it would help your career. But this is not a good strategy to get ahead. Think about it---- even those who use this strategy by writing negatives about Cramer do not get ahead. And Cramer is no Roubini: Roubini is the big leagues and anyone who does not see this is in la la land.

Mar 01 03:37 PM

[Douglas S:]

You're right! Let's get a lynch mob together and 'round him up and let him swing!
"He has been DEAD WRONG, and there is no excusing him."
Do you realize how stupid that sounds? Do you know how many "experts" out there have called a bottom in just about everything and been wrong? You are right though, it is all collusion and conspiracy and you probably shouldn't be in the market game. It obviously isn't right for you! Perhaps you should hit the Bingo hall on Friday nights, that's pretty safe as long as you don't listen to the old ladies who say it's all fixed and they never win anything!! OH MY Gosh!!! Kerkorian bought Ford last year, HE WAS DEAD WRONG AND THERE'S NO EXCUSING HIM!!! LOL, Schmuck!
T. Boone and Icahn both bought Yahoo...THEY WERE DEAD WRONG AND THERE IS NO EXCUSING THEM!!!! Sheesh get real people!!


On Mar 01 02:24 PM archman82011 wrote:

> Tom Brown has zero credibility.
>
> Tom Brown called the "bottom" in financial stocks at least 4 or 5
> times since the early summer of 2008.
>
> He has been DEAD WRONG, and there is no excusing him.
>
> He is just another in a long line of useless Wall Street types who
> only know how to make money in bull markets and lose a fortune in
> bear markets. People such as Mr. Brown survive because there remains
> no accountability for their calls, and because they are in complete
> collusion with the financial media and are still touted as "experts"
> to the general public.

Mar 01 03:49 PM

[User 112702:]

Sorry Tom, but I'd have to give this to Roubini...just let it go and move on. No time now to work against Dr. Doom.

Mar 01 03:56 PM

[Surfer1104:]

Roubini has no private investment success. Where was his commentaries prior to the market meltdown. Now he tries to peddle himself as some prophet of wall street doom and gloom. He should stick to reading text books and instructing students. His latest flaws in his calls on banks makes him look more like a court jester than a sophisticated walls street analysist.

Mar 01 04:38 PM

[Douglas S:]

If any of you who tout Roubini as a "god" would ever bother to read his biography, you would plainly see that the people he learned from and holds in the highest regard are Timothy Geithner and Larry Summers. In fact, he worked under both of them in prior positions. I would venture a guess by assuming none of you have read his Bio or any of his books. My problem with him is that he was a senior advisor and one of the key figures in the Clinton economic team and also had a key role in the Treasury Department who guess what.....created this housing mess we are currently in. It's really amazing that a guy who was one of the wolves circling the hen house and promoting these ideas to Clinton, can now say... "I saw it all coming for years". You sure as he** did Roubini because you were part of the entity that created this mess!! Here's a nice quote..."On January 18, 1999, Martin Luther King Day, President Bill Clinton declared that he was "pleased to announce the largest settlement in history in a lending discrimination [case], for home lending.... The Columbia National Mortgage Company will offer - listen to this - $6.5 billion in home mortgages and extra effort to help 78,000 minority and low- and moderate-income families unlock the door to home-ownership."
If Roubini was such an exceptional economist and the foreseer of all that is, why did he participate in the development of our current problem? Why did he not warn his mentor Summers or his friend Geithner? He, like all the others in Washington, lies, misleads, and promotes fear to enhance his popularity and make it appear that he is the only one who knows what's really going on. Also, if Summers and Geithner are truly such good friends and people whom he refers to as "Intelectual Hero's" in his bio, why does he not have any faith that they can cure the problem? I'll tell you why, because they cast him out as a nut case just like Clinton did and went to on their own fame without him. Roubini doesn't matter, here is the truth that we need to be worried about....
""""The welfare state advances by demonizing one private industry after another. In the end, people are taught that government alone can be trusted. Truth is no impediment for federal chieftains determined to blacken the reputation of the private sector. """"
Sound familiar?

Mar 01 04:45 PM

[Douglas S:]

Amen!!!


On Mar 01 04:38 PM Surfer1104 wrote:

> Roubini has no private investment success. Where was his commentaries
> prior to the market meltdown. Now he tries to peddle himself as some
> prophet of wall street doom and gloom. He should stick to reading
> text books and instructing students. His latest flaws in his calls
> on banks makes him look more like a court jester than a sophisticated
> walls street analysist.

Mar 01 04:54 PM

[bbbyb517:]

Uh, Tom, maybe you should consider another line of work.

Mar 01 05:42 PM

[User 347440:]

Wouldn't surprise me one bit if the next mogul to step in front of a train is Buffet. This IS different and Buffet's strategies may not work here. They haven't held up to date since the "crisis" started.


On Feb 28 02:05 PM ronbeasley wrote:

> Berkshire Hathaway has several bank investments. Wells Fargo is by
> far the biggest. Warren Buffet reduced his investment in BankAmerica
> and US Bancorp, but not in Wells. I think it makes more sense to
> pay attention to the actions of people like Buffett than to the hyperbolic
> dialogue of an academic.
>
> Wells Fago is quite simply one of the best managed, most conservative
> banks and, unless we are facing a total collapse here, presents a
> compelling investment opportunity. It has the earnings power to earn
> its way out of the current mess, and appears to have adequate reserves
> to cover the next year or so of individual and commercial credit
> losses.

Mar 01 05:55 PM

[ed233:]

Perhaps you should read a little more in depth some articles Mr. Roubini has published recently. One thing I do know is that his generalities do little to assist the problem at hand. Why does he never come forth with any concrete solutions he'd employ to make the situation better. No, it's easier to criticize everybody. I know it's screwed up but lets hear positive concrete suggestions insteading blabbing in article after article every thing is wrong. We can all do that!!!!!


On Feb 28 01:15 PM Skj wrote:

> dont piss in the wind tom.. You have been so wrong over the past
> year or so and if someone was actually following your 'investment
> advice', their portfolio has been slashed by two thirds. On the other
> hand, Roubini has been right on the dot. These attempts by a shill
> like you to ridicule an academic like Roubini just show how incapable
> you are of realizing the truth even if it poked you in the eyeball.

Mar 01 06:09 PM

[Douglas S:]

I agree totally! I was stunned this morning when I heard something along the lines that Berkshire had lost money like 5 years in a row? As a proud owner of about $10 worth of Berkshire.B, I was shaken to my core, lol. It does seem like he is losing a bit of his mojo but I have faith he will come through this smelling like a rose. In all seriousness, as a small investor, it has kind of rallied my spirits that even the greats have had a little trouble navigating the rough waters of late.


On Mar 01 05:55 PM User 347440 wrote:

> Wouldn't surprise me one bit if the next mogul to step in front of
> a train is Buffet. This IS different and Buffet's strategies may
> not work here. They haven't held up to date since the "crisis" started.
>

Mar 01 06:20 PM

[Ransome:]

Wells is up to something. They are getting all funked out about credit scores and mortgage loans. Buffet addressed this in his letter. Credit scores don't count, it is the quality of the borrower and the sensibility of the loan amount, down payment and cash flow. Perhaps Wells needs a bigger hammer to hoist over the heads of the revolving credit card loans at 30%. The great mystery to me is how a person making minute payments on $10,000 at 30% is considered a great credit risk.

I thought Warren's play at being a derivatives trader was a little weird. It is not clear it is in the best interests of the share holders over the long term. I don't think he expected the market to crater. Otherwise, just buy low and watch the stock go up as it must if he is to win his bet. This bet may cost him a credit rating later down the pike and for no good reason. Writing down the paper loss didn't help the stock.

Mar 01 07:27 PM

[burstwatch:]

This is a silly article.

After quite a bit of experience in the secondary mortgage market, I can tell you that the combination of Wachovia and Wells Fargo was, in fact, a combination of two zombie banks.

It is very clear that Wells Fargo is completely insolvent at this point. You simply can not have large Alt-A, Option Arm, and equity line exposures and be solvent at this point. Not to mention the high percentage of exposure to FL and CA, this adds a ton of fuel to the fire.

I am sorry, but solvency is not possible for these guys.


On Mar 01 05:55 PM User 347440 wrote:

> Wouldn't surprise me one bit if the next mogul to step in front of
> a train is Buffet. This IS different and Buffet's strategies may
> not work here. They haven't held up to date since the "crisis" started.
>

Mar 01 08:42 PM

[EMS:]

I agree w/ you. Warren has truly lost his marbles.


On Mar 01 07:27 PM Ransome wrote:

> Wells is up to something. They are getting all funked out about credit
> scores and mortgage loans. Buffet addressed this in his letter. Credit
> scores don't count, it is the quality of the borrower and the sensibility
> of the loan amount, down payment and cash flow. Perhaps Wells needs
> a bigger hammer to hoist over the heads of the revolving credit card
> loans at 30%. The great mystery to me is how a person making minute
> payments on $10,000 at 30% is considered a great credit risk.
>
> I thought Warren's play at being a derivatives trader was a little
> weird. It is not clear it is in the best interests of the share holders
> over the long term. I don't think he expected the market to crater.
> Otherwise, just buy low and watch the stock go up as it must if he
> is to win his bet. This bet may cost him a credit rating later down
> the pike and for no good reason. Writing down the paper loss didn't
> help the stock.

Mar 01 08:56 PM

[Moon Kil Woong:]

Roubini is right again that his estimates are not bank specific. And his arguments are usually general. However, recently he has been speaking to the root of Citibank that we all know is a zombie (liabilities well exceed assets) in which he is saying what I have been saying (Come on Citibank is already nationalized. The only difference is you have the bad execs still running the show and getting paid and it keeps dragging the whole market down).

Not to pick bones but, the funny thing about all of this is, even the derived loss figure for Well Fargo may be correct. It is easy that 5% of their derivatives basket is worthless).

The point is no one can tell what the total "real" loss is because banks can use Base I accounting to hide all their derivatives losses forever as long as they don't go bankrupt. The note regarding fudging the numbers on tax liability etc. also applies.

Banks, unlike all other businesses, have some of the sweetest accounting rules on earth including the US. Can you trust them regarding their asset bases and profitability. Obviously banks don't even thrust each other. That's why the Fed had to guarantee interbank lending.

Roubini is kind because he is in the public limelight. I am not so I can be more frank. The US banks accounting is basically fraudulent (we don't call it that because the government lets them do them). Who exactly is these regulations serving? Not you.

Mar 01 09:31 PM

[user guest:]

you have dared to challenge W after 911 - prepare to be taken down by the masses

Mar 01 10:19 PM

[Mayer Amsch...:]

Hey guys, it's me, the patriarch of the Rothschilds and founder of modern investment banks. Just came back from the dead to say you can put pretty much whoever you want in the "name" field on Seeking Alpha when you post a comment. Not that that relates, this is totally me, the ghost of Mayer Rothschild.

Mar 01 10:37 PM

[Stone Fox C...:]

If Citi is indeed insolvent then why do they have $81B in equity now? If Roubini is such a Greek Hero, then why don't he show exactly where they are insolvent? What marks aren't they taking that he claims they should? Years from now, we're gonna look bad and realize all the damage this guy has done by talking down the banking system. How I hear all every bank is insolvent and I just don't see it beyond Citi and maybe BAC. Where is the proof or is he just talking out of the side of his mouth?

Mar 01 10:40 PM

[Jynxed00:]

Douglas,
It is wrong to scream fire in a crowded theater...
Unless the theater is on fire.

Keep listening to your cheerleaders, and wish you had listened to NR months ago. I sure am glad I have invested that way.


On Mar 01 11:02 AM Douglas wrote:

> Roubini is a schmuck. God Bless you for calling him out; I pray that
> more and more people will finally someday wake up and realize that
> these losers are not the soothsayers they are made out to be. They
> are no different than an arsenist who sets fire to something, only
> to hang around and get off on the fear and panic they have created.
> WAKE UP PEOPLE....The likes of Gary Shilling, Peter Schiff, and Roubini
> only make headlines when their lifelong predictions FINALLY come
> true. You say it long enough, and guess what...it will come around
> at some point. Ever wonder why they dissappear when things correct?
> Shillings and Schiffs clients are down just as far as everyone else
> and in most cases are worse off because they have missed some of
> the greatest run ups in stock market history over the last several
> years just google it and see what past customers are saying! The
> only thing that saves Roubini, is that he hides under the umbrella
> of "economist" and not a stock market guru. I hope the loyalists
> of these fear mongering losers enjoy your paultry earnings from your
> .01% money market fund. Someday, when the sun comes up and you're
> sitting on a stack of $50 gold that you paid $1000 for, you'll probably
> hang yourself. But guess what, Schiff, Roubini and Shilling won't
> be attending your funeral because they will be off duping some other
> poor sucker into thinking the world is coming to an end!! Make your
> own decisions and create your own wealth, it's much more rewarding!!
>
>
>

Mar 01 10:54 PM

[User 356946:]

this author seems like a big-time pinbrain.
for example i don't see where roubini says "wells fargo is a goner".
my suggestion to the author would be to spare us your useless babbling and focus on your significant pinbrainness.

Mar 02 12:24 AM

[lookbeforeU...:]

Douglas - I have read many posts on this site and never have I experianced reactions such as yours. It appears you think anyone who dares to say "The King has no clothes" is an irrepsonsible know-nothing who should be silenced and ridiculed. Schiff has been predicting the demise of our financial system for 3 years - it didn't happen simply because he predicted it and people got scared, it happend because it was inevitable. The situation is not getting worse because of Schiff and Roubini, it is getting worse because very intelligent and well meaning people are having an extremely hard time deciding what is the best method for resolving all of the credit crises, and that has led a lot of investors to critically analyze the problems our financial sector faces. Look at what happened in Japan after their drunken real estate orgy in the '80's, and what has happened since because they refused to deal with the bank problem in the manner necessary. You can refuse to acknowledge it all you want, but that doesn't make it go away.

I suggest you save your invective and vitriol for someone who truely deserves it - your personal attacks on others in this blog are ridiculous and childish. Go ahead and disagree all you want, but stuff the name calling in a sock. Your anger is misplaced - it shoud be directed towards those that led the sheeple into this mess in the first place.

Mar 02 12:56 AM

[CapNgain:]

Most of your article was informative, and was supported with actual numbers. Too bad you more or less ruined this article by straying from an argument supported by numbers when you "diss'd" Rubini.

When almost every major bank action in this current downturn has been proceeded by the bank CEO claiming reserves were adequate, one begins to question whether anything the CEOs of poorly performing banks (contrast that with the multiple banks that have actually outperformed in the last year) have to say has any credibility.

People such as Meredith Witney, and Rubini have numbers to support their calls in the last 1-2 years. They were more correct in seeing this train wreck before it happened than many other professionals and major bank CEOs. However, just like the few internet analysts that were mostly correct in their price targets as the 1999-2000 tech bubble was inflating only to be very wrong when the bubble burst, the real test of Rubini and others abilities will be whether they call the banking bottom in this downturn, or whether their bearishness blinds them from the inevitable recovery at some point.




On Feb 28 05:13 PM vvvvviking wrote:

> I looked at Wells' 10K that came out on Friday, and they looked adequately
> reserved for the WB option arms. There is 120BB or so of principal
> balance on those loans, and they have them marked at 95BB, or in
> other words, a 20% loss estimate. That is consistent with most analysts
> assumptions on losses for similar vintage loans, and I think the
> Wachovia stuff will perform better than average - it was mostly retail,
> which performs about 30-40% better than Wholesale, and they were
> notorious for being pricky on appraisals (ask any broker who had
> to deal with them).
>
> On their Home Equity portfolio, I think they are being a bit light
> in their loss estimates, but no more light on those then I think
> they are heavy on the Option Arms. No doubt they marked the OAs
> down a lot since they aren't as familiar with them.
>
> BTW, Wells mark on the OAs is consistent with JPM's mark on WM's
> OAs when they were purchased, and WM was a MUCH worse underwriter
> than Wachovia. The majority of WM's OAs were Wholesale, and of course
> WM had all those appraisal issues. So even on a relative basis,
> WFC's mark is more conservative.
>
> Of course, I actually work in the mortgage industry, so can evaluate
> the appropriateness of these things, whereas Roubini is in the entertainment
> business, so has very little credibility in my mind.

Mar 02 01:31 AM

[xom-only:]

next dr doom will be commenting on which wine is appropriate or what should be done to the mother of 16 or is it 17.

Mar 02 08:07 AM

[Randy_H:]

Tom, there's a lucrative career waiting for you as a "licensed" real estate agent. Methinks you're much more suited for their world of blissfully ignorant optimism and mindlessly leveling attacks at any hint of unpleasant reality.

Good luck, and remember, 6% is in the bag.

Mar 02 09:59 AM

[Jeff Roth:]

you may rail about roubini's supposed "antics," but you don't sound too even keeled yourself in your rant.

Mar 02 11:33 AM

[LeoTheDog:]

Wow, what a xenophobic douchebag you are. For an American, your command of your native tongue is quite pathetic. Learn to use spellcheck before your next post, you a-hole.


On Mar 01 02:30 AM AmericanInvestor wrote:

> Roubini, Roubini, where for art thou Roubini.
>
> You've gotta know a guy like this looks in the mirror everyday thriving
> on his general assertions, lacking specifics, and only dressing up
> political garbage. They make this guy sound like he adds something
> new to finance of for that matter basic budgeting. Also, is this
> guy even a citizen of this country. If not....his nationalization
> statements are even more less credible. He comes to the US where
> freedome reigns and wasnt the government to limit freedom like the
> limits in the country he came from....and every otehr country outside
> our nation. Nothing new here.

Mar 02 02:48 PM

[Eyal:]

Exactly Tom, and when the person is smart, like you, then the prophecies about highly levered institutions are not self-fulfilling. Like Compucredit and FMD. You predicted they'd go up, but that prophesy did not come to pass. they went down. But Roubini's prophesies about investment banks worked, therefore you are smart and he is stupid.... right?

Mar 02 03:17 PM

[EMS:]

Tom,
You are a great, big loser.

Mar 02 04:23 PM

[EMS:]

Tommy,
I know of a car wash that is hiring.

Mar 02 06:22 PM

[Douglas S:]

Dearest lookbeforeUleap,
I'm almost afraid to respond to you since your sensitivity level is so high that you most assuredly will take it as an "attack". First off, if you have "read" many posts and "never" experienced a reaction like mine, I would have to question exactly how many posts you have actually read? Second, if you look by each persons name you will see a link that says something like "14 Comments" or something similiar....if you click that link it will take you that persons comment thread for every post they have made. Click mine dearest friend and read my posts, I then challenge you to find those so-called "invective and vitriol" comments that you claim I made. Now, if you are claiming that the names I used such as "wingnut", "numbskull" "Clown" "psycho" (which I'll use later)or "schmuck" are invective and vitriol, then you win. If that be the case, I then challenge you just to read this thread (as you claim you already have) and look at the "invective and vitriol" that you somehow missed from other commenters....: "Douchebag", "Pinbrain", "Dingbat", "Useless",
"Shitty", "Stupid", "Dipshit", Fraud", "Ass", and "Shill" and that was just a quick scan through. So in closing, if you have never seen such disgusting actions as mine, you either are a wingnut, or you can't read very well? If you are so offended by verbal sparring amongst passionate people perhaps you should go read quilters weekly instead? Again, click my 14 comments and read my posts, you may even find a little humor in there to comfort your sensitivity issues you have? On a side note, I think it's funny that people are dissing Tom for attacking Roubini, and saying he is no Roubini, yet that "psycho" Roubini says he is right over perhaps one of the greatest investors ever in Bill Gross. Well Mr. Roubini, I knew Bill Gross and you sir are no Bill Gross!!!


On Mar 02 12:56 AM lookbeforeUleap wrote:

> Douglas - I have read many posts on this site and never have I experianced
> reactions such as yours. It appears you think anyone who dares to
> say "The King has no clothes" is an irrepsonsible know-nothing who
> should be silenced and ridiculed. Schiff has been predicting the
> demise of our financial system for 3 years - it didn't happen simply
> because he predicted it and people got scared, it happend because
> it was inevitable. The situation is not getting worse because of
> Schiff and Roubini, it is getting worse because very intelligent
> and well meaning people are having an extremely hard time deciding
> what is the best method for resolving all of the credit crises, and
> that has led a lot of investors to critically analyze the problems
> our financial sector faces. Look at what happened in Japan after
> their drunken real estate orgy in the '80's, and what has happened
> since because they refused to deal with the bank problem in the manner
> necessary. You can refuse to acknowledge it all you want, but that
> doesn't make it go away.
>
> I suggest you save your invective and vitriol for someone who truely
> deserves it - your personal attacks on others in this blog are ridiculous
> and childish. Go ahead and disagree all you want, but stuff the name
> calling in a sock. Your anger is misplaced - it shoud be directed
> towards those that led the sheeple into this mess in the first place.

Mar 02 07:40 PM

[Oyp:]

Douglas,

Your last comment inspired me to look at your prior comments. The most priceless and applicable line therein was the following: "I'm just a simple home-gamer who thought WAMU and WB were great buys not all that long ago."

I guess all that research you did has served you well....

I add this only because I know it will inspire yet another over-the-top attack response, drawn from the depths of your impotent fury, that we can all chuckle about.

Mar 03 01:44 PM

[Douglas S:]

Well, you certainly got me there Oyp!! I'm just so embarrased by it all I.....whatever shall I do?? I was not aware that I was the first investor to have ever made a mistake! Now I'm really depressed. Thank you for pointing that out to me!
You moron, lol.....maybe if you boneheads ever fessed up to your mistakes honestly and were to come clean, you wouldn't give off such an air of stupidity when you call out every author on SA for their previous calls. As I said in my previous comment, there is a lot of humor in my replies as well as "the so-called over-the-top attacks" you all claim. If I can laugh at my own loss in WAMU and WB, surely someone else can relate to it in some way to bad call they themselves have made. I don't mean you of course or the other "perfect" investors, I just mean lowly little home-gamers like me. I never once said I was perfect did I? My speculative portfolio is just that....a basket of stocks that may or may not reward me in the long run, hence the word "speculative".
And at the very least my "research" is my research, not yours, not SA's, not CNBC's, it is mine and aside from a little boo boo in WAMU and WB I've done rather well for myself! Guess what, I also own some GM (please don't tell anyone, I would be so embarrased)! Finally..... I will apologize to you for unleashing this angry, furious, evil, vile, and abhorant "attack" on you. Please forgive me!


On Mar 03 01:44 PM Oyp wrote:

> Douglas,
>
> Your last comment inspired me to look at your prior comments. The
> most priceless and applicable line therein was the following: "I'm
> just a simple home-gamer who thought WAMU and WB were great buys
> not all that long ago."
>
> I guess all that research you did has served you well....
>
> I add this only because I know it will inspire yet another over-the-top
> attack response, drawn from the depths of your impotent fury, that
> we can all chuckle about.

Mar 03 05:11 PM

[User 368958:]

The fact that this article has gotten this much attention is absurd. Tom Brown vs. Roubini is like a pawn against a queen. Brown's counter arguments are puzzling and don't make much sense. Tom Brown should just shut up and try to learn something from these troubling economic times and actually listen to Roubini.

The scariest part is that Roubini has come out and said he is afraid he isn't bearish enough...

Mar 03 05:45 PM

[damienhaas:]

Tom Brown is a small fry and if he is so good, show everyone his trading success...., if there is any of them....

Mar 03 07:13 PM

[Ray Lopez:]

Did Roubini, who is a celebrity economist now, and whose calendar is proabably booked for the next five years, really respond to this guy? This guy should save that email for bragging rights, and play it up here, as he has.

Next!

Mar 03 07:48 PM

[EMS:]

Tom,
You are a punk.

Mar 03 09:03 PM

[JPK:]

Tom,

We laugh at you In Houston TX. We saw you a few times pumping IndyMac Bank and MBIA...do yourself a favor and get our of finance. You are a total clown and you really need to shut your mouth and go be a bartender or something...

Mar 03 11:10 PM

[User 305589:]

wtf?
if roubini calls the wells-wachovia merger a merger of two zombie banks it is crystal clear that he says wells has been a zombie before the merger and is a bigger one after. now, would you like to tell methe difference between a zombie and a goner? good luck and you may wish to reconsider your silly reporting to sa remark.

On Feb 28 03:42 PM mennoman wrote:

> Tommy,
> You obviously have something against Routini. His quote, "Wells Fargo
> took over Wachovia. It doesn't work! You can't take two zombie banks,
> put them together, and make a strong bank. It's like having two drunks
> trying to keep each other standing." That doesn't mean he says Wells
> is "a goner" as you say. You're in over your head. I'm reporting
> this to Seeking Alpha.

Mar 09 06:10 AM

[User 305589:]

Hi Tom, of course you have been dead wrong so far on quite a number of your stock calls, while roubini so far has been right on his macro calls.
I think though, that the game is far from over on both counts. imho roubini is waaayyy overrated and had his day. I have never seen any academic, economist, journalist etc. getting the macro economic picture right for any extended period of time. just spot on for a year or two or three and wrong as most everybody else thereafter. and never mind that roubini himself didn't predict things to turn as bad as he does today.
keep up your articles here tom. I, at least appreciate and enjoy them as they are a very refreshing attempt to ANALYZE thing from bottom up based on facts and real numbers - rather than just throwing dire predictions and emotions around as it has become so common everywhere.
btw, imho almost all the doomsters will get killed by the market over the next 12-24 months. has happened beofre, will happen again. when everybody and his dog has turned bearish and scared and has been convinced that things will go a lot worse, it is ALWAYS the time things turn around and leave the freshly converted bears and doomsayers in the dust

Mar 09 06:20 AM

[Ames Tiedeman:]

If real estate is stabilizing then WFC will have a chance to build on Q1. But if real estate in general and California real estate in particular is not stabilizing then WFC will have additional write-offs/losses. This is my concern. I do not have any idea how they will cope with another 30% drop in real estate prices that Meredith Whitney seems to be forecasting. That being said, from 8 to 20 was a hell of a trade.

Apr 11 09:22 AM